View:
As filed with the Securities and Exchange Commission on December 18, 1998
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALEXANDER & BALDWIN, INC.
(Exact name of issuer as specified in its charter)
HAWAII 99-0032630
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
822 BISHOP STREET, HONOLULU, HAWAII 96813
POST OFFICE BOX 3440, HONOLULU, HAWAII 96801
(Address of principal executive offices) (Zip Code)
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ALEXANDER & BALDWIN, INC. 1998 STOCK OPTION/STOCK INCENTIVE PLAN
ALEXANDER & BALDWIN, INC. 1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
ALEXANDER & BALDWIN, INC. NON-EMPLOYEE DIRECTOR STOCK RETAINER PLAN
(Full title of the plans)
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Michael J. Marks
Vice President, General Counsel and Secretary
ALEXANDER & BALDWIN, INC.
822 BISHOP STREET, HONOLULU, HAWAII 96813
(Name and address of agent for service)
(808) 525-6611
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
EXHIBIT 5
OPINION OF BROBECK, PHLEGER & HARRISON LLP
December 18, 1998
Alexander & Baldwin, Inc.
822 Bishop Street
Post Office Box 3440
Honolulu, Hawaii 96801
Re: Alexander & Baldwin, Inc. Registration Statement for
Offering of an Aggregate of 2,250,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Alexander & Baldwin, Inc., a Hawaii
corporation (the "Company"), in connection with the registration on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as amended, of
(i) 2,100,000 shares of the Company's common stock for issuance under the
Company's 1998 Stock Option/Stock Incentive Plan (the "Incentive Plan"),
(ii) 130,000 shares of the Company's common stock for issuance under the
Company's 1998 Non-Employee Director Stock Option Plan (the "Non-Employee
Director Option Plan"), and (iii) 20,000 shares of the Company's common stock
for issuance under the Company's Non-Employee Director Stock Retainer Plan (the
"Stock Retainer Plan").
This opinion is being furnished in accordance with the requirements of
Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the establishment of the
Incentive Plan, Non-Employee Director Option Plan and the Stock Retainer Plan.
Based on such review, we are of the opinion that, if, as and when the shares of
the Company's common stock are issued and sold (and the consideration therefor
received) pursuant to (a) the provisions of option agreements duly authorized
under the Incentive Plan or the Non-Employee Director Option Plan, and in
accordance with the Registration Statement, or (b) duly authorized direct stock
issuances in accordance with the Incentive Plan or Stock Retainer Plan and in
accordance with the Registration Statement, such shares will be duly
authorized, legally issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
This opinion letter is rendered as of the date first written above, and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above, and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Incentive Plan, Non-Employee Director Option Plan, Stock Retainer Plan, or the
shares of the Company's common stock issuable under such plans or options.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
Alexander & Baldwin, Inc.:
We consent to the incorporation by reference in this Registration Statement of
Alexander & Baldwin, Inc. and its subsidiaries on Form S-8 of our report dated
January 22, 1998, appearing in and incorporated by reference in the Annual
Report on Form 10-K of Alexander & Baldwin, Inc. and its subsidiaries for the
year ended December 31, 1997.
/s/ Deloitte & Touche LLP
December 18, 1998
EXHIBIT 99.2
ALEXANDER & BALDWIN, INC.
1998 STOCK OPTION/STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
DISCRETIONARY OPTION GRANT PROGRAM
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AGREEMENT made as of ___________, 1998, by and between ALEXANDER &
BALDWIN, INC., a Hawaii corporation (the "Company"), and ________________ (the
"Optionee").
W I T N E S S E T H:
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RECITALS
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A. The Company has, with the approval of the shareholders, adopted the
Alexander & Baldwin, Inc. 1998 Stock Option/Stock Incentive Plan (the "Plan")
for the purpose of providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Company as an incentive for them to join and/or remain in the service of the
Company or its subsidiaries.
B. Optionee is an individual who is to render valuable services to the
Company or its subsidiaries, and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Company's grant of a stock option to Optionee.
