As Filed With the Securities and Exchange Commission on May 19, 2000
Registration No. 333-______
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
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REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GLENAYRE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 98-0085742
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5935 Carnegie Boulevard, Suite 300
Charlotte, North Carolina 28209
(Address of principal executive offices) (Zip Code)
GLENAYRE 1996 INCENTIVE STOCK PLAN
(Full title of the plan)
--------
BERT C. KLEIN
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
GLENAYRE TECHNOLOGIES, INC.
5935 CARNEGIE BOULEVARD, SUITE 300
CHARLOTTE, NORTH CAROLINA 28209
(Name and address of agent for service)
704/553-0038
(Telephone number, including area code,
of agent for service)
Please send copies of all communications to:
A. ZACHARY SMITH III
KENNEDY COVINGTON LOBDELL & HICKMAN, L.L.P.
BANK OF AMERICA CORPORATE CENTER, SUITE 4200
100 NORTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28202-4006
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<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------- --------------------- ------------------------- ------------------------- -------------------
Title Amount Proposed maximum Proposed maximum Amount of
of securities to be to be Offering price aggregate registration
registered registered Per share(1) offering price(1) fee
- -------------------------------------- --------------------- ------------------------- ------------------------- -------------------
<S> <C> <C> <C> <C>
Common Stock, $.02 par value 2,500,000 shares $ 12.50 $ 31,250,000 $ 8,250
====================================== ===================== ========================= ========================= ===================
</TABLE>
- --------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h)(1) on the basis of $12.50 per share, the average
of the high and low prices for the Common Stock on May 15, 2000 as reported in
The Nasdaq Stock Market.
<PAGE>
EXPLANATORY NOTE
This Registration Statement relates to the amendment to the Glenayre
1996 Incentive Stock Plan to increase by 2,500,000 the number of shares of $.02
par value Common Stock authorized to be issued thereunder.
STATEMENT OF INCORPORATION BY REFERENCE
This Registration Statement on Form S-8 incorporates by reference the
contents of (i) PART I and (ii) PART II, Items 4, 6, 7 and 9, of the
Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (No.
333-04635), filed by the Registrant on May 22, 1998 and the Registration
Statement on Form S-8 (No. 333-81155), filed by the Registrant on June 17, 1999
relating to the Glenayre 1996 Incentive Stock Plan.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Glenayre Technologies, Inc.
(the "Company") with the Securities and Exchange Commission (Commission file
number 0-15761) and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement filed pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended including any amendment or report filed for the
purpose of updating such description.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such reports
and documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the issuance of the Common
Stock being offered hereby are being passed upon for the Company by Kennedy
Covington Lobdell & Hickman, L.L.P., Bank of America Corporate Center, Suite
4200, 100 North Tryon Street, Charlotte, North Carolina 28202. At May 10, 2000,
partners and associates of Kennedy Covington Lobdell & Hickman, L.L.P. and their
spouses and minor children owned beneficially an aggregate of 2,065 shares of
the Common Stock of the Company and options to purchase 22,000 shares of the
Common Stock of the Company.
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ITEM 8. EXHIBITS.
4 Glenayre 1996 Incentive Stock Plan, as amended (filed herewith).
5 Opinion of Kennedy Covington Lobdell & Hickman, L.L.P. (filed
herewith).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Kennedy Covington Lobdell & Hickman, L.L.P.
(contained in Exhibit 5).
23.3 Acknowledgment of Ernst & Young LLP (filed herewith).
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina, on May 19, 2000.
GLENAYRE TECHNOLOGIES, INC.
By /s/ Bert C. Klein
--------------------
Bert C. Klein
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on behalf
of the Company and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ Clarke H. Bailey Chairman of the Board May 19, 2000
- ---------------------------------------- and Director
Clarke H. Bailey
/s/ Eric L. Doggett President, Chief Executive Officer May 19, 2000
- ---------------------------------------- and Director
Eric L. Doggett
/s/ Bert C. Klein Senior Vice President, Chief May 19, 2000
- ---------------------------------------- Financial Officer, Chief Accounting
Bert C. Klein Officer, Secretary and Treasurer
/s/ Ramon D. Ardizzone Director May 19, 2000
- ----------------------------------------
Ramon D. Ardizzone
/s/ Donald S. Bates Director May 19, 2000
- ----------------------------------------
Donald S. Bates
/s/ Peter W. Gilson Director May 19, 2000
- ----------------------------------------
Peter W. Gilson
/s/ John J. Hurley Director May 19, 2000
- ----------------------------------------
John J. Hurley
/s/ Thomas C. Israel Director May 19, 2000
- ----------------------------------------
Thomas C. Israel
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Stephen P. Kelbley Director May 19, 2000
- ----------------------------------------
Stephen P. Kelbley
/s/ Anthony N. Pritzker Director May 19, 2000
- ----------------------------------------
Anthony N. Pritzker
/s/ Horace H. Sibley Director May 19, 2000
- ----------------------------------------
Horace H. Sibley
</TABLE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
GLENAYRE TECHNOLOGIES, INC.
Commission File Number 0-15761
EXHIBIT INDEX
Exhibit Description
- ------- -----------
4 Glenayre 1996 Incentive Stock Plan, as amended (filed herewith).
5 Opinion of Kennedy Covington Lobdell & Hickman, L.L.P. (filed
herewith).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Kennedy Covington Lobdell & Hickman, LLP (contained in
Exhibit 5).
