INCENTIVE STOCK PLAN -AHC.DOC
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: August 31, 1999
ALLIED HEALTHCARE PRODUCTS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-19266 23-1370721
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1720 Sublette Avenue
St. Louis, MO 63110
(Address of Principal Executive Offices) (Zip Code)
(314) 771-2400
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On August 24 ,1999, the Board of Directors of Allied Healthcare Products,
Inc. approved Allied Healthcare Products, Inc. 1999 Incentive Stock Plan (ISP).
The ISP is established to encourage eligible employees to acquire common stock
of the company. The directors believe that the ISP will stimulate employees'
efforts on the company's behalf; strengthen employees' desire to remain with the
company; encourage employees to have a greater personal financial investment in
the company; and aid the company in recruiting and retaining qualified executive
employees. Directors also believe the ISP is in the interest of the company and
its stockholders. A copy of the ISP is incorporated herein by reference and
attached hereto as Exhibit 1.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLIED HEALTHCARE PRODUCTS, INC.
Date: August 31, 1999 By: /s/ Thomas A. Jenuleson, CFO
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Name: Thomas A. Jenuleson
Title: Acting Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description Page No.
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1. 1999 Incentive Stock Plan 5
approved August 24, 1999
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Exhibit 1 - Allied Healthcare Products, Inc. 1999 Incentive Stock
Plan
ALLIED HEALTHCARE PRODUCTS, INC.
1999 INCENTIVE STOCK PLAN
The 1999 Incentive Stock Plan ("ISP") of Allied Healthcare Products, Inc.
(the "Company") is established to encourage eligible employees of the Company,
and its subsidiaries to acquire Common Stock in the Company. It is believed
that the ISP will (i) stimulate employees' efforts on the Company's behalf, (ii)
tend to maintain and strengthen their desire to remain with the Company, (iii)
be in the interest of the Company and its Stockholders, (iv) encourage such
employees to have a greater personal financial investment in the Company through
ownership of its Common Stock, and (v) aid the Company in recruiting and
retaining qualified executive employees.
1. ADMINISTRATION
The ISP shall be administered by the Board of Directors of the Company
which may delegate power to grant awards to a committee (the "Committee")
consisting of two or more Non-Employee Directors as that term is defined in Rule
16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Board or such Committee is authorized, subject to the provisions of the ISP,
to establish such rules and regulations as it deems necessary for the proper
administration of the ISP, and to make such determinations and to take such
action in connection therewith or in relation to the ISP as it deems necessary
or advisable, consistent with the ISP. Except as otherwise provided herein, the
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Board may delegate some or all of its power and authority hereunder with respect
to matters other than the grant of awards to the Chief Executive Officer or to
such other senior member of management as the Board deems appropriate; provided,
however, that no such delegation shall be applicable with regard to any matter
or action affecting an officer subject to Section 16 of the Exchange Act.
For the purpose of this section and all subsequent sections, the ISP shall
be deemed to include this plan and any comparable sub-plans established by
subsidiaries which, in the aggregate, shall constitute one plan governed by the
terms set forth herein.
2. ELIGIBILITY
Regular full-time employees of the Company and its subsidiaries, including
officers, whether or not directors of the Company, shall be eligible to
participate in the ISP ("Eligible Employees") if designated by the Board or the
Committee. Directors who are not regular employees are not eligible. It is
intended that awards will be made principally to those employees who are key
officers or management employees of the Company or a subsidiary, including
employees subject to Section 16 of the Exchange Act, and who are in a position
to have significant impact or achievement of the Company's long term objectives.
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3. INCENTIVES
Incentives under the ISP may be granted in any one or a combination of (i)
Nonqualified Stock Options; (ii) Reload or Stock Appreciation Right features in
conjunction with such Nonqualified Options; (iii) Performance Share Awards; and
(iv) Restricted Stock Grants (collectively "Incentives") not qualifying for
treatment as statutory incentive stock options. All Incentives shall be subject
to the terms and conditions set forth herein and to such other terms and
conditions as may be established by the Committee. Determinations by the
Committee under the ISP including without limitation, determinations of the
Eligible Employees, the form, amount and timing of Incentives, the terms and
provisions of Incentives, and the agreements evidencing Incentives, need not be
uniform and may be made selectively among Eligible Employees who receive, or are
eligible to receive, Incentives hereunder, whether or not such Eligible
Employees are similarly situated.
