<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1998
REGISTRATION NO. 333-______
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
UTILX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 91-1171716
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
P.O. BOX 97009
KENT, WASHINGTON 98064-9709
(253) 395-0200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
UTILX CORPORATION
AMENDED AND RESTATED 1994 OPTION AND RESTRICTED STOCK PLAN
(FULL TITLE OF THE PLAN)
----------------------
CRAIG E. DAVIES
CHIEF EXECUTIVE OFFICER
UTILX CORPORATION
P.O. BOX 97009
KENT, WASHINGTON 98064-9709
(253) 395-0200
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
----------------------
STEPHEN M. GRAHAM
SCOTT L. GELBAND
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
(206) 583-8888
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED(1) OFFERING PRICE PER SHARE(2) AGGREGATE OFFERING PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share 1,320,000 $4.75 $6,270,000.00 $1,850.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
such employee benefit plan as the result of any future stock split, stock
dividend or similar adjustment of the Registrant's outstanding Common
Stock.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the
amount of the registration fee. The price per share is estimated to be
$4.75 based on the average of the high ($4.875) and low ($4.625) sales
prices for the Registrant's Common Stock on May 20, 1998, as reported by
the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1997, filed with the Securities and Exchange
Commission (the "Commission") on June 27, 1997 pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which contains
certified financial statements for the most recent year for which such
statements have been filed;
(b) All other reports filed by the Registrant pursuant
to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal
year covered by the Annual Report referred to in (a) above; and
(c) The description of the Registrant's Common Stock
contained in the Registrant's Registration Statement on Form 8-A filed with
the Commission on April 29, 1988, pursuant to Section 12(g) of the Exchange
Act, including any amendments or reports filed for the purpose of updating
such description.
In addition, all reports and documents filed by the Registrant
with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date hereof and prior to the filing of a
post-effective amendment, which indicates that the securities offered hereby
have been sold or which deregisters the securities covered hereby then
remaining unsold, shall also be deemed to be incorporated by reference into
this Registration Statement and to be a part hereof commencing on the
respective dates on which such documents are filed.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the Delaware General Corporation Law (the
"DGCL") provides that a Delaware corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no cause to believe his or her conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware
corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by
or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such
person acted under similar standards, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine that despite the adjudication of liability, such
person is fairly and reasonably entitled to be indemnified for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 145 of the DGCL further provides that to the extent a
director or officer of a Delaware corporation has been successful in the
defense of any action, suit or proceeding referred to in subsections 145(a)
and (b) or in the defense of any claim, issue or matter therein, such person
shall be indemnified against expenses actually and reasonably incurred by
such person in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; and that the corporation may purchase and
maintain insurance on behalf of a director or officer of the corporation
against any liability asserted against such person or incurred by him or her
in any such capacity or arising out of his or her status as such whether or
not the corporation would have the power to indemnify such person against
such liabilities under Section 145.
II-1
<PAGE>
Section 10 of the Registrant's Amended and Restated Bylaws
(the "Bylaws") requires indemnification to the fullest extent permitted under
Delaware law. Subject to any restrictions imposed by Delaware law, the Bylaws
provide an unconditional right to indemnification for all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) actually and reasonably incurred or
suffered by any person entitled to indemnification in connection with any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was serving as a director or officer of the Registrant or that, being or
having been a director or officer or an employee of the Registrant, such
person is or was serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including an employee benefit plan.
However, Board approval is required with respect to indemnification for any
proceeding initiated by a person entitled to indemnification. The Bylaws
also provide that the Registrant may, by action of its Board of Directors,
provide indemnification to its employees and agents with the same scope and
effect as the foregoing indemnification of directors and officers.
Section 102(b)(7) of the DGCL permits a corporation to provide
in its certificate of incorporation that a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability for
(i) any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) payments of
unlawful dividends or unlawful stock repurchases or redemptions, or (iv) any
transaction from which the director derived an improper personal benefit.
Article 16 of the Registrant's Restated Certificate of
Incorporation provides that, to the fullest extent that the DGCL, as it now
exists or may hereafter be amended, permits the limitation or elimination of
the liability of directors, a director of the Registrant shall not be liable
to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of such Article 16
shall not adversely affect any right or protection of a director of the
Registrant for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
The Registrant's officers and directors are covered by
insurance (with certain exceptions and limitations) that indemnifies them
against losses for which the Registrant grants them indemnification and for
which they become legally obligated to pay on account of claims made against
them for "wrongful acts" committed before or during the policy period.
Additionally, the Registrant's outside directors are covered by a similar
insurance policy.
Item 8. EXHIBITS
Exhibit Number Description
-------------- --------------------------------------------------------------
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of Coopers & Lybrand LLP
23.3 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 UTILX Corporation Amended and Restated 1994 Option and
Restricted Stock Plan
II-2
<PAGE>
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:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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
this Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
PROVIDED, HOWEVER that paragraphs (1)(i) and (1)(ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 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 this 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.
C. Insofar as indemnification for liabilities arising under the
Securities Act 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
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 of controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer of 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 and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Kent, State of Washington, on the
21 day of May, 1998.
