SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Regal-Beloit Corporation
- ------------------------------------------------------------------------------
(Exact name of registrant specified in its charter)
Wisconsin 39-0875718
- ------------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 State Street Beloit, Wisconsin 53511
- ------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Regal-Beloit Corporation 1998 Stock Option Plan, as amended
- ------------------------------------------------------------------------------
(Full title of the plan)
Kenneth F. Kaplan, Vice President, CFO & Secretary
Regal-Beloit Corporation
200 State Street
Beloit, WI 53511
- ------------------------------------------------------------------------------
(Name and address of agent for service)
608/364-8800
- ------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
<PAGE>1
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share price fee
- ---------- ---------- --------- --------- ------------
Common Stock, 1,000,000 shares (1) (2) (3) $21,031,005 $5,847.55
par value $0.01
per share
<FN>
(1) The Plan provides for possible adjustment of the number, price and kind of
shares covered by options granted or to be granted in the event of certain
capital or other changes affecting the Registrant's Common Stock. This
Registration Statement therefore covers, in addition to the above stated
1,000,000 shares, an indeterminate number of shares that may become
subject to the Plan by means of any such adjustment.
(2) Pursuant to Rule 457(h), estimated solely for the purpose of computing the
registration fee, based upon (i) the aggregate exercise price for the
5,600 shares underlying options granted on April 21, 1998, at $30.00 per
share, (ii) the aggregate exercise price for the 105,000 shares underlying
options granted on April 21, 1999, at $20.00 per share, and (iii) as to
the remaining 889,400 shares available, at $21.10 per share, which is the
average of the high and low sales prices of the Registrant's Common Stock
on the American Stock Exchange on August 2, 1999, as reported in the
Midwest Edition of the Wall Street Journal.
(3) In the case of options, the actual offering price will be determined in
accordance with the terms of the Plan; however, it shall either (i) be
equal to the amount required to be received by the Company in order to
assure compliance with applicable state law or (ii) be equal to 100% of
the Fair Market Value of the Registrant's Common Stock on the date the
option is granted.
</FN>
</TABLE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information specified in Part I of Form S-8 (Items 1 and 2) will be sent
or given to Plan participants as specified by Rule 428(b)(1) under the
Securities Act of 1933.
<PAGE>2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Regal-Beloit Corporation, a Wisconsin
corporation (the "Registrant") (Commission File No. 1-7283), with the
Securities and Exchange Commission (the "Commission") pursuant to Section 13
of the Securities Exchange Act of 1934 (the "1934 Act") are incorporated
herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998;
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarterly
periods ending March 31 and June 30, 1999; and
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-B, dated June 10,
1994, and filed with the Commission on June 16, 1994, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such documents.
To the extent any information contained in a document filed after the
effective date of this registration statement is different from information
contained in a document filed or previously incorporated by reference in this
registration statement, you should rely on the most recent information which
will constitute a part of this registration statement.
Item 4. Description of Securities.
Not applicable. See Item 3(c) above.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
<PAGE>3
Item 6. Indemnification of Directors and Officers.
The Registrant is incorporated under the Wisconsin Business Corporation
Law ("WBCL"). Under Section 180.0851(1) of the WBCL, the Registrant is
required to indemnify a director or officer, to the extent such person is
successful on the merits or otherwise in the defense of a proceeding, for all
reasonable expenses incurred in the proceeding if such person was a party
because he or she was a director or officer of the Registrant. In all other
cases, the Registrant is required by Section 180.0851(2) of the WBCL to
indemnify a director or officer against liability incurred in a proceeding to
which such person was a party because he or she was a director or officer of
the Registrant, unless it is determined that he or she breached or failed
to perform a duty owed to the Registrant and the breach or failure to perform
constitutes: (i) a willful failure to deal fairly with the Registrant or
its shareholders in connection with a matter in which the director or officer
has a material conflict of interest; (ii) a violation of the criminal law,
unless the director or officer had reasonable cause to believe his or her
conduct was lawful or no reasonable cause to believe that his or her conduct
was unlawful; (iii) a transaction from which the director or officer derived
an improper personal profit; or (iv) willful misconduct. Section 180.0858(1)
of the WBCL provides that, subject to certain limitations, the mandatory
indemnification provisions do not preclude any additional right to
indemnification or allowance of expenses that a director or officer may have
under the Registrant's articles of incorporation, bylaws, a written agreement
between the director or officer and the corporation, a resolution of the Board
of Directors, or a resolution that is adopted after notice, by a majority vote
of all of the corporation's voting shares then issued and outstanding.
