-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ux5lyGForgGdEamqgrL5OHvD8CC+x4Q5iShvLnKU2lbE5QagU+G0dwPPhVUNyd8w dTUwr+qPTAQlitjddOND8g== 0000950124-95-003179.txt : 19951010 0000950124-95-003179.hdr.sgml : 19951010 ACCESSION NUMBER: 0000950124-95-003179 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19951006 EFFECTIVENESS DATE: 19951025 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANCE ROSS CORP CENTRAL INDEX KEY: 0000002457 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564] IRS NUMBER: 360861450 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-63259 FILM NUMBER: 95579162 BUSINESS ADDRESS: STREET 1: 6200 ELMRIDGE ROAD CITY: STERLING STATE: MI ZIP: 48310 BUSINESS PHONE: 3123469126 S-8 1 FORM S-8 REGISTRATION STATEMENT 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1995 REGISTRATION NO. 33- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ADVANCE ROSS CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 36-3878407 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 233 SOUTH WACKER DRIVE, SUITE 9700, CHICAGO, ILLINOIS 60606-6502 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE) ADVANCE ROSS CORPORATION 1995 DIRECTORS DEFERRAL PLAN 1993 ADVANCE ROSS CORPORATION STOCK OPTION PLAN ADVANCE ROSS CORPORATION STOCK OPTION PLAN ADVANCE ROSS / EUROPE TAX-FREE SHOPPING AB STOCK OPTION PLAN (FULL TITLE OF THE PLANS) HARVE A. FERRILL ADVANCE ROSS CORPORATION 233 SOUTH WACKER DRIVE, SUITE 9700 CHICAGO, ILLINOIS 60606-6502 (NAME AND ADDRESS OF AGENT FOR SERVICE) (312) 382-1100 (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) WITH A COPY TO: HERBERT S. WANDER, ESQ., P.C. KATTEN MUCHIN & ZAVIS 525 WEST MONROE, SUITE 1600 CHICAGO, ILLINOIS 60661-3693 (312) 902-5200 CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION REGISTERED REGISTERED(1) SHARE(2) PRICE(2) FEE(3) ------------------------ ------------- ------------------- ------------------- ------------ Common Stock, $.01 par value per share . . 100,000 $17.25 $1,725,000.00 $594.83
(1) Includes an indeterminate number of shares of Advance Ross Corporation Common Stock that may be issuable by reason of stock splits, stock dividends or similar transactions. (2) The amounts are based upon the average of the high and low sale prices of Advance Ross Corporation common stock as reported on the NASDAQ National Market System on October 2, 1995, and are used solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended. (3) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the Prospectus contained herein includes 2,036,952 shares of Common Stock covered by Registration Statement on Form S-8 (No. 33-59952), for which a filing fee of $2,625.76 was paid and 626,740 shares of Common Stock covered by Registration Statement on Form S-8 (No. 33-74620), for which a filing fee of $1,897.78 was paid. The foregoing numbers of shares of Common Stock covered by these Registration Statements have been adjusted to take into account a two-for-one stock split of the Company's Common Stock effective February 4, 1994, and a two-for-one stock split of the Company's Common Stock effective September 8, 1995. 2 The registrant has filed a Registration Statement on Form S-8 (No. 33-59952) which first became effective on March 25, 1993, and a Registration Statement on Form S-8 (No. 33-74620) which first became effective on January 27, 1994. Pursuant to Rule 429 under the Securities Act of 1933, as amended, the Prospectus contained herein includes 2,036,952 shares of Common Stock covered by Registration Statement No. 33-59952, of which 454,248 shares have been issued and 626,740 shares of Common Stock covered by Registration Statement No. 33-74620, of which 5,348 shares have been issued. The foregoing numbers of shares of Common Stock covered by these Registration Statements have been adjusted to take into account a two-for-one stock split of the Company's Common Stock effective February 4, 1994, and a two-for-one stock split of the Company's Common Stock effective September 8, 1995. 3 PART I INFORMATION REQUIRED IN THE PROSPECTUS The information called for in Part I of Form S-8 is not being filed with or included in this Form S-8 in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC"). The Form S-8 has one form of prospectus. The prospectus is to be used for reoffers and resales of the Company's Common Stock acquired pursuant to the exercise of options by affiliates of the Company who are participating in the Advance Ross Corporation 1995 Directors Deferral Plan, 1993 Advance Ross Corporation Stock Option Plan, the Advance Ross Corporation Stock Option Plan and the Advance Ross/Europe Tax-Free Shopping AB Stock Option Plan. The Prospectus has been prepared in accordance with the requirements of Form S-3, as required by the conditions specified in General Instruction C to Form S-8. The Company has filed a Registration Statement on Form S-8 (No. 33-59952) which first became effective on March 25, 1993, and a Registration Statement on Form S-8 (No. 33-74620) which first became effective on January 27, 1994, the contents of which are herein incorporated by this reference. 4 ADVANCE ROSS CORPORATION 1,164,388 SHARES OF COMMON STOCK 233 SOUTH WACKER DRIVE SUITE 9700 CHICAGO, ILLINOIS 60606-6502 (312) 382-1100 This Prospectus relates to up to 1,164,388 shares of Common Stock ("Common Stock" or the "Shares") of Advance Ross Corporation (the "Company"), which may be offered by the Selling Security Holder (as hereinafter defined) listed herein under the caption "Selling Security Holder." All 1,164,388 Shares may be acquired upon the exercise of stock options granted to the Selling Security Holder as a director, officer, employee or consultant of the Company. The dates on which the options become exercisable, and the respective expiration dates of the options, are described under the caption "Selling Security Holder." The 1,164,388 Shares covered by this Prospectus may be offered by the Selling Security Holder from time to time in transactions on the NASDAQ National Market System ("NASDAQ"), at prices and terms then obtainable, through negotiated transactions at negotiated prices, or through underwriters, broker-dealers or otherwise, however, there is no commitment to sell any of these Shares. The amount of Shares offered will be determined from time to time by each Selling Security Holder at his sole discretion. The Company will not receive any part of the proceeds of any sales. Any brokers' commissions, discounts, or other underwriters' compensation will be paid by the Selling Security Holder. The Selling Security Holder, and the broker-dealers through whom sales may be made, may, the Company not so conceding, be deemed to be underwriters under the Securities Act of 1933 (the "Securities Act"), and any commissions paid or any discounts or concessions allowed to such broker-dealers may be underwriting discounts and commissions under the Securities Act. The Company's Common Stock is traded on NASDAQ. On October 2, 1995, the closing ask price of the Common Stock on NASDAQ was $17.25 per Share. This price per Share reflects a two-for-one stock split of the Company's Common Stock effective September 8, 1995. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADE- QUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is October 6, 1995 5 TABLE OF CONTENTS
PAGE ---- Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Selling Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Description of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . 6 Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
No person has been authorized to give any information or to make any representation, other than those contained in this Prospectus, and if given or made, such information or representation must not be relied upon as having been authorized by the Company. Neither the delivery of this Prospectus nor any sale made through its use shall imply that there has been no change in the affairs of the Company since the date hereof. 2 6 AVAILABLE INFORMATION The Company is subject to certain of the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and are also available for inspection and copying at the following regional offices at the Commission: Room 1028, 75 Park Place, New York, New York 10007; and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can also be obtained at prescribed rates by mail addressed to the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The Company has filed a Registration Statement on Form S-8 (the "Registration Statement") under the Securities Act with the Commission with respect to the securities offered hereby. As permitted by the rules and regulations of the Commission, this Prospectus omits certain information contained in the Registration Statement. The Registration Statement, including the exhibits and schedules thereto, may be inspected and copied in the manner and at the sources described above. SELLING SECURITY HOLDERS Each of the Selling Security Holders identified below is the holder of non-qualified stock options granted by the Company, and this Prospectus covers the possible resale of the Common Stock issued or issuable upon the exercise of these options. The amount of Shares issued or issuable upon the exercise of the Selling Security Holders' options have been adjusted to take into account a two-for-one stock split of the Company's Common Stock effective September 8, 1995. HARVE A. FERRILL Mr. Ferrill, Chairman of the Board, Chief Executive Officer and a director of the Company, was granted non-qualified stock options pursuant to the Advance Ross Corporation Stock Option Plan on October 26, 1992, to acquire a total of 400,000 Shares at a price of $2.50 per Share that are covered by this Prospectus. Options to acquire 200,000 Shares became exercisable on each of April 26, 1993, and April 26, 1994. All of these options expire on October 26, 2002. Mr. Ferrill was also granted non-qualified stock options pursuant to the 1993 Advance Ross Corporation Stock Option Plan on June 5, 1995, to acquire a total of 50,000 Shares at a price of $12.50 per Share that are covered by this Prospectus. Options to acquire 25,000 Shares will become exercisable on each of June 5, 1996, and June 5, 1997. All of these options expire on June 5, 2005. Mr. Ferrill currently owns 142,600 shares of Common Stock. PAUL G. YOVOVICH Mr. Yovovich, President, Chief Operating Officer and a director of the Company, was granted non-qualified stock options pursuant to the Advance Ross Corporation Stock Option Plan on June 7, 1993, to acquire a total of 200,000 Shares at a price of $3.75 per Share that are covered by this Prospectus. Options to acquire 100,000 Shares became exercisable on each of December 7, 1993, and December 7, 1994. All of these options expire on June 7, 2003. Mr. Yovovich was also granted non-qualified stock options pursuant to the 1993 Advance Ross Corporation Stock Option Plan on June 15, 1993, to acquire a total of 200,000 Shares at a price of $4.00 per Share that are also covered by this Prospectus. Options to acquire 100,000 Shares became exercisable on each of December 15, 1993, and December 15, 1994. All of these options expire on June 15, 2003. Mr. Yovovich was also granted 3 7 additional non-qualified stock options pursuant to the 1993 Advance Ross Corporation Stock Option Plan on June 5, 1995, to acquire a total of 40,000 Shares at a price of $12.50 per Share that are covered by this Prospectus. Options to acquire 20,000 Shares will become exercisable on each of June 5, 1996, and June 5, 1997. All of these options expire on June 5, 2005. Mr. Yovovich currently owns 6,400 shares of Common Stock. RANDY M. JOSEPH Mr. Joseph, Vice President, Chief Financial Officer and Treasurer of the Company, was granted non-qualified stock options pursuant to the 1993 Advance Ross Corporation Stock Option Plan on November 21, 1994, to acquire a total of 10,000 Shares at a price of $10.13 per Share that are covered by this Prospectus. Options to acquire 2,000 Shares will become exercisable on each of November 21, 1995, November 21, 1996, November 21, 1997, November 21, 1998, and November 21, 1999. All of these options expire on November 21, 2004. Mr. Joseph was also granted non-qualified stock options pursuant to the 1993 Advance Ross Corporation Stock Option Plan on June 5, 1995, to acquire a total of 15,000 Shares at a price of $12.50 per Share that are covered by this Prospectus. Options to acquire 7,500 shares will become exercisable on each of June 5, 1996, and June 5, 1997. All of these options expire on June 5, 2005. Mr. Joseph currently owns 1,200 shares of Common Stock. If either Mr. Ferrill or Mr. Yovovich incurs a termination of employment prior to June 5, 1997, or Mr. Joseph incurs a termination of employment prior to November 21, 1999, all or any portion of the options which are not exercisable on the date immediately preceding the termination of employment shall not be nor become exercisable at any time on or after the date of termination of employment, except that if the Selling Security Holder's termination of employment is due to death or disability, as determined by the Advance Ross Stock Option Plan Committee, all outstanding options shall be fully exercisable. If the termination of employment is due to death, any unexercised and unexpired options may be exercised at any time within the one year period immediately following the date of the appointment of a representative. If the termination of employment is due to cause, any unexercised and unexpired options shall terminate simultaneously with the date of such termination of employment. If the termination of employment is due to other than death or cause, any unexercised and unexpired options shall terminate one year following the date of such termination of employment. Upon a "change in control" (as defined in the applicable plan) of the Company, Mr. Ferrill, Mr. Yovovich and Mr. Joseph's unexercisable options shall become fully exercisable in accordance with the plan under which they were issued. ROGER ANDERSON Mr. Anderson, a consultant to and director of the Company, was granted non-qualified stock options pursuant to the Advance Ross/Europe Tax-Free Shopping AB Stock Option Plan in November 1992 to acquire a total of 334,236 Shares at a price of $3.13 per Share. Mr. Anderson has exercised options on 86,848 Shares, and has remaining options to acquire a total of 247,388 Shares, all of which are covered by this Prospectus. Options to acquire 20 percent of the total 334,236 Shares became exercisable on each of November 2, 1993, and November 2, 1994, and will become exercisable on each of November 2, 1995, November 2, 1996, and November 2, 1997. All of these options expire on November 2, 1998. Mr. Anderson was also granted non-qualified stock options pursuant to the Advance Ross Corporation 1995 Directors Deferral Plan on June 5, 1995, to acquire a total of 2,000 Shares at a price of $12.50 per Share that are covered by this Prospectus. Options to acquire 100 percent of the total 2,000 Shares will become exercisable on the earlier of June 4, 1996, if Mr. Anderson is still a director of the Company or the date Mr. Anderson ceases to be a director of the Company because of his death or disability. All of these options expire on June 5, 2005. Mr. Anderson currently owns 9,432 shares of Common Stock. 