UTILX Corporation
By: /s/ Craig E. Davies
--------------------------
Craig E. Davies
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes Craig
E. Davies, Larry D. Pihl, Thomas L. Markl or any of them, as
attorneys-in-fact, with full power of substitution, to execute in the name
and on behalf of such person, individually and in each capacity stated below,
and to file, any and all amendments to this Registration Statement, including
any and all post-effective amendments and any related Rule 462(b)
Registration Statement and any amendment thereto.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities
indicated below on the 21 day of May, 1998.
SIGNATURE TITLE
--------- -----
/s/ Craig E. Davies President, Chief Executive Officer and
-------------------------- Director (Principal Executive Officer)
Craig E. Davies
/s/ Larry D. Pihl Vice President, Chief Financial
-------------------------- Officer,Treasurer and Controller
Larry D. Pihl (Principal Financial and Accounting
Officer)
/s/ Stanley J. Bright Director
--------------------------
Stanley J. Bright
/s/ John D. Durbin Director
--------------------------
John D. Durbin
/s/ John W. Ellis Director
--------------------------
John W. Ellis
/s/ Walter M. Higgins Director
--------------------------
Walter M. Higgins
/s/ Robert E. Runice Director
--------------------------
Robert E. Runice
II-4
<PAGE>
/s/ William M. Weisfield Director
--------------------------
William M. Weisfield
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- --------------------------------------------------------------
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of Coopers & Lybrand LLP
23.3 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 UTILX Corporation Amended and Restated 1994 Option and
Restricted Stock Plan
<PAGE>
EXHIBIT 5.1
[Perkins Coie LLP Letterhead]
May 21, 1998
UTILX Corporation
P.O. Box 97007
Kent, Washington 98064-9709
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen and Ladies:
We have acted as counsel to UTILX Corporation (the "Company") in connection
with the preparation of a Registration Statement on Form S-8 (the "Registration
Statement") which is being filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), with respect to
1,320,000 shares of common stock, par value $0.01 per share of the Company, or
such lesser number of shares as may be permitted (the "Shares") pursuant to the
UTILX Corporation Amended and Restated 1994 Option and Restricted Stock Plan
(the "Plan").
We have examined the Registration Statement and such documents and records
of the Company and other documents as we have deemed necessary for the purpose
of this opinion. In giving this opinion, we are assuming the authenticity of
all instruments presented to us as originals, the conformity with originals of
all instruments presented to us as copies and the genuineness of all signatures.
Based upon and subject to the foregoing, we are of the opinion that the
Shares that may be issued pursuant to the Plan have been duly authorized and
that, upon the due execution by the Company and the registration by its
registrar of the Shares and the sale thereof by the Company in accordance with
the terms of the Plan, and the receipt of the consideration therefor in
accordance with the terms of the Plan, the Shares will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Perkins Coie LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated May 9, 1997, on our audits of the consolidated
financial statements of UTILX Corporation as of March 31, 1997 and 1996 and for
each of the three years in the period ended March 31, 1997.
/s/ COOPERS & LYBRAND LLP
Seattle, Washington
May 21, 1998
II-6
<PAGE>
UTILX CORPORATION
AMENDED AND RESTATED 1994 OPTION AND RESTRICTED STOCK PLAN
1. DEFINITIONS
The following terms have the corresponding meanings for purposes of the Plan:
"Change of Control" means
(a) a "Board Change." For purposes of the Plan, a Board Change shall
have occurred if a majority of the seats (other than vacant seats) on the
Corporation's Board of Directors (the "Board") were to be occupied by
individuals who were neither (i) nominated by a majority of the Incumbent
Directors nor (ii) appointed by directors so nominated. An "Incumbent
Director" is a member of the Board who has been either (A) nominated by a
majority of the directors of the Corporation then in office or (B) appointed
by directors so nominated, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(b) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of (i) 20% or more of either (A) the then outstanding
shares of Common Stock (the "Outstanding Corporation Common Stock") or (B)
the combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"), in the case of either (A) or
(B) of this clause (i), which acquisition is not approved in advance by a
majority of the Incumbent Directors or (ii) 33% or more of either (A) the
Outstanding Corporation Common Stock or (B) the Outstanding Corporation
Voting Securities, in the case of either (A) or (B) of this clause (ii),
which acquisition is approved in advance by a majority of the Incumbent
Directors; provided, however, that the following acquisitions shall not
constitute a Change of Control: (x) any acquisition by the Corporation, (y)
any acquisition by any employee benefit plan (or related trust) sponsored by
or maintained by the Corporation or any corporation controlled by the
Corporation, or (z) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in clauses (i), (ii) and
(iii) of the following subsection (c) are satisfied; or
(c) approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, in each case, unless, immediately
following such reorganization, merger or consolidation, (i) more than 60% of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such reorganization, merger or consolidation in
substantially the same proportions as their ownership, immediately prior to
such reorganization, merger or consolidation, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case may
be, (ii) no Person (excluding the Corporation, any employee benefit plan (or
related trust) of the Corporation or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly
or indirectly, 33% or more of the Outstanding Corporation Common Stock or
Outstanding Corporation Voting Securities, as the case may be) beneficially
owns, directly or indirectly, 33% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors, and (iii) at least
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<PAGE>
a majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were Incumbent
Directors at the time of the execution of the initial agreement providing for
such reorganization, merger or consolidation; or
(d) approval by the stockholders of the Corporation of (i) a complete
liquidation or dissolution of the Corporation or (ii) the sale or other
disposition of all or substantially all of the assets of the Corporation,
other than to a corporation, with respect to which immediately following such
sale or other disposition, (A) more than 60% of, respectively, the then
outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or other
disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities, as
the case may be, (B) no Person (excluding the Corporation and any employee
benefit plan (or related trust) of the Corporation or such corporation and
any Person beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 33% or more of the Outstanding
Corporation Common Stock or Outstanding Corporation Voting Securities, as the
case may be, beneficially owns, directly or indirectly, 33% or more of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of directors, and
(C) at least a majority of the members of the board of directors of such
corporation were approved by a majority of the Incumbent Directors at the
time of the execution of the initial agreement of action of the Board
providing for such sale or other disposition of assets of the Corporation.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Committee" means the Committee or Committees provided for in Section 4,
which shall administer the Plan.