23.3 Acknowledgment of Ernst & Young LLP (filed herewith).
5
Exhibit 4
GLENAYRE 1996 INCENTIVE STOCK PLAN
<PAGE>
CONTENTS
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PAGE
Article 1. Establishment, Purpose and Duration 1
Article 2. Definitions 1
Article 3. Administration 5
Article 4. Shares Subject to the Plan 5
Article 5. Eligibility and Participation 6
Article 6. Stock Options 6
Article 7. Stock Appreciation Rights 8
Article 8. Restricted Stock 10
Article 9. Performance Shares 11
Article 10. Performance Measures 12
Article 11. Beneficiary Designation 12
Article 12. Deferrals 13
Article 13. Rights of Key Persons 13
Article 14. Change in Control 13
Article 15. Awards to Non-Officer Directors 15
Article 16. Amendment, Modification and Termination 17
Article 17. Withholding 18
Article 18. Indemnification 18
Article 19. Successors 19
Article 20. Legal Construction 19
<PAGE>
GLENAYRE 1996 INCENTIVE STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Glenayre Technologies, Inc. hereby
establishes an incentive compensation plan to be known as the "Glenayre 1996
Incentive Stock Plan" as set forth in this document. The Plan permits the grant
of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock and Performance Shares.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of May 22, 1996 (the "Effective Date") and shall remain in effect
as provided in Section 1.3 hereof. The Plan shall not become effective unless
stockholder approval is obtained.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success
and enhance the value of the Company by linking the personal interests of
Participants to those of the Company's stockholders, and by providing
Participants with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract and retain the services of Participants upon whose
judgment, interest and special effort the successful conduct of its operation
largely is dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as
described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 16 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award of an ISO be granted under the Plan after May 21, 2006.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is
capitalized:
2.1 "AWARD" means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock or Performance Shares.
2.2 "AWARD AGREEMENT" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
granted under the Plan.
2.3 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.4 "CHANGE IN CONTROL" of the Company shall have occurred when any
Acquiring Person (other than the Company, any employee benefit plan of the
Company or any person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan), alone or together with
its Affiliates and Associates, shall become the
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beneficial owner of 25% or more of the shares of Common Stock of the Company
then outstanding (except pursuant to an offer for all outstanding shares of the
Company's Common Stock at a price and upon such terms and provisions as a
majority of the Continuing Directors determine to be in the best interests of
the Company and its stockholders other than the Acquiring Person or any
Affiliate or Associate thereof on whose behalf the offer is being made), and the
Continuing Directors no longer constitute a majority of the Board. For purposes
of this definition, the following terms shall have the following meanings:
(a) "Acquiring Person" means any individual, firm, corporation or other
entity who or which, together with all Affiliates and Associates,
shall be the beneficial owner of a substantial block of the Company's
Common Stock.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 as promulgated under the
Exchange Act.
(c) "Continuing Director" means any individual who is a member of the
Board, while such individual is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of
any such Affiliate or Associate, and was a member of the Board prior
to the occurrence of the Change in Control; or any successor of a
Continuing Director, while such successor is a member of the Board,
and who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate, and is recommended or
elected to succeed the Continuing Director by a majority of the
Continuing Directors.
2.5 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code shall include the valid and binding governmental
regulations, court decisions and other regulatory and judicial authority issued
or rendered thereunder.
2.6 "COMMITTEE" means the Plan Administration Committee of the Board, as
specified in Article 3 herein, appointed by the Board to administer the Plan.
2.7 "COMMON STOCK" means the $0.02 par value common stock of the Company.
2.8 "COMPANY" means Glenayre Technologies, Inc., a Delaware corporation,
and any successor as provided in Article 19 herein.
2.9 "DIRECTOR" means any individual who is a member of the Board of
Directors.
2.10 "DISABILITY," with respect to a Participant, means "disability" as
defined from time to time under any long-term disability plan of the Company or
Subsidiary with which the Participant is employed.
2.11 "EARNINGS PER SHARE" means "earnings per common share" of the Company
determined in accordance with generally accepted accounting principles that
would be reported in the Company's Annual Report to Stockholders.
2.12 "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.
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2.13 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.14 "FAIR MARKET VALUE," with respect to a share of the Company's Common
Stock at a particular time, shall be that value as determined by the Committee
which shall be (i) if such Common Stock is listed on a national securities
exchange (which includes the NASDAQ Stock Market), on any given date, (A) the
closing price of a share of Common Stock, as reported on the consolidated
transaction reporting system for such exchange for that date, or if shares of
Common Stock were not traded on such date, on the next preceding day on which
shares of Common Stock were traded, or (B) if the Common Stock is not reported
on the consolidated transaction reporting system for such exchange, the last
price at which the Common Stock shall have been sold regular way on a national
securities exchange on said date, or, if no sales occur on said date, then on
the next preceding date on which there were such sales of Common Stock; or (ii)
if the Common Stock shall not be listed on a national securities exchange, the
mean between the average high bid and low asked prices last reported by the
National Association of Securities Dealers, Inc. for the over-the-counter market
on said date or, if no bid and asked prices are reported on said date, then on
the next preceding date on which there were such quotations; or (iii) if at any
time quotations for the Common Stock shall not be reported by the National
Association of Securities Dealers, Inc. for the over-the-counter market and the
Common Stock shall not be listed on any national securities exchange, the fair
market value determined by the Committee on the basis of available prices for
such Common Stock or in such other manner as the Committee may deem reasonable.