4. SHARES AVAILABLE FOR INCENTIVES
(a) Shares Subject to Issuance or Transfer. There is hereby reserved
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for issuance under the ISP an aggregate of 1,000,000 shares of the Company's
Common Stock ("Common Stock").
In the event of a lapse, expiration, termination or cancellation of any
Incentive granted under the ISP without the issuance of shares or payment of
cash, or if shares are issued under a Restricted Stock Grant hereunder and are
reacquired by the Company pursuant to rights reserved upon the issuance thereof,
the shares subject to or reserved for such Incentive may again be used for new
Incentives hereunder; provided that in no event may the number of shares issued
hereunder exceed the total number of shares reserved for issuance.
(b) Limitations on Individual Awards. In any given year, no eligible
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employee may be granted Incentives covering more than ten percent (10%) of the
number of fully-diluted shares of the Company's Common Stock outstanding as of
the first business day of the Company's fiscal year.
(c) Recapitalization Adjustment. In the event of a reorganization,
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recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, or any other change in the corporate structure
or shares of Common Stock of the Company, the Board of Directors shall (to the
extent that the grant or award does not already mandate adjustments) make a
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corresponding adjustment in the number and kind of shares authorized by the ISP,
in the number and kind of shares covered by Incentives granted, and, in the case
of Stock Options, in the option price.
5. NON-QUALIFIED STOCK OPTIONS
Non-Qualified Stock Options ("Stock Options") shall be subject to the
following terms and conditions and such other terms and conditions as the Board
of Directors or Committee may prescribe:
(a) Option Price. The option price per share with respect to each
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Stock Option shall be not be less than 90% of the fair market value of the
Common Stock on the date the Stock Option is granted. During any period in
which the Common Stock is listed for trading on a registered national securities
exchange or on the NASDAQ National Market System, the fair market value per
share of the Company's Common Stock shall be the lower of (i) the last reported
sales price on the date of grant or (ii) the average of the high and low
reported sales prices on the date of grant. At any other time the fair market
value per share of the Company's Common Stock shall be as determined in good
faith by Board of Directors of the Company.
(b) Period of Option. The duration of each Stock Option shall be fixed
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at the time of grant, except that no Stock Option granted shall be exercisable
more than ten (10) years after the date so granted.
(c) Payment. The option price shall be payable at the time the Stock
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Option is exercised in cash, provided, however, that at the discretion of the
Company or if provided in connection with the grant of any Stock Option award
payment of the exercise price may be made in whole or in part in the form of
shares of Common Stock already owned by the grantee (based on the fair market
value of the Common Stock on the date the option is exercised as determined in a
manner consistent with the establishment of fair market value per share on the
date of grant). In addition to payment of the exercise price, the Company may
condition the exercise of any Stock Option upon the grantee's deposit with the
Company of funds in addition to the exercise price in an amount equal to any
federal or state income withholding tax arising from such exercise. No shares
shall be issued until full payment therefor, including any associated taxes, has
been made. A grantee of a Stock Option shall have none of the rights of a
stockholder until the shares are issued.
(d) Exercise of Option. The shares covered by a Stock Option may be
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purchased in such installments and on such exercise dates as may be provided and
set forth in the grant or award. In the absence of any terms so provided, a
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Stock Option shall vest ratably over its term on an annual basis first becoming
exercisable in part on the first anniversary of the date of grant and becoming
exercisable in full on the anniversary of the date of grant next preceding the
expiration date of the option. Any shares not purchased on the applicable
exercise date may be purchased thereafter at any time prior to the final
expiration of the Stock Option. In no event (including those specified in
paragraphs (e), (f ) and (g) of this section below) shall any Stock Option be
exercisable after its specified expiration period.
