As filed with the Securities and Exchange Commission on November 4, 1996
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
WTD INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Oregon 98-0832150
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
10260 S.W. Greenburg Road, Suite 900
Portland, Oregon 97223
(Address of Principal Executive Offices, including zip code)
WTD INDUSTRIES, INC. 1996 STOCK OPTION PLAN
(Full title of the Plan)
ROBERT J. RIECKE
General Counsel
10260 S.W. Greenburg Road, Suite 900
Portland, Oregon 97223
(503) 246-3440
(Name, address and telephone number, including area code, of agent for service)
----------------------
Copy to:
ROY W. TUCKER, ESQ.
SEHAR S. AHMAD, ESQ.
Perkins Coie
1211 S.W. Fifth Avenue, Suite 1500
Portland, Oregon 97204
----------------------
CALCULATION OF REGISTRATION FEE
- ---------------------------- ----------------- ----------------------------- ----------------------------- ------------------
Title of Securities Amount to Be Proposed Maximum Proposed Maximum Amount of
to Be Registered Registered(1) Offering Price Per Share(2) Aggregate Offering Price(2) Registration Fee
- ---------------------------- ----------------- ----------------------------- ----------------------------- ------------------
Common Stock, no par value per share:
WTD Industries, Inc.
1996 Stock Option Plan 525,000 $1.86 $976,500 $295.91
============================ ----------------- ----------------------------- ----------------------------- ------------------
<FN>
(1) Together with an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance under
the WTD Industries, Inc. 1996 Stock Option Plan as the result of any
future stock split, stock dividend or similar adjustment of the
outstanding Common Stock of the Registrant.
(2) Estimated pursuant to Rule 457(h) under the Securities Act of 1933, as
amended, solely for the purpose of calculating the registration fee.
The price per share is estimated to be $1.86 based on the average of
the high and low price reported for the Common Stock in the
over-the-counter market on October 30, 1996 as reported on the Nasdaq
National Market.
</FN>
1
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended April 30, 1996 filed with the Securities and Exchange Commission (the
"Commission");
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1996 filed with the Commission; and
(c) The description of the Registrant's Common Stock contained
in the Registration Statement on Form 8-A filed with the Commission on August
26, 1987 under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and as amended on Form 8 filed with the Commission on March
17, 1989 and including any amendment or reports filed for the purpose of
updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that the securities offered
hereby have been sold or which deregisters the securities covered hereby then
remaining unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
Item 6. Indemnification of Directors and Officers
As an Oregon corporation the Registrant is subject to the Oregon
Business Corporation Act (the "Act") and the exculpation from liability and
indemnification provisions contained therein. Pursuant to Section 60.047(2)(d)
of the Act, Article 7 of the Registrant's Fourth Restated Articles of
Incorporation (the "Articles") eliminates the liability of the Registrant's
directors to the Registrant or its shareholders to the fullest extent permitted
by the Act.
Section 60.391 of the Act allows corporations to indemnify their
directors and officers against liability where the director or officer has acted
in good faith and with a reasonable belief that actions taken were in the best
interests of the corporation or at least not opposed to the corporation's best
interests and, if in a criminal proceeding, the individual had no reasonable
cause to believe the conduct in question was unlawful. Under the Act,
corporations may not indemnify against liability in connection with a claim by
or in the right of the corporation or for any improper personal benefit in which
the director or officer was adjudged liable to the corporation. Section 60.394
of the Act mandates indemnification for all reasonable expenses incurred in the
successful defense of any claim made or threatened whether or not such claim was
by or in the right of the corporation. Finally, pursuant to the Section 60.401
of the Act, a court may order indemnification in view of all the relevant
circumstances, whether or not the director or officer met the good-faith and
reasonable belief standards of conduct set out in Section 60.391 of the Act.
Section 60.414 of the Act also provides that the statutory
indemnification provisions are not deemed exclusive of any other rights to which
directors or officers may be entitled under a corporation's articles of
incorporation or bylaws, any agreement, general or specific action of the board
of directors, vote of shareholders or otherwise.
