<PAGE>
Registration No. 33-
-----------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------------------------
CLEAN DIESEL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(Jurisdiction of Incorporation or Organization)
06-1393453 06901
(I.R.S. Employer Identification No) (Zip Code)
300 Atlantic Street
Suite 702
Stamford Connecticut
(Address of Principal Executive Offices)
THE 1994 INCENTIVE PLAN OF CLEAN DIESEL TECHNOLOGIES, INC.
(Full title of plan)
-----------------------------------------
Charles W. Grinnell, Esq.
1055 Washington Blvd. - 5th Floor
Stamford, CT 06901
(Name and address of agent for service)
(203) 363-7105
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Title of Shares Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered be Registered Offering Price Per Aggregate Registration Fee
Share Offering Price
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 312,500 $3.18(1) $992,269.50(1) $300.69
par value, $0.05
per share
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based upon the following shares and exercise prices, 62,500 shares at
$0.20, 62,500 shares at $2.00, 37,500 shares at $2.50, 5,000 shares at
$6.50, 54,450 shares at $6.82, 5,000 shares at $5.63, 60,000 shares at
$4.50, and, estimated solely for the purpose of computing the
registration fee, 25,550 shares at $2.31 being the average of the high
and low prices as reported on the NASDAQ (small capitalization) system
on November 25, 1996.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in the
registration statement:
(a) The registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934;
(b) All other reports filed by the registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act subsequent to December 31, 1995;
(c) The description of the common stock contained in the registrant's
registration statement on Form S-1 under the Securities Act of 1933 (File No.
33-95840) including any amendment or report filed for the purpose of updating
such description.
All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Securities and 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 the
registration statement and to be a part thereof from the date of filing such
documents.
Item 5. Interests of Named Experts and Counsel
Charles W. Grinnell, counsel to the registrant who has issued an
opinion as to the validity of the common shares covered by this registration
statement, is a director and officer of the registrant, owns 7,842 of
registrant's common shares and holds options to purchase 12,000 common shares
covered by this registration statement.
Item 6. Indemnification of Directors and Officers.
Pursuant to Article 9 of the Articles of Incorporation of the
registrant, directors of the registrant are, to the fullest extent permitted
by the laws of Delaware, not personally liable to the registrant or its
shareholders for monetary damages for breach of fiduciary duty as directors.
Also, pursuant to Article 10 of the registrant's Articles of
Incorporation, the registrant shall indemnify directors and employees of the
registrant to the fullest extent permitted by the laws of Delaware against
liability imposed or incurred by such person in any pending or threatened
-1-
<PAGE>
action, suit or proceeding and is authorized to purchase and maintain insurance
to protect such persons from expense or liability incurred by them in such
capacity or arising out of their status.
Item 8. Exhibits.
4.1 Certificate of Incorporation of registrant is
incorporated by reference to Exhibit No. 3 (i)
to the registrant's Registration Statement
on Form S-1 (File No. 33-95840).
4.2 The 1994 Incentive Plan of Clean Diesel
Technologies, Inc. as amended through August 8, 1996.
4.3 Form of Option Agreement under the 1994
Incentive Plan of Clean Diesel Technologies, Inc.
5.0 Opinion of Charles W. Grinnell, Esq.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Charles W. Grinnell, Esq. (included
in opinion filed as Exhibit 5.0).
24.0 Powers of Attorney in favor of Ralph E. Bailey,
Kent D.S. Durr, John A. de Havilland, Jeremy D. Peter-
Hoblyn, Charles W. Grinnell, Scott M. Schecter
and James M. Valentine (included on signature pages).
Item 9. Undertakings.
The 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 (the "Act");
(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;
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<PAGE>
provided, however, that paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or 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 Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) That for the purposes of determining any liability under the Act,
each filing of the registrant's annual report pursuant to Section 13(a) or
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.
(5) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 6 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 assserted 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.
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<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 the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, therunto
duly authorized, in the City of Stamford, Connecticut, on November 27, 1996.
CLEAN DIESEL TECHNOLOGIES, INC
By /s/ Jeremy D. Peter-Hoblyn
----------------------------------
Jeremy D. Peter-Hoblyn
President and Chief Executive Officer
Each person whose signature appears below constitutes and
appoints Jeremy D. Peter-Hoblyn and Charles W. Grinnell, and each of them, as
his or her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments to this
registration statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto
said attorney-in fact and agent full power and authority to do and perform
each act and thing requisite and necessary to be done, as fully to all intents
and purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons on
November 27, 1996 in the capacities indicated.
Signature Title
/s/ J.D. Peter-Hoblyn President, Chief Executive Officer
- ---------------------------- and Director (Principal Executive
Jeremy D. Peter-Hoblyn Offcer)
/s/ Scott M. Schecter Vice President, Treasurer and Chief
- ---------------------------- Financial Officer (Principal
Scott M. Schecter Financial and Accounting Officer)
/s/ Ralph E. Bailey Chairman of the Board and Director
- ----------------------------
Ralph E. Bailey
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<PAGE>
/s/ John A. de Havilland Director
- ----------------------------
John A. de Havilland
/s/ Kent D.S. Durr Director
- ----------------------------
Kent D. S. Durr
/s/ James M. Valentine Executive Vice President, Chief
- ----------------------------- Operating Officer and Director
James M. Valentine
/s/ Charles W. Grinnell Vice President, General Counsel,
- ----------------------------- Corporate Secretary and Director
Charles W. Grinnell
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<PAGE>
EXHIBIT INDEX
4.1 Certificate of Incorporation of registrant is
incorporated by reference to Exhibit No. 3 (i)
to the registrant's Registration Statement
on Form S-1 (File No. 33-95840).
4.2 The 1994 Incentive Plan of Clean Diesel
Technologies, Inc. as amended through August 8, 1996.
4.3 Form of Option Agreement under the 1994
Incentive Plan of Clean Diesel Technologies, Inc.
5.0 Opinion of Charles W. Grinnell, Esq.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Charles W. Grinnell, Esq. (included
in opinion filed as Exhibit 5.0).
