-----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, QTPRSFXw9mbe2V6o0FgY3MjR21e4MfgnhPelZXMRxUNcijZ+64kfLoKfiGx73Xu6 Eba9dWIoXXtyTwLTGI/PHg== 0000950152-96-002533.txt : 19960518 0000950152-96-002533.hdr.sgml : 19960518 ACCESSION NUMBER: 0000950152-96-002533 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEMPOWER INC CENTRAL INDEX KEY: 0000847595 STANDARD INDUSTRIAL CLASSIFICATION: SANITARY SERVICES [4950] IRS NUMBER: 341481970 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17575 FILM NUMBER: 96568108 BUSINESS ADDRESS: STREET 1: 807 E TURKEYFOOT LAKE RD CITY: AKRON STATE: OH ZIP: 44319 BUSINESS PHONE: 2168964202 MAIL ADDRESS: STREET 1: 807 EAST TURKEYFOOT LAKE ROAD CITY: AKRON STATE: OH ZIP: 44319 10-Q 1 CHEMPOWER 10-Q 1 FORM 10-Q/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 ---------------------------------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- -------------------- Commission file number 0-17575 ------------ CHEMPOWER, INC. ------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO 34-1481970 ------------------------------- --------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 807 EAST TURKEYFOOT LAKE ROAD, AKRON, OHIO 44319 -------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (330) 896-4202 --------------------- NOT APPLICABLE -------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding May 1, 1996 -------------------------------- ------------------------------------ Common Stock, $.10 Par Value 7,565,113 shares 2 CHEMPOWER, INC. INDEX
PART I. FINANCIAL INFORMATION Page Number ----------------------------- ----------- Item 1. Financial Statements Condensed balance sheets--March 31, 1996 and December 31, 1995......................... 3 Condensed statements of income--Three months ended March 31, 1996 and 1995. 4 Condensed statements of cash flows--three months ended March 31, 1996 and 1995...... 5 Notes to condensed financial statements-- March 31, 1996............................ 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of operations.................................... 8-9 PART II. OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K.............. 10 SIGNATURES................................................ 11
3 PART I. FINANCIAL INFORMATION - ----------------------------- CHEMPOWER, INC. CONDENSED BALANCE SHEETS
March 31 December 31 1996 1995 ------------ ------------ (Unaudited) ASSETS (Dollars in thousands) CURRENT ASSETS Cash and cash equivalents $ 12,745 $ 11,603 Marketable securities 2,561 1,084 Trade receivables, less allowances 15,549 22,022 Contracts in progress 4,743 4,608 Inventories 4,509 4,058 Other current assets 1,378 385 ------------ ------------ TOTAL CURRENT ASSETS 41,485 43,760 PROPERTY, PLANT &.EQUIPMENT, at cost 14,247 13,638 Less: accumulated depreciation 7,092 6,773 ------------ ------------ NET PROPERTY, PLANT & EQUIPMENT 7,155 6,865 INTANGIBLE ASSETS 614 623 OTHER ASSETS 3,281 3,322 ------------ ------------ $ 52,535 $ 54,570 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Trade payables $ 4,687 $ 4,688 Contracts in progress 1,173 1,465 Payroll related accruals 6,619 7,740 Other current liabilities 2,040 2,726 ------------ ------------ TOTAL CURRENT LIABILITIES 14,519 16,619 DEFERRED CREDIT, EXCESS OF ACQUIRED INTEREST OVER COST 853 986 SHAREHOLDERS' EQUITY Common stock--par value $.IO per share: Authorized--15,000,000 shares Issued--7,756,121 shares at March 31 and December 31 776 776 Additional paid-in capital 20,334 20,334 Retained earnings 16,663 16,465 Treasury stock, at cost, 191,008 shares at March 31 and December 31 (610) (610) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 37,163 36,965 ------------ ------------ $ 52,535 $ 54,570 ============ ============ See Notes To Condensed Financial Statements
- 3 - 4 CHEMPOWER, INC. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31 -------------------- 1996 1995 -------- -------- (Dollars in thousands, except share data) Revenues......................... $ 16,990 $ 19,039 Cost of revenues................. 14,735 16,688 -------- -------- Gross profit................ 2,255 2,351 Selling, general and adminis- trative expenses............... 2,186 2,084 -------- -------- Operating income............ 69 267 Financial income................. 128 136 -------- -------- Income before taxes......... 197 403 Income taxes..................... (1) 141 -------- -------- Net income.................. $ 198 $ 262 ======== ======== Net income per Common Share...... $.03 $.04 ======== ======== Weighted average number of shares outstanding.......... 7,643,152 7,378,986 ========= ========= See Notes to Condensed Financial Statements
- 4 - 5 CHEMPOWER, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31 ---------------------- 1996 1995 --------- --------- (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES............................ $ 1,751 $ 2,618 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment................. (609) (204) --------- --------- Net cash used for investing activities.............. (609) (204) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Purchase of treasury stock................................ -- (200) --------- --------- Net cash used for financing activities............. -- (200) --------- --------- Net increase in cash and cash equivalents.......... 1,142 2,214 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............... 11,603 11,864 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................... $ 12,745 $ 14,078 ========= ========= SUPPLEMENTAL CASH FLOW DISCLOSURE Income taxes paid (net of refunds)........................ $ 705 $ 93 ========= ========= See Notes To Condensed Financial Statements
