SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under the Securities Act of 1933
--------------------------
HANSEN NATURAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 39-1679918
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
1010 Railroad Street
Corona, California 92882
(Address of Principal Executive Offices) (Zip Code)
HANSEN NATURAL CORPORATION 2001 STOCK OPTION PLAN
(Full Title of the Plan)
Rodney C. Sacks
Chairman of the Board of Directors
and Chief Executive Officer
Hansen Natural Corporation
1010 Railroad Street
Corona, California 92882
(Name and Address of Agent for Service)
(909) 739-6200
(Telephone Number, Including Area Code, of Agent for Service)
--------------------------
Copies to:
Benjamin M. Polk, Esq.
Winston & Strawn LLP
200 Park Avenue
New York, New York 10166
(212) 294-6700
CALCULATION OF REGISTRATION FEE
Title of
securities Proposed maximum Proposed maximum Amount of
to be Amount to offering price aggregate offering registration
registered be registered per share (2) price(2) fee
- ----------- -------------- ---------------- ----------------- -------------
Common stock, 2,000,000 $8.78 $17,560,000 $2,224.85
par value shares (1)
$0.005 per
share.
(1) Plus such indeterminate number of shares of common stock of the
Registrant as may be issued to prevent dilution resulting from stock dividends,
stock splits or similar transactions in accordance with Rule 416.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of calculating
the registration fee. It is not known how many of these shares will be purchased
or at what price. The estimate of the proposed maximum aggregate offering price
has been calculated based on the offering of all 2,000,000 shares registered
under the registration statement, at a price of $8.78 per share, which is the
average of the high and low prices of the Registrant's Common Stock as quoted on
the Nasdaq SmallCap Market on January 28, 2004.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I of Form S-8
will be sent or given to employees, directors or others as specified by Rule
428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act"). In
accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission") and the instructions to Form S-8, such documents
are not being filed with the Commission either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Hansen Natural Corporation (the "Corporation") is subject to the
informational and reporting requirements of Sections 13(a), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. The following documents previously filed with the Commission by
the Registrant pursuant to the Exchange Act, are incorporated by reference
herein:
(1) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002;
(2) The Registrant's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 2003, June 30, 2003 and September 30, 2003;
(3) The Registrant's Current Report on Form 8-K, dated September 17, 2003;
and
(4) The description of the Registrant's common stock, $0.005 par value
("Common Stock"), contained in Post-Effective Amendment No. 12 to the
Registrant's Registration Statement on Form S-3 (File No. 33-35796)
filed on August 4, 1993, including any amendment thereto or report
filed for the purpose of updating such description.
All documents subsequently filed with the Commission by the Registrant
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 securities
offered hereby have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference into the prospectus and
this Registration Statement and to be part hereof from the date of filing of
such documents. Any statement contained herein or in a document, all or a
portion of which is incorporated or deemed to be 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 which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters relating to the Common Stock offered hereby are being
passed upon for the Registrant by Winston & Strawn LLP. Benjamin M. Polk, a
partner of Winston & Strawn LLP, is a member of the Board of Directors of the
Registrant.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law, as amended (the
"DGCL"), permits, under certain circumstances, the indemnification of any person
with respect to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, to which
such person was or is a party or is threatened to be made a party by reason of
the fact that such person is or was a director, officer, employee, or agent of
the corporation or was serving in a similar capacity for another enterprise at
the request of the corporation. To the extent that a director, officer,
employee, or agent of the corporation has been successful in defending any such
proceeding, the DGCL provides that he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
With respect to a proceeding by or in the right of the corporation, such
person may be indemnified against expenses (including attorney's fees) 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. The statute provides, however,
that no indemnification is allowed in such a proceeding if such person is
adjudged liable to the corporation unless, and only to the extent that, the
court may, upon application, determine that he is entitled to indemnification
under the circumstances. With respect to proceedings other than those brought by
or in the right of the corporation, such person may be indemnified against
judgments, fines, and amounts paid in settlement, as well as expenses, 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
criminal action, had no reasonable cause to believe his conduct was unlawful,
notwithstanding the outcome of the proceeding. Except with respect to mandatory
indemnification of expenses to successful defendants as described in the
preceding paragraph or pursuant to a court order, the indemnification described
in this paragraph may be made only upon a determination in each specific case by
majority vote of a quorum of directors not parties to the proceeding, by written
opinion of independent legal counsel, or by the stockholders, that the defendant
met the applicable standard of conduct described above.
