View:
As filed with the Securities and Exchange Commission on May 7, 1996.
Registration No. __ - _______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________________
CUC INTERNATIONAL INC.
(Exact name of Registrant as Specified in its Charter)
Delaware 06-0918165
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
707 Summer Street
Stamford, Connecticut 06901
(Address, including Zip Code, of Registrant's Principal Executive Offices)
CUC International Inc. 1992 Employee Stock Option Plan
(Full Title of the Plan)
__________________________________
Cosmo Corigliano
CUC INTERNATIONAL INC.
707 Summer Street
Stamford, Connecticut 06901
(203) 324-9261
(Name, Address, including zip code, and Telephone Number, including Area Code,
of Agent for Service)
__________________________________
CALCULATION OF REGISTRATION FEE
Amount of Proposed Proposed
Title of Additional Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
Common Stock, 3,000,000 shares $33.125(1) $99,375,000(1) $34,267.24
$.01 par value
(1)Pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
the proposed maximum offering price and the registration fee are based
on the average of the high and low prices per share of the Registrant's
Common Stock reported on the New York Stock Exchange Composite Tape on
April 30, 1996.
Note: The contents of the Registrant's earlier registration statements
on Form S-8, filed January 10, 1994, Registration No. 33-74066,
April 27, 1995, Registration No. 33-91658, and January 26, 1996,
Registration No. 333-00475, with regard to the CUC International Inc.
1992 Employee Stock Option Plan, are incorporated herein by reference.
Exhibits
4.1 CUC International Inc. 1992 Employee Stock Option Plan
4.2 Form of Stock Option Agreement
5 Opinion of Jeffrey A. Gershowitz, Esq. as to the
legality of the securities being registered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Jeffrey A. Gershowitz, Esq. (included in the
opinion filed as Exhibit 5 hereto)
24 Powers of Attorney of certain officers and directors of
the Registrant (included on the signature page of this
Registration Statement)
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 Stamford,
State of Connecticut, on this 6th day of May, 1996.
CUC INTERNATIONAL INC.
By: /s/ Walter A. Forbes
Walter A. Forbes
Chief Executive Officer
and Chairman of the Board of Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Walter A. Forbes and E. Kirk Shelton,
and each and either of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including, without limitation, 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 in and about the premises,
as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
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/ Walter A. Forbes Chief Executive Officer May 6, 1996
Walter A. Forbes and Chairman of the Board
(Principal Executive Officer)
/s/ Cosmo Corigliano Senior Vice President and May 6, 1996
Cosmo Corigliano Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ Bartlett Burnap Director May 6, 1996
Bartlett Burnap
/s/ T. Barnes Donnelley Director May 6, 1996
T. Barnes Donnelley
/s/ Stephen A. Greyser Director May 6, 1996
Stephen A. Greyser
/s/ Christopher K. McLeod Director May 6, 1996
Christopher K. McLeod
/s/ Burton C. Perfit Director May 6, 1996
Burton C. Perfit
Robert P. Rittereiser Director
/s/ Stanley M. Rumbough, Jr. Director May 6, 1996
Stanley M. Rumbough, Jr.
/s/ E. Kirk Shelton Director May 6, 1996
E. Kirk Shelton
EXHIBIT INDEX
Exhibit Number Description Page
4.1 CUC International Inc. 1992 Employee
Stock Option Plan 5
4.2 Form of Stock Option Agreemen 12
5 Opinion of Jeffrey A. Gershowitz, Esq.
as to legality of the securities being
registered 15
23.1 Consent of Ernst & Young LLP 17
23.2 Consent of Jeffrey A. Gershowitz, Esq.
(included in the opinion filed as
Exhibit 5 hereto)
24 Powers of Attorney of certain
officers and directors of the
Registrant (included on the
signature page of this
Registration Statement)
AS AMENDED THROUGH DECEMBER 13, 1995
1992 EMPLOYEE STOCK OPTION PLAN
OF
CUC INTERNATIONAL INC.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan")
is designed to provide an incentive to key employees of CUC
International Inc., a Delaware corporation (the "Company"),
and its present and future subsidiary corporations, as
defined in Paragraph 15 ("Subsidiaries"), and to offer an
additional inducement in obtaining the services of such
individuals. No grant hereunder shall be made to any
director, nor to any employee who the Company determines is
an "officer" within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, (the "1934
Act"), as hereinafter defined. The Plan provides for the
grant of "incentive stock options," within the meaning of
Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), and "non-qualified stock options."
