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As filed with the Securities and Exchange Commission on June 10, 1994
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
QUANEX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 38-1872178
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1900 WEST LOOP SOUTH, SUITE 1500 77027
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)
QUANEX CORPORATION
1993 EMPLOYEE STOCK OPTION AND RESTRICTED STOCK PLAN
(Full title of the plan)
WAYNE M. ROSE
QUANEX CORPORATION
1900 WEST LOOP SOUTH, SUITE 1500
HOUSTON, TEXAS 77027
(Name and address of agent for service)
(713) 961-4600
(Telephone number, including area code, of agent for service)
Copies to:
HARVA R. DOCKERY, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
CALCULATION OF REGISTRATION FEE
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Proposed
maximum Proposed maximum Amount of
Amount to be offering price aggregate registration
Title of securities to be registered registered per share offering price fee
------------------------------------ ------------ -------------- ---------------- ------------
Common Stock, $.50 par value . . . . . 750,000(1) $20.125(2) $15,093,750 $5,205
Rights to purchase Series A Junior
Participating Preferred Stock . . . . . 750,000
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(1) Includes an indeterminable number of shares of Common Stock issuable as a
result of the anti-dilution provisions of the 1993 Employee Stock Option
and Restricted Stock Plan.
(2) Pursuant to Rule 457(h), the proposed maximum offering price is estimated,
solely for the purpose of determining the registration fee, on the basis
of the average high and low prices of the Common Stock on the New York
Stock Exchange Composite Tape on June 7, 1994.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
Quanex Corporation (the "Company" or "Registrant")
incorporates by reference in this Registration Statement the following
documents:
(a) The Registrant's annual report on Form 10-K
for the year ended October 31, 1993.
(b) The Registrant's quarterly reports on Form
10-Q for the quarters ended January 31, 1994, and April 30,
1994.
(c) All other reports filed by the Registrant
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), since October
31, 1993.
(d) The description of the Registrant's common
stock, $.50 par value (the "Common Stock"), which is contained
in the Prospectus dated January 12, 1981, included in the
Registrant's Registration Statement (Registration No. 2-70313)
and filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 424(b) of the Securities Act of
1933, as amended (the "Securities Act").
(e) The description of the rights to purchase
Series A Junior Participating Preferred Stock (the "Rights")
is set forth in the Amended and Restated Certificate of
Designation, Preferences and Rights, filed as Exhibit 1 to
Amendment No. 1 to the Registrant's Form 8-A dated April 28,
1989.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date
of the filing hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of the filing of such documents.
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not applicable.
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ITEM 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware provides that a corporation has the power to indemnify a director,
officer, employee or agent of the corporation and certain other persons serving
at the request of the corporation in related capacities against amounts paid
and expenses incurred in connection with an action or proceeding to which he
is, or is threatened to be made, a party by reason of such position, if such
person shall have 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, in any
criminal proceeding, if such person had no reasonable cause to believe his
conduct was unlawful; provided that, in the case of actions brought by or in
the right of the corporation, no indemnification shall be made with respect to
any matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the adjudicating court
determines that such indemnification is proper under the circumstances.
The Registrant's Restated Certificate of Incorporation, as
amended, eliminates the personal monetary liability of a director to the
Registrant and its stockholders for breach of his fiduciary duty of care as a
director to the extent currently allowed under the Delaware General Corporation
Law. Article XVII of the Registrant's Restated Certificate of Incorporation
provides that a director of the Registrant shall not be personally liable to
the Registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (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 which involve intentional misconduct or a
knowing violation of law, (iii) based on the payment of an improper dividend or
an improper repurchase of the Registrant's stock under Section 174 of the
General Corporation Law of the State of Delaware, or (iv) for any transaction
from which the director derived an improper personal benefit.
The Bylaws of the Registrant provide that, under certain
circumstances, the Registrant is required to indemnify any person who was, is,
or is threatened to be made a party in any action, suit or proceeding because
such person is or was a director or officer of the Registrant. The
Registrant's Bylaws were amended in February 1987 to provide for
indemnification by the Registrant of its officers and directors to the fullest
extent authorized by the General Corporation Law of the State of Delaware.
This right to indemnification under the Registrant's Bylaws is a contract
right, and requires the Registrant to provide for the payment of expenses in
advance of the final disposition of any suit or proceeding brought against the
director or officer of the Registrant in his official capacity as such,
provided that such director or officer delivers to the Registrant an
undertaking to repay any amounts advanced if it is ultimately determined that
such director or officer is not entitled to indemnification. The Registrant
also maintains a directors' and officers' liability insurance policy.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
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ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
4.1 Certificate of Incorporation of the Registrant, as
amended, filed as Exhibit 3.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
October 31, 1987, and incorporated herein by
reference.
4.2 Amended and Restated Bylaws of the Registrant, as
amended through October 21, 1992, filed as Exhibit
3.2 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 31, 1992, and
incorporated herein by reference.
4.3 Form of Registrant's Common Stock certificate, filed
as Exhibit 4.1 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 30, 1987,
and incorporated herein by reference.
4.4 Amended and Restated Rights Agreement between the
Registrant and Manufacturers Hanover Trust Company,
as Rights Agent, filed as Exhibit 1 to Amendment No.
1 to the Registrant's Form 8-A dated April 28, 1989,
and incorporated herein by reference.
4.5 Amended and Restated Certificate of Designation,
Preferences and Rights of the Registrant's Series A
Junior Participating Preferred Stock, filed as
Exhibit 1 to Amendment No. 1 to the Registrant's Form
8-A dated April 28, 1989, and incorporated herein by
reference.
4.6 Certificate of Designations of the Registrant's 6.88%
Cumulative Convertible Exchangeable Preferred Stock,
liquidation preference $250 per share, filed as
Exhibit 19.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended April 30, 1992, and
incorporated herein by reference.
4.7 Form of Indenture relating to the Registrant's 6.88%
Cumulative Subordinated Debentures due 2007 between
the Registrant and Chemical Bank, as Trustee, filed
as Exhibit 19.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 30, 1992,
and incorporated herein by reference.
4.8 Form of Certificate of 6.88% Cumulative Convertible
Exchangeable Preferred Stock, liquidation preference
$250 per share, filed as Exhibit 19.3 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1992, and incorporated herein
by reference.
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4.9 Deposit Agreement, relating to Depositary Convertible
Exchangeable Preferred Shares between the Registrant
and Chemical Bank, filed as Exhibit 19.4 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1992, and incorporated herein
by reference.
4.10 Form of Depositary Receipt for Depositary Convertible
Exchangeable Preferred Shares, filed as Exhibit 19.6
to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended April 30, 1992, and incorporated
herein by reference.
4.11 Note Agreement dated July 25, 1990, among the
Registrant and the Purchasers listed therein,
regarding the sale of $125,000,000 of the
Registrant's 10.77% Senior Notes due August 23, 2000,
filed as Exhibit 4.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 31,
1990, and incorporated herein by reference.
