As filed with the Securities and Exchange Commission on June 8, 2004
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
IONICS, INCORPORATED
(Exact name of registrant as specified in its charter)
Massachusetts 04-2068530
(State or other jurisdiction of (IRS employer identification number)
incorporation or organization)
65 Grove Street
Watertown, Massachusetts 02472-2882
(Address and zip code of principal executive offices)
INDUCEMENT NON-QUALIFIED STOCK OPTION AGREEMENT
(Full title of the Plan)
Stephen Korn, Esq.
Vice President & General Counsel
Ionics, Incorporated
65 Grove Street
Watertown, Massachusetts 02472-2882
(Name and address of agent for service)
617-926-2500
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Amount to be Offering Price Aggregate Amount of
Title of Securities to be Registered Registered (1) Per Share Offering Price Registration Fee
------------------------------------ -------------- --------- -------------- ----------------
Common Stock (Par Value $1.00 Per
Share) 150,000 $23.07 $3,460,500 $439.02
Total 150,000 $23.07 $3,460,500 $439.02
---------------
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, this
Registration Statement shall also cover any additional shares of Common
Stock which become issuable upon exercise of options granted under the
Inducement Non-Qualified Stock Option Agreement by reason of any stock
dividend, stock split, recapitalization or other similar transaction.
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PART I
Item 1. Plan Information
The documents containing the information specified in this Item 1 will
be sent or given to the Vice President, Americas Sales and Marketing,
Water Systems Division of the Registrant, to whom the Inducement
Non-Qualified Stock Option Agreement was granted on April 30, 2004, as
specified by Rule 428(b) (1). In accordance with the rules and
regulations of the Securities and Exchange Commission (the
"Commission") and the instructions to Form S-8, such documents are not
being filed with the Commission either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
Item 2. Registrant Information and Employee Plan Annual Information
The documents containing the information specified in this Item 2
will be sent or given to the Vice President, Americas Sales and
Marketing, Water Systems Division as specified by Rule 428(b) (1). In
accordance with the rules and regulations of the Commission and the
instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed with the Commission are incorporated by
reference in this Prospectus:
(a) The Annual Report of the Registrant on Form 10-K for the fiscal
year ended December 31, 2003, filed with the Commission on March
15, 2004 pursuant to the Securities Exchange Act of 1934, as
amended, which contains audited financial statements of the
Registrant for the fiscal year ended December 31, 2003.
(b) The Quarterly Report of the Registrant on Form 10-Q for the
fiscal quarter ended March 31, 2004, filed with the Commission on
May 10, 2004 pursuant to the Securities Exchange Act of 1934, as
amended.
(c) The section entitled "Description of Registrant's Securities to
be Registered" contained in the Registrant's Registration
Statement on Form 8-A, filed with the Commission on September 27,
1990 pursuant to Section 12(g) of the Exchange Act, including any
amendments or reports that have been filed for the purpose of
updating this description.
All documents subsequently filed with the Commission 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 herein 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 such
documents.
Item 4. Description of Securities
Not applicable.
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Item 5. Interest of Named Experts and Counsel
The validity of the shares of Common Stock offered hereby will be
passed upon for the Registrant by Stephen Korn, Esq., Vice President
and General Counsel of the Registrant. Mr. Korn is the beneficial
owner of 135,356 shares of Common Stock, including 132,500 shares of
Common Stock in the form of presently exercisable stock options and
1,633 shares held in the Ionics Section 401(k) Savings Plan (based on
May 24, 2004 data).
Item 6. Indemnification of Directors and Officers
The Registrant is permitted by Massachusetts law and required by its
By-laws to indemnify any director or officer or former director or
officer against all expenses and liabilities reasonably incurred by
him in connection with any legal action in which such person is
involved by reason of his position with the Registrant unless he
shall have been finally adjudicated in any action, suit or proceeding
not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Registrant. Such
indemnification shall include payment by the Registrant of expenses
incurred in defending a civil or criminal action or proceeding in
advance of the final disposition of such action or proceeding, upon
the Registrant's receipt of the undertaking of the person indemnified
to repay such payment if such person shall be adjudicated not
entitled to such indemnification.
