SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
___________________
FINANCIAL INDUSTRIES CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Texas 74-2126975
(State of Incorporation) (I.R.S. Employer Identification No.)
6500 River Place Blvd., Building One, Austin, Texas 78730
(Address, Including Zip Code, of Registrant's of Principal Executive Offices)
InterContinental Life Corporation
1999 Stock Option Plan
(Full Title of Plan)
Theodore A. Fleron, Vice President and Assistant Secretary
6500 River Place Blvd., Building One
Austin, Texas 78730
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
CALCULATION OF REGISTRATION FEE
Title of Securities Amount to Proposed Proposed maximum Amount of Registration Fee
to be registered be registered maximum offering aggregate
price per share(1) offering price(1)
Common Stock, 794,200 shares $12.39 $8,364,030 $1,449.33
par value $.20
(1) For purposes of computing the registration fee only. Pursuant to Rules
457(c) and (h) of the Securities Act of 1933, as amended, the Proposed
Maximum Aggregate Offering Price Per Share is based upon:
the average of the high and low prices of the common stock on June 11,
2001 with respect to 404,800 shares, and
the actual price at which 389,400 options may be exercised (prices
ranging from $ 8.18 per share to $ 12.39 per share).
-1-
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated herein by reference:
(1) Our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000.
(2) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2001.
(3) Our Current Reports on Form 8-K dated January 22, 2001, May 30,
2001 and June 8, 2001.
(4) The description of our common stock contained in the section
entitled "Description of Capital Stock of FIC" of our
Registration Statement on Form S-4 (File No. 333-54772) filed
with the Commission on February 1, 2001.
(5) All documents that we subsequently file pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this Registration Statement and prior to the filing of a
post-effective amendment to this Registration Statement that
indicates that all of the shares of common stock offered have
been sold or which deregisters all of such shares then remaining
unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of
filing of such documents. Any statement incorporated by reference
herein shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this Registration Statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
-2-
Item 6. Indemnification of Directors and Officers.
Our Bylaws require us to indemnify our officers and directors to the
fullest extent permitted by Article 2.02-1 of the Business Corporation Act of
the State of Texas (the "TBCA"). Generally, Article 2.02-1 of the TBCA permits a
corporation to indemnify a person who was, is, or is threatened to be made a
named defendant or respondent in a proceeding because the person was or is a
director or officer if it is determined that such person (i) conducted himself
in good faith, (ii) reasonably believed (a) in the case of conduct in his
official capacity as a director or officer of the corporation, that his conduct
was in the corporation's best interests, and/or (b) in other cases, that his
conduct was at least not opposed to the corporation's best interests, and (iii)
in the case of any criminal proceeding, had no reasonable cause to believe that
his conduct was unlawful.
In addition, the TBCA requires a corporation to indemnify a director or
officer for any action that such director or officer is wholly successfully in
defending on the merits. Texas law does not permit exculpation of liability in
the case of (i) a breach of the director's duty of loyalty to the corporation or
its shareholders, (ii) an act or omission not in good faith that constitutes a
breach of duty of the director to the corporation or that involves intentional
misconduct or a knowing violation of the law, (iii) a transaction from which a
director received an improper benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office or (iv) an act or
omission for which the liability of the director is expressly provided by
statute. We may provide liability insurance for each director and officer for
certain losses arising from claims or changes made against them while acting in
their capabilities as our directors or officers, whether or not we would have
the power to indemnify such person against such liability, as permitted by law.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following documents are filed as a part of this Registration Statement
or incorporated by reference herein:
4.1 InterContinental Life Corporation 1999 Stock Option Plan. *
5.1 Opinion of Special Counsel to FIC.*
23.1 Consent of Special Counsel to FIC (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP. *
24.1 Power of Attorney (included on signature pages).
* Filed herewith.
-3-
Item 9. Undertakings.
We hereby undertake:
(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 thereto) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
and of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b), if, in the aggregate, the change in volume
and price represent no more than a 20 percent change in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(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.
