<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
TARGETED GENETICS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1549568
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1100 OLIVE WAY, SUITE 100
SEATTLE, WASHINGTON 98101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP CODE))
TARGETED GENETICS CORPORATION
STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
(FULL TITLE OF THE PLAN)
--------------------------
H. STEWART PARKER
CHIEF EXECUTIVE OFFICER
TARGETED GENETICS CORPORATION
1100 OLIVE WAY, SUITE 100
SEATTLE, WASHINGTON 98101
(206) 623-7612
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
STEPHEN M. GRAHAM
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
(206) 583-8463
----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ---------------------------- -------------- ------------------------ -------------------------- ------------------
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING PRICE REGISTRATION FEE
(1) SHARE (2)
- ---------------------------- -------------- ------------------------ -------------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 180,000 $3.00 $540,000 $163.62
- ---------------------------- -------------- ------------------------ -------------------------- ------------------
</TABLE>
(1) Includes an indeterminate number of additional shares that may be issued to
adjust the number of shares issued pursuant to such nonemployee director
benefit plan as the result of any future stock split, stock dividend or
similar adjustment of the Registrant's outstanding common stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The
price per share is estimated to be $3.00, based on the average of the high
sales price ($3-1/8) and the low sales price ($2-7/8) for the Registrant's
common stock in the over-the-counter market on May 28, 1997, as reported by
the Nasdaq National Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, filed with the Securities and Exchange Commission
(the "Commission"), on March 17, 1997, which contains audited financial
statements for the most recent fiscal year for which such statements have been
filed;
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997 and filed with the Commission on May 9, 1997; and
(c) The description of the Registrant's Common Stock contained
in the Registration Statement on Form 8-A filed with the Commission on April 26,
1994, under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including any amendments or reports filed for the purpose of
updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act, after the date hereof and prior to the filing
of a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters the securities covered hereby then remaining
unsold shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liability arising under the Securities Act of 1933, as amended (the "Securities
Act"). Section 10 of the Registrant's Amended and Restated Bylaws provide for
indemnification of the Registrant's directors, officers, employees and agents to
the maximum extent permitted by Washington law.
Section 23B.08.320 of the Washington Business Corporation Act
authorizes a corporation to limit a director's liability to the corporation or
its shareholders for monetary damages for acts or omissions as a director,
except in certain circumstances involving intentional misconduct, self dealing
or illegal corporate loans or distributions, or any transaction from which the
director personally received a benefit in money, property or services to which
the director is not legally entitled. Article 11 of the Registrant's Amended and
Restated Articles of Incorporation contains provisions implementing, to the
fullest extent permitted by Washington law, such limitations on a director's
liability to the Registrant and its shareholders.
The Registrant has entered into an Indemnification Agreement with each
of the Registrant's executive officers and directors in which the Registrant
agrees to hold harmless and indemnify the officer or director to the fullest
extent permitted by Washington law. Under these Indemnification Agreements, the
officer or director is not indemnified for any action, suit, claim or proceeding
instituted by or at the direction of the officer or director unless such action,
suit, claim or proceeding is or was authorized by the Registrant's Board of
Directors or unless the action is to enforce the provisions of the
Indemnification Agreement.
No indemnity pursuant to the Indemnification Agreements shall be
provided by the Registrant on account of any suit in which a final, unappealable
judgment is rendered against an executive officer or director for an accounting
of profits made from the purchase or sale by the executive officer or director
of securities of the Registrant in violation of the provisions of Section 16(b)
of the Exchange Act, and amendments thereto, or for damages that have been paid
directly to the executive officer or director by an insurance carrier under a
policy of directors' and officers' liability insurance maintained by the
Registrant.