Directors and officers are also insured up to an aggregate amount of
$20 million under Directors' and Officers' Liability and Company
Reimbursement Policies.
The Registrant's Restated Articles of Organization include a
provision limiting the personal liability of directors of the Company
to its stockholders for monetary damages for breaches of their
fiduciary duty to the extent permitted by the Massachusetts Business
Corporation Law.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit No. Description of Exhibit
----------- ----------------------
4.1 Renewed Rights Agreement, dated as of August 19, 1997, *
between the Registrant and BankBoston N.A. (filed as Exhibit
1 to the Registrant's Current Report on Form 8-K dated
August 27, 1997).
4.2 Amendment No. 1 dated as of November 17, 2003, to the *
Renewed Rights Agreement dated August 19, 1997 between
the Registrant and Equiserve Trust Company as Rights Agent
(and successor in interest to BankBoston N.A.)
(filed as Exhibit 4.1 to the Registrant's Current Report on
Form 8-K dated November 26, 2003.)
4.3 Form of Common Stock Certificate (filed as Exhibit 4.2 to the *
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995).
4.4 Inducement Non-Qualified Stock Option Agreement between the 9
Registrant and Lester B. Devitt dated April 30, 2004.
5.1 Opinion of Stephen Korn, General Counsel (filed herewith). 15
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith). 16
23.2 Consent of KPMG LLP (filed herewith). 17
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23.3 Consent of Stephen Korn, General Counsel (included in
Exhibit 5.1). 15
24 Power of Attorney (included as part of the signature page of
this Registration Statement). 7
--------------------------
*Incorporated herein by reference.
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, represents a fundamental change in the
information set forth in the 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 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 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 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Watertown and Commonwealth of Massachusetts on the
7th day of June, 2004.
IONICS, INCORPORATED
By: /s/Douglas R. Brown
----------------------------
Douglas R. Brown
President and
Chief Executive Officer
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POWER OF ATTORNEY AND SIGNATURES
Each person whose signature appears below on this Registration Statement hereby
constitutes and appoints Douglas R. Brown and Stephen Korn and each of them,
with full power to act without the other, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities (until revoked in writing)
to sign any and all amendments (including post-effective amendments and
amendments thereto) to this Registration Statement of Ionics, Incorporated, 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 fully to all
intents and purposes as he or she might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/Douglas R. Brown President and Chief Executive Officer June 7, 2004
--------------------------------
Douglas R. Brown (Principal Executive Officer)
/s/Daniel M. Kuzmak Vice President and Chief Financial Officer June 7, 2004
--------------------------------
Daniel M. Kuzmak (Principal Financial Officer)
/s/Anthony Di Paola Vice President and Corporate Controller June 7, 2004
--------------------------------
Anthony Di Paola (Principal Accounting Officer)
/s/Stephen L. Brown Chairman of the Board and Director June 7, 2004
--------------------------------
Stephen L. Brown
/s/Lyman B. Dickerson Vice President, Water Systems Division and Director June 7, 2004
--------------------------------
Lyman B. Dickerson
/s/Kathleen F. Feldstein Director June 7, 2004
--------------------------------
Kathleen F. Feldstein
/s/William K. Reilly Director June 7, 2004
--------------------------------
William K. Reilly
/s/John J. Shields Director June 7, 2004
--------------------------------
John H. Shields
/s/Frederick T. Stant, III Director June 7, 2004
--------------------------------
Frederick T. Stant
/s/Robert H. Temkin Director June 7, 2004
--------------------------------
Robert H. Temkin
/s/Daniel I. C. Wang Director June 7, 2004
--------------------------------
Daniel I. C. Wang
/s/Mark S. Wrighton Director June 7, 2004
--------------------------------
Mark S. Wrighton
/s/Allen S. Wyett Director June 7, 2004
--------------------------------
Allen S. Wyett
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EXHIBIT INDEX
Sequentially Numbered
Exhibit No. Description of Exhibits Page
4.1 Renewed Rights Agreement, dated as of August 19, 1997, between *
the Registrant and BankBoston N.A. (filed as Exhibit 1 to the
Registrant's Current Report on Form 8-K dated August 27, 1997).