4 8 Upon a "change in control" (as defined in the applicable plan) of the Company, Mr. Anderson's unexercisable options issued under the Advance Ross Corporation 1995 Directors Deferral Plan shall be fully exercisable and in certain circumstances be converted into cash all in accordance with such plan and Mr. Anderson's unexercisable options issued under the Advance Ross/Europe Tax-Free Shopping AB Stock Option Plan shall become fully exercisable in accordance with such plan. PLAN OF DISTRIBUTION The Company will receive no proceeds from this offering. The securities offered hereby may be sold by the Selling Security Holder acting as principal for his own account through market transactions on NASDAQ, in one or more negotiated transactions at negotiated prices, or otherwise. The sale of securities may be offered to or through underwriters, brokers or dealers, and such underwriters, brokers or dealers may receive compensation in the form of underwriting discounts, commissions or concessions from the Selling Security Holder and/or the purchasers of the securities for whom they act as agent. The Selling Security Holder and any underwriters, brokers or dealers that participate in the distribution of the securities may, the Company not so conceding, be deemed to be underwriters and any compensation received by them and any provided pursuant to the sale of the securities by them might be deemed to be underwriting discounts and commissions under the Securities Act. In order to comply with certain states' securities laws, if applicable, the securities will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the securities may not be sold unless the securities have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. DESCRIPTION OF COMMON STOCK The Company's authorized capital stock consists of 12,000,000 shares of common stock, $.01 par value per share, and 1,200,000 shares of preferred stock, divided into 1,000,000 shares of $1 par value preferred stock (the "$1.00 Preferred Stock") and 200,000 shares of 5% cumulative preferred stock, $25 par value per share (the "5% Preferred Stock"). The Company's Common Stock and 5% Preferred Stock are registered under the Exchange Act. COMMON STOCK The authorized common stock of the Company consists of 12,000,000 shares of Common Stock, of which 7,075,370 were issued and outstanding as of October 2, 1995. All shares of common stock currently outstanding are fully paid and nonassessable, not subject to redemption and without preemptive or other rights to subscribe for or purchase any proportionate part of any new or additional issues of stock of any class or of securities convertible into stock of any class. Voting. Holders of Common Stock are entitled to one vote per share. Conversion. The Common Stock has no conversion rights. Dividends. Holders of Common Stock are entitled to receive, on a cumulative basis, after the requirements with respect to the 5% Preferred Stock have been met and subject to the rights and preferences of the $1.00 Preferred Stock, their pro rata share of any cash dividend if and when declared by the Board of Directors from funds legally available therefor. 5 9 Liquidation. After distribution in full of the preferential amount to be distributed to the holders of the 5% Preferred Stock then outstanding, the holders of the Common Stock shall, subject to such rights and preferences of the $1.00 Preferred Stock, be entitled to receive all of the remaining assets of the corporation available for distribution to its stockholders outstanding according to the number of shares of Common Stock held by them, respectively. Transfer Agent. The Company's Transfer Agent and Registrar for the Common Stock is Chemical Mellon Shareholder Services. PREFERRED STOCK. The authorized preferred stock consists of 1,200,000 shares, which consists of $1.00 par value per share, 1,000,000 shares authorized, none issued or outstanding and 5% Cumulative Preferred Stock, $25.00 par value per share, 200,000 shares authorized and 18,775 issued and outstanding as of October 2, 1995. The $1.00 Preferred Stock may be issued by resolutions of the Company's Board of Directors from time to time without any action of the stockholders. Such resolutions may authorize issuances of the $1.00 Preferred Stock, and may fix and determine dividend and liquidation preferences, voting rights, conversion privileges, redemption terms, and other privileges and rights of the stockholder of the $1.00 Preferred Stock so authorized. Such $1.00 Preferred Stock shall not be preferred or prior to the 5% Preferred Stock without the affirmative vote of at least two-thirds of the outstanding shares of the 5% Preferred Stock. Voting. The holders of the 5% Preferred Stock have no voting rights whatsoever, except as set forth in the following sentence. If the Company fails to make the payments due on the 5% Preferred Stock and such failure continues for a period of 12 months, the holders of the 5% Preferred Stock shall have the right, until all dividends accrued have been declared and paid, voting separately as a class, to elect one-third of the total number of directors of the Company, or if the number of directors of the Company is not a multiple of three, the integer next larger than one-third of the entire Board of Directors. Conversion. The 5% Preferred Stock has no conversion rights. Dividends. Holders of the 5% Preferred Stock are entitled to receive dividends of $1.25 per share per annum in equal quarterly installments. Liquidation. The holders of the 5% Preferred Stock are entitled to receive, ratably and equally, a sum equal to all accumulated and accrued unpaid dividends and $25 per share of 5% Preferred Stock if such distribution is involuntary or $27.50 per share of 5% Preferred Stock if such distribution is voluntary. Redemption. The 5% Preferred Stock is subject to redemption in whole or in part at the option of the Company upon payment of $27.50 per share plus accumulated, accrued and unpaid dividends. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company's Annual Report on Form 10-K for the year ended December 31, 1994, the Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, and June 30, 1995, and the Company's Reports on Form 10-C, dated June 30, 1995, and August 25, 1995 are hereby incorporated 6 10 by reference in this Prospectus. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Prospectus and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Copies of all documents incorporated herein by reference other than exhibits to such documents (unless such exhibits are specifically incorporated by reference herein) and of any other documents required to be delivered to employees pursuant to Rule 428(b) of the Securities Act of 1933, as amended, will be provided without charge to each person who receives a copy of this Prospectus upon written or oral request to the Company's principal executive offices at: 233 South Wacker Drive, Suite 9700, Chicago, Illinois 60606-6502, Attention: Secretary (telephone: (312) 382-1100). LEGAL MATTERS Certain legal matters with respect to the validity of the Common Stock offered hereby have been passed upon for the Company by Katten Muchin & Zavis, a partnership including professional corporations, Chicago, Illinois. Herbert S. Wander, a director of the Company, is a professional corporate member of Katten Muchin & Zavis, which has and will continue to provide legal services to the Company. As of September 11, 1995, Mr. Wander directly beneficially owned 20,000 shares of Common Stock and pursuant to the Advance Ross 1995 Directors Deferral Plan was granted non-qualified stock options to acquire an additional 2,000 shares of Common Stock. Saul E. Rudo, a member of Katten Muchin & Zavis, directly beneficially owned 600 shares of Common Stock as of October 2, 1995. * * * 7 11 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the SEC are incorporated in this Registration Statement by reference: 1. Advance Ross Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. 2. Advance Ross Corporation's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 1995, and June 30, 1995. 3. Advance Ross Corporation's Reports on Form 10-C, dated June 30, 1995, and August 25, 1995. 4. The description of the Advance Ross Corporation common stock (the "Common Stock") which is contained in the Company's Registration Statement filed pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act") and all amendments thereto and reports filed for the purpose of updating such description. In addition, all documents filed by the Company or the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of this registration statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all such securities then remaining unsold, shall be deemed to be incorporated in this registration statement by reference and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. The Company hereby undertakes to provide without charge to each person who has received a copy of the prospectus to which this registration statement relates, upon the written or oral request of any such person, a copy of any or all the documents that have been or may be incorporated by reference into this registration statement, other than exhibits to such documents (unless such exhibits are incorporated therein by reference). The Company hereby further undertakes to deliver or cause to be delivered to all participants who have an interest through the Plan in Common Stock (and any other participants who request such information orally or in writing) who do not otherwise receive such material, copies of all reports, proxy statements and other communications distributed by the Company to its stockholders generally, no later than the time such materials are first sent to its stockholders. ITEM 4. DESCRIPTION OF SECURITIES. Not Applicable. II-1 12 ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The legality of the shares offered hereby and legal matters in connection with the interests in the Plan have been passed upon by Katten Muchin & Zavis, a partnership including professional corporations. Herbert S. Wander, a director of the Company, is a professional corporate member of Katten Muchin & Zavis, which has and will continue to provide legal services to the Company. As of September 11, 1995, Mr. Wander directly beneficially owned 20,000 shares of Common Stock and pursuant to the Advance Ross Corporation Directors Deferral Plan was granted non-qualified Stock options to acquire an additional 2,000 shares of Common Stock. Saul E. Rudo, a member of Katten Muchin & Zavis directly beneficially owned 600 shares of Common Stock as of October 2, 1995. The consolidated financial statements and schedules of the Company for the periods ended December 31, 1992, 1993 and 1994, included in the Company's Annual Report on Form 10-K, which have been incorporated by reference in this Registration Statement on Form S-8 by reference, have been audited by Deloitte & Touche LLP, independent auditors, as indicated in their report with respect thereto, and are incorporated herein in reliance upon the authority of such firm as experts in accounting and auditing. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article Fourteenth of the Company's Restated Certificate of Incorporation as amended (the "Company Certificate") provides that the Company shall indemnify its directors (former and present) and officers against certain liabilities and expenses incurred as a result of their duties, and, along with Article 12 of the By-Laws of the Company, defines the rights of the Company directors and officers to indemnification by the Company in the event of personal liability or expenses incurred by them as a result of certain litigation against them. The Delaware General Corporation Law (the "GCL") empowers the Company to indemnify, subject to the standards therein prescribed, any person in connection with any action, suit or proceeding brought or threatened by reason of the fact that such person is or was a director, officer, employee or agent of the Company or is or was serving as such with respect to another corporation or other entity at the request of the Company. In addition, the GCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breach of directors' fiduciary duty of care. The directors and officers of the Company are covered by an insurance policy, indemnifying them against certain civil liabilities, including certain liabilities under the federal securities laws, which might be incurred by them in such capacity. Further, the Company has entered into indemnification agreements with each member of the board of directors which provide for additional indemnification. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not Applicable. ITEM 8. EXHIBITS. 4.1 Advance Ross Corporation 1995 Directors Deferral Plan. 4.2 Form of Advance Ross Corporation 1995 Deferral Plan Option Agreement. 4.3 1993 Advance Ross Corporation Stock Option Plan. Incorporated by reference to Exhibit 4.1 of Form S-8 dated January 27, 1994 (File No. 33-74620). II-2 13 4.4 Form of Advance Ross/Europe Tax-Free Shopping AB Stock Option Agreement. Incorporated by reference to Exhibit 4.1 of Form S-8 dated March 25, 1993 (File No. 33-59952). 4.5 Form of Stock Option Agreement by and between the partners of Hamilton Capital Partners and Advance Ross Corporation. Incorporated by reference to Item 7(c)(28.6) to Form 8-K, dated November 2, 1992 (File No. 0-770). 4.6 Advance Ross Corporation Stock Option Plan. Incorporated by reference to Exhibit 4.2 of Form S-8 dated March 25, 1993 (File No. 33-59952). 4.7 Amendment to Advance Ross Corporation Stock Option Plan dated June 8, 1995. 4.8 Form of Advance Ross Corporation Stock Option Agreement. Incorporated by reference to Exhibit 4.3 of Form S-8 dated March 25, 1993 (File No. 33-59952). 4.9 Amended and Restated Certificate of Incorporation of the Company. Incorporated by reference to Appendix B of Form S-4 filed on April 14, 1993 (File No. 0-21822). 4.10 Amendment to Amended and Restated Certificate of Incorporation of the Company dated June 16, 1993. 4.11 Amendment to Amended and Restated Certificate of Incorporation of the Company dated June 23, 1994. 4.12 By-laws of the Company. Incorporated by reference to Appendix C of Form S-4 filed on April 14, 1993 (File No. 0-21822). 5 Opinion of Katten Muchin & Zavis as to the legality of the shares of Common Stock being offered under the Plan. 23.1 Consent of Deloitte & Touche LLP with respect to their reports on certain financial statements of the Company. 24.3 Consent of Katten Muchin & Zavis (see Exhibit 5). 25.1 Power of Attorney (included on the signature page of this Registration Statement). ITEM 9. UNDERTAKINGS. 1. The Company hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act of 1933"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, II-3 14 individually, or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) 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. 2. The Company hereby undertakes that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment and each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors and officers of the Company and subsidiary companies pursuant to the foregoing provisions, or otherwise, the Company has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-4 15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe 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 Chicago, and State of Illinois, on the 5th day of October, 1995. ADVANCE ROSS CORPORATION By: /S/ HARVE A. FERRILL --------------------------------- Harve A. Ferrill, Chief Executive Officer NOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Harve A. Ferrill, Randy M. Joseph and Herbert S. Wander, and each of them, as 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 and file any and all 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 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 each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents 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 by the following persons in the capacities, on the 5th day of October, 1995.
