<PAGE> 1
Registration No. 33-_________
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
--------------------
SERV-TECH, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1398757
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5200 CEDAR CREST BOULEVARD
HOUSTON, TEXAS 77087
(Address of Principal Executive Offices) (Zip Code)
SERV-TECH, INC. AMENDED AND RESTATED 1989 INCENTIVE STOCK OPTION PLAN
SERV-TECH, INC. 1995 LONG TERM INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN SERV-TECH, INC. AND RICHARD L. DAERR
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN SERV-TECH, INC. AND FRANK A.PERRONE
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN SERV-TECH, INC. AND LARRY A. TALBERT
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN SERV-TECH, INC. AND DAVID P. TUSA
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN SERV-TECH, INC. AND DALE W. WILHELM
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN SERV-TECH, INC. AND JOHN M. SLACK
(20,000 SHARES)
NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN SERV-TECH, INC. AND JOHN M. SLACK
(8,000 SHARES)
(Full title of the plans)
FRANK A. PERRONE
SERV-TECH, INC.
5200 CEDAR CREST BOULEVARD
HOUSTON, TEXAS 77087
(Name and address of agent for service)
(713) 644-9974
(Telephone number, including area code, of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.50 per share . . . 883,000 shares $8.875 $6,044,734.38 $2,084.39
====================================================================================================================================
</TABLE>
(1) Pursuant to Rule 429, the Prospectus which constitutes part of this
Registration Statement also relates to an aggregate of 600,000 shares of
Common Stock registered pursuant to Registration Statements on Form S-8
(Registration Nos. 33-33378 and 33-58850), the contents of which are
incorporated herein by reference. Pursuant to Rule 457(h), these shares
represent the maximum number of shares of Common Stock issuable under the
above plans that are covered by this Registration Statement. Pursuant to
Rule 416(a), this Registration Statement also relates to an indeterminate
number of shares of Common Stock issuable as a result of antidilution
provisions of the above plans.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and (h), based on the option exercise prices of options to
acquire 434,750 shares of Common Stock which have been granted under the
above plans, and the average of the high and low price reported by the
Nasdaq National Market on August 23, 1995 with respect to 448,250 shares of
Common Stock as to which options have not been granted as of the date of
filing this Registration Statement.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") by Serv-Tech, Inc. (the "Company"), are
incorporated by reference herein and made a part hereof: (a) the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, (b) the
Company's Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, 1995 and June 30, 1995, and (c) the description of the common stock, par
value $.50 per share (the "Common Stock"), of the Company as set forth under
the caption "Description of Registrant's Securities to be Registered" in the
Company's Registration Statement on Form 8-A (File No. 0-17888) dated July 21,
1989, including any amendment or report filed for the purpose of updating such
description.
All documents filed subsequent to the date hereof by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934 prior to the 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 part hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act contains detailed
provisions for indemnification of directors and officers of Texas corporations
against judgments, penalties, fines, settlements and reasonable expenses which
may be incurred in connection with any threatened, pending or completed
actions, suits or proceedings in which the director or officer is a named
defendant or respondent, whether civil, criminal, administrative, arbitrative
or investigative, any appeals in such an action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit or proceeding.
Article VI of the Company's Bylaws, as amended, provides for
indemnification of present and former directors and officers of the Company to
the full extent permitted by Texas law. To the full extent permitted by Texas
law, the Company may pay for or reimburse expenses incurred by an indemnified
director or officer in advance of any final disposition. In addition, the
Company is expressly authorized to purchase insurance on behalf of its
directors and officers against any liability arising out of their status as
directors and officers.
2
<PAGE> 3
Policies of insurance are maintained by the Company under which the
directors and officers of the Company are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers.
As permitted by Article 1302-7.06 of the Texas Miscellaneous
Corporation Laws Act, Article X of the Company's Restated Articles of
Incorporation, as amended, eliminates or limits the personal liability of
directors for monetary damages for an act or omission in the director's
capacity as a director, except for: (i) a breach of a director's duty of
loyalty to the Company or its shareholders, (ii) an act or omission not in good
faith or that involves intentional misconduct or a knowing violation of the
law, (iii) a transaction from which a director received an improper benefit,
whether or not the benefit resulted from an action taken within the scope of
the director's office, (iv) an act or omission for which the liability of a
director is expressly provided for by statute, and (v) an act related to an
unlawful stock repurchase or payment of a dividend.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
------ --------------------------
<S> <C>
*4.1 -- Restated Articles of Incorporation of Serv-Tech, Inc.
*4.2 -- Bylaws, as amended, of Serv-Tech, Inc.
5.1 -- Opinion of Frank A. Perrone, Vice President, General Counsel and Secretary of the Company,
regarding legality of the Common Stock being issued
23.1 -- Consent of Frank A. Perrone, Vice President, General Counsel and Secretary of the Company
(included in Exhibit 5.1 to this Registration Statement)
23.2 -- Consent of Coopers & Lybrand L.L.P.
99.1 -- Serv-Tech, Inc. Amended and Restated 1989 Incentive Stock Option Plan
99.2 -- Serv-Tech, Inc. 1995 Long Term Incentive Plan
99.3 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Richard L. Daerr
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
99.4 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Frank A. Perrone
99.5 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Larry A. Talbert
99.6 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and David P. Tusa
99.7 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Dale W. Wilhelm
99.8 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and John M. Slack (20,000 shares)
99.9 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and John M. Slack (8,000 shares)
</TABLE>
_________________
* Incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration No. 33-29594).
4
<PAGE> 5
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 Houston, State of Texas, on August 25, 1995.
SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
-------------------------------------
RICHARD L. DAERR
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on August 25, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ RICHARD L. DAERR President, Chief Executive Officer and Director
--------------------------------------------------- (Principal Executive Officer)
RICHARD L. DAERR
/s/ DAVID P. TUSA Senior Vice President -- Finance and Administration
--------------------------------------------------- (Principal Financial Officer)
DAVID P. TUSA
/s/ DALE W. WILHELM Corporate Controller
--------------------------------------------------- (Principal Accounting Officer)
DALE W. WILHELM
/s/ ROBERT J. CRESCI Chairman of the Board of Directors
---------------------------------------------------
ROBERT J. CRESCI
/s/ MIKE M. MUSTAFOGLU Director
---------------------------------------------------
MIKE M. MUSTAFOGLU
/s/ JOHN B. O'BRIEN Director
---------------------------------------------------
JOHN B. O'BRIEN
/s/ JAMES M. PIETTE Director
---------------------------------------------------
JAMES M. PIETTE
/s/ MICHAEL T. WILLIS Director
---------------------------------------------------
MICHAEL T. WILLIS
</TABLE>
5
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
------ --------------------------
<S> <C>
*4.1 -- Restated Articles of Incorporation of Serv-Tech, Inc.
*4.2 -- Bylaws, as amended, of Serv-Tech, Inc.
5.1 -- Opinion of Frank A. Perrone, Vice President, General Counsel and Secretary
of the Company, regarding legality of the Common Stock being issued
23.1 -- Consent of Frank A. Perrone, Vice President, General Counsel and Secretary
of the Company (included in Exhibit 5.1 to this Registration Statement)
23.2 -- Consent of Coopers & Lybrand L.L.P.
99.1 -- Serv-Tech, Inc. Amended and Restated 1989 Incentive Stock Option Plan
99.2 -- Serv-Tech, Inc. 1995 Long Term Incentive Plan
99.3 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Richard L. Daerr
99.4 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Frank A. Perrone
99.5 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Larry A. Talbert
99.6 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and David P. Tusa
99.7 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and Dale W. Wilhelm
99.8 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and John M. Slack
(20,000 shares)
99.9 -- Nonqualified Stock Option Agreement between Serv-Tech, Inc. and John M. Slack
(8,000 shares)
-----------------
</TABLE>
* Incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration No. 33-29594).
<PAGE> 1
EXHIBIT 5.1
[SERV-TECH LETTERHEAD]
August 24, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
In my capacity as Vice President, General Counsel and Secretary of
Serv-Tech, Inc., a Texas corporation (the "Company"), I have acted as counsel
to the Company in connection with the registration, pursuant to a Registration
Statement on Form S-8 being filed with the Securities and Exchange Commission
(the "Registration Statement") under the Securities Act of 1933, as amended, of
the offering and sale to certain employees of the Company of up to 883,000
shares of the Company's common stock, par value $.50 per share (the "Common
Stock"), which may be issued in connection with certain securities (the
"Securities") which may be granted under the Serv-Tech, Inc. Amended and
Restated 1989 Incentive Stock Option Plan, Serv-Tech, Inc. 1995 Long Term
Incentive Plan, Nonqualified Stock Option Agreement between Serv-Tech, Inc. and
Richard L. Daerr, Nonqualified Stock Option Agreement between Serv-Tech, Inc.
and Frank A. Perrone, Nonqualified Stock Option Agreement between Serv-Tech,
Inc. and David P. Tusa, Nonqualified Stock Option Agreement between Serv-Tech,
Inc. and Dale W. Wilhelm, Nonqualified Stock Option Agreement between
Serv-Tech, Inc. and John M. Slack (20,000 shares), and Nonqualified Stock
Option Agreement between Serv-Tech, Inc. and John M. Slack (8,000 shares).
In such capacity I have examined the corporate documents of the
Company, including its Restated Certificate of Incorporation, its Bylaws, as
amended, and resolutions adopted by its board of directors and committees
thereof. I have also examined the Registration Statement, together with the
exhibits thereto, and such other documents which I have deemed necessary for
the purposes of expressing the opinion contained herein.
Based upon the foregoing, I am of the opinion that the Common Stock
issued in connection with the Securities in accordance with their respective
terms will be validly issued, fully paid and nonassessable.
<PAGE> 2
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ FRANK A. PERRONE
Frank A. Perrone
Vice President, General Counsel
and Secretary
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated February 17, 1995, on our audits of the
consolidated financial statements of Serv-Tech, Inc. and Subsidiaries for the
years ended December 31, 1994 and 1993.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Houston, Texas
August 25, 1995
<PAGE> 1
SERV TECH, INC.
AMENDED AND RESTATED
1989 INCENTIVE STOCK OPTION PLAN
1. PURPOSE. The purpose of this 1989 Incentive Stock Option Plan
(the "Plan") is to provide selected directors, officers, and key employees of
Serv-Tech, Inc. (the "Company") and its Affiliates an incentive (i) to join and
remain in the service of the Company and its Affiliates, (ii) to maintain and
enhance the long-term performance and profitability of the Company and its
Affiliates, and (iii) to encourage ownership by the Company's directors,
officers, and key employees of Common Stock of the Company.
2. DEFINITIONS.
(a) "Affiliate" or "Affiliates" means a parent or subsidiary
corporation or corporations of the Company as defined pursuant to
Section 424 of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as now or
hereafter amended.
(d) "Common Stock" means the Company's $.50 par value common
stock.
(e) "Date of Grant" means the date on which an Option is
granted under the Plan.
(f) "Fair Market Value" means the fair market value of the
Common Stock as determined by the Committee and shall be binding upon
the Company and upon the Optionee. The Committee may make such
determination of the fair market value (i) in case the Common Stock
shall not then be listed and traded upon a recognized securities
exchange, upon the basis of the mean between the bid and asked
quotations for the Common Stock on the Date of Grant (as reported by a
recognized stock quotation service) or, in the event that there shall
be no bid or asked quotations on the Date of Grant, then upon the
basis of the mean between the bid and asked quotations on the date
nearest preceding the Date of Grant if within ten days of the Date of
Grant, (ii) in case the Common Stock shall then be listed and traded
upon a recognized securities exchange, upon the basis of the mean
between the highest and lowest selling prices at which shares of the
Common Stock were traded on such recognized securities exchange on the
Date of Grant or, if the Common Stock was not traded on the Date of
Grant, upon the basis of the mean of such prices on the date nearest
preceding the Date of Grant if within ten days of the Date of Grant,
and (iii) in case the Fair Market Value may not be determined in
accordance with the provisions of Article 2(f)(i) or (ii), above, upon
any factors which the Committee shall deem appropriate consistent with
the provisions of Section 422 of the Code.
<PAGE> 2
(g) "Option" means an option to purchase Common Stock granted
under the Plan.
(h) "Optionee" means a person to whom an Option, which has
not been fully exercised or expired, has been granted under the Plan.
Other terms defined herein shall have the meaning given them in the text of the
Plan.
3. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by Committee of the Board,
which shall consist of not less than two disinterested directors of
the Company (the "Committee"). For purposes of this Section, a
disinterested director is a member of the Board who (a) is not at the
time he or she exercises discretion in administering this Plan and has
not at any time within one year prior thereto been awarded equity
securities of the Company under any plan of the Company or (b)
otherwise meets the definition of "disinterested person" as set forth
in the rules and regulations promulgated under Section 16(b) of the
Securities Exchange Act of 1934, as amended. The members of the
Committee shall be appointed by, and may be changed from time to time
in the discretion of, the Board.
(b) The Committee shall have the authority (i) to exercise
all of the powers granted to it under the Plan, (ii) to construe,
interpret, and implement the Plan and any Option Agreements executed
pursuant to Section 6, (iii) to prescribe, amend, and rescind rules
and regulations relating to the Plan, (iv) to make all determinations
necessary or advisable in administering the Plan, and (v) to correct
any defect, supply any omission, and reconcile any inconsistency in
the Plan.
(c) The determination of the Committee on all matters
relating to the Plan or any Option Agreement shall be conclusive.
(d) No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any
grant of Options thereunder.
4. COMMON STOCK SUBJECT TO OPTIONS. The aggregate number of
shares of the Company's Common Stock which may be issued upon the exercise of
Options granted under the Plan shall not exceed 800,000, subject to adjustment
under the provisions of Section 8. The shares of Common Stock to be issued
upon the exercise of Options shall be authorized but unissued shares, shares
issued and reacquired by the Company, or shares bought on the market for the
purposes of the Plan. In the event any Option shall, for any reason, terminate
or expire or be surrendered without having been exercised in full, the shares
subject to such Option but not purchased thereunder shall again be available
for Options to be granted under the Plan.
5. PARTICIPANTS. All employees of the Company and its Affiliates
shall be eligible to participate in the Plan. Grants of Options under the Plan
may be made to such officers and executive, managerial, or professional
employees ("Key Employees") of the Company or its Affiliates (including
directors who are also Key Employees of the Company or its Affiliates), as
2
<PAGE> 3
the Committee shall in its sole discretion select. The Committee may from time
to time in its sole discretion determine that any Key Employees shall be
ineligible to receive grants of Options under the Plan.
6. TERMS AND CONDITIONS OF OPTIONS. Any Option granted under the
Plan shall be evidenced by an agreement ("Option Agreement") which shall be
approved as to form and substance by the Committee, and shall be consistent
with the provisions of Section 422 of the Code. Each such Option Agreement
shall be executed by an officer of the Company and the applicable Optionee, and
shall be subject to the following limitations and conditions:
(a) The Committee may grant options under the Plan to
purchase Shares to such Key Employees, and in such amounts and subject
to such terms and conditions, as the Committee shall from time to time
determine in its sole discretion, subject to the terms and provisions
of this Plan.
(b) The option price per share with respect to each Option
shall be determined by the Committee but shall not be less than l00%
of the Fair Market Value of a share of the Common Stock on the Date of
Grant. In the case of those Optionees owning more than 10% of the
combined voting power of all classes of stock of the Company or its
Affiliates (as such ownership may be determined for purposes of
Section 422(b)(6) of the Code and the Regulations promulgated
thereunder) on the Date of Grant, the option price per share with
respect to such Option shall be not less than 110% of the Fair Market
Value of a share of Common Stock on the Date of Grant.
(c) The expiration date of each Option shall be fixed by the
Committee, but, notwithstanding any provision of the Plan to the
contrary, such expiration date shall not be more than ten years from
the Date of Grant or, if such Option is granted to an Optionee owning
more than 10% of the combined voting power of all classes of stock of
the Company or its Affiliates (as such ownership may be determined for
purposes of Section 422(b)(6) of the Code and the Regulations
promulgated thereunder) on the Date of Grant, such expiration date
shall not be more than five years from the Date of Grant.
(d) Each Option shall be exercisable from time to time over a
period commencing one year subsequent to the Date of Grant and ending
upon the expiration or termination of the Option; provided, however,
the Committee may, by the provisions of any Option Agreement, limit
the number of shares purchasable thereunder in any period or periods
of time during which the Option is exercisable. An Option shall not
be exercisable in whole or in part prior to the date of shareholder
approval of the Plan.
