As filed with the Securities and Exchange Commission
on May 20, 1997
Registration No
==================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
Form S-8
Registration Statement
Under
The Securities Act of 1933
Control Devices, Inc.
(Exact name of Registrant as specified in its charter)
Indiana 01-0490335
(State of Incorporation) (IRS Employer Identification No.)
228 Northeast Road
Standish, Maine 04084
(Address of Principal Executive Offices) (Zip Code)
Control Devices, Inc.
Employee Stock Purchase Plan
(Full title of the plan)
228 Northeast Road
Standish, Maine 04084
(Name and address of agent for service)
(217) 642-0300
(Telephone number, including area code, of agent for service)
Copies to:
Philip L. McCool, Esq.
Sommer & Barnard, PC
4000 Bank One Tower
Indianapolis, Indiana
46204
(317) 630-4000
__________________
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
each class Amount maximum maximum Amount of
of securities to be offering price aggregate registration
to be registered registered(1) per share offering fee
------------------ ----------- -------------- -----------------------
Common Shares,
No par value ..... 200,000 $11.9375(2) $2,387,500(2) $723.48
(1) In addition, pursuant to Rule 416(c) under the Securities
Act of 1933, this Registration Statement also covers an
indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described above.
(2) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) under the
Securities Act of 1933 on the basis of the average of the
high and low prices of the Common Shares reported on the
Nasdaq National Market on May 14, 1997.
==================================================================
Part II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference.
The documents listed below, and all documents filed by
registrant pursuant to Sections 13(a), 13(c) 14 and 15(d) of the
Securities Exchange Act of 1934 subsequent to the filing of this
Registration Statement and 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, are
deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996, filed with the Commission on
March 14, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997, filed with the
Commission on May 8, 1997; and
(c) The information contained in "Description of Capital
Shares" in the Registrant's Registration Statement on
Form S-1 (Reg. No. 333-09379) filed with the Securities
and Exchange Commission on August 1, 1996 is hereby
incorporated by reference.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
The validity of the issuance of the Common Shares registered
hereby will be passed upon for the Registrant by Sommer &
Barnard, PC, Indianapolis, Indiana, counsel for the Registrant.
Item 6. Indemnification of Directors and Officers.
Chapter 37 of the Indiana Business Corporation law, as amended
grants to each Indiana corporation broad powers to indemnify directors,
officers, employees or agents against expenses incurred in certain
proceedings if the conduct in question was found to be in good faith
and was reasonably believed to be in the corporation's best interest.
This statute provides, however, that this indemnification should not
be deemed exclusive of any other indemnification rights provided by the
articles of incorporation, by-laws, resolution or other authorization
adopted by a majority vote of the voting shares then issued and
outstanding. Section 7.02 of the Second Amended and Restated Code
of By-Laws of the Registrant read as follows:
Clause 7.021. Definitions. Terms defined in Chapter 37 of
the Indiana Business Corporation Law (IND. CODE Section 23-1-37, et
seq.) which are used in this Article 7 shall have the same
definitions for purposes of this Article 7 as they have in such
chapter of the Indiana Business Corporation Law.
Clause 7.022. Indemnification of Directors and Officers. The
Corporation shall indemnify any individual who is or was a director
or officer of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, partner or trustee of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise whether
or not for profit, against liability and expenses, including
attorneys fees, incurred by him in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and
whether formal or informal, in which he is made or threatened to be
made a party by reason of being or having been in any such
capacity, or arising out of his status as such, except (i) in the
case of any action, suit, or proceeding terminated by judgment,
order, or conviction, in relation to matters as to which he is
adjudged to have breached or failed to perform the duties of his
office and the breach or failure to perform constituted willful
misconduct or recklessness; and (ii) in any other situation, in
relation to matters as to which it is found by a majority of a
committee composed of all directors not involved in the matter in
controversy (whether or not a quorum) that the person breached or
failed to perform the duties of his office and the breach or
failure to perform constituted willful misconduct or recklessness.
The Corporation may pay for or reimburse reasonable expenses
incurred by a director or officer in defending any action, suit, or
proceeding in advance of the final disposition thereof upon receipt
of (i) a written affirmation of the director's or officer's good
faith belief that such director or officer has met the standard of
conduct prescribed by Indiana law; and (ii) an undertaking of the
director or officer to repay the amount paid by the Corporation if
it is ultimately determined that the director or officer is not
entitled to indemnification by the Corporation.