2. STOCK SUBJECT TO THE PLAN. Options may be granted under the
Plan to purchase in the aggregate not more than fifteen
million five hundred twenty-five thousand (15,525,000)
shares of Common Stock, $.01 par value per share, of the
Company ("Common Stock"), which shares may, in the
discretion of the Board of Directors, consist either in
whole or in part of authorized but unissued shares of Common
Stock or shares of Common Stock held in the treasury of the
Company. The Company shall at all times during the term of
the Plan reserve and keep available such number of shares of
Common Stock as will be sufficient to satisfy the
requirements of the Plan. Subject to the provision of
Paragraph 12, any shares subject to an option which for any
reason expires, is cancelled or is terminated unexercised as
to such shares shall again become available for option under
the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by a Committee (the "Committee") consisting of not less than
three members of the Board of Directors. A majority of the
members shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a
quorum is present, and any acts approved in writing by all
members without a meeting, shall be the acts of the
Committee. No member of the Committee at the time he is a
member of the Committee shall be eligible to be allocated
stock or to receive an option or stock appreciation right
(an "Allocation") under the Plan or any other plan of the
Company or any Subsidiary, except for formula plans as
defined in Rule 16b-3(c)(2) or its successors under the 1934
Act and no individual may serve as a member of the Committee
if, within one year prior to the commencement of such
individual's proposed membership on the Committee, he shall
have been eligible to receive an Allocation under the Plan
or any other plan of the Company or any Subsidiary.
Subject to the express provisions of the Plan, the Committee
shall have the authority, in its sole discretion, to
determine the individuals who shall receive options; the
times when they shall receive them; whether an incentive
and/or a non-qualified stock option shall be granted; the
number of shares to be subject to each option; the term of
each option; the date each option shall become exercisable;
whether an option shall be exercisable in whole, in part or
in installments, and if in installments, the number of
shares to be subject to each installment; the date each
installment shall become exercisable and the term of each
installment; to accelerate the date of exercise of any
installment; whether shares may be issued on exercise of an
option as partly paid, and, if so, the dates when future
installments of the exercise price shall become due and the
amounts of each installments; the exercise price; the form
of payment upon exercise; to require that the individual
remain employed in some capacity with the Company or its
Subsidiaries for a period of time from and after the date
the option is granted to him; the amount necessary to
satisfy the Company's withholding obligation; to restrict
the sale or other disposition of the shares of Common Stock
acquired upon the exercise of an option and to waive any
such restriction; to construe the respective option
agreements and the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to make all
other determinations necessary or advisable for
administering the Plan; and, with the consent of the
optionee, to cancel or modify an option, provided such
option as modified does not violate the terms of the Plan.
The determinations of the Committee on the matters referred
to in this Paragraph 3 shall be conclusive.
No member of the Committee shall be liable for anything
whatsoever in connection with the administration of the Plan
except such member's own willful misconduct. Under no
circumstances shall any member of the Committee be liable
for any act or omission of any other member of the
Committee. In the performance of its functions with respect
to the Plan, the Committee shall be entitled to rely upon
information and advice furnished by the Company's officers,
the Company's accountants, the Company's counsel and any
other party the Committee deems necessary and no member of
the Committee shall be liable for any action taken or not
taken in reliance upon any such advice.