(e) Termination of Employment. Upon the termination of a Stock Option
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grantee's employment (for any reason other than retirement, death or termination
for deliberate, willful or gross misconduct, or "for cause" as may be defined in
any employment or other agreement with such Stock Option grantee), Stock Option
privileges shall be limited to the shares which were immediately exercisable at
the date of such termination of employment. The Board of Directors and/or
Committee may in its discretion provide that any Stock Options outstanding but
not yet exercisable as of the termination of employment of a Stock Option
grantee may become exercisable in accordance with a schedule to be determined by
the Board of Directors or Committee. If a Stock Option grantee's employment is
terminated for deliberate, willful or gross misconduct, or for "cause" as may be
defined in any employment or other agreement with such Stock Option grantee, as
determined by the Company, all rights under the Stock Option shall expire upon
receipt of the notice of such termination of employment. Unless otherwise
provided in the award of a Stock Option, any exercisable portion of such Stock
Option shall lapse and expire upon the earlier to occur of: (i) the stated
expiration date of such option, or (ii) thirty days after the date of any such
termination of employment.
(f) Retirement. Upon retirement of the Stock Option grantee, Stock
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Option privileges shall be limited to those shares immediately exercisable at
the date of retirement. The Board of Directors or Committee, however, in its
discretion, may provide that any Stock Options outstanding but not yet
exercisable upon the retirement of the Stock Option grantee may become
exercisable in accordance with a schedule to be determined by the Board of
Directors or the Committee. Stock Option privileges shall expire unless
exercised within such period of time as may be established by the Board of
Directors or the Committee . Unless otherwise provided in the award of a Stock
Option, any exercisable portion of such Stock Option shall lapse and expire upon
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the earlier to occur of (i) the stated expiration date of such option or (ii)
180 days after the date of any such retirement.
(g) Death. Upon the death of a Stock Option grantee, Stock Option
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privileges shall be limited to those shares which were immediately exercisable
at the time of death. The Board of Directors, however, in its discretion, may
provide that any Stock Options outstanding but not yet exercisable upon the
death of a Stock Option grantee may become exercisable in accordance with a
schedule to be determined by the Board of Directors. Such privileges shall
expire unless exercised by legal representatives within a period of time as
determined by the Board of Directors but in no event later than the date of the
expiration of the Stock option. Unless otherwise provided in the award of a
Stock Option, any exercisable portion of such Stock Option shall lapse and
expire upon the earlier to occur of (i) the stated expiration date of such
option or (ii) ten months after the date of death of the employee.
(h) Acceleration of Vesting and other rights following a Change of
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Control. Any Stock Option granted or awarded pursuant to this Plan may provide
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that it will become exercisable in full in the event of a Change of Control of
the Company as may be defined in such grant or award. In the event of an
exercise of the Stock Option subsequent to a Change of Control (whether or not
such Change of Control has resulted in acceleration of vesting) the holder of a
Stock Option may elect in lieu of exercising the option for cash as provided
herein to receive from the Company in cash an amount equal to the amount by
which the fair market value exceeds the exercise price, reduced by the amount of
any withholding taxes required to be collected by the Company as a result of
such exercise.
(i) Forfeiture of Certain Option Benefits. Unless otherwise provided
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in connection with the grant or award of a Stock Option, the Company shall have
the right to repurchase shares of its Common Stock acquired upon exercise of a
Stock Option at a price equal to the exercise price per share in the event that
the employee holding such shares shall, within six months of terminating
employment with the Company, commence employment which the Board of Directors
reasonably believes, in its discretion, to be competitive with the Company or in
violation of any employment or other agreement between the Company and such
employee, provided, however, that (i) such repurchase right shall only be
applicable to shares acquired upon exercise of the Stock Option occurring on or
after a date which is six months prior to such grantee's termination of
employment with the Company and (ii) such right of repurchase shall not be
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applicable with respect to shares of the Company's Common Stock acquired upon
exercise of a Stock Option if the termination of employment occurred at the
election of the employee following a "change of control" of the Company pursuant
to rights granted to such employee under a written employment agreement or in
the terms of the option grant or award.
