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As filed with the Securities and Exchange Commission on February 20, 1998.
Registration No. 333-
- -------------------------------------------------------------------------------
UNITED STATES SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE ACT OF 1933
------------------------
LABORATORY SPECIALISTS OF AMERICA, INC.
(Exact Name of Registrant as Specified in its Charter)
OKLAHOMA 73-1451065
(State or other jurisdiction (I.R.S Employer Identification Number)
of incorporation or organization)
101 PARK AVENUE, SUITE 810
OKLAHOMA CITY, OKLAHOMA 73102
(Address of principal executive offices) (Zip Code)
LABORATORY SPECIALISTS OF AMERICA, INC. 1994 STOCK OPTION PLAN
(Full Title of the Plan)
MR. JOHN SIMONELLI
CHIEF EXECUTIVE OFFICER
LABORATORY SPECIALISTS OF AMERICA, INC.
101 PARK AVENUE, SUITE 810
OKLAHOMA CITY, OKLAHOMA 73102
(Name and Address of Agent For Service)
(405) 232-9800
(Telephone Number, Including Area Code, of Agent For Service)
------------------------
COPIES TO:
MR. MICHAEL E. DUNN, ESQ.
DUNN SWAN & CUNNINGHAM
2800 OKLAHOMA TOWER, 210 PARK AVENUE
OKLAHOMA CITY, OKLAHOMA 73102-5604
(405) 235-8318
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered(1) Registered Per Share(2) Price(2) Fee(3)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Common Stock, $.001 par value 425,000 $4.31 $1,831,750 $541
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of shares of
Common Stock as a result of adjust in the number of securities issuable
upon exercise of stock options by reason of anti-dilution provisions of the
Laboratory Specialists of America, Inc. 1994 Stock Option Plan.
(2) The Offering Price has been estimated and the registration fee has been
computed pursuant to Rule 457(c) on the basis of the average of the closing
bid and asked prices of the Common Stock as quoted on the Nasdaq SmallCap
Market on February 19, 1998, which was $4.31.
(3) Calculated pursuant to rule 457(h)(1) on the basis of the average of the
reported high and low sale prices of shares of the Common Stock on the
Nasdaq SmallCap Market on February 19, 1998.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
PLAN INFORMATION
Laboratory Specialists of America, Inc. (the "Company") established the
Laboratory Specialists of America, Inc. 1994 Stock Option Plan (the "Plan")
in May 1994. The Plan was amended and restated on October 30, 1996. The
Plan is not subject to any of the provisions of the Employee Retirement
Income Security Act of 1974.
The purpose of the Plan is to promote the interests of the Company by
providing key employees, non-employee members of the Board of Directors,
consultants and other independent contractors who provide valuable services
to the Company with the opportunity to acquire, or otherwise increase, their
proprietary interest in the Company as an incentive to remain in the service
to the Company.
The Plan provides for the grant of stock options ("Options"), including
incentive stock options ("ISO Options") and nonincentive stock options ("NSO
Options"), with or without stock appreciation rights ("SARs") to employees,
non-employee directors, independent contractors and consultants of the
Company. Under the provisions of the Plan, it is intended that ISO Options
(with or without SARs) granted under the Plan qualify as options granted
pursuant to Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and entitled to the favorable tax consequences thereunder upon the
grant and exercise of such ISO Options. The total number of shares of common
stock, $.001 par value per share, of the Company (the "Common Stock")
authorized and reserved for issuance by the Company under the Plan is
425,000. The Common Stock will be issued upon exercise of the Options
granted pursuant to the Plan.
ELIGIBILITY AND ADMINISTRATION
Options under the Plan may be granted only to persons ("Eligible
Persons") who at the time of grant are directors, executive officers, key
employees and independent contractors and consultants of the Company and its
subsidiaries. Non-employee directors are not eligible to be granted ISO
Options.
Eligible Persons under the Plan may be divided into two groups, in which
case there will be a separate administrator for each group. One group is to be
comprised of Participants that are Affiliates. For purposes of the Plan,
"Affiliates" is defined as all "officers" (as defined in Rule 16a-1(f)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), directors of the Company and all persons who own 10 percent
or more of the Company's issued and outstanding equity securities.
Initially, the power to administer the Plan with respect to Participants who
are Affiliates is vested with the Board. At any time the Board of Directors
may vest the power to administer the Plan with respect to Eligible Persons
who are Affiliates exclusively with a committee (the "Senior Committee")
comprised of two or more non-employee directors (as defined in Rule
16b-3(3)(i) promulgated under the Exchange Act) which are appointed by the
Board of Directors. The Senior Committee, in its sole discretion, may
require approval of the Board for specific grants of Options. The
administrator of all Eligible Persons who are not Affiliates
("Non-Affiliates") is vested exclusively with the Board. The Board may at
any time, however, appoint a committee (the "Employee Committee") of two or
more members of the Board and delegate to such Employee Committee the power
to administer the Plan with respect to Non-Affiliates. In addition, the
Board may establish an additional committee or committees of persons who are
members of the Board and delegate to such other committee or committees the
power to administer all or any portion of the Plan with respect to all or a
portion of the Eligible Persons. Members of each and all committees
administering all or any portion of the plan serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any
time. The Board may at any time terminate all or a portion of the functions
of the Senior Committee, the Employee Committee, or any other committee
allowed under the Plan and reassume all or a portion of the powers and
authority previously delegated to such
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committee. The Board, Employee Committee, Senior Committee, and/or any
other committee allowed under the Plan, whichever is applicable, is referred
to as the Plan Administrator.
To the extent that granted ISO Options are incentive stock options, the
terms and conditions of those Options must be consistent with the
qualification requirements set forth in the Internal Revenue Code of 1986, as
amended. The maximum number of shares of stock for which employee-directors
may be granted Options in any calendar year shall not exceed 25 percent of
the aggregate number of shares of stock with respect to which Options may be
granted under the Plan.
GRANT AND EXERCISE OF OPTIONS
The terms and conditions of the Options granted to each participant will
be set forth in the agreement evidencing the grant of such Options. Options
may be granted by the Plan Administrator on the following terms and
conditions. No Option shall be exercisable more than 10 years after the date
of grant. Subject to such limitation, the Plan Administrator has the
discretion to fix the period during which any Option may be exercised.
Options granted are non-transferable except by will or by the laws of descent
and distribution. Options are exercisable only by Eligible Persons while
serving as a non-employee director of the Company or a subsidiary or while
actively employed as an employee, an independent contractor or a consultant
by the Company or a subsidiary, except that (i) any Option granted and which
is otherwise exercisable, may be exercised by the personal representative of
a deceased Eligible Person within 12 months after the death of such Eligible
Person (but not beyond the option period of such Option), (ii) if any
Eligible Person is terminated as a non-employee director, an employee, an
independent contractor or any consultant of the Company or a subsidiary on
account of retirement, such Eligible Persons may exercise any Option which is
otherwise exercisable at any time within three months of such date of
termination, or (iii) if an Eligible Person is terminated as a non-employee
director, as an employee, an independent contractor or a consultant of the
Company or a subsidiary on account of incurring a disability, such Eligible
Person may exercise any Option which is otherwise exercisable at any time
within 12 months of such date of termination.
The Board, in its sole discretion, may permit an Eligible Person who is
terminated as a non-employee director, an employee, an independent contractor
or a consultant due to retirement or disability, or upon the occurrence of
special circumstances (as determined by the Board), or the personal
representative of a deceased Eligible Person to exercise and purchase (within
three years of such termination) all or any part of the shares subject to
Option on the date of termination.
The exercise prices of Options are determined by the Plan Administrator,
but in no event may such price be less than 85 percent of the fair market
value of the stock on the date of grant.
STOCK APPRECIATION RIGHTS
The Plan Administrator of each administrative group may also grant SARs
to Eligible Persons in connection with Options granted under the Plan. SARs
terminate at such time as the Plan Administrator determines and are
exercisable only upon the exercise of the related Option.