4.12 Revolving Credit and Letter of Credit Agreement dated
as of December 4, 1990, among the Registrant and the
Banks listed therein relating to a $40,000,000
revolving credit, filed as Exhibit 4.7 to the
Registrant's Annual Report on Form 10-K for the year
ended October 31, 1991, and incorporated herein by
reference.
4.13 Second Amendment to the Revolving Credit and Letter
of Credit Agreement dated as of April 15, 1992, filed
as Exhibit 4.13 to the Registrant's Registration
Statement on Form S-3 (Registration No. 33-47282),
and incorporated herein by reference.
4.14 Third and Fourth Amendments to the Revolving Credit
and Letter of Credit Agreement dated as of February
12, 1993, and April 1, 1993, respectively, filed as
Exhibit 19 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended April 30, 1993, and
incorporated herein by reference.
4.15 Form of Quanex Corporation 1993 Employee Stock Option
and Restricted Stock Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P. as to the
legality of the securities being registered.
23.1 Consent of Fulbright & Jaworski L.L.P. (included as
part of Exhibit 5.1).
23.2 Consent of Deloitte & Touche.
25.1 Power of attorney (contained on page 7 hereof).
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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
this Registration Statement (or the most recent
post-effective amendment hereof) 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 (i) and (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 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 herein, 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 the 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 into this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
herein, 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
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foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 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 of 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.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Robert C. Snyder and Wayne M.
Rose, and each of them, either one of whom may act without joinder of the
other, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, and each of them, or the substitute
or substitutes of any or all of them, may lawfully do or cause to be done by
virtue hereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 31st day of
May, 1994.
QUANEX CORPORATION
By /s/ Robert C. Snyder
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Robert C. Snyder
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Robert C. Snyder President, Chief Executive May 31, 1994
------------------------------- Officer and Director
Robert C. Snyder (Principal Executive Officer)
/s/ Wayne M. Rose Vice President and May 31, 1994
------------------------------- Chief Financial Officer
Wayne M. Rose (Principal Financial Officer)
/s/ Viren M. Parikh Controller (Principal May 31, 1994
------------------------------- Accounting Officer)
Viren M. Parikh
/s/ Carl E. Pfeiffer Chairman of the Board May 31, 1994
-------------------------------
Carl E. Pfeiffer
/s/ Gerald B. Haeckel Director May 31, 1994
-------------------------------
Gerald B. Haeckel
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/s/ Donald J. Morfee Director May 31, 1994
-------------------------------
Donald J. Morfee
/s/ John D. O'Connell Director May 31, 1994
-------------------------------
John D. O'Connell
/s/ Michael J. Sebastian Director May 31, 1994
-------------------------------
Michael J. Sebastian
/s/ Robert L. Walker Director May 31, 1994
-------------------------------
Robert L. Walker
/s/ Fred J. Broad Director May 31, 1994
-------------------------------
Fred J. Broad
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EXHIBIT INDEX
Exhibit Number Description Page Number
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4.1 Certificate of Incorporation of the Registrant, as amended, filed
as Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1987, and incorporated herein by
reference.
4.2 Amended and Restated Bylaws of the Registrant, as amended through
October 21, 1992, filed as Exhibit 3.2 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1992, and
incorporated herein by reference.
4.3 Form of Registrant's Common Stock certificate, filed as Exhibit 4.1
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1987, and incorporated herein by reference.
4.4 Amended and Restated Rights Agreement between the Registrant and
Manufacturers Hanover Trust Company, as Rights Agent, filed as
Exhibit 1 to Amendment No. 1 to the Registrant's Form 8-A dated
April 28, 1989, and incorporated herein by reference.
4.5 Amended and Restated Certificate of Designation, Preferences and
Rights of the Registrant's Series A Junior Participating Preferred
Stock, filed as Exhibit 1 to Amendment No. 1 to the Registrant's
Form 8-A dated April 28, 1989, and incorporated herein by
reference.
4.6 Certificate of Designations of the Registrant's 6.88% Cumulative
Convertible Exchangeable Preferred Stock, liquidation preference
$250 per share, filed as Exhibit 19.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended April 30, 1992, and
incorporated herein by reference.
4.7 Form of Indenture relating to the Registrant's 6.88% Cumulative
Subordinated Debentures due 2007 between the Registrant and
Chemical Bank, as Trustee, filed as Exhibit 19.2 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
April 30, 1992, and incorporated herein by reference.
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4.8 Form of Certificate of 6.88% Cumulative Convertible Exchangeable
Preferred Stock, liquidation preference $250 per share, filed as
Exhibit 19.3 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended April 30, 1992, and incorporated herein by
reference.
4.9 Deposit Agreement, relating to Depositary Convertible Exchangeable
Preferred Shares between the Registrant and Chemical Bank, filed as
Exhibit 19.4 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended April 30, 1992, and incorporated herein by
reference.
4.10 Form of Depositary Receipt for Depositary Convertible Exchangeable
Preferred Shares, filed as Exhibit 19.6 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended April 30, 1992,
and incorporated herein by reference.
4.11 Note Agreement dated July 25, 1990, among the Registrant and the
Purchasers listed therein, regarding the sale of $125,000,000 of
the Registrant's 10.77% Senior Notes due August 23, 2000, filed as
Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended July 31, 1990, and incorporated herein by
reference.
4.12 Revolving Credit and Letter of Credit Agreement dated as of
December 4, 1990, among the Registrant and the Banks listed therein
relating to a $40,000,000 revolving credit, filed as Exhibit 4.7 to
the Registrant's Annual Report on Form 10-K for the year ended
October 31, 1991, and incorporated herein by reference.
4.13 Second Amendment to the Revolving Credit and Letter of Credit
Agreement dated as of April 15, 1992, filed as Exhibit 4.13 to the
Registrant's Registration Statement on Form S-3 (Registration
No. 33-47282), and incorporated herein by reference.
4.14 Third and Fourth Amendments to the Revolving Credit and Letter of
Credit Agreement dated as of February 12, 1993, and April 1, 1993,
respectively, filed as Exhibit 19 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended April 30, 1993, and
incorporated herein by reference.
4.15 Form of Quanex Corporation 1993 Employee Stock Option and
Restricted Stock Plan.
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5.1 Opinion of Fulbright & Jaworski L.L.P. as to the legality of the
securities being registered.
23.1 Consent of Fulbright & Jaworski L.L.P. (included as part of Exhibit
5.1).
23.2 Consent of Deloitte & Touche.
25.1 Power of attorney (contained on page 7 hereof).
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EXHIBIT 4.15
QUANEX CORPORATION
EMPLOYEE STOCK OPTION AND RESTRICTED STOCK PLAN
SECTION 1. PURPOSE
The purpose of the Quanex Corporation Employee Stock Option
and Restricted Stock Plan is to promote the interests of Quanex Corporation
(the "Company") and its shareholders by providing it with a mechanism to enable
the Company and its subsidiaries to attract, retain and motivate their key
employees with compensatory arrangements and benefits that make use of the
Company's stock so as to provide for or increase the proprietary interests of
such employees in the Company. The Quanex Corporation Employee Stock Option
and Restricted Stock Plan is an amendment and restatement of the Quanex
Corporation 1993 Employee Stock Option Plan.