- 5 - 6 CHEMPOWER, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) March 31, 1996 NOTE A--BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. Operating results for the three month period ended March 31, 1996 are not necessarily indicative of the results that may be expected for the entire year of 1996. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report and Form 10-K as of December 31, 1995. NOTE B--ACQUISITION On May 3, 1995, the Company through its wholly-owned subsidiaries, Southwick Corp. and Brookfield Corp., purchased all of the issued and outstanding partnership units of Controlled Power Limited Partnership ("CPC"). CPC is in the business of designing, manufacturing and selling electrical metalclad switchgear, power distribution systems, bus duct systems and replacement parts for mass transit authorities, utilities, and chemical and other industrial facilities throughout the country. Through the purchase of the partnership units, the subsidiaries took control of CPC's inventory, accounts receivable, patents, real estate, plant and equipment. Pursuant to the terms of the Purchase Agreement, the subsidiaries made a cash payment of $4,900,000 at closing. Pro forma consolidated information assuming ownership of CPC as of January 1, 1995 is as follows:
Three Months Ended March 31 1996 1995 ------- ------- (Dollars in thousands, except per share data) Revenues................. $16,990 $25,435 Net Income (Loss)........ 198 (1,575) Net Income (Loss) per Common Share...... $ .03 $ (.21)
The pro forma information does not purport to be indicative of results which would actually have been obtained if the combination had been in effect for the periods indicated or which may be obtained in the future. - 6 - 7 CHEMPOWER, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued) March 31, 1996 NOTE C--CONTRACTS IN PROGRESS Comparative information for fixed-price contracts in progress at March 31, 1996 and December 31, 1995 is as follows:
March 31 December 31 1996 1995 --------------- ------------- (Dollars in thousands) Costs incurred on uncompleted contracts.................. $ 61,673 $ 68,335 Estimated earnings....................... 4,066 5,906 --------------- ------------- 65,739 74,241 Less billings to date 62,169 71,098 --------------- ------------- $ 3,570 $ 3,143 =============== ============= Included in the accompanying balance sheets under contracts in progress: Costs and estimated earnings in excess of related billings on uncompleted contracts.................. $ 4,743 $ 4,608 Billings in excess of related costs and estimated earnings on uncompleted contracts and provision for estimated losses on contracts........................... (1,173) 1,465 --------------- ------------- $ 3,570 $ 3,143 =============== =============
March 31, 1996 amounts include the operations of CPC. Costs incurred on uncompleted contracts, estimated earnings, and billings to date for CPC at March 31, 1996 were $61,146, $3,928, and $61,802, respectively. NOTE D--CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents. Cash equivalents consist primarily of money market funds. NOTE E--MARKETABLE SECURITIES The Company has classified all investment securities as available-for-sale. At March 31, 1996, the fair market value of marketable securities approximated their carrying cost. NOTE F--NET INCOME PER COMMON SHARE The net income per common share amounts have been computed by dividing net income by the weighted average number of shares (common and common equivalent) outstanding. For purposes of this computation, stock options are common equivalent shares. - 7 - 8 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The discussion of Results of Operations are grouped as follows: CONSOLIDATED --- Represents consolidated data of Chempower, Inc. and subsidiaries. CONSTRUCTION SERVICES --- This category consists of Chempower, Inc., Global Power Company and its Global Erectors division, excluding Manufacturing Services. MANUFACTURING SERVICES --- This category consists of CPC and the Company's three divisions: Houston Products, Owens Precision Fabricators and Advanced Coil Industries. RESULTS OF OPERATIONS CURRENT THREE MONTHS COMPARED TO THE SAME PERIOD LAST YEAR. Revenues for the thirteen week period ended March 31, 1996 were $16,990,000 a decrease from $19,039,000 or 10.8% from 1995. This decrease was attributable to the decline in the number of projects available in the Construction Services marketplace. Selling, general and administrative expenses increased 4.9% to $2,186,000 for the first quarter of 1996 as compared to $2,084,000 during the same period of 1995. This increase was due to the added operations of CPC, which was acquired May 3, 1995. Operating income decreased in 1996 