-----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, Qv2N0Ln0SYs51nm7+Sf94aBxXb/McFi/hqdF3eEvFV6LSgBNcx+O6yLcehrS2c6/ AXUEFE4Ii9y81GT/Swi7YQ== 0000912057-95-009414.txt : 19951108 0000912057-95-009414.hdr.sgml : 19951108 ACCESSION NUMBER: 0000912057-95-009414 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19951107 EFFECTIVENESS DATE: 19951126 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EGGHEAD INC /WA/ CENTRAL INDEX KEY: 0000832320 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 911296187 STATE OF INCORPORATION: WA FISCAL YEAR END: 0330 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-64033 FILM NUMBER: 95587815 BUSINESS ADDRESS: STREET 1: 22011 SE 51ST CITY: ISSAQUAH STATE: WA ZIP: 98027-7004 BUSINESS PHONE: 2063910800 MAIL ADDRESS: STREET 1: 22011 SE 51ST STREET CITY: ISSAQUAH STATE: WA ZIP: 98027-7004 S-8 1 S-8 As filed with the Securities and Exchange Commission on November 7, 1995 Registration No. 33- - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ______________________ EGGHEAD, INC. (Exact name of Registrant as specified in its charter) Washington 91-1296187 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 22705 East Mission Liberty Lake, Washington 99019 (Address of principal executive offices) (Zip code) RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN (Full title of the plans) BRIAN W. BENDER Vice President and Chief Financial Officer Egghead, Inc. 22705 East Mission Liberty Lake, Washington 99019 (509) 922-7031 (Name, address and telephone number of agent for service) ______________________ Copy to: CHARLES J. KATZ, JR. PERKINS COIE 1201 Third Avenue, 40th Floor Seattle, Washington 98101-3099 ______________________ CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Title of Securities Amount to Be Proposed Maximum Proposed Maximum Amount of to Be Registered Registered Offering Price Per Share(2) Aggregate Offering Price(2) Registration Fee - ----------------------------------------------------------------------------------------------------------------------------------- Common Stock, $.01 par value 275,000 (1) $7.125 $1,959,375.00 $676.00 - ----------------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------------
(1) Together with an indeterminate number of additional shares which may be necessary to adjust the number of shares reserved for issuance pursuant to the Restated Nonemployee Director Stock Option Plan as the result of any future stock split, stock dividend or similar adjustment of the outstanding Common Stock of the Registrant. (2) Estimated pursuant to Rule 457 of the Securities Act of 1933, as amended (the "Securities Act"), solely for the purpose of calculating the amount of the registration fee. The price per share is estimated to be $7.125 based on the average of the high ($7.25) and low ($7.00) trading prices for the Common Stock in the over-the-counter market on November 3, 1995, as reported on the Nasdaq National Market. PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents are hereby incorporated by reference into this Registration Statement: (a) The Registrant's latest Annual Report on Form 10-K for the year ended April 1, 1995, filed with the Securities and Exchange Commission (the "Commission") on May 25, 1995; (b) All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by the Annual Report on Form 10-K referred to in (a) above; and (c) The description of the Registrant's Common Stock contained in the Registration Statement on Form 8-A filed with the Commission on May 13, 1988 under Section 12 of the Exchange Act, including any amendments or reports filed for the purpose of updating such descriptions. All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the filing of a post-effective amendment which indicates that the securities offered hereby have been sold or which deregisters the securities covered hereby then remaining unsold shall also be deemed to be incorporated by reference into this Registration Statement and to be a part hereof commencing on the respective dates on which such documents are filed. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS A. As permitted by Section 23B.08.320 of the Washington Business Corporation Act, Article X of the Registrant's Articles of Incorporation limits a director's liability to the Registrant or its shareholders for monetary damages arising from his or her conduct as a director, except for acts or omissions that involve intentional misconduct or a knowing violation of law, approval of distributions or loans in violation of Section 23B.06.400 of the Washington Business Corporation Act or any transaction from which the director will personally receive a benefit in money, property or services to which the director is not legally entitled. Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation Act authorize a court to award, or a corporation's board of directors to grant, indemnification to directors and officers on terms sufficiently broad to permit indemnification under certain circumstances for liabilities arising under the Securities Act. As permitted by Section 23B.08.560 of the Washington Business Corporation Act, Article IX of the Registrant's Bylaws provides that the Registrant shall indemnify its officers and directors and may indemnify its employees and other agents against any and all loss, liability, expenses (including attorneys' fees), judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement (each, a "Loss") actually and reasonably incurred or suffered in connection with any actual or threatened claim, suit or proceeding, whether civil, criminal, administrative or investigative, except for a Loss arising out of acts or omissions finally adjudged to be intentional misconduct or a known violation of law, approval of distributions or loans that are finally adjudged to be in violation of RCW 23B.06.400 or any transaction in which it is finally adjudged that the indemnitee personally received a benefit in money, property or services to which the indemnitee was not legally entitled. The Registrant's Bylaws also permit it to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in such capacity, regardless of whether the Bylaws would permit indemnification, and to enter into agreements to indemnify its officers and directors in furtherance of Article IX of the Registrant's Bylaws. The Registrant has entered into such agreements with certain of its officers and directors. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 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 this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. ITEM 8. EXHIBITS Exhibit Number Description - ----------- ------------------------------------------------------------------ 5.1 Opinion of Perkins Coie regarding legality of the common stock being registered 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Perkins Coie (included in its Opinion filed as Exhibit 5.1) 24.1 Power of Attorney (see Signature Page) 99.1 Restated Nonemployee Director Stock Option Plan ITEM 9. UNDERTAKINGS A. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Liberty Lake, State of Washington, on the 7th day of November, 1995. EGGHEAD, INC. By TERENCE M. STROM ---------------------------------------- Terence M. Strom President and Chief Executive Officer POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Terence M. Strom and Brian W. Bender, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, to sign in the name and on behalf of such person, individually and in each capacity stated below, any or all amendments (including pre-effective and post- effective amendments) to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons on the 7th day of November, 1995 in the capacities indicated. Signature Title --------- ----- TERENCE M. STROM President, Chief Executive Officer and - -------------------------------- Director (Principal Executive Officer) Terence M. Strom BRIAN W. BENDER Vice President and Chief Financial - -------------------------------- Officer (Principal Financial and Brian W. Bender Accounting Officer) Director - -------------------------------- Paul G. Allen RICHARD P. COOLEY Director - -------------------------------- Richard P. Cooley STEVEN E. LEBOW Director - -------------------------------- Steven E. Lebow LINDA FAYNE LEVINSON Director - -------------------------------- Linda Fayne Levinson GEORGE P. ORBAN Director - -------------------------------- George P. Orban SAMUEL N. STROUM Director - -------------------------------- Samuel N. Stroum INDEX TO EXHIBITS Exhibit Sequentially Number Description Numbered Page - ------- -------------------------------------------------- ------------- 5.1 Opinion of Perkins Coie regarding legality of the common stock being registered 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Perkins Coie (included in its Opinion filed as Exhibit 5.1) 24.1 Power of Attorney (see Signature Page) 99.1 Restated Nonemployee Director Stock Option Plan EX-5.1 2 EX-5.1 Perkins Coie A Law Partnership Including Professional Corporations 1201 Third Avenue, 40th Floor, Seattle, Washington 98101-3099 Telephone: (206) 583-8888, Facsimile: (206) 583-8500 November 7, 1995 Egghead, Inc. 22705 East Mission Liberty Lake, WA 99019 RE: REGISTRATION STATEMENT ON FORM S-8 Ladies and Gentlemen: We have acted as counsel to you in connection with the preparation of a Registration Statement on Form S-8 (the "Registration Statement") pursuant to the Securities Act of 1933, as amended (the "Act"), which you are filing with the Securities and Exchange Commission with respect to 275,000 shares of Common Stock, $.01 par value per share (the "Shares"), which are to be issued pursuant to the Egghead, Inc. Restated Nonemployee Director Stock Option Plan (the "Plan"). We have examined the Registration Statement and such other documents and records of Egghead, Inc. as we have deemed relevant and necessary for the purposes of this opinion. Based upon and subject to the foregoing, we are of the opinion that the Shares that will be issued pursuant to the Plan, upon the due execution by Egghead, Inc. and the registration by its registrar of the Shares and the issuance thereof by Egghead, Inc. in accordance with the terms of the Plan, and the receipt of consideration therefor in accordance with the terms of the Plan, will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, PERKINS COIE EX-23.1 3 EX-23.1 [ARTHUR ANDERSEN LLP LETTERHEAD] CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To Egghead, Inc.: As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated May 16, 1995 included in the Egghead, Inc. Form 10-K for the year ended April 1, 1995, and to all references