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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 Bonus and Salary Replacement 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, 1,000,000 shares $33.125(1) $33,125,000(1) $11,422.41
$.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 March 2, 1993, Registration No. 33-58896 and
April 27, 1995, Registration No. 33-91656, with regard to the CUC
International Inc. 1992 Bonus and Salary Replacement Stock Option Plan, are
incorporated herein by reference.
Exhibits
4.1 CUC International Inc. 1992 Bonus and Salary Replacement Stock
Option Plan
4.2 Form of Bonus and Salary Replacement 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 an May 6, 1996
Walter A. Forbes 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
Bonus and Salary Replacement Stock Option Plan 5
4.2 Form of Bonus and Salary Replacement Stock
Option Agreement 11
5 Opinion of Jeffrey A. Gershowitz, Esq.
as to legality of the securities being
registered 14
23.1 Consent of Ernst & Young LLP 16
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 APRIL 10, 1996
CUC INTERNATIONAL INC.
1992 BONUS AND SALARY REPLACEMENT
STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan")
is designed to give key employees, consultants, advisors,
and vendors, of CUC International Inc., a Delaware
corporation (the "Company"), and its present and future
subsidiary corporations, as defined in Paragraph 15
("Subsidiaries"), the opportunity to receive stock option
grants in lieu of certain salary increases and all or a
portion of their respective bonuses or fees 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 1934
Act, as hereinafter defined. The Plan provides for the
grant of only "non-qualified stock options" governed by
Section 83 of the Internal Revenue Code of 1986, as amended
(the "Code").
2. STOCK SUBJECT TO THE PLAN. Options may be granted under
the Plan to purchase in the aggregate not more than Four
Million Nine Hundred Thirty-Seven Thousand Five Hundred
(4,937,500) shares of 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 provisions 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.
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; 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 such 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 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.
4. ELIGIBILITY. The Committee may, consistent with the
purpose 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 and or consultants,
advisors, or vendors of the Company or any of its
Subsidiaries and covering such number of shares of Common
Stock as it may determine. No consultant, advisor, or
vendor of the Company shall be eligible to receive option
grants unless bona fide services shall be rendered by such
consultant, advisor, or vendor and such services are not in
connection with the offer of sale of securities in a capital
raising transaction.
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. 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. 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), specifying the number
of shares as to which such option is being exercised and
accompanied by payment in full of the aggregate exercise
price thereof (or the amount due on exercise if the Stock
Option Contract permits installment payments) (i) in cash or
by certified check, or (ii) any other method which the
Committee may approve.
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 1933 Act or the 1934 Act, as
hereinafter defined, 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 be purchased or issued under the Plan.
8. TERMINATION OF EMPLOYMENT OR ENGAGEMENT. Any optionee
whose employment or engagement 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 at the time
or times provided in the Stock Option Contract and no such
termination shall cause any forfeiture of such option.
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
employment, or if the optionee's employment has terminated
by reason of 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 shall contain such
terms and conditions not inconsistent herewith as may be
determined by the Committee, and which may provide, among
other things, 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 1933 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
1933 Act.
11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CHANGE OF CONTROL.
Notwithstanding and other provisions of the Plan, in the
event of any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, merger,
consolidation, reorganization, split-up, combination or
exchange of shares or the like, the aggregate number and
kind of shares subject to each outstanding option and the
exercise prices shall be appropriately adjusted by the Board
of Directors, whose determination shall be conclusive.
