<PAGE>
As filed with the Securities and Exchange Commission on January 29, 1998.
Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
KAYNAR TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0591091
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 N. State College Blvd., Suite 1000
Orange, California 92868
(Address of principal executive offices)
KAYNAR TECHNOLOGIES INC. 1997 STOCK INCENTIVE PLAN
(Full title of the plan)
David A. Werner
Kaynar Technologies Inc.
500 N. State College Blvd., Suite 1000
Orange, California 92868
(714) 712-4900
(Name, address, and telephone number, including area code, of agent for service)
___________________
COPY TO:
C. James Levin, Esq.
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2889
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of securitiesto Amount to be Proposed maximum Proposed maximum Amount of
be registered registered offering price per aggregate offering registration fee
unit price
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<S> <C> <C> <C> <C>
Common Stock, par 500,000 shares(1) $25.50(2) $12,750,000(2) $3,761.25(2)
value $0.01 per share
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- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, options and other rights to purchase or acquire
the shares of Common Stock covered by the Prospectus and, pursuant to Rule
416(c) under the Securities Act of 1933, an indeterminate number of shares
which by reason of certain events specified in the Plan may become subject
to the Plan.
(2) Pursuant to Rule 457(h), the maximum offering price, per share and in the
aggregate, and the registration fee were calculated based upon the average
of the high and low prices of the Common Stock on January 26, 1998, as
reported on the Nasdaq National Market System.
The Exhibit Index for this Registration Statement follows the signature page.
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<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 (plan information and registrant information) will be sent or given to
optionees as specified by Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Securities Act"). Such documents need not be 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. These documents, which include the statement of
availability required by Item 2 of Form S-8, and the documents incorporated by
reference in this Registration Statement pursuant to Item 3 of Form S-8 (Part II
hereof), taken together, constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of Kaynar Technologies Inc. (the "Company")
filed with the Commission are incorporated herein by reference:
(a) The Company's Amendment No. 6 to the Registration Statement on
Form S-1, filed with the Commission on May 6, 1997 (File No. 333-22345),
which contains audited financial statements for the Company's fiscal year
ended on December 31, 1996;
(b) The Company's Quarterly Reports on Form 10-Q, filed with the
Commission on May 13, 1997, August 6, 1997, and November 12, 1997 (File No.
000-22519); and
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, filed with the Commission on May 6,
1997 (File No. 000-22519).
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold shall be deemed to
be incorporated by reference into the prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained herein or in a
document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or amended, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Common Stock is registered pursuant to Section 12 of the Exchange
Act. Therefore, the description of the securities is omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation, as amended, of the Company
contains a provision eliminating the personal liability of the directors to
the Company or its stockholders to the fullest extent set forth in Section
102(b)(7) of the Delaware General Corporation Law. The Bylaws of the Company
provide for indemnification of directors, officers, employees and agents of
the Company consistent with the provisions of Section 145 of the Delaware
General Corporation Law. The Company has also entered into indemnification
agreements with each director and certain executive officers that provide for
the maximum protection against liability permitted by law. The
indemnification agreements also provide that, to the extent the Company
purchases directors and officers insurance, the directors and officers who
are parties to such agreements will be covered. The Company, however, has no
obligation to purchase such insurance.
3
<PAGE>
Burton J. Kloster, Jr., an outside director of the Company and the
nominee of General Electric Capital Corporation ("GECC"), has entered into a
separate indemnification agreement with GECC. Under the agreement, GECC will
indemnify Mr. Kloster for losses, liabilities, damages and expenses incurred as
a result of his acting properly on behalf of GECC, to the extent such amounts
are not recoverable from the Company or any insurer of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Kaynar Technologies Inc. 1997 Stock Incentive Plan (formerly known as
the Kaynar Holdings Inc. 1997 Stock Incentive Plan), including the
Form of Eligible Director Nonqualified Stock Option Agreement on
Exhibit A thereto
4.2 Form of Incentive Stock Option Agreement
4.3 Form of Nonqualified Stock Option Agreement
5.1 Opinion of Counsel regarding the legality of the Common Stock to be
issued
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney for Jordan A. Law, David A. Werner, Robert M.
Nelson, Norman A. Barkeley, Burton J. Kloster, Jr., and Richard P.
Strubel (included in this Registration Statement on page S-1)
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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this
Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do 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 with or furnished to
4
<PAGE>
the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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 Securities Act and will be governed by the final
adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Orange, State of California, on January 29, 1998.
KAYNAR TECHNOLOGIES INC.
By: /S/ JORDAN A. LAW
-------------------------------
Jordan A. Law
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Jordan A. Law and David A. Werner his true and lawful attorney-in-fact and
agent, with full powers of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorney-in-fact and agent,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Jordan A. Law President, Chief Executive January 29, 1998
--------------------------- Officer and Chairman of the
Jordan A. Law Board (Principal Executive
Officer)
/s/ David A. Werner Executive Vice President and January 29, 1998
--------------------------- Director
David A. Werner (Principal Financial
Officer)
/s/ Robert M. Nelson Controller January 29, 1998
--------------------------- (Principal Accounting
Robert M. Nelson Officer)
/s/ Norman A. Barkeley Director January 29, 1998
---------------------------
Norman A. Barkeley
/s/ Burton J. Kloster, Jr. Director January 29, 1998
---------------------------
Burton J. Kloster, Jr.
/s/ Richard P. Strubel Director January 29, 1998
---------------------------
Richard P. Strubel
S-1
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Kaynar Technologies Inc. 1997 Stock Incentive Plan (formerly known as
the Kaynar Holdings Inc. 1997 Stock Incentive Plan), including the
Form of Eligible Director Nonqualified Stock Option Agreement on
Exhibit A thereto
4.2 Form of Incentive Stock Option Agreement
4.3 Form of Nonqualified Stock Option Agreement
5.1 Opinion of Counsel regarding the legality of the Common Stock to be
issued
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney for Jordan A. Law, David A. Werner, Robert M.
Nelson, Norman A. Barkeley, Burton J. Kloster, Jr., and Richard P.
Strubel (included in this Registration Statement on page S-1)
<PAGE>
KAYNAR TECHNOLOGIES INC.
1997 STOCK INCENTIVE PLAN (1)
(FORMERLY KNOWN AS THE "KAYNAR HOLDINGS INC.
1997 STOCK INCENTIVE PLAN")
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and Procedure . . . . . . 1
1.3 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Shares Available for Awards; Share Limits . . . . . . . . . . . . 3
1.5 Grant of Awards . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Award Period. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Awards . . . . . . . . . . 4
1.8 No Transferability; Limited Exception to Transfer Restrictions. . 4
2. OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Option Price. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Limitations on Grant and Terms of Incentive Stock Options . . . . 6
2.4 Limits on 10% Holders . . . . . . . . . . . . . . . . . . . . . . 6
3. STOCK APPRECIATION RIGHTS. . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Exercise of Stock Appreciation Rights . . . . . . . . . . . . . . 7
3.3 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. PERFORMANCE SHARE AWARDS AND STOCK BONUSES . . . . . . . . . . . . . . 8
4.1 Grants of Performance Share Awards. . . . . . . . . . . . . . . . 8
4.2 Special Performance-Based Share Awards. . . . . . . . . . . . . . 8
4.3 Grants of Stock Bonuses . . . . . . . . . . . . . . . . . . . . . 10
4.4 Deferred Payments . . . . . . . . . . . . . . . . . . . . . . . . 10
5. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Rights of Eligible Persons, Participants and Beneficiaries. . . . 11
5.2 Adjustments; Acceleration . . . . . . . . . . . . . . . . . . . . 11
5.3 Effect of Termination of Employment . . . . . . . . . . . . . . . 12
5.4 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . 13
5.5 Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.6 Plan Amendment, Termination and Suspension. . . . . . . . . . . . 13
5.7 Privileges of Stock Ownership . . . . . . . . . . . . . . . . . . 14
5.8 Effective Date of the Plan. . . . . . . . . . . . . . . . . . . . 14
5.9 Term of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . 14
5.10 Governing Law/Construction/Severability . . . . . . . . . . . . . 14
5.11 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
i
<PAGE>
5.12 Effect of Change of Subsidiary Status . . . . . . . . . . . . . . 15
5.13 Non-Exclusivity of Plan . . . . . . . . . . . . . . . . . . . . . 15
6. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. NON-EMPLOYEE DIRECTOR OPTIONS. . . . . . . . . . . . . . . . . . . . . 21
7.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.2 Annual Option Grants. . . . . . . . . . . . . . . . . . . . . . . 21
7.3 Option Price. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.4 Option Period and Exercisability. . . . . . . . . . . . . . . . . 21
7.5 Termination of Directorship . . . . . . . . . . . . . . . . . . . 22
7.6 Acceleration and Adjustments. . . . . . . . . . . . . . . . . . . 22
7.7 Acceleration Upon a Change in Control Event . . . . . . . . . . . 22
ii
<PAGE>
KAYNAR TECHNOLOGIES INC.