4.2 Amendment No. 1 dated as of November 17, 2003, to the Renewed *
Rights Agreement dated August 19, 1997 between the Registrant and
EquiServe Trust Company as Rights Agent (and successor in
interest to BankBoston N.A.) (filed as Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated November 26, 2003).
4.3 Form of Common Stock Certificate (filed as Exhibit 4.2 to the *
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995).
4.4 Inducement Non-Qualified Stock Option Agreement between the 9
Registrant and Lester B. Devitt dated April 30, 2004.
5.1 Opinion of Stephen Korn, General Counsel (filed herewith). 15
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith). 16
23.2 Consent of KPMG LLP (filed herewith). 17
23.3 Consent of Stephen Korn, General Counsel (included in Exhibit
5.1). 15
24 Power of Attorney (included as part of the signature page of this
Registration Statement). 7
*Incorporated herein by reference.
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EXHIBIT 4.4
IONICS, INCORPORATED
Inducement Non-Qualified Stock Option Agreement
This Inducement Non-Qualified Stock Option Agreement (the "Agreement")
made as of April 30, 2004 (the "Date of Grant") by and between Ionics,
Incorporated, a Massachusetts corporation (the "Company"), and Lester B. Devitt
(the "Employee"):
1. Option Grant. The Company hereby grants as of the Date of Grant to
the Employee an option to purchase a maximum of 150,000 shares (the "Option
Shares") of its common stock, $1.00 par value ("Common Stock"), at the price of
$23.07 per share, on the terms and conditions set forth in this Agreement.
2. Grant as Non-Qualified Option; Other Options. This option shall be
treated for federal income tax purposes as a Non-Qualified Option (rather than
an incentive stock option). This option is in addition to any other options
heretofore or hereafter granted to the Employee by the Company or any present or
future parent or subsidiary of the Company (such parents or subsidiaries
referred to collectively as the "Related Corporations"), but a duplicate
original of this instrument shall not effect the grant of another option.
3. Vesting of Option if Employment Continues. If the Employee has
continued to serve the Company or any Related Corporation in the capacity of an
employee, officer or consultant, as the case may be (such service is described
herein as maintaining or being "employed by the Company") on the following
dates, the Employee may exercise this option at any time from and after the
applicable date for the number of shares of Common Stock set forth opposite the
applicable date:
Applicable Date Shares
Date of Grant 37,500 shares
First Anniversary of Date of Grant an additional 37,500 shares
Second Anniversary of Date of Grant an additional 37,500 shares
Third Anniversary of Date of Grant an additional 37,500 shares
Notwithstanding the foregoing, (i) if the Employee's employment with
the Company is terminated by the Company for any reason other than for Cause (as
defined in Section 4(b) hereof), or by reason of the Employee's death or
Permanent Disability (as defined in Section 5(b) hereof, the Employee shall be
deemed for purposes of this Section 3 to have remained employed by the Company
for 12 months after such termination, and any shares that would have become
exercisable during such 12-month period shall become exercisable immediately
prior to such termination of the Employee's employment with the Company; and
(ii) if the Employee's employment with the Company is terminated by the Company
for Cause, no further shares shall become exercisable from and after such
termination of the Employee's employment with the Company.
Notwithstanding the foregoing, the Compensation Committee of
the Company's Board of Directors (the "Committee") may, in its
discretion, accelerate the date that any installment of this option
becomes exercisable. The foregoing rights are cumulative and (subject
to Sections 3 or 4 hereof if the Employee ceases to be employed by
the Company and all Related Corporations), may be exercised up to and
including the date that is ten years from the date this option is
granted (the "Scheduled Expiration Date").