II-1
<PAGE> 3
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- --------------------- ------------------------------------------------------
<S> <C>
5.1 Opinion of counsel regarding legality of the Common
Stock being registered
23.1 Consent of Ernst & Young LLP (see page II-6)
24.1 Power of Attorney (see Signature Page)
99.1 Targeted Genetics Corporation Stock Option Plan for
Nonemployee Directors
</TABLE>
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:
(a) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(b) 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) that, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(c) 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 (1)(a) and (1)(b) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant 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 that 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 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 foregoing provisions, 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
II-2
<PAGE> 4
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.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Seattle, state of Washington, on May 28, 1997.
TARGETED GENETICS CORPORATION
By: /S/ H. Stewart Parker
---------------------------------------
H. Stewart Parker
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints H.
Stewart Parker and James A. Johnson, or either of them, his or her
attorneys-in-fact, with the power of substitution, for him or her in any and all
capacities, to sign any amendments to this Registration Statement, and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact, or their substitute or substitutes, may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on May 28, 1997.
SIGNATURE TITLE
President, Chief Executive Officer and
/S/ H. Stewart Parker Director (Principal Executive Officer)
- ---------------------------
/S/ H. Stewart Parker
Vice President, Finance and Chief Financial
/S/ James A. Johnson Officer,Treasurer and Secretary
- --------------------------- (Principal Financial and Accounting Officer)
James A. Johnson
/S/ Jack L. Bowman
- --------------------------- Director
Jack L. Bowman
/S/Jeremy Curnock Cook
- --------------------------- Director
Jeremy Curnock Cook
/S/ Stephen A. Duzan
- --------------------------- Director
Stephen A. Duzan
/S/ James D. Grant
- --------------------------- Director
James D. Grant
/S/ Donald E. O'Neill
- --------------------------- Director
Donald E. O'Neill
/S/ Mark Richmond
- --------------------------- Director
Mark Richmond
/S/ Martin P. Sutter
- --------------------------- Director
Martin P. Sutter
II-4
<PAGE> 6
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Targeted Genetics Corporation Stock
Option Plan for Nonemployee Directors of our report dated February 7, 1997 with
respect to the consolidated financial statements Targeted Genetics Corporation
included in its Annual Report (Form 10-K) for the year ended December 31, 1996,
filed with the Securities and Exchange Commission.
ERNST & YOUNG, LLP
Seattle, Washington
May 29, 1997
II-5
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- ------------------- --------------------------------------------------------
<S> <C>
5.1 Opinion of counsel regarding legality of the Common
Stock being registered
23.1 Consent of Ernst & Young LLP (see page II-5)
24.1 Power of Attorney (see Signature Page)
99.1 Targeted Genetics Corporation Stock Option Plan for
Nonemployee Directors
</TABLE>
<PAGE> 1
Perkins Coie
A Law Partnership Including Professional Corporations
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
Telephone:(206)583-8888 - Facsimile:(206)583-8500
EXHIBIT 5.1
May 29, 1997
Targeted Genetics Corporation
Suite 100
1100 Olive Way
Seattle, WA 98101
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen and Ladies:
We have acted as counsel to Targeted Genetics Corporation (the
"Company") in connection with the preparation of a Registration Statement on
Form S-8 (the "Registration Statement") which is being filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, with
respect to 180,000 shares of common stock, $.01 par value, of the Company (the
"Shares"). The Shares may be issued pursuant to the Targeted Genetics
Corporation Stock Option Plan for Nonemployee Directors (the "Plan"). We have
examined the Registration Statement and such documents and records of the
Company and other documents as we have deemed necessary for the purpose of this
opinion.
Based upon and subject to the foregoing, we are of the opinion that the
Shares that may be issued upon the exercise of stock options granted or to be
granted pursuant to the Plan have been duly authorized and that, upon the due
execution by the Company and the registration by its registrar of the Shares and
the sale thereof by the Company in accordance with the terms of the Plan, and
the receipt of the consideration therefor in accordance with the terms of the
Plan, the Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
Perkins Coie
<PAGE> 1
EXHIBIT 99.1
TARGETED GENETICS CORPORATION
STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
AMENDED AND RESTATED ON JANUARY 14, 1997
SECTION 1 PURPOSES
The purpose of the Targeted Genetics Corporation Stock Option Plan for
Nonemployee Directors (this "Plan") is to attract and retain the services of
experienced and knowledgeable nonemployee directors for Targeted Genetics
Corporation (the "Company") and to provide added incentive to such directors by
providing an opportunity for stock ownership in the Company.
