<PAGE> 1
As filed with the Securities and Exchange Commission on August 21, 1998
Registration No. 33-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
APPLIED EXTRUSION TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0295865
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
APPLIED EXTRUSION TECHNOLOGIES, INC.
1994 STOCK OPTION PLAN
(Full title of the plan)
-------------------------
3 CENTENNIAL DRIVE
PEABODY, MA 01960
(Address of principal executive offices, including zip code)
-------------------------
Gerald M. Haines II, Esq.
Secretary and General Counsel
Applied Extrusion Technologies, Inc.
3 Centennial Drive
Peabody, Massachusetts 01960
(978) 538-1500
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
-------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Registration
Securities to be Registered Registered Share(1) Price(1) Fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value
per share(2) 850,000 shares $9.13 $7,760,500 $2,289
=======================================================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low
sale prices of the Common Stock on the Nasdaq National Market on August 18,
1998.
(2) The number of securities being carried forward from the Registrant's
Registration Statement on Form S-8 (File No. 33-80804) is 1,000,000 and the
amount of the filing fee previously paid with respect to these securities
was $2,385.73.
================================================================================
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus included
herein contains a combined Prospectus that also relates to a total of 1,000,000
shares of Common Stock of the Registrant previously registered under a
Registration Statement on Form S-8 No. 33-80804 (which was filed on June 29,
1994).
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933, as amended (the "Securities Act") and the
Note to Part I of Form S-8.
-2-
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed by Applied Extrusion Technologies, Inc.,
a Delaware corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference except to the
extent any statement or information therein is modified, superseded or replaced
by a statement or information contained in this document or in any other
subsequently filed document incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1997 (Commission File No. 000-19188).
(b) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 1997. (Commission File No.
000-19188).
(c) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1998. (Commission File No. 000-19188).
(d) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1998 (Commission File No. 000-19188).
(e) The Company's Current Report on Form 8-K dated March 6, 1998.
(Commission File No. 000- 19188).
(f) The Company's Current Report on Form 8-K filed January 14,
1998. (Commission File No. 000- 19188).
(g) The description of the Common Stock, $.01 par value per share
(the "Common Stock"), contained in Item 1 of the Company's
Registration Statement on Form 8-A, filed with the Commission
pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on April 24, 1991.
(Registration Statement No. 33-40145).
(h) Registration of Junior Preferred Stock Purchase Rights on Form
8-A12G filed March 3, 1998. (Commission File No. 000-19188).
(i) All reports and other documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the
filing of such reports and documents.
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<PAGE> 4
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein will be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement contained
herein or in any other subsequently filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. Section 145 further provides that a corporation similarly may
indemnify any such person serving in any such capacity who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor, against expenses (including attorney's fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit if
he acted in good faith and in manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or such other
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances, such person is fairly and reasonably entitled to indemnity for
such expenses which the Delaware Court of Chancery or such other court deems
proper.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to include in its certificate of incorporation a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision will not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation law (relating to unlawful
-4-
<PAGE> 5
payment of dividends and unlawful stock purchase and redemption) or (iv) for any
transaction from which the director derived an improper personal benefit.
The Registrant's Certificate of Incorporation, as amended, provides
that the Company's Directors shall not be liable to the Registrant or its
stockholders for monetary damages for breach of the fiduciary duty as a
director, except to the extent that exculpation from liabilities is not
permitted under the Delaware General Corporation Law as in effect at the time
such liability is determined. The Restated Certificate of Incorporation further
provides that the Registrant shall indemnify its directors and officers to the
full extent permitted by the law of the State of Delaware in connection with any
threatened, pending or contemplated legal proceeding to which they may be a
party or with which they may become involved by reason of being, agreeing to
become or having been an officer or director of the Registrant.
The Registrant maintains a directors' and officers' liability insurance
policy.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
Exhibit
Number Title of Exhibit
- ------ ----------------
4.3 Form of certificate representing shares of Common Stock, $0.01
par value per share. Incorporated by reference to the Exhibits
to Registrants Registration Statement on Form S-1 as amended
(No. 33-40145), filed with the Commission on April 24, 1991.
4.4 Applied Extrusion Technologies, Inc. 1994 Stock Option Plan,
as amended.
