SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
HARDING LAWSON ASSOCIATES GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 68-0132062
(State of Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
7655 Redwood Boulevard, Novato, California 94945
(Address of Principal Executive Offices)
Harding Lawson Associates Group, Inc. 1998 Stock Option Plan
Non-Qualified Stock Option Agreement
(Full Title of the Plan)
Gregory A. Thornton
Vice President and Chief Financial Officer
Harding Lawson Associates Group, Inc.
7655 Redwood Boulevard, Novato, California 94945
(Name and Address of Agent For Service)
(415) 892-0821
(Telephone Number, Including Area Code, of Agent For Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed
Class Of Maximum Maximum
Securities Amount Offering Aggregate Amount Of
To Be To Be Price Offering Registration
Registered Registered Per Unit Price Fee
<S> <C> <C> <C> <C>
Common Stock
1998 Stock Option Plan 500,000 $6.50 (1) $3,250,000 $903.50
Non-qualified Stock
Option Agreement 100,000 $10.00 $1,000,000 $278.00
(1) Estimated solely for the purpose of determining the registration fee,
computed in accordance with Rule 457(h) and Rule 457(c) on the basis of the
average of the reported high and low prices for the Common Stock on The
Nasdaq National Market on April 8, 1999.
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933 and the note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(a) Annual Report on Form 10-K for the fiscal year ended May 31, 1998 filed
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
(b) Quarterly Report on Form 10-Q for the quarter ended August 31, 1998;
(c) Quarterly Report on Form 10-Q for the quarter ended November 30, 1998;
(d) Quarterly Report on Form 10-Q for the quarter ended February 28, 2999;
(e) Current Report on Form 8-K dated October 2, 1998 regarding the
resignation of Donald L. Schreuder as Chief Executive Officer.
(f) Current Report on Form 8-K dated March 26, 1999 regarding the
appointment of Robert L. Costello, Jr. as Chief Executive Officer.
(g) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 10 filed on August 29, 1987 under Section 12 of
the Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act 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 in this Registration Statement, and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Name Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Delaware General Corporation Law provides for the indemnification of
officers and directors under certain conditions. The Restated Certificate of
Incorporation and Bylaws of the Registrant permit indemnification of directors
and officers to the maximum extent permitted by Delaware law. The Restated
Certificate of Incorporation contains a provision which eliminates the personal
liability of directors of the Registrant for monetary damages for certain
breaches of fiduciary duty, as permitted by Section 102(b)(7) of the Delaware
General Corporation Law. The Registrant has also entered into indemnification
agreements with its executive officers and directors by which the Registrant has
agreed to provide indemnification to them under certain circumstances. The
Registrant has in effect director and officer liability insurance policies
indemnifying the Registrant and the officers and directors of the Registrant and
officers and directors of the Registrant's subsidiaries within specific limits
for certain liabilities incurred by reason of their being or having been
directors or officers. The Registrant pays the entire premium for these
policies.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
EXHIBIT INDEX
Exhibit No. Exhibit Name
5 Opinion of Counsel; Howard Rice Nemerovski Canady Falk & Rabkin, a
professional corporation
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (See Exhibit 5)
24 Power of Attorney (see signature pages)
99.1 Harding Lawson Associates Group, Inc. 1998 Stock Option Plan
99.2 Non-qualified Stock Option Agreement Between the Registrant and
Robert L. Costello, Jr.
Item 9. Undertakings.
(a) 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 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.
(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.
(4) 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 13(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.
(5) 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
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 of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
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 Novato, State of California, on April 8, 1999.
HARDING LAWSON ASSOCIATES GROUP, INC.
By /s/ Gregory A. Thornton
Gregory A. Thornton
Vice President and Chief Financial Officer
Power of Attorney
Each person whose signature appears below on this Registration
Statement hereby constitutes and appoints Gregory A. Thornton and Patricia A.
England with full power to act without the other, his/her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him/her and in his/her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, grant unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying and confirming
that said attorneys-in-fact and agents or any of them, or their or his/her
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Robert L. Costello, Jr. President and Chief Executive Officer 4-8-99
Robert L. Costello, Jr. (Principal Executive Officer)
/s/ Gregory A. Thornton Vice President and Chief Financial Officer 4-8-99
Gregory A. Thornton (Principal Financial and Accounting Officer)
/s/ Richard D. Puntillo Chairman of the Board of Directors 4-8-99
Richard D. Puntillo
/s/ Richard S. Harding Director and Chairman Emeritus 4-8-99
Richard S. Harding
/s/ Ross K. Anderson Director 4-8-99
Ross K. Anderson
/s/ James M. Edgar Director 4-8-99
James M. Edgar
/s/ Stuart F. Platt Director 4-8-99
Stuart F. Platt
/s/ Donald K. Stager Director 4-8-99
Donald K. Stager
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Name
5 Opinion of Counsel; Howard Rice Nemerovski Canady Falk & Rabkin,
a professional corporation
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (See Exhibit 5)
24 Power of Attorney (see signature pages)
99.1 Harding Lawson Associates Group Inc. 1998 Stock Option Plan
99.2 Non-qualified Stock Option Agreement Between the Registrant and
Robert L. Costello, Jr.
April 5, 1999
Harding Lawson Associates Group, Inc.
7655 Redwood Boulevard
Novato, California 94945
Ladies and Gentlemen:
You have requested our opinion as counsel for Harding Lawson
Associates Group, Inc., a Delaware corporation (the "Company"), in connection
with the registration under the Securities Act of 1933, as amended, and the
Rules and Regulations promulgated thereunder, of 600,000 shares of Common Stock
("Stock") of the Company pursuant to the Company's 1998 Stock Option Plan,
relating to 500,000 shares, and pursuant to a Non-qualified Stock Option
Agreement between the Company and Robert L. Costello, Jr., relating to 100,000
shares (collectively, the "Plans").
