AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1999
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
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WATSCO, INC.
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(Exact Name of Registrant as Specified in Its Charter)
FLORIDA 59-0778222
- ------------------------------- ---------------------------------
(State or Other Jurisdiction Of (IRS Employer Identification No.)
Incorporation)
2665 SOUTH BAYSHORE DRIVE, SUITE 901
COCONUT GROVE, FLORIDA 33133
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(Address of Principal Executive Offices)
WATSCO, INC. AMENDED AND RESTATED 1991 STOCK OPTION PLAN
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(Full Title of the Plan)
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BARRY S. LOGAN
VICE PRESIDENT AND SECRETARY
WATSCO, INC.
2665 SOUTH BAYSHORE DRIVE, SUITE 901
COCONUT GROVE, FL 33133
(305) 714-4100
---------------------------------------
(Name, Address, and Telephone Number, Including Area Code, of Agent for Service)
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Copy to:
REBECCA R. ORAND, ESQ.
GREENBERG TRAURIG, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0557
CALCULATION OF REGISTRATION FEE
=================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE FEE
- -------------------------------------------------------------------------------------------------
Common Stock,
par value 3,661,875 $9.722-$23.167(1) $59,757,681(1) $16,613(1)
$.50 per share shares
(the "Common Stock")
- -------------------------------------------------------------------------------------------------
Class B Common Stock,
par value 3,661,875 $7.33-$16.00(2) $56,862,326(2) $15,808(2)
$.50 per share shares
(the Class B
"Common Stock")
=================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee and
computed in accordance with Rule 457(h) of the Securities Act of 1933, as
amended, on the basis of (i) the actual exercise price of each of the
1,675,250 options to purchase shares of Common Stock that were previously
granted and (ii) the average of the high and low sale price ($16.25) of the
Common Stock on June 25, 1999 with respect to the 1,986,625 options to
purchase shares of Common Stock that are subject to future grants under the
Third Amended and Restated 1991 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the registration fee and
computed in accordance with Rule 457(b) of the Securities Act of 1933, as
amended, on the basis of (i) the actual exercise price of each of the
956,416 options to purchase shares of Class B Common Stock that were
previously granted and (ii) the average of the high and low sale price
($15.75) of the Class B Common Stock on June 23, 1999 with respect to the
2,705,459 options to purchase shares of Class B Common Stock that are
subject to future grants under the Third Amended and Restated 1991 Stock
Option Plan.
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 (the "Commission") by the Registrant are hereby incorporated by
reference in this Registration Statement:
The Registrant hereby incorporates by reference into this Registration
Statement the following documents or portions thereof as indicated:
(a) the Registrant's Registration Statement on Form S-8 (Registration
No. 33-51934), filed with the Commission on September 14, 1992(1);
(b) the Registrant's Registration Statement on Form S-8 (Registration
No. 33-72798), filed with the Commission on December 13, 1993(2);
(c) the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998;
(d) the Registrant's report on Form 10-Q for the quarterly period ended
March 31, 1999 and all other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the 1933 Exchange Act, as amended, since the end of
the fiscal year covered by the document referred to in (c) above; and
(e) the Registrant's Proxy Statement dated April 30, 1999, relating to
the 1999 Annual Meeting of Shareholders;
(f) the description of the Registrant's Common Stock set forth in
Registrant's Form S-3 Registration Statement under the Securities Act of 1933
(Registration No. 333-00371).
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
Any statements contained in this Registration Statement, 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 statement contained herein or in any other subsequently filed
document which 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.
- ------------
(1) The Registration Statement on Form S-8 (Registration No. 33-51934), filed
with the Commission on September 14, 1992 (the "Original S-8"), registered
315,000 shares of the Registrant's Common Stock and 315,000 shares of the
Registrant's Class B Common Stock. When the Registrant's subsequent stock
splits are taken into account, the adjusted registered shares under the
Original S-8 are 1,063,125 shares of Common Stock and 1,063,125 shares of
Class B Common Stock.