4. Termination of Employment Relationship.
(a) Termination Other than for Cause. If the Employee's
employment with the Company is terminated by the Employee or by the Company,
other than by reason of Cause, this option may be exercised, to the extent
otherwise exercisable on the date of his termination (including any portions of
this option that become exercisable on or before his termination in accordance
with Section 3), at any time prior the Scheduled Expiration Date. In such case,
the Employee's only rights hereunder shall be those which are properly exercised
before the termination of this option.
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(b) Termination for Cause. If the Employee's employment with
the Company is terminated by the Company for Cause, all vested options will be
forfeited and this option shall terminate upon the Employee's receipt of written
notice of such termination and shall thereafter not be exercisable to any extent
whatsoever. For purposes of the Agreement, "Cause" shall mean any of the
following: (i) the Employee's dishonesty, malfeasance, disloyalty or breach of
fiduciary duties to the Corporation; (ii) the conviction of, or plea of guilty
or nolo contendere by, the Employee for any felony involving moral turpitude (or
for any lesser crime or offense involving the Corporation); (iii) the failure or
refusal, except due to incapacity as a result of illness or disability, of the
Employee to perform the lawful duties appropriate to his office assigned to him,
provided that such failure or refusal continues uncorrected for a period of 30
days after the Employee shall have received specific written directions in
respect thereof from his immediate supervisor; or (iv) any breach by the
Employee of the Employer's Agreement With Employee dated March 17, 2004.
5. Death; Disability.
(a) Death. If the Employee dies while employed by the Company,
this option may be exercised, to the extent otherwise exercisable on the date
of his death (including any portions of this option that become exercisable on
or before his termination in accordance with Section 3), by the Employee's
estate, personal representative or beneficiary to whom this option has been
assigned pursuant to Section 9, at any time prior to the Scheduled Expiration
Date.
(b) Disability. If the Employee's employment with the Company
is terminated by reason of his Permanent Disability, this option may be
exercised, to the extent otherwise exercisable on the date employment was
terminated (including any portions of this option that become exercisable on or
before his termination in accordance with Section 3), at any time prior to the
Scheduled Expiration Date. For purposes of this Agreement, "Permanent
Disability" shall mean the Employee's inability, by reason of any physical or
mental impairment, to substantially perform the significant aspects of his
regular duties, which inability is reasonably contemplated to continue for at
least one (1) year from its incidence and at least 90 days from the date of such
determination. Any question as to the existence, extent, or potentiality of the
Employee's Permanent Disability shall be determined by a qualified independent
physician selected by the Employee (or, if the Employee is unable to make such
selection, by an adult member of the Employee's immediate family) and reasonably
acceptable to the Board.
5. Death; Disability.
(a) Death. If the Employee dies while employed by the Company,
this option may be exercised, to the extent otherwise
exercisable on the date of his death (including any portions
of this option that become exercisable on or before his
termination in accordance with Section 3), by the Employee's
estate, personal representative or beneficiary to whom this
option has been assigned pursuant to Section 9, at any time
prior to the Scheduled Expiration Date.
(b) Disability. If the Employee's employment with the Company is
terminated by reason of his Permanent Disability, this
option may be exercised, to the extent otherwise exercisable
on the date employment was terminated (including any
portions of this option that become exercisable on or before
his termination in accordance with Section 3), at any time
prior to the Scheduled Expiration Date.
6. Partial Exercise. This option may be exercised in part at any time
and from time to time within the above limits, except that this option may not
be exercised for a fraction of a share.
7. Payment of Price.
(a) Form of Payment. The option price shall be paid in the
following manner:
(i) in cash or by check;
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(ii) subject to Section 7(b) below, by delivery of shares of
the Company's Common Stock having a fair market value
(as determined by the Committee) equal as of the date
of exercise to the option price;
(iii)by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of the
proceeds from the sale of the Option Shares and an
instruction to the broker or selling agent to pay that
amount to the Company; or
(iv) by any combination of the foregoing.