(e) An Option shall be exercisable by the filing of a written
notice of exercise with the Company, on such form and in such manner
as the Committee shall in its sole discretion prescribe. Any written
notice of exercise of an Option shall be accompanied by payment of the
full purchase price for the shares being purchased. Such payment
shall be made (i) by certified or official bank check payable to the
Company (or the equivalent thereof acceptable to the Company), or (ii)
with the consent of the Committee, by delivery
3
<PAGE> 4
of previously acquired shares of the Company's common stock having a
fair market value (determined as of the date such Option is exercised)
equal to all or part of the option price and, if applicable, of a
certified or official bank check (or the equivalent thereof acceptable
to the Company) for any remaining portion of the option price. As
soon as practicable after receipt of such payment, the Company shall,
subject to the provisions of Section 9, deliver to the Optionee a
certificate or certificates for such shares.
(f) No Option shall be transferable or assignable by an
Optionee, otherwise than by will or the laws of descent and
distribution. During the Optionee's lifetime, each option shall be
exercisable only by him. No Option shall be pledged or hypothecated
in any way and no Option shall be subject to execution, attachment, or
similar process except with the express consent of the Committee.
7. TERMINATION OF EMPLOYMENT; DEATH.
(a) If an Optionee's employment terminates for any reason,
other than the disability of the Optionee (as defined in Section
22(e)(3) of the Code), the Options granted to an Optionee (and not
theretofore exercised) shall terminate 90 days after such termination
of employment. Such Optionee may, within 90 days after his employment
terminates, exercise any Option granted to him to the extent that he
is entitled to exercise such Option on the date employment terminated.
An Optionee shall be deemed to have terminated employment when he
ceases to be employed by the Company and all of its Affiliates. The
Committee may in its discretion determine (i) whether any leave of
absence constitutes a termination of employment within the meaning of
the Plan and (ii) the impact, if any, of any such leave of absence on
grants of Options under the Plan theretofore made to an Optionee who
takes such leave of absence.
(b) If an Optionee's employment terminates by reason of
disability of the Optionee (as defined in Section 22(e)(3) of the
Code), such Optionee may, within one year of the date of termination
of employment, exercise any Option granted to him to the extent that
he is entitled to exercise such Option on the date his employment
terminated.
(c) In the event that an Optionee dies while in the employ of
the Company or an Affiliate, or during the 90 day period after his
employment terminates any Option granted to such Optionee which
otherwise could be exercised by such Optionee if living shall be
exercisable only by such Optionee's personal representative unless the
Optionee's will specifically disposes of such Option, in which case
such exercise shall be made only by the recipient of such specific
disposition.
(d) Notwithstanding the provisions of Sections 7(b) and 7(c),
in no event shall any Option be exercisable more than the applicable
period set forth in Section 6(c).
4
<PAGE> 5
8. ADJUSTMENT.
(a) In the event that the outstanding shares of Common Stock
of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company or of another corporation, by reason of a
recapitalization, reclassification, stock split-up, combination of
shares or dividend or other distribution payable in capital stock,
appropriate adjustment (if any is required) shall be made by the
Committee in the number and kind of shares for the purchase of which
Options may be granted under the Plan. In addition, the Committee
shall make appropriate adjustments in the number and kind of shares as
to which outstanding Options, or portions thereof, then unexercised,
shall be exercisable, to the end that the proportionate interest of
the holder of the Option shall, to the extent practicable, be
maintained as before the occurrence of such event; provided, however,
that any Options to purchase fractional shares resulting from any such
adjustment shall be eliminated. Such adjustment in outstanding
Options shall be made without change in the total price applicable to
the unexercised portion of the Option with a corresponding adjustment
in the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, any Option shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days written notice of the
date so fixed shall be given to each Optionee and each such Optionee
shall have the right during such period to exercise his Option as to
all or any part of the shares covered thereby which he is otherwise
eligible to purchase pursuant to the terms of the Plan and any Option
Agreement executed in connection with the grant of the Option.
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the shares under
outstanding and unexercised Options for securities of another
corporation, then the Board shall take such action, and the
Options shall terminate as provided in Section 8(b); or
(ii) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the shares under outstanding and
unexercised Options for securities of another corporation,
then the Committee shall adjust the shares under such
outstanding and unexercised Options (and shall adjust the
shares remaining under the Plan which are then available to
the Optionee under the Plan, if the Reorganization Agreement
makes specific provision thereof) in a manner not inconsistent
with the provisions
5
<PAGE> 6
of the Reorganization Agreement for the adjustment, change,
conversion, or exchange of such stock and such Options. The
term "Reorganization" as used in this Section 8(c) shall mean
any statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale,
pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the effective
date of the Reorganization.
(d) Adjustments and determinations under this Section 8 shall
be made by the Committee, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final,
binding, and conclusive.
9. RESTRICTIONS.
(a) If the Committee shall at any time determine that any
Consent (as hereinafter defined) is necessary or desirable as a
condition of, or in connection with, the granting of any Option, the
issuance or purchase of shares or other rights thereunder, or the
taking of any other action thereunder (each such action being
hereinafter referred to as a "Plan Action"), then such Plan Action
shall not be taken, in whole or in part, unless and until such Consent
shall have been effected or obtained to the full satisfaction of the
Committee. Without limiting the generality of the foregoing, in the
event that the Committee shall determine that a Consent is necessary
or desirable as a condition of, or in connection with any payment to
be made under the Plan, then the Committee shall be entitled to
determine not to make any payment whatsoever until such Consent shall
have been obtained in the manner described.
(b) The term "Consent" as used herein with respect to any
Plan Action means (i) any and all listings, registrations, or
qualifications in respect thereof upon any securities exchange or
under any federal, state, or local law, rule, or regulation, (ii) any
and all written agreements and representations by the Optionee with
respect to the disposition of shares, or with respect to any other
matter, which the Committee shall deem necessary or desirable to
comply with the terms of any such listing, registration, or
qualification or to obtain an exemption from the requirement that any
such listing, qualification, or registration be made, and (iii) any
and all consents, clearances, and approvals in respect of a Plan
Action by any governmental or other regulatory body.
10. WITHHOLDING TAXES. Whenever under the Plan shares are to be
delivered upon exercise of an Option, the Company shall be entitled to require
as a condition of delivery that the Optionee remit an amount sufficient to
satisfy all federal, state, and other governmental withholding tax requirements
related thereto.
11. RIGHT OF DISCHARGE RESERVED. Nothing in the Plan or in any
Option Agreement shall confer upon any officer, director, employee, or other
person the right to continue in the employment or service of the Company or any
of its Affiliates or affect any right which the
6
<PAGE> 7
Company or any of its Affiliates may have to terminate the employment or
service of such officer, director, employee, or other person.
12. NO RIGHTS AS A STOCKHOLDER. No Optionee or other person
exercising an Option shall have any of the rights of a stockholder of the
Company with respect to shares subject to an Option until the issuance of a
stock certificate to him for such shares. Except as otherwise provided in
Section 8, no adjustment shall be made for dividends, distributions, or other
rights (whether ordinary or extraordinary, and whether in cash, securities, or
other property) for which the record date is prior to the date such stock
certificate is issued.
13. RESTRICTIONS ON TRANSFERABILITY. Each Optionee or other
person exercising an Option may be required by the Committee to enter into a
Buy-Sell Agreement with the Company with respect to the shares issued to such
person upon the exercise of the Option.
14. NON-UNIFORM DETERMINATIONS. 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). Without limiting the
generality of the foregoing, the Committee shall be entitled, among other
things, to make non-uniform and selective determinations, and to enter into
non-uniform and selective Option Agreements, as to (i) the persons to be
granted Options under the Plan, (ii) the terms and provisions of Option
Agreements under the Plan, and (iii) the treatment of leaves of absence
pursuant to Section 7(a).
15. USE OF PROCEEDS. The proceeds received by the Company from
the sale of Common Stock pursuant to the exercise of Options granted under the
Plan shall be added to the Company's general funds and used for general
corporate purposes.
16. AMENDMENT, SUSPENSION, AND TERMINATION OF PLAN. The Committee
may at any time suspend or terminate the Plan or may amend it from time to time
in such respects as the Committee may deem advisable in order that the Options
granted thereunder may conform to any changes in the law or in any other
respect which the Committee may deem to be in the best interests of the
Company; provided, however, that without approval by the shareholders of the
Company representing a majority of the voting power, no such amendment shall
(i) except as specified in Paragraph 8, increase the maximum number of shares
for which Options may be granted under the Plan, (ii) change the provisions of
Section 6(b) relating to the establishment of the option price, (iii) change
the provisions of Section 6(c) relating to the expiration date of each Option,
(iv) materially modify the requirements as to eligibility for participation in
the Plan, or (v) extend the term of the Plan beyond the period set forth in
Section 17. No Option may be granted during any suspension or after the
termination of the Plan. No amendment, suspension, or termination of the Plan
shall, without an Optionee's consent, alter or impair any of the rights or
obligations under any Option theretofore granted to such Optionee under the
Plan.
7
<PAGE> 8
17. TERM OF PLAN.
(a) The Plan shall become effective upon the approval thereof
by the Board; provided, that notwithstanding any other provision of
this Plan (i) the Plan shall terminate and all Options thereunder
shall be void and of no effect unless the Plan shall be approved by
the affirmative votes of the holders of a majority of the shares of
stock of the Company present (in person or by proxy) and entitled to
vote at a meeting of the stockholders of the Company held for such
purpose following such approval by the Committee, or any adjournment
of such stockholders' meeting, and (ii) no option shall be exercisable
prior to such stockholders' approval.
(b) The Plan shall terminate 10 years after the date on which
it becomes effective, and no awards shall thereafter be made under the
Plan. Notwithstanding the foregoing, all Options granted prior to
such date shall remain in effect until such Options have been
satisfied or terminated in accordance with the terms and provisions of
the Plan.
18. MISCELLANEOUS.
(a) The provisions of the Plan are intended and should, as
necessary, be interpreted to permit all Options granted pursuant to
the Plan to qualify as incentive stock options as that term is defined
in Section 422 of the Code.
(b) The validity, construction, and enforcement of this
Agreement shall be governed by the laws of the State of Texas. In the
event of a dispute concerning this Agreement, the parties agree that
venue lies in a court of competent jurisdiction in Harris County,
Texas.
(c) The headings contained in this Agreement are for
reference purposes only and shall not affect this Agreement in any
manner whatsoever. Wherever required by the context, any gender shall
include any other gender, the singular shall include the plural, and
the plural shall include the singular.
(d) In the event of a conflict between the provisions of the
Plan and the provisions of an Option Agreement, the provisions of the
Plan shall control.
8
<PAGE> 1
SERV-TECH, INC.
1995 LONG TERM INCENTIVE PLAN
1. Purpose. The purpose of the 1995 Long Term Incentive Plan (the "Plan")
is to advance the interests of Serv-Tech, Inc. (the "Company") and its
shareholders by providing incentives to certain key employees of the Company and
its affiliates and to certain other key individuals who perform services for
these entities, including those who contribute significantly to the strategic
and long term performance objectives and growth of the Company and its
affiliates.
2. Administration. The Plan shall be administered solely by the Long Term
Incentive Plan Administrative Committee (the "Committee") of the Board of
Directors (the "Board") of the Company, as such Committee is from time to time
constituted, or any successor committee the Board may designate to administer
the Plan; provided that if at any time Rule 16b-3 or any successor rule ("Rule
16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), so permits without adversely affecting the ability of the Plan to comply
with the conditions for exemption from Section 16 of the Exchange Act (or any
successor provision) provided by Rule 16b-3, the Committee may delegate the
administration of the Plan in whole or in part, on such terms and conditions,
and to such person or persons as it may determine in its discretion, as it
relates to persons not subject to Section 16 of the Exchange Act (or any
successor provision). The membership of the Committee or such successor
committee shall be constituted so as to comply at all times with the applicable
requirements of Rule 16b-3. No member of the Committee shall be eligible or have
been eligible within one year prior to his appointment to receive awards under
the Plan ("Awards") or to receive awards under any other plan, program or
arrangement of the Company or any of its affiliates if such eligibility would
cause such member to cease to be a "disinterested person" under Rule 16b-3;
provided that if at any time Rule 16b-3 so permits without adversely affecting
the ability of the Plan to comply with the conditions for exemption from Section
16 of the Exchange Act (or any successor provision) provided by Rule 16b-3, one
or more members of the Committee may cease to be "disinterested persons."
The Committee has all the powers vested in it by the terms of the Plan set
forth herein, such powers to include exclusive authority (except as may be
delegated as permitted herein) to select the key employees and other key
individuals to be granted Awards under the Plan, to determine the type, size and
terms of the Award to be made to each individual selected, to modify the terms
of any Award that has been granted, to determine the time when Awards will be
granted, to establish performance objectives, to make any adjustments necessary
or desirable as a result of the granting of Awards to eligible individuals
located outside the United States and to prescribe the form of the instruments
embodying Awards made under the Plan. The Committee is authorized to interpret
the Plan and the Awards granted under the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determination, which it deems necessary or desirable for the administration of
the Plan. The Committee (or its delegate as permitted herein) may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award in the manner and to the extent the Committee deems necessary or
desirable to carry it into effect. Any decision of the Committee (or its
delegate as permitted herein) in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute discretion and
shall be final, conclusive and binding on all parties concerned. The Committee
may act only by a majority of its members in office, except that the members
thereof may authorize any one or more of their members or any officer of the
Company to execute and deliver documents or to take any other ministerial action
on behalf of the Committee with respect to Awards made or to be made to Plan
participants. No member of the Committee and no officer of the Company shall be
liable for anything done or omitted to be done by him, by any other member of
the Committee or by any officer of the Company in connection with the
performance of duties under the Plan, except for his own willful misconduct or
as expressly provided by statute. Determinations to be made by the Committee
under the Plan may be made by its delegates.
1
<PAGE> 2
3. Participation.
(a) Affiliates. If an Affiliate (as hereinafter defined) of the Company
wishes to participate in the Plan and its participation shall have been approved
by the Board upon the recommendation of the Committee, the board of directors or
other governing body of the Affiliate shall adopt a resolution in form and
substance satisfactory to the Committee authorizing participation by the
Affiliate in the Plan with respect to its key employees or other key individuals
performing services for it. As used herein, the term "Affiliate" means any
entity in which the Company has a substantial direct or indirect equity interest
or which has a substantial direct or indirect equity interest in the Company, as
determined by the Committee in its discretion.
An Affiliate participating in the Plan may cease to be a participating
company at any time by action of the Board or by action of the board of
directors or other governing body of such Affiliate, which latter action shall
be effective not earlier than the date of delivery to the Secretary of the
Company of a certified copy of a resolution of the Affiliate's board of
directors or other governing body taking such action. If the participation in
the Plan of an Affiliate shall terminate, such termination shall not relieve it
of any obligations theretofore incurred by it, except as may be approved by the
Committee in its discretion.
(b) Participants. Consistent with the purposes of the Plan, the Committee
shall have exclusive power (except as may be delegated as permitted herein) to
select the key employees and other key individuals performing services for the
Company, including consultants or independent contractors and others who perform
services for the Company and its Affiliates who may participate in the Plan and
be granted Awards under the Plan. Eligible individuals may be selected
individually or by groups or categories, as determined by the Committee in its
discretion. No director of the Company, unless he is an employee of the Company
or is an officer or director of an Affiliate, shall be eligible to receive an
Award under the Plan. In no event may a corporation be eligible to receive an
award under the Plan.
4. Awards under the Plan.
(a) Types of Awards. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights,"
(iii) "Restricted Stock," (iv) "Performance Grants" and (v) any other type of
Award deemed by the Committee in its discretion to be consistent with the
purposes of the Plan (including but not limited to, Awards of or options or
similar rights granted with respect to unbundled stock units or components
thereof, and Awards to be made to participants who are foreign nationals or are
employed or performing services outside the United States). Stock Options, which
include "Non-Qualified Stock Options" and "Incentive Stock Options" or
combinations thereof, are rights to purchase common shares of the Company and
stock of any other class into which such shares may thereafter be changed (the
"Common Shares"). Non-Qualified Stock Options and Incentive Stock Options are
subject to the terms, conditions and restrictions specified in Paragraph 5.
Stock Appreciation Rights are rights to receive (without payment to the Company)
cash, Common Shares, other Company securities (which may include, but need not
be limited to, unbundled stock units or components thereof, debentures,
preferred stock, warrants, securities convertible into Common Shares or other
property, and other types of securities including, but not limited to, those of
the Company or an Affiliate, or any combination thereof ("Other Company
Securities")) or property, or other forms of payment, or any combination
thereof, as determined by the Committee, based on the increase in the value of
the number of Common Shares specified in the Stock Appreciation Right. Stock
Appreciation Rights are subject to the terms, conditions and restrictions
specified in Paragraph 6. Shares of Restricted Stock are Common Shares which are
issued subject to certain restrictions pursuant to Paragraph 7. Performance
Grants are contingent awards subject to the terms, conditions and restrictions
described in Paragraph 8, pursuant to which the participant may become entitled
to receive cash, Common Shares, Other Company Securities or property, or other
forms of payment, or any combination thereof, as determined by the Committee.
