As filed with the Securities and Exchange Commission on December 5, 1997.
Registration No. 333-___________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------------------
RECOVERY ENGINEERING, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1557115
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
9300 NORTH 75TH AVENUE, MINNEAPOLIS, MINNESOTA 55428
(Address of principal executive offices, including zip code)
RECOVERY ENGINEERING, INC. 1994 STOCK OPTION AND INCENTIVE PLAN
(Full title of the plan)
Copy to:
Charles F. Karpinske Eric O. Madson, Esq.
Chief Financial Officer Robins, Kaplan, Miller & Ciresi L.L.P.
Recovery Engineering, Inc. 2800 LaSalle Plaza, 800 LaSalle Avenue
9300 North 75th Avenue Minneapolis, Minnesota 55402
Minneapolis, Minnesota 55428 (612) 349-8500
(612) 315-5500
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
CALCULATION OF REGISTRATION FEE
================================================================================
TITLE OF PROPOSED PROPOSED
SECURITIES AMOUNT MAXIMUM MAXIMUM
TO BE TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED(1) REGISTERED(2) PER SHARE(3) OFFERING PRICE(3) REGISTRATION FEE
- --------------------------------------------------------------------------------
Common Stock, 500,000 shares $26.44 $13,220,000 $3,900.00
$.01 par value
- --------------------------------------------------------------------------------
(1) Includes Common Stock Purchase Rights which currently are not separable from
the common stock and are not exercisable.
(2) Pursuant to Rule 457(c), the per share price is estimated, solely for the
purpose of determining the registration fee, based upon the average of the
high and low prices for such common stock on December 1, 1997 as reported on
The Nasdaq National Market.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Recovery Engineering, Inc.
(the "Company") (File No. 0-21232) with the Securities and Exchange Commission
(the "Commission") pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") and are incorporated by reference herein:
a. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
b. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997, and September 30, 1997;
c. The description of the Company's capital stock contained in the
Company's Registration Statement on Form 8-A (File No. 0-21232), as
amended on December 4, 1997, filed with the Commission; and
d. The description of the Company's Common Stock Purchase Rights contained
in the Company's Registration Statement on Form 8-A (File No. 0-21232),
filed with the Commission.
All documents filed with the Commission by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all such securities then remaining to be sold shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof, except
as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
The common stock, par value $.01 per share (the "Common Stock"), of the
Company offered pursuant to this Registration Statement and the related Common
Stock Purchase Rights are registered under Section 12(g) of the Exchange Act.
The description of the Company's capital stock and Common Stock Purchase Rights
are incorporated by reference pursuant to Item 3 above.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The financial statements and financial statement schedule of Recovery
Engineering, Inc. included or incorporated by reference in Recovery Engineering,
Inc.'s Annual Report (Form 10-K) for the year ended December 31, 1996, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon incorporated by reference therein and incorporated herein by reference.
Such financial statements and schedule are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Company's Bylaws provides that the Company shall
indemnify the directors and officers to such extent as permitted by Minnesota
Statutes, Section 302A.521, as now enacted or hereafter amended.
<PAGE>
In addition, as allowed by Minnesota Statutes, Section 302A.251,
Article 8 of the Company's Articles of Incorporation provides that a director of
the Company shall not be personally liable to the Company or its stockholders
for monetary damages for certain types of breaches of fiduciary duty as a
director.
Further, the Company has purchased director and officer liability
insurance that insures directors and officers against certain liabilities in
connection with the performance of their duties as directors and officers,
including liabilities under the Securities Act of 1933, as amended, and provides
for payment to the Company of costs incurred by it in indemnifying its directors
and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as a part of this Registration
Statement on Form S-8:
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
5.1 Opinion of Robins, Kaplan, Miller & Ciresi L.L.P. (filed electronically
herewith)
23.1 Consent of Ernst & Young LLP (filed electronically herewith)
23.2 Consent of Robins, Kaplan, Miller & Ciresi L.L.P. (included in Exhibit
5.1)
24.1 Powers of Attorney (filed electronically herewith)
99.1 Recovery Engineering, Inc. 1994 Stock Option and Incentive Plan, as
amended (filed electronically herewith)
ITEM 9. UNDERTAKINGS.