(2) That, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
-4-
We hereby undertake that, for purposes of determining any liability under
the Securities Act, each of our annual reports pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in 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 the time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of our company,
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than our
payment of expenses incurred or paid by our directors, officers or controlling
persons 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, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
-5-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
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 Austin, State of Texas on the 14th day of June, 2001.
FINANCIAL INDUSTRIES CORPORATION
By: /s/ Roy F. Mitte
Roy F. Mitte
Chairman, President and Chief
Executive Officer
POWER OF ATTORNEY
Know all those by these presents, that each person whose signature appears
below constitutes and appoints each of Roy F. Mitte and Theodore A. Fleron or
any of them, each acting alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for such person and in his
name, place and stead, in any and all capacities, in connection with the
Registration Statement on Form S-8 of Financial Industries Corporation under the
Securities Act of 1933, as amended, including, without limitation of the
generality of the foregoing, to sign the Registration Statement in the name and
on behalf of Financial Industries Corporation, or on behalf of the undersigned
as a director or officer of Financial Industries Corporation, and any and all
amendments or supplements to the Registration Statement, including any and all
stickers and post-effective amendments to the Registration Statement, and to
sign any and all additional Registration Statements relating to the same
offering of Securities as the Registration Statement that are filed pursuant to
Rule 462 under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any applicable securities exchange or
securities self-regulatory body, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes or substitute, may lawfully do or cause to be done
by virtue hereof.
-6-
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated and on the dates indicated.
Signature Title Date
/s/ John D. Barnett Director June 14, 2001
John D. Barnett
/s/ Joseph F. Crowe Director June 14, 2001
Joseph F. Crowe
/s/ Jeffrey H. Demgen Vice President; Director June 14, 2001
Jeffrey H. Demgen
/s/ Theodore A. Fleron Vice President and June 14, 2001
Theodore A. Fleron Assistant Secretary; Director
/s/ James M. Grace Vice President and Treasurer; June 14, 2001
James M. Grace Director
/s/ Michael S. Mitte Director June 14, 2001
Michael S. Mitte
/s/ Roy F. Mitte Chairman; President; Chief June 14, 2001
Roy F. Mitte Executive Officer; Director
/s/ Frank Parker Director June 14, 2001
Frank Parker
/s/ Thomas C. Richmond Director June 14, 2001
Thomas C. Richmond
/s/ Steven P. Schmitt Vice President; Secretary; June 14, 2001
Steven P. Schmitt Director
/s/ Jerome H. Supple Director June 14, 2001
Jerome H. Supple
-7-
EXHIBIT INDEX
Exhibit Number Description
4.1 InterContinental Life Corporation 1999 Stock Option Plan. *
5.1 Opinion of Special Counsel to FIC. *
23.1 Consent of Special Counsel to FIC (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP. *
24.1 Power of Attorney (included on signature pages).
* Filed herewith.
-8-
Exhibit 5.1
Financial Industries Corporation
6500 River Place Blvd., Building One
Austin, Texas 78730
June 13, 2001
Financial Industries Corporation
6500 River Place Blvd., Building One
Austin, Texas 78730
Ladies and Gentlemen:
I am Special Counsel of Financial Industries Corporation, a Texas corporation
(the "Company"), and I am delivering this opinion in connection with the filing
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), of a Registration Statement on Form S-8 (the
"Registration Statement") for the purpose of registering 794,200 shares of the
common stock of the Company, $0.20 par value (the "Common Stock"), with respect
to the InterContinental Life Corporation 1999 Stock Option Plan (the "Plan"). I
have reviewed originals (or copies) of certified or otherwise satisfactorily
identified documents, corporate and other records, certificates and papers as I
deemed it necessary to examine for the purpose of this opinion.
Based on the foregoing, it is my opinion that the shares of Common Stock which
are issued upon the exercise of stock options under the Plan are duly
authorized, and when issued and delivered against receipt of payment therefor in
accordance with the Plan, such shares of Common Stock will, be validly issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Melanie M. McCaffree
Melanie M. McCaffree
Exhibit 23.2
Consent of Independent Accounts
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 2, 2001, relating to the
financial statements and financial statement schedules of Financial Industries
Corporation, which appears in Financial Industries Corporation's Annual Report
on Form 10-K for the year ended December 31, 2000.
