sv8
As
filed with the Securities and Exchange Commission on October 4, 2005
Registration
No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SMITH & WESSON HOLDING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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Nevada
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87-0543688 |
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number) |
2100 Roosevelt Avenue
Springfield, Massachusetts 01104
(Address of Principal Executive Offices)(Zip Code)
2001 Stock Option Plan
2004 Incentive Compensation Plan
Option Agreement
(Full Title of the Plan)
Michael F. Golden
President and Chief Executive Officer
Smith & Wesson Holding Corporation
2100 Roosevelt Avenue, Springfield, Massachusetts 01102
(800) 331-0852
(Name, Address, and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Robert S. Kant, Esq.
Brandon F. Lombardi, Esq.
Greenberg Traurig, LLP
2375 East Camelback Road, Suite 700
Phoenix, Arizona 85016
(602) 445-8000
CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Proposed Maximum |
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Title of Securities |
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Amount to be |
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Offering Price |
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Aggregate |
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Amount of |
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To be Registered |
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Registered(1) |
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Per Share |
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Offering Price |
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Registration Fee |
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Common Stock, par value $.001
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1,330,167 shares(2)
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$1.15(2)
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$ |
1,529,692.05 |
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$ |
180.04 |
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Common Stock, par value $.001
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1,065,000 shares(3)
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$3.54(3)
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$ |
3,770,100.00 |
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$ |
443.74 |
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8,934,167 shares(4)
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$5.46(4)
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$ |
48,780,551.82 |
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$ |
5,741.47 |
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Common Stock, par value $.001
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500,000 shares(5)
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$1.47(5)
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$ |
735,000.00 |
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$ |
86.51 |
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Total.
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11,829,334 shares
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$ |
54,815,343.87 |
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$6,451.77(6)
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(1) |
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This Registration Statement shall also cover any additional shares of common stock which become
issuable under the 2001 Stock Option Plan, the 2004 Incentive Compensation Plan, and under an
option agreement by reason of any stock dividend, stock split, recapitalization, or any other
similar transaction without receipt of consideration which results in an increase in the number of
outstanding shares of common stock of Smith & Wesson Holding Corporation. |
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(2) |
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Represents 1,330,167 shares of common stock subject to options outstanding under the Smith &
Wesson Holding Corporation 2001 Stock Option Plan. The offering price of $1.15 was computed in
accordance with Rule 457(h) of the Securities Act of 1933, as amended, and represents the weighted
average price per share for 1,330,167 options outstanding under the Smith & Wesson Holding
Corporation 2001 Stock Option Plan. |
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(3) |
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Represents 1,065,000 shares of common stock subject to options outstanding under the Smith &
Wesson Holding Corporation 2004 Incentive Compensation Plan. The offering price of $3.54 was
computed in accordance with Rule 457(h) of the Securities Act of 1933, as amended, and represents
the weighted average price per share for 1,065,000 options outstanding under the Smith & Wesson
Holding Corporation 2004 Incentive Compensation Plan. |
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(4) |
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Consists of 8,934,167 shares of common stock reserved for issuance upon exercise of options not
yet granted, and awards of restricted stock not yet made, under the Smith & Wesson Holding
Corporation 2004 Incentive Compensation Plan. The offering price of $5.46 was calculated solely
for purposes of this offering under Rule 457(c) of the Securities Act of 1933, as amended, using
the average of the high and low sale prices per share of common stock of Smith & Wesson Holding
Corporation as reported on the American Stock Exchange on September 30, 2005. |
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(5) |
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Represents 500,000 shares issuable under an option agreement to purchase common stock of Smith
& Wesson Holding Corporation. |
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(6) |
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A registration fee of $268.00 was previously paid in
connection with a Registration
Statement (Reg. No. 333-87748) filed by the Registrant with the Securities and
Exchange Commission on May 7, 2002. Pursuant to Rule 457(p) of the Securities Act of 1933,
$268.00 of the registration fee is being offset against the previously paid registration fee in
connection with the filing of this Registration Statement. |
TABLE OF CONTENTS
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Smith & Wesson Holding Corporation (the Registrant) hereby incorporates by reference into
this Registration Statement the following documents previously filed with the Securities and
Exchange Commission (the Commission):
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(a) |
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Annual Report on From 10-K for the year ended April 30, 2005; |
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(b) |
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Quarterly Report on Form 10-Q for the quarter ended July 31, 2005; |
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(c) |
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Definitive proxy statement on Schedule 14A filed on August 24, 2005; |
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(d) |
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Current Reports on Form 8-K filed August 16, 2005, August 26, 2005, and
September 13, 2005; |
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(e) |
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The description of our common stock contained in our registration statement on
Form 10-SB filed on January 19, 2000, including any amendment or report filed for the
purpose of updating that description; |
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(f) |
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The description of our common stock contained in our registration statement on
Form 8-A filed on November 27, 2002, including any amendment or report filed for the
purpose of updating that description; and |
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(g) |
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The description of our common stock contained in our registration statement on
Form 8-A filed on August 25, 2005, including any amendment or report filed for the
purpose of updating that description. |
In addition, all documents subsequently filed with the Commission pursuant to Sections 13(a),
13(c), 14, and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment to this
Registration Statement that indicates that all securities offered have been sold or that
deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the date of the filing of such
documents.
Any statement contained herein or in a document, all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or amended, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The firm of Greenberg Traurig, LLP, Phoenix, Arizona, has acted as counsel for the Registrant
in the preparation of this Registration Statement. As of September 30, 2005, certain members of
such firm beneficially owned a total of 30,000 shares of the Registrants Common Stock.
II-1
Item 6. Indemnification of Directors and Officers.
The Amended and Restated Articles of Incorporation and Amended and Restated Bylaws of the
Registrant provide that the Registrant will indemnify and reimburse expenses, to the fullest extent
permitted by the Nevada General Corporation Law, to each person who is or was a director, officer,
employee, or other agent of the Registrant, or who serves or served any other enterprise or
organization at the request of the Registrant (an Indemnitee).
Under Nevada law, to the extent that an Indemnitee is successful on the merits or otherwise in
defense of any action, suit, or proceeding brought against him or her by reason of the fact that he
or she is or was a director, officer, employee, or agent of the Registrant, or serves or served any
other enterprise or organization at the request of the Registrant, the Registrant shall indemnify
him or her against expenses (including attorneys fees) actually and reasonably incurred by the
Indemnitee in connection with the defense.
If unsuccessful in defense of a civil, criminal, administrative, or investigative, action,
suit, or proceeding brought against him or her by reason of the fact that he or she is or was a
director, officer, employee, or agent of the Registrant, or serves or served any other enterprise
or organization at the request of the Registrant, the Registrant shall indemnify him or her against
expenses (including attorneys fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by the Indemnitee in connection with the defense if he or she is not liable and
acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to,
the best interests of the Registrant and, with respect to any criminal action, had no reasonable
cause to believe his or her conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the Registrant to procure a
judgment in its favor by reason of the fact that he or she is or was a director, officer, employee,
or agent of the Registrant, or is or was serving at the request of the Registrant, an Indemnitee
may be indemnified under Nevada law only against expenses, including amounts paid in settlement and
attorneys fees actually and reasonably incurred in the defense or settlement of the suit, if he or
she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the Registrant except that if the Indemnitee is adjudged to be liable for
negligence or misconduct in the performance of his or her duty to the Registrant, he or she cannot
be made whole even for expenses unless a court determines that he or she is fully and reasonably
entitled to indemnification for such expenses.
Also under Nevada law, an Indemnitee may not be indemnified for any claim, issue, or matter as
to which he or she has been adjudged by a court to be liable to the Registrant or for amounts paid
in settlement to the Registrant, unless and only to the extent that the court determines upon
application that he or she is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
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Exhibit |
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Number |
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Exhibit |
4.15
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Non-Qualified Stock Option Agreement issued on December 6, 2004, between the Registrant and
Michael F. Golden relating to the purchase of up to 500,000 shares of the Registrants Common
Stock |
5
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Opinion of Greenberg Traurig, LLP |
10.23
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2001 Stock Option Plan |
10.24
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2004 Incentive Compensation Plan |
23.1
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Consent of PricewaterhouseCoopers LLP |
23.2
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Consent of Greenberg Traurig, LLP (included in Exhibit 5) |
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Power of Attorney (included in the Signatures section of this Registration Statement) |
II-2
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 of 1933, as amended (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 the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the effective 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration
statement is on Form S-3, Form S-8, or Form F-3 and 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 15(d) of the Exchange Act
that are incorporated by reference in the 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 which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrants annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plans 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 the 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 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
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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 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.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Springfield, Massachusetts,
on this 4th day of
October, 2005.