The Articles provide that the Registrant is required to indemnify its
current and former directors and officers to the fullest extent permitted by law
and may indemnify its current and former employees or agents. Indemnification
Agreements executed by all directors and officers of the Registrant obligate the
Registrant to
2
indemnify such individuals for liabilities incurred by such individuals while
serving as directors or officers of the Registrant.
Item 8. Exhibits
Exhibit
Number Description
------- ------------------------------------------------------------------
5.1 Opinion of Perkins Coie regarding legality of the Common Stock
being registered
23.1 Consent of Moss Adams LLP
23.2 Consent of Perkins Coie
(included in the opinion filed as Exhibit 5.1)
99.1 WTD Industries, Inc. 1996 Stock Option Plan
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (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 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.
B. The undersigned Registrant hereby 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 (and, where applicable, each filing of an employee benefits plan's
annual report pursuant to 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 bona
fide offering thereof.
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 Commission such indemnification is
against public policy as expressed
3
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the 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
Securities Act and will be governed by the final adjudication of such issue.
4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Portland, State of Oregon, on November 4, 1996.
WTD INDUSTRIES, INC.
By:/s/Bruce L. Engel
-----------------
Bruce L. Engel
President
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Bruce L. Engel and K. Stanley Martin and each of them as attorneys-in-fact, with
full power of substitution, to execute in the name and on behalf of such person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments with the Securities and Exchange Commission or any regulatory
authority.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on November 4, 1996.
Signature Title
/s/ Bruce L. Engel President and Director
- -------------------------------------------- (Principal Executive Officer)
Bruce L. Engel
/s/ K. Stanley Martin Vice President-Finance and Director
- -------------------------------------------- (Principal Financial Officer and
K. Stanley Martin Principal Accounting Officer)
/s/ Robert J. Riecke Vice President-Administration
- -------------------------------------------- and Director
Robert J. Riecke
/s/ Scott Christie Director
- --------------------------------------------
Scott Christie
/s/ William H. Wright Director
- --------------------------------------------
William H. Wright
/s/ Richard W. Detweiler Director
- --------------------------------------------
Richard W. Detweiler
5
INDEX TO EXHIBITS
Exhibit Sequentially
Number Description Numbered Page
------- ----------------------------------------------- -------------
5.1 Opinion of Perkins Coie regarding legality of 7
the Common Stock being registered
23.1 Consent of Moss Adams LLP 8
23.2 Consent of Perkins Coie (included in the opinion
filed as Exhibit 5.1) 9
99.1 WTD Industries, Inc. 1996 Stock Option Plan 10
6
Exhibit 5.1
November 4, 1996
WTD Industries, Inc.
10260 S.W. Greenburg Road, Suite 900
Portland, Oregon 97223
Re: 525,000 Shares of Common Stock (no par value) of WTD Industries,
Inc. (the "Company")
Gentlemen and Ladies:
We have acted as counsel to the Company in connection with the
preparation of a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"), to be
filed with the Securities and Exchange Commission with respect to an aggregate
of 525,000 shares of Common Stock, no par value of the Company (the "Shares"),
which may be issued pursuant to the WTD Industries, Inc. 1996 Stock Option Plan
(the "Plan"). We have examined the Registration Statement and such documents and
records of the Company and other documents as we have deemed necessary for the
purpose of this opinion.
We are of the opinion that the Shares that will be issued upon the
exercise of stock options granted pursuant to the Plan have been duly authorized
and that, upon the receipt of the consideration therefor in accordance with the
terms of the Plan and issuance thereof by the Company, the Shares will be
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/Perkins Coie
---------------
PERKINS COIE
7
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 pertaining to WTD Industries, Inc. 1996 Stock
Option Plan with respect to the financial statements of WTD Industries, Inc.
which appear in the WTD Industries, Inc. Annual Report on Form 10-K for the year
ended April 30, 1996, filed with the Securities and Exchange Commission.
/s/ Moss Adams LLP
------------------
MOSS ADAMS LLP
Beaverton, Oregon
November 4, 1996
8
Exhibit 23.2
November 4, 1996
WTD Industries, Inc.
