As filed with the Securities and Exchange Commission on April 15, 1998.
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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CAL DIVE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 95-3409686
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
400 N. SAM HOUSTON PARKWAY E., SUITE 400, HOUSTON, TEXAS 77060
(Address of principal executive offices, including zip code)
CAL DIVE INTERNATIONAL, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
Andrew C. Becher, Senior Vice President and General Counsel
Cal Dive International, Inc.
400 N. Sam Houston Parkway E.
Suite 400
Houston, Texas 77060
(281) 618-0400
(281) 618-0400
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
PROPOSED
TITLE OF PROPOSED MAXIMUM
SECURITIES AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE (2) PRICE (2) FEE
- --------------------------------------------------------------------------------
Common Stock, 100,000 shares $36 $3,600,000 $1,062
No par value
- --------------------------------------------------------------------------------
(1) Represents the maximum number of shares of Common Stock of the Registrant
which could be purchased of stock set aside for issuance under the 1998
Employee Stock Purchase Plan.
(2) Pursuant to Rule 457(c), the per share price is estimated, solely for the
purpose of determining the registration fee, based upon the average of the
high and low prices for such common stock on April 13, 1998 as reported on
The Nasdaq National Market.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Cal Dive International, Inc.
(the "Company") (File No. 0-22739) with the Commission pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and are
incorporated by reference herein:
a. The Company's latest annual report, filed pursuant to Sections 13(a) or
15(d) of the Exchange Act.
b. All other reports filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the
Company's latest annual report on Form 10-K.
c. The descriptions of the Company's capital stock contained in the Company's
Registration Statement on Form S-1 (Registration No. 333-26357) and
incorporated by reference into the Company's Registration Statement on
Form 8-A (File No. 0-22739), filed with the Commission.
All documents filed with the Commission by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all such securities then remaining to be sold shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof, except
as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Andrew C. Becher, Senior Vice President and General Counsel of the
Company, hold options to purchase 100,000 shares of Common Stock at an exercise
price of $4.50.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 7 of the Company's Bylaws provides that the Company shall
indemnify the directors and officers to such extent as permitted by Minnesota
Statutes, Section 302A.521, as now enacted or hereafter amended.
In addition, as allowed by Minnesota Statutes, Section 302A.251, Article
IX of the Company's 1997 Amended and Restated Articles of Incorporation provides
that a director of the Company shall not be personally liable to the Company or
its stockholders for monetary damages for certain types of breaches of fiduciary
duty as a director.
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Further, the Company has purchased director and officer liability
insurance that insures directors and officers against certain liabilities in
connection with the performance of their duties as directors and officers,
including liabilities under the Securities Act of 1933, as amended, and provides
for payment to the Company of costs incurred by it in indemnifying its directors
and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed with this Registration Statement on Form
S-8:
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Andrew C. Becher, Senior Vice President and General
Counsel, Cal Dive International, Inc., as to the legality of Common
Stock of the Company (filed electronically herewith)
23.1 Consent of Arthur Anderson LLP (filed electronically herewith)
23.2 Consent of Andrew C. Becher, Senior Vice President and General
Counsel, Cal Dive International, Inc. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page and filed
electronically herewith)
99.1 1998 Employee Stock Purchase Plan (filed electronically herewith)
ITEM 9. UNDERTAKINGS.
(A) RULE 415 OFFERING.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
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Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(H) STATEMENT REQUIRED BY ITEM 512(H) IN CONNECTION WITH FILING OF
REGISTRATION STATEMENT ON FORM S-8.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
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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 April 15, 1998.
CAL DIVE INTERNATIONAL, INC.
By /s/ OWEN KRATZ
Owen Kratz
President and Chief Executive Officer
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POWER OF ATTORNEY
We, the undersigned directors and officers of Cal Dive International,
Inc., do hereby severally constitute and appoint Owen Kratz and Andrew C.
Becher, and each of them singly, our true and lawful attorneys and agents, to do
any and all things and acts in our names in the capacities indicated below and
to execute any and all instruments for us and in our names in the capacities
indicated below which said Owen Kratz or Andrew C. Becher, or either of them,
may deem necessary or advisable to enable Cal Dive International, Inc. to comply
with the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
Registration Statement on Form S-8 relating to the offering of Common Stock,
including specifically, but not limited to, power and authority to sign for us
or any of us in our names in the capacities indicated below the Registration
Statement and any and all amendments (including post-effective amendments)
thereto; and we hereby ratify and confirm all that Owen Kratz and Andrew C.
