As filed with the Securities and Exchange Commission on June 26, 1998.
Registration No. ________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
BERG ELECTRONICS CORP.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 75-2451903
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
James N. Mills
101 South Hanley Road
101 South Hanley Road St. Louis, Missouri 63105
St. Louis, Missouri 63105 (314) 726-1323
(Address, Including Zip Code, of (Name, Address, Including Zip Code,
Registrant's Principal and Telephone Number, Including
Executive Offices) Area Code, of Agent for Service)
Berg Electronics Corp. 1998 Incentive Compensation Plan
(Full Title of the Plan)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered (1) Registered (1) Per Share (2) Offering Price (2) Registration Fee
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 Par Value 977,713 Shares $20.50 $20,043,116.50 $5,912.72
===================================================================================================
<FN>
(1) Shares of common stock, $.01 par value per share ("Common Stock"), of Berg
Electronics Corp. (the "Company") being registered hereby relate to the
Company's 1998 Incentive Compensation Plan. Pursuant to Rule 416(a)
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), there is also being registered an indeterminate amount of
additional shares of Common Stock as may become issuable as a result of
stock splits, stock dividends or similar transactions.
(2) In accordance with sections (c) and (h)(1) of Rule 457 promulgated under
the Securities Act, calculated on the basis of the average of the high and
low prices of the Common Stock as reported on the New York Stock Exchange
on June 24, 1998.
</FN>
</TABLE>
1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in this Registration
Statement:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1997;
(b) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the end of the fiscal year covered by the Annual Report on Form 10-K
referred to in (a) above; and
(c) The description of the Company's Common Stock, which is contained in
the Company's Registration Statement on Form 8-A (File No. 1-14080) filed under
Section 12(b) of the Exchange Act on November 9, 1995, including any amendments
or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment to this Registration Statement that indicates that all of the shares
of Common Stock offered have been sold or which deregisters all of such shares
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. Any statement incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
II-1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company is incorporated in Delaware. Under Section 145 of the General
Corporation Law of the State of Delaware, a Delaware corporation has the power,
under specified circumstances and subject to certain limitations, to indemnify
its directors, officers, employees and agents in connection with actions, suits
or proceedings brought against them by a third party or in the right of the
corporation, by reason of the fact that they were or are such directors,
officers, employees or agents, against liabilities and expenses incurred in any
such action, suit, or proceeding. Article Tenth of the Certificate of
Incorporation of the Company provides for mandatory indemnification of directors
and officers to the fullest extent permitted by the General Corporation Law of
the State of Delaware.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person thereof 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 pursuant to this Registration Statement, the Company will, unless in
the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
3.1 Certificate of Incorporation of Berg Electronics Corp. (f/k/a Berg
Electronics Group, Inc.; f/k/a Berg Electronics Holdings Corp.; f/k/a Berg
CS Holdings, Inc.), together with amendments thereto. (Filed previously as
an exhibit to the Company's Registration Statement on Form S-1 (File No.
33-98240), and incorporated by reference herein.)
II-2
<PAGE>
3.2 Certificate of Amendment to Certificate of Incorporation, dated February
29, 1996, of Berg Electronics Corp. (Filed previously as an exhibit to the
Company's Form 10-K for the year ended December 31, 1995, and incorporated
by reference herein.)
3.3 Certificate of Amendment to Amended Certificate of Incorporation, dated May
28, 1998, of Berg Electronics Corp.*
3.4 Amended and Restated Bylaws of Berg Electronics Corp. (Filed previously as
an exhibit to the Company's Registration Statement on Form S-1 (File No.
33-98240), and incorporated by reference herein.)
4.1 Certificate of Designations, Preferences and Rights of Series A Junior
Preferred Stock of Berg Electronics Corp. (Filed previously as an exhibit
to the Company's Form 10-K for the year ended December 31, 1997, and
incorporated by reference herein.)
4.2 1998 Incentive Compensation Plan.*
5 Opinion of Weil, Gotshal & Manges LLP.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5).
24 Power of Attorney (see pages II-5 and II-6 of this Registration Statement).
- --------------------
* Filed herewith.
Item 9. Undertakings.
(a) The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement
to include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
(2) 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
II-3
<PAGE>
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act that is incorporated by
reference in this 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.
(c) See Item 6.
[The remainder of this page is intentionally left blank.]
II-4
<PAGE>
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 Clayton, State of Missouri, on this 26th day of
June, 1998.
BERG ELECTRONICS CORP.
By: /s/ David M. Sindelar
----------------------------------------
David M. Sindelar
Senior Vice President and
Chief Financial Officer
Each person whose signature to this Registration Statement appears below
hereby appoints David M. Sindelar as his attorney-in-fact to sign on his behalf
individually and in the capacity stated below and to file all post-effective
amendments to this Registration Statement, which amendments may make such
changes in and additions to this Registration Statement as such attorney-in-fact
may deem necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ James N. Mills Chairman of the Board of Directors June 26, 1998
- --------------------------- and Chief Executive Officer
James N. Mills (Principal Executive Officer)
/s/ David M. Sindelar Senior Vice President and Chief June 26, 1998
- --------------------------- Financial Officer (Principal
David M. Sindelar Financial Officer)
/s/ Joseph S. Catanzaro Chief Accounting Officer (Principal June 26, 1998
- --------------------------- Accounting Officer)
Joseph S. Catanzaro
/s/ Timothy L. Conlon Director, President and Chief June 26, 1998
- --------------------------- Operating Officer
Timothy L. Conlon
II-5
<PAGE>
/s/ Thomas O. Hicks Director June 26, 1998
- --------------------------
Thomas O. Hicks
/s/ Charles W. Tate Director June 26, 1998
- --------------------------
Charles W. Tate
/s/ Richard W. Vieser Director June 26, 1998
- --------------------------
Richard W. Vieser
/s/ Kenneth F. Yontz Director June 26, 1998
- --------------------------
Kenneth F. Yontz
</TABLE>
II-6
<PAGE>
Exhibit Index
Exhibit
No. Description
------- -----------
3.1 Certificate of Incorporation of Berg Electronics Corp. (f/k/a Berg
Electronics Group, Inc.; f/k/a Berg Electronics Holdings Corp.; f/k/a
Berg CS Holdings, Inc.), together with amendments thereto. (Filed
previously as an exhibit to the Company's Registration Statement on
Form S-1 (File No. 33-98240), and incorporated by reference herein.)
3.2 Certificate of Amendment to Certificate of Incorporation, dated
February 29, 1996, of Berg Electronics Corp. (Filed previously as an
exhibit to the Berg Electronics Corp. Form 10-K for the year ended
December 31, 1995 and incorporated by reference herein.)
3.3 Certificate of Amendment to Amended Certificate of Incorporation,
dated May 28, 1998, of Berg Electronics Corp.
3.4 Amended and Restated Bylaws of Berg Electronics Corp. (Filed
previously as an exhibit to the Company's Registration Statement on
Form S-1 (File No. 33-98240), and incorporated by reference herein.)
4.1 Certificate of Designations, Preferences and Rights of Series A
Junior Preferred Stock of Berg Electronics Corp. (Filed previously as
an exhibit to the Company's Form 10-K for the year ended December 31,
1997, and incorporated by reference herein.)
4.2 1998 Incentive Compensation Plan.
5 Opinion of Weil, Gotshal & Manges LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5).
24 Power of Attorney (see pages II-5 and II-6 of this Registration
Statement).
