AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 1999
REGISTRATION NO. 333-_______________
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
DAL-TILE INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3548809
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
7834 C.F. HAWN FREEWAY
DALLAS, TX 75217
(214) 398-1411
(Address of principal executive offices)
CERTAIN SHARES TO BE ISSUED UNDER THE
DAL-TILE INTERNATIONAL INC. 1990
STOCK OPTION PLAN (AS AMENDED AND RESTATED)
(Full title of the plan)
JACQUES R. SARDAS
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD
DAL-TILE INTERNATIONAL INC.
7834 C.F. HAWN FREEWAY
DALLAS, TX 75217
(214) 398-1411
(Name, address, and telephone number of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
=============================================================================
PROPOSED PROPOSED
TITLE OF SECURITIES AMOUNT TO MAXIMUM MAXIMUM AMOUNT OF
TO BE REGISTERED BE OFFERING AGGREGATE REGISTRATION
REGISTERED PRICE PER OFFERING FEE
SHARE PRICE
- -----------------------------------------------------------------------------
Common Stock, par 2,803,931 $9.01(2) $25,263,418.31(2) $7,023.23(2)
value $.01 per share shares(1)
- -----------------------------------------------------------------------------
Common Stock, par 725,875 $9.91(2) $7,193,421.25(2) $1,999.77(2)
value $.01 per share shares(1)
=============================================================================
(1) Includes an indeterminate number of shares of Common Stock that may be
issuable by reason of stock splits, stock dividends or similar
transactions in accordance with Rule 416 under the Securities Act of
1933.
(2) Pursuant to Rule 457(h) under the Securities Act of 1933, the amounts
are calculated based upon the maximum price at which stock options
covering the registered shares of Common Stock may be exercised.
<PAGE>
EXPLANATORY NOTE
This Registration Statement relates to 3,529,806 shares of common
stock of Dal-Tile International Inc. (the "Company", "we", or "us"), par
value $.01 per share (the "Common Stock"), which may be issued upon the
exercise of non-qualified stock options granted under the Dal-Tile
International Inc. 1990 Stock Option Plan, as amended and restated (the
"Plan"). These shares constitute only those shares of Common Stock which
are issuable pursuant to the exercise of options which were granted under
the Plan through and including January 1, 1996. Shares underlying options
granted subsequent to January 1, 1996 are not covered by this Registration
Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, NY and
Chicago, IL. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the
public from the SEC's web site at http://www.sec.gov. Reports, proxy and
information statements and other information concerning us can also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, NY 10005.
The SEC allows us to "incorporate by reference" information into this
registration statement, which means that we can disclose important
information to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is considered to be
part of this registration statement, and later information that we file
with the SEC will automatically update this registration statement. We
incorporate by reference the following documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering:
* Annual Report on Form 10-K and Form 10-K/A for the year ended
January 2, 1998;
* Quarterly Reports on Form 10-Q for the quarterly periods ended
October 2, 1998, July 3, 1998 and April 3, 1998; and
* The description of the Common Stock contained in our registration
statement on Form 8-A, dated July 16, 1996 (File No. 1-11939).
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Mark A. Solls
Vice President, General Counsel
and Secretary
Dal-Tile International Inc.
7834 C.F. Hawn Freeway
Dallas, Texas 75217
(214) 398-1411
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the securities offered pursuant to this Registration
Statement has been passed upon for the Company by Mark A. Solls, Esq., Vice
President, General Counsel and Secretary of the Company. Mr. Solls owns
shares and options to purchase shares of Common Stock of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SEVENTH of the Second Amended and Restated Certificate of
Incorporation of the Company provides as follows:
"To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended,
a Director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a Director."
Section 145 of the General Corporation Law of the State of Delaware
provides as follows:
A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation), by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by a director, officer, employee or agent of the
corporation, or a person who is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation or business association in connection with the defense or
settlement of an action or suit, if such person has acted in good faith and
in a manner that he or she reasonably believed to be in or not opposed to
the best interests of the corporation, except that no indemnification shall
be made if such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the
defendant is fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
The Company has entered into agreements to provide indemnification for
the Company's directors in addition to the indemnification provided for in
the Restated Bylaws of the Company. These agreements, among other things,
will indemnify the Company's directors to the fullest extent permitted by
Delaware law for certain expenses (including attorneys' fees), losses,
claims, liabilities, judgments, fines and settlement amounts incurred by
such indemnitee in any action or proceeding, including any action by or in
the right of the Company, on account of services as a director or officer
of any affiliate of the Company, or as a director or officer of any other
company or enterprise that the indemnitee provides services to at the
request of the Company.