24.0 Powers of Attorney in favor of Ralph E. Bailey,
Kent D.S. Durr, John A. de Havilland, Jeremy D. Peter-
Hoblyn, Charles W. Grinnell, Scott M. Schecter
and James M. Valentine (included on signature pages).
<PAGE>
Exhibit 4.2
CLEAN DIESEL TECHNOLOGIES, INC.
1994 INCENTIVE PLAN
As amended through August 8, 1996
<PAGE>
The 1994 Incentive Plan of Clean Diesel Technologies, Inc.
As amended through August 8, 1996
Index Page
1. Purpose and Effective Date 1
2. Definitions 1
3. Administration 3
3.1 Committee 3
3.2 Effect of Determinations 4
4. Eligibility 4
5. Shares Subject to This Plan 4
5.1 Maximum Number of Shares 4
5.2 Share Accounting 4
6. Awards 5
6.1 Options 5
6.2 Stock Appreciation Rights 7
6.3 Restricted Shares 8
6.4 Performance Awards 9
6.5 Bonuses 10
6.6 Other Awards 12
7. Adjustments Upon Changes in Capitalization 12
8. Change in Control 13
8.1 Definition of Change in Control 13
8.2 Effect of Change in Control 15
9. Relationship of the Plan to Benefit Plans 15
10. Effect of the Plan on Right to Continued Employment
and Interest in Particular Property 15
11. Withholding Taxes and Deferrals 16
11.1 Cash Withholding 16
11.2 Share Withholding 16
11.3 Deferrals 16
12. Compliance With Applicable Legal Requirements 17
13. Amendments 17
13.1 Plan Amendments 17
13.2 Award Amendments 17
13.3 Rights of Participants 17
13.4 Rule 16b-3 18
14. Miscellaneous Provisions 18
14.1 Awards in Various Countries 18
14.2 Transferability 18
14.3 Cancellation of Awards 18
14.4 Arbitration; Governing Law 19
(i)
<PAGE>
CLEAN DIESEL TECHNOLOGIES, INC.
1994 INCENTIVE PLAN
As amended through August 8, 1996
1. Purpose and Effective Date
The purpose of this 1994 Incentive Plan of Clean Diesel Technologies,
Inc., a Delaware corporation ("the Corporation") is to further the interests
of the Corporation and its shareholders by providing incentives in the form of
awards to such directors, officers, employees, consultants or advisors to the
Corporation as the directors shall determine are key to the continued success
and profitability of the Corporation. The Plan is intended to retain
Participants with significant training, experience and ability; to attract new
Participants whose services are considered valuable; and to encourage such
Participants to acquire a proprietary interest in the Corporation. So that the
maximum incentive can be provided each Participant in the Plan by granting to
such participant an Award best suited to the circumstances, the Plan provides
for granting, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Shares, Performance Awards, Bonuses, Other Awards, or any
combination of the foregoing.
This Plan shall become effective upon its adoption by the Board,
subject to approval within one (1) year of such adoption by the Corporation's
shareholders, and shall remain effective until terminated by resolution of the
Board.
2. Definitions
As used in this Plan:
(1) "Award" means the grant hereunder, and by consent of the
Participant, awards or options granted previously by the Corporation of any
form of Option, Stock Appreciation Right, Restricted Share, Performance Award,
Other Award, Bonus, or any other form of Share based or non-Share based Award.
(2) "Award Agreement" means a written agreement between the
Corporation and a Participant that sets forth the terms, conditions and
limitations applicable to an Award.
(3) "Beneficiary" means, where a Participant is with respect to any
Award not forfeitable by its terms on the death of the Participant entitled to
any unpaid portion thereof, such person or persons entitled thereto under the
Participant's will or under the laws of descent and distribution.
(4) "Board" means the Board of Directors of the Corporation.
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<PAGE>
(5) "Bonus" means any payment under ss. 6.5.
(6) "Change in Control" has the meaning set forth in ss. 8.
(7) "Code" means the United States Internal Revenue Code of 1986, as
amended and in effect from time to time, or any successor statute.
(8) "Committee" means the Committee of the Board or any successor
committee as described in Section 3.1, or, if there shall be no such
Committee, the Board.
(9) "Corporation" means Clean Diesel Technologies, Inc., a Delaware
corporation, or any successor corporation, and its subsidiaries and
affiliates, incorporated or otherwise, in which the Corporation shall own
directly or indirectly at least fifty percent (50%) of the interests.
(10) "Employee" means any individual who is a salaried employee on
the payroll of the Corporation.
(11) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute.
(12) "Fair Market Value Per Share" in reference to the common stock
of the Corporation means such value as shall be determined by the Board or a
Committee thereof, as the case may be, responsible from time to time for the
administration of the Plan.
(13) "Non-Qualified Stock Option" shall mean a stock option which is
not an Incentive Stock Option within the meaning of ss. 422 of the Code.
(14) "Option" means an Award to purchase Shares granted pursuant to
ss. 6.1.
(15) "Participant" means any director, officer, employee, consultant
or advisor who is granted an Award under this Plan. Except that consultants
and advisors shall not include those rendering services in connection with the
offer or sale of the Corporation's securities in a capital raising
transaction.
(16) "Performance Award" has the meaning described in ss.6.4.
(17) "Plan" means this 1994 Incentive Plan of Clean Diesel
technologies, Inc., as amended from time to time.
(18) "Restricted Shares" means Shares which have certain restrictions
attached to the ownership thereof, which may be issued under ss. 6.3.
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<PAGE>
(19) "Retirement" means termination of a Participant's employment
with the Corporation by retirement under the normal, mandatory, early and
applicable age plus service or other provision of the applicable retirement
plan of the Corporation or a subsidiary or affiliate of the Corporation, or,
if there shall be no such plan or plans, then under such procedures as the
Company or its subsidiaries and affiliates may from time to time establish.
(20) "Rule 16b-3" means such rule as promulgated by the Securities
and Exchange Commission under the Exchange Act as now in force or as such
regulation or successor regulation shall be hereafter amended.
(21) "Shares" mean shares of common stock of the Corporation.
(22) "Share Unit" means the right to receive a payment equivalent in
value to one Share on the date of payment.
