Registration No. 33-__________
FORM S-8
SECURITIES AND EXCHANGE COMMISSION
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ELECTROSOURCE, INC.
(Exact name of issuer as specified in its charter)
Delaware 742466304
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2809 Interstate 35 South
San Marcos, Texas 78666
(Address of Principal Executive (Zip Code)
Offices)
1996 STOCK OPTION PLAN
(Full title of plan)
Michael G. Semmens, President
Electrosource, Inc.
2809 Interstate 35 South
San Marcos, Texas 78666
(Name and address of agent for service)
(512) 753-6500
(Telephone number, including area code, of agent for service)
Copy to:
Bret Van Earp
Attorney at Law
100 Congress Avenue
Suite 1800
Austin, Texas 78701
Calculation of Registration Fee
Proposed
Proposed maximum
Title of Amount to maximum aggregate Amount of
securities to be be offering price offering registrat
registered registered per share price (1) ion fee
Common Stock,
$1.00 par value 960,000 $7.00 $6,720,000 $2,036.36
per share shares
(1) Estimated solely for the purpose of determining the
registration fee and based upon the closing price quoted by NASDAQ
for a share of Electrosource, Inc. Common Stock on June 30, 1997.
An Exhibit Index is found on Page 6.
Page 1 of 14 Pages.
This registration statement relates to 960,000 shares of
Electrosource, Inc. Common Stock, $1.00 par value per share (OCommon
StockO) reserved for issuance upon exercise of options that have
been granted but not exercised or that may be granted pursuant to
the 1996 Stock Option Plan (the OPlanO) of Electrosource, Inc. (the
OCompanyO).
Incorporation of Documents by Reference
The following documents are hereby specifically incorporated by
reference into this registration statement:
(1) The CompanyOs Annual Report on Form 10-K for the fiscal
year ended December 31, 1996;
(2) All other reports filed by the Company pursuant to Section
13(a) or Section 15(d) of the Exchange Act since December 31, 1996,
including the following:
(i) Form 8-K Current Report dated March 10, 1997;
(ii) Form 8-KA1 Current Report dated April 2, 1997;
(iii) Form 8-K Current Report dated April 3, 1997; and
(iv) The Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997.
(3) The description of the CompanyOs Common Stock set forth
under the captions ODescription of Electrosource, Inc. Common StockO
and OPurposes and Effects of Certain Provisions of the
Electrosource, Inc. Certificate and the Electrosource, Inc. BylawsO
in the Information Statement filed as Exhibit 28.1 to the CompanyOs
Registration Statement on Form 10 filed October 19, 1987 (as amended
by Form 8 Amendments filed January 8, 1988 and January 13, 1988),
which description of the CompanyOs Common Stock was incorporated by
reference into the Registration Statement on Form 10 in response to
Item 11, ODescription of RegistrantOs Securities to be Registered,O
together with any subsequent amendment or report filed for the
purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to December 31,
1996, and prior to the filing of a post-effective amendment to this
registration statement indicating that all securities offered have
been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference into this
registration statement and to be part thereof from the date of
filing of such documents.
Description of Securities
Not applicable
Legal Matters
The validity of the Company Common Stock offered hereby will be
passed upon for the Company by Bret Van Earp, Attorney at Law, 100
Congress Avenue, Suite 1800, Austin, Texas 78701.
Experts
The financial statements of the Company appearing in the Company's
Annual Report (Form 10-K) for the year ended December 31, 1996, have
been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon (which contains an explanatory
paragraph with respect to substantial doubt about the Company's
ability to continue as a going concern) included therein and
incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and
auditing.
Interests of Named Experts and Counsel
Not Applicable
Indemnification of Directors and Officers
The CompanyOs Restated Certificate of Incorporation provides that
a director of the Company will not be personally liable to the
Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except that such provisions will not
eliminate or limit the liability of a director (i) for a breach of
the directorOs duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) with
respect to unlawful payments of dividends or unlawful stock
purchases or redemptions for which the director is liable under
Section 174 of the General Corporation Law of the State of Delaware,
or (iv) for any transaction from which the director derives an
improper personal benefit.