EXHIBIT 3.3
CERTIFICATE OF AMENDMENT
TO THE AMENDED
CERTIFICATE OF INCORPORATION
OF BERG ELECTRONICS CORP.
The undersigned, being the Secretary of Berg Electronics Corp., a Delaware
corporation (the "Corporation") does hereby certify:
FIRST: The name of the Corporation is Berg Electronics Corp.
SECOND: The Certificate of Incorporation was filed with the Secretary of
State of the State of Delaware on November 4, 1992.
THIRD: The First Paragraph of Article FOURTH of the Amended Certificate of
Incorporation is hereby amended to read in its entirety as follows:
"FOURTH: The total number of shares of all classes of Capital Stock which
the Corporation shall have authority to issue is 155,500,000 shares consisting
of (a) 28,500,000 shares of a class designated as Preferred Stock, par value
$.01 per share ("Preferred Stock"); (b) 120,000,000 shares of a class designated
as Common Stock, par value $.01 per share ("Common Stock"); and (c) 7,000,000
shares of a class designated as Class A Common Stock, par value $.01 per share
("Class A Common Stock")."
All of the designations and the powers, preferences, rights,
qualifications, limitations, and restrictions of the Preferred Stock, the
Common Stock and the Class A Common Stock set forth in the Amended
Certificate of Incorporation of the Corporation currently existing shall
remain unaltered or modified by this Amendment.
FOURTH: The aforesaid Amendment to the Amended Certificate of Incorporation
was duly adopted in accordance with Section 242 of the General Corporation Law
of the State of Delaware by the Board of Directors. Thereafter, the Stockholders
have approved the Amendment at the Annual Meeting in accordance with the Proxy
Statement sent to all Shareholders prior to such meeting.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed pursuant to Section 103(a)(2) of the General Corporate
Law of the State of Delaware by the undersigned duly authorized officer of the
Corporation as of the 28th day of May, 1998.
BERG ELECTRONICS CORP.
By:
----------------------------------
W. Thomas McGhee, Secretary
1
EXHIBIT 4.2
BERG ELECTRONICS CORP.
1998 INCENTIVE COMPENSATION PLAN
1.0 DEFINITIONS
The following terms shall have the following meanings unless the context
indicates otherwise:
1.1 "Affiliated Person" shall mean an employee of an entity other than the
Company whose activities may benefit the Company and who has been
designated by the Committee to be eligible to participate in the Plan.
1.2 "Award" shall mean either a Stock Option, a SAR, a Stock Award, a Stock
Unit, a Performance Share, a Performance Unit, or a Cash Award.
1.3 "Award Agreement" shall mean a written agreement between the Company and
the Participant that establishes the terms, conditions, restrictions
and/or limitations applicable to an Award in addition to those established
by the Plan and by the Committee's exercise of its administrative powers.
1.4 "Board" shall mean the Board of Directors of the Company.
1.5 "Cash Award" shall mean the grant by the Committee to a Participant of an
Award of cash as described in Section 11 below.
1.6 "Change in Control" shall mean (a) the principals, officers, directors and
employees of HMTF and Mills & Partners and management of the Company
together with their affiliates (the "Control Group") shall cease to own of
record and beneficially an amount of Common Stock equal to at least 25% of
the amount of Common Stock owned by the Control Group of record and
beneficially as of the date on which the Plan is approved by the
stockholders of the Company, (b) any Person or related group (as defined
in Rule 13(d) under the Exchange Act), excluding the Control Group, shall
be or become the "beneficial owner" (as defined in Rules 12(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of a greater
percentage of the outstanding Common Stock than is owned beneficially by
the Control Group, or (c) the Board shall not consist of a majority of
Continuing Directors.
1
<PAGE>
1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
1.8 "Committee" shall mean the Compensation Committee of the Board; provided
that for purposes of determining the performance goals applicable to
Employees who constitute "covered employees" within the meaning of Code
Section 162(m), "Committee" shall mean the members of the Compensation
Committee of the Board who qualify as (x) a "Non-Employee Director" within
the meaning of Rule 16b-3(b)(3) (or any successor rule) under the Exchange
Act and (y) an "outside director" within the meaning of Code Section
162(m), and such performance goals shall be subject to ratification by
unanimous approval of the members of the Compensation Committee of the
Board. In the event the Board fails to establish or maintain a
Compensation Committee of the Board, "Committee" shall mean the Board or
any other committee or subcommittee of the Board appointed by the Board
from among its members.
1.9 "Common Stock" shall mean the common stock, $.01 par value per share, of
the Company.
1.10 "Company" shall mean Berg Electronics Corp., a Delaware corporation.
1.11 "Continuing Directors" shall mean the directors of the Company on the date
on which the Plan is approved by the stockholders of the Company and each
other director, if in each case, such other director's nomination for
election to the Board is recommended by a majority of the then Continuing
Directors or such other director receives the vote of HMTF.
1.12 "Dividend Equivalent Right" shall mean the right to receive an amount
equal to the amount of any dividend paid with respect to a share of Common
Stock multiplied by the number of hypothetical shares of Common Stock
underlying a Stock Unit or a Performance Unit, and which shall be payable
in cash, in Common Stock, in the form of additional Stock Units or
Performance Units (as the case may be) or a combination of all of the
foregoing.
1.13 "Effective Date" shall mean the date on which the Plan is approved by the
Company's stockholders.
1.14 "Employee" shall mean an employee or officer of the Company or any
Subsidiary as described in Treasury Regulation Section 1.421-7(h).
1.15 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, including applicable regulations thereunder.
1.16 "Fair Market Value of the Common Stock" shall mean:
2
<PAGE>
(a) if the Common Stock is readily tradeable on a national securities
exchange or other market system, the closing price of the Common
Stock on the date of calculation (or on the last preceding trading
date if Common Stock was not traded on such date), or
(b) if the Common Stock is not readily tradeable on a national
securities exchange or other market system:
(i) the book value of a share of Common Stock as of the last day
of the last completed fiscal quarter preceding the date of
calculation; or
(ii) any other value as otherwise determined in good faith by the
Board.
1.17 "HMTF" shall mean Hicks, Muse, Tate & Furst Incorporated, a Delaware
corporation.
1.18 "Independent Contractor" shall mean a person or an entity that renders
services to the Company, but, if a person, is not an Employee or a
Nonemployee Director.
1.19 "ISO" shall mean an "incentive stock option" as such term is used in Code
Section 422.
1.20 "Mills & Partners" shall mean Mills & Partners, Inc., a Delaware
corporation.
1.21 "Nonemployee Director" shall mean a member of the Board who is not an
Employee.
1.22 "Nonqualified Stock Option" shall mean a Stock Option that does not
qualify as an ISO.
1.23 "Participant" shall mean any Employee, Nonemployee Director, Affiliated
Person or Independent Contractor to whom an Award has been granted by the
Committee under the Plan.
1.24 "Performance-Based Award" shall mean an Award subject to the achievement
of certain performance goal or goals as described in Section 12 below.
1.25 "Performance Share" shall mean the grant by the Committee to a Participant
of an Award as described in Section 10.1 below.
1.26 "Performance Unit" shall mean the grant by the Committee to a Participant
of an Award as described in Section 10.2 below.
3
<PAGE>
1.27 "Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or other
entity of whatever nature.
1.28 "Plan" shall mean the Berg Electronics Corp. 1998 Incentive Compensation
Plan.