(23) "Stock Appreciation Right" means a right which may be issued
under ss. 6.2, the value of which is determined relative to the appreciation
in value of Shares.
(24) "Totally Disabled" means a condition of a Participant found by a
qualified physician selected by the Corporation to be that as described in ss.
22(e)(3) of the Code or as such Section or successor section shall be
hereafter amended.
(25) "Non-Employee Director" means a director as defined in Rule
16b-3 (b) (3) (i) of the Securities and Exchange Commission.
3. Administration
3.1 Committee
(a) This Plan shall be administered by the Board. The Board
may, however, appoint a Committee to administer the Plan which shall
consist of not less than a sufficient number of Non-Employee
Directors so as to qualify the Committee to administer this Plan as
contemplated by Rule 16b-3. The Board may limit the participation of
Committee members in the Plan to formula based or other awards. The
Board may remove members from or add members to the Committee.
Vacancies on the Committee shall be filled by the Board.
(b) To the extent permitted by ss. 13.3, the Board or
Committee is authorized to (i) determine the persons who shall be
Participants in the Plan and which Awards shall be granted to
Participants, (ii) establish, amend and rescind rules, regulations
and guidelines relating to the Plan as it deems appropriate, (iii)
interpret and administer the Plan, Awards and Award Agreements, (iv)
establish, modify and terminate terms and conditions of Award
Agreements, (v) grant waivers
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and accelerations of Plan, Award and Award Agreement restrictions and
(vi) take any other action necessary for the proper administration
and operation of the Plan.
(c) The Board or Committee may designate persons and
entities other than its members, including but not limited to, any
successor committee, the Chief Executive officer, and the Corporate
Secretary, to carry out any of its responsibilities under and
described in this Plan, under such conditions or limitations as the
Board or Committee may establish, other than its authority with
regard to participants, if any, who are subject to ss. 16 of the
Exchange Act.
3.2 Effect of Determinations
Determinations of the Board or Committee and its designees shall be
final, binding and conclusive on the Corporation, its stockholders, Employees
and Participants. No member of the Board or Committee or any of its designees
shall be personally liable for any action or determination made in good faith
with respect to this Plan, any award, or any Award Agreement.
4. Eligibility
Persons eligible for Awards under this Plan shall consist of key
managerial and other directors, officers, employees, consultants or agents who
possess valuable experience and skills and have contributed, or can be
expected to contribute, materially to the success and profitability of the
Corporation. The Board or Committee shall determine which persons shall be
Participants, the types of Awards to be made to Participants and the terms,
conditions and limitations applicable to the Awards.
5. Shares Subject to This Plan
5.1 Maximum Number of Shares
The maximum number of Shares available for Awards under this Plan in
each calendar year during any part of which this Plan shall be in effect shall
be such fixed amount of shares as the Board shall from time to time determine
but not more than twelve and one-half percent (12 1/2%) of the issued and
outstanding shares of the Corporation. Treasury stock shall not be deemed to
be issued and outstanding. Any and all such Shares may be issued in respect of
any of the types of Awards.
5.2 Share Accounting
Shares related to Awards that are forfeited, terminate, expire
unexercised, exchanged, settled in cash in lieu of Shares or settled in such
other manner so that a portion or all of the Shares included in an Award are
not issued to a Participant shall be
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<PAGE>
available for other Awards. Any Shares not so used shall be available for
further Awards; provided, however, that in any calendar year no more than the
amount determined under ss. 5.1 above, shall be available for Awards. Shares
issued under this Plan shall be authorized and unissued Shares or Shares
reacquired by the Corporation, as determined by the Committee. No fractional
Shares shall be issued under this Plan.
6. Awards
(a) Awards may include, but are not limited to, those described in
this ss. 6. Awards may be granted singly, in combination, or in tandem with
other Awards. Subject to the other provisions of this Plan, Awards may also be
made in combination or in tandem with, in replacement of, or as alternatives
to, grants or rights under this Plan and any other plan of the Corporation,
including any plan of any acquired entity and for the benefit of any present
or former director, officer, consultant or agent of such acquired entity.
Subject to the terms of the Awards described in this ss. 6 and the related
Award Agreement, the form of payment for Awards may be in cash, in Shares, in
Share Units, or such other form as determined by the Board or the Committee,
and may be made partly in one form and partly in one or more other forms, all
as determined by the Committee. Except as otherwise provided in this Plan,
Awards shall be evidenced by Award Agreements, the terms of which may be
amended or accelerated by the Board or Committee following the grant of any
Award and need not be uniform among Participants. Except as otherwise provided
in this Plan, Awards shall be granted for such minimum consideration as is
required by applicable law, rules and regulations, including without
limitation, the then applicable Rule 16b-3, and such additional consideration,
if any, as may be determined by the Committee.
(b) Notwithstanding anything contained in this Plan, if required by
the then applicable Rule 16b-3 or any successor provision, any "equity
security" awarded pursuant to this Plan to any participant who is subject to
Section 16 of the Exchange Act must be held by the Participant for at least
six (6) months after the award thereof. In addition, if required by the then
applicable Rule 16b-3 or any successor provision, with respect to any
Participant who is subject to Section 16 of the Exchange Act, at least six (6)
months must elapse from the date of acquisition of a "derivative security"
hereunder to the date of disposition of such security. The terms "equity
security" and "derivative security" shall have the meanings described in the
then applicable Rule 16b-3.
6.1 Options
Options may be granted under this Plan from time to time. If Options
are granted they shall be upon the following terms and conditions with such
additional terms and conditions, not inconsistent with the provisions of this
Plan, as the Board or Committee
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in its discretion shall deem desirable:
(a) Options shall be Non-Qualified Stock Options.
(b) The option price per Share for all Options shall be not
less than one hundred per cent (100%) of the Fair Market Value Per
Share on the date the Option is granted.
(c) Award Agreements for Options shall conform to the
requirements of this Plan, and may contain such other provisions as
the Committee shall deem advisable.
(d) Award Agreements for Options shall specify when an
Option may be exercisable. An option may be exercised, in whole or in
part, by giving written notice of exercise to the Corporation
specifying the number of Shares to be purchased. Shares purchased
upon exercise of an Option shall be paid for in full at the time the
Option is exercised in cash or, with the consent of the Board or
Committee, in Shares. Payment may also be made in any other manner or
form approved by the Board or Committee, consistent with applicable
law, regulations and rules.