In the event of a "change in control," as hereinafter
defined, options granted under this Plan shall become
immediately exercisable. A "change in control" shall be
deemed to have occurred if (i) a tender offer shall be made
and consummated for the ownership of 51% or more of the
outstanding voting securities of the Company, (ii) the
Company shall be merger or consolidated with another
corporation and as a result of such merger or consolidation
less than 60% of the outstanding voting securities of the
surviving or resulting corporation shall be owned in the
aggregate by the former shareholders of the Company, other
than affiliates (within the meaning of the 1934 Act) of any
party to such merger or consolidation, as the same shall
have existed immediately prior to such merger or
consolidation, (iii) the Company shall sell substantially
all of its assets to another corporation which is not a
wholly owned subsidiary, or (iv) a person within the meaning
of Section 3(a)(9) or of Section 13 (d) (3) (as in effect on
the date hereof) of the 1934 Act, shall acquire 40% or more
of the outstanding voting securities of the Company (whether
directly, indirectly, beneficially or of record). For
purposes hereof, ownership of voting securities shall take
into account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d) (1) (i) (as in
effect on the date hereof) pursuant to the 1934 Act.
12. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was
adopted by the Board of Directors on January 20, 1992. No
options may be granted under the Plan after December 31,
2001. The Board of Directors, without 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, to 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 as defined by the Internal
Revenue Code of 1986, 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. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN
CONSTITUENT CORPORATIONS. Anything in this Plan to the
contrary notwithstanding, the Board of Directors may,
without 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.
15. 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 any Parent
or any Subsidiary of such corporation.
(d) 1933 Act. The term "1933 Act" shall mean the
Securities Act of 1933 and any rules or regulations
promulgated thereunder.
(e) 1934 Act. The term "1934 Act" shall mean the
Securities Exchange Act of 1934 and any rules or
regulations promulgated thereunder.
16. 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 Company's discretion. In such event, the
optionee shall be entitled to receive the amount of the
salary increase and/or bonus such optionee would have been
entitled to receive if such options were not granted, plus
interest, which shall be calculated at a rate of six percent
per annum.
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 1,000,000 additional shares of common stock,
par value $.01 per share, of the Company ("Common Stock"),
reserved for issuance under the Company's 1992 Bonus and Salary
Replacement 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 1,000,000 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 Bonus and Salary Replacement 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 , 199
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 Bonus and Salary Replacement Stock Option Plan
(the "Plan").
Terms not defined herein shall have 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), (g) and
(h) 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
,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, merger, consolidation, reorganization,
split-up, combination, or exchange of shares or the like,
the number and kind of shares subject to this option and the
Exercise Price shall be appropriately adjusted by the Board
of Directors. The determination of the Board of Directors
shall be final.
(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.
(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 rights hereunder as if your employment had not been
terminated.
(h) In the event of a "change in control," as hereinafter
defined, your options shall become immediately exercisable.
A "change in control" shall be deemed to have occurred if
(i) a tender offer shall be made and consummated for the
ownership of 51% or more of the outstanding voting
securities of the Corporation, (ii) the Corporation shall be
merged or consolidated with another corporation and as a
result of such merger or consolidation less than 60% of the
outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former
shareholders of the Corporation, other than affiliates
(within the meaning of the Securities and Exchange Act of
1934, as amended (the "1934 Act")) of any party to such
merger or consolidation, as the same shall have existed
immediately prior to such merger or consolidation, (iii) the
Corporation shall sell substantially all of its assets to
another corporation which is not a wholly owned subsidiary,
or (iv) a person within the meaning of Section 3 (a)(9) or
of Section 13(d)(3) (as in effect on the date hereof) of the
1934 Act, shall acquire 40% or more of the outstanding
voting securities of the Corporation (whether directly,
indirectly, beneficially or of record). For purposes
hereof, ownership of voting securities shall take into
account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d)(1)(i) (as in effect
on the date hereof) pursuant to the 1934 Act.
-3-
(i) You may pay for shares purchased pursuant hereto (together
with any withholding taxes due with respect thereto) in cash
or by check at the time of exercise or with any other legal
consideration that may be acceptable to the Board of
Directors of the Corporation 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. This
option may be subject to approval by the Corporation's
stockholders.
Very truly yours,
E. Kirk Shelton
President and Chief Operating Officer
EKS:feh
bonrep92