<PAGE>1
As filed with the Securities and Exchange Commission on
June 18, 1996
Registration No. 33-___________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CompUSA Inc.
(Exact name of issuer as specified in its charter)
DELAWARE 75-2261497
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
14951 North Dallas Parkway, Dallas, TX 75240
(Address of principal executive offices) (zip code)
PCs Compleat, Inc. 1991 Stock Option Plan
(Full title of the plan(s))
JAMES E. SKINNER
Chief Financial Officer
CompUSA Inc.
14951 North Dallas Parkway
Dallas, Texas 75240
(214) 982-4000
(Name and address, including zip code, of agent for
service) (Telephone number, including area code, of
agent for service)
COPY TO:
Thomas M. Cerabino, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
(212) 821-8000
<PAGE>2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
Proposed Proposed maximum
Title of Amount maximum aggregate offering Amount
securities to be offering price (2) of regis-
to be registered(1) price per tration
registered share (2) fee
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock
$0.01 par
value per
share 325,413(3) $40.75 $13,260,579 $4,573
- --------------------------------------------
</TABLE>
(1) This Registration Statement covers the 325,413 shares of Common Stock,
$0.01 par value per share, of CompUSA Inc., a Delaware corporation
("CompUSA" or the "Registrant"), authorized to be issued under the PCs
Compleat, Inc. 1991 Stock Option Plan. On May 30, 1996, pursuant to
the merger of Snowstorm Merger Corp., a Delaware corporation and a
wholly-owned subsidiary of CompUSA, with and into PCs Compleat, Inc.
("PCs Compleat"), a Delaware corporation, PCs Compleat became a
wholly-owned subsidiary of CompUSA.
(2) Reflects the average of the high and low prices of CompUSA Common
Stock on June 12, 1996 on the New York Stock Exchange pursuant to Rule
457(h) and (c) under the Securities Act of 1933, as amended (the
"Securities Act").
(3) Represents shares which have not yet been issued.
<PAGE>3
PART I
INFORMATION NOT REQUIRED
IN THE REGISTRATION STATEMENT
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Securities and
Exchange Commission (the "Commission") by the Registrant, are incorporated
herein by reference:
(a) The Registrant's annual report filed on Form 10-K
for the fiscal year ended June 24, 1995, filed pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act").
(b) All other reports filed by the Registrant
pursuant to Section 13(a) or 15(d) of the Exchange Act since
the end of the fiscal year covered by the Form 10-K referred
to in (b) above, including, without limitation, the reports
referred to in items (c)-(g) below.
(c) The Registrant's quarterly report filed on Form
10-Q for the quarterly period ended September 23, 1995, filed
pursuant to the Exchange Act.
(d) The Registrant's quarterly report filed on Form
10-Q for the quarterly period ended December 23, 1995, filed
pursuant to the Exchange Act.
(e) The Registrant's quarterly report filed on Form
10-Q for the quarterly period ended March 23, 1996, filed
pursuant to the Exchange Act.
(f) The Registrant's current report on Form 8-K,
filed with the Commission on May 20, 1996.
(g) The Registrant's current report on Form 8-K,
filed with the Commission on June 14, 1996.
(h) The description of the Registrant's common stock,
$0.01 par value per share (the "Common Stock"), and the
description of the Registrant's Rights to Purchase Series A
Junior Participating Preferred Stock, which descriptions are
contained in the Registrant's Registration Statement, filed
pursuant to the Exchange
<PAGE>4
Act, on Form 8-A (File No. 1-11566) on May 5, 1994, as
amended by the Registrant's Form 8-A/A (File No. 1-11566),
filed pursuant to the Exchange Act on November 14, 1995.
In addition, all documents filed by CompUSA with the
Commission pursuant to Sections 13(a), 13(c), 14 and 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 the securities offered
hereby have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of the filing of such documents with the Commission. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein (or in any other subsequently filed document which also is
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
Inapplicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to 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 such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may indemnify such person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person 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. A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation to procure a judgment in its favor
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
<PAGE>5
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses (including attorneys' fees) which he actually
and reasonably incurred in connection therewith. The indemnification provided is
not deemed to be exclusive of any other rights to which an officer or director
may be entitled under any corporation's by-law, agreement, vote or otherwise.
