<PAGE>
Registration No. 333-_____
As filed with the Securities and Exchange Commission on January 14, 1997
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
ELECTRIC FUEL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 95-4302784
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
885 THIRD AVENUE
SUITE 2900
NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices, Including Zip Code)
ELECTRIC FUEL CORPORATION
1995 AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Full Title of the Plan)
WINTHROP G. MINOT
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
(617) 951-7364
(Name, Address, and Telephone Number, Including Area Code, of Agent For Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Title of Amount Proposed Proposed Amount of
securities to be maximum maximum registration
to be registered offering aggregate fee(1)
registered price offering
per price(1)
share(1)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 430,000(2)(3) 6.5313 2,808,459 $851.05
- ----------------------------------------------------------------------------------
Common Stock 70,000(4) 7.938 499,390 $151.33
- ----------------------------------------------------------------------------------
Total 500,000 $1002.38
- ----------------------------------------------------------------------------------
</TABLE>
(1) Calculated pursuant to Rule 457(h).
(2) Shares subject to options not yet granted pursuant to the Electric Fuel
Corporation 1995 Amended and Restated Non-Employee Director Stock Option
Plan (the "Plan").
(3) In addition, in accordance with Rule 416(a) under the Securities Act of
1933, as amended, this registration statement also covers such
indeterminate number of shares as may become subject to options under the
Plan as a result of the adjustment provisions thereof.
(4) Shares subject to options previously granted pursuant to the Plan.
===============================================================================
Page 1 of 16
Exhibit Index at Page 9
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
----------------
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
-----------------------------------------------------------
* The document(s) containing the information required by Item 1 of this Form S-8
and the statement of availability of Registrant information, and other
information required by Item 2 of this Form will be sent or given to non-
employee directors as specified by Rule 428 under the Securities Act of 1933,
as amended (the "Securities Act"). In accordance with Rule 428 and the
requirements of Part I of Form S-8, such documents are not being filed with
the Securities and Exchange Commission (the "Commission") either as part of
this Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424 of the Securities Act. Electric Fuel Corporation (the
"Registrant") shall maintain a file of such documents in accordance with the
provisions of Rule 428. Upon request, the Registrant shall furnish to the
Commission or its staff a copy of any or all of the documents included in such
file.
-2-
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
---------------------------------------
The Registrant hereby incorporates the following documents herein by
reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as filed with the Commission on April 1, 1996.
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarter ended
March 31, 1996, as filed with the Commission on May 14, 1996; for the quarter
ended June 30, 1996, as filed with the Commission on August 13, 1996; and for
the quarter ended September 30, 1996 as filed with the Commission on November
14, 1996. All other reports filed by the Registrant with the Securities and
Exchange Commission pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") since the end of the
fiscal year covered by the Registrant's Annual Report referred to above.
(c) The description of the Common Stock contained in the Registrant's
Registration Statement on Form 8-A filed under the Exchange Act on February 2,
1994, including any amendment or report subsequently filed by the Registrant for
the purpose of updating the information contained therein.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
-3-
<PAGE>
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
Section 145 of the Delaware General Corporation Law ("DGCL") provides
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,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 further provides that a corporation similarly may indemnify any such
person serving in any such capacity who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor, against expenses
(including attorney's fees) actually and reasonably incurred in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Delaware
Court of Chancery or such other court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
Section 10 of the Registrant's Amended and Restated Certificate of
Incorporation ("Certificate of Incorporation") provides that the Registrant's
Directors shall not be liable to the Registrant or its stockholders for monetary
damages for any breach of fiduciary duty as a director to the fullest extent
permitted by the DGCL.
-4-
<PAGE>
Section 11 of the Registrant's Certificate of Incorporation provides
that the Registrant shall, to the maximum extent permitted under the DGCL,
indemnify any person who was or is made a party or is threatened to be made a
party to any threatened, pending or completed action, suit, proceeding or claim,
whether civil, criminal, administrative or investigative (herein a
"proceeding"), by reason of the fact that such person is or was or has agreed to
be a director or officer of the Registrant or while a director or officer is or
was serving at the request of the Registrant as a director, officer, partner,
trustee, employee, or agent of any corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, against expenses (including attorney's fees), judgments, fines, penalties
and amounts paid in settlement incurred in connection with the investigation,
preparation to defend or defense of such action, suit, proceeding or claim.
