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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 0-27506
COHR INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 95-4559155
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION)
21540 PLUMMER STREET 91311
CHATSWORTH, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 773-2647
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO --- ---
As of August 7, 1997, there were outstanding 6,433,189 shares of the
Registrant's Common Stock, par value $0.01.
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COHR INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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Page Number
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements:
Consolidated Balance Sheets as of June 30, 1997 and
March 31, 1997 Consolidated Statements of Income for
the three months ended June 30, 1997, and June 30,
1996 Consolidated Statements of Cash Flows for the
three months ended June 30, 1997, and June 30, 1996
Notes to Financial Statements
Item 2 Management's Discussion and Analysis of Financial
Condition and results of Operations
General
Results of Operations
PART II OTHER INFORMATION
Item 1 Legal Proceedings
Item 4 Submission of matters to a vote of Security-Holders
Item 6 Exhibits and Reports on Form 8-K
</TABLE>
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PART I
COHR INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
ASSETS
JUNE 30, 1997 MARCH 31, 1997
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(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $21,125 $22,948
Investments 2,000 6,000
Accounts receivable - Trade, net of allowance for doubtful accounts of
$1,565 (June 30, 1997) and $1,490 (March 31, 1997) 29,925 25,439
Other 2,026 2,325
Inventory 8,974 8,535
Prepaid expenses and other 903 1,263
Deferred income tax asset 1,143 1,143
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Total current assets 66,096 67,653
EQUIPMENT AND IMPROVEMENTS, Net 7,547 6,943
INTANGIBLE ASSETS, Net of accumulated amortization of $839
(June 30, 1997) and $665 (March 31, 1997) 9,714 9,237
OTHER ASSETS 242 351
------- -------
TOTAL $83,599 $84,184
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $60 $1,342
Accounts payable - trade and other 3,309 4,040
Accrued expenses 2,972 2,618
Deferred revenue 5,766 6,394
Income tax payable 844 162
Current portion of long-term debt 966 853
------- -------
Total current liabilities 13,917 15,409
LONG-TERM DEBT 469 1,146
DEFERRED INCOME TAX LIABILITY 628 628
SHAREHOLDERS' EQUITY
Preferred Stock, $.01 par value; 2,000,000 shares authorized;
no shares issued and outstanding
Common Stock, $.01 par value; 20,000,000 shares authorized;
6,391,000 (1997) and 4,562,000 (1996) shares issued and outstanding 887 887
Additional paid in capital 55,153 55,153
Retained earnings 12,545 10,961
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Total shareholders' equity 68,585 67,001
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TOTAL $83,599 $84,184
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</TABLE>
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COHR INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30
--------------------
1997 1996
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<S> <C> <C>
Revenues $26,411 $20,465
Direct operating expenses 19,162 14,720
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Gross margin 7,249 5,745
Selling, general and administrative expenses 4,872 4,417
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Operating income 2,377 1,328
Interest income 310 232
Interest expense (14) (9)
------- -------
Income before income taxes 2,673 1,551
Provision for income taxes 1,089 620
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Net Income $1,584 $931
======= =======
Net Income Per Common Share $0.24 $0.20
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Weighted Average Number of Common Stock and
Common Stock Equivalents Outstanding 6,716 4,735
======= =======
</TABLE>
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COHR INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
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THREE MONTHS ENDED
JUNE 30,
-----------------------
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $1,584 $931
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Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 429 251
Provision for losses on accounts receivable 75 62
Changes in assets and liabilities:
(Increase) decrease in:
Receivables (4,561) (1,055)
Inventory (30) (448)
Other current assets 659 (751)
Other assets 109 (154)
Increase (decrease) in:
Notes Payable (1,282)
Accounts payable - trade (731) (548)
Accrued expenses 1,149 (1,095)
Deferred revenue (628) (831)
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Total Adjustments (4,811) (4,569)
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Net cash provided by (used in) operating activities (3,227) (3,638)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (723) (245)
Payment for acquisition of certain assets (1,147) (2,889)
Sale of investments 4,000
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Net cash provided by (used in) investing activities 2,130 (3,134)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 1,050
Payments and maturities on long-term debt (726) (411)
------- -------
Net cash provided by (used in) financing activities (726) 639
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NET DECREASE IN CASH AND CASH EQUIVALENTS (1,823) (6,133)
CASH AND CASH EQUIVALENTS, beginning of period 22,948 19,314
------- -------
CASH AND CASH EQUIVALENTS, end of period $21,125 $13,181
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes $407 $0
======= =======
Interest $70 $9
======= =======
DETAILS OF BUSINESSES OR ASSETS ACQUIRED AT FAIR VALUE
ARE AS FOLLOWS:
Current assets $409 $853
Equipment 138 1,520
Goodwill and other intangibles 660 2,465
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1,207 4,838
------- -------
Note issued 60
Liabilities assumed 0 1,949
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Net cash paid for acquisitions $1,147 $2,889
======= =======
</TABLE>
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COHR INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended June 30, 1997
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying consolidated financial
statements include all adjustments (which consist only of normal recurring
adjustments) necessary for a fair presentation of the financial position of COHR
Inc. ("COHR") and subsidiaries (collectively, the "Company"), and the results of
its operations and its cash flows for the interim periods presented. Although
COHR believes that the disclosures in these consolidated financial statements
are adequate to make the information presented not misleading, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. Results of operations for the interim periods are not
necessarily indicative of results to be expected for any other interim period or
for the full year.
The consolidated financial statements for the three months ended June
30, 1996 and June 30, 1997 are unaudited and should be read in conjunction with
the consolidated financial statements and notes thereto included in COHR's
Annual Report on Form 10-K, for the year ended March 31, 1997.
Consolidation of Subsidiaries - The Company's financial statements
include the activity of all of its wholly-owned subsidiaries over which the
Company has direct or indirect unilateral and perpetual control. All
intercompany transactions have been eliminated in consolidation.