4. ELIGIBILITY. The Committee may, consistent with the
purposes of the Plan, grant options from time to time,
within 10 years from the date of adoption of the Plan by the
Board of Directors, to key employees of the Company or any
of its Subsidiaries and covering such number of shares of
Common Stock as it may determine; provided, however, that
the aggregate market value (determined at the time the stock
option is granted) of the shares for which any eligible
person may be granted incentive stock options under the Plan
or any other plan of the Company, or of a Subsidiary of the
Company which are exercisable for the first time by such
optionee during any calendar year shall not exceed $100,000.
Any option (or the portion thereof) granted in excess of
such amount shall be treated as a non-qualified stock
option.
5. EXERCISE PRICE. The exercise price of the shares of Common
Stock under each option shall be determined by the
Committee, but in no event shall such purchase price be less
than 100% of the fair market value of the Common Stock on
the date of grant; provided, however, that if, at the time
an option is granted, the optionee owns (or is deemed to
own) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of
any of its Subsidiaries, the exercise price shall not be
less than 110% of the fair market value of the Common Stock
subject to the option at the time of the granting of such
option. The fair market value of the Common Stock on any
day shall be (a) if the principal market for the Common
Stock is a national securities exchange, the closing sale
price of the Common Stock on such day as reported by such
exchange or on a consolidated tape reflecting transactions
on such exchange, (b) if the principal market for the Common
Stock is not a national securities exchange and the Common
Stock is quoted on the National Association of Securities
Dealers Automated Quotations System ("NASDAQ"), and (i) if
the Common Stock is quoted on the NASDAQ National Market
System, the closing sale price of the Common Stock on such
day, or (ii) if the Common Stock is not quoted on the NASDAQ
National Market System, the average between the highest bid
and the lowest asked prices for the Common Stock on such day
on NASDAQ, or (c) if the principal market for the Common
Stock is not a national securities exchange and the Common
Stock is not quoted on NASDAQ, the average between the
highest bid and lowest asked prices for the Common Stock on
such day as reported by National Quotation Bureau,
Incorporated; provided that if clauses (a), (b) and (c) of
this Paragraph are all inapplicable, or if no trades have
been made or no quotes are available for such day, the fair
market value of the Common Stock shall be determined by the
Committee by any method consistent with applicable
regulations adopted by the Treasury Department relating to
stock options. The determination of the Committee shall be
conclusive in determining the fair market value of the
stock.
6. TERM OF OPTION. The term of each option granted pursuant to
the Plan shall be such term as is established by the
Committee, in its sole discretion, at the time such option
is granted; provided, however, that the term of each
incentive stock option granted pursuant to the Plan shall be
for a period not exceeding 10 years from the date of
granting thereof, and further, provided, that if, at the
time an option is granted, the optionee owns (or is deemed
to own) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, or of
any of its Subsidiaries, the term of the incentive stock
option shall be for a period not exceeding five years.
Options shall be subject to earlier termination as
hereinafter provided.
7. EXERCISE OF OPTION. An option (or any part or installment
thereof) shall be exercised by giving written notice to the
Company at its principal office (at present 707 Summer
Street, Stamford, Connecticut 06901), stating whether an
incentive stock option or a non-qualified stock option is
being exercised, specifying the number of shares as to which
such option is being exercised and accompanied by payment in
full of the aggregate exercise price therefor (or the amount
due on exercise if the Stock Option Contract permits
installment payments) (i) in cash or by certified check,
(ii) with previously acquired shares of Common Stock having
an aggregate fair market value, on the date of exercise,
equal to the aggregate exercise price of all options being
exercised, or (iii) any combination thereof.
The Company shall have the right to deduct and withhold from
any cash otherwise payable to an optionee, or require that
an optionee make arrangements satisfactory to the Company
for payment of, such amounts as the Company shall determine
for the purpose of satisfying its liability to withhold
Federal, state or local income or FICA taxes incurred by
reason of the grant or exercise of an option.