(b) Limitations on Payment by Delivery of Common Stock. If the
Employee delivers Common Stock held by the Employee ("Old Stock") to the Company
in full or partial payment of the option price, and the Old Stock so delivered
is subject to restrictions or limitations imposed by agreement between the
Employee and the Company, an equivalent number of Option Shares shall be subject
to all restrictions and limitations applicable to the Old Stock to the extent
that the Employee paid for the Option Shares by delivery of Old Stock, in
addition to any restrictions or limitations imposed by this Agreement.
Notwithstanding the foregoing, the Employee may not pay any part of the exercise
price hereof by transferring Common Stock to the Company unless such Common
Stock has been owned by the Employee free of any substantial risk of forfeiture
for at least six months.
8. Restrictions of Transfer; Legend. Unless registered pursuant to the
provisions of the Securities Act of 1933, as amended (the "Securities Act"),
Option Shares may not be transferred without the Company's written consent
except by will, or by the laws of descent and distribution. Option Shares will
be of an illiquid nature and will be deemed to be "restricted securities" for
purposes of the Securities Act, unless registered. Accordingly, such shares must
be sold in compliance with the registration requirements of the Securities Act
or an exemption therefrom.
9. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, this option may be exercised by written notice to the Company,
at the principal executive office of the Company, in the form of Exhibit A
annexed hereto. Such notice shall state the election to exercise this option and
the number of Option Shares for which it is being exercised and shall be signed
by the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares (unless payment
is being made pursuant to Section 7(a)(iii) hereof), and the Company shall
deliver a certificate or certificates representing such shares as soon as
practicable after the notice shall be received. Such certificate or certificates
shall be registered in the name of the person or persons so exercising this
option (or, if this option shall be exercised by the Employee and if the
Employee shall so request in the notice exercising this option, shall be
registered in the name of the Employee and another person jointly, with right of
survivorship). In the event this option shall be exercised, pursuant to Section
5 hereof, by any person or persons other than the Employee, such notice shall be
accompanied by appropriate proof of the right of such person or persons to
exercise this option.
10. Transferability of Option. This option may be transferred by the
Employee to (i) the spouse, children, or grandchildren of the Employee
("Immediate Family Members"); (ii) a trust or trusts for the exclusive benefit
of the Employee or the Immediate Family Members; or (iii) a partnership, limited
liability company, corporation or other entity in which the Employee or the
Immediate Family Members are the only partners, members, or stockholders. Any
subsequent transfer of this option shall be prohibited other than by will or the
laws of descent and distribution.
11. No Obligation to Exercise Option. The grant and acceptance of this
option imposes no obligation on the Employee to exercise it.
12. No Obligation to Continue Employment. Neither this Agreement nor
the grant of this option imposes any obligation on the Company or any Related
Corporation to continue to employ the Employee.
13. No Rights as Stockholder until Exercise. The Employee shall have no
rights as a stockholder with respect to the Option Shares until such time as the
Employee has exercised this option by delivered a notice of exercise and has
paid in full the purchase price for the number of shares for which this option
is to be so exercised in accordance with Section 8. No adjustment shall be made
for dividends or similar rights for which the record date is prior to such date
of exercise.