Net Income Per Common Share - Net income per common share is computed
based on the weighted average number of shares outstanding, giving retroactive
effect to all stock splits.
2. SUBSEQUENT EVENTS
Subsequent to June 30, 1997, the Company acquired the business of a
company in a business line similar to that of COHR Inc. The acquisition included
the purchase of certain assets including inventory, equipment, and other assets,
for a purchase price of $243,000, of which $180,000 was paid in cash, with a
short term note issued for the remainder.
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company is a national outsourcing service organization providing
equipment servicing, group purchasing and other services to hospitals,
integrated health systems and alternate site providers. The Company operates 32
regional service and sales sites to support its equipment services operations
and eight regional sales and customer service sites to support its group
purchasing activities.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 VERSUS THREE MONTHS ENDED JUNE 30, 1996
Revenues -- The Company's revenues for the three months ended June 30,
1997 totaled $26.4 million, an increase of $5.9 million or 28.8% over revenues
of $20.5 million for the three months ended June 30, 1996. Of the $5.9 million
increase in revenues, $5.5 million resulted from growth in COHR MasterPlan. The
$5.5 million was primarily from increases in revenues from sites acquired or
opened in previous periods. The Company acquired one new service and sales site
in the three months ended June 30, 1997.
Direct Operating Expenses -- The Company's direct expenses for the
three months ended June 30, 1997 totaled $19.2 million which represented an
increase of $4.5 million or 30.6% over the three months ended June 30, 1996
total of $14.7 million. Direct operating expenses as a percentage of revenues
for the three months ended June 30, 1997 increased to 72.7% from 71.7% for the
three months ended June 30, 1996.
Gross Margin. The Company's gross margin for the three months ended
June 30, 1997 totaled $7.2 million, an increase of $1.5 million or 26.3% over
the three months ended June 30, 1996 total of $5.7 million. Gross margin as a
percentage of revenues decreased to 27.3% for the three months ended June 30,
1997 from 27.8% for the three months ended June 30, 1996.
Selling, General and Administrative Expenses. The Company's selling,
general and administrative expenses for the three months ended June 30, 1997
totaled $4.9 million, an increase of $.5 million or 11.4% over the three months
ended June 30, 1996 total of $4.4 million. As a percentage of revenues, selling,
general and administrative expenses decreased during the three months ended June
30, 1997 to 18.6% from 21.5% during the three months ended June 30, 1996. The
absolute increase in expenses reflected the increase in costs necessary to
support the Company's expanded operations. The decrease in selling, general and
administrative expenses as a percentage of revenues reflected the growth of
revenues without a corresponding increase in administrative costs, as well as
other cost savings achieved through the consolidation of regional sales and
customer service sites.
Operating Income. The Company's operating income for the three months
ended June 30, 1997 totaled $2.4 million, an increase of $1.1 million or 84.6%
over the three months ended June 30 ,1996 total of $1.3 million. Operating
income as a percentage of revenues for the three months ended June 30, 1997
increased to 9.1% as compared to 6.3% for the three months ended June 30, 1996.
Provision for Income Taxes. The Company's provision for income taxes
for the three months ended June 30, 1997 totaled $1.1 million, an increase of
$.5 million or 83.3% over the three months ended June 30, 1996 total of
$.6 million due to the increase in pre-tax income for the period. The
<PAGE> 8
Company's effective tax rate for the three months ended June 30, 1997 and June
30, 1996 was 40.8% and 40.0% respectively.
Net Income. The Company's net income for the three months ended June
30, 1997 totaled $1.6 million, an increase of $.7 million or 77.8% over the
three months ended June 30, 1996 total of $.9 million. As a percentage of
revenues, net income increased to 6.1% in the three months ended June 30, 1997
from 4.4% in the three months ended June 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $52.2 million as of June 30, 1997
and March 31, 1997. The Company had cash and cash equivalents of $21.1 million
and $22.9 million for the same respective periods.
Net cash used in operating activities was $3.2 million and $3.6 million
for three months ended June 30, 1997 and 1996, respectively. The fluctuations in
cash used in operations is due primarily to changes in accounts receivable,
inventories, accounts payable and current income tax liabilities.
Net cash provided by (used in) investing activities was $2.1 million
and $(3.1) million for the three months ended June 30, 1997 and 1996
respectively. The source of cash in the three months ended June 30, 1997 was the
maturity of short-term investments. The principal uses of this cash were for the
purchase of businesses, customer lists and related assets. Capital expenditures
during these periods amounted to $.7 million and $.2 million respectively.
Cash flows (used in) provided by financing activities were principally
for acquiring new debt and payments on existing debt.
INFLATION
The Company believes that its operations have not been materially
adversely affected by inflation. The Company expects that salary and wage
increases for its skilled staff will continue to be higher than average wage
increases, as is common in the company's industry.
<PAGE> 9
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved from time to time in various legal proceedings
incidental to its business. In the opinion of the Company's management, no such
pending litigation is likely to have a material adverse effect on the Company's
business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
The annual meeting of stockholders of the Company was held on July 24,
1997. At the meeting, James D. Barber, Michael I. Matsuura and Frederick C.
Meyer were nominated for election as directors of the Company, each to hold
office until the 2000 annual meeting of stockholders, and there were no other
nominations. There were present at the meeting, in person or by proxy, holders
of 5,226,759 shares of the Company, 81.3% of the total shares outstanding.
The votes cast for election of directors was as follows:
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Nominee Votes For Votes Withheld
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<S> <C> <C>
James D. Barber 5,205,864 20,895
Michael I. Matsuura 5,205,564 21,195
Frederick C. Meyer 5,205,864 20,895
</TABLE>
Following the meeting Stephen W. Gamble, Ronnie J. Messenger and Louis A.
Simpson continued to serve as directors with the terms expiring at the 1998
annual meeting and Paul Chopra and Lynn Reitnouer continued to serve as
directors with the terms expiring at the 1999 annual meeting.