Certificates representing the shares purchased shall be
issued as promptly as practicable, provided that the Company
may postpone issuing certificates for such shares for such
time as the Company, in its sole discretion, may deem
necessary or desirable in order to enable it to comply with
any requirements of the Securities Act of 1933, as amended
("Securities Act"), the 1934 Act, any Rules or Regulations
of the Securities and Exchange Commission promulgated under
either of the foregoing acts, the listing requirements of
any securities exchange on which the Company's Common Stock
may now or hereafter be listed, or any applicable laws of
any jurisdiction relating to the authorization, issuance or
sale of securities. The holder of an option shall not have
the rights of a stockholder with respect to the shares
covered by his option until the date of issuance of a stock
certificate to him for such shares; provided, however, that
until such stock certificate is issued, any option holder
using previously acquired shares in payment of an option
exercise price shall have the rights of a shareholder with
respect to such previously acquired shares. In no case may
a fraction of a share by purchased or issued under the Plan.
8. TERMINATION OF EMPLOYMENT. Any optionee whose employment
with the Company (and its Subsidiaries) has terminated for
any reason other than death or permanent and total
disability (as defined in Section 22(e) (3) of the Code) may
exercise his option, to the extent exercisable on the date
of such termination, at any time within four months after
the date of termination, but in no event after the
expiration of the term of the option. Options granted to
any employee under the Plan shall not be affected by any
changes in the status of an optionee so long as he continues
to be employed in some capacity with the Company, or any of
the Subsidiaries, or a Constituent Corporation.
Nothing in the Plan or in any option granted under the Plan
shall confer on any individual any right to continue in the
employ of the Company or any of its Subsidiaries, or
interfere in any way with the right of the Company or any of
its Subsidiaries to terminate the employee's employment at
any time for any reason whatsoever without liability to the
Company or any of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies
while he is employed by the Company or any of its
Subsidiaries, or within three months after the termination
of his employment, or if the optionee's employment has
terminated by reason of a permanent and total disability (as
defined in Section 22(e)(3) of the Code), options granted
under this Plan shall become immediately exercisable by his
executor, administrator or other person at the time entitled
by law to his rights under the option.
10. STOCK OPTION CONTRACTS. Each option shall be evidenced by
an appropriate Stock Option Contract, and may contain such
terms and conditions not inconsistent herewith as may be
determined by the Committee, and which may provide, among
other things, (a) that in the event of the exercise of such
option, unless the shares of Common Stock received upon such
exercise shall have been registered under an effective
registration statement under the Securities Act, such shares
will be acquired for investment and not with a view to
distribution thereof, and that such shares may not be sold
except in compliance with the applicable provisions of the
Securities Act, and (b) that in the event of any disposition
of the shares of Common Stock acquired upon the exercise of
an incentive stock option within two years from the date of
grant of the option or one year from the date of issuance of
such shares to him (a "Disqualifying Disposition") the
optionee will notify the Company thereof in writing within
30 days after such disposition, pay the Company, on demand,
in cash an amount necessary to satisfy its obligation, if
any, to withhold any Federal, state or local income taxes or
other taxes by reason of such Disqualifying Disposition and
provide the Company, on demand, with such information as the
Company shall reasonably request to determine such
obligation.
11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. The number and
kind of shares reserved for issuance hereunder shall be
equitably adjusted, in the discretion of the Committee, in
the event of a stock split, stock dividend,
recapitalization, reorganization, merger, consolidation,
extraordinary dividend, split-up, spin-off, combination,
stock repurchase, exchange of shares, warrants or rights
offering to purchase stock at a price substantially below
fair market value or other similar corporate event affecting
the stock, in order to preserve the benefits intended to be
made available under the Plan. In the event of any of the
foregoing, the number and kind of shares subject to any
outstanding option granted pursuant to the Plan and the
exercise price of any such option shall be equitably
adjusted (including by payment of cash to the holder of such
option) in the discretion of the Committee in order to
preserve the benefits or potential benefits intended to be
made available to the holder of an option granted pursuant
to the Plan. The determination of the Committee as to what
adjustments shall be made, and the extent thereof, shall be
final. Unless otherwise determined by the Committee, such
adjustments shall be subject to the same vesting schedule
and restrictions to which the underlying option is subject.