Clause 7.023. Other Employees or Agents of the Corporation.
The Corporation may, in the discretion of the Board of Directors,
fully or partially provide the same rights of indemnification and
reimbursement as hereinabove provided for directors and officers of
the Corporation to other individuals who are or were employees or
agents of the Corporation or who are or were serving at the request
of the Corporation as or is or was serving at the request of the
Corporation as employees or agents of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise whether or not for profit.
Clause 7.024. Nonexclusive Provision. The indemnification
authorized under Section 7.02 above is in addition to all rights to
indemnification granted by Chapter 37 of the Indiana Business
Corporation Law (IND. CODE Section 23-1-37, et seq.) and in no way
limits the indemnification provisions of such Chapter.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
--------- -----------
5 Opinion re: Legality (Since shares will be
purchased on the open market, no Opinion re:
Legality is required.)
23 Consent of Independent Accountants
24 Power of Attorney (included at page II-5)
99 Control Devices, Inc. Employee Stock Purchase Plan
Item 9. Undertakings.
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 (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and
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 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) If the Registrant is a foreign private issuer, to
file a post-effective amendment to the Registration Statement
to include any financial statements required by Section 210.3-19 of
this chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act
need not be furnished, provided that the Registrant includes
in the prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph
(a)(4) and other information necessary to ensure that all
other information in the prospectus is at least as current as
the date of those financial statements.
(5) For the purposes of determining any liability under
the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan pursuant to section
15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the 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.
(6) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers, and controlling persons of the Registrant
pursuant to the foregoing provisions described in Item 15, or
otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirement
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 Standish, State of Maine, on the
16th day of May, 1997.
Control Devices, Inc.
By: /s/ Bruce D. Atkinson
--------------------------
Bruce D. Atkinson
Chief Executive Officer
The Plan. Pursuant to the requirements of the Securities Act,
the Plan Administrator has duly caused this Registration Statement
to be signed on its behalf by the Undersigned, thereunto duly
authorized, in the city of Standish, State of Maine, on the 16th
day of May, 1997.
Control Devices, Inc.
By: /s/ Jeffrey G. Wood
___________________________
Jeffrey G. Wood
Plan Administrator
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Bruce D. Atkinson
and Jeffrey G. Wood, and each of them, his true and lawful
attorney-in-fact and agent with full power of substitution for him
in his name, place and stead, in any and all capacities to sign any
and all amendments (including pre-effective and post effective
amendments) to this Registration Statement, and to file the same
with all exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission, grants unto
said attorneys-in-fact and agents 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 as to all intents and
purposes as he might or could do in person, and hereby ratifies and
confirms all that said attorneys-in-fact and agents or their or
his substitute or substitutes any lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
----------------- ------------ -----------
/s/ Jeffrey G. Wood Chief Financial Officer May 16, 1997
- ----------------------- Principal Financial Officer and
Jeffrey G. Wood Principal Accounting Officer
/s/ Bruce D. Atkinson Chief Executive Officer May 16, 1997
- ----------------------- and Director
Bruce D. Atkinson Principal Executive Officer
/s/ Ralph R. Whitney, Jr. Director and May 16, 1997
- ------------------------ Chairmand of the Board
Ralph R. Whitney, Jr.
/s/ Charles M. Brennan, III Director May 16, 1997
- ---------------------------
Charles M. Brennan, III
- --------------------------- Director
John D. Cooke
/s/ Jams O. Futterknecht, Jr. Director May 16, 1997
- ---------------------------
James O. Futterknecht, Jr.
- --------------------------- Director
Alan I. Mossberg
/s/ John M. Ramey Director May 16, 1997
- ---------------------------
John M. Ramey
/s/ Glenn Scolnik Director May 16, 1997
- ---------------------------
Glenn Scolnik
INDEX TO EXHIBITS FILED
TO REGISTRATION STATEMENT ON
FORM S-8 OF CONTROL DEVICES, INC.
Sequentially
Exhibit Numbered
No. Description Page
-------- -------------------- -----------
5 Opinion re: Legality (Since shares will be
purchased on the open market, no Opinion
re: Legality is required.)