Without limiting the generality of the foregoing, the Committee is authorized to
grant Awards that do not comply with the requirements of Rule 16b-3, except to
the extent the grant of such Awards adversely affects the compliance of the Plan
with Rule 16b-3.
(b) Maximum Number of Shares that May Be Issued. There may be issued under
the Plan (as Restricted Stock, in payment of Performance Grants, pursuant to the
exercise of Stock Options or Stock
2
<PAGE> 3
Appreciation Rights, or in payment of or pursuant to the exercise of such other
Awards as the Committee, in its discretion, may determine) an aggregate of not
more than 300,000 Common Shares, subject to adjustment as provided in Paragraph
15. Common Shares issued pursuant to the Plan may be either authorized but
unissued shares, treasury shares, re-acquired shares, or any combination
thereof. If any Common Shares issued as Restricted Stock or otherwise subject to
repurchase or forfeiture rights are re-acquired by the Company pursuant to such
rights, or if any Award is cancelled, terminates or expires unexercised, any
Common Shares that would otherwise have been issuable pursuant thereto will be
available for issuance under new Awards to the extent permitted by Rule 16b-3.
(c) Rights with respect to Common Shares and Other Securities.
(i) Unless otherwise determined by the Committee in its discretion, a
participant to whom an Award of Restricted Stock has been made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have, after issuance of a certificate or copy thereof for the number
of Common Shares awarded and prior to the expiration of the Restricted
Period or the earlier repurchase of such Common Shares as herein provided,
ownership of such Common Shares, including the right to vote the same and
to receive dividends or other distributions made or paid with respect to
such Common Shares (provided that such Common Shares, and any new,
additional or different shares, or Other Company Securities or property, or
other forms of consideration which the participant may be entitled to
receive with respect to such Common Shares as a result of a stock split,
stock dividend or any other event of the kind described in Paragraph 15,
shall be subject to the restrictions hereinafter described as determined by
the Committee in its discretion), subject, however, to the options,
restrictions and limitations imposed thereon pursuant to the Plan.
Notwithstanding the foregoing, unless otherwise determined by the Committee
in its discretion, a participant with whom an Award agreement is made to
issue Common Shares in the future, shall have no rights as a shareholder
with respect to Common Shares related to such agreement until issuance of a
certificate to him.
(ii) Unless otherwise determined by the Committee in its discretion, a
participant to whom a grant of Stock Options, Stock Appreciation Rights,
Performance Grants or any other Award is made (and any person succeeding to
such a participant's rights pursuant to the Plan) shall have no rights as a
stockholder with respect to any Common Shares or as a holder with respect
to other securities, if any, issuable pursuant to any such Award until the
date of the issuance of a stock certificate to him for such Common Shares
or other instrument of ownership, if any. Except as provided in Paragraph
15, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities,
other property or other forms of consideration, or any combination thereof)
for which the record date is prior to the date such stock certificate or
other instrument of ownership, if any, is issued.
(iii) For purposes of the Plan, and only with respect to Common
Shares, the term "fair market value" on any date shall mean (A) if the
Common Shares are listed or admitted to trade on a national securities
exchange or national market system, the closing price of the Common Shares,
as published in the "Wall Street Journal" or, if there is no trading on the
common Shares on such date, then the closing price of the Common Shares on
the next preceding date on which there was trading in such shares; (B) if
the Common Shares are not listed or admitted to trade on a national
securities exchange or national market system, the mean between the bid and
asked price for the Common Shares on such date, as furnished by the
National Association of Securities Dealers, Inc., through NASDAQ or a
similar organization if NASDAQ is no longer reporting such information; or
(C) if the Common Shares are not listed or admitted to trade on a national
securities exchange or national market system and if bid and asked prices
for the Common Shares are not so furnished through NASDAQ or a similar
organization, the value established by the Committee for purposes of
granting stock options under the Plan. In addition to the above rules, far
market value shall be determined without regard to any restriction other
than a restriction which, by its terms, will never lapse.
5. Stock Options. The Committee may grant Stock Options either alone, or
in conjunction with Stock Appreciation Rights, Reload Stock Options, Performance
Grants or other Awards, either at the time of grant or by amendment thereafter,
provided that an Incentive Stock Option may be granted only to an eligible
3
<PAGE> 4
employee of the Company or its parent or subsidiary corporation. Each Stock
Option (referred to herein as an "Option") granted under the Plan shall be
evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions, including, but
not limited to, restrictions upon the Option or the Common Shares issuable upon
exercise thereof, as the Committee, in its discretion, shall establish:
(a) The option price may be less than, equal to, or greater than, the fair
market value of the Common Shares subject to such Option at the time the Option
is granted, as determined by the Committee, but in no event will such option
price be less than 50% of the fair market value of the underlying Common Shares
at the time the Option is granted; provided, however, that in the case of an
Option granted retroactively in tandem with or as a substitution for another
Award, the option price shall be not less than 50% of the fair market value of
the underlying Common Shares on the date of such other Award; and provided
further that in the case of an Incentive Stock Option granted to an eligible
employee of the Company, the option price shall not be less than the fair market
value of the Common Shares subject to such Option at the time the Option is
granted, or if granted to such an employee who owns stock representing more than
ten percent of the voting power of all classes of stock of the Company or of its
parent or subsidiary (a "Ten Percent Employee"), such option price shall not be
less than 110% of such fair market value at the time the Option is granted.
(b) The Committee shall determine the number of Common Shares to be subject
to each Option. The number of Common Shares subject to an outstanding Option may
be reduced on a share-for-share or other appropriate basis, as determined by the
Committee, to the extent that Common Shares under such Option are used to
calculate the cash, Common Shares, Other Company Securities or property, or
other forms of payment, or any combination thereof, received pursuant to
exercise of a Stock Appreciation Right attached to such Option, or to the extent
that any other Award granted in conjunction with such Option is paid.
(c) The Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution, or (with respect to Non-Qualified Stock Options) pursuant to a
qualified domestic relations order, and shall be exercisable during the
grantee's lifetime only by him. Unless the Committee determines otherwise, the
Option shall not be exercisable for at least six months after the date of grant,
unless the grantee ceases employment or performance of services before the
expiration of such six-month period by reason of his death.
(d) The Option shall not be exercisable:
(i) in the case of any Incentive Stock Option granted to a Ten Percent
Employee, after the expiration of five years from the date it is granted,
and, in the case of any other Incentive Stock Option, after the expiration
of ten years from the date it is granted. Any Option may be exercised
during its term only at such time or times and in such installments as the
Committee may establish;
(ii) unless payment in full is made for the shares being acquired
thereunder at the time of exercise; such payment shall be made in such form
(including, but not limited to, cash, Common Shares, or the surrender of
another outstanding Award under the Plan, or any combination thereof) as
the Committee may determine in its discretion; and
(iii) unless the person exercising the Option has been, at all times
during the period beginning with the date of the grant of the Option and
ending on the day three months before the date of such exercise, employed
by or otherwise performing services for the Company or an Affiliate, or a
corporation, or a parent or subsidiary of such corporation issuing or
assuming the Option in a transaction to which Section 424(a) of the
Internal Revenue Code of 1986, as amended or any successor statutory
provision thereto (the "Code"), is applicable, except that
(A) in the case of any Non-Qualified Stock Option, if such person
shall cease to be employed by or otherwise performing services for the
Company or an Affiliate solely by reason of a period of Related
Employment as defined in Paragraph 14, he may, during such period of
Related Employment, exercise the Non-Qualified Stock Option as if he
continued such employment or performance of service; or
4
<PAGE> 5
(B) in the case of any Non-Qualified Stock Option, if such person
shall cease such employment or performance of services by reason of his
disability as defined in Paragraph 12 or early, normal or deferred
retirement under an approved retirement program of the Company or an
Affiliate (or such other plan or arrangement as may be approved by the
Committee, in its discretion, for this purpose) while holding an Option
which has not expired and has not been fully exercised, such person, at
any time within three years (or such other period determined by the
Committee) after the date he ceased such employment or performance of
services (but in no event after the Option has expired), may exercise
the Option with respect to any shares as to which he could have
exercised the Option on the date he ceased such employment or
performance of services, or with respect to such greater number of
shares as determined by the Committee; or
(C) in the case of any Non-Qualified Stock Option, if such person
shall cease such employment or performance of services for reasons other
than Related Employment, disability, early, normal or deferred
retirement or death (as provided elsewhere) while holding an Option
which has not expired and has not been fully exercised, such person or
his executors, administrators, heirs, or distributees, as the case may
be, may exercise the Option at any time during the period, if any, which
the Committee approves (but not beyond the expiration of the Option)
following the date he (or the decedent, as applicable) ceased such
employment or performance of services with respect to any shares as to
which he (or the decedent, as applicable) could have exercised the
Option on the date he ceased such employment or performance of services,
or with respect to such greater number of shares as determined by the
Committee; or
(D) if any person to whom an Incentive Stock Option has been
granted shall die or shall cease his employment or performance of
services by reason of disability (as defined in Paragraph 12) while
holding such an Option which has not expired and has not been fully
exercised, he or his executors, administrators, heirs or distributees,
as the case may be, may, at any time within one year (or such shorter
period determined by the Committee) after the date of death or cessation
of employment due to disability (but in no event after the Option has
expired), exercise the Option with respect to any shares as to which he
(or the decedent, as applicable) could have exercised such Option at the
time of his death or cessation of employment due to disability, or with
respect to such greater number of shares as determined by the Committee.
(e) In the case of an Incentive Stock Option, the amount of aggregate fair
market value of Common Shares (determined at the time of grant of the Option
pursuant to subparagraph 5(a) of the Plan) with respect to which incentive stock
options are exercisable for the first time by an employee during any calendar
year (under all such plans of his employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000.
(f) It is the intent of the Company that Non-Qualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that the
Incentive Stock Options granted under the Plan be consistent with and contain or
be deemed to contain all provisions required under Section 422 and the other
appropriate provisions of the Code and any implementing regulations (and any
successor provisions thereof), and that any ambiguities in construction shall be
interpreted in order to effectuate such intent. The Agreements providing
Non-Qualified Stock Options shall provide that such Options are not "incentive
stock options" for the purposes of Section 422 of the Code.
(g) The Committee may award Reload Stock Options (as defined below) to any
participant either in combination with other Awards or in separate Awards that
grant Reload Stock Options upon exercise of outstanding stock options granted
under Plan or otherwise. "Reload Stock Option" means a Stock Option (i) that is
awarded, either automatically in accordance with the terms of an Award agreement
or by separate Award, upon the exercise of a stock option granted under this
Plan or otherwise where the option price is paid by the option holder by
delivery of Common Shares, and (ii) that entitles such holder to purchase the
number of Common Shares so delivered for an option price equal to the fair
market value of a Common Share on the date of exercise.
5
<PAGE> 6
(h) Upon the exercise of an outstanding Option, the Committee may require
that the grantee receive cash or other property, as opposed to Common Shares;
provided, however, that the cash or other property must be of equivalent value
of the Common Shares subject to such Option.
6. Stock Appreciation Rights. The Committee may grant Stock Appreciation
Rights either alone, or in conjunction with Stock Options, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter. Each Award
of Stock Appreciation Rights granted under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Award of Stock Appreciation Rights or the Common
Shares issuable upon exercise thereof, as the Committee in its discretion shall
establish:
(a) The Committee shall determine the number of Common Shares to be subject
to each Award of Stock Appreciation Rights. The number of Common Shares subject
to an outstanding Award of Stock Appreciation Rights may be reduced on a
share-for-share or other appropriate basis, as determined by the Committee, to
the extent that Common Shares under such Award of Stock Appreciation Rights are
used to calculate the cash, Common Shares, Other Company Securities or property,
or other forms of payment, or any combination thereof, received pursuant to
exercise of an Option attached to such Award of Stock Appreciation Rights, or to
the extent that any other Award granted in conjunction with such Award of Stock
Appreciation Rights is paid.
(b) The Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, or pursuant to a qualified domestic
relations order, and shall be exercisable during the grantee's lifetime only by
him. Unless the Committee determines otherwise, the Award of Stock Appreciation
Rights shall not be exercisable for at least six months after the date of grant,
unless the grantee ceases employment or performance of services before the
expiration of such six-month period by reason of his death.
(c) The Award of Stock Appreciation Rights shall not be exercisable:
(i) in the case of any Award of Stock Appreciation Rights that are
attached to an Incentive Stock Option granted to a Ten Percent Employee,
after the expiration of five years from the date it is granted, and, in the
case of any other Award of Stock Appreciation Rights that are attached to
an Incentive Stock Option, after the expiration of ten years from the date
it is granted. Any Award of Stock Appreciation Rights may be exercised
during its term only at such time or times and in such installments as the
Committee may establish;
(ii) unless (and then only to the extent) the Option or other Award to
which the Award of Stock Appreciation Rights is attached, if any, is at the
time exercisable; and
(iii) unless the person exercising the Award of Stock Appreciation
Rights has been, at all times during the period beginning with the date of
the grant thereof and ending on the day three months before the date of
such exercise, employed by or otherwise performing services for the Company
or an Affiliate, or a corporation or a parent or subsidiary of such
corporation, issuing or assuming the Award of Stock Appreciation Right in a
transaction to which Section 424(a) of the Code, except that
(A) in the case of any Award of Stock Appreciation Rights (other
than those attached to an Incentive Stock Option), if such person shall
cease to be employed by or otherwise performing services for the Company
or an Affiliate solely by reason of a period of Related Employment as
defined in Paragraph 14, he may, during such period of Related
Employment, exercise the Award of Stock Appreciation Rights as if he
continued such employment or performance of services; or
(B) in the case of any Award of Stock Appreciation Right (other
than those attached to an Incentive Stock Option), if such person shall
cease such employment or performance of services by reason of his
disability as defined in Paragraph 12 or early, normal or deferred
retirement under an approved retirement program of the Company or an
Affiliate (or such other plan or arrangement as may be approved by the
Committee, in its discretion, for this purpose) while holding an Award
of Stock Appreciation Rights which has not expired and has not been
fully exercised, such person may, at any time within three years (or
such other period determined by the Committee) after the date he
6
<PAGE> 7
ceased such employment or performance of services (but in no event after
the Award of Stock Appreciation Rights has expired), exercise the Award
of Stock Appreciation Rights with respect to any shares as to which he
could have exercised the Award of Stock Appreciation Rights on the date
he ceased such employment or performance of services, or with respect to
such greater number of shares as determined by the Committee; or
(C) in the case of any Award of Stock Appreciation Right is (other
than those attached to an Incentive Stock Option), if such person shall
cease such employment or performance of services for reasons other than
Related Employment, disability, early, normal or deferred retirement or
death (as provided elsewhere) while holding an Award of Stock
Appreciation Rights which has not expired and has not been fully
exercised, such person, his executors, administrators, heirs or
distributees, as the case may be, may exercise the Award of Stock
Appreciation Rights at any time during the period, if any, which the
Committee approves (but in no event after the Award of Stock
Appreciation Rights expires) following the date he or the decedent, if
applicable) ceased such employment or performance of services with
respect to any shares as to which he (or the decedent, if applicable)
could have exercised the Award of Stock Appreciation Rights on the date
he ceased such employment or performance of services, or with respect to
such greater number of shares as determined by the Committee; or
(D) if any person to whom an Award of Stock Appreciation Rights
that is attached to an Incentive Stock Option has been granted shall die
or shall cease his employment or performance of services by reason of
disability (as defined in Paragraph 12) while holding such an Award of
Stock Appreciation Rights which has not expired and has not been fully
exercised, he or his executors, administrators, heirs or distributees,
as the case may be, may, at any time within one year (or such shorter
period determined by the Committee) after the date of death or cessation
of employment due to disability (but in no event after such Award of
Stock Appreciation Rights has expired), exercise such Award of Stock
Appreciation Rights with respect to any shares as to which he (or the
decedent, as applicable) could have exercised such Award of Stock
Appreciation Rights at the time of his death or cessation of employment
due to disability, or with respect to such greater number of shares as
determined by the Committee.
