Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MARTIN COLOR-FI, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0879569
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
306 Main Street, Edgefield, South Carolina 29824
(Address of principal executive offices and zip code)
MARTIN COLOR-FI, INC.
1994 INCENTIVE STOCK OPTION
AND STOCK APPRECIATION RIGHTS PLAN
(Full title of Plan)
Gregory W. Anderson, Esquire Copies to:
Corporate Counsel George S. King, Jr., Esquire
Martin Color-Fi, Inc. Suzanne Hulst Clawson, Esquire
306 Main Street Sinkler & Boyd, P.A.
Edgefield, South Carolina 29824 1426 Main Street, Suite 1200
(Name and address of agent for service) Columbia, South Carolina 29201
(803) 637-7000 (803) 779-3080
(Telephone number, including area code,
of agent for service)
<TABLE>
<CAPTION>
Calculation of Registration Fee
- --------------------------------------------------------------------------------------------------------------------------------
Proposed
Proposed maximum
Title of securities Amount to be maximum offering aggregate offering Amount of
to be registered registered(1) price per share(2) price(2) registration fee
- --------------------------------------------------------------------------------------------------------------------------------
Common Stock,
<S> <C> <C> <C> <C>
no par value 294,835 shares $7.25 $2,137,553.70 $737.09
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This registration statement also covers such indeterminable number of
additional shares as may become issuable to prevent dilution in the event
of stock splits, stock dividends or similar transactions pursuant to the
terms of the Plan.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low per share prices reported by the NASDAQ on
October 24, 1996.
Exhibit Index on page 6
<PAGE>
PART I
Information Required in the Section 10(a) Prospectus
The documents containing the information specified in Part I of Form
S-8 will be sent or given to employees of the Registrant eligible to participate
in the 1994 Stock Option Plan as required by Rule 428(b)(1) promulgated under
the Securities Act of 1933.
PART II
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference herein the following
documents:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995 (File No. 0-17565).
(b) The Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996.
(c) The description of the Registrant's common stock contained in
the Registrant's Form 8-A, declared effective on April 28,
1993, including any amendment or report filed for the purpose
of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment that indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Under the South Carolina Business Corporation Act of 1988 (the
"Corporation Act"), a corporation has the power to indemnify directors and
officers who meet the standards of good faith and reasonable belief that conduct
was lawful and in the corporate interest (or not opposed thereto) set forth in
the Corporation Act. The Corporation Act also empowers a corporation to provide
insurance for directors and officers against liability arising out of their
positions even though the insurance coverage is broader than the power of the
corporation to indemnify. Under the Corporation Act, unless limited by its
articles of incorporation, a corporation must indemnify a director or officer
who is wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party because he is or was a director or officer
against reasonable expenses incurred by him in connection with the proceeding.
The Registrant's Articles of Incorporation do not provide otherwise. The
provisions of the Corporation Act which deal with indemnification are codified
at Sections 33-8-500 through -580 of the Code of Laws of South Carolina 1976, as
amended.
In addition, the Company maintains directors' and officers' liability
insurance for the benefit of its directors and officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
2
<PAGE>
4.1 Martin Color-Fi, Inc. 1994 Incentive Stock Option and Stock
Appreciation Rights Plan.
4.2 Restated Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 of the Registrant's
Registration Statement on Form S-1 filed March 4, 1993, as
amended, Registration No. 33-59124 (the "S-1 Registration
Statement")).
4.3 First Amendment to Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.2 of the
S-1 Registration Statement).
4.4 Amended and Restated Bylaws of the Registrant (incorporated by
reference to Exhibit 3.3 of the S-1 Registration Statement).
4.5 First Amendment to Amended and Restated Bylaws of the
Registrant (incorporated by reference to Exhibit 4.5 to the
Registrant's Form 10-Q for the quarter ended June 30, 1994).