The DGCL permits a corporation to advance expenses incurred by a proposed
indemnitee in advance of final disposition of the proceeding provided the
indemnitee undertakes to repay such advanced expenses if it is ultimately
determined that he is not entitled to indemnification. A corporation may
purchase insurance on behalf of an indemnitee against any liability asserted
against him in his designated capacity, whether or not the corporation itself
would be empowered to indemnify him against such liability.
2
Delaware law also provides that the above rights shall not be deemed
exclusive of other rights of indemnification or advancement of expenses under
any by-law, agreement, vote of stockholders or disinterested directors, or
otherwise. The Registrant's Certificate of Incorporation and By-Laws generally
require the Registrant to indemnify and advance expenses to its directors and
its officers (and permit the Registrant to indemnify and advance expenses to its
employees and agents) to the fullest extent permitted by law.
Section 102(b)(7) of the DGCL permits Delaware corporations in their
certificates of incorporation to eliminate or limit the personal liability of
directors to the corporation or its stockholders for monetary damages for
breaches of certain duties. Under the Registrant's Certificate of Incorporation,
a director of the Registrant shall, to the maximum extent currently or hereafter
permitted by section 102(b)(7) of the DGCL (or any successor provision) have no
personal liability to the Registrant or its stockholders. Section 102(b)(7) of
the DGCL provides that Delaware corporations may not eliminate or limit the
liability of a director: (i) for any breach of the director's duty of loyalty to
the Registrant or its stockholders, (ii) for acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the DGCL (involving certain unlawful dividends and stock
purchases or redemptions), or (iv) for any transaction from which the director
derived an improper personal benefit.
The Registrant may maintain insurance covering the liability of the
Registrant to its directors and officers under the terms and provisions of the
By-Laws of the Registrant and covering its directors and officers for liability
incurred in their capacities as such directors and officers.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The Index to Exhibits immediately preceding the exhibits is attached hereto and
incorporated herein by reference.
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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; 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;
3
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) 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 the 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) 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 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 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 provisions described in Item 6
above, or otherwise, the Registrant has 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 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, 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 Corona, the State of California, on January 30, 2004.
HANSEN NATURAL CORPORATION
By: \s\ Rodney C. Sacks
------------------------
Name: Rodney C. Sacks
Title: Chairman of the Board of Directors
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Rodney C. Sacks and Hilton H. Schlosberg, and
each of them (with full power to each of them to act alone), his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, to do any and all acts and things and execute, in the name of
the undersigned, any and all instruments which said attorneys-in-fact and agents
may deem necessary or advisable in order to enable Hansen Natural Corporation to
comply with the Securities Act of 1933, as amended, and any requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing with the Securities and Exchange Commission of the registration statement
on Form S-8 under the Securities Act, including specifically, but without
limitation, power and authority to sign the name of the undersigned to such
registration statement, and any amendments to such registration statement
(including post-effective amendments), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, to sign any and all applications, registration statements,
notices or other documents necessary or advisable to comply with applicable
state securities laws, and to file the same, together with other documents in
connection therewith with the appropriate state securities authorities, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and to perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully and to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and any of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
5
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
Signature Title Date
----------------------- --------------------- --------------------
/s/ RODNEY C. SACKS Chairman of the Board of February 4, 2004
- ---------------------- Directors and Chief
Rodney C. Sacks Executive Officer (principal
executive officer)
/s/ HILTON H. SCHLOSBERG Vice Chairman of the Board February 4, 2004
- -------------------------- of Directors, President, Chief
Hilton H. Schlosberg Operating Officer, Chief
Financial Officer and
Secretary (principal financial
officer, controller, and
principal accounting officer)
/s/ BENJAMIN M. POLK Director February 4, 2004
- --------------------------
Benjamin M. Polk
/s/ NORMAN C. EPSTEIN Director February 4, 2004
- --------------------------
Norman C. Epstein
/s/ HAROLD C. TABER, JR. Director February 4, 2004
- --------------------------
Harold C. Taber, Jr.