to $69,000 compared to $267,000 in 1995. This decrease was due to lower Construction Services revenues. Interest income decreased to $128,000 in 19996 from $141,000 in 1995. Net income for the first quarter of 1996 was $198,000 or $.03 per share compared to $262,000 or $.04 per share in the same period of 1995. Net income as a percent of revenues was fairly constant at 1.2% in 1996 as compared to 1.4% in 1995. Construction Services Construction Services revenues were $10,309,000 for the first quarter of 1996 as compared to $15,740,000 for the same period 1995. This decrease was attributable to the decline in the number of projects available in the marketplace. Construction Services revenues represented 60.7% of total revenues in 1996 as compared to 82.7% of total revenues in 1995. Cost of Construction Services revenues represented 90.7% of Construction Services revenues in 1996 versus 92.4% in 1995. Construction services had an operating loss of $30,000 for the first quarter of 1996, compared to $186,000 of operating income in 1995. This loss was due to a decrease in Construction Services revenues. Manufacturing Services Manufacturing Services revenues more than doubled for the first three months of 1996 to $6,681,000 as compared to $3,299,000 from the same period of 1995. This increase was primarily the result of the inclusion of operations from CPC. Cost of Manufacturing Services revenues represented 80.6% of Manufacturing Services revenues versus 64.8% in 1995. This decrease was due to the inclusion of CPC operations during the year. A majority of the products manufactured by CPC (i.e. electrical metal-clad switchgear and power distribution systems) offer a lower rate of margin as compared to other products manufactured in this segment. In addition, increased competition in the marketplace resulted in lower sales pricing by the Houston Products division. Operating income decreased to $703,000 in 1996 from $735,000 in 1995 due to the lower rates of margin as a result of the competitive and economic factors discussed above. - 8 - 9 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Liquidity and Capital Resources: Working capital (current assets less current liabilities) at March 31, 1996 decreased to $26,966,000 from $27,141,000 at December 31, 1995. The ratio of current assets to current liabilities was 2.9 at the end of the first quarter of 1996 compared to 2.6 at the end of 1995. The Company currently has a $10,00,000 line of credit with FirstMerit First National Bank of Ohio. As of March 31, 1996, there was no borrowing against credit facilities available to the Company. The Company's current cash, funds available under its credit facility and future cash flow from operations, should be sufficient to meet capital requirements and short-term work capital needs. Events, Transactions, and Trends: The Company is experiencing a slow-down in Construction Services. This is primarily the result of the electric utilities delaying maintenance outages as the result of the impending deregulation in the electric power industry. The limited number of projects availble in the marketplace has caused strong competition for lower profit margin work. The Company expects this slow-down to continue through 1996 and could have an adverse impact on Construction Services. The Company continues to experience increased workers' compensation costs in a number of the states in which the Company operates its Construction Services. The Company closely monitors these costs and adjusts its pricing accordingly. However, an inability to pass these increases on could have an adverse affect on the Company's Construction Services. The Company continues to look for opportunities to expand Manufacturing Services through the acquisition of additional businesses and through internal growth. - 9 - 10 PART II. OTHER INFORMATION --------------------------- Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit Number Description ------ ----------- 10.1 1991 Incentive/Non-Qualified Stock Option Plan As Amended and Restated 27.1 Financial Data Schedule (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the three months ended March 31, 1996. - 10 - 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CHEMPOWER, INC. (Registrant) Date May 14, 1996 /s/ Robert E. Rohr --------------------- -------------------------------------- Robert E. Rohr Vice President of Finance and Treasurer (on behalf of the Registrant and as Principal Financial officer) - 11 - 12 EXHIBIT INDEX
Pagination By Sequential Exhibit Exhibit Numbering Number Description System ------ ----------- ------ 10.1 1991 Incentive/Non-Qualified Stock Option Plan as Amended and Restated 27.1 Financial Data Schedule