At the annual general meeting, the Stockholders approved the 1996 Stock Option
Plan, which is designed to provide an incentive for key employees and
nonemployee directors and to enable the Company to attract and retain the
services of key employees and nonemployee directors. 300,000 shares of the
Company's common stock may be issued upon exercise of stock options granted
under the 1996 Stock Option Plan.
The votes cast for adoption of the 1996 Stock Option Plan was as follows:
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Votes For Votes Against Abstain
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5,183,402 19,606 23,751
</TABLE>
The votes cast for ratifications of the appointment of Deloitte & Touche LLP as
independent public accountants for the Company for the fiscal year ending March
31, 1998 was as follows:
<TABLE>
<CAPTION>
Votes For Votes Against Abstain
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<S> <C> <C>
5,219,563 4,446 2,750
</TABLE>
There was no other action taken at the meeting.
ITEM 6. EXHIBITS & REPORTS ON FORM 8-K
(a) Exhibits included or incorporated herein:
See Exhibit Index
(b) Reports on Form 8-K
Not applicable
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COHR INC.
-------------------------------------
(Registrant)
Date: August 14, 1997 /s/ PAUL CHOPRA
-------------------------------------
Paul Chopra
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: August 14, 1997 /s/ UMESH MALHOTRA
-------------------------------------
Umesh Malhotra
Chief Financial Officer
(Principal Financial Officer)
<PAGE> 11
COHR INC.
INDEX TO EXHIBITS
ITEM__(a)3
(a) EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
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<S> <C> <C>
3.1* Certificate of Incorporation of Registrant ..................................
3.2* By-laws of Registrant .......................................................
4.1* Form of Warrant to Purchase Common Stock ....................................
4.2* Form of Registration Rights Agreement between Registrant, Healthcare
Association of Southern California ("HASC") and Hospital Council
Coordinated Programs, Inc. ..................................................
4.3* Specimen Stock Certificate ..................................................
10.1* Form of Indemnity Agreement entered into between Registrant and each of
its executive officers and directors ........................................
10.2* Employment Agreement between Registrant and Paul Chopra, effective
January 1, 1996 .............................................................
10.3* Executive Long-Term Incentive Plan of Registrant ............................
10.4* 1995 Stock Option Plan of Registrant and Form of Nonstatutory
Option Grant Under the Plan .................................................
10.5*** Revolving Credit Agreement between Registrant and 1st Business Bank,
dated June 11, 1996, together with Promissory Note ..........................
10.6**** Amendment dated November 14, 1996 to Revolving Credit Agreement
between Registrant and 1st Business Bank dated June 11, 1996, and
Promissory Note dated November 20, 1996 .....................................
10.7* Administrative Services Agreement between Registrant and Healthcare
Association of Southern California, dated January 1, 1996 ...................
10.8** Office Lease between TCEP II properties and Registrant dated May 8, 1996 ....
10.9 1996 Stock Option Plan of Registrant, as amended and restated on
June 17, 1997 ...............................................................
11 Computation of Per Share Earnings ...........................................
27 Financial Date Schedule .....................................................
</TABLE>
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* Incorporated by reference from Registrant's Statement on Form S-1,
Registration No. 33-80635.
** Incorporated by reference from Registrant's Annual Report for
the fiscal year ended March 31, 1996 on Form 10-K.
*** Incorporated by reference from Registrant's Quarterly Report for the
fiscal quarter ended September 30, 1996 on Form 10-Q.
**** Incorporated by reference from Registrant's Quarterly Report for the
fiscal quarter ended December 31, 1996 on Form 10-Q.
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Exhibit 10.9
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1996 STOCK OPTION PLAN
OF
COHR INC.
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TABLE OF CONTENTS
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Page
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ARTICLE I.
DEFINITIONS
Section 1.1 General..................................................................1
ARTICLE II.
SHARES SUBJECT TO PLAN
Section 2.1 Shares Subject to Plan...................................................3
Section 2.2 Unexercised Options and Other Rights.....................................4
Section 2.3 Effect of Certain Exercises..............................................4
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1 Key Employee Eligibility.................................................4
Section 3.2 Nonemployee Director Eligibility.........................................5
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1 Option Agreement.........................................................5
Section 4.2 Option Price.............................................................5
Section 4.3 Option Term..............................................................6
Section 4.4 Option Vesting...........................................................6
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1 Exercise Rights..........................................................8
Section 5.2 Partial Exercise.........................................................9
Section 5.3 Manner of Exercise.......................................................9
Section 5.4 Transfer of Shares to an Employee........................................9
Section 5.5 Certain Timing Requirements.............................................10
</TABLE>
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Section 5.6 Conditions to Issuance of Stock Certificates............................10
Section 5.7 Rights as Stockholders..................................................10
ARTICLE VI.
ADMINISTRATION
Section 6.1 Compensation Committee..................................................11
Section 6.2 Duties and Powers of Committee..........................................11
Section 6.3 Actions by the Committee................................................11
Section 6.4 Compensation; Professional Assistance; Good Faith Actions...............11
Section 6.5 No Liability............................................................11
Section 6.6 Indemnification.........................................................12
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.1 Not Transferable........................................................12
Section 7.2 Amendment or Termination of this Plan...................................12
Section 7.3 Changes in Common Stock or Assets of the Company........................12
Section 7.4 Change in Control.......................................................13
Section 7.5 Approval of Plan by Stockholders........................................14
Section 7.6 Tax Withholding.........................................................14
Section 7.7 Limitations Applicable to Section 16 Persons............................15
Section 7.8 Effect of Plan Upon Options and Compensation Plans......................15
Section 7.9 Non-qualified Stock Options.............................................16
Section 7.10 Compliance with Laws...................................................16
Section 7.11 Titles.................................................................16
Section 7.12 Governing Law..........................................................16
Section 7.13 Severability...........................................................16
</TABLE>
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1996 STOCK OPTION PLAN OF COHR INC.
The 1996 Stock Option Plan of COHR Inc. (the "Plan"), as established by
COHR Inc., a Delaware corporation (the "Company"), effective October 14, 1996,
is hereby amended and restated as set forth herein effective June 17, 1997.
