-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HE0qOkkvrok+YlYc4QAO/JU6QNhGTDVF4e13+N/SjLoW72W/TWIpfgSsaOBJaIBJ IQZWa9rLA2yfejck9Wjp6A== 0000919607-94-000022.txt : 19940719 0000919607-94-000022.hdr.sgml : 19940719 ACCESSION NUMBER: 0000919607-94-000022 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19940718 EFFECTIVENESS DATE: 19940806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOGER EQUITY INC CENTRAL INDEX KEY: 0000835664 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 592898045 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-54617 FILM NUMBER: 94539148 BUSINESS ADDRESS: STREET 1: 3986 BLVD CTR DR STE 101 CITY: JACKSONVILLE STATE: FL ZIP: 32207 BUSINESS PHONE: 9043983403 MAIL ADDRESS: STREET 1: 3986 BLVD CTR DR STREET 2: SUITE 101 CITY: JACKSONVILLE STATE: FL ZIP: 32207 S-8 1 13877 STOCK OPTION PLAN As filed with the Securities and Exchange Commission on July 18, 1994 Registration No. 33-_______ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ____________________ KOGER EQUITY, INC. (Exact name of issuer as specified in its charter) FLORIDA 59-2898045 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3986 BOULEVARD CENTER DRIVE, JACKSONVILLE, FLORIDA 32207 (Address of principal executive office) ____________________ KOGER EQUITY, INC. 1988 STOCK OPTION PLAN KOGER EQUITY, INC. 1993 STOCK OPTION PLAN (Full title of the Plans) ____________________ VICTOR A. HUGHES, JR. W. LAWRENCE JENKINS Senior Vice President and Secretary Chief Financial Officer KOGER EQUITY, INC. KOGER EQUITY, INC. 3986 Boulevard Center Drive 3986 Boulevard Center Drive Jacksonville, Florida 32207 Jacksonville, Florida 32207 904/398-3403 904/398-3403 (Name, address and telephone number, including area code of agents for service) Copies to: HAROLD F. McCART, Jr., ESQUIRE Boling & McCart (a professional association) Suite 700, 76 South Laura Street Jacksonville, Florida 32202 ____________________ CALCULATION OF REGISTRATION FEE Proposed Proposed Title of Maximum Maximum Amount Securities Amount Offering Aggregate of to be to be Price Per Offering Registration Registered Registered Share Price Fee Common Stock, Par Value $.01 286,250(1) $5.125(1) $1,467,031(1) $ 505.88(1) Per Share Table continued on following page. Common Stock, Par Value $.01 973,282(1) $7.625(1) $7,421,275(1) $2,559.06(1) Per Share Common Stock, Par Value $.01 240,468(2) $9.25(2) $2,224,329(2) $ 767.01(2) Per Share Total . . . $3,831.95 (1) Pursuant to Rule 457(h), based on the exercise price of the options granted under the Registrant's 1988 and 1993 Stock Option Plan. (2) Pursuant to Rule 457(c) based on $9.25 (the average of the high and low prices of the shares reported for July 12, 1994 by the American Stock Exchange) for shares issuable pursuant to options to be granted under these Plans. PART I INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS The documents containing the information specified in this Part I will be sent or given to the employees of Koger Equity, Inc. (the "Company") and its affiliates who are granted options to purchase shares pursuant to the Koger Equity, Inc. 1988 and 1993 Stock Option Plans as specified by Rule 428I(b)(1) as promulgated under the Securities Act of 1933, as amended. Such documents will include information required by Items 1 and 2 to Form S-8. Pursuant to instructions in Part I of Form S- 8, such documents are not filed with the Commission. These documents and the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Part II of this Form S-8, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act of 1933, as amended. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The following documents, filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated herein by reference as of their respective dates: (1) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, filed pursuant to Section 13 of the Exchange Act (File No. 1-9997). (2) The Company's Quarterly Report on Form 10-Q for the period ended March 31, 1994, filed pursuant to Section 13 of the Exchange Act (File No. 1-9997). (3) The Company's definitive proxy statement, dated April 8, 1994, filed pursuant to Section 14 of the Exchange Act (File No. 1-9997) relating to its Annual Meeting of Shareholders held on May 10, 1994. (4) Description of the shares of Common Stock contained in the Company's registration statement filed pursuant to Section 12(b) of the Exchange Act and any amendment thereto or reports filed for the purpose of updating such description (File No. 1-9997). All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a post-effective amendment indicating that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein 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 herein by reference shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that such a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement as modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities. Not Applicable. Item 5. Interests of Named Experts and Counsel. Not Applicable. Item 6. Indemnification of Directors and Officers. The Company's Articles of Incorporation provide that the Company shall indemnify its officers and directors to the fullest extent permitted by the General Corporation Law of the State of Florida as now or hereafter in force, including the advance of expenses and reasonable counsel fees. Section 93 of the Florida Business Corporation Act (Florida Statutes Section 607.0850) provides that a director, officer, agent and employee of a corporation or its subsidiaries or other affiliates may be indemnified under certain conditions by the corporation against expenses, including attorney's fees, actually and reasonably incurred in connection with the defense or settlement of an action, suit or proceeding, whether civil, criminal, administrative or investigative, to which he becomes a party because he was such director, officer, agent or employee, including expenses reasonably incurred in settlement of any of the aforesaid matters, if the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding determine that the person seeking indemnification acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation. Section 607.0850 also provides that the indemnification provided pursuant to above provisions is not exclusive, and a corporation may make any other further indemnification of any of its directors, officers, employees, or agents, under any by-laws, agreements, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. However, indemnification shall not be made to or on behalf of any director, officer, employee, or agent if a judgment or other final adjudication establishes that his actions, or omissions to act, were material to the cause of action so adjudicated and constitute: (a) A violation of the criminal law, unless the director, officer, employee, or agent had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful; (b) A transaction from which the director, officer, employee or agent derived an improper personal benefit; (c) In the case of a director, a circumstance under which certain liability provisions relating to the payment of dividends and asset distributions are applicable; or (d) Willful misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder. In addition, the Company carries directors and officers liability insurance. Item 7. Exemption From Registration Claimed. Not Applicable. Item 8. Exhibits Exhibit Number Description 4(a) Amended and Restated Articles of Incorporation. Incorporated by reference to Exhibit 3 of the Report on Form 8-K, dated May 10, 1994, filed by the Registrant (File No. 1-9997). 4(b) Koger Equity, Inc. By Laws, as Amended and Restated on May 5, 1992. Incorporated by reference to Exhibit 3 of the Form 10-Q filed by the Registrant for the quarter ended March 31, 1992 (File No. 1-9997). 4(c) Common Stock Certificate of Koger Equity, Inc. See Exhibit 4(a) to Registration Statement on Form S-11 (Registration No. 33-22890) which Exhibit is herein incorporated by reference. 4(d)(1)(A) Koger Equity, Inc. Rights Agreement (the "Rights Agreement") dated as of September 30, 1990 between the Company and Wachovia Bank and Trust Company, N.A. as Rights Agent ("Wachovia"). See Exhibit 1 to a Registration Statement on Form 8-A, dated October 3, 1990, (File No. 1-9997) which Exhibit is herein incorporated by reference. 4(d)(1)(B) First Amendment to the Rights Agreement, dated as of March 22, 1993, between the Company and First Union National Bank of North Carolina, as Rights Agent ("First Union"), entered into for purpose of replacing Wachovia. Incorporated by reference to Exhibit 4(b)(4) of the Form 10-Q filed by the Registrant for the quarter ended March 31, 1993 (File No. 1-9997). 4(d)(1)(C) Second Amendment to the Rights Agreement, dated as of December 21, 1993, between the Company and First Union. See Exhibit 5 to an Amendment on Form 8-A/A to a Registration Statement on Form 8-A, dated December 21, 1993, (File No. 1- 9997) which Exhibit is herein incorporated by reference. 4(d)(2) Form of Common Stock Purchase Rights Certificate (attached as Exhibit A to the Rights Agreement). Pursuant to the Rights Agreement, printed Common Stock Purchase Rights Certificates will not be mailed until the Distribution Date (as defined in the Rights Agreement). 4(d)(3) Summary of Common Stock Purchase Rights (attached as Exhibit B to the Rights Agreement). 5 Opinion of Boling & McCart.* 15 Letter Re: Unaudited Interim Financial Information.* 23(a) The consent of Deloitte & Touche, independent public accountant to the Registrant (See page 9).* 23(b) The Consent of Boling & McCart (See Exhibit 5 hereof).* 25 Powers of Attorney (See signature page hereof).