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SMITH & WESSON HOLDING CORPORATION |
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By:
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/s/ Michael F. Golden |
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Michael F. Golden
President and Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints, jointly and severally, Michael F. Golden and John A. Kelly and each of them, as his
or her true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all intents and purposes as
he or she might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the date indicated.
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Signature |
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Position |
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Date |
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/s/ Barry M. Monheit
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Chairman of the Board
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October 4, 2005 |
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Barry Monheit |
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/s/ Robert L. Scott
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Vice Chairman of the Board
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October 4, 2005 |
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Robert L. Scott |
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/s/ Michael F. Golden
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President, Chief Executive
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October 4, 2005 |
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Officer, and Director |
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Michael Golden
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(Principal Executive Officer) |
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/s/John A. Kelly
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Chief Financial Officer and Treasurer |
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(Principal Accounting and Financial |
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John A. Kelly
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Officer)
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October 4, 2005 |
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/s/ Jeffrey D. Buchanan
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Director
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October 4, 2005 |
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Jeffrey D. Buchanan |
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/s/ John B. Furman
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Director
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October 4, 2005 |
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John B. Furman |
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/s/ Colton R. Melby
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Director
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October 4, 2005 |
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Colton R. Melby |
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/s/ James J. Minder
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Director
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October 4, 2005 |
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James J. Minder |
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/s/ Mitchell A. Saltz
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Director
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October 4, 2005 |
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Mitchell A. Saltz |
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/s/ I. Marie Wadecki
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Director
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October 4, 2005 |
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I. Marie Wadecki |
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II-5
EXHIBIT INDEX
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Exhibit |
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Number |
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Exhibit |
4.15
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Non-Qualified Stock Option Agreement issued on December 6, 2004, between the Registrant and
Michael F. Golden relating to the purchase of up to 500,000 shares of the Registrants Common
Stock |
5
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Opinion of Greenberg Traurig, LLP |
10.23
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2001 Stock Option Plan |
10.24
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2004 Incentive Compensation Plan |
23.1
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Consent of PricewaterhouseCoopers LLP |
23.2
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Consent of Greenberg Traurig, LLP (included in Exhibit 5) |
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Power of Attorney (included in the Signatures section of this Registration Statement) |
exv4w15
Exhibit 4.15
SMITH & WESSON HOLDING CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
MICHAEL F. GOLDEN
1. Grant of Option. Smith & Wesson Holding Corporation, a Nevada corporation (the Company)
hereby grants, as of December 6, 2004 (Date of Grant), to Michael F. Golden (the Optionee) an
option (the Option) to purchase up to 500,000 shares of the Companys Common Stock, $.001 par
value per share (the Shares), at an exercise price per share equal to $1.47. The Option shall be
subject to the terms and conditions set forth herein. The Option is a new employee inducement
option and is not being granted pursuant to the Companys 2004 Incentive Compensation Plan (the
Plan). To the extent not provided for herein, the Option, however, shall be construed in
accordance with the Plan. The Option is a nonqualified stock option, and not an Incentive Stock
Option. The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by
all of the terms and conditions hereof and thereof and all applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein that are defined in the
Plan and not defined herein shall have the meanings attributed to them under the Plan.
3. Vesting Schedule. Except as otherwise provided in Sections 6 or 12 of this Agreement, or
in the Plan, the Option shall vest in the installments as provided below, which shall be
cumulative. To the extent that the Option has become vested with respect to a percentage of Shares
as provided below, the Option may thereafter be exercised by the Optionee, in whole or in part, at
any time or from time to time prior to the expiration of the Option as provided herein for such
vested Shares. The following table indicates each date (the Vesting Date) upon which the Optionee
shall be vested and thereby entitled to exercise the Option with respect to the percentage of
Shares granted as indicated beside the date, provided that the Continuous Service of the Optionee
continues through and on the applicable Vesting Date:
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Percentage of Shares |
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Vesting Date |
20% of the total number of options
granted.
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Each of the first five annual
anniversaries of the Date of Grant,
commencing on December 6, 2005,
such that the Option shall be fully
vested, with respect to all Shares
subject to this grant, on December 6, 2009. |
Except as otherwise specifically provided herein, there shall be no proportionate or partial
vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the
appropriate Vesting Date. Upon the termination of the Optionees Continuous Service with the
Company and its Related Entities, any unvested portion of the Option shall terminate and be null
and void.
4. Method of Exercise. The vested portion of this Option shall be exercisable in whole or in
part in accordance with the vesting schedule set forth in Section 3 hereof by written notice which
shall state the election to exercise the Option, the number of vested Shares in respect of which
the Option is being exercised, and such other representations and agreements as to the holders
investment intent with respect to such Shares as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and shall be delivered
in person or by certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the exercise price. This Option shall be deemed to be exercised after
both (a) receipt by the Company of such written notice accompanied by the exercise price and (b)
arrangements that are satisfactory to the Committee or the Board in its sole discretion have been
made for Optionees payment to the Company of the amount that is necessary to be withheld in
accordance with applicable Federal or state withholding requirements. No Shares will be issued
pursuant to the Option unless and until such issuance and such exercise shall comply with all
relevant provisions of applicable law, including the requirements of any stock exchange upon which
the Shares then may be traded.
5. Method of Payment. Payment of the exercise price is due in full upon exercise of all or
any part of the Option. The Optionee may elect to make payment of the exercise price in one or
more of the following ways:
(i) Cash or by check.
(ii) In the Companys sole discretion at the time the Option is exercised and provided that at
the time of exercise the Common Stock is publicly traded, pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common
Stock, results in either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from the sales
proceeds.
(iii) In the Companys sole discretion at the time the Option is exercised, delivery by
Optionee of a promissory note in a form satisfactory to the Company, in the amount of the aggregate
exercise price of the exercised Shares together with the execution and delivery by the Optionee of
a security agreement in a form satisfactory to the Company. The promissory note shall bear
interest at a rate at least equal to the applicable federal rate prescribed under the Code and
its regulations at time of purchase, and shall be secured by a pledge of the Shares purchased by
the promissory note pursuant to the security agreement. At any time that the Company is
incorporated in Delaware, payment of the Common Stocks par value, as defined in the Delaware
General Corporation Law, shall be made in cash and not by deferred payment. Notwithstanding the
foregoing, payment by promissory note shall not be permitted to the extent such payment would
violate the Sarbanes-Oxley Act of 2002.
2
(iv) Provided that at the time of exercise the Common Stock is publicly traded, by delivery of
already-owned shares of Common Stock either that Optionee has held for the period required to avoid
a charge to the Companys reported earnings (generally six (6) months) or that Optionee did not
acquire, directly or indirectly from the Company, that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. Delivery for these purposes, in the sole discretion of the Company at the time the
Optionee exercises the Option, shall include delivery to the Company of Optionees attestation of
ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the
foregoing, Optionee may not exercise the Option by tender to the Company of Common Stock to the
extent such tender would violate the provisions of any law, regulation or agreement restricting the
redemption of the Companys stock.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of:
(i) three months after the date on which the Optionees Continuous Service is terminated other
than by reason of (A) Cause, which, solely for purposes of this Agreement, shall mean the
termination of the Optionees Continuous Service by reason of the Optionees willful misconduct or
gross negligence, (B) a mental or physical disability (within the meaning of Internal Revenue Code
Section 22(e)) of the Optionee as determined by a medical doctor satisfactory to the Committee or
the Board, or (C) the death of the Optionee;
(ii) immediately upon the termination of the Optionees Continuous Service for Cause;
(iii) twelve months after the date on which the Optionees Continuous Service is terminated by
reason of a mental or physical disability (within the meaning of Section 22(e) of the Code) as
determined by a medical doctor satisfactory to the Committee or the Board;
(iv) twelve months after the date of termination of the Optionees Continuous Service by
reason of the death of the Optionee; or
(v) the tenth anniversary of the Date of Grant.
(b) To the extent not previously exercised, (i) the Option shall terminate immediately in the
event of (1) the liquidation or dissolution of the Company, or (2) any reorganization, merger,
consolidation or other form of corporate transaction in which the Company does not survive or the
Shares are converted into or exchanged for securities issued by another entity, unless the
successor or acquiring entity, or an affiliate of such successor or acquiring entity, assumes the
Option or substitutes an equivalent option or right pursuant to Section 9(c) of the Plan, and (ii)
the Committee or the Board in its sole discretion may by written notice (cancellation notice)
cancel, effective upon the consummation of any corporate transaction described in Subsection
7(b)(i) of the Plan in which the Company does survive, the Option (or portion thereof) that remains
unexercised on such date. The Committee or the Board shall give written notice of any proposed
transaction referred to in this Section 6(b) a reasonable
3
period of time prior to the closing date for such transaction (which notice may be given
either before or after approval of such transaction), in order that the Optionee may have a
reasonable period of time prior to the closing date of such transaction within which to exercise
the Option if and to the extent that it then is exercisable (including any portion of the Option
that may become exercisable upon the closing date of such transaction). The Optionee may condition
his exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).