The purposes of this Plan are as follows:
(a) To provide an additional incentive for officers and
eligible managerial employees ("Key Employees") and nonemployee members
of the Company's Board of Directors ("Nonemployee Directors") to
further the growth, development and financial success of the Company by
personally benefitting through the ownership of Company stock and/or
rights which recognize such growth, development and financial success.
(b) To enable the Company to obtain and retain the services of
Key Employees and Nonemployee Directors considered essential to the
long-range success of the Company by offering them an opportunity to
own stock in the Company and/or rights which will reflect the growth,
development and financial success of the Company.
ARTICLE I.
DEFINITIONS
Section 1.1 General. Wherever the following terms are used in this Plan
they shall have the meaning specified below, unless the context clearly
indicates otherwise.
"Affiliate" shall have the same meaning as in Rule 12b-2 of the
Exchange Act.
"Beneficiary" shall mean the person or persons properly designated by
the Optionee, including the Optionee's spouse or heirs at law, to exercise such
Optionee's rights under this Plan in the event of the Optionee's death, or if
the Optionee has not designated such person or persons, or such person or
persons shall all have predeceased the Optionee, the executor or administrator
of the Optionee's estate. Designation, revocation and redesignation of
Beneficiaries must be made in writing in accordance with rules established by
the Committee and shall be effective upon delivery to the Committee.
"Board" shall mean the Board of Directors of the Company.
"Bylaws" shall mean the Bylaws of the Company, as amended from time to
time.
"Change of Control" shall be defined at Section 7.4.
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<PAGE> 5
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
regulations and rulings thereunder. References to a particular section of the
Code shall include references to successor provisions.
"Committee" shall mean the Compensation Committee of the Board,
appointed as provided in Section 6.1 and the Bylaws of the Company.
"Common Stock" shall mean the common stock of the Company.
"Company" shall mean COHR Inc., a Delaware corporation, and any
successor corporation thereto, whether by reorganization, merger, consolidation
or otherwise.
"Director" shall mean a member of the Board.
"Effective Date" shall mean June 17, 1997.
"Employee" shall mean any employee (as defined in accordance with
Section 3401(c) of the Code) of the Company.
"Expiration Date" shall mean the last day of the term of an Option as
established in Section 4.3.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" of a share of Common Stock as of a given date shall
mean:
(i) if the Common Stock is listed on a national securities
exchange or authorized for quotation on the National Association of
Securities Dealers Inc.'s NASDAQ National Market ("NASDAQ/NMS"), the
closing price, regular way, of the Common Stock on such exchange or
NASDAQ/NMS, as the case may be, or if no such reported sale of the
Common Stock shall have occurred on such date, on the next preceding
date on which there was such a reported sale, or
(ii) if the Common Stock is not listed for trading on a
national securities exchange or authorized for quotation on NASDAQ/NMS,
the average of the closing bid and asked prices as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), or, if no such prices shall have been so reported for such
date, on the next preceding date for which such prices were so
reported, or
(iii) if the Common Stock is not listed for trading on a
national securities exchange and is not authorized for quotation on
NASDAQ/NMS or NASDAQ, the fair market value of the Common Stock as
determined in good faith by the Committee.
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<PAGE> 6
"Key Employee" shall mean any officer or other managerial Employee, as
designated from time to time by the Committee.
"Nonemployee Director" shall mean a member of the Board who is not an
Employee of the Company.
"Option" shall mean a stock option granted pursuant to this Plan.
"Optionee" shall mean a Participant.
"Participant" shall mean a person who has been granted an Option
pursuant to this Plan.
"Plan" shall mean this 1996 Stock Option Plan of COHR Inc.
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended in the future.
"Subsidiary" shall mean a United States or foreign corporation with
respect to which the Company owns, directly or indirectly, 50% or more of the
then-outstanding common stock.
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company is
terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, permanent and total disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of an Optionee by the Company and (ii) at
the discretion of the Committee, terminations which result in a temporary
severance of the employee-employer relationship that do not exceed one (1) year.
The Committee, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment.
Notwithstanding any other provision of this Plan, the Company has an absolute
and unrestricted right to terminate an Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
ARTICLE II.
SHARES SUBJECT TO PLAN
Section 2.1 Shares Subject to Plan. The shares subject to Options shall
be Common Stock, initially shares of the Company's common stock, no par value
per share, as presently constituted, and the aggregate number of such shares
which may be issued upon exercise of such options shall not exceed 300,000
shares. The number of shares for which Options may
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<PAGE> 7
be granted to any Participant in any calendar year shall not exceed 100,000.
Such total numbers of shares specified in the prior two sentences shall be
adjusted in accordance with the provisions of Section 7.3. The shares of Common
Stock issuable upon exercise or grant of an Option may be either previously
authorized but unissued shares or issued shares which have been repurchased by
the Company.
Section 2.2 Unexercised Options and Other Rights. If any Option expires
or is cancelled without having been fully exercised, the number of shares
subject to such Option but as to which such Option was not exercised prior to
its expiration or cancellation shall not be charged against the maximum number
of shares of Common Stock that may be issued under this Plan.
Section 2.3 Effect of Certain Exercises. If any shares of Common Stock
issuable pursuant to any Option are surrendered to the Company as payment for
the exercise price of said Option, the number of shares of Common Stock issuable
but so surrendered shall be charged against the maximum number of shares of
Common Stock that may be issued under this Plan. In the event the Company
withholds shares of Common Stock for tax withholding purposes pursuant to
Section 7.6 hereof, the number of shares that would have been issuable but that
are withheld pursuant to the provisions of Section 7.6 shall be charged against
the maximum number of shares of Common Stock that may be issued under this Plan.
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1 Key Employee Eligibility.
(a) Key Employees selected by the Committee, in its
absolute discretion, shall be eligible to be granted one or more
Options under the Plan. The Committee shall from time to time, in its
absolute discretion:
(i) Determine which Employees are Key Employees
and, from the Key Employees, which Key Employees shall be
granted Options under the Plan.
