Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
CULP, INC.
(Exact name of registrant, as specified in its charter)
North Carolina 56-1001967
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 South Main Street
Post Office Box 2686
High Point, North Carolina 27261-2686
(Address of principal executive officers)
___________________
Culp, Inc.
1997 Performance-Based Option Plan
(Full title of the plan)
___________________
PHILLIP W. WILSON
Vice President and Chief Financial Officer
Culp, Inc.
101 South Main Street
Post Office Box 2686
High Point, North Carolina 27261-2686
(Name and address of agent for service)
(336) 889-5161
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate offering Amount of
to be registered registered per unit price registration fee
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Common Stock, $.05 par value 106,000(1) $3.56(2) $377,360(2) $94.34
(including options under the Culp,
Inc. 1997 Performance-Based Option
Plan and including associated rights to
purchase Series A Participating
Preferred Stock) (3)
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
registration statement also relates to an indeterminate number of
additional shares of common stock issuable with respect to the shares
registered hereunder in the event of a stock split, stock dividend or
other similar transaction.
(2) In accordance with Rule 457(h)(1) of Regulation C, the price for the
shares is computed on the basis of the average high and low prices for
Common Shares on April 18, 2001 as reported on the New York Stock
Exchange.
(3) Each share of Common Stock of the Company has one attached right to
purchase Series A Participating Preferred Stock under the Rights
Agreement, dated as of October 8, 1999 between Culp, Inc. and Equiserve
Trust Company, N.A., as Rights Agent.
==========================================================================================================
PART II INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission by Culp, Inc. (the "Company") are incorporated by reference into
this registration statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 2000, as amended;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") since the end of its
latest fiscal year, as amended; and
(c) The description of the Common Stock, par value $.05 per share
("Common Stock") of the Company set forth in the Company's registration
statements filed pursuant to Section 12 of the Exchange Act and any amendment
or report filed for the purpose of updating such descriptions.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered
hereunder have been sold or which deregisters all of such securities then
remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of
such documents.
Any statement contained herein or 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 herein or in any other subsequently filed document (which
also is or is deemed to be incorporated by reference herein) modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
Item 6. Indemnification of Directors and Officers.
Section 55-2-02 of the North Carolina Business Corporation Act (the
"North Carolina Corporation Act") enables a North Carolina corporation in its
articles of incorporation to eliminate or limit, with certain exceptions, the
personal liability of a director for monetary damages for breach of duty as a
director. No such provision is effective to eliminate or limit a director's
liability for (i)-acts or omissions that the director at the time of the
breach knew or believed to be clearly in conflict with the best interests of
the corporation, (ii)-improper distributions described in Section 55-8-33 of
the North Carolina Corporation Act, (iii)-any transaction from which the
director derived an improper personal benefit, or (iv)-acts or omissions
occurring prior to the date the exculpatory provision became effective. The
Company's Articles of Incorporation limit the personal liability of its
directors to the fullest extent permitted by the North Carolina Corporation
Act.
Sections 55-8-50 through 55-8-58 of the North Carolina Corporation Act
permit a corporation to indemnify its directors, officers, employees or
agents under either or both a statutory or nonstatutory scheme of
indemnification. Under the statutory scheme, a corporation may, with certain
exceptions, indemnify a director, officer, employee or agent of the
corporation who was, is or is threatened to be made, a party to any
threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative, or investigative, because of the fact that
such person was a director, officer, agent or employee of the corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. This indemnity may
include the obligation to pay any judgment, settlement, penalty, fine
(including an excise tax assessed with respect to an employee benefit plan)
and reasonable expenses incurred in connection with a proceeding (including
counsel fees), but no such indemnification may be granted unless such
director, officer, agent or employee (i)-conducted himself in good faith,
(ii)-reasonable believed (1)-that any action taken in his official capacity
with the corporation was in the best interest of the corporation or (2)-that
in all other cases his conduct at least was not opposed to the corporation's
best interest, and (iii)-in the case of any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. Whether a director has
met the requisite standard of conduct for the type of indemnification set
forth above is determined by the board of directors, a committee of
directors, special legal counsel or the shareholders in accordance with
Section 55-8-55 of the North Carolina Corporation Act. A corporation may not
indemnify a director under the statutory scheme in connection with a
proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation or in connection with a proceeding in
which a director was adjudged liable on the basis of having received an
improper personal benefit.