The CompanyOs Bylaws provide that, to the extent permitted by law,
the Company will indemnify each of its directors, and authorize the
purchase of insurance with respect thereto. The Bylaws also provide
that the Company may indemnify its officers, employees or agents who
are made or threatened to be made defendants or respondents to any
threatened, pending or completed action, suit or proceeding due to
such personOs service to the Company or to certain other entities at
the request of the Company, so long as such person acted in good
faith and in a manner he reasonably believed to be not opposed to
the best interests of the Company. Such indemnification may be made
only upon a determination that such indemnification is proper in the
circumstances because the person to be indemnified has met the
applicable standard of conduct to permit indemnification under the
law.
In addition to indemnification provided pursuant to the CompanyOs
Restated Certificate of Incorporation and Bylaws, the Company has
entered into a Director Indemnification Agreement with each director
of the Company providing for, among other things, (i)
indemnification by the Company of each director to the full extent
authorized or permitted by Delaware statutes; (ii) maintenance by
the Company of director and officer insurance coverage for the
benefit of each director of up to $2,000,000, subject to
availability at premiums not substantially disproportionate to the
amount of coverage; (iii) indemnification by the Company of each
director in connection with settlements under certain circumstances;
(iv) procedures relating to independent review of determinations
regarding director indemnification (including special provisions in
case of a change in control of the Company); and (v) the advancement
of expenses to directors in connection with matters for which the
director is entitled to indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Securities and Exchange 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 Company of expenses
incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding)
is asserted against the Company by such director, officer or
controlling person in connection with the securities being
registered, the Company 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.
Exemption from Registration Claimed
Not applicable
Exhibits
The following exhibits are filed with or incorporated by reference
into this registration statement:
Exhibit
4.1 Articles Four, Seven, and Eight of the Restated
Certificate of Incorporation of Electrosource,
Inc. (filed as Exhibit 3.1 to registrant's
Registration Statement on Form 10 filed October
19, 1987 as amended by Form 8 Amendments filed
January 8, 1988 and January 13, 1988 and
incorporated herein by reference)
4.2 1996 Stock Option Plan of Electrosource, Inc.
5.1 Opinion re legality
24.1 Consent of Ernst & Young LLP
24.2 Consent of Bret Van Earp (included as part of
Exhibit 5.1)
Undertakings
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually or
in the aggregate, reflect a fundamental change in
the information set forth in the registration
statement;
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement
or any material change to such information in the
registration statement.
Provided, that paragraphs (a)(i) and (a)(ii) shall not apply if
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(b) That, for purposes 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 herein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) 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.
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrantOs annual report pursuant to
section 13(a) of section 15(d) of the Securities Exchange Act
of 1934 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.
The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the
requirements of Rule 14aD3 or Rule 14cD3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation SDX is not
set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such
interim financial information.
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 Austin, State
of Texas, on July 11, 1997.
ELECTROSOURCE, INC.
(Registrant)
By: /s/ Michael G. Semmens
Michael G. Semmens, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the date indicated.
Signature Title Date
/s/ Michael G. Semmens President and Chairman of June 30, 1997
Michael G. Semmens the Board of Directors
(Principal Executive Officer)
/s/ Richard S. Balzhiser Director June 30, 1997
Richard S. Balzhiser
/s/ William R. Graham Director June 30, 1997
William R. Graham
/s/ Norman Hackerman Director June 30, 1997
Norman Hackerman
/s/ Charles L. Mathews Director June 30, 1997
Charles L. Mathews
/s/ Nathan Morton Director June 30, 1997
Nathan Morton
/s/ Richard S. Williamson Director June 30, 1997
Richard S. Williamson
/s/ Thomas S. Wilson Director June 30, 1997
Thomas S. Wilson
/s/ James M. Rosel Vice President Finance June 30, 1997
James M. Rosel and General Counsel
(Chief Financial Officer)
/s/ Mary Beth Koenig Treasurer and Controller June 30, 1997
Mary Beth Koenig (Principal Accounting
Officer)
EXHIBIT INDEX
Exhibit Sequentially
Numbered Page
4.1 Articles Four, Seven, and Eight of the --
Restated Certificate of Incorporation of
Electrosource, Inc. (filed as Exhibit 3.1
to registrant's Registration Statement on
Form 10 filed October 19, 1987 as amended
by Form 8 Amendments filed January 8, 1988
and January 13, 1988 and incorporated
herein by reference)
4.2 1996 Stock Option Plan of Electrosource, 7
Inc.