SIGNATURE TITLE --------- ----- /S/ HARVE A. FERRILL Chairman of the Board, Chief Executive Officer, Principal - -------------------------- Executive Officer and Director Harve A. Ferrill /S/ PAUL G. YOVOVICH President, Chief Operating Officer and Director - -------------------------- Paul G. Yovovich /S/ RANDY M. JOSEPH Vice President, Treasurer, Chief Financial Officer and - -------------------------- Principal Accounting Officer Randy M. Joseph /S/ DUANE R. KULLBERG Director - -------------------------- Duane R. Kullberg /S/ HERBERT S. WANDER Director - -------------------------- Herbert S. Wander Director - -------------------------- Thomas J. Peterson /S/ HAROLD E. GUENTHER Director - -------------------------- Harold E. Guenther /S/ ROGER E. ANDERSON Director - -------------------------- Roger E. Anderson
II-5 16 EXHIBIT INDEX 4.1 Advance Ross Corporation 1995 Directors Deferral Plan. 4.2 Form of Advance Ross Corporation 1995 Deferral Plan Option Agreement. 4.3 1993 Advance Ross Corporation Stock Option Plan. Incorporated by reference to Exhibit 4.1 of Form S-8 dated January 27, 1994 (File No. 33-74620). 4.4 Form of Advance Ross/Europe Tax-Free Shopping AB Stock Option Agreement. Incorporated by reference to Exhibit 4.1 of Form S-8 dated March 25, 1993 (File No. 33-59952). 4.5 Form of Stock Option Agreement by and between the partners of Hamilton Capital Partners and Advance Ross Corporation. Incorporated by reference to Item 7(c)(28.6) to Form 8-K, dated November 2, 1992 (File No. 0-770). 4.6 Advance Ross Corporation Stock Option Plan. Incorporated by reference to Exhibit 4.2 of Form S-8 dated March 25, 1993 (File No. 33-59952). 4.7 Amendment to Advance Ross Corporation Stock Option Plan dated June 8, 1995. 4.8 Form of Advance Ross Corporation Stock Option Agreement. Incorporated by reference to Exhibit 4.3 of Form S-8 dated March 25, 1993 (File No. 33-59952). 4.9 Amended and Restated Certificate of Incorporation of the Company. Incorporated by reference to Appendix B of Form S-4 filed on April 14, 1993 (File No. 0-21822). 4.10 Amendment to Amended and Restated Certificate of Incorporation of the Company dated June 16, 1993. 4.11 Amendment to Amended and Restated Certificate of Incorporation of the Company dated June 23, 1994. 4.12 By-laws of the Company. Incorporated by reference to Appendix C of Form S-4 filed on April 14, 1993 (File No. 0-21822). 5 Opinion of Katten Muchin & Zavis as to the legality of the shares of Common Stock being offered under the Plan. 23.1 Consent of Deloitte & Touche LLP with respect to their reports on certain financial statements of the Company. 24.3 Consent of Katten Muchin & Zavis (see Exhibit 5). 25.1 Power of Attorney (included on the signature page of this Registration Statement). II-6 EX-4.1 2 1995 DIRECTORS DEFERRAL PLAN 1 EXHIBIT 4.1 ADVANCE ROSS CORPORATION 1995 DIRECTORS DEFERRAL PLAN 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I ESTABLISHMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.1 "Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.3 "Agreement" or "Award Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.4 "Award" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.5 "Board of Directors" or "Board" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.6 "Change in Control" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.7 "Code" or "Internal Revenue Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.8 "Commission" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.9 "Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.10 "Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.11 "Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.12 "Deferral Election" or "Election" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.13 "Deferred Retainer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.14 "Deferred Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.15 "Director" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.16 "Disability" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.17 "Earnings Factor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.18 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.19 "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.20 "Extraordinary Termination of Directorship" . . . . . . . . . . . . . . . . . . . . . . 6 2.21 "Fair Market Value" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.22 "Grant Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.23 "Notice Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.24 "Nonqualified Stock Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.25 "Option Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.26 "Option Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.27 "Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.28 "Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.29 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.30 "Representative" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.31 "Retainer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.32 "Rule 16b-3" or "Rule 16a-1(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.33 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.34 "Stock Option" or "Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.35 "Termination of Directorship" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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PAGE ---- 2.36 "Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.37 "Valuation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ARTICLE III ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.1 Committee Structure and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ARTICLE IV SPECIAL PROVISIONS REGARDING STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.2 Release of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.3 Restrictions on Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.4 Stockholder Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.5 Best Efforts To Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.6 Anti-Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.7 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.8 Limited Transfer During Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.9 Committee Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.10 No Company Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ARTICLE V DEFERRALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.1 Deferral of Retainer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.2 Election Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.3 Full Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.4 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.5 Payment to a Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.6 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5.7 Satisfaction of Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5.8 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5.9 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5.10 Nontransferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE VI OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 6.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 6.2 Grant and Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 6.3 Terms and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 6.4 Extraordinary Termination of Directorship . . . . . . . . . . . . . . . . . . . . . . . . . . 19 6.5 Other Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 6.6 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7.1 Amendments and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7.2 Unfunded Status of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 7.3 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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PAGE ---- 7.4 Special Provisions Regarding a Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 7.5 Rights with Respect to Continuance as a Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7.6 Awards in Substitution for Awards Granted by Other Corporations . . . . . . . . . . . . . . . . . . . . . 23 7.7 Procedure for Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7.8 Procedure for Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.9 Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(iii) 5 ADVANCE ROSS CORPORATION 1995 DIRECTORS DEFERRAL PLAN ARTICLE I ESTABLISHMENT 1.1 Purpose. The Advance Ross Corporation 1995 Directors Deferral Plan ("Plan") is hereby established by Advance Ross Corporation ("Company") effective June 1, 1995. The purpose of the Plan is to provide for the deferred payment to the non-employee directors of the Company of all or a portion of directors' fees in cash or Common Stock, with the potential to further align the interests of the directors with those of the stockholders of the Company and thereby promote the long-term growth and performance of the Company. Except as expressly provided herein, the Plan and the grant of Awards and the deferrals thereunder are expressly conditioned upon the Plan's approval by the security holders of the Company to the extent required by Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and if such approval is not obtained, then the Plan and the grant of Awards and all deferrals thereunder shall be null and void ab initio. The Plan is adopted effective as of June 1, 1995. ARTICLE II DEFINITIONS For purposes of the Plan, the following terms are defined as set forth below: 2.1 "Account" means the record of an interest in this Plan with respect to a Director's Deferred Retainer represented by his or her: (a) "Cash Account" which means an interest in this Plan composed of Deferred Retainers posted with a cash value to the credit of the Director, plus all income and gains credited to and minus all losses charged to such account, and minus all distributions charged to such account. (b) "Stock Account" which means an interest in this Plan composed of Deferred Retainers posted with shares of Deferred Stock to the credit of the Director, plus all income and gains credited to and minus all losses charged to such account, and minus all distributions charged to such account. 6 The value of the Cash Account at any time, other than on a Valuation Date, shall be the Cash Account accrued as of the immediately preceding Valuation Date increased by the amount credited to the Cash Account since the previous Valuation Date, and reduced by the value of any distributions from the Cash Account. On the Valuation Date, the value shall be that as determined under the preceding sentence increased by the product of the Cash Account and the Earnings Factor and decreased by the value of losses (if any) for that Valuation Date. On a Valuation Date, the Stock Account shall reflect the number of shares of Common Stock or the value of Common Stock credited to the Account as of the preceding Valuation Date increased by the number or value of shares credited to the Stock Account since the previous Valuation Date, and reduced by the number or value of any distributions from the Stock Account. Each Account represents an unfunded commitment of the Company to pay in the future the cash amounts or Deferred Stock credited thereunder, subject to all of the terms and conditions of this Plan. The Committee may establish more than one Account with respect to a Director, and the Plan shall apply separately with respect to each Account. 2.2 "Affiliate" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Company including, without limitation, any member of an affiliated group of which the Company is a common parent corporation as provided in Section 1504 of the Code. 2.3 "Agreement" or "Award Agreement" means, individually or collectively, any agreement entered into pursuant to this Plan pursuant to which an Award is granted to a Participant. 2.4 "Award" means a Stock Option or the crediting of Deferred Stock or the crediting of cash to the Account pursuant to the Plan. 2.5 "Board of Directors" or "Board" means the Board of Directors of the Company. 2.6 "Change in Control" shall be deemed to have occurred on the first to occur of any of the following events: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of either (A) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (B) the combined voting power of the then outstanding voting securities of the 2 7 Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change in Control of the Company: (1) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (4) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (1), (2) and (3) of Section 2.6(c) are satisfied; or (b) Individuals who, as of the effective date of this Plan, constitute the Board of Directors of the Company (the "Incumbent Board of the Company") cease for any reason to constitute at least a majority of the Board of Directors of the Company; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board of the Company shall be considered as though such individual were a member of the Incumbent Board of the Company, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as contemplated by Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company; or (c) Approval by the shareholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (1) more than seventy-five percent (75%) of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding the Company, any employee benefit plan (or related 3 8 trust) of the Company or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning immediately prior to such reorganization, merger or consolidation, directly or indirectly, twenty-five percent (25%) or more of the Outstanding Company Common Stock or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (3) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board of the Company at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or (d) Approval by the shareholders of the Company of the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, (A) more than seventy-five percent (75%) of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, twenty-five percent (25%) or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (3) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board of the Company at the time of the execution of the initial 4 9 agreement or action of the Board providing for such sale or other disposition of assets of the Company. 