In addition to, and notwithstanding the conditions and limitations on
indemnification described above under the statutory scheme, Section 55-8-57
of the North Carolina Corporation Act permits a corporation to indemnify or
agree to indemnify any of its directors, officers, employees or agents
against liability and expenses (including attorneys' fees) in any proceeding
(including proceedings brought by or on behalf of the corporation) arising
out of their status as such or their activities in such capacities, except
for any liabilities or expenses incurred on account of activities that were,
at the time taken, known or believed by the person seeking indemnification to
be clearly in conflict with the best interests of the corporation. Because
the Company's Bylaws provide for indemnification to the fullest extent
permitted under the North Carolina Corporation Act, the Company may indemnify
its directors, officers and employees in accordance with either the statutory
or the nonstatutory standard.
Sections 55-8-52 and 55-8-56 of the North Carolina Corporation Act
require a corporation, unless its articles of incorporation provide
otherwise, to indemnify a director or officer who has been wholly successful
on the merits or otherwise in the defense of any proceeding to which such
director or officer was, or was threatened to be made, a party because he is
or was a director or officer of the corporation. Unless prohibited by the
articles of incorporation, a director or officer also may make application
and obtain court-ordered indemnification if the court determines that such
director or officer is fairly and reasonably entitled to such indemnification
as provided in Section 55-8-54 and 55-8-56 of the North Carolina Corporation
Act.
Additionally, Section 55-8-57 of the North Carolina Corporation Act
authorizes a corporation to purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation against certain liabilities incurred by such persons, whether or
not the corporation is otherwise authorized by the North Carolina Corporation
Act to indemnify such party. The Company's directors and officers are
currently covered under the directors' and officers' insurance policies
maintained by the Company that will indemnify such persons against certain
liabilities arising from acts or omissions in the discharge of their duties.
Item 8. Exhibits.
Exhibit Number Description
4.1 Culp, Inc. 1997 Performance-Based Option Plan
4.2 Articles of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3(i) of the
Company's Quarterly Report on Form 10-Q for the period
ended January 29, 1995)
4.3 Articles of Amendment, dated October 5, 1999, to the
Company's Articles of Incorporation (incorporated by
reference to Exhibit 3(iii) of the Company's Quarterly
Report on Form10-Q for the period ended October 31, 1999)
4.4 Restated and Amended Bylaws of the Company, as amended
(incorporated by reference to Exhibit 3(b) of the
Company's Annual Report on Form 10-K for the fiscal year
ended April 28, 1991)
4.5 Rights Agreement, dated as of October 18, 1999, between
the Company and Equiserve Trust Company, N.A., as Rights
Agent, including the form of Articles of Amendment with
respect to the Series A Participating Preferred Stock
included as Exhibit A to the Rights Agreement, the forms
of Rights Certificate included as Exhibit B to the
Rights Agreement, and the form of Summary of Rights
included as Exhibit C to the Rights Agreement
(incorporated by reference to Exhibit 99.1 to the
Company's Form 8-K dated October 12, 1999)
5 Opinion of Robinson, Bradshaw & Hinson, P.A. with
respect to the validity of the shares being offered
23.1 Consent of Robinson, Bradshaw & Hinson, P.A. (contained
in Exhibit 5)
23.2 Consent of KPMG LLP
24.1 Power of Attorney of Robert T. Davis, dated February 27,
2001
24.2 Power of Attorney of H. Bruce English, dated March 7,
2001
24.3 Power of Attorney of Patrick B. Flavin, dated March 19,
2001
24.4 Power of Attorney of Patrick H. Norton, dated February
26, 2001
24.5 Power of Attorney of Earl N. Phillips, Jr., dated March
1, 2001
24.6 Power of Attorney of Judith C. Walker, dated February
26, 2001
Item 9. Undertakings.
The Company hereby undertakes as follows:
(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, each such post-effective amendment to this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at 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 that remain unsold at the
termination of the offering;
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of High Point, State of North Carolina on this 19 day
of April, 2001.
CULP, INC.
