<PAGE>
As filed with the Securities and Exchange Commission on July 2, 1998
Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________
800-JR CIGAR, INC.
(Exact name of Registrant as specified in its charter)
Delaware 52-2022117
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
_____________
800-JR CIGAR, Inc.
301 Route 10 East
Whippany, New Jersey 07981
(201) 884-9555
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
______________
1997 Long-Term Incentive Plan
(Full title of the Plan)
1997 Non-Employee Directors' Stock Plan
(Full title of the Plan)
800-JR Cigar, Inc. Employee Stock Purchase Plan
(Full title of the Plan)
and
800-JR Cigar, Inc. Employee Stock Purchase Plan for
Employees of MC Management
(Full title of the Plan)
______________
Lewis I. Rothman
President and Chief Executive Officer
800-JR CIGAR, Inc.
301 Route 10 East
Whippany, New Jersey 07981
(201) 884-9555
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
___________
Copy to:
Samuel B. Fortenbaugh III, Esq.
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
(212) 309-6000
_____________
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of securities to Amount to be offering aggregate offering Amount of
be registered registered (1) price per share price registration fee
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 470,000 shares $17.00 (2) $7,990,000 $2,357.05
10,000 shares $25.375(2) $253,750 $74.86
300,000 shares $17.6375(3) $5,291,250 $1,560.92
420,000 shares $20.75 (4) $8,715,000 $2,570.93
Total 1,200,000 shares $6,563.76
</TABLE>
(1) Pursuant to Rule 416(a) of the Securities Act of 1933, the number of
shares being registered shall be adjusted to include any additional
shares which may become issuable as a result of stock splits, stock
dividends, or similar transactions in accordance with the provisions
of the 1997 Long-Term Incentive Plan, the 1997 Non-Employee
Directors' Stock Plan, the 800-JR Cigar, Inc. Employee Stock
Purchase Plan, and the 800-JR Cigar, Inc. Employee Stock Purchase
Plan for Employees of MC Management.
(2) Calculated pursuant to Rule 457(h) for the purpose of calculating
the registration fee, based upon the price at which outstanding
options may be exercised.
(3) Calculated pursuant to Rules 457(c) and (h), based upon the average
of the reported high and low sales prices for the Common Stock as
reported on the Nasdaq National Market for June 26, 1998, discounted
15% to reflect the discount on the purchase price of the Common
Stock granted to eligible employees of the Company and MC
Management, pursuant to the terms of the 800-JR Cigar, Inc. Employee
Stock Purchase Plan and the 800-JR Cigar, Inc. Employee Stock
Purchase Plan for Employees of MC Management, respectively.
(4) Calculated pursuant to Rules 457(c) and (h),based on the average of
the reported high and low sales prices for the Common Stock as
reported on the Nasdaq National Market for June 26, 1998.
<PAGE>
EXPLANATORY NOTE
This Registration Statement registers the offer and sale of an aggregate of
1,200,000 shares, of which 800,000 shares are registered for offer and sale
under the 1997 Long-Term Incentive Plan, 300,000 shares are registered for offer
and sale under the 800-JR Cigar, Inc. Employee Stock Purchase Plan and the
800-JR Cigar, Inc. Employee Stock Purchase Plan for Employees of MC Management
(i.e., a combined total of 300,000 shares for both plans together), and 100,000
shares are registered for offer and sale under the 1997 Non-Employee Directors'
Stock Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Omitted as permitted.
Item 2. Registrant Information and Employee Plan Annual Information.
Omitted as permitted.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by 800-JR CIGAR, Inc., a
Delaware corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, filed with the Commission on April 1,
1998.
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998, filed with the Commission on May 14,
1998.
(c) The description of the Company's Common Stock, registered under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), contained in its Registration Statement on Form 8-A,
filed with the Commission on June 10, 1997, including any
amendments or reports filed for the purpose of updating such
description.
In addition, all reports and other documents subsequently filed by
the Company 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 have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Any statement contained herein or in a document all or a portion of
which is incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers.
Pursuant to the Company's Certificate of Incorporation and under
Delaware law, directors of the Company are not liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty, except for
liability in connection with a breach of duty of loyalty, for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, for dividend payments or stock repurchases illegal under Delaware law or
any transaction in which a director has derived an improper personal benefit.