/s/ MARK S. VIDERGAUZ Director February 4, 2004
- --------------------------
Mark S. Vidergauz
6
INDEX TO EXHIBITS
Exhibit No. Description
3.1 Certificate of Incorporation of the Registrant*
3.2 Amendment to Certificate of Incorporation of the Registrant**
3.3 By-Laws of the Registrant**
4.1 Hansen Natural Corporation 2001 Stock Option Plan
5.1 Opinion of Winston & Strawn LLP regarding the
legality of the securities being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Winston & Strawn LLP (included in Exhibit 5)
24.1 Powers of attorney (included in this Registration
Statement under "Signatures")
* Filed previously as an exhibit to the Registrant's Registration Statement
on Form S-3 (no. 33-35796) and incorporated herein by reference
** Filed previously as an exhibit to the Registrant's proxy statement dated
October 21, 1992 and incorporated herein by reference
7
February 4, 2004
Hansen Natural Corporation
1010 Railroad Street
Corona, California 92882
RE: Registration Statement on Form S-8 of Hansen Natural Corporation (the
"Registration Statement") registering 2,000,000 shares of Common Stock, $ .005
par value
Ladies and Gentlemen:
We have acted as special counsel for Hansen Natural Corporation, a Delaware
corporation (the "Company"), in connection with the registration on Form S-8 of
the offer and sale of up to 2,000,000 shares of common stock, $.005 par value,
of the Company (the "Common Stock") under the Hansen Natural Corporation 2001
Stock Option Plan (the "Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K promulgated under the Securities Act of 1933, as
amended (the "Act").
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of:
(i) the Registration Statement to be filed with the Securities and Exchange
Commission (the "Commission") under the Act; (ii) the Certificate of
Incorporation of the Company, as amended and currently in effect; (iii) the
By-Laws of the Company, as amended and currently in effect; (iv) the Plan; and
(v) resolutions of the Board of Directors of the Company relating to, among
other things, the filing of the Registration Statement. We have also examined
such other documents as we have deemed necessary or appropriate as a basis for
the opinion set forth below.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein that were not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that when
issued and delivered by the Company pursuant to the Plan, the shares of Common
Stock being registered will be legally issued, fully paid and non-assessable
shares of Common Stock.
The forgoing opinions are limited to the laws of the United States and the
General Corporation Law of the State of Delaware, including the applicable
provisions of the Delaware Constitution and reported judicial decisions
interpreting these laws. We express no opinion as to the application of the
securities or blue sky laws of the various states to the issuance and sale of
Common Stock.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. In giving such consent, we do not concede
that we are experts within the meaning of the Act or the rules and regulations
thereunder or that this consent is required by Section 7 of the Act.
Very truly yours,
/s/ Winston & Strawn LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Hansen Natural Corporation on Form S-8 of our report dated March 13, 2003
included in the Annual Report on Form 10-K of Hansen Natural Corporation for the
year ended December 31, 2002.
/s/ DELOITTE & TOUCHE LLP
Costa Mesa, California
February 4, 2004
HANSEN NATURAL CORPORATION
2001 STOCK OPTION PLAN
TABLE OF CONTENTS
Page
1. Purpose............................................................... 2
2. Definitions........................................................... 2
3. Shares Subject to the Plan............................................ 3
4. Grant of Stock Options and Stock Appreciation Rights.................. 3
5. Certificate for Awards of Stock....................................... 6
6. Loans................................................................. 7
7. Beneficiary........................................................... 7
8. Administration of the Plan............................................ 8
9. Amendment or Discontinuance........................................... 8
10.Adjustments in Event of Change in Common Stock........................ 9
11.Miscellaneous......................................................... 9
12.Effective Date and Stockholder Approval.............................. 11
i
HANSEN NATURAL CORPORATION
2001 STOCK OPTION PLAN
1. Purpose
The purpose of the Hansen Natural Corporation 2001 Stock Option Plan is to
attract and retain persons of ability as employees of Hansen Natural Corporation
and its subsidiaries and affiliates, and encourage such employees to continue to
exert their best efforts on behalf of the Company, its subsidiaries and
affiliates.