SECTION 2. DEFINITIONS
(A) "AGREEMENT" shall mean a written agreement setting forth
the terms of an Award.
(B) "AWARD" shall mean an Option (which may be designated as
an Incentive Stock Option or a Non-Incentive Stock Option) or a Restricted
Stock Award granted under this Plan.
(C) "BOARD" shall mean the Board of Directors of the Company.
(D) "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(E) "COMMITTEE" shall mean the committee appointed by the
Board to administer this Plan.
(F) "COMMON STOCK" shall mean the Company's Common Stock,
$.50 par value (or such other par value as may be designated by act of the
Company's stockholders). In addition, for purposes of the Plan and the Awards,
the term Common Stock shall also be deemed to include any rights to purchase
("Rights") the Series A Junior Participating Preferred Stock of the Company
that may then be trading together with the Common Stock as provided in the
Rights Agreement between the Company and Chemical Bank relating to the Rights.
(G) "COMPANY" shall mean Quanex Corporation.
(H) "DISABILITY" shall mean a mental or physical disability
which, in the opinion of a physician selected by the Committee, shall prevent
the Employee from earning a reasonable livelihood with the Company or any
Subsidiary and which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months and
which: (a) was not contracted, suffered or incurred while the Employee was
engaged in, or did not result from having engaged in, a felonious criminal
enterprise; (b) did not result from alcoholism or addiction to narcotics; and
(c) did not result from an injury incurred while a member of the Armed Forces
of the United States for which the Employee receives a military pension.
(I) "DISINTERESTED" shall mean disinterested within the
meaning of applicable regulatory requirements, including those promulgated
under Section 16 of the Exchange Act.
(J) "EMPLOYEE" shall mean an officer or employee of the
Company or a Subsidiary.
(K) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
(L) "FAIR MARKET VALUE" shall mean the closing price of the
Common Stock on the date in question as reported in the New York Stock Exchange
- -- Composite Transactions listing or if, in the discretion of the Committee,
another means of determining the fair market value of a share of Common Stock
at such date shall be necessary or advisable, the Committee may provide for
another means of determining such fair market value.
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(M) "INCENTIVE STOCK OPTION" shall mean an Option that is
intended by the Committee to meet the requirements of Section 422 of the Code
or any successor provision.
(N) "NON-INCENTIVE STOCK OPTION" shall mean an Option granted
pursuant to this Plan which does not qualify as an Incentive Stock Option.
(O) "OPTION" shall mean the right to purchase Common Stock at
a price to be specified and upon terms to be designated by the Committee
pursuant to this Plan. An Option shall be designated by the Committee as an
Incentive Stock Option or a Non-Incentive Stock Option.
(P) "OPTION PRICE" shall mean the price at which shares may
be purchased pursuant to an Option.
(Q) "PLAN" shall mean this Quanex Corporation Employee Stock
Option and Restricted Stock Plan.
(R) "RESTRICTED PERIOD" shall mean the period designated by
the Committee during which Restricted Stock may not be sold, assigned,
transferred, pledged, or otherwise encumbered.
(S) "RESTRICTED STOCK" shall mean those shares of Common
Stock issued pursuant to a Restricted Stock Award which are subject to the
restrictions, terms, and conditions set forth in the related Agreement.
(T) "RESTRICTED STOCK AWARD" shall mean an award of
Restricted Stock pursuant to Section 8 hereof.
(U) "RETAINED DISTRIBUTIONS" shall mean any securities or
other property (other than regular cash dividends) distributed by the Company
in respect of Restricted Stock during any Restricted Period.
(V) "RETIRE" or "RETIREMENT" shall mean retirement in
accordance with the terms of a retirement plan that is qualified under Section
401(a) of the Code and maintained by the Company or a Subsidiary in which the
employee is a participant.
(W) "SUBSIDIARY" shall mean any present or future subsidiary
corporations, as defined in Section 424 of the Code, of the Company.
SECTION 3. STOCK SUBJECT TO THE PLAN
The total amount of the Common Stock with respect to which
Awards may be granted shall not exceed in the aggregate 750,000 shares. The
class and aggregate number of shares which may be subject to the Options
granted under this Plan shall be subject to adjustment under Section 7. The
class and aggregate number of shares which may be subject to the Restricted
Stock Awards granted under the Plan shall also be subject to adjustment under
Section 8. Shares may be treasury shares or authorized but unissued shares.
If any Award under the Plan shall expire or terminate for any reason without
having been exercised in full, or if any Award shall be forfeited, the shares
subject to the unexercised or forfeited portion of such Award shall again be
available for the purposes of the Plan.
SECTION 4. ADMINISTRATION
The Plan shall be administered by a Committee, the members of
which shall be Disinterested persons. The Committee shall consist of not less
than two members of the Board, who are not Employees. The Board shall have the
power from time to time to add or remove members of the Committee, and to fill
vacancies arising for any reason. The Committee shall designate a chairman
from among its members, who shall preside at all of its meetings, and shall
designate a secretary, without regard to whether that person is a member of the
Committee, who shall keep the minutes of the proceedings and all records,
documents, and data pertaining to its administration of the Plan. Meetings
shall be held at any time and place as it shall choose. A majority of the
members of the Committee shall
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constitute a quorum for the transaction of business. The vote of a majority of
those members present at any meeting shall decide any question brought before
that meeting. In addition, the Committee may take any action otherwise proper
under the Plan by the affirmative vote, taken without a meeting, of a majority
of its members. No member of the Committee shall be liable for any act or
omission of any other member of the Committee or for any act or omission on his
own part, including but not limited to the exercise of any power or discretion
given to him under the Plan, except those resulting from his own gross
negligence or willful misconduct. All questions of interpretation and
application of the Plan, or as to Awards granted under it shall be subject to
the determination of a majority of the Committee. The Committee in exercising
any power or authority granted under this Plan or in making any determination
under this Plan shall perform or refrain from performing those acts using its
sole discretion and judgment. Any decision made by the Committee or any
refraining to act or any act taken by the Committee in good faith shall be
final and binding on all parties. The Committee's decision shall never be
subject to de novo review. When appropriate the Plan shall be administered in
order to qualify certain of the Options granted under it as Incentive Stock
Options.
SECTION 5. ELIGIBILITY
The individuals who shall be eligible to participate in the
Plan shall be those full-time key Employees, including directors if they are
Employees, as the Committee shall determine during the term of this Plan. No
individual shall be eligible to receive an Award under the Plan while that
individual is a member of the Committee.
