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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
Commission File No. 0-14908
TGC INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2095844
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1304 Summit, Suite 2
PLANO, TEXAS 75074
(Address, including zip code, of registrant's
principal executive offices)
TGC INDUSTRIES, INC.
1999 STOCK OPTION PLAN
(Full title of the plan)
RICE M. TILLEY, JR.
LAW, SNAKARD & GAMBILL, P.C.
1600 West 7th Street, Suite 500
FORT WORTH, TEXAS 76102
(817) 878-6350
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH A COPY TO:
JAMES O. WYSS
LAW, SNAKARD & GAMBILL, P.C.
1600 West 7th Street, Suite 500
FORT WORTH, TEXAS 76102
(817) 878-6338
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of offering aggregate Amount of
securities to Amount to price offering registration
be registered be registered per share price fee
Common Stock
(par value $.01
per share) 143,000 shs (1) $1.00(2) $143,000(3) $18.12
Common Stock
(par value $.01
per share) 100,000 shs (1) $0.80(2) $80,000(3) $10.14
Common Stock
(par value $.01
per share) 57,000 shs (4) $1.90(5) $108,300(6) $13.72
______
TOTAL $41.98
(1) Issuable upon exercise of presently outstanding options issued under
registrant's 1999 Stock Option Plan. This Registration Statement also covers
such indeterminable number of additional shares as may become deliverable due
to future adjustments under the terms of such Plan.
(2) Computed in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee.
(3) Calculated in accordance with Rule 457(h) based on the aggregate exercise
price for all presently outstanding options described in note (1) above.
(4) Issuable upon exercise of options not yet granted under the 1999 Stock
Option Plan. This Registration Statement also covers such indeterminable
number of additional shares as may become deliverable due to future
adjustments under the terms of such Plan.
(5) Computed in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. Computation based on the average of the
high and low prices of the Common Stock as reported on the National
Association of Securities Dealers, Inc. Over-The-Counter Bulletin Board
System on August 20, 2004, given that the price, at which options to be
granted in the future may be exercised, is not currently determinable.
(6) Calculated in accordance with Rule 457(h) based on the average of the
high and low prices of the Common Stock as reported on the National
Association of Securities Dealers, Inc. Over-The-Counter Bulletin Board
System on August 20, 2004, for options not yet granted under the 1999 Stock
Option Plan.
This Registration Statement shall be deemed to cover securities
resulting from stock splits, stock dividends, or similar transactions as
provided in Rule 416(c) of the Act. Pursuant thereto, this Registration
Statement also covers an indeterminate amount of interests to be offered or
sold pursuant to the stock option plan described herein.
Part I
Pursuant to the Note to Part I of Form S-8, the information required by
Items 1 and 2 of Form S-8 is not filed as part of this Registration
Statement.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, previously filed (Commission File No. 0-14908)
with the Securities and Exchange Commission (the "Commission") pursuant to
the Securities Exchange Act of 1934 (the "Exchange Act"), are, as of their
respective dates, incorporated in this Registration Statement by reference
and made a part hereof:
(1) The Annual Report on Form 10-KSB of TGC Industries, Inc. (the
"Company" or "Registrant") for the fiscal year ended December 31, 2003;
and
(2) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual
Report referred to in (1) above.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all of the securities offered have been sold
or which deregisters all securities then remaining unsold shall be deemed to
be incorporated by reference in and a part of this Registration Statement
from the date of filing of such documents.
Any statement contained in a document 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 in a subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with this offering have been passed
upon for the Company by Law, Snakard & Gambill, a Professional Corporation,
Fort Worth, Texas. Rice M. Tilley, Jr. is a shareholder of Law, Snakard &
Gambill, P.C. and is an Assistant Secretary of the Registrant. Mr. Tilley is
the beneficial owner of 4,587 shares of the Company's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Articles of Incorporation and Bylaws, as amended,
provide that the Company shall indemnify all directors and officers of the
Company to the full extent permitted by the Texas Business Corporation Act.
Under such provisions any director or officer who, in his capacity as such,
is made or threatened to be made, a party to any suit or proceeding, shall be
indemnified if such director or officer 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 Company. The Restated Articles of Incorporation, Bylaws, and the
Texas Business Corporation Act further provide that such indemnification is
not exclusive of any other rights to which such individuals may be entitled
under the Restated Articles of Incorporation, Bylaws, or any Agreement, vote
of stockholders or disinterested directors, or otherwise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit Number Description
4.1 1999 Stock Option Plan.
4.2 Amendment No. 1 to the 1999 Stock Option Plan.
5.1 Opinion of Counsel as to legality of securities being
registered.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of Independent Accountants, Lane Gorman
Trubitt, L.L.P.
23.3 Consent of Grant Thornton LLP.
24.1 Power of Attorney.
ITEM 9. UNDERTAKINGS
(a) The 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 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "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 the purposes
of determining any liability under that Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 6 or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person 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 Act and will be governed
by the final adjudication of such issue.
SIGNATURE
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 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 Plano, State of Texas, on August
20, 2004.
TGC INDUSTRIES, INC.
By: /s/ Wayne A. Whitener
Name: Wayne A. Whitener
Title: President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on August 20, 2004, by the following
persons in the capacities indicated.
Signatures Title Date
/s/Wayne A. Whitener President, Chief August 20, 2004
Wayne A. Whitener Executive Officer,
and Director
/s/Kenneth Uselton Secretary and
Kenneth Uselton Treasurer August 20, 2004
/s/William J. Barrett Director August 20, 2004
William J. Barrett
/s/Herbert M. Gardner Director August 20, 2004
Herbert M. Gardner
/s/Allen T. McInnes Director August 20, 2004
Allen T. McInnes
/s/Edward L. Flynn Director August 20, 2004
Edward L. Flynn
/s/William C. Hurtt, Jr. Director August 20, 2004
William C. Hurtt, Jr.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
4.1 1999 Stock Option Plan.
4.2 Amendment No. 1 to the 1999 Stock Option Plan.
5.1 Opinion of Counsel as to legality of securities
being registered.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of Independent Accountants, Lane Gorman
Trubitt, L.L.P.
23.3 Consent of Grant Thornton LLP.
24.1 Power of Attorney.
Exhibit 4.1
1999 Stock Option Plan
of
TGC Industries, Inc.