By: /s/ ROBERT G. CULP, III
Robert G. Culp, III
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ ROBERT G. CULP, III Chairman of the Board of April 19, 2001
------------------------------------- Directors and Chief
Robert G. Culp, III Executive Officer
/s/ HOWARD L. DUNN, JR. President, Chief April 19, 2001
------------------------------------- Operating Officer and
Howard L. Dunn, Jr. Director
/s/ FRANKLIN N. SAXON Senior Vice President, April 19, 2001
------------------------------------- President of the Culp
Franklin N. Saxon Velvets/Prints Division
and Director
/s/ PHILLIP W. WILSON Vice President and Chief April 19, 2001
------------------------------------- Financial Officer
Phillip W. Wilson (Principal Financial and
Accounting Officer)
/s/ ROBERT T. DAVIS* Director April 19, 2001
-------------------------------------
Robert T. Davis
/s/ H. BRUCE ENGLISH* Director April 19, 2001
-------------------------------------
H. Bruce English
/s/ PATRICK B. FLAVIN* Director April 19, 2001
-------------------------------------
Patrick B. Flavin
/s/ PATRICK H. NORTON* Director April 19, 2001
-------------------------------------
Patrick H. Norton
/s/ EARL N. PHILLIPS, JR.* Director April 19, 2001
-------------------------------------
Earl N. Phillips
/s/ JUDITH C. WALKER* Director April 19, 2001
-------------------------------------
Judith C. Walker
*By: /s/ PHILLIP W. WILSON
(Phillip W. Wilson, Attorney-in-Fact)
EXHIBIT INDEX
Exhibit Number Description
4.1 Culp, Inc. 1997 Performance-Based Option Plan
4.2 Articles of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3(i) of the
Company's Quarterly Report on Form 10-Q for the period
ended January 29, 1995)
4.3 Articles of Amendment, dated October 5, 1999, to the
Company's Articles of Incorporation (incorporated by
reference to Exhibit 3(iii) of the Company's Quarterly
Report on Form10-Q for the period ended October 31, 1999)
4.4 Restated and Amended Bylaws of the Company, as amended
(incorporated by reference to Exhibit 3(b) of the
Company's Annual Report on Form 10-K for the fiscal year
ended April 28, 1991)
4.5 Rights Agreement, dated as of October 18, 1999, between
the Company and Equiserve Trust Company, N.A., as Rights
Agent, including the form of Articles of Amendment with
respect to the Series A Participating Preferred Stock
included as Exhibit A to the Rights Agreement, the forms
of Rights Certificate included as Exhibit B to the
Rights Agreement, and the form of Summary of Rights
included as Exhibit C to the Rights Agreement
(incorporated by reference to Exhibit 99.1 to the
Company's Form 8-K dated October 12, 1999)
5 Opinion of Robinson, Bradshaw & Hinson, P.A. with
respect to the validity of the shares being offered
23.1 Consent of Robinson, Bradshaw & Hinson, P.A. (contained
in Exhibit 5)
23.2 Consent of KPMG LLP
24.1 Power of Attorney of Robert T. Davis, dated February 27,
2001
24.2 Power of Attorney of H. Bruce English, dated March 7,
2001
24.3 Power of Attorney of Patrick B. Flavin, dated March 19,
2001
24.4 Power of Attorney of Patrick H. Norton, dated February
26, 2001
24.5 Power of Attorney of Earl N. Phillips, Jr., dated March
1, 2001
24.6 Power of Attorney of Judith C. Walker, dated February
26, 2001
Exhibit 4.1
CULP, INC.
1997 PERFORMANCE-BASED OPTION PLAN
1. Purpose of Plan. The 1997 Performance-Based Option Plan (the
"Plan") is intended to increase the incentive for participants to contribute
to the success of Culp, Inc. and its subsidiaries ("Culp") and to reward them
for their contribution to that success.
2. Shares Subject to Plan. The options granted under this Plan will
be options to acquire shares of Culp's common stock $.05 par value. The
maximum number of shares that may be issued pursuant to this Plan is 106,000.
3. Administration of Plan. The Compensation Committee (the
"Committee") of Culp's Board of Directors will administer the Plan. Except to
the extent permitted under Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, during the year prior to commencement of service on the
Committee, the Committee members will not have participated in or received
securities under, and while serving and for one year after serving on the
Committee, such members shall not receive securities under or be eligible for
selection as persons to whom shares may be transferred or to whom stock
options may be granted under, the Plan or any other discretionary plan of
Culp (or an affiliate of Culp) under which participants are entitled to
acquire shares, stock options or stock appreciation rights of Culp (or an
affiliate of Culp).