No Employee who owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the corporation
employing the Employee or of its parent or subsidiary corporation shall be
eligible to receive an Option which is an Incentive Stock Option unless at the
time that the Option is granted the option price is at least 110% of the Fair
Market Value of the Common Stock at the time the Option is granted and the
Option by its own terms is not exercisable after the expiration of five years
from the date the Option is granted.
An Employee will be considered as owning the stock owned,
directly or indirectly, by or for his brothers and sisters (whether by the
whole or half blood), spouse, ancestors, and lineal descendants. Stock owned,
directly or indirectly, by or for a corporation, partnership, estate or trust
will be considered as being owned proportionately by or for its shareholders,
partners or beneficiaries. For all purposes of this Plan, a parent corporation
is any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, on the date of grant of the Option in
question, each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in that chain; and a subsidiary corporation is any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, on the date of grant of the Option in question,
each of the corporations, other than the last corporation in the chain, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in that chain.
SECTION 6. MAXIMUM NUMBER OF SHARES SUBJECT TO AN AWARD
Effective with respect to Options awarded after February 17,
1993, the maximum number of shares of Common Stock subject to Options that may
be awarded to any Employee under the Plan is 250,000. The maximum number of
shares of Common Stock that may be awarded to any Employee pursuant to
Restricted Stock Awards under the Plan is 250,000.
SECTION 7. STOCK OPTIONS
A. AUTHORITY TO GRANT OPTIONS. The Committee may grant
Incentive Stock Options or Non-Incentive Stock Options at any time during the
term of this Plan to any eligible Employee that it chooses.
Each Option granted shall be approved by the Committee.
Subject only to any applicable limitations set forth in this Plan, the number
of shares of Common Stock to be covered by an Option shall be as determined by
the Committee.
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B. OPTION PRICE. The price at which shares may be purchased
pursuant to an Option, whether it is an Incentive Stock Option or a
Non-Incentive Stock Option, shall be not less than the Fair Market Value of the
shares of Common Stock on the date the Option is granted. The Committee in its
discretion may provide that the price at which shares may be purchased shall be
more than the minimum price required.
C. DURATION OF OPTIONS. No Option which is an Incentive
Stock Option shall be exercisable after the expiration of ten years from the
date such Option is granted. The Committee in its discretion may provide that
such Option shall be exercisable throughout the ten year period or during any
lesser period of time commencing on or after the date of grant of such Option
and ending upon or before the expiration of the ten year period. If an
Employee owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the corporation employing the Employee or of its
parent or subsidiary corporation, no Option which is an Incentive Stock Option
shall be exercisable after the expiration of five years from the date such
Option is granted. No Option which is a Non-Incentive Stock Option shall be
exercisable after the expiration of ten years from the date such Option is
granted. The Committee in its discretion may provide that such Option shall be
exercisable throughout the ten year period or during any lesser period of time
commencing on or after the date of grant of such Option and ending upon or
before the expiration of the ten year period.
D. MAXIMUM VALUE OF STOCK SUBJECT TO OPTIONS WHICH ARE
INCENTIVE STOCK OPTIONS. To the extent that the aggregate Fair Market Value
(determined as of the date the Option is granted) of the stock with respect to
which Incentive Stock Options are exercisable for the first time by the
Optionee in any calendar year (under this Plan and any other incentive stock
option plan(s) of the Company and any parent and subsidiary corporation)
exceeds $100,000, the Options shall be treated as Non-Incentive Stock Options.
In making this determination, Options shall be taken into account in the order
in which they were granted.
E. AMOUNT EXERCISABLE. The usual form of agreement granting
an Option (whether Incentive or Non-incentive) shall, subject to any limitation
on exercise contained in the Agreement which is not inconsistent with this
Plan, contain the following terms of exercise:
(a) No Option granted under this Plan may be exercised
until an Optionee has completed one year of continuous employment with
the Company or any Subsidiary following the date of grant;
(b) Beginning on the day after the first anniversary of
the date of grant, an Option may be exercised up to 1/3 of the shares
subject to the Option;
(c) After the expiration of each succeeding anniversary
date of the date of grant, the Option may be exercised up to an
additional 1/3 of the shares subject to the Option, so that after the
expiration of the third anniversary of the date of grant, the Option
shall be exercisable in full; and
(d) To the extent not exercised, installments shall be
cumulative and may be exercised in whole or in part until the Option
expires on the tenth anniversary of the date of the grant.
However, the Committee, in its discretion, may change the terms of exercise so
that any Option may be exercised so long as it is valid and outstanding from
time to time in part or as a whole in such manner and subject to such
conditions as it may set. In addition, the Committee, in its discretion, may
accelerate the time in which any outstanding Option may be exercised. But in
no event shall any Option be exercisable after the tenth anniversary of the
date of the grant.
F. EXERCISE OF OPTIONS. An Optionee may exercise such
optionee's Option by delivering to the Company a written notice stating (i)
that such optionee wishes to exercise such Option on the date such notice is so
delivered, (ii) the number of shares of stock with respect to which the Option
is to be exercised and (iii) the address to which the certificate representing
such shares of stock should be mailed. In order to be effective, such written
notice shall be accompanied by (i) payment of the Option Price of
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such shares of stock and (ii) payment of an amount of money necessary to
satisfy any withholding tax liability that may result from the exercise of such
Option. Each such payment shall be made by cashier's check drawn on a national
banking association and payable to the order of the Company in United States
dollars.
If, at the time of receipt by the Company of such written
notice, (i) the Company has unrestricted surplus in an amount not less than the
Option Price of such shares of stock, (ii) all accrued cumulative preferential
dividends and other current preferential dividends on all outstanding shares of
preferred stock of the Company have been fully paid, (iii) the acquisition by
the Company of its own shares of stock for the purpose of enabling such
optionee to exercise such Option is otherwise permitted by applicable law and
without any vote or consent of any stockholder of the Company, and (iv) there
shall have been adopted, and there shall be in full force and effect, a
resolution of the Board authorizing the acquisition by the Company of its own
shares of stock for such purpose, then such optionee may deliver to the
Company, in payment of the Option Price of the shares of stock with respect to
which such Option is exercised, (x) certificates registered in the name of such
optionee that represent a number of shares of stock legally and beneficially
owned by such optionee (free of all liens, claims and encumbrances of every
kind) and having a Fair Market Value on the date of receipt by the Company of
such written notice that is not greater than the Option Price of the shares of
stock with respect to which such Option is to be exercised, such certificates
to be accompanied by stock powers duly endorsed in blank by the record holder
of the shares of stock represented by such certificates, with the signature of
such record holder guaranteed by a national banking association, and (y) if the
Option Price of the shares of stock with respect to which such Option is to be
exercised exceeds such Fair Market Value, a cashier's check drawn on a national
banking association and payable to the order of the Company in an amount, in
United States dollars, equal to the amount of such excess. Notwithstanding the
provisions of the immediately preceding sentence, the Committee, in its sole
discretion, may refuse to accept shares of stock in payment of the Option Price
of the shares of stock with respect to which such Option is to be exercised
and, in that event, any certificates representing shares of stock that were
received by the Company with such written notice shall be returned to such
optionee, together with notice by the Company to such optionee of the refusal
of the Committee to accept such shares of stock. If, at the expiration of
seven business days after the delivery to such optionee of such written notice
from the Company, such optionee shall not have delivered to the Company a
cashier's check drawn on a national banking association and payable to the
order of the Company in an amount, in United States dollars, equal to the
Option Price of the shares of stock with respect to which such Option is to be
exercised, such written notice from the optionee to the Company shall be
ineffective to exercise such Option.
