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Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
ROBERDS, INC.
(Exact name of registrant as specified in its charter)
OHIO 31-0801335
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1100 EAST CENTRAL AVENUE
DAYTON, OHIO 45449-1888
(Address of principal executive offices) (Zip code)
ROBERDS, INC. AMENDED 1993 STOCK INCENTIVE PLAN
(Full title of the plan)
ROBERT M. WILSON, PRESIDENT COPIES TO:
ROBERDS, INC. GLENN E. MORRICAL, ESQ.
1100 EAST CENTRAL AVENUE ARTER & HADDEN LLP
DAYTON, OHIO 45449-1888 925 EUCLID AVENUE
(Name and address of agent for service) 1100 HUNTINGTON BUILDING
CLEVELAND, OHIO 44115
(937) 859-5127 (216) 696-1100
(Telephone number, including area
code, of agent for service)
Pursuant to Rule 429(b), the Resale Prospectus constituting a part of
this Registration Statement also relates to the following seven Registration
Statements on Form S-8: Registration No. 33-73900, Registration No. 33-79182,
Registration No. 33-81086, Registration No. 33-97262, Registration No.
333-19903, Registration No. 333-37829 and Registration No. 333-43977.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================ ======================== ===================== ====================== ========================
TITLE OF SECURITIES TO BE AMOUNT TO BE REGISTERED PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF REGISTRATION
REGISTERED OFFERING PRICE AGGREGATE FEE
PER SHARE (3) OFFERING PRICE (3)
- ---------------------------- ------------------------ --------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
Common Shares
without par value 1,700,000 shares (1)(2) $1.4375 $2,443,750 $679.36
============================ ======================== ===================== ====================== ========================
</TABLE>
(1) Additional number of shares that may be issued under the Roberds,
Inc. Amended 1993 Stock Incentive Plan ( "Plan").
(2) Pursuant to Rule 416 under the Securities Act, additional Common
Shares of the Company issued or which become issuable in order to prevent
dilution resulting from any future stock split, stock dividend or similar
transaction are also being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(h) under the Securities Act based upon the average of
the high and low prices per share of the Company's Common Shares reported on the
Nasdaq SmallCap Market for September 20, 1999.
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EXPLANATORY NOTES
This Registration Statement has been filed to register 1,700,000
additional Common Shares made available under the Roberds, Inc. Amended 1993
Stock Incentive Plan ("Plan") by reason of the amendment thereto approved
effective April 30, 1999.
Pursuant to General Instruction E to Form S-8, the contents of the
Registrant's earlier Registration Statement on Form S-8 (File No. 33-97262)
relating to the Plan are incorporated herein by reference and made a part
hereof, and only the items required pursuant to such instruction are included
herein.
This Registration Statement also contains a Prospectus as provided by
General Instruction C to Form S-8 which relates to reoffers and resales of
Common Shares of the Registrant by (i) certain of its directors who have
acquired or may acquire shares pursuant to the Amended and Restated Roberds,
Inc. Deferred Compensation Plan for Outside Directors ("Deferred Compensation
Plan") or the Roberds, Inc. 1993 Outside Director Stock Option Plan ("Director
Plan"), or (ii) certain of its directors, officers and employees who have
acquired or may acquire shares pursuant to the Roberds, Inc. Profit Sharing and
Employee Retirement Savings Plan ("Retirement Savings Plan"), the Roberds, Inc.
Amended Employee Stock Purchase Plan ("Stock Purchase Plan") and the Plan.
Registration statements on Form S-8 have been filed with the Securities and
Exchange Commission relating to Common Shares issued or issuable under the
Deferred Compensation Plan (File No. 333-19903), the Director Plan (33-79182),
the Retirement Savings Plan (33-81086 and 333-43977), the Stock Purchase Plan
(33-73900 and 333-37829), and the Plan (33-97262).
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PROSPECTUS
ROBERDS, INC.
3,760,000 COMMON SHARES
Without Par Value
This Prospectus relates to not more than 3,760,000 Common Shares
without par value ("Common Shares") of Roberds, Inc., an Ohio corporation
("Company"), which have been or may be acquired by certain of its directors
pursuant to the Roberds, Inc. Outside 1993 Director Stock Option Plan or the
Amended and Restated Roberds, Inc. Deferred Compensation Plan for Outside
Directors or certain of its directors, officers and employees pursuant to the
Roberds, Inc. 1993 Amended Stock Incentive Plan, the Roberds, Inc. Amended
Employee Stock Purchase Plan or the Roberds, Inc. Profit Sharing and Employee
Retirement Savings Plan (collectively referred to in this Prospectus as the
"Plans"). This Prospectus covers any offers that may be made from time to time
by any or all of the security holders named herein ("Security Holders"). None of
the Security Holders have indicated to the Company any present intent to sell
any shares of the Company. It is anticipated that the Security Holders will
offer shares for sale at prices related to prevailing market prices. The Company
will receive no part of the proceeds of the sales, if any, made hereunder. All
expenses of registration are being borne by the Company, but all selling and
other expenses, if any, incurred by the individual Security Holders will be
borne by such Security Holders.
The Company's common shares trade on the Nasdaq SmallCap Market of the
Nasdaq Stock Market under the symbol "RBDS." On September 22, 1999, the closing
price of the Common Shares was $1.25.
The Security Holders and any broker executing selling orders on behalf
of any Security Holder may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended ("Securities Act"), in which event
commissions received by such broker may be deemed to be an underwriting
commission under the Securities Act.
SEE "CERTAIN FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD
BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON SHARES OFFERED
HEREBY.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is September 23, 1999.
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AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-8
("Registration Statement") under the Securities Act with the Securities and
Exchange Commission ("Commission") which includes this Prospectus with respect
to the Common Shares of the Company offered by Security Holders hereby. As
permitted by the rules and regulations of the Commission, this Prospectus omits
certain information contained in the Registration Statement. For further
information with respect to the Company and the Common Shares offered hereby,
reference is made to the Registration Statement, including the exhibits and
schedules thereto, which may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20459 or at its Regional Offices located at 500 West Madison, 14th Floor,
Chicago, Illinois 60661-2511 and 7 World Trade Center, 13th Floor, New York, New
York 10048. Statements contained in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
The Company files reports and other information with the Commission
pursuant to the Securities Exchange Act of 1934, as amended ("Exchange Act").
Reports, proxy statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
or at its Regional Offices located at 500 West Madison, 14th Floor, Chicago,
Illinois 60661-2511 and 7 World Trade Center, 13th Floor, New York, New York
10048, and copies of such material can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Information on the operation of the Commission's
public reference facilities can be obtained from the Commission by calling
1-800-SEC-0330. In addition, the Commission maintains an Internet site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company.
The Common Shares trade on the SmallCap Market of the Nasdaq Stock
Market, and reports, proxy statements and other information concerning the
Company may be inspected and copied at the offices of the Nasdaq Stock Market at
1735 K Street, N.W., Washington, D.C. 20006.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus is delivered, upon oral or written request of such
person, a copy of any and all of the information that has been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents. Requests for such copies should be directed to the attention of the
Corporate Secretary, Roberds, Inc., 1100 East Central Avenue, Dayton, Ohio
45449-1888, (937) 859-5127.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company previously filed with the
Commission are, as of their respective dates, incorporated in this Prospectus by
reference and made a part hereof:
1. The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998.
2. The Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1999 and June 30, 1999.
3. Description of the Registrant's Common Shares contained in Item 1 of
the Registrant's Registration Statement on Form 8-A (File No.
0-22702) filed under Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
All reports filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior
to the filing of a post-effective amendment which indicates that all Common
Shares offered have been sold or which deregisters all Common Shares then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be made a part hereof from the respective date of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein which has been filed with the Commission as of
the date hereof shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement contained
in this Prospectus shall be
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deemed to be modified or superseded by any statement contained in a document
incorporated or deemed to be incorporated by reference which has been filed with
the Commission after the date hereof to the extent that a statement written in
such subsequently filed document modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge a copy of all documents
mentioned above which have been or may be incorporated in this Prospectus by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that is incorporated
herein) to each person receiving this Prospectus (including any beneficial
owner), upon the written or oral request of such person. Requests for such
copies should be directed to:
Roberds, Inc.
Attention: Corporate Secretary
1100 East Central Avenue
Dayton, Ohio 45449-1888
Telephone: (937) 859-5127
NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OF THE SECURITY HOLDERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF ANY OFFER TO BUY, ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO, OR A
SOLICITATION OF, ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
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THE COMPANY
Roberds is a leading retailer of a broad range of home furnishing
products, including furniture, bedding, major appliances, and consumer
electronics.
The Company was incorporated in 1971 under the laws of the State of
Ohio. Its executive offices are located at 1100 East Central Avenue, Dayton,
Ohio 45449-1888, and its telephone number is (937) 859-5127.
CERTAIN FACTORS
In considering matters discussed in this Prospectus, prospective
purchasers of Common Shares should carefully consider certain risks associated
with the Common Shares including, but not limited to, the following:
CYCLICAL NATURE OF BUSINESS
- ---------------------------
The market for furniture, bedding, major appliances, and consumer electronics
has historically been cyclical, fluctuating significantly with general economic
cycles. During economic downturns, these product lines tend to experience longer
periods of recession and greater declines than the general economy. The Company
believes that the industry is significantly influenced by economic conditions
generally and particularly by the level of housing activity, interest rates,
consumer confidence, personal discretionary spending, and credit availability.
There can be no assurance that a prolonged economic downturn would not have a
material adverse effect on the Company.