Section 180.0859 of the WBCL provides that it is the public policy of the
State of Wisconsin to require or permit indemnification, allowance of expenses
and insurance to the extent required or permitted under Sections 180.0850 to
180.0858 of the WBCL for any liability incurred in connection with a proceeding
involving a federal or state statute, rule or regulation regulating the offer,
sale or purchase of securities.
Section 180.0828 of the WBCL provides that, with certain exceptions, a
director is not liable to the corporation, its shareholders, or any person
asserting rights on behalf of the corporation or its shareholders, for damages,
settlements, fees, fines, penalties or other monetary liabilities arising from
a breach of, or failure to perform, any duty resulting solely from his or her
status as a director, unless the person asserting liability proves that the
breach or failure to perform constitutes any of the four exceptions to
mandatory indemnification under Section 180.0851(2) referred to above.
Under Section 180.0833 of the WBCL, directors of the Registrant against
whom claims are asserted with respect to the declaration of an improper
dividend or other distribution to shareholders to which they assented are
entitled to contribution from other directors who assented to such distribution
and from shareholders who knowingly accepted the improper distribution, as
provided therein.
<PAGE>4
Article VIII of the Registrant's Bylaws contains provisions that generally
parallel the indemnification provisions of the WBCL and cover certain
procedural matters not dealt with in the WBCL.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See Exhibit Index following Signatures page in this Registration Statement,
which Exhibit Index is incorporated herein by reference.
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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(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, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
<PAGE>5
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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.
(c) Reference is made to the indemnification provisions referred to in
Item 6 of this Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>6
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 on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Beloit, State of Wisconsin, on August 6, 1999.
REGAL-BELOIT CORPORATION
(Registrant)
By: /S/ Kenneth F. Kaplan
--------------------------
Kenneth F. Kaplan
Vice President, Chief Financial Officer
and Secretary
____________________________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James L. Packard, Henry W. Knueppel, and
Kenneth F. Kaplan, and each of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and any other regulatory authority, granting unto each said attorney-in-fact
and agent, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
____________________
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and the foregoing power of attorney, have been signed
by the following persons in the capacities and on the date indicated. *
<PAGE>7
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/S/ James L. Packard Chairman, President, Chief Executive Officer
- ---------------------------- and Director
James L. Packard (Principal Executive Officer of the Registrant)
/S/ Henry W. Knueppel Executive Vice President and Director
- ----------------------------
Henry W. Knueppel
/S/ Kenneth F. Kaplan Vice President, Chief Financial Officer
- ---------------------------- and Secretary
Kenneth F. Kaplan (Principal Financial Officer of the Registrant)
(Principal Accounting Officer of the Registrant)
/S/ Frank E. Bauchiero
- ---------------------------- Director
Frank E. Bauchiero
/S/ J. Reed Coleman
- ---------------------------- Director
J. Reed Coleman
/S/ John M. Eldred
- ---------------------------- Director
John M. Eldred
/S/ Stephen N. Graff
- ---------------------------- Director
Stephen N. Graff
/S/ G. Frederick Kasten, Jr.
- ---------------------------- Director
G. Frederick Kasten, Jr.
/S/ William M. Keefer
- ---------------------------- Director
William M. Keefer
/S/ John A. McKay
- ---------------------------- Director
John A. McKay
* Each of these signatures is affixed as of August 9, 1999.
<PAGE>8
</TABLE>
<TABLE>
<CAPTION>
REGAL-BELOIT CORPORATION
(the "Registrant")
(Commission File No. ________)
EXHIBIT INDEX
TO
FORM S-8 REGISTRATION STATEMENT
<S> <C> <C> <C> <C>
Exhibit Incorporated Herein Filed Sequential
Number Description by Reference to Herewith Page No.
