Wisconsin 39-0143280
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4545 West Brown Deer Road
Milwaukee, Wisconsin 53223
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(Address of principal executive offices) (Zip Code)
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Richard A. Meeusen
President and Chief Executive Officer
Badger Meter, Inc.
4545 West Brown Deer Road
Milwaukee, Wisconsin 53223
(414) 355-0400 (Name, address and telephone number, including area
(1) Estimated pursuant to Rule 457(c) and (h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee, based on the
average of the high and low prices of the Common Stock on the American Stock
Exchange on August 5, 2003.
(2) The value attributable to the Common Share Purchase Rights is reflected in
the market price of the Common Stock to which the rights are attached.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document or documents containing the information specified in Part I are not required to be filed with the Securities and Exchange Commission (the "Commission") as part of this Form S-8 registration statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by Badger Meter, Inc. (the "Company") are hereby incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended December 31, 2002, which includes audited financial statements as of and for the year ended December 31, 2002.
(b) All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 2002, including (a) the Company's Current Report on
Form 8-K dated July 16, 2003, filed July 16, 2003; (b) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2003, filed April 30, 2003;
(c) the Company's Current Report on Form 8-K dated April 14, 2003, filed April
14, 2003; and (d) the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2003, filed August 1, 2003.
(c) The description of the Company's Common Stock, par value $1.00 per share, included in Registration Statement No. 0-2596 on Form 8-A, dated July 26, 1971, as amended by the Company's Form 8, dated January 8, 1987, and any amendments or reports filed for the purpose of updating such description.
(d) The description of the Company's Common Share Purchase Rights included in the Company's Registration Statement on Form 8-A, dated May 26, 1998, and any amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of filing of this
registration statement and prior to such time as the Company files a
post-effective amendment to the registration statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The Company's counsel, Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, WI 53202, has rendered an opinion as to the legality of the shares of the Company's Common Stock to be issued pursuant to the Badger Meter, Inc. 2003 Stock Option Plan. Luke E. Sims, a partner in the law firm of Foley & Lardner, beneficially owns 24,143 shares of the Company's Common Stock as of June 30, 2003.
Item 6. Indemnification of Directors and Officers.
Pursuant to the Wisconsin Business Corporation Law and the Company's
Restated By-laws, as amended, directors and officers of the Company are entitled
to mandatory indemnification from the Company against certain liabilities and
expenses (i) to the extent such officers or directors are successful in the
defense of a proceeding and (ii) in proceedings in which the director or officer
is not successful in defense thereof, unless (in the latter case only) it is
determined that the director or officer breached or failed to perform his or her
duties to the Company and such breach or failure constituted: (a) a willful
failure to deal fairly with the Company or its shareholders in connection with a
matter in which the director or officer had a material conflict of interest; (b)
a violation of the criminal law unless the director or officer has reasonable
cause to believe his or her conduct was lawful or had no reasonable cause to
believe his or her conduct was unlawful; (c) a transaction from which the
director or officer derived an improper personal profit; or (d) willful
misconduct. It should be noted that the Wisconsin Business Corporation Law
specifically states that it is the public policy of Wisconsin to require or
permit indemnification in connection with a proceeding involving securities
regulation, as described therein, to the extent required or permitted as
described above. Additionally, under the Wisconsin Business Corporation Law,
directors of the Company are not subject to personal liability to the Company,
its shareholders or any person asserting rights on behalf thereof for certain
breaches or failures to perform any duty resulting solely from their status as
directors except in circumstances paralleling those in subparagraphs (a) through
(d) outlined above.
The indemnification provided by the Wisconsin Business Corporation Law and the Company's Restated By-laws is not exclusive of any other rights to which a director or officer may be entitled.
Expenses for the defense of any action for which indemnification may be available may be advanced by the Company under certain circumstances.