EX-10.1 2 EXHIBIT 10.1 1 EXHIBIT 10.1 CHEMPOWER, INC. 1991 INCENTIVE/NON-QUALIFIED STOCK OPTION PLAN AS AMENDED AND RESTATED 1. PURPOSE OF THE PLAN The purpose of this amended and restated Chempower, Inc. 1991 Incentive/Non-qualified Stock Option Plan (the "Plan") is to provide a method of providing officers and other key employees, as well as directors, of Chempower, Inc. and its subsidiaries (collectively, the "Company") with greater incentive to serve and promote the interests of the Company and its shareholders. The premise of the Plan is that, if such persons acquire a proprietary interest in the business of the Company or increase such proprietary interest as they may already hold, then the incentive of such person to work toward the Company's continued success will be commensurately increased. Accordingly, the Company will, from time to time during the effective period of the Plan, grant to such persons as may be selected to participate in the Plan options to purchase Common Shares, $.10 par value ("Shares"), of the Company on the terms and subject to the conditions set forth in the Plan. This amended and restated Plan increases the number of Shares reserved for issuance under the Plan and makes certain additional changes. 2. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Stock Plan Committee of the Board of Directors or by such other Committee composed of no fewer than two (2) members of the Board of Directors of the Company (the "Committee"). Subject to the provisions of the Plan, the Committee shall have full and final authority, in its absolute discretion, (a) to determine the employees to be granted options under the Plan, (b) to determine the number of Shares subject to each option, (c) to determine the time or times at which options will be granted, (d) to determine the option price of the Shares subject to each option, which price shall not be less than the minimum specified in Section 6 of the Plan, (e) to determine the time or times when each option becomes exercisable and the duration of the exercise period, (f) to determine the terms and conditions under which the Committee shall accept the surrender of an option or any portion thereof pursuant to Section 9 of the Plan and to determine the form in which payment for such surrendered option or portion thereof shall be made, (g) to prescribe the form or forms of the agreements evidencing any options granted under the Plan, and (i) to construe and interpret the Plan and the agreements evidencing options granted under the Plan and to make all other determinations deemed necessary or advisable for the administration of the Plan. Any decision made or action taken in good faith by the Committee in connection with the administration, interpretation, and implementation of the Plan shall, to the extent permitted by law, be conclusive and binding 1 2 upon all optionees under the Plan and upon any person claiming under or through such an optionee, and no member of the Board of Directors shall be liable for any such decision made or action taken by the Committee. 3. SHARES AVAILABLE FOR OPTIONS Subject to the provisions of Section 10 of the Plan, the aggregate number of Shares for which options may be granted under the Plan shall not exceed one million three hundred thousand (1,300,000). The Shares to be delivered upon exercise of options under the Plan shall be made available, at the discretion of the Board of Directors, either from the authorized but unissued Shares of the Company or from Shares held by the Company as treasury shares, including Shares purchased in the open market. If an option granted under the Plan shall expire or terminate unexercised as to any Shares covered thereby, such Shares shall thereafter be available for the granting of other options under the Plan. If, however, an option granted under the Plan shall be accepted for surrender pursuant to terms and conditions determined by the Committee under Section 9, any Shares covered thereby shall not thereafter be available for the granting of other options under the Plan. Options granted under the Plan shall constitute either incentive stock options, as defined in Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"), hereinafter referred to as "incentive stock options", or non-qualified stock options as the Committee shall determine with respect to each option granted on or after such date. 4. ELIGIBILITY Options will be granted only to persons who are employees or Directors of the Company. The term "employee" shall include officers as well as other employees of the Company and shall include Directors who are also employees of the Company. Each grant of an option shall be evidenced by an agreement executed on behalf of the Company by the Chairman of the Board or another executive officer and delivered to and accepted by the optionee. In selecting the persons to whom options shall be granted under the Plan, as well as in determining the number of Shares subject to and the type and terms and provisions of each option, the Committee shall weigh such factors as it shall deem relevant to accomplish the purpose of the Plan, namely, to enhance the incentive of those key employees of the Company who exert authority over and are responsible for the management and conduct of the Company's business. A person who has been granted an option under the Plan may be granted an additional option or options if the Committee shall so determine. 