2.15 "FREESTANDING SAR" means an SAR that is granted independently of any
Option.
2.16 "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares,
granted under Article 6 herein, and which is designated an Incentive Stock
Option intended to meet the requirements of Section 422 of the Code.
2.17 "INSIDER" shall mean an individual who is, on the relevant date, an
officer, director or 10% beneficial owner of any class of the Company's equity
securities that is registered pursuant to Section 12 of the Exchange Act, all as
defined under Section 16 of the Exchange Act.
2.18 "KEY PERSON" means an employee or officer of the Company or a
Subsidiary, in a managerial or other position, who can make important
contributions to the Company or a Subsidiary or a key person providing important
services to the Company or a Subsidiary, all as determined by the Committee in
its discretion.
2.19 "NAMED EXECUTIVE OFFICER" means, for a calendar year, a Participant
who is one of the group of "covered employees" for such calendar year within the
meaning of Code Section 162(m) or any successor statute.
2.20 "NET INCOME" means "net income" of the Company determined in
accordance with generally accepted accounting principles that would be reported
in the Company's Annual Report to Stockholders.
3
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2.21 "NET SALES" means the "net sales" of the Company determined in
accordance with generally accepted accounting principles that would be reported
in the Company's Annual Report to Stockholders.
2.22 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares granted to Key Persons under Article 6 or to non-officer Directors under
Article 15 which is not intended to meet the requirements of Code Section 422.
2.23 "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option.
2.24 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant upon the exercise of an Option.
2.25 "PARTICIPANT" means a person who has outstanding an Award granted
under the Plan.
2.26 "PERFORMANCE-BASED EXCEPTION" means the performance-based exception
set forth in Code Section 162(m)(4)(C) from the deductibility limitations of
Code Section 162(m).
2.27 "PERFORMANCE SHARE" means an AWARD granted to a Participant pursuant
to Article 9 herein.
2.28 "PERIOD OF RESTRICTION" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, at its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 8 herein.
2.29 "RESTRICTED STOCK" means an Award granted to a Participant pursuant to
Article 8 herein.
2.30 "SHARES" means shares of Common Stock of the Company.
2.31 "STOCK APPRECIATION RIGHT" or "SAR" means an Award granted alone or in
connection with a related Option to a Participant pursuant to Article 7 herein.
2.32 "SUBSIDIARY" means any corporation, partnership, joint venture,
affiliate or other entity in which the Company has an ownership interest, and
which the Committee designates as a participating entity in the Plan.
2.33 "TANDEM SAR" means an SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
a Share under the related Option (and when a Share is purchased under the
Option, the Tandem SAR shall similarly be canceled).
2.34 "TOTAL STOCKHOLDER RETURN" means the percentage change in value of an
initial investment in Shares over a specified period assuming reinvestment of
all dividends during the period.
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2.35 "EFFECTIVE AMENDMENT DATE" means the date on which the stockholders of
the Company approve the amendment to the Plan to increase the number of Shares
reserved for grants of Awards under the Plan by an additional 2,200,000 Shares.
2.36 "SECOND EFFECTIVE AMENDMENT DATE" means that date on which the
stockholders of the Company approve the amendment to the Plan to increase the
number of Shares reserved for grants of Awards under the Plan by an additional
750,000 Shares.
2.37 "THIRD EFFECTIVE AMENDMENT DATE" means that date on which the
stockholders of the Company approve the amendment to the Plan to increase the
number of shares reserved for grants of Awards under the Plan by an additional
2,500,000 Shares.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Plan
Administration Committee of the Board or by any other Committee appointed by the
Board consisting of not less than two (2) Directors. All of the members of the
Committee shall comply with the "disinterested administration" rules of Rule
16b-3 under the Exchange Act, if applicable. The members of the Committee shall
be appointed from time to time by, and shall serve at the discretion of, the
Board of Directors. In addition, any action taken with respect to Named
Executive Officers for purposes of meeting the Performance-Based Exception shall
be taken by the Committee only if all of the members of the Committee are
"outside directors" within the meaning of Code Section 162(m), subject to any
applicable transition rules under Code Section 162(m). If all of the members of
the Committee are not "outside directors," such action shall be taken by a
subcommittee of the Committee comprised of at least two members who are "outside
directors."
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law, or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Key Persons who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and provisions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 16 herein),
amend the terms and provisions of any outstanding Award to the extent such terms
and provisions are within the discretion of the Committee as provided in the
Plan. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. To the extent
permitted by law, the Committee may delegate its authority hereunder.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, employees, Participants and their
estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN.
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Beginning on the Effective Date,
there is hereby reserved for grants of Awards under the Plan 2,200,000 Shares.
Beginning on the Effective Amendment Date, there is hereby reserved for grants
of Awards under the Plan an additional 2,200,000 Shares. Beginning on the Second
Effective Amendment Date, there
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is hereby reserved for grants of Awards under the Plan an additional 750,000
Shares, provided that the persons who are eligible for such grants shall be
limited to those persons described in Section 5.1. Beginning on the Third
Effective Amendment Date, there is hereby reserved for grants of Awards under
the Plan an additional 2,500,000 Shares. The number of Shares reserved for
grants of Awards under this paragraph shall be subject to adjustment as provided
in Section 4.3.