(e) A holder of an Option shall have no rights as a
stockholder with respect to any Shares covered by such Option unless
and until the date of the issuance of the stock certificate for such
Shares.
(f) (i) If, after completion of any required period of
continuous employment or affiliation in order to exercise an Option
as provided in an Award Agreement, a Participant dies while employed
by the Corporation, such Option shall be exercisable by the
Beneficiary thereof, but after the date of death of the Participant
only within the period specified in the Award Agreement which shall
not be later than the expiration date of the Option.
(ii) Following the death of a Participant, the
Board or Committee may at its discretion, upon the request of such
Participant's Beneficiary who holds an exercisable Option and in
consideration of the surrender of such Option, pay the amount by
which the Fair Market Value per Share on the date of such request
shall exceed the Option price per Share multiplied by the number of
Shares as to which the request was made.
(g) If, after completion of any required period of
continuous employment in order to exercise an Option as provided in
an Award Agreement, a Participant is Totally Disabled or retires,
such Option shall be exercisable by the Participant, but only within
the period specified in the Award Agreement.
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<PAGE>
6.2 Stock Appreciation Rights
Stock Appreciation Rights may be granted under this Plan from time to
time. If Stock Appreciation Rights are granted they shall be upon the
following terms and conditions, and such additional terms and conditions, not
inconsistent with the provisions of this Plan, as the Board or Committee in
its discretion shall deem desirable:
(a) A Stock Appreciation Right may be granted in tandem with
part or all of, in addition to, or completely independent of, an
Option or any other Award under this Plan. A Stock Appreciation Right
issued in tandem with an Option may be granted at the time of grant
of the related Option or at any time thereafter during the term of
the Option.
(b) Award Agreements for Stock Appreciation Rights shall
conform to the requirements of this Plan and may contain such other
provisions (including but not limited to, the permitted form of
payment for the exercise of the Stock Appreciation Right, the
requirement of employment for designated periods of time prior to
exercise and the ability of the Board or Committee to revoke Stock
Appreciation Rights which are issued in tandem with options without
compensation to the Participant) as the Board or Committee shall deem
advisable.
(c) Stock Appreciation Rights issued in tandem with Options
shall be subject to the following:
(i) Stock Appreciation Rights shall be exercisable
at such time or times and to the extent, but only to the extent, that
the Option to which they relate shall be exercisable.
(ii) Upon exercise of Stock Appreciation Rights the
holder thereof shall be entitled to receive a number of Shares equal
in aggregate value to the amount by which the Fair Market Value Per
Share on the date of such exercise shall exceed the option price per
Share of the related Option, multiplied by the number of Shares in
respect of which the Stock Appreciation Rights shall have been
exercised.
(iii) All or any part of the obligation arising out
of an exercise of Stock Appreciation Rights may, at the discretion of
the Board or Committee, be settled by the payment of cash equal to
the aggregate value of the Shares (or a fraction of a Share) that
would otherwise be delivered under ss. 6.2(c)(ii).
(iv) Upon exercise of Stock Appreciation Rights the
unexercised tandem options of the Participant shall automatically
terminate upon the exercise of such Stock
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<PAGE>
Appreciation Rights.
(v) Stock Appreciation Rights issued in tandem with
Options shall automatically terminate upon the exercise of such
Options.
6.3 Restricted Shares
Awards of Restricted Shares may be granted under this Plan from time
to time. If Awards of Restricted Shares are granted they shall be upon the
following terms and conditions and such additional terms and conditions, not
inconsistent with the express provisions of this Plan, as the Committee in its
discretion shall deem desirable:
(a) Restricted Shares are Shares which are subject to such
terms, conditions and restrictions as the Board or Committee deems
appropriate, which may include restrictions upon the sale,
assignment, transfer or other disposition of the Restricted Shares
and the requirement of forfeiture of the Restricted Shares upon
termination of employment under certain specified conditions. The
Board or Committee may condition the lapsing of restrictions on part
or all of an Award of Restricted Shares upon the attainment of
specific performance goals or such other factors as the Board or
Committee may determine. Awards of Restricted Shares may be granted
for no cash consideration or for such minimum consideration as may be
required by applicable law.
(b) Award Agreements for Restricted Shares shall conform to
the requirements of this Plan, and may contain such other terms and
conditions (including but not limited to, a description of a period
during which the Participant may not transfer the Restricted Shares
and limits on encumbering the Restricted Shares during such period)
as the Board or Committee shall deem desirable. To the extent
permitted by ss. 13.3 hereof, the Board or Committee may provide for
the lapse of any such term or condition in installments and may
accelerate or waive any such term or condition in whole or in part,
based on service, performance and/or such other factors or criteria
as the Board or Committee may determine.
(c) Award Agreements for Restricted Shares shall provide
that the stock certificates representing Restricted Shares shall be
legended, that such certificates be held by a custodian or the
Corporation, or that there be other mechanisms for maintaining
control by the Corporation of the Restricted Shares until the
restrictions thereon are no longer in effect. After the lapse, waiver
or release of the restrictions imposed pursuant to the Award
Agreement on any Restricted Shares, the Corporation shall cause to be
issued in
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the Participant's name a stock certificate evidencing the Restricted
Shares with respect to which the restrictions have lapsed or been
waived or released, free of any legend, and shall cause such stock
certificate to be delivered to the Participant.
(d) Except as otherwise provided in this Plan or in the
Award Agreement, the participant shall have, with respect to Awards
of Restricted Shares, all of the rights of a shareholder of the
Corporation, including the right to vote the Restricted Shares and
the right to receive any cash or stock dividends on such Restricted
Shares. The Board or Committee may provide that the payment of cash
dividends shall or may be deferred. Any reinvestment of deferred cash
dividends shall be as determined by the Board or Committee. Stock
dividends issued with respect to restricted Shares shall be
Restricted Shares and shall be subject to the same terms, conditions
and restrictions that apply to the Restricted Shares with respect to
which such dividends are issued. Any additional Shares issued with
respect to cash or stock dividends shall not be counted against the
maximum number of Shares for which Awards may be granted under this
Plan as set forth in Section 5.