(a) RULE 415 OFFERING.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
<PAGE>
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(h) STATEMENT REQUIRED BY ITEM 512(h) IN CONNECTION WITH FILING OF
REGISTRATION STATEMENT ON FORM S-8.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
THE REGISTRANT: Pursuant to the requirements of the Securities Act of
1933, the Registrant 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 Minneapolis, State of Minnesota on December 3,
1997.
RECOVERY ENGINEERING, INC.
By /s/ BRIAN F. SULLIVAN
----------------------------------------
Brian F. Sullivan
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ BRIAN F. SULLIVAN President, Chief Executive Officer December 3, 1997
- ------------------------- and Director (Principal Executive
Brian F. Sullivan Officer)
/s/ CHARLES F. KARPINSKE Chief Financial Officer (Principal December 3, 1997
- ------------------------- Financial Officer and Principal
Charles F. Karpinske Accounting Officer)
* Director December 3, 1997
- -------------------------
John E. Gherty
* Director December 3, 1997
- -------------------------
Sanjay H. Patel
* Director December 3, 1997
- -------------------------
William D. Thompson
* Director December 3, 1997
- -------------------------
William F. Wanner, Jr.
* Director December 3, 1997
- -------------------------
Ronald W. Weber
* Director December 3, 1997
- -------------------------
Richard J. Zeckhauser
* By /s/ CHARLES F. KARPINSKE
----------------------------------------
Charles F. Karpinske, Attorney-in-Fact
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION METHOD OF FILING
<C> <S> <S>
5.1 Opinion of Robins, Kaplan, Miller & Ciresi L.L.P. Filed electronically herewith
23.1 Consent of Ernst & Young LLP Filed electronically herewith
23.2 Consent of Robins, Kaplan, Miller & Ciresi L.L.P. Included in Exhibit 5.1
24.1 Powers of Attorney Filed electronically herewith
99.1 Recovery Engineering, Inc. 1994 Stock Option and Filed electronically herewith
Incentive Plan, as amended
</TABLE>
EXHIBIT 5.1
ROBINS, KAPLAN, MILLER & CIRESI L.L.P.
2800 LaSalle Plaza, 800 LaSalle Avenue
Minneapolis, Minnesota 55402
December 3, 1997
Recovery Engineering, Inc.
9300 North 75th Avenue
Minneapolis, MN 55428
Re: Registration Statement on Form S-8
1994 Stock Option and Incentive Plan, as amended
Registration of 500,000 shares of Common Stock
Ladies and Gentlemen:
We have acted as legal counsel for Recovery Engineering, Inc. (the
"Company") in connection with the preparation of a Registration Statement on
Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission, and the Prospectus to be used in conjunction with the
Registration Statement (the "Prospectus"), relating to the registration under
the Securities Act of 1933, as amended, of 500,000 shares (the "Shares") of
common stock, $.01 par value (the "Common Stock"), to be issued by the Company
pursuant to the Recovery Engineering, Inc. 1994 Stock Option and Incentive Plan,
as amended, (the "Plan") in the manner set forth in the Registration Statement
and the Prospectus.
In connection therewith, we have examined (a) the Articles of
Incorporation and Bylaws of the Company, both as amended to date; (b) the
corporate proceedings of the Company relative to its organization and to the
authorization and issuance of the Shares; and (c) the Registration Statement and
the Prospectus. In addition to such examination, we have reviewed such other
proceedings, documents and records and have ascertained or verified such
additional facts as we deem necessary or appropriate for purposes of this
opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company has been legally incorporated and is validly existing under
the laws of the State of Minnesota.
2. All necessary corporate action has been taken by the Company to
authorize the issuance of the Shares.
3. The Shares are validly authorized by the Company's Articles of
Incorporation, as amended, and when issued and paid for as contemplated
in the Registration Statement and Prospectus, will be validly issued,
fully paid, and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus.