(ii) Determine the number of shares to be subject to
each such Option granted to eligible Key Employees; and
(iii) Determine the terms and conditions of each such
Option, consistent with this Plan.
(b) Following the determination of the award to be granted to
an eligible Key Employee, the Committee shall instruct the Secretary of
the Company to issue the
-4-
<PAGE> 8
Option to such Key Employee and may impose such conditions on the grant
of the Option as it deems appropriate. Section 3.2 Nonemployee
Director Eligibility.
(a) Nonemployee Directors selected by the Committee, in its
absolute discretion, shall be eligible to be granted one or more
Options under the Plan. The Committee shall, from time to time, in its
absolute discretion:
(i) Determine which Nonemployee Directors,
including Nonemployee Directors serving on the Board on the
date this Plan is adopted and Nonemployee Directors thereafter
elected to the Board, shall be granted Options under the Plan;
(ii) Determine the number of shares to be subject to
each such Option granted to eligible Nonemployee Directors;
and
(iii) Determine the terms and conditions of each such
Option, consistent with this Plan.
(b) Following the determination of the award to be granted to
an eligible Nonemployee Director, the Committee shall instruct the
Secretary of the Company to issue the Option to such Nonemployee
Director and may impose such conditions on the grant of the Option as
it deems appropriate.
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1 Option Agreement. Each Option shall be evidenced by a
written stock option agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain the Option exercise
price, the terms for payment of the exercise price, the duration of the Option,
the number of shares of Common Stock to which the Option pertains, the terms of
the vesting schedule by which the Participant's rights under the Option become
nonforfeitable and such other terms and conditions as the Committee determines
appropriate, consistent with this Plan.
Section 4.2 Option Price.
(a) Except as provided at Subsection (b), the price per share
of the shares subject to each Option shall be set by the Committee;
provided, however, that such price shall be no less than the stated par
value of a share of Common Stock, if any, and
-5-
<PAGE> 9
shall in all cases be no less than the Fair Market Value of a share of
Common Stock as of the date the Option is granted.
(b) The price per share of the shares subject to each Option
granted to Nonemployee Directors pursuant to Section 3.2(a) shall in
each case be equal to the Fair Market Value of a share of Common Stock
as of the date the Option is granted.
Section 4.3 Option Term. Subject to earlier termination as provided
herein, the term of an Option shall be ten (10) years from the date the Option
is granted. The last day of the term of the Option shall be the Option's
Expiration Date.
Section 4.4 Option Vesting.
(a) For each Optionee who is a Nonemployee Director, unless
otherwise determined by the Committee, the Optionee's right to exercise
an Option shall at all times be 100% vested.
(b) For each Optionee who is a Key Employee, unless otherwise
determined by the Committee, the Optionee's right to exercise an Option
shall be immediately and automatically 25% vested upon the grant of the
Option and thereafter shall become vested in accordance with the
following schedule:
<TABLE>
<CAPTION>
Anniversary of
Date Option Granted Percentage Vested
------------------- -----------------
<S> <C>
First Anniversary 50%
Second Anniversary 75%
Third Anniversary 100%
</TABLE>
An Optionee may not exercise any part of an Option which is not vested.
At any time after the grant of an Option, the Committee may, in its
sole discretion and subject to whatever terms and conditions it
determines appropriate, accelerate the period during which an Option
vests hereunder.
(c) Notwithstanding Subsection (b), in the event of an
underwritten public offering of Common Stock by the Company or by an
Affiliate of the Company on or after January 1, 1997, each Optionee who
is a Key Employee shall automatically become 50% vested in the
nonvested portion of the Option awarded to such Optionee, determined as
of the date of the underwritten public offering. In such event, the
nonvested portion of the Option awarded to an Optionee, after
application of this Subsection (c), shall thereafter become vested as
follows:
-6-
<PAGE> 10
(i) If the underwritten public offering occurs
prior to the first anniversary of the date the Option is granted, then:
<TABLE>
<CAPTION>
Anniversary of
Date Option Granted Percentage Vested
------------------- -----------------
<S> <C>
First Anniversary 33 1/3%
Second Anniversary 66 2/3%
Third Anniversary 100%
</TABLE>
(ii) If the underwritten public offering occurs after
the first anniversary but prior to the second anniversary of
the date the Option is granted, then:
<TABLE>
<CAPTION>
Anniversary of
Date Option Granted Percentage Vested
------------------- -----------------
<S> <C>
Second Anniversary 50%
Third Anniversary 100%
</TABLE>
(iii) If the underwritten public offering occurs
after the second anniversary but prior to the third
anniversary of the date the Option is granted, then:
<TABLE>
<CAPTION>
Anniversary of
Date Option Granted Percentage Vested
------------------- -----------------
<S> <C>
Third Anniversary 100%
</TABLE>
(d) Notwithstanding Subsection (b), in the event of a Change
in Control, each Optionee who is a Key Employee shall automatically
become 100% vested in the Option awarded to such Optionee even if the
Change of Control shall occur prior to the third anniversary of the
date an Option is granted to the Optionee.
(e) No portion of an Option which is unexercisable at
Termination of Employment shall thereafter become exercisable;
provided, however, that provision may be made that such Option shall
become exercisable, with the consent of the Committee, in the event of
a Termination of Employment because of the Optionee's normal retirement
or permanent and total disability (each as determined by the Committee
in accordance with Company policies), death or early retirement or any
other reason permitted by the Committee.
(f) Anything in this Section 4.4 to the contrary
notwithstanding, no Option shall be exercisable by any Optionee who is
then subject to Section 16 of the Exchange Act (a "Section 16 Person")
within the period ending six (6) months after the date the Option is
granted. This Subsection (f) shall not apply to the exercise of any
Option by an Optionee if the grant of such Option to the Optionee was
approved in advance by the
-7-
<PAGE> 11
Board or, if the Committee is then composed solely of two or more
Nonemployee Directors as described in Rule 16b-3 in respect of the
exemption of grants to Section 16 Persons from potential liability
under Section 16(b) of the Exchange Act, by the Committee, or was
approved in advance or subsequently ratified not later than the date of
the next annual meeting of the Company's stockholders, by the
stockholders.