5 Opinion of Sinkler & Boyd, P.A.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Sinkler & Boyd, P.A. (included in Exhibit 5).
24 Power of Attorney
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
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 a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective 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 (1)(i) and (1)(ii) of this
undertaking do not apply if the registration statement is on Form S-3, S-8 or
Form F-3 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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
<PAGE>
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Act and will
be governed by the final adjudication of such issue.
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Edgefield, State of South Carolina on October 18,
1996.
MARTIN COLOR-FI, INC.
By: s/James F. Martin
James F. Martin
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following person in the capacities
indicated on October 18, 1996.
By: s/Bret J. Harris
Bret J. Harris
Chief Financial Officer
(Principal Accounting and Financial Officer)
4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on October 18, 1996.
s/James F. Martin Chairman of the Board and Chief Executive
James F. Martin Officer
s/Henry M. Poston President, Chief Operating Officer and Director
Henry M. Poston
President, Carpet Division and Director
Russell T. Lyon
s/Gregory W. Anderson Corporate Counsel and Director
Gregory W. Anderson
Director
W. Fred Davis, Jr.
Director
James C. Hite
Director
Jack J. Jackson
s/George L. Rainsford Director
George L. Rainsford
s/Bettis C. Rainsford Director
Bettis C. Rainsford
5
<PAGE>
EXHIBIT INDEX
EXHIBIT
4.1 Martin Color-Fi, Inc. 1994 Incentive Stock Option and Stock
Appreciation Rights Plan.
4.2 Restated Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 of the Registrant's
Registration Statement on Form S-1 filed March 4, 1993, as
amended, Registration No. 33-59124 (the "S-1 Registration
Statement")).
4.3 First Amendment to Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.2 of the
S-1 Registration Statement).
4.4 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 3.3 of the S-1 Registration
Statement).
4.5 First Amendment to Amended and Restated Bylaws of the
Registrant (incorporated by reference to Exhibit 4.5 to the
Registrant's Form 10-Q for the quarter ended June 30, 1994).
5 Opinion of Sinkler & Boyd, P.A.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Sinkler & Boyd, P.A.
(included in Exhibit 5)
24 Power of Attorney
6
MARTIN COLOR-FI, INC.
1994 INCENTIVE STOCK OPTION AND
STOCK APPRECIATION RIGHTS PLAN
Section 1. Purpose.
The purpose of the 1994 Martin Color-Fi, Inc. Incentive Stock Option
and Stock Appreciation Rights Plan (the "Plan") are: (i) to provide incentives
to officers and other key employees of the Company upon whose judgment,
initiative, and efforts the long-term growth and success of the Company is
largely dependent; (ii) to assist the Company in attracting and retaining key
employees of proven ability; and (iii) to increase the identity of interests of
such key employees with those of the Company's shareholders by providing such
employees options to acquire Shares of the Company.
Section 2. Definitions.
a. "Board" means the Board of Directors of the Company.
b. "Company" means Martin Color-Fi, Inc. When used in the Plan with
reference to employment, "Company" shall include any subsidiary of the Company.
c. "Committee" means the committee referred to in Section 3 hereof.
d. "Fair Market Value" means the mean of the closing bid and asked
quotations in the over-the-counter market on the date and value of a Share is to
be determined, as reported by the National Association of Securities Dealers,
Inc. through NASDAQ; or, in the event the Shares are listed on any exchange, the
last sale price on such exchange on the date the value of a Share is to be
determined, or, if there are no sales on such date, the mean of the bid and
asked price for Shares on such exchange at the close of business on such date;
or, in the event, on the date the value of a Share is to be determined, the
Shares of the Company are not publicly traded, the Committee shall determined
the Fair Market Value of such Shares, in good faith, by appraisal and/or other
appropriate methods of valuation.
e. "Incentive Stock Option" means an option granted under the Plan
which qualifies as an incentive stock option under Section 422 of the Internal
Revenue Code 1986, as amended (the "Code").
f. "Nonqualified Option" means an option granted under the Plan which
by its terms does not qualify as an Incentive Stock Option.
g. "Share" or "Shares" means shares of the Common Stock, without par
value, of the Company.