7. Transferability. The Option granted hereby is not transferable otherwise than by will or
under the applicable laws of descent and distribution, and during the lifetime of the Optionee the
Option shall be exercisable only by the Optionee, or the Optionees guardian or legal
representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated
in any way (whether by operation of law or otherwise), and the Option shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign, negotiate, pledge
or hypothecate the Option, or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option shall immediately
become null and void.
8. No Rights of Stockholders. Neither the Optionee nor any personal representative (or
beneficiary) shall be, or shall have any of the rights and privileges of, a stockholder of the
Company with respect to any shares of Stock purchasable or issuable upon the exercise of the
Option, in whole or in part, prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option. This Option shall become immediately fully
exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof,
there is a Change in Control, as defined in Section 7(b) of the Plan, that occurs during the
Optionees Continuous Service and such Change in Control was not approved by the Board of
Directors of the Company.
10. No Right to Continuous Service. Neither the Option nor this Agreement shall confer upon
the Optionee any right to Continuous Service with the Company.
11. Law Governing. This Agreement shall be governed in accordance with and governed by the
internal laws of the State of Nevada.
12. Interpretation / Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the amendment provisions
thereof, and to such rules, regulations and interpretations relating to the Plan adopted by the
Committee or the Board as may be in effect from time to time. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the
Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Optionee
accepts the Option subject to all the terms and provisions of the Plan and this Agreement. The
undersigned Optionee hereby accepts as binding, conclusive and final all decisions or
interpretations of the Committee or the Board upon any questions arising under the Plan and this
Agreement.
13. Notices. Any notice under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered personally or when deposited in the United
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States mail, registered, postage prepaid, and addressed, in the case of the Company, to the
Companys President at Smith & Wesson Holding Corporation, 2100 Roosevelt Avenue, Springfield,
Massachusetts 01104, or if the Company should move its principal office, to such principal office,
and, in the case of the Optionee, to the Optionees last permanent address as shown on the
Companys records, subject to the right of either party to designate some other address at any time
hereafter in a notice satisfying the requirements of this Section.
IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the 6th day
of December, 2004.
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COMPANY: |
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SMITH & WESSON HOLDING CORPORATION |
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By:
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/s/ John A. Kelly |
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Name:
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John A. Kelly |
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Title:
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Chief Financial Officer |
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Optionee has received a copy of the Companys most recent prospectus describing the Plan and a
complete copy of the Plan document. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option,
and fully understands all provisions of the Option.
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Dated: |
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6/02/2005 |
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OPTIONEE: |
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By:
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/s/ Michael F. Golden |
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Michael F. Golden |
5
exv5
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EXHIBIT 5 |
Robert S. Kant
Tel. 602.445.8302
Fax. 602.445.8100
KantR@gtlaw.com
October 4, 2005
Smith & Wesson Holding Corporation
2100 Roosevelt Avenue
Springfield, Massachusetts 01104
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Re:
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Registration Statement on Form S-8
Smith & Wesson Holding Corporation |
Ladies and Gentlemen:
As legal counsel to Smith & Wesson Holding Corporation, a Nevada corporation (the Company),
we have assisted in the preparation of the Companys Registration Statement on Form S-8 (the
Registration Statement) to be filed with the Securities and Exchange Commission on or about
September 30, 2005, in connection with the registration under the Securities Act of 1933, as
amended, of 1,355,137 shares of the Companys common stock, par value $0.001 per share (Common
Stock), issuable pursuant to the Companys 2001 Stock Option Plan (the 2001 Stock Option Plan),
9,999,167 shares issuable pursuant to the Companys 2004 Incentive Compensation Plan (the 2004
Incentive Compensation Plan), and 500,000 shares issuable pursuant to an option agreement (the
Option). The foregoing shares issuable pursuant to the 2001 Stock Option Plan, the 2004
Incentive Compensation Plan, and the Option are referred to collectively as the Shares. The
facts, as we understand them, are set forth in the Registration Statement.
With respect to the opinion set forth below, we have examined originals, certified copies, or
copies otherwise identified to our satisfaction as being true copies, only of the following:
A. The Amended and Restated Articles of Incorporation of the Company, as filed with the
Secretary of State of the state of Nevada on October 7, 2004;
B. The Amended and Restated Bylaws of the Company, as amended through the date hereof;
C. Resolutions of the Board of Directors of the Company adopted by unanimous written consent
dated as of May 31, 2001, adopting the 2001 Stock Option Plan;
D. The 2001 Stock Option Plan;
E. Resolutions of the Board of Directors of the Company adopted by unanimous written consent
dated as of May 24, 2004, adopting the 2004 Incentive Compensation Plan;
F. The 2004 Incentive Compensation Plan;
G. Resolutions of the Board of Directors of the Company adopted by unanimous written consent
dated as of November 16, 2004, approving the issuance of the Option;
H. The Option; and
Smith & Wesson Holding Corporation
October 4, 2005
Page 2
I. The Registration Statement.
Subject to the assumptions that (i) the documents and signatures examined by us are genuine
and authentic, and (ii) the persons executing the documents examined by us have the legal capacity
to execute such documents, and based solely upon our review of items A through I above, it is our
opinion that the Shares will be validly issued, fully paid, and nonassessable when issued and sold
in accordance with the terms of the 2001 Stock Option Plan, the 2004 Incentive Compensation Plan,
and the Option, as applicable.
We hereby expressly consent to any reference to our firm in the Registration Statement,
inclusion of this Opinion as an exhibit to the Registration Statement, and to the filing of this
Opinion with any other appropriate governmental agency.
Very truly yours,
/s/ Greenberg Traurig, LLP
exv10w23
Exhibit 10.23
SAF-T-HAMMER CORPORATION
Stock Option Plan
1. Purpose Of Plan.
(a) General Purpose. The purpose of the SAF-T-HAMMER CORPORATION Stock Option Plan (Plan) is
to further the interests of SAF-T-HAMMER CORPORATION, a Nevada corporation (the Corporation), and
its subsidiaries (i) by providing an incentive based form of compensation to the directors,
officers, key employees and service providers of the Corporation and of its subsidiaries, (ii) by
alleviating cash payments which would have been made to former employees of the Corporations
subsidiary as severance payments and providing shares of the Corporations Common Stock issued upon
the exercise of options in lieu of cash, and (iii) by encouraging such persons to invest in shares
of the Corporations Common Stock, thereby acquiring a proprietary interest in its business and the
business of its subsidiaries and an increased personal interest in its continued success and
progress.
(b) Incentive Stock Options. Some one or more of the options granted under the Plan may be
intended to qualify as an incentive stock option as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the Code), and any grant of such an option shall clearly
specify that such option is intended to so qualify. If no such specification is made, an option
granted hereunder shall not be intended to qualify as an incentive stock option. The employees
eligible to be considered for the grant of incentive stock options hereunder are any persons
regularly employed by the Corporation in a managerial capacity on a full-time, salaried basis.
2. Stock And Maximum Number Of Shares Subject To Plan.
(a) Description of Stock and Maximum Shares Allocated. The stock subject to the provisions of
the Plan and issuable upon exercise of options granted under the Plan are shares of the
Corporations Common Stock, $.001 par value, which may be either unissued or treasury shares, as
the Corporations Board of Directors (the Board) may from time to time determine. Subject to
adjustment as provided in Section 7, the aggregate number of shares of Common Stock covered by the
Plan and issuable upon exercise of all options granted hereunder shall be 10,000,000 shares, which
shares shall be reserved for use upon the exercise of options to be granted from time to time.
(b) Restoration of Unpurchased Shares. If an option expires or terminates for any reason prior
to its exercise in full and before the term of the Plan expires, the shares subject to, but not
issued under such option shall again be available for other options thereafter granted.
3. Administration; Amendments.
(a) Administration by Committee. The Plan shall be administered by the Board or whenever the
Board has at least two members who are not either employees or officers of the Corporation or of
any parent or subsidiary of the Corporation (Independent Directors) by a committee of not less
than two persons who are
Independent Directors (the Compensation Committee), with full power to
administer the Plan, to interpret the Plan and to establish and amend rules and regulations for its
administration.
(The term Compensation Committee as used throughout this Plan shall refer to the Board or a
committee of two Independent Directors, whichever is administering the Plan at the time).