RELIANCE ON VENDORS AND PRODUCT LINES
- -------------------------------------
Vendors provide the Company with substantial incentives in the form of
discounts, volume rebates, inventory financing programs, and cooperative
advertising. There can be no assurance that such vendor incentives will continue
at such levels. A reduction in or discontinuance of these vendor incentives or
significant delays in receiving them could have a material adverse effect on the
Company. Access to certain vendors and brand names is important to the Company's
continuing success. The loss of a key vendor, such as General Electric or
Broyhill, could have a material adverse effect on the Company.
EXPANSION
- ---------
The Company's planned growth depends, in part, on its ability to expand into new
markets and, to a lesser extent, its ability to open new stores within its
existing market areas. There is no assurance that the Company will be able to
locate favorable store sites and arrange favorable leases for new stores; open
new stores in a timely manner; hire, train, and integrate employees and managers
in those new stores; or that the Company will have access to sufficient
financial resources to permit further expansion. Similarly, there can be no
assurance that the Company can enter new markets successfully.
COMPETITION
- -----------
The retail sale of furniture, bedding, major appliances, and consumer
electronics products in the United States is highly competitive and, for
furniture and bedding products, is highly fragmented. There are large numbers of
local, regional, and national chains of department stores, specialty retailers,
and mass and catalog merchandisers, as well as mail-order and internet
merchandisers, competing in each of the Company's product categories and within
its geographic markets. Many of these competitors are publicly held and have
financial and other resources substantially greater than those of the Company.
Further, many of the Company's competitors, particularly in the appliance and
electronics product categories, have suffered severe financial problems. From
time to time, this has caused the Company to have to compete against retailers
that are liquidating merchandise or operating under the protection of the
bankruptcy laws. In the major appliance and consumer electronics categories,
there has been significant expansion into the Company's markets by publicly held
national "superstore" chains, which has greatly increased the competitive
environment in those product categories. In general, these competitive
conditions have led to heavy advertising, severe price competition, and
extensive use of "same-as-cash" programs. The Company expects such competition
to continue.
CONTROL BY INITIAL SHAREHOLDERS
- -------------------------------
Three individuals ("Initial Shareholders") owned all of the outstanding Common
Shares prior to the initial public offering in
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1993 ("IPO"). Two of those individuals, their spouses, and the estate of one of
them continue to own 49.5 percent of the outstanding Common Shares, and may be
in a position to control the outcome of all action requiring shareholder
approval, including the election of the entire Board of Directors, thereby
insuring their ability to control the future direction and management of the
Company.
DEPENDENCE ON LEASES WITH AFFILIATED PARTIES
- --------------------------------------------
The Company leases a substantial number of its properties from the Initial
Shareholders or entities controlled by one or more of them.
DEPENDENCE ON SENIOR MANAGEMENT
- -------------------------------
The Company's future performance depends to a significant extent upon the
efforts and abilities of certain members of senior management. The loss of the
services of any member of senior management could have a material adverse effect
upon the Company.
SHARES ELIGIBLE FOR FUTURE SALE
- -------------------------------
As of the date of this Prospectus, 6,191,762 Common Shares were outstanding. Of
these shares, the 2,700,000 Common Shares sold in the IPO are eligible for sale
in the public market without restriction, except for any shares purchased in the
IPO by an affiliate of the Company. As noted above, the Initial Shareholders
hold nearly a majority of the Common Shares, which are eligible for sale in the
public market pursuant to Rule 144 promulgated under the Securities Act of 1933.
In addition, the Company has filed Registration Statements on Form S-8 with
respect to all of the 3,000,000 Common Shares issuable under the Company's 1993
Stock Incentive Plan, all of the 10,000 Common Shares issuable pursuant to the
Company's Outside Director Stock Option Plan, all of the 225,000 Common Shares
issuable under the Company's Profit Sharing and Employee Retirement Savings
Plan, all of the 500,000 Common Shares issuable under the Roberds, Inc. Amended
Employee Stock Purchase Plan, and all of the 25,000 Common Shares issuable under
the Amended and Restated Deferred Compensation Plan for Outside Directors. Sales
of a substantial number of Common Shares in the public market, whether by
purchasers in the IPO or Initial Shareholders, or the perception that such sales
could occur, could adversely affect the market price of the Common Shares and
could impair the Company's future ability to raise capital through an offering
of its equity securities.
EFFECT OF CERTAIN CHARTER AND REGULATION PROVISIONS
- ---------------------------------------------------
The Company's Amended Articles of Incorporation and Regulations contain
provisions that may discourage acquisition bids for the Company and could limit
the price that certain investors might be willing to pay in the future for
Common Shares. Among such provisions are requirements for staggered terms of
directors and super-majority voting requirements for certain business
combinations.
OTHER FACTORS POSSIBLY AFFECTING FUTURE PERFORMANCE OF THE COMPANY
- ------------------------------------------------------------------
In addition to the factors identified above, future performance of the Company
may be affected by the factors identified in the section headed "Forward-Looking
Statements" contained in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999 and that may be identified in future filings by the
Company with the SEC.
CHANGE IN LISTING OF ROBERDS' SHARES ON NASDAQ
- ----------------------------------------------
As described more fully in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, Nasdaq changed the listing of the Company's shares
from the National Market tier of the Nasdaq Stock Market to the SmallCap Market,
effective June 21, 1999. It is not yet clear what impact this change may have on
trading in the Company's Common Shares or their price.
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OPERATING LOSSES
- ----------------
The Company has lost money in each of the years 1996-98 and for the six months
ended June 30, 1999. While the Company has implemented plans and a structure to
turn around its performance, there can be no assurance that it will be
successful in doing so.
FINANCIAL COVENANTS REQUIRE IMPROVEMENT IN RESULTS FROM OPERATIONS
- ------------------------------------------------------------------
In March 1999, the Company refinanced its revolving line of credit. The line of
credit includes certain restrictive covenants including, among others,
limitations on capital expenditures and the aggregate amount of funded debt.
The line prohibits the payment of dividends. The line also requires the
maintenance of a minimum fixed-charge-coverage ratio, which becomes
increasingly restrictive over time. In order to comply with this covenant, the
Company must improve operations significantly during 1999 over the actual
results experienced during 1998. If such improvements are not achieved, the
Company will have to renegotiate the covenants in order to remain in compliance.
Several of the Company's mortgage notes payable also include restrictive
covenants, including the maintenance of maximum debt to net worth ratios and a
requirement to maintain a minimum of $25,000 of tangible net worth. If these
covenants can not be maintained, the Company will have to renegotiate the
covenants in order to remain in compliance.
The Company has no assurance that the renegotiations discussed above, if
necessary, will be successful. If such renegotiations are not successful, the
Company will seek alternative financing sources. While the Company believes
that such financing can be obtained, there can be no assurance that it can be
obtained at all, or that it can be obtained on terms or at rates comparable to
those in the existing agreement or acceptable to the Company.
LABOR RELATIONS
- ---------------
On May 15, 1999, a majority of the commissioned sales associates in the
Company's Ohio region voted to be represented by the United Food and Commercial
Workers, Local 1099. Bargaining has commenced, but it is not clear what changes,
if any, may be made to the Company's work practices, compensation arrangements,
or benefits programs as the result of such bargaining.
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PLAN OF DISTRIBUTION
The following table sets forth at August 31, 1999, the names of the
Security Holders, relevant information regarding the relationship of the
Security Holders to the Company, the number of Common Shares beneficially owned
by each of them (including all shares that may be acquired upon exercise of
options or stock appreciation rights whether or not currently exercisable or
exercisable within 60 days), the number of shares covered by this Prospectus and
the number and percentage of shares held assuming all shares covered by the
Prospectus were sold.
<TABLE>
<CAPTION>
TOTAL NUMBER OF PERCENTAGE
NUMBER OF SHARES HELD OWNERSHIP
SHARES NUMBER OF ASSUMING ASSUMING
BENEFICIALLY SHARES SALE OF SALE OF
OWNED COVERED SHARES COVERED SHARES COVERED
NAME AND ADDRESS OF INCLUDING BY THIS BY THIS BY THIS
BENEFICIAL OWNER TITLE OPTIONS(1) PROSPECTUS(1) PROSPECTUS(2) PROSPECTUS(2)
- ---------------- ----- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Donald C. Wright Chairman 1,495,670 1,495,670 22.2
433 Windsor Park Drive
Dayton, Ohio 45459
Deborah A. Fletcher 1,324,401 1,324,401 19.7
1110 East Central Avenue
Dayton, Ohio 45449
Howard W. Smith Director 176,627 176,627 2.6
P.O. Box 390
Gray Hawk, Kentucky 40434
Billy D. Benton Executive Vice President- 154,355 144,355 10,000 *
General Merchandise
Manager
Melvin H. Baskin Chief Executive Officer 100,000 100,000 *
Robert M. Wilson President, Chief 66,230 65,230 1,000 *
Administrative Officer,
General Counsel,
Secretary, Director
James F. Robeson Vice Chairman 44,509 41,009 3,500 *
5120 Bonham Road
Oxford, Ohio 45056
Michael Van Autreve Vice President- 43,770 43,770 *
Bedding
R. Brian Good Senior Vice President- 41,200 25,000 16,200 *
Stores
</TABLE>
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<TABLE>
<CAPTION>
TOTAL NUMBER OF PERCENTAGE
NUMBER OF SHARES HELD OWNERSHIP
SHARES NUMBER OF ASSUMING ASSUMING
BENEFICIALLY SHARES SALE OF SALE OF
OWNED COVERED SHARES COVERED SHARES COVERED
NAME AND ADDRESS OF INCLUDING BY THIS BY THIS BY THIS
BENEFICIAL OWNER TITLE OPTIONS(1) PROSPECTUS(1) PROSPECTUS(2) PROSPECTUS(2)
- ---------------- ----- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Charles H. Palko Vice President - 30,000 30,000 *
Appliances and
Electronics
M. Scott Taylor Vice President- 20,000 20,000 *
Human Resources
Michael A. Bruns Vice President, 17,729 17,729 *
Controller, Chief
Accounting Officer
Wayne P. McCollum Chief Information Officer 17,500 16,500 1,000 *
Wayne B. Hawkins Treasurer, 17,318 17,318 *
Assistant Secretary
Gearry Davenport Chief Financial Officer 15,500 15,500 *
Gilbert P. Williamson Director 13,864 13,864 *
2320 Kettering Tower
Dayton, Ohio 45423
Steven Dominguez Vice President- 12,500 12,500 *
Visual Merchandising
Sandra J. Jackson Vice President-Marketing 12,500 12,500 *
Jonathan W. House Vice President-Warehousing, 10,000 10,000 *
Distribution and Logistics
Theodore D. Palmer Vice President-Store 10,000 10,000 *
Operations and Control
Jerry L. Kirby Director 3,500 2,000 1,500 *
One Fifth/Third Centre
Dayton, Ohio 45402
</TABLE>
Unless indicated otherwise, the business address of all the individuals listed
above is 1100 East Central Avenue, Dayton, Ohio 45449-1888.