In accordance with Section 145 of the DGCL, Article VI ("Article
VI") of the Restated and Amended Certificate of Incorporation of CompUSA
provides that no director of CompUSA shall be personally liable to CompUSA or to
any of its stockholders for monetary damages for breach of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability;
provided, however, that to the extent required from time to time by applicable
law, Article VI shall not eliminate or limit the liability of a director, to the
extent such liability is provided by applicable law, (i) for any breach of the
director's duty of loyalty to CompUSA 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 DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article VII of the Restated and Amended Bylaws of CompUSA provides for
indemnification of directors and officers except as to certain circumstances and
except as provided by applicable law.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Inapplicable.
Item 8. EXHIBITS
Exhibit No.
4.1 Restated and Amended Certificate of Incorporation.
(Previously filed as an exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period
ended December 23, 1995 and incorporated herein by
reference.)
4.2 Restated and Amended Bylaws. (Previously filed as an
exhibit to the Registrant's Quarterly Report on Form 10-Q
for the quarterly period ended March 26, 1994 and
incorporated herein by reference.)
4.3 Specimen Common Stock Certificate (as amended).
(Previously filed as an exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period
ended December 23, 1995 and incorporated herein by
reference.)
<PAGE>6
4.4 Rights Agreement dated April 29, 1994, between the Company
and Bank One, Texas, N.A. as Rights Agent. (Previously
filed as an exhibit to the Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended March 26, 1994
and incorporated herein by reference.)
4.5 Letter of the Company dated November 1, 1995, appointing
First Interstate Bank of Texas, N.A. as substitute Rights
Agent under the Rights Agreement. (Previously filed as an
exhibit to the Registrant's Quarterly Report on Form 10-Q
for the quarterly period ended December 23, 1995 and
incorporated herein by reference.)
5.1 Opinion of Willkie Farr & Gallagher, counsel to CompUSA,
as to the legality of the shares being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Willkie Farr & Gallagher (contained in exhibit
5.1).
24.1 Power of Attorney (reference is made to the signature page).
99.1 Copy of PCs Compleat, Inc. 1991 Stock Option Plan
Item 9. UNDERTAKINGS
1. CompUSA hereby undertakes:
(a) 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;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
Registration Statement;
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in
<PAGE>7
periodic reports filed by CompUSA pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference
in the Registration Statement.
(b) That, for the purpose of determining any liability under
the Securities Act, 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.
(c) 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.
2. CompUSA hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of CompUSA's
annual report pursuant to Section 13(a) or 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.
3. CompUSA hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of CompUSA pursuant to the foregoing provisions, or otherwise, CompUSA
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 CompUSA of expenses incurred or paid by a
director, officer or controlling person of CompUSA 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, CompUSA
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 by governed by the final adjudication
of such issue.
<PAGE>8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, 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 Dallas, State of Texas
on the 18th day of June, 1996.
CompUSA Inc.
By: /s/ James E. Skinner
James E. Skinner
Executive Vice President and
Chief Financial Officer
<PAGE>9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints James F. Halpin and James E.
Skinner, and each of them singly, with full power to act without the other,
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 to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary fully to all intents and purposes as he might or could
do in person thereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ James F. Halpin President, Chief Executive Officer and Director June 18, 1996
James F. Halpin (Principal Executive Officer)
/s/ James E. Skinner Executive Vice President June 18, 1996
James E. Skinner and Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ Giles H. Bateman Chairman of the June 18, 1996
Giles H. Bateman Board of Directors
/s/ Kevin J. Roche Director June 18, 1996
Kevin J. Roche
/s/ Warren D. Feldberg Director June 18, 1996
Warren D. Feldberg
/s/ Leonard L. Berry, Ph.D. Director June 18, 1996
Leonard L. Berry, Ph.D.
/s/ Lawrence Mittman Director June 18, 1996
Lawrence Mittman
/s/ Edith Weiner Director June 18, 1996
Edith Weiner
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
4.1 Restated and Amended Certificate of Incorporation.
(Previously filed as an exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended
December 23, 1995 and incorporated herein by reference.)
4.2 Restated and Amended Bylaws. (Previously filed as an
exhibit to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended March 26, 1994 and
incorporated herein by reference.)
4.3 Specimen Common Stock Certificate (as amended). (Previously
filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarterly period ended December 23, 1995 and
incorporated herein by reference.)