As promptly as practicable after the receipt by the Company of
(i) such written notice from the optionee, (ii) payment, in the form required
by the foregoing provisions of this Section of the Option Price of the shares
of stock with respect to which such Option is to be exercised, and (iii)
payment, in the form required by the foregoing provisions of this Section, of
an amount of money necessary to satisfy any withholding tax liability that may
result from the exercise of such Option, a certificate representing the number
of shares of stock with respect to which such Option has been so exercised,
such certificate to be registered in the name of such optionee, provided that
such delivery shall be considered to have been made when such certificate shall
have been mailed, postage prepaid, to such optionee at the address specified
for such purpose in such written notice from the optionee to the Company.
G. TRANSFERABILITY OF OPTIONS. Options shall not be
transferable by the optionee except by will or under the laws of descent and
distribution, and shall be exercisable, during his lifetime, only by him. Any
attempted sale, assignment, transfer, pledge or encumbrance of an Option in
violation of this Agreement shall be void and the Company shall not be bound
thereby.
H. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE. Except as
may be otherwise expressly provided herein or in the Agreement with respect to
an Option that is a Non-Incentive Stock Option, all Options (whether incentive
or non-incentive) shall terminate on the earlier of the date of the expiration
of the Option or one day less than three months after the date of severance,
upon severance of the employment relationship between the Company and the
optionee, whether with or without cause, for any reason other than the death,
Disability or Retirement of the optionee, during which period the optionee
shall be entitled to exercise the Option in respect of the number of shares
that the optionee would have been entitled to purchase had the optionee
exercised the Option on the date of such severance
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of employment. Whether authorized leave of absence, or absence on military or
government service, shall constitute severance of the employment relationship
between the Company and the optionee shall be determined by the Committee at
the time thereof. In the event of severance because of the Disability of the
holder of any Option (whether incentive or non-incentive) while in the employ
of the Company and before the date of expiration of such Option, such Option
shall terminate on the earlier of such date of expiration or one year following
the date of such severance because of Disability, during which period the
optionee shall be entitled to exercise the Option in respect to the number of
shares that the optionee would have been entitled to purchase had the optionee
exercised the Option on the date of such severance because of Disability. In
the event of the death of the holder of any Option (whether incentive or
non-incentive) while in the employ of the Company and before the date of
expiration of such Option, such Option shall terminate on the earlier of such
date of expiration or one year following the date of death. After the death of
the optionee, his executors, administrators or any person or person to whom his
Option may be transferred by will or by the laws of descent and distribution,
shall have the right, at any time prior to the termination of an Option to
exercise the Option, in respect to the number of shares that the optionee would
have been entitled to exercise if he had exercised the Option on the date of
his death while in employment. In addition, in the event of the Retirement of
the holder of any Non-Incentive Stock Option, before the date of expiration of
such Option, such Option shall terminate on the earlier of such date of
expiration or one year following the date of such Retirement, and, if such
optionee should die within the one year period any rights he may have to
exercise the Option shall be exercisable by his executor or administrator or
the person or persons to whom the Option shall have been transferred by his
will or laws of descent or distribution, as appropriate, for the remainder of
the one year period. Notwithstanding the foregoing provisions of this Section,
in the case of an Option that is a Non-Incentive Stock Option, the Committee
may provide for a different option termination date in the option agreement
with respect to such Option. For purposes of Incentive Stock Options issued
under this Plan, an employment relationship between the Company and the
optionee shall be deemed to exist during any period in which the optionee is
employed by the Company, a corporation issuing or assuming an option in a
transaction to which Section 424(a) of the Code applies, or a parent or
subsidiary corporation of such corporation issuing or assuming an option. For
this purpose, the phrase "corporation issuing or assuming an option" shall be
substituted for the word "Company" in the definitions of parent and subsidiary
corporations in Section 4 and the parent-subsidiary relationship shall be
determined at the time of the corporate action described in Section 424(a) of
the Code. For purposes of Non-Incentive Stock Options issued under this Plan,
an employment relationship between the Company and the optionee will exist
under the circumstances described above for Incentive Stock Options and will
also exist if the optionee is transferred to an affiliate corporation approved
by the Committee.
I. NO RIGHTS AS STOCKHOLDER. No optionee shall have rights
as a stockholder with respect to shares covered by his Option until the date a
stock certificate is issued for the shares. Except as provided in the
following provisions of this Section 7, no adjustment for dividends, or other
matters shall be made if the record date is prior to the date the certificate
is issued.
J. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence
of outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
If the Company shall effect a subdivision or consolidation of
shares or other capital adjustment of, or the payment of a dividend in capital
stock or other equity securities of the Company on, its Common Stock, or other
increase or reduction of the number of shares of the Common Stock outstanding
without receiving consideration therefor in money, services, or property, or
the reclassification of its Common Stock, in whole or in part, into other
equity securities of the Company, then (a) the number, class and per share
price of shares of stock subject to outstanding Options hereunder shall be
appropriately adjusted (or in the case of the issuance of other equity
securities as a dividend on, or in a reclassification of, the Common Stock, the
Options shall extend to such other securities) in such a manner as to entitle
an optionee to receive, upon exercise of an Option, for the same aggregate cash
compensation, the same total number and class or classes of shares (or in the
case of a dividend of, or
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reclassification into, other equity securities, such other securities) he would
have held after such adjustment if he had exercised his Option in full
immediately prior to the event requiring the adjustment, or, if applicable, the
record date for determining shareholders to be affected by such adjustment; and
(b) the number and class of shares then reserved for issuance under the Plan
(or in the case of a dividend of, or reclassification into, other equity
securities, such other securities) shall be adjusted by substituting for the
total number and class of shares of stock then received, the number and class
or classes of shares of stock (or in the case of a dividend on, or
reclassification into, other equity securities, such other securities) that
would have been received by the owner of an equal number of outstanding shares
of Common Stock as the result of the event requiring the adjustment.
Comparable rights shall accrue to each optionee in the event of successive
subdivisions, consolidations, capital adjustment, dividends or
reclassifications of the character described above.