Becher, or either of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ GERALD G. REUHL Chairman and Director April 15, 1998
Gerald G. Reuhl
/s/ OWEN KRATZ President, Chief Executive Officer, April 15, 1998
Owen Kratz and Director
/s/ S. JAMES NELSON, JR. Executive Vice President and Chief April 15, 1998
S. James Nelson, Jr. Financial Officer
/s/ WADE PURSELL Chief Accounting Officer
Wade Pursell
/s/ DAVID H. KENNEDY Director April 15, 1998
David H. Kennedy
/s/ GERALD M. HAGE Director April 15, 1998
Gerald M. Hage
/s/ GORDON F. AHALT Director April 15, 1998
Gordon F. Ahalt
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION MANNER OF FILING
5.1 Opinion of Andrew C. Becher, Senior Vice President and General
Counsel, Cal Dive International, Inc., as to the legality of Common
Stock of the Company (filed electronically herewith)
23.1 Consent of Arthur Andersen LLP (filed electronically herewith)
23.2 Consent of Andrew C. Becher, Senior Vice President and General
Counsel, Cal Dive International, Inc. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page and filed
electronically herewith)
99.1 1998 Employee Stock Purchase Plan (filed electronically herewith)
7
EXHIBIT 5.1
April 15, 1998
Cal Dive International, Inc.
400 N. Sam Houston Parkway E.
Suite 400
Houston, Texas 77060
Gentlemen:
The undersigned, as General Counsel for Cal Dive International, Inc., a
Minnesota Corporation (the "Company"), is rendering this opinion 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 100,000 shares of the Company's common
stock, no par value per share (the "Common Stock") which may be issued upon the
exercise of certain stock purchase rights (the "Purchase Rights") which may be
granted under the Company's 1997 Employee Stock Purchase Plan.
In such capacity, I have examined the corporate documents of the Company,
including its 1997 Amended and Restated Articles of Incorporation, its 1997
Amended and Restated By-Laws and resolutions adopted by our 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. I have
relied on representations made by and certificates of the officers of the
Company and public officials with respect to certain facts material to my
opinion. I have made no independent investigation regarding such representations
and certificates.
Based on the foregoing, I am of the opinion that when the Purchase Rights
when issued in accordance with such Plan, will be duly exercised in accordance
with their respective terms, and the Common Stock issued thereupon will be
validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/
Andrew C. Becher
General Counsel
8
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our report dated
February 19, 1998 included in Cal Dive International's Annual Report on form
10-K for the year ended December 31, 1997 and to all references to our Firm
included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
April 15, 1998.
9
EXHIBIT 99.1
CAL DIVE INTERNATIONAL, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
This Cal Dive International, Inc. Employee Stock Purchase Plan (the
"Plan") is intended as an incentive and to encourage stock ownership by all
eligible employees of Cal Dive International, Inc. (the "Company") (and its
subsidiaries) so that they may share in the fortunes of the Company by acquiring
or increasing their proprietary interest in the Company. This Plan is designed
to encourage eligible employees to remain in the employ of the Company. Options
issued pursuant to this Plan shall constitute options issued pursuant to an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the terms hereof shall be
interpreted consistent with this requirement.
2. ELIGIBILITY
All employees of the Company (or any of its subsidiaries) who were
employed by the Company (or any of its subsidiaries) on January 1, 1998, and who
have continued in employment shall be eligible to receive options under this
Plan to purchase the Company's no par common stock ("the Common Stock") (except
employees in countries whose laws make participation impractical). Persons hired
after January 1, 1998, who have been employed for six months or more on the
first day of January 1 or July 1 next following the date this Plan is approved
by the stockholders of the Company, shall be eligible to participate in the Plan
as of that payment period (each such six-month period constituting a "Payment
Period").
For purposes of this Section, the term employee shall not include an
employee whose customary employment is 20 hours or less per week or is for five
months or less in any calendar year.