4.4 Rights Agreement dated April 29, 1994, between the Company and
Bank One, Texas, N.A. as Rights Agent. (Previously filed as
an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the quarterly period ended March 26, 1994 and incorporated
herein by reference.)
4.5 Letter of the Company dated November 1, 1995, appointing First
Interstate Bank of Texas, N.A. as substitute Rights Agent
under the Rights Agreement. (Previously filed as an exhibit to
the Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended December 23, 1995 and incorporated
herein by reference.)
5.1 Opinion of Willkie Farr & Gallagher, counsel to CompUSA, as to
the legality of the shares being registered.
<PAGE>
23.1 Consent of Ernst & Young LLP.
99.1 Copy of PCs Compleat, Inc. 1991 Stock Option Plan.
<PAGE>
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
(212) 821-8000
June 18, 1996
CompUSA Inc.
14951 North Dallas Parkway
Dallas, Texas 75240
Dear Sirs:
We are delivering this opinion in connection with the Registration Statement
on Form S-8 (the "Registration Statement") of CompUSA Inc. (the "Company") to
be filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to an aggregate of
325,413 shares, par value $.01 per share, of common stock of the Company (the
"Shares"). The Shares are to be offered pursuant to the terms of the PCs
Compleat, Inc. 1991 Stock Option Plan (the "Plan") to participants in the
Plan (the "Participants"). We have examined and are familiar with originals or
copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records and other instruments relating to the
incorporation of the Company and to the authorization and issuance of the
Shares, and have made such investigations of law, as we have deemed necessary
and advisable.
Based upon the foregoing and having due regard for such legal questions as we
have deemed relevant, we are of the opinion that:
1. The Company is duly incorporated and validly existing under the laws
of the State of Delaware; and
2. The Shares have been duly authorized and, when issued, delivered and
sold by the Company and paid for by the Participants, pursuant to the
terms of the Plan, will constitute duly authorized, validly issued,
fully paid and nonassessable shares of common stock of the Company.
<PAGE>
CompUSA Inc.
June 18, 1996
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and to the reference to our firm in
the summary of the Plan provided to the Participants, which, together with the
documents incorporated by reference in the Registration Statement, constitute
a prospectus that meets the requirements of Section 10(a) of the Securities
Act.
Very truly yours,
/s/ Willkie Farr & Gallagher
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of CompUSA Inc. pertaining to the PCs Compleat, Inc. 1991 Stock
Option Plan of our report dated August 9, 1995, with respect to the
consolidated financial statements of CompUSA Inc. included in its Annual
Report on Form 10-K for the year ended June 24, 1995, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Dallas, Texas
June 17, 1996
<PAGE>1
PCs COMPLEAT, INC.
1991 STOCK OPTION PLAN
October 14, 1991
1. Purpose.
The purpose of this plan (the "Plan") is to secure for PCs Compleat,
Inc. (the "Company") and its shareholders the benefits arising from capital
stock ownership by employees, officers and directors of the Company and its
parent and subsidiary corporations who are expected to contribute to the
Company's future growth and success. Except where the context otherwise
requires, the term "Company" shall include the parent and all present and future
subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time (the
"Code"). Those provisions of the Plan which make express reference to Section
422 shall apply only to Incentive Stock Options (as that term is defined in the
Plan).
2. Type of Options and Administration.
(a) Types of Options. Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422 of the Code
or nonstatutory options which are not intended to meet the requirements of
Section 422 of the Code.
(b) Administration. The Plan will be administered by the Board of
Directors of the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board of Directors may
in its sole discretion grant options to purchase shares of the Company's Common
Stock ("Common Stock") and issue shares upon exercise of such options as
provided in the Plan. The Board shall have authority, subject to the express
provisions of the Plan, to construe the respective option agreements and the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective option agreements,
which need not be identical, and, to make all other determinations in the
judgment of the Board of Directors necessary or desirable for the administration
of the Plan. The Board of Directors may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any option agreement
in the manner and to the extent it shall deem expedient to carry the Plan into
effect and it shall be the sole and final
<PAGE>2
judge of such expediency. No director or person acting pursuant to authority
delegated by the Board of Directors shall be liable for any action or
determination under the Plan made in good faith. The Board of Directors may,
to the full extent permitted by or consistent with applicable laws or
regulations (including, without limitation, applicable state law and Rule
16b-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), or any successor rule ("Rule 16b-3")), delegate any or all of its
powers under the Plan to a committee (the "Committee") appointed by the Board
of Directors, and if the Committee is so appointed all references to the Board
of Directors in the Plan shall mean and relate to such Committee.