If the Company shall distribute to all holders of its shares
of Common Stock (including any such distribution made to non-dissenting
shareholders in connection with a consolidation or merger in which the Company
is the surviving corporation and in which holders of shares of Common Stock
continue to hold shares of Common Stock after such merger or consolidation)
evidences of indebtedness or cash or other assets (other than cash dividends
payable out of consolidated retained earnings not in excess of, in any one year
period, the greater of (a) $1.00 per share of Common Stock or (b) two times the
aggregate amount of dividends per share paid during the preceding calendar year
and dividends or distributions payable in shares of Common Stock or other
equity securities of the Company described in the immediately preceding
paragraph), then in each case the Option Price shall be adjusted by reducing
the Option Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such distribution by an
amount equal to the Fair Market Value, as determined in good faith by the Board
(whose determination shall be described in a statement filed in the Company's
corporate records and be available for inspection by any holder of an Option)
of the portion of the evidence of indebtedness or cash or other assets so to be
distributed applicable to one share of Common Stock; provided that in no event
shall the Option Price be less than the par value of a share of Common Stock.
Such adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of the distribution retroactive to the record date
for the determination of the stockholders entitled to receive such
distribution. Comparable adjustments shall be made in the event of successive
transactions of the character described above.
If the Company shall make a tender offer for, or grant to all
of its holders of its shares of Common Stock the right to require the Company
or any subsidiary of the Company to acquire from such stockholders shares of,
Common Stock, at a price in excess of the Current Market Price (a "Put Right")
or the Company shall grant to all of its holders for its shares of Common Stock
the right to acquire shares of Common Stock for less than the Current Market
Price (a "Purchase Right"), then, in the case of a Put Right, the Option Price
shall be adjusted by multiplying the Option Price in effect immediately prior
to the record date for the determination of stockholders entitled to receive
such Put Right by a fraction, the numerator of which shall be the number of
shares of Common Stock then outstanding minus the number of shares of Common
Stock which could be purchased at the Current Market Price for the aggregate
amount which would be paid if all Put Rights are exercised and the denominator
of which is the number of shares of Common Stock which would be outstanding if
all Put Rights are exercised; and, in the case of a Purchase Right, the Option
Price shall be adjusted by multiplying the Option Price in effect immediately
prior to the record date for the determination of the stockholders entitled to
receive such Purchase Right by a fraction, the numerator of which shall be the
number of shares of Common Stock then outstanding plus the number of shares of
Common Stock which could be purchased at the Current Market Price for the
aggregate amount which would be paid if all Purchase Rights are exercised and
the denominator of which is the number of shares of Common Stock which would be
outstanding if all Purchase Rights are exercised. In addition, the number of
shares subject to the Option shall be increased by multiplying the number of
shares then subject to the Option by a fraction which is the inverse of the
fraction used to adjust the Option Price. Notwithstanding the foregoing if any
such Put Rights or Purchase Rights shall terminate without being exercised, the
Option Price and number of shares subject to the Option shall be appropriately
readjusted to reflect the Option Price and number of shares subject to the
Option which would have been in effect if such unexercised Rights had never
existed. Comparable adjustments shall be made in the event of successive
transactions of the character described above.
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After the merger of one or more corporations into the Company,
after any consolidation of the Company and one or more corporations, or after
any other corporate transaction described in Section 424(a) of the Code in
which the Company shall be the surviving corporation, each optionee, at no
additional cost, shall be entitled to receive, upon any exercise of his Option,
in lieu of the number of shares as to which the Option shall then be so
exercised, the number and class of shares of stock or other equity securities
to which the optionee would have been entitled pursuant to the terms of the
agreement of merger or consolidation if at the time of such merger or
consolidation such optionee had been a holder of a number of shares of Common
Stock equal to the number of shares as to which the Option shall then be so
exercised and, if as a result of such merger, consolidation or other
transaction, the holders of Common Stock are not entitled to receive any shares
of Common Stock pursuant to the terms thereof, each optionee, at no additional
cost shall be entitled to receive, upon exercise of his Option, such other
assets and property, including cash to which he would have been entitled if at
the time of such merger, consolidation or other transaction he had been the
holder of the number of shares of Common Stock equal to the number of shares as
to which the Option shall then be so exercised. Comparable rights shall accrue
to each optionee in the event of successive mergers or consolidations of the
character described above.
After a merger of the Company into one or more corporations,
after a consolidation of the Company and one or more corporations, or after any
other corporate transaction described in Section 424(a) of the Code in which
the Company is not the surviving corporation, each optionee shall, at no
additional cost, be entitled at the option of the surviving corporation (i) to
have his then existing Option assumed or have a new option substituted for the
existing Option by the surviving corporation to the transaction which is then
employing him, or a parent or subsidiary of such corporation, on a basis where
the excess of the aggregate fair market value of the shares subject to the
Option immediately after the substitution or assumption over the aggregate
Option Price of such option is equal to the excess of the aggregate fair market
value of all shares subject to the option immediately before such substitution
or assumption over the aggregate Option Price of such shares, provided that the
shares subject to the new option must be traded on the New York or American
Stock Exchange or quoted on the National Association of Securities Dealers
Automated Quotation System, or (ii) to receive, upon any exercise of his
Option, in lieu of the number of shares as to which the Option shall then be so
exercised, the securities, property and other assets, including cash, to which
the optionee would have been entitled pursuant to the terms of the agreement of
merger or consolidation or the agreement giving rise to the other corporate
transaction if at the time of such merger, consolidation or other transaction
such optionee had been the holder of the number of shares of Common Stock equal
to the number of shares as to which the Option shall then be so exercised.
If a corporate transaction described in Section 424(a) of the
Code which involves the Company is to take place and there is to be no
surviving corporation while an Option remains in whole or in part unexercised,
it shall be canceled by the Board as of the effective date of any such
corporate transaction but before that date each optionee shall be provided with
a notice of such cancellation and each optionee shall have the right to
exercise such Option in full (without regard to any vesting limitations set
forth in or imposed pursuant to preceding provisions of this Plan or the option
agreement with respect to such Option) to the extent it is then still
unexercised during a 30-day period preceding the effective date of such
corporate transaction.
For purposes of this Section, Current Market Price per share
of Common Stock shall mean the last reported price for the Common Stock in the
New York Stock Exchange -- Composite Transaction listing on the trading day
immediately preceding the first trading day on which, as a result of the
establishment of a record date or otherwise, the trading price reflects that an
acquiror of Common Stock in the public market will not participate in or
receive the payment of any applicable dividend or distribution; provided,
however, that if there is no closing price for the stock as so reported on that
date or if, in the discretion of the Committee, another means of determining
the fair value of the shares of stock at such date shall be necessary or
advisable, the Committee may provide for another means for determining the
Current Market Price of the Common Stock.
Except as hereinbefore expressly provided, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall
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not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock then subject to outstanding
Options.