The Company maintains a liability insurance policy for its directors and officers as permitted by Wisconsin law which may extend to, among other things, liability arising under the Securities Act of 1933, as amended.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following exhibits have been filed (except where otherwise indicated) as part of this registration statement:
(4.1) Badger Meter, Inc. 2003 Stock Option Plan.
(4.2) Form of Stock Option Agreement used in connection with the
Badger Meter, Inc. 2003 Stock Option Plan.
(4.3) Rights Agreement, dated as of May 26, 1998, between the
Company and U.S. Bank, National Association (f/k/a/ Firstar
Bank, N.A., successor to Firstar Trust Company).
[Incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form 8-A (File No. 1-6706), dated
as of May 26, 1998.]
(4.4) Agreement of Substitution and Amendment of Common Shares
Rights Agreement, dated August 16, 2002, between the Company
and American Stock Transfer & Trust Company. [Incorporated by
reference to Exhibit 4.2 to the Company's Registration
Statement on Form S-3 (File No. 333-102057), filed on
December 20, 2002.]
(5) Opinion of Foley & Lardner.
(23.1) Consent of Ernst & Young LLP.
(23.2) Consent of Foley & Lardner (contained in Exhibit (5) hereto).
2
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(24) Power of Attorney relating to subsequent amendments (included
on the signature pages of this registration statement).
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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; and
(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 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 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, 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 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 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.
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 Milwaukee, State of Wisconsin, on this 11th day of August, 2003.
BADGER METER, INC.
BY: /s/ Richard A. Meeusen
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Name: Richard A. Meeusen
Title: President and Chief Executive
Officer
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POWER OF ATTORNEY
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 date indicated. Each person whose signature appears below constitutes and appoints Richard A. Meeusen and Richard E. Johnson, and each of them individually, his true and lawful attorneys-in-fact and agents, 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 (including post-effective amendments) to this registration statement 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 and 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 either of them, or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Signature Title Date
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/s/ James L. Forbes August 11, 2003
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James L. Forbes Chairman and Director
/s/ Richard A. Meeusen President and August 11, 2003
------------------------ Chief Executive Officer ----------------
Richard A. Meeusen and Director (Principal
Executive Officer)
------------------------ ----------------
Thomas J. Fischer Director
/s/ Kenneth P. Manning August 11, 2003
------------------------ ----------------
Kenneth P. Manning Director
/s/ Ulice Payne, Jr. August 11, 2003
------------------------ ----------------
Ulice Payne, Jr. Director
------------------------ ----------------
Andrew J. Policano Director
/s/ Steven J. Smith August 11, 2003
------------------------ ----------------
Steven J. Smith Director
/s/ John J. Stollenwerk August 11, 2003
------------------------ ----------------
John J. Stollenwerk Director
/s/ Richard E. Johnson Senior Vice President- August 11, 2003
------------------------ Finance, Chief Financial ----------------
Richard E. Johnson Officer And Treasurer
(Principal Financial
Officer)
/s/ Beverly L.P. Smiley Vice President- August 11, 2003
------------------------ Corporate Controller ----------------
Beverly L.P. Smiley (Principal Accounting
Officer)
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EXHIBIT INDEX
Exhibit No. Exhibit
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(4.1) Badger Meter, Inc. 2003 Stock Option Plan.
(4.2) Form of Stock Option Agreement used in connection with the
Badger Meter, Inc. 2003 Stock Option Plan.
(4.3) Rights Agreement, dated as of May 26, 1998, between the
Company and U.S. Bank, National Association (f/k/a/ Firstar
Bank, N.A., successor to Firstar Trust Company).
[Incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form 8-A (File No. 1-6706), dated
as of May 26, 1998.]
(4.4) Agreement of Substitution and Amendment of Common Shares
Rights Agreement, dated August 16, 2002, between the Company
and American Stock Transfer & Trust Company. [Incorporated
by reference to Exhibit 4.2 to the Company's Registration
Statement on Form S-3 (File No. 333-102057), filed on
December 20, 2002.]