- ------- ----------- ------------------- -------- ----------
5 Opinion of Counsel X 10-11
23.1 Consent of Arthur Andersen & Co. X 12
23.2 Consent of Counsel Contained in 10-11
Opinion Filed
as Exhibit 5
24 Powers of Attorney Signatures Page 8
to this
Registration
Statement
99 Regal-Beloit Corporation X
1998 Stock Option Plan and
Amendment to Section 6
</TABLE>
<PAGE>9
Exhibit 5
Regal-Beloit Corporation
200 State Street
Beloit, WI 53511
August 9, 1999
Regal-Beloit Corporation
200 State Street
Beloit, WI 53511
Gentlemen:
I am providing this opinion in connection with the Registration Statement
of Regal-Beloit Corporation, a Wisconsin corporation, (the "Company") on Form
S-8 (the "Registration Statement") filed under the Securities Act of 1933, as
amended (the "Act"). The Registration Statement is being filed in connection
with the Company's offering of 1,000,000 shares of Common Stock, par value
$0.01 per share, (the "Shares") in the form of Stock Options pursuant to the
Company's 1998 Stock Option Plan, as amended (the "Plan"). I have examined
(i) the Registration Statement; (ii) the Company's Articles of Incorporation
and Bylaws, as amended to date; (iii) the Plan; (iv) corporate proceedings
relating to the adoption of the Plan and amendment to Section 6 by the Board
of Directors and Shareholders and the issuance of the Shares; and (v) such
other documents and records as I have deemed necessary in order to render this
opinion. In rendering this opinion, I have relied as to certain factual
matters on certificates of officers of the Company and of state officials.
Based upon the foregoing, it is my opinion that:
1. The Company is a corporation duly incorporated and validly existing
under the laws of the State of Wisconsin.
2. The Shares, when issued (and in the case of Shares issued upon the
exercise of options, paid for) as contemplated by the Registration Statement
and the Plan, will be validly issued, fully paid and nonassessable by the
Company subject to the personal liability which may be imposed on shareholders
by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as
judicially interpreted, for debts owing to employees for services performed,
but not exceeding six months service in any one case. Although Section
180.0622(2)(b) provides that such personal liability of shareholders shall be
"to an amount equal to the par value of shares owned by them respectively, and
to the consideration for which their shares without par value was issued," the
Wisconsin Supreme Court, by a split decision without a written opinion, has
affirmed a judgment holding shareholders of a corporation liable under the
substantially identical predecessor statute in effect prior to January 1, 1991
(Section 180.40(6)) for unpaid employee wages to an amount equal to the
consideration for which their par value shares were issued rather than the
shares' lower stated par value. Local 257 of Hotel and Restaurant Employees
and Bartenders International Union v. Wilson Street East Dinner Playhouse,
Inc., 126 Wis. 2d 284, 375 N.W.2d 664 (1985) (affirming the 1983 decision of
the Circuit Court for Dane County, Wisconsin, in Case No. 82-CV-0023). The
Wisconsin Supreme Court has held that Section 180.40(6) applies to shareholders
<PAGE>10
Regal-Beloit Corporation
August 9, 1999
Page 2
of foreign corporations licensed to do business in the State of Wisconsin,
which the Company is, as well as to shareholders of domestic corporations.
Joncas v. Krueger, 61 Wis. 2d 529, 213 N.W.2d 1 (1973).
I consent to the filing of this opinion as an Exhibit to the Registration
Statement. In giving my consent, I do not admit that I am an "expert" within
the meaning of Section 11 of the Act, or that I come within the category of
persons whose consent is required by Section 7 of the Act.
Very truly yours,
REGAL-BELOIT CORPORATION
/S/ Charldene S. Schneier
-------------------------
Charldene S. Schneier
Attorney
<PAGE>11
Exhibit 24(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 27, 1999
included in Regal-Beloit Corporation's Form 10-K for the fiscal year ended
December 31, 1998 and all references to our firm included in this registration
statement.