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1 Exercise Rights.
(a) Subject to the restrictions on exercise of any part of an
Option which is nonvested, as provided for at Section 4.4, for those
Participants who are Key Employees, an Option shall be exercisable by
an Optionee while the Optionee is an Employee. Unless otherwise
permitted by the Committee, following an Optionee's Termination of
Employment, an Option may be exercised only in accordance with the
following:
(i) If the Optionee dies while an Option is
exercisable under the terms of this Plan, the Optionee's
Beneficiary may exercise such rights, to the extent the
Optionee could have done so immediately preceding his death,
within twelve (12) months after the Optionee's death, but not
later than the Option's Expiration Date.
(ii) If the Optionee's employment is terminated due
to his permanent and total disability, as determined by the
Committee, the Optionee may exercise his Option, to the extent
exercisable as of his Termination of Employment, within twelve
(12) months after termination, but not later than the Option's
Expiration Date.
(iii) If the Optionee's employment is terminated for
any reason other than those set forth in Paragraph (i) or (ii)
above, the Optionee may exercise his Option, to the extent
exercisable as of his Termination of Employment, within three
(3) months after Termination of Employment, but not later than
the Option's Expiration Date.
Notwithstanding the foregoing, with the consent of the Committee,
provision may be made that an Option shall become exercisable to the extent
provided in Section 4.4(e).
(b) For those Participants who are Nonemployee Directors, an
Option shall be exercisable by an Optionee while the Optionee is
serving as a member of the Board. If the Optionee's service as a member
of the Board terminates, then unless such
-8-
<PAGE> 12
termination is due to the Optionee's resignation as a member of the
Board, the Optionee may exercise his Option within ninety (90) days
following the date the Optionee ceases to be a member of the Board, but
not later than the Option's Expiration Date.
Section 5.2 Partial Exercise. Any exercisable Option may be exercised
in whole or in part. However, an Option shall not be exercisable with respect to
fractional shares.
Section 5.3 Manner of Exercise. All or a portion of any exercisable
Option shall be deemed exercised upon:
(a) Delivery of all of the following to the Secretary of
the Company or his office:
(i) A written notice complying with the applicable
rules established by the Committee or the Company stating that
the Option, or a portion thereof, is exercised. The notice
shall be signed by the Optionee or other person then entitled
to exercise the Option;
(ii) Such representations and documents as the
Committee, in its absolute discretion, deems necessary or
advisable to effect compliance with all applicable provisions
of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee
may, in its absolute discretion, also take whatever additional
actions it deems appropriate to effect such compliance,
including, without limitation, placing legends on share
certificates and issuing stop-transfer notices to agents and
registrars; and
(iii) In the event that the Option shall be exercised
pursuant to Section 5.1(a)(i) by any person or persons other
than the Optionee, appropriate proof of the right of such
person or persons to exercise the Option; and
(b) Full cash payment to the Secretary of the Company for the
exercise price of the shares being purchased under the Option. However,
at the discretion of the Committee, the terms of the Option may (i)
allow a delay in payment up to thirty (30) days from the date the
Option, or portion thereof, is exercised, (ii) allow payment, in whole
or in part, through the delivery of shares of Common Stock owned by the
Optionees, (iii) allow payment, in whole or in part, through the
surrender of shares of Common Stock then issuable upon exercise of the
Option; or (iv) allow payment, in whole or in part, through the
delivery of property of any kind which constitutes good and valuable
consideration.
Section 5.4 Transfer of Shares to an Employee. As soon as practicable
after receipt by the Company, pursuant to Section 5.3(b), of full cash payment
for the shares with respect to which an Option, or portion thereof, is exercised
by an Optionee, with respect to each such
-9-
<PAGE> 13
exercise, the Company shall transfer to the Optionee the number of shares equal
to the result of dividing:
(a) The amount of the payment made by the Optionee to the
Company pursuant to Section 5.3(b) by
(b) The price per share of the shares subject to the
Option as determined pursuant to Section 4.2.
Section 5.5 Certain Timing Requirements. At the discretion of the
Committee, shares of Common Stock issuable to the Optionee upon exercise of the
Option may be used to satisfy the Option exercise price or the tax withholding
consequences of such exercise only during such periods in which trading of the
Company Common Stock is permitted for Employees of the Company under Company
policy as in effect from time to time.
Section 5.6 Conditions to Issuance of Stock Certificates. The Company
shall not be required to issue or to deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any state or federal law, or under
the rulings or regulations of the Securities and Exchange Commission or
any other governmental regulatory body which the Committee shall, in
its absolute discretion, deem necessary or advisable;
(c) Obtaining any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following
the exercise of the Option as the Committee may establish from time to
time for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax.
Section 5.7 Rights as Stockholders. The holders of Options shall not
be, nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.
-10-
<PAGE> 14
ARTICLE VI.
ADMINISTRATION
Section 6.1 Compensation Committee. The Compensation Committee shall
consist of two or more Directors appointed by and holding office at the pleasure
of the Board. Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board.
Vacancies in the Committee may be filled by the Board.
Section 6.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan, the
Options, and the agreements pursuant to which the Options are granted or
awarded, and to adopt such rules for the administration, interpretation and
application of this Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such grant or award under this Plan need not be the
same with respect to each Optionee. In its absolute discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Committee under this Plan.
Section 6.3 Actions by the Committee. The Committee shall act with the
unanimous consent of its members in attendance at a meeting, or to the extent
permitted by law and the Bylaws, by telephonic meeting, or by a memorandum or
other written instrument signed by all members of the Committee.
Section 6.4 Compensation; Professional Assistance; Good Faith Actions.