1997 STOCK INCENTIVE PLAN(1)
1. THE PLAN.
1.1 PURPOSE.
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Awards to attract, motivate,
retain and reward key employees, including officers, whether or not directors,
of the Company with awards and incentives for high levels of individual
performance and improved financial performance of the Company and to attract,
motivate and retain experienced and knowledgeable independent directors through
the benefits provided under Article 7. "Corporation" means Kaynar Technologies
Inc., a Delaware corporation, and "Company" means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized terms are defined
in Article 6.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) COMMITTEE. This Plan shall be administered by and all Awards to
Eligible Persons shall be authorized by the Committee. Action of the Committee
with respect to the administration of this Plan shall be taken pursuant to a
majority vote or by unanimous written consent of its members.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the
express provisions of this Plan, the Committee shall have the authority:
(i) to determine from among those persons eligible the particular
Eligible Person who will receive any Awards;
- ------------------------
(1)Formerly known as the "Kaynar Holdings Inc. 1997 Stock Incentive
Plan." The Plan was approved by the shareholders of the Corporation on May 5,
1997. At the time, the Corporation was named "Kaynar Holdings Inc." On May 6,
1997, the Corporation merged with Kaynar Technologies Inc., with the Corporation
as the surviving corporation. In the merger, the Corporation renamed itself as
"Kaynar Technologies Inc." On January 27, 1998, the Board of Directors of the
Corporation approved certain non-material amendments to the Plan in order to
make it consistent with the Corporation's present name.
<PAGE>
(ii) to grant Awards to Eligible Persons, determine the price at
which Securities will be offered or awarded and the amount of securities to
be offered or awarded to any of such persons, and determine other specific
terms and conditions of such Awards consistent with the express limits of
this Plan, and establish the installments (if any) in which such Awards
shall become exercisable or shall vest, or determine that no delayed
exercisability or vesting is required, and establish the events of
termination or reversion of such Awards;
(iii) to approve the forms of Award Agreements (which need not be
identical either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Participants who are
granted Awards under Articles 2, 3, or 4 of this Plan, further define the
terms used in this Plan, and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights with
respect to, or modify, discontinue, suspend, or terminate any or all
outstanding Awards held by Eligible Persons, subject to any required
consent under Section 5.6;
(vi) to accelerate or extend the exercisability or extend the term
of any or all such outstanding Awards within the maximum ten-year term of
Awards under Section 1.6; and
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
Notwithstanding the foregoing, the provisions of Article 7 relating to
Non-Employee Director Awards shall be automatic and, to the maximum extent
possible, self-effectuating.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or pursuant
to this Plan shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons. No member of the Board
or Committee, or officer of the Corporation or any Subsidiary, shall be
liable for any such action or inaction of the entity or body, of another
person or, except in circumstances involving bad faith, of himself or
herself. Subject only to compliance with the express provisions hereof, the
Board and Committee may act in their absolute discretion in matters within
their authority related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking or
not taking any action under this Plan, the Committee or the Board, as the
case may be, may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. No director, officer or agent of
the Company shall be liable for any such action or determination taken or
made or omitted in good faith.
2
<PAGE>
(e) DELEGATION. The Committee may delegate ministerial,
non-discretionary functions to a third-party administrator or to individuals
who are officers or employees of the Company.
1.3 PARTICIPATION.
Awards may be granted by the Committee only to those persons that
the Committee determines to be Eligible Persons. An Eligible Person who has
been granted an Award may, if otherwise eligible, be granted additional
Awards if the Committee shall so determine.
1.4 SHARES AVAILABLE FOR AWARDS; SHARE LIMITS.
(a) SHARES AVAILABLE. Subject to the provisions of Section 5.2, the
capital stock that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any shares of its
Common Stock held as treasury shares. The shares may be delivered for any
lawful consideration.
(b) SHARE LIMITS. The maximum number of shares of Common Stock that
may be delivered pursuant to Awards (including Incentive Stock Options)
granted to Eligible Persons under this Plan shall not exceed 500,000 shares
(the "SHARE LIMIT"). The maximum number of shares of Common Stock that may
be delivered pursuant to Incentive Stock Options granted to Eligible
Employees shall not exceed 450,000 shares. The maximum number of shares of
Common Stock that may be delivered to Non-Employee Directors under the
provisions of Article 7 shall not exceed 50,000 shares. The maximum number
of shares subject to those Options and Stock Appreciation Rights that are
granted during any calendar year to any individual shall be limited to
45,000. Each of the four foregoing numerical limits shall be subject to
adjustment as contemplated by this Section 1.4 and Section 5.2.
(c) SHARE RESERVATION. No Award may be granted under this Plan unless,
on the date of grant, the sum of (i) the maximum number of shares issuable at
any time pursuant to such Award, plus (ii) the number of shares that have
previously been issued pursuant to Awards granted under this Plan, plus (iii)
the maximum number of shares that may be issued at any time after such date
of grant pursuant to Awards that are outstanding on such date, does not
exceed the Share Limit.
1.5 GRANT OF AWARDS.
Subject to the express provisions of this Plan, the Committee shall
determine the number of shares of Common Stock subject to each Award, the
price (if any) to be paid for the shares or the Award and, in the case of
Performance Share Awards, in addition to matters addressed in Section 1.2(b),
the specific objectives, goals and performance criteria (such as an increase
in sales, market value, earnings or book value over a base period, the years
of service before vesting, the relevant job classification or level of
responsibility or other factors) that further define the terms of the
Performance Share Award. Each Award shall be evidenced by an Award Agreement
signed by the Corporation and, if required by the
3
<PAGE>
Committee, by the Participant. The Award Agreement shall set forth the
material terms and conditions of the Award established by the Committee
consistent with the specific provisions of this Plan.
1.6 AWARD PERIOD.
Each Award and all executory rights or obligations under the
related Award Agreement shall expire on such date (if any) as shall be
determined by the Committee, but in the case of Options or other rights to
acquire Common Stock not later than ten (10) years after the Award Date.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. Unless the Committee otherwise expressly
provides, no Award shall be exercisable or shall vest until at least six
months after the initial Award Date, and once exercisable an Award shall
remain exercisable until the expiration or earlier termination of the Award.
The number of shares for which an Award (other than a Performance Share Award
or Performance-Based Share Award whose applicable performance cycle or
measurement period exceeds four years) becomes exercisable within any
calendar year shall not exceed 25% of the total number of shares covered by
the Award.
(b) PROCEDURE. Any exercisable Award shall be deemed to be exercised
when the Secretary of the Corporation receives written notice of such
exercise from the Participant, together with any required payment made in
accordance with Section 2.2(a) or 7.4, as the case may be.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests shall
be disregarded, but may be accumulated. The Committee, however, may determine
in the case of Eligible Persons that cash, other securities, or other
property will be paid or transferred in lieu of any fractional share
interests. No fewer than 100 shares may be purchased on exercise of any
Award at one time unless the number purchased is the total number at the time
available for purchase under the Award.
1.8 NO TRANSFERABILITY; LIMITED EXCEPTION TO TRANSFER RESTRICTIONS.
(a) LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly
provided in (or pursuant to) this Section 1.8, by applicable law and by the
Award Agreement, as the same may be amended, (i) all Awards are
non-transferable and shall not be subject in any manner to sale, transfer,
anticipation, alienation, assignment, pledge, encumbrance or charge; Awards
shall be exercised only by the Participant; and (ii) amounts payable or
shares issuable pursuant to an Award shall be delivered only to (or for the
account of) the Participant.
(b) EXCEPTIONS. The Committee may permit Awards to be exercised by and
paid only to certain persons or entities related to the Participant,
including but not limited to members of the Participant's immediate family,
charitable institutions, or trusts or other
4
<PAGE>
entities whose beneficiaries or beneficial owners are members of the
Participant's immediate family and/or charitable institutions, or to such
other persons or entities as may be approved by the Committee, pursuant to
such conditions and procedures as the Committee may establish. Any permitted
transfer shall be subject to the condition that the Committee receive
evidence satisfactory to it that the transfer is being made for estate and/or
tax planning purposes or a gratuitous or donative basis and without
consideration (other than nominal consideration). Notwithstanding the
foregoing, Incentive Stock Options shall be subject to any and all additional
transfer restrictions under the Code.
(c) FURTHER EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and
transfer restrictions in Section 1.8(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive benefits in the
event of the Participant's death or, if the Participant has died, transfers
to or exercise by the Participant's beneficiary, or, in the absence of a
validly designated beneficiary, transfers by will or the laws of descent
and distribution,
(iii) if the Participant has suffered a disability, permitted
transfers or exercises on behalf of the Participant by his or her legal
representative, or
(iv) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for the purpose of (or
who otherwise facilitate) the exercise of Awards consistent with applicable
laws and the express authorization of the Committee.
Notwithstanding the foregoing, Incentive Stock Options shall be subject to
all applicable transfer restrictions under the Code.
2. OPTIONS.
2.1 GRANTS.
One or more Options may be granted under this Article to any Eligible
Person. Each Option granted shall be designated in the applicable Award
Agreement, by the Committee as either an Incentive Stock Option, subject to
Section 2.3, or a Non-Qualified Stock Option.
2.2 OPTION PRICE.
(a) PRICING LIMITS. The purchase price per share of the Common Stock
covered by each Option shall be determined by the Committee at the time of the
Award, but shall not be less than 100% (110% in the case of a Participant
described in Section 2.4) of the Fair Market Value of the Common Stock on the
date of grant and in all cases shall not be less than the par value thereof.