2.7 "Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, final Treasury Regulations thereunder and any subsequent Internal Revenue Code. 2.8 "Commission" means the Securities and Exchange Commission or any successor agency. 2.9 "Committee" means the person or persons appointed by the Board of Directors to administer the Plan, as further described in the Plan. 2.10 "Common Stock" means the shares of the regular voting Common Stock, $.01 par value, whether presently or hereafter issued, and any other stock or security resulting from adjustment thereof as described hereinafter or the common stock of any successor to the Company which is designated for the purpose of the Plan. 2.11 "Company" means Advance Ross Corporation, a Delaware corporation, and includes any successor or assignee corporation or corporations into which the Company may be merged, changed or consolidated; any corporation for whose securities the securities of the Company shall be exchanged; and any assignee of or successor to substantially all of the assets of the Company. 2.12 "Deferral Election" or "Election" means an election by a Director to (a) either receive all of his or her Retainer on a current basis or to reduce his or her Retainer by an amount or percentage specified in the Election; and (b) to select whether the Deferred Retainer will be posted to the Cash Account, the Stock Account, or a combination of the foregoing. The Deferral Election with respect to Deferred Stock shall be effective only with respect to a Notice Date that is at least six months prior to the transaction to which the Election relates and is irrevocable with respect to that transaction. 2.13 "Deferred Retainer" means the amount of the Retainer deferred from time to time based upon the Participant's Deferral Election. 2.14 "Deferred Stock" means an award of Common Stock posted to the Participant's Stock Account which will be distributed at a later date pursuant to the Plan. 2.15 "Director" means each and any director who serves on the Board and who is not an officer or employee of the Company or any of its Affiliates. 5 10 2.16 "Disability" means a mental or physical illness that renders a Participant totally and permanently incapable of performing the Participant's duties for the Company or an Affiliate. The determination of Disability shall be made by the Committee. The determination of Disability for purposes of the Plan shall not be construed to be an admission of disability for any other purpose. 2.17 "Earnings Factor" means the product of (a) the interest rate in respect of one-year Treasury Bills selected by the Committee from time to time (but reviewed at least once per year) and (b) a fraction, the numerator of which is the number of full calendar months in the accounting period and the denominator of which is 12. If the accounting period is other than one or more full calendar months, the Committee shall appropriately modify the fraction calculated under the preceding sentence. 2.18 "Effective Date" means June 1, 1995. 2.19 "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 2.20 "Extraordinary Termination of Directorship" means the Termination of Directorship of the Participant due to death or Disability. 2.21 "Fair Market Value" means the value determined on the basis of the good faith determination of the Committee, without regard to whether the Common Stock is restricted or represents a minority interest, pursuant to the applicable method described below: (a) if the Common Stock is listed on a national securities exchange or quoted on the NASDAQ Stock Market ("NASDAQ"), the closing price of the Common Stock on the relevant date (or, if such date is not a business day or a day on which quotations are reported, then on the immediately preceding date on which quotations were reported), as reported by the principal national exchange on which such shares are traded (in the case of an exchange) or by the NASDAQ, as the case may be; (b) if the Common Stock is not listed on a national securities exchange or quoted on the NASDAQ, but is actively traded in the over-the-counter market, the average of the closing bid and asked prices for the Common Stock on the relevant date (or, if such date is not a business day or a day on which quotations are reported, then on the immediately preceding date on which quotations were reported); and (c) if, on the relevant date, the Common Stock is not publicly traded or reported as described in (a) or (b), the value determined in good faith by the Committee. 6 11 2.22 "Grant Date" means the date that as of which an Award is granted pursuant to this Plan. 2.23 "Notice Date" means the date established by the Committee as the deadline for it to receive a Deferral Election or any other notification with respect to an administrative matter in order to be effective under this Plan. 2.24 "Nonqualified Stock Option" means an Option to purchase Common Stock in the Company granted under this Plan the taxation of which is pursuant to Section 83 of the Code. 2.25 "Option Period" means the period during which the Option shall be exercisable in accordance with the Agreement and Article VI. 2.26 "Option Price" means the price at which the Common Stock may be purchased under an Option as provided in Section 6.3. 2.27 "Participant" means a Director to whom an Award has been granted under the Plan, and in the event a Representative is appointed for a Participant or another person becomes a Representative, then the term "Participant" shall mean such appointed Representative. A person will cease to be a Participant when the full value of his or her Award has been distributed in full. The term shall also include a trust for the benefit of the Participant, the Participant's parents, spouse or descendants; a partnership the interests in which are for the benefit of the Participant, the Participant's parents, spouse or descendants; or a custodian under a uniform gifts to minors act or similar statute for the benefit of the Participant's descendants, to the extent permitted by the Committee and not inconsistent with an application of Rule 16b-3. Notwithstanding the foregoing, the term "Termination of Directorship" shall mean the Termination of Directorship of the Director. 2.28 "Payment Date" means, with respect to the distribution of a Participant's Account, the first day of the month coincident with or next following the earliest of (a) the date of the Participant's Termination of Directorship, (b) the date elected by a Participant on a Deferral Election, and (c) the date of a Change in Control or termination of the Plan, whichever occurs first, unless waived by the Participant. Absent a Change in Control, the Committee may, in its sole discretion, delay the distribution of the Stock Account until the Plan is approved by stockholders. 2.29 "Plan" means the Advance Ross Corporation 1995 Directors Deferral Plan, as herein set forth and as may be amended from time to time. 2.30 "Representative" means (a) the person or entity acting as the executor or administrator of a Participant's estate pursuant to the last will and testament of a Participant or pursuant to the laws of the jurisdiction in which the Participant had the 7 12 Participant's primary residence at the date of the Participant's death; (b) the person or entity acting as the guardian or temporary guardian of a Participant; (c) the person or entity which is the beneficiary of the Participant upon or following the Participant's death; or (d) any person to whom an Award has been permissibly transferred by the Committee; provided that only one of the foregoing shall be the Representative at any point in time as determined under applicable law and recognized by the Committee. The Committee may, in its sole discretion, delay the distribution of the Stock Account until the Plan is approved by shareholders. 2.31 "Retainer" means the retainer provided to the Participant for services rendered as a Director, including attendance at meetings, but not the reimbursement of expenses, in his or her capacity as a Director. 2.32 "Rule 16b-3" or "Rule 16a-1(c)(3) mean Rule 16b-3 and Rule 16a-1(c)(3), as promulgated under the Exchange Act, as amended from time to time, or any successor thereto, in effect and applicable to the Plan and Participants. 2.33 "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 2.34 "Stock Option" or "Option" means an option granted under Article VI. 2.35 "Termination of Directorship" means the occurrence of any act or event that actually or effectively causes or results in the person's ceasing, for whatever reason, to be a Director of the Company or of any Affiliate, including, without limitation, death, Disability, dismissal, severance at the election of the Participant, retirement, or severance as a result of the discontinuance, liquidation, sale or transfer by the Company or its Affiliates of all businesses owned or operated by the Company or its Affiliates. A person who becomes an employee or officer of the Company shall not have incurred a Termination of Directorship. 2.36 "Trust" means any trust the Company may choose to adopt in connection with the Plan. 2.37 "Valuation Date" means the date or dates designated by the Committee for adjusting Accounts. In addition, certain other terms used herein have definitions given to them in the first place in which they are used. ARTICLE III 8 13 ADMINISTRATION 3.1 Committee Structure and Authority. The Plan shall be administered by the Committee which, except as provided herein, shall be comprised of one or more persons. The Committee shall be the Compensation Committee of the Board of Directors, unless such committee does not exist or the Board establishes another committee whose purpose is the administration of the Plan. In the absence of an appointment, the Board shall be the Committee; provided that only those members of the Compensation Committee of the Board who participate in the decision relative to Awards under the Plan shall be deemed to be part of the "Committee" for purposes of the Plan. A majority of the Committee shall constitute a quorum at any meeting thereof (including telephone conference) and the acts of a majority of the members present, or acts approved in writing by a majority of the entire Committee without a meeting, shall be the acts of the Committee for purposes of the Plan. The Committee may authorize any one or more of its members or an officer of the Company to execute and deliver documents on behalf of the Committee. A member of the Committee shall not exercise any discretion respecting himself or herself under the Plan. The Board shall have the authority to remove, replace or fill any vacancy of any member of the Committee upon notice to the Committee and the affected member. Any member of the Committee may resign upon notice to the Board. The Committee may allocate among one or more of its members, or may delegate to one or more of its agents, such duties and responsibilities as it determines. Among other things, the Committee shall have the authority, subject to the terms of the Plan and the Company's intent that transactions be exempt under Rule 16b-3: (a) to determine the terms and conditions of any Award hereunder; (b) to determine the number of shares of Common Stock to be allocated to the Stock Account; (c) to determine the terms and conditions of any Award granted hereunder (including, but not limited to, the Option Price, the Option Period, any exercise restriction or limitation and any exercise acceleration or forfeiture waiver regarding any Award and the shares of Common Stock relating thereto); (d) to provide for the forms of Agreement to be utilized in connection with this Plan; (e) to determine whether a Participant has a Disability or retires; (f) to determine what securities law requirements are applicable to this Plan, Awards, and the issuance of shares of Common Stock and to require 9 14 of a Participant that appropriate action be taken with respect to such requirements; (g) to interpret and make a final determination with respect to the remaining number of shares of Common Stock available under this Plan; (h) to determine the restrictions or limitations on the transfer of Common Stock; (i) to adjust the terms and conditions, at any time or from time to time, of any Award, subject to the limitations of Section 4.4; (j) to provide for any forms to be utilized in connection with the Plan; (k) to cancel, with the consent of the Participant or as otherwise provided in the Plan, outstanding Awards; (l) to require as a condition of the issuance or transfer of a certificate of Common Stock, the withholding from a Participant of the amount of any federal, state or local taxes as may be necessary in order for the Company or any other entity to obtain a deduction or as may be otherwise required by law; (m) to determine whether and with what effect an individual has incurred a Termination of Directorship; (n) to determine whether the Company or any other person has a right or obligation to purchase Common Stock from a Participant and, if so, the terms and conditions on which such Common Stock is to be purchased; (o) to determine whether an Award is to be adjusted or modified; (p) to determine the permissible methods of affecting a Deferral Election; (q) to establish, maintain and adjust Accounts; (r) to establish and determine the Earnings Factor, if any; (s) to direct and implement the payment of Accounts as of the Payment Date; (t) to adopt, amend and rescind such rules and regulations as, in its opinion, may be advisable in the administration of the Plan; and 10 15 (u) to appoint and compensate agents, counsel, auditors or other specialists to aid it in the discharge of its duties. The Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Award issued under the Plan and to otherwise supervise the administration of the Plan. The Committee's policies and procedures may differ with respect to Awards granted at different times or to different Participants. Any determination made by the Committee pursuant to the provisions of the Plan shall be made in its sole discretion. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and Participants. Any determination shall not be subject to de novo review if challenged in court. ARTICLE IV SPECIAL PROVISIONS REGARDING STOCK 4.1 Number of Shares. Subject to the adjustment under Section 4.6, the total number of shares of Common Stock reserved and available for distribution pursuant to Awards under this Plan shall be 50,000 shares of Common Stock authorized for issuance on the Effective Date. Such shares may consist, in whole or in part, of authorized and unissued shares or treasury shares. 4.2 Release of Shares. If any shares of Common Stock that have been optioned cease to be subject to an Award, if any shares of Common Stock that are subject to any Award are forfeited, if any Award otherwise terminates without issuance of shares of Common Stock being made to the Participant, or if any shares (whether or not restricted) of Common Stock are received by the Company in connection with the exercise of an Award including the satisfaction of any tax withholding, such shares, in the discretion of the Committee, may again be available for distribution in connection with Awards under this Plan. If any shares could not again be available for Options to a particular Participant under any applicable law, such shares shall be available exclusively for Options to Participants who are not subject to such limitations. 4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise or distribution of an Award shall be subject to the terms and conditions specified herein and to such other terms, conditions and restrictions as the Committee in its discretion may determine or provide. The Company shall not be required to issue or deliver any certificates for shares of Common Stock, cash or other property prior to 11 16 (i) the listing of such shares on any stock exchange (or other public market) on which the Common Stock may then be listed (or regularly traded), (ii) the completion of any registration or qualification of such shares under federal or state law, or any ruling or regulation of any government body which the Committee determines to be necessary or advisable, and (iii) the satisfaction of any applicable withholding obligation in order for the Company or an Affiliate to obtain a deduction with respect to the distribution of an Award. The Company may cause any certificate for any share of Common Stock to be delivered to be properly marked with a legend or other notation reflecting the limitations on transfer of such Common Stock as provided in the Plan or as the Committee may otherwise require. The Committee may require any person receiving the distribution of an Award to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the shares of Common Stock in compliance with applicable law or otherwise. Fractional shares shall not be delivered, but shall be rounded to the next lower whole number of shares and any portion of the Stock Account less than a whole share shall be posted in cash. 4.4 Stockholder Rights. No person shall have any rights of a stockholder as to shares of Common Stock subject to an Award until, after proper exercise of the Award or other action required, such shares shall have been recorded on the Company's official stockholder records as having been issued or transferred. Upon exercise of the Award or any portion thereof, the Company will have thirty (30) days in which to issue the shares, and the Participant will not be treated as a stockholder for any purpose whatsoever prior to such issuance. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date such shares are recorded as issued and transferred in the Company's official stockholder records, except as provided herein or in an Agreement. 4.5 Best Efforts To Register. The Company will register under the Securities Act the Common Stock delivered or deliverable pursuant to Awards on Commission Form S-8 if available to the Company for this purpose (or any successor or alternate form that is substantially similar to that form to the extent available to effect such registration), in accordance with the rules and regulations governing such forms, as soon as such forms are available for registration to the Company for this purpose. The Company will use its best efforts to cause the registration statement to become effective as soon as possible and will file such supplements and amendments to the registration statement as may be necessary to keep the registration statement in effect until the earliest of (a) one year following the expiration of the Option Period of the last Option outstanding, (b) the date the Company is no longer a reporting company under the Exchange Act and (c) the date all Participants have disposed of all shares delivered pursuant to any Award. The Company may delay the foregoing obligation if the Committee reasonably determines that any such registration would materially and adversely affect the Company's interests or if there is no material benefit to Participants. 12 17 4.6 Anti-Dilution. In the event of any change in capitalization, such as a stock dividend, stock split, combination or exchange of shares, recapitalization or other change in the capital structure of the Company, corporate separation or division of the Company (including, but not limited to, a split-up, spin-off, split-off or distribution to Company stockholders other than a normal cash dividend), sale by the Company of all or a substantial portion of its assets (measured on either a stand-alone or consolidated basis), reorganization, rights offering, a partial or complete liquidation, or any other corporate transaction, Company share offering or event involving the Company and having an effect similar to any of the foregoing, then the Committee shall adjust or substitute, as the case may be, the number of shares of Common Stock available for Awards under the Plan, the number of shares of Common Stock covered by outstanding Awards, and any other characteristics or terms of the Awards as the Committee shall deem necessary or appropriate to reflect equitably the effects of such changes to the Participants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated by rounding to the next lower whole number of shares with appropriate payment for such fractional share as shall reasonably be determined by the Committee. 4.7 Transfer of Shares. A Participant may at any time make a transfer of shares of Common Stock received pursuant to the exercise of an Award to his parents, spouse or descendants, to any trust for the benefit of the foregoing or to a partnership the interests of which are principally for the benefit of the Participant, his parents, spouse or descendants or to a custodian under a uniform gifts to minors act or similar statute for the benefit of any of the Participant's descendants. Any transfer of shares received pursuant to the exercise of an Award shall not be permitted or valid unless and until the transferee agrees to be bound by the provisions of this Plan, and any provision respecting Common Stock under the Agreement, provided that "Termination of Directorship" shall continue to refer to the Termination of Directorship of the director. 4.8 Limited Transfer During Offering. In the event there is an effective registration statement under the Securities Act pursuant to which shares of Common Stock shall be offered for sale in an underwritten offering, a Participant shall not, during the period requested by the underwriters managing the registered public offering, effect any public sale or distribution of shares received directly or indirectly pursuant to an exercise of an Award. 4.9 Committee Discretion. The Committee may in its sole discretion include in any Agreement an obligation that the Company purchase a Participant's shares of Common Stock received upon the exercise of an Award (including the purchase of any unexercised Awards which have not expired), or may obligate a Participant to sell shares of Common Stock to the Company upon such terms and conditions as the Committee may determine and set forth in an Agreement. The provisions of this 13 18 Section shall be construed by the Committee and shall be subject to such other terms and conditions as the Committee may from time to time determine. 4.10 No Company Obligation. None of the Company, an Affiliate or the Committee shall have any duty or obligation to affirmatively disclose to a record or beneficial holder of Common Stock or an Award, and such holder shall have no right to be advised of any material information regarding the Company or any Affiliate at any time prior to, upon or in connection with receipt or the exercise of an Award or the Company's purchase of Common Stock or an Award from such holder in accordance with the terms hereof. ARTICLE V DEFERRALS 5.1 Deferral of Retainer (a) A Director who desires to have all or a portion of his or her Deferred Retainer credited to an Account on his or her behalf shall file a Deferral Election pursuant to the procedures of the Committee specifying and authorizing an amount or percentage of his or her Retainer otherwise payable to be reduced and to be (1) posted to the Cash Account; or (2) posted to the Stock Account; or (3) a combination of any of the foregoing. (b) For each period for which a Deferral Election is in effect, the Company shall (1) post to the Cash Account the amount reflected in the Deferral Election to be so posted; (2) post to the Stock Account the number of shares of Common Stock equal to the amount of the Deferred Retainer to be posted to the Stock Account divided by the Fair Market Value per share of the Common Stock on the posting date; or (3) a combination of the foregoing. 14 19 (c) The Committee shall cause the Account for each Participant to reflect transactions involving amounts posted to the Account provided that unless otherwise specified by the Committee the date for posting with respect to the Stock Account shall be the fifteenth (15th) day of each month (or if such is not a business day, the day next following the fifteenth day of the month that is a business day). The posting date for shares of Common Stock shall be not less than six (6) months after the effective date of the Election, and the Committee shall credit the deferral to the Account in cash and delay the posting date for shares until the date that is six months after the effective date of the Election (with no interest credited to such cash obligation). Account values shall be maintained in shares, units or dollars. Cash dividends credited to the Participant's Stock Account shall be deemed to be invested in additional shares of Common Stock. Cash Accounts shall be credited from time to time with an amount equal to the value of the Account multiplied by the Earnings Factor. The Committee may correct any errors or omissions in the administration of this Plan by restoring or charging any Participant's Account with the amount that would be credited or charged to the Account had no error or omission been made. A Participant who does not elect a Deferred Retainer shall be deemed to have made an Election to receive all of his or her Retainer on a current basis. 5.2 Election Procedures. If properly executed and received by the Committee, a Deferral Election shall be effective only with respect to a Retainer paid in the period to which the Deferral Election applies and only with respect to a Retainer paid after the Notice Date for the Deferral Election. The Deferral Election shall be effective only if received on or prior to the Notice Date to which the Election relates and, unless the Committee permits otherwise, is irrevocable with respect to any calendar year that has commenced. An Election shall be deemed to be continuing and applicable to calendar years after the year in respect of which the Election is filed, and with respect to the Stock Account, shall be continuing for at least six months after the Director revokes the election. A Change in Control shall end all Deferral Elections. The Committee may establish rules and procedures governing when a Deferral Election will be effective and what Retainer will be subject to the Deferral Election. 5.3 Full Vesting. A Participant shall be fully vested and have a nonforfeitable right to his or her Account (and in any cash awaiting posting) at all times. 5.4 Distribution. A Participant shall be distributed the Account in a single distribution on the Payment Date (in the case of a Payment Date other than due to the death of the Participant). The Stock Account will be distributed in the form of Common Stock on the Payment Date. 5.5 Payment to a Representative. Upon the death of a Participant prior to a Payment Date, the Account shall be distributed to the Participant's Beneficiary. The Stock Account will be distributed in the form of Common Stock in a single distribution 15 20 as soon as administratively possible after the Participant's Payment Date (which is due to the death of the Participant), and the Cash Account will be distributed in cash in a single sum distribution as soon as administratively possible after the Participant's Payment Date (which is due to the death of the Participant). 5.6 Dividends. Cash dividends on the Common Stock that is the subject of the Deferred Stock Award shall be automatically deferred and reinvested in additional shares of Deferred Stock, and dividends on the Common Stock that is the subject of the Deferred Stock Award payable in stock shall be paid in the form of Deferred Stock of the same class as the stock on which such dividend was paid. Dividends shall be accounted for at the individual account level by "posting" such returns to the Account of each affected Participant. 5.7 Satisfaction of Obligation. The Company's obligation to a Participant with respect to an Award shall be satisfied by distributions to the Participant or from the Company or if the Committee, in its sole discretion, shall utilize the Trust, then from the Trust as directed by the Committee. 5.8 Trust. The Company may establish the Trust. The Company may from time to time transfer to the Trustee to be held in a trust cash or Common Stock equal to the amount of Deferred Retainer elected by a Director. The Company may direct the Trustee to maintain records of a separate account under the Trust for each Director. The Trust may be revocable or irrevocable. 