2 3 5. TERM OF OPTIONS The full term of each option granted under the Plan shall be such period as the Committee shall determine, but shall not be more than ten (10) years from the date of granting thereof, provided, however, that if an employee to whom an incentive stock option is granted is at the time of grant of the incentive stock option an owner as defined in Section 425(d) of the Code of more than 10 percent of the total combined voting power of all classes of stock of the Company or any subsidiary corporation, hereinafter referred to as a "Substantial Shareholder", no incentive stock option granted to such an employee shall be exercisable after the expiration of five (5) years from the date of grant of such option. Each option shall be subject to earlier termination as provided in Paragraphs (c) and (d) of Section 8 and in Section 9 of the Plan. The Committee may, with the concurrence of the affected optionee, cancel any option granted under the Plan and authorize the grant of a new option or options to buy Shares in such number and at such price as the Committee shall determine, subject to the provisions of the Plan. 6. OPTION PRICE The option price shall be determined by the Committee at the time any option is granted; provided, however, that if an incentive stock option is granted, the option price shall not be less than 100 percent of the fair market value of the Shares covered thereby at the time the option is granted (provided further, however, that any incentive stock option granted to any optionee who, at the time the option is granted, is a substantial shareholder, shall have an exercise price no less than 110 percent of the fair market value of the Shares covered thereby), such fair market value to be determined in accordance with procedures to be established by the Committee. 7. NON-TRANSFERABILITY OF OPTION No option granted under the Plan shall be transferable by the optionee other than (a) by will or by the laws of descent and distribution or (b) as otherwise hereafter permitted in accordance with Rule 16b-3 without jeopardizing or impairing any exemption provided for thereunder. Any restriction on the transferability of derivative securities required by Rule 16b-3 in order to qualify for an exemption thereunder is hereby incorporated in the Plan to the extent necessary to obtain the applicable exemption. 3 4 8. EXERCISE OF OPTIONS (a) Each option granted under the Plan shall be exercisable on such date or dates and during such period and for such number of Shares as shall be set forth in the agreement evidencing such option. (b) A person electing to exercise an option shall give written notice to the Company of such election and the number of Shares such person has elected to purchase and shall, at the time of exercise, tender the full purchase price of the Shares such person has elected to purchase. The purchase price may be paid either in cash or in the Company's Shares (excluding fractional shares), or a combination thereof; provided, however, that the practice known as "Pyramiding", which involves successive option exercises using Shares received from a preceding exercise to immediately exercise another option and so on, shall not be permitted. Shares delivered in payment of the purchase price shall be valued at the fair market value of such Shares on the date of exercise of the option. Until such person has been issued a certificate or certificates for the Shares so purchased, such person shall possess no rights of a record holder with respect to any such Shares. (c) No option shall be affected by any change of duties or position of the optionee (including transfer to or from a subsidiary), so long as such optionee continues to be an employee of the Company or one of its subsidiaries. If an optionee shall cease to be an employee for any reason other than death, the options held by such optionee shall thereafter be exercisable only to the extent of the purchase rights, if any, which had accrued as of the date of such cessation, provided that the Committee may provide in the agreement evidencing any option that the Committee may in its absolute discretion, upon any such cessation of employment, determine (but shall be under no obligation to determine) that such accrued purchase rights shall be deemed to include additional Shares covered by such option. Upon any such cessation of employment, such accrued rights to purchase shall in any event terminate upon the earlier of (A) the expiration of the full term of the option or (B) the expiration of thirty (30) days from the date of such cessation of employment if by reason of discharge or immediately if by reason of voluntary quit. The agreements evidencing options granted under the Plan may contain such provisions as the Committee shall approve with reference to the effect of approved leaves of absence. Nothing in the Plan or in any option granted hereunder shall confer upon any optionee any right to continue in the employ of the Company or any of its subsidiaries, or to limit or interfere in any way with the right of the Company or its subsidiaries to terminate such optionee's employment at any time, with or without cause. (d) Should an optionee die while in the employ of the Company, such person as shall have acquired, by will or by the laws of descent and distribution (the "personal representative"), the right to exercise any option theretofore granted such optionee 4 5 may exercise such option at any time prior to expiration of its full term or one (1) year