5.1 Opinion re legality 13
24.1 Consent of Ernst & Young 14
24.2 Consent of Bret Van Earp (included as part --
of Exhibit 5.1)
Exhibit 4.2
1996 Stock Option Plan
Adopted by the Board of Directors
August 7, 1996
I. Purpose
The 1996 Stock Option Plan (the "Plan") of Electrosource,
Inc. (the "Corporation") is intended to provide an opportunity
for officers, directors (employee and non-employee), employees
and consultants to acquire an equity interest in the development
and financial success of the Corporation's business. The
purposes of the plan are to create an incentive to serve or
continue in the service of the Corporation, to aid in obtaining
and retaining key personnel of outstanding ability, to attract
and retain directors with a high degree of training, experience
and ability, and to attract and retain consultants with a high
degree of training, experience and ability whose services are
considered specialized and unusually valuable.
II. Shares Subject to the Plan
The maximum number of shares of the common stock, $1.00 par
value, of the Corporation (the "Stock) which may be issued
pursuant to Incentive Stock Options and Non-Qualified Stock
Options granted under the Plan (collectively referred to herein
as "Options") shall be a total of 960,000 shares of Stock
(subject to adjustment as provided in Section VII), which may be
either authorized and unissued Stock or Stock held in the
treasury of the Corporation, as shall be determined from time to
time by the Committee of the Board of Directors of the
Corporation described below. If an Option expires or terminates
for any reason without being exercised in full, the unpurchased
shares of Stock subject to such Option shall again be available
for purposes of the Plan. Until termination of the Plan, the
Corporation shall at all times reserve a sufficient number of
shares to meet the requirements of the Plan.
It is the intent of the Corporation, upon approval of the
1996 Stock Option Plan by the stockholders, to consolidate those
Options granted and outstanding under the 1987 Stock Option Plan
of Electrosource, Inc., the 1988 Non-Employee Director Stock
Option Plan of Electrosource, Inc., the 1993 Non-Employee
Consultant Stock Option Plan of Electrosource, Inc., and the 1994
Stock Option Plan (the "Previous Plans"). The Options granted
and outstanding under the Previous Plans would automatically,
without any further action of the Board of Directors, be amended
to become part of and have the terms and conditions of the 1996
Stock Option Plan. Upon stockholder approval of the 1996 Stock
Option Plan, such Previous Plans would be null and void. In the
event that stockholder approval is withheld, the Previous Plans
would continue under their own terms until expiration or
amendment by stockholders.
III. Effective Date of the Plan
The Plan shall be deemed to be effective as of the 7th day
of August 1996, but its adoption shall be subject to approval by
the holders of at least a majority of a quorum of the voting
stock of the Corporation. In the event that such stockholder
approval is not obtained on or before August 7, 1997, the Plan,
and all options granted hereunder, shall terminate. The Plan
shall expire on August 6, 2006, unless sooner terminated as
provided in Section XII.
IV. Administration of the Plan
This plan shall be administered by a committee (the
"Committee") appointed by the Board of Directors consisting of
not less than three directors, each of whom must be a "Non-
Employee Director." A Non-Employee Director shall mean a
director who: (A) is not currently an officer (as defined in
Rule 16a-l(f) of the Securities and Exchange Commission) of the
Corporation or a parent or subsidiary of the Corporation, or
otherwise currently employed by the Corporation or a parent or
subsidiary of the Corporation; (B) does not receive compensation,
either directly or indirectly, from the Corporation or a parent
or subsidiary of the Corporation, for services rendered as a
consultant or in any capacity other than as a director, except
for an amount that does not exceed the dollar amount for which
disclosure would be required pursuant to Section 404(a) of
Regulation S-K of the Securities and Exchange Commission
("Regulation S-K"); (C) does not possess an interest in any other
transaction for which disclosure would be required pursuant to
Section 404(a) of Regulation S-K; and (D) is not engaged in a
business relationship for which disclosure would be required
pursuant to Section 404(b) of Regulation S-K.
The Board of Directors may from time to time appoint
members of the Committee in substitution for or in addition to
members previously appointed and may fill vacancies, however
caused, in the Committee. A majority of the Committee shall
constitute a quorum. All actions of the Committee shall be taken
by a majority of its members. Any action may be taken by a
written instrument signed by the members, and action so taken
shall be fully as effective as if it had been taken by the
members at a meeting duly called and held. The Committee shall
select one of its members as its chairman and shall hold its
meetings at such times and places as it shall deem advisable.
