AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 12, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSIONS
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
inTEST CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2370659
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 Pin Oak Lane
Cherry Hill, New Jersey 08003
(Address of principal executive offices) (Zip Code)
1997 STOCK PLAN
(Full title of the plan)
Robert E. Matthiessen Copy to:
President and Chief Operating Officer Patricia A. Gritzan, Esquire
inTEST Corporation Saul Ewing Remick & Saul LLP
2 Pin Oak Lane 3800 Centre Square West
Cherry Hill, New Jersey 08003 Philadelphia, Pennsylvania 19102
(609) 424-6886 (215) 972-7777
CALCULATION OF REGISTRATION FEE
================================================================================================
Proposed Maximum Proposed Maximum
Title of securities Amount to be Offering Price Per Aggregate Offering Amount of
to be registered registered Share (1) Price registration fee(1)
Common Stock, Par 500,000 $7.4375 $3,718,750 $1,097.03
Value $0.01 per
share
================================================================================================
(1) The registration fee with respect to these shares has been computed in
accordance with paragraphs (c) and (h) of Rule 457, based upon the
average of the high and low sale prices of shares of the Common Stock
on January 7, 1998.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.(1)
Item 2. Registration Information and Employee Plan Annual Information. (1)
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed in clauses (a) through (c) below are incorporated
herein by this reference thereto, and all documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Act"), prior to the filing of a post-
effective amendment which indicates that all securities offered have been sold
or which deregisters all securities then remaining unsold, shall be deemed to
be incorporated by this reference in this Registration Statement and to be a
part hereof from the date of filing of such documents.
(a) The Registrant's prospectus filed pursuant to Rule 424(b) of the
Act.
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarters
ended June 30, 1997 and September 30, 1997.
(c) The description of the Common Stock contained in the registration
statement filed by the Registrant to register such securities under Section 12
of the Securities Exchange Act of 1934, including any amendment or report
filed for the purpose of updating such description.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VI of the Company's Bylaws provides that the Company shall
indemnify its directors and officers to the fullest extent permitted by the
General Corporation Law of the State of Delaware ("DGCL"). The Bylaws require
the Company, among other things, to indemnify such directors and officers
against certain liabilities that may arise by reason of their status or
service as directors or officers, to advance expenses to them as they are
incurred, provided that they undertake to repay the amount advanced if it is
- - - - - - - - - -
(1) The information called for by Part I of Form S-8 is currently included
in the description of the Registrant's 1997 Stock Plan (the "Plan")
which is or will be delivered to each employee selected to participate
in the Plan in accordance with Rule 428 under the Securities Act of
1933, as amended. Pursuant to the Note to Part I of Form S-8, this
information is not filed with this Form S-8.
2
ultimately determined by a court that they are not entitled to
indemnification, and to obtain directors' and officers' liability insurance,
if available on reasonable terms. The Bylaws require the Company to indemnify
an officer or director in connection with a proceeding (or part thereof)
initiated by such officer or director only if the initiation of such
proceeding was authorized by the Board of Directors. Reference is made to
Section 145 of the DGCL which provides for indemnification of directors and
officers in certain circumstances. The Company has obtained an insurance
policy which will entitle the Company to be reimbursed for certain indemnity
payments it is required or permitted to make to its directors and officers.
Article IX of the Company's Certificate of Incorporation provides that a
director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of his or her fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omission not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for willful or negligent conduct in paying dividends or
repurchasing stock out of other than lawfully available funds, or (iv) for any
transaction from which the director derives an improper personal benefit.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
The following is a list of exhibits filed with, or incorporated by
reference into, this Registration Statement:
5 Opinion of Saul, Ewing, Remick & Saul LLP
10 Amended and Restated 1997 Stock Plan
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Saul, Ewing, Remick & Saul LLP (contained in
Exhibit No.5)
24 Power of Attorney (included on signature page of the
Registration Statement)
Item 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
3
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 Registration hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 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
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the 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 liability (other than payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the questions 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunder duly authorized, in the Township of Cherry Hill, State of New
Jersey, on January 12, 1998.
inTEST CORPORATION
By: /s/ Alyn R. Holt
------------------------
Alyn R. Holt, Chairman and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby makes, constitutes and appoints Alyn R. Holt, Robert E.