(d) An Award of Stock Appreciation Rights shall entitle the holder (or any
person entitled to act under the provisions of subparagraph 6(c)(iii)(D) hereof)
to exercise such Award or to surrender unexercised the Option (or other Award)
to which the Stock Appreciation Right is attached (or any portion of such Option
or other Award) to the Company and to receive from the Company in exchange
therefor, without payment to the Company, that number of Common Shares having an
aggregate value equal to the excess of the fair market value of one share, at
the time of such exercise, over the exercise price (or Option Price, as the case
may be) per share, times the number of shares subject to the Award of Stock
Appreciation Rights or the Option (or other Award), or portion thereof, which is
so exercised or surrendered, as the case may be. The Committee shall be entitled
in its discretion to elect to settle the obligation arising out of the exercise
of a Stock Appreciation Right or the surrender of the unexercised Option (or
other Award) to which the Stock Appreciation Right is attached, by the payment
of cash or Other Company Securities or property, or other forms of payment, or
any combination thereof, as determined by the Committee, equal to the aggregate
value of the Common Shares it would otherwise be obligated to deliver. Any such
election by the Committee shall be made as soon as practicable after the receipt
by the Committee of written notice of the exercise of the Stock Appreciation
Right. The value of a Common Share, Other Company Securities or property, or
other forms of payment determined by the Committee for this purpose shall be the
fair market value thereof on the last business day next preceding the date of
the election to exercise the Stock Appreciation Right, unless the Committee, in
its discretion, determines otherwise.
(e) A Stock Appreciation Right may provide that it shall be deemed to have
been exercised at the close of business on the business day preceding the
expiration date of the Stock Appreciation Right or of the related Option (or
other Award), or such other date as specified by the Committee, if at such time
such Stock Appreciation Right has a positive value. Such deemed exercise shall
be settled or paid in the same manner as a regular exercise thereof as provided
in subparagraph 6(d) hereof.
7
<PAGE> 8
(f) No fractional shares may be delivered under this Paragraph 6, but in
lieu thereof a cash or other adjustment shall be made as determined by the
Committee in its discretion.
7. Restricted Stock. Each Award of Restricted Stock under the Plan shall
be evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions as the Committee,
in its discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be issued
to a participant pursuant to the Award, and the extent, if any, to which they
shall be issued in exchange for cash, other consideration, or both.
(b) Common Shares issued to a participant in accordance with the Award may
not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed
of, except by will or the laws of descent and distribution, or pursuant to a
qualified domestic relations order, or as otherwise determined by the Committee,
for such period as the Committee shall determine, from the date on which the
Award is granted (the "Restricted Period"). The Company will have the option, at
the Committee's discretion, to repurchase the shares subject to the Award at
such price as the Committee shall have fixed or to provide for forfeiture to the
Company of the shares subject to the Award, which option or forfeiture may be
exercisable (i) if the participant's continuous employment or performance of
services for the Company and its Affiliates shall terminate for any reason,
except solely by reason of a period of Related Employment as defined in
Paragraph 14, or except as otherwise provided in subparagraph 7(c), prior to the
expiration of the Restricted Period, (ii) if, on or prior to the expiration of
the Restricted Period or the earlier lapse of such forfeiture option, the
participant has not paid to the Company an amount equal to any federal, state,
local or foreign income or other taxes which the Company determines is required
to be withheld in respect of such shares, or (iii) under such other
circumstances as determined by the Committee in its discretion. Such repurchase
option or forfeiture shall be exercisable on such terms, in such manner and
during such period as shall be determined by the Committee when the Award is
made or as amended thereafter, except as otherwise determined in the Committee's
discretion. Each certificate for Common Shares issued pursuant to a Restricted
Stock Award shall bear an appropriate legend referring to the foregoing
repurchase option or forfeiture and other restrictions and to the fact that the
shares are partly paid, shall be deposited by the award holder with the Company,
together with a stock power endorsed in blank, or shall be evidenced in such
other manner permitted by applicable law as determined by the Committee in its
discretion. Any attempt to dispose of any such Common Shares in contravention of
the foregoing repurchase and forfeiture options and other restrictions shall be
null and void and without effect. If Common Shares issued pursuant to a
Restricted Stock Award shall be repurchased or forfeited pursuant to the
repurchase option described above, the participant, or in the event of his
death, his personal representative, shall forthwith deliver to the Secretary of
the Company the certificates for the Common Shares awarded to the participant,
accompanied by such instrument of transfer, if any, as may reasonably be
required by the Secretary of the Company. All certificate for shares of Common
Shares delivered under the Plan also 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 Common Shares are then listed and any
applicable federal or state securities laws, and the Committee may cause a
legend or legends to be placed on any such certificates to make appropriate
reference to such restrictions.
(c) If a participant who has been in continuous employment or performance
of services for the Company or an Affiliate since the date on which a Restricted
Stock Award was granted to him shall, while in such employment or performance of
services, die, or terminate such employment or performance of services by reason
of disability as defined in Paragraph 12 or by reason of early, normal or
deferred retirement under an approved retirement program of the Company or an
Affiliate (or such other plan or arrangement as may be approved by the Committee
in its discretion, for this purpose) and any of such events shall occur after
the date on which the Award was granted to him and prior to the end of the
Restricted Period of such Award, the Committee may determine to cancel the
repurchase option or forfeiture (and any and all other restrictions) on any or
all of the Common Shares subject to such Award; and the repurchase option or
forfeiture shall become exercisable at such time as to the remaining shares, if
any.
8
<PAGE> 9
8. Performance Grants. The Award of a Performance Grant ("Performance
Grant") to a participant will entitle him to receive a specified amount
determined by the Committee (the "Actual Value"), if the terms and conditions
specified herein and in the Award are satisfied. The Committee may grant
Performance Grants either alone, or in conjunction with an Award of Stock
Appreciation Rights, Restricted Stock, Options or other Awards. Each Award of a
Performance Grant shall be subject to the following terms and conditions, and to
such other terms and conditions, including but not limited to, restrictions upon
any cash, Common Shares, Other Company Securities or property, or other forms of
payment, or any combination thereof, issued in respect of the Performance Grant,
as the Committee, in its discretion, shall establish, and shall be embodied in
an instrument in such form and substance as is determined by the Committee:
(a) The Committee shall determine the value or range of values of a
Performance Grant to be awarded to each participant selected for an Award and
whether or not such a Performance Grant is granted in conjunction with an Award
of Options, Stock Appreciation Rights, Restricted Stock or other Award, or any
combination thereof, under the Plan (which may include, but need not be limited
to, deferred Awards) concurrently or subsequently granted to the participant
(the "Associated Award"). As determined by the Committee, the maximum value of
each Performance Grant (the "Maximum Value") shall be: (i) an amount fixed by
the Committee at the time the Award is made or amended thereafter, (ii) an
amount which varies from time to time based in whole or in part on the then
current value of a Common Share, Other Company Securities or property, or other
securities or property, or any combination thereof or (iii) an amount that is
determinable from criteria specified by the Committee. Performance Grants may be
issued in different classes or series having different names, terms and
conditions. In the case of a Performance Grant awarded in conjunction with an
Associated Award, the Performance Grant may be reduced on an appropriate basis
to the extent that the Associated Award has been exercised, paid to or otherwise
received by the participant, as determined by the Committee.
(b) The award period ("Award Period") in respect of any Performance Grant
shall be a period determined by the Committee. At the time each Award is made,
the Committee shall establish performance objectives to be attained within the
Award Period as the means of determining the Actual Value of such a Performance
Grant. The performance objectives shall be based on such measure or measures of
performance, which may include, but need not be limited to, the performance of
the participant, the Company, one or more of its subsidiaries or one or more of
their divisions or units, or any combination of the foregoing, as the Committee
shall determine, and may be applied on an absolute basis or be relative to
industry or other indices, or any combination thereof. Without limiting the
generality of the foregoing, it is intended that the Committee shall establish
performance goals applicable to Performance Grants granted to participants who,
in the judgment of the Committee may be Covered Employees (within the meaning of
Section 162(m)(3) of the Code), in such a manner as shall permit payments with
respect thereto to qualify as "Performance-Based Compensation" as described in
Section 162(m)(4)(C) of the Code, and that the Committee shall otherwise satisfy
any other requirements necessary to permit such payments to qualify as
"Performance-Based Compensation".
(c) The Actual Value of a Performance Grant shall be equal to its Maximum
Value only if the performance objectives are attained in full, but the Committee
shall specify the manner in which the Actual Value of Performance Grants shall
be determined if the performance objectives are met in part. Such performance
measures the Actual Value or the Maximum Value, or any combination thereof, may
be adjusted in any manner by the Committee in its discretion at any time and
from time to time during or as soon as practicable after the Award Period, if it
determines that such performance measures, the Actual Value or the Maximum
Value, or any combination thereof, are not appropriate under the circumstances.
(d) The rights of a participant in Performance Grants awarded to him shall
be provisional and may be cancelled or paid in whole or in part, all as
determined by the Committee, if the participant's continuous employment or
performance of services for the Company and its Affiliates shall terminate for
any reason prior to the end of the Award Period, except solely by reason of a
period of Related Employment as defined in Paragraph 14.
9
<PAGE> 10
(e) The Committee shall determine whether the conditions of subparagraph
8(a) or 8(b) hereof have been met and, if so, shall ascertain the Actual Value
of the Performance Grants. If the Performance Grants have no Actual Value, the
Award and such Performance Grants shall be deemed to have been cancelled and the
Associated Award, if any, may be cancelled or permitted to continue in effect in
accordance with its terms. If the Performance Grants have any Actual Value and:
(i) were not awarded in conjunction with an Associated Award, the
Committee shall cause an amount equal to the Actual Value of the
Performance Grants earned by the participant to be paid to him or his
beneficiary as provided below; or
(ii) were awarded in conjunction with an Associated Award, the
Committee shall determine, in accordance with criteria specified by the
Committee (A) to cancel the Performance Grants, in which event no amount in
respect thereof shall be paid to the participant or his beneficiary, and
the Associated Award may be permitted to continue in effect in accordance
with its terms, (B) to pay the Actual Value of the Performance Grants to
the participant or his beneficiary as provided below, in which event the
Associated Award may be cancelled or (C) to pay to the participant or his
beneficiary as provided below, the Actual Value of only a portion of the
Performance Grants, in which event a complementary portion of the
Associated Award may be permitted to continue in effect in accordance with
its terms, as determined by the Committee.
Such determination by the Committee shall be made as promptly as
practicable following the end of the Award Period or upon the earlier
termination of employment or performance of services, or at such other time or
times as the Committee shall determine, and shall be made pursuant to criteria
specified by the Committee.
Payment of any amount in respect of the Performance Grants which the
Committee determines to pay as provided above shall be made by the Company as
promptly as practicable after the end of the Award Period upon the earlier
termination of employment or performance of services, or at such other time or
times as the Committee shall determine, and may be made in cash, Common Shares,
Other Company Securities or property, or other forms of payment, or any
combination thereof or in such other manner, as determined by the Committee in
its discretion. Notwithstanding anything in this Paragraph 8 to the contrary,
the Committee may, in its discretion, determine and pay out the Actual Value of
the Performance Grants at any time during the Award Period.
9. Deferral of Compensation. The Committee shall determine whether or not
an Award shall be made in conjunction with deferral of the participant's salary,
bonus or other compensation, or any combination thereof, and whether or not,
among other determinations as the Committee deems appropriate, such deferred
amounts may be:
(i) forfeited to the Company or to other participants, or any
combination thereof, under certain circumstances (which may include, but
need not be limited to, certain types of termination of employment or
performance of services for the Company and its Affiliates),
(ii) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures and/or
(iii) credited with income equivalents (which may include, but need
not be limited to, interest, dividends or other rates of return) until the
date or dates of payment of the Award, if any.
10. Deferred Payment of Awards. The Committee may specify that the
payment of all or any portion of cash, Common Shares, Other Company Securities
or property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as the Committee
shall determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return, or any
combination thereof) as may accrue
10
<PAGE> 11
thereon until the date or dates of payment, such investment equivalents and such
additional amounts of income equivalents to be determined by the Committee in
its discretion. In addition, a participant may elect to defer payment of all or
any portion of the amounts or property payable under an Award pursuant to the
provisions of any Company deferred compensation plan.
11. Amendment or Substitution of Awards under the Plan. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder, or reduction of the Option Price of an Option or exercise
price of an Award of Stock Appreciation Rights); provided that no such amendment
shall adversely affect in a material manner any right of a participant under the
Award without his written consent, unless the Committee determines in its
discretion that there have occurred or are about to occur significant changes in
the participant's position, duties or responsibilities, or significant changes
in economic, legislative, regulatory, tax, accounting or cost/benefit conditions
which are determined by the Committee in its discretion to have or to be
expected to have a substantial effect on the performance of the Company, or any
subsidiary, affiliate, division or department thereof, on the Plan or on any
Award under the Plan. The Committee may, in its discretion, permit holders of
Awards under the Plan to surrender all or part of outstanding Awards in order to
exercise or realize the rights under other Awards, or to exchange for the grant
of new Awards, or require holders of Awards to surrender all or part of
outstanding Awards as a condition precedent to the grant of new Awards under the
Plan.
12. Disability. For the purposes of this Plan, a participant shall be
deemed to have terminated
his employment or performance of services for the Company and its Affiliates by
reason of disability,
if the Committee shall determine that he is permanently and totally disabled
within the meaning of Section 22(e)(3) of the Code.
13. Termination of a Participant. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment by or
the performance of services for the Company or an Affiliate, provided that
transfers between the Company and an Affiliate or between Affiliates, and
approved leaves of absence shall not be deemed such a termination.
14. Related Employment. For the purposes of this Plan, Related Employment
shall mean the employment or performance of services by an individual for an
employer that is neither the Company nor an Affiliate, provided that (i) such
employment or performance of services is undertaken by the individual at the
request of the Company or an Affiliate, (ii) immediately prior to undertaking
such employment or performance of services, the individual was employed by or
performing services for the Company or an Affiliate or was engaged in Related
Employment as herein defined and (iii) such employment or performance of
services is in the best interests of the Company and is recognized by the
Committee, in its discretion, as Related Employment for purposes of this
Paragraph 14. The death or disability of an individual during a period of
Related Employment as herein defined shall be treated, for purposes of this
Plan, as if the death or onset of disability had occurred while the individual
was employed by or performing services for the Company or an Affiliate.
15. Dilution and Other Adjustments. In the event of any change in the
outstanding Common Shares of the Company by reason of any stock split, stock
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, liquidation, rights offering, share offering, reorganization,
combination or exchange of shares, a sale by the Company of all or part of its
assets, any distribution to stockholders other than a normal cash dividend, or
other extraordinary or unusual event, if the Committee shall determine, in its
discretion, that such change equitably requires an adjustment in the terms of
any Award or the number of Common Shares available for Awards, such adjustment
may be made by the Committee and shall be final, conclusive and binding for all
purposes of the Plan.
16. Designation of Beneficiary by Participant. A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of any
Award under the Plan in the event of his death, on a written form to be provided
by and filed with the Committee, and in a manner determined by the Committee in
its discretion. The Committee reserves the right to review and approve
beneficiary designations. A participant may change his beneficiary from time to
time in the same manner, unless such participant has
11
<PAGE> 12
made an irrevocable designation. Any designation of beneficiary under the Plan
(to the extent it is valid and enforceable under applicable law) shall be
controlling over any other disposition, testamentary or otherwise, as determined
by the Committee in its discretion. If no designated beneficiary survives the
participant and is living on the date on which any amount becomes payable to
such participant's beneficiary, such payment will be made to the legal
representatives of the participant's estate, and the term "beneficiary" as used
in the Plan shall be deemed to include such person or persons. If there is any
question as to the legal right of any beneficiary to receive a distribution
under the Plan, the Committee in its discretion may determine that the amount in
question be paid to the legal representatives of the estate of the participant,
in which event the Company, the Board and the Committee and the members thereof
will have no further liability to anyone with respect to such amount.
17. Change in Control.
(a) Upon any Change in Control:
(i) each Stock Option and Stock Appreciation Right that is outstanding
on the date of such Change in Control shall be exercisable in full
immediately;
(ii) except with respect to Paragraph 7(b)(ii), all restrictions with
respect to Restricted Stock shall lapse immediately, and the Company's
right to repurchase or forfeit any Restricted Stock outstanding on the date
of such Change in Control shall thereupon terminate and the certificates
representing such Restricted Stock and the related stock powers shall be
promptly delivered to the Participants entitled thereto; and
(iii) for Awards based primarily on the measure of performance of the
Company as a whole, all Award Periods for the purposes of determining the
amounts of Awards of Performance Grants shall end as of the end of the
calendar quarter immediately preceding the date of such Change in Control,
and the amount of the Award payable shall be the portion of the maximum
possible Award allocable to the portion of the Award Period that had
elapsed and the results achieved during such portion of the Award Period.
For Awards based primarily on the measure of performance of the participant
of one or more of the Company's subsidiaries, divisions, or units, but not
the Company as a whole, the effect on the Award Period and amount of Award
payments, if any, in the event of a Change in Control, shall be as
indicated by the terms of the Performance Grant Award.