In no event may an employee be granted an option under this Plan if that
employee owns stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of its parent
corporation or subsidiary corporation, as the terms "parent corporation" and
"subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For
purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply and Common Stock which the employee may
purchase under outstanding options shall be treated as Common Stock owned by the
employee.
3. STOCK SUBJECT TO PLAN
The stock subject to options under this Plan shall be shares of the
Company's authorized but unissued shares of Common Stock or shares of Common
Stock reacquired by the Company, including shares purchased in the open market.
The aggregate number of shares which may be issued pursuant to this Plan is
100,000, subject to increase or decrease by reason of stock splits,
reclassifications, stock dividends, changes in par value, and similar matters
requiring adjustment.
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4. PAYMENT PERIODS AND STOCK OPTIONS
The six-month periods, January 1 to June 30 and July 1 to December 31 are
Payment Periods during which payroll deductions will be accumulated under the
Plan. Each Payment Period includes only regular pay days falling within it.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee, who is then a participant in the
Plan, an option to purchase, on the last business day of such Payment Period, at
the Option Price hereinafter provided for, such number of shares of Common Stock
as determined in this Section 4, reserved for the purpose of the Plan as his or
her accumulated payroll deductions on such date will pay for at such Option
Price; provided and on condition that such employee remains eligible to
participate in the Plan throughout such Payment Period. The Option Price for
each Payment Period shall be the lesser of (i) 85% of the fair market value of
the Common Stock on the first business day of the Payment Period; or (ii) 85% of
the fair market value of the Common Stock on the last business day of the
Payment Period. In the event of an increase or decrease in the number of
outstanding shares of Common Stock through stock split-ups, reclassifications,
stock dividends, changes in par value and the like, an appropriate adjustment
shall be made in the number of shares and Option Price per share provided for
under the Plan, either by a proportionate increase in the number of shares and a
proportionate decrease in the Option Price per share, or by a proportionate
decrease in the number of shares and a proportionate increase in the Option
Price per share, as may be required to enable an eligible employee who is then a
participant in the plan as to whom an option is exercised on the last business
day of any then current Payment Period to acquire such number of full shares as
his accumulated payroll deductions on such date will pay for at the adjusted
Option Price.
On the first business day of each Payment Period, an employee shall be
deemed to have been granted an option to purchase the number of shares of Common
Stock determined by dividing $12,500 by the fair market value of the Common
Stock on such day.
For purposes of this Plan the term "FAIR MARKET VALUE" means on any date
the average of the high and low prices of the Common Stock on the NASDAQ
National Market System or, if the Common Stock is traded over-the-counter or on
another national securities exchange, such price or exchange as designated by
the Committee.
For purposes of this Plan the term "BUSINESS DAY" as used herein means a
day on which there is trading on the NASDAQ National Market System or such other
national securities exchange as shall be designated by the Board of Directors
pursuant to the preceding paragraph.
No employee shall be granted an option which permits his rights to
purchase Common Stock under this Plan and any similar plans of the Company or
any parent or subsidiary corporations to accrue at a rate which exceeds $25,000
of the fair market value of such Common Stock (determined as of the date such
option is granted) for each calendar year in which an option first becomes
exercisable. This limitation is required to comply with Section 423(b)(8) of the
Code.
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SPECIAL PAYMENT PERIOD
A special two-month payment period ("Special Payment Period") shall begin
May 1, 1998 and end June 30, 1998, if authorized by the Board of Directors. The
general provisions of this Plan apply to the Special Payment Period, except (a)
the number of shares subject to the option granted on May 1, 1998, is determined
by dividing $4,150 by the fair market value of the Common Stock on such day, and
(b) the term "Special Payment Period" is substituted for "Payment Period" as
necessary to effect the special two-month period.
5. EXERCISE OF OPTION
Each eligible employee who continues to be a participant in the Plan on
the last business day of a Payment Period shall be deemed to have exercised his
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
his accumulated payroll deductions on such date will pay for at the Option
Price. If a participant is not an employee on the last business day of a Payment
Period, he shall not be entitled to exercise his option.
6. AUTHORIZATION FOR ENTERING PLAN
An eligible employee may become a participant in the Plan by filling out,
signing and delivering to the Committee an Authorization Form provided by the
Committee:
(a) stating the percentage to be deducted regularly from his or
her regular base pay;
(b) authorizing the purchase of Common Stock for him or her in each
Payment Period in accordance with the terms of the Plan; and
(c) specifying the exact name in which Common Stock purchased for
him or her is to be issued.