23 Consent of Independent Accountants
24 Power of Attorney (included at page II-5)
99 Control Devices, Inc. Employee Stock
Purchase Plan
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 31, 1997
included in the Control Devices, Inc. Form 10-K for the year ended December
31, 1996 and to all references to our firm included in this registration
statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Stamford, Connecticut
May 16, 1997
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Bruce D. Atkinson and Jeffrey G. Wood, and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution for him in his name, place and stead, in any and all
capacities to sign any and all amendments (including pre-effective and post
effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto and other documents in connection therewith with
the Securities and Exchange Commission, grants unto said attorneys-in-fact
and agents 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
as to all intents and purposes as he might or could do in person, and hereby
ratifies and confirms all that said attorneys-in-fact and agents or their
or his substitute or substitutes any lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
----------------- ------------ -----------
/s/ Jeffrey G. Wood Chief Financial Officer May 16, 1997
- --------------------------- Principal Financial Officer and
Jeffrey G. Wood Principal Accounting Officer
/s/ Bruce D. Atkinson Chief Executive Office May 16, 1997
- --------------------------- and Director
Bruce D. Atkinson Principal Executive Officer
/s/ Ralph R. Whitney, Jr. Director and May 16, 1997
- --------------------------- Chairmand of the Board
Ralph R. Whitney, Jr.
/s/ Charles M. Brennan, III Director May 16, 1997
- ---------------------------
Charles M. Brennan, III
- --------------------------- Director
John D. Cooke
/s/ Jams O. Futterknecht, Jr. Director May 16, 1997
- ---------------------------
James O. Futterknecht, Jr.
- --------------------------- Director
Alan I. Mossberg
/s/ John M. Ramey Director May 16, 1997
- ---------------------------
John M. Ramey
/s/ Glenn Scolnik Director May 16, 1997
- ---------------------------
Glenn Scolnik
PREAMBLE
Effective as of January 1, 1997, Control Devices, Inc.
adopts this Employee Stock Purchase Plan ("Plan") for its
employees.
This Plan shall be known as the CONTROL DEVICES, INC.
EMPLOYEE STOCK PURCHASE PLAN. The purpose of the Plan is to enable
employees to purchase Control Devices, Inc. Common Shares through
payroll deductions.
NOW, THEREFORE, effective as of January 1, 1997, the
provisions of this Plan is adopted by the Company as set forth
hereinafter.
ARTICLE I
Definitions
The following terms when used herein, unless otherwise
expressly provided and/or unless the context clearly indicates
otherwise, shall have the following respective meanings:
1.01 Board or Board of Directors. The term "Board" or "Board
of Directors" shall mean the Board of Directors of Control Devices,
Inc.
1.02 Code. The term "Code" shall mean the Internal Revenue
Code of 1986, as amended.
1.03 Committee. The term "Committee" shall mean the Plan
Administrative Committee appointed by the Board of Directors of the
Company to administer the Plan.
1.04 Company. The term "Company" shall mean Control Devices,
Inc., an Indiana Corporation.
1.05 Compensation. The term "Compensation" shall mean the
amount paid by the Company or any designated subsidiary of the
Company to an Employee as remuneration for services rendered, and
reportable as income by the Employee for federal income tax
purposes, including commissions, bonuses, and overtime payments,
but exclusive of payments or benefits not paid directly to the
Employee.
1.06 Designated Subsidiaries. The term "Designated
Subsidiaries" shall mean the Subsidiaries which have been
designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
1.06 Effective Date. The term "Effective Date" shall mean
January 1, 1997.
1.07 Employees. The term "Employee" or "Employees" shall
mean all employees of the Company (or any Subsidiary of the
Company) who are in an eligible class specified in this Plan.
1.08 Employee Account. The term "Employee Account" shall
mean the book account to which Payroll Deductions are credited.
1.09 Entry Date. The term "Entry Date" shall mean the first
trading day each offering period. Unless otherwise subsequently
changed by the Company or the Committee, there will be four (4)
Entry Dates under this Plan; January 1, April 1, July 1, and
October 1. Provided, however, that the first Entry Date under this
Plan shall be such date as is selected by the Committee between
January 1, 1997 and March 30, 1997.
1.10 Fair Market Value. The term "Fair Market Value" shall
be determined as follows:
(a) NASDAQ. If the Common Stock is not at the time
listed or admitted to trading on any stock exchange, but is traded
in the over-the-counter market, the Fair Market Value will be the
average between the reported high price and the reported low price
of one share of Common Stock on the date in question in the over-the-counter
market, as such prices are reported by the National Association of
Securities Dealers through its NASDAQ system or any successor system.