K. SUBSTITUTION OPTIONS. Options may be granted under this
Plan from time to time in substitution for stock options held by employees of
other corporations who are about to become employees of the Company, or whose
employer is about to become a parent or subsidiary corporation, conditioned in
the case of an incentive stock option upon the employee becoming an employee as
the result of a merger or consolidation of the Company with another
corporation, or the acquisition by the Company of substantially all the assets
of another corporation, or the acquisition by the Company of at least 50% of
the issued and outstanding stock of another corporation as the result of which
it becomes a subsidiary of the Company. The terms and conditions of the
substitute Options granted may vary from the terms and conditions of this Plan
to the extent the Board at the time of grant may deem appropriate to conform,
in whole or in part, to the provisions of the stock options in substitution for
which they are granted. But with respect to stock options which are incentive
stock options, no variation shall be made which will affect the status of any
substitute option as an "incentive stock option" under Section 422 of the Code.
SECTION 8. RESTRICTED STOCK AWARDS
A. AWARDS. The Committee may make an Award of Restricted
Stock to selected eligible Employees. The amount of each Restricted Stock
Award and the respective terms and conditions of each Award (which terms and
conditions need not be the same in each case) shall be determined by the
Committee in its sole discretion. However, the terms and conditions of an
Award shall not be inconsistent with the terms of the Plan.
B. TRANSFERABILITY AND RIGHTS WITH RESPECT TO RESTRICTED
STOCK. Except as provided herein, Restricted Stock may not be sold, assigned,
transferred, pledged, or otherwise encumbered during a Restricted Period. Any
attempted sale, assignment, transfer, pledge or encumbrance of Restricted Stock
in violation of this Plan shall be void and the Company shall not be bound
thereby.
During the Restricted Period, certificates representing the
Restricted Stock and any Retained Distributions shall be registered in the
recipient's name and bear a restrictive legend to the effect that ownership of
such Restricted Stock (and any such Retained Distributions), and the enjoyment
of all rights appurtenant thereto are subject to the restrictions, terms, and
conditions provided in this Plan and the applicable Agreement. Such
certificates shall be deposited by the recipient with the Company, together
with stock powers or other instruments of assignment, each endorsed in blank,
which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions which
shall be forfeited in accordance with this Plan and the applicable Agreement.
Restricted Stock shall constitute issued and outstanding shares of Common Stock
for all corporate purposes.
Subject to the terms of this Plan and the Agreement with
respect to the Award, the recipient shall have the right to vote the Restricted
Stock awarded to such recipient and to receive and retain all regular cash
dividends, and to exercise all other rights, powers and privileges of a holder
of Common Stock, with respect to such Restricted Stock, with the exception that
(i) the recipient shall not be entitled to delivery of the stock certificate or
certificates representing such Restricted Stock until the restrictions
applicable thereto shall have expired, (ii) the Company shall retain custody of
all Retained Distributions made or declared with respect to the Restricted
Stock (and such Retained Distributions shall be subject to the same
restrictions, terms and conditions as are applicable to the Restricted Stock)
until such time, if ever, as the Restricted Stock with respect to which such
Retained Distributions shall have been made, paid, or declared shall have
become vested, and such Retained Distributions shall not bear interest or be
segregated in separate accounts and (iii) the recipient may not sell, assign,
transfer, pledge, exchange, encumber, or dispose of the Restricted Stock or any
Retained Distributions during the Restricted Period. Nothing in this Section
shall prevent transfers by will or by the applicable laws of descent and
distribution.
C. VESTING OF RESTRICTED STOCK. Restricted Stock Awards
shall be subject to such vesting restrictions, if any, as the Committee shall
determine in its sole discretion; provided that any Restricted
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Stock Award that is granted to an Employee who is then subject to the reporting
and short-swing profit provisions of Section 16 of the Exchange Act and the
rules thereunder shall vest no earlier than six months following the date on
which the Restricted Stock is deemed awarded for purposes of such provisions.
D. CONSEQUENCE OF VESTING. Subject to Section 9, when shares
of Restricted Stock become vested, the Restricted Period shall be terminated as
to those shares, and the Company shall deliver to the Restricted Stock Award
recipient (or his estate, if applicable) a Common Stock certificate
representing those shares and all Retained Distributions made or declared with
respect to those shares, reduced as necessary to satisfy the Company's tax
withholding obligation.
E. WITHHOLDING TAX. The Company shall meet its tax
withholding obligations under the Code and applicable state or local law
arising upon the vesting of Restricted Stock by delivering to the Restricted
Stock recipient (or his estate, if applicable) a reduced number of shares of
Common Stock in the manner specified herein. At the time of vesting of shares
of Restricted Stock, the Company shall (i) calculate the amount of withholding
tax due on the assumption that all such vested shares of Restricted Stock are
made available for delivery, (ii) reduce the number of such shares made
available for delivery so that the Fair Market Value of the shares withheld on
the vesting date approximates the amount of tax the Company is obliged to
withhold and (iii) in lieu of the withheld shares, remit cash to the United
States Treasury and other applicable governmental authorities, on behalf of the
participant, in the amount of the withholding tax due.
The Company shall withhold only whole shares of Common Stock
to satisfy its withholding obligation. Where the Fair Market Value of the
withheld shares does not equal Company's withholding tax obligation, the
Company shall withhold shares with a Fair Market Value slightly in excess of
the amount of its withholding obligation and shall remit the excess cash to the
Restricted Stock Award recipient (or his estate, if applicable) with the shares
of Common Stock made available for delivery.
The withheld shares of Restricted Stock not made available for
delivery by the Company shall be retained as treasury stock or will be
cancelled and, in either case, the recipient's right, title and interest in
such Restricted Stock shall terminate.
F. CHANGES IN COMPANY'S CAPITAL STRUCTURE. In the event that
the outstanding shares of Common Stock of the Company are changed into or
exchanged for a different number or kind of shares or other securities of the
Company, or of another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, stock dividend,
or combination of shares, appropriate adjustments shall be made by the
Committee in the aggregate number and kind of shares which may be issued or
granted as Awards. If any adjustment shall result in a fractional share, the
fraction shall be disregarded.
SECTION 9. REQUIREMENTS OF LAW
The Company shall not be required to sell, issue or deliver
any shares of Common Stock under any Award if such sale, issuance or delivery
shall constitute a violation by the Award recipient or the Company of any
provisions of any law or regulation of any governmental authority. Each Award
granted under this Plan shall be subject to the requirements that, if at any
time the Board or the Committee shall determine that the listing, registration
or qualification of the shares upon any securities exchange or under any state
or federal law of the United States or of any other country or governmental
subdivision, or the consent or approval of any governmental regulatory body, or
investment or other representations, are necessary or desirable in connection
with the issue, or purchase or delivery of shares subject to an Award, that
Award shall not be exercised in whole or in part and no shares shall be
delivered pursuant to an Award unless the listing, registration, qualification,
consent, approval or representations shall have been effected or obtained free
of any conditions not acceptable to the Committee. Any determination in this
connection by the Committee shall be final. In the event the shares issuable
or deliverable on exercise or vesting of an Award are not registered under the
Securities Act of 1933, the Company may imprint on the certificate for those
shares the following legend or any other legend which counsel for the Company
considers necessary or advisable to comply with the Securities Act of 1933:
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"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933 or under the
securities laws of any state and may not be sold or
transferred except upon registration or upon receipt by the
Corporation of an opinion of counsel satisfactory to the
Corporation, in form and substance satisfactory to the
Corporation, that registration is not required for a sale or
transfer."