(b) For this purpose, a Change in Control shall be deemed to occur when and
only when any of the following events first occurs:
(i) any person becomes the beneficial owner, directly or indirectly,
of securities of the Company representing 25 percent or more of the
combined voting power of the Company's then outstanding voting securities;
or
(ii) three or more directors, whose election or nomination for
election is not approved by a majority of the Incumbent Board (as
hereinafter defined), are elected within any single 24-month period to
serve on the Board of Directors; or
(iii) members of the Incumbent Board cease to constitute a majority of
the Board of Directors without the approval of the remaining members of the
Incumbent Board; or
(iv) any merger (other than a merger where the Company is the survivor
and there is no accompanying Change in Control under subparts (i), (ii) or
(iii) of this Subparagraph 17(b)), consolidation, liquidation or
dissolution of the Company or the sale of all or substantially all of the
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur pursuant to subpart (i) of this Subparagraph 17(b) solely because 25
percent or more of the combined voting power of the Company's outstanding
securities is acquired by one or more employee benefit plans maintained by the
Company or by any other employer the majority interest in which is held,
directly or indirectly, by the Company. For purposes of this Section 17, the
terms "person" and "beneficial owner" shall have the meaning
12
<PAGE> 13
set forth in Sections 3(a) and 13(d) of the Exchange Act, and in the regulations
promulgated thereunder, as in effect on April 1, 1995; and the term "Incumbent
Board" shall mean (A) the members of the Board of Directors of the Company on
April 1, 1995, to the extent that they continue to serve as members of the Board
of Directors, and (B) any individual who becomes a member of the Board of
Directors after April 1, 1995, if his election or nomination for election as a
director was approved by a vote of at least three-quarters of the then Incumbent
Board.
(c) If, as a result of a Change in Control, a participant is no longer
employed by or performing services for the company and Awards held by the
participant are deemed "excess parachute payments", as that term is defined in
Section 280G (b) of the Code, the Company will reimburse the participant for any
excise taxes imposed on such "excess parachute payments" pursuant to Section
4999 of the Code.
18. Miscellaneous Provisions.
(a) No employee or other person shall have any claim or right to be granted
an Award under the Plan. Determinations made by the Committee under the Plan
need not be uniform and may be made selectively among eligible individuals under
the Plan, whether or not such eligible individuals are similarly situated.
Neither the Plan nor any action taken hereunder shall be construed as giving any
employee or other person any right to continue to be employed by or perform
services for the Company or any Affiliate, and the right to terminate the
employment of or performance of services by any participant at any time and for
any reason is specifically reserved.
(b) No participant or other person shall have any right with respect to the
Plan, the Common Shares reserved for issuance under the Plan or in any Award,
contingent or otherwise, until written evidence of the Award shall have been
delivered to the recipient and all the terms, conditions and provisions of the
Plan and the Award applicable to such recipient (and each person claiming under
or through him) have been met.
(c) Except as may be approved by the Committee where such approval shall
not adversely affect compliance of the Plan with Rule 16b -3 under the Exchange
Act (or, with respect to Incentive Stock Options, under Section 422 of the
Code), a participant's rights and interest under the Plan may not be assigned or
transferred, hypothecated or encumbered in whole or in part either directly or
by operation of law or otherwise (except in the event of a participant's death)
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, provided, however, that
any Option or similar right (including, but not limited to, a Stock Appreciation
Right) offered pursuant to the Plan shall not be transferable other than by will
or the laws of descent and distribution, or (with the exception of Incentive
Stock Options and Awards attached to an Incentive Stock Option) pursuant to a
qualified domestic relations order, and shall be exercisable during the
participant's lifetime only by him (except to the extent it is transferred
pursuant to a qualified domestic relations order).
(d) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder with
respect to any Award unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, local and foreign
legal, securities exchange and other applicable requirements.
(e) It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3 under the Exchange Act, that any ambiguities or inconsistencies
in construction of the Plan be interpreted to give effect to such intention and
that if any provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent required to
permit the Plan to comply with Rule 16b-3; provided, however, that nothing
herein shall prevent the Committee from amending an Award granted hereunder in a
manner that causes such Award not to comply with Rule 16b-3. Notwithstanding
anything in the Plan to the contrary, the committee, in 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.
(f) The Company and its Affiliates shall have the right to deduct from any
payment made under the Plan any federal, state, local or foreign income or other
taxes required by law to be withheld with respect to
13
<PAGE> 14
such payment. It shall be a condition to the obligation of the Company to issue
Common Shares, Other Company Securities or property, other securities or
property, or other forms of payment, or any combination thereof, upon exercise,
settlement or payment of any Award under the Plan, that the participant (or any
beneficiary or person entitled to act) pay to the Company, upon its demand, such
amount as may be requested by the Company for the purpose of satisfying any
liability to withhold federal, state, local or foreign income or other taxes. If
the amount requested is not paid, the Company may refuse to issue Common Shares,
Other Company Securities or property, other securities or property, or other
forms of payment, or any combination thereof. Notwithstanding anything in the
Plan to the contrary, the Committee may, in its discretion, permit an eligible
participant (or any beneficiary or person entitled to act) to elect to pay a
portion or all of the amount requested by the Company for such taxes with
respect to such Award, at such time and in such manner as the Committee shall
deem to be appropriate including, but not limited to, by authorizing the Company
to withhold, or agreeing to surrender to the Company on or about the date such
tax liability is determinable, Common Shares, Other Company Securities or
property, other securities or property, or other forms of payment, or any
combination thereof, owned by such person or a portion of such forms of payment
that would otherwise be distributed, or have been distributed, as the case may
be, pursuant to such Award to such person, having a fair market value equal to
the amount of such taxes.
(g) The expenses of the Plan shall be borne by the Company. However, if an
Award is made to an individual employed by or performing services for an
Affiliate:
(i) if such Award results in payment of cash to the participant, such
Affiliate shall pay to the Company an amount equal to such cash payment
unless the Committee shall otherwise determine in its discretion;
(ii) if the Award results in the issuance by the Company to the
participant of Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment, or any combination
thereof, such Affiliate shall, unless the Committee shall otherwise
determine in its discretion, pay to the Company an amount equal to the fair
market value thereof, as determined by the Committee, on the date such
shares, other Company Securities or property, other securities or property,
or other forms of payment, or any combination thereof, are issued (or, in
the case of the issuance of Restricted Stock or of Common Shares, Other
Company Securities or property, or other securities or property, or other
forms of payment subject to transfer and forfeiture conditions, equal to
the fair market value thereof on the date on which they are no longer
subject to applicable restrictions), minus the amount, if any, received by
the Company in respect of the purchase of such Common Shares, Other Company
Securities or property, other securities or property or other forms of
payment, or any combination thereof, all as the Committee shall determine
in its discretion; and
(iii) the foregoing obligations of any such Affiliate entity shall
survive and remain in effect and binding on such entity even if its status
as an Affiliate of the Company should subsequently cease, except as
otherwise agreed by the Company and the entity.
(h) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's general
creditors.
(i) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken by the Company, the Board or the Committee or its delegates.
(j) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of payment
of Awards under the Plan, or any combination thereof, as of any specific time
shall mean such value as determined by the Committee in accordance with
applicable law.
(k) The masculine pronoun includes the feminine and the singular includes
the plural wherever appropriate.
14
<PAGE> 15
(l) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Awards hereunder or any Common
Shares issued pursuant hereto as may be required by Section 13 or 15(d) of the
Exchange Act (or any successor provision) or any other applicable statute, rule
or regulation.
(m) The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the Plan
and to Awards granted under the Plan, shall be governed by the substantive laws,
but not the choice of law rules, of the State of Texas.
19. Plan Amendment or Suspension. The Plan may be amended or suspended in
whole or in part at any time and from time to time by the Board, but no
amendment shall be effective unless and until the same is approved by
shareholders of the Company where the failure to obtain such approval would
adversely affect the compliance of the Plan with Rule 16b-3 under the Exchange
Act and with other applicable law. No amendment of the Plan shall adversely
affect in a material manner any right of any participant with respect to any
Award theretofore granted without such participant's written consent, except as
permitted under Paragraph 11.
20. Plan Termination. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan; or
(b) ten years from the date the Plan is initially approved and adopted by
the shareholders of the Company in accordance with Paragraph 21 hereof;
provided, however, that the Board may, prior to the expiration of such ten-year
period, extend the term of the Plan for an additional period of up to five years
for the grant of Awards other than Incentive Stock Options.
No termination of the Plan shall materially alter or impair any of the
rights or obligations of any person, without his consent, under any Award
theretofore granted under the Plan except that subsequent to termination of the
Plan, the Committee may make amendments permitted under Paragraph 11. After
termination of the Plan, no further Awards may be granted other than Reload
Stock Options granted in accordance with the terms of any Award granted prior to
termination of the Plan.
21. Shareholder Adoption. The Plan shall be submitted to the shareholders
of the Company for their approval and adoption at a meeting to be held on or
before June 1, 1995, or at any adjournment thereof. The Plan shall not be
effective and no Award shall be made hereunder unless and until the Plan has
been so approved and adopted. The shareholders shall be deemed to have approved
and adopted the Plan only if it is approved and adopted at a meeting of the
shareholders duly held by vote taken in the manner required by the laws of the
State of Texas and the applicable Federal securities laws.
15
<PAGE> 1
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made
effective this 10th day of November, 1994 (the "Grant Date"), between
Serv-Tech, Inc., a Texas corporation (the "Company") and Richard L. Daerr, an
employee of the Company (the "Optionee"), which parties agree as follows:
1. GRANT AND STOCK OPTION. The Optionee has been appointed by
the Company's Board of Directors as President and Cheif Executive Officer of
the Company. The Compensation Committee of the Company's Board of Directors
recognizes the valuable and important contribution that the Optionee will make
to the growth and success of the Company and so desires to ensure the
Optionee's continued employment in an executive capacity and to maintain and
enhance the performance and profitability of the Company. As such, the Company
hereby grants to the Optionee the right to acquire on the terms and conditions
hereinafter set forth, 180,000 shares of the Company's Common Stock (the
"Option Stock"), as set forth in Paragraph 3 hereof. The Option granted
hereunder shall become effective on the date of this Agreement and, unless
sooner terminated under the provisions thereof, shall expire at 12:00 midnight
on November 9, 2004.
2. PURCHASE PRICE. The purchase price of the Option Stock shall
be $6.25 per share, which is deemed to be at least 100% of the fair market
value of each share as of the date hereof, as determined in good faith by the
Board of Directors.
3. EXERCISE. Subject to the limitations contained herein, the
Optionee may exercise this Option to purchase the shares of Option Stock in the
following manner. The Optionee may:
(a) at any time after the Grant Date, exercise this
Option to purchase up to (but not more than) 20% of the Option Stock;
(b) at any time after November 9, 1995, exercise this
Option to purchase up to (but not more than) 40% of the Option Stock;
(c) at any time after November 9, 1996, exercise this
Option to purchase up to (but not more than) 60% of the Option Stock;
(d) at any time after November 9, 1997, exercise this
Option to purchase up to (but not more than) 80% of the Option Stock;
and
(e) at any time after November 9, 1998, exercise this
Option to purchase to 100% of the Option Stock;
provided, however, that on the occurrence of a "Change in Control," as defined
in Section 2.2 of the Optionee's Employment Agreement (the "Employment
Agreement"), the Optionee may acquire all of the Option Stock immediately upon
the date of the Change in Control.
<PAGE> 2
At 12:00 p.m. midnight on November 9, 2004, the Option created under
this Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 13 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not more than 30 days after the date of such
notice as the date on which the shares will be taken up and payment made
therefor in cash, personal check, or bank cashier's check, or the equivalent,
at the principal office of the Company. If any law or regulation requires the
Company to take any action with respect to the shares specified in such notice,
then the date for the delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of any
failure to take up and pay for the number of shares specified in such notice on
the date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NONTRANSFERABILITY OF OPTION. This Option shall not be
transferable or assignable by Optionee, otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the Optionee's
lifetime, only by him. This Option shall not be pledged or hypothecated in any
way and shall not be subject to execution, attachment or similar process except
with the express consent of the Company.
5. TERMINATION OF EMPLOYMENT. Upon termination of the Optionee's
employment under Section 1.6(d) of Employment Agreement, such option privileges
shall expire and become null and void unless exercised by him within two years
after the date of such termination. If the Employee's employment is terminated
other than in connection with a Qualifying Termination (as defined in the
Employment Agreement), the Employee's option privileges shall be limited to the
shares which were immediately purchasable by him at the date of such
termination.
6. DEATH OF OPTIONEE. If the Optionee dies during the time this
Option is exercisable, his Option privileges which could otherwise be exercised
by him if living shall be exercisable only by the Optionee's personal
representative, unless the Optionee's will specifically disposes of this
Option, in which case such exercise shall be made only by the recipient of such
specific disposition. However, in no event may this Option be exercisable to
any extent by anyone after November 9, 2004.
7. ADJUSTMENTS. The number of shares of Option Stock subject to
this Agreement shall be adjusted as follows:
(a) If the outstanding shares of Common Stock of the Company
are hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares or dividend or
2
<PAGE> 3
other distribution payable in capital stock, appropriate adjustment
shall be made by the Compensation Committee in the number and kind of
shares as to which the unexercised portion of this Option shall be
exercisable, to the end that the proportionate interest of the holder
of the Option shall, to the extent practicable, be maintained as
before the occurrence of such event; provided, however, that any right
to purchase fractional shares resulting from any such adjustment shall
be eliminated. Such adjustment in this Option shall be made without
change in the total price applicable to the unexercised portion of the
Option with a corresponding adjustment in the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, this Option shall terminate as of a date to be fixed by the
Compensation Committee, provided that not less than 30 days' written
notice of the date so fixed shall be given the Optionee, who shall
have the right during such period to exercise his Option as to all or
any part of the shares covered thereby which he is otherwise eligible
to purchase under this Agreement.
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the Option Stock subject to
this Agreement for securities of another corporation, then
Compensation Committee shall determine the change, conversion
or exchange of Option Stock; or
(ii) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the Option Stock subject to this
Agreement for securities of another corporation, then the
Compensation Committee shall adjust the shares under this
Option in a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change,
conversion, or exchange of such Option Stock. The term
"Reorganization" as used in this Section 6(c) shall mean any
statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale,
pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the effective
date of the Reorganization.
(d) Adjustments and determinations under this Section 7 shall
be made by the Compensation Committee, whose decisions as to what
adjustments or determinations shall be made, and the extent thereof,
shall be final, binding, and conclusive.
8. SHARES RESERVED. The Company will, at all times during the
term of this Agreement, reserve and keep available such number of shares of
Option Stock as will be sufficient to satisfy the requirements of this
Agreement and will pay all fees and expenses necessarily incurred by the
Company in connection with the issuance of such shares.
3
<PAGE> 4
9. EFFECT UPON EMPLOYMENT. The terms of the Optionee's
employment with the Company are as set forth in the Employment Agreement.
10. RESTRICTION ON ISSUANCE OF SHARES; OBLIGATION TO REGISTER
OPTION STOCK. The Company will not be obligated to sell any such shares of
Option Stock hereunder unless same are at the time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. In that connection, the Company agrees to
use its best efforts to register the Option Stock on a Registration Statement
on Form S-8 on or before November 30, 1994, and to make any such filings and do
all such acts and things as are necessary to register the Option Stock or
secure an exemption from registration under Texas securities laws and, from
time to time during the period in which all or any portion of this Option
remains unexercised, to prepare and deliver to the Optionee all such documents
necessary to constitute a prospectus meeting the requirements of Section 10(a)
of the Securities Act of 1933.
11. SUCCESSORS. This Agreement will be binding upon any successor
of the Company.
12. NO RIGHT TO OPTION STOCK. The Optionee shall have no rights
as a shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
13. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid to:
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, Texas 77087
If as to the Optionee, addressed to the address for notice set forth
beneath the Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective November 10, 1994.
THE COMPANY:
SERV-TECH, INC.
By: /s/ DAVID P. TUSA
-----------------------------------
David P. Tusa, Senior
Vice-President of Finance and
Administration
THE OPTIONEE:
/s/ RICHARD L. DAERR
--------------------------------------
Richard L. Daerr
Address for Notice:
6524 Vanderbilt
Houston, Texas 77005
5
<PAGE> 1
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made
effective this 10th day of November, 1994 (the "Grant Date"), between
Serv-Tech, Inc., a Texas corporation (the "Company") and Frank A. Perrone an
employee of the Company (the "Optionee"), which parties agree as follows:
1. GRANT AND STOCK OPTION. The Optionee has been appointed by
the Company's Board of Directors as the Secretary of the Company. The
Compensation Committee of the Company's Board of Directors recognizes the
valuable and important contribution that the Optionee will make to the growth
and success of the Company and so desires to ensure the Optionee's continued
employment in an executive capacity and to maintain and enhance the performance
and profitability of the Company. As such, the Company hereby grants to the
Optionee the right to acquire on the terms and conditions hereinafter set
forth, 35,000 shares of the Company's Common Stock (the "Option Stock"), as set
forth in Paragraph 3 hereof. The Option granted hereunder shall become
effective on the date of this Agreement and, unless sooner terminated under the
provisions thereof, shall expire at 12:00 midnight on November 9, 2004.