The Committee shall have full authority in its discretion to
determine the officers, directors, key employees, prospective
employees, and consultants of the Corporation and its
subsidiaries to whom Options (as defined below) shall be granted,
the number of shares of Stock covered thereby and the terms and
provisions thereof, subject to the Plan. In making such
determinations, the Committee may take into account the nature of
the services rendered and to be rendered by the respective
recipients, their present and potential contributions to the
Corporation and its subsidiaries and any other factors which the
Committee deems relevant. The Committee shall have full and
conclusive authority to interpret the Plan; to prescribe, amend
and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the respective Option
agreements; and to make all other determinations necessary or
advisable for the proper administration of the Plan. The
Committee's determinations under the Plan need not be uniform and
may be made by it selectively among persons who receive, or are
eligible to receive, Options under the Plan (whether or not such
persons are similarly situated). The Committee's decisions shall
be final and binding on all participants in the Plan.
V. Eligibility and Limits
Eligibility. Options to purchase Stock (hereinafter
referred to "Options"), may be granted to officers, employee
directors, non-employee directors, key employees, and consultants
of the Corporation and its present or future subsidiary
corporations.
Limits. The Committee shall have full and complete
authority, in its discretion, but subject to the express
provisions of the Plan, to grant from time to time options under
the Plan which constitute Incentive Stock Options, and to grant
options under the Plan which do not constitute Incentive Stock
Options (such options being hereinafter referred to as "Non-
Qualified Options"). At the time any Option is granted under the
Plan, the Committee shall determine whether the Option is to be
an Incentive Stock Option or a Non-Qualified Stock Option, and
the Option shall be clearly identified as to its status as an
Incentive Stock Option or a Non-Qualified Stock Option. The
aggregate fair market value (which shall be determined on the
date of the grant) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an
individual during any calendar year shall not exceed $100,000.
Directors. Each member of the Corporation's Board of
Directors that is not also an employee or officer of the
Corporation as of the date of the adoption of the Plan, and each
person who assumes a position on the Board of Directors of the
Corporation (whether by appointment by the Board or election)
after such date who is not also an employee or an officer of the
Corporation at the time shall, automatically and without the
exercise of discretion or the requirement of any further action
or authorization on the part of any person, receive an option to
purchase an aggregate of 15,000 shares of the Common Stock of the
Corporation which shall include any grants previously made under
the 1988 Non-Employee Director Stock Option Plan. In addition,
each non-employee director will be awarded an annual option to
purchase 2,000 shares of the Common Stock of the Corporation;
however, in no event will a director become eligible for the
annual grant prior to two full years of service on the Board of
Directors.
VI. Terms and Conditions of Options
The terms and conditions of each option granted an Optionee
designated by the Committee under the Plan shall be set forth in
an instrument designated "1996 Stock Option Agreement" issued by
the Corporation to the Optionee and containing such provisions as
the Board of Directors or Committee shall deem appropriate. The
1996 Stock Option Agreements issued by the Corporation need not
be identical but shall comply with the following terms and
conditions, to-wit:
Option Price. Subject to Section VIII and other provisions
of this Section VI, the Option price per share of Stock
purchasable under any Option granted under the Plan shall be
fixed by the Committee and set forth in the applicable Option
agreement. With respect to each grant of an Incentive Stock
Option, the option price per shall not be less than the fair
market value of a share of Stock (as determined in good faith by
the Committee) on the date such Option is granted. The date an
Option is granted shall be the date on which the Committee has
approved the terms and conditions of an Option agreement
evidencing the Option and has determined the recipient of the
Option and the number of shares covered by the Option and has
taken all such other action as is necessary to complete the grant
of the Option. In the event that the Stock is listed on NASDAQ
or an established stock exchange, its fair market value shall be
deemed to be the closing price of the Stock on such exchange on
the date the Option is granted, or if no sale of Stock shall have
been made on such date, its fair market value shall be deemed to
be such price for the next preceding date on which a sale has
occurred.
Option Term. The term of each option shall be for such
period as the Committee shall determine, but in no event be
exercisable after the expiration of ten years from the date of
grant of such Option and shall be subject to earlier termination
as herein provided.