Table of Contents
Page
Article I: Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1:1. Act . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1:2. Affiliates . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1:3. Agreement . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:4. Board of Directors . . . . . . . . . . . . . . . . . . 2
Sec. 1:5. Code . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:6. Committee . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:7. Eligible Individuals. . . . . . . . . . . . . . . . . . 2
Sec. 1:8. Fair Market Value . . . . . . . . . . . . . . . . . . . 2
Sec. 1:9. Holder. . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:10. Incentive Stock Options . . . . . . . . . . . . . . . . 2
Sec. 1:11. Nonstatutory Stock Options. . . . . . . . . . . . . . . 2
Sec. 1:12. Options . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 1:13. Stock . . . . . . . . . . . . . . . . . . . . . . . . . 2
Article II: Stock and Maximum Number of Shares Subject to the Plan. . . . 3
Sec. 2:1. Description of Stock and Maximum Shares Allocated . . . 3
Sec. 2:2. Restoration of Shares . . . . . . . . . . . . . . . . . 3
Article III: Administration of the Plan . . . . . . . . . . . . . . . . . 3
Sec. 3:1. Stock Option Committee. . . . . . . . . . . . . . . . . 3
Sec. 3:2. Duration, Removal, Etc. . . . . . . . . . . . . . . . . 3
Sec. 3:3. Meetings and Actions of Committee . . . . . . . . . . . 3
Sec. 3:4. Committee's Powers. . . . . . . . . . . . . . . . . . . 3
Article IV: Eligibility and Participation . . . . . . . . . . . . . . . . 4
Sec. 4:1. Eligible Individuals. . . . . . . . . . . . . . . . . . 4
Sec. 4:2. No Right to Option. . . . . . . . . . . . . . . . . . . 4
Article V: Grant of Options and Certain Terms of the Agreements . . . . . 5
Sec. 5:1. Determination of Eligible Individuals . . . . . . . . . 5
Sec. 5:2. Date of Grant . . . . . . . . . . . . . . . . . . . . . 5
Sec. 5:3. Stock Option Agreement. . . . . . . . . . . . . . . . . 5
Sec. 5:4. Forfeiture of Stock . . . . . . . . . . . . . . . . . . 5
Sec. 5:5. Cash Awards . . . . . . . . . . . . . . . . . . . . . . 5
Article VI: Terms and Conditions of Options . . . . . . . . . . . . . . . 6
Sec. 6:1. Number of Shares. . . . . . . . . . . . . . . . . . . . 6
Sec. 6:2. Exercise Price. . . . . . . . . . . . . . . . . . . . . 7
Sec. 6:3. Medium and Time of Payment, Method of Exercise, and
Withholding Taxes . . . . . . . . . . . . . . . . . . . 7
Sec. 6:4. Terms, Time of Exercise, and Transferability
of Options . . . . . . . . . . . . . . . . . . . . . . 9
Sec. 6:5. Limitation on Aggregate Value of Shares That May
Become First Exercisable During Any Calendar
Year Under an Incentive Stock Option. . . . . . . . . .12
Sec. 6:6. Adjustments Upon Changes in Capitalization,
Merger, Etc.. . . . . . . . . . . . . . . . . . . . . .12
Sec. 6:7. Rights as a Shareholder . . . . . . . . . . . . . . . .13
Sec. 6:8. Modification, Extension, and Renewal of Options . . . .13
Sec. 6:9. Furnish Information . . . . . . . . . . . . . . . . . .14
Sec. 6:10. Obligation to Exercise; Termination of Employment. . .14
Sec. 6:11. Agreement Provisions . . . . . . . . . . . . . . . . .14
Article VII: Duration of Plan . . . . . . . . . . . . . . . . . . . . . .14
Article VIII: Amendment of Plan . . . . . . . . . . . . . . . . . . . . .15
Article IX: General . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Sec. 9:1. Application of Funds. . . . . . . . . . . . . . . . . .15
Sec. 9:2. Right of Company and Affiliates to
Terminate Employment. . . . . . . . . . . . . . . . . .15
Sec. 9:3. No Liability for Good Faith Determinations. . . . . . .15
Sec. 9:4. Information Confidential. . . . . . . . . . . . . . . .15
Sec. 9:5. Other Benefits. . . . . . . . . . . . . . . . . . . . .16
Sec. 9:6. Execution of Receipts and Releases. . . . . . . . . . .16
Sec. 9:7. No Guarantee of Interests . . . . . . . . . . . . . . .16
Sec. 9:8. Payment of Expenses . . . . . . . . . . . . . . . . . .16
Sec. 9:9. Company Records . . . . . . . . . . . . . . . . . . . .16
Sec. 9:10. Information . . . . . . . . . . . . . . . . . . . . . .16
Sec. 9:11. No Liability of Company . . . . . . . . . . . . . . . .16
Sec. 9:12. Company Action. . . . . . . . . . . . . . . . . . . . .16
Sec. 9:13. Severability. . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:14. Notices . . . . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:15. Waiver of Notice. . . . . . . . . . . . . . . . . . . .17
Sec. 9:16. Successors. . . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:17. Headings. . . . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:18. Governing Law . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:19. Word Usage. . . . . . . . . . . . . . . . . . . . . . .17
Sec. 9:20. Remedies. . . . . . . . . . . . . . . . . . . . . . . .18
Article X: Approval of Shareholders . . . . . . . . . . . . . . . . . . .18
1999 Stock Option Plan
of
TGC Industries, Inc.
This TGC Industries, Inc. 1999 Stock Option Plan (the "Plan") provides
for the granting of:
(a) Incentive Stock Options (hereinafter defined) to certain
key employees of TGC Industries, Inc., a Texas corporation ("Company"),
and/or its Affiliates (hereinafter defined), and
(b) Nonstatutory Stock Options (hereinafter defined) to certain
key employees of Company, and/or its Affiliates, and to certain
individuals who are not employees of Company or its Affiliates.
The purpose of the Plan is to provide an incentive for key employees of
Company and/or its Affiliates, and for individuals who are not employees of
Company and/or its Affiliates but who from time to time provide substantial
advice or other assistance or services to Company and/or its Affiliates, to
remain in the service of Company and/or its Affiliates or continue to provide
such assistance, to extend to them the opportunity to acquire a proprietary
interest in Company so that they will apply their best efforts for the
benefit of Company, and to aid Company in attracting able persons to enter
the service of Company and/or its Affiliates or provide such assistance.
Article I
Definitions
Sec. 1:1. Act. "Act" shall mean the Securities Exchange Act of
1934, as amended.
Sec. 1:2. Affiliates. "Affiliates" shall mean: (a) any
corporation, other than Company, in an unbroken chain of corporations ending
with Company if each of the corporations, other than Company, owns 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; and (b)
any corporation, other than Company, in an unbroken chain of corporations
beginning with Company if each of the corporations, other than the last
corporation in the unbroken chain, owns 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.
Sec. 1:3. Agreement. "Agreement" shall mean the written agreement
between Company and a Holder evidencing the Option granted by Company and the
understanding of the parties with respect thereto.
Sec. 1:4. Board of Directors. "Board of Directors" shall mean the
board of directors of Company.
Sec. 1:5. Code. "Code" shall mean the Internal Revenue Code of
1986, as amended.
Sec. 1:6. Committee. "Committee" shall mean the committee
designated in Article III hereof by the Board of Directors to administer this
Plan.
Sec. 1:7. Eligible Individuals. "Eligible Individuals" shall mean:
(a) key employees, including officers and/or directors who are also employees
of Company and/or of any of its Affiliates; and (b) individuals who are not
employees of Company and/or of its Affiliates but who from time to time
provide substantial advice or other assistance or services to Company and/or
its Affiliates.