(2) The Registration Statement on Form S-8 (Registration No. 33-72798), filed
with the Commission on December 13, 1993, registered 600,000 shares of
Common Stock and 600,000 shares of Class B Common Stock. Giving effect to
the stock splits, the total number of shares registered pursuant to the
registration statements equals 3,088,125 shares of Common Stock and
3,088,125 shares of Class B Common Stock. At the Registrant's annual
meetings of the shareholders held in June 1996, May 1997 and June 1999, the
shareholders approved amendments to the Registrant's 1991 Stock Option Plan
(as amended, the "Plan") to increase the number of options under the Plan by
500,000 (1,125,000, giving effect to the stock splits), 691,250 (1,036,875,
giving effect to the stock splits) and 1,500,000, respectively. After giving
effect to the amendments to the Plan and the effectiveness of this
Registration Statement on Form S-8, the total number of shares registered on
Form S-8 and available for grant under the Plan will be 6,750,000. Attached
hereto as Exhibit 4.3 is the Third Amended and Restated 1991 Stock Option
Plan.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Cesar Alvarez, a Director of the Registrant, is a partner in the law
firm of Greenberg Traurig, P.A. which performs legal services for the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act which permits a Florida Corporation to indemnify a
present or former director or officer of the corporation (and certain other
persons serving at the request of the corporation in related capacities) for
liabilities, including legal expenses, arising by reason of service in such
capacity if such person shall have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and in any criminal proceeding if such person had not reasonable
cause to believe his conduct was unlawful. However, in the case of actions
brought by or in the right of the corporation, no indemnification may be made
with respect to any matter as to which such director or officer shall have been
adjudged liable, except in certain limited circumstances.
Article VII of the Registrant's Amended and Restated Articles of
Incorporation provides that the Registrant shall indemnify any present or former
director or officer of the Registrant (and certain other persons serving at the
request of the Registrant in related capacities) for liabilities incurred in
connection with litigation and by reason of service in such capacity, except in
relation to matters as to which he shall be adjudged in such action to be liable
for negligence or misconduct in the performance of his duties. The Registrant
maintains a standard policy of directors and officers liability insurance
covering directors and officers of the Registrant with respect to liabilities
incurred as a result of their service in such capacities.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act") may be permitted to directors, officers
or controlling persons of Registrant, pursuant to the foregoing provisions or
otherwise, Registrant has been advised that, in the opinion of the Commission
such indemnification is against public policy as expressed in the 1933 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 Registrant in
the successful defense of any suit or proceeding) is asserted by such director,
officer or controlling persons in connection with the securities being
registered hereunder, 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 1933 Act and will be governed by the
final adjudication of such issue.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought, nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index.
3
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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference 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 Registrant 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 liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling persons of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami, State of Florida on June 28, 1999.
WATSCO, INC.
By: /S/ BARRY S. LOGAN
---------------------------------------
Barry S. Logan
Vice President and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Albert H. Nahmad and Barry S.
Logan his true and lawful attorneys-in-fact, each acting alone, with full powers
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto, and other documents to be filed in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact or their substitutes, each acting alone, 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 below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ ALBERT H. NAHMAD President, Chief Executive June 28, 1999
- -------------------- Officer and Director
Albert H. Nahmad (principal executive officer)
/S/ BARRY S. LOGAN Vice President and Chief Financial June 28, 1999
- -------------------- Officer (principal financial and
Barry S. Logan accounting officer)
Director June __, 1999
- ------------------
Paul F. Manley
/S/ CESAR L. ALVAREZ Director June 28, 1999
- --------------------
Cesar L. Alvarez
/S/ DAVID B. FLEEMAN Director June 28, 1999
- --------------------
David B. Fleeman
/S/ BOB L. MOSS Director June 28, 1999
- ---------------
Bob L. Moss
5
/S/ ROBERTO MOTTA Director June 28, 1999
- -----------------
Roberto Motta
/S/ J. IRA HARRIS Director June 28, 1999
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J. Ira Harris
/S/ ROBERT J. NOVELLO Director June 28, 1999
- ---------------------
Robert J. Novello
/S/ ALAN H. POTAMKIN Director June 28, 1999
- --------------------
Alan H. Potamkin
6
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT NUMBER DESCRIPTION PAGE NO.