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(b) PAYMENT PROVISIONS. The purchase price of any shares purchased on
exercise of an Option granted under this Article shall be paid in full at the
time of each purchase in one or a combination of the following methods: (i)
in cash or by electronic funds transfer; (ii) by check payable to the order
of the Corporation; (iii) by notice and third party payment in such manner as
may be authorized by the Committee; or (iv) by the delivery of shares of
Common Stock of the Corporation already owned by the Participant, PROVIDED,
HOWEVER, that the Committee may in its absolute discretion limit the
Participant's ability to exercise an Award by delivering such shares, and
provided further that any shares delivered which were initially acquired upon
exercise of a stock option must have been owned by the Participant at least
six months as of the date of delivery. Shares of Common Stock used to
satisfy the exercise price of an Option shall be valued at their Fair Market
Value on the date of exercise.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate "Fair Market
Value" of stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking
into account both Common Stock subject to Incentive Stock Options under this
Plan and stock subject to incentive stock options under all other plans of
the Company or any parent corporation, such options shall be treated as
Nonqualified Stock Options. For this purpose, the Fair Market Value of the
stock subject to options shall be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options shall
be reduced first. To the extent a reduction of simultaneously granted
options is necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares of Common
Stock are to be treated as shares acquired pursuant to the exercise of an
Incentive Stock Option.
(b) OPTION PERIOD. Each Option and all rights thereunder shall expire
no later than 10 years after the Award Date.
(c) OTHER CODE LIMITS. Incentive Stock Options may only be granted to
Eligible Employees who are actually employed by the Corporation or a
Subsidiary and that satisfy the other eligibility requirements of the Code.
There shall be imposed in any Award Agreement relating to Incentive Stock
Options such other terms and conditions as from time to time are required in
order that the Option be an "incentive stock option" as that term is defined
in Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS.
No Incentive Stock Option may be granted to any person who, at the
time the Option is granted, owns (or is deemed to own under Section 424(d) of
the Code) shares of outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation,
unless the exercise price of such Option is at least 110% of the Fair Market
Value of the stock subject to the Option and such Option by its
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terms is not exercisable after the expiration of five years from the date
such Option is granted.
2.5 OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY
OTHER CORPORATIONS. Options and Stock Appreciation Rights may be granted to
Eligible Persons under this Plan in substitution for employee stock options
granted by other entities to persons who are or who will become Eligible
Persons in respect of the Company, in connection with a distribution, merger
or reorganization by or with the granting entity or an affiliated entity, or
the acquisition by the Company, directly or indirectly, of all or a
substantial part of the stock or assets of the other entity.
3. STOCK APPRECIATION RIGHTS.
3.1 GRANTS.
In its discretion, the Committee may grant a Stock Appreciation
Right to any Eligible Person either concurrently with the grant of another
Award or in respect of an outstanding Award, in whole or in part, or
independently of any other Award. Any Stock Appreciation Right granted in
connection with an Incentive Stock Option shall contain such terms as may be
required to comply with the provisions of Section 422 of the Code and the
regulations promulgated thereunder, unless the holder otherwise agrees.
3.2 EXERCISE OF STOCK APPRECIATION RIGHTS.
(a) EXERCISABILITY. Unless the Award Agreement or the Committee
otherwise provides, a Stock Appreciation Right related to another Award shall
be exercisable at such time or times, and to the extent, that the related
Award shall be exercisable.
(b) EFFECT ON AVAILABLE SHARES. To the extent that a Stock
Appreciation Right is exercised, the number of underlying shares of Common
Stock theretofore subject to a related Award shall be charged against the
maximum amount of Common Stock that may be delivered pursuant to Awards under
this Plan. The number of shares subject to the Stock Appreciation Right and
the related Option of the Participant shall, however, be reduced by the
number of underlying shares as to which the exercise related, unless the
Award Agreement otherwise provides.
(c) STAND-ALONE SARS. A Stock Appreciation Right granted independently
of any other Award shall be exercisable pursuant to the terms of the Award
Agreement but in no event earlier than six months after the Award Date,
except in the case of death or Total Disability.
3.3 PAYMENT.
(a) AMOUNT. Unless the Committee otherwise provides, upon exercise of
a Stock Appreciation Right and the attendant surrender of an exercisable
portion of any related
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Award, the Participant shall be entitled to receive payment of an amount
determined by multiplying
(i) the difference obtained by subtracting the exercise price per
share of Common Stock under the related Award (if applicable) or the
initial share value specified in the Award from the Fair Market Value of a
share of Common Stock on the date of exercise of the Stock Appreciation
Right, by
(ii) the number of shares with respect to which the Stock
Appreciation Right shall have been exercised.
(b) FORM OF PAYMENT. The Committee, in its sole discretion, shall
determine the form in which payment shall be made of the amount determined
under paragraph (a) above, either solely in cash, solely in shares of Common
Stock (valued at Fair Market Value on the date of exercise of the Stock
Appreciation Right), or partly in such shares and partly in cash, provided
that the Committee shall have determined that such exercise and payment are
consistent with applicable law. If the Committee permits the Participant to
elect to receive cash or shares (or a combination thereof) on such exercise,
any such election shall be subject to such conditions as the Committee may
impose.
4. PERFORMANCE SHARE AWARDS AND STOCK BONUSES
4.1 GRANTS OF PERFORMANCE SHARE AWARDS.
The Committee may, in its discretion, grant Performance Share
Awards to Eligible Persons based upon such factors as the Committee shall
deem relevant in light of the specific type and terms of the award. An Award
Agreement shall specify the maximum number of shares of Common Stock (if any)
subject to the Performance Share Award, the consideration (but not less than
the minimum lawful consideration) to be paid for any such shares as may be
issuable to the Participant, the duration of the Award and the conditions
upon which delivery of any shares or cash to the Participant shall be based.
The amount of cash or shares or other property that may be deliverable
pursuant to such Award shall be based upon the degree of attainment over a
specified period of not more than 10 years (a "performance cycle") as may be
established by the Committee of such measure(s) of the performance of the
Company (or any part thereof) or the Participant as may be established by the
Committee. The Committee may provide for full or partial credit, prior to
completion of such performance cycle or the attainment of the performance
achievement specified in the Award, in the event of the Participant's death,
Retirement, or Total Disability, a Change in Control Event or in such other
circumstances as the Committee consistent with Section 5.10(c)(2), if
applicable may determine.
4.2 SPECIAL PERFORMANCE-BASED SHARE AWARDS.
Without limiting the generality of the foregoing, and in addition
to Options and Stock Appreciation Rights granted under other provisions of
this Plan which are intended to satisfy the exception for "performance-based
compensation" under Section 162(m) of the
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Code (with such Awards hereinafter referred to as a "Qualifying Option" or a
"Qualifying Stock Appreciation Right," respectively), other performance-based
awards within the meaning of Section 162(m) of the Code ("PERFORMANCE-BASED
AWARDS"), whether in the form of performance stock, phantom stock, Cash-Based
Awards, or other rights, the grant, vesting, exercisability or payment of
which depends on the degree of achievement of the Performance Goals relative
to preestablished targeted levels for the Corporation or the Corporation and
one or more of its Subsidiaries, may be granted under this Plan. Any
Qualifying Option or Qualifying Stock Appreciation Right shall be subject
only to the requirements of subsections (a) and (c) below in order for such
Awards to satisfy the requirements for Performance-Based Awards under this
Section 4.2. With the exception of any Qualifying Option or Qualifying Stock
Appreciation Right, an Award that is intended to satisfy the requirements of
this Section 4.2 shall be designated as a Performance-Based Award at the time
of grant.
(a) ELIGIBLE CLASS. The eligible class of persons for
Performance-Based Awards under this Section shall be the executive officers
of the Corporation.
(b) PERFORMANCE GOAL ALTERNATIVES. The specific performance goals for
Performance-Based Awards granted under this Section (other than Qualifying
Options and Qualifying Stock Appreciation Rights) shall be, on an absolute or
relative basis, one or more of the Performance Goals, as selected by the
Committee in its sole discretion. The Committee shall establish in the
applicable Award Agreement the specific performance target(s) relative to the
Performance Goal(s) which must be attained before the compensation under the
Performance-Based Award becomes payable. The specific targets shall be
determined within the time period permitted under Section 162(m) of the Code
(and any regulations issued thereunder) so that such targets are considered
to be preestablished and so that the attainment of such targets is
substantially uncertain at the time of their establishment. The applicable
performance measurement period may not be less than one nor more than 10
years.
(c) MAXIMUM PERFORMANCE-BASED AWARD. Notwithstanding any other
provision of the Plan to the contrary, the maximum number of shares of Common
Stock which may be delivered pursuant to options, stock appreciation rights
or other share-based awards that are granted as Performance-Based Awards to
any Participant in any calendar year shall not exceed 75,000 shares, either
individually or in the aggregate, subject to adjustment as provided in
Section 5.2. Awards that are cancelled during the year shall be counted
against this limit to the extent required by Section 162(m) of the Code. In
addition, the aggregate amount of compensation to be paid to any Participant
in respect of any Cash-Based Awards that are granted during any calendar year
as Performance-Based Awards shall not exceed $200,000.
(d) COMMITTEE CERTIFICATION. Before any Performance-Based Award under
this Section 4.2 (other than Qualifying Options or Qualifying Stock
Appreciation Rights) is paid, the Committee must certify in writing that the
Performance Goal(s) and any other material terms of the Performance-Based
Award were satisfied; provided, however, that a Performance-Based Award may
be paid without regard to the satisfaction of the applicable
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Performance Goal in the event of a Change in Control Event in accordance with
Section 5.2(d).