Payment. Payment for all shares purchased pursuant to
exercise of an Option shall be made by cash, check, that number
of shares of the Corporation's Common Stock having an aggregate
market value (as determined by the closing price per share on the
NASDAQ on the date of exercise) equal to such purchase price, or
any combination of the foregoing. Subject to the provisions as
set forth below under Special Procedure for Certain Credit
Assisted Transactions, such payment shall be made at the time
that the Option or any part thereof is exercised, and no shares
of Stock shall be issued or delivered until full payment therefor
has been made.
Conditions to Exercise of Option. Each Option granted under
the Plan shall be exercisable at such time or times, or upon the
occurrence of such event or events, and in such amounts as the
Committee shall specify in the Option agreement, except that no
Option when initially granted as an Incentive Stock Option shall
provide that it may be exercisable to any extent during the first
six months following the date of grant; provided, however, that
subsequent to the grant of an Option, the Committee at any time
before complete termination of such Option, may accelerate the
time or times at which such Option may be exercise in whole or in
part.
Nontransferability of Options. An Option shall not be
transferable or assignable except by will or by the laws of
descent and distribution and shall be exercisable, during the
holder's lifetime, only by the holder.
Termination of Employment or Death. Upon any termination of
employment of the holder for any reason other than death or
disability, any Option held at the date of such termination may,
to the extent exercisable, be exercised within three months after
the date of such termination. Should the Option remain
unexercised at the end of the three-month period, such Option is
forfeited and returned to shares available for further grants.
Upon any termination of employment of the holder by reason of
disability, any Option held at the date of such termination may,
to the extent then exercisable, be exercised within twelve months
after the date of such termination. If the holder of an Option
dies, any Option held at the date of death may be exercised in
full, whether or not the Options are fully vested at such time,
by the holder's legatee or legatees under the holder's last will,
or by the holder's personal representatives or distributees,
within twelve (12) months after the holder's death. If the
holder of an Option retires at normal retirement age (age 65 or
older), any Options held at the date of retirement may be
exercised in full, whether or not the Options are fully vested at
such time, within twelve (12) months after the holder's
retirement. This Section shall not extend the term of the Option
specified in or pursuant to Section entitled Option Term. For
purposes of this Section, employment of a holder shall not be
deemed terminated so long as the holder is employed by the
Corporation, by a subsidiary of the Corporation or by another
corporation (or a parent or subsidiary corporation of such other
corporation) which has assumed the Option of the holder. For
purposes of this Section, the extent to which an Option is
exercisable shall be determined as of the date of termination of
employment except where specifically stipulated to the contrary.
Special Procedure for Certain Credit Assisted Transactions.
To the extent not inconsistent with the provisions of Section 422
of the Code or the provisions of Rule 16b-3 issued by the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended (the "Act"), any Option holder desiring
to obtain credit from a broker, dealer or other "creditor" as
defined in Regulation T issued by the board of Governors of the
Federal Reserve System to assist in exercising an Option may
deliver to such creditor a written exercise notice executed by
such holder with respect to such Option, together with written
instruction to the Corporation to deliver the Stock issued upon
such exercise of the Option to the creditor for deposit into an
account designated by the Option holder; upon receipt of such
exercise notice and instructions in a form acceptable to the
Corporation, the Corporation shall confirm to the creditor that
it will deliver to the creditor on behalf of the Option holder
the Stock issued upon such exercise of the Option and covered by
such instruction promptly following receipt of the exercise price
from the creditor. To the extent not inconsistent with the
provisions of Section 422 of the Code or the provisions of Rule
16b-3 issued by the Securities and Exchange Commission under the
Act, upon written request, the Corporation may in its discretion,
but shall not be obligated, to deliver to the creditor on behalf
of the Option holder shares of Stock resulting from such a credit
assisted exercise prior to receipt of the exercise price for such
shares if the creditor has delivered to the Corporation, in
addition to the other documents contemplated by this Section VI,
the creditor's written agreement to pay the Corporation such
exercise price in cash within five days after delivery of such
shares. The credit assistance contemplated by this Section VI
may include a margin loan by the creditor secured by the stock
purchased upon exercise of an Option or, in the case of an Option
holder who is not subject to Section 16 of the Act, an immediate
sale of some or all of such Stock by the creditor to obtain or
recover the exercise price which the creditor has committed to
pay to the Corporation on behalf of the Option holder.