<PAGE>
h. "Stock Appreciation Right" means a right to receive compensation in
the event the stock price increases beyond a set price.
i. "Stock Option" means an Incentive Stock Option or a Nonqualified
Option as the case may be.
j. "Subsidiary" means any company fifty (50%) percent or more of the
voting stock of which is owned or controlled, directly or, indirectly, by the
Company.
k. "Tender Offer" means a tender offer or request or invitation for
tenders subject to regulation under Section 14(d) of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, as the same may
be amended, modified, or superseded from time to time.
Section 3. Administration and Amendment.
a. Administration. The Plan shall be administered by a Committee of the
Board, consisting of three (3) or more Directors, who shall from time to time be
appointed by, and serve at the pleasure of, the Board. Each member of the
Committee shall be a disinterested person as defined by the General Rules and
Regulations under the Securities Exchange Act of 1934, as now or hereafter in
effect. No director shall serve as a member of the Committee if he, within one
(1) year prior to his appointment, was granted Stock Options or Stock
Appreciation Rights under the Plan or under any other discretionary plan of the
Company under which participants may receive stock or Stock Options. No member
of the Committee is eligible to participate in the Plan.
The Committee shall, in its sole discretion (i) determine the persons
to whom, and the time at which, Stock Options shall be granted, (ii) the number
of Shares to be subject to each Stock Option, (iii) the option price per Share,
and (iv) the term of each Stock Option, or Stock Appreciation Right, and (v) the
number of Stock Appreciation Rights. The Committee shall also interpret the
Plan, prescribe, amend, and rescind rules and regulations relating to the Plan,
and make all other determinations necessary or advisable for the administration
of the Plan, and such determinations shall be conclusive. The acts, at a
meeting, of a majority of the members of the Committee, or acts reduced to or
approved in writing by all members of the Committee, shall be acts of the
Committee.
b. Amendment. The Plan and Stock Options and/or Stock Appreciation
Rights granted under the Plan may be amended, modified, or terminated by the
Committee, provided that:
i. No action with respect to an outstanding Stock Option
or Stock Appreciation Right may be taken
2
<PAGE>
that would adversely affect the rights of the holder
of such Stock Option or Stock Appreciation Right
without such holder's consent; and
ii. No amendment to the Plan shall become effective
without approval by the holders of a majority of all
of the outstanding Shares of voting stock of the
Company at an annual or special stockholders meeting
if such amendment would:
(1) increase the number of Shares as to which
Stock Options or Stock Appreciation Rights
may be granted under the Plan, except as
provided for in Section 4(b); or
(2) extend the term of the Plan;
(3) change the minimum purchase or exercise
price for the Stock Optioned Shares or Stock
Appreciation Rights, respectively, except as
provided in Section 4(b); or
(4) extend the Stock Option or Stock
Appreciation Right period provided in
Sections 6(c), 7(b), or make a Stock Option
or Stock Appreciation Right exercisable
earlier than specified in Sections 6(c)(iii)
or 7(b).
Section 4. Option Shares and Appreciation Rights.
a. Number. The maximum number of Shares that may be issued upon
exercise of Stock Options granted under the Plan is Three Hundred Thousand
(300,000) Shares of the no par value Common Stock of the Company.
The maximum number of Stock Appreciation Rights that may be granted in
tandem with Stock Options is Three Hundred Thousand (300,000).
b. Adjustments. The Committee shall appropriately adjust the number of
Shares subject to the Plan and the number and Stock Option price of Shares
subject to outstanding Stock Options or Stock Appreciation Rights in the event
of any change in outstanding Shares by reason of a share dividend,
recapitalization, merger, consolidation, split-up, combination, or exchange of
shares or other similar corporate change. The granting of a Stock Option or
Stock Appreciation Right pursuant to this Plan shall not affect in any way the
right or power of the Company to make adjustments, reorganizations,
reclassifications, or changes of its capital or business structure or to merge,
consolidate, dissolve, liquidate, or sell or transfer all or any part of its
business or assets.