(c) Applicability of Rule 16b-3. Those provisions of the Plan which
make express reference to Rule 16b-3 shall apply only to such persons as are
required to file reports under Section 16(a) of the Exchange Act (a "Reporting
Person").
3. Eligibility.
(a) General. Options may be granted to persons who are, at the time of
grant, employees, officers or directors of the Company; provided, that the class
of employees to whom Incentive Stock Options may be granted shall be limited to
all employees of the Company. A person who has been granted an option may, if he
or she is otherwise eligible, be granted additional options if the Board of
Directors shall so determine.
(b) Grant of Options to Directors and Officers. From and after the
registration of the Common Stock of the Company under the Exchange Act, the
selection of a director or an officer (as the terms "director" and "officer" are
defined for purposes of Rule 16b-3) as a recipient of an option, the timing of
the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
of which all members shall be "disinterested persons" (as hereinafter defined),
or (ii) by two or more directors having full authority to act in the matter,
each of whom shall be a "disinterested person." For the purposes of the Plan, a
director shall be deemed to be a "disinterested person" only if such person
qualifies as a "disinterested person" within the meaning of Rule 16b-3, as such
term is interpreted from time to time.
4. Stock Subject to Plan.
Subject to adjustment as provided in Section 15 below, the maximum
number of shares of Common Stock of the Company which may be issued and sold
under the Plan is 525,000 shares. If an option granted under the Plan shall
expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject to such option shall again be available for
subsequent option grants under the Plan. If shares issued upon
<PAGE>3
exercise of an option under the Plan are tendered to the Company in payment of
the exercise price of an option granted under the Plan, such tendered shares
shall again be available for subsequent option grants under the Plan;
provided, that in no event shall (i) the total number of shares issued
pursuant to the exercise of Incentive Stock Options under the Plan, on a
cumulative basis, exceed the maximum number of shares authorized for issuance
under the Plan exclusive of shares made available for issuance pursuant to
this sentence or (ii) the total number of shares issued pursuant to the
exercise of options by Reporting Persons, on a cumulative basis, exceed the
maximum number of shares authorized for issuance under the Plan exclusive of
shares made available for issuance pursuant to this sentence.
5. Forms of Option Agreements.
As a condition to the grant of an option under the Plan, each
recipient of an option shall execute an option agreement in such form not
inconsistent with the Plan as may be approved by the Board of Directors. Such
option agreements may differ among recipients.
6. Purchase Price.
(a) General. The purchase price per share of stock deliverable upon the
exercise of an option shall be determined by the Board of Directors, provided,
however, that in the case of an Incentive Stock Option, the exercise price shall
not be less than 100% of the fair market value of such stock, as determined by
the Board of Directors, at the time of grant of such option, or less than 110%
of such fair market value in the case of options described in Section 11(b).
(b) Payment of Purchase Price. Options granted under the Plan may
provide for the payment of the exercise price by delivery of cash or a check to
the order of the Company in an amount equal to the exercise price of such
options, or, to the extent provided in the applicable option agreement, (i) by
delivery to the Company of shares of Common Stock of the Company already owned
by the optionee having a fair market value equal in amount to the exercise price
of the options being exercised, (ii) by any other means (including, without
limitation, by delivery of a promissory note of the optionee payable on such
terms as are specified by the Board of Directors) which the Board of Directors
determines are consistent with the purpose of the Plan and with applicable laws
and regulations (including, without limitation, the provisions of Rule 16b-3 and
Regulation T promulgated by the Federal Reserve Board) or (iii) by any
combination of such methods of payment. The fair market value of any shares of
the Company's Common Stock or other non-cash consideration which may be
delivered upon exercise of an option shall be determined by the Board of
Directors.
<PAGE>4
7. Option Period.
Each option and all rights thereunder shall expire on such date as
shall be set forth in the applicable option agreement, except that, in the case
of an Incentive Stock Option, such date shall not be later than ten years after
the date on which the option is granted and, in all cases, options shall be
subject to earlier termination as provided in the Plan.
8. Exercise of Options.
Each option granted under the Plan shall be exercisable either in full
or in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.
