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Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KRUG INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
Ohio 31-0621189
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
KRUG INTERNATIONAL CORP.
1290 HERCULES DR., SUITE 120
HOUSTON, TX 77058
(281) 212-1233
(Name, address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
KRUG INTERNATIONAL CORP.
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
JAMES J. MULLIGAN
MULLIGAN & MULLIGAN
241 WEST HADLEY ROAD
DAYTON, OHIO 45419
(937) 298-2226
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share price fee
- ---------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C>
Common Shares 80,000 $6.00(1) $480,000(1) $159
without par
value
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h), based upon the average of the high and low
sales prices of a Common Share on December 9, 1997, as reported on the
American Stock Exchange.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
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Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents filed with the Securities and Exchange
Commission are incorporated herein by reference as of their respective dates of
filing:
(a) The Annual Report of KRUG International Corp. (the
"Corporation") on Form 10-K for the year ended March 31, 1997, filed
pursuant to Section 13 of the Securities Exchange Act of 1934
("Exchange Act").
(b) The Corporation's Quarterly Report on Form 10-Q for the
quarters ended June 30, 1997, and September 30, 1997, filed pursuant to
Section 13(a) of the Exchange Act.
(c) The Corporation's Current Reports on Form 8-K filed March
31, 1997 and October 17, 1997.
(d) The description of the Corporation's Common Shares
contained in the Registration Statement filed pursuant to Section 12 of
the Exchange Act, including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Corporation pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment which indicates that all Common Shares offered
hereunder have been sold or which deregisters all Common Shares then remaining
unsold hereunder shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
--------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
The law firm of Mulligan & Mulligan is general counsel to the
Corporation and provided an opinion regarding the legality of the actions taken
and to be taken by the Corporation regarding its 1997 Employee Stock Purchase
Plan. James J. Mulligan is a partner in Mulligan & Mulligan and is also a
director and Secretary of the Corporation. Mr. Mulligan is the beneficial owner
of 26,905 Common Shares and warrants to purchase 5,380 Common Shares of the
Corporation.
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Item 6. Indemnification of Directors and Officers.
------------------------------------------
Article III of the Code of Regulations of the Corporation sets
forth certain rights of directors and officers of the Corporation to
indemnification. Under Article III, the liabilities against which a director and
officer may be indemnified and factors employed to determine whether a director
and officer is entitled to indemnification in a particular instance depend on
whether the proceeding in which the claim for indemnification arises was brought
(a) other than by and in the right of the Corporation ("Third Party Actions") or
(b) by and in the right of the Corporation ("Derivative Actions").
In Third Party Actions, the Corporation will indemnify each
director and officer against expenses, including attorneys' fees, judgments,
fines, penalties, and amounts paid in settlement actually and reasonably
incurred by him in connection with any threatened or actual proceeding in which
he may be involved by reason of his having acted in such capacity, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and with respect to any matter the subject
of a criminal proceeding, had no reasonable cause to believe that his conduct
was unlawful.
In Derivative Actions, the Corporation will indemnify each
director and officer against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of any
such proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation except that no
indemnification is permitted with respect to any matter as to which such person
has been adjudged to be liable for negligence or misconduct in the performance
of his duty to the Corporation unless a court determines such person is entitled
to indemnification.
Unless indemnification is ordered by a court, the
determination as to whether or not an individual has satisfied the applicable
standards of conduct (and therefore may be indemnified) is made by the
Corporation by a majority vote of a quorum consisting of directors of the
Corporation who were not parties to the action, or if such a quorum is not
obtainable, or if a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or by the shareholders of the Corporation.
Article III of the Code of Regulations does not limit in any
way other indemnification rights to which those seeking indemnification may be
entitled.
The Corporation maintains insurance policies which presently
provide protection, within the maximum liability limits of the policies and
subject to a deductible amount for each claim, to the Corporation under its
indemnification obligations and to the directors and officers with respect to
certain matters which are not covered by the Corporation's indemnification
obligations.