ITEM 8. EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1 -- Second Amended and Restated Certificate of Incorporation of the
Company (Filed as Exhibit 3.1 to the Company's Form 10-Q filed on
November 7, 1996 and incorporated herein by reference).
4.2 -- Amended and Restated By-Laws of the Company (Filed as Exhibit 3.2
to the Company's Registration Statement on Form S-1
(No. 333-5069) and incorporated herein by reference).
4.3 -- Specimen form of certificate for common stock (Filed as Exhibit
4.1 to the Company's Registration Statement on Form S-1
(No. 333-5069) and incorporated herein by reference).
4.4 -- Dal-Tile International Inc. 1990 Stock Option Plan as amended and
restated (entitled the Dal-Tile International Inc. 1998 Amended
and Restated Stock Option Plan).*
5.1 -- Opinion of Mark A. Solls as to the legality of the shares of
Common Stock covered by the Registration Statement.*
23.1 -- Consent of Ernst & Young LLP.*
24.1 -- Powers of Attorney (included on the signature pages).
* Filed herewith.
ITEM 9. UNDERTAKINGS
The Company hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to the Registration Statement
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.
(b) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment to 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) 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.
(d) That, for the purpose of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
Section 13(a) or Section 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.
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 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 of the Company 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 Company will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company 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 Dallas, Texas, on January 20, 1999.
DAL-TILE INTERNATIONAL INC.
By: /s/ Mark A. Solls
---------------------------
Mark A. Solls
Vice President, General Counsel
and Secretary
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Mark A. Solls, as his or her
true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him in his or her name, place and stead, in any and
all capacities, to sign any and all amendments to this Registration
Statement and any additional registration statements pursuant to
Instruction E to Form S-8 and any and all documents in connection
therewith, and to file the same, with all exhibits thereto, and all
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent 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 or she might or could do in person, and hereby ratifies,
approves and confirms all that his or her said attorney-in-fact and agent,
or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Jacques R. Sardas
---------------------- Jan. 20, 1999
Jacques R. Sardas President, Chief Executive
Officer and Chairman of the
Board of Directors
/s/ William C. Wellborn
------------------------ Jan. 20, 1999
William C. Wellborn Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ John M. Goldsmith
----------------------- Jan. 20, 1999
John M. Goldsmith Director
/s/ Charles J. Pilliod, Jr.
----------------------- Jan. 20, 1999
Charles J. Pilliod, Jr. Director
/s/ Henry F. Skelsey
----------------------- Jan. 20, 1999
Henry F. Skelsey Director
/s/ Douglas D. Danforth
----------------------- Jan. 20, 1999
Douglas D. Danforth Director
/s/ Vincent A. Mai
----------------------- Jan. 20, 1999
Vincent A. Mai Director
/s/ Norman E. Wells, Jr.
----------------------- Jan. 20, 1999
Norman E. Wells, Jr. Director
/s/ John F. Fiedler
----------------------- Jan. 20, 1999
John F. Fiedler Director
<PAGE>
INDEX TO EXHIBITS
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EXHIBIT NO. DESCRIPTION OF EXHIBIT
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4.1 Second Amended and Restated Certificate of Incorporation of
the Company (Filed as Exhibit 3.1 to the Company's Form
10-Q filed on November 7, 1996 and incorporated herein by
reference).
4.2 Amended and Restated By-Laws of the Company (Filed as
Exhibit 3.2 to the Company's Registration Statement on
Form S-1 (No. 333-5069) and incorporated herein by
reference).
4.3 Specimen form of Certificate for Common Stock (Filed as
Exhibit 4.1 to the Company's Registration Statement on
Form S-1 (No. 333-5069) and incorporated herein by
reference.)
4.4 Dal-Tile International Inc. 1990 Stock Option Plan as
amended and restated (entitled the Dal-Tile International
Inc. 1998 Amended and Restated Stock Option Plan).*
5.1 Opinion of Mark A. Solls as to the legality of the
securities covered by the Registration Statement.*
23.1 Consent of Ernst & Young LLP.*
24.1 Powers of Attorney (included on the signature pages).
* Filed herewith.