1.29 "SAR" shall mean the grant by the Committee to a Participant of a stock
appreciation right as described in Section 8 below.
1.30 "Stock Award" shall mean the grant by the Committee to a Participant of an
Award of Common Stock under Section 9.1 below.
1.31 "Stock Option" shall mean the grant by the Committee to a Participant of
an option to purchase Common Stock under Section 7 below.
1.32 "Stock Unit" shall mean the grant by the Committee to a Participant of an
Award as described in Section 9.2 below.
1.33 "Subsidiary" shall mean a corporation of which the Company directly or
indirectly owns more than 50 percent of the common stock entitled to vote
generally in the election of directors of such corporation or any other
business entity in which the Company directly or indirectly has an
ownership interest of more than 50 percent.
1.34 "Treasury Regulations" shall mean the regulations promulgated under the
Code by the United States Department of the Treasury, as amended from time
to time.
1.35 "Vest" shall mean:
(a) with respect to Stock Options and SARs, when the Stock Option or SAR
(or a portion of such Stock Option or SAR) first becomes exercisable
and remains exercisable subject to the terms and conditions of such
Stock Option or SAR; or
(b) with respect to Awards other than Stock Options and SARs, when the
Participant has an unrestricted right, title and interest to receive
the compensation (whether payable in cash, Common Stock, or a
combination of both) attributable to an Award (or a portion of such
Award) or to otherwise enjoy the benefits underlying such Award,
subject to restrictions and/or limitations no greater than the
restrictions and/or limitations imposed by Sections 14, 17.2, 17.3,
17.4 and 17.7 below.
1.36 "Vesting Date" shall mean the date or dates on which an Award Vests.
4
<PAGE>
2.0 PURPOSE AND TERM OF PLAN
2.1 Purpose. The purpose of the Plan is to motivate certain Employees,
Nonemployee Directors, Affiliated Persons and Independent Contractors to
put forth maximum efforts toward the growth, profitability, and success of
the Company and Subsidiaries by providing incentives to such persons
through cash payments and/or through the ownership and performance of the
Common Stock. In addition, the Plan is intended to provide incentives
which will attract and retain highly qualified individuals as Employees
and Nonemployee Directors and to assist in aligning the interests of such
Employees and Nonemployee Directors with those of the stockholders of the
Company.
2.2 Term. The Plan shall be effective as of the Effective Date. The Plan shall
terminate on the 10th anniversary of the Effective Date (unless sooner
terminated by the Board).
3.0 ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. All Employees, Nonemployee Directors,
Affiliated Persons and Independent Contractors shall be eligible to
participate in the Plan and to receive Awards. Participants shall consist
of such Employees, Nonemployee Directors, Affiliated Persons and
Independent Contractors as the Committee in its sole discretion designates
to receive Awards under the Plan. Designation of a Participant in any year
shall not require the Committee to designate such person or entity to
receive an Award in any other year or, once designated, to receive the
same type or amount of Award as granted to the Participant in any other
year. The Committee shall consider such factors as it deems pertinent in
selecting Participants and in determining the type and amount of their
respective Awards.
4.0 ADMINISTRATION
4.1 Responsibility. The Committee shall have the responsibility, in its sole
discretion, to control, operate, manage and administer the Plan in
accordance with its terms.
4.2 Award Agreement. Each Award granted under the Plan shall be evidenced by
an Award Agreement which shall be signed by the Committee and the
Participant; provided, however, that in the event of any conflict between
a provision of the Plan and any provision of an Award Agreement, the
provision of the Plan shall prevail.
4.3 Authority of the Committee. The Committee shall have all the discretionary
authority that may be necessary or helpful to enable it to discharge its
responsibilities with respect to the Plan, including but not limited to
the following:
(a) to determine eligibility for participation in the Plan;
5
<PAGE>
(b) to determine eligibility for and the type and size of an Award
granted under the Plan;
(c) to supply any omission, correct any defect, or reconcile any
inconsistency in the Plan in such manner and to such extent as it
shall deem appropriate in its sole discretion to carry the same into
effect;
(d) to issue administrative guidelines as an aid to administer the Plan
and make changes in such guidelines as it from time to time deems
proper;
(e) to make rules for carrying out and administering the Plan and make
changes in such rules as it from time to time deems proper;
(f) to the extent permitted under the Plan, grant waivers of Plan terms,
conditions, restrictions and limitations;
(g) to accelerate the Vesting of any Award when such action or actions
would be in the best interest of the Company;
(h) to grant Awards in replacement of Awards previously granted under
the Plan or any other executive compensation plan of the Company;
and
(i) to take any and all other actions it deems necessary or advisable
for the proper operation or administration of the Plan.
4.4 Action by the Committee. The Committee may act only by a majority of its
members. Any determination of the Committee may be made, without a
meeting, by a writing or writings signed by all of the members of the
Committee. In addition, the Committee may authorize any one or more of its
members to execute and deliver documents on behalf of the Committee.
4.5 Delegation of Authority. The Committee may delegate to one or more of its
members, or to one or more agents, such administrative duties as it may
deem advisable; provided, however, that any such delegation shall be in
writing. In addition, the Committee, or any person to whom it has
delegated duties under this Section 4.5, may employ one or more persons to
render advice with respect to any responsibility the Committee or such
person may have under the Plan. The Committee may employ such legal or
other counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion or computation
received from any such counsel, consultant or agent. Expenses incurred by
the Committee in the engagement of such counsel, consultant or agent shall
be paid by the Company, or the Subsidiary whose employees have benefitted
from the Plan, as determined by the Committee.
6
<PAGE>
4.6 Determinations and Interpretations by the Committee. All determinations
and interpretations made by the Committee shall be binding and conclusive
on all Participants and their heirs, successors and legal representatives.
4.7 Liability. No member of the Board, no member of the Committee and no
employee of the Company shall be liable for any act or failure to act
hereunder, except in circumstances involving his or her bad faith, gross
negligence or willful misconduct, or for any act or failure to act
hereunder by any other member or employee or by any agent to whom duties
in connection with the administration of the Plan have been delegated.
4.8 Indemnification. The Company shall indemnify members of the Committee and
any agent of the Committee who is an employee of the Company against any
and all liabilities or expenses to which they may be subjected by reason
of any act or failure to act with respect to their duties on behalf of the
Plan, except in circumstances involving such person's bad faith, gross
negligence or willful misconduct.
5.0 SHARES SUBJECT TO PLAN
5.1 Available Shares. The aggregate number of shares of Common Stock which
shall be available for grants of Awards under the Plan during its term
shall be 977,713, which number represents the number of shares of Common
Stock available for grants as of the Effective Date under the Company's
1993 Stock Option Plan (the "1993 Plan"), plus not more than 1,424,377
shares of Common Stock underlying Awards which have been granted under the
1993 Plan and which terminate after the Effective Date by expiration,
forfeiture, cancellation or otherwise without the issuance of such shares
under the 1993 Plan. On or about the Effective Date, the Board shall amend
the 1993 Plan so that, except for grants of stock options approved by the
Committee on December 18, 1997 (the "December Grants"), no further grants
shall be made under the 1993 Plan and all available shares under the 1993
Plan as of the Effective Date (after taking into consideration the
December Grants) shall be transferred to the Plan. Shares of Common Stock
available for issuance under the Plan may be either authorized but
unissued shares, shares of issued stock held in the Company's treasury, or
both, at the discretion of the Company, and subject to any adjustments
made in accordance with Section 5.2 below. Any shares of Common Stock
underlying Awards which terminate by expiration, forfeiture, cancellation
or otherwise without the issuance of such shares shall again be available
for grants of Awards under the Plan.