"Common Stock" means common stock, par value $0.01 per share, of the
Corporation.
"Corporation" means UTILX Corporation, a Delaware corporation.
"Designated Beneficiary" means any person designated in writing by a
Participant as a legal recipient of payments due under an award in the event
of the Participant's death or, in the absence of such designation, the
Participant's estate. Such designation must be on file with the Corporation
in order to be effective but, unless the Participant has made an irrevocable
designation, may be changed from time to time by the Participant.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" of the Common Stock as of any trading day means the
closing price of the Common Stock as reported on such trading day by the
Nasdaq National Market. If no closing sales price is reported for the Common
Stock on such trading day, then "Fair Market Value" shall mean the highest
bid price reported for the Common Stock on such trading day by the National
Quotation Bureau Incorporated or any similar nationally recognized
organization. The Committee, at its sole discretion, shall make all
determinations required by this definition.
"Incentive Stock Option" means an incentive stock option as defined in
Section 422 of the Code.
"Maximum Annual Participant Grant" means the maximum number of shares with
respect to which an option or options may be granted to any optionee
Participant in any one fiscal year of the Corporation.
2
<PAGE>
"Nonqualified Stock Option" means an Option that does not qualify as an
Incentive Stock Option.
"Officer" means a duly elected officer of the Corporation as defined in the
Corporation's By-Laws. "Option" means an option to purchase shares of Common
Stock granted pursuant to the Plan, whether an Incentive Stock Option or a
Nonqualified Stock Option.
"Participant" means an employee or Officer who has received an award under
the Plan. "Plan" means this UTILX Corporation 1994 Option and Restricted
Stock Plan.
"Related Corporation" (other than a parent corporation) means any corporation
(other than the Corporation) in an unbroken chain of corporations ending with
the Corporation, if stock possessing 50% or more of the total combined voting
power of all classes of stock of each of the corporations other than the
Corporation is owned by one of the other corporations in such chain. When
referring to a parent corporation, the term "Related Corporation" means any
corporation in an unbroken chain of corporations ending with the Corporation
if, at the time of the granting of the Option or Restricted Stock, each of
the corporations other than the Corporation owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
"Restricted Period" shall have the meaning set forth in Section 7(c).
"Restricted Stock" means the shares of Common Stock referred to in Section 7.
"Retirement" means the termination of the services of a Participant because
of normal retirement or early retirement as may be approved by the Committee.
"Rule 16b-3" means Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.
"Withholding Tax" means any tax, including any federal, state or local income
tax or payroll tax, required by any governmental entity to be withheld or
otherwise deducted and paid with respect to the transfer of shares of Common
Stock as a result of the exercise of a Nonqualified Stock Option (as defined
in Section 6(a)) or the award or vesting of Restricted Stock or stock grants.
2. STOCK SUBJECT TO THE PLAN
On April 21, 1994, the effective date of the Plan, 600,000 shares of Common
Stock were reserved for issuance upon the exercise of Options and for
issuance of Restricted Stock awards under the Plan. On April 1, 1997 and on
April 1 of each year thereafter until April 1, 2001, the number of shares of
Common Stock that are available for issuance under the Plan shall be
increased by an amount of 3.4% of the outstanding common shares on that date.
Any unused portion of the available shares in any fiscal year, including
those available as of April 1, 1997, are carried forward and available for
grants and options in succeeding fiscal years. Shares issued upon the
exercise of Options and for issuance of Restricted Stock may be authorized
and unissued shares of Common Stock or previously outstanding shares of
Common Stock then held in the Corporation's treasury. The maximum number of
incentive stock options issuable under the 1994 Plan after May 30, 1997 is
900,000. The issuance of restricted shares is limited to 50,000 in any one
fiscal year. If any Option granted under the Plan shall expire or terminate
for any reason (including, without limitation, by reason of its cancellation,
in whole or in part, pursuant to the provisions of Section 6(c) or otherwise,
or the substitution in place thereof of a new option) without having been
exercised in full, the shares subject thereto shall again be available for
the purposes of issuance under the Plan. If shares of Restricted Stock shall
be forfeited and returned to the Corporation pursuant to the provisions of
Section 7, such shares shall again be available for the purposes of issuance
under the Plan to the extent permitted by Rule 16b-3.