Matthiessen and Hugh T. Regan, Jr., and each of them, with full power to act
without the other, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any and all amendments to this
Registration Statement, including post-effective amendments, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in
connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or any substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Alyn R. Holt Chairman and Chief January 12, 1998
- ----------------------------- Executive Officer
Alyn R. Holt (principal executive officer)
/s/ Robert E. Matthiessen President, Chief Operating January 12, 1998
- ----------------------------- Officer and Director
Robert E. Matthiessen
/s/ Daniel J. Graham Senior Vice President January 12, 1998
- ----------------------------- and Director
Daniel J. Graham
5
/s/ Hugh T. Regan, Jr. Treasurer and Chief January 12, 1998
- ----------------------------- Financial Officer (principal
Hugh T. Regan, Jr. accounting and financial
officer)
/s/ Hugh T. Regan, Sr. Secretary January 12, 1998
- -----------------------------
Hugh T. Regan, Sr.
/s/ Richard O. Endres Director January 12, 1998
- -----------------------------
Richard O. Endres
/s/ Stuart F. Daniels Director January 12, 1998
- -----------------------------
Stuart F. Daniels
6
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
5 Opinion of Saul, Ewing, Remick & Saul LLP
10 Amended and Restated 1997 Stock Plan
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Saul, Ewing, Remick & Saul LLP
(contained in Exhibit No. 5)
24 Power of Attorney (included on signature page
of Registration Statement)
7
EXHIBIT 5
[LETTERHEAD OF SAUL, EWING, REMICK & SAUL LLP]
January 12, 1997
inTEST Corporation
2 Pin Oak Lane
Cherry Hill, NJ 08003
Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") of inTEST Corporation, a Delaware corporation (the "Company"), to
be filed with the Securities and Exchange Commission covering the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of
500,000 shares of common stock, par value $0.01 per share, of the Company (the
"Shares").
We have examined the Registration Statement, the Certificate of
Incorporation and By-laws of the Company and such records, certificates and
other documents as we have considered necessary or appropriate for the
purposes of this Opinion.
Based on the foregoing, it is our opinion that:
1. the Company is duly organized, validly existing and in good
standing under the laws of the State of Delaware; and
2. the Shares to be issued in accordance with the terms described in
the Registration Statement have been duly authorized and, when issued in
accordance with the terms described in the Registration Statement, will be
validly issued, fully paid and non-assessable.
We hereby consent to use of our name in the Registration Statement as
counsel who will pass upon the legality of the Shares for the Company and as
having prepared this Opinion as an exhibit to the Registration Statement. In
giving the foregoing consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/Saul, Ewing, Remick & Saul LLP
--------------------------------------
SAUL, EWING, REMICK & SAUL LLP
EXHIBIT 10
inTEST CORPORATION
AMENDED AND RESTATED
1997 STOCK PLAN
ARTICLE I
ESTABLISHMENT
1.1 PURPOSE. The inTEST Corporation 1997 Stock Plan (the "Plan") is
hereby established by inTEST Corporation (the "Company"). The purpose of the
Plan is to promote the overall financial objectives of the Company and its
stockholders by motivating those persons selected to participate in the Plan
to achieve long-term growth in the equity of the Company and by retaining the
association of those individuals who are instrumental in achieving this
growth. The Plan provides additional incentives to officers and other key
employees ("Key Employees"), consultants ("Consultants") and members of the
Board of Directors of the Company or its Affiliates, as defined herein
("Directors"), to enter into or remain in the service or employ of the Company
or its Affiliates and to devote themselves to the Company's success by
granting such individuals an opportunity to acquire or increase their
proprietary interest in the Company through receipt of (i) rights (the
"Options") to acquire the Company's Common Stock, par value $.01 per share
(the "Common Stock"), and (ii) awards of shares of the Common Stock ("Stock
Awards").