EXHIBIT 4.4
DAL-TILE INTERNATIONAL INC.
1998 AMENDED AND RESTATED
STOCK OPTION PLAN
ARTICLE 1
GENERAL
1.1 Purpose. The purpose of this Dal-Tile International Inc. 1998
Amended and Restated Stock Option Plan (the "Plan") is to provide for
certain key employees of Dal-Tile International Inc. ("Dal-Tile"), a
Delaware corporation, its successors and assigns and its subsidiaries and
affiliates (collectively, the "Company"), an incentive (i) to join and
remain in the service of the Company, (ii) to maintain and enhance the
long-term performance and profitability of the Company and (iii) to acquire
a proprietary interest in the success of the Company. The grant and
exercise of Options under the Plan is intended to meet the requirements of
Rule 16b-3 of the 1934 Act (as hereinafter defined) at all times during
which the Company and its Insiders (as hereinafter defined) are subject to
the requirements of Section 16 of the 1934 Act.
1.2 Definition of Certain Terms.
(a) "Agreement" means an agreement issued pursuant to
Section 2.1.
(b) "Board" means the Board of Directors of Dal-Tile.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Committee appointed to administer
the Plan in accordance with Section 1.3.
(e) "Common Stock" means the shares of common stock, par
value $.01 per share, of Dal-Tile and, subject to Section 2.5, any other
shares into which such common stock shall thereafter be exchanged by reason
of a recapitalization, merger, consolidation, split-up, combination,
exchange of shares or the like.
(f) "Date of Grant" means the date as of which an Option is
granted by the Committee under an Agreement.
(g) "Fair Market Value" per share as of a particular date
means (i) the closing sales price per share of Common Stock on the national
securities exchange on which the Common Stock is principally traded for the
last date (including the Date of Grant) on which there was a sale of such
Common Stock on such exchange, or (ii) if the shares of Common Stock are
not then traded on a national securities exchange, the average of the
closing bid and asked prices for the shares of Common Stock in the
over-the-counter market on which the Common Stock is principally traded for
the last date (including the Date of Grant) on which there was a sale of
such Common Stock in such market, or (iii) if the shares of Common Stock
are not then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Committee, in its sole
discretion, shall determine.
(h) "Insider" means an insider as so defined for purposes of
Section 16 of the 1934 Act.
(i) "Option" means any incentive stock option or
"nonqualified" stock option, both as described in Section 1.5, granted
under the Plan.
(j) "Optionee" means an employee of the Company who has been
awarded any Option under this Plan.
(k) The terms "parent corporation" and "subsidiary
corporation" as used herein shall have the meaning given those terms in
Code section 425(e) and (f), respectively. A corporation shall be deemed a
parent or a subsidiary only for such periods during which the requisite
ownership relationship is maintained.
(l) "Plan" means this Dal-Tile International Inc. 1997
Amended and Restated Stock Option Plan and any predecessor plan.
(m) "Termination With Cause," with respect to any Optionee,
means, except as otherwise provided in an Agreement, termination by the
Company of such Optionee's employment for: (i) misappropriation of
corporate funds, (ii) conviction of a crime, (iii) willful violation of
written directions of the Chief Executive Officer or the Board of Directors
of the Company; or (iv) gross negligence and willful misconduct.
(n) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
1.3 Administration.
(a) (i) Subject to Section 1.3(e), the Plan shall be
administered by a committee of the Board which shall consist of at least
two members of the Board and which shall have the power of the Board to
authorize awards under the Plan. At all times during which Dal-Tile and its
Insiders are subject to the requirements of Section 16 of the 1934 Act, all
members of the Committee shall be "Non-Employee Directors" as described in
Rule 16b-3 of the 1934 Act. All members of the Committee or a subcommittee
shall be "outside directors" for purposes of Section 162(m) of the Code
with respect to any optionees whose compensation may be subject to the
deductibility limitations of Section 162(m) of the Code. The members of the
Committee shall be appointed by, and may be changed from time to time in
the discretion of, the Board.