Very truly yours,
ROBINS, KAPLAN, MILLER & CIRESI L.L.P.
By /s/ Eric O. Madson
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-8) pertaining to the Recovery Engineering,
Inc. 1994 Stock Option and Incentive Plan and to the incorporation by reference
therein of our reports dated January 31, 1997, with respect to the financial
statements of Recovery Engineering, Inc. incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1996 and the related
financial statement schedule included therein, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 3, 1997
EXHIBIT 24.1
POWER OF ATTORNEY
I am a director or officer of Recovery Engineering, Inc. and do hereby
constitute and appoint Brian F. Sullivan and Charles F. Karpinske, and each of
them singly, my true and lawful attorneys and agents, to do any and all things
and acts in my name in the capacities indicated below and to execute any and all
instruments for me and in my name in the capacities indicated below which said
Brian F. Sullivan or Charles F. Karpinske, or either of them, may deem necessary
or advisable to enable Recovery Engineering, Inc. to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with the Registration
Statement on Form S-8 relating to the offering of Common Stock, including
specifically, but not limited to, power and authority to sign for me in my name
in the capacities indicated below the Registration Statement and any and all
amendments (including post-effective amendments) thereto; and I hereby ratify
and confirm all that Brian F. Sullivan and Charles F. Karpinske, or either of
them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney on the date
set forth below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ BRIAN F. SULLIVAN President, Chief Executive Officer November 5, 1997
- ------------------------- and Director (Principal Executive
Brian F. Sullivan Officer)
/s/ CHARLES F. KARPINSKE Chief Financial Officer (Principal November 5, 1997
- ------------------------- Financial Officer and Principal
Charles F. Karpinske Accounting Officer)
/s/ JOHN E. GHERTY Director November 9, 1997
- -------------------------
John E. Gherty
/s/ SANJAY H. PATEL Director November 6, 1997
- -------------------------
Sanjay H. Patel
/s/ WILLIAM D. THOMPSON Director November 13, 1997
- -------------------------
William D. Thompson
/s/ WILLIAM F. WANNER, JR. Director November 5, 1997
- -------------------------
William F. Wanner, Jr.
/s/ RONALD W. WEBER Director November 5, 1997
- -------------------------
Ronald W. Weber
/s/ RICHARD J. ZECKHAUSER Director November 19, 1997
- -------------------------
Richard J. Zeckhauser
</TABLE>
EXHIBIT 99.1
RECOVERY ENGINEERING, INC.
1994 STOCK OPTION AND INCENTIVE PLAN
AS AMENDED
<PAGE>
RECOVERY ENGINEERING, INC.
1994 STOCK OPTION AND INCENTIVE PLAN
The purpose of the Recovery Engineering, Inc. 1994 Stock Option and
Incentive Plan (the "Plan") is to promote the growth and profitability of
Recovery Engineering, Inc. (the "Company") and its Affiliates by providing its
employees, consultants and other service providers with an incentive to achieve
long-term corporate objectives, to attract and retain persons of outstanding
competence, and to provide such persons with an equity interest in the Company.
1. STOCK SUBJECT TO PLAN. An aggregate of 350,000 shares (the "Shares")
of the Common Stock, par value $.0l per share ("Common Stock"), of the Company
may be subject to awards granted under the Plan. The number of shares authorized
for issuance under the Plan may be increased from time to time by approval of
the Board of Directors and, if required pursuant to Rule 16b-3 under the
Securities Exchange Act of 1934 or the applicable rules of any securities
exchange or the NASD, the shareholders of the Company. Such Shares may be
authorized but unissued Common Stock or authorized and issued Common Stock that
has been or may be acquired by the Company. Shares that are subject to an award
which expires or is terminated unexercised, or which are reacquired by the
Company upon the forfeiture of restricted Shares, shall again be available for
issuance under the Plan.