5.1 Opinion of Ropes & Gray.
23.1 Consent of Deloitte & Touche.
23.2 Consent of Ropes & Gray (contained in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (included in Part II of this Registration
Statement under the caption "Signatures").
Item 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
-5-
<PAGE> 6
(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 this Registration Statement (or the most recent post-effective
amendment thereof), which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement; PROVIDED, HOWEVER, that paragraphs
(a)(1)(i) and (a)(1)(ii) will 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, each such post-effective amendment will be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time will be deemed to be the initial
bona fide offering thereof, and
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 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 will be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer 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 and will be governed by the final
adjudication of such issue.
-6-
<PAGE> 7
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 Town of Peabody, Commonwealth of Massachusetts on the 20th
day of August, 1998.
APPLIED EXTRUSION TECHNOLOGIES, INC.
By: /s/ Anthony J. Allott
-----------------------------------------
Name: Anthony J. Allott
Title: Vice President, Chief Financial
Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, the Board
of Directors has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the Town of Peabody,
Commonwealth of Massachusetts on this 20th day of August, 1998.
APPLIED EXTRUSION TECHNOLOGIES, INC.
By: /s/ Thomas E. Williams
-----------------------------------------
Name: Thomas E. Williams
Title: Chief Executive Officer,
President and Director
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<PAGE> 8
Each person whose signature appears below constitutes and appoints
Gerald M. Haines II, Anthony J. Allott, and Sean Bradley, and each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-8 to be filed by Applied
Extrusion Technologies, Inc., and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Signatures Title Date
---------- ----- ----
/s/ Amin J. Khoury Chairman of the Board August 20, 1998
- ---------------------------
Amin J. Khoury
/s/ Thomas E. Williams President and Chief August 20, 1998
- --------------------------- Executive Officer and
Thomas E. Williams Director
/s/ Anthony J. Allott Vice President, Chief August 20, 1998
- --------------------------- Financial Officer and
Anthony J. Allott Treasurer
/s/ Nader A. Golestaneh Director August 20, 1998
- ---------------------------
Nader A. Golestaneh
/s/ Richard G. Hamermesh Director August 20, 1998
- ---------------------------
Richard G. Hamermesh
/s/ Mark M. Harmeling Director August 20, 1998
- ---------------------------
Mark M. Harmeling
/s/ Paul W. Marshall Director August 20, 1998
- ---------------------------
Paul W. Marshall
/s/ Joseph J. O'Donnell Director August 20, 1998
- ---------------------------
Joseph J. O'Donnell
-8-
<PAGE> 9
EXHIBIT INDEX
Exhibit
Number Title of Exhibit
- ------- ----------------
4.3 Form of certificate representing shares of Common Stock, $0.01
par value per share. Incorporated by reference to Registrant's
Registration Statement on Form S-1, as amended (Commission
File No. 33-40145). Filed with the Commission on April 24,
1991.
4.4 Applied Extrusion Technologies, Inc. 1994 Stock Option Plan,
as amended to date.
5.1 Opinion of Ropes & Gray.
23.1 Consent of Deloitte & Touche.
23.2 Consent of Ropes & Gray (contained in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (included in Part II of this Registration
Statement under the caption "Signatures").
-9-
<PAGE> 1
Exhibit 4.4
APPLIED EXTRUSION TECHNOLOGIES, INC.
1994 STOCK OPTION PLAN AS AMENDED
1. PURPOSE
The purpose of this 1994 Stock Option Plan (the "Plan") is to advance
the interests of Applied Extrusion Technologies, Inc. (the "Company") by
enhancing the ability of the Company and its subsidiaries to attract and retain
employees, consultants or advisers who are in a position to make significant
contributions to the success of the Company; to reward such individuals for
their contributions; and to encourage such individuals to take into account the
long-term interests of the Company through interests in shares of the Company's
common stock (the "Stock"). Any employee, consultant or adviser designated to
participate in the Plan is referred to as a "participant".