(b) The Committee shall have the authority (i) to exercise
all of the powers granted to it under the Plan, (ii) to construe, interpret
and implement the Plan and any Agreement executed pursuant to Section 2.1,
(iii) to prescribe, amend and rescind rules and regulations relating to the
Plan, (iv) to make all determinations necessary or advisable in
administering the Plan, and (v) to correct any defect, supply any omission
and reconcile any inconsistency in the Plan and (vi) to grant Options on
such terms, not inconsistent with the Plan, as it shall determine.
(c) The determination of the Committee on all matters
relating to the Plan or any Agreement shall be conclusive.
(d) No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
award thereunder.
(e) Notwithstanding anything to the contrary contained
herein, the Board may, in its sole discretion, at any time and from time to
time, resolve to administer the Plan. Such event, the term "Committee" as
used herein shall be deemed to mean the Board.
1.4 Persons Eligible for Awards. Awards under the Plan may be
made from time to time to such key employees of the Company as the
Committee shall in its sole discretion select, provided, however, that
subject to Section 3.4, the Committee may not award Options to any such
employee with respect to more than 6,000,000 shares of Common Stock in any
fiscal year during the term of the Plan.
1.5 Types of Awards Under the Plan. Awards may be made under the
Plan in the form of (a) stock options which may, in the Committee's
discretion, be granted either as (i) "nonqualified" stock options subject
to the provisions of section 83 of the Code or (ii) "incentive stock
options" described in section 422 of the Code, all as more fully set forth
in Article 2.
1.6 Shares Available for Awards.
(a) Subject to Section 3.4 (relating to adjustments upon
changes in capitalization), as of any date the total number of shares of
Common Stock with respect to which Options may be outstanding under the
Plan shall be equal to the excess (if any) of (i) 10,586,425 shares over
(ii) the sum of (A) the number of shares subject to outstanding Options
granted under the Plan and (B) the number of shares previously transferred
pursuant to the exercise of Options granted under the Plan. In accordance
with (and without limitation upon) the preceding sentence, but subject to
the requirements of Rule 16b-3 of the 1934 Act, if applicable, shares of
Common Stock covered by Options granted under the Plan which expire or
terminate for any reason shall again become available for award under the
Plan.
(b) Shares that are issued upon the exercise of Options
awarded under the Plan shall be authorized and unissued or treasury shares
of Common Stock.
(c) Without limiting the generality of the preceding
provisions of this Section 1.6, the Committee may, but solely with the
Optionee's consent, agree to cancel any award of Options under the Plan and
issue new Options in substitution therefor, provided that the Options as so
substituted shall satisfy all of the requirements of the Plan as of the
date such new Options are awarded.
1.7 Option Price. Except as the Committee may otherwise provide,
the exercise price of each Option shall not be less than 100% of the Fair
Market Value of the shares of Common Stock covered by the Option as of the
Date of Grant.
ARTICLE 2
STOCK OPTIONS
2.1 Agreements Evidencing Stock Options.
(a) Options awarded under the Plan shall be evidenced by
Agreements which shall not be inconsistent with the terms and provisions of
the Plan, and, in the case of incentive stock options, of section 422 of
the Code, and which shall contain such provisions as the Committee may in
its sole discretion deem necessary or desirable. Without limiting the
generality of the foregoing, the Committee may in any Agreement impose such
restrictions or conditions upon the exercise of such Option or upon the
sale or other disposition of the shares of Common Stock issuable upon
exercise of such Option as the Committee may in its sole discretion
determine. By accepting an award pursuant to the Plan each Optionee shall
thereby agree that each such award shall be subject to all of the terms and
provisions of the Plan, including, but not limited to, the provisions of
Section 1.3(d).
(b) Each Agreement shall set forth the number of shares of
Common Stock subject to the Option granted thereby.
(c) Each Agreement relating to Options shall set forth the
amount payable by the Optionee to Dal-Tile upon exercise of the Option
evidenced thereby, subject to adjustment by the Committee to reflect
changes in capitalization as contemplated by Section 3.4.
(d) An Option granted under this Plan shall be an incentive
stock option only if the relevant Agreement by its terms (i) expressly sets
forth the rules described in Sections 2.8 and 2.9 hereof, and (ii)
expressly states that it is intended to qualify as an incentive stock
option. Any Option granted under this Plan which does not satisfy the
foregoing requirements of this Section 2.1(d) is intended to be a
nonqualified stock option subject to the provisions of section 83 of the
Code, and is intended not to qualify for incentive stock option treatment
under section 422 of the Code.