The Registrant also maintains directors and officers' insurance.
ITEM 8. EXHIBITS.
--------
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Amended and Restated Certificate of Incorporation of the
Registration Statement on Form S-1 [Registration No. 33-73256],
which became effective on February 23, 1994.)
4.2 Amended and Restated By-Laws of the Registrant (Incorporated by
reference to the Registrant's Registration Statement on Form S-1
[Registration No. 33- 97944], which became effective on February
5, 1996. )
4.3 Specimen Certificate for shares of Common Stock, $.01 par value
per share, of the Registrant (Incorporated by reference to the
Registrant's Registration Statement on Form S-1 [Registration No.
33-73256], which became effective on February 23, 1994.)
5. Opinion of Ropes & Gray.
23.1. Consent of Ropes & Gray (contained in its opinion filed as
Exhibit 5 hereto).
23.2 Consent of Kesselman & Kesselman.
24. Power of Attorney (contained in Part II hereof under "Signatures
and Power of Attorney").
99. Electric Fuel Corporation 1995 Amended and Restated Non-Employee
Director Stock Option Plan
-5-
<PAGE>
ITEM 9. UNDERTAKINGS.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933,
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration statement (or the most recent post-effective
amendment thereof), which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration statement,
and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
--------
however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the
- -------
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
-6-
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
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 New York, state of New York, on this fourteenth day
of January, 1997.
ELECTRIC FUEL CORPORATION
By /s/ Robert S. Ehrlich
---------------------------------------------
Robert S. Ehrlich, Chairman of the Board,
Director and Chief Financial Officer
We, the undersigned directors of Electric Fuel Corporation, hereby
severally constitute and appoint Robert S. Ehrlich and Yehuda Harats, and each
of them singly, our true and lawful attorneys with full power to them, and each
of them singly, to sign for us and in our names in the capacities as directors,
any and all amendments or supplements to the Registration Statement on Form S-8
of Electric Fuel Corporation, and generally to do all such things in our name
and on our behalf in our capacities as directors to enable Electric Fuel
Corporation to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be required by our said
attorneys or any of them, to any and all said amendments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Robert S. Ehrlich Chairman of the Board January 14, 1997
- -------------------------- of Directors and Chief
Robert S. Ehrlich Financial Officer
(Principal Financial
Officer)
/s/ Yehuda Harats President, Chief Executive January 14, 1997
- -------------------------- Officer and Director
Yehuda Harats (Principal Executive
Officer)
-7-
<PAGE>
/s/ Stewart J. Edelman Principal Accounting January 14, 1997
- -------------------------- Officer and Treasurer
Stewart J. Edelman
/s/ Jay Eastman Director January 14, 1997
- --------------------------
Jay Eastman
/s/ Jack Rosenfeld Director January 14, 1997
- --------------------------
Jack Rosenfeld
/s/ Harvey Krueger Director January 14, 1997
- --------------------------
Harvey Krueger
/s/ Lawrence M. Miller Director January 14, 1997
- --------------------------
Lawrence M. Miller
-8-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
<S> <C> <C>
4.1 Amended and Restated Certificate of Incorporation of the
Registration Statement on Form S-1 [Registration No. 33- 73256],
which became effective on February 23, 1994.)
4.2 Amended and Restated By-Laws of the Registrant (Incorporated by
reference to the Registrant's Registration Statement on Form S-1
[Registration No. 33-97944], which became effective on February
5, 1996.)
4.3 Specimen Certificate for shares of Common Stock, $.01 par value
per share, of the Registrant (Incorporated by reference to the
Registrant's Registration Statement on Form S-1 [Registration
No. 33-73256], which became effective on February 23, 1994.)