Such authorization must be received by the Committee at least 10 days
before the beginning date of the next succeeding Payment Period.
Unless an employee files a new Authorization Form or withdraws from the
Plan, his or her deductions and purchases under the Authorization Form he or she
has on file under the Plan will continue in effect as long as the Plan remains
in effect.
The Company will accumulate and hold for the employee's account the
amounts deducted from his or her pay. No interest will be paid on these amounts.
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7. MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS
An employee may authorize payroll deductions in any whole percentage
amount up to but not more than 10% of his REGULAR BASE PAY (which excludes
payments for overtime, bonuses and other special items), provided, however, that
the minimum deduction in respect of any payroll period shall be 1% (or such
other amount as the Committee shall establish). An employee may not make any
additional payments into his or her account.
An employee's regular base pay during the Payment Period shall be
determined by multiplying his base pay by the number of regular payroll days in
such period (or the hourly rate by 1040), provided that, in the case of an
eligible part time hourly employee, the employee's base pay during a Payment
Period shall be determined by multiplying such employee's hourly rate by the
number of regularly scheduled hours of work for such employee during such
offering period.
8. CHANGE IN PAYROLL DEDUCTIONS
Payroll deductions may be changed prior to the beginning of each Payment
Period pursuant to procedures specified by the Committee. A new Authorization
Form must be received by the Committee for any change to become effective.
9. WITHDRAWAL FROM THE PLAN
An employee may withdraw from the Plan, in whole but not in part, at any
time prior to 10 days before the last business day of each Payment Period by
delivering a Withdrawal Notice to the Committee. In this case, the Company will
promptly refund the entire balance of his or her payroll deductions which have
not been applied to purchase Common Stock under the Plan.
An employee who withdraws from the Plan is treated as an employee who has
not participated in the Plan. To re-enter, he or she must file a new
Authorization form at least 10 days before the beginning date of the next
Payment Period.
10. ISSUANCE OF STOCK/UNUSED PAYROLL DEDUCTIONS
Certificates of stock will be issued to participants, as appropriate, as
soon as practicable after each Payment Period. Fractional shares will not be
issued under the Plan. Any accumulated payroll deductions which would have been
used to purchase fractional shares will be returned to the employee promptly
without interest if the employee ceased participation in the Plan, or carried
over to the next Payment Period if the employee continues in the Plan.
Certificates for Common Stock purchased under the Plan will be issued only
in the name of the employee, or if his or her Authorization Form so specifies,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship.
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11. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS
An employee's rights under the Plan are his or hers alone and may not be
transferred or assigned to any other person. Any option granted to an employee
may be exercised only by such employee.
12. TERMINATION OF EMPLOYEE'S RIGHTS
An employee's rights under the Plan will terminate when he ceases to be an
employee for any reason, including retirement, resignation, lay-off, discharge
or death. A Withdrawal Notice will be considered as having been received from
the employee on the day his or her employment ceases, and all payroll deductions
not used to purchase Common Stock will be refunded.
If an employee's payroll deductions are interrupted by any legal process,
a Withdrawal Notice will be considered as having been received from him or her
on the day the interruption occurs.
13. TERMINATION AND AMENDMENTS TO PLAN
The Plan may be terminated at any time by the Company's Board of
Directors. It will terminate in any case when all or substantially all of the
unissued shares of Common Stock reserved for the purposes of the Plan have been
purchased. If at any time shares of Common Stock reserved for the purposes of
the Plan remain available for purchase, but not in sufficient number to satisfy
all then unfilled purchase requirements, the available shares shall be
apportioned among participants in proportion to their options and the Plan shall
terminate. Upon such termination or any other termination of the Plan, all
payroll deductions not used to purchase Common Stock shall be refunded.
The Board of Directors also reserves the right to amend the Plan from time
to time, in any respect provided, however, that no amendment shall be effective
which would (a) increase the number of shares of Common Stock to be offered,
except as provided in Section 3, or (b) change the class of employees eligible
to receive options under the Plan, without prior approval of the stockholders.