Item 7. Exemption from Registration Claimed.
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Not applicable.
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Item 8. Exhibits.
---------
See Index to Exhibits at Page 7.
Item 9. Undertakings.
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(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, 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 ("Securities 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 this 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 the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bonafide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bonafide offering thereof.
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(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the 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.
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SIGNATURES
----------
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on this 21st day of
November, 1997.
KRUG INTERNATIONAL CORP.
By: /s/ Charles Linn Haslam
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Charles Linn Haslam, Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
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Name Title Date
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<S> <C> <C>
/s/ Charles Linn Haslam Chairman and November 21,1997
- ------------------------- Chief Executive
Charles Linn Haslam Officer
(principal executive
officer)
/s/ Robert M. Thornton, Jr. Director, President November 21, 1997
- ------------------------- and Chief Financial
Robert M. Thornton, Jr. Officer (principal
financial officer)
/s/ Robert M. Ellis Principal accounting November 21, 1997
- ------------------------- officer
Robert M. Ellis
/s/ James J. Mulligan Director and November 21, 1997
- ------------------------- Secretary
James J. Mulligan
/s/ T. Wayne Holt Director November 21, 1997
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T. Wayne Holt
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</TABLE>
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INDEX TO EXHIBITS
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<TABLE>
<CAPTION>
Located at
Manually Numbered
Exhibit Page
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<S> <C>
(4) INSTRUMENTS DEFINING THE RIGHTS OF
SECURITY HOLDERS, INCLUDING INDENTURES:
4.1 Amended Articles of Incorporation of KRUG
International Corp. were filed as Exhibit 3.1 to the
Corporation's Report on Form 10-K for the year
ended March 31, 1992............................................... *
4.2 Code of Regulations of KRUG International Corp.
was filed as Exhibit 3.1 to the Corporation's Report
on Form 10-Q for the quarter ended June 30, 1996................... *
4.3 KRUG International Corp. 1997 Employee Stock
Purchase Plan...................................................... 8
(5) OPINION REGARDING LEGALITY:
5.1 Opinion of Mulligan & Mulligan..................................... 12
(23) CONSENTS OF EXPERTS AND COUNSEL:
23.1 Consent of Deloitte & Touche LLP 13
23.2 Consent of Mulligan & Mulligan is contained in its
opinion at 5.1, above..............................................
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<FN>
* Indicates incorporation by reference from a document previously filed with the Securities
and Exchange Commission.
</TABLE>
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Exhibit 4.3
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AMENDED FEBRUARY 7, 1997
KRUG INTERNATIONAL CORP.
1997 EMPLOYEE STOCK PURCHASE PLAN
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1. Purpose.
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The purpose of the 1997 Employee Stock Purchase Plan ("Plan") is to grant
options to certain employees of the Corporation to purchase Common Shares of the
Corporation at prices below the fair market value of the Shares so as to
increase the identity of interests of such employees with those of the
shareholders of the Corporation
2. Definitions.
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(a) "Board" means the Board of Directors of the Corporation.
(b) "Corporation" means KRUG International Corp.; when used in the Plan
with reference to employment, "Corporation" shall include Krug Life Sciences
Inc. ("KLSI") and any Subsidiary of the Corporation chosen by the Board to
participate in the Plan.
(c) "Fair Market Value" means (1) if the Shares are listed on the American
Stock Exchange, the last sale price of a Share on the American Stock Exchange on
the date the value of a Share is to be determined or, if there are no sales on
such date, the mean of the bid and asked prices for Shares on the American Stock
Exchange at the close of business on such date; or (2) if the Shares are not
listed on the American Stock Exchange, the value determined by such reasonable
method as shall be approved by the Board.
(d) "Share" or "Shares" means the Common Shares, without par value, of the
Corporation.
(e) "Subsidiary" means any company more than 50% of the voting stock of
which is owned or controlled, directly or indirectly, by the Corporation.
(f) "Plan Entry Date" means January 2, 1997.