Sec. 1:8. Fair Market Value. "Fair Market Value" shall mean, if the
Stock is traded on one or more established markets or exchanges, the mean of
the opening and closing prices of the Stock on the primary market or exchange
on which the Stock is traded, and if the Stock is not so traded or the Stock
does not trade on the relevant date, the value determined in good faith by
the Board of Directors. For purposes of valuing Incentive Stock Options, the
Fair Market Value of stock shall be determined without regard to any
restriction other than one which, by its terms, will never lapse.
Sec. 1:9. Holder. "Holder" shall mean an Eligible Individual to
whom an Option has been granted.
Sec. 1:10. Incentive Stock Options. "Incentive Stock Options" shall
mean stock options that are intended to satisfy the requirements of Sec. 422
of the Code.
Sec. 1:11. Nonstatutory Stock Options. "Nonstatutory Stock Options"
shall mean stock options that are not intended to be, or are not denominated
as, Incentive Stock Options.
Sec. 1:12. Options. "Options" shall mean either Incentive Stock
Options or Nonstatutory Stock Options, or both.
Sec. 1:13. Stock. "Stock" shall mean Company's authorized $.30 par
value Common Stock.
Article II
Stock and Maximum Number of Shares Subject to the Plan
Sec. 2:1. Description of Stock and Maximum Shares Allocated. The
Stock which Options granted hereunder give a Holder the right to purchase may
be unissued or reacquired shares of Stock, as the Board of Directors may, in
its sole and absolute discretion, from time to time determine. Subject to
the adjustments in Sec. 6.6 hereof, the aggregate number of shares of Stock
to be issued pursuant to the exercise of all Options granted hereunder may
equal, but may not exceed, 300,000 shares of Company's Stock.
Sec. 2:2. Restoration of Shares. If an Option hereunder expires,
terminates, or is not exercised for any reason during the term of this Plan,
the shares of Stock which were subject to such Option shall be "restored" to
the Plan by again being available for Options granted after the shares'
restoration, effective as of the first day of the year following such
expiration, termination, or non-exercise.
Article III
Administration of the Plan
Sec. 3:1. Stock Option Committee. This Plan will be administered by
a Committee consisting of three (3) members to be appointed by Company's
Board of Directors. The members of the Stock Option Committee must be
members of the Company's Board of Directors.
Sec. 3:2. Duration, Removal, Etc. The members of the Committee
shall serve at the pleasure of the Board of Directors, which shall have the
power, at any time and from time to time, to remove members from the
Committee or to add members thereto. Vacancies on the Committee, however
caused, shall be filled by the Board of Directors.
Sec. 3:3. Meetings and Actions of Committee. The Committee shall
elect one of its members as its Chairman and shall hold its meetings at such
times and places as it may determine. All decisions and determinations of
the Committee shall be made by the majority vote of all of its members
present at a meeting; provided, however, that any decision or determination
reduced to writing and signed by all of the members of the Committee shall be
as fully effective as if it had been made at a meeting duly called and held.
The Committee may make any rules and regulations for the conduct of its
business that are not inconsistent with the provisions hereof and with the
Bylaws of Company.
Sec. 3:4. Committee's Powers. Subject to the express provisions
hereof, the Committee shall have the authority, in its sole and absolute
discretion to: (a) adopt, amend, and rescind administrative and interpretive
rules and regulations relating to the Plan; (b) determine the terms and
provisions of the respective Agreements (which need not be identical),
including provisions defining or otherwise relating to: (i) subject to
Article VI of the Plan, the term and the period or periods and extent of
exercisability of the Options, (ii) the extent to which the transferability
of shares of Stock issued upon exercise of Options is restricted, (iii) the
effect of termination of employment upon the exercisability of the Options,
and (iv) the effect of approved leaves of absence (consistent with any
applicable regulations of the Internal Revenue Service); (c) accelerate the
time of exercisability of any Option that has been granted; (d) construe the
respective Option Agreements and the Plan; and (e) make all other
determinations and perform all other acts necessary or advisable for
administering the Plan, including the delegation of such ministerial acts and
responsibilities as the Committee deems appropriate. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any Agreement in the manner and to the extent it shall deem
expedient to carry it into effect, and it shall be the sole and final judge
of such expediency. The determination of the Committee on the matters
referred to in this Sec. 3.4 shall be final and conclusive.
Article IV
Eligibility and Participation
Sec. 4:1. Eligible Individuals. Options may be granted hereunder
only to persons who are Eligible Individuals at the time of the grant
thereof. Notwithstanding any provision contained herein to the contrary, a
person may not receive an Incentive Stock Option hereunder unless he or she
is an employee of Company and/or an Affiliate, nor shall a person be eligible
to receive an Incentive Stock Option hereunder if he or she, at the time such
Option is granted, would own (within the meaning of Secs. 422 and 424 of the
Code) stock possessing more than ten percent (10%) of the total combined
voting power or value of all classes of stock of Company or an Affiliate,
unless at the time such Incentive Stock Option is granted the exercise price
per share is at least one hundred ten percent (110%) of the Fair Market Value
of each share of stock to which the Incentive Stock Option relates and the
Incentive Stock Option is not exercisable after the expiration of five (5)
years from the date it is granted.
Sec. 4:2. No Right to Option. The adoption of the Plan shall not be
deemed to give any person a right to be granted an Option.
Article V
Grant of Options and Certain Terms of the Agreements
Sec. 5:1. Determination of Eligible Individuals. Subject to the
express provisions hereof, the Committee shall determine which Eligible
Individuals shall be granted Options hereunder from time to time. In making
grants, the Committee shall take into consideration the contribution the
potential Holder has made or may make to the success of Company and/or its
Affiliates along with such other considerations as the Board of Directors may
from time to time specify. The Committee shall also determine the number of
shares subject to each of such Options and shall authorize and cause Company
to grant Options in accordance with such determinations.
Sec. 5:2. Date of Grant. The date on which the Committee completes
all action constituting an offer of an Option to an individual, including the
specification of the number of shares of Stock to be subject to the Option,
shall be the date on which the Option covered by an Agreement is granted,
even though certain terms of the Agreement may not be determined at such time
and even though the Agreement may not be executed until a later time. For
purposes of the preceding sentence, an offer shall be deemed made if the
Committee has completed all such action and has communicated the grant
thereof to the potential Holder. In no event, however, may an Optionee gain
any rights in addition to those specified by the Committee in its grant,
regardless of the time that may pass between the grant of the Option and the
actual execution of the Agreement by Company and the Optionee.
Sec. 5:3. Stock Option Agreement. Each Option granted hereunder
shall be evidenced by an Agreement, executed by Company and the Eligible
Individual to whom the Option is granted, incorporating such terms as the
Committee deems necessary or desirable. More than one Option may be granted
hereunder to the same Eligible Individual and be outstanding concurrently
hereunder. In the event an Eligible Individual is granted both one or more
Incentive Stock Options and one or more Nonstatutory Stock Options, such
grants shall be evidenced by separate Agreements, one for each of the
Incentive Stock Option grants and one for each of the Nonstatutory Stock
Option grants.