3
<PAGE>
c. Unexercised Stock Options or Stock Appreciation Rights. Shares
subject to unexercised Stock Options or Stock Appreciation Rights which expire
or terminate shall thereupon become available for the grant of additional Stock
Options or Stock Appreciation Rights to the same employee or other employees
without decreasing the aggregate number of Stock Option Shares and/or Stock
Appreciation Rights which may be granted under the Plan; or shall be available
for any lawful corporate purpose, provided, however, any Shares covered by a
Stock Option to which Stock Option rights have terminated by reason of the
exercise of Stock Appreciation Rights, as provided in Section 7, shall not be
available for the grant of Stock Options under the Plan.
Section 5. Eligible Employees.
Stock Option and/or Stock Appreciation Rights may be granted by the
Committee to officers, directors, and other key employees of the Company. A
Director who is not employed by the Company is not eligible to participate in
the Plan. The fact that an employee has been granted a Stock Option and/or a
Stock Appreciation Right under this Plan shall not in any way affect or qualify
the right of the employer to terminate his employment at any time. Nothing
contained in this Plan shall be construed to limit the right of the Company to
grant Stock Options or Stock Appreciation Rights otherwise than under the Plan
for any proper and lawful purpose, including, but not limited to, Stock Options
or Stock Appreciation Rights granted to key employees. Key employees to whom
Stock Options and/or Stock Appreciation Rights may be granted under the Plan
will be those selected by the Committee who, in the sole discretion of the
Committee, have contributed in the past or who may be expected to contribute
materially in the future to the successful performance of the Company.
Section 6. Options and Option Terms.
a. Designation of Options. Stock Options granted under the Plan are
intended to qualify as Incentive Stock Options. The Committee may, however, in
particular instances, grant Stock Options under the Plan which would not qualify
as Incentive Stock Options.
b. Options. The terms of each Stock Option shall be set forth in a
written Stock Option Agreement approved by the Committee, or a Stock Option or
Stock Appreciation Right Agreement approved by the Committee.
c. Terms of All Stock Options. The following terms and provisions shall
apply to all Stock Options granted under the Plan:
i. No Stock Option may be granted under the Plan at an
exercise price per Share which is less than the Fair
Market Value of a Share on the date of grant.
4
<PAGE>
ii. No Stock Option may be exercised more than ten (10)
years after the date of grant.
iii. No Stock Option shall be exercisable either in whole or
in part within six (6) months after the date on which
it is granted. Thereafter, a Stock Option may be
exercised with respect to all Shares subject to the
Stock Option or may be exercised with respect to a
specified number of Shares over a specified period or
periods as determined by the Committee, in its
discretion, at the time a Stock Option is granted.
iv. Except as provided in Section 6(c)(v) and Section
6(c)(vi), a Stock Option may be exercised only if the
optionee has been continuously employed by the Company
since the date of grant of the Stock Option. Whether
authorized leave of absence or absence for military or
governmental service shall constitute a termination of
employment shall be determined by the Committee.
v. In the event the optionee shall cease to be employed by
the Company for any reason (including retirement) other
than disability or death, the grant of any Stock Option
and Stock Appreciation Rights shall immediately be
forfeited and cancelled.
vi. In the event the optionee shall die or become disabled
(as defined in Section 22(e)(3) of the Code) while
employed by the Company, the Stock Option of such
deceased or disabled optionee may, subject to the ten
year (10) year limitation in Sub-Section 6(c)(ii), be
exercised within one (1) year from the date of the
optionee's death or disability, to the extent the
optionee was entitled to exercise such Stock Option on
the date of his disability, death, by the person or
persons (including the optionee's estate) to whom his
rights under such Stock Option shall have passed by
will or by the laws of descent and distribution or by
his legal representative if the optionee is disabled.