The Company's Certificate of Incorporation provides for mandatory
indemnification of directors and officers of the Company against any expense,
liability and loss to which they become subject, or which they may incur as a
result of having been a director or officer of the Company. In addition, the
Company must advance or reimburse directors and officers for expenses incurred
by them in connection with certain claims.
In addition to the indemnification provision in the Certificate of
Incorporation, the Company has entered into an Indemnification Agreement with
each of its directors and executive officers in the belief that such individuals
may become unwilling to serve the Company without assurances that adequate
liability insurance, indemnification or a combination thereof is, and will
continue to be, provided to them.
The Company's By-Laws provide that the Company shall, to the fullest
extent permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify its officers and directors as
permitted pursuant thereto.
Section 145 of the General Corporation Law of the State of Delaware,
as amended, permits a corporation, under specified circumstances, to indemnify
its directors, officers, employees or agents against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlements actually and
reasonably incurred by them in connection with any action, suit or proceeding
brought by third parties by reason of the fact that they were or are directors,
officers, employees or agents of the corporation, if such directors, officers,
employees or agents acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reason to believe their
conduct was unlawful. In an action by or in the right of the corporation,
indemnification may be made only for expenses actually and reasonably incurred
by directors, officers, employees or agents in connection with the defense or
settlement of an action or suit, and only with respect to a matter as to which
they shall have acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interest of the corporation, except that no
indemnification shall be made if such person shall have been adjudged liable to
the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
directors, officers, employees or agents are fairly and reasonably entitled to
indemnify for such expenses despite such adjudication of liability.
Item 7. Exemption from Registration Claimed.
Not applicable.
II-2
<PAGE>
Item 8. Exhibits.
4.1 Certificate of Incorporation of the Company, incorporated
by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
333-23401).
4.2 By-Laws of the Company, incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1 (Registration No. 333-23401).
4.3 Specimen Common Stock Certificate, incorporated by
reference to Exhibit 4.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
4.4 The Company's 1997 Long-Term Incentive Plan, incorporated
by reference to Exhibit 10.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
4.5 The Company's 1997 Non-Employee Directors' Stock Plan,
incorporated by reference to Exhibit 10.2 to Amendment No.
1 to the Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
4.6 The Company's 1997 Employee Stock Purchase Plan,
incorporated by reference to Exhibit 10.3 to Amendment No.
1 to the Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
5 Opinion of Morgan, Lewis & Bockius LLP regarding
legality of the shares of Common Stock.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of J.H. Cohn LLP.
23.3 Consent of Morgan, Lewis & Bockius LLP (included in
Exhibit 5).
24 Power of Attorney (included on page II-5 of this
Registration Statement).
99 800-JR CIGAR, Inc. Employee Stock Purchase Plan for
Employees of MC Management.
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
(the "Securities Act");
(ii) To reflect in the Prospectus any facts or
events arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in this
II-3
<PAGE>
Registration Statement. Notwithstanding the
foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
and of the estimated maximum offering range may be
reflected in the form of Prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this Registration
Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this 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 may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company 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
Company 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 Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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, on June 30,
1998.
800-JR CIGAR, Inc.
By /s/ Lewis I. Rothman
------------------------------
Lewis I. Rothman
President and Chief Executive
Officer
Each person whose signature to this Registration Statement appears below hereby
appoints each of Lewis I. Rothman and Michael Colleton as his or her
attorney-in-fact to sign on his or her behalf individually and in the capacity
stated below and to file all supplements, amendments and post-effective
amendments to this Registration Statement, and any and all instruments or
documents filed as a part of or in connection with this Registration Statement
or any amendment or supplement thereto, and any such attorney-in-fact may make
such changes and additions to this Registration Statement as such
attorney-in-fact may deem necessary or appropriate.