(b) Exercise Price. Upon the grant of any option, the Compensation Committee shall specify the
exercise price for the shares issuable upon exercise of options granted. Upon approval of the
Board, which shall specify which options, if any, may be issued at less than Fair Market Value (as
defined below), an option exercise price per share may be less than 100% of the Fair Market Value
per share of the Corporations Common Stock on the date such option is granted. Options issued at
less than Fair Market Value may not be treated as incentive stock options.
(c) Fair Market Value. The Fair Market Value of a share on any particular day shall be
determined as follows:
(1) If the shares are listed or admitted to trading on any securities exchange, the
fair market value shall be the average sales price on such day on the New York
Stock Exchange, or if the shares have not been listed or admitted to trading on the
New York Stock Exchange, on such other securities exchange on which such stock is
then listed or admitted to trading, or if no sale takes place on such day on any
such exchange, the average of the closing bid and asked price on such day as
officially quoted on any such exchange;
(2) If the shares are not then listed or admitted to trading on any securities
exchange, the fair market value shall be the average sales price on such day or, if
no sale takes place on such day, the average of the reported closing bid and asked
price on such date, in the over-the-counter market as furnished by the National
Association of Securities Dealers Automated Quotation (NASDAQ), or if NASDAQ at
the time is not engaged in the business of reporting such prices, as furnished by
any similar firm then engaged in such business and selected by the Board; or
(3) If the shares are not then listed or admitted to trading in the
over-the-counter market, the fair market value shall be the amount determined by
the Board in a manner consistent with Treasury Regulation Section 20-2031-2
promulgated under the Code or in such other manner prescribed by the Secretary of
the Treasury or the Internal Revenue Service.
(d) Interpretation. The interpretation and construction by the Compensation Committee of the
terms and provisions of this Plan and of the agreements governing options and rights granted under
the Plan shall be final and conclusive. No member of the
2
Compensation Committee shall be liable for
any action taken or determination made in good faith.
(e) Amendments to Plan. The Compensation Committee may, without action on the part of the
stockholders of the Corporation, make such amendments to, changes in and additions to the Plan as
it may, from time to time, deem proper and in the best interests of the Corporation; provided that
the Compensation Committee may not, without consent of the holder, take any action which
disqualifies any option granted under the Plan as an incentive stock option for treatment as such
or which adversely affects or impairs the rights of the holder of any option outstanding under the
Plan.
4. Participants; Duration Of Plan.
(a) Eligibility and Participation. Options may be granted in the total amount for the period
as allocated by the Board as provided in Section 4(b) below only to persons who at the time of
grant are directors, key employees of, or service providers to the Corporation or others who
qualify under the general purpose of the Plan stated above in Section 1, whether or not such
persons are also members of the Board; provided, however, that no incentive stock option may be
granted to a director of the Corporation unless such person is also an executive employee of the
Corporation.
(b) Allotment. The Board shall determine the aggregate number of shares of Common Stock which
may be optioned from time to time but the Compensation Committee shall have sole authority to
determine the number of shares and the recipient thereof to be optioned at any time. The
Compensation Committee shall not be required to grant all options allocated by the Board for any
given period if it determines, in its sole and exclusive judgment, that such grant is not in the
best interests of the Corporation. The grant of an option to any person shall neither entitle such
individual to, nor disqualify such individual from, participation in any other grant of options
under the Plan.
(c) Duration of Plan. The term of the Plan, unless previously terminated by the Board, is ten years or May 14,
2011. No option shall be granted under the Plan unless granted within ten years after the adoption
of the Plan by the Board, but options outstanding on that date shall not be terminated or otherwise
affected by virtue of the Plans expiration.
(d) Approval of Stockholders. If the Board issues any incentive stock options, solely for the
purposes of compliance with the Code provisions pertaining to incentive stock options, the Plan
shall be submitted to the stockholders of the Corporation for their approval at a regular meeting
to be held within twelve months after adoption of the Plan by the Board. Stockholder approval shall
be evidenced by the affirmative vote of the holders of a majority of the shares of Common Stock
present in person or by proxy and voting at the meeting. If the stockholders decline to approve the
Plan at such meeting or if the Plan is not approved by the stockholders within twelve months after
its adoption by the Board, no incentive stock options may be issued under the Plan but all options
granted under the Plan shall remain in full force and effect regardless of Shareholder approval and
the Plan may be used for future nonincentive stock option issuances. If
3
shareholders fail to
approve the Plan, all previously issued incentive stock options shall be automatically converted to
nonincentive stock options.
5. Terms And Conditions Of Options And Rights.
(a) Individual Agreements. Options granted under the Plan shall be evidenced by agreements in
such form as the Board from time to time approves, which agreements shall substantially comply with
and be subject to the terms of the Plan, including the terms and conditions of this Section 5.
(b) Required Provisions. Each agreement shall state (i) the total number of shares to which it
pertains, (ii) the exercise price for the shares covered by the option, (iii) the time at which the
option becomes exercisable, (iv) the scheduled expiration date of the option, (v) the vesting
period(s) for such options, and (vi) the timing and conditions of issuance of any stock option
exercise.
(c) Period. No option granted under the Plan shall be exercisable for a period in excess of
ten years from the date of its grant. All options granted shall be subject to earlier termination
in the event of termination of employment, retirement or death of the holder as provided in Section
6 or as otherwise set forth in the agreement granting the option. Unless otherwise provided in the
agreement granting the Stock Option itself, an option may be exercised in full or in part at any
time or from time to time during the term thereof, or provide for its exercise in stated
installments at stated times during such term.
(d) No Fractional Shares. Options shall be granted and exercisable only for whole shares; no
fractional shares will be issuable upon exercise of any option granted under the Plan.
(e) Method of Exercising Option. The method for exercising options granted to former employees
of the Corporation or of its subsidiaries shall be set forth in the agreement granting the option
itself. All other options shall be exercised by written notice to the Corporation, addressed to the
Corporation at its principal place of business. Such notice shall state the election to exercise
the option and the number of shares with respect to which it is being exercised, and shall be
signed by the person exercising the option. Such notice shall be accompanied (i) by the certificate
described in Section 8(b) and (ii) by payment in full of the exercise price for the number of
shares being purchased. Payment may be made in cash or by bank cashiers check, or if required by
the terms of the option itself, by allocating compensation due to the Grantee by the Corporation or
by any of its subsidiaries to the Corporation as payment for the exercise price. In lieu of cash,
if permitted by the option itself, such payment may be made in whole or in part with shares of the
same class of stock as are then subject to the option, delivered in lieu of cash concurrently with
such exercise, the shares so delivered to be valued on the basis of the fair market value of the
stock (determined in a manner specified in the instrument evidencing the option) on the day
preceding the date of exercise. Alternatively, if permitted by the option itself, the Grantee may,
in lieu of using previously outstanding shares therefore, use some of the shares as to which the
option is then being exercised. The Corporation shall deliver a certificate or certificates
representing the option shares to
4
the purchaser as soon as practicable after payment for those
shares has been received. If an option is exercised by any person other than the optionholder, such
notice shall be accompanied by appropriate proof of the right of such person to exercise the
option. All shares that are purchased and paid for in full upon the exercise of an option shall be
fully paid and non-assessable.
(f) No Rights of a Stockholder. An optionholder shall have no rights as a stockholder with
respect to shares covered by an option. No adjustment will be made for dividends with respect to an
option for which the record date is prior to the date a stock certificate is issued upon exercise
of an option. Upon exercise of an option, the holder of the shares of Common Stock so received
shall have all rights of a stockholder of the Corporation as of the date of issuance.
(g) Compliance with Law. No shares of Corporation Common Stock shall be issued or transferred
upon the exercise of any option unless and until all legal requirements applicable to the issuance
or transfer of such shares have been completed.
(h) Other Provisions. The option agreements may contain such other provisions as the Board deems necessary to
effectuate the sense and purpose of the Plan, including covenants on the holders part not to
compete and remedies to the Corporation in the event of the breach of any such covenant.
6. Termination Of Employment; Assignability; Death.
(a) Termination of Employment. Except as otherwise set forth in this Section 10(a), if any
optionholder ceases to be a director or employee of the Corporation or of any subsidiary of the
Corporation, or ceases to render services pursuant to a consulting, management or other agreement,
other than for death, disability or discharge for cause, such holder (or successors or transferees)
may, within three months after the date of termination, but in no event after the stated expiration
date, purchase some or all of the shares with respect to which such optionholder was entitled to
exercise such option, on the date such employment, directorship, or consulting relationship
terminated and the option shall thereafter be void for all purposes. Any termination of an
agreement pursuant to which services are rendered to the Corporation or of any subsidiary of the
Corporation by any party who is an optionholder, without a renewal of that agreement or entry into
a similar successor agreement, may be treated as a termination of the employment of the third
party. Notwithstanding the foregoing, the termination of an option issued pursuant to Section
1(a)(ii) shall be governed as expressly set forth in such option.