2. ADMINISTRATION.
a. COMMITTEE. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board of Directors of
the Company (the "Board"). The Committee shall be comprised of the
entire Board or, if the Board so determines, of two or more members of
the Board.
b. POWERS AND DUTIES. The Committee shall have the authority
to make rules and regulations governing the administration of the Plan;
to select the eligible employees, consultants and other service
providers to whom awards shall be granted; to determine the type,
amount, size, and terms of awards; to determine the time when awards
shall be granted; to determine whether any restrictions shall be placed
on Shares purchased pursuant to any option or issued pursuant to any
award; and to make all other determinations necessary or advisable for
the administration of the Plan. The Committee's determinations need not
be uniform, and may be made by it selectively among persons who are
eligible to receive awards under the Plan, whether or not such persons
are similarly situated. All interpretations, decisions, or
determinations made by the Committee pursuant to the Plan shall be
final and conclusive.
3. ELIGIBILITY; PARTICIPANTS.
a. Any person who provides services to the Company or any of
its Affiliates as an employee, consultant or other service provider
shall be eligible to receive awards under the Plan. Eligible persons
may be selected to receive awards individually or by group or category
(for example, by pay grade) as the Committee may determine. The
selection of officers of the Company to receive awards under the Plan
and the terms of
<PAGE>
any award granted to such officers shall be approved by the Committee.
The Committee, in its sole discretion, may delegate to one or more
officers of the Company the authority to select persons who are not
officers to receive awards under the Plan and to establish the terms of
awards granted to such persons.
b. A person who has been granted an award under this Plan, or
under any predecessor plan, may be granted additional awards if the
Committee shall so determine. Except to the extent otherwise provided
in the agreement evidencing an award, the granting of an award under
this Plan shall not affect any outstanding award previously granted
under this Plan or under any other plan of the Company or any
Affiliate.
c. For purposes of this Plan, the term "Affiliate" shall mean
any "parent corporation" or "subsidiary corporation" of the Company, as
those terms are defined in Sections 424(e) and 424(f) of the Internal
Revenue Code of 1986, as amended.
4. AWARDS. The Committee may make awards to eligible persons in the
form of stock options which are intended to qualify as "Incentive Stock Options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, or stock options which are not intended to so qualify ("Non-qualified
Options"), or awards of restricted stock, or any combination thereof.
5. STOCK OPTIONS. A stock option granted pursuant to the Plan shall
entitle the optionee, upon exercise, to purchase Shares at a specified price
during a specified period. Options shall be subject to such terms and conditions
as the Committee shall from time to time approve; provided, that each option
shall be subject to the following requirements:
a. TYPE OF OPTION. Each option shall be identified in the
agreement pursuant to which it is granted as an Incentive Stock Option
or as a Non-qualified Option, as the case may be.
b. TERM. No option shall be exercisable more than 121 months
after the date on which it is granted.
c. PAYMENT. The purchase price of Shares subject to an option
shall be payable in full at the time the option is exercised. Payment
may be made in cash, in shares of Common Stock having an aggregate fair
market value on the date of exercise which is not less than the option
price, or by a combination of cash and such shares, as the Committee
may determine, and subject to such terms and conditions as the
Committee deems appropriate.
d. OPTIONS NOT TRANSFERABLE. Options shall not be transferable
except to the extent permitted by the agreement evidencing such option;
provided, that in no event shall any option be transferable by the
optionee, other than by will or the laws of descent and distribution.
Options shall be exercisable during an optionee's lifetime only by such
optionee. If, pursuant to the agreement evidencing any option, such
option remains exercisable after the optionee's death, it may be
exercised, to the extent permitted by such agreement, by the personal
representative of the optionee's estate or by any person
<PAGE>
who acquired the right to exercise such option by bequest, inheritance,
or otherwise by reason of the optionee's death.
e. INCENTIVE STOCK OPTIONS. If an option is an Incentive Stock
Option, it shall be subject to the following additional requirements:
i. Incentive Stock Options may be granted only to
persons who are employees of the Company or of an Affiliate.
ii. The purchase price of Shares that are subject to
an Incentive Stock Option shall not be less than 100% of the
fair market value of such Shares at the time the option is
granted, as determined in good faith by the Committee.