(5) Opinion of Foley & Lardner.
(23.1) Consent of Ernst & Young LLP.
(23.2) Consent of Foley & Lardner (contained in Exhibit (5)
hereto).
(24) Power of attorney relating to subsequent amendments
(included on the signature pages of this registration
statement).
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Exhibit (4.1)
BADGER METER, INC.
2003 STOCK OPTION PLAN
1. Purpose
The purpose of the Badger Meter, Inc. 2003 Stock Option Plan (the "Plan") is to promote the best interests of Badger Meter, Inc. (the "Company") and its shareholders by encouraging directors and key employees of the Company and its subsidiaries to secure or increase on reasonable terms their stock ownership in the Company. The Board of Directors of the Company believes the Plan will promote continuity of management, increased incentive and personal interest in the welfare of the Company by those who are primarily responsible for shaping and carrying out the long-range plans of the Company and its subsidiaries and securing their continued growth and financial success. It is intended that certain of the options issued under the Plan may constitute incentive stock options within the meaning of Section 422 of the Internal Revenue Code ("Incentive Stock Options") and the remainder of the options issued under the Plan will constitute non-qualified stock options ("Non-qualified Stock Options").
2. Effective Date
The Plan shall become effective on the date of adoption by the shareholders of the Company and all options granted by the Board of Directors prior to such shareholder approval shall be subject to such approval.
3. Administration
(a) The Plan shall be administered by the Management Review Committee of the Board (the "Committee") as such Committee may be constituted from time to time. The Committee shall consist of not less than two members of the Board selected by the Board, each of whom shall qualify as a non-employee director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 ("Exchange Act"), or any successor rule or regulation thereto. A majority of the members of the Committee shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made by a majority vote at a meeting duly called and held.
If at any time the Committee shall not be in existence or not consist of directors who are qualified as "non-employee directors" as defined above, the Board shall administer the Plan. To the extent permitted by applicable law, the Board may, in its discretion, delegate to another committee of the Board or to any or all of the authority and responsibility of the Committee with respect to options to participants other than participants who are subject to the provisions of Section 16 of the Exchange Act. To the extent that the Board has delegated to such other committee the authority and
responsibility of the Committee, all references to the Committee herein shall include such other committee.
(b) Subject to the express provisions of the Plan, the Committee shall have complete authority to select the key employees to whom options shall be granted, to determine the number of shares subject to each option, the time at which the option is to be granted, the type of option, the option period, the option price and the manner in which options become exercisable, and shall establish such other terms and conditions of the options as the Committee may deem necessary or desirable. In making such determinations, the Committee may take into account the nature of the services rendered by the respective employees, their present and potential contribution to the success of their respective organizations and such other factors as the Committee in its discretion shall deem relevant. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind the rules and regulations relating to it, to waive any conditions or restriction with respect to any options, and to make all other determinations necessary or advisable for the administration of the Plan. The determinations of the Committee on the matters referred to in this paragraph 3 shall be conclusive.
4. Eligibility
Any non-employee director ("Director") or key employee ("Employee") of the Company or its present and future subsidiaries, as defined in Section 424(f) of the Internal Revenue Code ("Subsidiaries"), whose judgment, initiative and efforts contribute materially to the successful performance of the Company or its Subsidiaries, shall be eligible to receive options under the Plan.
5. Shares Subject to the Plan
The shares which may be issued pursuant to options under the Plan shall be shares of the Company's Common Stock, $1.00 par value ("Stock"), and may be either authorized and unissued or treasury shares. The total number of shares for which options may be granted and which may be purchased pursuant to options under the Plan shall not exceed an aggregate of 200,000 shares, subject to adjustment as provided in the following sentence and in paragraph 12 hereof. If an option granted under the Plan expires, is canceled or terminates unexercised as to any shares of Stock subject thereto, or if shares of Stock are used to satisfy the Company's withholding tax obligations, such shares shall again be available for the granting of additional options under the Plan.