* 28(a) Amended and Restated Koger Equity, Inc. 1988 Stock Option Plan* 28(b) Koger Equity, Inc. 1993 Stock Option Plan See Exhibit II to Registrant's Proxy Statement dated June 30, 1993 (File No. 1-9997) which is incorporated herein by reference. *Filed with this report. Item 9. Undertakings. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors and officers and controlling persons of the Company pursuant to the provisions referred to in Item 6 of this Registration Statement or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim against the Company for indemnification against such liability (other than the payment by the Company of expenses incurred or paid by a director or officer of the Company in the successful defense of any action, suit or proceeding) is asserted by a director or 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 of whether or not such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The Company 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 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, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (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 the registrant need not file a post-effective amendment to include the information required to be included by subsection (i) or (ii) if the information is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 which are incorporated by reference in the Registration Statement. (2) 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. (3) To remove from registration by means of a post- effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for the purpose of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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. (5) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus to each employee to whom the prospectus is sent or given a copy of the registrant's annual report to stockholders for its last fiscal year, unless such employee otherwise has received a copy of such report, in which case the registrant shall state in the prospectus that it will promptly furnish, without charge, a copy of such report on written request of the employee. If the last fiscal year of the registrant has ended within 120 days prior to the use of the prospectus, the annual report of the registrant for the preceding fiscal year may be so delivered, but within such 120 day period the annual report for the last fiscal year will be furnished to each such employee. (6) The undersigned registrant hereby undertakes to transmit or cause to be transmitted to all employees participating in the plan who do not otherwise receive such material as stockholders of the registrant, at the time and in the manner such material is sent to its stockholders, copies of all reports, proxy statements and other communications distributed to its stockholders generally. SIGNATURES The Registrant. Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Jacksonville, State of Florida, the 13 day of July, 1994. KOGER EQUITY, INC. By: IRVIN H. DAVIS Irvin H. Davis President and Director Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Each person whose signature appears below hereby authorized S. D. Stoneburner, Irvin H. Davis and Victor A. Hughes, Jr., and each of them, as Attorneys-in-Fact, to sign on his behalf individually and in each capacity stated below, and to file any amendments, including Post Effective Amendments, to this Registration Statement. Signature Title Date S. D. STONEBURNER Chairman of the Board of (S. D. Stoneburner) Directors and Director IRVIN H. DAVIS President and Director (Irvin H. Davis) (Chief Executive Officer) VICTOR A. HUGHES, JR. Senior Vice President and (Victor A. Hughes, Jr.) Director (Chief Financial Officer) JAMES L. STEPHENS Treasurer (Chief Accounting (James L. Stephens) Officer) July 13, 1994 D. PIKE ALOIAN Director (D. Pike Aloian) BENHAMIN C. BISHOP, JR. Director (Benjamin C. Bishop, Jr.) CHARLES E. COMMANDER, III Director (Charles E. Commander, III) DAVID B. HILEY Director (David B. Hiley) G. CHRISTIAN LANTZSCH Director (G. Christian Lantzsch) THOMAS J. SMITH, JR. Director (Thomas K. Smith, Jr.) GEORGE F. STAUDTER Director (George F. Staudter) EX-5 2 13877 EXHIBIT 5 Exhibit 5 July 13, 1994 Board of Directors Koger Equity, Inc. 3986 Boulevard Center Drive Jacksonville, FL 32207 Re: Koger Equity, Inc. 1988 and 1993 Stock Option Plans Registration Statement on Form S-8 Dear Sirs: We have acted as counsel for Koger Equity, Inc., a Florida corporation (the "Company"), in connection with the preparation and filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended, of the above-captioned Registration Statement (the "Registration Statement") for the purpose of registering 1,500,000 shares of the Company's commons stock, par value $.01 per share (the "Shares"), issuable upon the exercise of stock options by key employees of the Company pursuant to its 1988 Stock Option Plan and its 1993 Stock Option Plan (the "Option Plans"). In so acting as such counsel, we have examined and relied upon the originals or copies, certified or otherwise identified to our satisfaction, of such Company records, documents, certificates, and other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. Based upon the foregoing, and such examination of law as we have deemed necessary, we are of the opinion that: 1. The Company has been incorporated and is existing as a corporation and its status is active under the laws of the State of Florida. 