- ----------------
* Less than one percent
(1) Includes (a) all Common Shares that may be acquired upon
exercise of options outstanding at the date of this Prospectus,
whether or not currently exercisable or exercisable within 60
days and (b) all Common Shares vested for the benefit of the
named persons under the Roberds, Inc. Profit Sharing and
Employee Retirement Savings Plan, the Roberds, Inc. Employee
Stock Purchase Plan, the Roberds, Inc. 1993 Stock Incentive Plan
or the Amended and Restated Roberds, Inc. Deferred Compensation
Plan for Outside Directors. Excludes Common Shares covered by
this Prospectus as to which the number is not determinable
because such Common Shares may be acquired in the future under
one or more of the plans.
(2) Assumes all Common Shares acquired by such persons covered by
this Prospectus have been sold. None of the Security Holders
have indicated any present intent to sell any shares of the
Company.
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The preceding table may be amended or supplemented from time to time to
reflect changes in the persons included as Security Holders and changes in
other information presented. Inclusion in the table as a Security Holder
above is not any admission that the person so named is an "executive
officer" or affiliate of the Company within the meaning of Rule 405 under
the Securities Act.
The Security Holders may make private sales of the Common Shares from time
to time directly or through a broker or brokers. In connection with any
sales, the Security Holders and any brokers participating in such sale may
be deemed to be "underwriters" within the meaning of the Act. Security
Holders may sell shares in public or private transactions at negotiated
prices or market prices either directly or through a broker or brokers.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 1701.13 of the Ohio Revised Code provides generally that a
corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action or suit
because such person was or is a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, or agent of another corporation or
entity. In the event that any director or officer succeeds on the merits in
any action, indemnification is required. Such indemnification includes
attorneys fees, actually and reasonably incurred by such a person in
connection with the defense or settlement of any such action or suit if such
person acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and, with regard to
criminal actions, the director or officer had no reason to believe his
conduct was unlawful. In the context of a derivative suit by or in the right
of a corporation, a corporation may indemnify a director or officer if the
director or officer acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation
and such director or officer is not adjudged to be liable for negligence or
misconduct to the corporation, or the action or lawsuit is not brought under
provisions of the Ohio General Corporation Law pertaining to unlawful loans,
dividends or distributions of assets.
Directors only are entitled to advancement of costs incurred in defending
any suit or derivative action, provided that any such action does not arise
under the provisions of the Ohio General Corporation Law pertaining to
unlawful loans, dividends, or distributions of assets. In order to receive
mandatory advancement, a director must first agree to cooperate with the
corporation and repay the amount advanced if it is proven by clear and
convincing evidence that his act or failure to act was done with deliberate
intent to cause injury to the corporation or reckless disregard for the
corporation's best interests.
The indemnification provided pursuant to the Ohio General Corporation Law is
not exclusive and is in addition to any further indemnification provided
pursuant to a corporation's code of regulations, any other agreement or
otherwise.
Article VI of the Company's Amended Code of Regulations provides that the
Registrant shall provide indemnity to the fullest extent authorized by law,
including the provisions of the Ohio General Corporation Law. In addition,
the Amended Code of Regulations entitles officers to advancement of costs
incurred in defending any suit or derivative action. In connection with
actions initiated by any director or officer seeking indemnity,
indemnification will be provided only if the action, suit or proceeding
initiated by such person was authorized by the board of directors. All
indemnification rights provided by the Amended Code of Regulations are
deemed contract rights pursuant to which any such person entitled to
indemnification may bring suit as if the provisions of the Amended Code of
Regulations were set forth in a separate written contract between the
Company and any director or officer.
The Company maintains an insurance policy covering its directors and
officers for alleged wrongful acts or omissions within the scope of their
duties subject to certain exclusions and deductibles. The cost of that
policy is borne by the Company.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to Directors, officers and persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
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.
11
<PAGE> 12
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 Dayton, State of Ohio, on September 23, 1999.
ROBERDS, INC.
By: /s/ Robert M. Wilson
-------------------------
Robert M. Wilson
President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on September 23, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chief Executive Officer, Director
- -------------------------
Melvin H. Baskin
/s/ Robert M. Wilson Director, President, and
- ------------------------- Chief Administrative Officer
Robert M. Wilson
* Chief Financial Officer (Principal Financial Officer)
- -------------------------
Gearry Davenport
* Vice President, Controller and Chief Accounting
- ------------------------- Officer (Principal Accounting Officer)
Michael A. Bruns
* Vice Chairman of the Board of Directors
- -------------------------
James F. Robeson
* Director
- -------------------------
Jerry L. Kirby
* Director
- -------------------------
Gilbert P. Williamson
* Director
- -------------------------
Howard W. Smith
* Chairman of the Board of Directors
- -------------------------
Donald C. Wright
</TABLE>
*By: /s/ Robert M. Wilson
---------------------------
Robert M. Wilson
Attorney-in-Fact
pursuant to powers of attorney filed herewith
12
<PAGE> 13
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------
<S> <C>
5.1 Opinion of Arter & Hadden LLP.
23.1 Independent Auditors' Consent.
23.2 Consent of Arter & Hadden LLP (Included in Exhibit 5.1).
24 Powers of Attorney.
99.1 Roberds, Inc. Amended 1993 Stock Incentive Plan, as amended April 30, 1999
</TABLE>
13
<PAGE> 1
EXHIBIT 5.1
-----------
ARTER & HADDEN LLP
925 Euclid Avenue
1100 Huntington Building
Cleveland, Ohio 44115
September 23, 1999
Roberds, Inc.
1100 East Central Avenue
Dayton, Ohio 45449-1888
Gentlemen:
As special securities counsel for Roberds, Inc., an Ohio corporation
("Company"), we are familiar with the Registration Statement on Form S-8,
referred to herein as the "Registration Statement," to be filed on or about
September 23, 1999 by the Company with the Securities and Exchange Commission
("Commission") under the Securities Act of 1933, as amended, with respect to
1,700,000 of the Company's Common Shares, without par value ("Shares") issuable
pursuant to the Roberds, Inc. Amended 1993 Stock Incentive Plan ("Plan").
In connection with the foregoing, we have examined (a) the Amended
Articles of Incorporation and the Code of Regulations of the Company, each as
amended to date, (b) the Plan, and (c) such records of the corporate proceedings
of the Company and such other documents as we deemed necessary to render this
opinion.
Based upon such examination, we are of the opinion that the Shares have
been duly authorized and when issued and delivered upon receipt of the
consideration provided for under the Plan and in the manner contemplated by the
Plan will be validly issued, fully paid, and nonassessable.
We hereby bring to your attention that our legal opinions are an
expression of professional judgment and not a guarantee of a result. This
opinion is rendered as of the date hereof, and we undertake no, and hereby
disclaim any, obligation to advise you of any changes or new developments that
might affect any matters or opinions set forth herein.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ Arter & Hadden LLP
ARTER & HADDEN LLP
14
<PAGE> 1
EXHIBIT 23.1
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Roberds, Inc. on Form S-8 of our report dated February 16, 1999 (March 10, 1999
as to Note D) (which expresses an unqualified opinion and includes an
explanatory paragraph relating to the ability of Roberds, Inc. to continue as a
going concern), appearing in the Annual Report on Form 10-K of Roberds, Inc. for
the year ended December 31, 1998, of our report dated February 26, 1999,
appearing in Amendment No. 1 to the Annual Report on Form 10-K/A for the year
ended December 31, 1998, and of our report dated March 15, 1999, appearing in
Amendment No. 2 to the Annual Report on Form 10-K/A for the year ended December
31, 1998.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Dayton, Ohio
September 21, 1999
<PAGE> 1
EXHIBIT 24
----------
POWER OF ATTORNEY
ROBERDS, INC.
Common Stock
KNOW ALL MEN BY THESE PRESENTS: That each person whose signature
appears below has made, constituted and appointed, and by this instrument does
make, constitute and appoint Robert M. Wilson, Michael A. Bruns, Glenn E.
Morrical, and Christian D. Saine, and each of them, his true and lawful
attorney, with full power of substitution and resubstitution, to affix for him
and in his name, place and stead, as attorney-in-fact, his signature as director
or officer, or both, of Roberds, Inc., an Ohio corporation (the "Company"), to
Registration Statements on Form S-8 or any other form that may be used from time
to time, with respect to the issuance and sale of its Common Shares and other
securities pursuant to the Roberds, Inc. 1993 Outside Director Stock Option
Plan, the Amended and Restated Roberds, Inc. Deferred Compensation Plan for
Outside Directors, the Roberds, Inc. Amended 1993 Stock Incentive Plan, the
Roberds, Inc. Amended Employee Stock Purchase Plan and the Roberds, Inc. Profit
Sharing and Employee Retirement Savings Plan and to any and all amendments,
post-effective amendments and exhibits to such Registration Statements, and to
any and all applications and other documents pertaining thereto, giving and
granting to each such attorney-in-fact full power and authority to do and
perform every act and thing whatsoever necessary to be done in the premises, as
fully as they might or could do if personally present, and hereby ratifying and
confirming all that each of such attorney-in-fact or any such substitute shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed this 23rd
day of September, 1999.