3. ADMINISTRATION
3
<PAGE>
The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have plenary authority, at its
discretion, to determine the individuals to whom, and the time or times at
which, Restricted Stock shall be awarded and Options shall be granted
(including, without limitation, whether such Options shall be Incentive Stock
Options or Nonqualified Stock Options or a combination thereof) and the
number of shares to be covered by each such award or grant. In making such
determinations, the Committee may take into account the nature of the
services rendered by the respective Participants, their present and potential
contributions to the Corporation's success and such other factors as the
Committee, at its discretion, may deem relevant. Subject to the express
provisions of the Plan, the Committee shall have plenary authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of Restricted Stock and
option agreements (which need not be identical) and to make all other
determinations necessary or advisable for the administration of the Plan.
The Committee's determinations of the matters referred to in this Section 3
shall be conclusive. It is the intention of the Corporation that the Plan
and the administration hereof comply in all respects with Rule 16b-3, and the
rules and regulations promulgated thereunder, and if any Plan provision is
later found not to be in compliance with Rule 16b-3, the provision shall be
deemed null and void, and in all events the Plan shall be construed in favor
of its meeting the requirements of Rule 16b-3. Notwithstanding anything in
the Plan to the contrary, the Board, at its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use of any
provision of the Plan to persons who are subject to Section 16 of the
Exchange Act without so limiting or conditioning the Plan with respect to
other persons.
4. THE COMMITTEE
The Board shall designate a Committee (or Committees) of members of the
Board. With respect to Options granted and Restricted Stock awarded to
officers and directors who are subject to Section 16 under the Exchange Act,
the Committee (or Committees) shall meet the requirements of Rule 16b-3.
The Committee shall be appointed by the Board, which may from time to time
appoint members of the Committee in substitution for members previously
appointed and may fill vacancies, however caused, in the Committee. The
Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places as it may determine. A majority of its
members shall constitute a quorum. All determinations of the Committee shall
be made by not less than a majority of its members. Any decision or
determination reduced to writing and signed by all the Committee members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a secretary, shall
keep minutes of its meetings and shall make such rules and regulations for
the conduct of its business as it shall deem advisable.
5. ELIGIBILITY
The Committee may award Restricted Stock and grant Options to employees or
Officers of the Corporation or a Related Corporation. The award of Incentive
Stock Options by the Committee is limited to employees of the Corporation and
any Related Corporation. Any person eligible under the Plan may receive one
or more grants of Options or one or more awards of Restricted Stock, or any
combination thereof, as the Committee shall from time to time determine, and
such determinations may be different as to different Participants and may
vary as to different awards and grants.
6. OPTION GRANTS
(a) The Committee is authorized under the Plan, at its discretion, to issue
Options as Incentive Stock Options or as Nonqualified Stock Options and the
Options shall be designated as Incentive Stock Options or Nonqualified Stock
Options in the applicable option agreement. The Maximum Annual Participant
Grant shall be 100,000 shares, subject to adjustment as provided in Section
12. The purchase price of the Common Stock under each Option granted under
the Plan shall be determined by the Committee, but
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shall be not less than 100% of the Fair Market Value of the Common Stock at
the time such Option is granted.
(b) The Committee shall be authorized, at its discretion, to prescribe in
the Option grant the installments, if any, in which an Option granted under
the Plan shall become exercisable, provided that no Option shall be
exercisable prior to the first anniversary of the date of grant thereof
except as provided in Sections 6(c), (d), (g), (h) and (j) or except as the
Committee otherwise determines. In no case may an Option be exercised for
less than 10 shares at any one time (or the remaining shares covered by the
Option if less than 10) during the term of the Option. The Committee shall
also be authorized to establish the manner of the exercise of an Option. The
term of each Option shall be not more than 10 years from the date of grant
thereof.
In general, upon exercise, the Option price is to be paid in full in cash;
however, the Committee can determine at the time the Option is granted for
Incentive Stock Options or at any time prior to exercise for Nonqualified
Stock Options, that additional forms of payment will be permitted. To the
extent permitted by the Committee and applicable laws and regulations
(including, but not limited to, federal tax and securities laws and
regulations and state corporate law), an Option may be exercised (i) in
Common Stock owned by the Option holder having a Fair Market Value on the
date of exercise equal to the aggregate Option price or in a combination of
cash and stock; provided, however, that payment in stock shall not be made
unless such stock shall have been owned by the Option holder for a period of
at least six months prior thereto; or (ii) by delivery of a properly executed
exercise notice, together with irrevocable instructions to a broker
designated by the Corporation, all in accordance with the regulations of the
Federal Reserve Board, to deliver promptly to the Corporation the amount of
sale or loan proceeds to pay the exercise price and any Withholding Tax
obligations that may arise in connection with the exercise. As a condition
to the exercise of an Option, the Option holder shall make such arrangements
as the Committee may require for the satisfaction of any federal, state or
local withholding tax obligations that may arise in connection with such
exercise.