(b) Assignability. Options granted under the Plan and the privileges conferred thereby shall
not be assignable or transferable, unless the Compensation Committee provides otherwise. Options
shall be exercisable by such transferee as set forth in this Section 6.
(c) Disability. If the employment or directorship of the optionholder is terminated due to
disability, the optionholder (or transferee of the optionholder) may exercise the options, in whole
or in part, to the extent they were exercisable on the date
5
when the optionholders employment or
directorship terminated, at any time prior to the expiration date of the options or within one year
of the date of termination of employment or directorship, whichever is earlier.
(d) Discharge for Cause. If the employment or directorship of the optionholder with the
Corporation or any of its subsidiaries is terminated due to discharge for cause, the options shall
terminate upon receipt by the optionholder of notice of such termination or the effective date of
the termination, whichever is earlier. Discharge for cause shall include discharge for personal
dishonesty, willful misconduct in performance of duties, failure, impairment or inability to
perform required duties, breach of fiduciary duty or conviction of any felony or crime of moral
turpitude. The Compensation Committee shall have the sole and exclusive right
to determine whether the optionholder has been discharged for cause for purposes of the Plan
and the date of such discharge.
(e) Death of Holder. If optionholder dies while in the Corporations or any of its
subsidiaries employ or while rendering consulting services to the Corporation or to any of its
subsidiaries, an option shall be exercisable until the stated expiration date thereof by the person
or persons (successors) to whom the holders rights pass under will or by the laws of descent and
distribution or by transferees of the optionholders, as the case may be, but only to the extent
that the holder was entitled to exercise the option at the date of death. An option may be
exercised (and payment of the option price made in full) by the successors or transferees only
after written notice to the Corporation, specifying the number of shares to be purchased or rights
to be exercised. Such notice shall comply with the provisions of Section 5(e), and shall be
accompanied by the certificate required by Section 8(b).
7. Certain Adjustments.
(a) Capital Adjustments. Except as limited by Section 422 of the Code, the aggregate number of
shares of Common Stock subject to the Plan, the number of shares covered by outstanding options,
and the price per share stated in such options shall be proportionately adjusted for any increase
or decrease in the number of outstanding shares of Common Stock of the Corporation resulting from a
subdivision or consolidation of shares or any other capital adjustment or the payment of a stock
dividend or any other increase or decrease in the number of such shares effected without receipt by
the Corporation of consideration therefor in money, services or property.
(b) Corporate Reorganizations. Upon the dissolution or liquidation of the Corporation, or upon
a reorganization, merger or consolidation of the Corporation as a result of which the outstanding
securities of the class then subject to options hereunder are changed into or exchanged for cash or
property or securities not of the Corporations issue, or any combination thereof, or upon a sale
of substantially all of the property of the Corporation to, or the acquisition of stock
representing more than eighty percent (80%) of the voting power of the stock of the Corporation
then outstanding by another corporation or by a group of persons who are required to file a Form
13D under the Securities Exchange Act of 1934 (34 Act), the Plan shall terminate, and all options
theretofore granted hereunder shall terminate, unless provision be made in writing in connection
with
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such transaction for the continuance of the Plan or for the assumption of options covering the
stock of a successor employer corporation, or a parent or a subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, in which event the Plan and options
theretofore granted shall continue in the manner and under the terms so provided. If the Plan and
unexercised options shall terminate pursuant to the foregoing sentence, all persons
entitled to exercise any unexercised portions of options then outstanding shall have the
right, at such time prior to the consummation of the transaction causing such termination as the
Corporation shall designate, to exercise the unexercised portions of their options, including the
portions thereof which would, but for this paragraph entitled Corporate Reorganizations, not yet
be exercisable.
8. Delivery Of Stock; Legends, Representations.
(a) Legend on Certificates. All certificates representing shares of Common Stock issued upon
exercise of options granted under the Plan shall be endorsed with a legend reading as follows:
The shares of Common Stock evidenced by this certificate have been issued to the
registered owner in reliance upon written representations that these shares have been
purchased solely for investment. These shares may not be sold, transferred or assigned
unless in the opinion of the Corporation and its legal counsel such sale, transfer or
assignment will not be in violation of the Securities Act of 1933, as amended, and the
Rules and Regulations thereunder.
(b) Private Offering for Investment Only. The options are and shall be made available only to
a limited number of present and future key executives, directors, services providers and key
employees of the Corporation and its subsidiaries who have knowledge of the Corporations financial
condition, management and its affairs. The Plan is not intended to provide additional capital for
the Corporation, but to encourage stock ownership among the Corporations and its subsidiaries key
personnel. By the act of accepting an option, each optionholder agrees (i) that, if he, his
successors, or his transferees exercise his option, he his successors, or his transferees will
purchase the subject shares solely for investment and not with any intention at such time to resell
or redistribute those shares, and (ii) that he, his successors, or his transferees will confirm
such intention by an appropriate certificate at the time the option is exercised. However, the
neglect or failure to execute such a certificate shall not limit or negate the foregoing agreement.
9. Compliance With Legal Requirements.
(a) For Investment Only. If, at the time of exercise of this option, there is not in effect as
to the Option Shares being purchased a registration statement under the Securities Act of 1933, as
amended (or any successor statute) (collectively, the 1933 Act), then the exercise of this option
shall be effective only upon receipt by the Corporation from the key employee or service provider
(or his legal representatives or heirs) of a written representation that the option shares are
being purchased for investment and not for distribution.
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(b) Registration Statement Preparation. The key employee or service provider hereby agrees to supply the Corporation with such
information and to cooperate with the Corporation, as the Corporation may reasonably request, in
connection with the preparation and filing of the registration statements and amendments thereto
under the Securities Act of 1933 and applicable state statutes and regulations applicable to the
option shares. The Corporation shall not be liable for failure to issue any such option shares
where such opinion of counsel cannot be obtained within the period specified for the exercise of
the option, or where such registration is required in the opinion of counsel. If shares of Common
Stock of the Corporation are, at the time of the exercise of this option, listed upon a securities
exchange, the exercise of this option shall be contingent upon completion of the necessary steps to
list the option shares being purchased upon such securities exchange.
(c) Additional Restrictions on Option Exercise. Officers or any other employee or service
providers who are privy to material confidential information of the Corporation as determined by
the Committee may only exercise options during the period commencing three days following the
release for publication of quarterly or annual financial information regarding the Corporation and
ending two weeks prior to the end of the then current fiscal quarter of the Corporation (the
Release Period).
A release for publication shall be deemed to be satisfied if the specified financial data
appears:
(1) On a wire service;
(2) A financial news service;
(3) In a newspaper of general circulation; or
(4) Is otherwise made publicly available.
Notwithstanding any provision to the contrary contained herein, a key employee or service
provider may exercise options only so long as such exercise does not violate the law or any rule or
regulation adopted by the appropriate governmental authority.
10. Application Of Funds.
The proceeds received by the Corporation from the sale of Common Stock pursuant to the
exercise of options will be used for general corporate purposes.
11. Withholding Of Taxes.
The Corporation shall have the right to deduct from any other compensation of the option
holder any federal, state or locate income taxes (including FICA) required by law to be withheld
with respect to the granting or exercise of any options.
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Dated as of the 31st day of May, 2001.