SECTION 2 ADMINISTRATION
The administrator of this Plan (the "Plan Administrator") shall be the
Board of Directors of the Company (the "Board"). Subject to the terms of this
Plan, the Plan Administrator shall have the power to construe the provisions of
this Plan, to determine all questions arising hereunder and to adopt and amend
such rules and regulations for the administration of this Plan as it may deem
desirable.
SECTION 3 SHARES SUBJECT TO THE PLAN
Subject to adjustment in accordance with Section 6 hereof, the total
number of shares of the Company's common stock (the "Common Stock") for which
options may be granted under this Plan is 300,000 (the "Shares"). The Shares
shall be shares currently authorized but unissued or subsequently acquired by
the Company and shall include shares representing the unexercised portion of any
option granted under this Plan which expires or terminates without being
exercised in full.
SECTION 4 ELIGIBILITY
4.1 ELIGIBLE DIRECTORS
Each member of the Board elected or appointed who is not otherwise an
employee of the Company or any parent or subsidiary corporation (an "Eligible
Director") shall be eligible to participate in this Plan.
4.2 INITIAL GRANTS
Immediately following his or her initial election or appointment to the
Board, each Eligible Director shall automatically receive an option to purchase
15,000 Shares.
4.3 ANNUAL GRANTS
Each Eligible Director continuing service as an Eligible Director
immediately following an Annual Meeting of Shareholders shall automatically
receive an option to purchase 5,000 Shares immediately following each year's
Annual Meeting of Shareholders as an annual grant; provided that an Eligible
Director who has received an initial grant of 15,000 Shares on such date shall
not receive an annual grant until the next Annual Meeting.
4.4 AVAILABILITY OF SHARES
No grant shall be made under this Plan if the effect of such grant
would be to obligate the Company to issue more Shares than are reserved under
Section 3. If insufficient Shares are reserved under Section 3 to fully fund one
or more grants to be made under this Section 4 on the same date of grant, then
the Shares
<PAGE> 2
available shall be divided by the number of Eligible Directors then
entitled to a grant and each such Eligible Director shall be granted an option
for that number of Shares.
SECTION 5 OPTION TERMS
Each option granted to an Eligible Director under this Plan and the
issuance of Shares hereunder shall be subject to the following terms:
5.1 OPTION AGREEMENT
Each option shall be evidenced by an option agreement (an "Agreement")
duly executed on behalf of the Company. Each Agreement shall comply with and be
subject to the terms and conditions of this Plan. Any Agreement may contain such
other terms, provisions and conditions not inconsistent with this Plan as may be
determined by the Plan Administrator.
5.2 OPTION EXERCISE PRICE
The option exercise price for an option shall be the closing price, or
if there is no closing price, the mean between the high and the low sale price
of shares of Common Stock on the Nasdaq Stock Market on the day the option is
granted or, if no Common Stock was traded on such date, on the next succeeding
day on which Common Stock is so traded.
5.3 VESTING AND EXERCISABILITY
Each option granted to an Eligible Director shall vest and become
exercisable in accordance with the following schedule:
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<TABLE>
<CAPTION>
Period of Eligible Director's Continuous Service
as a Director With the Company
From the Date the Option is Granted Portion of Total Option Which Is Exercisable
- ------------------------------------------------- ----------------------------------------------
<S> <C>
Less than twelve months 0%
Twelve months 33-1/3%
Twenty-four months 66-2/3%
Thirty-six months 100%
</TABLE>
5.4 TIME AND MANNER OF EXERCISE OF OPTION
Each option may be exercised in whole or in part at any time and from
time to time; provided, however, that no fewer than 20% of the Shares
purchasable under the option (or the remaining Shares then purchasable under the
option, if less than 20%) may be purchased upon any exercise of any option
hereunder and that only whole Shares will be issued pursuant to the exercise of
any option.