5.9 Notice to Trustee. If the Company establishes the Trust and if a payment required under the terms of this Plan has not been made to a Participant, the Participant must notify the Trustee in writing of the amount owed to him pursuant to this Plan and the date such amount was due and payable. 5.10 Nontransferability. No Account shall be pledged, hypothecated or otherwise encumbered or subject to a lien, obligation or liability of a Participant, or assigned or transferred by a Participant otherwise than by will or the laws of descent and distribution or to a Representative upon the death of the Participant. ARTICLE VI OPTIONS 6.1 Eligibility. Each Director shall be granted Options to purchase shares of Common Stock as provided herein. 6.2 Grant and Exercise. Each Director who is a Director on the Effective Date shall be granted an Option on such date to purchase 1,000 shares of Common Stock 16 21 without further action by the Board or the Committee. On the date of each regular annual shareholder meeting of the Company to occur after the Effective Date, each person who is a Director on such date and is either continuing as a Director subsequent to the meeting or is elected to serve as a Director at such meeting shall be granted an Option to purchase 1,000 shares of Common Stock without further action by the Board or the Committee. If the number of shares of Common Stock available to grant under the Plan on a scheduled date of grant is insufficient to make all automatic grants required to be made pursuant to the Plan on such date, then each eligible Director shall receive an Option to purchase a pro rata number of the remaining shares of Common Stock available under the Plan; provided further, however, that if such proration results in fractional shares of Common Stock, then such Option shall be rounded down to the nearest number of whole shares of Common Stock. If there is no whole number of shares remaining to be granted, then no grants shall be made under the Plan. Each Option granted under the Plan shall be evidenced by an Agreement, in a form approved by the Committee, which shall embody the terms and conditions of such Option and which shall be subject to the express terms and conditions set forth in the Plan. Such Agreement shall become effective upon execution by the Participant. 6.3 Terms and Conditions. Stock Options shall be subject to the following terms and conditions and to such terms and conditions as shall be determined by the Committee, including the following: (a) Option Period. The Option Period of each Stock Option shall be fixed by the Committee; provided that no Option shall be exercisable more than ten (10) years after the date the Stock Option is granted. (b) Option Price. The Option Price per share of the Common Stock purchasable under an Option shall be the Fair Market Value on the Grant Date. (c) Exercisability. Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee. Except as provided in an Agreement, an Option shall not be exercisable until the earlier of the day immediately preceding the date of the first anniversary of the Grant Date, provided the Participant is a Director on that date, and the date of the Participant's Extraordinary Termination of Directorship. If the Committee provides that any Stock Option is exercisable only in installments, the Committee may at any time waive such installment exercise provisions, in whole or in part. In addition, the Committee may at any time accelerate the exercisability of any Stock Option. (d) Method of Exercise. Subject to the provisions of this Article VI, a Participant may exercise Stock Options, in whole or in part, at any time during the Option Period by the Participant's giving written notice of exercise on a form provided by the Committee (if available) to the Company specifying the number of shares of 17 22 Common Stock subject to the Stock Option to be purchased. Such notice shall be accompanied by payment in full of the purchase price by cash or check or such other form of payment as the Company may accept. If approved by the Committee, payment in full or in part may also be made (i) by delivering Common Stock already owned by the Participant having a total Fair Market Value on the date of such delivery equal to the Option Price; (ii) by the execution and delivery of a note or other evidence of indebtedness (and any security agreement thereunder) satisfactory to the Committee and permitted in accordance with Section 6.3(e); (iii) by authorizing the Company to retain shares of Common Stock which would otherwise be issuable upon exercise of the Option having a total Fair Market Value on the date of delivery equal to the Option Price; (iv) by the delivery of cash or the extension of credit by a broker-dealer to whom the Participant has submitted a notice of exercise or otherwise indicated an intent to exercise an Option (in accordance with Part 220, Chapter II, Title 12 of the Code of Federal Regulations, so-called "cashless" exercise); or (v) by any combination of the foregoing. No shares of Common Stock shall be issued until full payment therefor, as determined by the Committee, has been made. A Participant shall have all of the rights of a stockholder of the Company holding the class of Common Stock that is subject to such Stock Option (including, if applicable, the right to vote the shares and the right to receive dividends), when the Participant has given written notice of exercise, has paid in full for such shares and such shares have been recorded on the Company's official stockholder records as having been issued and transferred. (e) Company Loan or Guarantee. Upon the exercise of any Option and subject to the pertinent Agreement and the discretion of the Committee, the Company may at the request of the Participant: (i) lend to the Participant, with recourse, an amount equal to such portion of the Option Price as the Committee may determine; or (ii) guarantee a loan obtained by the Participant from a third-party for the purpose of tendering the Option Price. The terms and conditions of any loan or guarantee, including the term, interest rate, and any security interest thereunder, shall be determined by the Committee, except that no extension of credit or guarantee shall obligate the Company for an amount to exceed the least of the Option Price, the aggregate Fair Market Value per share of the Common Stock on the date of exercise, less the par value of the shares of Common Stock to be purchased upon the exercise of the Award, or the amount permitted under applicable laws or the regulations and rules of the Federal Reserve Board and any other governmental agency having jurisdiction. (f) Non-transferability of Options. Except as provided herein or in an Agreement, no Stock Option or interest therein shall be transferable by the Participant 18 23 other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable during the Participant's lifetime only by the Participant. If and to the extent transferability is permitted by Rule 16b-3 and except as otherwise provided herein or by an Agreement, every Option granted hereunder shall be freely transferable, but only if such transfer does not result in liability under Section 16 of the Exchange Act to the Participant or other Participants and is consistent with registration of the Option and sale of Common Stock on Form S-8 (or a successor form) or the Committee's waiver of such condition. 6.4 Extraordinary Termination of Directorship. Unless otherwise provided in an Agreement or determined by the Committee, if a Participant incurs an Extraordinary Termination of Directorship, any unexpired and unexercised Stock Option held by such Participant shall thereafter be fully exercisable for a period of one (1) year (or such other period or no period as the Committee may specify) immediately following the date of such Extraordinary Termination of Directorship or until the expiration of the Option Period, whichever period is the shorter. 6.5 Other Termination. Unless otherwise provided in an Agreement or determined by the Committee, if a Participant incurs a Termination of Directorship other than due to an Extraordinary Termination of Directorship, any Stock Option held by such Participant shall thereupon terminate, except that such Stock Option, to the extent then exercisable, may be exercised for the lesser of the three-month period commencing with the date of such Termination of Directorship or until the expiration of the Option Period. The death or Disability of a Participant after a Termination of Directorship otherwise provided herein shall not extend the exercisability of the time permitted to exercise an Option. 6.6 Change in Control. Notwithstanding any other provision of this Plan to the contrary, in the event of a Change in Control, any Stock Options outstanding as of the date such Change in Control and not then exercisable shall become fully exercisable. ARTICLE VII MISCELLANEOUS 7.1 Amendments and Termination. The Board may amend, alter, or discontinue this Plan at any time, but no amendment, alteration or discontinuation shall be made which would (a) impair the rights of a Participant under an Award granted without the Participant's consent, except such an amendment made to cause this Plan to qualify for the exemption provided by Rule 16b-3 or (b) disqualify this Plan from the exemption provided by Rule 16b-3. In addition, no such amendment shall 19 24 be made without the approval of the Company's stockholders to the extent such approval is required by law or agreement. The Committee may amend this Plan at any time provided that (a) no amendment shall impair the rights of any Participant under any Award theretofore granted without the Participant's consent, (b) no amendment shall disqualify this Plan from the exemption provided by Rule 16b-3, and (c) any amendment shall be subject to the approval or rejection of the Board. The Committee may amend the terms of any Award or other Award theretofore granted, prospectively or retroactively, but no such amendment shall impair the rights of any Participant without the Participant's consent, except such an amendment made to cause this Plan or Award to qualify for the exemption provided by Rule 16b-3. Subject to the above provisions, the Board shall have authority to amend this Plan to take into account changes in law and tax and accounting rules, as well as other developments and to grant Awards which qualify for beneficial treatment under such rules without stockholder approval. Notwithstanding the foregoing, if any right under this Plan would cause an otherwise eligible transaction to be ineligible for pooling of interest accounting treatment, the Committee may modify or adjust the right so that pooling of interest accounting treatment shall be available. 7.2 Unfunded Status of Plan. The Accounts are maintained solely for bookkeeping purposes. It is intended that the Plan be an "unfunded" plan of deferred compensation. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payments; provided, however, that, unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the "unfunded" status of the Plan. The Participants do not have rights with respect to specific property and are only unsecured creditors of the Company. 7.3 General Provisions. (a) Representation. The Committee may require each person purchasing or receiving shares pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to the distribution thereof in violation of the Securities Act. The certificates for such shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. 20 25 (b) No Additional Obligation. Nothing contained in the Plan shall prevent the Company or an Affiliate from adopting other or additional compensation arrangements. (c) Withholding. If determined to be required to protect the Company, no later than the date as of which an amount first becomes includable in the gross income of the Participant for Federal income tax purposes with respect to any Award, the Participant shall pay to the Company (or other entity identified by the Committee), or make arrangements satisfactory to the Company or other entity identified by the Committee regarding the payment of, any Federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount required in order for the Company or an Affiliate to obtain a current tax deduction. Unless otherwise determined by the Committee, withholding obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement provided that any applicable requirements under Section 16 of the Exchange Act are satisfied. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. (d) Representation. The Committee shall establish such procedures as it deems appropriate for a Participant to designate a Representative to whom any amounts payable in the event of the Participant's death are to be paid. (e) Controlling Law. The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware (other than its law respecting choice of law). The Plan shall be construed to comply with all applicable law, and to avoid liability to the Company, an Affiliate or a Participant, including, without limitation, liability under Section 16(b) of the Exchange Act. (f) Offset. Any amounts owed to the Company or an Affiliate by the Participant of whatever nature may be offset by the Company from the value of any shares of Common Stock, cash or other thing of value under the Plan to be transferred to the Participant, and no shares of Common Stock, cash or other thing of value under the Plan shall be transferred unless and until all disputes between the Company and the Participant have been fully and finally resolved and the Participant has waived all claims to such against the Company or an Affiliate. (g) Fail-Safe. With respect to persons subject to Section 16 of the Exchange Act, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or Rule 16a-1(c)(3). To the extent any 21 26 provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. Moreover, in the event the Plan does not include a provision required by Rule 16b-3 or Rule 16a-1(c)(3) to be stated therein, such provision (other than one relating to eligibility requirements, or the price and amount of Awards) shall be deemed to be incorporated by reference into the Plan with respect to Participants subject to Section 16. 