iii. The aggregate fair market value (determined at
the time the option is granted) of the Shares with respect to
which Incentive Stock Options are exercisable by the optionee
for the first time during any calendar year, under this Plan
or any other plan of the Company or any Affiliate, shall not
exceed $100,000.
iv. An Incentive Stock Option shall not be
exercisable more than ten years after the date on which it is
granted.
v. The purchase price of Shares that are subject to
an Incentive Stock Option granted to an employee who, at the
time such option is granted, owns 10% or more of the total
combined voting power of all classes of stock of the Company
or of any Affiliate shall not be less than 110% of the fair
market value of such Shares on the date such option is
granted, and such option may not be exercisable more than five
years after the date on which it is granted. For the purposes
of this subparagraph, the rules of Section 424(d) of the Code
shall apply in determining the stock ownership of any
employee.
Subject to the foregoing, options may be made exercisable in one or more
installments, upon the happening of certain events, upon the fulfillment of
certain conditions, or upon such other terms and conditions as the Committee
shall determine.
6. RESTRICTED STOCK. Restricted stock awards granted pursuant to the
Plan shall entitle the holder to receive Shares, subject to forfeiture if
specified conditions are not satisfied at the end of a specified period.
Restricted stock awards shall be subject to such terms and conditions as the
Committee shall from time to time approve; provided, that each award shall be
subject to the following requirements:
a. RESTRICTED PERIOD. The Committee shall establish a period
(the "Restricted Period") at the time an award is granted during which
the holder will not be permitted to sell, transfer, pledge, encumber,
or assign the Shares subject to the award. The Committee may provide
for the lapse of restrictions in installments, or upon the occurrence
of certain events, where deemed appropriate. Any attempt by a holder to
<PAGE>
dispose of restricted Shares in a manner contrary to the applicable
restrictions shall be void, and of no force and effect.
b. RIGHTS DURING RESTRICTED PERIOD. Except to the extent
otherwise provided in this paragraph 6 or under the terms of any
restricted stock agreement, during the Restricted Period the holder of
restricted Shares shall have all of the rights of a shareholder in the
Company with respect to such Shares, including the right to vote the
Shares and to receive dividends and other distributions with respect to
the Shares; provided, that all stock dividends, stock rights, and stock
issued upon split-ups or reclassifications of Shares shall be subject
to the same restrictions as the Shares with respect to which such stock
dividends, rights, or additional stock are issued, and may be held in
custody as provided below in this paragraph 6 until the restrictions
thereon shall have lapsed.
c. FORFEITURES. Except to the extent otherwise provided in the
restricted stock agreement, all Shares then subject to any restriction
shall be forfeited to the Company without further obligation of the
Company to the holder thereof, and all rights of the holder with
respect to such Shares shall terminate, if the holder shall cease to
provide services to the Company and its Affiliates as an employee,
consultant or other service provider, or if any condition established
by the Committee for the release of any restriction shall not have
occurred, prior to the expiration of the Restricted Period.
d. CUSTODY. The Committee may provide that the certificates
evidencing restricted Shares shall be held in custody by a bank or
other institution, or by the Company or any Affiliate, until the
restrictions thereon have lapsed, and may require that the holder of
any restricted Shares shall have delivered to the Company one or more
stock powers, endorsed in blank, relating to the restricted Shares as a
condition of receiving the award.
e. CERTIFICATES. A recipient of a restricted stock award shall
be issued a certificate or certificates evidencing the Shares subject
to such award. Such certificates shall be registered in the name of the
recipient, and may bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such award, which legend
shall be in substantially the following form:
"The transferability of this certificate and the shares
represented hereby are subject to the terms and conditions
(including forfeiture) of the Recovery Engineering, Inc. 1994
Stock Option and Incentive Plan and an Agreement entered into
between the registered owner and Recovery Engineering, Inc.