6. Option Price
The option price per share of Stock shall be fixed by the Committee, but shall be not less than 100% in the case of Incentive Stock Options of the fair market value of the Stock on the date the option is granted. Unless otherwise determined by the Committee, the "fair market value" of Stock on the date of grant shall be the closing price for a share
of Stock on such date, or, if such date is not a trading date, the next preceding trading date as quoted on the American Stock Exchange Transaction Reporting System.
7. Grant of Options
(a) Subject to the terms and conditions of the Plan, the Committee may, from time to time, grant to Employees options to purchase such number of shares of Stock and on such terms and conditions as the Committee may determine. More than one option may be granted to the same Employee. The day on which the Committee approves the granting of an option shall be considered as the date on which such option is granted.
(b) Notwithstanding the foregoing, each Director of the Company who is not an employee of the Company or any subsidiary or affiliate thereof, and who first became or becomes a Director after May 2, 2003, shall, upon approval of the Plan by the shareholders of the Company, or at the time of their first election to the Board, subject to adjustments as provided in paragraph 12, automatically receive an option to purchase 6,000 shares of Stock on that date. Any date on which a Director receives an option shall be referred to as a "Grant Date". Such options shall be Non-qualified Stock Options with an expiration date ten (10) years after the Grant Date. The option price per share shall be the closing price for a share of Stock on the Grant Date, or if such day is not a trading day, the next preceding trading day as quoted on the American Stock Exchange Transaction Reporting System.
(c) Notwithstanding the foregoing, each Director of the Company who is not an employee of the Company or any subsidiary or affiliate thereof, and who first became or becomes a Director after May 2, 2003, shall, upon approval of the Plan by the shareholders of the Company, or at the time of their first election to the Board, be entitled to receive an option to purchase up to 2,500 shares of Stock on that date with the amount of options granted fixed by the number of options remaining unexercised under the Long-term Incentive Plan approved by the Management Review Committee on January 26, 1999, in order to increase the Directors' stake in the future of the Company. Any date on which a Director receives an option shall be referred to as a Grant Date. Such options shall be Non-qualified Stock Options with an expiration date ten (10) years after the Grant Date. The option price per share shall be the closing price for a share of Stock on the Grant Date, or if such day is not a trading day, the next preceding trading day as quoted on the American Stock Exchange Transaction Reporting System.
8. Option Period
Except as set forth in paragraph 7, the Committee shall determine the expiration date of each option, but in the case of Incentive Stock Options such expiration date shall be not later than ten (10) years after the date such option is granted.
9. Maximum Per Participant
The aggregate fair market value (determined at the time the option is granted pursuant to paragraph 7) of the Stock with respect to which any Incentive Stock Options are exercisable for the first time by a Director or Employee during any calendar year under the Plan or any other such plan of the Company or any Subsidiary shall not exceed $100,000.
10. Exercise of Options
An option may be exercised, subject to its terms and conditions and the
terms and conditions of the Plan, in full at any time or in part from time to
time by delivery to the Company at its principal office of a written notice of
exercise specifying the number of shares with respect to which the option is
being exercised. Any notice of exercise shall be accompanied by full payment of
the option price of the shares being purchased (a) in cash or its equivalent; or
(b) with the consent of the Committee, by delivering to the Company shares of
Stock (valued at their fair market value as of the date of exercise, as
determined by the Committee consistent with the method of valuation set forth in
paragraphs 6 and 7); (c) with the consent of the Committee, by any combination
of (a) and (b); or (d) by delivering (including by fax) to the Company or its
designated agent an executed irrevocable option exercise form together with
irrevocable instructions to a broker/dealer to sell or margin a sufficient
portion of the shares of Stock and delivering the sale or margin loan proceeds
directly to the Company to pay for the option price.