(e) If the employment of a Participant is terminated prior
to the lapse of restrictions on Restricted Shares because the
Participant dies, becomes Totally Disabled or retires involuntarily
the restrictions on all Restricted Shares awarded to a participant
shall lapse on the date of such termination.
6.4 Performance Awards
Performance Awards may be granted under this Plan from time to time.
If Performance Awards are granted they shall be upon the following terms and
conditions and such additional terms and conditions, not inconsistent with the
express provisions of this Plan, as the Board or Committee in its discretion
shall deem advisable:
(a) Performance Awards are Awards which are based upon the
long-term performance of all or a portion of the Corporation or which
are based upon the long-term individual performance of a Participant.
Performance Awards may be in the form of performance units,
performance shares and such other forms of Performance Awards which
the Board or Committee shall determine to be desirable. Performance
Awards are Awards which are granted to participants contingent upon
(i) the future performance of all or a portion of the Corporation
which may include, without limitation, performance relative to a
group of companies in the same or related industries, achievement of
specific business objectives, attainment of certain growth rates,
profitability goals and such other
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<PAGE>
measurements as the Board or Committee determines to be appropriate,
(ii) the future performance of a Participant, which may include,
without limitation, attainment of specified goals and objectives and
such other measurements as the Board or Committee determines to be
appropriate, (iii) the future performance of a combination of all or
a portion of the Corporation and a participant, or (iv) such other
measurements and criteria as may be considered appropriate by the
Board or Committee. Performance Awards may contain multiple
performance measurements.
(b) Award Agreements for Performance Awards shall conform to
the requirements of this Plan and may contain such other terms and
conditions as the Board or Committee shall deem desirable, including
but not limited to, applicable performance measurements, a
description of whether performance measurements are to be used singly
or in combination, a description of whether different performance
measurements may be used for different performance periods, the
length of performance periods, the ability of the Board or Committee
to amend and adjust measurements, payouts and performance periods of
performance Awards and any requirements of employment during
performance periods.
(c) Award Agreements for Performance Awards shall provide
for a required minimum period of continuous employment during a
performance period of a Performance Award. If such minimum period of
continuous employment shall have elapsed, the Award Agreement may
provide, or the Board or Committee may determine, the portion of the
payment of the Performance Award which the Participant or the
Participant's beneficiary, as applicable, is to receive at the end of
the performance period.
6.5 Bonuses
Bonuses may be granted under this Plan from time to time on an annual
or one-time basis. The amount of Bonuses which may be awarded shall be as
determined by the Board or Committee. The Board or Committee may establish a
basis upon which aggregate Bonus expenditures for any year shall be
determined, which may include measurements of financial performance of the
Corporation or of a unit or department thereof, relative performance of the
Corporation or of a department thereof within the same or related industries,
competitive compensation considerations and other measurements and criteria.
(a) Each Bonus may be made at the discretion of the Board or
Committee either in cash, in Shares, in Share Units, or in another
form as determined by the Board or Committee and may be made partly
in one form and partly in one or more other forms. In the case of an
Award of a Bonus in Shares or Share
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<PAGE>
Units, the number shall be determined by using the Fair Market Value
Per Share on the date of the Award of the Bonus.
(b) The payment of any Bonus shall be subject to such
obligations or conditions as the Board or Committee may specify in
making or recommending the Award of the Bonus, but Bonuses need not
be evidenced by Award Agreements.
(c) When payment of all or part of a Bonus is deferred in
the form of Shares or Share Units, the account of the Participant to
whom the Bonus was made will be credited with an amount per Share
equal to the dividends payable on each issued and outstanding Share
("dividend equivalents"). Amounts thus credited shall, in the
discretion of the Board or Committee, either:
(i) be paid in cash as and when each such credit
shall be made, or
(ii) be credited in Shares or Share Units, with the
number determined by using the Fair Market Value Per Share on the
date of the dividend payment and delivered in such form and at such
time or times as may be determined by the Board or Committee.
(d) When payment of all or part of a bonus is deferred in
cash, the Committee may provide that the account of the Participant
to whom the Bonus was made shall be credited with amounts equivalent
to interest ("interest equivalents"). Amounts thus credited shall be
at the rate determined by the Board or Committee.
(e) Any Bonus payable in Shares may, in the discretion of
the Board or Committee, be paid in cash, on each date on which
payment in Shares would otherwise have been made, in an amount equal
to the Fair Market Value Per Share on each such date, multiplied by
the number of Shares which would otherwise have been paid on such
date.
(f) Bonuses may be awarded in Share Units in accordance with
the following terms and conditions and such other terms and
conditions as the Board or Committee may impose:
(i) The number of Share Units awarded with respect
to any Bonus shall be the number determined by using the Fair Market
Value Per Share on the date of the Award of the Bonus.
(ii) Any Bonus made in Share Units may, in the
discretion or on the recommendation of the Board or Committee, be
paid in Shares on each date on which payment in cash would otherwise
be made.
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<PAGE>
(g) In lieu of the foregoing forms of payment of Bonuses,
the Board or Committee may specify or recommend any other form of
payment which it determines to be of substantially equivalent
economic value to the cash value of the Bonus including, without
limitation, forms involving payments to a trust or trusts for the
benefit of one or more Participants.
(h) Each payment of a Bonus that is to be made in cash shall
be from the general funds of the Corporation or its respective
subsidiary or affiliate, as the case may be.
(i) In the event of the death of a Participant to whom a
Bonus is to be or shall have been made, the Bonus or any portion
thereof remaining unpaid shall be paid to such Participant's
Beneficiary under the Participant's will or pursuant to the relevant
laws of descent and distribution.
6.6 Other Awards
(a) The Board or Committee may grant other Share based Awards under
this Plan, including without limitation, those Awards pursuant to which Shares
are or may in the future be acquired, Awards denominated in Share Units,
securities convertible into Shares and dividend equivalents. The Board or
Committee shall determine the terms and conditions of such other Share based
Awards. Shares issued in connection with such other Share based Awards shall
be issued for such minimum consideration as shall be required by applicable
law, rules and regulations, including the then applicable Rule 16b-3, and such
additional consideration, if any, as may be determined by the Board or
Committee.