Copies of such Plan and Agreement are on file in the offices
of Recovery Engineering, Inc."
f. GIFTS, ETC. Notwithstanding any other provision of this
paragraph 6, the Committee may permit a gift of restricted stock to the
holder's spouse, child, stepchild, grandchild, or legal dependent, or
to a trust whose sole beneficiary or beneficiaries shall be the holder
and/or any one or more of such persons; provided, that the donee shall
have entered into an agreement with the Company pursuant to which it
agrees that the
<PAGE>
restricted stock shall be subject to the same restrictions in the hands
of such donee as it was in the hands of the donor.
7. AGREEMENTS. Each option or award granted pursuant to the Plan shall
be evidenced by an agreement setting forth the terms and conditions upon which
it is granted. Multiple options or awards may be evidenced by a single
agreement. Subject to the limitations set forth in the Plan, the Committee may,
with the consent of the person to whom an award has been granted, amend any such
agreement to modify the terms or conditions governing the award evidenced
thereby.
8. ADJUSTMENTS. In the event of any change in the outstanding Shares of
Common Stock by reason of any stock dividend or split, recapitalization,
reclassification, combination, or exchange of Shares or other similar corporate
change, then if the Committee shall determine, in its sole discretion, that such
change necessarily or equitably requires an adjustment in the number of Shares
subject to an award, in the option price or value of an award, or in the maximum
number of Shares subject to this Plan, such adjustments shall be made by the
Committee and shall be conclusive and binding for all purposes of this Plan. No
adjustment shall be made in connection with the issuance by the Company of any
warrants, rights, or options to acquire additional Common Stock or of securities
convertible into Common Stock.
9. MERGER, CONSOLIDATION, REORGANIZATION, LIQUIDATION, ETC. Subject to
the provisions of the agreement evidencing any award, if the Company shall
become a party to any corporate merger, consolidation, major acquisition of
property for stock, reorganization, or liquidation, the Board of Directors of
the Company shall have the power to make any arrangement it deems advisable with
respect to outstanding awards and in the number of Shares subject to this Plan,
which shall be binding for all purposes of this Plan, including, but not limited
to, the substitution of new awards for any awards then outstanding, the
assumption of any such awards, and the termination of such awards.
10. EXPENSES OF PLAN. The expenses of administering this Plan shall be
borne by the Company and its Affiliates.
11. RELIANCE ON REPORTS. Each member of the Committee and each member
of the Board of Directors shall be fully justified in relying or acting in good
faith upon any report made by the independent public accountants of the Company
and its Affiliates and upon any other information furnished in connection with
this Plan by any person or persons other than himself. In no event shall any
person who is or shall have been a member of the Committee or of the Board of
Directors be liable for any determination made or other action taken or omitted
in reliance upon any such report or information, or for any action taken or
omitted, including the furnishing of information, in good faith.
12. RIGHTS AS SHAREHOLDER. Except to the extent otherwise specifically
provided hereon, no recipient of any award shall have any rights as a
shareholder with respect to Shares sold or issued pursuant to the Plan until
certificates for such Shares have been issued to such person.
<PAGE>
13. GENERAL RESTRICTIONS. Each award granted pursuant to the Plan shall
be subject to the requirement that if, in the opinion of the Committee, the
listing, registration, or qualification of any Shares related thereto upon any
securities exchange or under any state or federal law, the consent or approval
of any regulatory body, or an agreement by the recipient with respect to the
disposition of any such Shares, is necessary or desirable as a condition of the
issuance or sale of such Shares, such award shall not be consummated unless and
until such listing, registration, qualification, consent, approval, or agreement
is effected or obtained in form satisfactory to the Committee.
14. EMPLOYMENT RIGHTS. Nothing in this Plan, or in any agreement
entered into hereunder, shall confer upon any person the right to continue to
provide services to the Company or an Affiliate as an employee, consultant or
other service provider, or affect the right of the Company or Affiliate to
terminate such person's service at any time, with or without cause.
15. WITHHOLDING. If the Company proposes or is required to issue Shares
pursuant to the Plan, it may require the recipient to remit to it, or may
withhold from such award or from the recipient's other compensation, an amount,
in the form of cash or Shares, sufficient to satisfy any applicable federal,
state, or local tax withholding requirements prior to the delivery of any
certificates for such Shares.