In no event shall a Participant receive an Award or Awards during any one
calendar year ending prior to the Second Effective Amendment Date covering in
the aggregate more than 250,000 Shares or during any one calendar year ending on
or after the Second Effective Amendment Date covering in the aggregate more than
500,000 Shares. The limitation on awards to a Participant during a calendar year
under this paragraph shall be subject to adjustment as provided in Section 4.3.
4.2 LAPSED AWARDS. If any Award granted under the Plan is canceled,
terminates, expires or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan.
4.3 ADJUSTMENTS IN AVAILABLE SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under the
Plan, in the number and class of and/or price of Shares subject to outstanding
Awards granted under the Plan and in the limitation on awards to a Participant
during a calendar year, as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent the dilution or enlargement of
rights under the Plan; provided, however, that the number of Shares subject to
any Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in the Plan are Key
Persons, as determined by the Committee, and any non-officer Director who
participates in the Plan pursuant to Article 15.
The Key Persons who are eligible for grants of Awards covering the 750,000
Shares reserved under the Plan on the Second Effective Amendment Date shall be
limited to: (i) a Chief Executive Officer of the Company hired after March 1,
1999; (ii) a Chief Financial Officer of the Company hired after March 1, 1999;
and (iii) any other senior executive of the Company or a Subsidiary (as
determined by the Committee) hired after March 1, 1999.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Key Persons those to
whom Awards shall be granted and shall determine the nature and amount of each
Award. Non-officer Directors shall be granted Awards in accordance with the
provisions of Article 15.
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ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Key Persons in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Section 422 of the Code,
or an NQSO whose grant is intended not to fall under Code Section 422.
6.3 OPTION PRICE. The Committee shall determine the Option Price for each
grant of an Option under this Article 6, which such Option Price shall be set
forth in the applicable Award Agreement; provided, however, that the Option
Price shall be at least equal to 100% of the Fair Market Value of a Share on the
date the Option is granted with respect to the grant of either (i) an Option
granted to a Named Executive Officer that is intended to satisfy the
Performance-Based Exception or (ii) an ISO.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the 10th anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve and which shall be set forth in the
applicable Award Agreement, which need not be the same for each grant or for
each Participant.
6.6 PAYMENT. Options shall be exercised by the delivery of a written notice
of exercise to the Company, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares which are
tendered to satisfy the Option Price must have been held by the Participant for
at least six months prior to their tender), or (c) by a combination of (a) and
(b).
The Committee also may allow cashless exercise as permitted under the
Federal Reserve Board's Regulation G or Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
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6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including without
limitation, restrictions under applicable Federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded and under any blue sky or state securities laws applicable
to such Shares.
6.8 TERMINATION OF EMPLOYMENT. Each Option Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the Option
following termination of the Participant's employment with the Company and its
Subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with the
Participant, need not be uniform among all Options issued pursuant to this
Article 6, may reflect distinctions based on the reasons for termination of
employment and may include provisions relating to the Participant's competition
with the Company after termination of employment. In that regard, if an Award
Agreement permits exercise of an Option following the death of the Participant,
the Award Agreement shall provide that such Option shall be exercisable to the
extent provided therein by any person that may be empowered to do so under the
Participant's will, or if the Participant shall fail to make a testamentary
disposition of the Option or shall have died intestate, by the Participant's
executor or other legal representative.
6.9 NONTRANSFERABILITY of OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under this Article 6 may be
sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, all ISOs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such
Participant.
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article 6
may be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a
Participant's Award Agreement, all NQSOs granted to a Participant
under this Article 6 shall be exercisable during his or her lifetime
only by such Participant.
6.10 NO RIGHTS. A Participant granted an Option shall have no rights as a
stockholder of the Company with respect to the Shares covered by such Option
except to the extent that Shares are issued to the Participant upon the due
exercise of the Option.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and provisions of the Plan, SARs
may be granted to Key Persons in such number, and upon such terms, and at any
time and from time to time as shall be determined by the Committee. The
Committee may grant Freestanding SARs, Tandem SARs or any combination of these
forms of SARs.
The Committee shall have complete discretion in determining the number of
Shares covered by SARs granted hereunder (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
provisions pertaining to such SARs.
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The number of Shares covered by a Freestanding SAR shall be counted against the
number of Shares available for grants of Awards under Section 4.1, but the
number of Shares covered by a Tandem SAR shall not be so counted.
The grant price of a Freestanding SAR shall equal the Fair Market Value of
a Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.
7.2 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of the Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than 100% of the
difference between the Option Price of the underlying ISO and the Fair Market
Value of the Shares subject to the underlying ISO at the time the Tandem SAR is
exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market
Value of the Shares subject to the ISO exceeds the Option Price of the ISO.
7.3 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and provisions the Committee, in its sole discretion, imposes
upon them.
7.4 SAR AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR and such other
provisions as the Committee shall determine.
7.5 TERM OF SARS. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed 10 years.
7.6 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the date
of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value or in some combination thereof; provided,
however, that from and after the date of a Change in Control, the exercise of an
SAR may be settled only in cash.
7.7 RULE 16b-3 REQUIREMENTS. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on exercise of an SAR (including
without limitation, the right of the Committee to limit the time of exercise to
specified periods) as may be required to satisfy the requirements of Section 16
(or any successor provision) of the Exchange Act.