to our Firm included in this registration statement. /s/Arthur Andersen LLP Seattle, Washington November 7, 1995 EX-99.1 4 EX-99.1 EGGHEAD, INC RESTATED NONEMPLOYEE DIRECTOR STOCK OPTION PLAN ARTICLE I. PURPOSES The purposes of the Egghead, Inc. Restated Nonemployee Director Stock Option Plan (the "Plan") are to attract and retain the services of experienced and knowledgeable nonemployee directors of Egghead, Inc. (the "Corporation") and to provide an incentive for such directors to increase their proprietary interests in the Corporation's long-term success and progress. ARTICLE II. SHARES SUBJECT TO THE PLAN Subject to adjustment in accordance with Article VI hereof, the total number of shares of the Corporation's common stock (the "Common Stock") for which options may be granted under the Plan is 450,000 (the "Shares"). The Shares shall be shares presently authorized but unissued or subsequently acquired by the Corporation and shall include shares representing the unexercised portion of any option granted under the Plan that expires or terminates without being exercised in full. ARTICLE III. ADMINISTRATION OF THE PLAN The administrator of the Plan (the "Plan Administrator") shall be the Board of Directors of the Corporation (the "Board"). Subject to the terms of the Plan, the Plan Administrator shall have the power to construe the provisions of the Plan, to determine all questions arising thereunder, and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. No member of the Plan Administrator shall participate in any vote by the Plan Administrator on any matter materially affecting the rights of any such member under the Plan. ARTICLE IV. PARTICIPATION IN THE PLAN Each member of the Board elected or appointed who is not otherwise an employee of the Corporation or any parent or subsidiary corporation (an "Eligible Director") shall automatically receive the following options: 1. INITIAL GRANTS (a) Each Eligible Director who is in office on the day the Plan is adopted by the Board and who continues in office after the annual meeting of shareholders to be held in 1993 (the "1993 Annual Meeting") shall automatically receive a grant of an option to purchase 9,000 Shares on the day this Plan is adopted by the Board. (b) Each Eligible Director who is elected for the first time at the 1993 Annual Meeting or at any subsequent annual meeting of shareholders prior to June 7, 1995 shall automatically receive a grant of an option to purchase 9,000 Shares on the day after such annual meeting. (c) Each Eligible Director who is elected for the first time at an annual meeting of shareholders after June 7, 1995 shall automatically receive a grant of an option to purchase 22,500 Shares on the day after such annual meeting. (d) Each Eligible Director who is appointed or elected after June 7, 1995 other than at an annual meeting of shareholders shall, on the day of such appointment or election, automatically receive a grant of an option to purchase that number of Shares equal to 7,500 multiplied by a fraction, the numerator of which is 12 minus the number of whole months which have elapsed since the last annual meeting of shareholders and the denominator of which is 12; provided, however, that such option shall vest in full on the day of the first annual meeting of shareholders to occur after the grant. A-1 2. SUPPLEMENTAL INITIAL GRANTS Each Eligible Director who is in office on June 7, 1995 shall automatically receive a grant of an option to purchase 13,500 Shares on that date. 3. ADDITIONAL GRANTS Each Eligible Director who holds an option granted on or after June 7, 1995 that has become fully vested shall automatically receive a grant of an option to purchase 22,500 Shares on the day after the annual meeting of shareholders at which such prior option has become fully vested. If insufficient Shares remain available for issuance under the Plan to fully fund one or more grants to be made under this Article IV on the same grant date, then such grant or grants shall be made as follows: (i) a single Initial Grant shall be made for the remaining number of Shares reserved under this Article IV on that grant date; and (ii) multiple Initial and/or Additional Grants shall be reduced ratably so that the aggregate number of Shares subject to all such grants equals the remaining number of Shares available for issuance under this Article IV on that grant date. If the Company's shareholders do not approve the amendment to the Plan dated June 7, 1995, all grants made pursuant to paragraphs 1(c), 1(d), 2 and 3 above shall be deemed null and void. ARTICLE V. OPTION TERMS Each option granted to an Eligible Director under the Plan and the issuance of Shares thereunder shall be subject to the following terms: 1. OPTION AGREEMENT Each option granted under the Plan shall be evidenced by an option agreement (an "Agreement") duly executed on behalf of the Corporation. Each Agreement shall comply with and be subject to the terms and conditions of the Plan. Any Agreement may contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Plan Administrator. 2. OPTION EXERCISE PRICE The option exercise price for an option granted under the Plan shall be the fair market value of the Shares covered by the option at the time the option is granted. For purposes of the Plan, "fair market value" shall be the average of the high and low sales prices at which the Common Stock was sold on such date as reported by the Nasdaq National Market on such date or, if no Common Stock was traded on such date, on the next preceding date on which Common Stock was so traded. 3. VESTING AND EXERCISABILITY Except as set forth in paragraph 1(d) of Article IV, Initial Grants (other than Supplemental Initial Grants) and Additional Grants shall become exercisable in accordance with the following schedule and vested portions may be exercised in full at one time or in part from time to time:
PERIOD OF OPTIONEE'S CONTINUOUS SERVICE AS A DIRECTOR PORTION OF GRANT WITH THE COMPANY FROM THE DATE THE OPTION IS GRANTED THAT IS EXERCISABLE - ----------------------------------------------------------------------------------------------- ------------------- Until first subsequent annual meeting of shareholders after grant.............................. 0% Until second subsequent annual meeting of shareholders after grant............................. 33 1/3% Until third subsequent annual meeting of shareholders after grant.............................. 66 2/3% Thereafter..................................................................................... 100%
For purposes of options granted at the time this Plan is initially adopted by the Board, the first subsequent annual meeting of shareholders shall be the meeting held in 1994. A-2 Supplemental Initial Grants shall become exercisable in accordance with the following schedule and vested portions may be exercised in full at one time or in part from time to time:
PERIOD OF OPTIONEE'S CONTINUOUS SERVICE AS A DIRECTOR PORTION OF GRANT WITH THE COMPANY FROM THE DATE THE OPTION IS GRANTED THAT IS EXERCISABLE - ----------------------------------------------------------------------------------------------- ------------------- Until first subsequent annual meeting of shareholders after grant.............................. 33 1/3% Until second subsequent annual meeting of shareholders after grant............................. 66 2/3% Thereafter..................................................................................... 100%
4. TIME AND MANNER OF EXERCISE OF OPTION Each option may be exercised in whole or in part at any time and from time to time; provided, however, that no fewer than 100 Shares (or the remaining Shares then purchasable under the option, if less than 100 Shares) may be purchased upon any exercise of option rights hereunder and that only whole Shares will be issued pursuant to the exercise of any option. Any option may be exercised by given written notice, signed by the person exercising the option, to the Corporation stating the number of Shares with respect to which the option is being exercised, accompanied by payment in full for such Shares, which payment may be in whole or in part (i) in cash or by check or (ii) in shares of Common Stock already owned for at least six (6) months by the person exercising the option, valued at fair market value at the time of such exercise. 5. TERM OF OPTIONS Each option shall expire ten (10) years from the date of the granting thereof, but shall be subject to earlier termination as follows: (a) In the event that an optionee ceases to be a director of the Corporation for any reason other than the death of the optionee, the options granted to such optionee may be exercised by him or her only within one (1) year after the date such optionee ceases to be a director of the Corporation and only as to that portion of the option that has become vested as of the date of such cessation. (b) In the event of the death of an optionee, whether during the optionee's service as a director or during the one (1) year period referred to in Section 5 (a), the options granted to such optionee shall be exercisable, to the extent vested as provided in Section 5 (a) or as of the date of death, as the case may be, and such options shall expire unless exercised within one (1) year after the date of the optionee's death, by the legal representatives or the estate of such optionee, by any person or persons whom the optionee shall have designated in writing on forms prescribed by and filed with the Corporation or, if no such designation has been made, by the person or persons to whom the optionee's rights have passed by will or the laws of descent and distribution. 6. TRANSFERABILITY During an optionee's lifetime, an option may be exercised only by the optionee. Options granted under the Plan and the rights and privileges conferred thereby shall not be subject to execution, attachment or similar process and may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will or by the applicable laws of descent and distribution except that, to the extent permitted by applicable law and Rule 16b-3 promulgated under Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Plan Administrator may permit a recipient of an option to designate in writing during the optionee's lifetime a beneficiary to receive and exercise options in the event of the optionee's death (as provided in Section 5 (b)). Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any option under the Plan or of any right or privilege conferred thereby, contrary to the provisions of the Plan, or the sale or levy or any attachment or similar process upon the rights and privileges conferred hereby, shall be null and void. A-3 7. PARTICIPANT'S OR SUCCESSOR'S RIGHTS AS STOCKHOLDER Neither the recipient of an option under the Plan nor the optionee's successor(s) in interest shall have any rights as a stockholder of the Corporation with respect to any Shares subject to an option granted to such person until such person becomes a holder of record of such Shares. 8. LIMITATION AS TO DIRECTORSHIP Neither the Plan nor the granting of an option nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that an optionee has a right to continue as a director for any period of time or at any particular rate of compensation. 9. REGULATORY APPROVAL AND COMPLIANCE The Corporation shall not be required to issue any certificate or certificates for Shares upon the exercise of an option granted under the Plan, or record as a holder of record of Shares the name of the individual exercising an option under the Plan, without obtaining to the complete satisfaction of the Plan Administrator the approval of all regulatory bodies deemed necessary by the Plan Administrator, and without complying, to the Plan Administrator's complete satisfaction, with all rules and regulations under federal, state or local law deemed applicable by the Plan Administrator. ARTICLE VI. CAPITAL ADJUSTMENTS The aggregate number and class of Shares for which options may be granted under the Plan, the number and class of Shares covered by each automatic grant and each outstanding option and the exercise price per Share thereof (but not the total price) shall all be proportionately adjusted for any stock dividends, stock splits, recapitalizations, combinations or exchanges of shares, split-ups, split-offs, spinoffs, or other similar changes in capitalization. Upon the effective date of a dissolution or liquidation of the Corporation, or of a reorganization, merger or consolidation of the Corporation with one or more corporations that results in more than 20% of the outstanding voting shares of the Corporation being owned by one or more affiliated corporations or other affiliated entities, or of a transfer of all or substantially all the assets or more than 20% of the then outstanding shares of the Corporation to another corporation or other entity, this Plan and all options granted hereunder shall terminate. In the event of such dissolution, liquidation, reorganization, merger, consolidation, transfer of assets or transfer of stock, each optionee shall be entitled, for a period of twenty days prior to the effective date of such transaction, to purchase the full number of shares under his or her option which he or she otherwise would have been entitled to purchase during the remaining term of such option. Adjustments under this Article VI shall be made by the Plan Administrator, whose determination shall be final. In the event of any adjustment in the number of Shares covered by any option, any fractional Shares resulting from such adjustment shall be disregarded and each such option shall cover only the number of full Shares resulting from such adjustment. ARTICLE VII. EXPENSES OF THE PLAN All costs and expenses of the adoption and administration of the Plan shall be borne by the Corporation; none of such expenses shall be charged to any optionee. ARTICLE VIII. EFFECTIVE DATE AND DURATION OF THE PLAN The Plan became effective on June 16, 1993. The Plan shall continue in effect until it is terminated by action of the Board or the Corporation's shareholders, but such termination shall not affect the then outstanding terms of any options. ARTICLE IX. TERMINATION AND AMENDMENT OF THE PLAN The Board may amend, terminate or suspend the Plan at any time, in its sole and absolute discretion; provided, however, that if required to qualify the Plan under Rule 16b-3 promulgated A-4 under Section 16(b) of the Exchange Act, no amendment may be made more than once every six (6) months that would change the amount, price, timing or vesting of the options, other than to comply with changes in the Internal Revenue Code of 1986, as amended, or the rules and regulations promulgated thereunder; and provided, further, that if required to qualify the Plan under Rule 16b-3, no amendment that would (a) materially increase the number of Shares that may be issued under the Plan, (b) materially modify the requirements as to eligibility for participation in the Plan, or (c) otherwise materially increase the benefits accruing to participants under the Plan shall be made without the approval of the Corporation's shareholders. ARTICLE X. COMPLIANCE WITH RULE 16b-3 It is the intention of the Corporation that the Plan comply in all respects with Rule 16b-3 promulgated under Section 16(b) of the Exchange Act and that Plan participants remain disinterested persons ("Disinterested Persons") for purposes of administering other employee benefit plans of the Corporation and having such other plans be exempt from Section 16(b) of the Exchange Act. Therefore, if any Plan provision is later found not to be in compliance with Rule 16b-3 or if any Plan provision would disqualify Plan participants from remaining Disinterested Persons, that provision shall be deemed null and void, and in all events the Plan shall be construed in favor of its meeting the requirements of Rule 16b-3. A-5 -----END PRIVACY-ENHANCED MESSAGE-----