Upon the exercise of an SAR, the holder is entitled to receive the excess
amount of the fair market value of the Stock, as of the date of exercise, for
which the SAR is exercised over the exercise price of the Option. The
Eligible Person may request the method and combination of payment upon the
exercise of a SAR; however, the Board has the final authority to determine
whether the SAR shall be paid in cash or shares of stock or both. An amount
equal to the income tax resulting to the Company on the exercise of the SAR
is required to be paid to the Company at the time of exercise by the Eligible
Person who exercises.
STOCK OPTIONS
2
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The Plan Administrators may grant ISO Options to employees of the
Company and any of its subsidiaries. The option price for shares subject to
an ISO Option is determined by the Plan Administrator, but in no event shall
the ISO Option exercise price be less than the fair market value of the stock
on the date of grant of the ISO Option. ISO Options will not be granted to
any management employee, if immediately before the grant of an ISO Option,
such employee owns 10 percent of the total combined voting power of all
classes of stock of the Company or its subsidiaries, unless the ISO Option
exercise price is at least 110 percent of the fair market value of the stock
subject to the ISO Option, and such ISO Option is not exercisable after the
expiration of five years from the date such ISO Option is granted.
Options granted under the Plan are exercisable in such amounts, at such
intervals and upon such terms as the Option grant provides. The Option
exercise price of the Common Stock is determined by the Plan Administrator,
provided such exercise price may not be less than 85 percent (100 percent for
ISO Options) of the fair market value of the shares on the date of grant of
the Option. However, if a participant owns more than 10 percent of the total
combined voting power of all classes of capital stock of the Company, the
exercise price of ISO Options may not be less than 110 percent of the fair
market value of the Common Stock on the date of the grant, and such ISO
Options cannot be exercised five years after the grant. The aggregate
fair market value of the Common Stock with respect to which ISO Options are
initially exercisable by any participant in any calendar year may not exceed
$100,000. The fair market value of a share of the Common Stock is determined
by averaging the closing high bid and low asked quotations for such share on
the date of grant of the option. Upon the exercise of an Option, the Option
price must be paid in full, in cash or in Common Stock or a combination of
cash and Common Stock in the event that the purchase is pursuant to exercise
of rights under an SAR which is attached to an Option and which is
exercisable on the date of exercise of the Option. Subject to the Plan
Administrator's approval, upon exercise of an Option with an SAR attached, a
participant may receive cash, shares of Common Stock or a combination of both
in an amount or having a fair market value equal to the excess of the fair
market value, on the date of exercise, of the shares for which the Option and
SAR are exercised over the Option exercise price.
Options granted under the Plan may not be exercised under any
circumstances 10 years from the date of grant. Subject to the foregoing,
Options are exercisable only by participants who are directors, actively
employed as employees, independent contractors or consultants by the Company
or a subsidiary of the Company (employees only for ISO Options), except that
Options may, with the consent of the Plan Administrator, be exercised at any
time within three years after the participant's retirement, death, disability
or the occurrence of other special circumstances as determined by the Plan
Administrator, but in no event beyond the expiration date of the Option. If
a participant's services as a director, employment as an employee,
independent contractor or a consultant by the Company or its subsidiary
terminates for any reason other than death, disability or retirement, any
Option granted to such participant immediately terminates, unless permitted
to be exercised by the Plan Administrator in its sole discretion. No Option
under the Plan may be granted after June 30, 2005. Options are not
transferable except by will or by the laws of descent and distribution.
TERMINATION AND AMENDMENT
The Plan will terminate on June 30, 2005. The Plan may be altered,
changed, modified, amended or terminated by written amendment approved by the
Board of Directors of the Company; provided, that no action of the Board of
Directors may, without the approval of the shareholders, increase the total
amount of Common Stock which may be purchased under Options granted under the
Plan; withdraw the administration of the Plan from the Plan Administrator;
amend or alter the Option exercise price of Common Stock under the Plan;
change the manner of computing the spread payable by the Company to a
participant upon the exercise of an SAR; or amend the Plan in any other
manner which would impair the applicability of the exemption afforded by
Exchange Act Rule 16b-3 to the Plan. No amendment, modification or
termination of the Plan may in any manner adversely affect any Option
theretofore granted under the Plan without the consent of the participant.
FEDERAL INCOME TAX CONSEQUENCES
3
<PAGE>
No tax obligation will arise for the participant or the Company upon the
granting of Options under the Plan. Upon exercise of a NSO Option, a
participant will recognize ordinary income in an amount equal to the excess,
if any, of the fair market value, on the date of exercise, of the shares of
Common Stock acquired over the exercise price of the Option. Thereupon, the
Company will be entitled to a tax deduction in an amount equal to the
ordinary income recognized by the participant if, only in the case of
employees, the Company deducts and withholds appropriate income taxes. Any
additional gain or loss realized by a participant on disposition of such
Option shares generally will be capital gain or loss to the participant and
will not result in any additional tax deduction to the Company.
Upon the exercise of an ISO Option, a participant will not recognize
taxable income. The recognition of income and gain is deferred until the
participant sells the shares of Common Stock acquired pursuant to exercise of
the ISO Option. If the participant does not dispose of the shares of Common
Stock within two years from the date the ISO Option was granted and within
one year after the exercise of the ISO Option, and the ISO Option is
exercised no later than three months after the termination of the
participant's employment, the gain on sale will be treated as long-term
capital gain. The Company is not entitled to any tax deduction in respect of
the exercise of an ISO Option, however, if the Option shares are not held for
the full term of the holding period described above, the Options will
retroactively lose their qualification as ISO Options (i.e., become NSO
Options), the gain on the sale of such shares, being the lesser of (a) the
fair market value of the shares on the date of exercise minus the Option
price, or (b) the amount realized on disposition minus the Option exercise
price, will be taxed to the participant as ordinary income and the Company
may be entitled to a deduction in the same amount. Any additional gain or
loss realized by a participant upon disposition of the shares of Common Stock
acquired pursuant to exercise of the Option prior to the expiration of the
full term of the holding period described above, generally will be capital
gain or loss to the participant and will not result in a tax deduction to the
Company. The "spread" upon exercise of an ISO Option constitutes a tax
preference item for purposes of the "alternative minimum tax" under the Code.
The tax benefits which might otherwise accrue to a participant may be
affected by the imposition of such tax if applicable to the participant's
individual circumstances.
ADDITIONAL INFORMATION
Additional information regarding the Plan and its administration may be
obtained by calling the Company's office at (405) 232-9800 or by writing to
Laboratory Specialists of America, Inc., 101 Park Avenue, Suite 810, Oklahoma
City, Oklahoma, Attention: Larry E. Howell.