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7.8 TERMINATION OF EMPLOYMENT. Each SAR Award Agreement shall set forth the
extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant's employment with the Company and its
Subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with the
Participant, need not be uniform among all SARs issued pursuant to the Plan and
may reflect distinctions based on the reasons for termination of employment. In
that regard, if an Award Agreement permits exercise of an SAR following the
death of the Participant, the Award Agreement shall provide that such SAR shall
be exercisable to the extent provided therein by any person that may be
empowered to do so under the Participant's will, or if the Participant shall
fail to make a testamentary disposition of the SAR or shall have died intestate,
by the Participant's executor or other legal representative.
7.9 NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under this Article 7 may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.
7.10 NO RIGHTS. A Participant granted an SAR shall have no rights as a
stockholder of the Company with respect to the Shares covered by such SAR except
to the extent that Shares are issued to the Participant upon the due exercise of
the SAR.
ARTICLE 8. RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, Restricted Stock may be granted to Key Persons in such number, and upon
such terms, and at any time and from time to time as shall be determined by the
Committee.
8.2 RESTRICTED STOCK AWARD AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period of
Restriction, the number of Shares of Restricted Stock granted and such other
provisions as the Committee shall determine.
8.3 TRANSFERABILITY. Except as provided in this Article 8, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Agreement. All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be available during his or her
lifetime only to such Participant.
8.4 OTHER RESTRICTIONS. The Committee may impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, and/or individual), time-based
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restrictions on vesting following the attainment of the performance goals and/or
restrictions under applicable Federal or state securities laws.
The Company shall retain the certificates representing Shares of Restricted
Stock in the Company's possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied.
Except as otherwise provided in this Article 8 or in the applicable Award
Agreement, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the Participant after
the last day of the Period of Restriction.
8.5 VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
8.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate.
In the event that any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange Act, such dividend
shall be subject to a vesting period equal to the remaining vesting period of
the Shares of Restricted Stock with respect to which the dividend is paid.
8.7 TERMINATION OF EMPLOYMENT. Each Restricted Stock Award Agreement shall
set forth the extent to which the Participant shall have the right to receive
unvested Restricted Shares following termination of the Participant's employment
with the Company and its Subsidiaries. Such provisions shall be determined in
the sole discretion of the Committee, shall be included in the Award Agreement
entered into with Participants, need not be uniform among all Shares of
Restricted Stock issued pursuant to the Plan and may reflect distinctions based
on the reasons for termination of employment; provided, however, that except in
cases of terminations resulting from a Change in Control and terminations by
reason of death or Disability, payment of an Award of Restricted Stock which is
intended to qualify for the Performance-Based Exception may not occur before
attainment of the related performance goal.
ARTICLE 9. PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE SHARES. Subject to the terms and provisions of the
Plan, Performance Shares may be granted to eligible Key Persons in such amount
and upon such terms, and at any time and from time to time as shall be
determined by the Committee. The number and/or vesting of Performance Shares
granted, in the Committee's discretion, shall be contingent upon the degree of
attainment of specified performance goals or other conditions over a specified
period (the "Performance Period"). The terms and provisions of an Award of
Performance Shares shall be evidenced by an appropriate Award Agreement.
9.2 VALUE OF PERFORMANCE SHARES. The value of a Performance Share at any
time shall equal the Fair Market Value of a Share at such time.
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9.3 FORM AND TIMING OF PAYMENT OF PERFORMANCE SHARES. During the course of
a Performance Period, the Committee shall determine the number of Performance
Shares as to which the Participant has earned a right to be paid pursuant to the
terms of the applicable Award Agreement. The Committee shall pay any earned
Performance Shares as soon as practicable after they are earned in the form of
cash, Shares or a combination thereof (as determined by the Committee) having an
aggregate Fair Market Value equal to the value of the earned Performance Shares
as of the date they are earned. Any Shares used to pay out earned Performance
Shares may be granted subject to any restrictions deemed appropriate by the
Committee. In addition, the Committee, in its discretion, may cancel any earned
Performance Shares and grant Stock Options to the Participant which the
Committee determines to be of equivalent value based on a conversion formula
stated in the Performance Shares Award Agreement.
The Committee, in its discretion, may also grant dividend equivalents
rights with respect to earned but unpaid Performance Shares as evidenced by the
applicable Award Agreement. Performance Shares shall not have any voting rights.
9.4 TERMINATION OF EMPLOYMENT. Each Performance Share Award Agreement shall
set forth the extent to which the Participant shall have the right to receive
unearned Performance Shares following termination of the Participant's
employment with the Company and its Subsidiaries. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with the Participant, need not be uniform among all
Performance Shares awarded pursuant to the Plan and may reflect distinctions
based on the reasons of termination of employment; provided, however, that
except in cases of terminations resulting from a Change in Control and
terminations by reason of death or Disability, payment of an Award of
Performance Shares which is intended to qualify for the Performance-Based
Exception may not occur before attainment of the related performance goal.
9.5 NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Performance Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant.
ARTICLE 10. PERFORMANCE MEASURES
The performance measure(s) to be used for purposes of Awards (other than
Options) to Named Executive Officers which are designed to qualify for the
Performance-Based Exception shall be chosen from among the following
alternatives:
(a) Earnings Per Share;
(b) Net Income;
(c) Net Sales; or
(d) Total Stockholder Return.
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In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining stockholder approval of such changes, the Committee shall have the
discretion to make such changes without obtaining stockholder approval.
ARTICLE 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 12. DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option or SAR, the lapse or
waiver of restrictions with respect to Restricted Stock or the satisfaction of
any requirements or goals with respect to Performance Shares. If any such
deferral election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.