1.2 TWO-PART PLAN. The Plan shall be divided into two sub-plans: the
"Key Employee Plan," which will govern benefits for Key Employees, as defined
herein, and the "Non-Qualified Plan," which will govern benefits to Directors
and Consultants. All provisions hereunder which refer to the "Plan" shall
apply to each of the Key Employee Plan and the Non-Qualified Plan.
ARTICLE II
STOCK SUBJECT TO PLAN
2.1 AGGREGATE MAXIMUM NUMBER. The aggregate maximum number of shares
of the Common Stock for which Options or Stock Awards may be granted under the
Plan, including without limitation, the Key Employee Plan, is 500,000 shares
(the "Plan Shares"), which number is subject to adjustment as provided in
Section 7.6. Plan Shares shall be issued from authorized and unissued Common
Stock or Common Stock held in or hereafter acquired for the treasury of the
Company. If any outstanding Option granted under the Plan expires, lapses or
is terminated for any reason, or if pursuant to the terms of a Stock Award
the shares so awarded are forfeited, the Plan Shares allocable to the
unexercised portion of such Option, or such forfeited shares of a Stock Award
may again be the subject of an Option or Stock Award granted pursuant to the
Plan.
ARTICLE III
TERM OF PLAN
3.1 TERM OF PLAN. The Plan shall commence on the date of approval of
the Plan by the Board of Directors of the Company ("Effective Date"), but
shall terminate unless the Plan is approved by the stockholders of the Company
within twelve months of such date as set forth in Section 422(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"). Any Options granted
pursuant to the Plan prior to approval of the Plan by the stockholders of the
Company shall be subject to such approval and, notwithstanding anything to the
contrary herein or in any Option Document (as defined below), shall not be
exercisable until such approval is obtained. No Option may be granted under
the Plan on or after the date which is ten years after the Effective Date.
ARTICLE IV
ELIGIBILITY
4.1 ELIGIBILITY.
(a) KEY EMPLOYEE PLAN. Except as herein provided, the persons
who shall be eligible to participate in the Key Employee Plan and be granted
awards of Options or Stock Awards ("Benefits") shall be those Key Employees
who shall be in a position, in the opinion of the Committee, as defined
herein, to make contributions to the growth, management, protection and
success of the Company and its Affiliates. Of those persons described in the
preceding sentence, the Administrator, as herein defined, may, from time to
time, select persons to be granted Benefits and shall determine the terms and
conditions with respect thereto. In making any such selection and in
determining the form of the benefit, the Administrator may give consideration
to the person's functions and responsibilities, the person's contributions to
the Company and its Affiliates, the value of the individual's service to the
Company and its Affiliates and such other factors deemed relevant by the
Administrator. The term "Affiliates" shall mean any corporation in which the
Company owns, directly or indirectly, 50 percent or more of the voting
stock or capital at the time of the granting of the Option or Stock Award.
(b) NON-QUALIFIED PLAN. NQSOs, as defined herein, and Stock
Awards may be granted to Directors and Consultants pursuant to the Non-
Qualified Plan as herein provided.
ARTICLE V
STOCK OPTIONS
5.1 KEY EMPLOYEE PLAN OPTIONS. Options granted under the Key Employee
Plan may be either ISOs, as defined herein, or NQSOs. Each Option granted
under the Key Employee Plan is intended to be an incentive stock option
("ISO") within the meaning of Section 422(b) of the Code for federal income
tax purposes, except to the extent (i) any such ISO grant would exceed the
limitation of subsection 5.3(a) below, (ii) any Option is specifically
designated at the time of grant (the "Grant Date") as not being an ISO (an
Option which is not an ISO, and therefore is a non-qualified option, is
referred to herein as an "NQSO"), or (iii) any Option is granted to a person
who is not an employee of the Company or any Affiliate on the Grant Date.
Under the Key Employee Plan, Options may be granted to Key Employees at such
times, in such amounts, and on such terms and conditions as determined by the
Administrator, in accordance with the terms of the Plan.