(c) In the event that a Participant's services for the Corporation or a
Related Corporation shall cease and the termination of such individual's
service is for cause, the Options shall automatically terminate upon first
notification to the Option holder of such termination of services, unless the
Committee determines otherwise, and such Option shall automatically terminate
upon the date of such termination of services for all shares which were not
purchasable upon such date. For purposes of this Section 6(c), "cause" is
defined as a determination by the Committee that the Option holder has (i)
committed a felony, (ii) engaged in an act or acts of deliberate and
intentional dishonesty resulting or intended to result directly or indirectly
in improper material gain to or personal enrichment of the individual at the
Corporation's expense, or (iii) willfully disobeyed the Corporation's
appropriate rules, instructions or orders, and such willful disobedience has
continued for a period of 10 days following notice thereof from the
Corporation.
In the event of the termination of the services of an Option holder because
of Retirement or disability, the Option holder may (unless such Option shall
have been previously terminated pursuant to the provisions of the preceding
paragraph or unless otherwise provided in his or her Option grant) exercise
such Option at any time prior to 24 months from the date of such termination,
(i) in the event of disability or Retirement, to the extent of the number of
shares covered by such Option, whether or not such shares had become
purchasable by the Option holder at the date of the termination of his or her
services and (ii) in the event of early retirement not approved by the
Committee, to the extent of the number of shares covered by such Option at
such time or times within 24 months from the date of such termination as such
Option becomes purchasable by the Option holder in accordance with its terms.
In the event of the death of an individual to whom an Option has been granted
under the Plan, while that individual is performing services for the
Corporation or a Related Corporation, the Option theretofore granted to that
individual (unless such Option shall have been previously terminated pursuant
to the provisions of this Section 6(c) or unless otherwise provided in the
Option grant) may, subject to the limitations described in Section 6(f), be
exercised by that individual's Designated Beneficiary, by the
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legatee or legatees of the Option under that individual's last will, or by
the individual's personal representatives or distributees, at any time within
a period of 24 months after the individual's death, but not after the
expiration of the Option, to the extent of the remaining shares covered by
the Option whether or not such shares had become purchasable by such an
individual at the date of his or her death. In the event of the death of an
individual (i) during the 24-month period following termination of his or her
services or (ii) following termination of his or her services by reason of
Retirement or disability, then the Option (if not previously terminated
pursuant to the provisions of this Section 6(c) may be exercised during the
remainder of such 24-month period or during the remaining term of the Option,
respectively, by the individual's Designated Beneficiary, by the legatee or
legatees under his or her last will, or by the individual's personal
representative or distributee, but only to the extent of the number of shares
purchasable by such individual pursuant to the provisions of Section 6(d) at
the date of termination of his or her services.
In the event of the termination of the services of an Option holder, other
than by reason of Retirement, disability or death, the holder may (unless his
or her Option shall have been previously terminated pursuant to the
provisions of this Section 6(c) or unless otherwise provided in his or her
Option grant) exercise such Option at any time within three months after such
termination, but not after the expiration of the Option, to the extent of the
number of shares covered by such Option that were purchasable by him or her
at the date of the termination of his or her services, and such Option shall
automatically terminate upon the date of such termination of services for all
shares that were not purchasable upon such date.
Although an Option may be exercised after Retirement, disability, death or
other termination under Section 422 of the Code, if the Option has been
designated as an Incentive Stock Option, it must be exercised within three
months after the date of Retirement or other termination or one year after
the termination of employment due to disability in order to qualify for
Incentive Stock Option tax treatment.
(d) Notwithstanding the foregoing provisions, the Committee may determine,
at its sole discretion, in the case of any termination of services, that the
holder of an Option may exercise such Option to the extent of some or all of
the remaining shares covered thereby whether or not such shares had become
purchasable by such an individual at the date of the termination of his or
her services and may exercise such Option at any time prior to the expiration
of the original term of the Option, except that such extension shall not
cause any Incentive Stock Option to fail to continue to qualify as an
Incentive Stock Option without the consent of the Option holder. Options
granted under the Plan shall not be affected by any change of relationship
with the Corporation so long as the holder continues to be an employee or
Officer of the Corporation or of a Related Corporation; however, a change in
a participant's status from an employee to a nonemployee Officer shall result
in the termination of an outstanding Incentive Stock Option held by such
participant in accordance with Section 6(c). The Committee, at its absolute
discretion, may determine all questions of whether particular leaves of
absence constitute a termination of services; provided, however, that with
respect to Incentive Stock Options, such determination shall be subject to
any requirements contained in the Code. Nothing in the Plan or in any Option
granted pursuant to the Plan shall confer on any individual any right to
continue in the employ or other service of the Corporation or any other
person or interfere in any way with the right of the Corporation or any other
person to terminate his or her employment or other services at any time.
(e) The date of grant of an Option pursuant to the Plan shall be the date
specified by the Committee at the time it grants such Option, provided that
such date shall not be prior to the date of such action by the Committee and
that the price shall be determined in accordance with Section 6(a) on such
date. The Committee shall promptly notify a grantee of an award and a
written Option grant shall promptly be duly executed and delivered by or on
behalf of the Corporation.