We have examined the Company's Registration Statement on Form S-8
filed with the Securities and Exchange Commission on or about the date hereof
(the "Registration Statement"). We further have examined the certificate of
incorporation, the By-Laws, the minutes of the Board of Directors and
stockholders of the Company regarding approval of the Plan, a certificate of an
officer of the Company and such other documents as we deemed pertinent as a
basis for the opinion hereinafter expressed.
In connection with this opinion we have assumed the following:
(a) the authenticity of original documents and genuineness of all signatures;
(b) the conformity to the originals of all documents submitted to us as copies;
and (c) the truth, accuracy and completeness of the information contained in the
certificate we have reviewed. As to matters of fact material to our opinions, we
have relied on our review of the documents referred to above and on statements
made to us by officers of the Company. We have not independently verified any
factual matters or any assumptions made by us in this letter and disclaim any
inference as to the reasonableness of any such assumption.
Based on the foregoing examination, we are of the opinion that
upon the issuance and sale of shares of Stock pursuant to and in accordance with
the terms of the respective Plans, such shares of Stock will be legally issued,
fully paid and nonassessable.
We are members of the bar of the State of California and are not
admitted to practice in any other jurisdiction. The opinions set forth above are
limited in all respects to matters governed by the federal laws of the United
States of America and the General Corporation Law of the State of Delaware.
The opinion set forth herein is given as of the date hereof and
is expressly limited to the matters stated. No opinion is implied or may be
inferred beyond what is explicitly stated in this letter.
Copies of this letter may not be circulated or furnished to any
other person or entity, and this letter may not be referred to in any report or
document furnished to any other person or entity, without our prior written
consent.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
HOWARD, RICE, NEMEROVSKI,
CANADY, FALK & RABKIN
A Professional Corporation
By /s/ Daniel J. Winnike
Daniel J. Winnike, Esq.
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1998 Stock Option Plan and the Non-Qualified Stock Option
Agreement of Harding Lawson Associates Group, Inc. of our report dated July 3,
1998 with respect to the consolidated financial statements of Harding Lawson
Associates Group, Inc. included in its Form 10-K for the year ended May 31,
1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Francisco, California
April 8, 1999
HARDING LAWSON ASSOCIATES GROUP, INC.
1998 STOCK OPTION PLAN
1. Adoption and Purpose of the Plan. This stock option plan, to be
known as the "Harding Lawson Associates 1998 Stock Option Plan" (but referred to
herein as the "Plan") has been adopted by the board of directors (the "Board")
of Harding Lawson Associates Group, Inc., a Delaware corporation (the
"Company"), and is subject to the approval of its shareholders pursuant to
section 7 below. The purpose of this Plan is to advance the interests of the
Company and its shareholders by enabling the Company to attract and retain
qualified directors, officers, and employees with an opportunity for investment
in the Company. The options that may be granted hereunder ("Options") represent
the right by the grantee thereof (each, including any permitted transferee, an
"Optionee") to acquire shares of the Company's common stock ("Shares," which if
acquired pursuant to the exercise of an Option will be referred to as "Option
Shares") subject to the terms and conditions of this Plan and a written
agreement between the Company and the Optionee to evidence each such Option (an
"Option Agreement").
2. Certain Definitions. The defined terms set forth in Exhibit A
attached hereto and incorporated herein (together with other capitalized terms
defined elsewhere in this Plan) will govern the interpretation of this Plan.
3. Eligibility. The Company may grant Options under this Plan only to
persons who, at the time of such grant, are directors, officers and/or employees
of the Company and/or any of its Subsidiaries (collectively, "Eligible
Participants"). No person will be an Eligible Participant following his or her
Termination of Eligibility Status and no Option may be granted to any person
other than an Eligible Participant. There is no limitation on the number of
Options that may be granted to an Eligible Participant.
4. Shares Reserved for Options. The plan shall consist of 500,000
Option Shares. At all times while Options granted under this Plan are
outstanding, the Company will reserve for issuance for the purposes hereof a
sufficient number of authorized and unissued Shares to fully satisfy the
Company's obligations under all such outstanding Options.
5. Administration. This Plan will be administered and interpreted by
the Board, or by a committee consisting of two or more members of the Board,
appointed by the Board for such purpose (the Board, or such committee, referred
to herein as the "Administrator"). Subject to the express terms and conditions
hereof, the Administrator is authorized to prescribe, amend and rescind rules
and regulations relating to this Plan, and to make all other determinations
necessary or advisable for its administration and interpretation. Specifically,
the Administrator will have full and final authority in its discretion, subject
to the specific limitations on that discretion as are set forth herein and in
the Articles of Incorporation and Bylaws of the Company, at any time:
(a) to select and approve the Eligible Participants to whom
Options will be granted from time to time hereunder;
(b) to determine the Fair Market Value of the Shares as of the
Grant Date for any Option that is granted hereunder;
(c) with respect to each Option it decides to grant, to
determine the terms and conditions of that Option, to be set forth in the Option
Agreement evidencing that Option (the form of which also being subject to
approval by the Administrator), which may vary from the "default" terms and
conditions set forth in section 6 below, except to the extent otherwise provided
in this Plan, including, without limitation, as follows:
(i) the total number of Option Shares that
may be acquired by the Optionee pursuant to the Option;
(ii) if the Option satisfies the conditions
under Section 422(b) of the Code, whether the Option will be treated as an ISO;
(iii) the per share purchase price to be paid to the
Company by the Optionee to acquire the Option Shares issuable upon exercise of
the Option (the "Option Price");
(iv) the maximum period or term during which the
Option will be exercisable (the
"Option Term");
(v) the maximum period following any Termination of
Eligibility Status, whether resulting from an Optionee's death, disability or
any other reason, during which period (the "Grace Period") the Option will be
exercisable, subject to Vesting and to the expiration of the Option Term;
(vi) whether to accept a promissory note or other
form of legal consideration in
addition to cash as payment of all or a portion of the Option Price and/or Tax
Withholding Liability to be paid by the Optionee upon the exercise of an Option
granted hereunder;
(vii) the conditions (e.g., the passage of time or
the occurrence of events), if
any, that must be satisfied prior to the vesting of the right to exercise all or
specified portions of an Option (such portions being described as the number of
Option Shares, or the percentage of the total number of Option Shares that may
be acquired by the Optionee pursuant to the Option; the vested portion being
referred to as a "Vested Option" and the unvested portion being referred to as
an "Unvested Option"); and
(d) to delegate all or a portion of the Administrator's
authority under sections 5(a), (b) and (c) above to one or more members of the
Board who also are executive officers of the Company, and subject to such
restrictions and limitations as the Administrator may decide to impose on such
delegation.