ARTICLE 13. RIGHTS OF KEY PERSONS
13.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company or Subsidiary. For purposes of the Plan, a transfer of a Participant's
employment between the Company and a Subsidiary, or between Subsidiaries, shall
not be deemed to be a termination of employment.
13.2 PARTICIPATION. No Key Person shall have the right to be selected to
receive an Award under the Plan or, having been so selected, to be selected to
receive a future Award.
ARTICLE 14. CHANGE IN CONTROL
14.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable throughout
their entire term;
(b) Any restriction periods and restrictions imposed on shares of
Restricted Stock shall lapse; and
(c) The target payout opportunities attainable under all outstanding
Awards of Restricted Stock and Performance Shares shall be deemed to
have been fully earned for the entire Performance Period(s) as of the
effective date of the Change
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in Control, and the vesting of all Awards shall be accelerated as of
the effective date of the Change in Control.
14.2 LIMITATION ON CHANGE-IN-CONTROL BENEFITS. (a) It is the intention of
the Company and the Participants to reduce the amounts payable or distributable
to a Participant hereunder if the aggregate Net After Tax Receipts (as defined
below) to the Participant would thereby be increased, as a result of the
application of the excise tax provisions of Section 4999 of the Code.
Accordingly, anything in the Plan to the contrary notwithstanding, in the event
that the independent accountants regularly employed by the Company immediately
prior to any "change" described below (the "Accounting Firm") shall determine
that receipt of all Payments (as defined below) would subject the Participant to
tax under Section 4999 of the Code, it shall determine whether some amount of
Payments would meet the definition of a "Reduced Amount," (as defined below). If
the Accounting Firm determines that there is a Reduced Amount, the aggregate
Payments shall be reduced to such Reduced Amount in accordance with the
provisions of Section 14.2(b) below.
For purposes of this Section 14.2(a):
(i) A "Payment" shall mean any payment or distribution in the nature
of compensation to or for the benefit of a Participant who is a
"disqualified individual" within the meaning of Section 280G(c)
of the Code and which is contingent on a "change" described in
Section 280G(b)(2)(A)(i) of the Code with respect to the Company,
whether paid or payable pursuant to the Plan or otherwise;
(ii) "Plan Payment" shall mean a Payment paid or payable pursuant to
the Plan (disregarding this Section 14.2);
(iii) "Net After Tax Receipt" shall mean the Present Value of a
Payment, net of all taxes imposed on the Participant with respect
thereto under Sections 1 and 4999 of the Code, determined by
applying the highest marginal rate under Section 1 of the Code
which applied to the Participant's Federal taxable income for the
immediately preceding taxable year;
(iv) "Present Value" shall mean such value determined in accordance
with Section 280G(d)(4) of the Code; and
(v) "Reduced Amount" shall mean the smallest aggregate amount of
Payments which (A) is less than the sum of all Payments and (B)
results in aggregate Net After Tax Receipts which are equal to or
greater than the Net After Tax Receipts which would result if all
Payments were paid to or for the benefit of the Participant.
(b) If the Accounting Firm determines that aggregate Payments should be
reduced to the Reduced Amount, the Committee shall promptly give the Participant
notice to that effect and a copy of the detailed calculation thereof, and the
Participant may then elect, in the Participant's sole discretion, which and how
much of the Payments, including without limitation Plan Payments, shall be
eliminated or reduced (as long as after such election the Present Value of the
aggregate Payments is equal to the Reduced Amount), and shall advise the
Committee in writing of such election within 10 days of the Participant's
receipt of notice. If no such election is made by the Participant within such 10
day period, the
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Committee may elect which of the Payments, including without limitation Plan
Payments, shall be eliminated or reduced (as long as after such election the
Present Value of the aggregate Payments is equal to the Reduced Amount) and
shall notify the Participant promptly of such election. All determinations made
by the Accounting Firm under this Section 14.2 shall be binding upon the Company
and the Participant and shall be made within 60 days immediately following the
event constituting the "change" referred to above. As promptly as practicable
following such determination, the Company shall pay to or distribute for the
benefit of the Participant such Payments as are then due to the Participant
under the Plan.
(c) At the time of the initial determination by the Accounting Firm
hereunder, it is possible that amounts will have been paid or distributed by the
Company to or for the benefit of the Participant pursuant to the Plan which
should not have been so paid or distributed ("Overpayment") or that additional
amounts which will have not been paid or distributed by the Company to or for
the benefit of the Participant pursuant to the Plan could have been so paid or
distributed ("Underpayment"), in each case, consistent with the calculation of
the Reduced Amount hereunder. In the event that the Accounting Firm, based
either upon the assertion of a deficiency by the Internal Revenue Service
against the Company or the Participant which the Accounting Firm believes has a
high probability of success or controlling precedent or other substantial
authority, determines that an Overpayment has been made, any such Overpayment
paid or distributed by the Company to or for the benefit of the Participant
shall be treated for all purposes as a loan ab initio to the Participant which
the Participant shall repay to the Company together with interest at the
applicable Federal rate provided for in Section 7872(f)(2) of the Code;
provided, however, that no such loan shall be deemed to have been made and no
amount shall be payable by the Participant to the Company if and to the extent
such deemed loan and payment would not either reduce the amount on which the
Participant is subject to tax under Section 1 and Section 4999 of the Code or
generate a refund of such taxes.