The Committee, in addition to any other powers granted to it hereunder,
shall have the powers, subject to the expressed provisions of the Plan:
(a) in its discretion, to determine the Employees (defined in
Section 4(a) hereof) to receive options, the times when options shall
be granted, the times when options may be exercised, the number of
shares to be subject to each option, and any restrictions on the
transfer or ownership of shares purchased pursuant to an option;
(b) to prescribe, amend and repeal rules and regulations of
general application relating to the Plan;
(c) to construe and interpret the Plan;
(d) to require of any person exercising an option granted
under the Plan, at the time of such exercise, the execution of any
paper or making or any representation or the giving of any
commitment that the Committee shall, in its discretion, deem necessary
or advisable by reason of the securities laws of the United States or
any State, or the execution of any paper or the payment of any sum of
money in respect of taxes or the undertaking to pay or have paid any
such sum that the Committee shall, in its discretion, deem necessary by
reason of the Internal Revenue Code or any rule or regulation
thereunder, or by reason of the tax laws of any State;
(e) to amend stock options previously granted and outstanding,
but no amendment to any such agreement shall be made without the
consent of the optionee if such amendment would adversely affect the
rights of the optionee under his stock option agreement; and no
amendment shall be made to any stock option agreement that would cause
the inclusion therein of any term or provision inconsistent with the
Plan; and
(f) to make all other determinations necessary or advisable
for the administration of the Plan. Determinations of the Committee
with respect to the matters referred to in this section shall be
conclusive and binding on all persons eligible to participate under the
Plan and their legal representatives and beneficiaries. The Committee
shall have full authority to act with respect to the participation of
any Employee, and nothing in the Plan shall be construed to be in
derogation of such authority.
The Committee may designate selected Committee members or employees of
Culp to assist the Committee in the administration of the Plan and may grant
authority to such persons to execute documents, including options, on behalf
of the Committee, subject in each such case to the requirements of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended.
Decisions and determinations of the Committee on all matters relating
to the Plan shall be in its sole discretion and shall be conclusive. No
member of the Committee, nor any person authorized to act on behalf of the
Committee, shall be liable for any action taken or decision made in good
faith relating to the Plan or any award thereunder.
1. Grant of Option to Employees.
(a) Employees to Whom Options May Be Granted. The Committee
may grant an option to any employee of Culp who is a corporate officer
or who is determined by the Committee to be a key manager ("Employee").
In determining which Employees will be granted an option, the Committee
shall consider the duties of the Employees, their present and potential
contributions to the success of Culp, and such other factors as the
Committee deems relevant in connection with accomplishing the purposes
of the Plan.
(b) Number of Shares. The Committee may grant to an Employee
an option to purchase such number of shares as the Committee may chose.
(c) Exercise Price. The exercise price with respect to each
option granted hereunder will be $1.00 per share.
(d) Date of Grants: Term of Options. By April 1, 1997, the
Committee will grant to Employees hereunder options to purchase 106,000
shares, all of which options will be on the terms specified on Schedule
4(d) attached hereto.
1. Exercise. An option granted hereunder may be exercised as to
part or all of the shares covered thereby. During the participant's lifetime,
only the participant or his legal guardian may exercise an option granted to
the participant. If a participant dies prior to the expiration date of an
option granted to him, without having exercised his option as to all of the
shares covered thereby, the option may be exercised by the estate or a person
who acquired the right to exercise the option by bequest or inheritance or by
reason of the death of the Employee.
2. Payment of Exercise Price. The exercise price will be payable
upon exercise of the option to purchase shares. Payment of the exercise price
shall be made in cash or, to the extent permitted by the Committee and as set
forth in the Memorandum of Option, with shares of Culp common stock, valued
at the fair market value on the date of exercise, delivered to or withheld by
Culp at the time of exercise.
3. Transferability. No option granted hereunder may be transferred
by the participant except by will or by the laws of descent and distribution,
upon the death of the participant.
4. Memorandum of Option. The Committee will deliver to each
participant to whom an option is granted a Memorandum of Option, stating the
terms of the option.
5. Capital Adjustments. The number of shares of common stock
covered by each outstanding option granted under the Plan, and the option
price thereof, will be subject to an appropriate and equitable adjustment, as
determined by the Committee, to reflect any stock dividend, stock split or
share combination, and will be subject to such adjustment as the Committee
may deem appropriate to reflect any exchange of shares, recapitalization,
merger, consolidation, separation, reorganization, liquidation or the like,
of or by Culp.