- -------------- ----------- ----------
4.1 Registrant's Amended and Restated Articles of
Incorporation(1).
4.2 Registrant's Bylaws(2).
4.3 Watsco, Inc. Third Amended and Restated
1991 Stock Option Plan.
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Greenberg Traurig, P.A. (contained in its
opinion filed as Exhibit 5.1 hereto)
24.0 Power of Attorney (included in the Signatures
section of this Registration Statement)
- ------------
(1) Incorporated by reference to Exhibit 3.1 filed with the Registrant's Form
10-Q dated June 30, 1995 and incorporated herein by reference.
(2) Incorporated by reference to Exhibit 3.2 filed with the Registrant's Annual
Report on Form 10-K for the fiscal year ended January 31, 1985.
EXHIBIT 4.3
----------------------------------------------------
WATSCO, INC.
THIRD AMENDED AND RESTATED
1991 STOCK OPTION PLAN
----------------------------------------------------
1. PURPOSE. The purpose of this Plan is to advance the interests of
Watsco, Inc., a Florida corporation (the "Company"), and its Subsidiaries by
providing an additional incentive to attract and retain qualified and competent
persons who provide services to the Company and its Subsidiaries, and upon whose
efforts and judgment the success of the Company and its Subsidiaries is largely
dependent, through the encouragement of stock ownership in the Company by such
persons.
2. DEFINITIONS. As used herein, the following terms shall have the meaning
indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the stock option committee appointed
by the Board pursuant to Section 13(a) hereof.
(c) "Director" shall mean a member of the Board.
(d) "Fair Market Value" of a Share on any date of reference shall
mean the "Closing Price" (as defined below) on the business day immediately
preceding such date of the Common Stock, par value $.50 per share, of the
Company (the "Common Stock"), in the case of options to purchase Common Stock,
and the Class B Common Stock, par value $.50 per share, of the Company (the
"Class B Common Stock"), in the case of options to purchase Class B Common
Stock, unless the Committee in its sole discretion shall determine otherwise in
a fair and uniform manner. For the purpose of determining Fair Market Value, the
"Closing Price" of the Common Stock or the Class B Common Stock on any business
day shall be (i) if such common stock is listed or admitted for trading on any
United States national securities exchange, or if actual transactions are
otherwise reported on a consolidated transaction reporting system, the last
reported sale price of such common stock on such exchange or reporting system,
as reported in any newspaper of general circulation, (ii) if such common stock
is quoted on the National Association of Securities Dealers Automated Quotations
System ("NASDAQ"), or any similar system of automated dissemination of
quotations of securities prices in common use, the last reported sale price of
such common stock on such system or, if sales prices are not reported, the mean
between the closing high bid and low asked quotations for such day of such
common stock on such system, as reported in any newspaper of general circulation
or (iii) if neither clause
(i) or (ii) is applicable, the mean between the high bid and low asked
quotations for such common stock as reported by the National Quotation Bureau,
Incorporated if at least two securities dealers have inserted both bid and
asked quotations for such common stock on at least five of the ten preceding
days. If neither (i), (ii), or (iii) above is applicable, then Fair Market
Value shall be determined in good faith by the Committee or the Board in a fair
and uniform manner.
(e) "Incentive Stock Option" shall mean an incentive stock option
as defined in Section 422 of the Internal Revenue Code.
(f) "Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(g) "Non-Qualified Stock Option" shall mean an Option which is
not an Incentive Stock Option.
(h) "Option" (when capitalized) shall mean any option granted
under this Plan.
(i) "Optionee" shall mean a person to whom a stock option is
granted under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(j) "Outside Director" shall mean a member of the Board who
qualifies as an "outside director" under Section 162(m) of the Internal Revenue
Code and the regulations thereunder and as a "Non-Employee Director" under Rule
16b-3 promulgated under the Securities Exchange Act.