The Company has filed the Registration Statement on Form S-8 (herein,
together with all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "1933 Act"), with the Securities and
Exchange Commission (the "Commission"), Washington, D.C., with respect to the
securities offered by the Company under the Plan. As permitted by the rules
and regulations of the Commission, this Registration Statement incorporates
certain documents which constitute under Rule 428(a)(1) promulgated under the
1933 Act a prospectus that meets the requirements of Section 10(a) of the
1933 Act. The statements contained in the Registration Statement as to the
contents of any contract or other document referenced herein are not
necessarily complete, and in each instance, if the contract or document was
filed as an exhibit, reference is hereby made to the copy of the contract or
other document filed as an exhibit to the Registration Statement and each
such statement is qualified in all respects by such reference. Furthermore,
the Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") as a "small business
issuer" as defined under Regulation S-B promulgated under the 1933 Act. In
accordance with the 1934 Act, the Company files reports, proxy and other
information statements with the Commission (File No. 33-25701). All such
reports, proxy and other information statements will be provided without
charge to the participants in the Plan. The Registration Statement, such
reports, proxy and other information statements can be inspected and copied
at, and copies of such materials can be obtained at prescribed rates from,
the Public Reference Section of the Commission in the office of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549-1004, and at the regional offices of the Commission at 7 World Trade
Center, 13th Floor, New York, New York 10048 and at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of the Registration Statement and
the exhibits and schedules thereto and such reports, proxy and other
information statements
4
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may be obtained from the Commission at such offices, upon payment of
prescribed rates. In addition, the Registration Statements and exhibits and
such reports, proxy and other information statements made with the Commission
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR")
system are publicly available through the Commission's site on the World Wide
Web on the Internet, located at http://www.sec.gov. The Registration
Statement, all exhibits thereto and amendments thereof and all other
documents incorporated by reference have been filed with the Commission
through EDGAR. The Company will provide without charge to each participant in
the Plan, upon written or oral request, a copy of any information
incorporated by reference herein. Such requests should be directed to
Laboratory Specialists of America, Inc. at 101 Park Avenue, Suite 810,
Oklahoma City, Oklahoma 73102, telephone: (405) 232-9800.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Securities and
Exchange Commission (the "Commission") are incorporated in this Registration
Statement by reference:
(a) the Prospectus, dated September 9, 1997, of the Company filed with
the Commission pursuant to Rule 424(b) and in conjunction with the Company's
Registration Statement on Form SB-2 (No. 333-30997), as declared effective by
the Commission on September 9, 1997;
(b) the Annual Report on Form 10-KSB for the year ended December 31,
1996, filed with the Commission on April 22, 1997; the Quarterly Report on
Form 10-QSB for the quarter ended March 31, 1997, filed with the Commission
on May 9, 1997; the Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1997, filed with the Commission on August 12, 1997; the Quarterly
Report on Form 10-QSB for the quarter ended September 30, 1997, filed with
the Commission on November 7, 1997; the report on Form 8-K, filed with the
Commission on March 3, 1997, the report on Form 8-K filed with the Commission
on April 9, 1997; the amendment to report on Form 8-K filed with the
Commission on May 13, 1997;
(c) the Company's Registration Statement on Form 8-A, as filed with the
Commission on November 4, 1994.
(d) the Company's Certificate of Incorporation filed as Exhibit 3.1 to
Registration Statement on Form SB-2 (Registration No. 33-82058-D) as filed
with the Central Regional Office of the Commission on July 28, 1994; and
(e) the Company's Bylaws filed as Exhibit 3.2 to Registration Statement
on Form SB-2 (Registration No. 33-82058-D) as filed with the Central Regional
Office of the Commission on July 28, 1994.
Furthermore, all documents and reports subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be part hereof from the date
of filing of each such document or report.
ITEM 4. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 1031 of the Oklahoma General Corporation Act permits (and
Registrant's Certificate of Incorporation and Bylaws, which are incorporated
by reference herein) authorize indemnification of directors and officers of
the Registrant and officers and directors of another corporation,
partnership, joint venture, trust or other enterprise who serve at the
request of Registrant, against expenses, including attorneys fees, judgments,
fines and amount paid in settlement actually and reasonably incurred by such
person in connection with any action, suit or proceeding in which
5
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such person is a party by reason of such person being or having been a
director or officer of Registrant or at the request of Registrant, if he
conducted himself in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of Registrant, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. Registrant may not indemnify an officer or a director
with respect to any claim, issue or matter as to which such officer or
director shall have been adjudged to be liable to Registrant, unless and only
to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. To the extent that an officer or director is successful on the
merits or otherwise in defense on the merits or otherwise in defense of any
action, suit or proceeding with respect to which such person is entitled to
indemnification, or in defense of any claim, issue or matter therein, such
person is entitled to be indemnified against expenses, including attorneys
fees, actually and reasonable incurred by him in connection therewith.
The circumstances under which indemnification is granted with an action
brought on behalf of Registrant are generally the same as those set forth
above; however, expenses incurred by an officer or a director in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation
in advance of final disposition upon receipt of an undertaking by or on
behalf of such officer or director to repay such amount it is ultimately
determined that such officer or director is not entitled to indemnification
by Registrant.
These provisions my be sufficiently broad to indemnify such persons for
liabilities under the Securities Act of 1933, as amended (the "1933 Act"), in
which case such provision is against public policy as expressed in the 1933
Act and is therefore unenforceable.
ITEM 8. EXHIBITS.
4.1 Form of certificate of the common stock is incorporated by reference
to Exhibit 4.1 of Amendment No. 2 to the Company's Registration
Statement on Form SB-2 (No. 33-82058-D), as filed with the Central
Regional Office of the Commission on September 1, 1994.
4.2 Laboratory Specialists of America, Inc. 1994 Stock Option Plan.
5.1 Opinion of Dunn Swan & Cunningham, A Professional Corporation, counsel
to the Company.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Dunn Swan & Cunningham.
24.1 Power of Attorney of John Simonelli.
24.2 Power of Attorney of Larry E. Howell.
24.3 Power of Attorney of Arthur R. Peterson, Jr.
24.4 Power of Attorney of Robert A. Gardebled, Jr.
24.5 Power of Attorney of Jerome P. Welch.
24.6 Power of Attorney of Michael E. Dunn.
6
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ITEM 9. UNDERTAKINGS.
(a) RULE 415 OFFERING.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a) (3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs 2(a)(1)(i) and 2(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 pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by
reference herein.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "Securities Act"), each such post-effective
amendment shall be deemed to be a new registration statement relating to
the securities offered herein, 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.
(e) REQUEST FOR ACCELERATION OF EFFECTIVE DATE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
undersigned Company's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the new offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(h) RULE 430A.
Insofar as indemnification for liabilities arising under the
Securities Act my be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer, or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Company will, unless
in the opinion of its counsel the matter has been settled by controlling
7
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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.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Oklahoma City, Oklahoma, on this
18th day of February, 1998.
LABORATORY SPECIALISTS OF AMERICA, INC.
(Registrant)
By: /S/LARRY E. HOWELL
---------------------------------------------
Larry E. Howell, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/S/JOHN SIMONELLI Chairman of the Board, Chief February 18, 1998
- ---------------------------- Executive Officer, Secretary
John Simonelli and Director
/S/LARRY E. HOWELL President and Chief Operating February 18, 1998
- ---------------------------- Officer and Director
Larry E. Howell
/S/ARTHUR R. PETERSON, JR. Treasurer and Director February 18, 1998
- ----------------------------
Arthur R. Peterson, Jr.
/S/ROBERT A. GARDEBLED, JR. Director February 18, 1998
- ----------------------------
Robert A. Gardebled, Jr.
/S/MICHAEL E. DUNN Director February 18, 1998
- ----------------------------
Michael E. Dunn
/S/JEROME P. WELCH Director February 18, 1998
- ----------------------------
Jerome P. Welch
9
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EXHIBIT 4.2
LABORATORY SPECIALISTS OF AMERICA, INC.
1994 STOCK OPTION PLAN
(AS AMENDED THROUGH OCTOBER 31, 1996)
ARTICLE I
GENERAL PROVISIONS
On May 10, 1994, Laboratory Specialists of America, Inc. (the "Company")
adopted the Laboratory Specialists of America, Inc. 1994 Stock Option Plan
(the "Original Plan"). On October 30, 1996, the Board of Directors of the
Company (the "Board") approved certain amendments of the Original Plan
(including an increase in the shares of stock authorized to be issued under
the Original Plan and certain other technical changes) and readopted the 1994
Stock Option Plan (the "Revised 1996 Plan"). The Revised 1996 Plan must be
approved by the shareholders of the Company within one year of the date of
its adoption by the Board. If the Revised 1996 Plan is not timely approved
by the shareholders, (i) the Original Plan will continue in effect and (ii)
any Options issued under the Revised 1996 Plan shall remain valid and
unchanged to the extent that such Options contain terms which could have been
granted under the Original Plan. The Revised 1996 Plan shall be known as the
Laboratory Specialists of America, Inc. 1994 Stock Option Plan (the "Plan").
Any Options outstanding prior to the adoption by the Board of the Revised
1996 Plan shall remain valid and unchanged.
1.1 PURPOSE. The purpose of the Plan shall be to attract, retain and
motivate directors, executive officers, key employees and independent
contractors and consultants of the Company and its subsidiaries ("Eligible
Persons") by way of granting (i) non-qualified stock options ("Stock
Options"), (ii) non-qualified stock options with stock appreciation rights
attached ("Stock Option SARs"), (iii) incentive stock options ("ISO
Options"), and (iv) ISO Options with stock appreciation rights attached ("ISO
Option SARs"). For the purpose of this Plan, Stock Option SARs and ISO
Option SARs are sometimes collectively herein called "SARs;" and Stock
Options and ISO Options are sometimes collectively herein called "Options."