2. PURCHASE PRICE. The purchase price of the Option Stock shall
be $6.25 per share, which is deemed to be at least 100% of the fair market
value of each share as of the date hereof, as determined in good faith by the
Board of Directors.
3. EXERCISE. Subject to the limitations contained herein, the
Optionee may exercise this Option to purchase the shares of Option Stock in the
following manner. The Optionee may:
(a) at any time after the Grant Date, exercise this
Option to purchase up to (but not more than) 20% of the Option Stock;
(b) at any time after November 9, 1995, exercise this
Option to purchase up to (but not more than) 40% of the Option Stock;
(c) at any time after November 9, 1996, exercise this
Option to purchase up to (but not more than) 60% of the Option Stock;
(d) at any time after November 9, 1997, exercise this
Option to purchase up to (but not more than) 80% of the Option Stock;
and
(e) at any time after November 9, 1998, exercise this
Option to purchase to 100% of the Option Stock;
provided, however, that on the occurrence of a "Change in Control," as defined
in Section 2.2 of the Optionee's Employment Agreement (the "Employment
Agreement"), the Optionee may acquire all of the Option Stock immediately upon
the date of the Change in Control.
<PAGE> 2
At 12:00 p.m. midnight on November 9, 2004, the Option created under
this Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 13 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not more than 30 days after the date of such
notice as the date on which the shares will be taken up and payment made
therefor in cash, personal check, or bank cashier's check, or the equivalent,
at the principal office of the Company. If any law or regulation requires the
Company to take any action with respect to the shares specified in such notice,
then the date for the delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of any
failure to take up and pay for the number of shares specified in such notice on
the date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NONTRANSFERABILITY OF OPTION. This Option shall not be
transferable or assignable by Optionee, otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the Optionee's
lifetime, only by him. This Option shall not be pledged or hypothecated in any
way and shall not be subject to execution, attachment or similar process except
with the express consent of the Company.
5. TERMINATION OF EMPLOYMENT. Upon termination of the Optionee's
employment under Section 1.6(d) of the Employment Agreement, such option
privileges shall expire and become null and void unless exercised by him within
two years after the date of such termination. If the Employee's employment is
terminated other than in connection with a Qualifying Termination (as defined
in the Employment Agreement), the Employee's option privileges shall be
limited to the shares which were immediately purchasable by him at the date of
such termination.
6. DEATH OF OPTIONEE. If the Optionee dies during the time this
Option is exercisable, his Option privileges which could otherwise be exercised
by him if living shall be exercisable only by the Optionee's personal
representative, unless the Optionee's will specifically disposes of this
Option, in which case such exercise shall be made only by the recipient of such
specific disposition. However, in no event may this Option be exercisable to
any extent by anyone after November 9, 2004.
7. ADJUSTMENTS. The number of shares of Option Stock subject to
this Agreement shall be adjusted as follows:
(a) If the outstanding shares of Common Stock of the Company
are hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares or dividend or
2
<PAGE> 3
other distribution payable in capital stock, appropriate adjustment
shall be made by the Compensation Committee in the number and kind of
shares as to which the unexercised portion of this Option shall be
exercisable, to the end that the proportionate interest of the holder
of the Option shall, to the extent practicable, be maintained as
before the occurrence of such event; provided, however, that any right
to purchase fractional shares resulting from any such adjustment shall
be eliminated. Such adjustment in this Option shall be made without
change in the total price applicable to the unexercised portion of
the Option with a corresponding adjustment in the Option price per
share.
(b) In the event of the dissolution or liquidation of the
Company, this Option shall terminate as of a date to be fixed by the
Compensation Committee, provided that not less than 30 days' written
notice of the date so fixed shall be given the Optionee, who shall
have the right during such period to exercise his Option as to all or
any part of the shares covered thereby which he is otherwise eligible
to purchase under this Agreement.
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the Option Stock subject to
this Agreement for securities of another corporation, then
Compensation Committee shall determine the change, conversion
or exchange of Option Stock; or
(ii) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the Option Stock subject to this
Agreement for securities of another corporation, then the
Compensation Committee shall adjust the shares under this
Option in a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change,
conversion, or exchange of such Option Stock. The term
"Reorganization" as used in this Section 6(c) shall mean any
statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale,
pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the effective
date of the Reorganization.
(d) Adjustments and determinations under this Section 7 shall
be made by the Compensation Committee, whose decisions as to what
adjustments or determinations shall be made, and the extent thereof,
shall be final, binding, and conclusive.
8. SHARES RESERVED. The Company will, at all times during the
term of this Agreement, reserve and keep available such number of shares of
Option Stock as will be sufficient to satisfy the requirements of this
Agreement and will pay all fees and expenses necessarily incurred by the
Company in connection with the issuance of such shares.
3
<PAGE> 4
9. EFFECT UPON EMPLOYMENT. The terms of the Optionee's
employment with the Company are as set forth in the Employment Agreement.
10. RESTRICTION ON ISSUANCE OF SHARES; OBLIGATION TO REGISTER
OPTION STOCK. The Company will not be obligated to sell any such shares of
Option Stock hereunder unless same are at the time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. In that connection, the Company agrees to
use its best efforts to register the Option Stock on a Registration Statement
on Form S-8 on or before November 30, 1994, and to make any such filings and do
all such acts and things as are necessary to register the Option Stock or
secure an exemption from registration under Texas securities laws and, from
time to time during the period in which all or any portion of this Option
remains unexercised, to prepare and deliver to the Optionee all such documents
necessary to constitute a prospectus meeting the requirements of Section 10(a)
of the Securities Act of 1933.
11. SUCCESSORS. This Agreement will be binding upon any successor
of the Company.
12. NO RIGHT TO OPTION STOCK. The Optionee shall have no rights
as a shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
13. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid to:
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, Texas 77087
If as to the Optionee, addressed to the address for notice set forth
beneath the Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective November 10, 1994.
THE COMPANY:
SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
-----------------------------------
Richard L. Daerr
President and Chief Executive
Officer
THE OPTIONEE:
/s/ FRANK A. PERRONE
--------------------------------------
Frank A. Perrone
Address for Notice:
2630 Bissonnet #112
Houston, Texas 77005
5
<PAGE> 1
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement (the "Agreement") is made
effective this 10th day of November, 1994 (the "Grant Date"), between
Serv-Tech, Inc., a Texas corporation (the "Company") and Larry A. Talbert, an
employee of the Company (the "Optionee"), which parties agree as follows:
1. GRANT AND STOCK OPTION. The Optionee is President of Talbert
& Associates, Inc., a subsidiary of the Company. The Compensation Committee of
the Company's Board of Directors recognizes the valuable and important
contribution that the Optionee will make to the growth and success of the
Company and so desires to ensure the Optionee's continued employment and to
maintain and enhance the performance and profitability of the Company. As
such, the Company hereby grants to the Optionee the right to acquire on the
terms and conditions hereinafter set forth, 75,000 shares of the Company's
Common Stock (the "Option Stock"), as set forth in Paragraph 3 hereof. The
Option granted hereunder shall become effective on the date of this Agreement
and, unless sooner terminated under the provisions thereof, shall expire at
12:00 midnight on November 10, 2004.
2. PURCHASE PRICE. The purchase price of the Option Stock shall
be $6.25 per share, which is deemed to be at least one hundred percent (100%)
of the fair market value of each share as of the date hereof, as determined in
good faith by the Board of Directors.
3. EXERCISE. Subject to the limitations contained herein, the
Optionee may exercise this Option to purchase the shares of Option Stock in the
following manner. The Optionee may:
(a) at any time after the Grant Date (being November 10,
1994), exercise this Option to purchase up to (but not more than) 20%
of the Option Stock;
(b) at any time after November 10, 1995, exercise this
Option to purchase up to (but not more than) 40% of the Option Stock;
(c) at any time after November 10, 1996, exercise this
Option to purchase up to (but not more than) 60% of the Option Stock;
(d) at any time after November 10, 1997, exercise this
Option to purchase up to (but not more than) 80% of the Option Stock;
and
(e) at any time after November 10, 1998, exercise this
Option to purchase to 100% of the Option Stock;
<PAGE> 2
provided, however, that on the occurrence of a "Change in Control," as defined
on Schedule A hereto, the Optionee may acquire all of the Option Stock
immediately upon the date of the Change in Control.
At 12:00 p.m. midnight on November 10, 2004, the Option created under
this Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 13 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not more than thirty (30) days after the date of
such notice as the date on which the shares will be taken up and payment made
therefor in cash, personal check, or bank cashier's check, or the equivalent,
at the principal office of the Company. If any law or regulation requires the
Company to take any action with respect to the shares specified in such notice,
then the date for the delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of any
failure to take up and pay for the number of shares specified in such notice on
the date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NON-TRANSFERABILITY OF OPTION. This Option shall not be
transferable or assignable by Optionee, otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the Optionee's
lifetime, only by him. This Option shall not be pledged or hypothecated in any
way and shall not be subject to execution, attachment or similar process except
with the express consent of the Company.
5. TERMINATION OF EMPLOYMENT. Upon termination of the Optionee's
employment, such option privileges shall expire and become null and void unless
exercised by him within one (1) year after the date of such termination. If
the Employee's employment is terminated other than in connection with a Change
in Control, the Employee's option privileges shall be limited to the shares
which were immediately purchasable by him at the date of such termination.
6. DEATH OF OPTIONEE. If the Optionee dies during the time this
Option is exercisable, his Option privileges which could otherwise be exercised
by him if living shall be exercisable only by the Optionee's personal
representative, unless the Optionee's will specifically disposes of this
Option, in which case such exercise shall be made only by the recipient of such
specific disposition. However, in no event may this Option be exercisable to
any extent by anyone after November 10, 2004.
2
<PAGE> 3
7. ADJUSTMENTS. The number of shares of Option Stock subject to
this Agreement shall be adjusted as follows:
(a) If the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company or of another corporation, by reason of a
recapitalization, reclassification, stock split-up, combination of
shares or dividend or other distribution payable in capital stock,
appropriate adjustment shall be made by the Compensation Committee in
the number and kind of shares as to which the unexercised portion of
this Option shall be exercisable, to the end that the proportionate
interest of the holder of the Option shall, to the extent practicable,
be maintained as before the occurrence of such event; provided,
however, that any right to purchase fractional shares resulting from
any such adjustment shall be eliminated. Such adjustment in this
Option shall be made without change in the total price applicable to
the unexercised portion of the Option with a corresponding adjustment
in the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, this Option shall terminate as of a date to be fixed by the
Compensation Committee, provided that not less than thirty (30) days'
written notice of the date so fixed shall be given the Optionee, who
shall have the right during such period to exercise his Option as to
all or any part of the shares covered thereby which he is otherwise
eligible to purchase under this Agreement.
(c) In the event of a Reorganization (as hereinafter
defined) in which the Company is not the surviving or acquiring
company, or in which the Company is or becomes a wholly-owned
subsidiary of another company after the effective date of the
Reorganization, then:
(i) If there is no plan or agreement respecting
the Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the Option Stock subject to
this Agreement for securities of another corporation, then
Compensation Committee shall determine the change, conversion
or exchange of Option Stock; or
(ii) If there is a Reorganization Agreement and if
the Reorganization Agreement specifically provides for the
change, conversion, or exchange of the Option Stock subject to
this Agreement for securities of another corporation, then the
Compensation Committee shall adjust the shares under this
Option in a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change,
conversion, or exchange of such Option Stock. The term
"Reorganization" as used in this Section 6(c) shall mean any
statutory
3
<PAGE> 4
merger, statutory consolidation, sale of all or substantially
all of the assets of the Company, or sale, pursuant to an
agreement with the Company, of securities of the Company
pursuant to which the Company is or becomes a wholly-owned
subsidiary of another company after the effective date of the
Reorganization.
(d) Adjustments and determinations under this Section 7
shall be made by the Compensation Committee, whose decisions as to
what adjustments or determinations shall be made, and the extent
thereof, shall be final, binding, and conclusive.
8. SHARES RESERVED. The Company will, at all times during the
term of this Agreement, reserve and keep available such number of shares of
Option Stock as will be sufficient to satisfy the requirements of this
Agreement and will pay all fees and expenses necessarily incurred by the
Company in connection with the issuance of such shares.
9. EFFECT UPON EMPLOYMENT. The terms of the Optionee's employment
with the Company are as set forth in the Employment Agreement.
10. RESTRICTION ON ISSUANCE OF SHARES; OBLIGATION TO REGISTER
OPTION STOCK. The Company will not be obligated to sell any such shares of
Option Stock hereunder unless same are at the time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. In that connection, the Company agrees to
use its best efforts to register the Option Stock on a Registration Statement
on Form S-8 on or before November 30, 1994, and to make any such filings and do
all such acts and things as are necessary to register the Option Stock or
secure an exemption from registration under Texas securities laws and, from
time to time during the period in which all or any portion of this Option
remains unexercised, to prepare and deliver to the Optionee all such documents
necessary to constitute a prospectus meeting the requirements of Section 10(a)
of the Securities Act of 1933.
11. SUCCESSORS. This Agreement will be binding upon any successor
of the Company.
12. NO RIGHT TO OPTION STOCK. The Optionee shall have no rights as
a shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
13. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid to:
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, TX 77087
4
<PAGE> 5
If as to the Optionee, addressed to the address for notice set forth
beneath the Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective November 10, 1994.
SERV-TECH, INC.
"Company"
By: /s/ RICHARD L. DAERR
-----------------------------------
Richard L. Daerr
President and Chief Executive
Officer
"Optionee"
/s/ LARRY A. TALBERT
--------------------------------------
Larry A. Talbert
Address for Notice:
31 Rosedown
Destrehan, LA 77047-2529
5
<PAGE> 6
SCHEDULE A
Change in Control. Except as provided below, a Change in Control shall
be deemed to occur when and only when the first of the following events occurs:
(a) any person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 25 percent or
more of the combined voting power of the Company's then outstanding
voting securities, and a majority of the Incumbent Board (as defined
below) does not approve the acquisition before the acquisition occurs;
or
(b) three or more directors, whose election or nomination
for election is not approved by a majority of the Incumbent Board, are
elected within any single 12-month period to serve on the Board of
Directors; or
(c) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
pursuant to subsection (a), above, solely because 25 percent or more of the
combined voting power of the Company's outstanding securities is acquired by
one or more employee benefit plans maintained by the Company or by any other
employer the majority interest in which is held, directly or indirectly, by the
Company. For purposes of this Section 2.2, the terms "person" and "beneficial
owner" shall have the meaning set forth in Sections 3(a) and 13(d) of the
Securities Exchange Act of 1934, as amended, and in the regulations promulgated
thereunder; and the term "Incumbent Board" shall mean (i) the members of the
Board of Directors on January 1, 1995, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual who becomes
a member of the Board of Directors after January 1, 1995, if his election or
nomination for election as a director was approved by a vote of at least three
quarters of the then Incumbent Board.
<PAGE> 1
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made
effective this 10th day of November, 1994 (the "Grant Date"), between
Serv-Tech, Inc., a Texas corporation (the "Company") and David P. Tusa, an
employee of the Company (the "Optionee"), which parties agree as follows:
1. GRANT AND STOCK OPTION. The Optionee has been appointed by
the Company's Board of Directors as Senior Vice-President of Finance and
Administration of the Company. The Compensation Committee of the Company's
Board of Directors recognizes the valuable and important contribution that the
Optionee will make to the growth and success of the Company and so desires to
ensure the Optionee's continued employment in an executive capacity and to
maintain and enhance the performance and profitability of the Company. As
such, the Company hereby grants to the Optionee the right to acquire on the
terms and conditions hereinafter set forth, 50,000 shares of the Company's
Common Stock (the "Option Stock"), as set forth in Paragraph 3 hereof. The
Option granted hereunder shall become effective on the date of this Agreement
and, unless sooner terminated under the provisions thereof, shall expire at
12:00 midnight on November 9, 2004.
2. PURCHASE PRICE. The purchase price of the Option Stock shall
be $6.25 per share, which is deemed to be at least 100% of the fair market
value of each share as of the date hereof, as determined in good faith by the
Board of Directors.