/s/ PricewaterhouseCoopers
PricewaterhouseCoopers LLP
Dallas, Texas
June 14, 2001
InterContinental Life Corporation
1999 Stock Option Plan
A. The Plan
1. Name: This Plan shall be known as the "InterContinental Life
Corporation 1999 Stock Option Plan."
2. Purpose: The purposes of the Plan are to encourage stock
ownership by key management employees of InterContinental Life
Corporation (herein called the "Company") and its Subsidiaries,
to provide an incentive for such employees to expand and improve
the profits and prosperity of the Company and its Subsidiaries,
and to assist the Company and its Subsidiaries in attracting and
retaining key personnel through the grant of options to purchase
shares of the Company's common stock. It is intended that the
stock options granted hereunder shall constitute nonstatutory
stock options and shall not be treated as "incentive stock
options" within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended, or successor provisions thereto
or of like import.
3. Effective Date and Term: The Plan was approved by the Board of
Directors of the Company on March 6, 1999, and shall become
effective on May 18, 1999, subject to approval by a majority of
the shareholders of the Company, present in person or by proxy,
at the annual meeting of shareholders of the Company to be held
on May 18, 1999. The Plan shall terminate upon the eleventh
anniversary of the Effective Date.
B. Definitions
Unless otherwise required by the context:
1. "Anniversary Date" shall mean the first anniversary of the
Effective Date and each succeeding anniversary thereof.
2. "Board" shall mean the Board of Directors of the Company.
3. "Change in Control" shall mean the occurrence of either (i) the
termination, by resignation or otherwise, of Roy F. Mitte as
Chairman of the Board and Chief Executive Officer or (ii) the
appointment or election to the Board of persons constituting a
majority of the number of members of the Board which persons were
not nominated or appointed to the Board by Roy F. Mitte.
A-1
4. "Committee" shall mean the Executive Committee, which is
appointed by the Board, and which shall be composed of at least
three members of the Board.
5. "Company" shall mean the InterContinental Life Corporation, its
subsidiaries, affiliates and successors in interest.
6. "Code" shall mean the Internal Revenue Code of 1986, as amended.
7. "Effective Date" shall mean the date determined in accordance
with the provisions of paragraph A.3, hereof.
8. "Option shall mean a right to purchase Stock, granted pursuant
to the Plan.
9. "Option Price" shall mean the purchase price to be paid for each
share of Stock subject to issuance pursuant to the exercise of an
Option , as determined in Section G, below.
10. "Participant" shall mean an employee of the Company, or of any
Affiliate of the Company, to whom an Option is granted under the
Plan.
11. "Plan" shall mean this InterContinental Life Corporation Stock
Option Plan.
12. "Plan Year" shall mean a twelve-month period which commences on
the Effective Date or an Anniversary Date, as applicable and ends
on the last day of the twelfth month following such Effective
Date or Anniversary Date, as applicable.
13. "Stock" shall mean the common stock of the Company, par value
$.22.
14. "Subsidiary" shall mean a subsidiary corporation of the Company,
as defined in Section 425(f) of the Code.
15. "Affiliate" shall mean (i) any Subsidiary of the Company and (ii)
Financial Industries Corporation and any direct or indirect
wholly-owned subsidiary of Financial Industries Corporation.
C. Stock To Be Optioned
Subject to the provisions of Section M of the Plan, the maximum number
of shares of stock that may be optioned or sold under the Plan is
800,000 shares. Such shares may be treasury or authorized but unissued
shares of Stock.
A-2
D. Options Under the Plan:
Shares of Stock with respect to which an Option has been granted and
exercised hereunder shall not again be available for grant under the
Plan. In the event that Options granted hereunder shall expire,
terminate or be canceled for any reason without being exercised, new
Options may be granted under the Plan with respect to the number of
shares to which such Option expiration, termination or cancellation
pertains.