5.2 Adjustment to Shares. If there is any change in the Common Stock of the
Company, through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, dividend in kind or
other like change in capital structure or distribution (other than normal
cash dividends) to stockholders of the Company, an adjustment shall be
made
7
<PAGE>
to each outstanding Award so that each such Award shall thereafter be with
respect to or exercisable for such securities, cash and/or other property
as would have been received in respect of the Common Stock subject to such
Award had such Award been paid, distributed or exercised in full
immediately prior to such change or distribution. Such adjustment shall be
made successively each time any such change shall occur. In addition, in
the event of any such change or distribution, in order to prevent dilution
or enlargement of Participants' rights under the Plan, the Committee shall
have the authority to adjust, in an equitable manner, the number and kind
of shares that may be issued under the Plan, the number and kind of shares
subject to outstanding Awards, the exercise price applicable to
outstanding Stock Options and SARs, and the Fair Market Value of the
Common Stock and other value determinations applicable to outstanding
Awards. Appropriate adjustments may also be made by the Committee in the
terms of any Awards granted under the Plan to reflect such changes or
distributions and to modify any other terms of outstanding Awards on an
equitable basis, including modifications of performance goals and changes
in the length of performance periods; provided, however, that with respect
to Performance-Based Awards, such modifications and/or changes do not
disqualify compensation attributable to such Awards as "performance-based
compensation" under Code Section 162(m). In addition, the Committee is
authorized to make adjustments to the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring
events affecting the Company or the financial statements of the Company,
or in response to changes in applicable laws, regulations, or accounting
principles; provided, however, that with respect to Performance-Based
Awards, such modifications and/or changes do not disqualify compensation
attributable to such Awards as "performance-based compensation" under Code
Section 162(m). Notwithstanding anything contained in the Plan, any
adjustment with respect to an ISO due to a change or distribution
described in this Section 5.2 shall comply with the rules of Code Section
424(a), and in no event shall any adjustment be made which would render
any ISO granted hereunder other than an incentive stock option for
purposes of Code Section 422.
6.0 MAXIMUM INDIVIDUAL AWARDS
6.1 Maximum Aggregate Number of Shares Underlying Stock-Based Awards Granted
Under the Plan to Any Single Participant. The maximum aggregate number of
shares of Common Stock underlying all Awards measured in shares of Common
Stock (whether payable in cash, Common Stock, or a combination of both)
that may be granted to any single Participant during the life of the Plan
shall be 250,000 shares (without regard to any options granted under the
1993 Plan), subject to adjustment as provided in Section 5.2 above. For
purposes of the preceding sentence, such Awards that are cancelled or
repriced shall continue to be counted in determining such maximum
aggregate number of shares of Common Stock that may be granted to any
single Participant during the life of the Plan.
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6.2 Maximum Performance-Based Cash Awards to any Participant. The maximum
aggregate amount of Cash Awards intended to qualify as Performance-Based
Awards (but not measured in shares of Common Stock) and granted to any
single Participant with respect to any fiscal year of the Company ending
during the term of the Plan shall be 200% of such Participant's salary for
such fiscal year and 200% of such Participant's salary for all fiscal years
ending during the term of the Plan, regardless of the date of payment of
such Cash Awards, but in no event more than $25 million during the term of
the Plan in the aggregate for any single Participant.
7.0 STOCK OPTIONS
7.1 In General. The Committee may, in its sole discretion, grant Stock Options
to Employees, Nonemployee Directors, Affiliated Persons and/or Independent
Contractors. The Committee shall, in its sole discretion, determine the
Employees, the Nonemployee Directors, Affiliated Persons and Independent
Contractors who will receive Stock Options and the number of shares of
Common Stock underlying each Stock Option. With respect to Employees who
become Participants, the Committee may grant such Participants ISOs or
Nonqualified Stock Options or a combination of both. With respect to
Nonemployee Directors, Affiliated Persons and Independent Contractors who
become Participants, the Committee may grant such Participants only
Nonqualified Stock Options. Each Stock Option shall be subject to such
terms and conditions consistent with the Plan as the Committee may impose
from time to time. In addition, each Stock Option shall be subject to the
terms and conditions set forth in Sections 7.2 through 7.8 below.
7.2 Exercise Price. The Committee shall specify the exercise price of each
Stock Option in the Award Agreement; provided, however, that (i) the
exercise price of any ISO shall not be less than 100 percent of the Fair
Market Value of the Common Stock on the date of grant and (ii) the exercise
price of any Nonqualified Stock Option shall not be less than 100 percent
of the Fair Market Value of the Common Stock on the date of grant unless
the Committee, in its sole discretion and due to special circumstances,
determines otherwise on the date of grant.
7.3 Term of Stock Option. The Committee shall specify the term of each Stock
Option in the Award Agreement; provided, however, that:
(a) no ISO shall be exercised after the 10th anniversary of the date of
grant of such ISO; and
(b) no Nonqualified Stock Option shall be exercised after the 10th
anniversary of the date of grant of such Nonqualified Stock Option,
unless the Committee, in its sole discretion, provides otherwise.
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Each Stock Option shall terminate at such earlier times and upon such
conditions or circumstances as the Committee shall, in its sole discretion,
set forth in the Award Agreement on the date of grant.
7.4 Vesting Date. The Committee shall specify the Vesting Date with respect to
each Stock Option in the Award Agreement. The Committee may grant Stock
Options that are Vested, either in whole or in part, on the date of grant.
If the Committee fails to specify in the Award Agreement the percent of a
Stock Option that Vests and the applicable date(s) of such Vesting, such
Stock Option shall become exercisable in accordance with the following
schedule:
=============================================================
Anniversary of Date of Grant Percent That Vests
-------------------------------------------------------------
On or after 1st 20%
-------------------------------------------------------------
On or after 2nd 40%
-------------------------------------------------------------
On or after 3rd 60%
-------------------------------------------------------------
On or after 4th 80%
-------------------------------------------------------------
On or after 5th 100%
=============================================================
Notwithstanding any provision in the Plan or an Award Agreement to the
contrary, a Stock Option shall not become exercisable with respect to a
fractional share of Common Stock, and the portion of such Stock Option that
otherwise would have become Vested may Vest, if at all, at a later Vesting
Date or shall be subject to the provisions of Section 17.10. The Vesting of
a Stock Option may also be subject to such other terms and conditions as
shall be determined by the Committee, including, without limitation,
accelerating the Vesting (i) based on individual performance or (ii) if
certain performance goals are achieved.
7.5 Exercise of Stock Options. The Stock Option exercise price may be paid in
cash or, in the sole discretion of the Committee, by the delivery of shares
of Common Stock then owned by the Participant, by the withholding of shares
of Common Stock for which a Stock Option is exercisable or by a combination
of these methods. In the sole discretion of the Committee, payment may also
be made by delivering a properly executed exercise notice to the Company
together with a copy of irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds to pay the
exercise price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms. The
Committee may prescribe any other method of paying the exercise price that
it determines to be consistent with applicable law and the purposes of the
Plan, including, without limitation, in lieu of the
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exercise of a Stock Option by delivery of shares of Common Stock then
owned by a Participant, providing the Company with a notarized statement
attesting to the number of shares owned by the Participant, where upon
verification by the Company, the Company would issue to the Participant
only the number of incremental shares to which the Participant is entitled
upon exercise of the Stock Option. In determining which methods a
Participant may utilize to pay the exercise price, the Committee may
consider such factors as it determines are appropriate; provided, however,
that with respect to ISOs, all such discretionary determinations by the
Committee shall be made at the time of grant and specified in the Award
Agreement.