/s/ Melvin H. Baskin /s/ Jerry L. Kirby
- ------------------------- ---------------------------
Melvin H. Baskin Jerry L. Kirby
/s/ Robert M. Wilson /s/ Gilbert P. Williamson
- ------------------------- ---------------------------
Robert M. Wilson Gilbert P. Williamson
/s/ Michael A. Bruns /s/ James F. Robeson
- ------------------------- ---------------------------
Michael A. Bruns James F. Robeson
/s/ Howard W. Smith /s/ Donald C. Wright
- ------------------------- ---------------------------
Howard W. Smith Donald C. Wright
/s/ Gearry Davenport
- -------------------------
Gearry Davenport
16
<PAGE> 1
EXHIBIT 99.1
------------
ROBERDS, INC.
AMENDED 1993 STOCK INCENTIVE PLAN
April 30, 1999
1. PURPOSE. The purpose of this 1993 Stock Incentive Plan (the "Plan") is to
advance the interests of Roberds, Inc. ("the Company") and its shareholders by
offering to those employees of the Company and its subsidiaries who will be
responsible for the long-term growth of the Company's earnings the opportunity
to acquire or increase their equity interests in the Company or to enjoy
performance-based stock and/or cash incentives, thereby achieving a greater
commonality of interest between shareholders and employees, enhancing the
Company's ability to retain and attract highly qualified employees and providing
an additional incentive to such employees to achieve the Company's long-term
business plans and objectives.
2. AWARD OPPORTUNITIES. Awards under the Plan may be granted in the form of (a)
incentive stock options as provided in Section 412 of the Internal Revenue Code
of 1986, as amended (the "Code"), (b) nonqualified stock options, (c) shares of
common stock of the Company which are restricted and must be purchased by the
employee ("Restricted Stock"), (d) stock appreciation rights ("SARs"), (e)
limited stock appreciation rights ("LSARs"), (f) performance units, or (g) stock
units (all of which shall hereinafter be collectively referred to as "Awards").
Incentive and non-qualified stock options shall hereinafter be referred
to individually as an "option" and collectively as "Options" in this Plan.
3. ADMINISTRATION.
(A) COMMITTEE. The Plan shall be administered by the Company's Board of
Directors (the "Board") or by a committee (the "Committee") of the Board, as
determined from time to time by the Board. The Committee shall consist of no
fewer than three directors of the Company who shall be appointed, from time
to time, by the Board. At any time that the Company has a class of equity
securities registered under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), only directors who, at the time of
service, qualify as "non-employee directors" within the meaning of Rule 16b-3
or its successor under the Exchange Act shall be members of the Committee.
All references in this Plan to the Board shall be understood to refer either
to the full Board or to the Committee, to the extent administration of the
Plan has been delegated by the Board to the Committee.
(B) AUTHORITY. The Board, or the Committee, to the extent the Board has
delegated such authority to the Committee, shall have full and final
authority with respect to the Plan (i) to interpret all provisions of the
Plan consistent with law; (ii) to determine the employees who will receive
Awards; (iii) to determine the frequency of grant of Awards; (iv) to
determine the number and type of Options to be granted to each employee and
the price at which they may be exercised; (v) to determine the number of
shares of Restricted Stock to be granted to each employee and the purchase
price of such shares; (vi) to specify the number of shares subject to each
Option; (vii) to prescribe the form and terms of instruments evidencing any
Award granted under the Plan; (viii) to determine when Options or SARs may be
exercised or; (ix) to determine the term of the restricted period and other
conditions applicable to Restricted Stock; (x) to adopt, amend and rescind
general and special rules and regulations for the Plan's administration; and
(xi) to make all other determinations necessary or advisable for the
administration of the Plan. The Board may, with the consent of the person or
persons who has been granted an Award under the Plan, amend the instrument
regarding such Award consistent with the provisions of the Plan.
(C) INDEMNIFICATION. No member of the Board or the Committee shall be liable
for any action taken or determination made in good faith. The members of the
Board and the Committee shall be indemnified by the Company for any acts or
omissions in connection with the Plan to the full extent permitted by Ohio
and Federal law.
4. Eligibility. Participation in the Plan shall be determined by the Board and
shall be limited to employees of the
17
<PAGE> 2
Company and its subsidiaries.
5. STOCK SUBJECT TO PLAN. Subject to adjustments as provided in Section 12(A)
hereof, the aggregate number of shares of common stock, without par value, of
the Company ("Shares") as to which Awards may be granted under the Plan shall
not exceed 3,000,000 Shares. Such Shares may be authorized but unissued Shares
or treasury Shares.
The Board shall maintain records showing the cumulative total of all Shares
subject to Options outstanding, the number of Shares purchased as Restricted
Stock and their applicable restricted period under this Plan and the number of
Shares delivered in settlement of any other Award under the Plan.
If an Option granted hereunder shall expire or terminate for any reason
without having been fully exercised or if any Shares of Restricted Stock granted
under this Plan is forfeited to the Company or if any Shares to be issued
pursuant to an Award are not issued for any reason, then the Shares covered by
the unexercised portion of such Option, the forfeited Restricted Stock Shares
and the Shares not issued upon settlement of an Award shall be available for the
purposes of this Plan. In addition, any Shares which are used as full or partial
payment by a Participant of the exercise price upon exercise of an Option shall
be available for Awards under the Plan as shall any Shares which are withheld in
payment of tax withholding obligations of a Participant (as provided in Section
12 (F)).
6. OPTIONS.
(A) ALLOTMENT OF SHARES. The Board may, in its sole discretion and
subject to the provisions of the Plan, grant to eligible employees at
such times as it deems appropriate following adoption of the Plan by
the Board, Options to purchase Shares, subject to approval of the Plan
by the Company Shareholders.
Options may be allotted to participants in such amounts, subject to
the limitations specified in this Section, as the Board, in its sole
discretion, may from time to time determine.
(B) OPTION PRICE. The price per Share at which each non-qualified or
incentive stock option granted under the Plan may be exercised shall
not, as to any particular option, be less than one hundred percent
(100%) of the fair market value of a Share at the time such option is
granted. In the case of a participant who owns stock representing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of its parent or any subsidiary (as
determined under Section 425(d) of the Code) at the time the incentive
stock Option is granted, the Option price shall not be less than 110%
of the fair market value of the Shares at the time the incentive stock
option is granted. The foregoing rule shall not apply to a nonqualified
stock option.
For purposes of Options granted hereunder, "fair market value" of a
Share shall mean the average of the high and low prices reported in the
consolidated reporting system (for exchange traded securities and last
sale reported over-the-counter securities) or the average of the bid
and asked prices (for other over-the-counter securities), on the date
the Option is granted, or, if no such prices are available, the fair
market value on such date of a Share as the Board shall determine.
Unless another date is specified by the Board, the date on which the
Board approves the granting of an Option shall be deemed the date on
which the Option is granted.
(C) OPTION PERIOD. An Option granted under the Plan shall terminate,
and the right of the participant (or the participant's estate, personal
representative, or beneficiary) to purchase Shares upon exercise of the
Option shall expire, on the date determined by the Board at the time
the Option is granted (the "Termination Date"). No incentive stock
option shall be exercisable more than ten (10) years after the date on
which it was granted, and no nonqualified stock option shall be
exercisable more than ten (10) years and one (1) day after the date on
which it was granted. In the case of a participant who owns stock
representing more than ten percent (10%) of the total combined voting
power of all classes of the Company's stock, no incentive stock option
shall be exercisable more than five (5) years after the date on which
it is granted.
(D) EXERCISE OF OPTIONS.
(1) By a Participant During Continuous Employment.
Unless otherwise determined by the Board at the time of grant, an
Option will be exercisable in four (4) equal annual installments
commencing on the first anniversary of the date the Option was
granted and within the guidelines established by Section 6(F)
applicable to incentive stock op-
18
<PAGE> 3
tions. In its discretion, the Board may at any time accelerate the
exercisability of an Option. During the lifetime of a participant
to whom an Option is granted, the Option may be exercised only by
the participant or by the participant's attorney-in-fact or legal
guardian as hereinafter provided (unless such exercise would
disqualify an Option as an incentive stock option).
A participant who has been continuously employed by the Company or
a subsidiary since the date of Option grant is eligible to exercise all Options
which are then exercisable up to the Termination Date of such Options and within
the guidelines established by Section (F). The Board will decide in each case,
subject to the limitations set forth in Section 422 of the Code applicable to
incentive stock options, to what extent leaves of absence for government or
military service, illness, temporary disability, or other reasons shall not for
this purpose be deemed interruptions of continuous employment.
(2) By a Former Employee.
A participant who terminates employment with the Company and its
subsidiaries for reasons other than retirement, permanent and total
disability or death, must exercise all Options previously awarded on or
prior to the date of his termination of employment (but no later than
the Termination Date of the Options). The exercise of such Options must
be within the guidelines established by Section 6(F). An Option may be
exercised on or prior to the date of such termination of employment
only for the number of Shares for which it could have been exercised at
the time the participant terminated employment with the Company and its
subsidiaries. The failure to exercise all Options by a participant on
or prior to the date of his termination of employment will result in
the forfeiture of all unexercised Options.
(3) In Case of Retirement.