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SAF-T-HAMMER CORPORATION, a Nevada corporation |
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By |
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Mitchell Saltz |
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Chief Executive Officer |
9
exv10w24
Exhibit 10.24
SMITH & WESSON HOLDING CORPORATION
2004 INCENTIVE STOCK PLAN
TABLE OF CONTENTS
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Purpose |
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Administration |
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Authority of the Committee |
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Manner of Exercise of Committee Authority |
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(c) |
|
Limitation of Liability |
|
|
1 |
|
3. |
|
Stock Subject to Plan |
|
|
2 |
|
|
|
(a) |
|
Limitation on Overall Number of Shares Subject to Awards |
|
|
2 |
|
|
|
(b) |
|
Application of Limitations |
|
|
2 |
|
4. |
|
Eligibility; Per-Person Award Limitations |
|
|
2 |
|
5. |
|
Specific Terms of Awards |
|
|
2 |
|
|
|
(a) |
|
General |
|
|
2 |
|
|
|
(b) |
|
Options |
|
|
2 |
|
|
|
(c) |
|
Stock Appreciation Rights |
|
|
3 |
|
|
|
(d) |
|
Restricted Stock |
|
|
4 |
|
|
|
(e) |
|
Bonus Stock and Awards in Lieu of Obligations |
|
|
5 |
|
|
|
(f) |
|
Other Stock-Based Awards |
|
|
5 |
|
6. |
|
Certain Provisions Applicable to Awards |
|
|
5 |
|
|
|
(a) |
|
Stand-Alone, Additional, Tandem, and Substitute Awards |
|
|
5 |
|
|
|
(b) |
|
Term of Awards |
|
|
5 |
|
|
|
(c) |
|
Form and Timing of Payment Under Awards; Deferrals |
|
|
6 |
|
|
|
(d) |
|
Exemptions from Section 16(b) Liability |
|
|
6 |
|
7. |
|
Change in Control |
|
|
6 |
|
|
|
(a) |
|
Effect of Change in Control. |
|
|
6 |
|
|
|
(b) |
|
Definition of Change in Control |
|
|
6 |
|
|
|
(c) |
|
Definition of Change in Control Price. |
|
|
7 |
|
8. |
|
Automatic Grant Program |
|
|
7 |
|
|
|
(a) |
|
Amount and Date of Grant |
|
|
7 |
|
|
|
(b) |
|
Exercise Price |
|
|
8 |
|
|
|
(c) |
|
Vesting |
|
|
8 |
|
|
|
(d) |
|
Term of Automatic Options |
|
|
8 |
|
|
|
(e) |
|
Other Terms |
|
|
8 |
|
9. |
|
General Provisions |
|
|
8 |
|
|
|
(a) |
|
Compliance With Legal and Other Requirements |
|
|
8 |
|
|
|
(b) |
|
Limits on Transferability; Beneficiaries |
|
|
9 |
|
|
|
(c) |
|
Adjustments |
|
|
9 |
|
|
|
(d) |
|
Taxes |
|
|
10 |
|
|
|
(e) |
|
Changes to the Plan and Awards |
|
|
10 |
|
|
|
(f) |
|
Limitation on Rights Conferred Under Plan |
|
|
10 |
|
|
|
(g) |
|
Unfunded Status of Awards; Creation of Trusts |
|
|
10 |
|
|
|
(h) |
|
Nonexclusivity of the Plan |
|
|
11 |
|
|
|
(i) |
|
Payments in the Event of Forfeitures; Fractional Shares |
|
|
11 |
|
|
|
(j) |
|
Governing Law |
|
|
11 |
|
|
|
(k) |
|
Plan Effective Date and Stockholder Approval; Termination of Plan |
|
|
11 |
|
10. |
|
Definitions |
|
|
11 |
|
|
|
(a) |
|
Automatic Options means as defined in Section 8(a) |
|
|
11 |
|
|
|
(b) |
|
Award |
|
|
11 |
|
|
|
(c) |
|
Beneficiary |
|
|
11 |
|
|
|
(d) |
|
Beneficial Owner, Beneficially Owning and Beneficial Ownership |
|
|
11 |
|
|
|
(e) |
|
Board |
|
|
11 |
|
|
|
(f) |
|
Change in Control |
|
|
11 |
|
|
|
(g) |
|
Change in Control Price |
|
|
12 |
|
|
|
(h) |
|
Code |
|
|
12 |
|
i
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
|
Committee |
|
|
12 |
|
|
|
(j) |
|
Consultant |
|
|
12 |
|
|
|
(k) |
|
Continuous Service |
|
|
12 |
|
|
|
(l) |
|
Corporate Transaction |
|
|
12 |
|
|
|
(m) |
|
Director |
|
|
12 |
|
|
|
(n) |
|
Effective Date |
|
|
12 |
|
|
|
(o) |
|
Eligible Person |
|
|
12 |
|
|
|
(p) |
|
Employee |
|
|
12 |
|
|
|
(q) |
|
Exchange Act |
|
|
12 |
|
|
|
(r) |
|
Executive Officer |
|
|
12 |
|
|
|
(s) |
|
Fair Market Value |
|
|
12 |
|
|
|
(t) |
|
Incentive Stock Option |
|
|
13 |
|
|
|
(u) |
|
Incumbent Board |
|
|
13 |
|
|
|
(v) |
|
Limited Stock Appreciation Right |
|
|
13 |
|
|
|
(w) |
|
Option |
|
|
13 |
|
|
|
(x) |
|
Optionee |
|
|
13 |
|
|
|
(y) |
|
Other Stock-Based Awards |
|
|
13 |
|
|
|
(z) |
|
Participant |
|
|
13 |
|
|
|
(aa) |
|
Person |
|
|
13 |
|
|
|
(bb) |
|
Related Entity |
|
|
13 |
|
|
|
(cc) |
|
Restricted Stock |
|
|
13 |
|
|
|
(dd) |
|
Rule 16b-3 and Rule 16a-1(c)(3) |
|
|
13 |
|
|
|
(ee) |
|
Stock |
|
|
13 |
|
|
|
(ff) |
|
Stock Appreciation Right |
|
|
13 |
|
|
|
(gg) |
|
Subsidiary |
|
|
13 |
|
ii
SMITH & WESSON HOLDING CORPORATION
2004 INCENTIVE STOCK PLAN
1. Purpose. The purpose of this 2004 Incentive Stock Plan (the Plan) is to assist Smith &
Wesson Holding Corporation, a Nevada corporation (the Company), and its Related Entities in
attracting, motivating, retaining, and rewarding high-quality executives and other Employees,
officers, Directors, and Consultants by enabling such persons to acquire or increase a proprietary
interest in the Company in order to strengthen the mutuality of interests between such persons and
the Companys stockholders, and providing such persons with annual and long-term performance
incentives to expend their maximum efforts in the creation of stockholder value. The Plan is
intended to qualify certain compensation awarded under the Plan for tax deductibility under Section
162(m) of the Code to the extent deemed appropriate by the applicable Committee (or any successor
committee) of the Board of Directors of the Company. The Company adopted the Saf-T-Hammer
Corporation Stock Option Plan on May 31, 2001 (the Former Plan). The name of Saf-T-Hammer
Corporation was changed to Smith & Wesson Holding Corporation on
February 15, 2002. Upon the
adoption of the Plan by the shareholders of the Company, no further awards shall be made pursuant
to the Former Plan.
2. Administration.
(a) Authority of the Committee. The Plan shall be administered by the Committee; provided,
however, that except as otherwise expressly provided in this Plan or, during the period that the
Company is a publicly held corporation, in order to comply with Code Section 162(m) or Rule 16b-3
under the Exchange Act, the Board may exercise any power or authority granted to the Committee
under this Plan. The Committee or the Board shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to select Eligible Persons to become
Participants, grant Awards, determine the type, number and other terms and conditions of, and all
other matters relating to, Awards, prescribe Award agreements (which need not be identical for each
Participant) and rules and regulations for the administration of the Plan, construe and interpret
the Plan and Award agreements and correct defects, supply omissions or reconcile inconsistencies
therein, and to make all other decisions and determinations as the Committee or the Board may deem
necessary or advisable for the administration of the Plan. In exercising any discretion granted to
the Committee or the Board under the Plan or pursuant to any Award, the Committee or the Board
shall not be required to follow past practices, act in a manner consistent with past practices, or
treat any Eligible Person in a manner consistent with the treatment of other Eligible Persons.
(b) Manner of Exercise of Committee Authority. The Committee, and not the Board, shall
exercise sole and exclusive discretion on any matter relating to a Participant then subject to
Section 16 of the Exchange Act with respect to the Company to the extent necessary in order that
transactions by such Participant shall be exempt under Rule 16b-3 under the Exchange Act. Any
action of the Committee or the Board shall be final, conclusive, and binding on all persons,
including the Company, its Related Entities, Participants, Beneficiaries, transferees under Section
9(b) hereof, or other persons claiming rights from or through a Participant, and stockholders. The
express grant of any specific power to the Committee or the Board, and the taking of any action by
the Committee or the Board, shall not be construed as limiting any power or authority of the
Committee or the Board. The Committee or the Board may delegate to officers or managers of the
Company or any Related Entity, or committees thereof, the authority, subject to such terms as the
Committee or the Board shall determine, (i) to perform administrative functions, (ii) with respect
to Participants not subject to Section 16 of the Exchange Act, to perform such other functions as
the Committee or the Board may determine, and (iii) with respect to Participants subject to Section
16, to perform such other functions of the Committee or the Board as the Committee or the Board may
determine to the extent performance of such functions will not result in the loss of an exemption
under Rule 16b-3 otherwise available for transactions by such persons, in each case to the extent
permitted under applicable law. The Committee or the Board may appoint agents to assist it in
administering the Plan.
(c) Limitation of Liability. The Committee and the Board, and each member thereof, shall be
entitled to, in good faith, rely or act upon any report or other information furnished to him or
her by any Executive Officer, other officer or Employee, the Companys independent auditors,
Consultants or any other agents assisting in the administration of the Plan. Members of the
Committee and the Board, and any officer or Employee acting at the direction or on behalf of the
Committee or the Board, shall not be personally liable for any action or
determination taken or
made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action or determination.