2. Definitions
When used herein, the following terms shall have the following meanings:
"Beneficiary" means the beneficiary or beneficiaries designated pursuant to
Section 7 to receive the benefit, if any, provided under the Plan upon the death
of an Employee.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.)
"Committee" means the Committee appointed by the Board pursuant to Section
8.
"Company" means Hansen Natural Corporation, and its successors and assigns.
"Employee" means an employee of a Participating Company who, in the
judgment of the Committee, is responsible for or contributes to the growth or
profitability of the business of the Company.
"Exchange" means the New York Stock Exchange, or if the Stock is not listed
on the New York Stock Exchange, the principal exchange on which the Stock is
listed or the NASDAQ system of the National Association of Securities Dealers.
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" means, as of any date, the mean between the reported
high and low sales prices on the Exchange for one share of Stock on such date,
or, if no sales of Stock have taken place on such date, the Fair Market Value of
one share of Stock on the most recent date on which selling prices were reported
on the Exchange. In the event that the Company's shares are not publicly traded
on an Exchange, the Committee shall determine the fair market value for all
purposes.
2
"Option" means an option to purchase Stock subject to the applicable
provisions of Section 4 and awarded in accordance with the terms of the Plan and
which may be an incentive stock option qualified under Section 422 of the Code
or a nonqualified stock option.
"Option Agreement" means the written agreement evidencing each Option or
SAR granted to an Employee under the Plan.
"Participating Company" means the Company or any subsidiary of other
affiliate of the Company; provided, however, for incentive stock options only,
"Participating Company" means the Company or any corporation which at the time
such option is granted qualifies as a "subsidiary corporation" of the Company
under Section 424(f) of the Code.
"Plan" means the Hansen Natural Corporation 2001 Stock Option Plan, as the
same may be amended, administered or interpreted from time to time.
"SAR" means a stock appreciation right subject to the appropriate
requirements under Section 4 and awarded in accordance with the terms of the
Plan.
"Stock" means the common stock of the Company.
"Total Disability" means the complete and permanent inability of an
Employee to perform all of his or her duties under the terms of his or her
employment with any Participating Company, as determined by the Committee upon
the basis of such evidence, including independent medical reports and data, as
the Committee deems appropriate or necessary.
3. Shares Subject to the Plan
The aggregate number of shares of Stock with respect to which awards may be
granted under the Plan is 2,000,000 shares. Such shares shall be made available
either from authorized and unissued shares or shares held by the Company in its
treasury. If, for any reason, any shares of Stock subject to purchase or payment
by exercising an Option or SAR under the Plan are not delivered or are
reacquired by the Company, for reasons including, but not limited to,
termination of employment, or expiration or cancellation of an Option or SAR,
such shares of Stock shall again become available for award under the Plan.
4. Grant of Stock Options and Stock Appreciation Rights
(a) Subject to the provisions of the Plan, the Committee shall determine
and designate from time to time those Employees to whom Options are to be
granted; determine whether such Option shall be incentive stock options or
nonqualified stock options or a combination of incentive stock options and
nonqualified stock options; determine the number of shares of Stock subject to
each Option or the number of shares of Stock that shall be used to determine the
value of an SAR; determine the time or times when and the manner in which each
Option shall be exercisable and the duration of the exercise period; determine
whether or not all or part of each Option may be cancelled by the exercise of an
SAR; and determine any other terms of each Option not inconsistent with the
provisions herein; provided, however, that (A) no Option shall be granted after
the expiration of ten years from the effective date of the Plan and (B) the
aggregate Fair Market Value (determined as of the date an Option is granted) of
the Stock for which incentive stock options granted to any Employee under this
Plan may first become exercisable in any calendar year shall not exceed
$100,000.
3
(b) The exercise period for Options and SARs shall be no more than 10 years
from the date of grant; provided, however, that the exercise period for an
incentive stock option and any tandem SARs granted to an Employee who, at the
time of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company (a "Ten Percent
Shareholder") shall not exceed five years.
(c) The option or SAR exercise price per share shall be determined by the
Committee at the time the Option is granted and shall be at least equal to the
par value of one share of Stock if the Stock has a par value; provided ,
however, that the exercise price for an incentive stock option and any tandem
SARs shall be not less than the Stock's Fair Market Value at date of grant, or
in the case of an incentive stock option and any tandem SARs granted to a Ten
Percent Shareholder, 110 percent of the Fair Market Value on the date of grant,
all as determined by the Committee.