The ISO Options to be granted under the Plan are intended to be qualified
pursuant to Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Stock Options to be granted are intended to be
"non-qualified stock options" as described in Sections 83 and 421 of the
Code. Furthermore, under the Plan, the terms "parent" and "subsidiary"
shall have the same meaning as set forth in Subsections (e) and (f) of
Section 425 of the Code unless the context herein clearly indicates to the
contrary.
1.2 GENERAL. The terms and provisions of this Article I shall be
applicable to Stock Options, SARs and ISO Options unless the context herein
clearly indicates to the contrary.
1.3 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board and/or committees established by the Board.
1.3.1 DIVISION OF PARTICIPANTS AND ESTABLISHMENT OF COMMITTEES. The
Eligible Persons under the Plan ("Participants") shall be divided into two
groups and there shall be a separate administrator for each group. One
group will be comprised of Participants that are Affiliates. For purposes
of this Plan, "Affiliate" shall mean all "officers" (as defined in Rule
16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) and directors of the Company and all persons who own
10 percent or more of the Company's issued and outstanding equity
securities. Initially, the power to administer the Plan with respect to
Participants who are Affiliates shall be vested with the Board. At any
time the Board may vest the power to administer the Plan with respect to
Participants who are Affiliates exclusively with a committee (the "Senior
Committee") comprised of two or more Non-Employee Directors (as defined in
Rule 16b-3(3)(i) promulgated under the Exchange Act) which are appointed by
the Board. The Senior Committee, in its sole discretion, may require
approval of the Board for specific grants of Options. The administration
of all
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Participants that are not Affiliates ("Non-Affiliates") shall be vested
exclusively with the Board. The Board, however, may at any time
appoint a committee (the "Employee Committee") of two or more members of
the Board and delegate to such Employee Committee the power to administer
the Plan with respect to Non-Affiliates. In addition, the Board may
establish an additional committee or committees of persons who are members
of the Board and delegate to such other committee or committees the power
to administer all or any portion of the Plan with respect to all or a
portion of the Participants. Members of each and all committees
administering all or any portion of the Plan shall serve for such period of
time as the Board may determine and shall be subject to removal by the
Board at any time. The Board may at any time terminate all or a portion of
the functions of the Senior Committee, the Employee Committee, or any other
committee allowed under this Plan and reassume all or a portion of the
powers and authority previously delegated to such committee. The Board in
its discretion may also require the members of any committee allowed under
this Plan to be "outside directors" as defined in any applicable
regulations promulgated under Section 162(m) of the Code.
1.3.2 PLAN ADMINISTRATOR. The Board, the Employee Committee, Senior
Committee, and/or any other committee allowed under this Plan, whichever is
applicable, shall be each referred to herein as a "Plan Administrator."
Unless otherwise provided in the Plan, each Plan Administrator shall have,
with respect to its administered group, the power where consistent with the
general purpose and intent of the Plan to (i) modify the requirements of
the Plan to conform with the law or to meet special circumstances not
anticipated or covered in the Plan, (ii) suspend or discontinue the Plan,
(iii) establish policies and (iv) adopt rules and regulations and prescribe
forms for carrying out the purposes and provisions of the Plan including
the form of any "stock option agreements" ("Stock Option Agreements"). A
majority of the members of a Plan Administrator shall constitute a quorum,
and an act of the majority of the members present at any meeting at which a
quorum is present shall be the act of such Plan Administrator.
1.3.3 PLAN INTERPRETATION. Unless otherwise provided in the Plan,
the Board shall have the authority to interpret and construe the Plan, and
determine all questions arising under the Plan and any agreement made
pursuant to the Plan. Any interpretation, decision or determination made
by the Board shall be final, binding and conclusive.
1.3.4 SELECTION OF PARTICIPANTS. In designating and selecting
Eligible Persons for participation in the Plan, a Plan Administrator shall
consult with and give consideration to the recommendations and criticisms
submitted by appropriate managerial and executive officers of the Company.
A Plan Administrator also shall take into account the duties and
responsibilities of the Eligible Persons, their past, present and potential
contributions to the success of the Company and such other factors as a
Plan Administrator shall deem relevant in connection with accomplishing the
purpose of the Plan.
1.4 SHARES SUBJECT TO THE PLAN. Shares of stock ("Stock") covered by
Stock Options, SARs and ISO Options shall consist of 425,000 shares of the
Common Stock, $.001 par value, of the Company, subject to adjustment pursuant
to Section 1.7 of the Plan, which may be either authorized and unissued
shares or treasury shares, as determined in the sole discretion of the Board.
If any Option for shares of Stock, granted to a Participant lapses, or is
otherwise terminated, the Plan Administrator may grant Stock Options, SARs or
ISO Options for such shares of Stock to other Participants. However, Stock
Options, SARs and ISO Options shall not be granted again for shares of Stock
which have been (i) subject to SARs which are surrendered in exchange for
cash or shares of Stock issued pursuant to the exercise of SARs as provided
in Article II hereof and (ii) shares withheld for tax withholding
requirements.
1.5 PARTICIPATION IN THE PLAN. A Plan Administrator shall determine
from time to time those Eligible Persons within the group of Eligible Persons
administered by such Plan Administrator, who are to be granted Stock Options,
SARs and ISO Options and the number of shares of Stock covered thereby.
Non-Employee Directors shall not be eligible to be granted ISO Options. The
maximum number of shares of Stock for which employee-Directors may be
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granted Options in any calendar year shall not exceed 25 percent of the
aggregate number of shares of Stock with respect to which Options may be
granted under the Plan.
1.6 DETERMINATION OF FAIR MARKET VALUE. As used in the Plan, "fair
market value" shall mean on any particular day (i) if the Stock is listed or
admitted for trading on any national securities exchange or the SmallCap
Market System or the National Market System of Nasdaq Stock Market, Inc.
("Nasdaq"), the last sale price, or if no sale occurred, the mean between the
closing high bid and low asked quotations, for such day of the Stock, (ii) if
Stock is not traded on any national securities exchange but is quoted on an
automated quotation system or any similar system of automated dissemination
of quotations or securities prices in common use, the mean between the
closing high bid and low asked quotations for such day of the Stock on such
system, (iii) if neither clause (i) nor (ii) is applicable, the mean between
the high bid and low asked quotations for the Stock as reported by the
National Daily Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for shares of the Stock
on at least five (5) of the ten (10) preceding days, (iv) in lieu of the
above, if actual transactions in the shares of Stock are reported on a
consolidated transaction reporting system, the last sale price of the shares
of Stock on such system or, (v) if none of the conditions set forth above is
met, the fair market value of shares of Stock as determined by the Board.
Provided, however, for purposes of determining "fair market value" of the
Common Stock of the Company, such value shall be determined without regard to
any restriction other than a restriction which will never lapse.
1.7 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The grants of Options
shall in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
assets or business. The aggregate number of shares of Stock under Options
granted under the Plan, the Option Price and the ISO Price and the total
number of shares of Stock which may be purchased by a Participant on exercise
of an Option shall be appropriately adjusted by the Board to reflect any
recapitalization, stock split, merger, consolidation, reorganization,
combination, liquidation, stock dividend or similar transaction involving the
Company. Provided, however, and notwithstanding the foregoing, (i) a
dissolution or liquidation of the Company, (ii) a merger or consolidation in
which the Company is not the surviving or the resulting corporation or (iii)
a reverse merger in which the Company is the surviving entity but in which
the securities possessing more than 50 percent of the total combined voting
power of the Company's outstanding securities are transferred to a person or
persons different from those who held such securities immediately prior to
the merger (collectively referred to herein as a "Corporate Transaction"),
shall cause the Plan and any Stock Option, SAR or ISO Option granted
thereunder, to terminate upon the effective date of such dissolution,
liquidation, merger or consolidation, subject to Section 1.21 of the Plan.