2. The Shares have been authorized and, when issued and sold as contemplated in the Registration Statement, and in accordance with the terms of the Option Plans which are Exhibits 28(a) and 28(b) to the Registration Statement, will be validly issued, fully paid and non-assessable. We consent to the use of this letter as an Exhibit to the Registration Statement. Very truly yours, Boling & McCart EX-15 3 13877 EXHIBIT 15 Exhibit 15 July 13, 1994 Koger Equity, Inc. Jacksonville, Florida We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Koger Equity, Inc. and Subsidiaries for the periods ended March 31, 1994 and 1993, as indicated in our report dated May 6, 1994 which includes an explanatory paragraph relating to uncertainties pertaining to pending litigation and an indemnity agreement with certain former directors of Koger Properties, Inc.; because we did not perform an audit, we expressed no opinion on that information. We are aware that our report referred to above, which was included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, is being used in this Registration Statement. We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Section 7 and 11 of that Act. DELOITTE & TOUCHE EX-23 4 13877 EXHIBIT 23 Exhibit 23(a) INDEPENDENT AUDITOR'S CONSENT Koger Equity, Inc. We hereby consent to the incorporation by reference in this Registration Statement of Koger Equity, Inc. on Form S-8 of our report, dated March 4, 1994, which expresses an unqualified opinion and includes an explanatory paragraph relating to uncertainties pertaining to pending litigation and an indemnity agreement with certain former directors of Koger Properties, Inc.; appearing in the Annual Report on Form 10-K of Koger Equity, Inc. for the year ended December 31, 1993. DELOITTE & TOUCHE Jacksonville, Florida July 13, 1994 EX-28 5 13877 EXHIBIT 28 Exhibit 28(2) 01/27/94 AMENDED AND RESTATED KOGER EQUITY, INC. 1988 Stock Option Plan 1. PURPOSE Koger Equity, Inc. 1988 Stock Option Plan (the "Plan") is hereby amended and restated this 5th day of February, 1992, in accordance with Section 7 of the Plan having been, adopted by the Board of Directors and shareholders of Koger Equity, Inc., (the "Company"), a Florida corporation, on the 15th day of August, 1988. The purpose of this Plan is to provide an incentive to persons of ability to use their best efforts to promote the interests of the Company by granting stock options to certain key employees of the Company and its subsidiaries who will have an opportunity to participate in the increased value of the Company which their efforts, initiative, and skill will help to produce. The stock options granted under this Plan are not intended to qualify as incentive stock options within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"), and accordingly shall not be treated as such. 2. ADMINISTRATION (a) The Plan shall be administered by the Executive Compensation Committee (the "Company Committee") of the Board of Directors of the Company (the "Company Board") as such Company Committee may be constituted from time to time. The Company Committee shall consist of at least two (2) members of the Company Board selected by the Company Board, all of whom shall be Disinterested Persons. A Disinterested Person for the purposes of the Plan shall be defined to mean one who is not at the time he exercises discretion in administering the Plan or at any time within one (1) year prior thereto eligible for participation or participating in the Plan or any other plan of the Company which would entitle him to acquire stock, stock options or stock appreciation rights of the Company or any of its subsidiaries. (b) A majority of the members of the Company Committee shall determine those employees of the Company who shall be granted stock options under the Plan. (c) A majority of the members of the Company Committee shall constitute a quorum. All determinations of the Company Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by all of the members of the Company Committee shall be fully effective as if it has been made by a majority voice at a meeting duly called and held. (d) Subject to the express provisions of the Plan, the Company Committee shall have complete authority to interpret the Plan, to grant stock options (the "Options") (which term shall be deemed to include stock appreciation rights with respect to the