10260 S.W. Greenburg Road, Suite 900
Portland, Oregon 97223
Re: 525,000 Shares of Common Stock (no par value) of WTD Industries,
Inc. (the "Company")
Gentlemen and Ladies:
We have acted as counsel to the Company in connection with the
preparation of a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"), to be
filed with the Securities and Exchange Commission with respect to an aggregate
of 525,000 shares of Common Stock, no par value of the Company (the "Shares"),
which may be issued pursuant to the WTD Industries, Inc. 1996 Stock Option Plan
(the "Plan"). We have examined the Registration Statement and such documents and
records of the Company and other documents as we have deemed necessary for the
purpose of this opinion.
We are of the opinion that the Shares that will be issued upon the
exercise of stock options granted pursuant to the Plan have been duly authorized
and that, upon the receipt of the consideration therefor in accordance with the
terms of the Plan and issuance thereof by the Company, the Shares will be
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/Perkins Coie
---------------
PERKINS COIE
9
Exhibit 99.1
WTD INDUSTRIES, INC.
1996 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the WTD Industries, Inc. 1996 Stock Option Plan (the
"Plan") is to enhance the long-term shareholder value of WTD Industries, Inc.,
an Oregon corporation (the "Company"), by offering opportunities to employees,
directors, officers, consultants, agents, advisors and independent contractors
of the Company and its Subsidiaries (as defined in Section 2) to participate in
the Company's growth and success, and to encourage them to remain in the service
of the Company and its Subsidiaries and to acquire and maintain stock ownership
in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 Award
"Award" means an award or grant of Nonqualified Stock Options made to a
Participant pursuant to the Plan.
2.2 Board
"Board" means the Board of Directors of the Company.
2.3 Cause
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.4 Code
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 Common Stock
"Common Stock" means the common stock, no par value, of the Company.
2.6 Disability
"Disability" means "disability" as that term is defined for purposes of
the Company's Long Term Disability Plan or other similar successor plan
applicable to salaried employees.
2.7 Exchange Act
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
10
2.8 Fair Market Value
"Fair Market Value" shall be as established in good faith by the Plan
Administrator or, if the Common Stock is listed on the Nasdaq National Market,
the last reported sales price for the Common Stock as reported by the Nasdaq
National Market for a single trading day. If there is no such reported price for
the Common Stock for the date in question, then such price on the last preceding
date for which such price exists shall be determinative of the Fair Market
Value.
2.9 Grant Date
"Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted.
2.10 Holder
"Holder" means the Participant to whom an Award is granted or, for a
Holder who has died, the personal representative of the Holder's estate, the
person(s) to whom the Holder's rights under the Award have passed by will or the
applicable laws of descent and distribution or the beneficiary designated
pursuant to Section 8.
2.11 Nonqualified Stock Option
"Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 that does not qualify as an "incentive stock option" as
that term is defined in Section 422 of the Code.
2.12 Option
"Option" means the right to purchase Common Stock granted under
Section 7.
2.13 Participant
"Participant" means an individual who is a Holder of an Award or, as
the context may require, any employee, director, officer, consultant, agent,
advisor or independent contractor of the Company or a Subsidiary who has been
designated by the Plan Administrator as eligible to participate in the Plan.
2.14 Plan Administrator
"Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
2.15 Securities Act
"Securities Act" means the Securities Act of 1933, as amended.
2.16 Subsidiary
"Subsidiary" means any entity that is directly or indirectly controlled
by the Company or in which the Company has a significant ownership interest, as
determined by the Plan Administrator, and any entity that may become a direct or
indirect parent of the Company.
11
SECTION 3. ADMINISTRATION
3.1 Plan Administrator
The Plan shall be administered by the Board or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the Board. If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall
consider in selecting the Plan Administrator and the membership of any committee
acting as Plan Administrator for the Plan with respect to any persons subject or
likely to become subject to Section 16 under the Exchange Act the provisions
regarding (a) "outside directors" as contemplated by Section 162(m) of the Code
and (b) "nonemployee directors" as contemplated by Rule 16b-3 under the Exchange
Act. The Board may delegate the responsibility for administering the Plan with
respect to designated classes of eligible Participants to different committees,
subject to such limitations as the Board deems appropriate. Committee members
shall serve for such term as the Board may determine, subject to removal by the
Board at any time.