Provided, further, that for the purposes of this Section 1.7, if any merger,
consolidation or combination occurs in which the Company is not the surviving
corporation and is the result of a mere change in the identity, form or place
of organization of the Company accomplished in accordance with Section
368(a)(1)(F) of the Code, then, such event will not cause a termination of
the Plan. Appropriate adjustment may also be made by the Board in the terms
of a SAR to reflect any of the foregoing changes.
1.8 AMENDMENT AND TERMINATION OF THE PLAN. The Plan shall terminate at
midnight, June 30, 2005, but prior thereto may be altered, changed, modified,
amended or terminated by written amendment approved by the Board. Provided,
that no action of the Board may (A) without the approval of the shareholders
of the Company, (i) increase the aggregate number of shares of Stock which
may be purchased under Stock Options, SARs or ISO Options granted under the
Plan, (ii) withdraw the administration of the Plan from the Plan
Administrator, (iii) amend or alter the Option Price or ISO Price, as
applicable, (iv) change the manner of computing the spread upon the exercise
of a SAR, (v) amend the Plan in any manner which would impair the
applicability of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, to the Plan or (B) without the consent of the holder of ISO Options,
disqualify any ISO Options previously granted under the Plan from treatment
as incentive stock options under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Except as provided in this Article I, no
amendment, modification or termination of the Plan shall in any manner
adversely affect any Stock Option, SAR or ISO Option theretofore granted
under the Plan without the consent of the affected Participant.
Notwithstanding the foregoing, Options may be granted under the Plan to
purchase shares of Stock in excess of the number of shares then available for
issuance under the Plan if (i) an amendment to increase the maximum number of
shares issuable under the Plan is adopted by
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the Board prior to the initial grant of any such Option and within one year
thereafter such amendment is approved by the Company's shareholders and (ii)
each such Option granted is not to become exercisable or vested, in whole or
in part, at any time prior to the obtaining of such shareholder approval.
1.9 EFFECTIVE DATE. The Plan shall be effective May 10, 1994, subject
to approval by the holders of a majority of the outstanding Common Stock of
the Company present, or represented, and entitled to vote at a meeting called
for such purpose or pursuant to a consent in lieu of meeting executed by a
majority of the holders of the outstanding Common Stock of the Company, and
upon the issuance of a favorable opinion of counsel with respect to certain
tax consequences of the Plan as it affects Stock Options, ISO Options and
SARs. The Revised 1996 Plan shall be submitted to the shareholders of the
Company for their approval at a regular or special meeting to be held within
12 months after the adoption of the Revised 1996 Plan by the Board.
Shareholder approval shall be evidenced by the affirmative vote of the
holders of a majority of the shares of the Company's Common Stock present in
person or by proxy and voting at the meeting. The date such shareholder
approval has been obtained shall be referred to in this Plan as the Revised
1996 Plan Effective Date.
1.10 SECURITIES LAW REQUIREMENTS. The Company shall have the right,
but not the obligation to cause the shares of Stock issuable upon exercise of
the Options to be registered under the Securities Act of 1933, as amended
(the "Securities Act") or the securities laws of any state or jurisdiction.
1.10.1 RESTRICTIONS ON TRANSFERABILITY AND LEGEND ON CERTIFICATES.
As a condition precedent to the grant of any Stock Option or the issuance
or transfer of shares pursuant to the exercise of any Stock Option, the
Company may require the Participant or holder to take any reasonable action
to meet such requirements or to obtain such approvals. The Company shall
have the right to restrict the transferability of shares of Stock issued or
transferred upon exercise of the Stock Options in such manner as it deems
necessary or appropriate to insure the availability of any exemption from
registration under the Securities Act and any other applicable securities
laws or regulations that may be available, including the endorsement with a
legend reading as follows:
The shares of Common Stock evidenced by this certificate
have been issued to the registered owner in reliance upon
written representations that these shares have been
purchased solely for investment purposes. These shares may
not be sold, transferred or assigned unless in the opinion
of the Company and its legal counsel such sale, transfer or
assignment will not be in violation of the Securities Act of
1933, as amended, and the rules and regulations thereunder.
1.10.2 REGISTRATION STATEMENT. If a registration statement covering
the shares of Stock issuable upon exercise of the Options granted under the
Plan is filed under the Securities Act, and is declared effective by the
Securities and Exchange Commission, the provisions of Section 1.10.1 shall
terminate during the period of time that such registration statement, as
periodically amended, remains effective.
1.11 SEPARATE CERTIFICATES. Separate certificates representing the
Common Stock of the Company to be delivered to a Participant upon the
exercise of any Stock Option, SAR, or ISO Option will be issued to such
Participant.
1.12 PAYMENT FOR STOCK; RECEIPT OF STOCK OR CASH IN LIEU OF PAYMENT.
1.12.1 PAYMENT FOR STOCK. Payment for shares of Stock purchased
under this Plan shall be made (i) in full and in cash or check made payable
to the Company or (ii) may also be made in Common Stock of the Company held
for the requisite period necessary to avoid a charge to the Company's
reported earnings and valued at fair market value on the date of exercise
of the Option, or (iii) a combination of cash and Common Stock of the
Company. In the event that Common Stock of the Company is utilized in
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consideration for the purchase of Stock upon the exercise of an Option,
such Common Stock shall be valued at the "fair market value" as defined in
Section 1.6 of the Plan.
1.12.2 RECEIPT OF STOCK OR CASH IN LIEU OF PAYMENT. Furthermore, a
Participant may exercise an Option without payment of the Option Price or
ISO Price in the event that the exercise is pursuant to rights under an SAR
attached to the Option and such SAR is exercisable on the date of exercise
of the Option to which it is attached. In the event an Option with an SAR
attached is exercised without payment of the Option Price or ISO Price in
cash or by check, the Participant shall be entitled to receive either (i) a
cash payment from the Company equal to the excess of the total fair market
value of the shares of Stock on such date as determined with respect to
which the Option is being exercised over the total cash Option Price or ISO
Price of such shares of Stock as set forth in the Option or (ii) that
number of whole shares of Stock as is determined by dividing (A) an amount
equal to the fair market value per share of Stock on the date of exercise
into (B) an amount equal to the excess of the total fair market value of
the shares of Stock on such date with respect to which the Option is being
exercised over the total cash Option Price or ISO Price of such shares of
Stock as set forth in the Option, and fractional shares will be rounded to
the next lowest number and the Participant will receive cash in lieu
thereof.
1.13 INCURRENCE OF DISABILITY AND RETIREMENT. A Participant shall be
deemed to have terminated his employment as an employee, his independent
contractor arrangement or consulting arrangement with the Company and
incurred a disability ("Disability") if such Participant suffers a physical
or mental condition which, in the judgment of the Board, totally and
permanently prevents a Participant from engaging in any substantial gainful
employment with or the providing of services or consulting for the Company or
a subsidiary. A Participant shall be deemed to have terminated employment as
an employee, independent contractor or a consultant due to retirement
("Retirement") if such Participant ceases to be an employee, independent
contractor or a consultant of the Company or its subsidiary, without cause,
after attaining the age of 55.
1.14 STOCK OPTIONS AND ISO OPTIONS GRANTED SEPARATELY. Because the
Plan Administrator is authorized to grant Stock Options, SARs and ISO Options
to Participants, the grant thereof and Stock Option Agreements relating
thereto will be made separately and totally independent of each other.
Except as it relates to the total number of shares of Stock which may be
issued under the Plan, the grant or exercise of a Stock Option or SARs shall
in no manner affect the grant and exercise of any ISO Options. Similarly,
the grant and exercise of any ISO Option shall in no manner affect the grant
and exercise of any Stock Option or SARs.
1.15 GRANTS OF OPTIONS AND STOCK OPTION AGREEMENT. Each Stock Option,
ISO Option and/or SAR granted under this Plan shall be evidenced by the
minutes of a meeting of the Plan Administrator or by the written consent of
the Plan Administrator and by a written Stock Option Agreement effective on
the date of grant and executed by the Company and the Participant. Each
Option granted hereunder shall contain such terms, restrictions and
conditions as the Plan Administrator may determine, which terms, restrictions
and conditions may or may not be the same in each case.