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
Signature Title Date
/s/ Lewis I. Rothman
- ----------------------- Chairman of the Board, President June 30, 1998
Lewis I. Rothman and Chief Executive Officer
(Principal Executive Officer)
/s/ Michael E. Colleton
- ----------------------- Chief Financial Officer, June 30, 1998
Michael E. Colleton (Principal Financial Officer)
/s/ LaVonda M. Rothman
- ----------------------- Executive Vice President June 30, 1998
LaVonda M. Rothman and Director
/s/ Maureen A. Colleton
- ----------------------- Director June 30, 1998
Maureen A. Colleton
/s/ Jane Vargas
- ----------------------- Director June 30, 1998
Jane Vargas
II-5
<PAGE>
EXHIBIT INDEX
Exhibit Description
4.1 Certificate of Incorporation of the Company, incorporated
by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
333-23401).
4.2 By-Laws of the Company, incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1 (Registration No. 333-23401).
4.3 Specimen Common Stock Certificate, incorporated by
reference to Exhibit 4.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
4.4 The Company's 1997 Long-Term Incentive Plan, incorporated
by reference to Exhibit 10.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
4.5 The Company's 1997 Non-Employee Directors' Stock Plan,
incorporated by reference to Exhibit 10.2 to Amendment No.
1 to the Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
4.6 The Company's 1997 Employee Stock Purchase Plan,
incorporated by reference to Exhibit 10.3 to Amendment No.
1 to the Registrant's Registration Statement on Form S-1
(Registration No. 333-23401).
5 Opinion of Morgan, Lewis & Bockius LLP regarding
legality of the shares of Common Stock.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of J.H. Cohn LLP.
23.3 Consent of Morgan, Lewis & Bockius LLP (included in
Exhibit 5).
24 Power of Attorney (included on page II-5 of this
Registration Statement).
99 800-JR Cigar, Inc. Employee Stock Purchase Plan for
Employees of MC Management.
<PAGE>
EXHIBIT 5
[MORGAN, LEWIS & BOCKIUS LLP
LETTERHEAD]
June 30, 1998
800-JR CIGAR, Inc.
301 Route 10 East
Whippany, New Jersey 07981
Re: Issuance of Shares Pursuant to
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to 800-JR CIGAR, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), of a Registration Statement on Form S-8 (the
"Registration Statement") relating to the registration by the Company of an
aggregate of 1,200,000 shares, of which 800,000 shares are to be registered for
offer and sale under the 1997 Long-Term Incentive Plan, 300,000 shares are to be
registered for offer and sale under the 1997 Employee Stock Purchase Plan and
the 800-JR CIGAR, Inc. Employee Stock Purchase Plan for Employees of MC
Management (i.e., a combined total of 300,000 shares for both plans
together), and 100,000 shares are to be registered for offer and sale under
the 1997 Non-Employee Directors' Stock Plan (collectively, the "Shares").
In so acting, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of the Registration Statement, the
1997 Long-Term Incentive Plan, the 1997 Employee Stock Purchase Plan, the
800-JR CIGAR, Inc. Employee Stock Purchase Plan for Employees of MC
Management the 1997 Non-Employee Directors' Stock Plan and such other
documents, records, certificates and other instruments of the Company as
in our judgment are necessary or appropriate for purposes of this opinion.
Based on the foregoing, we are of the following opinion:
1. The Company is a corporation duly incorporated and validly existing
under the laws of the State of Delaware.
2. The Shares have been duly authorized and, when issued and paid for in
accordance with the 1997 Long-Term Incentive Plan, the 1997 Employee Stock
Purchase
<PAGE>
Plan, the 800-JR CIGAR, Inc. Employee Stock Purchase Plan for Employees
of MC Management and the 1997 Non-Employee Directors' Stock Plan, will
be validly issued, fully paid and non-assessable.
We are expressing the opinions above as members of the Bar of the
State of New York and express no opinion as to any law other than the General
Corporation Law of the State of Delaware.
We consent to the use of this opinion as an exhibit to the
Registration Statement. In giving such opinion, we do not thereby admit that we
are acting within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockivs LLP
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-00000) pertaining to the 1997 Long Term Incentive Plan, the
1997 Non-Employee Directors' Plan and the 1997 Employee Stock Purchase Plan
of 800 Jr - CIGAR, Inc. of our report dated February 27, 1998, with respect to
the consolidated financial statements and schedule of 800 JR - CIGAR, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31,
1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
MetroPark, New Jersey
June 26, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated May 21, 1996 on the consolidated
statements of income, stockholders' equity and cash flows of 800-JR CIGAR,
Inc. and subsidiaries for the year ended December 31, 1995 which appear in the
Annual Report on Form 10-K for the fiscal year ended December 31, 1997
previously filed by 800-JR CIGAR, Inc.