/S/ ARTHUR ANDERSEN LLP
-------------------
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
August 5, 1999
<PAGE>12
REGAL-BELOIT CORPORATION
1998 STOCK OPTION PLAN
1. PURPOSES. The purpose of the 1998 Stock Option Plan (the "1998 Plan") is
to provide, on a basis competitive with industry practices, long-term
incentives through stock grants (the "Grants") to Directors, Officers, key
executives and other management employees of Regal-Beloit Corporation and
its subsidiaries (the "Company"), in order to assist the Company in
attracting and retaining experienced and capable Directors, Officers, key
executives and other management employees and to associate the interest of
such persons with those of the Company's Shareholders.
2. EFFECTIVE DATE. The 1998 Plan is effective as of April 21, 1998, subject
to the approval by the holders of at least a majority of the outstanding
shares of the Company's Common Stock, present, or represented, and entitled
to vote at the 1998 Annual Meeting of Shareholders. Grants may be made
under the 1998 Plan on and after its effective date.
3. SHARES OF STOCK SUBJECT TO THE 1998 PLAN. The shares that may be
delivered or purchased or used for reference purposes under the 1998 Plan
shall not exceed an aggregate of 1,000,000 shares of the Company's Common
Stock, $0.01 par value, subject to adjustment as provided in Section 19.
The Committee may make any other type of Grant which it shall determine is
consistent with the objectives and limitations of the 1998 Plan.
4. ADMINISTRATION OF THE 1998 PLAN. The 1998 Plan shall be administered
by the Board of Directors of the Company or a Committee comprised of two or
more Non-Employee Directors, (hereinafter collectively called "the
Committee"). The Committee shall have all the powers vested in it by the
terms of the 1998 Plan, such powers to include exclusive authority (within
the limits described herein) to select the eligible Participants (as
hereinafter defined) to receive Grants under the 1998 Plan, to determine
the type, size and terms of Grants to be made to each Participant selected,
to determine the time when Grants will be granted and to establish
objectives and conditions, if any, relating to such Grants. The Committee
shall have full power and authority to administer and interpret the 1998
<PAGE>13
Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the 1998 Plan and to make all other
determinations which the Committee deems necessary or advisable. The
Committee's interpretation of the 1998 Plan and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned,
including the Company, its Shareholders and Participants in the 1998 Plan.
In administering the 1998 Plan, the term "Committee" shall mean exclusively
the Board of Directors where appropriate when interpreting the 1998 Plan as
it pertains to Non-Employee Directors. "Non-Employee Directors" means
those Outside Directors who are not officers or employees of the Company.
5. ELIGIBLE PARTICIPANTS. The persons eligible to participate in the 1998
Plan shall be all Directors, Officers, key executives and other management
employees of the Company who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company (the
"Participants").
6. NON-EMPLOYEE DIRECTOR GRANTS.
a. (i) The 1998 Plan shall supersede the 1991 Flexible Stock Incentive
Plan, as amended, as to Non-Employee Director grants only,
effective April 21, 1998.
(ii) Under the 1998 Plan, each individual Non-Employee Director will be
annually granted stock options, Stock Appreciation Rights or any
combination thereof of shares of Common Stock at 100 percent
(100%) of the fair market value as of the date corresponding to
the Annual Shareholders' Meeting. For the years 1998 and 1999,
each individual Non-Employee Director shall be granted 800 shares
of Common Stock. For the years 2000 and 2001, each individual
Grant will be increased to 900 shares. For the years 2002
through 2008, each individual Grant will be increased to 1,000
shares. However, the first Grant to each Non-Employee Director
who is initially elected as a Non-Employee Director or is
initially appointed subsequent to the date of the Annual
Shareholders' Meeting of the Company and prior to the date of the
next succeeding Annual Shareholders' Meeting, shall be three
(3) times the number of shares granted to each individual Non-
Employee Director during such applicable year at 100 percent
(100%) of the fair market value at the closing sale price on the
date that he or she becomes a director of the Company.
b. The right to exercise any Grant given to Non-Employee Directors shall
vest immediately upon Grant. Unexercised Grants to Non-Employee
Directors shall terminate the earlier of ten (10) years after the date
of Grant or ninety (90) days after the Non-Employee Director ceases to
be a member of the Company's Board of Directors, unless terminated for
Cause as provided in Section 18.