1.16 USE OF PROCEEDS. The proceeds received by the Company from the
sale of Stock pursuant to the exercise of Options granted under the Plan
shall be added to the Company's general funds and used for general corporate
purposes.
1.17 NON-TRANSFERABILITY OF OPTIONS. Except as otherwise herein
provided, any Option or SAR granted shall not be transferable otherwise than
by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Participant, only by him. More
particularly (but without limiting the generality of the foregoing), the
Option and/or SAR may not be assigned, transferred (except as provided
above), pledged or hypothecated in any way, shall not be assignable by
operation of law and shall not be subject to execution, attachment, or
similar process. Any attempted assignment, transfer, pledge, hypothecation,
or other disposition of the Option and/or SAR contrary to the provisions
hereof shall be null and void and without effect.
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1.18 ADDITIONAL DOCUMENTS ON DEATH OF PARTICIPANT. No transfer of an
Option and/or SAR by the Participant by will or the laws of descent and
distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice and an unauthenticated copy of the
will and/or such other evidence as the Plan Administrator may deem necessary
to establish the validity of the transfer and the acceptance by the successor
to the Option and/or SAR of the terms and conditions of such Option and/or
SAR.
1.19 CHANGES IN EMPLOYMENT. So long as the Participant shall continue
to be a director, an employee, an independent contractor or a consultant of
the Company or any one of its subsidiaries, any Option granted to such
Participant shall not be affected by any change of duties or position.
Nothing in the Plan or in any Stock Option Agreement which relates to the
Plan shall confer upon any Participant any right to continue as a director or
in the employ as an employee, independent contractor or consultant of the
Company or of any of its subsidiaries, or interfere in any way with the right
of the Company or any of its subsidiaries to terminate such Participant as a
director, employee or independent contractor or consultant at any time.
1.20 SHAREHOLDER RIGHTS. No Participant shall have a right as a
shareholder with respect to any shares of Stock subject to an Option prior to
the purchase of such shares of Stock by exercise of the Option.
1.21 RIGHT TO EXERCISE UPON COMPANY CEASING TO EXIST. In the event of
a Corporate Transaction, the Participant shall have the right immediately
prior to consummation of the Corporate Transaction to exercise, in whole or
in part, such Participant's then remaining Options whether or not then
exercisable, but limited to that number of shares that can be acquired
without causing the Participant to have an "excess parachute payment" as
determined under Section 280G of the Code determined by taking into account
all of Participant's "parachute payments" determined under Section 280G of
the Code. Provided, the foregoing notwithstanding, after the Participant has
been afforded the opportunity to exercise the Participant's then remaining
Options as provided in this Section 1.21, and to the extent such Options are
not timely exercised as provided in this Section 1.21, then, the terms and
provisions of this Plan and any Stock Option Agreement will thereafter
continue in effect, and the Participant will be entitled to exercise any such
remaining and unexercised Options in accordance with the terms and provisions
of this Plan and such Stock Option Agreement as such Options thereafter
become exercisable. Provided further, that for the purposes of this Section
1.21, if any merger, consolidation or combination occurs in which the Company
is not the surviving corporation and is the result of a mere change in the
identity, form, or place of organization of the Company accomplished in
accordance with Section 368(a)(1)(F) of the Code, then, such event shall not
cause an acceleration of the exercisability of any such Options granted
hereunder.
1.22 ASSUMPTION OF OUTSTANDING OPTIONS AND SARS. To the extent
permitted by the then applicable provisions of the Code, any successor to the
Company succeeding to, or assigned the business of, the Company as the result
of or in connection with a corporate merger, consolidation, combination,
reorganization, dissolution or liquidation transaction shall assume Options
and SARs outstanding under the Plan or issue new Options and/or SARs in place
of outstanding Options and/or SARs under the Plan.
1.23 TAX WITHHOLDINGS. The Company's obligation to deliver Stock upon
the exercise of Options under the Plan shall be subject to the satisfaction
of all applicable federal, state and local income tax withholding
requirements. The Board may in its discretion and in accordance with the
provisions of Section 1.23 and such supplemental rules as the Board may from
time to time adopt, provide any or all holders of Options with the right to
use shares of Stock in satisfaction of all or part of the federal, state and
local income tax liabilities incurred by such holders in connection with the
exercise of their Options ("Taxes"). Such right may be provided to any such
holders of Options in either or both of the following methods: (i) the
holder of an Option may be provided with the election, which may be subject
to approval by the Plan Administrator, to have the Company withhold, from the
Stock otherwise issuable upon exercise of such Option, a portion of those
shares of Stock with an aggregate fair market value equal to the percentage
(not to exceed 100 percent) of the applicable Taxes designated by the holder
of the Options, and/or (ii) the Board may, in its discretion, provide the
holder of the Options with the election to deliver to the Company, at the
time the Option is exercised, one or more shares of Stock previously acquired
by such holder (other than pursuant to the transaction
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triggering the Taxes) with an aggregate fair market value equal to the
percentage (not to exceed 100 percent) of the Taxes incurred in connection
with such Option exercise designated by such holder.
1.24 GOVERNING LAW. The Plan shall be governed by and all questions
hereunder shall be determined in accordance with the laws of the State of
Oklahoma.
ARTICLE II
TERMS OF STOCK OPTIONS AND EXERCISE
2.1 GENERAL TERMS.
2.1.1 GRANT AND TERMS FOR STOCK OPTIONS. Stock Options shall be
granted by the Plan Administrator on the following terms and conditions:
No Stock Option shall be exercisable more than 10 years after the date of
grant. Subject to such limitation, the Plan Administrator shall have the
discretion to fix the period (the "Option Period") during which any Stock
Option may be exercised. Stock Options granted shall not be transferable
except by will or by the laws of descent and distribution. Stock Options
shall be exercisable only by the Participant while serving as a Non-
Employee Director of the Company or a subsidiary or while actively employed
as an employee, an independent contractor or a consultant by the Company or
a subsidiary, except that (i) any such Stock Option granted and which is
otherwise exercisable, may be exercised by the personal representative of a
deceased Participant within 12 months after the death of such Participant
(but not beyond the Option Period of such Stock Option), (ii) if a
Participant is terminated as a Non-Employee Director, an employee, an
independent contractor or a consultant of the Company or a subsidiary on
account of Retirement, such Participant may exercise any Stock Option which
is otherwise exercisable at any time within three months of such date of
termination, or (iii) if a Participant is terminated as a Non-Employee
Director, as an employee, an independent contractor or a consultant of the
Company or a subsidiary on account of incurring a Disability, such
Participant may exercise any Stock Option which is otherwise exercisable at
any time within 12 months of such date of termination. If a Participant
should die during the applicable three-month or 12-month period following
the date of such Participant's Retirement or termination on account of
Disability, the rights of the personal representative of such deceased
Participant as such relate to any Stock Options granted to such deceased
Participant shall be governed in accordance with Subsection 2.1.1(i) of
this Article II.
2.1.2 OPTION PRICE. The option price ("Option Price") for shares of
Stock subject to Stock Option shall be determined by the Plan
Administrator, but in no event shall such Option Price be less than 85
percent of the fair market value of the Stock on the date of grant.
2.1.3 ACCELERATION OF OTHERWISE UNEXERCISABLE STOCK OPTION ON
RETIREMENT, DEATH, DISABILITY OR OTHER SPECIAL CIRCUMSTANCES. The Board,
in its sole discretion, may permit (i) a Participant who is terminated as a
Non-Employee Director, an employee, an independent contractor or a
consultant due to Retirement or Disability, (ii) the personal
representative of a deceased Participant, or (iii) any other Participant
who is terminated as a Non-Employee Director, an employee, an independent
contractor or a consultant upon the occurrence of special circumstances (as
determined by the Board), to exercise and purchase (within three years of
such date of such Participant's termination) all or any part of the shares
subject to Stock Option on the date of the Participant's termination,
Retirement, Disability, death, or as the Board otherwise so determines,
notwithstanding that all installments, if any, with respect to such Stock
Option, had not accrued on such termination date.