(d) No part of any Option or SAR may be exercised by an Employee until such
Employee shall have remained in the employ of one or more Participating
Companies for such period as the Committee may specify, if any, after the date
on which the Option is granted, or achieved such performance or other criteria,
as the Committee may specify, if any, of the Company or any other Participating
Company, and the Committee may further require exercisability in installments;
provided, however, the period during which an SAR is exercisable shall commence
no earlier than six months following the date the SAR is granted.
(e) (i) If the Employee's employment terminates, he or she may exercise his
or her Options or SARs to the extent that he or she shall have been entitled to
do so at the date of the termination of his or her employment, at any time, or
from time to time, within three months after the date of the termination of his
or her employment or within such other period, and subject to such terms and
conditions as the Committee may specify, but not later than the expiration date
specified in Section 4(b) above.
(ii) If an Employee who has been granted an Option or SAR dies while
an Employee of a Participating Company, his or her Options or SARs may be
exercised, to the extent that the Employee shall have been entitled to do
so on the date of his or her death or such termination of employment, by
his or her Beneficiary including, if applicable, his or her executors or
administrators, at any time, or from time to time, within six months after
the date of the Employee's death or within such other period, and subject
to such terms and conditions as the Committee may specify, but no later
than the expiration date specified in Section 4(b) above.
(iii)If the Employee's employment by a Participating Company
terminates because of his or her Total Disability, he or she may exercise
his or her Options or SARs, to the extent that he or she shall have been
entitled to do so at the date of the termination of his or her employment,
at any time, or from time to time, within six months after the date of the
termination of his or her employment or within such other period, and
subject to such terms and conditions as the Committee may specify, but not
later than the expiration date specified in Section 4(b) above.
4
(f) If the Employee's employment terminates for any reason prior to the
date all or a portion of the Options become exercisable, such nonexercisable
Options shall automatically expire on the date of termination of employment.
However, if the Employee's termination of employment is due to death or Total
Disability, the Committee may, in its sole discretion, pay such Employee or his
or her Beneficiary an amount as the Committee determines to be reasonable
compensation for the expired Options.
(g) No Option or SAR granted under the Plan shall be transferable other
than by Will or by the laws of descent and distribution. During the lifetime of
the optionee, an Option and SAR shall be exercisable only by him or her.
Notwithstanding the foregoing, if the agreement evidencing such award so
provides, an Employee may transfer any Option or SAR (other than an incentive
stock option or related SAR) to the Employee's spouse, parents, children, and/or
grandchildren, or to one or more trusts for the benefit of such family members,
provided the Employee does not receive any consideration for the transfer. Any
Option or SAR so transferred shall be subject to the same terms and conditions
that applied to such Option or SAR immediately prior to its transfer (except
that such transferred Option or SAR shall not be further transferable by the
transferee during the transferee's lifetime).
(h) With respect to an incentive stock option, the Committee shall specify
such terms and provisions as the Committee may determine to be necessary or
desirable in order to qualify such Option as an incentive stock option within
the meaning of Section 422 of the Code.
(i) Each Option granted under the Plan shall be evidenced by a written
Option Agreement, in a form approved by the Committee. Such agreement shall be
subject to and incorporate the express terms and conditions, if any, required
under the Plan or as required by the Committee for the form of Option granted
and such other terms and conditions as the Committee may specify. Further, each
such Option Agreement shall provide that unless at the time of exercise of the
Option there shall be, in the opinion of counsel for the Company, a valid and
effective registration statement under the Securities Act of 1933 ("'33 Act")
and appropriate qualification and registration under applicable state securities
laws relating to the Stock being acquired pursuant to the Option, the Employee
shall upon exercise of the Option give a representation that he or she is
acquiring such shares for his or her own account for investment and not with a
view to, or for sale in connection with, the resale or distribution of such
shares. In the absence of such registration statement, the Employee shall be
required to execute a written affirmation, in a form reasonably satisfactory to
the Company, of such investment intent and to further agree that he or she will
not sell or transfer any Stock acquired pursuant to the Option until he or she
requests and receives an opinion of the Company's counsel to the effect that
such proposed sale or transfer will not result in a violation of the '33 Act, or
a registration statement covering the sale or transfer of the shares has been
declared effective by the Securities and Exchange Commission, or he or she
obtains a no-action letter from the Securities and Exchange Commission with
respect to the proposed transfer.