Upon retirement (as hereafter defined), the non-qualified stock
options of a participant must be exercised within three (3) years of
such retirement and the incentive stock Options must be exercised
within three (3) months of such retirement and within the guidelines
established by Section 6(F) (but no later than the Termination Date of
such Option). For purposes of the Plan, "retirement" shall mean that
the participant on the date of termination of employment has attained
age 60 with 10 years of continuous employment with the Company and its
subsidiaries. If the participant should die within the three (3) year
or three (3) month period following retirement, as applicable, the
provisions contained in Section 6(D), Paragraph 5 hereof shall apply.
The exercisability of all Options granted to such a Participant shall
be accelerated and the Options shall become immediately exercisable
without regard to the number of Shares for which it otherwise could
have been exercised on the date of retirement.
(4) In Case of Permanent and Total Disability.
If a participant who was granted an Option terminates employment
with the Company and its subsidiaries because of permanent and total disability
and is eligible for benefits under the Company disability plan, or successor
plan, upon termination of employment, all non-qualified stock Options previously
awarded must be exercised within three (3) years of such termination of
employment and all incentive stock Options must be exercised within one (1) year
of such termination of employment subject to the guidelines established by
Section 6 (F) (but no later than the Termination Date of such Option). If the
participant should die during such three (3) year or one (1) year period, as
applicable, the provisions contained in Section 6(D), Paragraph 5 hereof shall
apply. The exercisability of all Options granted to such a Participant shall be
accelerated and the Options shall become immediately exercisable without regard
to the number of Shares for which it could otherwise have been exercised on the
date of termination of employment.
(5) In Case of Death.
If a participant who was granted an Option dies while employed by
the Company or a subsidiary, or during the three (3) year or three (3) month
period following retirement or during the three (3) year or one (1) year period
following termination of employment due to permanent and total disability, as
applicable, all Options previously awarded must be exercised no later than the
Termination Date of such Option by the participant's estate, or by a person who
acquired the right to exercise the Option by bequest or inheritance and within
the guidelines established by Section 6(F). The exercisability of all Options
granted to such a Participant shall be accelerated and the Options shall become
immediately exercisable without regard to the number of Shares for which it
otherwise could have been exercised on the date of death.
19
<PAGE> 4
(6) Termination of Options.
An Option granted under the Plan shall be considered terminated in
whole or in part, to the extent that, in accordance with the provisions of the
Plan, it can no longer be exercised for Shares originally subject to the Option.
(E) MANNER OF EXERCISE AND PAYMENT.
(1) Exercise
Each option granted under this Plan shall be deemed exercised to the
extent that the participant shall deliver to the Company written notice of the
number of full Shares with respect to which the Option is being exercised. The
participant shall at the same time tender to the Company payment in full for the
Shares for which the Option is exercised, which may be in cash or, subject to
Section 6(E), Paragraph 2 hereof, in previously issued Shares or partly in cash
and partly in Shares, and shall comply with such other reasonable requirements
as the Board may establish, pursuant to Section 12(D) of the Plan. These
provisions shall not preclude exercise of an Option, or payment for Shares, by
any other proper legal method specifically approved by the Board.
No person, estate or other entity shall have any of the rights of a
shareholder with reference to Shares subject to an Option until a certificate
for the Shares has been delivered.
An Option granted under this Plan may be exercised for any lesser
number of whole Shares than the full amount for which it could then be
exercised, provided, however, that the Board may require, in the agreement
evidencing an Option, any partial exercise to be with respect to a specified
minimum number of Shares. Such a partial exercise of an Option shall not affect
the right to exercise the Option from time to time in accordance with the Plan
for the remaining Shares subject to the Option.
(2) Payment in Shares
The value of Shares delivered for payment of the exercise price
shall be the fair market value of the Shares determined as provided in Section
6(B) on the date the Option is exercised. If certificates representing Shares
are used to pay all or part of the exercise price of an Option, separate
certificates shall be delivered to the Company representing the number of Shares
so used, and an additional certificate or certificates shall be delivered
representing the additional Shares to which the Option holder is entitled as a
result of exercise of the Option. Notwithstanding the foregoing and the
provisions of Section 6(E), paragraph (1), the Board, in its sole discretion,
may refuse to accept Shares delivered for payment of the exercise price, in
which event any certificates representing Shares that were actually received by
the Company with the written notice of exercise shall be returned to the person
exercising such Option together with notice by the Company of the refusal of the
Company to accept such Shares.
In the event Shares are delivered for payment of the option price as
herein provided, then, at the discretion of the Board, the participant may be
granted an Option to purchase a number of Shares equal to the number of Shares
delivered in payment of the exercise price, with an exercise price equal to the
current fair market value of such Shares, and with a term of such Option
extending to the expiration date of the Option which was exercised with respect
to which Shares were delivered as payment of all or a portion of the exercise
price.
(3) Loans
The Company may make loans to such holders of Options as the Board,
in its discretion, may determine (including a holder who is a director or
officer of the Company) in connection with the exercise of Options granted under
the Plan; provided, however, that the Board shall not authorize the making of
any loan where the possession of such discretion or the making of such a loan
would result in a "modification" (as defined in Section 425 of the Code) of any
incentive stock option. Such loans shall be subject to the following terms and
conditions and such other terms and conditions as the Board shall determine at
the time the loan is made which are not inconsistent with the Plan. Such loans
shall bear interest at such rates as the Board shall determine from time to
time, which rates shall be the then current market rates. In no event may any
such loan exceed the fair market value, at the date of exercise, of the Shares
covered by the Option, or
20
<PAGE> 5
portion thereof, exercised by the holder. No loan shall have an initial term
exceeding five years, but any such loan may be renewable at the discretion of
the Board. At the time a loan is made, Shares having a fair market value at
least equal to the principal amount of the loan shall be pledged by the holder
to the Company as security for payment of the unpaid balance of the loan. Every
loan shall comply with all applicable laws, regulations and rules of the Board
of Governors of the Federal Reserve System and any other governmental agency
having jurisdiction.
(4) Award of Cash or Shares in Lieu of Exercise
The Board may elect, in lieu of accepting payment of the option
price and delivering any or all Shares as to which an Option has been exercised,
to pay the holder of such Option an amount in cash or Shares, or a combination
of cash and Shares, equal to the amount by which the fair market value
(determined as provided in Section 6(B)) on the date of exercise of the Shares
as to which such Option has been exercised exceeds the option price that would
otherwise be payable by the holder of such Option for such Shares. The Board may
also permit a Participant to simultaneously exercise an Option and sell the
Shares acquired upon exercise, pursuant to a brokerage arrangement, approved in
advance by the Board, and use the proceeds from such a sale as payment of the
option price of such Shares.
(5) Persons Subject to Section 16 of the Exchange Act
Participants who are subject to Section 16 of the Exchange Act are
hereby advised that reliance on Rule 16b-3 may require that any equity security
of the Company acquired upon exercise of an option by such person be held at
least until the date six months after the date of grant of the option.
(F) LIMITATIONS ON EXERCISE. In the case of Options intended to be
incentive stock options, the aggregate fair market value, determined as of the
date of grant, of the Shares as to which such Options are exercisable for the
first time by a participant shall be limited to $100,000 per calendar year.
Non-qualified stock options may be exercised by a participant without
regard to the foregoing limitation.
7. STOCK APPRECIATION RIGHTS.
(A) GRANTING OF STOCK APPRECIATION RIGHTS. The Board may, in its sole
discretion and subject to the provisions of the Plan, grant to eligible
employees at such times as it deems appropriate following adoption of
the Plan by the Board, Stock Appreciation Rights, subject to approval
of the Plan by the Company Shareholders.
(B) STOCK APPRECIATION RIGHTS.A Stock Appreciation Right is a right to
receive the following amount of appreciation -- an amount equal to the
excess of the fair market value of a Share on the exercise date over
the fair market value of a Share on the date of grant of the Stock
Appreciation Right, multiplied by the number of Shares with respect to
which the Stock Appreciation Right shall have been exercised.
(C) TERMS OF GRANTS. A Stock Appreciation Right may be granted in
tandem with, in addition to or completely independent of an Option or
any other Award under the Plan.
(D) MANNER OF EXERCISE. A Stock Appreciation Right may be exercised by
a Participant in accordance with procedures established by the Board,
and a Stock Appreciation Right shall be exercisable as provided by the
Board on the date of grant. The Board may also provide that a Stock
Appreciation Right shall be automatically exercised on one or more
specified dates. Notwithstanding the foregoing, all Stock Appreciation
Rights shall be automatically exercised as of the end of the month in
which the participant's employment terminates due to death, permanent
and total disability or retirement.
(E) FORM OF PAYMENT. Payment upon exercise of a Stock Appreciation
Right may be made in cash or in Shares, or any combination thereof, as
the Board shall determine; provided, however, that any Stock
Appreciation Right exercised upon or subsequent to the occurrence of a
Change of Control (as defined in Section 12(B)) shall be paid in cash.
(F) PERSONS SUBJECT TO SECTION 16 OF THE EXCHANGE ACT. Participants who
are subject to Section 16 of the Exchange Act are hereby advised that,
unless the date of exercise of a Stock Appreciation Right is automatic
or fixed
21
<PAGE> 6
in advance under this Plan and is outside the control of the
Participant, reliance on Rule 16b-3 with respect to cash settlements of
Stock Appreciation Rights requires that (1) the Company on a regular
basis publicly releases for publication quarterly and annual summary
statements of sales and earnings and (2) exercises of Stock
Appreciation Rights resulting in full or partial cash settlements must
occur only during the period beginning with the third business day and
ending on the twelfth business day following release of such
information.