7.4 Special Provisions Regarding a Change in Control. (a) In the event of a Change in Control, before the Plan's approval by stockholders in accordance with Rule 16b-3, the condition of the Plan's approval by stockholders shall be waived and the Plan and grant of all Options and all Deferral Elections shall be given effect without regard to such condition; (b) In the event of a Change in Control, (i) a Participant for whom a Deferral Election with respect to the Stock Account has been in effect less than six months on the date of the Change in Control, or (ii) a Participant for whom a Deferral Election with respect to the Stock Account is in effect, but stockholder approval of the Plan has not been obtained at the time of the Change in Control, the Participant will receive a distribution of cash upon his or her Termination of Directorship equal to the Deferred Retainer (credited to the Stock Account), plus an amount equal to the difference between the Deferred Retainer and the "Change in Control Price" (as defined in Section (d)) per share of the Common Stock, assuming the number of shares of Common Stock that would have been purchased on the date the Deferred Retainer was credited to the Stock Account had such Deferred Retainer been used to purchase Common Stock (absent the Change in Control and the operation of this Section), plus interest on such total amount at the prime rate as reported from time to time in The Wall Street Journal (determined from time to time) compounded annually; (c) In the event of a Change in Control, if the Change in Control is within six months of the Grant Date of an Option, such Option shall be cancelled in exchange for a payment to the Participant at the time of the Participant's Termination of Directorship equal to the amount by which the "Change in Control Price" (as deferred in Section (d)) per share of Common Stock exceeds the Option Price per share of Common Stock, multiplied by the number of shares of Common Stock granted under the Option to which this right applies, plus interest on such amount at the prime rate as reported from time to time in The Wall Street Journal, compounded annually and determined from time to time; 22 27 (d) For purposes of this Section, "Change in Control Price" means the higher of (i) the highest reported sales price of a share of Common Stock in any transaction reported on the principal exchange on which such shares are listed during the 60-day period prior to and including the date of a Change in Control, or (ii) if the Change in Control is the result of a tender or exchange offer or a merger, consolidation, liquidation or sale of all or substantially all of the assets of the Company (in each case a "Corporate Transaction"), the highest price per share of Common Stock paid in such tender or exchange offer or a Corporate Transaction. To the extent that the consideration paid in any such transaction described above consists all or in part of securities or other non-cash consideration, the value of such securities or other non-cash consideration shall be determined in the sole discretion of the Committee; and; (e) Notwithstanding the foregoing, if any right under this Plan would cause a transaction to be ineligible for pooling of interest accounting that would, but for the right hereunder, be eligible for such accounting treatment, the Committee may modify or adjust the right so that pooling of interest accounting shall be available, including the substitution of Common Stock having a Fair Market Value equal to the cash otherwise payable hereunder for the right which caused the transaction to be ineligible for pooling of interest accounting. 7.5 Rights with Respect to Continuance as a Director. Nothing contained herein shall be deemed to alter the relationship between the Company or an Affiliate and a Participant, or the contractual relationship between a Participant and the Company or an Affiliate if there is a written contract regarding such relationship. Nothing contained herein shall be construed to constitute a contract of employment between the Company or an Affiliate and a Participant. The Company or an Affiliate and each of the Participants continue to have the right to terminate the employment or service relationship at any time for any reason, except as provided in a written contract. The Company or an Affiliate shall have no obligation to retain the Participant in its employ or service as a result of the Plan. There shall be no inference as to the length of employment or service hereby, and the Company or an Affiliate reserves the same rights to terminate the Participant's employment or service as existed prior to the individual becoming a Participant in the Plan. 7.6 Awards in Substitution for Awards Granted by Other Corporations. Awards may be granted under the Plan from time to time in substitution for awards held by employees, directors or service providers of other corporations who are about to become Directors of the Company or an Affiliate as the result of a merger or consolidation of the employing corporation with the Company or an Affiliate, or the acquisition by the Company or an Affiliate of the assets of the employing corporation, or the acquisition by the Company or Affiliate of the stock of the employing corporation, as the result of which it becomes a designated employer under the Plan. 23 28 The terms and conditions of the Awards so granted may vary from the terms and conditions set forth in the Plan at the time of such grant as the majority of the members of the Committee may deem appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted. 7.7 Procedure for Adoption. Any Affiliate of the Company may by resolution of such Affiliate's board of directors, with the consent of the Board of Directors and subject to such conditions as may be imposed by the Board of Directors, adopt the Plan for the benefit of its directors as of the date specified in the board resolution. 7.8 Procedure for Withdrawal. Any Affiliate which has adopted the Plan may, by resolution of the board of directors of such direct or indirect subsidiary, with the consent of the Board of Directors and subject to such conditions as may be imposed by the Board of Directors, terminate its adoption of the Plan. 7.9 Delay. If at the time, the Participant is subject to "short-swing" liability under Section 16 of the Exchange Act, any time period provided for under the Plan to the extent necessary to avoid the imposition of liability shall be suspended and delayed during the period the Participant would be subject to such liability. 7.10 Headings. The headings contained in the Plan are for reference purposes only and shall not affect the meaning or interpretation of the Plan. 7.11 Severability. If any provision of the Plan shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not effect any other provision hereby, and the Plan shall be construed as if such invalid or unenforceable provision were omitted. 7.12 Successors and Assigns. The Plan shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon a Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant's heirs, legal representatives and successors. 24 29 7.13 Entire Agreement. The Plan and the Agreement constitute the entire agreement with respect to the subject matter hereof and thereof, provided that in the event of any inconsistency between the Plan and the Agreement, the terms and conditions of the Plan shall control. Executed on this 11th day of August, 1995. ADVANCE ROSS CORPORATION By: /S/ Randy M. Joseph --------------------- Randy M. Joseph 25 EX-4.2 3 1995 DEFERRAL PLAN OPTION AGREEMENT 1 EXHIBIT 4.2 NON-QUALIFIED STOCK OPTION AGREEMENT FOR STOCK OPTIONS GRANTED UNDER THE ADVANCE ROSS CORPORATION 1995 DIRECTORS DEFERRAL PLAN 2 STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT dated as of June 5, 1995, is between Advance Ross Corporation, a Delaware corporation (the "Company"), and ______________________, a non-employee director of the Company or one of its Affiliates (the "Participant"). WHEREAS, the Company desires, by affording the Participant an opportunity to purchase shares of the Company's Common Stock as hereinafter provided, to carry out the purposes of the Advance Ross Corporation 1995 Directors Deferral Plan (the "Plan"); and WHEREAS, the Committee has duly made all determinations necessary or appropriate to the grants hereunder; NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto have agreed, and do hereby agree, as follows: 1. Grant of Option, Option Price and Term. (a) The Company hereby grants to the Participant, as a matter of separate agreement and not in lieu of any other compensation for services, the right and option (the "Option") to purchase the number of shares of the Common Stock of the Company ("Option Shares") set forth on the execution page hereof on the terms and conditions herein set forth. (b) For each of the Option Shares purchased, the Participant shall pay to the Company the price per share set forth on the execution page hereof (the "Option Price") for the aggregate Option Price to exercise all of the Option as set forth on the execution page hereof. (c) The term of this Option shall be a period of ten (10) years (the "Option Period") from the date set forth on the execution page hereof ("Grant Date"). During the Option Period, the Option shall be exercisable on and after the earlier of the day immediately preceding the date of the first anniversary of the Grant Date if the Participant is a Director on such date or the date of an Extraordinary Termination of Directorship, whichever occurs first. If the Participant is not a Director on the day immediately preceding the date of the first anniversary of the Grant Date and has not incurred an Extraordinary Termination of Directorship, the Option is forfeited. (d) The Option granted hereunder is designated as an option the taxation of which is pursuant to Section 83 of the Code. 3 (e) The Company shall not be required to issue any fractional Option Shares. 2. Exercise. The Option may only be exercised by the delivery to the Company of a properly completed written notice, in form satisfactory to the Committee, which notice shall specify the number of Option Shares to be purchased and the aggregate Option Price for such shares, together with payment in full of such aggregate Option Price. Payment shall only be made: (a) in cash or by check; (b) by the delivery to the Company of a valid and enforceable stock certificate (or certificates) representing shares of Common Stock, which is endorsed in blank or accompanied by an executed stock power (or powers) and guaranteed in a manner acceptable to the Committee; (c) by reducing the number of shares of Common Stock to be issued and delivered to the Participant upon such exercise; (d) in cash by a broker-dealer to whom the Participant has submitted an irrevocable notice of exercise; or (e) in any combination of (a), (b), (c) or (d). If any part of the payment of the Option Price is made in shares of Common Stock, such shares shall be valued by using their Fair Market Value as of their date of delivery. The Option shall not be exercised unless there has been compliance with all the preceding provisions of this Paragraph 2, and, for all purposes of this Stock Option Agreement, the date of the exercise of the Option shall be the date upon which there is compliance with all such requirements. 3. Payment of Withholding Taxes. If the Company is obligated to withhold an amount on account of any tax imposed as a result of the exercise of the Option, the Participant shall be required to pay such amount to the Company in cash or in Common Stock, as provided in the Plan. 4. Requirements of Law; Registration and Transfer Requirements. -3- 4 The Company shall not be required to sell or issue any shares under the Option if the issuance of such shares shall constitute a violation of any provision of any law or regulation of any governmental authority. This Option and each and every obligation of the Company hereunder are subject to the requirement that the Option may not be exercised or performed, in whole or in part, unless and until the Option Shares are listed, registered or qualified, properly marked with a legend or other notation, or otherwise restricted, as is provided for in the Plan. 5. Adjustments/Change in Control. In the event of a Change in Control, the Option hereunder shall be fully exercisable provided the person is a Director on the date of such Change in Control, or other corporate restructuring provided for in the Plan, the Participant shall have such rights, and the Committee shall take such actions, as are provided for in the Plan. 6. Nontransferability. The Option and any interest in the Option may be transferred to a trust or Partnership consistent with the Plan and the Participant's estate planning intent but only if such transfer does not result in liability to the Participant or any other Participant and is consistent with the use of Form S-8 or the Committee's waiver of such condition; otherwise, the Option must not be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner other than by will or the laws of descent and distribution. 7. Plan. Notwithstanding any other provision of this Stock Option Agreement, the Option is granted pursuant to the Plan, as in effect on the date hereof, and is subject to all the terms and conditions of the Plan, as the same may be amended from time to time; provided, however, that no amendment to either the Plan or this Stock Option Agreement shall deprive the Participant, without the Participant's consent, of the Option or of any of Participant's rights under this Stock Option Agreement. The interpretation and construction by the Committee of the Plan, this Stock Option Agreement, the Option, and such rules and regulations as may be adopted by the Committee for the purpose of administering the Plan, shall be final and binding upon the Participant. Until the Option shall expire, terminate or be exercised in full, the Company shall, upon written request therefor, send a copy of the Plan, in its then-current form, to the Participant or any other person or entity then entitled to exercise the Option. Participant hereby acknowledges receipt of a copy of the Plan. -4- 5 8. Stockholder Rights. Until the Option shall have been duly exercised to purchase such Option Shares and such shares have been officially recorded as issued on the Company's official stockholder records, no person or entity shall be entitled to vote, receive dividends or be deemed for any purpose the holder of any Option Shares, and adjustments for dividends or otherwise shall be made only if the record date therefor is subsequent to the date such shares are recorded and after the date of exercise and without duplication of any adjustment. 