6. Default Terms and Conditions of Option Agreements. Unless otherwise
expressly provided in an Option Agreement based on the Administrator's
determination pursuant to section 5(c) above, the following terms and conditions
will be deemed to apply to each Option as if expressly set forth in the Option
Agreement:
6.1 ISO. No Option will be treated as an ISO unless treatment
as an ISO is expressly provided for in an Option Agreement and such Option
satisfies the conditions of Section 422(b) of the Code.
6.2 Option Term. The Option Term will be for a period of 10
years beginning on the Grant Date (or 5 years in the case of an ISO granted to a
10% shareholder).
6.3 Grace Periods. Following a Termination of Eligibility
Status:
(a) Unless the Termination of Eligibility Status is a
result of a Qualified Retirement or Termination for Cause, that portion of the
Option that is a Vested Option will be exercisable for 30 days from the date of
termination, except in the case of death or permanent disability, when such
Vested Options will be exercisable for one year from the date of death or
determination of permanent disability;
(b) If the termination of Eligibility Status is the
result of a Qualified Retirement, that portion of the Option that is a Vested
Option will be exercisable at any time prior to the expiration of the Option
Term; and
(c) the Option will terminate, and there will be no
Grace Period, effective immediately as of the date and time of a Termination for
Cause of the Optionee, regardless of whether the Option is Vested or Unvested.
6.4 Vesting. The Option initially will be deemed an entirely
Unvested Option, but portions of the Option will become a Vested Option on the
following schedule, unless otherwise specified in the Option Agreement:
(a) fifty percent (50%) will become a Vested as of
the second anniversary of the "Grant Date" specified in the Option Agreement;
and
(b) twenty-five percent (25%) of the Option will
become a Vested Option as of the third anniversary of the Grant Date; and
(c) twenty-five percent (25%) of the Option will
become a Vested Option as of the fourth anniversary of the Grant Date;
provided that the Optionee does not suffer a Termination of Eligibility Status
prior to each such vesting date and provided further that additional vesting
will be suspended during any period while the Optionee is on a leave of absence
from the Company or its Subsidiaries, as determined by the Administrator.
6.5 Exercise of the Option; Issuance of Share Certificate.
(a) The portion of the Option that is a Vested Option
may be exercised by giving written notice thereof to the Company, on such form
as may be specified by the Administrator, but in any event stating: the
Optionee's intention to exercise the Option; the date of exercise; the number of
full Option Shares to be purchased; the amount and form of payment of the Option
Price; and such assurances of the Optionee's investment intent as the Company
may require to ensure that the transaction complies in all respects with the
requirements of the 1933 Act and other applicable securities laws. The notice of
exercise will be signed by the person or persons exercising the Option. In the
event that the Option is being exercised by the representative of the Optionee,
the notice will be accompanied by proof satisfactory to the Company of the
representative's right to exercise the Option. The Option may be exercised by a
securities broker acting on behalf of the Optionee pursuant to authorization
instructions approved by the Company. The notice of exercise will be accompanied
by full payment of the Option Price for the number of Option Shares to be
purchased, in United States dollars, in cash, by check made payable to the
Company, or by delivery of such other form of payment (if any) as approved by
the Administrator. Payment may also be made by delivering a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds sufficient to pay the Option Price and, if required, the amount
of any Tax Witholding Liability.
(b) To the extent required by applicable federal,
state, local or foreign law, and as a condition to the Company's obligation to
issue any Shares upon the exercise of the Option in full or in part, the
Optionee will make arrangements satisfactory to the Company for the payment of
any applicable Tax Withholding Liability that may arise by reason of or in
connection with such exercise. Such arrangements may include, in the Company's
sole discretion, that the Optionee tender to the Company the amount of such Tax
Withholding Liability, in cash, by check made payable to the Company, by
delivery of irrevocable instructions to a broker as described in the last
sentence of section (a) above, or in the form of such other payment as may be
approved by the Administrator, in its discretion pursuant to section 5(c)(vi)
above.
(c) After receiving a proper notice of exercise and
payment of the applicable Option Price and Tax Withholding Liability, the
Company will cause to be issued a certificate or certificates or an electronic
transfer of shares, where requested, for the Option Shares as to which the
Option has been exercised, registered in the name of the person rightfully
exercising the Option and the Company will cause such certificate or
certificates or electronic transfer to be delivered to such person.
6.6 Compliance with Law. Notwithstanding any other provision
of this Plan, Options may be granted pursuant to this Plan, and Option Shares
may be issued pursuant to the exercise thereof by an Optionee, only after and on
the condition that there has been compliance with all applicable federal and
state securities laws. The Company will not be required to list, register or
qualify any Option Shares upon any securities exchange, under any applicable
state, federal or foreign law or regulation, or with the Securities and Exchange
Commission or any state agency, or secure the consent or approval of any
governmental regulatory authority, except that if at any time the Board
determines, in its discretion, that such listing, registration or qualification
of the Option Shares, or any such consent or approval, is necessary or desirable
as a condition of or in connection with the exercise of an Option and the
purchase of Option Shares thereunder, that Option may not be exercised, in whole
or in part, unless and until such listing, registration, qualification, consent
or approval is effected or obtained free of any conditions that are not
acceptable to the Board, in its discretion. However, the Company will seek to
register or qualify with, or as may be provided by applicable local law, file
for and secure an exemption from such registration or qualification requirements
from, the applicable securities administrator and other officials of each
jurisdiction in which an Eligible Participant would be granted an Option
hereunder prior to such grant.