<PAGE>14
c. In all other respects, Grants to a Non-Employee Director under the Plan
shall be controlled by the terms and conditions of the 1998 Plan and
the rules, regulations, agreements, guidelines, instruments and
interpretations issued by the Committee, except where inconsistent
with the limitations set forth in this Section 6 of the 1998 Plan.
7. GRANTS.
a. Types. Grants under the 1998 Plan shall be made with reference to
shares of the Company's Common Stock and may include, but need not be
limited to Incentive Stock Options ("ISO"), Nonqualified Stock
Options ("NSO"), Restricted Stock, Deferred Stock, Stock Appreciation
Rights or any combination thereof.
b. Vesting.
(i) The Committee, in its sole discretion, shall determine any
vesting (i.e., exercisability) requirements applicable to each
Grant.
(ii) The Committee may also determine that all or a portion of a
payment of Grants other than ISOs and NSOs to a Participant
under the 1998 Plan, whether it is to be made in cash, shares of
the Company's Common Stock or a combination thereof, shall be
vested at such times and upon such terms as may be selected by
it in its sole discretion.
c. Price. The option price per share of each option granted shall be
established by the Committee except that the option price shall not
be less than 100 percent (100%) of the fair market value of the stock
at the closing sale price on the date the option is granted. If there
is no sale on the date of Grant, the fair market value of the stock
shall be the closing sale price of the stock on the preceding business
day on which the Company's Common Stock was traded.
d. Performance Goals. The Committee may, but need not, establish
performance goals to be achieved within such performance periods as
may be selected by it in its sole discretion, using such measures of
the performance of the Company as it may select.
e. Guidelines. The Committee may adopt from time to time written
policies implementing the 1998 Plan. Such policies may include, but
need not be limited to the type, size and term of Grants to be made
to Participants and the conditions for payment of such Grants.
<PAGE>15
f. Maximum Grants. Participants may be granted multiple Grants under the
1998 Plan. However, no one Participant shall be granted a Grant if
immediately after such Grant he or she is the owner or would be deemed
to be the owner of more than 10 percent (10%) of the total combined
voting power of all classes of stock of the Company, unless the option
price per share is at least 110 percent (110%) of the fair market
value and such Grant by its terms is not exercisable after the
expiration of five (5) years from the date such Grant is granted.
8. PAYMENT OF GRANTS.
The Committee shall determine the extent to which Grants other than ISOs
and NSOs shall be payable in cash, shares of the Company's Common Stock or
any combination thereof to a Participant. The Committee may determine that
all or a portion of a payment to a Participant under the 1998 Plan, whether
it is to be made in cash, shares of the Company's Common Stock or a
combination thereof shall be deferred. Deferrals shall be for such
periods and upon such terms as the Committee may determine in its sole
discretion.
9. EXERCISE OF ISOs AND NSOs. The price for shares may be paid in any
combination of cash, cashier's or certified check, personal check
acceptable to the Company, or shares of the Company's Common Stock,
including previously owned Company Stock.
10. RIGHTS OF SHAREHOLDERS. A Participant under the 1998 Plan shall have
no rights as a holder of the Company's Common Stock with respect to Grants
hereunder, unless and until certificates for shares of such stock are
issued to the Participant.
11. ASSIGNMENT OR TRANSFER. Except as otherwise provided by the Committee,
Grants under the 1998 Plan or any rights or interests therein shall not
be assignable or transferable except by will or the laws of descent and
distribution, or exercisable by anyone other than the Participant during
his or her lifetime.
12. AGREEMENTS. All Grants granted under the 1998 Plan shall be evidenced by
agreements in such form and containing such terms and conditions (not
inconsistent with the 1998 Plan) as the Committee shall adopt.
13. COMPLIANCE WITH LEGAL REGULATIONS.
a. The Committee may require each person purchasing shares pursuant to a
stock option or other Grant under the 1998 Plan to represent to and
agree with the Company in writing that the optionee or Participant is
acquiring the shares without a view to distribution thereof. The
certificates for such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.
<PAGE>16
b. All certificates for shares of stock or other securities delivered
under the 1998 Plan shall be subject to such stock transfer orders
and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the stock is then
listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such
certificate to make appropriate reference to such restrictions.