(b) The Board or Committee may also grant other non-Share based
Awards under this Plan and shall determine the terms and conditions of such
other non-Share based Awards in tandem or combination with other Awards or
each other, in exchange of other Awards, or in tandem or combination with, or
as alternatives to grants or rights under any other employee plan of the
Corporation, including any plan of any acquired entity. The Board or Committee
shall have the authority to determine the Participants for such Awards and all
other terms and conditions of such other Awards. No amendment of this Plan is
required for the creation of another type of Award.
7. Adjustments Upon Changes in Capitalization
(a) Subject to any required action by the Corporation's stockholders,
in the event of a reorganization, recapitalization, stock split, stock
dividend, exchange of Shares, combination of Shares, merger, consolidation or
any other change in corporate structure of the Corporation affecting the
Shares, or in the event of a sale by the Corporation of all or a significant
part of its
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<PAGE>
assets, or any distribution to its shareholders other than a normal cash
dividend, the Board or Committee may make appropriate adjustment in the
number, kind, price and value of Shares authorized by this Plan and any
adjustments to outstanding Awards as it determines appropriate so as to
prevent dilution or enlargement of rights.
(b) The existence of an Award under this Plan shall not affect in any
way the right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks, ahead of or affecting the Stock or rights thereunder
or convertible thereto, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
(c) Awards granted hereunder prior to June 30, 1995 with respect to
Shares shall be adjusted as to the number thereof, in the event of the
issuance or reacquisition of Shares for any reason by the Corporation, so as
to maintain the ratio of the number of Shares with respect to such Awards
outstanding on June 30, 1995 to the number of the Corporations's issued and
outstanding Shares on such date; provided, however, that (i) where the
Corporation shall issue securities convertible into Shares or options or
warrants for purchase of Shares, no such adjustment shall be required until
the conversion of securities into or the purchase of Shares and (ii) upon any
such adjustment the exercise price of additional Shares upon a Participant's
Award shall be the purchase price (or fair market value of consideration
therefor) of Shares issued which initiated the adjustment and the Shares
originally granted by the Award shall carry the original exercise price
therof. This Section 7 (c) shall expire and be of no further force and effect
after the first public offering of common stock of the Corporation. The
adjustments contemplated by this Section, however, shall be effected with
respect to shares issued in such public offering. A "Public Offering" shall
mean shares issued only pursuant to an effective registration statement filed
with the Securities and Exchange Commission.
8. Change in Control
8.1 Definition of Change in Control
A "Change in Control" shall be deemed to have occurred if any one or
more of the events described in paragraphs (a), (b) or (c) below occurs.
(a) Any "person," as such term is used in Sections 13(d)
and 14(d) of the Exchange Act (including any group of persons
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<PAGE>
with which any person or its affiliates or associates, as such terms
are defined in Rule 12b-2 under the Exchange Act has any agreement,
arrangement or understanding, oral or written, regarding the
acquiring, holding, voting or disposing of any of the Corporation's
securities, but excluding a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation) (i)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing fifty one percent (51%) or more of the
combined voting power of the Corporation's then outstanding
securities (hereinafter referred to as an "Acquiring Person"); or
(b) In any two year period persons being a majority of the
Board shall cease to be so unless the nomination of the new directors
during such period was approved by at least a majority of the
directors then still in office who were directors at the beginning of
the period; or
(c) A consolidation or merger or "Business Combination," as
that term is defined as of the effective date of this Plan in Section
203(c)(3) of The General Corporation Law of Delaware, of the
Corporation shall occur (with the term "interested shareholder" as
used in that Section being deemed to refer to an Acquiring Person) in
which the Corporation is not the surviving Corporation and pursuant
to which the Corporation's shares are converted to cash, securities
or other property, but not a business combination where shareholders
of the Corporation prior to the business combination have
substantially the same proportionate ownership in a business entity
after the merger; or
(d) The Shareholders of the Corporation shall approve any
plan for liquidation or dissolution of the Corporation not otherwise
involving a transaction where shareholders of the Corporation prior
to the transaction have substantially the same proportionate
ownership of a business entity after the transaction.
(e) In no event, however, shall a Change in Control be
deemed to have occurred with respect to a Participant, if that
Participant is part of an Acquiring Person which consummates the
Change in Control transaction. A Participant shall be deemed "part of
an Acquiring Person" for purposes of the preceding sentence if the
Participant is an equity participant or has agreed to become an
equity participant in the Acquiring Person (except for (i) passive
ownership of less than three percent of the securities of the
Acquiring Person; or (ii) ownership of equity participation in the
Acquiring Person which is otherwise not deemed to be significant, as
determined prior to the Change in Control by a majority of the
disinterested Continuing Directors).
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<PAGE>
8.2 Effect of Change in Control
Upon the occurrence of an event of Change in Control, unless
otherwise with respect to any Award specifically prohibited by the terms of
the second paragraph of Section 6:
(a) Any and all Options and Stock Appreciation Rights
shall become immediately exercisable.
(b) Any restriction periods and restrictions imposed on
Restricted Shares (except such as may be required by relevant
securities laws) shall lapse, and within ten (10) business days after
the occurrence of a Change in Control, the stock certificates
representing Restricted Shares, without any restrictions or legend
thereon (except a legend as may be required by relevant securities
laws), shall be delivered to the applicable Participants;
(c) The goal, objective, target value or the like,
attainable under all performance Awards shall be deemed to have been
fully earned for the entire performance period as of the effective
date of the Change in Control, except that all performance Awards
which shall have been outstanding less than six (6) months on the
effective date of the Change in Control shall not be deemed to have
earned the goal, objective, target value, or the like; and
(d) Subject to ss. 14.3 hereof, all such other actions and
modifications to the Awards as determined by the Board or Committee
to be appropriate before the Change in Control of the Corporation
shall become effective.