Options granted pursuant to the Plan may be incentive stock options as
defined in section 422 of the Internal Revenue Code of 1986 (as from time to
time amended, the "Code") (any option that is intended so to qualify as an
incentive stock option being referred to herein as an "incentive option"), or
options that are not incentive options, or both. Except as otherwise expressly
provided with respect to an option grant, no option granted pursuant to the Plan
shall be an incentive option.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan, (a) to grant awards consisting of options or
stock appreciation rights ("SARs"), or both, to such participants as the Board
may select; (b) to determine the time or times when awards shall be granted and
the number of shares of Stock subject to each award; (c) to determine which
options are, and which options are not, incentive options; (d) to determine the
terms and conditions of each award; (e) to prescribe the form or forms of any
instruments evidencing awards and any other instruments required under the Plan
and to change such forms from time to time; (f) to adopt, amend and rescind
rules and regulations for the administration of the Plan; and (g) to interpret
the Plan and to decide any questions and settle all controversies and disputes
that may arise in connection with the Plan. Such determinations of the Board
shall be conclusive and shall bind all parties. Subject to Section 8 the Board
shall also have the authority, both generally and in particular instances, to
waive compliance by a participant with any obligation to be performed by him
under an award, to waive any condition or provision of an award, and to amend or
cancel any award (and if an award is canceled, to grant a new award on such
terms as the Board shall specify) except that the Board may not take any action
with respect to an outstanding award that would adversely affect the rights of
the participant under such award without such participant's consent. Nothing in
the preceding sentence shall be construed as limiting the power of the Board to
make adjustments required by Section 4(c) and Section 6(j).
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event all
references (as appropriate) to the Board hereunder shall be deemed to refer to
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<PAGE> 2
the Committee. The Committee, if one is appointed, shall consist of at least two
directors. A majority of the members of the Committee shall constitute a quorum,
and all determinations of the Committee shall be made by a majority of its
members. Any determination of the Committee under the Plan may be made without
notice or meeting of the Committee by a writing signed by a majority of the
Committee members. On and after registration of the Stock under the Securities
Exchange Act of 1934, the Board shall delegate the power to select directors and
officers to receive awards under the Plan and the timing, pricing and amount of
such awards to a committee, all members of which shall be disinterested persons
within the meaning of Rule 16b-3 under that Act and "outside directors" within
the meaning of Section 162(m)(4)(C)(i) of the Code.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which it is approved by
the shareholders of the Company. Grants of awards under the Plan may be made
prior to that date (but after Board adoption of the Plan), subject to approval
of the Plan by such shareholders.
No awards shall be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board, but awards
previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
(a) NUMBER OF SHARES. Subject to adjustment as provided in Section
4(c), the aggregate number of shares of Stock that may be delivered upon the
exercise of awards granted under the Plan shall be 1,850,000. If any award
granted under the Plan terminates without having been exercised in full, or upon
exercise is satisfied other than by delivery of Stock, the number of shares of
Stock as to which such award was not exercised shall be available for future
grants within the limits set forth in this Section 4(a).
The maximum number of shares of Stock for which options may be granted
under the Plan to any individual during any calendar year shall be 250,000. The
maximum number of shares of Stock for which SARs may be granted under the Plan
to any individual during any calendar year shall likewise be 250,000. For
purposes of the preceding two sentences, the regrant of a canceled award or a
change in the exercise price of an outstanding award (other than pursuant to the
first paragraph of Section 4(c) below) shall be considered an additional grant
subject to the 250,000 annual limit.
(b) SHARES TO BE DELIVERED. Shares delivered under the Plan shall
be authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
(c) CHANGES IN STOCK. In the event of a stock dividend, stock
split or combination of shares, recapitalization or other change in the
Company's capital stock, the number and kind of shares of stock or securities of
the Company subject to awards then outstanding or subsequently granted under the
Plan, the exercise price of such awards, the maximum number of shares or
securities that may be delivered under the Plan, and other relevant provisions
shall be appropriately adjusted by the Board, whose determination shall be
binding on all persons.
-2-
<PAGE> 3
The Board may also adjust the number of shares subject to outstanding
awards, the exercise price of outstanding awards and the terms of outstanding
awards, to take into consideration material changes in accounting practices or
principles, extraordinary dividends, consolidations or mergers (except those
described in Section 6(j)), acquisitions or dispositions of stock or property or
any other event if it is determined by the Board that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an incentive option, without the
consent of the participant, if it would constitute a modification, extension or
renewal of the option within the meaning of section 424(h) of the Code.