(k) "Plan" shall mean this Third Amended and Restated 1991 Stock
Option Plan for the Company.
(l) "Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(m) "Share" shall mean a share or shares of either the Common
Stock or Class B Common Stock.
(n) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50 percent or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
3. SHARES AVAILABLE FOR OPTION GRANTS. The Committee or the Board may
grant to Optionees from time to time Options to purchase an aggregate of up to
Six Million Seven
-2-
Hundred and Fifty Thousand (6,750,000) Shares from the Company's authorized and
unissued Shares. If any Option granted under the Plan shall terminate, expire,
or be cancelled or surrendered as to any Shares, new Options may thereafter be
granted covering such Shares.
4. INCENTIVE AND NON-QUALIFIED OPTIONS.
(a) An Option granted hereunder shall be either an Incentive
Stock Option or a Non-Qualified Stock Option as determined by the Committee or
the Board at the time of grant of such Option and shall clearly state whether it
is an Incentive Stock Option or a Non-Qualified Stock Option. All Incentive
Stock Options shall be granted within 10 years from the effective date of this
Plan. Incentive Stock Options may not be granted to any person who is not an
employee of the Company or any Subsidiary.
(b) Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options to the extent that the
aggregate fair market value (determined at the time the Option is granted) of
the Shares, with respect to which Options meeting the requirements of Section
422(b) of the Internal Revenue Code are exercisable for the first time by any
individual during any calendar year (under all plans of the Company and its
parent and subsidiary corporations as defined in Section 424 of the Internal
Revenue Code), exceeds $100,000.
5. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement that
may contain any term deemed necessary or desirable by the Committee or the
Board, provided such terms are not inconsistent with this Plan or any applicable
law. Optionees shall be (i) those persons selected by the Committee from the
class of all regular employees of, or persons who provide consulting or other
services as independent contractors to, the Company or its Subsidiaries,
including Directors and officers who are regular employees of the Company or any
Subsidiaries, and (ii) Directors who are not employees of the Company or of any
Subsidiaries. Any person who files with the Committee or the Board, in a form
satisfactory to the Committee or the Board, a written waiver of eligibility to
receive any Option under this Plan shall not be eligible to receive any Option
under this Plan for the duration of such waiver.
(b) In granting Options, the Committee or the Board shall take
into consideration the contribution the person has made to the success of the
Company or its Subsidiaries and such other factors as the Committee or the Board
shall determine. The Committee or the Board shall also have the authority to
consult with and receive recommendations from officers and other personnel of
the Company and its Subsidiaries with regard to these matters. The Committee or
the Board may from time to time in granting Options under the Plan prescribe
such other terms and conditions concerning such Options as it deems appropriate,
including, without limitation, (i) prescribing the date or dates on which the
Option becomes exercisable, (ii) providing that the Option rights accrue or
become exercisable in installments over a period of years, or upon the
attainment of stated goals or both, or (iii) relating an Option to
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the continued employment of the Optionee for a specified period of time,
provided that such terms and conditions are not more favorable to an Optionee
than those expressly permitted herein.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment with the Company or its Subsidiaries. Neither the Plan nor
any Option granted under the Plan shall confer upon any person any right to
employment or continuance of employment by the Company or its Subsidiaries.
(d) Notwithstanding any other provision of this Plan, an
Incentive Stock Option shall not be granted to any person owning directly or
indirectly (through attribution under Section 424(d) of the Internal Revenue
Code) at the date of grant, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company (or of its parent or
subsidiary corporation [as defined in Section 424 of the Internal Revenue Code]
at the date of grant) unless the option price of such Option is at least 110% of
the Fair Market Value of the Shares subject to such Option on the date the
Option is granted, and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.
(e) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, the aggregate number of Options
granted to any one Optionee may not exceed 3,750,000 subject to adjustment as
provided in Section 10 hereof.