(g) "Plan Termination Date" means December 31, 1997.
3. Eligibility.
------------
Any employee of the Corporation who was employed by the Corporation on
December 1, 1996 and also on the date of his election to participate in the Plan
shall be eligible to participate herein. An employee may not exercise an option
granted hereunder unless he remains continuously in the employ of the
Corporation until December 31, 1997.
4. Option price.
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The option price of the Shares shall be 85% of the Fair Market Value of the
Shares on the Plan Entry Date or the Plan Termination Date, whichever is the
lower.
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5. Maximum Number of Shares Subject to Option.
-------------------------------------------
Each eligible employee shall be entitled to place under option any number
of whole Shares up to a maximum of 200 Shares.
6. Employee's Election to Participate.
-----------------------------------
(a) Within 30 days following the date of notice of the granting of the
option, each eligible employee who elects to place Shares under option shall so
indicate by properly completing and signing the form which shall accompany such
notice and mailing or delivering such form to James W. Hoose, Sr., Human
Resources Director for KLSI.
(b) An election to place Shares under option will not constitute an
obligation to purchase any of the Shares placed under option. Such an election
will merely notify the Corporation of the number of Shares to be held under
option for the employee.
(c) An employee who fails to elect participation in the Plan in the manner
and within the time provided or to authorize and maintain the payroll deductions
hereinafter provided shall have no further rights under the Plan.
(d) An employee electing to participate may do so with respect to all or
any portion of the Shares which he is entitled to place under option.
7. Payroll Deductions.
-------------------
(a) Concurrently with election to participate in the Plan the employee must
authorize a payroll deduction of an amount sufficient to pay for all of the
Shares the employee holds under option by the Plan Termination Date, subject to
adjustment as necessary from time to time.
(b) Payroll deductions shall commence as of the first payroll following
election to participate in the Plan and shall continue until the employee has
paid in full for the number of Shares he elects to hold under option or until
the employee elects to abandon this option, whichever event shall first occur.
The employee may make cash payments for the Shares at any time.
(c) The application by the employee to participate in the Plan will contain
the following signed statement by the Company; "This counterpart in the hands of
the employee whose signature is affixed above will constitute a nonassignable
certificate of indebtedness subject to all the terms and provisions of the
Plan."
8. Issuance and Delivery of Stock Certificates.
--------------------------------------------
Certificates for shares will be issued and delivered to the employee for
the number of shares paid for as soon as practicable after the Plan Termination
Date. No fractional Shares will be issued.
9. Employee's Right to Abandon Option.
-----------------------------------
At any time during the term of the Plan an employee may elect to abandon
his option with respect to all or any number of the Shares then under option. As
to any Shares so abandoned, the employee shall have no further option or right
of any nature at any subsequent time. Upon such abandonment, the Corporation
will pay to the employee with interest as hereafter provided the amount of his
payroll deduction or cash payments applicable to the abandoned shares.
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10. Interest on Payroll Deductions or Cash Payments.
------------------------------------------------
Whether or not an employee applies his accumulated payroll deductions or
cash payments to the purchase of the Shares or elects to withdraw from the Plan
and receive payment of the amount of his accumulated payroll deductions or cash
payments, the amount of each employee's payroll deductions or cash payments
shall constitute indebtedness of the Corporation to him until applied to the
purchase of Shares or until payment to him and such indebtedness shall bear
interest at the rate of 7 percent per annum.
11. Term of the Plan.
-----------------
The term of the Plan shall commence on the Plan Entry Date and end on the
Plan Termination Date. In the event of a change of control of the Corporation or
any participating subsidiary of the Corporation as determined by the Board, the
Plan shall end and the Corporation shall either (i) pay each affected
participating employee the amount of his accumulated payroll deduction or cash
payments, with interest as provided herein, or (ii) have issued to such employee
the number of whole Shares fully paid for by such employee to such date and any
excess in cash.