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(j) Except as otherwise provided in the Plan, the purchase price of the
shares as to which an Option shall be exercised shall be paid to the Company at
the time of exercise either in cash or in stock already owned by the optionee,
or a combination of cash and stock, or in such other consideration as the
Committee deems appropriate, having a total fair market value equal to the
purchase price. Alternatively, an Option may be exercised in whole or in part by
delivering a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds necessary to pay the purchase price and applicable withholding
taxes, and such other documents as the Committee may determine.
(k) Upon exercise of an SAR, the Employee shall be entitled to receive all
or a portion of the excess of the Fair Market Value of a specified number of
shares of Stock at the time of exercise over a specified amount which shall not,
subject to Section 4(j), be less than the Fair Market Value of such specified
number of shares of Stock at the time the SAR is granted. Upon exercise of an
SAR, payment of such excess shall be made in cash.
(l) If the Option granted to an Employee allows the Employee to elect to
cancel all or any portion of an unexercised Option by exercising a related
(tandem) SAR, then the Option price per share of Stock shall be used as the
specified price in Section 4(k), to determine the value of the SAR upon such
exercise, and, in the event of the exercise of such SAR, the Company's
obligation in respect of such Option or such portion thereof will be discharged
by payment of the SAR so exercised.
(m) No officer of the Company may be (x) awarded shares of Stock or (y)
granted Options during any consecutive 24-month period for more than 1,000,000
shares of Stock (subject to adjustment pursuant to Section 10).
5. Certificate for Awards of Stock
(a) Each Employee entitled to receive shares of Stock under the Plan shall
be issued a certificate for such shares. Such certificate shall be registered in
the name designated by the Employee, and shall bear an appropriate legend
reciting the terms, conditions and restrictions, if any, applicable to such
shares and shall be subject to appropriate stop-transfer orders.
(b) Shares of Stock shall be made available under the Plan either from
authorized and unissued shares, or shares held by the Company in its treasury.
The Company shall not be required to issue or deliver any certificates for
shares of Stock prior to the listing of such shares on any stock exchange on
which the Stock may then be listed, the completion of any registration or
qualification of such shares under any federal or state law, or any ruling or
regulation of any governmental body, which the Committee shall, in its sole
discretion, determine to be necessary or advisable and the recipient's execution
of a shareholders agreement providing such terms and conditions as the Committee
may determine in its sole discretion.
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(c) All certificates for shares of Stock delivered under the Plan shall
also be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or state securities
laws, and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. The foregoing
provisions of this Section 5(c) shall not be effective if and to the extent that
the shares of Stock delivered under the Plan are covered by an effective and
current registration statement under the Securities Act of 1933, or if, and so
long as, the Committee determines that application of such provisions is no
longer required or desirable. In making such determination, the Committee may
rely upon an opinion of counsel for the Company.
(d) Each Employee who receives Stock upon exercise of an Option shall have
all of the rights of a shareholder with respect to such shares, including the
right to vote the shares and receive dividends and other distributions. No
Employee awarded an Option shall have any right as a shareholder with respect to
any shares subject to such Option prior to the date of issuance to him or her of
a certificate or certificates for such shares.
6. Loans
(a) The Committee may provide for supplemental loans to Employees at such
time and in such manner as the Committee may determine in connection with the
exercise of an Option.
(b) Any such loan shall be evidenced by a written loan agreement or other
instrument in such form and shall contain such terms and conditions, including
without limitation, provisions for interest, payment schedules, collateral,
events of default or acceleration of such loans or parts thereof, as the
Committee shall specify; provided, however, that in the case of an incentive
stock option, the interest rate set by the Committee under such an arrangement
shall be no lower than that required to avoid the imputation of unstated
interest under the Code and the Committee shall specify no such term or
condition that would result in such Option failing to qualify as an incentive
stock option.