Any option may be exercised by giving written notice, signed by the
person exercising the option, to the Company stating the number of Shares with
respect to which the option is being exercised, accompanied by payment in full
for such Shares, which payment may be in whole or in part (a) in cash or by
check, (b) in shares of Common Stock already owned for at least six months by
the person exercising the option, valued at fair market value at the time of
such exercise, or (c) by delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker, to properly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price, all in
accordance with the regulations of the Federal Reserve Board.
5.5 TERM OF OPTIONS
Each option shall expire ten years from the date of the granting
thereof, but shall be subject to earlier termination as follows:
(a) In the event that an Optionee ceases to be a director of
the Company for any reason other than the death of the Optionee, the unvested
portion of the options granted to such Optionee shall terminate immediately and
the vested portion of the options granted to such Optionee may be exercised by
him or her only within three months after the date such Optionee ceases to be a
director of the Company.
(b) In the event of the death of an Optionee, whether during
the Optionee's service as a director or during the three-month period referred
to in Section 5.5(a), the unvested portion of the options granted to such
Optionee shall terminate immediately and the vested portion of the options
granted to such Optionee shall be exercisable, and such options shall expire
unless exercised within twelve months after the date of the Optionee's death, by
the legal representatives or the estate of such Optionee, by any person or
persons whom the Optionee shall have designated in writing on forms prescribed
by and filed with the Company or, if no such designation has been made, by the
person or persons to whom the Optionee's rights have passed by will or the laws
of descent and distribution.
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<PAGE> 4
5.6 TRANSFERABILITY
During an Optionee's lifetime, an option may be exercised only by the
Optionee. Options granted under this Plan and the rights and privileges
conferred thereby shall not be subject to execution, attachment or similar
process and may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by (a) will or by
the applicable laws of descent and distribution, or (b) by gift or other
transfer to either (i) a spouse or other immediate family member or (ii) any
trust or estate in which the Optionee or such Optionee's spouse or other
immediate family member has a substantial beneficial interest. In addition, an
Optionee may designate in writing during the Optionee's lifetime a beneficiary
to receive and exercise options in the event of the Optionee's death (as
provided in Section 5.5(b)). Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of any option under this Plan or of any right
or privilege conferred thereby, contrary to the provisions of this Plan, or the
sale or levy or any attachment or similar process upon the rights and privileges
conferred hereby, shall be null and void.
5.7 HOLDING PERIOD
If an individual subject to Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") sells shares of Common Stock obtained
upon the exercise of any option granted under this Plan within six (6) months
after the date the option was granted, such sale may result in short-swing
profit recovery under Section 16(b) of the Exchange Act.
5.8 PARTICIPANT'S OR SUCCESSOR'S RIGHTS AS SHAREHOLDER
Neither an Optionee nor the Optionee's successor in interest shall have
any rights as a shareholder of the Company with respect to any Shares subject to
an option granted to the Optionee until such person becomes a holder of record
of such Shares.
5.9 LIMITATION AS TO DIRECTORSHIP
Neither this Plan, nor the granting of an option, nor any other action
taken pursuant to this Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an Optionee has a right to continue as a
director for any period of time or at any particular rate of compensation.
5.10 REGULATORY APPROVAL AND COMPLIANCE
The Company shall not be required to issue any certificate or
certificates for Shares upon the exercise of an option granted under this Plan,
or record as a holder of record of Shares the name of the individual exercising
an option under this Plan, without obtaining to the complete satisfaction of the
Plan Administrator the approval of all regulatory bodies deemed necessary by the
Plan Administrator, and without complying, to the Plan Administrator's complete
satisfaction, with all rules and regulations under federal, state or local law
deemed applicable by the Plan Administrator.