8. LIMITED STOCK APPRECIATION RIGHTS
(A) GRANTING OF LIMITED STOCK APPRECIATION RIGHTS. The Board may, in
its sole discretion and subject to the provisions of the Plan, grant to
officers at such times as it deems appropriate following adoption of
the Plan by the Board, subject to approval of the Plan by the Company
Shareholders, rights to receive cash to Officers who are Option holders
equal to the fair market value of a Share of stock on the exercise date
over the exercise price of the related option ("Limited Stock
Appreciation Rights") which rights, however, are conditioned upon and
may be exercised only if each of the following three conditions are
satisfied:
(1) The Company has equity securities registered under the Exchange
Act;
(2) The option holder is an Officer subject to Section 16(b) of the
Exchange Act; and
(3) There has been an event of Change of Control as defined in
Section 12(B).
Such Limited Stock Appreciation Rights shall be evidenced by
agreements in such form and containing such additional terms not
inconsistent with the Plan as the Board shall from time to time
approve.
(B) TERMS OF GRANTS. Each Limited Stock Appreciation Right shall relate
to a specific Option under the Plan. The number of Limited Stock
Appreciation Rights granted to a Participant shall be no more than the
number of Shares that the Participant is entitled to receive pursuant
to the related Option. The number of Limited Stock Appreciation Rights
held by a Participant shall be reduced by:
(i) the number of Limited Stock Appreciation Rights
exercised for cash under the Stock Appreciation Rights
agreement; and
(ii) the number of Shares of stock purchased by such
participant pursuant to the related Option.
(C) MANNER OF EXERCISE. In no event shall a Limited Stock Appreciation
Right be exercisable within the first six (6) months after the date of
the grant. If an event of Change of Control occurs and is outside the
control of the Participant, all Limited Stock Appreciation Rights held
by such Participant (other than any Limited Stock Appreciation Rights
granted within the prior six months or in response to the event of
Change of Control) shall be automatically exercised as of the date of
the Change of Control without any election by the Participant.
Determination of whether the Change of Control is within the control of
the Participant shall be made based upon the interpretations by the
Securities and Exchange Commission or its staff as then available and
in effect. If the event of Change of Control is outside the control of
the Participant, then the Limited Stock Appreciation Rights held by
such Participant shall become immediately exercisable but shall not be
automatically exercised. A Participant described in the immediately
preceding sentence may exercise Limited Stock Appreciation Rights by
giving written notice of such exercise to the Company, and the date
upon which such notice is received by the Company shall be the exercise
date for the Limited Stock Appreciation Right. See Section 7 (F). All
Limited Stock Appreciation Rights shall be automatically exercised as
of the end of the month in which the Participant's employment
terminates due to death, permanent and total disability or retirement.
(D) APPRECIATION AVAILABLE. Each Limited Stock Appreciation Right shall
entitle a Participant to the following amount of appreciation -- the
excess of the fair market value of a Share on the exercise date over
the option price of the related Option. The total appreciation
available to a Participant from any exercise of Limited Stock
Appreciation Rights shall be equal to the number of Limited Stock
Appreciation Rights being exercised, multiplied by the amount of
appreciation per Right determined under the preceding sentence.
(E) PAYMENT OF APPRECIATION. The total appreciation available to the
Participant from an exercise of Limited Stock Appreciation Rights shall
be paid to the Participant in cash. The amount thereof shall be the
amount of appreciation determined under Paragraph D above. Payment
shall be made within 10 days of the exercise of the Limited Stock
Appreciation Rights.
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<PAGE> 7
(F) LIMITATIONS UNDER EXERCISE OF LIMITED STOCK APPRECIATION RIGHTS. A
Participant may exercise a Limited Stock Appreciation Right for cash,
only after a Change of Control and only in conjunction with the Option
to which the Limited Stock Appreciation Right relates. Limited Stock
Appreciation Rights may be exercised only by such persons as may
exercise the related Options under the Plan. Adjustment to the number
of Shares in the Plan and the price per Share pursuant to Section 12
(A) shall also be made in a similar manner to any Limited Stock
Appreciation Rights held by each Participant.
9. RESTRICTED STOCK.
(A) GRANTING OF RESTRICTED STOCK. The Board may, in its sole discretion
and subject to the provisions of the Plan, grant to eligible employees
at such times as it deems appropriate following adoption of the Plan by
the Board, the right to purchase Shares of Restricted Stock, subject to
approval of the Plan by the Company Shareholders.
(B) RESTRICTED STOCK PRICE. The price at which Restricted Stock may be
purchased by a Participant under the Plan shall be determined by the
Board and shall not be less than the fair market value of a Share. Fair
market value shall be determined as provided in Section 6(B) hereof.
The purchase price per Share as to any particular Restricted Stock
grant shall also be known as the "Initial Price Per Share."
(C) TERMS OF RESTRICTED STOCK.At the time of a Restricted Stock grant,
the Board shall establish a period of time (the "Restricted Period")
applicable to the Restricted Stock, which shall not be more than ten
(10) years from the date of grant. Each grant of Restricted Stock may
have a different Restricted Period. The Board may in its sole
discretion, at the time of the grant of Restricted Stock is made,
prescribe conditions for the incremental lapse of restrictions during
the Restricted Period and for the lapse of termination of restrictions
upon the satisfaction of other conditions with respect to all or any
portion of the Restricted Stock. The Board may also, in its sole
discretion, at any time shorten or terminate the Restricted Period or
waive any conditions for the lapse or termination of restrictions with
respect to all or any portion of the Shares of Restricted Stock.
Unless another date is specified, the date on which the Board
approves the grant of Restricted Stock shall be deemed the date on
which the Restricted Stock is granted.
In order for a Participant to exercise his right to purchase
Shares of Restricted Stock under a grant (unless that payment date is
further extended by the Board), within thirty (30) days after the date
of grant, such Participant shall execute, retroactive to the date of
such grant, an agreement reflecting the number of Shares he is
purchasing and the conditions imposed upon the purchase of such Shares
as determined by the Board.
As payment for the purchase price of the Restricted Stock, the
Participant may tender to the Company payment in cash, in previously
issued Shares (taken at their fair market value on the date the
Restricted Stock is granted determined as provided in Section 6(B)) or
partly in cash and partly in previously issued Shares and shall comply
with such other reasonable requirements as the Board may establish,
pursuant to this Section 9(C). Notwithstanding the foregoing, the
Board, in its sole discretion, may refuse to accept Shares in payment
of the purchase price.
A stock certificate representing the number of Shares of
Restricted Stock granted to and purchased by a Participant shall be
registered in the Participant's name but shall be held in custody by
the Company for the Participant's account. The Participant shall have
the rights and privileges of a shareholder as to such Shares of
Restricted Stock, including the right to vote such Shares, except that
(i) the Participant shall not be entitled to delivery of the
certificate until the expiration or termination of the Restricted
Period and the satisfaction of any other conditions prescribed by the
Board, (ii) none of the Shares may be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of during the Restricted
Period and until the satisfaction of any other conditions prescribed by
the Board, and (iii) all of the Restricted Stock shall be forfeited and
all rights of the Participant to such Restricted Stock Shares shall
terminate without further obligation on the part of the Company (except
for the obligation of the Company to purchase the Restricted Stock from
the Participant at the Initial Price Per Share) in the event the
Participant has not remained in the continuous employment of the
Company or a subsidiary until the expiration or termination of the
Restricted Period and the satisfaction of any other conditions
prescribed by the Board applicable to such Restricted Stock. The Board
shall decide in each case to what extent leaves of absence for
government or military service, illness, temporary disability or other
reasons shall not, for this purpose, be deemed interruption of
continuous employment. If the Participant's continuous employment
should be terminated because of death, permanent and total disability
or retirement, the provisions contained in Section 9(D) shall apply.
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<PAGE> 8
At the discretion of the Board, cash and stock dividends may
be either currently paid or withheld by the Company for the
Participant's account, and interest may be paid on the amount of cash
dividends withheld at a rate and subject to such terms as determined by
the Board.
Each Certificate evidencing Shares of Restricted Stock shall
be inscribed with a legend substantially as follows:
"The Shares of common stock of Roberds, Inc. evidenced by this
certificate are subject to the terms and restrictions of the
Roberds, Inc. 1993 Stock Incentive Plan. Such Shares are
subject to forfeiture or cancellation under the terms of said
Plan and shall not be sold, transferred, assigned, pledged,
encumbered or otherwise alienated or hypothecated except
pursuant to the provisions of said Plan, a copy of which is
available from Roberds, Inc. upon request."
Upon the expiration or termination of the Restricted Period
and the satisfaction of any other conditions prescribed by the Board or
at such earlier time as provided for in Section 9(D), the restrictions
applicable to the Restricted Stock Shares shall lapse and a stock
certificate for the number of Restricted Stock Shares with respect to
which the restrictions have lapsed shall be delivered, free of all such
restrictions, except any that may be imposed by law, to the Participant
or the Participant's beneficiary or estate, as the case may be. The
Company shall not be required to deliver any fractional Shares but will
pay, in lieu thereof, the fair market value (determined in accordance
with Section 6(B) as of the date the restrictions lapse) of such
fractional Shares to the Participant or the Participant's beneficiary
or estate, as the case may be.
(D) TERMINATION OF EMPLOYMENT.All rights to the Restricted Stock Shares
shall be forfeited if the Participant terminates employment with the
Company and its subsidiaries for any reason except for death, permanent
and total disability or retirement prior to the expiration of the
restrictions on such Shares and such forfeited Shares shall be
purchased by the Company at the Initial Price Per Share within a
reasonable time period established by the Board. Any attempt to dispose
of any such Shares in contravention of the foregoing restrictions shall
be null and void and without effect.
If a Participant who has been in the continuous employ of the
Company or a subsidiary since the date on which the Restricted Stock
was granted dies, becomes permanently and totally disabled or retires
while in such employment and prior to the lapse of the restrictions on
the Restricted Stock, all such restrictions shall lapse and cease to be
effective as of the end of the month in which the Participant's
employment terminates due to death, permanent and total disability or
retirement.