The Company may, but shall in no event be obligated to, register any securities
covered by this Plan under the Securities Act of 1933 (as now in effect or as
later amended) and, in the event any shares are registered, the Company may
remove any legend on certificates representing those shares. The Company shall
not be obligated to take any other affirmative action in order to cause the
exercise of an Award or the issuance or delivery of shares under the Award to
comply with any law or regulation or any governmental authority.
SECTION 10. EMPLOYMENT OBLIGATION
The granting of any Award shall not impose upon the Company
any obligation to employ or continue to employ any Award recipient. The right
of the Company to terminate the employment of any officer or other Employee
shall not be diminished or affected by reason of the fact that an Award has
been granted to him.
SECTION 11. FORFEITURE FOR CAUSE
Notwithstanding any other provision of this Plan, if the
Committee finds by a majority vote, that the Award recipient, before or after
termination of his employment with the Company (a) committed a fraud,
embezzlement, theft, felony or act of dishonesty in the course of his
employment by the Company which conduct damaged the Company or (b) disclosed
trade secrets of the Company, then any outstanding options which have not been
exercised by the individual and any Awards which have not yet vested will be
forfeited. The decision of the Committee as to the cause of an Award
recipient's discharge, the damage done to the Company and the extent of the
individual's competitive activity will be final. No decision of the Committee,
however, will affect the finality of the discharge of the individual by the
Company.
SECTION 12. AMENDMENT OR TERMINATION OF PLAN
The Board may modify, revise or terminate this Plan at any
time and from time to time. However, without the further Company stockholder
approval by a majority of the votes cast at a duly held stockholders' meeting
at which a quorum representing a majority of all outstanding voting stock (or
if the provisions of the corporate charter, bylaws or applicable state law
prescribe a greater degree of stockholder approval for this action, without the
degree of stockholder approval thus required) is, either in person or by proxy,
present and voting on the issue, the Board may not (a) increase the aggregate
number of shares that may be subject to Awards pursuant to the provisions of
this Plan; (b) materially increase the benefits accruing to participants under
this Plan; or (c) materially modify the requirements as to eligibility for
participation in this Plan.
SECTION 13. WRITTEN AGREEMENT
Each Award granted under this Plan shall be embodied in a
written Agreement, which shall be subject to the terms and conditions
prescribed above, and shall be signed by the recipient and by the appropriate
officer of the Company for and in the name and on behalf of the Company. Each
Agreement shall contain any other provisions consistent with this Plan that the
Committee in its discretion shall deem advisable.
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SECTION 14. INDEMNIFICATION OF THE COMMITTEE
The Company shall indemnify each present and future member of
the Committee against, and each member of the Committee shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including the amount of judgments and the amount of approved settlements made
with a view to the curtailment of costs of litigation, other than amounts paid
to the Company itself) reasonably incurred by him in connection with or arising
out of any action, suit or proceeding in which he may be involved by reason of
his being or having been a member of the Committee, whether or not he continues
to be such member of the Committee at the time of incurring such expenses;
provided, however, that such indemnity shall not include any expenses incurred
by any such member of the Committee (a) in respect of matters as to which he
shall be finally adjudged in any such action, suit or proceeding to have been
guilty of gross negligence or willful misconduct in the performance of his duty
as such member of the Committee, or (b) in respect of any matter in which any
settlement is effected, to an amount in excess of the amount approved by the
Company on the advice of its legal counsel; and provided further, that no right
of indemnification under the provisions set forth herein shall be available to
or enforceable by any such member of the Committee unless, within sixty (60)
days after institution of any such action, suit or proceeding, he shall have
offered the Company, in writing, the opportunity to handle and defend the same
at its own expense. The foregoing right of indemnification shall inure to the
benefit of the heirs, executors or administrators of each such member of the
Committee and shall be in addition to all other rights to which such member of
the Committee may be entitled to as a matter of law, contract or otherwise.
Nothing in this Section shall be construed to limit or otherwise affect any
right to indemnification or payment of expense, or any provisions limiting the
liability of any officer or director of the Company or any member of the
Committee, provided by law, the Certificate of Incorporation of the Company or
otherwise.
SECTION 15. SECTION 83(B) ELECTIONS.
No Employee shall exercise the election permitted under
Section 83(b) of the Code with respect to an Award without written approval of
the Committee. If the Committee permits such an election with respect to any
Award, the Company shall require the Award recipient to pay the Company an
amount necessary to satisfy the Company's tax withholding obligation.
SECTION 16. AWARD GRANT TERMINATION.
No Awards shall be granted pursuant to this Plan after
December 1, 2002.
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EXHIBIT 5.1
FULBRIGHT & JAWORSKI
L.L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP HOUSTON
1301 MCKINNEY, SUITE 5100 WASHINGTON, D.C.
HOUSTON, TEXAS 77010-3095 AUSTIN
SAN ANTONIO
TELEPHONE: 713/651-5151 DALLAS
TELEX: 76-2829 NEW YORK
FACSIMILE: 713/651-5246 LOS ANGELES
LONDON
ZURICH
HONG KONG
June 9, 1994
Quanex Corporation
1900 West Loop South, Suite 1500
Houston, Texas 77027
Gentlemen:
We have acted as counsel for Quanex Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933 of 750,000 shares of the Company's common stock, $.50
par value (the "Shares"), to be offered upon the terms and subject to the
conditions set forth in the Company's 1993 Employee Stock Option and Restricted
Stock Plan (the "Plan").
In connection therewith, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Certificate of
Incorporation of the Company, as amended, the Amended and Restated Bylaws of
the Company, the Plan, records of relevant corporate proceedings with respect
to the offering of the Shares and such other documents and instruments as we
have deemed necessary or appropriate for the expression of the opinions
contained herein. We have also reviewed the Company's Registration Statement
on Form S-8 to be filed with the Securities and Exchange Commission with
respect to the Shares (the "Registration Statement").
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based on the foregoing and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly authorized and, when issued in accordance with the terms
of the Plan, will be validly issued, fully paid and non-assessable.
The opinions expressed herein are limited exclusively to the
General Corporation Law of the State of Delaware.
2
Quanex Corporation
June 9, 1994
Page 2
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
-----------------------------------
FULBRIGHT & JAWORSKI L.L.P.
1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Quanex Corporation on Form S-8 of our report dated November 24, 1993,
incorporated by reference in the Annual Report on Form 10-K of Quanex
Corporation for the year ended October 31, 1993.
/s/ Deloitte & Touche
DELOITTE & TOUCHE
Houston, Texas
June 9, 1994