C. The granted option is intended to be a non-qualified stock option
which does not satisfy the requirements of Section 422 of the Internal Revenue
---
Code.
D. For purposes of this Agreement, the following definitions shall be in
effect:
Common Stock: Common Stock shall mean the shares of the Company's
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common stock, without par value.
Employee: Optionee shall be considered to be an Employee for so long
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as such individual remains in the employ of the Company or one or more of its
Subsidiaries.
Parent: A corporation shall be deemed to be a Parent of the Company
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if it is a corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each corporation in the unbroken
chain (other than the Company) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
Section 16(b) Insider: Optionee shall be considered to be a
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Section 16(b) Insider on any relevant date under this Agreement if Optionee
(A) is at the time an officer or director of the Company subject to the short-
swing profit restrictions of Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or (B) was such an officer or director at
any time during the six-month period immediately preceding the date in question
and made any purchase or sale of Common Stock during such six-month period
which would be taken into account for purposes of such short-swing profit
restrictions.
Service: Optionee shall be deemed to be in the Service of the
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Company for so long as Optionee renders services on a periodic basis to the
Company (or any Subsidiary or Parent) as an Employee.
Subsidiary: A corporation shall be deemed to be a Subsidiary of the
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Company if it is a member of an unbroken chain of corporations beginning with
the Company, provided each corporation in such chain (other than the last
corporation) owns, at the time of determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain. The term "Subsidiary" shall also
include any partnership, joint venture or other business entity of which the
Company owns, directly or indirectly through another subsidiary corporation,
more than a fifty percent (50%) interest in voting power, capital or profits.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
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set forth in this Agreement, the Company hereby grants to Optionee, as of the
date of this Agreement (the "Grant Date"), a stock option to purchase up to
__________ shares of Common Stock (the "Optioned Shares") at the price of
_______________ Dollars ($________) per share (the "Option Price"). In
addition, Optionee shall be eligible to receive a new option (a "reload
option"), subject to the terms and conditions set forth in the Addendum
attached hereto and incorporated herein by reference, on each occasion Optionee
exercises this option for one or more Optioned Shares by delivering previously-
acquired shares of Common Stock in payment of the Option Price and satisfying
certain other conditions set forth in such Addendum.
2. OPTION TERM. This option shall have a maximum term of ten
-----------
years measured from the Grant Date and shall accordingly expire at the close of
business on _________, 2008 (the "Expiration Date"), unless sooner terminated
in accordance with Paragraph 5 or 7 of this Agreement.
3. LIMITED TRANSFERABILITY. During the Optionee's lifetime, this
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option shall be exercisable only by Optionee and
shall not be transferable or assignable by Optionee except for a transfer of
this option by will or by the laws of descent and distribution following
Optionee's death.
4. EXERCISABILITY. This option shall become fully exercisable for
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all of the Optioned Shares upon the expiration of the six-month period measured
from July 27, 1998 (the "Commencement Date") and may thereafter be exercised
for any or all of the Optioned Shares. The option shall remain so exercisable
until the expiration or sooner termination of the option term.
5. CESSATION OF SERVICE; TERMINATION OF OPTIONS. The option term
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specified in Paragraph 2 shall terminate (and this option shall cease to be
exercisable) prior to the Expiration Date should one of the following
provisions become applicable:
(i) Except as otherwise provided in subparagraphs
(ii) through (vi) below, should Optionee cease to remain in the Service of the
Company at any time during the option term, then the period for exercising this
option shall be reduced to a three-year period commencing with the date of such
cessation of Service. During such three-year period, this option may not be
exercised for more than that number of Optioned Shares (if any) for which this
option is exercisable at the time of Optionee's cessation of Service. In no
event, however, shall this option be exercisable at any time after the
Expiration Date.