(E) PERSONS SUBJECT TO SECTION 16 OF THE EXCHANGE ACT. Participants who
are subject to Section 16 of the Exchange Act are hereby advised that
reliance on Rule 16b-3 may require that any equity security of the
Company acquired upon exercise of Restricted Stock by such person be
held at least until the date six months after the date of grant of the
Restricted Stock.
10. PERFORMANCE UNITS.
(A) GRANTING PERFORMANCE UNITS. The Board may, in its sole discretion
and subject to the provisions of the Plan, grant to eligible employees
at such times as it deems appropriate following adoption of the Plan by
the Board, Performance Units, subject to approval of the Plan by the
Company Shareholders. Each Performance Unit shall represent the right
of a Participant to receive an amount equal to a Payment Value, which
Payment Value shall be determined by the Board and shall be based upon
the performance of the Participant, the Company, or a division of the
Company over a Performance Period or such other measure of performance
as may be determined by the Board. A Participant to whom an award of
Performance Units has been made shall not be required to provide any
consideration for a Performance Unit other than the rendering of
services or the payment of any minimum amount required by applicable
law, unless otherwise determined by the Board. Each Performance Unit
granted under the Plan shall be evidenced by a written Performance Unit
Agreement between the Company and the Participant. The Performance Unit
Agreement shall be in such form and shall contain such terms and
conditions as the Board shall determine.
(B) TERMS OF GRANTS. The Performance Period for each Performance Unit
granted under the Plan shall be of such duration as the Board shall
establish at the time of the award. The performance criteria for each
Performance Unit awarded under the Plan shall be determined by the
Board. More than one award of Performance Units may be granted to any
individual Participant under the Plan, and the terms and conditions of
Performance Units, such as the Performance Periods and performance
criteria, may differ. If during a Performance Period there should
occur, in the
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<PAGE> 9
opinion of the Board, significant changes in economic conditions or in
the nature of the operations of the Company which the Board did not
foresee in establishing the performance criteria for such Performance
Period, and which in the Board's sole judgment, have, or are expected
to have, a substantial effect on the Participant's or the Company's
ability to meet the performance criteria, the Board may revise the
performance criteria formerly determined by it in such a manner as the
Board, in its sole judgment, may deem appropriate.
(C) TERMINATION OF EMPLOYMENT.A grant of Performance Units to a
Participant shall be forfeited if the Participant terminates employment
with the Company and its subsidiaries, during the Performance Period,
except for death, permanent and total disability or retirement prior to
the expiration of the Performance Period.
If a Participant who has been in the continuous employ of the
Company or a subsidiary since the date on which the Performance Unit
was granted dies, becomes permanently and totally disabled or retires
while in such employment and prior to the expiration of the Performance
Period, all Performance Units shall be deemed to be earned in such
amount as of the end of the month in which the Participant's employment
terminates due to death, permanent and total disability or retirement
as provided in the Performance Unit Agreement at the time of grant.
(D) MANNER OF SETTLEMENT. The Payment Value of a Performance Unit shall
be paid to a Participant in cash, in Shares, or in a combination of
cash and Shares as determined by the Board in its sole discretion. The
Payment Value of a Performance Unit shall be paid to the Participant on
such date following the conclusion of the Performance Period as the
Board shall designate at the time of grant.
(E) All other terms and conditions of a grant of Performance Units
shall be determined by the Board.
(F) PERSONS SUBJECT TO SECTION 16 OF THE EXCHANGE ACT. Participants who
are subject to Section 16 of the Exchange Act are hereby advised that
the Staff of the Securities and Exchange Commission has taken the
position that rights similar to Performance Units may be considered
Stock Appreciation Rights for purposes of Section 16, depending upon
the performance criteria for the particular Performance Units. See
Section 7(F).
11. STOCK UNITS
(A) GRANTING STOCK UNITS. The Board may, in its sole discretion and
subject to the provisions of the Plan, grant to eligible employees at
such times as it deems appropriate following adoption of the Plan by
the Board, either alone or in addition to other Awards made under the
Plan, units that are valued in whole or in part by reference to or
otherwise based on Shares ("Stock Units"), subject to the approval of
the Plan by the Company Shareholders. Each Stock Unit granted under
this Plan shall be evidenced by a written Stock Unit Agreement between
the Company and the Participant. The Stock Unit Agreement shall be in
such form and shall contain such terms and conditions as the Board may
determine.
(B) TERMS OF GRANTS. The Board shall determine the Participants to whom
Stock Units are to be granted, the times at which such awards are to be
made, the number of Shares to be granted pursuant to such awards and
all other terms and conditions regarding such awards. More than one
Stock Unit Award may be granted to an individual Participant under the
Plan, and the terms and conditions of Stock Unit Awards may differ. A
Participant to whom an award of Shares has been made pursuant to a
Stock Unit Award shall not be required to provide any consideration for
the Shares, other than the rendering of services or the payment of any
minimum amount required by applicable law, unless otherwise determined
by the Board.
(C) TERMINATION OF EMPLOYMENT.All rights to Stock Units shall be
forfeited if the Participant terminates employment with the Company and
its subsidiaries for any reason except for death, permanent and total
disability or retirement prior to the expiration of the applicable
measurement period for such Stock Units.
If a Participant who has been in the continuous employ of the
Company or a subsidiary since the date on which the Stock Unit was
granted dies, becomes permanently and totally disabled or retires while
in such employment and prior to the expiration of the measurement
period for such Stock Unit, the Stock Unit shall be deemed to be earned
in such amount as of the end of the month in which the participant's
employment terminates due to death, permanent and total disability or
retirement as provided in the Stock Unit Agreement at the time of
grant.
(D) MANNER OF SETTLEMENT. The amount due a Participant for Stock Units
which were granted may be paid in case in Shares, or in a combination
of cash and Shares, as determined by the Board in its sole discretion.
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<PAGE> 10
(E) All other terms and conditions of a grant of Stock Units shall be
determined by the Board.
(F) PERSONS SUBJECT TO SECTION 16 OF THE EXCHANGE ACT. Participants who
are subject to Section 16 of the Exchange Act are hereby advised that
the Staff of the Securities and Exchange Commission has taken the
position that rights similar to Stock Units may be considered Stock
Appreciation Rights for purposes of Section 16, depending upon the
performance criteria for the particular Stock Unit. See Section 7(F).
12. OTHER PROVISIONS
(A) ADJUSTMENT OF SHARES. In the event that the outstanding Shares are
changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up,
stock dividend or combination of Shares, or issuance or exercise of
warrants or rights, the Board shall make an appropriate and equitable
adjustment in the number and kind of Shares subject to outstanding
Awards, or portions thereof then unexercised, and the number and kind
of Shares subject to the Plan to the end that after such event the
Shares subject to the Plan and the Participant's right to a
proportionate interest in the Company shall be maintained as before the
occurrence of such event. Such adjustment in an outstanding Award shall
be made without change in the total price applicable to the Award or
the unexercised portion of any Award (except for any change in the
total price resulting from rounding off Share quantities or prices) and
with any necessary corresponding adjustment in option price per Share.
Any such adjustment made by the Board shall be final and binding upon
all Participants, the Company and all other interested persons. Any
adjustment of an incentive stock option under this paragraph shall be
made in such manner so as not to constitute a "modification" within the
meaning of Section 425(h)(3) of the Code. The Board, in its sole
discretion may at any time make or provide for such adjustments to the
Plan or any Award granted thereunder as it shall deem appropriate to
prevent the reduction or enlargement of rights, including adjustments
in the event of changes in the outstanding common stock by reason of
mergers, consolidations, combinations, exchanges of Shares,
separations, reorganizations, liquidations, issuance or exercise of
warrants or rights and the like in which the Company is not the sole
surviving successor to the assets or business of the Company
immediately prior thereto. In the event of any offer to holders of
common stock generally relating to the acquisition of their Shares, the
Board may make such adjustments as it deems equitable in respect of
outstanding Awards. Any such determination of the Board shall be
conclusive.
(B) CHANGE OF CONTROL. In the event the Company experiences a Change of
Control (as hereafter defined), all Options shall become exercisable
immediately prior to the Change of Control, provided that any portion
of such Option which is an incentive stock option shall be exercisable
up to the maximum amount allowed by Section 6(F) applicable to
incentive stock options and the balance shall become a non-qualified
stock option, all Restricted Stock restrictions shall lapse immediately
prior to such event, all Limited Stock Appreciation Rights and Stock
Appreciation Rights shall become exercisable immediately prior to the
Change of Control and all grants of Performance Units and Stock Units
shall be deemed to have been fully earned immediately prior to the
Change of Control, subject to the limitation that any Award which has
been outstanding less than six (6) months on the date of Change of
Control shall not be afforded such treatment.