14. WITHHOLDING TAXES.
a. The Company shall have the right to deduct from all Grants hereunder
paid in cash any federal, state, local, or foreign taxes required
by law to be withheld with respect to such Grants.
b. With respect to Grants paid by shares of the Company's Common Stock,
the Company shall also have the right to require the payment (through
withholding from the Participant's salary or otherwise) of any of
the taxes referenced above in Section 14a. An appropriate number of
shares of Common Stock may be withheld for such payment. If shares
are used to satisfy tax withholding requirements, the value of such
shares shall be based on the fair market value of the Common Stock
on the date when the tax withholding is required to be made.
c. The obligation of the Company to make delivery of Grants in cash or
the Company's Common Stock shall be subject to currency or other
restrictions imposed by any government.
15. NO RIGHTS TO GRANTS. No Participant or other person shall have any right
to receive a Grant under the 1998 Plan. Neither the 1998 Plan nor any
action taken hereunder shall be construed as giving any Participant any
right to be retained in the employ of the Company or any of its
subsidiaries or shall interfere with or restrict in any way the rights of
the Company, which are hereby reserved, to discharge the Participant at
any time for any reason whatsoever, with or without good cause.
16. COST AND EXPENSES. The cost and expense of administering the 1998 Plan
shall be borne by the Company and not charged to any Grant nor to any
Participant receiving a Grant.
17. TERMINATION OR EXPIRATION OF GRANTS. If any Grant under the 1998 Plan
terminates or expires, the shares allocable to the unexercised portion of
the Grant will be available for purposes of the 1998 Plan. In certain
circumstances where a Participant uses stock to exercise a Grant, only
the net shares issued to the Participant are counted against the number
of shares issued under the 1998 Plan. Certain stock issuances which are
later forfeited by the Participant do not count as grants under the 1998
Plan.
<PAGE>17
18. TERMINATION OF EMPLOYMENT.
a. (i) In the event a Participant's employment with the Company is
terminated, whether voluntarily or otherwise, but not by reason
of death, disability or retirement, each prior unexpired or
uncancelled Grant, to the extent exercisable as of the date of
such termination of employment or service, shall terminate thirty
(30) days after the Participant's date of termination or as
determined by the Committee.
(ii) Notwithstanding the foregoing, if a Participant's employment or
service as a Non-Employee Director of the Company is terminated
for Cause (as defined below), each unexpired or uncancelled Grant,
to the extent not previously exercised by him or her, shall
terminate immediately.
b. The term "Cause" is defined as: (i) the commission by a Participant
of any act or omission that would constitute a felony under federal,
state or equivalent foreign law, (ii) fraud, dishonesty, theft,
embezzlement, disclosure of trade secrets or confidential information
or other acts or omissions that result in a breach of any fiduciary
duty to the Company.
c. In the event a Participant terminates his or her employment with the
Company as a result of death, disability, or retirement, the
Committee shall have the discretion to extend the period of
exercisability of each previously granted and unexpired or uncancelled
Grant in accordance with applicable statutes, rules and regulations
and to preserve ISO treatment, where necessary, unless the termination
date specified in the Grant occurs earlier. The Committee shall also
have discretion to determine whether such Grant(s) shall become
immediately exercisable in full.
19. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding shares of the Company's Common Stock by reason of any split,
stock dividend, recapitalization, merger, consolidation, combination or
exchange of shares or other similar corporate change, such equitable
adjustments shall be made in the 1998 Plan and the Grants thereunder as
the Committee determines are necessary or appropriate. If necessary,
the Committee may make any adjustments in the maximum number of shares
referred to in Section 3, in the number and option price of shares
subject to outstanding options, in the number and purchase price of
shares subject to outstanding stock purchase rights, and in the number
of shares subject to other Grants granted under the 1998 Plan. Such
adjustment shall be conclusive and binding for all purposes of the 1998
Plan.
<PAGE>18
20. AMENDMENTS AND TERMINATIONS.
a. Amendments. The Committee may terminate or amend the 1998 Plan in
whole or in part at any time, but no such action shall adversely
affect any rights or obligations with respect to any Grants
theretofore made under the 1998 Plan nor change the limitations as
to Non-Employee Directors as set forth in Section 6 hereof.