(ii) Should Optionee's Service be terminated by the
Company other than for Misconduct (as defined in subparagraph (v) below) or
Cause (as defined in the Employment Agreement between Optionee and the Company
dated as of July 27, 1998), then the exercisability of this option, to the
extent it is not otherwise at the time fully exercisable, shall be
automatically accelerated so that such option shall become fully exercisable
with respect to the total number of Optioned Shares at the time subject to this
option, and this option shall cease to be exercisable upon the earlier of
(A) the expiration of three-year period commencing with the date of such
termination by the Company, or (B) the Expiration Date.
(iii) Should Optionee die while this option is
outstanding, then (A) the exercisability of this option, to the extent it is
not otherwise at the time fully exercisable, shall be automatically accelerated
so that such option shall become fully exercisable with respect to the total
number of Optioned Shares at the time subject to this option, and (B) the
personal representative of Optionee's estate (or the person or persons to whom
the option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution) shall have the right to exercise this option
for any or all of the Optioned Shares. Such right shall lapse, and this option
shall cease to be exercisable, upon the earlier of (A) the expiration of the
twelve-month period measured from the date of Optionee's death or (B) the
Expiration Date.
(iv) Should Optionee become disabled and cease by
reason thereof to remain in the Service of the Company at any time during the
option term, then Optionee shall have a period of three years (commencing with
the date of such cessation of Service) to exercise this option for any or all
of the Optioned Shares for which this option either is exercisable at the time
of Optionee's cessation of Service or becomes exercisable during the subsequent
three-year period. In no event, however, shall this option be exercised at any
time after the Expiration Date. For purposes of this Agreement, Optionee shall
be deemed to be disabled if Optionee is, by reason of any medically-
determinable physical or mental impairment (A) which is expected to result in
death or (B) which is expected to be, or is, of continuous duration of twelve
consecutive months or more, unable to perform his/her usual duties for the
Company (or any Subsidiary or Parent) employing his/her services.
(v) Should Optionee's Service be terminated by the
Company for Misconduct (as defined below) or Cause (as defined in the Employ-
ment Agreement between Optionee and the Company dated as of July 27, 1998), or
should Optionee (a) engage in any post-Service activity, whether as an
Employee, consultant, advisor, or otherwise, competitive with the business
operations of the Company (or any Subsidiary or Parent), or (b) engage in any
other conduct, while in Service or following cessation of Service, materially
detrimental to the business or affairs of the Company (or any Subsidiary or
Parent), as determined in the sole discretion of the Plan Administrator, then
this option shall terminate immediately and cease to be outstanding.
Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by Optionee, any unauthorized use or disclosure by Optionee of
confidential information or trade secrets of the Company (or any Subsidiary or
Parent), or any other intentional misconduct by Optionee adversely affecting
the business or affairs of the Company (or any Subsidiary or Parent) in a
material manner. The foregoing definition shall not be deemed to be inclusive
of all the acts or omissions which the Company (or any Subsidiary or Parent)
may consider as grounds for the dismissal or discharge of Optionee or other
person in the Service of the Company (or any Subsidiary or Parent).
(vi) Except as otherwise provided in subparagraphs
(ii) through (iv) above, should Optionee cease Service for any reason prior to
the expiration of the six- (6) month period measured from the Commencement
Date, then this option shall immediately terminate and cease to be outstanding
without ever becoming exercisable for any of the Optioned Shares.
6. ADJUSTMENT IN OPTIONED SHARES.
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a. In the event any change is made to the Common Stock by
reason of any stock dividend, stock split, combination of shares or other
change affecting the outstanding Common Stock as a class without the Company's
receipt of consideration, the number and/or class of shares purchasable under
this option and the Option Price payable per share shall be adjusted
appropriately to prevent the dilution or enlargement of Optionee's benefits
hereunder.
b. If this option remains outstanding following any merger
or other business combination involving the Company, then this option shall be
adjusted appropriately to apply and pertain to the number and class of
securities which would have been issuable, in the consummation of such merger
or business combination, to an actual holder of Common Stock for the same
number of shares as are subject to this option immediately prior to such merger
or business combination. Appropriate adjustments also shall be made to the
Option Price payable per share; provided, however, that the aggregate Option
Price shall remain the same.