7.6 Restrictions Relating to ISOs. In addition to being subject to the terms
and conditions of this Section 7, ISOs shall comply with all other
requirements under Code Section 422. Accordingly, ISOs may be granted only
to Participants who are employees (as described in Treasury Regulation
Section 1.421-7(h)) of the Company or of any "Parent Corporation" (as
defined in Code Section 424(e)) or of any "Subsidiary Corporation" (as
defined in Code Section 424(f)) on the date of grant. The aggregate market
value (determined as of the time the ISO is granted) of the Common Stock
with respect to which ISOs (under all option plans of the Company and of
any Parent Corporation and of any Subsidiary Corporation) are exercisable
for the first time by a Participant during any calendar year shall not
exceed $100,000. For purposes of the preceding sentence, (i) ISOs shall be
taken into account in the order in which they are granted and (ii) ISOs
granted before 1987 shall not be taken into account. ISOs shall not be
transferable by the Participant otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the
Participant's lifetime, only by such Participant. The Committee shall not
grant ISOs to any Employee who, at the time the ISO is granted, owns stock
possessing (after the application of the attribution rules of Code Section
424(d)) more than 10 percent of the total combined voting power of all
classes of stock of the Company or of any Parent Corporation or of any
Subsidiary Corporation unless the exercise price of the ISO is fixed at
not less than 110 percent of the Fair Market Value of the Common Stock on
the date of grant and the exercise of such ISO is prohibited by its terms
after the 5th anniversary of the ISO's date of grant. In addition, no ISO
shall be issued to a Participant in tandem with a Nonqualified Stock
Option issued to such Participant in accordance with Treasury Regulation
Section 14a.422A-1, Q/A-39.
7.7 Additional Terms and Conditions. The Committee may, by way of the Award
Agreements or otherwise, establish such other terms, conditions,
restrictions and/or limitations, if any, of any Stock Option, provided
they are not inconsistent with the Plan, including, without limitation,
the requirement that the Participant not engage in competition with the
Company.
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7.8 Conversion Stock Options. The Committee may, in its sole discretion, grant
a Stock Option to any holder of an option (an "Original Option") to
purchase shares of the stock of any corporation:
(i) the stock or assets of which were acquired, directly or indirectly, by
the Company or any Subsidiary; or
(ii) which was merged with and into the Company or a Subsidiary;
so that the Original Option is "converted" into a Stock Option (a
"Conversion Stock Option"); provided, however, that such Conversion Stock
Option as of the date of its grant (the "Conversion Stock Option Grant
Date") shall have the same economic value as the Original Option as of the
Conversion Stock Option Grant Date. In addition, unless the Committee in
its sole discretion determines otherwise, a Conversion Stock Option which
is converting an Original Option intended to qualify as an ISO shall have
the same terms and conditions as applicable to the Original Option in
accordance with Code Section 424 and the Treasury Regulations thereunder so
that the conversion (x) is treated as the issuance or assumption of a stock
option under Code Section 424(a) and (y) is not treated as a modification,
extension or renewal of a stock option under Code Section 424(h).
8.0 SARS
8.1 In General. The Committee may, in its sole discretion, grant SARs to
Employees, Nonemployee Directors, Affiliated Persons and/or Independent
Contractors. An SAR is a right to receive a payment in cash, Common Stock
or a combination of both, in an amount equal to the excess of:
(x) the Fair Market Value of the Common Stock, or other specified
valuation, of a specified number of shares of Common Stock on the date
the SAR is exercised; over
(y) the Fair Market Value of the Common Stock, or other specified
valuation (which shall be no less than the Fair Market Value of the
Common Stock), of such shares of Common Stock on the date the SAR is
granted, all as determined by the Committee;
provided, however, that if a SAR is granted retroactively in tandem with or
in substitution for a Stock Option, the designated Fair Market Value of the
Common Stock in the Award Agreement may be the Fair Market Value of the
Common Stock on the date such Stock Option was granted. Each SAR shall be
subject to such terms and conditions, including, but not limited to, a
provision that automatically converts a SAR into a Stock Option on a
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conversion date specified at the time of grant, as the Committee shall
impose from time to time in its sole discretion and subject to the terms
of the Plan.
9.0 STOCK AWARDS AND STOCK UNITS
9.1 Stock Awards. The Committee may, in its sole discretion, grant Stock
Awards to Employees, Nonemployee Directors, Affiliated Persons, and/or
Independent Contractors as additional compensation or in lieu of other
compensation for services to the Company. A Stock Award shall consist of
shares of Common Stock which shall be subject to such terms and conditions
as the Committee, in its sole discretion, determines appropriate,
including, without limitation, restrictions on the sale or other
disposition of such shares, the Vesting Date with respect to such shares
and the right of the Company to reacquire such shares for no consideration
upon termination of the Participant's employment within specified periods.
The Committee may require the Participant to deliver a duly signed stock
power, endorsed in blank, relating to the Common Stock covered by such
Stock Award and/or that the stock certificates evidencing such shares be
held in custody or bear restrictive legends until the restrictions thereon
shall have lapsed. With respect to the shares of Common Stock subject to a
Stock Award granted to a Participant, such Participant shall have all of
the rights of a holder of shares of Common Stock, including the right to
receive dividends and to vote the shares, unless the Committee determines
otherwise on the date of grant.
9.2 Stock Units. The Committee may, in its sole discretion, grant Stock Units
to Employees, Nonemployee Directors, Affiliated Persons and/or Independent
Contractors as additional compensation or in lieu of other compensation
for services to the Company. A Stock Unit is a hypothetical share of
Common Stock represented by a notional account established and maintained
(or caused to be established or maintained) by the Company for such
Participant who receives a grant of Stock Units. Stock Units shall be
subject to such terms and conditions as the Committee, in its sole
discretion, determines appropriate, including, without limitation,
determinations of the Vesting Date with respect to such Stock Units and
the criteria for the Vesting of such Stock Units. A Stock Unit granted by
the Committee shall provide for payment in shares of Common Stock at such
time or times as the Award Agreement shall specify. The Committee shall
determine whether a Participant who has been granted a Stock Unit shall
also be entitled to a Dividend Equivalent Right.
9.3 Payout of Stock Units. Subject to a Participant's election to defer in
accordance with Section 17.3 below, upon the Vesting of a Stock Unit, the
shares of Common Stock representing the Stock Unit shall be distributed to
the Participant, unless the Committee, in its sole discretion, provides
for the payment of the Stock Unit in cash (or partially in cash and
partially in shares of Common Stock) equal to the value of the shares of
Common Stock which would otherwise be distributed to the Participant.
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10.0 PERFORMANCE SHARES AND PERFORMANCE UNITS
10.1 Performance Shares. The Committee may, in its sole discretion, grant
Performance Shares to Employees, Nonemployee Directors, Affiliated
Persons, and/or Independent Contractors as additional compensation or in
lieu of other compensation for services to the Company. A Performance
Share shall consist of a share or shares of Common Stock which shall be
subject to such terms and conditions as the Committee, in its sole
discretion, determines appropriate, including, without limitation,
determining the performance goal or goals which, depending on the extent
to which such goals are met, will determine the number and/or value of the
Performance Shares that will be paid out or distributed to the Participant
who has been granted Performance Shares. Performance goals may be based
on, without limitation, Company-wide, divisional and/or individual
performance, as the Committee, in its sole discretion, may determine, and
may be based on the performance measures listed in Section 12.3 below.