Sec. 5:4. Forfeiture of Stock. Each Agreement may provide for
conditions giving rise to the forfeiture of the Stock acquired pursuant to an
Option granted hereunder and/or such restrictions on the transferability of
shares of Stock acquired pursuant to an Option granted hereunder as the
Committee in its sole and absolute discretion deems proper or advisable.
Such conditions giving rise to forfeiture may include, but need not be
limited to, the requirement that the Holder render substantial services to
Company and/or its Affiliates for a specified period of time. Such
restrictions on transferability may include, but need not be limited to,
options and rights of first refusal in favor of Company.
Sec. 5:5. Cash Awards. In addition, the Board of Directors may
authorize the Committee to grant cash awards payable in connection with the
exercise of an Option upon such terms and conditions as are specified by the
Board of Directors; provided that no such cash award shall be effective
unless it complies with any applicable requirements for exemption from
liability pursuant to Rule 16b-3 promulgated under the Act.
Article VI
Terms and Conditions of Options
All Options granted hereunder shall comply with, be deemed to include,
and shall be subject to, the following terms and conditions:
Sec. 6:1. Number of Shares. Each Agreement shall state the number
of shares of Stock to which it relates. Except to the extent an Agreement
otherwise provides, the following limitations shall apply to the exercise of
each Option:
A. First Year. A Holder may not exercise his or her Option
during the first twelve (12) month period following the date of grant of
such Option.
B. After First Year. A Holder may exercise up to (but not more
than) one-third of the total shares of Stock subject to his or her
Option at any time after the first twelve (12) month period following
the day of grant of such Option.
C. After Second Year. A Holder may exercise up to (but not
more than) two-thirds of the total shares of Stock subject to his or
her Option at any time after the first twenty-four (24) month period
following the date of grant of such Option.
D. After Third Year. A Holder may exercise all of the shares
of Stock subject to his or her Option at any time after the first
thirty-six (36) month period following the date of grant of such Option.
E. Senior Status. Notwithstanding the limitations stated
above, if a Holder is sixty-five (65) years of age or older at the time
his or her Option is granted, such Holder may exercise up to (but not
more than) one-half of the total shares of Stock subject to such Option
at any time during the first twelve (12) month period following the date
of grant of such Option and thereafter may exercise all of the shares of
Stock subject to such Option.
F. De Minimus Limitation. Subject to the limitations stated
above, each Option may be exercised at one time or on several successive
occasions; however, each Option may not be exercised in an amount less
than one hundred (100) shares at any one time (unless such exercise is
being made as to the entire portion of Stock which may be purchased
pursuant to this Plan).
Sec. 6:2. Exercise Price. Each Agreement shall state the exercise
price per share of Stock. The exercise price per share of stock subject to
an Incentive Stock Option shall not be less than the greater of: (a) the par
value per share of the Stock; or (b) one hundred percent (100%) of the Fair
Market Value per share of Company's Stock on the date of the grant of the
Option. The exercise price per share of stock subject to a Nonstatutory
Stock Option shall not be less than fifty percent (50%) of the Fair Market
Value per share of the Stock on the date of the grant of the Option.
Sec. 6:3. Medium and Time of Payment, Method of Exercise, and
Withholding Taxes.
A. Exercise of Option. Except as otherwise permitted below,
the exercise price of stock covered by an Option shall be payable upon
the exercise of the Option in cash, by certified or cashier's check.
Exercise of an Option shall not be effective until Company has received
written notice of exercise. Such notice must specify the number of
whole shares to be purchased and be accompanied by payment in full of
the aggregate exercise price of the number of shares purchased. Company
shall not in any case be required to sell, issue, or deliver a
fractional share with respect to any Option.
1. Stock-for-Stock Exercise. With the consent of the
Committee, the Holder may pay the exercise price with shares of
Stock of Company which have been held by the Holder for at least
six (6) months prior to the date of exercise, or with the consent
of the Committee, by a combination of cash and such shares. Such
Stock shall be duly endorsed for transfer to Company. Such Stock
shall be deemed to have a fair market value on the date of delivery
equal to the aggregate purchase price of the shares with respect to
which such Option or portion thereof is being exercised.
2. Cashless Exercise/Sale Method. With the consent of the
Committee, payment in full of the exercise price of the Option may
be made through the Company's receipt of a copy of instructions to
a broker directing such broker to sell the Stock for which the
Option is being exercised, to remit to the Company an amount equal
to the aggregate exercise price of such Option, with the balance
being remitted to Holder.
3. Cashless Exercise/Net Method. With the consent of the
Committee, payment in full of the exercise price of the Option may
be made, based on written instructions received from the Holder, by
Company's issuance to the Holder of that number of shares of Stock
having a fair market value equal to only the "profit portion" of
his, her, or its Option (i.e., the excess of the then fair market
value of the Stock over the Holder's exercise price).
B. New Options. In the event that a Holder pays the exercise
price of his Option, in whole or in part, with previously owned shares
of Stock, pursuant to the rules specified above, then, if and to the
extent approved by the Committee, in addition to the shares of Stock
purchased pursuant to the Option exercise, such Holder shall also
receive a new Option, subject to the terms and conditions set forth
below and in the Holder's individual Stock Option Agreement. Upon
exercise of the Option with payment in the form of either shares of
Stock or a combination of cash and shares of Stock, the Committee may,
in its sole and absolute discretion, grant the Holder a new Option for
shares of Stock equal to the number of shares that were delivered by the
Holder to Company to pay, in whole or in part, the exercise price of the
previous Option. The exercise price of the new Option shall be equal to
at least 100% of the Fair Market Value per share of the Stock on the
date of the exercise of the previous Option. Provided, however, the new
Option cannot be exercised by the Holder until the later of: (1) the
exercisability dates specified in the individual Option Agreement; or
(2) six (6) months after the date of grant. As a further condition on
the exercisability of the new Option, the shares of Stock received by
the Holder upon exercise of his or her previous Option must be held by
the Holder for at least six (6) months prior to any sale of such shares
by the Holder. Any sale of such shares by a Holder prior to the
expiration of the six (6) month holding period shall render the new
Option non-exercisable. Nothing in this paragraph shall prevent the
Committee from granting a Holder another new Option in the future when
the previous new Option is exercised by the Holder with the payment of
previously owned shares of Stock.
C. Withholding.
1. General. The Committee may, in its discretion, require
a Holder to pay to Company at the time of exercise of an Option (or
portion thereof) the amount that Company deems necessary to satisfy
its obligation to withhold Federal, state, or local income or other
taxes incurred by reason of the exercise. Upon the exercise of an
Option requiring tax withholding, a Holder may make a written
request to have shares of stock withheld by Company from the shares
otherwise to be received. The number of shares so withheld shall
have an aggregate Fair Market Value on the date of exercise
sufficient to satisfy the applicable withholding taxes. The
acceptance of any such request by a Holder shall be at the sole
discretion of the Committee, including, if deemed necessary by the
Committee, approval by the Securities and Exchange Commission and
the satisfaction of any additional requirements necessary to obtain
such approval.