12. Termination of Employment.
--------------------------
If a participating employee ceases to be employed for any reason prior to
December 31, 1997, the Corporation shall pay to him his accumulated payroll
deductions or cash payments with interest as provided above to the date of
termination.
13. Options Not Transferable.
-------------------------
Options under this Plan shall not be transferable by any employee nor be
exercisable by any person other than the employee.
14. Share Dividend or Recapitalization.
-----------------------------------
If any share dividend is declared upon the Shares, or if there is any
recapitalization of the Corporation with respect to its Shares resulting in a
split-up or combination or exchange of Shares the number and kind of shares then
subject to options granted to eligible employees under the Plan shall be
proportionately and appropriately adjusted by the Board without any change in
the aggregate purchase prices to be paid therefor.
15. Administration.
---------------
The Plan will be administered by an Employee Stock Purchase Plan Committee
composed of three members to be selected from time to time by the Board. The
Committee may prescribe rules and regulations from time to time for the
administration of the Plan and may decide questions which may arise with respect
to its interpretation or application. The Committee shall interpret and apply
the Plan so that it qualifies as an employee stock purchase plan within the
meaning of Section 423 of the Internal Revenue Code of 1986.
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16. Share Ownership.
----------------
Notwithstanding anything herein to the contrary, no employee shall be
entitled to place any Shares under option under the Plan if such employee,
immediately after the placing of such Shares under option, owns Shares
(including all shares which may be purchased under outstanding options)
possessing 5 percent or more of the total combined voting power or value of all
classes of shares of the Corporation or of its parent or subsidiary corporation.
For the foregoing purposes the rules of section 424(d) of the Internal Revenue
Code of 1986 shall apply in determining share ownership. Also, no employee shall
be granted an option under the Plan which permits his rights to purchase Shares
under all Share purchase plans of the Corporation and its parent and subsidiary
corporations to accrue at a rate which exceeds $25,000 of fair market value of
such shares (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
17. Renewal of the Plan by the Board.
---------------------------------
The Board may, in its discretion, renew the Plan for four one year periods
with such changes therein as it deems appropriate provided that the Plan, as
amended, continues to qualify as an employee stock purchase plan within the
meaning of Section 423 of the Internal Revenue Code of 1986.
18. Shareholder Approval.
---------------------
The Plan is subject to approval by the holders of a majority of the Shares
constituting a quorum and present, in person or by proxy, at a meeting of the
Shareholders of the Corporation held on or before November 7, 1997.
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Exhibit 5.1
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MULLIGAN & MULLIGAN
ATTORNEYS AT LAW
James J. Mulligan 241 West Hadley Road (937) 298-2226
Patrick J. Mulligan Dayton, Ohio 45419 Fax: Same
December 15, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
As counsel, we have assisted KRUG International Corp., an Ohio corporation
("KRUG"), in connection with the preparation and filing of KRUG's Registration
Statement on Form S-8 relating to the offering and sale of up to 80,000 of its
Common Shares, without par value, pursuant to its "1997 Employee Stock Purchase
Plan" (the "Plan").
Please be advised that we have examined such proceedings and records of
KRUG and have made investigation of such other matters as, in our judgment,
permit us to render an informed opinion on the matters set forth herein. Based
upon the foregoing, it is our opinion that:
(i) KRUG is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio, with full power to issue and
sell its Common Shares pursuant to the Plan; and
(ii) Common Shares of KRUG issued or sold by KRUG pursuant to the Plan
have been duly authorized and, when issued or sold and paid for in
accordance with the terms of the Plan, will be validly issued, fully paid
and non-assessable.
We consent to the use of this opinion as an exhibit to KRUG's Registration
Statement on Form S-8 with respect to the Plan.
Very truly yours,
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Exhibit 23.1
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
KRUG International Corp. on Form S-8 of our report dated May 16, 1997,
appearing in the Annual Report on Form 10-K of KRUG International Corp. for the
year ended March 31, 1997.
DELOITTE & TOUCHE LLP
Houston, Texas
December 15, 1997
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