VII. Change in Capitalization; Merger; Liquidation
The number of shares of Stock as to which Options may be
granted, the number of shares covered by each outstanding Option,
and the price per share of each outstanding Option shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Stock resulting from a subdivision or
combination of shares or the payment of a stock dividend in
shares of Stock to holders of outstanding shares of Stock or any
other increase or decrease in the number of such shares effected
without receipt of consideration by the Corporation. If the
Corporation shall be the surviving corporation in any merger or
consolidation, recapitalization, reclassification of shares or
similar reorganization, the holder of each outstanding Option
shall be entitled to purchase, at the same times and upon the
same terms and conditions as are then provided in the Option, the
number and class of shares of stock or other securities to which
a holder of the number of shares of Stock subject to the Option
at the time of such transaction would have been entitled to
receive as a result of such transaction. In the event of any
such changes in capitalization of the Corporation, the Committee
may make such additional adjustments in the number and class of
shares of Stock or other securities with respect to which
outstanding Options are exercisable and with respect to which
future Options may be granted as the Committee in its sole
discretion shall deem equitable or appropriate to prevent
dilution or enlargement of rights. Any adjustment pursuant to
this Section VII may provide, in the Committee's discretion, for
the elimination of any fractional shares that might otherwise
become subject to any Option without payment therefor. The
optionee shall have the right, immediately prior to dissolution,
liquidation, merger or consolidation of the Corporation (to the
extent the Corporation is not the surviving entity in such merger
or consolidation), to exercise his/her Options in full without
regard to any installment exercise provisions, to the extent that
it shall not have been exercised. In the event of a dissolution
or liquidation of the Corporation or a merger or consolidation in
which the Corporation is not the surviving corporation, each
outstanding Option shall terminate upon the effective date
thereof, except to the extent that another corporation assumes
such Option or substitutes another option therefor. In the event
of a change of the Corporation's shares of Stock with par value
into the same number of shares with a different par value or
without par value, the shares resulting from any such change
shall be deemed to be the Stock within the meaning of the Plan.
Except as expressly provided in this Section, the holder of an
Option shall have no rights by reason of any subdivision or
combination of shares of Stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of Stock of any class or by reason of any dissolution,
liquidation, merger or consolidation or distribution to the
Corporation's stockholders of assets or stock of another
corporation. Except as expressly provided herein, any issue by
the Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with regard to,
the number or price of shares of Stock subject to any Option.
The existence of the Plan and Options granted pursuant to the
Plan shall not affect in any way the right or power of the
Corporation to make or authorize any adjustment,
reclassification, reorganization or other change in its capital
or business structure, any merger or consolidation of the
Corporation, any issue of debt or equity securities having
preferences or priorities as to the Stock or the rights thereof,
the dissolution of the Corporation, any sale or transfer of all
or part of its business or assets, or any other corporate act or
proceeding.
VIII. Compliance with Code; Compliance with Rule 16b-3
All Incentive Stock Options granted hereunder are intended
to comply with Section 422 and, to the extent applicable, Section
424 of the Code, and all provisions of this Plan and all
Incentive Stock Options granted hereunder shall be construed in
such manner as to effectuate that intent. This Plan and all
Options granted hereunder are intended to satisfy the conditions
of Rule 16b-3 issued by the Securities and Exchange Commission
under the Act, as it may be amended from time to time, and all
provisions of this Plan and all Options granted hereunder shall
be construed in such manner as to effectuate that intent.
IX. Right to Terminate Employment; No Rights as Stockholder
Nothing in the Plan or in any Option granted under the Plan
shall confer upon any holder thereof the right to continue as an
employee, director or consultant of the Corporation or any of its
subsidiaries or affect the right of the Corporation or any of its
subsidiaries to terminate the holder's association with the
Corporation or any of its subsidiaries at any time. The holder
of an Option shall, as such, have none of the rights of a
stockholder.
X. Leaves of Absence
Except as otherwise provided by law or regulation with
respect to Incentive Stock Options, the Committee may in its
discretion determine whether any leave of absence constitutes a
termination of employment for purposes of the Plan and the
impact, if any, of such leave of absence on Options previously
granted to a holder who takes a leave of absence.