SECTION 6 CAPITAL ADJUSTMENTS
6.1 RECAPITALIZATION
The aggregate number and class of shares for which options may be
granted under this Plan, the number and class of shares covered by each
outstanding option and the exercise price per share thereof (but not the total
price), shall all be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock of the Company resulting from a
split or consolidation of shares or any like capital adjustment, or the payment
of any stock dividend.
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<PAGE> 5
6.2 EFFECT OF LIQUIDATION OR REORGANIZATION
Upon a merger (other than a merger of the Company in which the holders
of shares of Common Stock immediately prior to the merger have the same
proportionate ownership of shares of Common Stock in the surviving corporation
immediately after the merger), consolidation, acquisition of property or stock,
separation, reorganization (other than a mere reincorporation or the creation of
a holding company) or liquidation of the Company (each a "corporate
transaction"), as a result of which the shareholders of the Company receive
cash, stock or other property in exchange for or in connection with their shares
of Common Stock, then the Optionee shall have the right immediately prior to any
such merger, consolidation, acquisition of property or stock, reorganization or
liquidation to exercise such option in whole or in part whether or not the
vesting requirements set forth in the option agreement have been satisfied. To
the extent such option is not exercised, it shall terminate, except that in the
event of a corporate transaction in which the shareholders of the Company
receive capital stock of another corporation in exchange for their shares of
Common Stock, such unexercised option shall be assumed or an equivalent option
shall be substituted by the successor corporation or a parent or subsidiary of
such successor corporation. Any such assumed or equivalent option shall be 100%
vested and exercisable with respect to the total number of shares purchasable
under such option; provided that such acceleration will not occur if, in the
opinion of the Company's outside accountants, such acceleration would render
unavailable "pooling of interests" accounting treatment for such transaction for
which pooling of interests accounting treatment is sought by the Company. Upon a
merger of the Company in which the holders of Common Stock immediately prior to
the merger have the same proportionate ownership of Common Stock in the
surviving corporation immediately after the merger, a mere reincorporation or
the creation of a holding company, each option outstanding under the Plan shall
be assumed or an equivalent option shall be substituted by the successor
corporation or a parent or subsidiary of such corporation, and the vesting
schedule set forth in the option agreement shall continue to apply to such
assumed or equivalent option.
6.3 FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by any
option, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.
SECTION 7 EXPENSES
All costs and expenses of the adoption and administration of this Plan
shall be borne by the Company; none of such expenses shall be charged to any
Optionee.
SECTION 8 COMPLIANCE WITH RULE 16B-3
It is the intention of the Company that this Plan comply in all
respects with the requirements for a "formula plan" within the meaning
attributed to that term for purposes of Rule 16b-3 promulgated under Section
16(b) of the Exchange Act. Therefore, if any Plan provision is later found not
to be in compliance with such requirements, that provision shall be deemed null
and void, and in all events this Plan shall be construed in favor of its meeting
such requirements.
SECTION 9 TERMINATION AND AMENDMENT
The Board may amend, terminate or suspend this Plan at any time, in its
sole and absolute discretion; provided, however, that if required to qualify
this Plan as a formula plan for purposes of Rule 16b-3 under Section 16(b) of
the Exchange Act, no amendment may be made more than once every six months that
would change the amount, price, timing or vesting of the options, other than to
comply with changes in the Internal
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<PAGE> 6
Revenue Code of 1986, as amended, or the rules and regulations thereunder;
provided further that no amendment that would (a) increase the number of Shares
that may be issued under this Plan, or (b) otherwise require shareholder
approval under any applicable law or regulation shall be made without the
approval of the Company's shareholders.
SECTION 10 DURATION
This Plan shall continue in effect until March 2, 2004 unless it is
sooner terminated by action of the Board or the Company's shareholders, but such
termination shall not affect the then-outstanding terms of any options.
Adopted by the Company's Board of Directors on March 2, 1994 and approved
by the Company's shareholders on March 23, 1994. Amended and restated by
the Board on October 17, 1996. Amended and restated by the Board on January
14, 1997.
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