7. ACCELERATION AND CANCELLATION OF OPTIONS. In the event there
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should occur a change in control of the Company (a "Change in Control"),
including (without limitation) within the term Change in Control one or more of
the following occurrences:
(i) a merger or consolidation approved by the Company's stock-
holders in which securities possessing 35% or more of the total combined
voting power of the Company's outstanding securities are transferred
to a person or persons different from the persons holding those
securities immediately prior to such transaction,
(ii) any approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company, or any sale,
transfer or other disposition of all or substantially all of the
Company's assets, other than a sale, transfer or other disposition by
the Company of all or substantially all of the Company's assets to an
entity, at least 75% of the combined voting power of the voting
securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company
immediately prior to such sale, or
(iii) any other change in control of a nature required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A under
the 1934 Act, whether or not the Company is at the time required to comply
with such Regulation 14A, provided that, without limitation, a change
in control shall in all events be deemed to have occurred if (a) any
person (as defined in Rule 13d-3 of the 1934 Act) becomes the
beneficial owner (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing 35% or more of the total combined voting power
of the Company's outstanding securities, or (b) there is a change in
the composition of the Company's Board of Directors (the "Board") over
a period of twenty-four (24) consecutive months or less such that a
majority of the Board members ceases to consist of individuals who
either (I) have served continuously as Board members since the
beginning of such period or (II) have been elected or nominated for
election as Board members during such period by a vote of at least
two-thirds of the Board members described in clause (I) who were still
in office at the time the Board approved such election or nomination,
other than, in the case of either (I) or (II) above, a Board member
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of directors of
the Company.
then the exercisability of this option, to the extent
it is not otherwise at the time fully exercisable, shall be automatically
accelerated so that such option shall, immediately prior to the specified
effective date of the Change in Control, become fully exercisable for the total
number of Optioned Shares at the time subject to this option and may be
exercised for all or any portion of such Optioned Shares. Immediately
following the consummation of the Change in Control, all outstanding options
shall terminate and cease to be outstanding, except to the extent assumed by
the successor corporation (or parent thereof) or otherwise expressly continued
in full force and effect pursuant to the terms of the Change in Control trans-
action.
8. SHAREHOLDER RIGHTS. The holder of this option shall have
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none of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option, paid the Option Price and been
issued one or more stock certificates for the purchased shares.
9. MANNER OF EXERCISING OPTION.
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a. In order to exercise this option for one or more of the
Optioned Shares, Optionee (or in the case of exercise after Optionee's death,
Optionee's legal representative, executor, administrator, heir or legatee, as
the case may be) must take the following actions:
(i) Deliver to the Secretary of the Company, or
his/her designee, a written notice of exercise (the "Exercise Notice") in which
there is specified the number of Optioned Shares for which the Option is being
exercised.
(ii) Pay the aggregate Option Price for the purchased
shares in one of the following alternative forms:
full payment in cash or cash equivalents, such as a
certified check, bank draft, personal check or postal or express money
order made payable to the Company's order; or
full payment in shares of Common Stock held by the
Optionee for the requisite period necessary to avoid a charge to the
Company's reported earnings and valued at Fair Market Value on the
Exercise Date; or
full payment in a combination of the foregoing.
(iii) Furnish to the Company appropriate documentation
that the person or persons exercising the option, if other than Optionee, have
the right to exercise this option.
b. For purposes of this Agreement, the following
definitions shall be in effect:
Exercise Date: The Exercise Date shall be the first date on which
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there shall have been delivered to the Company both (I) the Exercise
Notice and (II) the payment of the Option Price for the purchased
shares.
Fair Market Value: The Fair Market Value of a share of Common Stock
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on any relevant date shall be the mean between the highest and lowest
selling prices per share of Common Stock on the date in question, as
quoted on the NASDAQ National Market (or any successor system).