d. Additional Provisions Relating to Incentive Stock Options. The
following additional terms and provisions shall apply to Incentive Stock Options
granted under the Plan:
i. No Incentive Stock Option shall be granted to an
employee who possesses, directly or indirectly (within
the meaning of Section 424(d) of the Code),
5
<PAGE>
at the time of grant, more than ten percent (10%) of
the voting power of all classes of stock of the
Company, unless the exercise price per Share is at
least equal to one hundred ten percent (110%) of the
Fair Market Value of the Shares subject to the Stock
Option on the date the Stock Option is granted and the
Stock Option is not exercisable after the expiration of
five (5) years from the date of grant.
ii. If, during any calendar year, Incentive Stock Options
first become exercisable by an individual for stock
having an aggregate fair market value in excess of
$100,000 (determined as of the date the related Stock
Option was granted), the Stock Options covering the
Shares exceeding $100,000 will be treated as
nonqualified stock options. Stock Options covering
Shares up to $100,000 in value will continue to qualify
as Incentive Stock Options.
iii. For the Stock Option to be taxed as an Incentive Stock
Option, the Shares received from the exercise of the
option must not be disposed of before the later of one
(1) year after the date of transfer or two (2) years
after the date of grant.
e. Procedure for Exercise and Payment.
A Stock Option granted under the Plan may be exercised by the optionee by
giving written notice of exercise to the Committee (or the designee of the
Committee) of the Company. (See Section 12 for proper notice procedure.) The
exercise price for the Shares purchased shall be paid in full at the time such
notice is given. A Stock Option shall be deemed exercised on the date the
Company receives written notice of exercise, together with full payment of the
Shares purchased. The exercise price may be paid to the Company either in cash,
by check, by delivery to the Company of Shares already-owned by the optionee, or
by any combination thereof. The Committee may, however, at any time and in its
discretion, adopt guidelines limiting or restricting the use of already-owned
Shares to pay all or any portion of the exercise price. In the event
already-owned Shares are used to pay for a portion of the exercise price, the
amount credited to payment of the exercise price shall be the Fair Market Value
of the already-owned Shares on the date the Stock Option is exercised. In no
case may a Stock Option be exercised for a fraction of a Share.
Section 7. Stock Appreciation Rights.
(a) A Stock Appreciation Right may be granted in tandem with any Stock
Option granted under this Plan.
6
<PAGE>
i. Stock Appreciation Right as used in this Plan means a
right of an optionee to surrender his right to purchase
all or any portion of the Shares subject to his Stock
Option issued in tandem with the Stock Appreciation
Right ("Unpurchased Shares") and to receive from the
Company, without payment to the Company, cash equal to
the excess of the aggregate Fair Market Value of the
Unpurchased Shares on the date the right is exercised
over the aggregate Stock Option price of the
Unpurchased Shares.
ii. The exercise of a Stock Option right shall cause a
correlative reduction in Stock Appreciation Rights held
by a participant, and the exercise of a Stock
Appreciation Right will cause a correlative
cancellation of Stock Option rights.
iii. The grant of a Stock Appreciation Right shall be
evidenced by an agreement in such form, and containing
such terms as are not inconsistent with this Plan, as
the Committee shall from time to time determine.
a. Exercise of Stock Appreciation Right. A Stock Appreciation Right
shall not be exercisable during the first six (6) months after it is granted.
Thereafter, a Stock Appreciation Right may be exercised as follows:
i. to the extent the related Stock Option is exercisable,
during the period beginning on the third business day
following the date the Company releases for publication
its latest quarterly or latest annual summary of its
sales and earnings and ending on the twelfth business
day following such date; or
ii. with respect to any or all Shares subject to the
related Stock Option, during the thirty (30) day period
commencing on the date an offeror first acquires shares
pursuant to a Tender Offer and ending at the close of
business on the thirtieth day following such date.