11. Transferability
No option shall be assignable or transferable by a Director or an Employee other than by will or the laws of descent and distribution, and may be exercised during the life of the Director or Employee only by the Director or Employee or his guardian or legal representative, except that an Employee may, to the extent allowed by the Committee and in a manner specified by the Committee, (a) designate in writing a beneficiary to exercise the option after the Employee's death and (b) transfer any option.
12. Capital Adjustments Affecting Common Stock
In the event of a capital adjustment resulting from a stock dividend, stock split, reorganization, recapitalization, merger, consolidation, combination or exchange of shares or the like, the number of shares of Stock subject to the Plan and the aggregate number and class of shares under option in outstanding option agreements shall be adjusted in a manner consistent with such capital adjustment; provided, however, that no such adjustment shall require the Company to sell any fractional shares. The determination of the Committee as to any adjustment shall be final. Notwithstanding the foregoing, options subject to grant or previously granted to Directors under the Plan at the time of any capital adjustments shall be subject only to such adjustments as shall be necessary to maintain the relative proportionate interest of each Director and preserve, without exceeding, the value of such options.
13. Corporate Mergers and Other Consolidations
The Committee may also grant options having terms and provisions which vary from those specified in the Plan provided that any options granted pursuant to this paragraph are granted in substitution for, or in connection with the assumption of, existing options granted by another company and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a corporate merger, consolidation, acquisition or other reorganization to which the Company is a party.
14. Option Agreements
All options granted under the Plan shall be evidenced by written agreement (which need not be identical) in such form as the Committee shall determine. Each option agreement shall specify whether the option granted thereunder is intended to constitute an Incentive Stock Option or a Non-qualified Stock Option.
15. Transfer Restrictions
Shares of Stock purchased under the Plan and held by any person who is an officer or Director of the Company, or who directly or indirectly controls the Company, may not be sold or otherwise disposed of except pursuant to an effective registration statement under the Securities Act of 1933 or except in a transaction in compliance with Rule 144 under such Act or other transaction which, in the opinion of counsel for the Company, is exempt from registration under such Act. The Committee may waive the foregoing restrictions in whole or in part in any particular case or cases, or may terminate such restrictions, whenever the Committee determines that such restrictions afford no substantial benefit to the Company.
16. Amendment of Plan
Shareholder approval is required for any amendment of the Plan.
17. Termination of Plan
The Board shall have the right to suspend or terminate the Plan at any time; provided, however, that no Incentive Stock Options may be granted after the tenth (10th) anniversary of the effective date of the Plan as described in paragraph 2 hereof. Termination of the Plan shall not affect the rights of Employees or Directors under options previously granted to them, and all unexpired options shall continue in force and operation after termination of the Plan except as they may lapse or be terminated by their own terms and conditions.
18. Tax Withholding
(a) The Company may deduct and withhold from any cash otherwise payable to an Employee such amount as may be required for the purpose of satisfying the Company's obligation to withhold federal, state or local taxes as the result of the exercise of an option. In the event the amount so withheld is insufficient for such purpose, the Company may require that the Employee pay to the Company upon its demand or otherwise make arrangements satisfactory to the Company for payment of such amount as may be requested by the Company in order to satisfy its obligation to withhold any such taxes.
(b) An Employee may be permitted to satisfy the Company's withholding tax requirements by electing to have the Company withhold shares of Stock otherwise issuable to the Employee or to deliver to the Company shares of Stock having a fair market value on the date income is recognized pursuant to the exercise of an option equal to the amount required to be withheld. The election shall be made in writing and shall be made according to such rules and procedures as the Committee may determine.
19. Rights as a Shareholder
A Director or an Employee shall have no rights as a shareholder with respect to any shares subject to any option until the date the options shall have been exercised, the shares shall have been fully paid and a stock certificate shall have been issued.