10.2 Performance Units. The Committee may, in its sole discretion, grant
Performance Units to Employees, Nonemployee Directors, Affiliated Persons,
and/or Independent Contractors as additional compensation or in lieu of
other compensation for services to the Company. A Performance Unit is a
hypothetical share or shares of Common Stock represented by a notional
account which shall be established and maintained (or caused to be
established or maintained) by the Company for such Participant who
receives a grant of Performance Units. Performance Units shall be subject
to such terms and conditions as the Committee, in its sole discretion,
determines appropriate, including, without limitation, determining the
performance goal or goals which, depending on the extent to which such
goals are met, will determine the number and/or value of the Performance
Units that will be accrued with respect to the Participant who has been
granted Performance Units. Performance goals may be based on, without
limitation, Company-wide, divisional and/or individual performance, as the
Committee, in its sole discretion, may determine, and may be based on the
performance measures listed in Section 12.3 below.
10.3 Adjustment of Performance Goals. With respect to those Performance Shares
or Performance Units that are not intended to qualify as Performance-Based
Awards (as described in Section 12 below), the Committee shall have the
authority at any time to make adjustments to performance goals for any
outstanding Performance Shares or Performance Units which the Committee
deems necessary or desirable unless at the time of establishment of the
performance goals the Committee shall have precluded its authority to make
such adjustments.
10.4 Payout of Performance Shares or Performance Units. Subject to a
Participant's election to defer in accordance with Section 17.3 below,
upon the Vesting of a Performance Share or a Performance Unit, the
Performance Share or the Performance
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Unit shall be distributed to the Participant in shares of Common Stock,
unless the Committee, in its sole discretion, provides for the payment of
the Performance Share or a Performance Unit in cash (or partially in cash
and partially in shares of Common Stock) equal to the value of the shares
of Common Stock which would otherwise be distributed to the Participant.
11.0 CASH AWARDS
11.1 In General. The Committee may, in its sole discretion, grant Cash Awards
to Employees, Nonemployee Directors, Affiliated Persons, and/or
Independent Contractors as additional compensation or in lieu of other
compensation for services to the Company. A Cash Award shall be subject to
such terms and conditions as the Committee, in its sole discretion,
determines appropriate, including, without limitation, determining the
Vesting Date with respect to such Cash Award, the criteria for the Vesting
of such Cash Award, and the right of the Company to require the
Participant to repay the Cash Award (with or without interest) upon
termination of the Participant's employment within specified periods.
12.0 PERFORMANCE-BASED AWARDS
12.1 In General. The Committee, in its sole discretion, may designate and
design Awards granted under the Plan as Performance-Based Awards if it
determines that compensation attributable to such Awards might not
otherwise be tax deductible by the Company due to the deduction limitation
imposed by Code Section 162(m). Accordingly, an Award granted under the
Plan may be granted in such a manner that the compensation attributable to
such Award is intended by the Committee to qualify as "performance-based
compensation" (as such term is used in Code Section 162(m) and the
Treasury Regulations thereunder) and thus be exempt from the deduction
limitation imposed by Code Section 162(m) ("Performance-Based Awards").
12.2 Qualification of Performance-Based Awards. Awards shall qualify as
Performance-Based Awards under the Plan only if:
(a) at the time of grant at least two members of the Committee, acting
as a separate committee, qualify as "outside directors" (as such
term is used in Code Section 162(m) and the Treasury Regulation
thereunder);
(b) with respect to either the granting or Vesting of an Award (other
than (i) a Nonqualified Stock Option or (ii) a SAR, either of which
is granted with an exercise price at or above the Fair Market Value
of the Common Stock on the date of grant), such Award is subject to
the achievement of a performance goal or
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goals based on one or more of the performance measures specified in
Section 12.3 below;
(c) the Committee establishes in writing (i) the objective
performance-based goals applicable to a given performance period and
(ii) the individual employees or class of employees to which such
performance-based goals apply no later than 90 days after the
commencement of such performance period (but in no event after 25
percent of such performance period has elapsed);
(d) no compensation attributable to a Performance-Based Award will be paid
to or otherwise received by a Participant until the Committee
certifies in writing that the performance goal or goals (and any other
material terms) applicable to such performance period have been
satisfied; and
(e) after the establishment of a performance goal, the Committee shall not
revise such performance goal (unless such revision will not disqualify
compensation attributable to the Award as "performance-based
compensation" under Code Section 162(m)) or increase the amount of
compensation payable with respect to such Award upon the attainment of
such performance goal.
12.3 Performance Measures. The Committee may use the following performance
measures (either individually or in any combination) to set performance
goals with respect to Awards intended to qualify as Performance-Based
Awards: net sales; pre-tax income before allocation of corporate overhead
and bonus; budget; cash flow; earnings per share; net income; division,
group or corporate financial goals; return on stockholders' equity; return
on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of the Common Stock or any
other publicly-traded securities of the Company; market share; gross
profits; earnings before interest and taxes; earnings before interest,
taxes, depreciation and amortization; economic value-added models;
comparisons with various stock market indices; increase in number of
customers; and/or reductions in costs.
12.4 Shareholder Reapproval. As required by Treasury Regulation Section
1.162-27(e)(vi), the material terms of performance goals as described in
this Section 12 shall be disclosed to and reapproved by the Company's
stockholders no later than the first stockholder meeting that occurs in the
5th year following the year in which the Company's stockholders previously
approved such performance goals.
13.0 CHANGE IN CONTROL
13.1 Accelerated Vesting or Payout. Notwithstanding any other provision of this
Plan to the contrary, if there is a Change in Control of the Company, the
Committee may accelerate
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the Vesting Date and/or payout of such Awards; provided, however, that
such action shall not conflict with any provision contained in an Award
Agreement unless such provision is amended in accordance with Section 16.3
below.
14.0 TERMINATION OF EMPLOYMENT IF PARTICIPANT IS AN EMPLOYEE
14.1 Termination of Employment Due to Death or Disability. Subject to Section
14.4 and any written agreement between the Company and a Participant, if a
Participant's employment is terminated due to death or disability:
(a) all non-Vested portions of Awards held by the Participant on the
date of the Participant's death or the date of the termination of
his or her employment, as the case may be, shall immediately be
forfeited by such Participant as of such date; and
(b) all Vested portions of Stock Options and SARs held by the
Participant on the date of the Participant's death or the date of
the termination of his or her employment, as the case may be, shall
remain exercisable until the earlier of:
(i) the end of the 12-month period following the date of the
Participant's death or the date of the termination of his or
her employment, as the case may be; or
(ii) the date the Stock Option or SAR would otherwise expire.
14.2 Termination of Employment for Cause. Subject to any written agreement
between the Company and a Participant, if such Participant's employment is
terminated by the Company for cause or voluntarily by such Participant,
all Awards held by a Participant on the date of any such termination of
his or her employment, whether Vested or non-Vested, shall immediately be
forfeited by such Participant as of such date.