from the date of death of the optionee, whichever is earlier, provided that any such exercise shall be limited to the purchase rights which had accrued as of the date when the optionee ceased to be an employee, whether by death or otherwise, and provided further, however, that the Committee may provide in the agreement evidencing any option that all Shares covered by such option shall become subject to purchase immediately upon the death of the optionee. (e) In the case of incentive stock options, the aggregate fair market value (determined as of the date the option is granted) of the Shares with respect to which options are exercisable for the first time by any individual during any calendar year (under this Plan and all such plans of the Company and any parent or subsidiary corporation) shall not exceed $100,000. 9. SURRENDER OF OPTIONS - STOCK APPRECIATION RIGHTS The Cornmittee may, in its absolute discretion and under such terms and conditions as it deems appropriate, accept the surrender by an optionee, or the personal representative of an optionee, of an option, or any portion thereof, to purchase Shares granted under the Plan and authorize the payment in consideration for such surrender of an amount equal to the excess of the fair market value at the date of surrender of the Shares covered by the option, or portion thereof, surrendered over the aggregate option price of such Shares, such payment to be in Shares (valued at fair market value on the date of such surrender) or in cash, or partly in Shares and partly in cash as determined by the Committee, provided that the Committee determines that such surrender is consistent with the purpose set forth in Section 1 hereof. 10. ADJUSTMENT UPON CHANGES IN CAPITALIZATION In the event of any change in the number of outstanding Shares through the declaration of share dividends, share splits, mergers, or consolidations, through recapitalizations, or by reason of any other increase or decrease in the number of outstanding Shares effected without receipt of consideration by the Company, the number of Shares available and reserved for options which may thereafter be granted, the number of Shares reserved for and subject to any options outstanding but unexercised, and the price per share payable on the exercise of any options outstanding but unexercised, shall be adjusted as the Committee considers appropriate, and all such adjustments by the Committee shall be conclusive and binding upon all optionees under the Plan and upon any person claiming under or through such an optionee. 11. ISSUANCE OF SUBSTITUTE OPTIONS The Committee may also make a determination, subject to approval and authorization by the Board of Directors, to issue option having terms and provisions which vary from those specified herein, provided that any options issued pursuant to this Section are issued in 5 6 substitution for, or in connection with the assumption of, existing options issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation in which the Company or a subsidiary is a party. 12. AMENDMENT, SUSPENSION OR TERMINATION OF PLAN The Board of Directors may at any time terminate or from time to time amend or suspend the Plan; provided, however, that no such amendment shall, without approval of the shareholders of the Company, except as provided in Section 10 hereof, (a) increase the aggregate number of Shares as to which options may be granted under the Plan; (b) increase the maximum period during which options may be exercised; or (c) extend the effective period of this Plan. No option may be granted during any suspension of the Plan or after the Plan has been terminated and no amendment, suspension or termination shall, without the optionee's consent, alter or impair any of the rights or obligations under any option theretofore granted to such person under the Plan. Notwithstanding the foregoing, no amendment may be made without shareholder approval if such approval is required under Rule 16b-3 under the Securities Exchange Act of 1934, as amended to qualify for the exemption from Section 16(b) of that Act or is required by the rules of the National Association of Securities Dealers Automated Quotation System. 13. EFFECTIVE DATE AND DURATION OF PLAN This amended and restated Plan was adopted by the Board of Directors on March 6, 1996. This amended and restated Plan shall become effective upon its approval by the affirmative vote of the holders of a majority of the outstanding Shares present in person or by proxy and entitled to vote on this Plan at the Annual Meeting of the Shareholders of the Company on May 2, 1996, or any adjournment thereof. No options may be granted under this Plan subsequent to May 1, 2001. Dated: March 6, 1996 CHEMPOWER, INC. /s/ T.J. Kukk ---------------------------------- T.J. Kukk, President /s/ Ernest M. Rochester ---------------------------------- Ernest M. Rochester, Secretary 6 EX-27 3 EXHIBIT 27
5 0000847595 CHEMPOWER, INC. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 12,745 2,561 16,128 579 4,509 41,485 14,247 7,092 52,535 14,519 0 776 0 0 36,387 52,535 16,990 16,990 14,735 14,735 2,186 0 0 197 (1) 198 0 0 0 198 .03 .03
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