5.2 NON-QUALIFIED PLAN OPTIONS.
Options granted under the Non-Qualified Plan shall be NQSOs. Such
Options may be granted to Directors and Consultants at such times, in such
amounts, and on such terms and conditions as determined by the Administrator
in accordance with the terms of the Plan.
2
5.3 TERMS AND CONDITIONS OF OPTIONS. Options granted pursuant to the
Plan shall be evidenced by written documents ("Option Documents") in such form
as the Administrator shall from time to time approve, subject to the following
terms and conditions. Option Documents may also contain such other terms and
conditions (including vesting schedules for the exercisability of Options)
which the Administrator shall from time to time provide which are not
inconsistent with the terms of the Plan. Persons to whom Options are granted
are hereinafter referred to as "Optionees."
(a) NUMBER OF OPTION SHARES. Each Option Document shall state
the number of shares of Common Stock ("Option Shares") to which it pertains.
If the aggregate fair market value of Option Shares with respect to which ISOs
are exercisable for the first time by an Optionee during any calendar year
(determined as of the date the ISO is granted) and any options granted under
other incentive stock option plans of the Company exceed $100,000, the portion
of such options in excess of $100,000 shall be treated as options which are
not ISOs in accordance with Section 422(d) of the Code.
(b) OPTION PRICE. Each Option Document shall state the price at
which an Option Share may be purchased (the "Option Price"), which, in the
case of an ISO shall be not less than 100% of the "Fair Market Value" of a
share of the Common Stock on the Grant Date. If the Common Stock is listed on
a national securities exchange or quoted on The Nasdaq Stock Market
("NASDAQ"), the Fair Market Value is the closing price of the Common Stock on
the relevant date (or, if such date is not a business day or a day on which
quotations are reported, then on the immediately preceding date on which
quotations were reported), as reported by the principal national exchange on
which such shares are traded (in the case of an exchange) or by NASDAQ, as the
case may be. If the Common Stock is not listed on a national securities
exchange or quoted on NASDAQ, the Fair Market Value will be as determined by
the Administrator in good faith. If an ISO is granted to an Optionee who then
owns, directly or by attribution under Section 424(d) of the Code, shares
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company, then the Option Price shall be not less
than One Hundred and Ten Percent (110%) of the Fair Market Value of an Option
Share on the Grant Date.
(c) MEDIUM OF PAYMENT. An Optionee shall pay for Options Shares
(i) in cash, (ii) by bank check payable to the order of the Company or (iii)
by such other mode of payment as the Administrator may approve, including
payment through a broker in accordance with procedures permitted by Regulation
T of the Federal Reserve Board. Furthermore, the Administrator may provide in
an Option Document that payment may be made in whole or in part in shares of
the Common Stock held by the Optionee for more than one year. If payment is
made in whole or in part in shares of the Common Stock, then the Optionee
shall deliver to the Company certificates registered in the name of such
Optionee representing shares of Common Stock legally and beneficially owned by
such Optionee, free of all liens, claims and encumbrances of every kind and
having a Fair Market Value on the date of delivery of such notice that is not
less than the Option Price of the Option Shares with respect to which such
Option is to be exercised, accompanied by stock powers duly endorsed in blank
by the record holder of the shares represented by such certificates. If
certificates for shares of the Company's Common Stock delivered to the Company
represent a number of shares in excess ("Excess Shares") of the number of
shares required to make payment for the Option Price of the Option Shares (or
the relevant portion thereof) with respect to which such Option is to be
3
exercised by payment in shares of Common Stock, the stock certificate issued
to the Optionee shall represent the total of the Option Shares in respect of
which payment is so made plus such Excess Shares. Notwithstanding the
foregoing, the Board of Directors, in its sole discretion, may refuse to
accept shares of Common Stock in payment of the Option Price. In that event,
any certificates representing shares of Common Stock which were delivered to
the Company shall be returned to the Optionee with notice of the refusal of
the Board of Directors to accept such shares in payment of the Option Price.
The Board of Directors may impose such limitations or prohibitions on the use
of shares of the Common Stock to exercise an Option as it deems appropriate,
subject to the provisions of the Plan.