14.3 Other Terminations of Employment. Subject to any written agreement between
the Company and a Participant, if such Participant's employment is
terminated for any reason other than for cause or such Participant's
death, disability or voluntary resignation:
(a) all non-Vested portions of Awards held by the Participant on the
date of the termination of his or her employment shall immediately
be forfeited by such Participant as of such date; and
(b) all Vested portions of Stock Options and/or SARs held by the
Participant on the date of the termination of his or her employment
shall remain exercisable until the earlier of:
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(i) the end of the 90-day period following the date of the
termination of the Participant's employment; or
(ii) the date the Stock Option or SAR would otherwise expire.
14.4 Committee Discretion. Notwithstanding anything contained in the Plan to
the contrary, except in the event (i) a Participant is terminated by the
Company for cause or (ii) a Participant voluntarily resigns his or her
employment with the Company, the Committee may, in its sole discretion and
at anytime, provide that:
(a) any or all non-Vested portions of Stock Options and/or SARs held by
the Participant on the date of the Participant's death and/or the
date of the termination of his or her employment shall immediately
become exercisable as of such date and, except with respect to ISOs,
shall remain exercisable until a date that occurs on or prior to the
date the Stock Option or SAR is scheduled to expire;
(b) any or all Vested portions of Nonqualified Stock Options and/or SARs
held by the Participant on the date of the Participant's death
and/or the date of the termination of his or her employment shall
remain exercisable until a date that occurs on or prior to the date
the Stock Option or SAR is scheduled to expire; and/or
(c) any or all non-Vested portions of Stock Awards, Stock Units,
Performance Shares, Performance Units and/or Cash Awards held by the
Participant on the date of the Participant's death and/or the date
of the termination of his or her employment shall immediately Vest
or shall become Vested on a date that occurs on or prior to the date
the Award is scheduled to vest.
14.5 ISOs. Notwithstanding anything contained in the Plan to the contrary, (i)
the provisions contained in this Section 14 shall be applied to an ISO
only if the application of such provision maintains the treatment of such
ISO as an ISO and (ii) the exercise period of an ISO in the event of a
termination of the Participant's employment due to disability provided in
Section 14.1 above shall be applied only if the Participant is
"permanently and totally disabled" (as such term is defined in Code
Section 22(e)(3)).
15.0 TAXES
15.1 Withholding Taxes. With respect to Employees, the Company, or the
applicable Subsidiary, may require a Participant who has become Vested in
his or her Stock Award, Stock Unit, Performance Share or Performance Unit
granted hereunder, or who exercises a Stock Option or SAR granted
hereunder to reimburse the corporation which employs such Participant for
any taxes required by any governmental regulatory authority to be withheld
or otherwise deducted and paid by such corporation or entity in respect of
the
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issuance or disposition of such shares or the payment of any amounts. In
lieu thereof, the corporation or entity which employs such Participant
shall have the right to withhold the amount of such taxes from any other
sums due or to become due from such corporation or entity to the
Participant upon such terms and conditions as the Committee shall
prescribe. The corporation or entity that employs such Participant may, in
its discretion, hold the stock certificate to which such Participant is
entitled upon the Vesting of a Stock Award, Stock Unit, Performance Share
or Performance Unit or the exercise of a Stock Option or SAR as security
for the payment of such withholding tax liability, until cash sufficient to
pay that liability has been accumulated.
15.2 Use of Common Stock to Satisfy Withholding Obligation. With respect to
Employees, at any time that the Company, Subsidiary or other entity that
employs such Participant becomes subject to a withholding obligation under
applicable law with respect to the Vesting of a Stock Award, Stock Unit,
Performance Share or Performance Unit or the exercise of a Nonqualified
Stock Option (the "Tax Date"), except as set forth below, a holder of such
Award may, with the prior written consent of the Committee, elect to
satisfy, in whole or in part, the holder's related personal tax liabilities
(an "Election") by (i) directing the Company, Subsidiary or other entity
that employs such Participant to withhold from shares issuable in the
related Vesting or exercise either a specified number of shares or shares
of Common Stock having a specified value (in each case not in excess of the
related personal tax liabilities), (ii) tendering shares of Common Stock
previously issued pursuant to the exercise of a Stock Option or other
shares of the Common Stock owned by the holder, or (iii) combining any or
all of the foregoing Elections in any fashion. An Election shall be
irrevocable. The withheld shares and other shares of Common Stock tendered
in payment shall be valued at their Fair Market Value of the Common Stock
on the Tax Date. The Committee may suspend or terminate the right to make
Elections or provide that the right to make Elections shall not apply to
particular shares or exercises. The Committee may impose any additional
conditions or restrictions on the right to make an Election as it shall
deem appropriate, including conditions or restrictions with respect to
Section 16 of the Exchange Act.
15.3 Compliance with Code Section 162(m). Unless otherwise determined by the
Committee in its discretion, any performance goals applicable to any
Employee who is a "covered employee" within the meaning of Code Section
162(m) shall be determined by the Committee by its members who qualify as
"non-employee directors" within the meaning of Rule 16b-3(b)(3) of the
Exchange Act and as "outside directors" within the meaning of such Code
Section, and such members of the Committee shall also certify in accordance
with the provisions of such Code Section and applicable Treasury
Regulations whether such performance goals have been attained for purposes
of an Award. The Committee may delegate any other matters relating to
Employees qualifying as "covered employees" to its members who qualify as
non-employee, outside directors. The performance goals determined by the
members of the Committee who qualify as non-employee, outside
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directors and such other matters as may be delegated by the Committee to
such members shall be subject to separate ratification by the unanimous
approval of all members of the Committee, unless the Committee determines
otherwise.
15.4 No Guarantee of Tax Consequences. No person connected with the Plan in any
capacity, including, but not limited to, the Company and any Subsidiary
and their directors, officers, agents and employees makes any
representation, commitment or guarantee that any tax treatment, including,
but not limited to, federal, state and local income, estate and gift tax
treatment, will be applicable with respect to amounts deferred under the
Plan, or paid to or for the benefit of a Participant under the Plan, or
that such tax treatment will apply to or be available to a Participant on
account of participation in the Plan.
16.0 AMENDMENT AND TERMINATION
16.1 Termination of Plan. The Board may suspend or terminate the Plan at any
time with or without prior notice; provided, however, that no action
authorized by this Section 16.1 shall reduce the amount of any outstanding
Award or change the terms and conditions thereof without the Participant's
consent.
16.2 Amendment of Plan. The Board may amend the Plan at any time with or
without prior notice; provided, however, that no action authorized by this
Section 16.2 shall reduce the amount of any outstanding Award or change
the terms and conditions thereof without the Participant's consent. No
amendment of the Plan shall, without the approval of the stockholders of
the Company:
(a) increase the total number of shares which may be issued under the
Plan;
(b) increase the maximum number of shares with respect to all Awards
measured in Common Stock that may be granted to any individual under
the Plan;
(c) increase the maximum dollar amount with respect to all Awards measured
in cash that may be paid to any individual under the Plan; or
(d) modify the requirements as to eligibility for Awards under the Plan.
In addition, the Plan shall not be amended without the approval of such
amendment by the Company's stockholders if such amendment (i) is required
under the rules and regulations of the stock exchange or national market
system on which the Common Stock is listed or (ii) will disqualify any ISO
granted hereunder.