E. Administration
The Plan shall be administered by the Committee. Two members of the
Committee shall constitute a quorum for the transaction of business.
The Committee shall be responsible to the Board for the operation of
the Plan, and shall determine the participation in the Plan by
employees of the Company and its Affiliates, and the extent of that
participation. The interpretation and construction of any provisions
of the Plan by the Committee shall be final, unless otherwise
determined by the Board. No member of the Board or the Committee shall
be liable for any action or determination made by him in good faith.
F. Eligibility
The Board or the Committee may grant Options to any key management
employee (including an employee who is an officer) of the Company or
its Affiliates. Options may be awarded by the Board or the Committee
at any time and from time to time to new Participants, or to existing
Participants, and to a greater or lesser number of Participants, and
may include or exclude previous Participants, as the Board or the
Committee shall determine. Options granted at different times need not
contain similar terms.
G. Option Price:
The purchase price for Stock under each Option shall be 100 percent
(100%) of the fair market value of the Stock at the time the Option is
granted, but in no event less than $7.50 per share. If the Stock is
publicly traded, then such fair market value shall be determined as
follows: (i) if the principal trading market for the Stock is the
NASDAQ Small-Cap Market, the NASDAQ National Market or a national
securities exchange, the last reported sale price thereof on the day
of the grant, or (if there were no trades on that date, the latest
preceding date on which as sale was reported, or (ii) if the Stock is
not principally traded on such market or exchange, the mean between
the last reported "bid" and "asked" prices of the Stock on the day of
the grant, as reported on NASDAQ or as reported in a recognized
financial reporting system, as applicable. If the Stock is not
publicly traded, or if publicly traded, is not subject to reported
transactions or "bid" or "asked" quotations as set forth above, such
fair market value shall be as determined by the Board.
A-3
H. Terms and Conditions of Options
Options granted pursuant to the Plan shall be authorized by the Board
or the Committee and shall be evidenced by agreements in such form as
the Board or the Committee shall from time to time approve. Such
agreements shall comply with and be subject to the following terms and
conditions:
1. Employment Agreement: The Board or the Committee may, in its
discretion, include in any Option granted under the Plan a
condition that the Participant shall agree to remain in the
employ of, and render services to, the Company or any of its
Affiliates for a period of time (specified in the agreement)
following the date the Option is granted. Unless otherwise set
forth in a written employment agreement between the Company and
the Participant, no such agreement shall impose upon the Company
or any of its Affiliates, however, any obligation to employ the
Participant for any period of time.
2. Manner of Exercise: Any Options granted hereunder may be
exercised by the Participant serving upon the Secretary of the
Company written notice of such exercise which notice shall be
irrevocable and shall specify the number of shares of Stock to be
purchased pursuant to such exercise.
3. Time and Method of Payment: The Option Price shall be paid in
full in cash at the time an Option is exercised under the Plan.
Such payment, in the form of a personal or bank check, shall
accompany the notice of exercise. Unless submitted in accordance
with the provisions of this Plan, an exercise of any Option
granted under the Plan shall be invalid and of no effect.
Promptly after the exercise of an Option and the payment of the
full Option Price, the Participant shall be entitled to the
issuance of a stock certificate evidencing his ownership of such
Stock. A Participant shall have none of the rights of a
shareholder of the Company pursuant to the exercise of an Option
hereunder until the issuance of Stock to such Participant
pursuant to such exercise and no adjustment shall be made for
dividends or other rights for which the record date is prior to
the date that the certificate evidencing such Stock is issued.
4. Number of Shares: Each Option shall state the total number of
shares of Stock to which it pertains.
5. Option Period and Limitations On Exercise of Options: The Option
period shall be one year from the date the Option becomes
exercisable in whole or in part under the terms of the Plan.