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14. Adjustments Upon Changes in Capitalization and Other Events. Upon
the occurrence of any of the following events, an Employee's rights with respect
to this option shall be adjusted as hereinafter provided:
(a) Stock Dividends and Stock Splits. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of this option shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) Recapitalization Adjustments. Immediately upon the
consummation of an Acquisition (as defined below), this option shall immediately
become fully exercisable and shall remain the obligation of the Company or be
assumed by the surviving or acquiring entity, and there shall automatically be
substituted for the shares of Common Stock subject to this option, the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition. In the event of a reorganization,
recapitalization, merger, consolidation, or any other change in the corporate
structure or shares of the Company, adjustments in the number and kind of shares
covered by, and in the exercise price of, this option necessary to maintain the
proportionate interest of the Employee and preserve, without exceeding, the
value of this option, shall be made. For purposes of this Section 14, an
"Acquisition" shall mean: (x) any merger, consolidation or purchase of
outstanding capital stock of the Company, or other form of business combination
in which the Company is the target of such combination or after which the voting
securities of the Company outstanding immediately prior thereto represent
(either by remaining outstanding or by being converted into voting securities of
the surviving or acquiring entity) less than 50% of the combined voting power of
the voting securities of the Company or such surviving or acquiring entity
outstanding immediately after such event (other than as a result of a financing
transaction); or (y) any sale of all or substantially all of the capital stock
or assets of the Company in a business combination (other than in a spin-off or
similar transaction); or (z) any other acquisition of the business of the
Company, as determined by the Committee.
(c) Issuance of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to this option. No adjustments shall be made for dividends
paid in cash or in property other than securities of the Company.
(d) Adjustments. Upon the happening of any of the foregoing
events, the class and aggregate number of shares that are subject to this option
shall be appropriately adjusted to reflect such events. The Committee shall
determine the specific adjustments to be made under this Section 14 and its
determination shall be conclusive.
15. Withholding Taxes. If the Company or any Related Corporation in its
discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Employee hereby agrees that the Company or any Related
Corporation may withhold from the Employee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or another
property otherwise deliverable to the Employee on exercise of this option. The
Employee further agrees that, if the Company or Related Corporation does not
withhold an amount from the Employee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Employee will make reimbursement on demand, in cash, for the amount withheld.
16. Employee Not to Compete. The Employee acknowledges that he is
subject to certain non-competition obligations set forth in the Agreement with
Employee between the Employee and the Company dated March 17, 2004.
17. Provision of Documentation to Employee. By signing this Agreement
the Employee acknowledges receipt of a copy of this Agreement.
18. Miscellaneous.
(a) Notices. All notices hereunder shall be in writing and
shall be deemed given when sent by certified or registered mail, postage
prepaid, return receipt requested, to the address et forth below. The addresses
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or such notices may be changed from time to time by written notice given in the
manner provided for herein.
(b) Entire Agreement; Modification. This Agreement constitutes
the entire agreement between the parties relative to the subject matter hereof,
and supersedes all proposals, written or oral, and all other communications
between the parties relating to the subject matter of this Agreement. This
Agreement may be modified, amended or rescinded only by a written agreement
executed by both parties.
(c) Severability. The invalidity, illegality or
unenforceability of any provision of this Agreement shall in no way affect the
validity, legality or enforceability or of any other provisions.
(d) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, subject to the limitations set forth in Section 10
hereof.
(e) Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of the conflicts of laws thereof. The
preceding choice of law provisions shall apply to all claims, under any theory
whatsoever, arising out of the relationship of the parties contemplated herein.
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
IONICS, INCORPORATED
/s/Lester B. Devitt By: /s/Douglas R. Brown
----------------------- -----------------------------
Employee Douglas R. Brown
Chief Executive Officer
Lester B. Devitt
----------------
Print Name of Employee
Address:
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EXHIBIT A
Ionics, Incorporated
65 Grove Street
Watertown, MA 02472
Attention: Assistant Treasurer
Gentlemen:
Please take notice that the undersigned hereby elects to exercise the stock
option granted to Lester B. Devitt on April 30, 2004 by and to the extent of
purchasing __________ shares of the Common Stock of Ionics, Incorporated (the
"Company") for the option price of $23.07 per share, subject to the terms and
conditions of the Inducement Non-Qualified Stock Option Agreement dated as of
April 30, 2004 by and between the Company and Lester B. Devitt (the
"Agreement").