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16.3 Amendment or Cancellation of Award Agreements. The Committee may amend or
modify any Award Agreement at any time by mutual agreement between the
Committee and the Participant or such other persons as may then have an
interest therein. In addition, by mutual agreement between the Committee
and a Participant or such other persons as may then have an interest
therein, Awards may be granted to an Employee, Nonemployee Director,
Affiliated Person or Independent Contractor in substitution and exchange
for, and in cancellation of, any Awards previously granted to such
Employee, Nonemployee Director, Affiliated Person or Independent
Contractor under the Plan, or any award previously granted to such
Employee, Nonemployee Director, Affiliated Person or Independent
Contractor under any other present or future plan of the Company or any
present or future plan of an entity which (i) is purchased by the Company,
(ii) purchases the Company, or (iii) merges into or with the Company.
17.0 MISCELLANEOUS
17.1 Other Provisions. Awards granted under the Plan may also be subject to
such other provisions (whether or not applicable to the Award granted to
any other Participant) as the Committee determines on the date of grant to
be appropriate, including, without limitation, for the installment
purchase of Common Stock under Stock Options, to assist the Participant in
financing the acquisition of Common Stock, for the forfeiture of, or
restrictions on resale or other disposition of, Common Stock acquired
under any Stock Option, for the acceleration of Vesting of Awards in the
event of a Change in Control of the Company, for the payment of the value
of Awards to Participants in the event of a Change in Control of the
Company, or to comply with federal and state securities laws, or
understandings or conditions as to the Participant's employment in
addition to those specifically provided for under the Plan.
17.2 Transferability. Each Award granted under the Plan to a Participant and
any interest therein shall not be transferable otherwise than by will or
the laws of descent and distribution, and Stock Options and SARs shall be
exercisable, during the Participant's lifetime, only by the Participant.
In the event of the death of a Participant, each Stock Option or SAR
theretofore granted to him or her shall be exercisable during such period
after his or her death as the Committee shall, in its sole discretion, set
forth in the Award Agreement on the date of grant and then only by the
executor or administrator of the estate of the deceased Participant or the
person or persons to whom the deceased Participant's rights under the
Stock Option or SAR shall pass by will or the laws of descent and
distribution. Any purported transfer of an Award or any interest therein
to a creditor of a Participant shall be void, and the Award may be
forfeited at the discretion of the Committee. Notwithstanding the
foregoing, the Committee, in its sole discretion and on a case-by-case
basis, may permit the transferability of a Nonqualified Stock Option by a
Participant, including to, but not limited to, members of the
Participant's immediate family or trusts or family partnerships or other
similar entities for the benefit of such
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persons, and all such transfers shall be subject to such terms,
conditions, restrictions and/or limitations, if any, as the Committee may
establish and include in the Award Agreement or any amendment thereto.
17.3 Election to Defer Compensation Attributable to Award. The Committee may,
in its sole discretion, allow a Participant to elect to defer the receipt
of any compensation attributable to an Award under guidelines and
procedures to be established by the Committee after taking into account
the advice of the Company's tax counsel.
17.4 Listing of Shares and Related Matters. If at any time the Committee shall
determine that the listing, registration or qualification of the shares of
Common Stock subject to any Award on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of, or in connection
with, the granting of an Award or the issuance of shares of Common Stock
thereunder, such Award may not be exercised, distributed or paid out, as
the case may be, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
17.5 No Right, Title, or Interest in Company Assets. Participants shall have no
right, title, or interest whatsoever in or to any investments which the
Company may make to aid it in meeting its obligations under the Plan.
Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or
a fiduciary relationship between the Company and any Participant,
beneficiary, legal representative or other person. To the extent that any
person acquires a right to receive payments from the Company under the
Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall
be paid from the general funds of the Company and no special or separate
fund shall be established and no segregation of assets shall be made to
assure payment of such amounts except as expressly set forth in the Plan.
The Plan is not intended to be subject to the Employee Retirement Income
Security Act of 1974, as amended.
17.6 No Right to Continued Employment or Service or to Grants. The
Participant's rights, if any, to continue to serve the Company as a
director, officer, employee, independent contractor or otherwise, shall
not be enlarged or otherwise affected by his or her designation as a
Participant under the Plan, and the Company or the applicable Subsidiary
reserves the right to terminate the employment of any Employee or the
services of any Independent Contractor or director at any time. The
adoption of the Plan shall not be deemed to give any Employee, Nonemployee
Director, Affiliated Person or Independent Contractor or any other
individual any right to be selected as a Participant or to be granted an
Award.
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17.7 Awards Subject to Foreign Laws. The Committee may grant Awards to
individual Participants who are subject to the tax laws of nations other
than the United States, and such Awards may have terms and conditions as
determined by the Committee as necessary to comply with applicable foreign
laws. The Committee may take any action which it deems advisable to obtain
approval of such Awards by the appropriate foreign governmental entity;
provided, however, that no such Awards may be granted pursuant to this
Section 17.7 and no action may be taken which would result in a violation
of the Exchange Act or any other applicable law.
17.8 Governing Law. The Plan, all Awards granted hereunder, and all actions
taken in connection herewith shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflict of laws, except as superseded by applicable federal
law.
17.9 Other Benefits. No Award granted under the Plan shall be considered
compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary nor affect any benefits or compensation
under any other benefit or compensation plan of the Company or any
Subsidiary now or subsequently in effect.
17.10 No Fractional Shares. No fractional shares of Common Stock shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, Common Stock, Stock Options or other property
shall be issued or paid in lieu of fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
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EXHIBIT 5
WEIL, GOTSHAL & MANGES LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
(214) 746-7700
(214) 746-7777 (fax)
June 26, 1998
Berg Electronics Corp.
101 South Hanley Road, Suite 400
St. Louis, Missouri 63105
Ladies and Gentlemen:
We have acted as counsel to Berg Electronics Corp., a Delaware corporation
(the "Company"), in connection with the preparation and filing by the Company
with the Securities and Exchange Commission (the "Commission") of a Registration
Statement on Form S-8 to be filed with the Commission on or about June 26, 1998
(the "Registration Statement"), under the Securities Act of 1933, as amended,
with respect to the offer and sale by the Company of up to 977,713 shares (the
"Registered Shares") of the common stock, par value $.01 per share, of the
Company issuable from time to time under the Company's 1998 Incentive
Compensation Plan (the "Plan").
In so acting, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Registration Statement, the Plan, a form
of award agreement to be utilized under the Plan and such corporate records,
agreements, documents, and other instruments and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinion hereinafter set
forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates of officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that when (a) the purchase price for the Registered Shares
issuable under the Plan has been appropriately determined in accordance with the
terms of the Plan and the provisions of the
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General Corporation Law of the State of Delaware (the "DGCL") (including the
provisions requiring the payment of consideration having a value not less than
the par value of such shares); (b) each award under the Plan has been duly
authorized in accordance with the terms of the Plan and the applicable
provisions of the DGCL and the award agreement has been duly executed and
delivered by the Company and the recipient of such award; and (c) such
Registered Shares are issued and delivered in accordance with the terms of the
Plan and the award agreement, such Registered Shares will be validly issued,
fully paid and nonassessable.
The opinion expressed herein is limited to the corporate laws of the State
of Delaware and we express no opinion as to the effect on the matters covered by
this letter of the laws of any other jurisdiction. We hereby consent to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
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EXHIBIT 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 27, 1998
included in Berg Electronics Corp.'s Form 10-K for the year ended December 31,
1997, and to all references to our firm included in this registration statement.
ARTHUR ANDERSEN LLP
St. Louis, Missouri
June 26, 1998
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