6.7 Restrictions on Transfer.
(a) Options Nontransferable. No Option will be
transferable by an Optionee otherwise than by will or the laws of descent and
distribution. During the lifetime of a natural person who is granted an Option
under this Plan, the Option will be exercisable only by him or her.
Notwithstanding anything else in this Plan to the contrary, no Option Agreement
will contain any provision which is contrary to, or which modifies, the
provisions of this section 6.7(a).
(b) Prohibited Transfers. No Holder of any Option
Shares may Transfer such Shares, or any interest therein: (i) except as
expressly provided in this Plan; and (ii) in full compliance with all applicable
securities laws and any applicable restrictions on Transfer provided in the
Company's Articles of Incorporation and/or Bylaws, which will be deemed
incorporated by reference into this Plan. All Transfers of Option Shares not
complying with the specific limitations and conditions set forth in this section
6.7 are expressly prohibited. Any prohibited Transfer is void and of no effect,
and no purported transferee in connection therewith will be recognized as a
Holder of Option Shares for any purpose whatsoever. Should such a Transfer
purport to occur, the Company may refuse to carry out the Transfer on its books,
attempt to set aside the Transfer, enforce any undertakings or rights under this
Plan, or exercise any other legal or equitable remedy.
(c) Conditions to Transfer. It will be a condition to
any Transfer of any Option Shares that:
(i) the transferee of the Shares will
execute such documents as the Company may reasonably require to ensure that the
Company's rights under this Plan, and any applicable Option Agreement, are
adequately protected with respect to such Shares, including, without limitation,
the transferee's agreement to be bound by all of the terms and conditions of
this Plan and such Agreement, as if he or she were the original Holder of such
Shares; and
(ii) the Company is satisfied that such
Transfer complies in all respects with the requirements imposed by applicable
state and federal securities laws and regulations.
(d) Market Standoff. If in connection with any public
offering of securities of the Company (or any Successor Entity), the underwriter
or underwriters managing such offering so requests, then each Optionee and each
Holder of Option Shares will agree to not sell or otherwise Transfer any such
Shares (other than Shares included in such underwriting) without the prior
written consent of such underwriter, for such period of time as may be requested
by the underwriter commencing on the effective date of the registration
statement filed with the Securities and Exchange Commission in connection with
such offering.
6.8 Change of Control Transactions. Except as otherwise
provided in the Option Agreement, or any contract of employment or engagement
between Optionee and the Company, in the event of a Change of Control
Transaction, the Company shall endeavor to cause the Successor Entity in such
transaction either to assume all of the Options which have been granted
hereunder and which are outstanding as of the consummation of such transaction
("Closing"), or to issue (or cause to be issued) in substitution thereof
comparable options of such Successor Entity (or of its parent or its
Subsidiary). If the Successor Entity is unwilling to either assume such Options
or grant comparable options in substitution for such Options, on terms that are
acceptable to the Company as determined by the Board in the exercise of its
discretion, then with respect to each outstanding Option, that portion of the
Option which remains Unvested will become Vested immediately prior to such
Closing; and the Board may cancel all outstanding Options, and terminate this
Plan, effective as of the Closing, provided that it will notify all Optionees of
the proposed Change of Control Transaction a reasonable amount of time prior to
the Closing so that each Optionee will be given the opportunity to exercise the
Vested portion of his or her Option (after giving effect to the acceleration of
such vesting discussed above) prior to the Closing. For purposes of this section
6.8, the term "Change of Control Transaction" means (a) the sale of all or
substantially all of the assets of the Company to any person or entity that,
prior to such sale, did not control, was not under common control with, or was
not controlled by, the Company, or (b) a merger or consolidation or other
reorganization in which the Company is not the surviving entity or becomes owned
entirely by another entity, unless at least fifty percent (50%) of the
outstanding voting securities of the surviving or parent corporation, as the
case may be, immediately following such transaction are beneficially held by
such persons and entities in the same proportion as such persons and entities
beneficially held the outstanding voting securities of the Company immediately
prior to such transaction, or (c) the sale or other change of beneficial
ownership of the outstanding voting securities of the Company such that any
person or "group" as that term is defined under the Securities Exchange Act of
1934, as amended becomes the beneficial owner of more than 50% of the
outstanding voting securities of the Company.
6.9 Additional Restrictions on Transfer; Investment Intent. By
accepting an Option and/or Option Shares under this Plan, the Optionee will be
deemed to represent, warrant and agree that, unless a registration statement is
in effect with respect to the offer and sale of Option Shares: (i) neither the
Option nor any such Shares will be freely tradeable and must be held
indefinitely unless such Option and such Shares are either registered under the
1933 Act or an exemption from such registration is available; (ii) the Company
is under no obligation to register the Option or any such Shares; (iii) upon
exercise of the Option, the Optionee will purchase the Option Shares for his or
her own account and not with a view to distribution within the meaning of the
1933 Act, other than as may be effected in compliance with the 1933 Act and the
rules and regulations promulgated thereunder; (iv) no one else will have any
beneficial interest in the Option Shares; (v) the Optionee has no present
intention of disposing of the Option Shares at any particular time; and (vi)
neither the Option nor the Shares have been qualified under the securities laws
of any state and may only be offered and sold pursuant to an exception from
qualification under applicable state securities laws.
6.10 Stock Certificates; Legends. Certificates representing
Option Shares will bear all legends required by law and necessary or appropriate
in the Administrator's discretion to effectuate the provisions of this Plan and
of the applicable Option Agreement. The Company may place a "stop transfer"
order against Option Shares until full compliance with all restrictions and
conditions set forth in this Plan, in any applicable Option Agreement and in the
legends referred to in this section 6.10.
6.11 Notices. Any notice to be given to the Company under the
terms of an Option Agreement will be addressed to the Company at its principal
executive office, Attention: Secretary, or at such other address as the Company
may designate in writing. Any notice to be given to an Optionee will be
addressed to him or her at the address provided to the Company by the Optionee.