2.2 Term of Options.
(a) Each Agreement shall set forth the period during which
the Option evidenced thereby shall be exercisable, whether in whole or in
part, and any vesting provisions applicable to the Option, such terms to be
determined by the Committee in its discretion; provided that,
notwithstanding the foregoing or any other provision of the Plan, no
Agreement shall permit an incentive stock option to be exercisable more
than 10 years after the date of grant.
(b) Each Agreement shall set forth such other terms and
conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem appropriate.
2.3 Exercise of Options. Subject to the provisions of this
Article 2, each Option granted under the Plan shall be exercisable as
follows:
(a) An Option shall become exercisable at such times and
subject to such conditions as the applicable Agreement or the Committee may
otherwise provide.
(b) Unless the applicable Agreement otherwise provides, an
Option granted under the Plan may be exercised from time to time as to all
or part of the shares as to which such Option shall then be exercisable.
(c) An Option shall be exercised by the filing of a written
notice of exercise with Dal-Tile, on such form and in such manner as the
Committee shall in its sole discretion prescribe.
(d) Any written notice of exercise of an Option shall be
accompanied by payment of the exercise price for the shares being
purchased. Except as the Committee may otherwise provide, such payment
shall be made by certified or official bank check payable to Dal-Tile (or
the equivalent thereof, including shares of Common Stock). As soon as
practicable after receipt of such payment, Dal-Tile shall deliver to the
Optionee a certificate or certificates for the shares of Common Stock so
purchased.
2.4 Termination of Options.
(a) Notwithstanding anything to the contrary in this Plan,
except as the Agreement or the Committee may otherwise provide and as set
forth in Section 2.4(b) and Section 2.4(d), all incentive stock options and
"nonqualified" stock options granted to an Optionee (and already vested but
not yet exercised) shall terminate on the earliest to occur of the
expiration of the term of the Option and the date which is 45 days after
termination of his employment with the Company for any reason (one year
after termination by reason of death, disability or retirement at or after
the Optionee's sixty-fifth birthday or at such earlier retirement age as
may be approved by the Committee).
(b) Notwithstanding anything to the contrary in this Plan,
all Options granted to an Optionee shall immediately expire and cease to be
exercisable and all rights granted to an Optionee under this Plan and such
Optionee's Agreement shall immediately expire in the event of a Termination
With Cause of the Optionee by the Company at any time.
(c) Unless the applicable Agreement or the Committee
expressly provides otherwise, Options awarded to Optionees under the terms
of the Plan will be exercisable only in accordance with the following
vesting schedule:
CUMULATIVE
PERCENTAGE OF
VESTING DATE TOTAL SHARES
------------ -------------
On the date of the applicable Agreement 25%
On the first anniversary of the date of
the Agreement 50%
On the second anniversary of the date of
the Agreement 75%
On the third anniversary of the date of
the Agreement 100%
The Committee may modify this vesting schedule in any manner that it deems
appropriate in any Agreement or otherwise and may provide different vesting
schedules in different Agreements in its sole discretion. Except as set
forth in an Agreement or as the Committee may provide, in the event that an
Optionee's employment with the Company is terminated for any reason prior
to the date on which the Optionee's right to exercise the Options has fully
vested pursuant to this Section 2.4(c), the Options will immediately cease
to be exercisable with respect to any and all shares which have not vested
as of the date of such termination.
2.5 Unless otherwise determined by the Committee coincident with
the grant of an Option or subsequently, in the event of a Transaction which
does not also constitute a Non-Control Transaction (as hereinafter
defined), the Options shall vest and each Optionee shall be entitled to
receive in respect of each share of Common Stock subject to his Options
(whether or not vested), upon exercise, the same amount and kind of stock,
securities, cash, property or other consideration that each holder of a
share of Common Stock was entitled to receive in the Transaction in respect
of each share. In the event of a Non-Control Transaction, each Optionee
shall be entitled to receive in respect of each share of Common Stock
subject to his Options, upon exercise of such Options after the vesting
thereof, the same kind of stock, securities, cash, property or other
consideration that each holder of a share of Common Stock was entitled to
receive in the Non-Control Transaction in respect of a share. Unless
otherwise determined by the Committee, Options will not automatically vest
upon the occurrence of a Non-Control Transaction.