(b) Stock Exchange. If the Common Stock is at the time
listed or admitted to trading on any stock exchange, then the Fair
Market Value will be the average between the reported high price
and the reported low price of one share of Common Stock on the date
in question on the stock exchange that is the primary market for
the stock, as such prices are officially quoted on such exchange.
(c) No Listing: No Stock Exchange. If the Common Stock
is at the time neither listed nor admitted to trading on any stock
exchange nor traded in the over-the-counter market, or if the
Committee determines that neither subparagraph (a) nor (b) above
reflects Fair Market Value of the stock, then the Fair Market Value
will be determined by the Committee after taking into account such
factors as the Committee deems appropriate.
1.11 Offering Period. The term "Offering Period" shall mean,
subject to the discretion of the Board, a period of up to 24 months
during which Payroll Deductions are collected and applied to the
purchase of Company Stock. The Board shall have the power to
change the duration of the Offering Periods with respect to future
offerings with out shareholder approval if such change is announced
at least 15 days prior to the scheduled beginning of the first
Offering Period to be affected. Unless and until otherwise
determined by the Board, Offering Periods shall be three-month
periods, and shall run concurrently with Purchase Periods.
1.12 Participant. The term "Participant" shall mean an
Employee who meets the eligibility requirements of this Plan and
who elects to participate in this Plan.
1.13 Payroll Deduction. The term "Payroll Deduction" shall
mean amounts withheld from an Employee's compensation at his or her
election which are credited to the Employee's Account for purchase
of Company Stock hereunder.
1.14 Plan. The term "Plan" shall mean the CONTROL DEVICES,
INC. EMPLOYEE STOCK PURCHASE PLAN, created hereunder.
1.15 Plan Administrator. The term "Plan Administrator" shall
mean the Committee appointed by the Board of Directors of the
Company to administer the Plan, or such other person or entity
which may be subsequently appointed by the Board of Directors of
the Company as a successor Plan Administrator.
1.16 Purchase Date. The term "Purchase Date" shall mean the
last Trading Day of each Purchase Period.
1.17 Purchase Period. The term "Purchase Period" shall mean
the approximately three month period commencing after one Purchase
Date and ending with the next following Purchase Date, except that
the first Purchase Period of any Offering Period shall commence on
the Entry Date and end with the next following Purchase Date.
1.18 Purchase Price. The term "Purchase Price" shall mean an
amount equal to a designated percentage of the Fair Market Value of
a share of Company Stock on the Purchase Date. The designated
percentage shall be 85% unless otherwise determined by the Board.
In no event shall the designated percentage be less than 85%.
1.19 Stock or Company Stock. The term "Stock" or "Company
Stock" shall mean Control Devices, Inc. no par value common shares.
1.20 Stock Certificate. The term "Stock Certificate" shall
mean a certificate issued for Company Stock purchased under this
Plan.
1.21 Stock Rights. The term "Stock Rights" shall mean all
rights attributable to owning Company Stock as provided hereunder
including, but not limited to dividend rights and voting rights.
1.22 Subsidiary. The term "Subsidiary" shall mean a
corporation, domestic or foreign, of which not less than 50% of the
voting shares are held by the Company or a Subsidiary, whether or
not such corporation now exists or is hereafter organized or
acquired by the Company or a Subsidiary.
1.23 Trading Day. The term "Trading Day" shall mean a day on
which national stock exchanges and the National Association of
Securities Dealers Automated Quotation (NASDAQ) System are open for
trading.
ARTICLE II
Term of Plan and Stock to be Issued
2.01 Purpose. The following constitutes the provisions of
the Control Devices, Inc. Employee Stock Purchase Plan, subject to
approval of the Company's shareholders. The purpose of this Plan
is to provide Employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Company Stock through
accumulated Payroll Deductions. It is the intention of the Company
to have the Plan qualify as an "Employee Stock Purchase Plan" under
Code Section 423. The provisions of the Plan, accordingly, shall
be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code. It
is intended that the Stock will be purchased either directly from
the Company or on the open market, assuming such purchase can be
done without adverse impact on future "pooling of interest" methods
of acquisition. The shares purchased from the Company will be from
the Company's authorized but unissued shares or treasury shares.
2.02 Term of Plan. This Plan will continue in existence
until terminated by the Board of Directors of the Company.