(d) INITIAL EXERCISE. The Administrator shall determine the
time at which an Option may first be exercised.
(e) TERMINATION OF OPTIONS. All Options shall expire at such
time as the Administrator may determine and set forth in the Option Document,
which date shall not be later than the last business date immediately
preceding the tenth anniversary of the Grant Date of such Option (the
"Expiration Date"). No Option may be exercised later than the Expiration
Date. Notwithstanding the foregoing, no Option shall be exercisable after the
first to occur of the following:
(i) In the case of an ISO, five years from the Grant Date
if, on the Grant Date the Optionee owns, directly or by attribution under
Section 424(d) of the Code, shares possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company;
(ii) The date set by the Board of Directors of the Company
to be an accelerated expiration date after a finding by the Board of Directors
of the Company that a change in the financial accounting treatment for Options
from that in effect on the date the Plan was adopted materially adversely
affects or, in the determination of the Board of Directors, may materially
adversely affect in the foreseeable future, the Company, provided the Board of
Directors may take whatever other action, including acceleration of any
exercise provisions, it deems necessary should it make the determination
referred to herein above;
(iii) Expiration of one year (or such shorter period as the
Administrator may select and set forth in the Option Document) from the date
the Optionee's employment or service with the Company terminates for any
reason other than circumstances described by Subsection (e)(v), below;
(iv) In the event of a "Change in Control" (as defined in
Subsection (f) below), the Administrator can (A) accelerate the Expiration
Date of any Option which has vested provided an Optionee who holds an Option
is given written notice at least thirty (30) days before the date so fixed,
(B) terminate any Option which has not then vested or (C) accelerate the
vesting schedule of any Option; or
(v) In the case of an Option granted under the Key
Employee Plan, a finding by the Committee, after full consideration of the
facts presented on behalf of both the Company and the Optionee, that the
Optionee has been discharged from employment with the Company for Cause. For
purposes of this Section, "Cause" shall mean: (A) a breach by Optionee of his
employment agreement with the Company, (B) a breach of Optionee's duty of
loyalty to the Company, including without limitation any act of dishonesty,
4
embezzlement or fraud with respect to the Company, (C) the commission by
Optionee of a felony, a crime involving moral turpitude or other act causing
material harm to the Company's standing and reputation, (D) Optionee's
continued failure to perform his duties to the Company or (E) unauthorized
disclosure by Optionee of trade secrets or other confidential information
belonging to the Company. In the event of a finding that the Optionee has
been discharged for Cause, in addition to immediate termination of the Option,
the Optionee shall automatically forfeit all Option Shares for which the
Company has not yet delivered the share certificates upon refund of the Option
Price.
(f) CHANGE OF CONTROL. In the event of a Change in Control (as
defined below), the Administrator may take whatever action with respect to the
Options outstanding under the Plan it deems necessary or desirable, including,
without limitation, accelerating the Expiration Date in the respective Option
Documents to a date no earlier than thirty (30) days after notice of such
acceleration is given to the Optionee or terminate any Option which has not
then vested. A "Change of Control" shall be deemed to have occurred upon the
earliest to occur of the following events:
(i) The date the stockholders of the Company (or the Board
of Directors, if stockholder action is not required) approve a plan or other
arrangement pursuant to which the Company will be dissolved or liquidated;
(ii) the date the stockholders of the Company (or the Board
of Directors, if stockholder action is not required) approve a definitive
agreement to sell or otherwise dispose of all or substantially all of the
assets of the Company;
(iii) the date the stockholders of the Company (or the Board
of Directors, if stockholder action is not required) and the stockholders of
the other constituent corporation (or its board of directors if stockholder
action is not required) have approved a definitive agreement to merge or
consolidate the Company with or into such other corporation, other than, in
either case, a merger or consolidation of the Company in which holders of
shares of the Common Stock immediately prior to the merger or consolidation
will hold at least a majority of the ownership of common stock of the
surviving corporation (and, if one class of common stock is not the only class
of voting securities entitled to vote on the election of directors of the
surviving corporation, a majority of the voting power of the surviving
corporation's voting securities) immediately after the merger or
consolidation, which common stock (and, if applicable, voting securities) is
to be held in substantially the same proportion as such holders' ownership of
Common Stock immediately before the merger or consolidation; or
(iv) the date any entity, person or group, (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities and Exchange
Act of 1934, as amended (the "Exchange Act")), other than (A) the Company or
any of its Affiliates or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its Affiliates or (B) any
person who, on the date the Plan is approved by the stockholders, shall have
been the beneficial owner of at least twenty percent (20%) of the outstanding
Common Stock, shall have become the beneficial owner of, or shall have
obtained voting control over, more than fifty percent (50%) of the outstanding
shares of the Common Stock.