No fractional shares of Company Stock shall be reserved or
authorized or made subject to any outstanding option by any
such adjustment.
12. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was
adopted by the Board of Directors on August 28, 1992. No
options may be granted under the Plan after the tenth
anniversary of that date. The Board of Directors, without
further approval of the Company's stockholders, may at any
time suspend or terminate the Plan, in whole or in part, or
amend it from time to time in such respects as it may deem
advisable, including, without limitation, in order that
incentive stock options granted hereunder meet the
requirements for "incentive stock options" under the Code,
or any comparable provisions thereafter enacted and conform
to any change in applicable law or to regulations or rulings
of administrative agencies. No termination, suspension or
amendment of the Plan shall, without the consent of the
holder of an existing option affected thereby, adversely
affect his rights under such option.
13. NON-TRANSFERABILITY OF OPTIONS. No option granted under the
Plan shall be transferable otherwise than by will or the
laws of descent and distribution, and options may be
exercised, during the lifetime of the holder thereof, only
by him. Except to the extent provided in Paragraph 9,
options may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation
of law or otherwise) and shall not be subject to execution,
attachment or similar process.
14. DESIGNATION OF BENEFICIARY. The optionee may designate in
writing on forms prescribed by and filed with the Committee
prior to the optionee's death a beneficiary or beneficiaries
to receive all or part of the options to be delivered to the
optionee under this Plan in the event of the death of the
optionee at any time on forms prescribed by and filed with
the Committee. In the event of the optionee's death, the
options to be delivered to the optionee under this Plan with
respect to which a designation of a beneficiary has been
made (to the extent such designation is valid and
enforceable under applicable law) shall be delivered, in
accordance with the Plan, to the designated beneficiary or
beneficiaries. Any options to be delivered as to which a
designation has not been made shall be delivered to the
optionee's estate. If there is any question as to the legal
right of any beneficiary to receive delivery of the Plan
pursuant to the Plan, the options (and shares issuable upon
the exercise thereof) may be delivered in the sole
discretion of the Committee to the estate of the optionee,
in which event neither the Company nor any Subsidiary shall
have any further liability to anyone with respect to such
options.
15. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN
CONSTITUENT CORPORATIONS. Anything in this Plan to the
contrary notwithstanding, the Board of Directors may,
without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as
defined in Paragraph 15) or assume the prior options of such
Constituent Corporation.
16. DEFINITIONS.
(a) Subsidiary. The term "Subsidiary" shall have the
same definition as "subsidiary corporation" in Section
425(f) of the Code.
(b) Parent. The term "Parent" shall have the same
definition as "parent corporation" in Section 425(e) of
the Code.
(c) Constituent Corporation. The term "Constituent
Corporation" shall mean any corporation which engages
with the Company or any Subsidiary in a transaction to
which Section 425(a) of the Code applies (or would
apply if the option assumed or substituted were an
incentive stock option), or any Parent or any
Subsidiary of such corporation.
17. STOCKHOLDERS' APPROVAL. The Company has determined that
stockholder approval is not required in order to grant
options under this Plan. In the event that, in the future,
the Company determines that stockholder approval is required
in order to grant options under this Plan and thereafter
seeks such approval, if such approval is declined by the
stockholders, then any options granted hereunder may be
rescinded in whole or in part in the Company's discretion.
18. GOVERNING LAW. The Plan and all rights hereunder shall be
construed in accordance with an governed by the internal
laws of the State of Delaware.
Exhibit 5
May 6, 1996
CUC International Inc.