2.03 Stock to be Issued. The initial number of shares of
Company Stock which may be issued under this Plan shall be 200,000
shares. The Board of Directors of the Company in its discretion
may authorize the issuance of additional shares under this Plan at
any subsequent date by appropriate resolutions adopted by the Board
and Shareholder approval.
2.04 Adjustments. The aggregate number of shares of Stock
offered under the Plan and the price of shares that any Participant
has elected to purchase shall be adjusted proportionately by the
Committee for any increase or decrease in the number of outstanding
shares of Stock resulting from a subdivision or consolidation of
shares, the payment of a stock dividend, any other increase or
decrease in such shares effected without receipt or payment of
consideration by the Company or the distribution of the shares of
a Subsidiary to the Company's shareholders.
2.05 Reorganizations. In the event of a dissolution or
liquidation of the Company, or a merger or consolidation to which
the Company is a constituent corporation, the Plan shall terminate
unless the plan of merger, consolidation or reorganization provides
otherwise, and all amounts that have been withheld but not yet
applied to purchase Stock hereunder shall be refunded, without
interest. The Plan shall in no event be construed to restrict in
any way the Company's right to undertake a dissolution,
liquidation, merger, consolidation or other reorganization.
ARTICLE III
Eligibility
3.01 Eligibility Requirements. Employees of the Company (or
any Designated Subsidiary) will be eligible to participate in this
Plan on the Entry Date immediately following completion of one full
year of employment, provided the Employee is employed as a full-time
regular employee on that date. The Committee will make the
final decision as to the eligibility date of any particular
Employee. For the purposes of the Plan, the employment
relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by
the Company. Where the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship will be deemed
to have terminated on the 91st day of such leave.
The Committee will have the authority to make a final
determination as to whether or not a particular Employee is a full-time
regular Employee who is eligible under this Plan. As a general rule, an
Employee who normally completes fewer than 1,000 hours of active
employment per year, and/or whose customary employment is for not more
than five months in any calendar year will not be considered a regular
full-time Employee who is eligible under this Plan.
3.02 Election to Participate. An eligible Employee may
become a Participant in the Plan by completing an enrollment form
authorizing Payroll Deductions in the form provided by the Company
and filing it with the Company's payroll office prior to the
applicable Entry Date. Payroll Deductions for a Participant shall
commence on the first payroll period following the Entry Date and
shall end on the last payroll period in the Offering Period, unless
sooner terminated by the Participant as provided in Section 4.03.
Participation in this Plan will be optional by eligible
Employees. An Employee who decides not to participate on any
particular Entry Date may later decide to participate on any
subsequent Entry Date. Likewise, an Employee who decides to
participate in this Plan may subsequently decide to discontinue
participation as of any Entry Date, and likewise, resume
participation as of any subsequent Entry Date. No Employee shall
be required to participate in this Plan.
3.03 Eligibility Determinations. Any provisions of the Plan
to the contrary notwithstanding, no Employee shall be granted a
purchase right under the Plan (i) if, immediately after the grant,
such Employee (or any other person whose stock would be attributed
to such Employee pursuant to Section 424(d) of the Code) would own
stock and or hold outstanding purchase rights to purchase stock
possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any
Subsidiary of the Company, or (ii) which permits his or her rights
to purchase stock under all employee stock purchase plans of the
Company and its Subsidiaries to accrue at a rate which exceeds
$25,000 worth of stock (determined at Fair Market Value of the
shares at the time such purchase right is granted) for each
calendar year in which such purchase right is outstanding at any
time.
ARTICLE IV
Purchase and Sale of Stock and Payroll Deduction Procedures
4.01 Purchase of Stock. Company Stock may be purchased under
this Plan only through Payroll Deductions. The Company Stock will
be purchased either directly from the Company or on the open
market. Shares purchased directly from the Company will be from the
Company's authorized but unissued shares or treasury shares as
determined by the Company. Such Stock will be purchased on each
Purchase Date during the year.