Any such notice will be deemed to have been duly given if and when enclosed in a
properly sealed envelope, addressed as aforesaid, deposited, postage prepaid, in
a post office or branch post office regularly maintained by the local postal
authority.
6.12 Other Provisions. Each Option Agreement may contain such
other terms, provisions and conditions, including restrictions on the Transfer
of Option Shares, and rights of the Company to repurchase such Shares, not
inconsistent with this Plan and applicable law, as may be determined by the
Administrator in its sole discretion.
6.13 Specific Performance. Under those circumstances in which
the Company chooses to timely exercise its rights to repurchase Option Shares as
provided herein or in any Option Agreement, the Company will be entitled to
receive such Shares in specie in order to have the same available for future
issuance without dilution of the holdings of other shareholders of the Company.
By accepting Option Shares, the Holder thereof therefore acknowledges and agrees
that money damages will be inadequate to compensate the Company and its
shareholders if such a repurchase is not completed as contemplated hereunder and
that the Company will, in such case, be entitled to a decree of specific
performance of the terms hereof or to an injunction restraining such holder (or
such Holder's personal representative) from violating this Plan or Option
Agreement, in addition to any other remedies that may be available to the
Company at law or in equity.
7. Term of the Plan. This Plan will become effective on the date of its
adoption by the Board. This Plan will expire on the tenth (10th) anniversary of
the date of its adoption by the Board or its approval by the shareholders of the
Company, whichever is earlier, unless it is terminated earlier pursuant to
section 11 of this Plan, after which no more Options may be granted under this
Plan, although all outstanding Options granted prior to such expiration or
termination will remain subject to the provisions of this Plan, and no such
expiration or termination of this Plan will result in the expiration or
termination of any such Option prior to the expiration or early termination of
the applicable Option Term.
8. Adjustments Upon Changes in Stock. In the event of any change in the
outstanding Shares of the Company as a result of a stock split, reverse stock
split, stock bonus or distribution, recapitalization, combination or
reclassification, appropriate proportionate adjustments will be made in: (i) the
aggregate number of Shares that are reserved for issuance in the Option Pool
pursuant to section 4 above, under outstanding Options or future Options granted
hereunder; (ii) the Option Price and the number of Option Shares that may be
acquired under each outstanding Option granted hereunder; and (iii) other rights
and matters determined on a per share basis under this Plan or any Option
Agreement evidencing an outstanding Option granted hereunder. Any such
adjustments will be made only by the Board, and when so made will be effective,
conclusive and binding for all purposes with respect to this Plan and all
Options then outstanding. No such adjustments will be required by reason of the
issuance or sale by the Company for cash or other consideration of additional
Shares or securities convertible into or exchangeable for Shares.
9. Modification, Extension and Renewal of Options. Subject to the terms
and conditions and within the limitations of this Plan, the Administrator may
modify outstanding Options granted under this Plan, but under no circumstances
may the shares be repriced or surrendered and replaced with other options
bearing a lower exercise price. Notwithstanding the foregoing, however, no
modification of any Option will, without the consent of the Optionee, alter or
impair any rights or obligations under any outstanding Option.
10. Governing Law. The internal laws of the State of Delaware
(irrespective of its choice of law principles) will govern the validity of this
Plan, the construction of its terms and the interpretation of the rights and
duties of the parties hereunder and under any Option Agreement.
11. Amendment and Discontinuance. The Board may amend, suspend or
discontinue this Plan at any time or from time to time; provided that no action
of the Board will, without the approval of the shareholders of the Company,
materially increase (other than by reason of an adjustment pursuant to section 8
hereof) the maximum aggregate number of Option Shares in the Option Pool, or
materially modify the category of, or eligibility requirements for, persons who
are Eligible Participants. However, no such action may alter or impair any
Option previously granted under this Plan without the consent of the Optionee,
nor may the number of Option Shares in the Option Pool be reduced to a number
that is less than the aggregate number of Option Shares (i) that may be issued
pursuant to the exercise of all outstanding and unexpired Options granted
hereunder, and (ii) that have been issued and are outstanding pursuant to the
exercise of Options granted hereunder.
12. No Shareholder Rights. No rights or privileges of a shareholder in
the Company are conferred by reason of the granting of an Option. No Optionee
will become a shareholder in the Company with respect to any Option Shares
unless and until the Option has been properly exercised and the Option Price
fully paid as to the portion of the Option exercised.
13. Copies of Plan. A copy of this Plan will be delivered to each
Optionee at or before the time he, she or it executes an Option Agreement.
Date Plan Adopted by Board of Directors: September 25, 1998
Date Plan Approved by the Shareholders: November 4, 1998
<PAGE>
EXHIBIT A
DEFINITIONS
1. "10% shareholder" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set forth in
Section 424(d) of the Code at the time he or she is granted an Option, stock
possessing more than 10% of the total combined voting power or value of all
classes of stock of the Company and/or of its Subsidiaries.
2. "1933 Act" means the Securities Act of 1933, as amended.
3. "Administrator" has the meaning set forth in section 5 of the Plan.
4. "Board" has the meaning set forth in section 1 of the Plan.
5. "Business Combination" has the meaning set forth in section 6.8 of
the Plan.
6. "Change of Control Transaction" has the meaning set forth in section
6.8 of the Plan.
7. "Closing" has the meaning set forth in section 6.8 of the Plan.
8. "Code" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer to Sections of
the Code as enacted at the time of the Plan's adoption by the Board and as
subsequently amended, or to any substantially similar successor provisions of
the Code resulting from recodification, renumbering or otherwise).
9. "Company" has the meaning set forth in section 1 of the Plan.
10. "Disability" means any physical or mental disability that results
in a Termination of Eligibility Status under applicable law, except that for
purposes of section 6.1(c) of the Plan, the term "disability" means permanent
and total disability within the meaning of Section 22(e)(3) of the Code.