9. Relationship of the Plan to Benefit Plans
The amount of Bonuses to any Participant under this Plan shall be
eligible for inclusion in the Participant's earnings base for the purpose of
determining the benefits to which the Participant is entitled under
retirement, pension, excess benefit, thrift, savings, profit-sharing,
insurance, long-term disability and other benefit plans, if any, of the
Corporation as determined by the Board or Committee. No other income of a
Participant attributable to this Plan shall be included in the Participant's
earnings for purposes of any benefit plan in which the Participant may be
eligible to participate.
10. Effect of the Plan On Right to Continued Employment and
Interest in Particular Property
(a) None of the existence of this Plan, any Awards granted pursuant
hereto or any Award Agreement shall create any right to continued employment
of any Participant by the Corporation. No Participant shall have, under any
circumstances, any interest
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<PAGE>
whatsoever, vested or contingent, in any particular property or asset of the
Corporation or in any particular Share or Shares of the Corporation that may
be held by the Corporation (other than Restricted Shares held by a custodian)
by virtue of any Award. A Participant may be granted additional Awards under
this Plan under such circumstances and at such times as the Board or Committee
may determine; provided, however, that no Participant shall be entitled to any
Award in the absence of a specific grant by the Board or Committee of an
Award, notwithstanding the prior grant of an Award to such Participant.
(b) This Plan shall not be deemed a substitute for, and shall not
preclude the establishment or continuation of any other plan, practice or
arrangement that may now or hereafter be provided for the payment of
compensation, special awards or benefits to directors, officer, employees,
consultants and agents of the Corporation and its subsidiaries generally, or
to any class or group of employees, including without limitation, any
retirement, pension, excess benefit, thrift, savings, profit-sharing,
insurance, long-term disability, health care plans or other employee benefit
plans. Any such arrangements may be authorized by the Corporation and payment
thereunder made independently of this Plan.
11. Withholding Taxes and Deferrals
11.1 Cash Withholding
The Corporation and its participating subsidiaries shall have the
right to deduct from any cash payment made under Awards under this Plan any
federal, state, provincial or local income, or other taxes required by law to
be withheld with respect to such payment or to take such other action as may
be necessary in the opinion of the Corporation to satisfy all obligations for
the payment of such taxes.
11.2 Share Withholding
Any Share based Award may provide by the grant thereof that the
recipient of such Award may elect, in accordance with any applicable laws,
rules and regulations, to pay a portion or all of the amount of such minimum
required withholding taxes in Shares. In such event, the Participant shall
authorize the Corporation to withhold, or shall agree to deliver to the
Corporation, Shares owned by such Participant or a portion of the Shares that
otherwise would be distributed to such Participant, having a Fair Market Value
equal to the amount of withholding tax liability.
11.3 Deferrals
The Board or Committee may require or permit a Participant to defer
such Participant's receipt of the payment of cash or the
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<PAGE>
delivery of Shares that would otherwise be due to such Participant by virtue
of the exercise, the satisfaction of any requirements or goals or lapse or
waiver of restrictions of an Award made under this Plan. If any such deferment
election is required or permitted, the Board or Committee shall establish
rules and procedures for such payment deferrals.
12. Compliance With Applicable Legal Requirements
No certificate for Shares distributable pursuant to this Plan shall
be issued and delivered unless the issuance of such certificate complies with
all applicable legal requirements including, without limitation, compliance
with the provisions of applicable state securities laws, the Securities Act of
1933, as amended from time to time or any successor statute, the Exchange Act
and the requirements of the exchanges on which Shares may, at the time, be
listed, and the provisions of any foreign securities laws or the rules of
foreign securities exchanges, where applicable.
13. Amendments
13.1 Plan Amendments
The Board may, insofar as permitted by law, from time to time, with
respect to any Shares at the time not subject to Awards, suspend or
discontinue this Plan or revise or amend it in any respect whatsoever,
provided, however, unless the Committee or the Board, as appropriate,
specifically otherwise provides, any revision or amendment that would cause
this Plan to fail to comply with any requirement of applicable law, regulation
or rule if such amendment were not approved by the stockholders of the
Corporation shall not be effective unless and until the approval of the
stockholders of the Corporation is obtained.
13.2 Award Amendments
Subject to the terms and conditions and within the limitations of
this Plan, the Board or Committee may amend, cancel, modify, or extend
outstanding Awards granted under this Plan.
13.3 Rights of Participants
No amendment, suspension or termination of this Plan nor any
amendment, cancellation or modification of any outstanding Award or Award
Agreement that would adversely affect the right of any Participant with
respect to an Award previously granted under this Plan will be effective
without the written consent of the affected Participant. Such written consent
may be obtained simultaneously with the grant of any Award.
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<PAGE>
13.4 Rule 16b-3
This Plan is intended to comply with Rule 16b-3 with respect to
Participants, if any, who are subject to ss. 16 of the Exchange Act and in the
event that the Corporation shall become subject to said ss. 16. Should the
requirements of Rule 16b-3 change, the Board or the Committee, as appropriate,
may amend the Plan to comply with the requirements of the amended Rule 16b-3
or its successor provision or provisions.
14. Miscellaneous Provisions
14.1 Awards in Various Countries
The Board or Committee shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of various countries in which the
Corporation or its subsidiaries may operate to assure the viability of the
benefits of Awards made to participants employed in such countries and to meet
the objectives of this Plan.
14.2 Transferability
(a) Awards may not be pledged or assigned and may otherwise be
transferred only to the extent provided herein or in an Award Agreement not
inconsistent herewith, provided, however, that an Option or Stock Appreciation
Right or any other benefit or Award hereunder deemed to be a derivative
security shall not be transferable other than by will or the laws of descent
and distribution and shall be exercisable during a Participant's lifetime only
by him or by his guardian or legal representative or pursuant to a "qualified
domestic relations order" as defined by the Code, or such order under the laws
of other jurisdictions as shall be similar in effect to a qualified domestic
relations order.
(b) Notwithstanding the foregoing, however, a Participant may, with
the consent of the Board or Committee and subject to such terms and conditions
as they may impose, assign or transfer an Award to or among immediate family
members, their issue or spouses or to a trust or family partnership of which
such immediate family members, their issue or spouses, are beneficiaries or
partners, as the case may be.