5
(g) TRANSFERS. No ISO granted under the Plan may be
transferred, except by will or by the laws of descent and distribution.
During the lifetime of the person to whom an ISO is granted, such Option may
be exercised only by such person. No NQSO under the Plan may be transferred,
except by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder.
(h) OTHER PROVISIONS. The Option Documents shall contain such
other provisions including, without limitation, additional restrictions upon
the exercise of the Option or additional limitations upon the term of the
Option, as the Administrator shall deem advisable.
(i) AMENDMENT. The Administrator shall have the right to amend
Option Documents issued to such Optionee, subject to the Optionee's consent if
such amendment is not favorable to the Optionee, except that the consent of
the Optionee shall not be required for any amendment made under Subsection (f)
above.
5.4 EXERCISE.
(a) NOTICE. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and of
payment in full of the Option Price for the Option Shares to be purchased.
Each such notice shall (i) specify the number of Option Shares to be
purchased, (ii) satisfy the securities law requirements set forth in this
Section 5.4, and (iii) in the case of an ISO, state that the Optionee
acknowledges that the Options Shares may not be sold within one year of
exercise or two years from the Grant Date and that the Option must be
exercised within three months following termination of employment, in order to
maintain the ISO status of the Option.
(b) RESTRICTED STOCK. Each exercise notice shall (unless the
Option Shares are covered by a then current registration statement or a
Notification under Regulation A under the Securities Act of 1933, as amended
(the "Securities Act")), contain the Optionee's acknowledgment in form and
substance satisfactory to the Company that (i) such Option Shares are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the
Company, may be made without violating the registration provisions of the
Securities Act); (ii) the Optionee has been advised and understands that (A)
the Option Shares have not been registered under the Securities Act and are
"restricted securities" within the meaning of Rule 144 under the Securities
Act and are subject to restrictions on transfer and (B) the Company is under
no obligation to register the Option Shares under the Securities Act or to
take any action which would make available to the Optionee any exemption from
such registration, (iii) such Option Shares may not be transferred without
compliance with all applicable federal and state securities laws, and (iv) an
appropriate legend referring to the foregoing restrictions on transfer and any
other restrictions imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the above, should the Company be advised by
counsel that the issuance of Option Shares upon the exercise of an Option
should be delayed pending (A) registration under federal or state securities
laws, (B) the receipt of an opinion that an appropriate exemption therefrom is
available, (C) the listing or inclusion of the Option Shares on any securities
exchange or in an automated quotation system or (D) the consent or approval of
6
any governmental regulatory body whose consent or approval is necessary in
connection with the issuance of such Option Shares, the Company may defer the
exercise of any Option granted hereunder until either such event in A, B, C or
D has occurred.
(c) NOTICE OF DISQUALIFYING DISPOSITION. An Optionee shall
notify the Administrator if any Option Shares received upon the exercise of an
ISO are sold within one year of exercise or two years from the Grant Date.
ARTICLE VI
STOCK AWARDS
6.1 GRANTS OF STOCK AWARDS. Stock Awards will consist of shares of
Common Stock ("Bonus Shares") transferred to recipients ("Recipient"), either
without payment therefor or with such payment as may be required by the
Administrator, as additional compensation for such Recipient's service to the
Company. Stock Awards shall be subject to such terms and conditions as the
Administrator determines appropriate including, without limitation,
restrictions on the sale or other disposition of such Bonus Shares and rights
of the Company to reacquire such Bonus Shares upon termination of the
Recipient's employment or service within specified periods.