6. Amendment or Discontinuance. The Plan may be amended, altered or
discontinued by the Board of Directors of Culp. No termination or amendment
of the Plan shall materially and adversely affect any rights or obligations
of the holder of an option theretofore granted under the Plan without his
consent.
7. Effect of the Plan. Neither the adoption of this Plan nor any
action of the Board or the Committee shall be deemed to give any person any
right to be granted an option to purchase common stock of Culp or any other
rights hereunder except as may be expressly granted by the Committee and
evidenced by a Memorandum of Option described in Section 8.
8. Effectiveness of the Plan: Duration. The Plan shall be effective
upon the approval of the Plan by the Board of Directors of Culp, but the Plan
shall be subject to approval by the vote of the holders of a majority of the
shares of stock of Culp entitled to vote. The Committee shall grant options
as contemplated in Section 4(d) before submission of the Plan to the
shareholders for their approval, but if such approval is not obtained within
twelve months of the approval by the Board of Directors, then the Plan shall
terminate and any options theretofore granted shall be void. No options may
be granted under this Plan except the initial grants as contemplated in
Section 4(d).
Schedule 4(d)
1. Vesting /Exercisability. Except as provided below, the options
would not become exercisable until January 1 , 2006.
(a) Earnings. If the Company's reported audited earnings for
any fiscal year 1997 through 1999 equal or exceed $1.50 per share, the
options would become exercisable five business days after the Company
makes a public announcement of such earnings. (The Committee would have
the discretion to determine appropriate treatment for extraordinary items,
accounting changes or substantial changes (including additional equity
offerings) to the Company's capital structure.)
(b) Death, Disability, Retirement. If the employee's
employment terminates on account of death, disability or retirement after
reaching age 65, his options will become immediately exercisable.
(c) Limitations on Exercise. Before the holder of an option
granted pursuant to this plan may exercise such option, such holder must
first provide five (5) business days notice to Culp of the holder's
intention to make such exercise, including the number of shares as to
which the holder intends to exercise an option and the proposed date of
the exercise. Upon receiving such notice, Culp will make a determination
of the amount of applicable employee remuneration that would be
attributable to the holder upon such exercise under the provisions of
Section 162(m) of the Internal Revenue Code of 1986, as amended (or any
successor provision) ("Section 162(m)"). If the amount of applicable
employee remuneration attributable to the holder under Section 162(m) upon
the proposed exercise, together with all other applicable employee
remuneration attributable to the holder for Culp's tax year in which the
exercise is proposed to be made, exceeds the amount of applicable employee
remuneration attributable to the holder that would be deductible by Culp
under the provisions of Section 162(m), then Culp will notify the holder,
on or before the proposed date of exercise specified in the holder's
notice, of the maximum number of shares as to which the holder may
exercise an option and not exceed the amount of applicable employee
remuneration that would be deductible by Culp under Section 162(m), and
the holder's exercise shall be limited to an exercise with respect to such
maximum number of shares. Further, if after the exercise of options under
the plan the maximum amount of deductible applicable employee remuneration
(as determined under Section 162(m)) has been received by or attributed to
the holder of such options for Culp's current tax year, then any other
applicable employee remuneration payable or to be paid during the same tax
year by Culp to such holder pursuant to any agreement, plan or arrangement
will not be paid to the holder during such tax year, but will be deferred
and paid to such holder during the period beginning three months after the
beginning of Culp's following tax year and ending four months after the
beginning of such tax year. It is the intention of these provisions to
limit the amount of shares as to which a holder of options under this plan
may exercise options in any tax year to an amount that, when considered
together with all other compensation received by the holder from Culp
during such year, will not cause any compensation to be paid or attributed
to such holder to be nondeductible to Culp pursuant to the provision of
Section 162(m).
1. Duration of Options. Once the options become exercisable, they
remain exercisable until December 31, 2006; provided, however, that if the
holder of options hereunder is prevented from exercising options because of
the provisions of paragraph 1(c) above, the period during which such options
may be exercised shall be extended by such period of time as is necessary to
allow the holder to exercise all such options in compliance with paragraph
1(c), except that in no case will any options remain exercisable after
December 31, 2011.
2. Forfeiture/ Early Termination of Options. If the employee's
employment is terminated for cause, the option expires upon termination;
otherwise, the option expires three (3) months after termination of
employment.