Except as provided in paragraph H.6, hereof, no Option shall be
exercisable until the first Anniversary Date next following the
date of grant thereof, when it becomes exercisable in accordance
with the following schedule:
A-4
A. For Options Granted During the First Plan Year: Options
granted during the first Plan Year shall be exercisable
on the first Anniversary Date following the date of
grant to the extent of twenty percent (20%) of the
Stock covered by such Option. On each succeeding
Anniversary Date, an additional twenty percent (20%) of
such Option shall become exercisable, with the result
that no Option granted during the first Plan Year may
be exercised, in whole or in part, after the sixth
Anniversary Date;
B. For Options Granted During the Second Plan Year:
Options granted during the second Plan Year shall be
exercisable on the first Anniversary Date following the
date of grant to the extent of twenty-five percent
(25%) of the Stock covered by such Option. On each
succeeding Anniversary Date, an additional twenty-five
percent (25%) of such Option shall become exercisable,
with the result that no Option granted during the
second Plan Year may be exercised, in whole or in part,
after the sixth Anniversary Date.
C. For Options Granted During the Third Plan Year: Options
granted during the third Plan Year shall be exercisable
on the first Anniversary Date following the date of
grant to the extent of thirty-three and one-third
percent (33 1/3 %) of the Stock covered by such Option.
On each succeeding Anniversary Date, an additional
thirty-three and one-third percent (33 1/3%) of such
Option shall become exercisable, with the result that
no Option granted during the third Plan Year may be
exercised, in whole or in part, after the sixth
Anniversary Date.
D. For Options Granted During the Fourth Plan Year:
Options granted during the fourth Plan Year shall be
exercisable on the first Anniversary Date following the
date of grant to the extent of fifty percent (50 %) of
the Stock covered by such Option. On the next
succeeding Anniversary Date, an additional fifty
percent (50%) of such Option shall become exercisable,
with the result that no Option granted during the
fourth Plan Year may be exercised, in whole or in part,
after the sixth Anniversary Date.
E. For Options Granted During the Fifth Plan Year: Options
granted during the fifth Plan Year shall be exercisable
on the first Anniversary Date following the date of
grant to the extent of one hundred percent (100 %) of
the Stock covered by such Option, with the result that
no Option granted during the fifth Plan Year may be
exercised, in whole or in part, after the sixth
Anniversary Date. No option may be exercised for the
purchase of fractional shares of stock.
A-5
6. Exercise of Options Upon Change in Control: Notwithstanding the
provisions of paragraph H.5, hereof, each Option granted under
the Plan shall become exercisable, in whole or in part, upon the
effective date of a Change in Control. Following the effective
date of a Change in Control, the Option period shall be one year
from the date the Option becomes exercisable.
7. Designation of Options: Each Option shall be designated, at the
time of issuance, as not being an incentive stock option under
Section 422A of the Code.
I. Termination of Employment
Except as provided in Section J, below, if a Participant ceases to be
employed by the Company or any of its Affiliates, his Options,
including those Options which are exercisable at the time of such
termination of employment, shall expire thirty (30) days following the
date of termination of employment; provided, however, that if a
Participant's cessation of employment with the Company and its
Affiliates is due to his retirement with the consent of the Company or
any of its Affiliates , the Participant may, at any time within three
months after such cessation of employment, exercise his Options to the
extent that he was entitled to exercise them on the date of cessation
of employment. The Committee may cancel any Option granted hereunder
during the post-employment periods referred to in this paragraph if
the Participant engages in employment or other activities contrary, in
the opinion of the Committee, to the best interests of the Company or
any of its Affiliates. The Committee shall determine in each case
whether a termination of employment shall be considered a retirement
with the consent of the Company or an Affiliate, and, subject to
applicable law, whether a leave of absence shall constitute a
termination of employment. Any such determination of the Committee
shall be final and conclusive, unless overruled by the Board.
J. Rights In Event of Death or Disability
If a Participant dies without having fully exercised his Options, the
executors or administrators, or legatees or heirs, of his estate shall
have the right to exercise only such Options as the deceased
Participant was presently entitled to exercise on the date of his
death. Any such exercise by the executors or administrators, or
legatees or heirs, of the estate of a Participant must be made within
90 days following the date of death of the Participant, in accordance
with the procedures set forth in Section H.2., hereof. After the
expiration of such 90-day period, no Options which the deceased
Participant was presently entitled to exercise on the date of his
death may be exercised.