6. OPTION PRICE. The option price per Share of any Option shall be any
price determined by the Committee or the Board but shall not be less than the
par value per Share; provided, however, that in no event shall the option price
per Share of any Incentive Stock Option be less than the Fair Market Value of
the Shares underlying such Option on the date such Option is granted.
7. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i) the
Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Committee or the Board in its sole discretion have
been made for the Optionee's payment to the Company of the amount that is
necessary for the Company or Subsidiary employing the Optionee to withhold in
accordance with applicable Federal or state tax withholding requirements. Unless
further limited by the Committee or the Board in any Option, and subject to such
guidelines as the Committee or the Board may establish, the option price of any
Shares purchased shall be paid (1) in cash, (2) by certified or official bank
check, (3) by money order, (4) with Shares, (5) by the withholding of Shares
issuable upon exercise of the Option or by any other form of cashless exercise
procedure approved by the Committee or the Board , or (6) in such other
consideration as the Committee or the Board deems appropriate, or by a
combination of the above. The Committee or the Board also may, in its sole
discretion, permit an Optionee to elect to defer receipt of any Shares to which
he may be entitled as a result of his exercise of any Option, in accordance with
such rules
-4-
(including without limitation rules regarding when such elections must be made)
as the Committee or the Board may establish from time to time. The
Committee or the Board in its sole discretion may accept a personal check in
full or partial payment of any Shares. If the exercise price is paid in whole or
in part with Shares, or through the withholding of Shares issuable upon exercise
of the Option, the value of the Shares surrendered or withheld shall be their
Fair Market Value on the date the Option is exercised. The Company in its sole
discretion may, on an individual basis or pursuant to a general program
established in connection with this Plan, lend money to an Optionee, guarantee a
loan to an Optionee, or otherwise assist an Optionee to obtain the cash
necessary to exercise all or a portion of an Option granted hereunder or to pay
any tax liability of the Optionee attributable to such exercise. If the exercise
price is paid in whole or part with Optionee's promissory note, such note shall
(i) provide for full recourse to the maker, (ii) be collateralized by the pledge
of the Shares that the Optionee purchases upon exercise of such Option, (iii)
bear interest at the prime rate of the Company's principal lender, and (iv)
contain such other terms as the Board in its sole discretion shall reasonably
require. No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares are
issued to such person(s) under the terms of this Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 10 hereof.
8. EXERCISABILITY OF OPTIONS. Any Option shall become exercisable in such
amounts, at such intervals and upon such terms as the Committee or the Board
shall provide in such Option, except as otherwise provided in this Section 8.
(a) The expiration date of an Option shall be determined by the
Committee or the Board at the time of grant, but in no event shall an Incentive
Stock Option be exercisable after the expiration of 10 years from the date on
which the Option is granted. Non-Qualified Stock Options may have a term that
expires more than 10 years from the date on which the Option is granted, and the
term of any outstanding Non-Qualified Stock Options may be extended by the Board
or the Committee in its discretion.
(b) Unless otherwise provided in any Option, each outstanding
Option shall become immediately fully exercisable:
(i) if there occurs any transaction (which shall
include a series of transactions occurring within 60 days or occurring pursuant
to a plan), that has the result that shareholders of the Company immediately
before such transaction cease to own at least 51 percent of the voting stock of
the Company or of any entity that results from the participation of the Company
in a reorganization, consolidation, merger, liquidation or any other form of
corporate transaction;
(ii) if the shareholders of the Company shall approve
a plan of merger, consolidation, reorganization, liquidation or dissolution in
which the Company does not survive
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(unless the approved merger, consolidation, reorganization, liquidation or
dissolution is subsequently abandoned); or
(iii) if the shareholders of the Company shall approve
a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).
(c) The Committee or the Board may in its sole discretion
accelerate the date on which any Option may be exercised and may accelerate the
vesting of any Shares subject to any Option or previously acquired by the
exercise of any Option.