9. Right to Service as a Director. No provision of this Stock Option Agreement or of the Option granted hereunder shall give the Participant any right to continue as a director of the Company or any of its Affiliates, create any inference as to the length of such service, affect the right of the Company or its Affiliates to Terminate the Directorship of the Participant or give the Participant any right to participate in any employee benefit plan or other program (other than the Plan) of the Company or any of its Affiliates. 10. Disclosure Rights. The Company shall have no duty or obligation to affirmatively disclose to the Participant or a beneficiary, and the Participant or beneficiary shall have no right to be advised of, any material information regarding the Company or an Affiliate at any time prior to, upon or in connection with the exercise of an Option or the Company's purchase of Common Stock in accordance with the terms of this Stock Option Agreement. 11. Investment Representation and Agreement. The Committee may require the Participant to furnish to the Company, prior to the issuance of any shares of Common Stock upon the exercise of all or any part of this Option, an agreement (in such form as such Committee may specify) in which the Participant represents that the shares of Common Stock acquired by him upon exercise are being acquired for investment and not with a view to the sale or distribution thereof. 12. Governing Law. This Stock Option Agreement and the Option granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware (other than its laws respecting choice of law). 13. Entire Agreement. -5- 6 This Stock Option Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction. 14. Definitions. Wherever initial capitalization of a term is used in this Stock Option Agreement, it shall have the same meaning as that given to it by the Plan, except to the extent such meaning should conflict with any meaning afforded to such term in this Stock Option Agreement. 15. Amendment. Any amendment to this Stock Option Agreement shall be in writing and signed by the Company. The Committee may amend this Agreement from time to time to provide for grants on multiple Grant Dates. 16. Waiver; Cumulative Rights. The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time. 17. Counterparts. This Stock Option Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument. 18. Notices. Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its principal place of business, and the Participant at his address as shown on the Company's payroll records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. -6- 7 19. Headings. The headings contained in this Stock Option Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Stock Option Agreement. 20. Severability. If any provision of this Stock Option Agreement shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not effect any other provision hereof, and this Stock Option Agreement shall be construed as if such invalid or unenforceable provision were omitted. 21. Successors and Assigns. This Stock Option Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant or a beneficiary, and all rights granted to the Company hereunder, shall be binding upon the Participant's or the beneficiary's heirs, legal representatives and successors. IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement -7- 8 to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his hand, all as of the day and year first above written. ADVANCE ROSS CORPORATION By: _______________________________ _______________________________ Title PARTICIPANT: ____________________________________
Option Price Number of Aggregate Grant Date Per Share Option Shares Option Price - ---------- ------------ ------------- ------------
-8- EX-4.7 4 AMENDMENT TO STOCK OPTION PLAN 1 EXHIBIT 4.7 FIRST AMENDMENT OF THE 1992 ADVANCE ROSS CORPORATION STOCK OPTION PLAN WHEREAS, the Company adopted the Advance Ross Corporation Stock Option Plan effective October 26, 1992 ("1992 Plan"); WHEREAS, the Company, by action of its Board of Directors, reserved the right to amend the 1992 Plan from time to time; WHEREAS, the Company believes the inclusion of provisions permitting participants to exercise options without the need to borrow or otherwise tender cash is desirable; NOW, THEREFORE, the Company amends the 1992 Plan, effective January 1, 1995 as follows: Section 5.6 of the 1992 Plan be and hereby is amended as follows: "Payment of Purchase Price Upon Exercise. Except as otherwise provided in a Stock Option Agreement, the Option Price of the shares of Common Stock as to which an Option shall be exercised shall be paid in full to the Company at the time of exercise, by cash or check or such other form of payment as the Company may accept. If approved by the Committee, payment in full or in part may also be made (i) by delivering Common Stock already owned by the Participant having a total Fair Market Value on the date of such delivery equal to the Option Price; (ii) by the execution and delivery of a note or other evidence of indebtedness (and any security agreement thereunder) satisfactory to the Committee and permitted in accordance with this Agreement; (iii) by authorizing the Company to retain shares of Common Stock which would otherwise be issuable upon exercise of the Option having a total Fair Market Value on the date of delivery equal to the Option Price; (iv) by the delivery of cash by a broker-dealer to whom the Participant has submitted a notice of exercise (in accordance with Part 220, Chapter II, Title 12 of the Code of Federal Regulations, so-called "cashless" exercise); or (v) by any combination of the foregoing. The Company shall not issue or transfer Common Stock upon exercise of an Option until the Option Price is paid in full. The Committee may, without obtaining shareholder approval, provide that a Participant will be granted Options in number not to exceed the number of shares of Common Stock tendered (actually or constructively) upon exercise of an Option at a price to be determined by the Committee, provided the Committee has determined that the grant of such right to a Participant will not result in liability to any Participant under Section 16 of the Exchange Act." 2 * * * Except as hereby amended, the 1992 Plan shall remain in full force and effect. Executed on this 8th day of June, 1995. ADVANCE ROSS CORPORATION By /s/ RANDY M. JOSEPH ---------------------- EX-4.10 5 AMENDMENT TO AMENDED AND RESTATED CERT. 6/16/93 1 EXHIBIT 4.10 CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF ADVANCE ROSS HOLDING CORPORATION ADVANCE ROSS HOLDING CORPORATION (the "Corporation"), a corporation organized and existing by virtue of the General Corporation Law of the State of Delaware (the "Law") does hereby certify: I. The Corporation has not issued any stock. The Corporation is acting through its directors, who have been duly elected and qualified. II. Pursuant to Section 241(b) of the Law, the directors of the Corporation have adopted the following Amendment to the Corporation's Restated Certificate of Incorporation: Article FIRST of the Restated Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows: "FIRST: The name of the Corporation is Advance Ross Corporation." IN WITNESS WHEREOF, said ADVANCE ROSS HOLDING CORPORATION has caused this Certificate of Amendment of Restated Certificate of Incorporation to be signed by HARVE A. FERRILL, its President, and attested by CONSTANCE SCHIRMER, its Secretary, this 16 day of June, 1993. ---- ADVANCE ROSS HOLDING CORPORATION By: /s/ HARVE A. FERRILL ---------------------------------- HARVE A. FERRILL, President ATTEST: By: /s/ CONSTANCE SCHIRMER ------------------------------------- CONSTANCE SCHIRMER, Secretary EX-4.11 6 AMENDMENT TO AMENDED AND RESTATED CERT. 6/23/94 1 EXHIBIT 4.11 CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF ADVANCE ROSS CORPORATION ADVANCE ROSS CORPORATION (the "Corporation"), a corporation organized and existing by virtue of the General Corporation Law of the State of Delaware (the "Act") does hereby certify: 1. In accordance with the provisions of Section 242 of the Act, an amendment to the Restated Certificate of Incorporation of this Corporation has been duly adopted by the affirmative vote of the holders of a majority of the Corporation's outstanding common stock in accordance with Section 222 of the Act, said amendment having been previously approved and deemed advisable by the Board of Directors of the Corporation with the direction that said amendment be considered at the next annual meeting of the stockholders. 2. Said amendment amends the first paragraph of Article FOURTH of the Restated Certificate of Incorporation of this Corporation so that, as amended, said first paragraph of Article FOURTH in its entirety, shall read as follows: "FOURTH. The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 13,200,000 shares, of which 200,000 shares shall be shares of 5% Cumulative Preferred Stock of the par value of Twenty-Five Dollars ($25.00) each ("5% Cumulative Preferred Stock"), 1,000,000 shares shall be Preferred Stock of the par value of One Dollar ($1.00) each ("Preferred Stock $1.00 Par"), and 12,000,000 shares shall be shares of Common Stock of the par value of One Cent ($.01) each ("Common Stock")." IN WITNESS WHEREOF, said ADVANCE ROSS CORPORATION has caused this Certificate of Amendment of Restated Certificate of Incorporation to be signed by PAUL G. YOVOVICH, its President, and attested by CONSTANCE SCHIRMER, its Secretary, this 23rd day of June, 1994. ----- ADVANCE ROSS CORPORATION By: /s/ PAUL G. YOVOVICH ------------------------------- PAUL G. YOVOVICH, President ATTEST: By: /s/ CONSTANCE SCHIRMER ------------------------------- CONSTANCE SCHIRMER, Secretary EX-5 7 OPINION OF KATTEN MUCHIN & ZAVIS 1 EXHIBIT 5 [KATTEN MUCHIN & ZAVIS LETTERHEAD] October 6, 1995 Advance Ross Corporation 233 South Wacker Drive Suite 9700 Chicago, Illinois 60606-6502 Gentlemen: We have acted as counsel to Advance Ross Corporation, a Delaware corporation (the "Company"), in connection with the filing by the Company of a registration statement on Form S-8 (the "Registration Statement"), under the Securities Act of 1933, as amended (the "Act"), registering for sale 100,000 shares of the Company's Common Stock ("Common Stock") which are issuable under the Advance Ross Corporation 1995 Directors Deferral Plan, 1993 Advance Ross Corporation Stock Option Plan, the Advance Ross Corporation Stock Option Plan and the Advance Ross/Europe Tax-Free Shopping AB Stock Option Plan (the "Plans"). In connection with this opinion, we have examined and relied upon originals or copies, certified or otherwise identified to our satisfaction, of the following: 1. the Registration Statement; 2. the Plans; 3. the Restated Certificate of Incorporation, as amended, of the Company; 5. the By-laws, as amended, of the Company; 6. copies of certain corporate records of the Company; 7. certificates of officers, representatives and agents of the Company and resolutions of the Board of Directors of the Company, and we have assumed that all of the representations contained therein are accurate and complete; and 2 Advance Ross Corporation October 6, 1995 Page 2 8. such other instruments, documents, statements and records of the Company and others as we have deemed relevant and necessary to examine and rely upon for the purpose of this opinion. In connection with this opinion, we have assumed the accuracy and completeness of all documents and records that we have reviewed, the genuineness of all signatures, the authenticity of the documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed or reproduced copies. We have further assumed that all natural persons involved in the transactions contemplated by the Registration Statement (the "Offering") have sufficient legal capacity to enter into and perform their respective obligations and to carry out their roles in the Offering. Based upon the foregoing, we are of the opinion that the 100,000 shares of Common Stock issuable under the Plans, when issued and delivered by the Company in accordance with the terms of the Plans, will be validly issued, fully paid and nonassessable securities of the Company. We are qualified to practice law in the State of Illinois, and we do not purport to be experts in and do not express any opinion herein concerning law other than the laws of the State of Illinois, the Delaware General Corporation Law and the United States of America. We express no opinion herein concerning any statutes, administrative decisions, rules or regulations of any county, municipality or special political subdivision, whether created or enabled through legislative action at the federal, state or regional level. This opinion is given to you as of the date hereof, and we assume no obligation to advise you of changes that may hereafter be brought to our attention. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. This opinion is rendered solely for purposes of the Offering and should not be relied upon for any other purpose. Very truly yours, /s/ KATTEN MUCHIN & ZAVIS KATTEN MUCHIN & ZAVIS EX-23.1 8 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Advance Ross Corporation on Form S-8 of our report dated March 13, 1995, appearing in the Annual Report on Form 10-K of Advance Ross Corporation for the year ended December 31, 1994 and to the reference to us under the heading "Interests of Named Experts and Counsel" in the Prospectus, which is part of this Registration Statement. /s/ DELOITTE & TOUCHE LLP Deloitte & Touche LLP Chicago, Illinois October 3, 1995 -----END PRIVACY-ENHANCED MESSAGE-----