14.3 Cancellation of Awards
Except as otherwise provided in this Plan or in applicable Award
Agreements, the terms of which need not be uniform among Participants, if a
participant to whom an Award is granted ceases to be employed by the
Corporation all of such Participant's unexercised Awards and Awards on which
there are restrictions shall be immediately canceled.
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<PAGE>
14.4 Arbitration; Governing Law
(a) The Shares are registered in the United States under the Exchange Act
and are listed for trading on the United States stock exchange known as The
NASDAQ Stock Market, Inc. Any and all disputes whatsoever between a
Participant and the Corporation concerning the administration of this Plan,
the interpretation and effect of an Award Agreement or of this Plan or the
rights of a Participant under an Award Agreement shall be finally determined
before one neutral arbitrator in the City of Stamford, Connecticut, U.S.A.
under the rules of commercial arbitration of the American Arbitration
Association then in effect and judgment upon any award by such arbitrator may
be entered in any Court having jurisdiction or application may be made to such
court for a judicial acceptance of the award and an order of enforcement, as
the case may be. The arbitrator hereunder shall have no power or authority to
award consequential, punitive or statutory damages.
(b) This Plan, its administration and all Awards granted hereunder, the
terms and provisions of any related Award Agreements and the rights of all
Participants shall be governed and interpreted in accordance with the laws of
Connecticut U.S.A.
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<PAGE>
Exhibit 4.3
CLEAN DIESEL TECHNOLOGIES, INC.
1994 INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
STOCK OPTION AWARD AGREEMENT dated as of between Clean Diesel
Technologies, Inc., a Delaware corporation ("the Company"), of 300 Atlantic
Street, Stamford, Connecticut, and
,
a director, officer, employee of or consultant to the Company or an
affilliate thereof ("the Participant").
WHEREAS, the Company desires, to afford to the Participant an
opportunity to purchase shares of the Company's Common Stock pursuant to the
grant of an option under the Company's 1994 Incentive Plan; and
WHEREAS, the Participant desires to obtain such opportunity;
NOW THEREFORE, the parties agree, as follows:
1. Option Grant. The Company grants to the Participant the
right and option ("this Option"), to purchase shares of
Common Stock of the Company, par value $.05 per share ("the Stock")
at the exercise price per share of U.S. $ , subject, in all
respects, to the terms and conditions of the Plan and to the
following terms and conditions.
2. Term. The term of this Option shall be a period ending on
the day (the "Expiration Date) ten (10) years from the date first
set out above.
3. Vesting. (a) This Option shall only be first exercisable,
in whole or in part, with respect to the following number of shares
on the following dates:
Shares Dates
------ -----
(b) This option shall terminate and all option shares granted
hereunder, whether vested or unvested, shall become non-exercisable
immediately upon the termination of the Participant's status as a director,
officer, employee of or consultant to the Company or an affilliate thereof;
provided, however, that if such status of the Participant shall be terminated
with the prior consent of the Board, and provided that such termination is not
for cause (of which the Board shall be the sole judge), the Board may permit
options hereunder to be exercised by the Participant at any time,
<PAGE>
Option Award Agreement, p. 2.
during the period ending not later than the Expiration Date as the Board shall
agree, provided such option would have been able to have been excercised
according to its terms absent such termination.
(c) In the event of the Participant's death, total disability or
retirement, such portion of this Option as shall have vested and shall remain
unexercised, may be exercised by the Participant or the Participant's
Beneficiary at any time during the period ending not later than the Expiration
Date, provided that such option would have been able to have been exercised
according to its terms absent such death, total disability or retirement.
(d) Pursuant to and as defined in the Plan, this Option shall
immediately vest upon a "Change of Control" of the Company.
4. Method of Exercise. This Option may be exercised only by one or
more notices from time to time in writing of the Participant's intent to
exercise this Award, or a portion thereof, delivered to the Secretary of the
Company accompanied by the Participant's check in the amount of the exercise
price.
5. Taxes. At the time of exercise of this Option, the Participant
shall deliver to the Company, if required by the Company, a check payable to
the Company equal, in the sole opinion of the Company, to the applicable
National, State or Provincial and local income or other taxes legally required
to be withheld, stopped or paid by reason of such exercise.
6. Transferability. This Option may not be transferred,
assigned or pledged except in accordance with the Plan.
IN WITNESS WHEREOF, the Company and the Participant have each
executed this Agreement, all as of the day and year first above written.
CLEAN DIESEL TECHNOLOGIES, INC
By:
------------------------------- -----------------------------------
(Vice) President Participant
<PAGE>
Exhibit 5.0
November 27, 1996
Board of Directors
Clean Diesel Technologies, Inc.
Suite 702, 300 Atlantic Street
Stamford CT 06901
Dear Sirs:
This opinion is rendered in connection with the registration on Form S-8 ("the
Registration Statement") of 312,500 shares of Common Stock (the "Shares") of
Clean Diesel Technologies, Inc. (the "Company") pursuant or subject to the
1994 Incentive Plan of the Company. In rendering this opinion I have reviewed
the Articles of Incorporation of the Company, as amended, and such other
documents as I deemed relevant in the circumstances.
In my opinion such of the Shares as are to be issued under stock option
agreements extant as of the date hereof have been duly authorized, and, when
approved by resolution of the Board of Directors of the Company and covered by
future stock option agreements, the remainder of the Shares shall have been
duly authorized. Further, in my opinion, when payment of the exercise price is
made to and certificates therefor are issued by the Transfer Agent and
Registrar of the Company, the Shares evidenced by such certificates shall be
validly issued and non-assessable.
I consent to the reference to this opinion in the Registration Statement and
to its inclusion as an exhibit to the Registration Statement.
Very truly yours,
/s/ C.W. Grinnell
Charles W. Grinnell
Vice President, General Counsel
& Corporate Secretary
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Clean Diesel Technologies, Inc. pertaining to the 1994 Incentive
Plan of Clean Diesel Technologies, Inc., as amended through August 8, 1996, of
our report dated March 11, 1996 with respect to the fiancial statements of
Clean Diesel Technologies, Inc. included in the Annual Report (Form 10-K) for
the year ended December 31, 1995,filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Stamford, Connecticut
November 27, 1996