In the event that the Accounting Firm, based upon controlling precedent or
other substantial authority, determines that an Underpayment has occurred, any
such Underpayment shall be promptly paid by the Company to or for the benefit of
the Participant together with interest at the applicable Federal rate provided
for in Section 7872(f)(2) of the Code.
14.3 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of the Plan or any Award
Agreement provision, the provisions of this Article 14 may not be terminated,
amended or modified on or after the date of a Change in Control to affect
adversely any Award theretofore granted under the Plan without the prior written
consent of the Participant with respect to said Participant's outstanding
Awards; provided, however, the Board of Directors, upon recommendation of the
Committee, may terminate, amend or modify this Article 14 at any time and from
time to prior to the date of a Change in Control.
ARTICLE 15. AWARDS TO NON-OFFICER DIRECTORS
15.1 AWARDS UNDER PRIOR PLAN. Each non-officer Director on July 15, 1992
was granted an option under the Glenayre Technologies, Inc. Long-Term Incentive
Plan (the "Prior Plan") to purchase Common Stock on the later of October 30,
1992 or the date such Director completed three years of service on the Board.
Each non-officer Director elected to the Board for the first time after July 15,
1992 was granted an option under the
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Prior Plan to purchase Common Stock on the third anniversary of the Director's
service on the Board. Thereafter, each non-officer Director was awarded an
additional option under the Prior Plan to purchase Common Stock on the third
anniversary of the initial option award.
15.2 AWARDS UNDER THE PLAN. (a) Between May 22, 1996 (the date the Plan was
approved by the Company's stockholders) and April 17, 1997, the provisions of
this Section 15.2(a) applied to the grant of Nonqualified Stock Options to
non-officer Directors. Each non-officer Director, who was awarded an option
under the Prior Plan to purchase Common Stock as described in Section 15.1 shall
be granted a Nonqualified Stock Option to purchase 18,000 shares of Common Stock
upon each third anniversary of the date on which such option was granted under
the Prior Plan, if he or she is then a non-officer Director. Each non-officer
Director who was not awarded an option under the Prior Plan shall be granted a
Nonqualified Stock Option to purchase 18,000 shares of Common Stock upon the
date such non-officer Director completes 3 years of service as a non-officer
Director and upon each third anniversary date thereafter, if he or she is then a
non-officer Director.
(b) On and after April 18, 1997, the following provisions of this Section
15.2(b) shall apply to the grant of Nonqualified Stock Options to non-officer
Directors in lieu of the grant of Nonqualified Stock Options pursuant to Section
15.2(a) hereof:
(1) Each non-officer Director, who is first elected a Director on or
after April 18, 1997, shall be granted a Nonqualified Stock Option to
purchase 30,000 shares of Common Stock on the date of his or her
election as such and upon each third anniversary date thereafter, if he
or she is then a non-officer Director.
(2) Each non-officer Director, who first becomes a non-officer
Director on or after April 18, 1997 and who was an officer Director
immediately prior to becoming a non-officer Director, shall be granted
a Nonqualified Stock Option to purchase 30,000 shares of Common Stock
on the date he or she first becomes a non-officer Director and upon
each third anniversary date thereafter, if he or she is then a
non-officer Director.
(3) Each non-officer Director, who is a non-officer Director on April
18, 1997 and who was not granted a Nonqualified Stock Option in 1997
pursuant to Section 15.2(b)(1) or (2) above, shall be granted a
Nonqualified Stock Option to purchase 30,000 shares of Common Stock on
April 18, 1997 and upon each third anniversary date thereafter, if he
or she is then a non-officer Director.
(c) For purposes of this Article 15, a "non-officer Director" shall mean a
Director of the Company who is not performing services as an employee of the
Company or a Subsidiary regardless of whether such Director may hold an office
in the Company or a Subsidiary such as Chairman of the Board or Vice Chairman of
the Board.
(d) Each Option granted under this Article 15 shall be evidenced by an
Award Agreement.
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15.3 OPTION PRICE. The Option Price for each Option granted under this
Article 15 shall be equal to the Fair Market Value of a Share on the date the
Option is granted.
15.4 EXERCISE AND DURATION OF OPTION. Options granted under this Article 15
prior to April 18, 1997 shall be immediately exercisable. Options granted under
this Article 15 on or after April 18, 1997 shall be vested and immediately
exercisable as to one-third of the shares; an additional one-third of the shares
shall become vested and exercisable on the first anniversary of the date of
grant and the balance shall become vested and exercisable on the second
anniversary of the date of grant. A non-officer Director shall forfeit the
portion of any Option granted under this Article 15 on or after April 18, 1997
that has not become vested and exercisable prior to the date such non-officer
Director's service on the Board terminates. Vested and exercisable Options shall
remain exercisable for 10 years from the date of grant, whether or not the
Director's service on the Board continues during such period.
15.5 PAYMENTS. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for
the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares which are
tendered to satisfy the Option Price must have been held by the Director for at
least six months prior to their tender), or (c) by a combination of (a) and (b).
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Director, in the Director's
name, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).
15.6 NONTRANSFERABILITY OF OPTIONS. No Options granted under this Article
15 may be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, Options granted to a Director under this Article 15 shall be
exercisable during his or her lifetime only by such Director.
15.7 NO RIGHTS. A Director granted an Option under this Article 15 shall
have no rights as a stockholder of the Company with respect to the Shares
covered by such Option except to the extent that shares are issued to the
Director upon the due exercise of the Option.