4.02 Valuation of Stock - Purchase Price. The price to be
paid for Company Stock purchased hereunder will be eighty-five
percent (85%) of the closing price for Company Stock on the NASDAQ
Stock Exchange on each of the Purchase Dates. Provided, however,
the price paid for such Stock may not be less than the Book Value
of such Stock as of the last day of the prior quarter. (Example:
On the January 2nd Purchase Date, the Book Value to be used will be
the Book Value of the Company reported for the particular quarter
(March 31, June 30, September 30 or December 31) on reports filed
with the Securities and Exchange Commission (or as reported to
shareholders if not otherwise reported to the Securities and
Exchange Commission) ("Book Value"). If Book Value for such prior
quarter exceeds eighty-five percent (85%) of the closing market
price of Company Stock on the particular Purchase Date, the
Purchase Price will be the Book Value of such Stock. Provided,
however, no purchase will be made until the next Purchase Date if
such Book Value exceeds the closing price of Company Stock on the
NASDAQ Stock Exchange as of the particular Purchase Date. In no
event shall the Purchase Price be less than the lower of: (i) 85%
of the Fair Market Value of a share of Company Stock on the Entry
Date, or (ii) 85% of the Fair Market Value of a share of Company
stock on the Purchase Date.
4.03 Payroll Deduction Procedures. The Committee shall
determine the exact Payroll Deduction procedures to be used under
the Plan. At the time the Participant files an enrollment form, he
or she shall elect to have Payroll Deductions made on each payday
during the Offering Period in and amount of between 1% and 10% of
his or her Compensation. The aggregate of such Payroll Deductions
during any Offering Period shall not exceed 10% of the
Participant's Compensation paid during that Offering Period.
A Participant may increase or decrease the rate of his or her
Payroll Deductions during a Purchase Period by filing with the
Company a new enrollment form authorizing a change in the Payroll
Deduction rate. The change in rate will generally be effective
with the first payroll period following such advance notice period
as the Company shall specify. A Participant's enrollment form
shall remain in effect for successive Purchase Periods and Offering
Periods unless terminated as provided in this Section 4.03. The
Board is authorized to limit the number of Participant rate changes
during any Offering Period.
Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code, a Participant's Payroll
Deduction may be decreased to 0% at such time during the Purchase
Period which is scheduled to end during the current calendar year
(the "Current Purchase Period") that the aggregate of all Payroll
Deductions which were previously used to purchase Stock under the
Plan in a prior Purchase Period which ended during that calendar
year plus all Payroll Deductions accumulated with respect to the
Current Purchase Period equal $22,500. The Company may provide
either (i) that Payroll Deductions shall recommence at the rate
provided in the Participant's enrollment form at the beginning of
the first Purchase Period scheduled to end in the following
calendar year, unless terminated by the Participant as provided in
this Section, or (ii) that participation shall recommence only upon
filing a new enrollment form.
On or before March 15, June 15, September 15 or December 15 of
any year (or on such other dates as the Committee may designate
from time to time), Employees may elect to withdraw all but not
less than all their Payroll Deductions credited to his or her
Employee Account and not yet used to purchase Company Stock, and
have those amounts returned to him or her on the next Purchase
Date. Such Participant's purchase right will automatically
terminate, and participation will not resume until the Participant
files another enrollment form. The Committee will establish
appropriate procedures for implementation of such election. There
will be no interest accrued on payroll deductions.
4.04 Purchase Rights On the Enrollment Date of each Offering
Period, each eligible Employee participating in the Offering Period
shall be granted a purchase right to purchase on each Purchase Date
during the Offering Period, as many shares (including fractional)
of Company Stock as are possible based on the amount of cash
credited to each such Employee's Account.
4.05 Issuance of Stock Certificates. Subject to such
reasonable procedures as the Committee may establish from time to
time, a Participant may make a written or phone request for actual
issuance of a Stock Certificate for all of the whole shares of
Stock in his or her Employee Account. As soon as feasible after
such request, such Stock Certificate will be issued to the
Participant.
Likewise, in the event of termination of employment, within a
reasonable time after such termination, generally 30 days after the
end of the calendar quarter in which termination occurs, the
Employee or his or her designated beneficiary, as the case may be,
will be issued a Stock Certificate with the full number of shares
of Company Stock credited to such Participant in his or her
Employee Account. Likewise, the Employee or his or her designated
beneficiary will receive cash in lieu of any fractional shares held
in the Employee's Account. Finally, any Payroll Deductions not yet
applied to the purchase of Company Stock will be refunded in cash.
4.06 Dividends and Voting. To the extent that Stock
Certificates have actually been issued to an Employee, any
dividends shall be paid directly to the Employee. If Stock
Certificates have not been issued, but the shares are credited to
an Employee's Account, any dividends will be credited to such
Employee's Account and will be used to purchase additional shares
of Company Stock as of the next Purchase Date.