"Transaction" means, except as otherwise provided in an Agreement
(i) the approval by stockholders of the liquidation or dissolution of the
Company, (ii) a sale or other disposition of 80% or more of the outstanding
voting stock of the Company, or (iii) the merger or consolidation of the
Company with or into any entity. "Non-Control Transaction" means (i) a
merger or consolidation in which the Company is the surviving corporation
and the shares of its outstanding Common Stock are not changed into other
securities or property pursuant to such merger or consolidation, (ii) a
merger or consolidation with an affiliate of the Company following which
those persons who owned directly or indirectly a majority of the
outstanding shares of voting stock immediately prior to such merger or
consolidation will own a majority of the outstanding shares of voting stock
of the surviving corporation, or (iii) a sale or other disposition of
capital stock of the Company following which those persons who owned
directly or indirectly a majority of the outstanding shares of voting stock
of the Company immediately prior to such sale will own a majority of the
outstanding shares of voting stock of the purchasing entity.
Notwithstanding anything in the Plan, the merger of DTI Merger Company with
and into Dal-Tile (the "Merger"), pursuant to which Dal-Tile is the
surviving corporation, shall not affect the operation of the Plan in any
manner whatsoever, and, in particular, shall not be or be deemed to be a
Transaction and immediately subsequent to the Merger each Option shall
continue to be exercisable for Class A common stock, par value $.01 per
share, of Dal-Tile.
2.6 Rule 16b-3. Notwithstanding anything in the Plan to the
contrary, the Plan shall be administered, and Options shall be granted and
exercised, in accordance with the 1934 Act and, specifically, Rule 16b-3
thereof.
2.7 $100,000 Limitation on Annual Vesting of Incentive Stock
Options.
(a) Subject to the further provisions of this Section 2.7,
to the extent that the aggregate fair market value of stock with respect to
which incentive stock options (determined without regard to the provisions
of this Section 2.7) are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Optionee's employer
corporation and its parent and subsidiary corporations) exceeds $100,000
(or such limitation as set forth in Section 422 of the Code as may be
amended from time to time), such Options shall be treated as Options that
are "nonqualified" stock options.
(b) For purposes of Section 2.7(a), which shall be applied
by taking options into account in the order in which they were granted, the
Fair Market Value of any stock shall be determined as of the time the
Option with respect to such stock is granted.
(c) In applying the provisions of Section 2.7(a), there
shall be taken into account solely (i) incentive stock options granted to
an Optionee under this Plan, and (ii) incentive stock options granted to
the Optionee after December 31, 1986 under all other stock option plans of
his employer corporation, and its parent or subsidiary corporations.
(d) The foregoing provisions of this Section 2.7 shall in no
way limit or restrict the aggregate fair market value of the stock which
may be acquired in any calendar year upon the exercise of "nonqualified"
stock options granted under the Plan or under any other stock option plan
of the Optionee's employer corporation, or its parent or subsidiary
corporations.
2.8 Special Rules for 10% Stockholders. Notwithstanding any
provisions to the contrary, an incentive stock option may not be granted
under this Plan to an individual who, at the time the option is granted,
owns stock possessing more than 10% of the total combined voting power of
all classes of stock of his employer corporation or of its parent or
subsidiary corporations (as such ownership may be determined for purposes
of section 422 of the Code) unless (a) at the time such incentive stock
option is granted the option exercise price is at least 110% of the Fair
Market Value of the shares subject to the incentive stock option and (b)
the incentive stock option by its terms is not exercisable after the
expiration of 5 years from the date such incentive stock option is granted.
ARTICLE 3
MISCELLANEOUS
3.1 Amendment of the Plan; Modification of Awards.
(a) The Board may, without stockholder approval, from time
to time suspend or discontinue the Plan or revise or amend it in any
respect whatsoever, except that no such amendment shall impair any rights
or obligations under any award theretofore made under the Plan without the
consent of the person to whom such award was made, provided, further, that
an amendment which requires stockholder approval in order for the Plan to
continue to comply with Rule 16b-3 or any other law, regulation or stock
exchange requirement shall not be effective unless approved by the
requisite vote of stockholders.