15.8 LIMITATION ON AWARDS. Notwithstanding anything to the contrary herein,
(i) no Awards shall be made pursuant to this Article 15 to a Director who is an
employee of the Company or any Subsidiary; (ii) no awards shall be made pursuant
to this Article 15 following the suspension or termination of the Plan pursuant
to Article 16; and (iii) no awards shall be made pursuant to this Article 15
unless shares of Common Stock are available therefor under Section 4.1.
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ARTICLE 16. AMENDMENT, MODIFICATION AND TERMINATION
16.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part; provided, however, that no amendment which requires stockholder
approval in order for the Plan to continue to comply with Rule 16b-3 under the
Exchange Act, including any successor to such Rule, shall be effective unless
such amendment shall be approved by the requisite vote of stockholders of the
Company entitled to vote thereon.
The Committee shall not have the authority to cancel outstanding Awards and
issue substitute Awards in replacement thereof.
In no event shall any issued and outstanding Option be repriced to a lower
Option Price at any time during the term of such Option, without the prior
affirmative vote of a majority of shares of stock of the Company present at a
stockholders meeting in person or by proxy and entitled to vote thereon. Any
amendment or repeal of this provision shall require the affirmative vote of a
majority of shares of stock of the Company present at a stockholders meeting in
person or by proxy and entitled to vote thereon.
16.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.
16.3 ACCELERATION OF AWARD VESTING; WAIVER OF RESTRICTIONS. Notwithstanding
any provision of the Plan or any Award Agreement provision to the contrary, the
Committee, in its sole and exclusive discretion, shall have the power at any
time to (i) accelerate the vesting of any Award granted under the Plan,
including without limitation, acceleration to such a date that would result in
said Awards becoming immediately vested or (ii) waive any restrictions of any
Award granted under the Plan.
ARTICLE 17. WITHHOLDING
17.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of the Plan.
17.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date as of which the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
ARTICLE 18. INDEMNIFICATION
Each person who is or shall have been a member of the Committee or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability
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or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit or proceeding to which
he or she may be a party or in which he or she may be involved by reason of any
action taken or failure to act under the Plan and against and from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such action, suit,
or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a matter of law or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
ARTICLE 19. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 20. LEGAL CONSTRUCTION
20.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
20.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
20.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
20.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under the Plan are intended to comply with all applicable conditions or Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
20.5 GOVERNING LAW. To the extent not preempted by Federal law, the Plan,
and all Award Agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of North Carolina.
This document incorporates the Plan and subsequent amendments adopted on January
20, 1997, May 21, 1998, December 18, 1998, May 25, 1999 and May 11, 2000.
19
Exhibit 5
KENNEDY COVINGTON LOBDELL & HICKMAN, L.L.P.
ATTORNEYS AT LAW
Bank of America Corporate Center
100 North Tryon Street
Suite 4200
Charlotte, North Carolina 28202-4006
Telephone 704/331-7400 Other Offices:
Facsimile 704/331-7598 Raleigh, North Carolina
Rock Hill, South Carolina
May 19, 2000
Glenayre Technologies, Inc.
5935 Carnegie Boulevard, Suite 300
Charlotte, NC 28209
Gentlemen:
You have requested our opinion in connection with the registration
under the Securities Act of 1933, as amended, of 2,500,000 shares of the $.02
par value Common Stock (the Common Stock) of Glenayre Technologies, Inc. (the
Company), a Delaware corporation, by the Registration Statement on Form S-8 (the
Registration Statement), to be filed by you with the Securities and Exchange
Commission in connection with the amendment to the Glenayre 1996 Incentive Stock
Plan, as amended (the Plan), to increase by 2,500,000 the number of shares
available for issuance thereunder.
We have made such investigations of law, examined original copies,
certified or otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other instruments, and
received such statements from officers and representatives of the Company, as we
have deemed necessary for purposes of this opinion.
Based upon the foregoing, we are of the opinion that the 2,500,000
shares of the Common Stock covered by the Registration Statement have been duly
and validly authorized and will be validly issued, fully paid and nonassessable
when issued in accordance with the Plan and receipt by the Company of the
consideration therefor of not less than the par value of the Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/KENNEDY COVINGTON LOBDELL & HICKMAN, L.L.P.
KENNEDY COVINGTON LOBDELL & HICKMAN, L.L.P.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITOR
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the registration of 2,500,000 shares of Common Stock
under the Glenayre 1996 Incentive Stock Plan of our report dated February 7,
2000 with respect to the consolidated financial statements and schedules of
Glenayre Technologies, Inc. included in its Annual Report (Form 10-K) for the
year ended December 31, 1999, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Charlotte, North Carolina
May 19, 2000
Exhibit 23.3
May 19, 2000
To the Board of Directors and Stockholders of
Glenayre Technologies, Inc.
Charlotte, North Carolina
We are aware of the incorporation by reference in the Registration Statement on
Form S-8 of Glenayre Technologies, Inc. for the registration of 2,500,000 shares
of its Common Stock under the Glenayre 1996 Incentive Stock Plan of our report
dated April 14, 2000 relating to the unaudited condensed consolidated interim
financial statements of Glenayre Technologies, Inc. that are included in its
Form 10-Q for the quarter ended March 31, 2000.
Very truly yours,
/s/ Ernst & Young, LLP
Ernst & Young, LLP