11. "Donative Transfer" with respect to Option Shares means any
voluntary Transfer by a transferor other than for value or the payment of
consideration to the transferor.
12. "Eligible Participants" has the meaning set forth in section 3 of
the Plan.
13. "Fair Market Value" means, with respect to the Shares and as of the
date that is relevant to such a determination (e.g., on the Grant Date), the
market price per share of such Shares determined by the Administrator,
consistent with the requirements of Section 422 of the Code and to the extent
consistent therewith, as follows: (a) if the Shares are traded on a stock
exchange on the date in question, then the Fair Market Value will be equal to
the closing price reported by the applicable composite-transactions report for
such date; (b) if the Shares are traded over-the-counter on the date in question
and are classified as a national market issue, then the Fair Market Value will
be equal to the last-transaction price quoted by The Nasdaq Stock Market for
such date; (c) if the Shares are traded over-the-counter on the date in question
but are not classified as a national market issue, then the Fair Market Value
will be equal to the mean between the last reported representative bid and asked
prices quoted by The Nasdaq Stock Market for such date; and (d) if none of the
foregoing provisions is applicable, then the Fair Market Value will be
determined by the Administrator in good faith on such basis as it deems
appropriate.
14. "Grace Period" has the meaning set forth in section 5(c)(v) of the
Plan.
15. "Grant Date" means, with respect to an Option, the date on which
the Option Agreement evidencing that Option is entered into between the Company
and the Optionee, or such other date as may be set forth in that Option
Agreement as the "Grant Date" which will be the effective date of that Option
Agreement.
16. "Holder" means the holder of any Option Shares.
17. "Involuntary Transfer" with respect to Option Shares includes,
without limitation, any of the following: (A) an assignment of the Shares for
the benefit of creditors of the transferor; (B) a Transfer by operation of law;
(C) an execution of judgment against the Shares or the acquisition of record or
beneficial ownership of Shares by a lender or creditor; (D) a Transfer pursuant
to any decree of divorce, dissolution or separate maintenance, any property
settlement, any separation agreement or any other agreement with a spouse
(except for bona fide estate planning purposes) under which any Shares are
Transferred or awarded to the spouse of the transferor or are required to be
sold; or (E) a Transfer resulting from the filing by the transferor of a
petition for relief, or the filing of an involuntary petition against the
transferor, under the bankruptcy laws of the United States or of any other
nation.
18. "ISO" means an "incentive stock option" as defined in Section 422
of the Code.
19. "Option Agreement" has the meaning set forth in section 1 of the
Plan.
20. "Option Price" has the meaning set forth in section 5(c)(iii) of
the Plan.
21. "Option Shares" has the meaning set forth in section 1 of the Plan,
provided that for purposes of section 6.7 of the Plan, the term "Option Shares"
includes all Shares issued by the Company to a Holder (or his, her or its
predecessor) by reason of such holdings, including any securities which may be
acquired as a result of a stock split, stock dividend, and other distributions
of Shares in the Company made upon, or in exchange for, other securities of the
Company.
22. "Option Term" has the meaning set forth in section 5(c)(iv) of the
Plan.
23. "Optionee" has the meaning set forth in section 1 of the Plan.
24. "Options" has the meaning set forth in section 1 of the Plan.
25. "Plan" has the meaning set forth in section 1 of the Plan.
26. Qualified Retirement shall mean the voluntary termination of an
employee or director of the Company after the individual has reached age 55 with
not less than 10 years of service with the Company. In order for such
termination to remain a Qualified Retirement under the Plan, the individual must
withdraw from the profession in which that individual was employed with the
Company and shall not during the time of the Grace Period, directly engage in or
have any interest in, any person, firm, corporation or business (whether as an
employee, officer, director, agent, security holder, creditor, consultant or
otherwise) that engages in any activity or service which is the same as, similar
to or competitive with, in whole or in part, the Company.
27. "Shares" has the meaning set forth in section 1 of the Plan.
28. "Subsidiary" has the same meaning as "Subsidiary Corporation" as
defined in Section 424(f) of the Code.
29. "Successor Entity" means a corporation or other entity that
acquires all or substantially all of the assets of the Company, or which is the
surviving or parent entity resulting from a Business Combination, as that term
is defined in section 6.8 of the Plan.
30. "Tax Withholding Liability" in connection with the exercise of any
Option means all federal and state income taxes, social security tax, and any
other taxes applicable to the compensation income arising from the transaction
required by applicable law to be withheld by the Company.
31. "Termination of Eligibility Status" means (i) in the case of any
employee of the Company and/or any of its Subsidiaries, a termination of his or
her employment, whether by the employee or employer, and whether voluntary or
involuntary, including without limitation as a result of the death or disability
of the employee, and (ii) in the case of any director of the Company and/or any
of its Subsidiaries, the death of or resignation by the director or his or her
removal from the board in the manner provided by the articles of incorporation,
bylaws or other organic instruments of the Company or Subsidiary or otherwise in
accordance with applicable law.
32. "Termination for Cause" means (i) in the case of an Optionee who is
an employee of the Company and/or any of its Subsidiaries, a termination by the
employer of the Optionee's employment for "cause" as defined by any applicable
contract of employment, or if not defined therein (or following termination of
any such contract of employment), pursuant to the "For Cause Standard" set forth
below, (ii) in the case of an Optionee who is or which is an advisor, consultant
or independent contractor to the Company and/or any of its Subsidiaries, a
termination of the services relationship by the hiring party for "cause" or
breach of contract, as defined by any applicable contract of engagement between
the parties, or if not defined therein (or following termination of any such
contract of engagement), pursuant to the "For Cause Standard" set forth below,
and (iii) in the case of an Optionee who is a director, but not an employee, of
the Company, removal of him or her from the board of directors by action of the
shareholders or, if permitted by applicable law and the articles, bylaws or
other organic documents of the Company, by the other directors, in connection
with the good faith determination of the board of directors (or of the Company's
shareholders if so required, but in either case excluding the vote of the
subject individual if he or she is a director or a shareholder) that the "For
Cause Standard" set forth below has been satisfied. For purposes hereof, the
"For Cause Standard" means that one or more of the following has occurred: (a)
the commission by Optionee of any act materially detrimental to the Company,
including fraud, embezzlement, theft, bad faith, gross negligence, recklessness
or willful misconduct; (b) incompetence or repeated failure or refusal to
perform the duties required of Optionee by the Company; (c) conviction of a
felony or of any crime of moral turpitude to the extent materially detrimental
to the Company; or (d) any material misrepresentation by Optionee to the Company
regarding the operation of the business, provided that the action or conduct
described in clause (b) above will constitute "Cause" only if such action or
conduct continues after the Company has provided Optionee with written notice
thereof and a reasonable opportunity (to be not less than 30 days) to cure the
same.