(f) In the event an Option holder is granted Incentive Stock Options that in
the aggregate entitle the Option holder to purchase, in the first year such
Options become exercisable (whether under their original terms or as a result
of the occurrence of an Acceleration Event, as defined below), Common Stock
of the Corporation or a Related Corporation having a Fair Market Value
(determined as of the time such Options
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are granted) in excess of $100,000, such portion in excess of $100,000 shall
be treated as a Nonqualified Stock Option. Such limitation shall not apply
if the Internal Revenue Service publicly rules, issues a private ruling to
the Corporation, any Option holder of the Corporation or any legatee,
personal representative or distributee of an Option holder or states in
proposed, temporary or final regulations that provisions which allow the full
exercise of an Option holder's Incentive Stock Options upon the occurrence of
the relevant Acceleration Event do not violate Section 422(d) of the Code.
An "Acceleration Event" means (i) a determination of the Committee to allow
an Option holder to exercise his or her Options in full upon termination of
his or her employment or other service as provided in Section 6(c) or (d),
(ii) the death of an Option holder while he or she is employed by the
Corporation or a Related Corporation, (iii) any Change of Control, or (iv)
the Option holder's termination of employment or other service under
circumstances that will allow him or her to exercise Options not otherwise
exercisable pursuant to Section 6(j).
(g) Notwithstanding any contrary waiting period, installment period or other
limitation or restriction in any Option agreement or in the Plan, in the
event of a Change of Control, each Option outstanding under the Plan shall
thereupon become exercisable at any time during the remaining term of the
Option, but not after the term of the Option, to the extent of the number of
shares covered by the Option, whether or not such shares had become
purchasable by the Option holder thereunder immediately prior to such Change
of Control, subject, however, to the limitations described in Section 6(f),
by the Option holder.
(h) Anything in the Plan to the contrary notwithstanding, upon a Change of
Control an Option holder (other than an Option holder who initiated a Change
of Control in a capacity other than as an officer or a director of the
Corporation) who is an officer or a director of the Corporation (within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder) with respect to an Option that was granted at least
six months prior to the date of exercise pursuant to this sentence shall,
unless the Committee shall determine otherwise at the time of grant,
surrender the Option to the Corporation and receive in cash an amount equal
to the amount by which the fair market value of the Option on the date of
exercise (determined as provided in Section 6(i)) shall exceed the purchase
price per share under the Option multiplied by the number of shares of Common
Stock granted under the Option as to which the Option shall have been
exercised.
Any other Option holder who is not an officer or director of the Corporation
(within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder) with respect to an Option shall, unless
the Committee shall determine otherwise at the time of grant, have the right,
in lieu of payment of the full purchase price of the shares of Common Stock
being purchased under the Option and by giving written notice to the
Corporation, to elect (within such 90-day period from and after a Change of
Control) to surrender all or part of the Option to the Corporation and to
receive in cash an amount equal to the amount by which the fair market value
of the Option on the date of exercise (determined as provided in Section
6(i)) shall exceed the purchase price per share under the Option multiplied
by the number of shares of Common Stock granted under the Option as to which
the right granted by this sentence shall have been exercised. Such written
notice shall specify the Option holder's election to purchase shares of
Common Stock granted under the Option or to receive the cash payment referred
to in the immediately preceding sentence.
Notwithstanding the foregoing, this Section 6(h) shall be operative only in
the event of a Change of Control in which the consideration to be paid does
not consist solely of equity securities registered under Section 12 of the
Exchange Act.
(i) For the purpose of determining the amount payable pursuant to Section
6(h), the "fair market value of the Option" will be equal to the higher of
(x) the highest Fair Market Value of the Common Stock on any trading day
during the 90-calendar-day period ending on the date of exercise and (y)
whichever of the following is applicable:
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(i) the highest per share price paid in any tender or exchange
offer that is in effect at any time during the 90 calendar days preceding
the exercise of the limited right;
(ii) the fixed or formula price for the acquisition of shares of
Common Stock in a merger or similar agreement approved by the
Corporation's stockholders or the Board, if such price is determinable on
the date of exercise; or
(iii) the highest price per share paid to any stockholder of the
Corporation in a transaction or group of transactions giving rise to the
exercisability of the Option. In no event, however, may the holder of an
Incentive Stock Option receive an amount in excess of the maximum amount
that will enable the Option to continue to qualify as an Incentive Stock
Option without the consent of the Participant.
(j) Notwithstanding the foregoing provisions, the Option holder's employment
or other contract with the Corporation may provide that upon termination of
his or her employment or other services for other than cause or for "good
reason" (as defined in his or her contract), all Options shall become
immediately exercisable.
7. RESTRICTED STOCK AWARDS
(a) Subsequent to April 1, 1997, the number of shares available for issuance
as Restricted Stock Awards is limited to 50,000 in any one fiscal year.
(b) The consideration to be received for shares of Restricted Stock issued
hereunder out of authorized but unissued shares or out of treasury shares
shall be equal to cash in an amount equal to the par value thereof and past
services for the Corporation. The recipient of Restricted Stock shall be
recorded as a stockholder of the Corporation, at which time the Corporation,
at its discretion, may either issue a Restricted Stock certificate or make a
book entry credit in the Corporation's stock ledger to evidence the award of
such Restricted Stock, and the Participant shall have, subject to the
provisions hereof, all the rights of a stockholder with respect to such
shares and receive all dividends or other distributions made or paid with
respect to such shares; provided, that the shares themselves, and any new,
additional or different shares or securities that the recipient may be
entitled to receive with respect to such shares by virtue of a stock split or
stock dividend or any other change in the corporate or capital structure of
the Corporation, shall be subject to the restrictions hereinafter described.