(e) TERMS AND CONDITIONS OF AWARDS. The Committee will have the
discretion to determine the restrictions or other limitations of the
individual Awards granted under this Section 4.2 including the authority to
reduce Awards, payouts or vesting or to pay no Awards, in its sole
discretion, if the Committee preserves such authority at the time of grant by
language to this effect in its authorizing resolutions or otherwise.
(f) ADJUSTMENTS FOR CHANGES IN CAPITALIZATION AND OTHER MATERIAL
CHANGES. In the event of a change in corporate capitalization, such as a
stock split or stock dividend, or a corporate transaction, such as a merger,
consolidation, spinoff, reorganization or similar event, or any partial or
complete liquidation of the Corporation, or any similar event consistent with
regulations issued under Section 162(m) of the Code including, without
limitation, any material change in accounting policies or practices affecting
the Corporation and/or the Performance Goals or targets, then the Committee
may make adjustments to the Performance Goals and targets relating to
outstanding Performance-Based Awards to the extent such adjustments are made
to reflect the occurrence of such an event; provided, however, that
adjustments described in this subsection may be made only to the extent that
the occurrence of an event described herein was unforeseen at the time the
targets for a Performance-Based Award were established by the Committee.
(g) CASH-BASED AWARDS. Cash-Based Awards will be charged against the
maximum number of shares issuable under the Plan by the number of shares
equal to the amount of cash paid divided by the fair market value of a share
of Common Stock at the time the Cash-Based Award is paid.
4.3 GRANTS OF STOCK BONUSES.
The Committee may grant a Stock Bonus to any Eligible Person to
reward exceptional or special services, contributions or achievements in the
manner and on such terms and conditions (including any restrictions on such
shares) as determined from time to time by the Committee. The number of
shares so awarded shall be determined by the Committee. The Award may be
granted independently or in lieu of a cash bonus.
4.4 DEFERRED PAYMENTS.
The Committee may authorize for the benefit of any Eligible Person
the deferral of any payment of cash or shares that may become due or of cash
otherwise payable under this Plan, and provide for accredited benefits
thereon based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such deferral shall be
subject to such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of Participants.
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5. OTHER PROVISIONS.
5.1 RIGHTS OF ELIGIBLE PERSONS, PARTICIPANTS AND BENEFICIARIES.
(a) EMPLOYMENT STATUS. Status as an Eligible Person shall not be
construed as a commitment that any Award will be made under this Plan to an
Eligible Person or to Eligible Persons generally.
(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any
other documents related to this Plan or to any Award) shall confer upon any
Eligible Person or other Participant any right to continue in the employ or
other service of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with the right of
the Company to change such person's compensation or other benefits or to
terminate the employment of such person, with or without cause, but nothing
contained in this Plan or any document related hereto shall adversely affect
any independent contractual right of such person without his or her consent
thereto.
(c) PLAN NOT FUNDED. Awards payable under this Plan shall be payable
in shares or from the general assets of the Corporation, and no special or
separate reserve, fund or deposit shall be made to assure payment of such
Awards. No Participant, Beneficiary or other person shall have any right,
title or interest in any fund or in any specific asset (including shares of
Common Stock, except as expressly otherwise provided) of the Company by
reason of any Award hereunder. Neither the provisions of this Plan (or of
any related documents), nor the creation or adoption of this Plan, nor any
action taken pursuant to the provisions of this Plan shall create, or be
construed to create, a trust of any kind or a fiduciary relationship between
the Company and any Participant, Beneficiary or other person. To the extent
that a Participant, Beneficiary or other person acquires a right to receive
payment pursuant to any Award hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Company.
5.2 ADJUSTMENTS; ACCELERATION.
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Common Stock (whether in
the form of cash, Common Stock, other securities, or other property), or any
reclassification, recapitalization, stock split (including a stock split in
the form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Common Stock or other securities of the Corporation, or there
shall occur any other like corporate transaction or event in respect of the
Common Stock or a sale of substantially all the assets of the Corporation as
an entirety, then the Committee shall, in such manner and to such extent (if
any) as it deems appropriate and equitable (1) proportionately adjust any or
all of (a) the number and type of shares of Common Stock (or other
securities) which thereafter may be made the subject of Awards (including the
specific maxima and numbers of shares set forth elsewhere in this Plan), (b)
the number, amount and type of shares of Common Stock (or other securities or
property) subject to any or all outstanding Awards, (c) the grant, purchase,
or exercise price of any or all outstanding
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Awards, (d) the securities, cash or other property deliverable upon exercise
of any outstanding Awards, or (e) the performance standards appropriate to
any outstanding Awards, or (2) in the case of an extraordinary dividend or
other distribution, recapitalization, reclassification, merger,
reorganization, consolidation, combination, sale of assets, split up,
exchange, or spin off, make provision for a cash payment or for the
substitution or exchange of any or all outstanding Awards or the cash,
securities or property deliverable to the holder of any or all outstanding
Awards based upon the distribution or consideration payable to holders of the
Common Stock of the Corporation upon or in respect of such event; PROVIDED,
HOWEVER, in each case, that with respect to Awards of Incentive Stock
Options, no such adjustment shall be made which would cause the Plan to
violate Section 424(a) of the Code or any successor provisions thereto
without the written consent of holders materially adversely affected thereby.
In any of such events, the Committee may take such action sufficiently prior
to such event if necessary to permit the Participant to realize the benefits
intended to be conveyed with respect to the underlying shares in the same
manner as is available to shareholders generally.
(b) ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. As to any
Participant, unless prior to a Change in Control Event, the Committee
determines that, upon its occurrence, there shall be no acceleration of
benefits under Awards or determines that only certain or limited benefits
under Awards shall be accelerated and the extent to which they shall be
accelerated, and/or establishes a different time in respect of such Change in
Control Event for such acceleration, then upon the occurrence of a Change in
Control Event (i) each Option and Stock Appreciation Right shall become
immediately exercisable, (ii) each Performance Share Award shall become
payable to the Participant. The Committee may override the limitations on
acceleration in this Section 5.2(b) by express provision in the Award
Agreement and may accord any Eligible Person a right to refuse any
acceleration, whether pursuant to the Award Agreement or otherwise, in such
circumstances as the Committee may approve. Any acceleration of Awards shall
comply with applicable regulatory requirements, including without limitation
Section 422 of the Code.
(c) POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If any Option or
other right to acquire Common Stock under this Plan (other than under Article
7) has been fully accelerated as permitted by Section 5.2(b) but is not
exercised prior to (i) a dissolution of the Corporation, or (ii) an event
described in Section 5.2(a) that the Corporation does not survive, or (iii)
the consummation of an event described in Section 5.2(a) that results in a
Change in Control Event approved by the Board, such Option or right shall
thereupon terminate, subject to any provision that has been expressly made by
the Committee for the survival, substitution, exchange or other settlement of
such Option or right.
5.3 EFFECT OF TERMINATION OF EMPLOYMENT.
The Committee shall establish in respect of each Award granted to
an Eligible Person the effect of a termination of employment on the rights
and benefits thereunder and in so doing may make distinctions based upon the
cause of termination. In addition, in the event of, or in anticipation of, a
termination of employment with the Company for any reason, other than
discharge for cause, the Committee may, in its discretion, increase the
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portion of the Participant's Award available to the Participant, or
Participant's Beneficiary or Personal Representative, as the case may be, or,
subject to the provisions of Section 1.6, extend the exercisability period
upon such terms as the Committee shall determine and expressly set forth in
or by amendment to the Award Agreement.
5.4 COMPLIANCE WITH LAWS.
This Plan, the granting and vesting of Awards under this Plan and
the offer, issuance and delivery of shares of Common Stock and/or the payment
of money under this Plan or under Awards granted hereunder are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Corporation,
be necessary or advisable in connection therewith. Any securities delivered
under this Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Corporation, provide
such assurances and representations to the Corporation as the Corporation may
deem necessary or desirable to assure compliance with all applicable legal
requirements.
5.5 TAX WITHHOLDING.
Upon any exercise, vesting, or payment of any Award or upon the
disposition of shares of Common Stock acquired pursuant to the exercise of an
Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall have the right at
its option to (i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the amount
of any taxes which the Company may be required to withhold with respect to
such Award event or payment or (ii) deduct from any amount payable in cash
the amount of any taxes which the Company may be required to withhold with
respect to such cash payment. In any case where a tax is required to be
withheld in connection with the delivery of shares of Common Stock under this
Plan, the Committee may in its sole discretion grant (either at the time of
the Award or thereafter) to the Participant the right to elect, pursuant to
such rules and subject to such conditions as the Committee may establish, to
have the Corporation reduce the number of shares to be delivered by (or
otherwise reacquire) the appropriate number of shares valued at their then
Fair Market Value, to satisfy such withholding obligation.
5.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
(a) BOARD AUTHORIZATION. The Board may, at any time, terminate or,
from time to time, amend, modify or suspend this Plan, in whole or in part.
No Awards may be granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain jurisdiction as to
Awards then outstanding in accordance with the terms of this Plan.
(b) STOCKHOLDER APPROVAL. Any amendment that would (i) materially
increase the benefits accruing to Participants under this Plan, (ii)
materially increase the aggregate
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number of securities that may be issued under this Plan, or (iii) materially
modify the requirements as to eligibility for participation in this Plan,
shall be subject to stockholder approval only to the extent then required by
(i) Section 422 of the Code or applicable law, (ii) the Corporation's
Certificate of Incorporation or (iii) any certificate of designation with
respect to the preferred stock of the Corporation, or as deemed necessary or
advisable by the Board.