Members of the Committee shall receive such compensation for their services as
members as may be determined by the Board. All expenses and liabilities which
members of the Committee incur in connection with the administration of this
Plan shall be borne by the Company. The Committee may, with the approval of the
Board, employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and the Company's officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon all Optionees, the
Company and all other interested persons. No members of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to this Plan, or any award made hereunder, and all members of
the Committee shall be fully protected by the Company in respect of any such
action, determination or interpretation.
Section 6.5 No Liability. No member of the Board or the Committee, or
Director, officer or employee of the Company shall be liable, responsible or
accountable in damages or otherwise for any determination made or other action
taken or any failure to act by such
-11-
<PAGE> 15
person so long as such person is not determined to be guilty by a final
adjudication of willful misconduct with respect to such determination, action or
failure to act.
Section 6.6 Indemnification. To the fullest extent permitted by law,
each of the members of the Board and the Committee and each of the Directors,
officers and employees of the Company shall be held harmless and be indemnified
by the Company for any liability, loss (including amounts paid in settlement),
damages or expenses (including reasonable attorneys' fees) suffered by virtue of
any determinations, acts or failures to act, or alleged acts or failures to act,
in connection with the administration of this Plan so long as such person is not
determined by a final adjudication to be guilty of willful misconduct with
respect to such determination, action or failure to act.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.1 Not Transferable. Options under this Plan may not be sold,
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution; provided, however, that an Optionee may designate a
Beneficiary to exercise his Option under this Plan after the Optionee's death.
No Option or interest or right therein shall be liable for the debts, contracts
or engagements of the Optionee or the Optionee's successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 7.1 shall prevent transfers by will or by
the applicable laws of descent and distribution. An Option shall be exercised
during the Optionee's lifetime only by the Optionee or his guardian or legal
representative.
Section 7.2 Amendment or Termination of this Plan. The Board may from
time to time in its discretion amend or modify the Plan without the approval of
the stockholders of the Company, except as such stockholder approval may be
required under the listing requirements of any national securities exchange or
national market system on which are listed any of the Company's equity
securities. No amendment, suspension or termination of this Plan shall, without
the consent of the holder of an Option, alter or impair any rights or
obligations under any Option theretofore granted or awarded. No Option may be
granted or awarded during any period after termination of this Plan.
Section 7.3 Changes in Common Stock or Assets of the Company.
(a) In the event that the outstanding shares of Common Stock
are hereafter changed into or exchanged for cash or a different number
or kind of shares or other
-12-
<PAGE> 16
securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination of
shares, appropriate adjustments shall be made by the Committee in the
number and kind of shares for the purchase of which Options may be
granted, including adjustments of the limitation in Section 2.1 on the
maximum number and the maximum number of shares subject to Options that
may be granted to any Participant in any calendar year and the kind of
shares which may be issued.
(b) In the event of such a change or exchange, other than for
shares or securities of another corporation or by reason of
reorganization, the Committee shall also make an appropriate and
equitable adjustment in the number and kind of shares as to which all
outstanding Options, or portions thereof then unexercised, shall be
exercisable and an appropriate and equitable adjustment to the Option
exercise price of all outstanding Options. Such adjustment shall be
made with the intent that after the change or exchange of shares, each
Optionee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in an outstanding Option may
include a necessary or appropriate corresponding adjustment in the
option exercise price, but shall be made without change in the total
price applicable to the Option, or the unexercised portion thereof
(except for any change in the aggregate price resulting from rounding
off of share quantities or prices).
(c) In the event of a "spin-off" or other substantial
distribution of assets of the Company which has a material diminutive
effective upon the Fair Market Value of the Company's Common Stock, the
Committee may in its discretion make an appropriate and equitable
adjustment to the Option exercise price to reflect such diminution.
Section 7.4 Change in Control. In the event of a Change in Control, the
terms of an Option shall provide that all granted or awarded Options will
immediately vest in the Optionee, and such Option shall be exercisable as to all
shares covered thereby, notwithstanding anything to the contrary in (i) Section
4.4 or (ii) the provisions of such Option. For purposes of this Section 7.4 and
this Plan in general, the term "Change in Control" shall mean any one or more of
the following:
(i) the acquisition or holding by any person, entity or
"group" within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (other than by the Company, any Subsidiary or any employee
benefit plan of the Company or a Subsidiary, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 40% or more of either the then-outstanding Common Stock or the
combined voting power of the Company's then-outstanding voting
securities entitled to vote generally in the election of directors
("Voting Power"); except that no such person, entity or group shall be
deemed to own beneficially any securities held by the Company or a
Subsidiary or any employee benefit plan (or any related trust) of the
Company or a Subsidiary; provided, however, that no Change of Control
shall be
-13-
<PAGE> 17
deemed to have occurred solely by reason of any such acquisition by a
corporation with respect to which, after such acquisition, more than
60% of both the then-outstanding common stock and the voting power of
such corporation are then-beneficially owned, directly or indirectly,
by the persons who were the beneficial owners of the Common Stock and
voting securities of the Company immediately before such acquisition in
substantially the same proportions as their respective ownership,
immediately before such acquisition, of the then-outstanding Common
Stock or the Voting Power of the Company, as the case may be; or
(ii) individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided that any individual who becomes
a director after the Effective Date whose election or nomination for
election by the Company's stockholders was approved by at least a
majority of the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election
of the directors of the Company (as such terms are used in Rule 14a-11
under the Exchange Act)) shall be deemed to be members of the Incumbent
Board; or
(iii) approval by the stockholders of the Company of (A) a
merger, reorganization or consolidation with respect to which persons
who were the respective beneficial owners of the Common Stock and
Voting Power of the Company immediately before such merger,
reorganization or consolidation do not, immediately thereafter,
beneficially own, directly or indirectly, more than 60% of,
respectively, the then-outstanding common stock and the voting power of
the corporation resulting from such merger, reorganization or
consolidation, (B) a liquidation or dissolution of the Company or (C)
the sale or other disposition of all or substantially all of the assets
of the Company.