(b) With the consent of the Optionee and subject to the
terms and conditions of the Plan (including Section 3.1(a)), the Committee
may amend outstanding Agreements with such Optionee, for example, to (i)
accelerate the time or times at which an Option may be exercised or (ii)
extend the scheduled expiration date of the Option.
3.2 Nonassignability. Except as the Committee may otherwise
provide, no right granted to any Optionee under the Plan or under any
Agreement shall be assignable or transferable other than by will or by the
laws of descent and distribution. Except as the Committee may otherwise
provide, during the life of the Optionee, all rights granted to the
Optionee under the Plan or under any Agreement shall be exercisable only by
him.
3.3 Withholding of Taxes.
(a) The Company shall be entitled to withhold from any
payments to an Optionee an amount sufficient to satisfy any federal, state
and other governmental tax required to be withheld in connection with the
exercise of an Option. Whenever under the Plan shares of Common Stock are
to be delivered upon exercise of an Option, Dal-Tile shall be entitled to
require as a condition of delivery that the Optionee remit an amount
sufficient to satisfy all federal, state and other governmental tax
withholding requirements related thereto.
(b) Disposition of Incentive Stock Options. If an Optionee
makes a disposition, within the meaning of Section 424(c) of the Code and
regulations promulgated thereunder, of any share or shares of Common Stock
issued to such Optionee pursuant to the exercise of an Option granted as an
Incentive Stock Option within the two-year period commencing on the date
after the Date of Grant or within the one-year period commencing on the
date after the date of transfer of such share or shares of Common Stock to
the Optionee pursuant to such exercise, the Optionee shall, within ten (10)
days of such disposition, notify Dal-Tile thereof, by delivery of written
notice to Dal-Tile at its principal executive office.
3.4 Adjustments Upon Changes in Capitalization. The number of
shares of Common Stock or other stock or securities which may be issued
pursuant to the exercise of Options granted under the Plan in the aggregate
and to any Optionee and the exercise price of Options shall be equitably
adjusted for any increase or decrease in the number of issued shares of
Common Stock resulting from the subdivision or combination of shares of
Common Stock or other capital adjustments, or the payment of a stock
dividend or extraordinary cash dividend after the effective date of this
Plan, or other increase or decrease in the number of such shares of Common
Stock effected without receipt of consideration by Dal-Tile; provided,
however, that any Options to purchase fractional shares of Common Stock
resulting from any such adjustment shall be eliminated. Adjustments under
this Section 3.4 shall be made by the Committee, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final,
binding and conclusive. 3.5 Right of Discharge Reserved. Nothing in this
Plan or in any Agreement shall confer upon any employee or other person the
right to continue in the employment or service of the Company or affect any
right which the Company may have to terminate the employment or service of
such employee or other person.
3.6 No Rights as a Stockholder. No Optionee or other person
holding an Option shall have any of the rights of a stockholder of Dal-Tile
with respect to shares subject to an Option until the issuance of a stock
certificate to him for such shares. Except as otherwise provided in Section
3.4, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities
or other property) for which the record date is prior to the date such
stock certificate is issued.
3.7 Nature of Payments.
(a) Any and all payments of shares of Common Stock or cash
hereunder shall be granted, transferred or paid in consideration of
services performed by the Optionee for the Company.
(b) All such grants, issuances and payments shall constitute
a special incentive payment to the Optionee and shall not, unless otherwise
determined by the Committee, be taken into account in computing the amount
of salary or compensation of the Optionee for the purposes of determining
any pension, retirement, death or other benefits under (i) any pension,
retirement, life insurance or other benefit plan of the Company or (ii) any
agreement between the Company and the Optionee.
3.8 Non-Uniform Determinations.
The Committee's determinations under the Plan need not be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, awards under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the
Committee shall be entitled, among other things, to make non-uniform and
selective determinations, and to enter into non-uniform and selective
Agreements, as to (i) the persons to receive awards under the Plan, and (ii)
the terms and provisions of awards under the Plan.
3.9 Other Payments or Awards. Nothing contained in the Plan shall
be deemed in any way to limit or restrict the Company or the Committee from
making any award or payment to any person under any other plan, arrangement
or understanding, whether now existing or hereafter in effect.