Should the Common Stock become traded on a national securities
exchange, then the Fair Market Value per share shall be the mean
between the highest and lowest selling prices on such exchange on the
date in question. If there is no reported sale of Common Stock on the
NASDAQ National Market (or national securities exchange) on the date
in question, then the Fair Market Value shall be the mean between the
highest and lowest selling prices on the NASDAQ National Market (or
such securities exchange) on the last preceding date for which such
quotations exist.
c. As soon as practicable after the Exercise Date, the
Company shall issue to Optionee (or to the other person or persons exercising
this option) a certificate or certificates representing the purchased shares.
d. In no event may this option be exercised for any
fractional shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
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a. The exercise of this option and the issuance of
Optioned Shares upon such exercise shall be subject to compliance by the
Company and Optionee with all applicable requirements of law relating thereto
and with all applicable regulations of any stock exchange on which shares of
the Common Stock may be listed at the time of such exercise and issuance.
b. In connection with the exercise of this option,
Optionee shall execute and deliver to the Company such representations in
writing as may be requested by the Company in order for it to comply with the
applicable requirements of federal and state securities laws.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
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provided in Paragraph 3 or 7, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of Optionee and the successors and assigns of
the Company.
12. NON-LIABILITY OF COMPANY.
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a. If the Optioned Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall
be void with respect to such excess shares unless stockholder approval of an
amendment to the Plan sufficiently increasing the number of shares of Common
Stock issuable thereunder is obtained.
b. The inability of the Company to obtain approval from
any regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Company of any liability with respect to the non-issuance or sale
of the Common Stock as to which such approval shall not have been obtained.
However, the Company shall use reasonable efforts to obtain all such approvals.
13. NO IMPAIRMENT OF COMPANY'S RIGHTS. This Agreement shall not
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in any way affect the right of the Company to adjust, reclassify, reorganize or
otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
14. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement
---------------------------------
or in the Plan shall confer upon Optionee any right to continue in the Service
of the Company (or any Subsidiary or Parent employing or retaining Optionee)
for any period of time or otherwise interfere with or restrict in any way the
rights of the Company (or such Subsidiary or Parent) or Optionee, which rights
are hereby expressly reserved by each, to terminate Optionee's Service at any
time for any reason whatsoever, with or without cause.
15. NOTICES. Any notice required to be given or delivered to the
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Company under the terms of this Agreement shall be in writing and addressed to
the Company in care of the Corporate Secretary or his/her designee at the
principal corporate offices at 822 Bishop Street, Honolulu, HI 96813. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature line
on this Agreement. All notices shall be deemed to have been given or delivered
upon personal delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.
16. CONSTRUCTION. This Agreement and the option evidenced hereby
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are made and granted pursuant to the Plan and are in all respects limited by
and subject to the express terms and provisions of the Plan. All decisions of
the Plan Administrator with respect to any question or issue arising under the
Plan or this Agreement shall be conclusive and binding on all persons having an
interest in this option.
17. TAX WITHHOLDING.
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a. The Company's obligation to deliver shares of Common
Stock upon the exercise of this option shall be subject to the satisfaction of
all applicable Federal, State and local income and employment tax withholding
requirements.
b. Optionee may elect to have the Company withhold, at the
time this option is exercised, a portion of the shares purchased under the
option with an aggregate Fair Market Value equal to the designated percentage
(any multiple of 5% up to 100% as specified by Optionee) of the applicable
Federal and State income tax withholding liability incurred by Optionee in
connection with the option exercise (the "Withholding Taxes").
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before
the date the amount of the Withholding Taxes incurred by Optionee in
connection with the exercise of the option is determined (the "Tax
Determination Date").
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the
approval of the Plan Administrator, either at the time the election is
made or at any earlier time, and none of the shares purchased under the
option actually shall be withheld in satisfaction of the Withholding Taxes
incurred in connection with the exercise of the option, except to the
extent the election is so approved by the Plan Administrator.