In addition, a Stock Appreciation Right may only be exercised on a date or
dates on which the Fair Market Value of a Share exceeds the Stock Option price
per Share applicable to the related Stock Option.
b. Cancellation. The right of an optionee to exercise a Stock Appreciation
Right shall be canceled if and to the extent the related Stock Option is
exercised. The right of an optionee to exercise a Stock Option shall be canceled
if and to the extent that
7
<PAGE>
Shares covered by such Stock Option are used to calculate cash received upon the
exercise of a related Stock Appreciation Right.
c. Procedure for Exercise. An optionee shall exercise a Stock Appreciation
Right by giving written notice of such exercise, specifying the number of Shares
as to which the right is exercised, to the Committee. Provided the exercise is
valid and in accordance with the terms of the Plan, the Company shall after a
reasonable time after the receipt of a notice, pay to optionee the cash to which
he is entitled. (See Section 12 for proper notice procedures).
Section 8. Cash Payment in Lieu of Exercise of Stock Option.
In the event of a Tender Offer, the Committee shall have the authority, in
its sole discretion, to authorize the payment (subject to the acquisition of
Shares by the offeror pursuant to a Tender Offer) to a holder of a Stock Option
granted under the Plan, in exchange for the cancellation of all or a part of
such holder's Stock Option, of cash in an amount not to exceed the excess of the
aggregate fair market value on the date of such cancellation (or, if higher, the
highest price paid for Shares pursuant to any Tender Offer for Shares which was
in effect at any time during the period between the commencement date of the
Tender Offer and the date of cancellation of the Stock Option) of the Shares
with respect which the Stock Option is being canceled over the aggregate option
price of such Shares.
Section 9. Non-Transferability.
Stock Options or Stock Appreciation Rights granted hereunder may not be
sold, pledged, assigned, hypothecated, or transferred except by will or the laws
of descent and distribution and may be exercised during the lifetime of the
optionee only by such optionee. The Stock Appreciation Rights are only
transferrable when and under the same circumstances the underlying Stock Option
is transferred.
Section 10. Conditions of Employment.
The granting of a Stock Option or Stock Appreciation Right under this Plan
shall impose no obligation on the Company or on any of its subsidiary
corporations to continue the employment of any participant, and shall not lessen
or affect the right to terminate such employment of the participant.
Participation under this Plan shall not affect eligibility for any profit
sharing, bonus, insurance, pension, or other extra-compensation plan which the
Company or its subsidiary corporations have previously adopted or may at any
time adopt for employees.
8
<PAGE>
Section 11. Conditions Upon Granting of Stock Options and Issuance
of Certificates.
No Stock Option shall be granted and Shares shall not be issued upon the
exercise of a Stock Option unless the grant of a Stock Option, the exercise of
such Stock Option, and the issuance and delivery of the Shares pursuant thereto
shall comply with all relevant provisions of federal and state law, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed. No optionee shall be deemed a stockholder of the Company for any
purpose until he or she has properly exercised, at least in part, his or her
Stock Option, and until a Share certificate has been issued to such optionee by
the Company.
Section 12. Notices.
Whenever a Stock Option is granted under this Plan in respect of Stock
Option Shares, such Shares may be purchased by written notice of election prior
to the expiration of the Stock Option. Likewise, written notice is required to
exercise Stock Appreciation Rights. The notice to exercise Stock Options should
state the number of Shares with respect to which the Stock Option is being
exercised. The exercise notice for Stock Appreciation Rights shall state number
of rights desired to be exercised and desired method of payment. Each notice
relating to this Plan shall be in writing and delivered in person or sent by
certified or registered mail to the proper address. Each notice shall be deemed
to have been given on the date it is delivered (in the case of personal
delivery) or mailed. Each notice to the Company shall be addressed as follows:
Martin Color-Fi, Inc., P. O. Box 469, Edgefield, South Carolina 29824,
Attention: Stock Option Committee.