If a Participant terminates his employment with the Company or an
Affiliate as a result of a "permanent and total disability (as that
term is defined by section 22(e)(3) of the Internal Revenue Code of
1986, as amended) without having fully exercised his Options, he shall
have the right to exercise only such Options as he was presently
entitled to exercise on the date of his permanent and total
disability. Any such exercise by the Participant must be made within
90 days following the date of such Participant's permanent and total
disability, in accordance with the procedures set forth in Section
H.2., hereof. After the expiration of such 90-day period, no Options
which the Participant was presently entitled to exercise on the date
of his permanent and total disability may be exercised.
A-6
K. No Obligation To Exercise Options
The granting of an Option shall impose no obligation upon the
Participant to exercise such Option.
L. Nonassignability
Options shall not be transferable other than by will or by the laws of
descent and distribution, to the extent provided herein, and during a
Participant's lifetime may be exercised only by such Participant.
M. Effect of Change In Stock Subject To The Plan
The aggregate number of shares of Stock available for Options under
the Plan, the shares subject to any Option, and the price per share,
shall all be proportionately adjusted for any increase or decrease in
the number of issued shares of Stock subsequent to the effective date
of the Plan resulting from (1) a subdivision or consolidation of Stock
or any other capital adjustment, (2) the payment of a dividend
consisting of Stock, or (3) any other increase or decrease in the
amount of Stock outstanding effected without the receipt of
consideration by the Company. If the Company shall be the surviving
Corporation in any merger or consolidation, any Option shall pertain,
apply, and relate to the nature and amount of securities of such
resulting entity to which a holder of the number of shares of Stock
subject to the Option would have become entitled to following such
merger or consolidation.
If the Company is merged into or consolidated with any other
corporation in a transaction where the Company is not the surviving
corporation, or if it sells all or substantially all of its assets to
any other corporation, then either (i) the Company shall cause
provision to be made for the continuance of the Plan after such event,
or for the substitution for this Plan for another Plan covering the
number and class of securities which the Participants in this Plan
would have been entitled to receive in such merger or consolidation by
virtue of such sale if the Participant had been the holder of record
of a number of shares of Stock of the Company equal to the then
unexpired portion of the Options then held by Participants, or (ii)
the Company shall give to the Participants written notice of its
election not to cause such provision to be made and all unexercised
Options shall become exercisable in full (or, at the individual
election of a Participant, in part) at any time during a period of 20
calendar days, to be designated by the Company, ending not more than
10 calendar days prior to the effective date of such merger,
consolidation or sale, in which case any unexercised Options shall not
be exercisable to any extent after the expiration of such 20 calendar
day period.
A-7
N. Amendment and Termination
The Board or the Committee may terminate, amend, or revise the Plan
with respect to any shares as to which Options have not been granted.
The Board or the Committee may alter or amend the provisions of
paragraph 3, hereof, pertaining to the Term of the Plan. Neither the
Board nor the Committee may, without the consent of the holder of an
Option, alter or impair any Option previously granted under the Plan,
except as authorized herein. Unless sooner terminated, the Plan shall
remain in effect for a period of eleven years from the date of the
Plan's adoption by the Board. Termination of the Plan shall not affect
any Option previously granted.
O. Reservation of Shares of Stock
The Company, during the term of this Plan, will at all times reserve
and keep available, and will seek or obtain from any regulatory body
having jurisdiction, any requisite authority necessary to issue and
sell the number of shares of Stock that shall be sufficient to satisfy
the requirements of this Plan. The inability of the Company to obtain
from any regulatory body having jurisdiction the authority deemed
necessary by counsel for the Company for the lawful issuance and sale
of its Stock hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell stock as to which the
requisite authority has not be obtained.
P. Tax Withholding:
The Company shall have the right to require a Participant to remit to
the Company an amount sufficient to satisfy Federal taxes, required by
law or regulation to be withheld or deducted with respect to any
taxable event arising as a result of the exercise by a Participant of
Options under this Plan.
A-8