6.2 TRANSFERABILITY; LEGENDS. Bonus Shares may be transferred only if
(i) the Bonus Shares are securities covered by a then current registration
statement or a Notification under Regulation A under the Securities Act, or
such transfer complies with the requirements of Rule 144 of the Exchange Act;
and (ii) such transfer does not violate any restriction imposed on the Stock
Award. The Bonus Shares may bear a legend referring to (x) the restrictions
on transferability of such Bonus Shares, or (y) if the Recipient is subject to
Section 16 of the Exchange Act at the time the Bonus Shares are issued, the
liability which may arise under Section 16 upon disposition of the Bonus
Shares.
ARTICLE VII
ADMINISTRATION
7.1 ADMINISTRATOR. The Administrator for purposes of the Non-
Qualified Plan and the Key Employee Plan will be as follows:
(a) NON-QUALIFIED PLAN. The grant of Options and Stock Awards
pursuant to the Non-Qualified Plan will be administered by the Board of
Directors of the Company. The Board of Directors of the Company may make such
interpretation and construction of the Non-Qualified Plan as necessary from
time to time in its sole discretion, such interpretation and construction of
the Non-Qualified Plan to be final, binding and conclusive.
(b) KEY EMPLOYEE PLAN. With respect to the Key Employee Plan,
the Board of Directors shall appoint a committee (the "Committee") composed of
two or more non-employee directors (as the term "non-employee directors" is
defined under Rule 16b-3(b)(3) of the Exchange Act) to operate and administer
the Key Employee Plan. The Committee will administer the grant of Options and
Stock Awards pursuant to the Key Employee Plan.
7.2 MEETINGS. The Committee shall hold meetings at such times and
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent
of the members of the Committee shall be the valid acts of the Committee.
7
7.3 DISCRETION OF COMMITTEE AND THE BOARD OF DIRECTORS. The Committee
shall from time to time at its discretion grant Benefits pursuant to the terms
of the Key Employee Plan and the Board of Directors shall from time to time at
its discretion grant Benefits pursuant to the terms of the Non-Qualified Plan.
The Administrator, as the case may be, shall have plenary authority to
determine the Optionees or Recipients (each a "Participant") to whom and the
times at which Benefits shall be granted, the number of Plan Shares to be
covered by such grants and the price and other terms and conditions thereof,
including a specification with respect to whether an Option is intended to
be an ISO, subject, however, to the express provisions of the Key Employee
Plan and compliance with Rule 16b-3(d) under the Exchange Act. In making such
determinations the Administrator may take into account the nature of the
Participant's services and responsibilities, the Participant's present and
potential contribution to the Company's success and such other factors as it
may deem relevant. The interpretation and construction by the Administrator
of any provision of the Plan or of any benefit granted under it shall be
final, binding and conclusive.
7.4 NO LIABILITY. No member of the Board of Directors or the
Committee shall be personally liable for any action or determination with
respect to the Plan or any benefit thereunder, or for any act or omission of
any other member of the Board of Directors or the Committee, including but not
limited to the exercise of any power and discretion given to him under the
Plan, except those resulting from (i) any breach of such person's duty of
loyalty to the Company or its stockholders, (ii) acts or omissions not in good
faith or involving intentional misconduct or a knowing violation of law or
(iii) any transaction from which such person derived an improper personal
benefit.