2. Additional Sec. 16b Requirements. Currently, with
respect to Option holders subject to liability under Section 16b of
the Act, such additional requirements include the following: (1)
any previously owned shares of Stock used to satisfy the
withholding obligation must have been held by the taxpayer for at
least six (6) months, and any Option shares otherwise issuable
hereunder to be withheld to satisfy such obligations may be so
withheld only if both the exercise of the Option and the election
to have shares withheld are made at least six (6) months after the
date of grant; (2) the Option holder's election must be made: (a)
at least six (6) months less one day prior to the date on which the
option exercise becomes taxable, or (b) within a 10-day "window
period" beginning on the third business day following the release
of Company's annual or quarterly financial reports and ending on
the twelfth day thereafter (but in no event later than the date the
option exercise becomes taxable); (3) Company has been subject to
the Act's reporting requirements for more than a year and has filed
all reports and statements required to be filed pursuant to Section
13 of the Act; (4) Company regularly issues quarterly or annual
summary statements of sales and earnings; (5) all members of the
Committee administering the Plan with respect to Option holders
subject to liability under Section 16b of the Act are
"disinterested" in accordance with Rule 16b-3 promulgated under the
Act; (6) the Committee will be empowered to consent to or
disapprove an Option holder's withholding election; and (7) any
withholding election will be required to be irrevocable.
Sec. 6:4. Terms, Time of Exercise, and Transferability of Options.
A. Decrease in Term of Option. In addition to such other terms
and conditions as may be included in a particular Agreement granting an
Option, an Option shall be exercisable during a Holder's lifetime only
by him or her or by his or her guardian or legal representative. An
Option shall not be transferrable other than by will or the laws of
descent and distribution. Each Option shall also be subject to the
following terms and conditions (except to the extent a Holder's
Agreement otherwise provides):
1. Termination of Employment or Directorship.
a. Voluntary Termination. If a Holder ceases to be
employed by at least one of the employers in the group of
employers consisting of Company and its Affiliates because the
Holder voluntarily terminates his or her employment with such
group of employers and the Holder does not remain or thereupon
become a director of Company or one or more of its Affiliates,
or if a Holder ceases to be a director of at least one of the
corporations in the group of corporations consisting of
Company and its Affiliates and the Holder does not remain or
thereupon become an employee of Company or one or more of its
Affiliates, the portion (if any) of an Option that remains
unexercised, including that portion (if any) that pursuant to
the Agreement is not yet exercisable, as of the date of the
Holder's termination of employment or ceasing to be a
director, whichever occurs later, shall terminate and cease to
be exercisable as of such date (or ninety [90] days prior
thereto if the Holder elected to exercise his or her Option in
anticipation of such termination [to be determined in the sole
discretion of the Committee]).
b. Termination for Cause. If a Holder ceases to be
employed by at least one of the employers in the group of
employers consisting of Company and its Affiliate because any
of such entities terminates the Holder's employment for cause,
the portion (if any) of an Option that remains unexercised,
including that portion (if any) that pursuant to the Agreement
is not yet exercisable, at the time of the Holder's
termination of employment, shall terminate and cease to be
exercisable immediately upon such termination (or ninety [90]
days prior thereto if the Holder elected to exercise his or
her Option in anticipation of such termination [to be
determined in the sole discretion of the Committee]). A
Holder's employment shall be deemed terminated "for cause" if
terminated by the Board of Directors of Company (or the board
of directors of an Affiliate) because of incompetence,
insubordination, dishonesty, other acts detrimental to the
interest of Company and/or its Affiliates, or any material
breach by the Holder of any employment, nondisclosure,
noncompetition, or other contract with Company and/or one of
its Affiliates. Whether "cause" exists shall be determined by
such Board of Directors in its sole discretion and in good
faith. The exercise of an option in anticipation of a
termination for cause shall be null and void.
c. Termination Without Cause. If a Holder ceases
to be employed by at least one of the employers in the group
of employers consisting of Company and its Affiliates because
one or more of such entities terminates the employment of the
Holder for otherwise than for "cause," and the Holder does not
remain or thereupon become a director of Company and/or one or
more of its Affiliates, the Holder shall have the right for
thirty (30) days following such termination to exercise the
Option with respect to that portion thereof that has become
exercisable pursuant to Holder's Agreement as of the date of
such termination, and thereafter the Option shall terminate
and cease to be exercisable.
2. Disability. If a Holder ceases to be employed by at
least one of the employers in the group of employers consisting of
Company and its Affiliates by reason of disability (as defined in
Sec. 22(e)(3) of the Code) and does not remain or thereupon become
a director of Company or one or more of its Affiliates, or if the
Holder ceases by reason of such disability to be a director of at
least one of the corporations in the group of corporations
consisting of Company and its Affiliates, the Holder shall have the
right for ninety (90) days after the date of termination of
employment with, or cessation of directorship of, such group of
employers by reason of disability, whichever occurs later, to
exercise an Option to the extent such Option is exercisable on the
date of his or her termination of employment, and thereafter the
Option shall terminate and cease to be exercisable.
3. Death. If a Holder dies while in the employ of Company
or an Affiliate, or dies while a director of Company or an
Affiliate, his or her Option shall be exercisable by his or her
legal representatives, legatees, or distributees for six (6) months
following the date of the Holder's death to the extent such Option
is exercisable on the Holder's date of death, and thereafter the
Option shall terminate and cease to be exercisable.
B. Term of Option. Notwithstanding any other provision of this
Plan, including the provisions of Subsection A above, no Incentive Stock
Option may be exercised after the expiration of ten (10) years from the
date it was granted (or the period specified in Sec. 4.1, if
applicable). The Committee may prescribe in any Agreement that the
Option evidenced thereby may be exercised in full or in part as to any
number of shares subject thereto at any time or from time to time during
the term of the Option, or in such installments at such times during
said term as the Committee may prescribe. Except as provided above and
unless otherwise provided in any Agreement, an Option may be exercised
at any time or from time to time during the term of the Option. Such
exercise may be as to any or all whole (but no fractional) shares which
have become purchasable under the Option.
C. Issuance of Stock Certificates. Within a reasonable time,
or such time as may be permitted by law, after Company receives written
notice that the Holder has elected to exercise all or a portion of an
Option, such notice to be accompanied by payment in full of the
aggregate exercise price of the number of shares purchased, Company
shall issue and deliver a certificate representing the shares acquired
as a result of the exercise and any other amounts payable in consequence
of such exercise. In the event that a Holder exercises both an
Incentive Stock Option, or portion thereof, and a Nonstatutory Stock
Option, or a portion thereof, separate Stock certificates shall be
issued, one for the Stock subject to the Incentive Stock Option and one
for the Stock subject to the Nonstatutory Stock Option. The number of
shares of Stock transferrable due to an exercise of an Option under this
Plan shall not be increased due to the passage of time, except as may be
provided in an Agreement.