Unless the holders of at least a majority of the outstanding shares
of the Common Stock, present or represented, and entitled to vote at
a meeting of Shareholders shall have first approved thereof, no
amendment of the 1998 Plan shall be effective which would (i)
increase the maximum number of shares referred to in Section 3 of
the 1998 Plan; (ii) extend the maximum period during which ISO Grants
may be granted under the 1998 Plan, or (iii) reduce the price per
share at which ISO Options may be offered under the 1998 Plan below
100 percent (100%) of the fair market value on the date of Grant.
For purposes of this Section 20a, subject to adjustment as provided
in Section 19, any (1) cancellation and reissuance or (2) repricing
of any Grants made under the 1998 Plan at a new option price as
provided in the 1998 Plan's rules relating to stock options and Stock
Appreciation Rights shall not constitute an amendment of this 1998
Plan.
With the consent of the Participant affected, the Committee or the
Board of Directors, where applicable, may amend outstanding agreements
evidencing Grants under the 1998 Plan in a manner not inconsistent
with the terms of the 1998 Plan.
b. Termination. Unless the 1998 Plan shall heretofore have been
terminated as above provided, the 1998 Plan shall terminate on and no
Grants shall be granted after April 20, 2008. Any Grants outstanding
under the 1998 Plan at the time of the termination of the 1998 Plan
shall remain in effect until such Grant shall have been exercised or
shall have expired according to its terms.
21. GOVERNING LAWS. The validity and construction of the 1998 Plan and any
agreements entered into thereunder shall be governed by the laws of the
State of Wisconsin.
22. COMPLIANCE WITH APPLICABLE LAWS. The Committee will comply with all
applicable laws, rules and regulations including the Internal Revenue Code
of 1986, as amended (the "Code") and the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or any successor provisions or other
regulatory requirements. To the extent required, the 1998 Plan is
designed to comply with Section 162(m) of the Code to qualify future
performance based compensation and to qualify under Section 16 of the
Exchange Act. To the extent any provision of the 1998 Plan or action by
the Committee fails to so comply, it shall be deemed null and void to
the extent permitted by law and deemed advisable by the Committee.
<PAGE>19
AMENDMENT TO SECTION 6 OF THE 1998 PLAN
6. NON-EMPLOYEE DIRECTOR GRANTS.
a. (ii) Under the 1998 Plan, each individual Non-Employee Director will
be granted a stock option for 15,000 shares of Common Stock at
100% of the fair market value at the closing stock price on
April 21, 1999 ("Director's Grant"). 3,000 shares will
immediately be exercisable (i.e., vested) on April 21, 1999.
The remainder of the Director's Grant will become exercisable in
the amount of 3,000 shares per year on the date of the Annual
Shareholders' Meeting in each of the next four years as long as
the Non-Employee Director remains in office.
(iii) The Director's Grant to each Non-Employee Director who is
initially elected at a subsequent Annual Shareholders' Meeting
or is initially appointed after an Annual Shareholders' Meeting
but prior to the next Annual Shareholders' Meeting, shall be in
an amount equal to the pro rata balance of 15,000 shares of
Common Stock for the remainder of the five year period of the
Director's Grant. The Director's Grant shall be at 100% of the
fair market value at the closing stock price on the
corresponding date of the Annual Shareholders' Meeting of the
year of election or appointment. As an example, if a
Non-Employee Director is initially elected in the year 2000, the
new Non-Employee Director will be granted 12,000 shares of
Common Stock of which 3,000 shares are immediately exercisable.
The remaining 9,000 shares would become exercisable in the amount
of 3,000 shares per year on the date of the Annual Shareholders'
Meeting in each of the next three years, assuming the
Non-Employee Director remains in office.
b. Unexercised Grants to Non-Employee Directors shall terminate the
earlier of ten (10) years after the date of Grant or ninety (90) days
after the Non-Employee Director ceases to be a member of the Company's
Board of Directors, unless terminated for Cause as provided in
Section 18.
<PAGE 20>