7.5 INDEMNIFICATION. In addition to such other rights of
indemnification as he may have as a member of the Board of Directors or the
Committee, and with respect to the administration of the Plan and the granting
of Benefits hereunder, each member of the Board of Directors and of the
Committee shall be entitled to be indemnified by the Company to the fullest
extent permitted by applicable law, for all expenses (including but not
limited to reasonable attorneys' fees and expenses), judgments, fines and
amounts paid in settlement reasonably incurred by him in connection with or
arising out of any action, suit or proceeding with respect to the
administration of the Plan or the granting of Benefits hereunder (each a
"Proceeding") in which he may be involved by reason of his being or having
been a member of the Board of Directors or the Committee, whether or not he
continues to be such member of the Board of Directors or the Committee at the
time of the incurring of such expenses; provided however, that such indemnity
shall not include any expenses incurred by such member of the Board of
Directors or Committee in respect of any matter in which any settlement is
effected in an amount in excess of the amount approved by the Company on the
advice of its legal counsel; and provided further that no right of
indemnification under the provisions set forth herein shall be available to or
accessible by any such member of the Administrator unless within ten (10) days
after institution of any such action, suit or proceeding he shall have offered
the Company in writing the opportunity to handle and defend such action, suit
or proceeding at its own expense. The foregoing right of indemnification
shall inure to the benefit of the heirs, executors or administrators of each
such member of the Board of Directors or the Committee and shall be in
addition to all other rights to which such member of the Board of Directors or
the Committee would be entitled to as a matter of law, contract or otherwise.
8
Expenses (including attorneys' fees) incurred by a member of the Board of
Directors or the Committee in defending any Proceeding may be paid by the
Company in advance of the final disposition of such Proceeding upon receipt of
an undertaking by or such person to repay all amounts advanced if it should be
ultimately be determined that such person is not entitled to be indemnified
under this Article or otherwise, except that no such advance payment will be
required if it is determined by the Board of Directors that there is a
substantial probability that such person will not be able to repay the advance
payments.
7.6 ADJUSTMENTS ON CHANGES IN COMMON STOCK. The aggregate number of
shares of Common Stock as to which Options or Stock Awards may be granted
under the Non-Qualified Plan and the Key Employee Plan, the number of Option
Shares covered by each outstanding Option and the Option Price per Option
Share specified in each outstanding Option shall be appropriately adjusted in
the event of a stock dividend, stock split or other increase or decrease in
the number of issued and outstanding shares of Common Stock resulting from a
subdivision or consolidation of the Common Stock or other capital adjustment
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common Stock) effected
without receipt of consideration by the Company. The Board of Directors shall
have the authority to determine the adjustments to be made under this Section
and any such determination by the Board of Directors shall be final, binding
and conclusive, provided that no adjustment shall be made which will cause an
ISO to lose its status as such.
ARTICLE VIII
MISCELLANEOUS
8.1 AMENDMENT OF THE PLAN. The Board of Directors may terminate,
suspend, amend or otherwise modify the Plan from time to time in such manner
as it may deem advisable. Notwithstanding the foregoing, with respect to the
Key Employee Plan, any amendment which would change the eligibility of
employees or the class of employees eligible to receive an Option or increase
the maximum number of shares as to which Options may be granted, will only be
effective if such action is approved by the holders of stock of the Company
having a majority of the vote.
8.2 CONTINUED EMPLOYMENT. The grant of an Option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company to continue the employment of
the Participant or the service as a member of the Board of Directors, as a
consultant or in any other capacity, whichever the case may be with the
Company or any of its Affiliates.
8.3 WITHHOLDING OF TAXES. Whenever the Company proposes or is
required to issue or transfer Option Shares or Bonus Shares, the Company shall
have the right to (a) require the recipient or transferee to remit to the
Company an amount sufficient to satisfy any federal, state and/or local
withholding tax requirements prior to the delivery or transfer of any
certificate or certificates for such Option Shares or Bonus Shares, or (b)
take whatever action it deems necessary to protect its interests, including
withholding a portion of such Option Shares or Bonus Shares.
____________________
Amended and Restated as of January 6, 1998.
9
EXHIBIT 23.1
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
Consent of Independent Auditors
The Board of Directors
inTEST Corporation
We consent to the use of our report dated March 14, 1997, except for
the first two paragraphs of Note 12, as to which the date is April 25, 1997,
and the third paragraph of Note 12, as to which the date is June 4, 1997,
relating to the consolidated balance sheets of inTEST Corporation and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1996, incorporated by
reference in this registration statement on Form S-8, which report appears in
inTEST Corporation's Form S-1 dated June 17, 1997.
January 8, 1998 KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
---------------------------
Philadelphia, Pennsylvania