Any Employee who becomes an owner of Company Stock under this
Plan will be entitled to vote such Company Stock. Such Employees
will receive a form of proxy each year to enable them to exercise
their voting rights.
4.07 Sale of Stock by Employees. An Employee who owns
Company Stock under this Plan will have the right to sell such
Stock on a daily basis. If a Stock Certificate has been issued to
the Employee, the Employee may sell such Shares through any broker
of his or her choice subject to applicable securities laws.
If a Stock Certificate has not actually been issued to an
Employee hereunder, but the Employee has Company Stock in the
Employee's Account hereunder, the Employee (subject to such
reasonable procedures as the Committee may establish from time to
time) will have the following choices if he or she desires to sell
the Company Stock:
1. The Employee may make a written request accompanied
by a $15 check for actual issuance of a Stock Certificate, which
will be issued to the Employee as soon as feasible. The Employee
may then sell such Stock in any manner that the Employee chooses;
or
2. The Employee may request a sale of all of the shares
of Company Stock in the Employee's Account by sending a written
request to such individual or entity as is designated by the
Committee from time to time. Any requested sales will occur within
five (5) business days after such written request is received by
the Committee and will be sold through a broker selected by the
Committee. Brokerage commissions and transaction fees will be
deducted from the sales price.
ARTICLE V
Termination of Employment/Payment of Benefits
5.01 Termination of Employment. Within a reasonable time
after termination of employment, generally shortly after the end of
the calendar quarter in which termination occurs, the Participant
will receive a Stock Certificate for all full shares of Company
Stock credited to the Employee's Account. The Employee also will
receive any additional cash that is credited to the Employee's
Account.
5.02 Beneficiary Designation. Each Participant shall be
entitled to designate one or more beneficiaries entitled to receive
all Stock Certificates, cash in lieu of fractional shares and all
accrued Payroll Deductions held in the Employee's Account in the
event of the death of the Employee.
5.03 Unclaimed Benefits. If any payments directed to be made
from the Plan are not claimed, the Committee shall dispose of such
payments as the Committee determines.
5.04 Payment of Benefits on Behalf of Minor or Legal
Incompetent. In the event that any benefit under the Plan is
payable to a minor or other legally incompetent person, the
Committee shall not be required to seek the appointment of a
guardian, but shall be authorized to pay the same to any person
having custody of such minor or incompetent person, to pay to such
minor or incompetent person without the intervention of a guardian,
or to pay the same to a legal guardian of such minor or incompetent
person if one has already been appointed.
5.05 Non-Alienation of Benefits. Unless otherwise required
by law, none of the benefits, payments, proceeds, claims or rights
of any Participant or beneficiary hereunder shall be subject to any
claim of any creditor of any Participant or beneficiary, and in
particular, the same shall not be subject to attachment or
garnishment or other legal process. No Participant or beneficiary
shall have any rights to alienate, pledge, encumber, or assign any
of the benefits or payments or proceeds, which he or she may expect
to receive, continentally or otherwise, under the Plan.
ARTICLE VI
Plan Administration
6.01 Appointment of Committee as Plan Administrator. The
Board of Directors will appoint a Plan Administrative Committee
consisting of three (3) individuals, unless a different number of
individuals is specified by the Board from time to time. Such
Committee members will continue to serve on the Committee until and
unless replaced by the Board or unless one or more of such members
resigns by written instrument. At any time, the Board may appoint
new or replacement members for the Committee.
At any time, the Board may appoint any other entity or persons
to act as Plan Administrator in place of the Committee. In the
event that another entity is appointed as Plan Administrator, such
entity will take over the duties of the Committee hereunder.
6.02 Administration of the Plan. As Plan Administrator, such
Committee will interpret Plan provisions, administer the day-to-day
activities of the Plan, establish appropriate procedures for
efficient and economical operation of the Plan and appoint advisers
as necessary to help administer the Plan. As necessary, the
Committee shall establish such procedures and rules as are
appropriate to carry out the purposes of this Plan.
6.03 Appointment of Advisers. As Plan Administrator, the
Committee shall have the power to appoint such advisers as are
deemed appropriate by the Committee to assist the Committee in
administering the Plan.
6.04 Administrative Costs. Except to the extent that the
Company or the Committee determines to charge specific fees
directly to Participants, the Company shall pay any costs involved
with respect to administration of the Plan, including any costs
associated with employment of outside advisers to assist in
administering or interpreting the Plan.