9. TERMINATION OF OPTION PERIOD. The unexercised portion of any Option
shall automatically and without notice terminate and become null and void at the
time of the earliest to occur of the following:
(i) three months after the date on which the
Optionee's employment is terminated for any reason other than by reason of (A)
Cause, which, solely for purposes of this Plan, shall mean the termination of
the Optionee's employment by reason of the Optionee's willful misconduct or
gross negligence, (B) a mental or physical disability (within the meaning of
Internal Revenue Code Section 22(e)) as determined by a medical doctor
satisfactory to the Committee, or (C) death;
(ii) immediately upon the termination of the
Optionee's employment for Cause;
(iii) twelve months after the date on which the
Optionee's employment is terminated by reason of a mental or physical disability
(within the meaning of Internal Revenue Code Section 22(e)) as determined by a
medical doctor satisfactory to the Committee or the Board;
(iv) (A) twelve months after the date of termination
of the Optionee's employment by reason of death of the Optionee, or (B) three
months after the date on which the Optionee shall die if such death shall occur
during the one year period specified in Subsection 9(a)(iii) hereof.
All references herein to the termination of the Optionee's employment shall, in
the case of a Optionee who is not an employee of the Company or a Subsidiary,
refer to the termination of the Optionee's service with the Company.
(b) The Committee or the Board in its sole discretion may by
giving written notice ("cancellation notice") cancel, effective upon the date of
the consummation of any corporate transaction described in Subsections 8(b)(ii)
or (iii) hereof that remains unexercised on such date. Such cancellation notice
shall be given a reasonable period of time prior to the
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proposed date of such cancellation and may be given either before or
after-approval of such corporate transaction.
10. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split-up, combination or
exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the
maximum number of Shares available for grant under the Plan, or available for
grant to any person under the Plan, so that the same percentage of the Company's
issued and outstanding Shares shall continue to be subject to being so optioned;
and
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then subject to any
outstanding Option, so that the same percentage of the Company's issued and
outstanding Shares shall remain subject to purchase at the same aggregate
exercise price.
(b) Unless otherwise provided in any Option, the Committee or the
Board may change the terms of Options outstanding under this Plan, with respect
to the option price or the number of Shares subject to the Options, or both,
when, in the Committee's or Board's sole discretion, such adjustments become
appropriate so as to preserve but not increase benefits under the Plan.
(c) Except as otherwise expressly provided herein, the issuance
by the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
a direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made to, the number of or exercise price for Shares then
subject to outstanding Options granted under the Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares subject to
outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any
sale, transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
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11. TRANSFERABILITY OF OPTIONS AND SHARES.
(a) Except as otherwise provided in paragraph (b) hereof, (i) no
Option, shall be subject to alienation, assignment, pledge, charge or other
transfer other than by the Optionee by will or the laws of descent and
distribution, and any attempt to make any such prohibited transfer shall be
void; (ii) each Option shall be exercisable during the Optionee's lifetime only
by the Optionee, or in the case of a Non-Qualified Stock Option that has been
assigned or transferred with the prior written consent of the Committee or the
Board, only by the permitted assignee.
(b) A Non-Qualified Stock Option may be transferred by the
Optionee to one of more transferees during the lifetime of the Optionee, and may
be exercised by such transferees in accordance with the terms of the Plan and
the Option, but only if and to the extent such transfers and exercises are
permitted by the Board or the Committee pursuant to the express terms of the
Option agreement or as otherwise agreed to in writing by the Board or the
Committee, and subject to (i) any terms and conditions which the Board or the
Committee may impose thereon and (ii) any prohibitions or restrictions on such
transfers pursuant to Rule 16b-3 promulgated under the Securities Exchange Act.
(c) Unless the prior written consent of the Committee or the
Board is obtained and the transaction does not violate the requirements of Rule
16b-3 promulgated under the Securities Exchange Act, no Shares acquired by an
officer or Director pursuant to the exercise of an Option may be sold, assigned,
pledged or otherwise transferred prior to the expiration of the six-month period
following the date on which the Option was granted.