The undersigned hereby agrees to make payment, in cash or in such other property
as permitted under the Agreement, of the purchase price for said shares for
delivery to the undersigned of the stock certificate of the Company representing
the shares purchased, pursuant to Section 7 of the Agreement. If the undersigned
is making payment of any part of the purchase price by delivery of shares of
Common Stock of the Company, the undersigned hereby confirms that he has
investigated and considered the possible income tax consequences to the
undersigned of making such payments in said form, and also confirms that he has
owned such Common Stock free of any substantial risk of forfeiture for at least
six months.
The undersigned hereby specifically confirms to the Company that, unless the
Company has effected the registration with the U.S. Securities and Exchange
Commission of the shares of Common Stock to be issued pursuant to this exercise,
the undersigned is acquiring said shares for investment and not with a view to
sale or distribution thereof. The undersigned further confirms that said shares
shall be held subject to all of the terms and conditions and the Agreement.
Very truly yours,
-------------------------------
Signed by ______________________
(party duly exercising option)
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EXHIBIT 5.1
June 7, 2004
Ionics, Incorporated
65 Grove Street
Watertown, Massachusetts 02472-2882
Re: Registration Statement on Form S-8 relating to an Inducement Non-Qualified
Stock Option Agreement
Ladies and Gentlemen:
As General Counsel for Ionics, Incorporated, a Massachusetts corporation (the
"Company"), I am familiar with its corporate affairs. In particular, I have
acted as counsel for the Company in connection with the registration of 150,000
shares of the Company's common stock, par value $1.00 per share (the "Shares"),
reserved for issuance under an Inducement Non-Qualified Stock Option Agreement
between the Company and Lester B. Devitt, its newly appointed Vice President,
Americas Sales and Marketing, Water Systems Division, dated April 30, 2004 (the
"Option") pursuant to a Registration Statement on Form S-8 (the "Registration
Statement") filed by the Company on the date hereof with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the
conduct of certain corporate proceedings relating thereto.
As such counsel, I have examined and am familiar with the Registration
Statement, certain corporate records of the Company, including its Restated
Articles of Organization, as amended, its By-Laws, as amended, minutes of
meetings of its Board of Directors and stockholders, and such other documents,
instruments and certificates of government officials as I have deemed necessary
as a basis for the opinions herein expressed.
In my examination described in the preceding paragraph, I have assumed the
genuineness of all signatures, the authenticity of all documents submitted to me
as originals, the conformity to the corresponding originals of all documents
submitted to me as copies, the authenticity of the originals of such copies, and
the accuracy and completeness of all corporate records.
I have made such examination of Massachusetts law as I have deemed relevant for
purposes of this opinion, but have not made any review of the laws of any other
state or jurisdiction. Accordingly, this opinion is limited to Massachusetts
law.
Based upon and subject to the foregoing, I am of the opinion that the Shares to
be issued by the Company from time to time pursuant to the Plan will be duly
authorized, validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and further consent to the use of my name wherever
appearing in the Registration Statement and any amendments thereto. This opinion
is being furnished to you solely for the foregoing use and, other than in
connection with such use, is not to be disseminated, reproduced or published in
any form, used for any other purpose or relied upon by any other person or
entity without my prior written consent.
Very truly yours,
/s/ Stephen Korn
----------------
Stephen Korn
General Counsel
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EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 12, 2004, relating to the
financial statements and financial statement schedule of Ionics, Incorporated,
which appears in the Ionics, Incorporated Annual Report on Form 10-K for the
year ended December 31, 2003.
/s/PricewaterhouseCoopers LLP
-----------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 7, 2004
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Ionics, Incorporated of our report dated November 3, 2003 with
respect to the combined balance sheets of The Ecolochem Group as of September
30, 2003 and 2002, and the related combined statements of earnings,
stockholders' equity and comprehensive income, and cash flows for each of the
years in the three-year period ended September 30, 2003, which report appears in
the Form 8-K of Ionics, Incorporated filed on February 12, 2004.
/s/KPMG LLP
-----------
KPMG LLP
Norfolk, Virginia
June 7, 2004
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