(c) AMENDMENTS TO AWARDS. Without limiting any other express authority
of the Committee under but subject to the express limits of this Plan, the
Committee by agreement or resolution may waive conditions of or limitations
on Awards to Eligible Persons that the Committee in the prior exercise of its
discretion has imposed, without the consent of a Participant, and may make
other changes to the terms and conditions of Awards that do not affect in any
manner materially adverse to the Participant, his or her rights and benefits
under an Award.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of this Plan or change of or affecting any
outstanding Award shall, without written consent of the Participant, affect
in any manner materially adverse to the Participant any rights or benefits of
the Participant or obligations of the Corporation under any Award granted
under this Plan prior to the effective date of such change. Changes
contemplated by Section 5.2 shall not be deemed to constitute changes or
amendments for purposes of this Section 5.6.
5.7 PRIVILEGES OF STOCK OWNERSHIP.
Except as otherwise expressly authorized by the Committee or this
Plan, a Participant shall not be entitled to any privilege of stock ownership
as to any shares of Common Stock not actually delivered to and held of record
by him or her. No adjustment will be made for dividends or other rights as a
shareholders for which a record date is prior to such date of delivery.
5.8 EFFECTIVE DATE OF THE PLAN.
This Plan shall be effective as of May 5, 1997, the date of Board
approval, subject to shareholder approval within 12 months thereafter.
5.9 TERM OF THE PLAN.
No Award shall be granted more than ten (10) years after the
effective date of this Plan (the "termination date"). Unless otherwise
expressly provided in this Plan or in an applicable Award Agreement, any
Award granted prior to the termination date may extend beyond such date, and
all authority of the Committee with respect to Awards hereunder, including
the authority to amend an Award, shall continue during any suspension of this
Plan and in respect of Awards outstanding on the termination date.
5.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
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(a) CHOICE OF LAW. This Plan, the Awards, all documents evidencing
Awards and all other related documents shall be governed by, and construed in
accordance with the laws of the state of incorporation of the Corporation.
(b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
(c) PLAN CONSTRUCTION.
(1) RULE 16B-3. It is the intent of the Corporation that
transactions in and affecting Awards in the case of Participants who are or
may be subject to Section 16 of the Exchange Act satisfy any then
applicable requirements of Rule 16b-3 so that such persons (unless they
otherwise agree) will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the Exchange Act in respect of those
transactions and will not be subjected to avoidable liability thereunder.
If any provision of this Plan or of any Award would otherwise frustrate or
conflict with the intent expressed above, that provision to the extent
possible shall be interpreted as to avoid such conflict. If the conflict
remains irreconcilable, the Committee may disregard the provision if it
concludes that to do so furthers the interest of the Corporation and is
consistent with the purposes of this Plan as to such persons in the
circumstances.
(2) SECTION 162(M). It is the further intent of the Company that
Options or Stock Appreciation Rights with an exercise or base price not
less than Fair Market Value on the date of grant and performance awards
under Section 4.2 of this Plan that are granted to or held by a Section 16
Person shall qualify as performance-based compensation under Section 162(m)
of the Code, and this Plan shall be interpreted consistent with such
intent.
5.11 CAPTIONS.
Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
5.12 EFFECT OF CHANGE OF SUBSIDIARY STATUS.
For purposes of this Plan and any Award hereunder, if an entity
ceases to be a Subsidiary a termination of employment and service shall be
deemed to have occurred with respect to each Eligible Person in respect of
such Subsidiary who does not continue as an Eligible Person in respect of
another entity within the Company.
5.13 NON-EXCLUSIVITY OF PLAN.
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Nothing in this Plan shall limit or be deemed to limit the
authority of the Board or the Committee to grant awards or authorize any
other compensation, with or without reference to the Common Stock, under any
other plan or authority.
6. DEFINITIONS.
6.1 DEFINITIONS.
(a) "AWARD" shall mean an award of any Option, Stock Appreciation
Right, Stock Bonus, Performance-Based Award, Cash-Based Award, Performance
Share Award, dividend equivalent or deferred payment right or other right or
security that would constitute a "derivative security" under Rule 16a-1(c) of
the Exchange Act, or any combination thereof, whether alternative or
cumulative, authorized by and granted under this Plan.
(b) "AWARD AGREEMENT" shall mean any writing setting forth the terms of
an Award that has been authorized by the Committee.
(c) "AWARD DATE" shall mean the date upon which the Committee took the
action granting an Award or such later date as the Committee designates as
the Award Date at the time of the Award or, in the case of Awards under
Article 7, the applicable dates set forth therein.
(d) "AWARD PERIOD" shall mean the period beginning on an Award Date and
ending on the expiration date of such Award.
(e) "BENEFICIARY" shall mean the person, persons, trust or trusts
designated by a Participant or, in the absence of a designation, entitled by
will or the laws of descent and distribution, to receive the benefits
specified in the Award Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's executor or
administrator if no other Beneficiary is designated and able to act under the
circumstances.
(f) "BOARD" shall mean the Board of Directors of the Corporation.
(g) "CASH-BASED AWARDS" shall mean Awards that, if paid, must be paid
in cash and that are neither denominated in nor have a value derived from the
value of, nor an exercise or conversion privilege at a price related to,
shares of Common Stock.
(h) "CASH FLOW" shall mean cash and cash equivalents derived from
either (i) net cash flow from operations or (ii) net cash flow from
operations, financings and investing activities, as determined by the
Committee at the time an Award is granted.
(i) "CHANGE IN CONTROL EVENT" shall mean any of the following:
(1) Approval by the shareholders of the Corporation of the
dissolution or liquidation of the Corporation;
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(2) Approval by the shareholders of the Corporation of an
agreement to merge or consolidate, or otherwise reorganize, with or into
one or more entities that are not Subsidiaries or other affiliates, as a
result of which less than 40% of the outstanding voting securities of the
surviving or resulting entity immediately after the reorganization are, or
will be, owned, directly or indirectly, by shareholders of the Corporation
immediately before such reorganization (assuming for purposes of such
determination that there is no change in the record ownership of the
Corporation's securities from the record date for such approval until such
reorganization and that such record owners hold no securities of the other
parties to such reorganization, but including in such determination any
securities of the other parties to such reorganization held by affiliates
of the Corporation);
(3) Approval by the shareholders of the Corporation of the sale of
substantially all of the Corporation's business and/or assets to a person
or entity which is not a Subsidiary or other affiliate; or;
(4) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act but excluding any person described in and satisfying
the conditions of Rule 13d-1(b)(1) thereunder), other than General Electric
Capital Corporation and its affiliates, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing more than 40% of the combined
voting power of the Corporation's then outstanding securities entitled to
then vote generally in the election of directors of the Corporation; or
(5) During any period not longer than two consecutive years,
individuals who at the beginning of such period constituted the Board cease
to constitute at least a majority thereof, unless the election, or the
nomination for election by the Corporation's shareholders, of each new
Board member was approved by a vote of at least three-fourths of the Board
members then still in office who were Board members at the beginning of
such period (including for these purposes, new members whose election or
nomination was so approved).
(j) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(k) "COMMISSION" shall mean the Securities and Exchange Commission.
(l) "COMMITTEE" shall mean the Board or a committee appointed by the
Board to administer this Plan, which committee shall be comprised only of two
or more directors or such greater number of directors as may be required
under applicable law, each of whom, in respect of any decision at a time when
the Participant affected by the decision may be subject to Section 162(m) of
the Code, shall be an "outside" director within the meaning of Section 162(m)
of the Code.
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(m) "COMMON STOCK" shall mean the Common Stock of the Corporation and
such other securities or property as may become the subject of Awards, or
become subject to Awards, pursuant to an adjustment made under Section 5.2 of
this Plan.
(n) "COMPANY" shall mean, collectively, the Corporation and its
Subsidiaries.
(o) "CORPORATION" shall mean Kaynar Technologies Inc., a Delaware
corporation, and its successors. The Corporation was formerly known as
Kaynar Holdings Inc.
(p) "DISINTERESTED" shall mean disinterested within the meaning of any
applicable regulatory requirements, including Rule 16b-3.
(q) "ELIGIBLE EMPLOYEE" shall mean an officer (whether or not a
director) or key employee of the Company.
(r) "ELIGIBLE PERSON" means an Eligible Employee, or any Other Eligible
Person, as determined by the Committee in its discretion, or, with respect to
the provisions of Article 7, a Non-Employee Director.
(s) "EPS" shall mean earnings per common share on a fully diluted basis
determined by dividing (i) net earnings, less dividends on preferred stock of
the Corporation by (ii) the weighted average number of common shares and
common shares equivalents outstanding.
(t) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(u) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(v) "FAIR MARKET VALUE" on any date shall mean (i) if the stock is
listed or admitted to trade on a national securities exchange, the closing
price of the stock on the Composite Tape, as published in the Western Edition
of The Wall Street Journal, of the principal national securities exchange on
which the stock is so listed or admitted to trade, on such date, or, if there
is no trading of the stock on such date, then the closing price of the stock
as quoted on such Composite Tape on the next preceding date on which there
was trading in such shares; (ii) if the stock is not listed or admitted to
trade on a national securities exchange, the last price for the stock on such
date, as furnished by the National Association of Securities Dealers, Inc.