5. Opinion of Ropes & Gray. 10
23.1 Consent of Ropes & Gray (contained in its opinion filed as 10
Exhibit 5 hereto).
23.2 Consent of Kesselman & Kesselman. 11
24. Power of Attorney (contained in Part II hereof under "Signatures 7
and Power of Attorney").
99. Electric Fuel Corporation 1995 Amended and Restated Non-Employee 12
Director Stock Option Plan.
</TABLE>
<PAGE>
EXHIBIT 5
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
Tel. (617) 951-7000
January 14, 1997
Electric Fuel Corporation
885 Third Avenue
New York, New York 10022
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-8 (the "Registration Statement"), filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, for the registration of 500,000 shares of common stock, $.01 par value
(the "Shares"), of Electric Fuel Corporation (the "Company") issuable under the
Company's 1995 Amended and Restated Non-Employee Director Stock Option Plan
(the "Plan").
We have acted as counsel for the Company in connection with the Plan and
are familiar with the actions taken by the Company in connection herewith. For
purposes of this opinion, we have examined copies of the Registration Statement,
the Plan and such other documents as we have deemed appropriate.
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and that when issued and sold in accordance with the terms of
the Plan will have been validly issued and will be fully paid and non-
assessable.
We hereby consent to the filing of this opinion as part of the Registration
Statement.
Very truly yours,
/s/ Ropes & Gray
-----------------------------
Ropes & Gray
<PAGE>
EXHIBIT 23.2
Kesselman Coopers & Lybrand
& Kesselman
certified public
accountants (Isr.)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8, pertaining to the 1995 Stock Option Plan for Non-Employee Directors of
Electric Fuel Corporation of our report dated March 21, 1996, with respect to
the consolidated financial statements of Electric Fuel Corporation incorporated
by reference in its Annual Report (Form 10-K) for the year ended December 31,
1995 filed with the Securities and Exchange Commission.
/s/ Kesselman & Kesselman
-----------------------------------
Kesselman & Kesselman
Certified Public Accountants (Israel)
Jerusalem, Israel
January 9, 1997
<PAGE>
EXHIBIT 99
ELECTRIC FUEL CORPORATION
AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1995 Stock Option Plan for Non-Employee Directors (the
"Plan") is to advance the interests of Electric Fuel Corporation (the "Company")
by enhancing the ability of the Company to attract and retain directors who are
in a position to make significant contributions to the success of the Company
and to reward such directors for such contributions through ownership of shares
of the Company's common stock (the "Stock").
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") of the
Board of Directors (the "Board") of the Company from time to time appointed by
the Board to administer the Plan in accordance with the express provisions of
the Plan, (a) to prescribe the form or forms of instruments evidencing options
and any other instruments required under the Plan and to change such forms from
time to time; (b) to adopt, amend and rescind rules and regulations for the
administration of the Plan; and (c) to interpret the Plan and to decide any
questions and settle all controversies and disputes that may arise in connection
with the Plan. Such determinations of the Committee shall be conclusive and
shall bind all parties. Subject to Section 7 of this Plan and to Rule 16b-3
under the Securities Exchange Act of 1934, as from time to time in effect ("Rule
16b-3"), the Committee shall also have the authority, both generally and in
particular instances, to waive compliance by a non-employee director with any
obligation to be performed by him under an option and to waive any condition or
provision of an option.
The Plan is a "formula" plan within the meaning of the rules and
regulations of the Securities and Exchange Act of 1934. As a result of the Plan
being a formula plan and otherwise meeting certain requirements of the SEC
adopted under Section 16, non-employee directors may be members of the Committee
administering the Plan. Accordingly, options to non-employee directors are
granted solely under this Plan and not under the Company's regular stock award
plans.
3. EFFECTIVE DATE AND TERM OF PLAN
This Plan, having been approved by the Board of Directors on September 28,
1995 (the "Effective Date"), is subject to approval of this Plan by vote of a
majority of the stockholders of the Company present and eligible to vote on the
question at an annual or special meeting of
<PAGE>
stockholders held not later than September 28, 1996. Options may be granted
under the Plan prior to the date of stockholder approval, and options so granted
shall be effective on the effective date of grant subject to stockholder
approval of the Plan as provided in this Section. No options may be awarded
under this Plan after September 28, 2005, but the Plan shall continue thereafter
while previously awarded options remain subject to the Plan.