3.2 Administration and Interpretation by the Plan Administrator
Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the number of shares of Common Stock
subject to an Award, all terms, conditions, restrictions and limitations, if
any, of an Award and the terms of any instrument that evidences the Award. The
Plan Administrator shall also have exclusive authority to interpret the Plan and
may from time to time adopt, and change, rules and regulations of general
application for the Plan's administration. The Plan Administrator's
interpretation of the Plan and its rules and regulations, and all actions taken
and determinations made by the Plan Administrator pursuant to the Plan, shall be
conclusive and binding on all parties involved or affected. The Plan
Administrator may delegate administrative duties to such of the Company's
officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 Authorized Number of Shares
Subject to adjustment from time to time as provided in Section 9.1, a
maximum of 525,000 shares of Common Stock shall be available for issuance under
the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares or shares now held or subsequently acquired by the Company.
4.2 Limitations
Subject to adjustment from time to time as provided in Section 9.1, not
more than 50,000 shares of Common Stock may be made subject to Awards under the
Plan to any individual Participant in the aggregate in any one fiscal year of
the Company, except that the Plan Administrator may make additional onetime
grants of up to 100,000 shares to newly hired Participants, such limitation to
be applied in a manner consistent with the requirements of, and only to the
extent required for compliance with, the exclusion from the limitation on
deductibility of compensation under Section 162(m) of the Code.
4.3 Reuse of Shares
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for in shares) shall again be available
for issuance in connection with future grants of Awards under the Plan;
provided, however, that for purposes of Section 4.2, any such shares shall be
counted in accordance with the requirements of Section 162(m) of the Code.
12
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and
key employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Awards may also be made to consultants, agents, advisors
and independent contractors who provide services to the Company and its
Subsidiaries.
SECTION 6. AWARDS
6.1 Form and Grant of Awards
The Plan Administrator shall have the authority, in its sole
discretion, to determine the Awards to be made under the Plan. Such Awards shall
consist of Nonqualified Stock Options.
6.2 Acquired Company Awards
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b3 under the Exchange Act, and the persons holding such
Awards shall be deemed to be Participants and Holders.
SECTION 7. AWARDS OF OPTIONS
7.1 Grant of Options
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Nonqualified Stock Options.
7.2 Option Exercise Price
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 85% of the Fair
Market Value of the Common Stock on the Grant Date.
7.3 Term of Options
The term of each Option shall be as established by the Plan
Administrator or, if not so established, shall be 10 years from the Grant Date.
7.4 Exercise of Options
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will become exercisable according to the
following schedule, which may be waived or modified by the Plan Administrator at
any time:
13
Period of Holder's Continuous Employment or Service
With the Company or Its Subsidiaries Percent of Total Option
From the Option Grant Date That Is Exercisable
- -------------------------------------------------- ------------------------
After 6 months 20%
After 1 year 40%
After 2 years 60%
After 3 years 80%
After 4 years 100%
To the extent that the right to purchase shares has accrued thereunder,
an Option may be exercised from time to time by written notice to the Company,
in accordance with procedures established by the Plan Administrator, setting
forth the number of shares with respect to which the Option is being exercised
and accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 100 shares at any one time (or the lesser number of remaining
shares covered by the Option).
7.5 Payment of Exercise Price
The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check, or, unless the Plan Administrator at any time
determines otherwise, a combination of cash and/or check: if and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act,
delivery of a properly executed exercise notice, together with irrevocable
instructions, to (i) a brokerage firm designated by the Company to deliver
promptly to the Company the aggregate amount of sale proceeds to pay the Option
exercise price and any withholding tax obligations that may arise in connection
with the exercise and (ii) the Company to deliver the certificates for such
purchased shares directly to such brokerage firm, all in accordance with the
regulations of the Federal Reserve Board. In addition, the exercise price for
shares purchased under an Option may be paid, either singly or in combination
with one or more of the alternative forms of payment authorized by this Section
7.5, or by such other consideration as the Plan Administrator may permit.