3. Stock Subject to Plan
(a) Limitation on Overall Number of Shares Subject to Awards. Subject to adjustment as
provided in Section 9(c) hereof, the total number of shares of Stock reserved and available for
delivery in connection with Awards under the Plan shall be the sum of (i) the lesser of (y) 15% of
the outstanding shares of Stock from time to time or (z) 10,000,000 shares of Stock, plus (ii) the
number of shares of Stock with respect to which any Awards previously granted under the Plan
terminated without being exercised, expire, are forfeited or canceled, do not vest, or are
surrendered in payment of any Awards or any tax withholding with regard thereto. Any shares of
Stock delivered under the Plan may consist, in whole or in part, of authorized and unissued shares
or treasury shares. Subject to adjustment as provided in Section 9(c) hereof, the number of shares
of Stock that may be issued pursuant to Incentive Stock Options shall not exceed 10,000,000 shares.
(b) Application of Limitations. The limitation contained in Section 3(a) shall apply not only
to Awards that are settleable by the delivery of shares of Stock but also to Awards relating to
shares of Stock but settleable only in cash (such as cash-only Stock Appreciation Rights). The
Committee or the Board may adopt reasonable counting procedures to ensure appropriate counting,
avoid double counting (as, for example, in the case of tandem or substitute awards), and make
adjustments if the number of shares of Stock actually delivered differs from the number of shares
previously counted in connection with an Award.
4. Eligibility; Per-Person Award Limitations. Awards may be granted under the Plan only to
Eligible Persons. In each fiscal year during any part of which the Plan is in effect, an Eligible
Person may not be granted Awards relating to more than 100,000 shares of Stock, subject to
adjustment as provided in Section 9(c), under each of Sections 5(b), 5(c), 5(d), 5(e), and 5(f).
Directors, who are not Employees, proposed directors, proposed employees, and independent
contractors shall be eligible to receive awards other than Incentive Stock Options.
5. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set forth in this Section 5.
In addition, the Committee or the Board may impose on any Award or the exercise thereof, at the
date of grant or thereafter (subject to Section 9(e)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee or the Board shall determine,
including terms requiring forfeiture of Awards in the event of termination of Continuous Service by
the Participant and terms permitting a Participant to make elections relating to his or her Award.
The Committee or the Board shall retain full power and discretion to accelerate, waive, or modify,
at any time, any term or condition of an Award that is not mandatory under the Plan.
(b) Options. The Committee and the Board each is authorized to grant Options to Participants
on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock purchasable under an
Option shall be determined by the Committee or the Board, provided that such
exercise price shall not, in the case of Incentive Stock Options, be less than 100%
of the Fair Market Value of the Stock on the date of grant of the Option and shall
not, in any event, be less than the par value of a share of Stock on the date of
grant of such Option. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is granted to such employee,
the option price of such Incentive Stock Option (to the extent required by the Code
at the time of grant) shall be no less than 110% of the Fair Market Value of the
Stock on the date such Incentive Stock Option is granted.
2
(iv) Dividends and Splits. As a condition to the grant of an Award of Restricted
Stock, the Committee or the Board may require that any cash dividends paid on a
share of Restricted Stock be automatically reinvested in additional shares of
Restricted Stock or applied to the purchase of additional Awards under the Plan.
Unless otherwise determined by the Committee or the Board, Stock distributed in
connection with a Stock split or Stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of forfeiture to the same
extent as the Restricted Stock with respect to which such Stock or other property
has been distributed.
(e) Bonus Stock and Awards in Lieu of Obligations. The Committee and the Board each is authorized to grant Stock as a bonus, or to grant Stock
or other Awards in lieu of Company obligations to pay cash or deliver other property under the Plan
or under other plans or compensatory arrangements, provided that, in the case of Participants
subject to Section 16 of the Exchange Act, the amount of such grants remains within the discretion
of the Committee to the extent necessary to ensure that acquisitions of Stock or other Awards are
exempt from liability under Section 16(b) of the Exchange Act. Stock or Awards granted hereunder
shall be subject to such other terms as shall be determined by the Committee or the Board.
(f) Other Stock-Based Awards. The Committee and the Board each is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or
related to, Stock, as deemed by the Committee or the Board to be consistent with the purposes of
the Plan, including, without limitation, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment
contingent upon performance of the Company or any other factors designated by the Committee or the
Board, and Awards valued by reference to the book value of Stock or the value of securities of or
the performance of specified Related Entities or business units. The Committee or the Board shall
determine the terms and conditions of such Awards. Stock delivered pursuant to an Award in the
nature of a purchase right granted under this Section 5(f) shall be purchased for such
consideration (including without limitation loans from the Company or a Related Entity), paid for
at such times, by such methods, and in such forms, including, without limitation, cash, Stock,
other Awards, or other property, as the Committee or the Board shall determine. The Committee and
the Board shall have the discretion to grant such other Awards that are exercisable for unvested
shares of Stock. Should the Optionees Continuous Service cease while holding such unvested
shares, the Company shall have the right to repurchase, at the exercise price paid per share, any
or all of those unvested shares. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting schedule for the
purchased shares) shall be established by the Committee or the Board and set forth in the document
evidencing such repurchase right. Cash awards, as an element of or supplement to any other Award
under the Plan, may also be granted pursuant to this Section 5(f).
6. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan
may, in the discretion of the Committee or the Board, be granted either alone or in addition to, in
tandem with, or in substitution or exchange for, any other Award or any award granted under another
plan of the Company, any Related Entity, or any business entity to be acquired by the Company or a
Related Entity, or any other right of a Participant to receive payment from the Company or any
Related Entity. Such additional, tandem, and substitute or exchange Awards may be granted at any
time. If an Award is granted in substitution or exchange for another Award or award, the Committee
or the Board shall require the surrender of such other Award or award in consideration for the
grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including
in lieu of cash amounts payable under other plans of the Company or any Related Entity, in which
the value of Stock subject to the Award is equivalent in value to the cash compensation (for
example, Restricted Stock), or in which the exercise price, grant price or purchase price of the
Award in the nature of a right that may be exercised is equal to the Fair Market Value of the
underlying Stock minus the value of the cash compensation surrendered (for example, Options granted
with an exercise price discounted by the amount of the cash compensation surrendered).
(b)
Term of Awards. The term of each Award shall be for such period as may be determined by
the Committee or the Board; provided that in no event shall the term of any Option or Stock
5
Appreciation Right exceed a period of ten years (or such shorter term as may be required in respect
of an Incentive Stock Option under Section 422 of the Code).
(c) Form and Timing of Payment Under Awards; Deferrals. Subject to the terms of the Plan and
any applicable Award agreement, payments to be made to the Company or a Related Entity upon the
exercise of an Option or other Award or settlement of an Award may be made in such forms as the
Committee or the Board shall determine, including, without limitation, cash, other Awards or other
property, and may be made in a single payment or transfer, in installments, or on a deferred basis.
Any installment or deferral provided for in the preceding sentence shall, however, be subject to
the Companys compliance with the provisions of the Sarbanes-Oxley Act of 2002, the rules and
regulations adopted by the Securities and Exchange Commission thereunder, and all applicable rules
of any national securities exchange on which the Companys securities are listed for trading. The
settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such
settlement, in the discretion of the Committee or the Board or upon occurrence of one or more
specified events (in addition to a Change in Control). Installment or deferred payments may be
required by the Committee or the Board (subject to Section 9(e) of the Plan) or permitted at the
election of the Participant on terms and conditions established by the Committee or the Board.
Payments may include, without limitation, provisions for the payment or crediting of a reasonable
interest rate on installment or deferred payments or the grant or crediting of other amounts in
respect of installment or deferred payments denominated in Stock.
(d) Exemptions from Section 16(b) Liability. It is the intent of the Company that this Plan
comply in all respects with applicable provisions of Rule 16b-3 or Rule 16a-1(c)(3) to the extent
necessary to ensure that neither the grant of any Awards to nor other transaction by a Participant
who is subject to Section 16 of the Exchange Act is subject to liability under Section 16(b)
thereof (except for transactions acknowledged in writing to be non-exempt by such Participant).
Accordingly, if any provision of this Plan or any Award agreement does not comply with the
requirements of Rule 16b-3 or Rule 16a-1(c)(3) as then applicable to any such transaction, such
provision will be construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall avoid liability under
Section 16(b). In addition, the purchase price of any Award conferring a right to purchase Stock
shall be not less than any specified percentage of the Fair Market Value of Stock at the date of
grant of the Award then required in order to comply with Rule 16b-3.