4. SHARES SUBJECT TO PLAN
a. Number of Shares. Subject to adjustment as provided in Section 4(c) of
this Plan, the aggregate number of shares of Stock that may be delivered upon
the exercise of options granted under the Plan shall be 500,000. If any option
granted under the Plan terminates without having been exercised in full, the
number of shares of Stock as to which such option was not exercised shall be
available for future grants within the limits set forth in this Section 4(a).
b. Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock shall be delivered under the Plan.
c. Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in the Company's capital
stock, the number and kind of shares of stock or securities of the Company
subject to options then outstanding or subsequently granted under the Plan, the
maximum number of shares or securities that may be delivered under the Plan, the
exercise price, and other relevant provisions shall be appropriately adjusted by
the Committee, whose determination shall be binding on all persons.
5. ELIGIBILITY FOR OPTIONS
Each director who is not an employee of the Company or of any subsidiary of
the Company shall be eligible to receive options under the Plan (an "Eligible
Director").
6. TERMS AND CONDITIONS OF OPTIONS
a. Number of Options.
i. Initial Grant. Each individual who is an Eligible Director on the
-------------
Effective Date of the Plan shall be granted, on that date, an option
covering 15,000 shares of Stock, subject to stockholder approval as
provided in Section 3. Each individual who thereafter becomes an Eligible
Director shall, upon first qualifying as an Eligible Director, be granted
an option covering 15,000 shares of Stock. Option grants pursuant to either
of the two preceding sentences are herein referred to as "Initial Grants".
<PAGE>
ii. Subsequent Options. Following the Initial Grant, each Eligible
------------------
Director shall be awarded an additional option covering 5,000 shares of
Stock on each anniversary of the Initial Grant, provided that he or she is
an Eligible Director on such anniversary.
b. Exercise Price. The exercise price of each option shall be 100% of the
fair market value per share of the Stock at the time the option is granted, but
not less, in the case of an original issue of authorized stock, than par value
per share. For this purpose, "fair market value" shall mean the closing price
of the Stock as reported on the Nasdaq National Market System (or other exchange
or market system if no longer listed on such exchange) on the date of the grant
(based on The Wall Street Journal report of composite transactions).
c. Duration of Options. The latest date on which an option may be
exercised (the "Final Exercise Date") shall be the date which is ten years from
the date the option was granted.
d. Exercise of Options.
i. Each option shall become exercisable in accordance with the
following:
(1) One year after the date of the grant, the option shall become
exercisable to the extent of one-third of the shares covered
thereby, and
(2) On each of the second and third anniversaries of the date of
the grant, the option shall become exercisable as to an
additional one-third of the shares covered thereby.
ii. Any exercise of an option shall be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (a) the
option certificate and any other documents required by the Committee and
(b) payment in full for the number of shares for which the option is
exercised.
iii. If an option is exercised by the executor or administrator of a
deceased director, or by the person or persons to whom the option has been
transferred by the director's will or the applicable laws of descent and
distribution, the Company shall be under no obligation to deliver Stock
pursuant to such exercise until the Company is satisfied as to the
authority of the person or persons exercising the option.
e. Payment for and Delivery of Stock. Stock purchased under the Plan shall
be paid for as follows; (i) in cash or by certified check, bank draft or money
order payable to the order of the Company, (ii) through the delivery of shares
of Stock having a fair market value on the last business day preceding the date
of exercise equal to the purchase price, provided that, in the case of shares of
stock acquired directly from the Company, such shares have been
<PAGE>
held for at least six months, or (iii) by a combination of cash and Stock as
provided in clauses (i) and (ii) above.
An option holder shall not have the rights of a stockholder with regard to
awards under the Plan except as to Stock actually received by him or her under
the Plan.