7.6 Post-Termination Exercises
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.
In case of termination of the Holder's employment or services, the
Option shall be exercisable, to the extent of the number of shares purchasable
by the Holder at the date of such termination, only (a) within one year if the
termination of the Holder's employment or services is coincident with Disability
or (b) within one month after the date the Holder ceases to be an employee,
director, officer, consultant, agent, advisor or independent contractor of the
Company or a Subsidiary if termination of the Holder's employment or services is
for any reason other than death or Disability, but in no event later than the
remaining term of the Option. Any Option exercisable at the time of the Holder's
death may be exercised, to the extent of the number of shares purchasable by the
Holder at the date of the Holder's death, by the personal representative of the
Holder's estate, the person(s) to whom the Holder's rights under the Award have
passed by will or the applicable laws of descent and distribution, or the
beneficiary designated pursuant to Section 8 at any time or from time to time
within one year after the date of death, but in no event later than the
remaining term of the Option. Any portion of an Option that is not exercisable
on the date of termination of the Holder's employment or services shall
terminate on such date, unless the Plan Administrator determines otherwise. In
case of termination of the Holder's employment or services for Cause, the Option
shall automatically terminate upon first notification to the Holder of such
termination, unless the Plan Administrator determines otherwise. If a Holder's
employment or services with the Company are suspended
14
pending an investigation of whether the Holder shall be terminated for Cause,
all the Holder's rights under any Option likewise shall be suspended during the
period of investigation.
A transfer of employment or services between or among the Company and
its Subsidiaries shall not be considered a termination of employment or
services. The effect of a Company approved leave of absence on the terms and
conditions of an option shall be determined by the Plan Administrator, in its
sole discretion.
SECTION 8. ASSIGNABILITY
No Award granted under the Plan may be assigned, pledged or transferred
by the Holder other than by will or by the laws of descent and distribution,
and, during the Holder's lifetime, such Awards may be exercised only by the
Holder. Notwithstanding the foregoing, the Plan Administrator, in its sole
discretion, may permit such assignment, transfer and exercisability and may
permit a Holder of such Awards to designate a beneficiary who may exercise the
Award or receive compensation under the Award after the Holder's death;
provided, however, that any Award so assigned or transferred shall be subject to
all the same terms and conditions contained in the instrument evidencing the
Award.
SECTION 9. ADJUSTMENTS
9.1 Adjustment of Shares
The aggregate number and class of shares for which Options may be
granted under the Plan, the maximum number and class of securities that may be
made subject to Awards to any individual Participant as set forth in Section
4.2, the number and class of shares covered by each outstanding Option and the
exercise price per share thereof (but not the total price) shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a split-up or consolidation of shares or
any like capital adjustment, or the payment of any stock dividend.
9.2 Cash, Stock or Other Property for Stock
Except as provided in Section 9.3, upon a merger (other than a merger
of the Company in which the holders of shares of Common Stock immediately prior
to the merger have the same proportionate ownership of shares of Common Stock in
the surviving corporation immediately after the merger), consolidation,
acquisition of property or stock, separation, reorganization (other than a mere
reincorporation or the creation of a holding company) or liquidation of the
Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for or in connection with their shares of
Common Stock, any Option granted hereunder shall terminate, but the Participant
shall have the right immediately prior to any such merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation to
exercise such Participant's Option in whole or in part whether or not the
vesting requirements set forth in the option agreement have been satisfied.