7. Change in Control.
(a) Effect of Change in Control. If and to the extent provided in the Award, in the event
of a Change in Control, as defined in Section 7(b):
(i) The Committee may, within its discretion, accelerate the vesting and
exercisability of any Award carrying a right to exercise that was not previously
vested and exercisable as of the time of the Change in Control, subject to
applicable restrictions set forth in Section 8(a) hereof;
(ii) The Committee may, within its discretion, accelerate the exercisability of
any limited Stock Appreciation Rights (and other Stock Appreciation Rights if so
provided by their terms) and provide for the settlement of such Stock Appreciation
Rights for amounts, in cash, determined by reference to the Change in Control Price;
and
(iii) The Committee may, within its discretion, lapse the restrictions,
deferral of settlement, and forfeiture conditions applicable to any other Award
granted under the Plan and such Awards may be deemed fully vested as of the time of
the Change in Control, except to the extent of any waiver by the Participant and
subject to applicable restrictions set forth in Section 9(a) hereof.
(b)
Definition of Change in Control. A Change in Control shall be deemed to have occurred upon:
6
(i) Approval by the stockholders of the Company of a reorganization, merger,
consolidation, or other form of corporate transaction or series of transactions, in
each case, with respect to which persons who were the stockholders of the Company
immediately prior to such reorganization, merger, consolidation, or other
transaction do not, immediately thereafter, own more than 50% of the combined voting
power entitled to vote generally in the election of directors of the reorganized,
merged, or consolidated companys then outstanding voting securities, or a
liquidation or dissolution of the Company or the sale of all or substantially all of
the assets of the Company (unless such reorganization, merger, consolidation or
other corporate transaction, liquidation, dissolution or sale (any such event being
referred to as a Corporate Transaction) is subsequently abandoned);
(ii) Individuals who, as of the date on which the Award is granted, constitute
the Board (the Incumbent Board) cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent to
the date on which the Award was granted whose election, or nomination for election
by the Companys stockholders, was approved by a vote of at least a majority of the
Directors then comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of the Directors of the
Company) shall be, for purposes of this Agreement, considered as though such person
were a member of the Incumbent Board; or
(iii) the acquisition (other than from the Company) by any person, entity, or
group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act, of more than 50% of either the then outstanding shares of the
Companys Stock or the combined voting power of the Companys then outstanding
voting securities entitled to vote generally in the election of directors
(hereinafter referred to as the ownership of a Controlling Interest) excluding,
for this purpose, any acquisitions by (1) the Company or a Related Entity, (2) any
person, entity, or group that as of the date on which the Award is granted owns
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act) of a Controlling Interest or (3) any employee benefit plan
of the Company a Related Entity.
(c) Definition of Change in Control Price. The Change in Control Price means an amount in
cash equal to the higher of (i) the amount of cash and fair market value of property that is the
highest price per share paid (including extraordinary dividends) in any Corporate Transaction
triggering the Change in Control under Section 7(b)(i) hereof or any liquidation of shares
following a sale of substantially all of the assets of the Company, or (ii) the highest Fair Market
Value per share at any time during the 60-day period preceding and the 60-day period following the
Change in Control.
8. Automatic Grant Program
(a) Amount and Date of Grant. During the term of the Plan, the Company shall make automatic
grants of Options (Automatic Options) to each Director who is not employed by the Company:
(i) Annual Grants. Each year on the Annual Grant Date, an Automatic Option to
acquire 10,000 shares of Stock shall be granted to each Director for as long as
shares of Stock are available under Section 3(a) hereof. The Annual Grant Date
shall be the date of the Companys annual stockholders meeting commencing as of the
first annual meeting occurring after the Effective Date. Any Director that was
granted an Automatic Option under Section 8(a)(ii) within 90 days of an Annual Grant
Date
shall be ineligible to receive an Automatic Option pursuant to this Section 8(a)(i)
on such Annual Grant Date.
(ii) Initial New Director Grants. On the Initial Grant Date, every new member of
the Board, who is an Director and has not previously received an Automatic Option
under this Section 8(a)(ii) shall be granted an Automatic Option to acquire 25,000
shares of Stock for as long
7
(g) Change in Control Price means the amount calculated in accordance with Section 7(c) of
the Plan.
(h) Code means the Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations thereto.
(i) Committee means a committee designated by the Board to administer the Plan. The Board
may designate more than one committee to administer the Plan as to various categories of Eligible
Persons. The Committee shall
consist of at least two directors, and each member of which shall be (i) a non-employee
director within the meaning of Rule 16b-3 under the Exchange Act, unless administration of the
Plan by non-employee directors is not then required in order for exemptions under Rule 16b-3 to
apply to transactions under the Plan, and (ii) an outside director within the meaning of Section
162(m) of the Code, unless administration of the Plan by outside directors is not then required
in order to qualify for tax deductibility under Section 162(m) of the Code, provided, when
appropriate, a Committee shall satisfy the then requirements of any stock exchange or automated
quotation system upon which the Stock or other Company securities are listed or quoted.
(j) Consultant means any person (other than an Employee or a Director, solely with respect
to rendering services in such persons capacity as a director) who is engaged by the Company or any
Related Entity to render consulting or advisory services to the Company or such Related Entity.
(k) Continuous Service means uninterrupted provision of services to the Company in any
capacity of Employee, Director, or Consultant. Continuous Service shall not be considered to be
interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any
Related Entities, or any successor entities, in any capacity of Employee Director, or Consultant,
or (iii) any change in status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director, or Consultant (except as otherwise provided
in the Option Agreement). An approved leave of absence shall include sick leave, military leave,
or any other authorized personal leave.
(l) Corporate Transaction means a Corporate Transaction as defined in Section 7(b)(i) of the
Plan.
(m) Director means a member of the Board or the board of directors of any Related Entity.
(n) Effective Date means the effective date of the Plan, which shall be the date the Plan is
adopted by the shareholders of the Company.
(o) Eligible Person means each Executive Officer of the Company (as defined under the
Exchange Act) and other officers, Directors, and Employees of the Company or of any Related Entity,
and Consultants with the Company or any Related Entity. The foregoing notwithstanding, only
employees of the Company or any Subsidiary shall be Eligible Persons for purposes of receiving any
Incentive Stock Options. An Employee on leave of absence may be considered as still in the employ
of the Company or a Related Entity for purposes of eligibility for participation in the Plan.
(p) Employee means any person, including an officer or Director, who is an employee of the
Company or any Related Entity. The Payment of a directors fee by the Company or a Related Entity
shall not be sufficient to constitute employment by the Company.
(q) Exchange Act
means the Securities Exchange Act of 1934, as amended from time to time, including rules
thereunder and successor provisions and rules thereto.
(r) Executive Officer means an executive officer of the Company as defined under the
Exchange Act.
otherwise determined by the Committee or the Board, the Fair Market Value of Stock
as of any given date after which the Company is a Publicly Held Corporation shall be the closing
sale price per share reported on a consolidated basis for stock listed on the principal stock
exchange or market on which Stock is traded on the date as of which such value is being determined
or, if there is no sale on that date, then on the last previous day on which a sale was reported.
(t) Incentive Stock Option means any Option intended to be designated as an incentive stock
option within the meaning of Section 422 of the Code or any successor provision thereto.
(u) Incumbent Board means the Incumbent Board as defined in Section 7(b)(ii) of the Plan.
(v) Limited Stock Appreciation Right means a right granted to a Participant under Section
6(c) hereof.
(w) Option means a right granted to a Participant under Section 5(b) hereof, to purchase
Stock or other Awards at a specified price during specified time periods.
(x) Optionee means a person to whom an Option or Incentive Stock Option is granted under
this Plan or any person who succeeds to the rights of such person under this Plan.
(y) Other Stock-Based Awards means Awards granted to a Participant under Section 5(f)
hereof.
(z) Participant means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible Person.
(aa) Person shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, and shall include a group as defined in Section
13(d) thereof.
(bb) Related Entity
means any entity that is directly or indirectly controlled by the Company or any entity in
which the Company has a significant equity interest, as determined by the Board or the Committee.
(cc) Restricted Stock means Stock granted to a Participant under Section 5(d) hereof, that
is subject to certain restrictions and to a risk of forfeiture.
(dd) Rule 16b-3 and Rule 16a-1(c)(3) means Rule 16b-3 and Rule 16a-1(c)(3), as from time
to time in effect and applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
(ee) Stock means the Companys Common Stock, and such other securities as may be substituted
(or resubstituted) for Stock pursuant to Section 10(c) hereof.
(ff) Stock Appreciation Right means a right granted to a Participant under Section 6(c)
hereof.
(gg) Subsidiary means a subsidiary corporation whether now or hereafter existing, as
defined in Section 424(f) of the Code.