20. Miscellaneous
The grant of any option under the Plan may also be subject to other provisions as the Committee determines appropriate, including, without limitation, provisions for (a) one or more means to enable Employees to defer recognition of taxable income relating to options; (b) the purchase of Stock under options in installments; and (c) compliance with federal or state securities laws and stock exchange requirements.
Exhibit (4.2)
BADGER METER, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ___ day of ______, ____, by and between Badger Meter, Inc., a Wisconsin corporation (the "Company"), and _________ ________________ (the "Optionee");
WITNESSETH:
WHEREAS, the Company has adopted the Badger Meter, Inc. Stock Option Plan (the "Plan"), to permit options to purchase shares of the Company's Common Stock, $1.00 par value per share ("Stock"), to be granted to certain key employees of the Company or any subsidiary of the Company (a "Subsidiary"); and
NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein set forth, the parties hereby mutually covenant and agree as follows:
1. Grant of Options. Subject to the terms and conditions of the Plan and this Agreement, the Company grants to the Optionee the option to purchase from the Company all or any part of an aggregate number of ______ shares of Stock (hereinafter such shares of Stock are referred to as the "Optioned Shares", and this option to purchase the Optioned Shares is referred to as the "Option"). The Option is intended by the Company to constitute a nonqualified stock option.
2. Option Price. The price to be paid for the Optioned Shares shall be _____________________________ ($00.00) per share (the "Option Price"), which has been determined by the Plan Administrator designated pursuant to Section 3 of the Plan to be not less than 100% of the fair market value of such stock on the date of grant.
3. Exercise of Option. The Option may be exercised by the Optionee, in whole or in part, from time to time, during the period beginning one year after the date of this Agreement and ending _______________, but only in accordance with the following schedule:
Cumulative Percentage
Elapsed Number of of Shares
Years After Date Subject to Option
of This Agreement Which May Be Purchased
------------------ ----------------------
Less than One Year 0%
One Year 20%
Two Years 40%
Three Years 60%
Four Years 80%
Five Years 100%
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In the event of death, disability or retirement, 100% of the shares granted vest as of the date of the death, disability or retirement, and may be purchased within twelve (12) months after the date of such termination, in accordance with the provisions of Section 5(c) herein. To the extent otherwise exercisable, the Option may be exercised following the termination of the employment relationship between the Optionee and Company and any Subsidiary, except in the event of death, disability or retirement, only as provided in subsection (b) of Section 5 herein.
4. Manner of Exercise and Payment. The Option may be exercised only by written notice to the Company by the Optionee of the Optionee's intent to exercise the Option, delivered or mailed by postpaid registered or certified mail addressed to the Secretary of the Company at its office in Milwaukee, Wisconsin, specifying the number of Optioned Shares in respect of which the Option is being exercised. Such notice shall be accompanied by payment of the entire Option Price of the Optioned Shares being purchased in cash or its equivalent.
5. Termination of Employment.
(a) If the Optionee's employment with the Company or a Subsidiary is terminated by the Company "for cause", or by the Optionee for any reason other than death, disability, or retirement, the Option shall terminate immediately upon such termination of employment.
(b) If the Optionee's employment with the Company or a Subsidiary is terminated by the Company without cause, the Option may be exercised to the extent otherwise exercisable at the date of such termination of employment, in whole or in part, within three (3) months after the date of such termination of employment, but not thereafter.
(c) If the Optionee's employment with the Company or a Subsidiary is terminated by reason of retirement, disability within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended ("Code") or death, the Option may be exercised in whole or in part, within twelve (12) months after the date of such
termination of employment, but not thereafter. For purposes of the Section 5, termination by the Employer "for cause" shall mean any termination of the Optionee by reason of any action or omission on the part of the Optionee which is contrary to the interests of the Company or not in the interests of the Company.