5. ELIGIBILITY FOR AWARDS
Persons eligible to receive awards under the Plan shall be those
participants who, in the opinion of the Board, are in a position to make a
significant contribution to the success of the Company and its subsidiaries. A
subsidiary for purposes of the Plan shall be a corporation in which the Company
owns, directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock.
Incentive options shall be granted only to "employees" as defined in
the provisions of the Code or regulations thereunder applicable to incentive
stock options.
6. TERMS AND CONDITIONS OF OPTIONS AND SARS
(a) EXERCISE PRICE OF OPTIONS. The exercise price of each option
shall be determined by the Board but in any case shall not be less than 100%
(110%, in the case of an incentive option granted to a ten-percent shareholder)
of the fair market value of the Stock at the time the option is granted; nor
shall the exercise price be less, in the case of an original issue of authorized
stock, than par value. For this purpose, "fair market value" in the case of
incentive options shall have the same meaning as it does in the provisions of
the Code and the regulations thereunder applicable to incentive options; and
"ten-percent shareholder" shall mean any participant who at the time of grant
owns directly, or by reason of the attribution rules set forth in section 424(d)
of the Code is deemed to own, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of its
parent or subsidiary corporations.
(b) DURATION OF OPTIONS. An option shall be exercisable during
such period or periods as the Board may specify. The latest date on which an
option may be exercised (the "Final Exercise Date") shall be the date which is
ten years (five years, in the case of an incentive option granted to a
"ten-percent shareholder" as defined in (a) above) from the date the option was
granted or such earlier date as may be specified by the Board at the time the
option is granted.
(c) EXERCISE OF OPTIONS.
(1) An option shall become exercisable at such time or times and
upon such conditions as the Board shall specify. In the case
of an option not immediately exercisable in full, the Board
may at any time accelerate the time at which all or any part
of the option may be exercised.
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<PAGE> 4
(2) Any exercise of an option shall be in writing, signed by the
proper person and furnished to the Company, accompanied by (i)
such documents as may be required by the Board and (ii)
payment in full as specified below in Section 6(d) for the
number of shares for which the option is exercised.
(3) In the case of an option that is not an incentive option, the
Board shall have the right to require that the participant
exercising the option remit to the Company an amount
sufficient to satisfy any federal, state, or local withholding
tax requirements (or make other arrangements satisfactory to
the Company with regard to such taxes) prior to the delivery
of any Stock pursuant to the exercise of the option. If
permitted by the Board, either at the time of the grant of the
option or the time of exercise, the participant may elect, at
such time and in such manner as the Board may prescribe, to
satisfy such withholding obligation by (i) delivering to the
Company Stock owned by such individual having a fair market
value equal to such withholding obligation, or (ii) requesting
that the Company withhold from the shares of Stock to be
delivered upon the exercise a number of shares of Stock having
a fair market value equal to such withholding obligation.
In the case of an incentive option, if at the time the option
is exercised the Board determines that under applicable law
and regulations the Company could be liable for the
withholding of any federal or state tax with respect to a
disposition of the Stock received upon exercise, the Board may
require as a condition of exercise that the participant
exercising the option agree (i) to inform the Company promptly
of any disposition (within the meaning of section 424(c) of
the Code and the regulations thereunder) of Stock received
upon exercise, and (ii) to give such security as the Board
deems adequate to meet the potential liability of the Company
for the withholding of tax, and to augment such security from
time to time in any amount reasonably deemed necessary by the
Board to preserve the adequacy of such security.
(4) If an option is exercised by the executor or administrator of
a deceased participant, or by the person or persons to whom
the option has been transferred by the participant's will or
the applicable laws of descent and distribution, the Company
shall be under no obligation to deliver Stock pursuant to such
exercise until the Company is satisfied as to the authority of
the person or persons exercising the option.
(d) PAYMENT FOR STOCK. Stock purchased upon exercise of an option
under the Plan shall be paid for as follows: (i) in cash or by personal check,
certified check, bank draft or money order payable to the order of the Company
or (ii) if so permitted by the Board (which, in the case of an incentive option,
shall specify such method of payment at the time of grant), (A) through the
delivery of shares of Stock (which, in the case of Stock acquired from the
Company, shall have been held for at least six months) having a fair market
value on the last business day preceding the date of exercise equal to the
purchase price or (B) by delivery of a promissory note of the participant to the
Company, such note to be payable on such terms as are specified by the Board or
(C) by delivery of an unconditional and irrevocable undertaking by a broker to
deliver promptly to the Company sufficient funds to pay the exercise price or
(D) by having the Company hold back from the shares transferred upon exercise
Stock having a fair market value on the last business day preceding the date of
the exercise equal to the purchase price or (E) by any combination of the
permissible forms of payment; PROVIDED, that if the Stock delivered upon
exercise of the option
-4-
<PAGE> 5
is an original issue of authorized Stock, at least so much of the exercise price
as represents the par value of such Stock shall be paid other than with a
personal check or promissory note of the person exercising the option.