33. "Transfer" with respect to Option Shares, includes, without
limitation, a voluntary or involuntary sale, assignment, transfer, conveyance,
pledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy of
those Shares, including any Involuntary Transfer, Donative Transfer or transfer
by will or under the laws of descent and distribution.
34. "Unvested Option" has the meaning set forth in section 5(c)(vii) of
the Plan.
35. "Vested Option" has the meaning set forth in section 5(c)(vii) of
the Plan.
HARDING LAWSON ASSOCIATES GROUP, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into by and between HARDING LAWSON ASSOCIATES GROUP, INC., a Delaware
corporation (the "Corporation"), and Robert L. Costello, Jr. (the "Optionee"),
to be effective as of March 19, 1999 (the "Effective Date").
RECITALS
A. This Agreement is entered into pursuant to the Employment Agreement
between the Corporation and the Optionee dated March 19, 1999 (the "Employment
Agreement").
B. As used herein, the term "Subsidiary" shall mean any present or
future corporation which is a wholly owned subsidiary of the Corporation.
C. The option(s) subject to this Agreement shall be Nonstatutory Stock
Options covering shares of the Corporation's authorized but unissued or
reacquired $0.01 par value Common Stock (the "Shares").
D. Although this agreement is not being entered into pursuant to the
Harding Lawson Associates 1998 Stock Option Plan (the "Plan"), all provisions of
this Agreement are subject to, and shall be interpreted in accordance with, the
Plan. In the event that there are any provisions of this Agreement that are
contrary to the Plan, the terms of the Agreement shall supersede the provisions
of the Plan.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the parties do hereby
agree as follows:
1. Grant of Option.
The Corporation hereby grants to the Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of One Hundred
Thousand (100,000) Shares (the "Option Shares"), such number being subject to
adjustment as provided in Section 11 hereof, on the terms and conditions set
forth herein and in the Plan. The Option is intended to be a Nonstatutory Stock
Option, and not an "incentive stock option" within the meaning of Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code").
2. Exercise Price.
The exercise price (the "Exercise Price") of the Option Shares
shall be Ten Dollars ($10.00) per Share, which price has been determined by the
Corporation to be not less than the fair market value of the Option Shares as of
the date on which the Option was granted to the Optionee.
3. Terms of Option.
(a) The Option is exercisable up to the date ten (10) years
from the Effective Date, subject to earlier termination as provided in Sections
6, 7, 8, and 9 hereof or when the Option has been exercised in full pursuant to
the terms of this Agreement. The Optionee shall have the right and option to
purchase the following number of Option Shares at the Exercise Price:
Cumulative Percent
of Options Exercisable Cumulative Number
Vest Date (Vested) of Shares Exercisable
March 18, 2000 0% 0
March 18, 2001 50% 50,000
March 18, 2002 75% 75,000
March 18, 2003 100% 100,000
(b) The Option may be exercised as to any or all of the vested
Option Shares. Except as provided in Sections 6, 7, and 9 hereof the Option may
not be exercised at any time unless the Optionee is then serving the Corporation
and shall have been continuously serving the Corporation since the Effective
Date. The Exercise Price of those Option Shares as to which the Option may be
exercised shall be paid in full at the time of exercise, as provided in Section
12 of this Agreement, below.
4. Rights as a Stockholder.
The holder of the Option shall have no rights as a stockholder
with respect to any Option Shares until he shall have exercised this Option in
accordance with its terms and certificates or electronic transfer evidencing the
Option Shares shall have been delivered to him or her by the Corporation. No
adjustment, except as provided in Section 11 hereof, shall be made for
dividends, distributions, or other rights in respect to such Option Shares for
which the record date is prior to the date on which the Optionee or his
transferee became the holder of record.
5. Nontransferability.
(a) During the Optionee's lifetime, the Option (i) shall not
be transferable or assignable and (ii) may be exercised only by the Optionee.
More particularly (but without limiting the generality of the foregoing), the
Option may not be assigned, transferred (except as provided above), pledged, or
hypothecated in any way, shall not be assignable by operation of law, and shall
not be subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment, or
similar process upon the Option, shall be null and void and without effect.
(b) The foregoing paragraph notwithstanding, the Option may be
assigned or transferred by will or by laws of the descent and distribution to
the extent provided in Section 6, below; provided, however, that no such
transfer or assignment shall be effective unless the Corporation shall have been
furnished with written notice thereof and such other evidence as the Corporation
may deem necessary to establish compliance with any laws or regulations
pertaining thereto.
6. Death of Optionee.
In the event of the death of the Optionee while he or she is
in the service of the Corporation, his personal representatives, executors,
trustees, or legatees shall have the right for a period of twelve (12) months
from the date of death to exercise the Option to the extent the Optionee was
entitled to exercise the Option on the date of his death; provided, however,
that in no event may the Option be exercised after the date on which it would
normally have expired under its terms. If no such exercise is made within such
twelve (12) month period following death, the Option shall become no longer
exercisable.
7. Disability of Optionee.
In the event that the Optionee becomes permanently disabled
while he or she is serving the Corporation, any unexercised portion of the
Option which may be otherwise exercisable by the Optionee at the date of
termination due to such disability shall be exercisable for a period of twelve
(12) months from the date of termination; provided, however, that in no event
may the Option be exercised after the date on which it would normally have
expired under its terms. If no such exercise is made within said twelve (12)
month period following such termination by reason of disability, the Option
shall become no longer exercisable.