6. Withholding Taxes.
(a) It shall be a condition to the obligation of the Company to issue or transfer shares of Stock upon exercise of the Option that the Optionee pay to the Company upon its demand or otherwise make arrangement satisfactory to the Company for payment of such amount as may be requested by the Company for the purpose of satisfying its liability to withhold federal, state or local income or other taxes incurred by reason of the exercise of the Option. If any amount requested is not paid, the Company may refuse to issue to transfer shares of Stock upon exercise of the Option.
(b) (i) The Optionee shall be permitted to satisfy the Company's withholding tax requirements by electing (the "Election") to have the Company withhold shares of Stock otherwise issuable to the Optionee or to deliver to the Company shares of stock having a fair market value on the date income is recognized pursuant to the exercise of the Option (the "Tax Date") equal to the amount required to be withheld. If the number of shares of Stock determined pursuant to the preceding sentence shall include a fractional share, the number of shares withheld or delivered shall be reduced to the next lower whole number and the Optionee shall deliver to the Company cash in lieu of such fractional share, or otherwise make arrangements satisfactory to the Company for payment of such amount.
(ii) If the Optionee is an officer, director or more than 10% shareholder of the Company (an "Insider"), the full number of shares of Stock purchased may be issued to the Optionee upon exercise and the Optionee shall be unconditionally obligated to deliver to the Company, as soon as practicable after the Tax Date, the number of shares of Stock having a fair market value on the Tax Date equal to the amount required to be withheld. If the number of shares so determined shall include a fractional share, the Optionee shall deliver cash in lieu of such fractional share.
(iii) The Election must be received by the Secretary of the Company at its principal office in Milwaukee, Wisconsin, prior to the Optionee's Tax Date; and if the Optionee is an Insider, the Election (1) shall not be effective until at least six months after the date of this Agreement; provided, however, that this restriction shall not apply in the event death or disability of the Optionee occurs prior to expiration of this six month period, and (2) must be received by the Secretary of the Company either six months or more prior to the Tax Date or during a ten-day period beginning on the third business day following the release of the Company's quarterly or annual summary statement of sales and earnings which occurs prior to the Tax Date.
(iv) The Election shall be irrevocable, and shall be subject to disapproval, in whole or in part, by the Plan Administrator. The Election shall be made in writing and shall be made according to such rules and regulations and in such form as the Plan Administrator shall determine.
7. Status of Optionee. The Optionee shall not be deemed for any purposes to be a shareholder of the Company with respect to any shares which may be acquired hereunder except to the extent that the Option shall have been exercised and a stock certificate has been issued.
8. Nontransferability of Option. The Option shall not be transferable by the Optionee otherwise than by will or the laws of descent and distribution.
9. Powers of Company Not Affected. The existence of the Option shall not affect in any way the right to power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred, or prior preference stock ahead of or affecting the Stock or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
10. Adjustment of Number of Shares and Price. In the event of a capital adjustment resulting from a stock dividend (other than a stock dividend in lieu of an ordinary cash dividend), stock split, reorganization, recapitalization, merger, consolidation, combination or exchange of shares or the like, the Optioned Shares shall be adjusted in a manner consistent with such capital adjustment; provided, however, that no such adjustment shall require the Company to sell any fractional shares and the adjustment shall be limited accordingly. The determination of the Plan Administrator as to any adjustment shall be final.
11. Restrictions on Optional Shares. Shares of stock purchased under the Plan and held by any person who is an officer or director of the Company, or who directly or indirectly controls the Company, may not be sold or otherwise disposed of except pursuant to an effective Registration Statement under the Securities Act of 1933 or in a transaction which, in the opinion of counsel for the Company, is exempt from registration under such Act. The Plan Administrator may waive the foregoing restrictions in whole or in part in any particular case or cases, or may terminate such restrictions, whenever the Plan Administrator determines that such restrictions afford no substantial benefit to the Company.
12. Interpretation by Plan Administrator. As a condition of the granting of the Option, the Optionee agrees for himself and his legal representatives that any dispute or disagreement which may arise under, as a result of or pursuant to this Agreement, shall
be determined by the Plan Administrator in its sole discretion, and any interpretation by the Plan Administrator of the terms of this Agreement shall be final, binding and conclusive.