14. LIMITATIONS ON SALE OF STOCK
PURCHASED UNDER THE PLAN
The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. An employee may, therefore,
sell stock purchased under the Plan at any time he or she chooses; provided,
however, that because of certain Federal tax requirements, each employee agrees
by participating in this Plan, promptly to give the Company notice of any such
Common Stock disposed of before the later of (a) two years after the first
business day of the Payment Period during which the stock was purchased (the
grant date), and (b) one year after the transfer of the Common Stock to him or
her, in each case identifying the date acquired and the number of such shares
disposed of. The employee assumes the risk of any market fluctuations in the
price of Common Stock purchased under this Plan. See Section 21, WITHHOLDING OF
ADDITIONAL INCOME TAX.
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15. COMPANY'S PAYMENT OF
EXPENSES RELATED TO PLAN
The Company will bear all costs of administering and carrying out the
Plan.
16. PARTICIPATING SUBSIDIARIES
The term "subsidiaries" shall mean each subsidiary of the Company
designated by the Board of Directors to participate in the Plan. The Board of
Directors shall have the power to make such designations before or after the
Plan is approved by the stockholders.
17. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Employee Benefits Committee, or such
other committee appointed by the Board of Directors of the Company (the
"Committee"). The Committee shall consist of not less than three members. The
Board of Directors may from time to time remove members from, or add members to
the Committee. Vacancies on the Committee, however caused, shall be filled by
the Board of Directors. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it may determine.
Acts by a majority of the Committee, or acts reduced to and approved in writing
by a majority of the members of the Committee, including written approvals by
electronic means, shall be valid acts of the Committee.
The interpretation and construction by the Committee in its discretion of
any provisions of the Plan or of any options granted under it shall be final
unless otherwise determined by the Board of Directors. The Committee may from
time to time adopt such rules and regulations for carrying out the Plan as it
may deem best. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith and in its sole
judgment with respect to the Plan or any option granted under it.
18. THE EFFECT AND REVIEW
OF ADMINISTRATIVE RULINGS
The officials of the Company charged with administering the Plan shall
have full and absolute discretion in the exercise of their authority. All
actions taken and all rulings or decisions made by those officials in the
exercise of their powers and authorities in relation to the Plan shall be
binding on all other parties even if the official might have an actual or
potential conflict of interest in the action, ruling or decision. No action,
ruling or decision by the official shall be subject to de novo review in any
judicial proceeding. No action, ruling or decision of any official may be set
aside unless it has been held to be arbitrary or capricious by a final judgment
of a court having jurisdiction with respect to the issue.
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19. OPTIONEES NOT STOCKHOLDERS
The granting of an option to an employee and the deduction from his or her
pay shall not entitle the optionee to any rights as a stockholder with respect
to Common Stock subject to the option. Only after the shares of Common Stock
have been purchased by and issued to such employee shall the rights of a
stockholder apply.
20. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan will be used for general corporate
purposes.
21. GOVERNMENTAL REGULATION
The Company's obligation to sell and deliver shares of Common Stock under
this Plan is subject to compliance with any governmental authority required in
connection with the authorization, sale and issuance of Common Stock.
22. WITHHOLDING OF ADDITIONAL INCOME TAX
The Company, in accordance with Section 3402(a) of the Code (and the
Regulations and Rulings promulgated thereunder) and state law, if applicable,
will withhold from the wages of participating employees, in all payroll periods
following and in the same calendar year as the date on which compensation is
deemed received by the employee, additional income taxes in respect of the
amount that is considered compensation includable in the employee's gross
income, resulting from the sale of Common Stock acquired under the terms of this
Plan.
23. INDEMNIFICATION
To the extent permitted under local law, each member of the Board of
Directors and official of the Company administering this Plan will be
indemnified by the Company for all expenses incurred by the official as a result
of the official's administration of this Plan. Expenses incurred as a result of
gross negligence and willful misconduct are excluded from this indemnification.
24. GOVERNING LAWS
The law of the State of Texas shall govern all matters relating to this
Plan except to the extent it is superseded by the laws of the United States.
25. APPROVAL OF STOCKHOLDERS
This Plan shall not be effective until approved by the Company's
stockholders within 12 months before or after the date the Plan is adopted by
the Board of Directors.
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