shares of stock subject to this Plan, as set forth in Section 3 hereof as exercisable in accordance with Section 5(b)(iv) and (v) hereof) under the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, to make all other determinations necessary or advisable for the administration of the Plan and to discontinue the Plan. The transactions contemplated by the Plan are intended to qualify for the exemption provided in Rule 16b-3 as promulgated under the Securities and Exchange Act of 1934, as amended. The Company Committee may from time to time make amendments to the Plan as it, in its sole discretion, determines are necessary in order to preserve such exemption under such rule or other similar rule which might be in effect. The determinations of the Company Committee on the matters referred to in this Section 2 shall be final, binding, and conclusive. 3. ELIGIBLE PARTICIPANTS AND SHARES SUBJECT TO PLAN Options may be granted by the Company, by action of the Company Committee, from time to time to certain key employees of the Company and its affiliates (the "Participants") to purchase an aggregate of S00,000 shares of common stock ($.01 par value) of the Company (the "Common Stock"), and such amount of shares shall be reserved for Options granted under the Plan (subject to adjustment as provided in Section 5(e)). Upon the expiration or terminations of any Option granted under the Plan which has not been fully exercised, the number of shares subject to such Option which have not been exercised shall become available for future grant under the Plan, except that if an Option is terminated as a result of the exercise of rights granted pursuant to Section 5(b)(iv) or Section 5(b)(v) hereof, the underlying shares shall not again become so available. The shares of Common Stock issued upon exercise of Options granted under the Plan shall be authorized and unissued shares or previously issued shares reacquired and held by the Company. 4. GRANT OF OPTIONS Subject to the provisions of the Plan, the Company Committee shall: (a) determine and designate from time to time those Participants to which Options are to be granted, (b) determine the number of shares of Common Stock subject to each Option, (c) determine the time when and the manner in which each Option shall be exercisable, and (d) if the shares of Common Stock issued upon the exercise of each Option are not registered under the Securities Act of 1933, as amended, determine the time when Common Stock issued by the Company pursuant to the exercise of an Option may be sold by the Participant; provided, however, no Option shall be granted after the expiration of ten (10) years from the effective date of the Plan specified in Section 8 below. 5. TERMS AND CONDITIONS OF OPTIONS Each Option granted under the Plan shall be evidenced by a written agreement, in a form approved by the Company Committee. Such agreement shall specify the number of shares of Common Stock subject to the Option an shall be subject to the following express terms and conditions and to such other terms and conditions as the Company Committee may deem appropriate: (a) Option Price The Option price per share of the Common Stock of the Company shall be determined by the Company Committee at the time the Option is granted; provided, however, in no event shall such Option price per share be less than 100 of the fair market value of one share of Common Stock on the date of the grant of the Options. The term "fair market value" shall mean the closing price at which shares of Common Stock of the Company shall have been traded as reported by the American Stock Exchange composite transaction listing (or other standard daily index or trading on such exchange) or, if the Common Stock of the Company is not so listed, any other stock exchange on which the Company's share are tradable on the date of grant of such Option. In the event that any Option shall be granted on a date on which there were no such sales of such stock on such exchange, the fair market value of such stock on such date shall be determined by the Company Committee. Unless the Company Committee shall by resolution otherwise expressly provide, the date upon which the Company Committee acts to grant an Option for all purposes of this Plan, shall be deemed the date on which such Option is granted. From and after such date the Participant to who such Option is granted shall have all rights of an Option holder as provided in this Plan, without regard to the date upon which a formal written agreement evidencing the grant shall be executed and delivered. (b) Exercise of Option: Payment of Purchase Price Upon Exercise. (i) An option granted under the Plan shall not be exercised prior to six (6) months after the Date of Grant and thereafter shall be exercisable, in whole or in part in accordance with the terms of the Option. Subject to Section 5(e) below, the