(iv) The shares withheld pursuant to the election
shall be valued at Fair Market Value on the Tax Determination Date in
accordance with the valuation provisions of paragraph 9.b of this
Agreement.
(v) In no event may the number of shares of
Common Stock requested to be withheld exceed in Fair Market Value the
dollar amount of the Withholding Taxes incurred by Optionee in connection
with the exercise of the option.
c. Optionee may elect to deliver to the Company, at the
time the option is exercised, shares of Common Stock previously acquired by
such individual (other than in connection with such option exercise) with an
aggregate Fair Market Value equal to the designated percentage (any multiple of
5% up to 100% as specified by Optionee) of the Withholding Taxes incurred by
Optionee in connection with the option exercise.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before
the Tax Determination Date.
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the
approval of the Plan Administrator, either at the time the election is
made or at any earlier time, and none of the delivered shares shall be
accepted in satisfaction of the Withholding Taxes, except to the
extent the election is so approved by the Plan Administrator.
(iv) The delivered shares shall be valued at Fair
Market Value on the Tax Determination Date in accordance with the
valuation provisions of paragraph 9.b of this Agreement.
(v) In no event may the number of delivered
shares exceed in Fair Market Value the dollar amount of the Withholding
Taxes incurred by the Optionee in connection with the exercise of the
option.
18. GOVERNING LAW. The interpretation, performance, and
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enforcement of this Agreement shall be governed by the laws of the State of
Hawaii.
19. COUNTERPARTS. This Agreement may be executed in counter-
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parts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate on its behalf by its duly authorized officer, and
Optionee also has executed this Agreement in duplicate, all as of the day and
year indicated above.
ALEXANDER & BALDWIN, INC.
By ________________________________
Its Vice President
Attest:
__________________________ ___________________________________
Assistant Secretary Optionee
Address:
___________________________________
___________________________________
ADDENDUM
TO
NON-QUALIFIED STOCK OPTION AGREEMENT
The provisions of this Addendum hereby are incorporated into, and
made a part of, that certain Non-Qualified Stock Option Agreement dated
August 27, 1998 (the "Option Agreement"), by and between the Company and
Optionee, evidencing the option grant (the "Original Option") made on such date
to Optionee under the terms of the Company's 1998 Stock Option/Stock Incentive
Plan (the "Plan"). All capitalized terms in this Addendum shall have the
meanings assigned to them in the Option Agreement.
RELOAD OPTION GRANT
1. AUTOMATIC RELOAD GRANT. Optionee hereby is made eligible to
----------------------
receive one or more automatic option grants under the Plan to the extent
Optionee subsequently exercises the Original Option on one or more separate
occasions, in accordance with the following requirements:
(i) The Original Option is exercised prior to the expiration
of the five- (5) year period measured from its Grant Date.
(ii) The Option Price is, in connection with such exercise,
paid in shares of Common Stock held by the Optionee for a period of at
least six (6) months.
(iii) The Original Option is exercised by Optionee, and not by
the legal representative, heirs or legatees of the Optionee's estate.
On each occasion on which the Original Option is so exercised
by Optionee, Optionee automatically shall be granted at that time (the "Reload
Grant Date") a new option (the "Reload Option") to purchase the same number of
shares of Common Stock as is delivered in payment of the Option Price. No
reload option will be granted for shares of Common Stock delivered or withheld
in satisfaction of the withholding tax liability arising from such exercise.
2. RELOAD OPTION TERMS. The terms and provisions of each Reload
-------------------
Option granted pursuant to this Addendum shall be exactly the same as the terms
and provisions of the Original Option as set forth in the Option Agreement to
which this Addendum is attached, except to the extent otherwise indicated
below:
A. Option Price. The option price per share of the Common Stock
------------
purchasable under the Reload Option (the "Reload Option Price") shall
be equal to the greater of (i) the Fair Market Value per share of Com-
mon Stock on the Reload Grant Date or (ii) one hundred fifty percent
(150%) of the Option Price per share in effect under the Original
Option.