3. EXERCISE. Subject to the limitations contained herein, the
Optionee may exercise this Option to purchase the shares of Option Stock in the
following manner. The Optionee may:
(a) at any time after the Grant Date, exercise this
Option to purchase up to (but not more than) 20% of the Option Stock;
(b) at any time after November 9, 1995, exercise this
Option to purchase up to (but not more than) 40% of the Option Stock;
(c) at any time after November 9, 1996, exercise this
Option to purchase up to (but not more than) 60% of the Option Stock;
(d) at any time after November 9, 1997, exercise this
Option to purchase up to (but not more than) 80% of the Option Stock;
and
(e) at any time after November 9, 1998, exercise this
Option to purchase to 100% of the Option Stock;
provided, however, that on the occurrence of a "Change in Control," as defined
in Section 2.2 of the Optionee's Employment Agreement (the "Employment
Agreement"), the Optionee may acquire all of the Option Stock immediately upon
the date of the Change in Control.
<PAGE> 2
At 12:00 p.m. midnight on November 9, 2004, the Option created under
this Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 13 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not more than 30 days after the date of such
notice as the date on which the shares will be taken up and payment made
therefor in cash, personal check, or bank cashier's check, or the equivalent,
at the principal office of the Company. If any law or regulation requires the
Company to take any action with respect to the shares specified in such notice,
then the date for the delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of any
failure to take up and pay for the number of shares specified in such notice on
the date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NONTRANSFERABILITY OF OPTION. This Option shall not be
transferable or assignable by Optionee, otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the Optionee's
lifetime, only by him. This Option shall not be pledged or hypothecated in any
way and shall not be subject to execution, attachment or similar process except
with the express consent of the Company.
5. TERMINATION OF EMPLOYMENT. Upon termination of the Optionee's
employment under Section 1.6(d) of Employment Agreement, such option privileges
shall expire and become null and void unless exercised by him within two years
after the date of such termination. If the Employee's employment is terminated
other than in connection with a Qualifying Termination (as defined in the
Employment Agreement), the Employee's option privileges shall be limited to the
shares which were immediately purchasable by him at the date of such
termination.
6. DEATH OF OPTIONEE. If the Optionee dies during the time this
Option is exercisable, his Option privileges which could otherwise be exercised
by him if living shall be exercisable only by the Optionee's personal
representative, unless the Optionee's will specifically disposes of this
Option, in which case such exercise shall be made only by the recipient of such
specific disposition. However, in no event may this Option be exercisable to
any extent by anyone after November 9, 2004.
7. ADJUSTMENTS. The number of shares of Option Stock subject to
this Agreement shall be adjusted as follows:
(a) If the outstanding shares of Common Stock of the Company
are hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares or dividend or
2
<PAGE> 3
other distribution payable in capital stock, appropriate adjustment
shall be made by the Compensation Committee in the number and kind of
shares as to which the unexercised portion of this Option shall be
exercisable, to the end that the proportionate interest of the holder
of the Option shall, to the extent practicable, be maintained as
before the occurrence of such event; provided, however, that any right
to purchase fractional shares resulting from any such adjustment shall
be eliminated. Such adjustment in this Option shall be made without
change in the total price applicable to the unexercised portion of the
Option with a corresponding adjustment in the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, this Option shall terminate as of a date to be fixed by the
Compensation Committee, provided that not less than 30 days' written
notice of the date so fixed shall be given the Optionee, who shall
have the right during such period to exercise his Option as to all or
any part of the shares covered thereby which he is otherwise eligible
to purchase under this Agreement.
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the Option Stock subject to
this Agreement for securities of another corporation, then
Compensation Committee shall determine the change, conversion
or exchange of Option Stock; or
(ii) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the Option Stock subject to this
Agreement for securities of another corporation, then the
Compensation Committee shall adjust the shares under this
Option in a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change,
conversion, or exchange of such Option Stock. The term
"Reorganization" as used in this Section 6(c) shall mean any
statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale,
pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the effective
date of the Reorganization.
(d) Adjustments and determinations under this Section 7 shall
be made by the Compensation Committee, whose decisions as to what
adjustments or determinations shall be made, and the extent thereof,
shall be final, binding, and conclusive.
8. SHARES RESERVED. The Company will, at all times during the
term of this Agreement, reserve and keep available such number of shares of
Option Stock as will be sufficient to satisfy the requirements of this
Agreement and will pay all fees and expenses necessarily incurred by the
Company in connection with the issuance of such shares.
3
<PAGE> 4
9. EFFECT UPON EMPLOYMENT. The terms of the Optionee's
employment with the Company are as set forth in the Employment Agreement.
10. RESTRICTION ON ISSUANCE OF SHARES; OBLIGATION TO REGISTER
OPTION STOCK. The Company will not be obligated to sell any such shares of
Option Stock hereunder unless same are at the time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. In that connection, the Company agrees to
use its best efforts to register the Option Stock on a Registration Statement
on Form S-8 on or before November 30, 1994, and to make any such filings and do
all such acts and things as are necessary to register the Option Stock or
secure an exemption from registration under Texas securities laws and, from
time to time during the period in which all or any portion of this Option
remains unexercised, to prepare and deliver to the Optionee all such documents
necessary to constitute a prospectus meeting the requirements of Section 10(a)
of the Securities Act of 1933.
11. SUCCESSORS. This Agreement will be binding upon any successor
of the Company.
12. NO RIGHT TO OPTION STOCK. The Optionee shall have no rights
as a shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
13. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid to:
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, Texas 77087
If as to the Optionee, addressed to the address for notice set forth
beneath the Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective November 10, 1994.
THE COMPANY:
SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
-----------------------------------
Richard L. Daerr
President and Chief Executive
Officer
THE OPTIONEE:
/s/ DAVID P. TUSA
--------------------------------------
David P. Tusa
Address for Notice:
16318 Acapulco Drive
Houston, Texas 77040
5
<PAGE> 1
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made
effective this 10th day of November, 1994 (the "Grant Date"), between
Serv-Tech, Inc., a Texas corporation (the "Company") and Dale W. Wilhelm, an
employee of the Company (the "Optionee"), which parties agree as follows:
1. GRANT AND STOCK OPTION. The Optionee is the Company's
Controller and principal accounting officer. The Compensation Committee of the
Company's Board of Directors recognizes the valuable and important contribution
that the Optionee will make to the growth and success of the Company and so
desires to ensure the Optionee's continued employment and to maintain and
enhance the performance and profitability of the Company. As such, the Company
hereby grants to the Optionee the right to acquire on the terms and conditions
hereinafter set forth, 15,000 shares of the Company's Common Stock (the "Option
Stock"), as set forth in Paragraph 3 hereof. The Option granted hereunder
shall become effective on the date of this Agreement and, unless sooner
terminated under the provisions thereof, shall expire at 12:00 midnight on
November 9, 2004.
2. PURCHASE PRICE. The purchase price of the Option Stock shall
be $6.25 per share, which is deemed to be at least 100% of the fair market
value of each share as of the date hereof, as determined in good faith by the
Board of Directors.
3. EXERCISE. Subject to the limitations contained herein, the
Optionee may exercise this Option to purchase the shares of Option Stock in the
following manner. The Optionee may:
(a) at any time after the Grant Date, exercise this
Option to purchase up to (but not more than) 20% of the Option Stock;
(b) at any time after November 9, 1995, exercise this
Option to purchase up to (but not more than) 40% of the Option Stock;
(c) at any time after November 9, 1996, exercise this
Option to purchase up to (but not more than) 60% of the Option Stock;
(d) at any time after November 9, 1997, exercise this
Option to purchase up to (but not more than) 80% of the Option Stock;
and
(e) at any time after November 9, 1998, exercise this
Option to purchase to 100% of the Option Stock;
provided, however, that on the occurrence of a "Change in Control," as defined
on Schedule A hereto, the Optionee may acquire all of the Option Stock
immediately upon the date of the Change in Control.
<PAGE> 2
At 12:00 p.m. midnight on November 9, 2004, the Option created under
this Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 13 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not more than 30 days after the date of such
notice as the date on which the shares will be taken up and payment made
therefor in cash, personal check, or bank cashier's check, or the equivalent,
at the principal office of the Company. If any law or regulation requires the
Company to take any action with respect to the shares specified in such notice,
then the date for the delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of any
failure to take up and pay for the number of shares specified in such notice on
the date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NONTRANSFERABILITY OF OPTION. This Option shall not be
transferable or assignable by Optionee, otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the Optionee's
lifetime, only by him. This Option shall not be pledged or hypothecated in any
way and shall not be subject to execution, attachment or similar process except
with the express consent of the Company.
5. TERMINATION OF EMPLOYMENT. Upon termination of the Optionee's
employment, such option privileges shall expire and become null and void unless
exercised by him within two years after the date of such termination. If the
Employee's employment is terminated other than in connection with a Change in
Control, the Employee's option privileges shall be limited to the shares which
were immediately purchasable by him at the date of such termination.
6. DEATH OF OPTIONEE. If the Optionee dies during the time this
Option is exercisable, his Option privileges which could otherwise be exercised
by him if living shall be exercisable only by the Optionee's personal
representative, unless the Optionee's will specifically disposes of this
Option, in which case such exercise shall be made only by the recipient of such
specific disposition. However, in no event may this Option be exercisable to
any extent by anyone after November 9, 2004.
7. ADJUSTMENTS. The number of shares of Option Stock subject to
this Agreement shall be adjusted as follows:
(a) If the outstanding shares of Common Stock of the Company
are hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares or dividend or
other distribution payable in capital stock, appropriate adjustment
shall be made by the Compensation Committee in the number and kind of
shares as to which the unexercised
2
<PAGE> 3
portion of this Option shall be exercisable, to the end that the
proportionate interest of the holder of the Option shall, to the
extent practicable, be maintained as before the occurrence of such
event; provided, however, that any right to purchase fractional shares
resulting from any such adjustment shall be eliminated. Such
adjustment in this Option shall be made without change in the total
price applicable to the unexercised portion of the Option with a
corresponding adjustment in the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, this Option shall terminate as of a date to be fixed by the
Compensation Committee, provided that not less than 30 days' written
notice of the date so fixed shall be given the Optionee, who shall
have the right during such period to exercise his Option as to all or
any part of the shares covered thereby which he is otherwise eligible
to purchase under this Agreement.
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the Option Stock subject to
this Agreement for securities of another corporation, then
Compensation Committee shall determine the change, conversion
or exchange of Option Stock; or
(ii) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the Option Stock subject to this
Agreement for securities of another corporation, then the
Compensation Committee shall adjust the shares under this
Option in a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change,
conversion, or exchange of such Option Stock. The term
"Reorganization" as used in this Section 6(c) shall mean any
statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale,
pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the effective
date of the Reorganization.
(d) Adjustments and determinations under this Section 7 shall
be made by the Compensation Committee, whose decisions as to what
adjustments or determinations shall be made, and the extent thereof,
shall be final, binding, and conclusive.
8. SHARES RESERVED. The Company will, at all times during the
term of this Agreement, reserve and keep available such number of shares of
Option Stock as will be sufficient to satisfy the requirements of this
Agreement and will pay all fees and expenses necessarily incurred by the
Company in connection with the issuance of such shares.
3
<PAGE> 4
9. EFFECT UPON EMPLOYMENT. The terms of the Optionee's
employment with the Company are as set forth in the Employment Agreement.
10. RESTRICTION ON ISSUANCE OF SHARES; OBLIGATION TO REGISTER
OPTION STOCK. The Company will not be obligated to sell any such shares of
Option Stock hereunder unless same are at the time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. In that connection, the Company agrees to
use its best efforts to register the Option Stock on a Registration Statement
on Form S-8 on or before November 30, 1994, and to make any such filings and do
all such acts and things as are necessary to register the Option Stock or
secure an exemption from registration under Texas securities laws and, from
time to time during the period in which all or any portion of this Option
remains unexercised, to prepare and deliver to the Optionee all such documents
necessary to constitute a prospectus meeting the requirements of Section 10(a)
of the Securities Act of 1933.
11. SUCCESSORS. This Agreement will be binding upon any successor
of the Company.
12. NO RIGHT TO OPTION STOCK. The Optionee shall have no rights
as a shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
13. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid to:
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, Texas 77087
If as to the Optionee, addressed to the address for notice set forth
beneath the Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective November 10, 1994.
THE COMPANY:
SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
-----------------------------------
Richard L. Daerr
President and Chief Executive
Officer
THE OPTIONEE:
/s/ DALE W. WILHELM
--------------------------------------
Dale W. Wilhelm
Address for Notice:
1047 Thornton
Houston, Texas 77018
5
<PAGE> 6
SCHEDULE A
Change in Control. Except as provided below, a Change in Control
shall be deemed to occur when and only when the first of the following events
occurs:
(a) any person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 25 percent or
more of the combined voting power of the Company's then outstanding
voting securities, and a majority of the Incumbent Board (as defined
below) does not approve the acquisition before the acquisition occurs;
or
(b) three or more directors, whose election or nomination
for election is not approved by a majority of the Incumbent Board, are
elected within any single 12-month period to serve on the Board of
Directors; or
(c) members of the Incumbent Board cease to constitute a
majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
pursuant to subsection (a), above, solely because 25 percent or more of the
combined voting power of the Company's outstanding securities is acquired by
one or more employee benefit plans maintained by the Company or by any other
employer the majority interest in which is held, directly or indirectly, by the
Company. For purposes of this Section 2.2, the terms "person" and "beneficial
owner" shall have the meaning set forth in sections 3(a) and 13(d) of the
Securities Exchange Act of 1934, as amended, and in the regulations promulgated
thereunder; and the term "Incumbent Board" shall mean (i) the members of the
Board of Directors on January 1, 1995, to the extent that they continue to
serve as members of the Board of Directors, and (ii) any individual who becomes
a member of the Board of Directors after January 1, 1995, if his election or
nomination for election as a director was approved by a vote of at least three
quarters of the then Incumbent Board.
<PAGE> 1
SERV-TECH, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made
effective this 3rd day of August, 1994, between Serv-Tech, Inc., a Texas
corporation ("Company") and John M. Slack, an employee of the Company
("Optionee"), which parties agree as follows:
INTRODUCTION. In November, 1993 (the "Grant Date"), the Company
granted to the Optionee an incentive stock option ("Incentive Stock Option") to
purchase 20,000 shares of the Company's common stock, par value $.50 per share,
("Common Stock") exercisable in five equal increments on each anniversary date
thereof of each option, beginning one year after the Grant Date. The Company
and the Optionee are now in the process of negotiating the Optionee's
separation from employment, to be effective as of September 30, 1994. As part
of such separation, the Company's Compensation Committee (the "Committee") has
approved the extension of the exercise period of the Incentive Stock Option to
September 30, 1996 (the "Extension") and the acceleration of the exercisability
of the Incentive Stock Option to September 30, 1994. As a result of the
Extension, the Incentive Stock Option has been modified so as to amount to a
new option grant and has been replaced by this nonqualified stock option. It is
the purpose and intent of this Agreement to set forth the terms and conditions
of the Optionee's right to acquire Common Stock hereunder.
1. GRANT AND STOCK OPTION. The Company hereby grants to the
Optionee the right to acquire 20,000 shares of the Company's Common Stock (the
"Option Stock"), as set forth in Paragraph 3 hereof. The Option granted
hereunder shall become effective on the date of this Agreement and, unless
sooner terminated under the provisions thereof, shall expire at 12:00 midnight
on September 30, 1996.
2. PURCHASE PRICE. The purchase price of the Option Stock shall
be $7.75 per share.
3. EXERCISE. Subject to the limitations contained herein, the
Optionee may exercise this Option to purchase the shares of Option Stock at any
time after the date hereof and before 12:00 p.m. midnight on September 30,
1996. At 12:00 p.m. midnight on September 30, 1996, the Option created under
this Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 10 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not less than 15 nor more than 30 days after the
date of such notice as the date on which the shares will be taken up and
payment made therefor in cash, personal check, or bank cashier's check, or the
equivalent, at the principal office of the Company. If any law or regulation
requires the Company to take any action with respect to the shares specified in
such notice, then the date for the delivery of such shares against payment
therefor shall be extended for the period necessary to take such action. In the
event of any failure to take up and pay for the number of shares specified in
such notice on the
<PAGE> 2
date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NONTRANSFERABILITY OF OPTION. This Option shall not be
transferable or assignable by Optionee, otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the Optionee's
lifetime, only by him. This Option shall not be pledged or hypothecated in any
way and shall not be subject to execution, attachment or similar process except
with the express consent of the Company.
5. DEATH OF OPTIONEE. If the Optionee dies during the time this
Option is exercisable, his Option privileges which could otherwise be exercised
by him if living shall be exercisable only by the Optionee's personal
representative, unless the Optionee's will specifically disposes of this
Option, in which case such exercise shall be made only by the recipient of such
specific disposition. However, in no event may this Option be exercisable to
any extent by anyone after September 30, 1996.