3.10 Restrictions.
(a) If the Committee shall at any time determine that any
Consent (as hereinafter defined) is necessary or desirable as a condition
of, or in connection with, the granting of any award under the Plan, the
issuance or purchase of shares or other rights thereunder or the taking of
any other action thereunder (each such action being hereinafter referred to
as a "Plan Action"), then such Plan Action shall not be taken, in whole or
in part, unless and until such Consent shall have been effected or obtained
to the full satisfaction of the Committee.
(b) The term "Consent" as used herein with respect to any
Plan Action means (i) any and all listings, registrations or qualifications
in respect thereof upon any securities exchange or under any federal, state
or local law, rule or regulation, (ii) any and all written agreements and
representations by the grantee with respect to the disposition of shares,
or with respect to any other matter, which the Committee shall deem
necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the
requirement that any such listing, qualification or registration be made
and (iii) any and all consents, clearances and approvals in respect of a
Plan Action by any governmental or other regulatory bodies.
3.11 Section Headings. The section headings contained herein are
for the purposes of convenience only and are not intended to define or
limit the contents of said sections.
3.12 Interpretation. Unless expressly stated in the relevant
Agreement, each Option is intended to be performance-based compensation
within the meaning of Section 162(m)(4)(C) and the Committee shall
interpret the Plan accordingly.
3.13 Effective Date and Term of Plan.
(a) The 1998 Amended and Restated Stock Option Plan was
approved by the Board effective as of July 17, 1998 subject to approval of
the Plan by a majority of the voting stockholders of the Company.
(b) The Plan shall terminate 10 years after its adoption by
the Board, and no awards shall thereafter be made under the Plan.
Notwithstanding the foregoing, all awards made under the Plan prior to the
date on which the Plan terminates shall remain in effect until such awards
have been satisfied or terminated in accordance with the terms and
provisions of the Plan.
EXHIBIT 5.1
[LETTERHEAD OF DAL-TILE INTERNATIONAL INC.]
January 20, 1999
Dal-Tile International
7834 C.F. Hawn Freeway
Dallas, TX 75217
RE: Registration Statement on Form S-8 for the Dal-Tile International
Inc. 1990 Stock-Option Plan (As Amended and Restated) (the "Plan")
Ladies and Gentlemen:
This opinion is delivered in connection with the registration by
Dal-Tile International Inc., a Delaware corporation (the "Company"), on
Form S-8 (the "Registration Statement"), under the Securities Act of 1933
(the "Act"), as amended, of 3,529,806 shares of common stock of the
Company, par value $.01 per share (the "Common Stock") issuable upon the
exercise of stock options granted on or prior to January 1, 1996 pursuant
to the Plan.
In arriving at this opinion, I have examined such corporate
instruments, documents, statements and records of the Company, and I have
examined such statutes and regulations and have conducted such legal
analysis, as I have deemed relevant, necessary and appropriate for the
purposes of this opinion. I have assumed the genuineness of all signatures
and the authenticity of all documents submitted to me as originals, the
conformity to original documents of all the documents submitted to me as
certified or photostatic copies, and the authenticity of the originals of
such latter documents. I also have assumed that any future changes to the
terms and conditions of the Plan will be duly authorized by the Company and
will comply with all applicable laws.
Based on the foregoing, I am of the opinion that the 3,529,806
shares of Common Stock to be issued pursuant to the Registration Statement
have been duly authorized and, when issued and delivered by the Company in
accordance with the terms and conditions of the Plan, will be validly
issued, fully paid and nonassessable securities of the Company.
I hereby consent to the reference to my name in the Registration
Statement and further consent to the inclusion of this opinion as Exhibit
5.1 to the Registration Statement. In giving this consent, I do not hereby
admit that I am in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Securities and
Exchange Commission.
The opinion expressed herein is solely for your benefit in
connection with the Registration Statement and may not be relied on in any
manner or for any purpose by any other person or entity and may not be
quoted in whole or in part without my prior written consent.
Very truly yours,
/s/ Mark A. Solls
-------------------------------
Mark A. Solls
Vice President, General Counsel
and Secretary
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Dal-Tile International Inc. 1990 Stock Option
Plan (as amended and restated) of our report dated February 16, 1998 with
respect to the consolidated financial statements of Dal-Tile International
Inc., as amended, included in its Form 10-K/A.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
Dallas, Texas
January 15, 1999