12. ISSUANCE OF SHARES.
(a) Notwithstanding any other provision of this Plan, the Company
shall not be obligated to issue any Shares unless it is advised by counsel of
its selection that it may do so without violation of the applicable Federal and
State laws pertaining to the issuance of securities, and may require any stock
so issued to bear a legend, may give its transfer agent instructions, and may
take such other steps, as in its judgment are reasonably required to prevent any
such violation.
(b) As a condition to any sale or issuance of Shares upon
exercise of any Option, the Committee or the Board may require such agreements
or undertakings as the Committee or the Board may deem necessary or advisable to
facilitate compliance with any applicable law or regulation including, but not
limited to, the following:
(i) a representation and warranty by the Optionee to
the Company, at the time any Option is exercised, that he is acquiring the
Shares to be issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
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(ii) a representation, warranty and/or agreement to be
bound by any legends endorsed upon the certificate(s) for such Shares that are,
in the opinion of the Committee or the Board, necessary or appropriate to
facilitate compliance with the provisions of any securities laws deemed by the
Committee or the Board to be applicable to the issuance and transfer of such
Shares.
13. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by a committee appointed by
the Board (the "Committee") which shall be composed of two or more Directors all
of whom shall be Outside Directors. The membership of the Committee shall be
constituted so as to comply at all times with the applicable requirements of
Rule 16b-3 promulgated under the Securities Exchange Act and Section 162(m) of
the Internal Revenue Code. The Committee shall serve at the pleasure of the
Board and shall have the powers designated herein and such other powers as the
Board may from time to time confer upon it.
(b) The Board may grant Options pursuant to this Plan to
Directors who are not employees of the Company or any Subsidiary and/or other
persons to whom Options may be granted under Section 5(a) hereof.
(c) The Committee or the Board, from time to time, may adopt
rules and regulations for carrying out the purposes of the Plan. The
determinations by the Committee or the Board, and the interpretation and
construction of any provision of the Plan or any Option by the Committee or the
Board, shall be final and conclusive.
(d) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at a
meeting or (ii) without a meeting by the unanimous written approval of the
members of the Committee.
14. WITHHOLDING OR DEDUCTION FOR TAXES. If at any time specified herein
for the making of any issuance or delivery of any Option or Common Stock to any
Optionee or beneficiary, any law or regulation of any governmental authority
having jurisdiction in the premises shall require the Company to withhold, or to
make any deduction for, any taxes or take any other action in connection with
the issuance or delivery then to be made, such issuance or delivery shall be
deferred until such withholding or deduction shall have been provided for by the
Optionee or beneficiary, or other appropriate action shall have been taken.
15. FORMULA GRANTS TO OUTSIDE DIRECTORS.
(a) Each Outside Director who was not granted an option to
purchase shares of Common Stock prior to 1993 will receive an option to purchase
25,313 shares of Common Stock upon his or her initial election to the Board. All
such options will become fully exercisable at 20% per year commencing on the
first anniversary of the date of grant. Commencing on the sixth anniversary of
the date of his or her initial election to the Board, and
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thereafter on each anniversary that such Director is a member of the Board each
such Outside Director will receive an option to purchase 3,375 shares of Common
Stock, which option will become fully exercisable on the first anniversary of
the date of grant.
(b) Each Outside Director who was granted an option to purchase
shares of Common Stock prior to 1993 will receive, commencing on the sixth
anniversary of the date of the last grant of an option to such Outside Director
and thereafter on each anniversary that such outside Director is a member of the
Board of Directors, an option to purchase 3,375 shares of Common Stock which
option will become fully exercisable on the first anniversary of the date of
grant.
(c) The per share exercise price of all Options granted to
Outside Directors pursuant to paragraphs (a) and (b) of this Section 15 will be
equal to the Fair Market Value of the Shares underlying such Option on the date
such Option is granted. The unexercised portion of any Option granted pursuant
to paragraphs (a) or (b) of this Section 15 shall become null and void three
months after the date on which such Outside Director ceases to be a Director for
any reason.
(d) The Board may also grant Options to Outside Directors
pursuant to Section 5, subject to the provisions of the Plan generally
applicable to Options granted pursuant to Section 5.