9.3 Conversion of Options on Stock for Stock Exchange
If the shareholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common Stock in
any transaction involving a merger, consolidation, acquisition of property or
stock, separation or reorganization, all Options granted hereunder shall be
converted into options to purchase shares of Exchange Stock, unless the Company
and the corporation issuing the Exchange Stock, in their sole discretion,
determine that any or all such Options granted hereunder shall not be converted
into options to purchase shares of Exchange Stock but instead shall terminate in
accordance with the provisions of Section 9.2. The amount and price of converted
options shall be determined by adjusting the amount and price of the options
granted hereunder in the same proportion as used for determining the number of
shares of Exchange Stock the holders of the shares of Common Stock receive in
such merger, consolidation, acquisition of property or stock, separation or
reorganization. In any such transaction, other than a merger of the Company in
which the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger or a mere reincorporation or the creation of a holding company,
the converted options shall be fully vested whether or not the vesting
requirements set forth in the option
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agreement have been satisfied; provided that such acceleration will not occur
if, in the opinion of the Company's outside accountants, such acceleration would
render unavailable "pooling of interests" accounting treatment for any
reorganization, merger or consolidation of the Company for which pooling of
interests accounting treatment is sought by the Company.
9.4 Fractional Shares
In the event of any adjustment in the number of shares covered by any
Option, any fractional shares resulting from such adjustment shall be
disregarded and each such Option shall cover only the number of full shares
resulting from such adjustment.
9.5 Determination of Board to Be Final
All Section 9 adjustments shall be made by the Board, and its
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.
9.6 Further Adjustment of Awards
Subject to Sections 9.2 and 9.3, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to Participants (but shall not be
limited to) establishing, amending or waiving the type, terms, conditions or
duration of, or restrictions on, Awards so as to provide for earlier, later,
extended or additional time for exercise and other modifications, and the Plan
Administrator may take such actions with respect to all Participants, to certain
categories of Participants or only to individual Participants. The Plan
Administrator may take such actions before or after granting Awards to which the
action relates and before or after any public announcement with respect to such
sale, merger, consolidation, reorganization, liquidation or change in control
that is the reason for such action.
9.7 Limitations
The grant of Awards will in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
SECTION 10. WITHHOLDING
The Company may require the Holder to pay to the Company the amount of
any withholding taxes that the Company is required to withhold with respect to
the grant or exercise of any Award. The Company shall have the right to withhold
from any shares of Common Stock issuable pursuant to an Award or from any cash
amounts otherwise due or to become due from the Company to the Participant an
amount equal to such taxes. The Company may also deduct from any Award any other
amounts due from the Participant to the Company or a Subsidiary.
SECTION 11. AMENDMENT AND TERMINATION OF PLAN
11.1 Amendment of Plan
The Plan may be amended only by the Board as it shall deem advisable;
however, to the extent required for compliance with any applicable law or
regulation, shareholder approval will be required for any amendment that will
(a) increase the total number of shares as to which Options may be granted under
the Plan or (b) otherwise require shareholder approval under any applicable law
or regulation.
11.2 Termination of Plan
The Company's shareholders or the Board may suspend or terminate the
Plan at any time. The Plan will have no fixed expiration date.
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11.3 Consent of Holder
The amendment or termination of the Plan shall not, without the consent
of the Holder of any Award under the Plan, impair or diminish any rights or
obligations under any Award theretofore granted under the Plan.
SECTION 12. GENERAL
12.1 Award Agreements
Awards granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
12.2 Continued Employment or Services; Rights in Awards
None of the Plan, participation in the Plan as a Participant or any
action of the Plan Administrator taken under the Plan shall be construed as
giving any Participant or employee of the Company any right to be retained in
the employ of the Company or limit the Company's right to terminate the
employment or services of the Participant.
12.3 Registration; Certificates for Shares
The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the non issuance or
sale of such shares as to which such requisite authority shall not have been
obtained.
12.4 No Rights as a Shareholder
No Award shall entitle the Holder to any dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Award, free of all applicable
restrictions.
12.5 Compliance With Laws and Regulations
Notwithstanding anything in the Plan to the contrary, the Board, in its
sole discretion, may bifurcate the Plan so as to restrict, limit or condition
the use of any provision of the Plan to Participants who are officers or
directors subject to Section 16 of the Exchange Act without so restricting,
limiting or conditioning the Plan with respect to other Participants.
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12.6 No Trust or Fund
The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.
12.7 Severability
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
SECTION 13. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the
Board, so long as it is approved by the Company's shareholders at any time
within 12 months of such adoption.
Adopted by the Board on August 20, 1996 and approved by the Company's
shareholders on October 21, 1996.
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