Option shall terminate seven (7) years after the date of grant, or such earlier date as provided in the Plan. (ii) In the event a Participant dies or becomes totally disabled, at any time after having been granted an Option, the Options granted to the Participant shall immediately become fully exercisable by the Participant's estate or heirs in the case of death for the time period specified in Section 5(d)(i)(B) below of this Agreement and by the Participant or the Participant's legal guardian in the case of total disability for the time period specified in Section 5(b)(i) above. (iii) A Participant shall exercise an Option by written notice to the Company, which notice shall specify the number of shares to be purchased and the date of exercise (the "Date of Exercise"), which shall be not more than seven (7) days after the date of the mailing of such notice. On or before the Date of Exercise, the Participant shall deliver to the Company, at the office designated in the stock option agreement, a certified or cashier's check, cash or Common Stock previously acquired and currently owned by the Participant having a total fair market value, as determined as aforesaid, by the Company Committee, equal to the Option price for such shares, or in combination of cash and Common Stock having a total fair market value equal to the option price for such shares. The Participant shall have no rights in the optioned stock until such payment is made. In the event of any failure to pay for the number of shares specified in the notice of election by a certified or cashier's check, cash, previously acquired shares or a combination of previously acquired shares and cash, the Option shall become inoperative and lapse as to such number of shares, but shall continue with respect to any remaining shares subject to the Option as to which exercise has not yet been made. (iv) Alternatively, by written notice the Participant may elect to exercise the Option by receiving the number of shares represented by the difference between the aggregate fair market value of the shares exercised on the Date of Exercise by the Participant and the aggregate exercise price of such shares, divided by the fair market value of the Company's Common Stock on the Date of Exercise. (v) Alternatively, by written notice a Participant may elect to exercise the Option on the Date of Exercise in part by receiving for such Participant's benefit cash equal to the minimum amount required to be withheld for payroll tax purposes as described in Section 5(g) below and the balance by receiving shares in the manner prescribed in Section 5(b)(iii) above. The Company Committee shall have sole discretion to consent to or disapprove any election of a Participant pursuant to this Section 5(b)(v), provided that the Company Committee shall, in the exercise of such discretion, be subject to such limitations as may be imposed on the administrators of a plan by Rule 16b3, as amended and adopted by the Securities and Exchange Commission under Section 16(b) of the Securities Exchange Act of 1934 as in effect on the date hereof, and as the same may be hereafter further amended, as a condition to the exemption from the operation of Section 16(b) of transactions substantially identical to that permitted by this Section 5(b)(v). Neither the Company Committee nor the Company shall be under any liability to any person by reason of the Company Committee's disapproval of such election. (vi) Within fifteen (15) days after the Date of Exercise, the Company shall deliver, or cause to be delivered to the Participant stock certificate(s) for the number of shares of Common Stock with respect to which the Option is being exercised, if the Company has received the certification described in Section 5(f) below. Delivery of the shares may be made at the office of the Company or at the offices of a transfer agent appointed for the transfer of the shares of Common Stock of the Company, as the Company shall determine. Shares shall be registered in the name of the Participant. A Participant shall not have any of the rights of a stockholder until the shares are issued as herein provided. Anything herein to the contrary notwithstanding, if any law or any regulation of the Securities and Exchange Commission or of any other body having jurisdiction shall require the Company or the Participant to take any action in connection with the shares specified in a notice of election before such shares can be delivered to such Participant, then the date stated therein for the delivery of the shares shall be postponed until the fifth business day next following the completion of such action. (c) Nontransferability of Option An Option shall not be assigned, pledged, or hypothecated in any way, shall not be subject to execution and shall not be transferable by a Participant other than by will or by the laws of descent and