(c) Except for 35,000 shares of Restricted Stock granted on or prior to
April 21, 1994, during a period of years following the date of grant, as
determined by the Committee, which period shall in no event be less than 12
months (the "Restricted Period"), the Restricted Stock or any rights thereto
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of by the recipient, except in the event of the
recipient's death or the transfer of the Restricted Stock or any rights
thereto to the Corporation under the provisions of the next succeeding
paragraph. In the event of the death or Retirement of the recipient during
the Restricted Period, such restrictions shall immediately lapse, and the
recipient or, in the case of the recipient's death, his or her Designated
Beneficiary, the legatee under his or her last will or his or her personal
representative or distributee shall be free to transfer, encumber or
otherwise dispose of the Restricted Stock; provided, however, in the event of
the early retirement of the recipient not approved by the Committee during
the Restricted Period, such restrictions shall continue until they lapse in
accordance with the terms of the grant.
Except as provided in Section 7(d), in the event that, during the Restricted
Period, the service of the recipient by the Corporation or a Related
Corporation is terminated for any reason (including termination with or
without cause by the Corporation or a Related Corporation or resignation by
the recipient), other than termination of service due to the Retirement or
death of the recipient, then the shares of Restricted Stock held by him or
her shall be forfeited to the Corporation and the recipient shall immediately
transfer and return to the Corporation the certificates, if any have been
issued to him or her, representing all the
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Restricted Stock and the recipient's rights as a stockholder with respect to
the Restricted Stock shall cease, effective with such termination of service.
Notwithstanding the foregoing, the recipient's service contract with the
Corporation may provide that upon termination of his or her service for other
than cause or for good reason, all Restricted Stock shall cease to be subject
to such restrictions.
A recipient's rights to Restricted Stock may not be assigned or transferred
except upon death by will, descent or distribution. In the event of an
attempt by the recipient to sell, exchange, transfer, pledge or otherwise
dispose of shares of Restricted Stock in violation of the provisions hereof,
such shares shall be forfeited to the Corporation.
(d) Notwithstanding the Restricted Period contained in the grant of
Restricted Stock, in the event of a Change of Control in which the
consideration to be paid does not consist solely of equity securities
registered under Section 12 of the Exchange Act, all restrictions on shares
of Restricted Stock shall immediately lapse and such Restricted Shares shall
become immediately transferable and nonforfeitable.
(e) Notwithstanding anything contained in the Plan to the contrary, the
Committee may determine, at its sole discretion, in the case of any
termination of a recipient's service, that the restrictions on some or all of
the shares of Restricted Stock awarded to a recipient shall immediately lapse
and such Restricted Shares shall become immediately transferable and
nonforfeitable.
8. WITHHOLDING TAXES
In connection with the transfer of shares of Common Stock as a result of the
exercise of a Nonqualified Stock Option or the award of Restricted Stock or
stock grants, the Corporation (a) shall not issue a certificate for such
shares until it has received payment from the Participant of any Withholding
Tax in cash or by the retention by the Corporation or acceptance by the
Corporation upon delivery thereof by the Participant of shares of Common
Stock sufficient in Fair Market Value to cover the amount of such Withholding
Tax and (b) shall have the right to retain or sell without notice, or to
demand surrender of, shares of Common Stock in value sufficient to cover any
Withholding Tax. The Corporation shall have the right to withhold from any
cash amounts due from the Corporation to the award recipient pursuant to the
Plan an amount equal to the Withholding Tax. In either case, the Corporation
shall make payment (or reimburse itself for payment made) to the appropriate
taxing authority of an amount in cash equal to the amount of such Withholding
Tax, remitting any balance to the Participant. For purposes of this Section
8, the value of shares of Common Stock so retained or surrendered shall be
equal to the Fair Market Value of such shares on the date that the amount of
the Withholding Tax is to be determined (the "Tax Date"), and the value of
shares of Common Stock so sold shall be the actual net sale price per share
(after deduction of commissions) received by the Corporation.
Notwithstanding the foregoing, the Participant may elect, subject to approval
by the Committee, to satisfy the obligation to pay any Withholding Tax, in
whole or in part, by providing the Corporation with funds sufficient to
enable the Corporation to pay such Withholding Tax or by having the
Corporation retain or accept upon delivery thereof by the Participant shares
of Common Stock sufficient in Fair Market Value to cover the amount of such
Withholding Tax. Each election by a Participant to have shares retained or to
deliver shares for this purpose must be in writing and made on or prior to
the Tax Date.
9. TRANSFERABILITY AND OWNERSHIP RIGHTS OF OPTIONS
Options granted under the Plan may be exercised during a Participant's
lifetime only by the Participant and options granted under the Plan and the
rights and privileges conferred thereby shall not be subject to execution,
attachment or similar process and may not be transferred, assigned, pledged
or hypothecated in any manner (whether by operation of law or otherwise)
except to the extent permitted by the Committee and by Rule 16b-3 and Section
422 of the Code.