16. AMENDMENTS. The Board of Directors of the Company may at any time,
and from time to time, amend the Plan in any respect, except that no amendment
that would:
a. materially increase the benefits accruing to participants
under the Plan;
b. increase the number of Shares available for issuance or
sale pursuant to the Plan (other than as permitted by paragraphs 8 and
9); or
c. materially modify the requirements as to eligibility for
participation in the Plan;
shall be made without the affirmative vote of shareholders holding at least a
majority of the voting stock of the Company represented in person or by proxy at
a duly held shareholders' meeting.
17. Immediate Acceleration of Awards. Notwithstanding any provision in
this Plan or in any award to the contrary, the restrictions on all shares of
restricted stock shall lapse immediately and all outstanding options will become
exercisable immediately if, subsequent to the Effective Date of this Plan, any
of the following events occur:
a. Any person or group of persons, other than the shareholders
of record of the Company as of the date of this Plan is adopted by the
Board, becomes the beneficial owner of 30% or more of any equity
security of the Company entitled to vote for the election of directors;
b. A change in the composition of the Board within any
consecutive two-year period such that the "Continuing Directors" cease
to constitute a majority of the board.
<PAGE>
For purposes of this event, the "Continuing Directors" shall mean those
members of the Board who either: (i) were directors at the beginning of
such two-year period, or (ii) were elected by, or on nominations or
recommendations of, a majority of the then-existing Board members; or
c. The shareholders of the Company approve an agreement to
merge or consolidate with or into another corporation or an agreement
to sell or otherwise dispose of all or substantially all of the
Company's assets (including a plan of liquidation).
For purposes of this paragraph 17, beneficial ownership by a person or
group of persons shall be determined in accordance with Regulation 13D (or any
similar successor regulation) promulgated by the Securities and Exchange
Commission pursuant to the 1934 Act. Beneficial ownership of more than 30% of an
equity security may be established by any reasonable method, but shall be
presumed conclusively to exist as to any person who files a Schedule 13D report
with the Securities and Exchange Commission reporting such ownership. If the
restrictions and forfeiture periods are eliminated by reason of subparagraph a.,
the limitations of this Plan shall not become applicable again should the person
cease to own 30% or more of any equity security of the Company.
A participant shall not be entitled to the immediate acceleration of an
award as provided in this paragraph 17 if such acceleration would, with respect
to the participant, constitute a "parachute payment" for purposes of Internal
Revenue Code Section 280G, or any successor provision. The participant shall
have the right to designate those awards which would be reduced or eliminated so
that the participant will not receive a "parachute payment."
Prior to the occurrence of one of the events described in subparagraph
a., b. or c. above, the participant shall have no rights under this paragraph
17, and the Board shall have the power and right, within its sole discretion, to
rescind, modify or amend this paragraph 17 without any consent of the
participant. In all other cases, and notwithstanding the authority granted to
the Board or the Committee, as the case may be, to exercise discretion in
interpreting, administering, amending or terminating this Plan, neither the
Board nor the Committee shall, following the occurrence of one of the events
described in subparagraph a., b. or c. above, have the power to exercise such
authority or otherwise take any action which is inconsistent with the provisions
of this paragraph 17.
18. SHAREHOLDER APPROVAL. The Plan shall be subject to approval by the
shareholders holding at least a majority of the voting stock of the Company
represented in person or by proxy and voting thereon at a duly held
shareholders' meeting, and any award granted under the Plan prior to the date of
such approval shall be contingent upon such approval.
19. EFFECTIVE DATE; DURATION. This Plan shall be effective as of
January 31, 1994, subject to shareholder approval of the Plan as described above
on or before January 31, 1995. No options or rights shall be granted under the
Plan after the earlier of (a) the date on which the Plan is terminated by the
Board of Directors of the Company; or (b) January 31, 2004. Options or rights
outstanding at the termination of the Plan may continue to be exercised in
accordance with their terms after such termination.
<PAGE>
FIRST AMENDMENT TO THE
RECOVERY ENGINEERING, INC.