("NASD") through the NASDAQ National Market Reporting System or a similar
organization if the NASD is no longer reporting such information; (iii) if
the stock is not listed or admitted to trade on a national securities
exchange and is not reported on the National Market Reporting System, the
mean between the bid and asked price for the stock on such date, as furnished
by the NASD or a similar organization; or (iv) if the stock is not listed or
admitted to trade on a national securities exchange, is not reported on the
National Market Reporting System and if bid and asked
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prices for the stock are not furnished by the NASD or a similar organization,
the value as established by the Committee at such time for purposes of this
Plan.
(w) "INCENTIVE STOCK OPTION" shall mean an Option which is intended, as
evidenced by its designation, as an incentive stock option within the meaning
of Section 422 of the Code, the award of which contains such provisions
(including but not limited to the receipt of shareholder approval of this
Plan, if the Award is made prior to such approval) and is made under such
circumstances and to such persons as may be necessary to comply with that
section.
(x) "NONQUALIFIED STOCK OPTION" shall mean an Option that is designated
as a Nonqualified Stock Option and shall include any Option intended as an
Incentive Stock Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an incentive
stock option shall be deemed to be designated a nonqualified stock option
under this Plan and not an incentive stock option under the Code.
(y) "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board of
Directors of the Corporation who is not an officer or employee of the Company.
(z) "NON-EMPLOYEE DIRECTOR PARTICIPANT" shall mean a Non-Employee
Director who holds an outstanding Award under the provisions of Article 7.
(aa) "OPTION" shall mean an option to purchase Common Stock granted
under this Plan. The Committee shall designate any Option granted to an
Eligible Person as a Nonqualified Stock Option or an Incentive Stock Option.
Options granted under Article 7 shall be Nonqualified Stock Options.
(ab) "OTHER ELIGIBLE PERSON" shall mean any individual consultant or
advisor who or (to the extent provided in the next sentence) agent who
renders or has rendered BONA FIDE services (other than services in connection
with the offering or sale of securities of the Company in a capital raising
transaction) to the Company, and who is selected to participate in this Plan
by the Committee; PROVIDED that if the Corporation's officers and directors
are or become subject to Section 16 of the Exchange Act, a Non-Employee
Director shall not thereafter be selected as an Other Eligible Person. A
non-employee agent providing BONA FIDE services to the Company (other than as
an eligible advisor or consultant) may also be selected as an Other Eligible
Person if such agent's participation in this Plan would not adversely affect
(x) the Corporation's eligibility to use Form S-8 to register under the
Securities Act of 1933, as amended, the offering of shares issuable under
this Plan by the Corporation or (y) the Corporation's compliance with any
other applicable laws.
(ac) "PARTICIPANT" shall mean an Eligible Person who has been granted an
Award under this Plan and a Non-Employee Director who has been received an
Award under Article 7 of this Plan.
(ad) "PERFORMANCE-BASED AWARD" shall mean an Award of a right to receive
shares of Common Stock or other compensation (including cash) under Section
4.2, the issuance or
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payment of which is contingent upon, among other conditions, the attainment
of performance objectives specified by the Committee.
(ae) "PERFORMANCE GOALS" shall mean EPS or ROE or Cash Flow or Total
Stockholder Return, and "Performance Goals" means any combination thereof.
(af) "PERFORMANCE SHARE AWARD" shall mean an Award of a right to receive
shares of Common Stock under Section 4.1, the issuance or payment of which is
contingent upon, among other conditions, the attainment of performance
objectives specified by the Committee.
(ag) "PERSONAL REPRESENTATIVE" shall mean the person or persons who,
upon the disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and who shall have
become the legal representative of the Participant.
(ah) "PLAN" shall mean this Kaynar Technologies Inc. 1997 Stock
Incentive Plan, formerly known as the Kaynar Holdings Inc. 1997 Stock
Incentive Plan.
(ai) "ROE" shall mean consolidated net income of the Corporation (less
preferred dividends), divided by the average consolidated common shareholders
equity.
(aj) "RULE 16B-3" shall mean Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act, as amended from time to time.
(ak) "SECTION 16 PERSON" shall mean a person subject to Section 16(a) of
the Exchange Act.
(al) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
(am) "STOCK APPRECIATION RIGHT" shall mean a right authorized under this
Plan to receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.
(an) "STOCK BONUS" shall mean an Award of shares of Common Stock granted
under this Plan for no consideration other than past services and without
restriction other than such transfer or other restrictions as the Committee
may deem advisable to assure compliance with law.
(ao) "SUBSIDIARY" shall mean any corporation or other entity a majority
of whose outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Corporation.
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(ap) "TOTAL DISABILITY" shall mean a "permanent and total disability"
within the meaning of Section 22(e)(3) of the Code and (except in the care of
a Non-Employee Director) such other disabilities, infirmities, afflictions or
conditions as the Committee by rule may include.
7. NON-EMPLOYEE DIRECTOR OPTIONS.
7.1 PARTICIPATION.
Awards under this Article 7 shall be made only to Non-Employee
Directors and shall be evidenced by Award Agreements substantially in the
form of Exhibit A hereto.
7.2 ANNUAL OPTION GRANTS.
(a) TIME OF INITIAL AWARD. Persons who are Non-Employee Directors in
office at the time this Plan is first approved by the shareholders of the
Corporation shall be granted without further action a Nonqualified Stock
Option to purchase 1,000 shares of Common Stock. After approval of this Plan
by the shareholders of the Corporation, if any person who is not then an
officer or employee of the Company shall become a director of the
Corporation, there shall be granted automatically to such person (without any
action by the Board or Committee) a Nonqualified Stock Option (the Award Date
of which shall be the date such person takes office) to purchase 1,000 shares
of Common Stock.
(b) SUBSEQUENT ANNUAL AWARDS. On January 31 in each year during the
term of the Plan, commencing in 1998, there shall be granted automatically
(without any action by the Committee or the Board) a Nonqualified Stock
Option (the Award Date of which shall be such date in January) to each
Non-Employee Director then continuing in office to purchase 500 shares of
Common Stock.
(c) MAXIMUM NUMBER OF SHARES. Annual grants that would otherwise
exceed the maximum number of shares under Section 1.4(a) shall be prorated
within such limitation. A Non-Employee Director shall not receive more than
one Nonqualified Stock Option under this Section 7.2 in any calendar year.
7.3 OPTION PRICE.
The purchase price per share of the Common Stock covered by each
Option granted pursuant to Section 7.2 hereof shall be 100 percent of the
Fair Market Value of the Common Stock on the Award Date. The exercise price
of any Option granted under this Article shall be paid in full at the time of
each purchase in cash or by check or in shares of Common Stock valued at
their Fair Market Value on the date of exercise of the Option, or partly in
such shares and partly in cash, PROVIDED THAT any such shares used in payment
shall have been owned by the Participant at least six months prior to the
date of exercise.
7.4 OPTION PERIOD AND EXERCISABILITY.
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<PAGE>
Each Option granted under this Article 7 and all rights or
obligations thereunder shall expire five (5) years after the Award Date and
shall be subject to earlier termination as provided below. Each Option
granted under Section 7.2 shall become exercisable at the rate of 25% per
annum commencing on the first anniversary of the Award Date and each of the
next three anniversaries thereof.
7.5 TERMINATION OF DIRECTORSHIP.
If a Non-Employee Director's services as a member of the Board of
Directors terminate by reason of death, or Total Disability, an Option
granted pursuant to this Article held by such Participant shall immediately
become and shall remain exercisable for two years after the date of such
termination or until the expiration of the stated term of such Option,
whichever first occurs. If a Non-Employee Director's services as a member of
the Board of Directors terminate for any other reason, any portion of an
Option granted pursuant to this Article which is not then exercisable shall
terminate and any portion of such Option which is then exercisable may be
exercised for six months after the date of such termination or until the
expiration of the stated term whichever first occurs.
7.6 ACCELERATION AND ADJUSTMENTS.
Options granted under this Article 7 shall be subject to
acceleration and adjustment as provided in Section 6.2, but only to the
extent that such acceleration and adjustment is consistent with changes to
Options held by persons other than executive officers or directors of the
Corporation.
7.7 ACCELERATION UPON A CHANGE IN CONTROL EVENT.
Upon the occurrence of a Change in Control Event, each Option granted
under Section 7.2 hereof shall become immediately exercisable in full; provided,
however, that none of the Options granted under Section 7.2 shall be accelerated
to a date less than six months after the Award Date of such Option. To the
extent that any Option granted under this Article 7 is not exercised prior to
(i) a dissolution of the Corporation or (ii) a merger or other corporate event
that the Corporation does not survive, and no provision is (or consistent with
the provisions of Section 7.7 can be) made for the assumption, conversion,
substitution or exchange of the Option, the Option shall terminate upon the
occurrence of such event.
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<PAGE>
EXHIBIT A
KAYNAR TECHNOLOGIES INC.
ELIGIBLE DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ____ day of _____________, 199__,
between KAYNAR TECHNOLOGIES INC., a Delaware corporation (the "Corporation"),
and ________________ (the "Director").
W I T N E S S E T H
WHEREAS, the Corporation has adopted and the shareholders of the
Corporation have approved the 1997 Stock Incentive Plan (the "Plan").
WHEREAS, pursuant to Article 7.2 of the Plan, the Corporation has
granted an option (the "Option") to the Director upon the terms and conditions
evidenced hereby, as required by the Plan, which Option is not intended as and
shall not be deemed to be an incentive stock option within the meaning of
Section 422 of the Code.