6. ADJUSTMENTS.
(a) In the event that the outstanding shares of Common Stock
of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other
securities-of-the Company or of another corporation, by reason of a
recapitalization, reclassification, stock split-up, combination of
shares or dividend or other distribution payable in capital stock,
appropriate adjustment (if any is required) shall be made by the
Committee in the number and kind of shares for the purchase of which
Options may be granted under the Plan. In addition, the Committee
shall make appropriate adjustments in the number and kind of shares as
to which outstanding Options, or portions thereof, then unexercised,
shall be exercisable, to the end that the proportionate interest of
the holder of the Option shall, to the extent practicable, be
maintained as before the occurrence of such event; provided, however,
that any Options to purchase fractional shares resulting from any such
adjustment shall be eliminated. Such adjustment in outstanding Options
shall be made without change in the total price applicable to the
unexercised portion of the Option with a corresponding adjustment in
the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, any Option shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days written notice of the
date so fixed shall be given to each Optionee and each such Optionee
shall have the right during such period to exercise his Option as to
all or any part of the shares covered thereby which he is otherwise
eligible to purchase pursuant to the terms of the Plan and any Option
Agreement executed in connection with the grant of the Option.
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
-2-
<PAGE> 3
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the shares under
outstanding and unexercised Options for securities of another
corporation, then the Board shall take such action, and the
Options shall terminate as provided in Section 6(b); or
(ii) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the shares under outstanding and
unexercised Options for securities of another corporation,
then the Committee shall adjust the shares under such
outstanding and unexercised Options (and shall adjust the
shares remaining under the Plan which are then available to
the Optionee under the Plan, if the Reorganization Agreement
makes specific provision thereof) in a manner not inconsistent
with the provisions of the Reorganization Agreement for the
adjustment, change, conversion, or exchange of such stock and
such Options. The term "Reorganization" as used in this
Section 6(c) shall mean any statutory merger, statutory
consolidation, sale of all or substantially all of the assets
of the Company, or sale, pursuant to an agreement with the
Company, of securities of the Company pursuant to which the
Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization.
(d) Adjustments and determinations under this Section 6 shall
be made by the Committee, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final,
binding, and conclusive.
7. SHARES RESERVED. The Company will, at all times during the
term of this Agreement, reserve and keep available such number of shares of
Option Stock as will be sufficient to satisfy the requirements of this
Agreement and will pay all fees and expenses necessarily incurred by the
Company in connection with the issuance of such shares.
8. SUCCESSORS. This Agreement will be binding upon any successor
of the Company.
9. NO RIGHT TO OPTION STOCK. The Optionee shall have no rights as
a shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
10. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid to:
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, Texas 77087
-3-
<PAGE> 4
If as to Optionee, addressed to the address for notice set forth
beneath Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective October 11, 1994.
SERV-TECH
By: /s/ RICHARD L. DAERR
----------------------------------
Richard L. Daerr, President & CEO
OPTIONEE:
/s/ JOHN M. SLACK
-------------------------------------
John M. Slack
Address for Notice:
3502 Forest City Drive
Kingwood, Texas 77339
-4-
<PAGE> 5
SERV-TECH, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made
effective this 3rd day of August, 1994, between Serv-Tech, Inc., a Texas
corporation ("Company") and John M. Slack, an employee of the Company
("Optionee"), which parties agree as follows:
INTRODUCTION. On July 31, 1993 the Company granted to the Optionee an
incentive stock option ("Incentive Stock Option") to purchase 20,000 shares of
the Company's common stock, par value $.50 per share, ("Common Stock"). Under
the Incentive Stock Option, the Optionee currently has the right to purchase
12,000 shares (the right to purchase the remaining 8,000 shares being referred
to herein as the "Non-Vested Portion of the Incentive Stock Option"). The
Company and the Optionee are now in the process of negotiating the Optionee's
separation from employment, to be effective as of September 30, 1994. As part
of such separation, the Company's Compensation Committee (the "Committee") has
approved the extension of the exercise period of the Non-Vested Portion of the
Incentive Stock Option to September 30, 1996 (the "Extension") and the
acceleration of the exercisability of the Non-Vested Portion of the Incentive
Stock Option to September 30, 1994. As a result of the Extension, the
Non-Vested Portion of the Incentive Stock Option has been modified so as to
amount to a new grant and has been replaced by this nonqualified stock option.
It is the purpose and intent of this Agreement to set forth the terms and
conditions of the Optionee's right to acquire Common Stock hereunder.
1. GRANT AND STOCK OPTION. The Company hereby grants to the
Optionee, the right to acquire 8,000 shares of the Company's Common Stock (the
"Option Stock"), as set forth in Paragraph 3 hereof. The Option granted
hereunder shall become effective on the date of this Agreement and, unless
sooner terminated under the provisions thereof, shall expire at 12:00 midnight
on September 30, 1996.
2. PURCHASE PRICE. The purchase price of the Option Stock shall
be $6.625 per share.
3. EXERCISE. Subject to the limitations contained herein, the
Optionee may exercise this Option to purchase the shares of Option Stock at any
time after the date hereof and before 12:00 p.m. midnight on September 30,
1996. At 12:00 p.m. midnight on September 30, 1996, the Option created under
this Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 10 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not less than 15 nor more than 30 days after the
date of such notice as the date on which the shares will be taken up and
payment made
<PAGE> 6
therefor in cash, personal check, or bank cashier's check, or the equivalent,
at the principal office of the Company. If any law or regulation requires the
Company to take any action with respect to the shares specified in such notice,
then the date for the delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of any
failure to take up and pay for the number of shares specified in such notice on
the date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NONTRANSFERABILITY OF OPTION. This Option shall not be
transferable or assignable by Optionee, otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the Optionee's
lifetime, only by him. This Option shall not be pledged or hypothecated in any
way and shall not be subject to execution, attachment or similar process except
with the express consent of the Company.
5. DEATH OF OPTIONEE. If the Optionee dies during the time this
Option is exercisable, his Option privileges which could otherwise be exercised
by him if living shall be exercisable only by the Optionee's personal
representative, unless the Optionee's will specifically disposes of this
Option, in which case such exercise shall be made only by the recipient of such
specific disposition. However, in no event may this Option be exercisable to
any extent by anyone after September 30, 1996.
6. ADJUSTMENTS.
(a) In the event that the outstanding shares of Common Stock
of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company or of another corporation, by reason of a
recapitalization, reclassification, stock split-up, combination of
shares or dividend or other distribution payable in capital stock,
appropriate adjustment (if any is required) shall be made by the
Committee in the number and kind of shares for the purchase of which
Options may be granted under the Plan. In addition, the Committee
shall make appropriate adjustments in the number and kind of shares as
to which outstanding Options, or portions thereof, then unexercised,
shall be exercisable, to the end that the proportionate interest of
the holder of the Option shall, to the extent practicable, be
maintained as before the occurrence of such event; provided, however,
that any Options to purchase fractional shares resulting from any such
adjustment shall be eliminated. Such adjustment in outstanding Options
shall be made without change in the total price applicable to the
unexercised portion of the Option with a corresponding adjustment in
the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, any Option shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days written notice of the
date so fixed shall be given to each Optionee and each such Optionee
shall have the right during such period to exercise his Option as to
all or any part of the shares covered thereby which he is otherwise
eligible to purchase pursuant to the terms of the Plan and any Option
Agreement executed in connection with the grant of the Option.
-2-
<PAGE> 7
(c) In the event of a Reorganization (as hereinafter defined)
in which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for the
change, conversion, or exchange of the shares under
outstanding and unexercised Options for securities of another
corporation, then the Board shall take such action, and the
Options shall terminate as provided in Section 6(b); or
(ii) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion, or exchange of the shares under outstanding and
unexercised Options for securities of another corporation,
then the Committee shall adjust the shares under such
outstanding and unexercised Options (and shall adjust the
shares remaining under the Plan which are then available to
the Optionee under the Plan, if the Reorganization Agreement
makes specific provision thereof) in a manner not inconsistent
with the provisions of the Reorganization Agreement for the
adjustment, change, conversion, or exchange of such stock and
such Options. The term "Reorganization" as used in this
Section 6(c) shall mean any statutory merger, statutory
consolidation, sale of all or substantially all of the assets
of the Company, or sale, pursuant to an agreement with the
Company, of securities of the Company pursuant to which the
Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization.
(d) Adjustments and determinations under this Section 6 shall
be made by the Committee, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final,
binding, and conclusive.
7. SHARES RESERVED. The Company will, at all times during the
term of this Agreement, reserve and keep available such number of shares of
Option Stock as will be sufficient to satisfy the requirements of this
Agreement and will pay all fees and expenses necessarily incurred by the
Company in connection with the issuance of such shares.
8. SUCCESSORS. This Agreement will be binding upon any successor
of the Company.
9. NO RIGHT TO OPTION STOCK. The Optionee shall have no rights as
a shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
10. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid to:
-3-
<PAGE> 8
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, Texas 77087
If as to Optionee, addressed to the address for notice set forth
beneath Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective October 17, 1994.
SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
----------------------------------
Richard L. Daerr, President & CEO
OPTIONEE:
/s/ JOHN M. SLACK
-------------------------------------
John M. Slack
Address for Notice:
3502 Forest City Drive
Kingwood, Texas 77339
-4-
<PAGE> 1
EXHIBIT B
SERV-TECH, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option (the "Agreement") is made effective this
3rd day of August, 1994, between Serv-Tech, Inc., a Texas corporation
("Company") and John M. Slack, an employee of the Company ("Optionee"), which
parties agree as follows:
Introduction. On July 31, 1993 the Company granted to the Optionee an
incentive stock option ("Incentive Stock Option") to purchase 20,000 shares of
the Company's common stock, par value $.50 per share, ("Common Stock"). Under
the Incentive Stock Option, the Optionee currently has the right to purchase
12,000 shares (the right to purchase the remaining 8,000 shares being referred
to herein as the "Non-Vested Portion of the Incentive Stock Option"). The
Company and the Optionee are now in the process of negotiating the Optionee's
separation from employment, to be effective as of September 30, 1994. As part
of such separation, the Company's Compensation Committee (the "Committee") has
approved the extension of the exercise period of the Non-Vested Portion of the
Incentive Stock Option to September 30, 1996 (the "Extension") and the
acceleration of the exercisability of the Non-Vested Portion of the Incentive
Stock Option to September 30, 1994. As a result of the Extension, the
Non-Vested Portion of the Incentive Stock Option has been modified so as to
amount to a new grant and has been replaced by this nonqualified stock option.
It is the purpose and intent of this Agreement to set forth the terms and
conditions of the Optionee's right to acquire Common Stock hereunder.
1. Grant and Stock Option. The Company hereby grants to the Optionee,
the right to acquire 8,000 shares of the Company's Common Stock (the "Option
Stock"), as set forth in Paragraph 3 hereof. The Option granted hereunder shall
become effective on the date of this Agreement and, unless terminated under the
provisions thereof, shall expire at 12:00 midnight on September 30, 1996.
2. Purchase Price. The purchase price of the Option Stock shall be
$6.625 per share.
3. Exercise. Subject to the limitations contained herein, the Optionee
may exercise this option to purchase the shares of Option Stock at any time
after the date hereof and before 12:00 p.m. midnight on September 30, 1996. At
12:00 p.m. midnight on September 30, 1996, the option created under this
Agreement shall expire and be of no further force and effect. No partial
exercise of this Option may be for less than one hundred (100) full shares. In
no event shall the Company be required to issue fractional shares as a result
of an exercise of this Option.
Subject to the foregoing limitations and such limitations as appear
below, this Option shall be exercised by giving written notice to the Company
pursuant to Paragraph 10 of this Agreement. Such notice shall state the number
of shares with respect to which this Option is being exercised and shall
specify a date which shall be not less than 15 nor more than 30 days after the
date of such notice as the date on which the shares will be taken up and payment
made
<PAGE> 2
therefor in cash, personal check, or bank cashier's check, or the equivalent,
at the principal office of the Company. If any law or regulation requires the
Company to take any action with respect to the shares specified in such notice,
then the date for the delivery of such shares against payment therefor shall be
extended for the period necessary to take such action. In the event of any
failure to take up and pay for the number of shares specified in such notice on
the date set forth therein, as the same may be extended as provided above, the
exercise of this Option may be terminated by the Company with respect to such
number of shares covered by this Agreement and not yet acquired pursuant
thereto.
4. NONTRANSFERABILITY OF OPTION. This Option shall not be transferable
or assignable by Optionee, otherwise than by will or the laws of descent and
distribution and shall be exercisable, during the Optionee's lifetime, only by
him. This Option shall not be pledged or hypothecated in any way and shall not
be subject to execution, attachment or similar process except with the express
consent of the Company.
5. DEATH OF OPTIONEE. If the Optionee dies during the time this Option
is exercisable, his Option privileges which could otherwise be exercised by him
if living shall be exercisable only by the Optionee's personal representative,
unless the Optionee's will specifically disposes of this Option, in which case
such exercise shall be made only by the recipient of such specific disposition.
However, in no event may this Option be exercisable to any extent by anyone
after September 30, 1996.
6. ADJUSTMENTS.
(a) In the event that the outstanding shares of Common Stock of
the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company or of another corporation, by reason of a
recapitalization, reclassification, stock split-up, combination of
shares or dividend or other distribution payable in capital stock,
appropriate adjustment (if any is required) shall be made by the
Committee in the number and kind of shares for the purchase of which
Option may be granted under the Plan. In addition, the Committee shall
make appropriate adjustments in the number and kind of shares as to
which outstanding Options, or portions thereof, then unexercised, shall
be exercisable, to the end that the proportionate interest of the holder
of the Option shall, to the extent practicable, be maintained as before
the occurrence of such event; provided; however, that any Options to
purchase fractional shares resulting from any such adjustment shall be
eliminated. Such adjustment in outstanding Options sHall be made without
change in the total price applicable to the unexercised portion of the
Option with a corresponding adjustment in the Option price per share.
(b) In the event of the dissolution or liquidation of the
Company, any Option shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days written notice of the
date so fixed shall be given to each Optionee and each such Optionee
shall have the right during such period to exercise his Option as to all
or any part of the shares covered thereby which he is otherwise eligible
to purchase pursuant to the terms of the Plan and any Option Agreement
executed in connection with the grant of the Option.
-2-
<PAGE> 3
(c) In the event of a Reorganization (as herein defined) in
which the Company is not the surviving or acquiring company, or in
which the Company is or becomes a wholly-owned subsidiary of another
company after the effective date of the Reorganization, then:
(i) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the
Reorganization Agreement does not specifically provide for
the change, conversion, or exchange of the shares under
outstanding and unexercised Options for securities of another
corporation, then the Board shall take such action, and the
Options shall terminated as provided in Section (b); or
(ii) If there is a Reorganization Agreement and if
the Reorganization Agreement specifically provides for the
change, conversion, or exchange of the shares under
outstanding and unexercised Options for securities of another
corporation, then the Committee shall adjust the shares
under such outstanding and unexercised Options (and shall
adjust the shares remaining under the Plan which are then
available to the Optionee under the Plan, if the
Reorganization Agreement makes specific provision thereof) in
a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change,
conversion, or exchange of such stock and such Options. The
term "Reorganization" as used in this Section 6(c) shall mean
any statutory merger, statutory consolidation, sale of all or
subtantially all of the assets of the Company, or sale,
pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the
effective date of the Reorganization.
(d) Adjustments and determinations under this Section 6 shall
be made by the Committee, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final,
binding, and conclusive.
7. Shares Reserved. The Company will, at all times during the term of
this agreement, reserve and keep available such number of share of Option Stock
as will be sufficient to satisfy the requirements of this Agreement and will
pay all fess and expenses necessarily incurred by the Company in connection with
the issuance of such shares.
8. Successors. This Agreement will be binding upon any successor of
the Company.
9. No Right to Option Stock. The Optinee shall have no rights as a
shareholder by reason of this Agreement and shall have only those rights
expressly conferred by this Agreement.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if
delivered or mailed, first class, with postage prepaid to:
-3-
<PAGE> 4
If to the Company, addressed to:
Serv-Tech, Inc.
5200 Cedar Crest Blvd.
Houston, Texas 77087
If as to the Optionee, addressed to the address for notice set forth
beneath Optionee's signature below.
Delivery may also be made to any other address for notice as either
party shall hereafter notify the other party in writing, from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective October 17, 1994.
SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
----------------------------------
Richard L. Daerr, President & CEO
OPTIONEE:
/s/ JOHN M. SLACK
-------------------------------------
John M. Slack
Address for Notice:
3502 Forest City Drive
Kingwood, Texas 77339
-4-