For purposes of these provisions, the term "Persons" shall
mean any individual, firm, corporation, partnership, joint venture,
association, trust, or other entity and any "Affiliate" or "Associate"
thereof (as such terms are defined in Rule 12b-2 promulgated under the
1934 Act).
For purposes of this Plan, the term "Change of Control" of the
Company shall mean and shall be deemed to have occurred if:
(a) The "acquisition" after the date hereof by any "Person"
(as such term is defined below) of "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
as in effect on the date hereof) of any securities of the
Company which generally entitles the holder thereof to vote
generally for the election of directors of the Company (the
"Voting Securities") which, when added to the Voting
Securities then "Beneficially Owned" by such person, would
result in such Person "Beneficially Owning" twenty percent
(20%) or more of the combined voting power of the Company's
then outstanding Voting Securities; provided. however, that
for purposes of this paragraph (a), a Person shall not be
deemed to have made an acquisition of Voting Securities if
such Person: (i) acquires Voting Securities as a result of a
stock split, stock dividend or other corporate restructuring
in which all shareholders of the class of such Voting
Securities are treated on a pro rata basis; (ii) is generally
engaged in the business of underwriting securities and
acquires the Voting Securities ("Underwriting Securities") (x)
pursuant to the terms of an underwriting agreement (an
"Underwriting Agreement") to which
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<PAGE> 11
the Company and such underwriter are parties and which
Underwriting Agreement is on terms customarily used by that
underwriter for primary or secondary public offerings of
equity securities or (y) pursuant to stabilizing transactions
to facilitate a distribution contemplated by an Underwriting
Agreement in accordance with Rule 10b-7 promulgated under the
1934 Act; or (z) to cover over allotments created in
connection with a distribution of Voting Securities pursuant
to an Underwriting Agreement; (iii) acquires the Voting
Securities directly from the Company; (iv) becomes the
Beneficial Owner of more than the permitted percentage of
Voting Securities solely as a result of the acquisition of
Voting Securities by the Company which, by reducing the number
of Voting Securities outstanding, increases the proportional
number of Shares Beneficially Owned by such Person; (v) is the
Company or any corporation or other Person of which a majority
of its voting power or its equity securities or equity
interest is owned directly or indirectly by the Company (a
"Subsidiary") or (vi) acquires Voting Securities in connection
with a "Non-Control Transaction" (as defined in paragraph (c)
below); or
(b) The individuals who, as of July 31, 1993, are members of
the Board of Directors of the Company (the "Incumbent Board"),
cease for any reason (other than a voluntary resignation by
any such member) to constitute at least two-thirds of the
Board of Directors of the Company; provided, however, that if
either the election of any new director or the nomination for
election of any new director by the Company's shareholders was
approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall be considered as a member of
the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the 1934 Act as in
effect on the date hereof) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors (a "Proxy Contest")
including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) Approval of shareholders of the Company of:
(1) A merger, consolidation or reorganization involving
the Company (a "Business Combination"), unless
(i) the shareholders of the Company,
immediately before the Business Combination, own, directly or
indirectly immediately following the Business Combination, at
least 75% of the combined voting power for the election of
directors generally of the outstanding securities of the
Corporation resulting from the Business Combination (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before
the Business Combination, and
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for the Business Combination constitute at
least two-thirds of the members of the Board of Directors of
the Surviving Corporation, and
(iii) no Person (other than the Company or
any Subsidiary, a trustee or other fiduciary holding
securities under one or more employee benefit plans or
arrangements (or any trust forming a part thereof) maintained
by the Company, the Surviving Corporation or any Subsidiary,
or any Person who, immediately prior to the Business
Combination, had Beneficial Ownership of twenty percent (20%)
or more of the then outstanding Voting Securities) upon
confirmation of the Business Combination is the Beneficial
Owner of twenty percent (20%) or more of the combined voting
power for the election of directors generally of the Surviving
Corporation's then outstanding securities (a transaction
described in clauses (i) through (iii) shall be referred to as
a "Non-Control Transaction");
(2) A complete liquidation or dissolution of the Company; or
(3) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other
than a transfer to a Subsidiary).
Voting Securities acquired by a Person that is not deemed to
constitute an "acquisition" of such Voting Securities by such Person by
reason of either of the proviso to paragraph (a) above shall, except in
the case of Underwriting Securities nevertheless be deemed to be
Beneficially Owned by such Person for purposes of determining whether
the "acquisition" of any additional Voting Securities by such Person
(which subsequent "acquisition" is not covered by either proviso to
paragraph (a) and, therefore, is considered to be an "acquisition" of
Voting Securities for purposes of paragraph (a)) would result in such
Person exceeding the twenty percent (20%) or more threshold or the more
than
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<PAGE> 12
30% threshold, as the case may be, established therein.
Notwithstanding the foregoing, a change shall not be deemed to
occur solely because twenty (20%) or more of the then outstanding
Voting Securities is Beneficially Owned by (i) a trustee or other
fiduciary holding securities under one or more employee benefit plans
or arrangements (or any trust forming a part thereof) maintained by the
Company or any Subsidiary or (ii) any corporation which, immediately
prior to its acquisition of such interest, is owned directly or
indirectly by the shareholders of the Company in the same proportion as
their ownership of stock in the Company immediately prior to such
acquisition; furthermore, if an employee's employment is terminated and
the employee reasonably demonstrates that such termination (i) was at
the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change Control and who
effectuates a Change of Control or (ii) otherwise occurred in
connection with, or in anticipation of, a Change Control which actually
occurs, then for all purposes hereof, a Changed Control shall be deemed
to have occurred and the date of a Change of Control with respect to
the employment shall mean the date immediately prior to the date of
such termination of employment.
(C) NON-TRANSFERABILITY. No Award granted to a Participant under this
Plan shall be transferable other than by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order as
defined in the Code, provided that transfer pursuant to a qualified
domestic relations order shall not be permitted with respect to
incentive stock options or in circumstances where such transfer would
cause a lapse of restriction for purposes of Section 83 of the Code.
Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process,
any Award other than as permitted in the preceding sentence shall give
no right to the purported transferee.
(D) COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES. No Option
shall be exercisable and no Shares shall be delivered in settlement of
any Award and no unrestricted Shares shall be issued for Restricted
Stock under this Plan except in compliance with all applicable Federal
and state laws and regulations including, without limitation,
compliance with the rules of all domestic stock exchanges on which the
Company's Shares may be listed. Any Share certificate issued to
evidence Shares for which an Award is exercised or with respect to
which Restricted Stock restrictions lapse, shall bear such legends and
statements as the Board deems advisable in order to assure compliance
with Federal and state laws and regulations. No Award shall be
exercisable and no Shares shall be delivered and no Shares shall be
issued for Restricted Stock under this Plan until the Company has
obtained consent or approval from such regulatory bodies, Federal or
state, having jurisdiction over such matters as the Board may deem
advisable.
In the case of the exercise of an Award by a person or estate
acquiring the right to exercise such Award by bequest or inheritance or
in the case of a person or estate acquiring by bequest or inheritance
the right to receive Shares for Restricted Stock because of the lapse
of the restrictions, the right to the Payment Value of a Performance
Unit, or the right to receive settlement of a Stock Unit, the Board may
require reasonable evidence as to the ownership of the Award, and may
require such consents and releases of taxing authorities as it may deem
advisable.
(E) NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor its
operation, nor any document describing or referring to the Plan, or any
part thereof, shall confer upon any Participant under the Plan any
right to continue in the employ of the Company or a subsidiary or shall
in any way affect the right and power of the Company or a subsidiary to
terminate the employment of any participant under the Plan at any time
with or without assigning a reason therefor.
(F) TAX WITHHOLDING. The Board shall have the right to deduct from any
settlement of an Award, including without limitation the delivery or
vesting of Shares, made under the Plan any Federal, state or local
taxes of any kind required by law to be withheld with respect to such
payments or to take any such other action as may be necessary in the
opinion of the Board to satisfy all obligations for payment of such
taxes. If Shares which would otherwise be delivered in settlement of
the Award are used to satisfy tax withholding, such Shares shall be
valued based on their Fair Market Value determined in accordance with
section 6(B) when the tax withholding is required to be made.
Participants who are subject to Section 16 of the Exchange Act are
hereby advised that pursuant to Rule 16b-3 thereunder the use of Shares
to satisfy tax withholding will be treated as the exercise of a Stock
Appreciation Right. See Section 7(F).
(G) AMENDMENT AND TERMINATION. The Board may at any time suspend, amend
or terminate the Plan, and, without limiting the foregoing, the Board
shall have the express authority to amend the Plan from time to time,
with or without approval by the shareholders, in the manner and to the
extent that the Board believes is necessary or appropriate in order to
cause the Plan to conform to provisions of Rule 16b-3 under the
Exchange Act and any other rules under Section 16 of the Exchange Act,
as any of such rules may be amended, supplemented or superseded from
time to time. Except for adjustments made in accordance with Section
12(A), the Board may not, without the consent of the grantee of the
Award, alter or impair any Award previously granted under the Plan. No
Award may be granted
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<PAGE> 13
during any suspension of the Plan or after termination thereof.
In addition to Board approval of an amendment, if the
amendment would: (i) materially increase the benefits accruing to
Participants; (ii) increase the number of Shares deliverable under the
Plan (other than in accordance with the provisions of Section 12(A) or,
(iii) materially modify the requirements as to eligibility for
participation in the Plan, then such amendment shall be approved by the
holders of a majority of the Company's outstanding capital stock
represented and entitled to vote at a meeting held for the purpose of
approving such amendment to the extent required by Rule 16b-3 of the
Exchange Act.
(H) EFFECTIVE DATE OF THE PLAN. This Plan was adopted by the Board on
September 24, 1993 and by the Shareholders on September 24, 1993. The
Plan shall become effective on the date the Registration Statement
filed by the Company under the Securities Act of 1933 becomes effective
with respect to Shares to be issued pursuant to the Plan. Awards may be
granted under this Plan prior to the date the Plan becomes effective,
but all such Awards shall be subject to the Plan becoming effective, as
provided above.
(I) DURATION OF THE PLAN. Unless previously terminated by the Board,
this Plan shall terminate at the close of business on September 23,
2003, and no Award shall be granted under it thereafter, but such
termination shall not affect any Award theretofore granted.
(J) USE OF CERTAIN TERMS. The terms "parent" and "subsidiary" shall
have the meanings ascribed to them in Section 425 of the Code and
unless the context otherwise requires, the other terms defined in
Section 421, 422 and 425, inclusive, of the Code and regulations and
revenue rulings applicable thereto, shall have the meanings attributed
to them therein.
APPROVED BY BOARD 2/16/99
APPROVED BY SHAREHOLDERS 4/30/99
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