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by the Director, the Corporation and the Director agree to the terms
and conditions set forth herein as required by the terms of the Plan.
1. OPTION GRANT. This Agreement evidences the grant to the Director, as
of ___________, 199__ (the "Option Date"), of an Option to purchase an aggregate
of [INSERT NUMBER] shares of Common Stock, par value $.01 per share, under
Section 7.2 of the Plan, subject to the terms and conditions and to adjustment
as set forth herein or in pursuant to the Plan.
2. EXERCISE PRICE. The Option entitles the Director to purchase (subject
to the terms of Sections 3 through 5 below) all or any part of the Option shares
at a price per share of $____.___, which amount represents the Fair Market Value
of the shares on the Option Date.
3. OPTION EXERCISABILITY AND TERM. Subject to acceleration and
adjustment pursuant to Section 7.6 of the Plan, the Option shall first become
and remain exercisable as to 25% of the shares on ____________, _____ and as to
an additional 25% of the shares on each of the following dates: ______________,
_____, __________, _____ and
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<PAGE>
_____________, _____. The Option shall terminate on ____________, 19__,**
unless earlier terminated in accordance with the terms of Section 5.6 of the
Plan.
4. SERVICE AND EFFECT OF TERMINATION OF SERVICE. The Director agrees to
serve as a director in accordance with the provisions of the Corporation's
Certificate of Incorporation, bylaws and applicable law. If the Director's
services as a member of the Board shall terminate, this Option shall terminate
at the times and to the extent set forth in Section 7.5 of the Plan.
5. GENERAL TERMS. The Option and this Agreement are subject to, and the
Corporation and the Director agree to be bound by, the provisions of the Plan
that apply to the Option. Such provisions are incorporated herein by this
reference. The Director acknowledges receiving a copy of the Plan and reading
its applicable provisions. Capitalized terms not otherwise defined herein shall
have the meaning assigned to such terms in the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
KAYNAR TECHNOLOGIES INC.
(a Delaware corporation)
By: ___________________________
Name:
Title:
Optionee Director
_____________________________
(Signature)
_____________________________
(Print Name)
_____________________________
(Address)
_____________________________
(City, State, Zip Code)
- -----------------------
** insert day before fifth anniversary of date of grant.
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<PAGE>
In consideration of the execution of the foregoing Stock Option
Agreement by KAYNAR TECHNOLOGIES INC., I, ____________________________, the
spouse of the Director therein named, do hereby agree to be bound by all of the
terms and provisions thereof and of the Plan.
DATED: ______________, 19__.
___________________________
Signature of Spouse
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<PAGE>
KAYNAR TECHNOLOGIES INC.
1997 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ____ day of _________ _____, between
Kaynar Technologies Inc., a Delaware corporation (the "Corporation"), and
(the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Corporation's 1997 Stock Incentive Plan
(the "Plan"), the Corporation has granted to the Employee effective as of the
____ day of ___________, _____ (the "Award Date") an option to purchase all
or any part of ____________ authorized but unissued shares of Common Stock,
par value $0.01 per share, of the Corporation upon the terms and conditions
set forth herein and in the Plan.
NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom, the
parties agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.
2. GRANT OF OPTION. This Agreement evidences the Corporation's grant
to the Employee of the right and option to purchase, on the terms and
conditions set forth herein and in the Plan, all or any part of an aggregate
of ______ shares of the Common Stock at the price of $______ per share (the
"Option"), exercisable from time to time, subject to the provisions of this
Agreement and the Plan, prior to the close of business on the day before the
tenth anniversary of the Award Date (the "Expiration Date"). Such price
equals the Fair Market Value of the Corporation's Common Stock as of the
Award Date. It is the intent of the Corporation that this Option constitute
an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Code").
3. EXERCISABILITY OF OPTION. Except as earlier permitted by or
pursuant to the Plan or by resolution of the Committee adopted AFTER the date
hereof, no shares may be purchased by exercise of the Option until the
expiration of six months after the Award Date. The Option may be exercised
in installments as to 25% of the aggregate number of shares set forth in
Section 2 hereof (subject to adjustment) on and after the first anniversary
of the Award Date and as to an additional 25% of such aggregate number of
such shares (subject to adjustment) on each of the second, third and fourth
anniversaries of the Option Date.
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<PAGE>
To the extent the Employee does not in any year purchase all or any
part of the shares to which the Employee is entitled, the Employee has the
right cumulatively thereafter to purchase any shares not so purchased and
such right shall continue until the Option terminates or expires. Fractional
share interests shall be disregarded, but may be accumulated. No fewer than
one-hundred (100) shares may be purchased at any one time, unless the number
purchased is the total number at the time available for purchase under the
Option.
4. LIMITATION ON EXERCISE OF OPTION. In the event the Employee is
granted incentive stock options (whether under this Agreement or any other
incentive stock option agreement) and the aggregate fair market value
(determined as of the respective dates of grant of such options) of the
Common Stock with respect to which such options are first exercisable in any
calendar year exceeds $100,000, the most recently granted options shall be
treated as nonqualified stock options to the extent of the excess. In
addition, in the case of simultaneously granted options, the Corporation may,
in the manner and to the extent permitted by law, designate which shares are
to be treated as stock acquired pursuant to the exercise of an incentive
stock option.
5. METHOD OF EXERCISE OF OPTION. The Option shall be exercisable by
the delivery to the Corporation of a written notice stating the number of
shares to be purchased pursuant to the Option and accompanied by payment made
in accordance with and in a form permitted in Section 2.2 of the Plan for the
full purchase price of the shares to be purchased, subject to such further
limitations and rules or procedures as the Committee may from time to time
establish as to any non-cash payment and as to the tax withholding
requirements of Section 5.5 of the Plan. Shares delivered in payment of the
exercise price must have been owned by the Employee for at least six months
prior to the exercise. In addition, the Employee (or the Employee's
Beneficiary or Personal Representative) shall furnish any written statements
required pursuant to Section 5.4 of the Plan.
6. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH; CHANGE IN SUBSIDIARY
STATUS. The Option and all other rights hereunder, to the extent not
exercised, shall terminate and become null and void at such time as the
Employee ceases to be employed by either the Corporation or any Subsidiary,
except that
(a) if the Employee terminates by reason other than by death, Total
Disability (as defined in subsection (b) below) or for Cause (as defined
below and as determined by the Committee in its sole discretion), the
Employee may at any time within a period of three months after such
termination exercise the Option to the extent the Option was exercisable at
the date of such termination;
(b) if the Employee terminates by reason of becoming Totally Disabled
(within the meaning of Code Section 22(e)(3) or as otherwise defined by the
Committee), or if the Employee becomes Totally Disabled within three months
after a termination described in subsection (a), then the Option may be
exercised within a period of one year after the Employee becomes Totally
Disabled (or, if earlier, the
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<PAGE>
Employee's termination from employment), to the extent that the Option
was exercisable on such date; and
(c) if the Employee dies prior to a termination of employment, or
within three months after a termination of employment under subsection (a)
or (b) above, then the Option may be exercised within a period of one year
after the Employee's termination from employment, to the extent that the
Option was exercisable on such date;
provided, however, that in no event may the Option be exercised by anyone
under this Section or otherwise after the Expiration Date. If the Employee
is employed by an entity which ceases to be a Subsidiary, such event shall be
deemed for purposes of this Section 6 to be a termination of employment
described in subsection (a) in respect of the Employee. Absence from work
caused by military service or authorized sick leave shall not be considered
as a termination of employment for purposes of this Section.
For purposes of this Agreement, "Cause" means that the Committee,
acting in good faith, determines that the Employee has: (a) committed a
material breach of the Employee's duties and responsibilities (other than as
a result of incapacity due to a Total Disability); or (b) been convicted of a
felony, or entered a plea of guilty or nolo contendere with respect to such a
crime; or (c) violated any fiduciary duty or duty of loyalty owed to the
Corporation; or (d) failed to properly discharge the Employee's duties and
responsibilities; or (e) engaged or is engaging in immoderate use of
alcoholic beverages or narcotics or other substance abuse; or (f) violated
any of the Corporation's established employment policies in effect from time
to time.
7. TERMINATION OF OPTION UNDER CERTAIN EVENTS. As permitted by
Section 5.2(c) of the Plan, the Committee retains the right to terminate the
Option.
8. NON-TRANSFERABILITY OF OPTION. The Option and any other rights of
the Employee under this Agreement or the Plan are nontransferable as provided
in Section 1.8 of the Plan.
9. NOTICES. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Corporation at its principal office
located at 500 North State College Boulevard, Orange, California 92868, to
the attention of the Corporate Secretary and to the Employee at the address
given beneath the Employee's signature hereto, or at such other address as
either party may hereafter designate in writing to the other.
10. PLAN. The Option and all rights of the Employee thereunder are
subject to, and the Employee agrees to be bound by, all of the terms and
conditions of Articles 1, 2, 5 and 6 of the Plan, incorporated herein by this
reference, to the extent such provisions are applicable to options granted to
Eligible Employees. The Employee acknowledges receipt of a copy of the Plan,
which is made a part hereof by this reference, and agrees to be bound by the
terms thereof. Unless otherwise expressly provided in other sections of this
Agreement, provisions of the Plan that confer discretionary authority on the
Committee do not (and shall
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<PAGE>
not be deemed to) create any rights in the Employee unless such rights are
expressly set forth herein or are otherwise in the sole discretion of the
Committee so conferred by appropriate action of the Committee under the Plan
after the date hereof.