Each notice to the optionee or other person or persons then entitled to
exercise a Stock Option or Stock Appreciation Right shall be addressed to the
optionee or such other person or persons at the optionee's address set forth in
the Stock Option. Anyone to whom a notice may be given under this Plan may
designate a new address by written notice to the other party to that effect.
Section 13. Pronouns.
All pronouns used herein shall be deemed to refer to the masculine,
feminine, singular or plural, as the identity of the person or persons may
require.
9
<PAGE>
Section 14. Expiration.
The Plan shall expire ten (10) years after the date it is approved by the
shareholders of the Company, unless sooner terminated pursuant to this Plan.
Section 15. Liquidation.
Upon the complete liquidation of the Company, any unexercised Stock Options
or Stock Appreciation Rights previously granted under this Plan shall be deemed
canceled, except as otherwise provided in paragraph 4(b) above on the occasion
of a merger or consolidation. In the event of the complete liquidation of a
subsidiary corporation, or in the event that such corporation ceases to be a
subsidiary corporation as that term is defined in paragraph 1 above, any
unexercised Stock Options or Stock Appreciation Rights previously granted to
participants employed by such corporation shall be deemed canceled unless such
participants shall become employed by the Company or by any other subsidiary
corporation on the occurrence of any such event.
10
Sinkler & Boyd, P.A.
Attorneys at Law
The Palmetto Center
1426 Main Street, Suite 1200
Columbia, South Carolina 29201
(803) 779-3080
October 28, 1996
Martin Color-Fi, Inc.
306 Main Street
Edgefield, South Carolina 29824
Gentlemen:
In connection with the registration under the Securities Act of 1933
(the "Act") of 294,835 shares of the common stock (the "Common Stock") of Martin
Color-Fi, Inc., a South Carolina corporation (the "Company"), for issuance
pursuant to the Martin Color-Fi, Inc. 1994 Incentive Stock Option and Stock
Option Appreciation Rights Plan, we have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination it is our opinion that the Common
Stock, when issued upon the terms and conditions set forth in the Registration
Statement filed by the Company in connection with the registration of the Common
Stock, and upon receipt of the consideration therefor, will be legally issued,
fully paid and nonassessable.
We consent to be named in the Registration Statement as attorneys who
will pass upon certain legal matters in connection with the offering described
in the Registration Statement, and to the filing of a copy of this opinion as an
exhibit to the Registration Statement. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
Sinkler & Boyd, P.A.
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 filed October 29, 1996) pertaining to the 1994 Incentive Stock Option
and Stock Appreciation Rights Plan of Martin Color-Fi, Inc., of our report dated
February 20, 1996, with respect to the consolidated financial statements and
schedule of Martin Color-Fi, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1995, filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Greenville, South Carolina
October 28, 1996
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James F. Martin and Bret J. Harris,
jointly and severally, his true and lawful attorneys-in-fact and agents, 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 documentation in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Signature Title Date
s/James F. Martin President, Chief Executive Officer October 18, 1996
James F. Martin and Chairman of the Board of
Directors
s/Henry M. Poston Executive Vice President, Chief October 18, 1996
Henry M. Poston Operating Officer and Director
Vice President and Director October __, 1996
Russell T. Lyon
Director October __, 1996
Jack J. Jackson
s/Gregory W. Anderson Director October 18, 1996
Gregory W. Anderson
Director October __, 1996
James C. Hite
Director October __, 1996
W. Fred Davis, Jr.
s/George L. Rainsford Director October 18, 1996
George L. Rainsford
s/Bettis C. Rainsford Director October 18, 1996
Bettis C. Rainsford