(e) STOCK APPRECIATION RIGHTS. The Board in its discretion may
grant SARs either in tandem with or independent of options awarded under the
Plan. Except as hereinafter provided, each SAR will entitle the participant to
receive upon exercise, with respect to each share of Stock to which the SAR
relates, the excess of (i) the share's value on the date of exercise, over (ii)
the share's fair market value on the date it was granted. For purposes of clause
(i), "value" shall mean fair market value; PROVIDED, that the Board may adjust
such value to take into account dividends on the Stock and may also grant SARs
that provide, in such limited circumstances following a change in control of the
Company (as determined by the Board) as the Board may specify, that "value" for
purposes of clause (i) is to be determined by reference to an average value for
the Stock during a period immediately preceding the change in control, all as
determined by the Board. The amount payable to a participant upon exercise of an
SAR shall be paid either in cash or in shares of Stock, as the Board determines.
Each SAR shall be exercisable during such period or periods and on such terms as
the Board may specify. No SAR shall be exercisable after the date which is ten
years from the date of grant.
(f) DELIVERY OF STOCK. A participant shall not have the rights of
a shareholder with regard to awards under the Plan except as to Stock actually
received by him under the Plan.
The Company shall not be obligated to deliver any shares of Stock (i)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, and (ii) if the outstanding Stock
is at the time listed on any stock exchange, until the shares to be delivered
have been listed or authorized to be listed on such exchange upon official
notice of issuance, and (iii) until all other legal matters in connection with
the issuance and delivery of such shares have been approved by the Company's
counsel. If the sale of Stock has not been registered under the Securities Act
of 1933, as amended, the Company may require, as a condition to exercise of the
award, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer.
(g) NONTRANSFERABILITY OF AWARDS. No award may be transferred
other than by will or by the laws of descent and distribution, and during a
participant's lifetime an award may be exercised only by him.
(h) DEATH. If a participant dies, each award held by the
participant immediately prior to death may be exercised, to the extent it was
exercisable immediately prior to death, by his executor or administrator, or by
the person or persons to whom the award is transferred by will or the applicable
laws of descent and distribution, at any time within the period ending with the
third anniversary of the participant's death but in no event beyond the Final
Exercise Date. All awards held by a participant immediately prior to death that
are not then exercisable shall terminate on the date of death.
(i) OTHER TERMINATION OF SERVICE. If an employee's employment with
the Company and its subsidiaries terminates for any reason, other than death,
all awards held by the employee that are not then exercisable shall terminate.
Awards that are exercisable on the date employment terminates shall continue to
be exercisable for a period of three months (or such longer period as the Board
may determine, but in no event beyond the Final Exercise Date) unless the
employee was discharged for cause which in the opinion of the Board casts such
discredit on him as
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<PAGE> 6
to justify termination of his awards. After completion of that three-month
period such awards shall terminate to the extent not previously exercised,
expired or terminated. For purposes of this Section 6(i), employment shall not
be considered terminated (i) in the case of sick leave or other bona fide leave
of absence approved for purposes of the Plan by the Board, so long as the
employee's right to reemployment is guaranteed either by statute or by contract,
or (ii) in the case of a transfer of employment between the Company and a
subsidiary or between subsidiaries, or to the employment of a corporation (or a
parent or subsidiary corporation of such corporation) issuing or assuming an
award in a transaction to which section 424(a) of the Code applies.
In the case of a participant who is not an employee, provisions
relating to the exercisability of awards following termination of service shall
be specified in the award. If not so specified, all awards held by such
participant that are not then exercisable shall terminate upon termination of
service. Awards that are exercisable on the date the participant's service as a
consultant terminates shall continue to be exercisable for a period of three
months (or such longer period as the Board may determine, but in no event beyond
the Final Exercise Date) unless the participant was terminated for cause which
in the opinion of the Board casts such discredit on him as to justify
termination of his awards. After completion of that three-month period such
awards shall terminate to the extent not previously exercised, expired or
terminated.