The Company shall not be obligated to deliver any shares of Stock (a)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with and any applicable taxes have been
paid, (b) if the outstanding Stock is at the time listed on any stock exchange,
until the shares to be delivered have been listed or authorized to be listed on
such exchange upon official notice of issuance, and (c) until all other legal
matters in connection with the issuance and delivery of such shares have been
approved by the Company's counsel. If the sale of Stock has not been registered
under the Securities Act of 1933, as from time to time in effect, the Company
may require, as a condition to exercise of the option, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.
f. Nontransferability of Options. No option may be transferred other than
by will or by the laws of descent and distribution, and during a director's
lifetime an option may be exercised only by the director.
g. Death. Upon the death of any Eligible Director granted options under
this Plan, all options not then exercisable shall terminate. All options held
by the director that are exercisable immediately prior to death may be exercised
by his executor or administrator, or by the person or persons to whom the option
is transferred by will or the applicable laws of descent and distribution, at
any time within the three-month period following the director's death (but not
later than the Final Exercise Date).
h. Other Termination of Status of Director. If a director's service with
the Company terminates for any reason other than death, all options held by the
director that are not then exercisable shall terminate. Options that are
exercisable on the date of termination shall continue to be exercisable for a
period of three months (or until the Final Exercise Date, if earlier), but shall
terminate immediately if the director was removed or terminated for fraud,
dishonesty or intentional misrepresentation or embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any of its subsidiaries.
After completion of that three-month period, such options shall terminate to the
extent not previously exercised, expired or terminated.
i. Mergers, etc. In the event of any merger or consolidation involving the
Company, any liquidation or dissolution of the Company, any sale of
substantially all of the Company's assets or any other transaction or series of
related transactions as a result of which a single person or several persons
acting in concert own a majority of the Company's then outstanding Stock (such
merger, consolidation, sale or other transaction being hereinafter referred to
as a
<PAGE>
"Transaction"), all outstanding options shall become exercisable prior to
the consummation of such Transaction, such options shall be exercisable at such
time as the Committee determines but in no event for less than a period of at
least 20 days prior to the consummation, but only to the extent the Committee
determines it may so accelerate the exercisability of such options in accordance
with the applicable requirements of Rule 16b-3. Upon consummation of the
Transaction, all outstanding options not so exercised shall terminate and cease
to be exercisable. There shall be excluded from the foregoing any Transaction
as a result of which (a) the holders of Stock prior to the Transaction retain or
acquire securities constituting a majority of the outstanding voting common
stock of the acquiring or surviving corporation or other entity and (b) no
single person owns more than half of the outstanding voting common stock of the
acquiring or surviving corporation or other entity. For purposes of this
Section, voting common stock of the acquiring or surviving corporation or other
entity that is issuable upon conversion of convertible securities or upon
exercise of warrants or options shall be considered outstanding, and all
securities that vote in the election of directors (other than solely as the
result of a default in the making of any dividend or other payment) shall be
deemed to constitute that number of shares of voting common stock which is
equivalent to the number of such votes that may be cast by the holders of such
securities.
7. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.
Neither adoption of the Plan nor the grant of options to an Eligible
Director shall confer upon any person any right to continued status as a
director with the Company or any subsidiary or affect in any way the right of
the Company or subsidiary to terminate a director relationship at any time or
shall affect the Company's right to grant to such director options that are not
subject to the Plan, to issue to such directors Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
directors.
The Committee may at any time discontinue granting options under the Plan.
The Committee may at any time or times amend the Plan or any outstanding options
for the purpose of satisfying any changes in applicable laws or regulations or
for any other purpose which may at the time be permitted by law, or may at any
time terminate the Plan as to any further grants of options, provided that no
such amendment shall adversely affect the rights of any director (without his or
her consent) under any option previously granted. The provisions of Section 5
or 6 of this Plan shall not be amended any more frequently than once every six
months other than to comply with changes in the Internal Revenue Code of 1986,
the Employee Retirement Income Security Act of 1974 or the rules and regulations
thereunder, all as from time to time in effect.