(j) Reload Provisions. Any Stock Option which by its terms includes
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provisions permitting the exercise of the option by means of an exchange of
previously-owned shares of the Company's common Stock held by the optionee may
also include so-called "reload provisions" resulting in the grant of a new
option to the employee covering a number of shares of the Company's Common Stock
equal to the number of shares of stock surrendered to the Company in connection
with such exchange exercise; having a price per share for such new option equal
to the fair market value per share of the shares so surrendered as of the date
of such surrender and expiring as of the later of five years following the date
of such exchange exercise or the date upon which the original option expires.
The rights under such "reload option" shall vest immediately but all terms of
such option shall (other than price, number of shares and vesting) be consistent
with the terms of the original option.
(k) Tandem Stock Appreciation Right Provisions. The Company may include
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with any Stock Option granted hereunder so-called tandem stock appreciation
rights allowing the optionee to receive, in lieu of the exercise of such option,
the value of the option as evidenced by the amount by which the fair market
value exceeds the exercise price. In connection with the grant of any such
tandem stock appreciation rights, the option grant shall specify whether such
right (if exercised) shall be payable in cash or in shares of the Company's
Common Stock or in a combination thereof.
6. PERFORMANCE SHARE AWARDS
The Company may grant awards under which payment may be made in shares of
Common Stock, cash or any combination of shares and cash if the performance of
the Company or any subsidiary or division of the Company selected by the
Committee during the Award Period meets certain goals established by the Board
of Directors or Committee ("Performance Share Awards"). Such Performance Share
Awards shall be subject to the following terms and conditions and such other
terms and conditions as the Board of Directors or Committee may prescribe:
(a) Award Period and Performance Goals. The Company shall determine
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and include in a Performance Share Award grant the period of time for which a
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Performance Share Award is made ("Award Period"). The Company shall also
establish performance objectives ("Performance Goals") to be met by the Company,
subsidiary or division during the Award Period as a condition to payment of the
Performance Share Award. The Performance Goals may include earnings per share,
return on stockholder equity, return on assets, net income, or any other
financial or other measurement established by the Company. The Performance
Goals may include minimum and optimum objectives or a single set of objectives.
(b) Payment of Performance Share Awards. The Company shall establish
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the method of calculating the amount of payment to be made under a Performance
Share Award if the Performance Goals are met, including the fixing of a
maximum-payment. The Performance Share Award shall be expressed in terms of
shares of Common Stock and referred to as "Performance Shares". After the
completion of an Award Period, the performance of the Company, subsidiary or
division shall be measured against the Performance Goals, and Board of Directors
or the Committee shall determine whether all, none or any portion of a
Performance Share Award shall be paid. The Committee, in its discretion, may
elect to make payment in shares of Common Stock, cash or a combination of shares
and cash. Any cash payment shall be based on the fair market value of
Performance Shares on, or as soon as practicable prior to, the date of payment.
(c) Revision of Performance Goals. At any time prior to the end of an
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Award Period, the Committee may revise the Performance Goals and the computation
of payment if unforeseen events occur which have a substantial effect on the
performance of the Company, subsidiary or division and which in the judgment of
the Board of Directors or the Committee make the application of the Performance
Goals unfair unless a revision is made.
(d) Requirement of Employment. A grantee of a Performance Share Award
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must remain in the employment of the Company until the completion of the Award
Period in-order to be entitled to payment under the Performance Share Award;
provided that the Board of Directors or the Committee may, in its sole
discretion, provide for a partial payment where such an exception is deemed
equitable.
(e) Dividends. The Board of Directors or the Committee may, in its
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discretion, at the time of the granting of a Performance Share Award, provide
that any dividends declared on the Common Stock during the Award Period, and
which would have been paid with respect to Performance Shares had they been
owned by a grantee, be (i) paid to the grantee, or (ii) accumulated for the
benefit of the grantee and used to increase the number of Performance Shares of
the grantee.