707 Summer Street
Stamford, CT 06901
RE: Registration Statement on Form S-8
Gentlemen and Ladies:
I have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by CUC International Inc.
(the "Company") with the Securities and Exchange Commission in
connection with the registration under the Securities Act of
1933, as amended, of 3,000,000 additional shares of common stock,
par value $.01 per share, of the Company ("Common Stock"),
reserved for issuance under the Company's 1992 Employee Stock
Option Plan (the "Plan").
In connection with the foregoing, I have examined, among other
things, the Registration Statement, the Plan, and originals or
copies, satisfactory to me, of all such corporate records and of
all such agreements, certificates and other documents as I have
deemed relevant and necessary as a basis for the opinion
hereinafter expressed. In such examination, I have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to me as originals and the conformity with the original
documents of documents submitted to me as copies. As to various
facts material to such opinion, I have, to the extent relevant
facts were not independently established by me, relied on
certificates of public officials and certificates and oaths and
declarations of officers or other representatives of the Company.
Based upon and subject to the foregoing, I am of the opinion
that:
1. The Company is a corporation duly organized and validly
existing under the laws of the State of Delaware; and
2. The 3,000,000 shares of the Company's Common Stock being
registered pursuant to the Registration Statement, when
issued pursuant to the provisions of the Plan and upon
payment of the purchase price therefor, will be duly
authorized, validly issued, fully paid and non-assessable.
I hereby consent to the filing of a copy of this opinion as an
exhibit to the Registration Statement and to the use of my name
wherever appearing in such Registration Statement, including any
amendment thereto.
Very truly yours,
/s/ Jeffrey A. Gershowitz
Jeffrey A. Gershowitz
Vice President and
Associate General Counsel
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the CUC International Inc.
1992 Employee Stock Option Plan and in the related Prospectus of
our report dated March 19, 1996, with respect to the consolidated
financial statements and schedule of CUC International Inc.
included in its Annual Report (Form 10-K) for the year ended
January 31, 1996, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Stamford, Connecticut
May 6, 1996
, 199
Dear :
I am pleased to advise you that the Board of Directors of CUC
International Inc. (the "Corporation") on authorized
the granting to you of a non-statutory option to purchase
shares of common stock, $.01 par value, of the Corporation (the
"Common Stock") at a price of $ per share (the "Exercise
Price"), which the Board believes to be the fair market value on
that date. Your option has been granted under the Company's 1992
Employee Stock Option Plan (the "Plan").
Terms not defined herein shall have the meaning set forth in the
Plan.
Your option may be exercised under the following terms:
(a) This option shall not be transferrable except by will or the
laws of descent and distribution;
(b) Subject to the provisions of paragraphs (e), (f) and (g)
hereof, this option may be exercisable by you as follows:
You may purchase (%) of the Common Stock for which
options are herein granted on or after February , 199
and an additional (%) on or after each successive
February 1.
Your right to exercise this option shall be cumulative. The
Board of Directors of the Corporation may at any time
accelerate the vesting of this option. This option shall
expire on the tenth anniversary of the date of grant.
(c) If required by the Corporation, prior to the delivery to you
of a certificate or certificates representing the shares of
Common Stock purchased by you upon the exercise of this
option, you shall have deposited with the Corporation a non-
disposition letter (restricting disposition by you of the
shares of Common Stock) in form satisfactory to counsel for
the Corporation;
(2)
(d) In the event of a stock split, stock dividend,
recapitalization, reorganization, merger, consolidation,
extraordinary dividend, split-up, spin-off, combination,
stock repurchase, exchange of shares, warrants or rights
offering to purchase stock at a price substantially below
fair market value or other similar corporate event affecting
the Common Stock, the number and kind of shares subject to
this option and the Exercise Price shall be equitably
adjusted (including by payment of cash to you) in the
discretion of the committee of the Board of Directors (the
"Committee") that administers the Plan in order to preserve
the benefits or potential benefits intended to be made
available to you under this option. The determination of
the Committee as to what adjustments shall be made, and the
extent thereof, shall be final. Unless otherwise determined
by the Committee, such adjustments shall be subject to the
same vesting schedule and restrictions to which this option
is subject. No fractional shares of Common Stock shall be
reserved or authorized or made subject to this option by any
such adjustment.