9. Nontransferability of Options.
Incentive Stock Options, and all options granted to Reporting Persons,
shall not be assignable or transferable by the person to whom they are granted,
either voluntarily or by operation of law, except by will or the laws of descent
and distribution, and, during the life of the optionee, shall be exercisable
only by the optionee; provided, however, that non-statutory options may be
transferred pursuant to a qualified domestic relations order (as defined in Rule
16b-3).
10. Effect of Termination of Employment or Other Relationship.
Except as provided in Section 11(d) with respect to Incentive Stock
Options, and subject to the provisions of the Plan, the Board of Directors shall
determine the period of time during which an optionee may exercise an option
following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods
shall be set forth in the agreement evidencing such option.
11. Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) Express Designation. All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.
(b) 10% Shareholder. If any employee to whom an Incentive Stock Option
is to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock
<PAGE>5
ownership rules of Section 424(d) of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
(i) The purchase price per share of the Common Stock subject
to such Incentive Stock Option shall not be less than 110% of the
fair market value of one share of Common Stock at the time of grant;
and
(ii) the option exercise period shall not exceed five years
from the date of grant.
(c) Dollar Limitation. For so long as the Code shall so provide,
options granted to any employee under the Plan (and any other incentive stock
option plans of the Company) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate fair market value
(determined as of the respective date or dates of grant) of more than $100,000.
(d) Termination of Employment, Death or Disability. No Incentive
Stock Option may be exercised unless, at the time of such exercise, the
optionee is, and has been continuously since the date of grant of his or her
option, employed by the Company, except that:
(i) an Incentive Stock Option may be exercised within the
period of three months after the date the optionee ceases to be an
employee of the Company (or within such lesser period as may be
specified in the applicable option agreement), provided, that the
agreement with respect to such option may designate a longer exercise
period and that the exercise after such three-month period shall be
treated as the exercise of a non-statutory option under the Plan;
(ii) if the optionee dies while in the employ of the Company,
or within three months after the optionee ceases to be such an
employee, the Incentive Stock Option may be exercised by the person to
whom it is transferred by will or the laws of descent and distribution
within the period of one year after the date of death (or within such
lesser period as may be specified in the applicable option agreement);
and
(iii) if the optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code or any successor provision thereto) while
in the employ of the Company, the Incentive Stock Option may be
exercised within the period of one year after the date the optionee
ceases to be such an employee because of such disability (or within
such lesser period as may be specified in the applicable option
agreement).
<PAGE>6
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
12. Additional Provisions.
(a) Additional Option Provisions. The Board of Directors may, in its
sole discretion, include additional provisions in option agreements covering
options granted under the Plan, including without limitation restrictions on
transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange
for or guaranty loans or to transfer other property to optionees upon exercise
of options, or such other provisions as shall be determined by the Board of
Directors; provided that such additional provisions shall not be inconsistent
with any other term or condition of the Plan and such additional provisions
shall not cause any Incentive Stock Option granted under the Plan to fail to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code.
(b) Acceleration, Extension, Etc. The Board of Directors may, in its
sole discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised; provided, however, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3.
13. General Restrictions.
(a) Investment Representations. The Company may require any person to
whom an option is granted, as a condition of exercising such option, to give
written assurances in substance and form satisfactory to the Company to the
effect that such person is acquiring the Common Stock subject to the option for
his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Company in connection with any public offering of its Common Stock.
(b) Compliance With Securities Laws. Each option shall be subject to
the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
option upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or
<PAGE>7
that the disclosure of non-public information or the satisfaction of any other
condition is necessary as a condition of, or in connection with, the issuance
or purchase of shares thereunder, such option may not be exercised, in whole
or in part, unless such listing, registration, qualification, consent or
approval, or satisfaction of such condition shall have been effected or
obtained on conditions acceptable to the Board of Directors. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification, or to satisfy such condition.