D. Issuance in Compliance With Securities Laws. Nothing herein
or in any Option granted hereunder shall require Company to issue any
shares upon exercise of any Option if such issuance would, in the
opinion of counsel for Company, constitute a violation of the Securities
Act of 1933, as amended, or any similar or superseding statute or
statutes, or any other applicable statute or regulation, as then in
effect.
E. Investment Legend. At the time of exercise of an Option,
Company may, as a condition precedent to the exercise of such Option,
require from the Holder of the Option (or in the event of his or her
death, his or her legal representatives, legatees, or distributees) such
written representations, if any, concerning his or her intentions with
regard to the retention or disposition of the shares being acquired by
exercise of such Option and such written covenants and agreements, if
any, as to the manner of disposal of such shares as, in the opinion of
counsel to Company, may be necessary to ensure that any disposition by
such Holder (or in the event of his or her death, his or her legal
representatives, legatees, or distributees), will not involve a
violation of the Securities Act of 1933, as amended, or any similar or
superseding statute or statutes, or any other applicable state or
federal statute or regulation, as then in effect. Certificates for
shares of Stock, when issued, may have the following legend, or
statements of other applicable restrictions, endorsed thereon, and may
not be immediately transferable:
The shares of Stock evidenced by this certificate have
been issued to the registered owner in reliance upon
written representations that these shares have been
purchased for investment. These shares may not be sold,
transferred, or assigned unless, in the opinion of
Company and its legal counsel, such sale, transfer, or
assignment will not be in violation of the Securities
Act of 1933, as amended, applicable rules and regulations
of the Securities and Exchange Commission, and any
applicable state securities laws.
Sec. 6:5. Limitation on Aggregate Value of Shares That May Become
First Exercisable During Any Calendar Year Under an Incentive Stock Option.
With respect to any Incentive Stock Option granted under this Plan, to the
extent that the aggregate Fair Market Value of shares of Stock exceed
$100,000, then such excess over $100,000 shall not be considered as subject
to an Incentive Stock Option, but rather shall be considered as subject to a
Nonstatutory Stock Option. This rule shall be applied by taking shares of
Stock subject to Incentive Stock Options that are purchasable for the first
time in the calendar year into account in the order in which such Incentive
Stock Options were granted.
Sec. 6:6. Adjustments Upon Changes in Capitalization, Merger, Etc.
A. Method of Adjustment. In the event of any change in the
number of outstanding shares of Stock effected without receipt of
consideration therefor by Company (other than as a result of the
conversion of Company's Class B Common Stock into Class A Common Stock)
by reason of a stock dividend, or split, combination, exchange of shares
or other recapitalization, merger, or otherwise, in which Company is the
surviving corporation, the aggregate number and class of the reserved
shares, the number and class of shares subject to each outstanding
Option, and the exercise price of each outstanding Option shall be
automatically adjusted to accurately and equitably reflect the effect
thereon of such change (provided that any fractional share resulting
from such adjustment may be eliminated). In the event of a dispute
concerning such adjustment, the decision of the Committee shall be
conclusive. The number of reserved shares or the number of shares
subject to any outstanding Option shall be automatically reduced by any
fraction included therein which results from any adjustment made
pursuant hereto.
B. Termination of Option. The following provisions shall apply
unless a Holder's Agreement provides otherwise. A dissolution or
liquidation of Company; a sale of all or substantially all of the assets
of Company where it is contemplated that within a reasonable period of
time thereafter Company will either be liquidated or converted into a
nonoperating company or an extraordinary dividend will be declared
resulting in a partial liquidation of Company (but in all cases only
with respect to those employees whom it is anticipated will lose their
employment with Company and its Affiliates as a result of such sale of
assets); a merger or consolidation (other than a merger effecting a
reincorporation of Company in another state or any other merger or a
consolidation in which the shareholders of the surviving corporation and
their proportionate interests therein immediately after the merger or
consolidation are substantially identical to the shareholders of Company
and their proportionate interests therein immediately prior to the
merger or consolidation) in which Company is not the surviving
corporation (or survives only as a subsidiary of another corporation in
a transaction in which the shareholders of the parent of Company and
their proportionate interests therein immediately after the transaction
are not substantially identical to the shareholders of Company and their
proportionate interests therein immediately prior to the transaction)
shall cause every Option then outstanding to terminate, but the Holders
of each such then outstanding Option shall, in any event, have the
right, immediately prior to such dissolution, liquidation, sale of
assets, merger, consolidation, or transaction, to exercise each such
Option, to the extent not theretofore exercised, without regard to the
determination as to the periods and installments of exercisability made
pursuant to a Holder's Agreement if (and only if) such Options have not
at that time expired or been terminated.
Sec. 6:7. Rights as a Shareholder. A Holder shall have no right as
a shareholder with respect to any shares covered by his or her Option until a
certificate representing such shares is issued to him or her. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash or
other property) or distributions or other rights for which the record date is
prior to the date such certificate is issued (except as provided in Sec. 6.6.
hereof).
Sec. 6:8. Modification, Extension, and Renewal of Options. Subject
to the terms and conditions of and within the limitations of the Plan, the
Committee may modify, extend, or renew outstanding Options granted under the
Plan, or accept the surrender of Options outstanding hereunder (to the extent
not theretofore exercised) and authorize the granting of new Options
hereunder in substitution therefor (to the extent not theretofore exercised).
The Committee may not, however, without the consent of the Holder, modify any
outstanding Incentive Stock Options so as to specify a lower exercise price
or accept the surrender of outstanding Incentive Stock Options and authorize
the granting of new Options in substitution therefor specifying a lower
option price. In addition, no modification of an Option granted hereunder
may, without the consent of the Holder, alter or impair any rights or
obligations under any Option theretofore granted hereunder to such Holder
under the Plan, except as may be necessary with respect to Incentive Stock
Options to satisfy the requirements of Sec. 422 of the Code.
Sec. 6:9. Furnish Information. Each Holder shall furnish to Company
all information requested by Company to enable it to comply with any
reporting or other requirements imposed upon Company by or under any
applicable statute or regulation.
Sec. 6:10. Obligation to Exercise; Termination of Employment. The
granting of an Option hereunder shall impose no obligation upon the Holder to
exercise the same or any part thereof. In the event of a Holder's
termination of employment with Company or an Affiliate, the unexercised
portion of an Option granted hereunder shall terminate in accordance with
Sec. 6.4 hereof.
Sec. 6:11. Agreement Provisions. The Agreements authorized under
the Plan shall contain such provisions in addition to those required by the
Plan (including, without limitation, restrictions or the removal of
restrictions upon the exercise of the Option and the retention or transfer of
shares thereby acquired) as the Committee deems advisable. Each Agreement
shall identify the Option evidenced thereby as an Incentive Stock Option or
Nonstatutory Stock Option, as the case may be, and no Agreement shall cover
both an Incentive Stock Option and Nonstatutory Stock Option. Except as
provided by Subsection B of Sec. 6.6, each Agreement relating to an Incentive
Stock Option granted hereunder shall contain such limitations and
restrictions upon the exercise of the Incentive Stock Option to which it
relates as is necessary for the Incentive Stock Option to which such
Agreement relates to constitute an incentive stock option, as defined in Sec.