13. Employment. It is understood that nothing herein contained shall be deemed to confer upon the Optionee any right to continue in the employ of the Company, nor to interfere in any way with the right of the Company to terminate the employment of the Optionee at any time.
14. Benefits of Agreement. The benefits and obligations under this Agreement shall inure to and be binding upon all successors of both parties to this Agreement.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officers and its corporate seal hereunto affixed, and the Optionee has hereunto affixed his hand and seal, as of the day and year first above written.
BADGER METER, INC.
By: ______________________________________
President and Chief Executive Officer
Attest ___________________________________
Secretary
AGREED AND ACCEPTED
[FOLEY & LARDNER LOGO] FOLEY & LARDNER
777 East Wisconsin Avenue,
Suite 3800
Milwaukee, Wisconsin 53202-5306
414.271.2400 TEL
414.297.4900 FAX
www.foleylardner.com
August 11, 2003
CLIENT/MATTER NUMBER
014180-0101
Badger Meter, Inc.
4545 West Brown Deer Road
Milwaukee, Wisconsin 53223
Ladies and Gentlemen:
We have acted as counsel for Badger Meter, Inc., a Wisconsin corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-8 (the "Registration Statement") to be filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of 200,000 shares of the Company's Common Stock, $1 par value (the "Common Stock"), which may be issued pursuant to the Badger Meter, Inc. 2003 Stock Option Plan (the "2003 Plan"). Each share of Common Stock issued pursuant to the 2003 Plan will be accompanied by a Common Share Purchase Right (the "Rights") in accordance with the Rights Agreement, dated as of May 26, 1998, as amended (the "Rights Agreement"), between the Company and American Stock Transfer & Trust Company, as successor to U.S. Bank, National Association (f/k/a Firstar Bank, N.A., successor to Firstar Trust Company).
As counsel to the Company, we have examined: (i) the Registration
Statement; (ii) the 2003 Plan and related documents; (iii) resolutions of the
Board of Directors of the Company relating to the 2003 Plan and the issuance of
Common Stock pursuant thereto; (iv) the Company's Restated Articles of
Incorporation and By-laws, as amended to date; (v) the Rights Agreement; and
(vi) such other corporate proceedings, documents and records as we have deemed
necessary or appropriate to enable us to render this opinion.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing under the laws of the State of Wisconsin.
2. The shares of Common Stock that are subject to the Registration Statement, when issued and paid for in the manner provided in the 2003 Plan, will be validly issued, fully paid and nonassessable and no personal liability will attach to the ownership thereof, except with respect to wage claims of employees of the Company for services performed, not to exceed six months' service in any one case, as provided in Section 180.0622(2)(b) of the Wisconsin Business Corporation Law.
BRUSSELS DETROIT MILWAUKEE SAN DIEGO TAMPA
CHICAGO JACKSONVILLE ORLANDO SAN DIEGO/DEL MAR WASHINGTON, D.C.
DENVER LOS ANGELES SACRAMENTO SAN FRANCISCO WEST PALM BEACH
MADISON TALLAHASSEE
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FOLEY:LARDNER
Badger Meter, Inc.
August 8, 2003
3. The Rights that relate to the Common Stock, when issued in the manner contemplated in the Rights Agreement, will be validly issued.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to references to our firm therein. In giving our consent, we do
not admit that we are "experts" within the meaning of Section 11 of the
Securities Act or within the category of persons whose consent is required by
Section 7 of the Securities Act.
Very truly yours,
/s/ FOLEY & LARDNER FOLEY & LARDNER |
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Badger Meter, Inc. 2003 Stock Option Plan of our report dated January 31, 2003, with respect to the consolidated financial statements and of Badger Meter, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2002, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
August 7, 2003
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