11. NOTICE OF DISPOSITION. The Employee agrees to notify the
Corporation of any sale or other disposition of any shares of Common Stock
received upon exercise of the Option, if such sale or disposition occurs
within two years after the Option Date or within one year after the date of
such exercise.
[remainder of page intentionally left blank]
4
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Employee has
hereunto set his or her hand.
KAYNAR TECHNOLOGIES INC.,
a Delaware corporation
By: ______________________________
Name:
Title:
EMPLOYEE
________________________________
(Signature)
________________________________
(Print Name)
________________________________
(Address)
________________________________
(City, State, Zip Code)
5
<PAGE>
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Incentive Stock Option
Agreement by Kaynar Technologies Inc., I, ____________________________, the
spouse of the Employee herein named, do hereby join with my spouse in executing
the foregoing Incentive Stock Option Agreement and do hereby agree to be bound
by all of the terms and provisions thereof and of the Plan.
DATED: ____________, _____. _____________________________
Signature of Spouse
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<PAGE>
KAYNAR TECHNOLOGIES INC.
1997 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the _____ day of _______ ___, between
Kaynar Technologies Inc., a Delaware corporation (the "Corporation"), and
(the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Corporation's 1997 Stock Incentive Plan
(the "Plan"), the Corporation has granted to the Employee effective as of the
____ day of __________, _____ (the "Award Date") an option to purchase all or
any part of _____________ authorized but unissued shares of Common Stock, par
value $0.01 per share, of the Corporation upon the terms and conditions set
forth herein and in the Plan.
NOW, THEREFORE, in consideration of the mutual promises and covenants
made herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the Plan.
2. GRANT OF OPTION. This Agreement evidences the Corporation's grant
to the Employee of the right and option to purchase, on the terms and
conditions set forth herein and in the Plan, all or any part of an aggregate
of ____ shares of the Common Stock at the price of $______ per share (the
"Option"), exercisable from time to time, subject to the provisions of this
Agreement and the Plan, prior to the close of business on the day before the
tenth anniversary of the Award Date (the "Expiration Date"). Such price
equals the Fair Market Value of the Corporation's Common Stock as of the
Award Date. It is the intent of the Corporation that this Option constitute
a nonqualified stock option and such option shall not be deemed an incentive
stock option within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended ("Code").
3. EXERCISABILITY OF OPTION. Except as earlier permitted by or
pursuant to the Plan or by resolution of the Committee adopted AFTER the date
hereof, no shares may be purchased by exercise of the Option until the
expiration of six months after the Award Date. The Option may be exercised
in installments as to [25%] of the aggregate number of shares set forth in
Section 2 hereof (subject to adjustment) on and after the [first] anniversary
of the Award Date and as to an additional [25%] of such aggregate number of
such shares (subject to adjustment) on each of the [second, third and fourth]
anniversaries of the Award Date.
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<PAGE>
To the extent the Employee does not in any year purchase all or any
part of the shares to which the Employee is entitled, the Employee has the
right cumulatively thereafter to purchase any shares not so purchased and
such right shall continue until the Option terminates or expires. Fractional
share interests shall be disregarded, but may be accumulated. No fewer than
one-hundred (100) shares may be purchased at any one time, unless the number
purchased is the total number at the time available for purchase under the
Option.
4. METHOD OF EXERCISE OF OPTION. The Option shall be exercisable by
the delivery to the Corporation of a written notice stating the number of
shares to be purchased pursuant to the Option and accompanied by payment made
in accordance with and in a form permitted in Section 2.2 of the Plan for the
full purchase price of the shares to be purchased, subject to such further
limitations and rules or procedures as the Committee may from time to time
establish as to any non-cash payment and as to the tax withholding
requirements of Section 5.5 of the Plan. Shares delivered in payment of the
exercise price must have been owned by the Employee for at least six months
prior to the exercise. In addition, the Employee (or the Employee's
Beneficiary or Personal Representative) shall furnish any written statements
required pursuant to Section 5.4 of the Plan.
5. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH; CHANGE IN SUBSIDIARY
STATUS. The Option and all other rights hereunder, to the extent not
exercised, shall terminate and become null and void at such time as the
Employee ceases to be employed by either the Corporation or any Subsidiary,
except that
(a) if the Employee terminates by reason other than by death, Total
Disability (as defined in subsection (b) below) or for Cause (as defined
below and as determined by the Committee in its sole discretion), the
Employee may at any time within a period of three months after such
termination exercise the Option to the extent the Option was exercisable at
the date of such termination;
(b) if the Employee terminates by reason of becoming Totally Disabled
(within the meaning of Code Section 22(e)(3) or as otherwise defined by the
Committee), or if the Employee becomes Totally Disabled within three months
after a termination described in subsection (a), then the Option may be
exercised within a period of one year after the Employee becomes Totally
Disabled (or, if earlier, the Employee's termination from employment), to
the extent that the Option was exercisable on such date; and
(c) if the Employee dies prior to a termination of employment, or
within three months after a termination of employment under subsection (a)
or (b) above, then the Option may be exercised within a period of one year
after the Employee's termination from employment, to the extent that the
Option was exercisable on such date;
provided, however, that in no event may the Option be exercised by anyone
under this Section or otherwise after the Expiration Date. If the Employee
is employed by an entity
2
<PAGE>
which ceases to be a Subsidiary, such event shall be deemed for purposes of
this Section 5 to be a termination of employment described in subsection (a)
in respect of the Employee. Absence from work caused by military service or
authorized sick leave shall not be considered as a termination of employment
for purposes of this Section.
For purposes of this Agreement, "Cause" means that the Committee,
acting in good faith, determines that the Employee has: (a) committed a
material breach of the Employee's duties and responsibilities (other than as
a result of incapacity due to a Total Disability); or (b) been convicted of a
felony, or entered a plea of guilty or nolo contendere with respect to such a
crime; or (c) violated any fiduciary duty or duty of loyalty owed to the
Corporation; or (d) failed to properly discharge the Employee's duties and
responsibilities; or (e) engaged or is engaging in immoderate use of
alcoholic beverages or narcotics or other substance abuse; or (f) violated
any of the Corporation's established employment policies in effect from time
to time.
6. TERMINATION OF OPTION UNDER CERTAIN EVENTS. As permitted by
Section 5.2(c) of the Plan, the Committee retains the right to terminate the
Option.
7. NON-TRANSFERABILITY OF OPTION. The Option and any other rights of
the Employee under this Agreement or the Plan are nontransferable as provided
in Section 1.8 of the Plan.
8. NOTICES. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Corporation at its principal office
located at 500 North State College Boulevard, Orange, California 92868, to
the attention of the Corporate Secretary and to the Employee at the address
given beneath the Employee's signature hereto, or at such other address as
either party may hereafter designate in writing to the other.
9. PLAN. The Option and all rights of the Employee thereunder are
subject to, and the Employee agrees to be bound by, all of the terms and
conditions of Articles 1, 2, 5 and 6 of the Plan, incorporated herein by this
reference, to the extent such provisions are applicable to options granted to
Eligible Employees. The Employee acknowledges receipt of a copy of the Plan,
which is made a part hereof by this reference, and agrees to be bound by the
terms thereof. Unless otherwise expressly provided in other sections of this
Agreement, provisions of the Plan that confer discretionary authority on the
Committee do not (and shall not be deemed to) create any rights in the
Employee unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the Plan after the date hereof.
[remainder of page intentionally left blank]
3
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Employee has
hereunto set his or her hand.
KAYNAR TECHNOLOGIES INC.,
a Delaware corporation
By______________________________
Name:
Title:
EMPLOYEE
________________________________
(Signature)
________________________________
(Print Name)
________________________________
(Address)
________________________________
(City, State, Zip Code)
5
<PAGE>
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Nonqualified Stock
Option Agreement by Kaynar Technologies Inc., I, ____________________________,
the spouse of the Employee herein named, do hereby join with my spouse in
executing the foregoing Nonqualified Stock Option Agreement and do hereby agree
to be bound by all of the terms and provisions thereof and of the Plan.
DATED: ____________, _____. _____________________________
Signature of Spouse
5
<PAGE>
[O'MELVENY & MYERS LLP LETTERHEAD]
January
27th
1 9 9 8
WRITERS DIRECT NUMBER OUR FILE NUMBER
(213) 669-6000 445,882-013
LA1-776068
Kaynar Technologies Inc.
500 N. State College Boulevard
Suite 1000
Orange, California 92868
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
At your request, we have examined the above-referenced Registration
Statement on Form S-8 (the "Registration Statement") to be filed by you with the
Securities and Exchange Commission on January 29, 1998 in connection with the
registration under the Securities Act of 1933, as amended, of 500,000 shares of
your Common Stock, $0.01 par value (the "Shares") for your 1997 Stock Incentive
Plan.
We are familiar with the proceedings heretofore taken, and with the
additional proceedings proposed to be taken, by you in connection with the
authorization and proposed issuance and sale of the Shares.
It is our opinion that, subject to said proceedings being duly taken
and completed by you prior to the issuance and sale of the Shares, upon the
issuance and sale thereof in the manner referred to in the Registration
Statement, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ O'MELVENY & MYERS LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated May 6, 1997
included in Kaynar Technologies Inc.'s Form S-1 Registration Statement for
the year ended December 31, 1996 and to all references to our Firm included
in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Orange County, California
January 28, 1998