Section 7.5 Approval of Plan by Stockholders. This Plan shall be
submitted for the approval of the Company's stockholders within twelve (12)
months after the Effective Date. Options may be granted prior to such
stockholder approval, provided that such Options shall not be exercisable prior
to the time when this Plan is approved by the stockholders, and provided further
that if such approval has not been obtained at the end of said 12-month period,
all Options previously granted under this Plan shall thereupon be cancelled and
become null and void. The Company shall take such actions with respect to the
Plan as may be necessary to satisfy the requirements of Rule 16b-3.
Section 7.6 Tax Withholding.
(i) Whenever under the Plan shares of Common Stock are to be
delivered upon exercise of an Option or any other event with respect to rights
and benefits hereunder, the Company shall be entitled to require (a) that the
Optionee remit an amount in cash sufficient to satisfy all federal, state and
local tax withholding requirements related thereto
-14-
<PAGE> 18
("Required Withholding"), (b)
the withholding of such Required Withholding from compensation otherwise due to
the Optionee, or (c) any combination of the foregoing.
(ii) Subject to the following subsection, and if and to the
extent permitted by the Committee, an Optionee may elect the withholding ("Share
Withholding") by the Company of a portion of the shares of Common Stock
otherwise deliverable to such Optionee
upon the exercise of an Option (a "Taxable Event") having a Fair Market Value
equal to (a) the minimum amount necessary to satisfy Required Withholding
liability attributable to the Taxable Event; or (b) with the Committee's prior
approval, a greater amount, not to exceed the estimated total amount of such
Optionee's tax liability with respect to the Taxable Event.
(iii) Each Share Withholding election shall be subject to the
following conditions:
(a) the Optionee's election shall be subject to
the Committee's discretion to revoke the Optionee's right to elect Share
Withholding at any time before the Optionee's election if the Committee has
reserved the right to do so in the option agreement;
(b) the Optionee's election must be made before
the date on which the amount of tax to be withheld is determined; and
(c) the Optionee's election shall be
irrevocable.
The Committee shall not be obligated to issue shares and/or distribute
cash to any person upon exercise of any right until such payment has been
received or shares have been so withheld, unless withholding (or offset against
a cash payment) as of or prior to the date of such exercise is sufficient to
cover all such sums due or which may be due with respect to such exercise.
Section 7.7 Limitations Applicable to Section 16 Persons.
(a) Notwithstanding any other provision of this Plan, this
Plan and any Option granted to a Key Employee who is then subject to
Section 16 of the Exchange Act, shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16
of the Exchange Act (including any amendment to Rule 16b-3 of the
Exchange Act) that are requirements for the application of such
exemptive rule. Any such additional limitation shall be set forth in an
annex to this Plan, such annex to be incorporated herein by this
reference and made part of this Plan.
(b) With respect to persons subject to Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
-15-
<PAGE> 19
Moreover, in the event the Plan does not include a provision required
by Rule 16b-3 to be stated therein, such provision (other than one
relating to eligibility requirements, or the price and amount of
awards) shall be deemed automatically to be incorporated by reference
into the Plan insofar as participants subject to Section 16 are
concerned.
Section 7.8 Effect of Plan Upon Options and Compensation Plans. The
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company. Nothing in this Plan shall be construed to limit the
right of the Company (a) to establish any other forms of incentives or
compensation for employees of the Company or (b) to grant or assume options or
other rights otherwise than under this Plan in connection with any proper
corporate or partnership purpose including but not by way of limitation, the
grant or assumption of options in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business, stock or assets of
any corporation, partnership, firm or association or the performance of services
for the benefit of the Company.
Section 7.9 Non-qualified Stock Options. Options granted under this
Plan are not intended to be incentive stock options within the meaning of
Section 422(b) of the Code.
Section 7.10 Compliance with Laws. This Plan is subject to compliance
with all applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities law and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with
all applicable legal requirements. To the extent permitted by applicable law,
the Plan and Options granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
Section 7.11 Titles. Titles are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of this Plan.
Section 7.12 Governing Law. This Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of Delaware.
Section 7.13 Severability. If any portion of this Plan is declared by a
court of competent jurisdiction to be invalid or unenforceable after all appeals
have either been
-16-
<PAGE> 20
exhausted or the time for any appeals to be taken has expired, the remainder of
the terms, provisions, covenants and restrictions of this Plan shall remain in
full force and effect and in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, COHR Inc. has caused this instrument to be executed
by its duly authorized officers on this ____ day of _________________, 1997.
COHR INC.
By:
----------------------------
Title:
----------------------------
By:
----------------------------
Title:
----------------------------
-17-
<PAGE> 1
EXHIBIT 11
COHR INC.
COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------
<S> <C> <C>
1997 1996
------ -----
NET INCOME ATTRIBUTABLE TO
COMMON STOCK $1,584 $931
====== =====
PRIMARY AND FULLY DILUTED EARNINGS PER SHARE:
Weighted average number of common
shares outstanding 6,419 4,562
Dilutive effect of stock options and warrants
after application of treasury stock method 297 173
------ -----
Number of shares used to compute
primary earnings per share 6,716 4,735
Primary earnings per share $0.24 $0.20
====== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 21,125
<SECURITIES> 2,000
<RECEIVABLES> 31,490
<ALLOWANCES> 1,565
<INVENTORY> 8,974
<CURRENT-ASSETS> 66,096
<PP&E> 11,601
<DEPRECIATION> 4,054
<TOTAL-ASSETS> 83,599
<CURRENT-LIABILITIES> 13,917
<BONDS> 0
0
0
<COMMON> 887
<OTHER-SE> 67,698
<TOTAL-LIABILITY-AND-EQUITY> 83,599
<SALES> 26,411
<TOTAL-REVENUES> 26,411
<CGS> 19,162
<TOTAL-COSTS> 19,162
<OTHER-EXPENSES> 4,872
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14
<INCOME-PRETAX> 2,673
<INCOME-TAX> 1,089
<INCOME-CONTINUING> 1,584
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,584
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
</TABLE>