10. HOLDING PERIODS
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(a) If an individual subject to Section 16 of the Exchange Act sells shares
of Common Stock obtained upon the exercise of an Option within six months
after the date the Option was granted, such sale may result in short-swing
profit recovery under Section 16(b) of the Exchange Act.
(b) In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, an Option holder must hold the shares
issued upon the exercise of an Incentive Stock Option for two years after the
date of grant of the Option and one year from the date of exercise. An
Option holder may be subject to the alternative minimum tax at the time of
exercise of an Incentive Stock Option. The Committee may require an Option
holder to give the Corporation prompt notice of any disposition in advance of
the required holding period of shares of Common Stock acquired by exercise of
an Incentive Stock Option. Tax advice should be obtained when exercising any
Option and prior to the disposition of the shares issued upon the exercise of
any Option.
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11. RULE 16B-3 COMPLIANCE AND BIFURCATION OF PLAN
It is the intention of the Corporation that, if any of the Corporation's
equity securities are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, the Plan shall comply in all respects with Rule 16b-3 under the
Exchange Act and, if any Plan provision is later found not to be in
compliance with such section, the provision shall be deemed null and void,
and in all events the Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3. Notwithstanding anything in the Plan to the
contrary, the Board, at its absolute discretion, may bifurcate the Plan so as
to restrict, limit or condition the use of any provision of the Plan to
Participants who are Officers and Directors subject to Section 16 of the
Exchange Act without so restricting, limiting or conditioning the Plan with
respect to other Participants.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Except as otherwise provided in Section 6(g) and (h), in the event of any
changes in the outstanding stock of the Corporation by reason of stock
dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, split-ups, split-offs, spin-offs,
liquidations or other similar changes in capitalization, or any distribution
to stockholders other than cash dividends, the Committee shall make such
adjustments, if any, in light of the change or distribution as the Committee,
at its sole discretion, shall determine to be appropriate in the number and
class of shares or rights subject to Options and the exercise prices of the
Options covered thereby. In the event of any such change in the outstanding
Common Stock of the Corporation, the aggregate number and class of shares
available under the Plan, the Maximum Annual Participant Grant set forth in
Section 6, the maximum number of shares as to which Options may be granted
and the maximum number of shares of Restricted Stock that may be awarded
shall be appropriately adjusted by the Committee.
13. AMENDMENT AND TERMINATION
Unless the Plan shall theretofore have been terminated as hereinafter
provided, the Plan shall terminate on, and no awards of Restricted Stock or
Options shall be made after, April 21, 2004; provided, however, that such
termination shall have no effect on awards of Restricted Stock or Options
made prior thereto. The Plan may be terminated, modified or amended by the
stockholders of the Corporation. The Board may also terminate the Plan, or
modify or amend the Plan in such respects as it shall deem advisable in order
to conform to any change in any law or regulation applicable thereto, or in
other respects; however, to the extent required for compliance with Rule
16b-3, Section 422 of the Code or other applicable law or regulation,
stockholder approval will be required for any amendment that will (a)
materially increase the total number of shares as to which Options may be
granted or that may be issued as Restricted Stock, (b) materially change the
class of persons eligible to receive awards of Restricted Stock and grants of
Options, (c) materially increase the benefits accruing to participants under
the Plan, or (d) otherwise require stockholder approval under any applicable
law or regulation. The amendment or termination of the Plan shall not,
without the consent of the recipient of any award under the Plan, alter or
impair any rights or obligations under any award theretofore granted under
the Plan.
14. INDEMNIFICATION
In addition to all other rights of indemnification they may have as Directors
of the Corporation or as members of the Committee, members of the Board and
the Committee shall be indemnified by the Corporation for all reasonable
expenses and liabilities of any type and nature, including attorneys' fees,
incurred in connection with any action, suit or proceeding to which they or
any of them are a party by reason of, or in connection with, any Option
granted, Restricted Stock or stock grants awarded hereunder and against all
amounts paid by them in settlement thereof (if such settlement is approved by
independent legal counsel selected by the Corporation); provided, however,
that if such member or members are adjudged liable for willful misconduct,
the indemnification provisions of this Section 14 shall not apply to expenses
that relate to matters involving such willful misconduct. This
indemnification shall apply only if such member or members notify the
Corporation of such action, suit or proceeding in writing, within
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14 days after institution of any such action, suit or proceeding, so that the
Corporation may have the opportunity to make appropriate arrangements to
prosecute or defend any such action.
5. EFFECTIVENESS OF THE PLAN
The Plan shall become effective on April 21, 1994. The Committee may at its
discretion authorize the awarding of Restricted Stock and the granting of
Options, the issuance or exercise of which, respectively, shall be expressly
subject to the conditions that (a) the shares of Common Stock reserved for
issuance under the Plan shall have been duly listed, upon official notice of
issuance, upon each stock exchange in the United States upon which the Common
Stock is traded and (b) a registration statement under the Securities Act of
1933, as amended, with respect to such shares shall have become effective.
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