422 of the Code.
Article VII
Duration of Plan
No Incentive Stock Options may be granted hereunder after the date that
is ten (10) years from the earlier of: (i) the date this Plan is adopted by
the Board of Directors; or (ii) the date this Plan is approved by Company's
shareholders. In addition, with respect to shares of Stock not currently
covered by an outstanding Option, this Plan may be terminated at any time by
the Board of Directors.
Article VIII
Amendment of Plan
The Board of Directors may, insofar as permitted by law, with respect to
any shares at the time are not subject to Options, suspend or discontinue the
Plan or revise or amend it in any respect whatsoever; provided, however,
that, without the approval of the holders of a majority of the outstanding
shares of voting stock of all classes of Company, no such revision or
amendment shall: (a) change the number of shares of the Stock subject to the
Plan, (b) change the designation of the class of employees eligible to
receive Options, (c) decrease the price at which Incentive Stock Options may
be granted, (d) remove the administration of the Plan from the Committee, or
(e) without the consent of the affected Holder, cause the Incentive Stock
Options granted hereunder and outstanding at such time that satisfied the
requirements of Sec. 422 of the Code to no longer satisfy such requirements.
Article IX
General
Sec. 9:1. Application of Funds. The proceeds received by Company
from the sale of shares pursuant to Options shall be used for general
corporate purposes.
Sec. 9:2. Right of Company and Affiliates to Terminate Employment.
Nothing contained in the Plan, or in any Agreement, shall confer upon any
Holder the right to continue in the employ of Company or any Affiliate, or
interfere in any way with the rights of Company or any Affiliate to terminate
his or her employment at any time.
Sec. 9:3. No Liability for Good Faith Determinations. Neither the
members of the Board of Directors nor any member of the Committee shall be
liable for any act, omission, or determination taken or made in good faith
with respect to the Plan or any Option granted under it, and members of the
Board of Directors and the Committee shall be entitled to indemnification and
reimbursement by Company in respect of any claim, loss, damage, or expense
(including attorneys' fees, the costs of settling any suit, provided such
settlement is approved by independent legal counsel selected by Company, and
amounts paid in satisfaction of a judgment, except a judgment based on a
finding of bad faith) arising therefrom to the full extent permitted by law
and under any directors and officers liability or similar insurance coverage
that may from time to time be in effect.
Sec. 9:4. Information Confidential. As partial consideration for
the granting of each Option hereunder, the Holder shall agree with Company
that he or she will keep confidential all information and knowledge that he
or she has relating to the manner and amount of his participation in the
Plan; provided, however, that such information may be disclosed as required
by law and may be given in confidence to the Holder's spouse, tax, and
financial advisors, or to a financial institution to the extent that such
information is necessary to secure a loan. In the event any breach of this
promise comes to the attention of the Committee, it shall take into
consideration such breach, in determining whether to recommend the grant of
any future Option to such Holder, as a factor militating against the
advisability of granting any such future Option to such individual.
Sec. 9:5. Other Benefits. Participation in the Plan shall not
preclude the Holder from eligibility in any other stock option plan of
Company or any Affiliate or any old age benefit, insurance, pension, profit
sharing retirement, bonus, or other extra compensation plans which Company or
any Affiliate has adopted, or may, at any time, adopt for the benefit of its
employees.
Sec. 9:6. Execution of Receipts and Releases. Any payment of cash
or any issuance or transfer of shares of Stock to the Holder, or to his or
her legal representative, heir, legatee, or distributee, in accordance with
the provisions hereof, shall, to the extent thereof, be in full satisfaction
of all claims of such persons hereunder. The Committee may require any
Holder, legal representative, heir, legatee, or distributee, as a condition
precedent to such payment, issuance, or transfer, to execute a release and
receipt therefor in such form as it shall determine.
Sec. 9:7. No Guarantee of Interests. Neither the Committee nor
Company guarantees the Stock of Company from loss or depreciation.
Sec. 9:8. Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan, including, but not
limited to, legal and accounting fees, shall be paid by Company or its
Affiliates.
Sec. 9:9. Company Records. Records of Company or its Affiliates
regarding the Holder's period of employment, termination of employment and
the reason therefor, leaves of absence, re-employment, and other matters
shall be conclusive for all purposes hereunder, unless determined by the
Committee to be incorrect.
Sec. 9:10. Information. Company and its Affiliates shall, upon
request or as may be specifically required hereunder, furnish or cause to be
furnished, all of the information or documentation which is necessary or
required by the Committee to perform its duties and functions under the Plan.
Sec. 9:11. No Liability of Company. Company assumes no obligation
or responsibility to the Holder or his or her personal representatives,
heirs, legatees, or distributees for any act of, or failure to act on the
part of, the Committee.
Sec. 9:12. Company Action. Any action required of Company shall be
by resolution of its Board of Directors or by a person authorized to act by
resolution of the Board of Directors.
Sec. 9:13. Severability. If any provision of this Plan is held to
be illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions hereof, but such provision shall be fully
severable, and the Plan shall be construed and enforced as if the illegal or
invalid provision had never been included herein.
Sec. 9:14. Notices. Whenever any notice is required or permitted
hereunder, such notice must be in writing and personally delivered or sent by
mail. Any notice required or permitted to be delivered hereunder shall be
deemed to be delivered on the date on which it is personally delivered, or,
whether actually received or not, on the third business day after it is
deposited in the United States mail, certified or registered, postage
prepaid, addressed to the person who is to receive it at the address which
such person has theretofore specified by written notice delivered in
accordance herewith. Company or a Holder may change, at any time and from
time to time, by written notice to the other, the address which it or he had
theretofore specified for receiving notices. Until changed in accordance
herewith, Company and each Holder shall specify as its and his or her address
for receiving notices the address set forth in the Agreement pertaining to
the shares to which such notice relates.
Sec. 9:15. Waiver of Notice. Any person entitled to notice
hereunder may waive such notice.
Sec. 9:16. Successors. The Plan shall be binding upon the Holder,
his or her heirs, legatees, and legal representatives, upon Company, its
successors, and assigns, and upon the Committee, and its successors.
Sec. 9:17. Headings. The titles and headings of Sections and
Subsections are included for convenience of reference only and are not to be
considered in construction of the provisions hereof.
Sec. 9:18. Governing Law. All questions arising with respect to the
provisions of the Plan shall be determined by application of the laws of the
State of Texas except to the extent Texas law is preempted by federal law.
Questions arising with respect to the provisions of an Agreement that are
matters of contract law shall be governed by the laws of the state specified
in the Agreement, except to the extent Texas corporate law conflicts with the
contract law of such state, in which event Texas corporate law shall govern.