8. Termination of Employment for Cause.
If an Optionee is determined by the Board of Directors to have
committed an act of theft, embezzlement, fraud, dishonesty, a breach of
fiduciary duty to the Corporation or a Subsidiary, a deliberate disregard of the
rules of the Corporation which resulted in loss, damage, or injury to the
Corporation or a Subsidiary, engages in any conduct which constitutes unfair
competition with the Corporation or a Subsidiary, or induces any customer,
consultant, employee, or supplier of the Corporation or Subsidiary to breach any
contract with the Corporation or a Subsidiary, neither the Optionee nor his
estate shall be entitled to exercise any Option with respect to any Option
Shares whatsoever after termination of employment, whether or not after such
termination of employment the Optionee may receive payment from the Corporation
for services rendered prior to termination, for fees or payments. In making such
determination, the Corporation shall give the Optionee an opportunity to present
evidence on his behalf. Termination of employment shall be deemed to occur when
the Corporation provides written notice to the Optionee that his employment is
terminated.
9. Termination of Employment For Any Reason Other Than Death,
Disability, Or Cause.
In the event the Optionee, during his life, ceases to be
employed by the Corporation, and such employment was terminated (whether at the
initiative of the Optionee or the decision of the Board for any reason other
than as described in Sections 6, 7, and 8 above, the Optionee shall have the
right to exercise the unexpired portion of this Option (to the extent that he or
she was entitled to do so at the date of termination) at any time within thirty
(30) days after such termination, but thereafter the Option shall become no
longer exercisable; provided, however, that in no event may any portion of this
Option be exercised after the date on which it would otherwise normally have
expired under its terms had the Optionee remained in the Corporation's service.
10. No Rights Conferred.
Nothing in this Agreement shall confer upon the Optionee any
right to continue in the service of the Corporation.
11. Adjustments Upon Changes in Capital Structure.
(a) In the event of any changes in the outstanding Common
Stock of the Corporation by reason of any stock dividend, stock split or reverse
stock split, combination, reclassification, recapitalization, merger,
consolidation, reorganization, or liquidation of or involving the Corporation,
the aggregate number and/or the class of shares subject to this Agreement, and
the exercise price of the Option prior to such event, shall be appropriately
adjusted by the Board of Directors of the Corporation in accordance with the
terms of the Plan, and such adjustment shall be conclusive.
(b) The exercisability of the options covered hereby in the
event of a change of control of the Corporation shall be governed by the
provisions in Section 3 (a) of the Employment Agreement.
12. Method of Exercising Option.
(a) Subject to the terms and conditions of this Agreement, the
Option may be exercised by written notice to the Corporation at its main office.
Such notice shall (i) be in form satisfactory to the Corporation, (ii) state the
election to exercise the Option and the number of Option Shares in respect of
which it is being exercised, (iii) be signed by the person or persons exercising
the Option, and (iv) be accompanied by payment of the full purchase price of the
Option Shares being purchased, and the Corporation shall deliver a certificate
or certificates or electronic transfer representing such Option Shares as soon
as practicable after the notice shall be received.
(b) Payment upon exercise of the Option may be (i) in cash or
by a certified or bank cashier's check, (ii) in stock of the Corporation at such
value as the Board of Directors in its sole discretion shall determine, provided
that such determination shall be final and binding on both the Corporation and
the Optionee, (iii) by a full recourse promissory note secured by the Shares
being purchased bearing an interest rate greater than or equal to the applicable
federal rate prescribed in Section 1274(d) of the Code, or (iv) by any
combination of the above methods of payment.
(c) The certificate or certificates or electronic transfer for
the Shares as to which the Option shall have been so exercised shall be
registered in the name of the Optionee and shall be delivered as provided above
to or upon the written order of the person or persons exercising the Option. In
the event the Option shall be exercised pursuant to Section 6 hereof, the notice
described in paragraph (a), above, shall be accompanied by appropriate proof to
the right of such person or persons to exercise the Option. All Option Shares
purchased as provided herein shall be fully paid and nonassessable.
13. Notice.
Any notice required or permitted by this Agreement shall be
deemed given to (a) the Optionee, an authorized transferee or assignee of the
Optionee, or a stockholder when delivered personally or three (3) days after it
is deposited in the U.S. mail, postage prepaid and addressed to such person at
his address appearing on the stock records of the Corporation; or (b) the
Corporation, when delivered personally to its President or Secretary or three
(3) days after it is deposited in the mail, postage prepaid, and addressed to
the Corporation, attention its President, at the Corporation's principal place
of business. It shall be the duty of both the Corporation and the Optionee (or
his transferee or assignee) to notify the other of any change of address.
14. Restrictive Legends.
Limitations on the transferability of shares of Common Stock
as may be required by state and federal securities laws and regulations may
appear on legends on share certificates issued pursuant to Options granted
pursuant to this Agreement, and the Corporation will make notations in its
records and make other arrangements so as to ensure compliance with these
restrictions on transferability.
15. Income Taxation.
The Optionee acknowledges that he or she has been informed
that the exercise of this option, in whole or in part, will result in the
imposition of federal income taxation at the time of exercise based on the
spread between the exercise price and the fair market value of the shares on the
date of exercise. Additionally, at the time the Option Shares are sold the
Optionee will recognize income or loss associated with gains or losses in an
amount equal to the difference between the fair market value of the Option
Shares at the time of exercise and the sale price of the shares.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
duly executed by its officer thereunto fully authorized, and the Optionee has
hereunto set his hand, as of the day and year first above written.
HARDING LAWSON ASSOCIATES GROUP, INC.
By /s/ Patricia A. England
Patricia A. England, Secretary
OPTIONEE
/s/ Robert L. Costello, Jr.
(Signature of Optionee)
Robert L. Costello, Jr.
(Please Print Name Above)