distribution. (d) Termination of OPtions (i) Exercise in the Event of Termination of Employment with the Company or with one of its subsidiaries. (A) In the event of termination of the employment of the Participant for any cause, other than death, retirement or total disability of the Participant, whether by reason of resignation or discharge, this Option shall terminate immediately; provided, however, with the consent of the Committee, which shall be a matter of its sole discretion, such Participant (if the Participant shall voluntarily terminate the Participant's employment with the Company) may, within the ninety (90) days immediately following such voluntary termination of employment and subject to the provisions of Section 5(d) above, exercise any unexercised Option which could have been exercised on the date of such voluntary termination. (B) This Option shall terminate twelve months from the date of the Participant's death, provided the Participant at the time of his death was in the employ of the Company or retired from such employment, either as the result of age or total disability, as determined by the Company's employee policy manual, (notwithstanding Section 5(b) above). In such event, the Participant's personal representative(s) may exercise any unexercised Option which the Participant held at the time of the Participant's death, provided that such exercise must be accomplished prior to the expiration of such Option as provided by Section 5(b) above and within said twelve-month period after the Participant's death. (C) Retirement, either as the result of age or total disability as determined in accordance with the Company's employee policy manual, shall not cause an early termination of an Option. (ii) Exercise in the event of the termination of services by the Company or by one of its subsidiaries. If one of the employees' services to the Company or one of its subsidiaries is terminated, any such employees who hold outstanding options granted under this Plan shall have the right, during the period ending thirty (30) days after such termination to exercise any such Option which could have been exercised on the date of such termination. Following such thirty (30) day period, any option held by any employee of the Company or one of its subsidiaries who is not then an employee of the Company or one of its subsidiaries shall terminate. (e) Recapitalization and Reorganization (i) If any change is made in the stock subject to this Plan by reason of stock dividends, stock split-up, reverse stock split, or other recapitalization or reclassification of the Company's Common Stock, appropriate action consistent with such change shall be taken by the Company Committee as to the number of shares and price per share of the stock subject to this Plan or to any Option granted hereunder in order to prevent substantial dilution or enlargement of the rights granted to, or available for, Participants in the Plan. (ii) In the case of a reorganization, consolidation, spinoff, merger or other similar corporate transaction affecting the Common Stock of the Company, the Company and the spun-off corporation or the surviving corporation, as the case may be, shall assume without cost to any Participant all Options outstanding under this Plan or issue equivalent new Options based upon consideration distributed in the transaction to shareholders of the Company in respect of the Common Stock and the Company Board shall take any appropriate action required to effectuate the intent of this Section 5(e)(ii). (iii) Notwithstanding the foregoing, all such Options may be canceled by the Company as of the effective date of any such reorganization, merger, consolidation or spin-off or of any dissolution or liquidation of the Company by action of the Company Committee, by giving notice to each Participant or his or her personal representatives(s) or legal guardian(s) of its intention to do so and by permitting, during the thirty (30) day period next preceding the effective date of any such event, the exercise in whole or in part of each Option outstanding under the Plan, without regard to any installment provisions hereof, but subject to any other limitation on the exercise of such Option in effect on the Date of Exercise. Appropriate action shall be taken by the Company Committee as to the number of shares and price per share of the Stock subject to this Plan or to any Option granted hereunder in order to prevent substantial dilution or enlargement or the rights granted to, or available for, Participants in the Plan. (iv) The Company Committee may make such additional adjustments in the price and number of shares subject to Options as it deems appropriate to prevent dilution on account of any issuance of shares of the Company's Common Stock in a merger or similar corporate transaction. (f) Securities Registration Prior to the delivery