The obligation of Company to sell and deliver Stock hereunder is subject to
applicable laws and to the approval of any governmental authority required in
connection with the authorization, issuance, sale, or delivery of such Stock.
Sec. 9:19. Word Usage. Words used in the masculine shall apply to
the feminine where applicable, and wherever the context of this Plan
dictates, the plural shall be read as the singular and the singular as the
plural.
Sec. 9:20. Remedies. Company may recover from a Holder reasonable
attorneys' fees incurred in connection with the enforcement of the terms and
provisions of the Plan and any Agreement whether by an action to enforce
specific performance or for damages for its breach or otherwise.
Article X
Approval of Shareholders
The Plan shall take effect on the date it is adopted by the Board of
Directors. However, if this Plan is not approved by the holders of a
majority of the outstanding shares of Company's Common Stock at a Meeting of
Shareholders scheduled to be held in 2000, any Options granted hereunder
shall be null, void, and of no force and effect as of their grant date.
IN WITNESS WHEREOF, TGC Industries, Inc., acting by and through its
officers hereunto duly authorized has executed this instrument to be
effective the 14th day of December, 1999.
TGC INDUSTRIES, INC.
/s/ Allen T. McInnes
Allen T. McInnes,
Chairman of the Board
Exhibit 4.2
Amendment No. 1
to the
1999 Stock Option Plan
of
TGC INDUSTRIES, INC.
This is Amendment No. 1 to the 1999 Stock Option Plan (the "Plan") of
TGC Industries, Inc., a Texas corporation (hereinafter referred to as the
"Company"), under which incentive and non-statutory stock options may be
granted to the officers, employees, and/or directors of the Company and/or
its subsidiaries (now existing or hereafter acquired).
Article VIII of the Plan provides that the Company's Board of Directors
may at any time amend the Plan, insofar as permitted by law.
The purpose of this Amendment No. 1 is to amend the Plan by deleting
Section 1:13 in its entirety and substituting therefor the following:
"Sec. 1:13. Stock. "Stock" shall mean Company's authorized
$.01 par value Common Stock."
This Amendment No. 1 to the 1999 Stock Option Plan is dated to be
effective June 20, 2003.
TGC INDUSTRIES, INC.
/s/ Allen T. McInnes
Allen T. McInnes,
Chairman of the Board
Exhibit 5.1
Opinion of Counsel
LAW, SNAKARD & GAMBILL
A PROFESSIONAL CORPORATION
1600 WEST 7TH STREET, SUITE 500
FORT WORTH, TEXAS 76102
AREA (817) 335-7373
FACSIMILE 332-7473
DIRECT DIAL NUMBER
(817) 878-6350
August 20, 2004
TGC Industries, Inc.
1304 Summit, Suite 2
Plano, Texas 75074
Re: Form S-8 Registration Statement
Gentlemen:
We have acted as counsel to TGC Industries, Inc., a Texas corporation
(the "Company"), in connection with the proposed offering of the following
shares of the Company's Common Stock, $.01 par value (the "Common Stock"):
300,000 shares of Common Stock issuable upon exercise of options granted or
not yet granted under the Company's 1999 Stock Option Plan (the "Plan").
All of the above shares of Common Stock are offered pursuant to a
Registration Statement on Form S-8 (the "Registration Statement") to which
this opinion is being filed as an exhibit.
In our capacity as counsel to the Company, we have examined and relied
upon the Company's Restated Articles of Incorporation and Bylaws, as amended,
the Plan, and the records of corporate proceedings with respect to the
approval of the proposed registration and the offering and sale of the shares
of Common Stock thereunder, and have made such other investigations as we
have deemed necessary and prudent for the purposes of the opinions expressed
herein.
Based upon the foregoing, but subject to the penultimate paragraph of
this letter, we are of the opinion that:
(1) All of the above described shares of Common Stock have been duly
authorized;
(2) When (a) the Registration Statement has become effective; (b) the
applicable provisions of the securities laws of the various states
have been complied with; and (c) the 300,000 shares issuable upon
exercise of options granted or to be granted under the Plan have
been issued and paid for in accordance with (i) the terms and
conditions set forth in the Registration Statement and (ii) the
terms and conditions in the Plan and related documents entered or to
be entered into between the Company and a particular optionee, then,
upon delivery of such shares of Common Stock, such Common Stock will
be legally issued, fully paid, and nonassessable.
This opinion is limited to the matters expressly set forth herein, and
no opinion is implied or may be inferred beyond the matters expressly so
stated.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the aforesaid Registration Statement and
further consent to the use of our name wherever appearing in the Registration
Statement and any subsequent amendments thereto.
Respectfully Submitted,
/s/ Law, Snakard & Gambill, P.C.
LAW, SNAKARD & GAMBILL, P.C.
Exhibit 23.1
[CONTAINED IN EXHIBIT 5.1]
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 30, 2004 relating to the
financial statements as of and for the year ended December 31, 2003, which
appear in TGC Industries, Inc.'s Annual Report on Form 10-KSB for the year
ended December 31, 2003.
/s/ Lane Gorman Trubitt, L.L.P.
Lane Gorman Trubitt L.L.P.
Dallas, Texas
August 20, 2004
Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated February 4, 2003, accompanying the
financial statements of TGC Industries, Inc. appearing in the 2003 Annual
Report of the Company to its shareholders and included in the Annual Report
on Form 10-KSB for the year ended December 31, 2003, which is incorporated by
reference in this Registration Statement. We consent to the incorporation by
reference in this Registration Statement of the aforementioned report.
/s/ Grant Thornton LLP
Grant Thornton LLP
Dallas, Texas
August 20, 2004
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
of TGC Industries, Inc., a Texas corporation (the "Company"), hereby
constitutes and appoints William J. Barrett and Wayne A. Whitener, or either
of them, his true and lawful attorney in fact and agent, with the full power
of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign a registration statement on Form S-
8 and any and all amendments (including post-effective amendments) thereto,
and to file the same, with all exhibits thereto, and all other documents in
connection therewith, with the Securities and Exchange Commission for the
purpose of registering, under the Securities Act of 1933, shares of Company's
common stock ("Common Stock") issuable upon the exercise of options granted
under the Company's 1999 Stock Option Plan granting unto said attorney in
fact and agent full power and authority to do and perform each and every act
and thing requisite and necessary to be done as fully to all intents and
purposes as he may, might, or could do in person, hereby ratifying and
confirming all that said attorney in fact and agent may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
effective the 20th day of August, 2004.
SIGNATURES TITLE
/s/Wayne A. Whitener President, Chief
Wayne A. Whitener Executive Officer,
and Director
/s/Kenneth Uselton Secretary and
Kenneth Uselton Treasurer
/s/William J. Barrett Director
William J. Barrett
/s/Herbert M. Gardner Director
Herbert M. Gardner
/s/Allen T. McInnes Director
Allen T. McInnes
/s/Edward L. Flynn Director
Edward L. Flynn
/s/William C. Hurtt, Jr. Director
William C. Hurtt, Jr.
4346.01035/438457.1