(j) MERGERS, ETC. In the event of a consolidation or merger in
which the Company is not the surviving corporation or which results in the
acquisition of substantially all the Company's outstanding Stock by a single
person or entity or by a group of persons and/or entities acting in concert, or
in the event of the sale or transfer of substantially all the Company's assets,
all outstanding awards shall thereupon terminate, provided that at least 20 days
prior to the effective date of any such merger, consolidation or sale of assets,
the Board shall either (i) make all outstanding awards exercisable immediately
prior to consummation of such merger, consolidation or sale of assets or (ii) if
there is a surviving or acquiring corporation, arrange, subject to consummation
of the merger, consolidation or sale of assets, to have that corporation or an
affiliate of that corporation grant to participants replacement awards which in
the case of incentive awards satisfy, in the determination of the Board, the
requirements of section 424(a) of the Code.
The Board may grant awards under the Plan in substitution for awards
held by employees, consultants or advisers of another corporation who
concurrently become employees, consultants or advisers of the Company or a
subsidiary of the Company as the result of a merger or consolidation of that
corporation with the Company or a subsidiary of the Company, or as the result of
the acquisition by the Company or a subsidiary of the Company of property or
stock of that corporation. The Company may direct that substitute awards be
granted on such terms and conditions as the Board considers appropriate in the
circumstances.
7. EMPLOYMENT RIGHTS
Neither the adoption of the Plan nor the grant of awards shall confer
upon any participant any right to continue as an employee of, or consultant or
adviser to, the Company or any parent or subsidiary or affect in any way the
right of the Company or parent or subsidiary to terminate them at any time.
Except as specifically provided by the Board in any particular case, the loss of
existing or potential profit in awards granted under this Plan shall not
constitute an element of damages in the event of termination of the relationship
of a participant even if the termination is in violation of an obligation of the
Company to the participant by contract or otherwise.
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<PAGE> 7
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that are not
subject to the Plan, to issue to such participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued.
The Board may at any time discontinue granting awards under the Plan.
With the consent of the participant, the Board may at any time cancel an
existing award in whole or in part and grant another award for such number of
shares as the Board specifies. The Board may at any time or times amend the Plan
or any outstanding award for the purpose of satisfying the requirements of
section 422 of the Code or of any changes in applicable laws or regulations or
for any other purpose that may at the time be permitted by law, or may at any
time terminate the Plan as to any further grants of awards, no such amendment
shall adversely affect the rights of any participant (without his consent) under
any award previously granted.
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<PAGE> 1
Exhibit 5.1
[ROPES & GRAY LETTERHEAD]
August 20, 1998
Applied Extrusion Technologies, Inc.
3 Centennial Drive
Peabody, Massachusetts 01960
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-8 (the "Registration Statement"), filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, for the registration of an additional 850,000 shares of common stock,
$.01 par value (the "Shares"), of Applied Extrusion Technologies, Inc. (the
"Company") to be issued under the Company's 1994 Stock Option Plan, as amended
(the "Stock Option Plan").
We have acted as counsel for the Company in connection with the Stock
Option Plan and are familiar with the actions taken by the Company in connection
therewith. For purposes of this opinion, we have examined copies of the
Registration Statement, the Stock Option Plan and such other documents as we
have deemed appropriate.
Based upon the foregoing, we are of the opinion that the Shares have
been duly authorized and that the Shares, when issued and sold in accordance
with the terms of the Stock Option Plan, will have been validly issued and will
be fully paid and non-assessable.
We hereby consent to the filing of this opinion as part of the
Registration Statement.
Very truly yours,
/s/ Ropes & Gray
---------------------------
Ropes & Gray
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS CONSENT
- ----------------------------
We consent to the incorporation by reference in this Registration Statement of
Applied Extrusion Technologies, Inc. (the Company) on Form S-8 of our report
dated November 25, 1997, appearing in the Annual Report on Form 10-K of the
Company for the year ended September 30, 1997.
/s/Deloitte & Touche LLP
- ------------------------
Boston, Massachusetts
August 20, 1998