2.1.4 NUMBER OF STOCK OPTIONS GRANTED. Participants may be granted
more than one Stock Option. In making any such determination, the Plan
Administrator shall obtain the advice and recommendation of the officers of
the Company or a subsidiary which have supervisory authority over such
Participants. The
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granting of a Stock Option under the Plan shall not affect any outstanding
Stock Option previously granted to a Participant under the Plan.
2.1.5 NOTICE OF EXERCISE STOCK OPTION. Upon exercise of a Stock
Option, a Participant shall give written notice to the Secretary of the
Company, or other officer designated by the Plan Administrator, at the
Company's main office in Oklahoma City, Oklahoma. No Stock shall be issued
to any Participant until the Company receives full payment for the Stock
purchased, if applicable, and any required Taxes.
ARTICLE III
SARS
3.1 GENERAL TERMS.
3.1.1 GRANT AND TERMS OF SARS. The Plan Administrator of each
administered group may grant SARs to Participants in connection with Stock
Options or ISO Options granted under the Plan. SARs shall terminate at
such time as the Plan Administrator determines and shall be exercised only
upon surrender of the related Stock Option or ISO Option and only to the
extent that the related Stock Option or ISO Option (or the portion thereof
as to which the SAR is exercisable) is exercised. SARs may be exercised
only by the Participant while a Non-Employee Director, an employee, an
independent contractor or a consultant of the Company or a subsidiary
except that (i) any SARs previously granted to a Participant which are
otherwise exercisable may be exercised, with the approval of the Plan
Administrator, by the personal representative of a deceased Participant
(but not beyond the expiration date of such SAR), and (ii) if a Participant
is terminated as a Non-Employee Director, an employee, an independent
contractor or a consultant of the Company or a subsidiary, as the case may
be, on account of Retirement or Disability, such Participant may exercise
any SARs which are otherwise exercisable, with the approval of the Plan
Administrator, anytime within three months of the date of the termination
by Retirement or within 12 months of termination by Disability. If a
Participant should die during the applicable three-month period following
the date of such Participant's Retirement or during the applicable 12 month
period following the date of termination on account of Disability, the
rights of the personal representative of such deceased Participant as such
relate to any SARs granted to such deceased Participant shall be governed
in accordance with (i) of the second sentence of this Subsection 3.1.1.
The applicable SAR shall (i) terminate upon the termination of the
underlying Stock Option or ISO Option, as the case may be, (ii) only be
transferable at the same time and under the same conditions as the
underlying Stock Option or ISO Option is transferable, (iii) only be
exercised when the underlying Stock Option or ISO Option is exercised, and
(iv) may be exercised only if there is a positive spread between the Option
Price or ISO Price, as applicable and the fair market value of the Stock
for which the SAR is exercised.
3.1.2 ACCELERATION OF OTHERWISE UNEXERCISABLE SARS ON RETIREMENT,
DEATH, DISABILITY OR OTHER SPECIAL CIRCUMSTANCES. The Board, in its sole
discretion, may permit (i) a Participant is terminated as a Non-Employee
Director, an employee, an independent contractor, or a consultant with the
Company or a subsidiary due to Retirement or Disability, (ii) the personal
representative of such deceased Participant, or (iii) any other Participant
who is terminated as a Non-Employee Director, an employee, an independent
contractor or a consultant with the Company or a subsidiary upon the
occurrence of special circumstances (as determined by the Board) to
exercise (within three years of such date of such termination) all or any
part of any such SARs previously granted to such Participant as of the date
of such Participant's termination, Retirement, Disability, death, or as the
Board otherwise so determines, notwithstanding that all installments, if
any with respect to such SARs, had not accrued on such date.
3.1.3 FORM OF PAYMENT OF SARS. The Participant may request the
method and combination of payment upon the exercise of a SAR; however, the
Board has the final authority to determine whether the
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value of the SAR shall be paid in cash or shares of Stock or both. Upon
exercise of a SAR, the holder is entitled to receive the excess amount of
the fair market value of the Stock (as of the date of exercise) for which
the SAR is exercised over the Option Price or ISO Price, as applicable,
under the related Stock Option or ISO Option, as the case may be. All
applicable Taxes will be paid by the Participant to the Company upon the
exercise of a SAR because the excess amount described above will be
required to be included within taxable income in accordance with Sections
61 and 83 of the Code.
ARTICLE IV
GRANTING OF ISO OPTIONS
4.1 GENERAL. With respect to ISO Options granted on or after the
effective date of the Plan the following provisions in this Article IV shall
apply to the exclusion of any inconsistent provision in any other Article in
the Plan because the ISO Options to be granted under the Plan are intended to
qualify as "incentive stock options" as defined in Section 422 of the Code.
4.2 GRANT AND TERMS OF ISO OPTIONS. ISO Options may be granted only to
employees of the Company and any of its subsidiaries. No ISO Options shall
be granted to any person who is not eligible to receive "incentive stock
options" as provided in Section 422 of the Code. No ISO Options shall be
granted to any management employee if, immediately before the grant of an ISO
Option, such employee owns more than 10 percent of the total combined voting
power of all classes of stock of the Company or its subsidiaries (as
determined in accordance with the stock attribution rules contained in
Section 425(d) of the Code). Provided, the preceding sentence shall not apply
if, at the time the ISO Option is granted, the ISO Price is at least 110
percent of the "fair market value" of the Stock subject to the ISO Option,
and such ISO Option by its terms is not exercisable after the expiration of
five years from the date such ISO Option is granted.
4.2.1 ISO OPTION PRICE. The option price for shares of Stock subject
to an ISO Option ("ISO Price") shall be determined by the Plan
Administrator, but in no event shall such ISO Price be less than the fair
market value of the Stock on the date of grant.
4.2.2 ANNUAL ISO OPTION LIMITATION. The aggregate "fair market
value" (determined as of the time the ISO Option is granted) of the Stock
with respect to which ISO Options are exercisable for the first time by any
Participant during in any calendar year (under all "incentive stock option"
plans qualified under Section 422 of the Code sponsored by the Company and
its subsidiary corporations) shall not exceed $100,000.
4.2.3 TERMS OF ISO OPTIONS. ISO Options shall be granted on the
following terms and conditions: (i) no ISO Option shall be exercisable more
than 10 years after the date of grant (five years if the ISO Option is
granted to a Participant who at the time of the grant owns or is deemed to
own stock possessing more than 10 percent of the total combined voting
power of all classes of stock of the Company or a subsidiary); (ii) the
Plan Administrator shall have the discretion to fix the period (the "ISO
Period") during which any ISO Option may be exercised; (iii) ISO Options
granted shall not be transferable except by will or by the laws of descent
and distribution; (iv) ISO Options shall be exercisable only by the
Participant while actively employed by the Company or a subsidiary, except
that (A) any such ISO Option granted and which is otherwise exercisable,
may be exercised by the personal representative of a deceased Participant
within 12 months after the death of such Participant (but not beyond the
expiration date of such ISO Option), (B) if a Participant terminates his
employment as an employee with the Company or a subsidiary on account of
Retirement, such Participant may exercise any ISO Option which is otherwise
exercisable at any time within three months of such date of termination and
(C) if a Participant terminates his employment with the Company or a
subsidiary on account of incurring a Disability, such Participant may
exercise any ISO Option which is otherwise exercisable at any time within
12 months of such date of termination. If a Participant should die during
the applicable
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<PAGE>
three-month or 12 month period following the date of such Participant's
Retirement or Disability, then in such event, the rights of the personal
representative of such deceased Participant as such relate to any ISO
Options granted to such deceased Participant shall be governed in
accordance with this Subsection 4.2.3.