7. Beneficiary
(a) Each Employee shall file with the Company a written designation of one
or more persons as the Beneficiary who shall be entitled to receive the Option
or SAR, if any, awarded under the Plan upon his or her death. An Employee may
from time to time revoke or change his or her Beneficiary designation without
the consent of any prior Beneficiary by filing a new designation with the
Company. The last such designation received by the Company shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall
be effective unless received by the Company prior to the Employee's death, and
in no event shall it be effective as of a date prior to such receipt.
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(b) If no such Beneficiary designation is in effect at the time of an
Employee's death, or if no designated Beneficiary survives the Employee or if
such designation conflicts with law, the Employee's estate shall be entitled to
receive the Option and SAR, if any, awarded under the Plan upon his or her
death. If the Company is in doubt as to the right of any person to receive such
Option or SAR, the Company may retain such Option or SAR, without liability for
any income thereon, until the Company determines the rights thereto, or the
Company may transfer such Option or SAR into any court of appropriate
jurisdiction and such payment shall be a complete discharge of the liability of
the Company therefor.
8. Administration of the Plan
(a) The Plan shall be administered by the Compensation Committee of the
Board or such other committee as appointed by the Board (the "Committee"). The
Committee shall have at least two members and each member shall be a member of
the Board and (unless otherwise determined by the Board) shall satisfy the
"nonemployee director" requirements of Rule 16b-3 under the Exchange Act and the
"outside director" provisions of Section 162(m) of the Code, or any successor
regulations or provisions.
(b) All decisions, determinations or actions of the Committee made or taken
pursuant to grants of authority under the Plan shall be made or taken in the
sole discretion of the Committee and shall be final, conclusive and binding on
all persons for all purposes.
(c) The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof, and its
interpretations and constructions thereof and actions taken thereunder shall be
final, conclusive and binding on all persons for all purposes.
(d) The Committee's decisions and determinations under the Plan need not be
uniform and may be made selectively among Employees, whether or not such
Employees are similarly situated.
(e) The act of a majority of the members present at a meeting duly called
and held shall be the act of the Committee. Any decision or determination
reduced to writing and signed by all members of the Committee shall be fully as
effective as if made by unanimous vote at a meeting duly called and held.
(f) Notwithstanding anything else herein to the contrary, Options or SARs
may be granted to an Employee who is not an officer of the Company by the Board
or the Executive Committee of the Board (in lieu of being granted by the
Committee), in which event the Board or the Executive Committee of the Board (as
the case may be) may exercise any discretionary authority with respect to such
Options or SARs that would otherwise be exercisable by the Committee.
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9. Amendment or Discontinuance
(a) The Board may, at any time, amend or terminate the Plan. No amendment
shall become effective unless approved by affirmative vote of the Company's
stockholders if such approval is necessary or desirable for the continued
validity of the Plan or if the failure to obtain such approval would adversely
affect the compliance of the Plan with Rule 16b-3 or any successor rule under
the Exchange Act or Section 162(m) of the Code or any other rule or regulation.
No amendment or termination shall materially impair the rights of any person
with respect to a previously granted Option or SAR without such person's
consent.
10. Adjustments in Event of Change in Common Stock
(a) Subject to Section 10(b), if the outstanding shares of Stock of the
Company are increased, decreased, or exchanged for a different number or kind of
shares or other securities, or if additional shares or new or different shares
or other securities are distributed with respect to such shares of stock or
securities, through merger, consolidation, sale of all or substantially all of
the property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Stock or other securities, then, to the extent
permitted by the Company, an appropriate and proportionate adjustment shall be
made in (i) the maximum number and kind of shares provided in Section 3, (ii)
the maximum number and kind of shares with respect to which an officer of the
Company may be granted an award pursuant to Section 4(m), (iii) the number and
kind of shares or other securities subject to the outstanding Options and tandem
SARs, if any, and (iv) the price for each share or other unit of any other
securities subject to outstanding Options without change in the aggregate
purchase price or value as to which such Options remain exercisable or subject
to restrictions. Any adjustment under this Section 10(a) shall be made by the
Company, whose determination as to what adjustments shall be made and the extent
thereof will be final, binding and conclusive. No fractional interests will be
issued under the Plan resulting from any such adjustment.