XI. Restrictions on Delivery and Sale of Shares
Each Option granted under the Plan is subject to the
condition that if at any time the Committee, in its discretion,
shall determine that the listing, registration or qualification
of the shares covered by such Option upon any securities exchange
or under any state or federal law is necessary or desirable as a
condition of or in connection with the granting of such Option or
the purchase or delivery of shares thereunder, the delivery of
any or all shares pursuant to such Option may be withheld unless
and until such listing, registration or qualification shall have
been effected. If a registration statement is not in effect
under the Securities Act of 1933 and any applicable state
securities laws with respect to the shares of Stock purchasable
or otherwise deliverable under Options then outstanding, the
Committee may require, as a condition of exercise of any Option,
that the optionee or other recipient of an Option represent, in
writing, that the shares received pursuant to the Option are
being acquired for investment and not with a view to distribution
and agree that the shares will not be disposed of except pursuant
to an effective registration statement, unless the Corporation
shall have received an opinion of counsel that such disposition
is exempt from such requirement under the Securities Act of 1933
and any applicable state securities laws. The Corporation may
endorse on certificates representing shares delivered pursuant to
an Option such legends referring to the foregoing representations
or restrictions or any other applicable restrictions or resale as
the Corporation, in its discretion, shall deem appropriate.
XII. Termination and Amendments of the Plan
The Plan shall terminate August 6, 2006, the date ten years
after adoption of the Plan by the Board of Directors, and no
Options shall be granted under the Plan after that date, but
Options granted before termination of the Plan shall remain
exercisable thereafter until they expire or lapse according to
their terms. The Plan may be terminated, modified or amended by
the Board of Directors of the Corporation; provided, however,
that:
A.No such termination, modification or amendment without
the consent of the holder of the Option shall adversely
affect his rights under such Option; and
B.Any modification or amendment which would (1)
materially increase the benefits accruing to
participant, (2) materially increase the number of
securities which may be issued under the Plan, or (3)
materially modify the requirements as to eligibility
for participation in the Plan, within the meaning of
Rule 16b-3 issued by the Securities and Exchange
Commission under the Act, shall be effective only if it
is approved by the stockholders of the Corporation at
the next annual meeting of stockholders after the date
of adoption by the Board of Directors of such
modification or amendment.
XIII. Effective Date of Plan; Stockholder Approval
The Plan shall become effective on August 7, 1996, the date
of its adoption by the Board of Directors, subject, however, to
the approval of the Plan by the Corporation's stockholders at
their next annual meeting. Options granted hereunder prior to
such approval shall be conditional upon such approval. Unless
such approval is obtained by August 7, 1997, this Plan and any
Options granted hereunder shall become void thereafter.
Exhibit 5.1
Bret Van Earp
ATTORNEY AT LAW
SUITE 1800
100 CONGRESS AVENUE
AUSTIN, TEXAS 78701
____
(512) 469-3725
July 10, 1997
Electrosource, Inc.
2809 Interstate Highway 35 South
San Marcos, Texas 78666
Re: Issuance of shares pursuant to 1996 Stock Option Plan
Gentlemen:
Reference is made to the registration statement on Form S-8 (the
ORegistration StatementO) filed with the Securities and Exchange
Commission by Electrosource, Inc. (the OCompanyO) under the
Securities Act of 1933 relating to 960,000 shares of the Common
Stock, $1.00 par value, (OCommon StockO), of the Company issuable
on the exercise of stock options granted pursuant to the 1996
Stock Option Plan of Electrosource, Inc. (the OPlanO).
I have made such examination of law and have examined such
certificates, documents, and records as I have deemed necessary
for purposes of this opinion. Based upon such examination and
review, I am of the opinion that the Common Stock will be, when
issued upon exercise of stock options in accordance with the
terms of the Plan, validly issued, fully paid, and non-
assessable.
The foregoing opinion is premised upon representations made by
the Company to the effect that (i) the Company will at all times
maintain reserved and available sufficient authorized but
unissued shares to meet its obligations under the Plan and (ii)
no option will be granted under the Plan at an exercise price
less than the par value of the shares covered by such option.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name in the section
of the Registration Statement captioned OLegal Matters.O
Very Truly Yours,
/s/ Bret Van Earp
Bret Van Earp
Exhibit 24.1
Consent of Ernst & Young LLP
Independent Auditors
We consent to the reference to our firm under the
caption "Experts" in the Registration Statement on Form S-8
pertaining to the 1996 Stock Option Plan of Electrosource,
Inc. and to the incorporation by reference therein of our
report dated February 28, 1997, with respect to the financial
statements of Electrosource, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1996,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Austin, Texas
July 7, 1997