4.2.4 ACCELERATION OF OTHERWISE UNEXERCISABLE ISO OPTION ON
RETIREMENT, DEATH, DISABILITY OR OTHER SPECIAL CIRCUMSTANCES. The Board,
in its sole discretion, may permit (i) a Participant who terminates
employment as an employee with the Company or a subsidiary due to
Retirement or a Disability, (ii) the personal representative of a deceased
Participant, or (iii) any other Participant who terminates employment as an
employee with the Company or a subsidiary upon the occurrence of special
circumstances (as determined by the Board) to exercise and purchase (within
three months of such date of termination of employment as an employee or 12
months in the case of a disabled or deceased Participant) all or any part
of the shares of Stock subject to ISO Option on the date of the
Participant's Retirement, Disability, death, or as the Board otherwise so
determines, notwithstanding that all installments, if any, had not accrued
on such date.
4.2.5 NUMBER OF ISO OPTIONS GRANTED. Subject to the applicable
limitations contained in the Plan with respect to ISO Options, Participants
may be granted more than one ISO Option. In making any such determination,
the Plan Administrator shall obtain the advice and recommendation of the
officers of the Company or a subsidiary which have supervisory authority
over such Participants. The granting of an ISO Option under the Plan shall
not affect any outstanding ISO Option previously granted to a Participant
under the Plan.
4.2.6 NOTICE TO EXERCISE ISO OPTION. Upon exercise of an ISO Option,
a Participant shall give written notice to the Secretary of the Company, or
other officer designated by the Plan Administrator, at the Company's main
office in Oklahoma City, Oklahoma.
ARTICLE V
OPTIONS NOT QUALIFYING AS
INCENTIVE STOCK OPTIONS
5.1 NON-QUALIFYING OPTIONS. With respect to all or any portion of any
option granted under the Plan not qualifying as an "incentive stock option"
under Section 422 of the Code, such option shall be considered as a Stock
Option granted under this Plan for all purposes.
10
<PAGE>
EXHIBIT 5
DUNN SWAN & CUNNINGHAM
Attorneys and Counsellors At Law
2800 Oklahoma Tower
210 Park Avenue
(405)235-8318
Facsimile (405)235-9605
February 18, 1998
Board of Directors
Laboratory Specialists of America, Inc.
101 Park Avenue, Suite 810
Edmond, Oklahoma 73102
Gentlemen:
We have acted as counsel to Laboratory Specialists of America, Inc., an
Oklahoma corporation (the "Company"), in conjunction with the offering of an
aggregate of 425,000 shares of Common Stock, $.001 par value per share, of
the Company (the "Shares") to be issued upon exercise of stock options
granted under the Laboratory Specialists of America, Inc. 1994 Stock Option
Plan (the "Plan").
The offering of the Securities is more fully described in that certain
Registration Statement on Form S-8, filed by the Company with the United
States Securities and Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Act").
For purposes of this opinion, we have made such investigations as we
deem necessary or appropriate and have reviewed and considered among other
certificates, documents and materials the following:
(a) The Certificate of Incorporation of the Company;
(b) The Bylaws of the Company;
(c) A copy of the resolutions adopted by the Board of Directors of the
Company on February 18, 1998, as certified by the Secretary of the
Company;
(e) The manually signed Registration Statement;
(f) Form of certificate of the Common Stock of the Company; and
(g) The Certificate of Officers and Directors of Laboratory Specialists
of America, Inc. dated February 18, 1998.
In conducting our examination we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
certified copies. Based upon our examination and consideration of the
foregoing and upon our examination and
1
<PAGE>
consideration of such other documents, certificates, records, matters and
things as we have deemed necessary for the purposes hereof, we are of the
opinion as of the date hereof that:
1. The Company is duly organized and existing under the laws of the
State of Oklahoma;
2. All of the issued and outstanding shares of the Common Stock of the
Company have been legally issued, are fully paid and are not liable to
further call or assessment;
3. The 425,000 shares of Common Stock to be issued upon exercise of
stock options granted pursuant to the Plan, upon issuance and delivery
against payment therefor in accordance with the terms and conditions of the
stock options, will be legally issued, fully paid and not liable for further
call or assessment;
In arriving at the foregoing opinion, we have relied, among other
things, upon the examination of the corporate records of the Company and
certificates of officers and directors of the Company and of public
officials. We hereby consent to the use of this opinion in the Registration
Statement and all amendments thereto.
Very truly yours,
/s/ DUNN SWAN & CUNNINGHAM
2
<PAGE>
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports
dated March 7, 1997 included in Laboratory Specialists of America, Inc.'s
Form 10-KSB for the year ended December 31, 1996 and in the Form SB-2 (No.
333-30997), as declared effective by the Commission on September 9, 1997 and
to all references to our Firm included in this Registration Statement.
/S/Arthur Andersen LLP
Oklahoma City, Oklahoma,
January 28, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Registration
Statement of Laboratory Specialists of America, Inc. on Form S-8 of our
report dated March 7, 1997, on the statements of net assets of the Forensic
Drug Testing Division of Pathology Laboratories, Ltd. as of December 31, 1996
and 1995, and the related statements of divisional operations and divisional
cash flows for the years then ended, appearing in the Prospectus and
Registration Statement (No. 333-30997) of Laboratory Specialists of America,
Inc. on Form SB-2.
/S/Deloitte & Touche LLP
Jackson, Mississippi
January 29, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF DUNN SWAN & CUNNINGHAM
Dunn Swan & Cunningham, A Professional Corporation, hereby consents to
the use of its name in the Registration Statement.
/S/DUNN SWAN & CUNNINGHAM
A Professional Corporation
Oklahoma City, Oklahoma,
February 18, 1998
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that John Simonelli constitutes and
appoints Larry Howell and Michael E. Dunn, and each of them, his true and
lawful attorney-in-fact and agent, with all power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement,
including post-effective amendments thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission, granting unto same attorneys-in-fact and
agents, and each of them, 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 attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated February 18, 1998
/S/JOHN SIMONELLI
----------------------------------
John Simonelli
<PAGE>
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Larry E. Howell constitutes
and appoints John Simonelli and Michael E. Dunn, and each of them, his true
and lawful attorney-in-fact and agent, with all power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement,
including post-effective amendments thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission, granting unto same attorneys-in-fact and
agents, and each of them, 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 attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated February 18, 1998
/S/LARRY E. HOWELL
-----------------------------------
Larry E. Howell
<PAGE>
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Arthur R. Peterson, Jr.
constitutes and appoints John Simonelli, Larry E. Howell and Michael E. Dunn,
and each of them, his true and lawful attorney-in-fact and agent, with all
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to this
Registration Statement, including post-effective amendments thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting unto same
attorneys-in-fact and agents, and each of them, 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
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated February 18, 1998
/S/ARTHUR R. PETERSON, JR.
--------------------------------
Arthur R. Peterson, Jr.
<PAGE>
EXHIBIT 24.4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Robert A. Gardebled, Jr.
constitutes and appoints John Simonelli, Larry E. Howell and Michael E. Dunn,
and each of them, his true and lawful attorney-in-fact and agent, with all
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to this
Registration Statement, including post-effective amendments thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting unto same
attorneys-in-fact and agents, and each of them, 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
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated February 18, 1998
/S/ROBERT A. GARDEBLED, JR.
--------------------------------
Robert A. Gardebled, Jr.
<PAGE>
EXHIBIT 24.5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Jerome P. Welch constitutes
and appoints John Simonelli, Larry Howell and Michael E. Dunn, and each of
them, his true and lawful attorney-in-fact and agent, with all power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith with
the Securities and Exchange Commission, granting unto same attorneys-in-fact
and agents, and each of them, 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 attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated February 18, 1998
/S/JEROME P. WELCH
----------------------------------
Jerome P. Welch
<PAGE>
EXHIBIT 24.6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Michael E. Dunn constitutes
and appoints John Simonelli and Larry Howell, and each of them, his true and
lawful attorney-in-fact and agent, with all power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement,
including post-effective amendments thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission, granting unto same attorneys-in-fact and
agents, and each of them, 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 attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated February 18, 1998
/S/MICHAEL E. DUNN
-----------------------------
Michael E. Dunn