(e) Notwithstanding anything herein to the contrary, if the
Board of Directors of the Corporation or any committee of
the Board of Directors, after full consideration of the
facts, finds by majority vote that you have engaged in
fraud, embezzlement, theft, commission of a felony, or
dishonesty in the course of your employment by the
Corporation, you shall forfeit all unexercised options for
which the Corporation has not yet delivered share
certificates, in each case whether such options are granted
by this letter or otherwise. The decision of the Board of
Directors of the Corporation or such committee shall be
final.
(f) Subject to paragraph (e) hereof, if you die while in the
employ of the Corporation or any of its affiliates or
subsidiaries or if you die within a period of three (3)
months after your employment has terminated or if your
employment is terminated by reason of permanent and total
disability (as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended (the "Code")), this option
shall become immediately exercisable in full and, in the
case of your death, your estate shall have the right to
exercise your options hereunder. You may designate, in
writing on forms to be provided to you by the Committee, a
beneficiary or beneficiaries to receive all or part of the
options upon your death.
(g) Subject to paragraph (e) hereof, in the event your
employment with the Corporation or any of its affiliates or
subsidiaries is terminated for any reason other than death
or permanent and total disability (as defined in Section
22(e)(3) of the Code), you shall be entitled to exercise
your options hereunder, to the extent exercisable on the
date of termination, at any time within four (4) months from
such termination, but in no event thereafter or after the
expiration of the term of the option.
(3)
(h) You may pay for shares purchased pursuant hereto as follows:
(i) You may pay the Exercise Price per share in cash
or check at the time of exercise.
(ii) You may pay the Exercise Price by remitting
to the Corporation in cash or by check an amount equal
to or greater than the product of (a) the par value of
the Corporation's Common Stock and (b) the number of
shares of Common Stock acquired pursuant to the
exercise of this option (such amount is hereinafter
referred to as the "Minimum Payment") and by executing
a promissory note for the balance equal to (A) the
product of (i) the Exercise Price and (ii) the number
of shares of Common Stock acquired pursuant to the
exercise of this option less (B) the Minimum Payment
(such balance is hereinafter referred to as the
"Principal Amount"). Pursuant to the terms of the
promissory note, interest will be charged per year at
the lowest interest rate in effect at the time of
exercise, which will prevent any imputation of income
under Sections 483 or 7872 of the Code. Five years
from the date of exercise, the Principal Amount plus
interest compounded annually will be due. In the
discretion of the Corporation's Board of Directors, the
Corporation may demand repayment of the Principal
Amount plus accrued interest upon a termination of your
employment with the Corporation or any of its
subsidiaries. With notice of your exercise of your
option, you must give notice of your election to use
the loan arrangement described above. In the
discretion of the Corporation's Board of Directors, you
may be required to execute a pledge agreement. The
Corporation will retain possession of certificates
representing shares of Common Stock acquired pursuant
to the exercise of this option until the loan is repaid
in full;
(iii) You may arrange for a "cashless" stock option
exercise with the Corporation's exercise facilitator
pursuant to which such exercise facilitator will pay
the Exercise Price per share in cash or check at the
time of exercise; or
(iv) You may pay with any other legal consideration
that may be acceptable to the Committee in its sole
discretion at the time of exercise.
When you wish to exercise your stock option in whole or in part,
please refer to the provisions of this letter and correspond in
writing with the Secretary of the Corporation. This is not an
incentive stock option under Section 422A of the Code.
Very truly yours,
E. Kirk Shelton
President and Chief Operating Officer
EKS:feh
1992plan