(b) Notwithstanding anything else herein to the contrary, the Board, in its
sole discretion may provide, at the time of grant of an Option or at any time
thereafter, that upon the occurrence of a change in control of the Company (as
determined by the Board) all or a specified portion of any outstanding Options
not theretofore exercisable shall immediately become exercisable and that any
Option not exercised prior to such change in control shall be canceled.
11. Miscellaneous
(a) Nothing in this Plan or any Option Agreement hereunder shall confer
upon any employee any right to continue in the employ of any Participating
Company or interfere in any way with the right of any Participating Company to
terminate his or her employment at any time.
(b) No Option or SAR granted under the Plan shall be deemed salary or
compensation for the purpose of computing benefits under any employee benefit
plan or other arrangement of any Participating Company for the benefit of its
employees unless any such Participating Company shall determine otherwise.
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(c) No Employee shall have any claim to an Option or SAR until it is
actually granted under the Plan. To the extent that any person acquires a right
to receive payments from the Company under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company.
(d) Absence on leave approved by a duly constituted officer of a
Participating Company shall not be considered interruption or termination of
employment for any purposes of the Plan; provided, however, that no Option or
SAR may be granted to an employee while he or she is absent on leave.
(e) If the Committee shall find that any person to whom any Option or SAR,
or portion thereof, is awarded to under the Plan is unable to care for his or
her affairs because of illness or accident, or is a minor, then any payment due
him or her (unless a prior claim therefor has been made by a duly appointed
legal representative) may, if the Committee so directs the Company, be paid to
his or her spouse, a child, a relative, an institution maintaining or having
custody of such person, or any other person deemed by the Committee to be a
proper recipient on behalf of such person otherwise entitled to payment. Any
such payment shall be a complete discharge of the liability of the Company
therefor.
(f) The right of any Employee or other person to any Option, SAR or Stock
under the Plan may not be assigned, transferred, pledged or encumbered, either
voluntarily or by operation of law, except as provided in Section 7 with respect
to the designation of a Beneficiary or as may otherwise be required by law, and
except as provided in Section 4(g). If, by reason of any attempted assignment,
transfer, pledge, or encumbrance or any bankruptcy or other event happening at
any time, any amount payable under the Plan would be made subject to the debts
or liabilities of the Employee or his or her Beneficiary or would otherwise
devolve upon anyone else and not be enjoyed by the Employee or his or her
Beneficiary, then the Committee may terminate such person's interest in any such
payment and direct that the same be held and applied to or for the benefit of
the Employee, his or her Beneficiary or any other persons deemed to be the
natural objects of his or her bounty, taking into account the expressed wishes
of the Employee (or, in the event of his or her death, those of his or her
Beneficiary) in such manner as the Committee may deem proper.
(g) Copies of the Plan and all amendments, administrative rules and
procedures and interpretations shall be made available to all Employees at all
reasonable times at the Company's headquarters.
(h) The Committee may cause to be made, as a condition precedent to the
grant of any Option or SAR, or otherwise, appropriate arrangements with the
Employee or his or her Beneficiary, for the withholding of any federal, state,
local or foreign taxes.
(i) The Plan and the grant of Options and SARs shall be subject to all
applicable federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required.
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(j) All elections, designations, requests, notices, instructions and other
communications from an Employee, Beneficiary or other person to the Committee,
required or permitted under the Plan, shall be in such form as is prescribed
from time to time by the Committee and shall be mailed by first class mail or
delivered to such location as shall be specified by the Committee.
(k) The terms of the Plan shall be binding upon the Company and its
successors and assigns.
(l) Captions preceding the sections hereof are inserted solely as a matter
of convenience and in no way define or limit the scope or intent of any
provision hereof.
(m) The Company shall have the right to require an optionee to remit to the
Company an amount sufficient to satisfy any federal, state or local withholding
tax requirements prior to the delivery of any certificate or certificates for
Common Stock.
12. Effective Date and Stockholder Approval
The effective date of the Plan shall be July 1, 2001, subject to approval
by a majority of the Company's stockholders at their 2001 Annual Meeting.
Notwithstanding anything in the Plan to the contrary, if the Plan shall have
been approved by the Board prior to such Annual Meeting, Employees may be
selected and award criteria may be determined as provided herein subject to such
subsequent stockholder approval.
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