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7. RESTRICTED STOCK GRANTS
The Board of Directors or the Committee may issue shares of Common Stock to
a grantee which shares shall be subject to the following terms and conditions
and such other terms and conditions as the Committee may prescribe ("Restricted
Stock Grant"):
(a) Requirement of Employment. A grantee of a Restricted Stock Grant
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must remain in the employment of the Company during a period designated by the
Committee ("Restriction Period"). If the grantee leaves the employment of the
Company prior to the end of the Restriction Period, the Restricted Stock Grant
shall terminate and the shares of Common Stock shall be returned immediately to
the Company, provided that the Committee may, at the time of the grant, provide
for the employment restriction to lapse with respect to a portion or portions of
the Restricted Stock Grant at different times during the Restriction Period.
The Board of Directors or the Committee may, in its discretion, also provide for
such complete or partial exceptions to the employment restriction as it deems
equitable.
(b) Restrictions on Transfer and Legend on Stock Certificates. During
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the Restriction Period, the grantee may not sell, assign, transfer, pledge, or
otherwise dispose of the shares of Common Stock except to a successor under
Section 9 hereof. Each certificate for shares of Common Stock issued hereunder
shall contain a legend giving appropriate notice of the restrictions in the
grant.
(c) Escrow Agreement. The Company may require the grantee to enter
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into an escrow agreement providing that the certificates representing the
Restricted Stock Grant will remain in the physical custody of an escrow holder
until all restrictions are removed or expire.
(d) Lapse of Restrictions. All restrictions imposed under the
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Restricted Stock Grant shall lapse upon the expiration of the Restriction Period
if the conditions as to employment set forth above have been met. The grantee
shall then be entitled to have the legend removed from the certificates.
(e) Dividends. The Board of Directors or Committee may, in its
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discretion, at the time of the Restricted Stock Grant, provide that any
dividends declared on the Common Stock during the Restriction Period shall
either be (i) paid to the grantee, or (ii) accumulated for the benefit of the
grantee and paid to the grantee only after the expiration of the Restriction
Period.
8. DISCONTINUANCE OR AMENDMENT OF THE PLAN.
The Board of Directors may discontinue the ISP at any time and may from
time to time amend or revise the terms of the ISP as permitted by applicable
statutes except that it may not revoke or alter, in a manner unfavorable to the
grantees of any Incentives hereunder, any Incentives then outstanding, nor may
the Board amend the ISP without stockholder approval, if the effect of such
amendment or absence of such stockholder approval would cause the Plan to fail
to comply with Rule 16b-3 under the Exchange Act, or any other requirement of
applicable law or regulation. No incentive shall be granted under the ISP after
June 30, 2009 but Incentives granted theretofore may extend beyond that date.
9. NONTRANSFERABILITY
Each Incentive granted under the ISP shall not be transferable other than
by will or the laws of descent and distribution, and with respect to Stock
Options, shall be exercisable, during the grantee's lifetime, only by the
grantee or the grantee's guardian or legal representative.
10. NO RIGHT OF EMPLOYMENT
ISP and the Incentives granted hereunder shall not confer upon any Eligible
Employee the right to continued employment with the Company or affect in any way
the right of the Company to terminate the employment of an Eligible Employee at
any time and for any or no reason.
1. TAXES
The Company shall be entitled to withhold the amount of any tax
attributable to any amount payable or shares deliverable under the ISP after
giving the person entitled to receive such amount or shares notice as far in
advance as practicable and may condition delivery of certificates evidencing
shares awarded or purchased under the ISP upon receipt of funds to effect such
withholding.
12. LISTING AND REGISTRATION OF THE SHARES
Each option issued hereunder shall be subject to the requirement that if at
any time the Company shall determine that the listing, registration or
qualification of the shares subject to the option upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the granting of such option or the issue or purchase of shares
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thereunder, such option may not be exercised in whole or in part unless and
until such listing, registration, qualification consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee. In the absence of any such registration or qualification the Company
may place the following legend on the certificates representing any shares
issued under this Plan.
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
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1933 AS AMENDED OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
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TRANSFERRED WITHOUT AN OPINION OF COUNSEL SATISFACTORY IN FORM AND
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SUBSTANCE TO THE COMPANY THAT SUCH TRANSFER MAY BE LAWFULLY
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EFFECTED IN THE ABSENCE OF SUCH REGISTRATION."
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13. EFFECTIVE DATE
The Plan shall be effective as of July 15, 1999.
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