B. Payment. The Reload Option Price shall become immediately due
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upon exercise of the Reload Option and shall be payable in any of the
forms authorized under the Option Agreement for payment of the Option
Price.
C. Exercisability. The Reload Option shall not become
--------------
exercisable until all the Option Shares purchased under the Original
Option on the Reload Grant Date have been held by Optionee (or the legal
representatives or heirs or legatees of Optionee's estate) for a period of
at least two (2) years measured from the Reload Grant Date. In the
event any of such Option Shares are sold or otherwise cease to be held
by Optionee before the end of such two- (2) year period, the Reload
Option immediately shall expire in its entirety. Upon the
satisfaction of such holding period requirement, the Reload Option
shall become exercisable for any or all of the shares of Common Stock
at the time subject to such option and shall remain so exercisable
until the expiration or sooner termination of the option term of the
Reload Option. The exercisability of the Reload Option shall,
however, be subject to acceleration to the limited extent provided in
Paragraph 5 of this Addendum.
D. Option Term. The Reload Option shall have the same maximum
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option term and Expiration Date as the Original Option, subject to
earlier termination, pursuant to the provisions of the Option
Agreement, in connection with the Optionee's cessation of Service.
E. Limited Transferability. During Optionee's lifetime, the
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Reload Option shall be exercisable only by the Optionee and shall not
be assignable or transferable by Optionee other than by will or by the
laws of descent and distribution following Optionee's death.
3. NO ADDITIONAL RELOAD OPTION. No additional Reload Option
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shall be granted in connection with the exercise of any Reload Option granted
pursuant to this Addendum, whether or not shares of Common Stock are delivered
in payment of the Reload Option Price in effect under that Reload Option.
4. STOCKHOLDER RIGHTS. The holder of the Reload Option shall
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have none of the rights of a stockholder with respect to any shares covered by
the Reload Option until such individual shall have exercised the Reload Option,
paid the Reload Option Price and satisfied all other conditions precedent to
the
issuance of certificates for the purchased shares.
5. CHANGE IN CONTROL. The following provisions shall govern the
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treatment of each Reload Option granted pursuant to this Addendum in the event
a Change in Control (as such term is defined in the Option Agreement) should
occur while that Reload Option is outstanding:
A. In the event of a Change in Control, the Reload Option
immediately will become exercisable for all the shares of Common Stock
at the time subject to that option, and may be exercised for any or
all of those shares immediately prior to such Change in Control.
B. Upon the consummation of the Change in Control, the Reload
Option shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation or its parent company or
otherwise expressly continued in full force and effect pursuant to the
terms of the Change in Control transaction.
C. If the Company is the surviving entity in any merger or other
business combination which does not result in the termination of the
Reload Option, then the Reload Option shall be adjusted appropriately
to apply and pertain to the number and class of securities which would
be issuable, in consummation of such merger or business combination,
to an actual holder of the same number of shares of Common Stock as is
subject to such Reload Option immediately prior to such merger or
business combination. Appropriate adjustments shall be made to the
Reload Option Price per share payable under the Reload Option,
provided the aggregate Reload Option Price shall remain the same.
D. The grant of any Reload Option pursuant to this Addendum shall
in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
6. MISCELLANEOUS PROVISIONS. Each Reload Option granted pursuant
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to this Addendum shall be subject to the following additional terms and
provisions.
A. The Company's obligation to deliver shares of Common Stock
upon the exercise of each Reload Option shall be subject to the
satisfaction of all applicable Federal, State and local income and
employment tax withholding requirements.
B. To the extent the Optionee has the right to have a portion of
the shares purchased under the Original Option withheld by the Company
in satisfaction of the applicable withholding taxes incurred in
connection with the exercise of that Option (or otherwise to deliver
existing shares of Common Stock in satisfaction of such tax
liability), the Optionee shall have the similar right with respect to
the withholding tax liability incurred in connection with the exercise
of the Reload Option.