6.06 Responsibilities of Company, and Committee. It is
recognized that the Company, and the Committee, have certain
responsibilities hereunder, but only with respect to those specific
powers, duties, responsibilities, and obligations as are
specifically given them under this Plan. Each of the parties
warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of
this Plan. Furthermore, each of the parties may rely upon any such
direction, information or action of another party as being proper
under this Plan and is not required under this Plan to inquire into
the propriety of any such direction, information, or action. It is
intended that each of the parties shall be responsible for the
proper exercise of its own powers, duties, responsibilities, and
obligations under this Plan and shall not be responsible for any
act or failure to act of another party. The parties shall
discharge the specific powers, duties, responsibilities, or
obligations given them under this Plan solely in the interests of
participants and their beneficiaries and for the exclusive purpose
of providing benefits to participants and their beneficiaries and
defraying reasonable expenses of administering the Plan, and with
the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
ARTICLE VII
Amendment or Termination of Plan
7.01 Amendment and Termination of Plan. This Plan may be
amended or terminated at any time by the Board of Directors of the
Company, except that no Plan termination can affect purchase rights
previously granted. However, an Offering Period may be terminated
by the Board on any Purchase Date if the Board determines that the
termination of the Plan is in the best interests of the Company and
its shareholders. No amendment may make any change in any purchase
right theretofore granted which adversely affects the rights of any
Participant without the consent of the affected participants.
ARTICLE VIII
Miscellaneous Provisions
8.01 Conditions of Issuance of Shares. Certain officers,
directors, other affiliates and insiders may be restricted by
various securities laws with respect to disposition of their Stock.
Shared shall not be issued with respect to a purchase right unless
the exercise of that option, and the issuance and delivery of those
shares complies with all applicable provisions of law, and such
issuance will be subject to the approval of counsel for the Company
with respect to such compliance.
8.02 Indemnification. To the extent permitted by applicable
laws, the Company and Committee shall be indemnified and saved
harmless with respect to liability or claims of liability to which
they may be subjected by reason of their good faith compliance with
any duties and responsibilities imposed upon them by this Plan.
8.03 Liabilities Mutually Exclusive. Except to the extent
expressly provided by applicable laws, each party (the Company and
Committee) hereunder shall only be responsible for its own act or
omissions.
8.04 Authority of Committee. The Committee shall have
complete authority to determine the existence, nonexistence,
nature, and amount of the rights and interests of all persons in
the Plan.
8.05 Persons Authorized to Act on Behalf of Company.
Whenever the Company, under the terms of this Plan, is permitted or
required to do or perform any matter, act, or thing, it shall be
done and performed by any duly authorized officer of the Company.
8.06 Applicable Law and Severability of Plan Provisions.
Except to the extent preempted by the laws of the United States,
this Agreement shall be construed according to the laws of the
State of Indiana, and all provisions hereof shall be administered
according thereto and its validity shall be determined according to
the laws of such State.
If any provision of this Plan is held to be illegal or
invalid, such illegality or invalidity shall not affect the
remaining provisions of this Plan, and they shall be construed and
enforced as if such illegal or invalid provision had never been
inserted therein.
8.07 Grammatical Interpretations. Whenever any words are
used herein in the masculine gender, they shall be construed as
though they were also used in the feminine gender in all cases
where they would so apply, and wherever any words are used herein
in the singular form, they shall be construed as though they were
also used in the plural form in all cases where they would so
apply.
8.08 Multiple Counterparts. This Agreement is signed in
multiple counterparts, each of which shall be deemed an original.
8.09 Titles. The titles of the Articles and sections herein
are for convenience only and shall have no bearing on the
interpretation of this Plan.
8.10 Use of Funds. All Payroll Deductions received or held
by the Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to
segregate such Payroll Deductions.
8.11 Reports. Statements of account will be given to
participating Employees at least annually, which statements will
set forth the amounts of Payroll Deductions, the Purchase Price,
the number of shares purchased and the remaining cash balance, if
any.
8.12 No Rights as an Employee. Nothing in this Plan shall be
construed to give any person the right to remain in the employee of
the Company or one of its Subsidiaries. The Company and each
Designated Subsidiary reserves the tight to terminate the
employment of any person at any time, with or without cause.
IN WITNESS WHEREOF, the parties hereto have caused this Plan
to be signed on the ______ day of __________________ 1997, to be
effective as of .
CONTROL DEVICES, INC.
By:______________________
Title:___________________
By:______________________
Title:___________________