16. INTERPRETATION.
(a) As it is the intent of the Company that the Plan comply in
all respects with Rule 16b-3 promulgated under the Securities Exchange Act
("Rule 16b-3"), any ambiguities or inconsistencies in construction of the Plan
shall be interpreted to give effect to such intention, and if any provision of
the Plan is found not to be in compliance with Rule 16b-3, such provision shall
be deemed null and void to the extent required to permit the Plan to comply with
Rule 16b-3. The Committee or the Board may from time to time adopt rules and
regulations under, and amend, the Plan in furtherance of the intent of the
foregoing.
(b) The Plan shall be administered and interpreted so that all
Incentive Stock Options granted under the Plan will qualify as Incentive Stock
Options under section 422 of the Internal Revenue Code. If any provision of the
Plan should be held invalid for the granting of Incentive Stock Options or
illegal for any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and enforced as if
such provision had never been included in the Plan.
(c) This Plan shall be governed by the laws of the State of
Florida.
(d) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan.
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(e) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
17. AMENDMENT AND DISCONTINUATION OF THE PLAN. The Committee or the Board
may from time to time amend, suspend or terminate the Plan or any Option;
provided, however, that, any amendment to the Plan shall be subject to the
approval of the Company's shareholders if such shareholder approval is required
by any federal or state law or regulation (including, without limitation, Rule
16b-3 or to comply with Section 162(m) of the Internal Revenue Code) or the
rules of any Stock exchange or automated quotation system on which the Common
Stock may then be listed or granted. Except to the extent provided in Sections 9
and 10 hereof, no amendment, suspension or termination of the Plan or any Option
issued hereunder shall substantially impair the rights or benefits of any
Optionee pursuant to any Option previously granted without the consent of the
Optionee.
18. EFFECTIVE DATE AND TERMINATION DATE. The Plan shall terminate on the
tenth anniversary of the date on which it first was adopted by the Board. The
effective date of this Third Amendment and Restatement of the Plan shall be the
date on which the Board adopts this Third Amendment and Restatement of the Plan.
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EXHIBIT 5.1
June 30, 1999
Watsco, Inc.
2665 S. Bayshore Drive, Suite 901
Coconut Grove, Florida 33133
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel to Watsco, Inc., a Florida corporation formerly
known as Watsco, Inc. (the "Company"), in connection with the filing of the
Company's registration statement on Form S-8 with the Securities and Exchange
Commission on or about June 30, 1999, (the "Registration Statement") under the
Securities Act of 1933, as amended. The Registration Statement is being filed in
connection with the Company's offering of 3,661,875 additional shares of Common
Stock ($.50 par value per share) and 3,661,875 shares of Class B Common Stock
($.50 par value per share) (together the "Additional Plan Shares") pursuant to
the Company's Amended and Restated 1991 Stock Option Plan (the "Plan"). The
Additional Plan Shares increase the aggregate number of shares available for
grants under the Plan from 3,088,125 to 6,750,000.
We are familiar with the proceedings to date with respect to such offering
and have examined such records, document and matters of law and satisfied
ourselves as to such matters of fact as we have considered relevant for purposes
of this opinion.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals and the conformity to the originals of
all documents submitted to us as copies. We have also assumed the genuineness of
the signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties thereto, and the due authorization, execution and delivery of all
documents by the parties thereto.
We are of the opinion that when the Additional Plan Shares shall have been
issued and sold on the terms contemplated by the Plan and the Registration
Statement shall have become effective, the Additional Plan Shares will be
legally issued, fully paid and non-assessable.
This opinion shall be limited to the laws of the State of Florida and the
federal laws of the United States of America.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Greenberg Traurig, P.A.
--------------------------------------------
GREENBERG TRAURIG, P.A.
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Form S-8 Registration Statement of our
reports dated February 6, 1999, included in Watsco, Inc.'s Form 10-K for the
year ended December 31, 1998, and to all references to our Firm included in this
Form S-8 Registration Statement.
ARTHUR ANDERSEN LLP
Miami, Florida,
June 28, 1999.