of a certificate(s) representing the shares specified on any notice of election to exercise any Option, the Participant or the Participant's personal representative(s) or legal guardian(s) shall certify to the Company in such, form as it shall require that such Participant or personal representative(s) or legal guardian(s) will receive and hold such shares for investment and not with a view to resale or distribution thereof to the public, if in the opinion of the counsel of the Company such certification is necessary or desirable to comply with Federal and/or state securities laws. The Company shall not be required, upon the exercise of any Option, to issue or deliver any shares of stock prior to (a) the authorization of such shares for listing on any stock exchange on which the Company's Common Stock may then be listed, and (b) the completion of such registration or other qualification as the Company shall determine to be necessary or desirable. The Company may at any time prepare and file, at its own expense and without the consent of any Participant, a registration statement under the Securities Act of 1933, as amended, or any similar or superseding statute or statutes as then in effect, with respect to all or any shares reserved for or transferred under this Plan, either separately or together with other Common Stock or securities of the Company. In such event, any Participant or personal representative(s) or legal guardian(s) who shall have given the certification referred to in the first sentence of this Section shall be determined to be released therefrom upon the effective date of such registration statement. Nothing in this Plan shall give any Participant the right to request the Company to prepare of file such a registration statement at any time. (g) Withholding With respect to any amount, a Participant must recognize as compensation for income tax purposes in connection with the exercise of an Option, the Company or its subsidiary, as the case may be, will file the necessary payroll tax returns to governmental agencies, to remit timely to such agencies the necessary minimum payroll taxes and employee withholding taxes, and to file timely the required calendar year-end payroll information returns to the applicable governmental agencies and the Participant. The Participant must agree to provide the Company in a timely manner the funds necessary to meet the minimum withholding requirements (including FICA and Federal, state or local income taxes or other taxes with respect to the Option) of the applicable governmental agencies at the time(s) such taxes must be paid, as determined by the Company. (h) No Rights to Continued Employment The Plan and any Option granted under the Plan shall not confer upon any Participant the right to continue in the employ of the Company of any of its subsidiaries solely by reason of the grant, acceptance or exercise of an Option nor shall it interfere in any way with the right of the Company or any of its subsidiaries to terminate the Participant's employment at any time. (i) Stockholder's Rights No Participant shall have any rights of a stockholder by virtue of the grant of an Option except with respect to shares actually issued to him and the issuance of shares shall confer no retroactive right to dividends or other distributions. 6. COMPLIANCE WITH OTHER LAWS AND REGULATIONS The Plan, the grant and exercise of Options thereunder and the obligation of the Company to sell and deliver shares under such Options, shall be subject to all applicable Federal and state laws, rules and regulations and to such approvals by any government, regulatory agency or stock exchange as may be required. 7. AMENDMENT OR TERMINATION OF THE PLAN The Company Committee may amend, suspend, or terminate this Plan at any time, provided however, that no unexercised Option granted under this Plan may be altered or canceled, except in accordance with its terms or as provided herein, without the written consent of the Participant to whom such Option was granted, and provided further that no amendment may change (except as provided in Section 5(e) above) the aggregate number of shares of Option price per share with respect to shares which may be issued under the Plan or the Participants eligible to reeive Options as provided in the Plan. No amendment of this Plan shall be effective without shareholder approval of such amendment if such approval is required by Rule 16b-3. 8. EFFECTIVE DATE The Plan became effective upon approval thereof by the Board of Directors of the Company and the affirmative vote of the holders of a majority of the outstanding shares of Common Stock of the Company, which approvals occurred on the 15th day of August, 1988. 9. TERM No Option shall be granted hereunder after the expiration of ten (10) years from the effective date of the Plan. -----END PRIVACY-ENHANCED MESSAGE-----