1994 STOCK OPTION AND INCENTIVE PLAN
January 31, 1995
RECITALS:
A. The Recovery Engineering, Inc. 1994 Stock Option and Incentive Plan
(the "Plan") was adopted by the Board of Directors of Recovery
Engineering, Inc. (the "Company") on January 31, 1994, and was approved
by the shareholders of the Company on April 12, 1994. The Plan is now
in full force and effect.
B. The Company desires to amend the Plan to increase the number of shares
of common stock available for issuance under the Plan.
AMENDMENT:
THEREFORE, the Plan is hereby amended as follows:
1. The first sentence of paragraph 1 of the Plan is hereby amended to read
as follows:
"1. Stock Subject to Plan. An aggregate of 700,000 shares of
the Common Stock, par value $.01 per share, ("Common Stock") of the
Company may be subject to awards granted under the Plan."
2. The foregoing amendment shall be effective as of January 31, 1995, and
shall be subject to approval by the shareholders of the Company at its
next Annual or Special Meeting of shareholders.
<PAGE>
SECOND AMENDMENT TO THE
RECOVERY ENGINEERING, INC.
1994 STOCK OPTION AND INCENTIVE PLAN
January 28, 1997
RECITALS:
A. The Recovery Engineering, Inc. 1994 Stock Option and Incentive Plan
(the "Plan") was adopted by the Board of Directors of Recovery
Engineering, Inc. (the "Company") on January 31, 1994, and was approved
by the shareholders of the Company on April 12, 1994. The First
Amendment to the Plan, increasing the number of shares of common stock
available for issuance under the Plan from 350,000 shares to 700,000
shares, was adopted by the Board of Directors on January 31, 1995, and
was approved by the shareholders of the Company on April 25, 1995. The
Plan, as amended, is now in full force and effect.
B. The Company desires to amend the Plan to further increase the number of
shares of common stock available for issuance under the Plan.
AMENDMENT:
THEREFORE, the Plan is hereby amended as follows:
1. The first sentence of paragraph 1 of the Plan is hereby amended to read
as follows:
"1. Stock Subject to Plan. An aggregate of 800,000 shares of
the Common Stock, par value $.01 per share, ("Common Stock") of the
Company may be subject to awards granted under the Plan."
2. The foregoing amendment shall be effective as of January 28, 1997, and
shall be subject to approval by the shareholders of the Company at its
next Annual or Special Meeting of shareholders.
<PAGE>
THIRD AMENDMENT TO THE
RECOVERY ENGINEERING, INC.
1994 STOCK OPTION AND INCENTIVE PLAN
April 24, 1997
RECITALS:
A. The Recovery Engineering, Inc. 1994 Stock Option and Incentive Plan
(the "Plan") was adopted by the Board of Directors of Recovery
Engineering, Inc. (the "Company") on January 31, 1994, and was approved
by the shareholders of the Company on April 12, 1994. The First
Amendment to the Plan, increasing the number of shares of common stock
available for issuance under the Plan from 350,000 shares to 700,000
shares, was adopted by the Board of Directors on January 31, 1995, and
was approved by the shareholders of the Company on April 25, 1995. The
Second Amendment to the Plan, increasing the number of shares of common
stock available for issuance under the Plan from 700,000 shares to
800,000 shares, was adopted by the Board of Directors on January 28,
1997, and was approved by the shareholders of the Company on April 24,
1997. The Plan, as amended, is now in full force and effect.
B. The Company desires to amend the Plan to further increase the number of
shares of common stock available for issuance under the Plan.
AMENDMENT:
THEREFORE, the Plan is hereby amended as follows:
1. The first sentence of paragraph 1 of the Plan is hereby amended to read
as follows:
"1. Stock Subject to Plan. An aggregate of 850,000 shares of
the Common Stock, par value $.01 per share, ("Common Stock") of the
Company may be subject to awards granted under the Plan."
2. The foregoing amendment shall be effective as of April 24, 1997, and
shall be subject to approval by the shareholders of the Company at its
next Annual or Special Meeting of shareholders.