14. Rights as a Shareholder.
The holder of an option shall have no rights as a shareholder with
respect to any shares covered by the option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
15. Adjustment Provisions for Recapitalizations and Related Transactions.
(a) General. If, through or as a result of any merger, consolidation,
sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment may be made in (x) the maximum number
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities subject to any then outstanding options under the
Plan, and (z) the price for each share subject to any then outstanding options
under the Plan, without changing the aggregate purchase price as to which such
options remain exercisable. Notwithstanding the foregoing, no adjustment shall
be made pursuant to this Section 15 if such adjustment would cause the Plan to
fail to comply with Section 422 of the Code or with Rule 16b-3.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 15 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
<PAGE>8
16. Merger, Consolidation, Asset Sale, Liquidation, Etc.
(a) General. In the event of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Company,
the Board of Directors of the Company, or the board of directors of any
corporation assuming the obligations of the Company, shall take any one or more
of the following actions, as to outstanding options: (i) provide that such
options shall be assumed, or equivalent options shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof), provided that any
such options substituted for Incentive Stock Options shall meet the requirements
of Section 424(a) of the Code, (ii) upon written notice to the optionees,
provide that all unexercised options will terminate immediately prior to the
consummation of such transaction unless exercised by the optionee within a
specified period following the date of such notice, (iii) in the event of a
merger under the terms of which holders of the Common Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the merger (the "Merger Price"), make or provide for a cash payment to the
optionees equal to the difference between (A) the Merger Price times the number
of shares of Common Stock subject to such outstanding options (to the extent
then exercisable at prices not in excess of the Merger Price) and (B) the
aggregate exercise price of all such outstanding options in exchange for the
termination of such options, or (iv) provide that all or any outstanding options
shall become exercisable in full immediately prior to such event.
(b) Substitute Options. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
17. No Special Employment Rights.
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
<PAGE>9
18. Other Employee Benefits.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
19. Amendment of the Plan.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect, except that if at any time the approval
of the shareholders of the Company is required under Section 422 of the Code or
any successor provision with respect to Incentive Stock Options, or under Rule
16b-3, the Board of Directors may not effect such modification or amendment
without such approval.
(b) The termination or any modification or amendment of the Plan shall
not, without the consent of an optionee, affect his or her rights under an
option previously granted to him or her. With the consent of the optionee
affected, the Board of Directors may amend outstanding option agreements in a
manner not inconsistent with the Plan. The Board of Directors shall have the
right to amend or modify (i) the terms and provisions of the Plan and of any
outstanding Incentive Stock Options granted under the Plan to the extent
necessary to qualify any or all such options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code and (ii) the terms and
provisions of the Plan and of any outstanding option to the extent necessary to
ensure the qualification of the Plan under Rule 16b-3.
20. Withholding.
(a) The Company shall have the right to deduct from payments of any
kind otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a fair
market value equal to such withholding obligation. The fair market value of the
shares used to satisfy such withholding obligation shall be determined by the
Company as of
<PAGE>10
the date that the amount of tax to be withheld is to be determined. An
optionee who has made an election pursuant to this Section 20(a) may only
satisfy his or her withholding obligation with shares of Common Stock which
are not subject to any repurchase, forfeiture, unfulfilled vesting or other
similar requirements.
(b) Notwithstanding the foregoing, in the case of a Reporting Person,
no election to use shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3.
21. Cancellation and New Grant of Options, Etc.
The Board of Directors shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
22. Effective Date and Duration of the Plan.
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, no options
previously granted under the Plan shall be deemed to be Incentive Stock Options
and no Incentive Stock Options shall be granted thereafter. Amendments to the
Plan not requiring shareholder approval shall become effective when adopted by
the Board of Directors; amendments requiring shareholder approval (as provided
in Section 19) shall become effective when adopted by the Board of Directors,
but no Incentive Stock Option granted after the date of such amendment shall
become exercisable (to the extent that such amendment to the Plan was required
to enable the Company to grant such Incentive Stock Option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Company to
grant such option to a particular optionee. Subject to this limitation, options
may be granted under the Plan at any
<PAGE>11
time after the effective date and before the date fixed for termination of the
Plan.
(b) Termination. Unless sooner terminated in accordance with Section
16, the Plan shall terminate, with respect to Incentive Stock Options, upon the
earlier of (i) the close of business on the day next preceding the tenth
anniversary of the date of its adoption by the Board of Directors, or (ii) the
date on which all shares available for issuance under the Plan shall have been
issued pursuant to the exercise or cancellation of options granted under the
Plan. Unless sooner terminated in accordance with Section 16, the Plan shall
terminate with respect to options which are not Incentive Stock Options on the
date specified in (ii) above. If the date of termination is determined under (i)
above, then options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options.
23. Provision for Foreign Participants.
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.
Adopted by the Board of
Directors on October 14, 1991.