J. H. COHN LLP
Roseland, New Jersey
June 29, 1998
<PAGE>
EXHIBIT 99
800-JR CIGAR, INC.
EMPLOYEE STOCK PURCHASE PLAN
FOR EMPLOYEES OF
MC MANAGEMENT
ARTICLE I
Introduction
Sec. 1.01 Statement of Purpose. The purpose of the 800-JR Cigar,
Inc. Employee Stock Purchase Plan for Employees of MC Management is to
provide eligible employees of MC Management who wish to become stockholders, an
opportunity to purchase Common Stock of the Company. The Board of Directors of
the Company believes that participation in ownership will be to the mutual
benefit of the employees of MC Management and the Company.
Sec. 1.02 Internal Revenue Code Considerations. The Plan is not
intended to constitute an "employee stock purchase plan" within the meaning of
section 423 of the Internal Revenue Code of 1986, as amended.
ARTICLE II
Definitions
Sec. 2.01 "Administrative Committee" means the committee appointed by
the Board to administer the Plan, as provided in Section 6.04 hereof.
Sec. 2.02 "Board" means the Board of Directors of the Company.
Sec. 2.03 "Code" means the Internal Revenue Code of 1986, as amended.
Sec. 2.04 "Company" means 800-JR Cigar, Inc., a Delaware corporation.
Sec. 2.05 "Compensation" means the total remuneration paid, during
the period of reference, to an Employee by MC Management, including regular
salary or wages, overtime payments, bonuses, commissions and vacation pay, to
which has been added (a) any elective deferral amounts by which the Employee has
had his current remuneration reduced for the purposes of funding a contribution
to any plan sponsored by the Company or MC Management and satisfying the
requirements of section 401(k) of the Code, and (b) any amounts by which the
Employee's compensation has been reduced pursuant to a compensation reduction
agreement between the Employee and MC Management for the purpose of funding
benefits through any cafeteria plan sponsored by MC Management meeting the
requirements of section 125 of the Code. There shall be excluded from
"Compensation" for the purposes of the Plan, whether or not reportable as income
by the Employee, expense reimbursements of all types, payments in lieu of
expenses, contributions by the Company
<PAGE>
or MC Management, as applicable, to any qualified retirement plan
or other program of deferred compensation (except as provided above), MC
Management contributions to Social Security or worker's compensation, the costs
paid by MC Management in connection with fringe benefits and relocation,
including gross-ups, and any amounts accrued for the benefit of the Employee,
but not paid, during the period of reference.
Sec. 2.06 "Continuous Service" means the period of time during which
the Employee has been employed by MC Management and during which there has been
no interruption of the Employee's employment by MC Management. For this
purpose, periods of Excused Absence shall not be considered to be interruptions
of Continuous Service.
Sec. 2.07 "Effective Date" shall mean January 1, 1998.
Sec. 2.08 "Eligible Employee" means each person who:
(a) is an Employee whose customary employment is for more
than 5 months in any calendar year;
(b) is an Employee whose customary employment is for more
than 20 hours per week;
(c) is employed on the Effective Date, or has completed at
least one year of Continuous Service; and
(d) is not deemed for purposes of section 423(b)(3) of the
Code to own stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company.
Sec. 2.09 "Employee" means each person employed by MC Management.
Sec. 2.10 "Excused Absence" means absence pursuant to a leave of
absence granted by MC Management or any other entity constituting MC Management,
absence due to disability or illness, absence by reason of a layoff, or absence
by reason of active duty in the armed forces of the United States. In no event
may an Excused Absence exceed six (6) months in length (or, if longer and if
applicable, the period of the individual's active duty in the armed forces of
the United States and such period thereafter as such individual's right to
reemployment by MC Management is protected by law), and any absence shall cease
to be an Excused Absence upon the earlier of (a) the last day of the calendar
month in which the duration of the absence reaches six (6) months or (b) the
last day of the calendar month in which the leave expires by its terms, the
layoff ends by recall or permanent separation from service, or recovery from
illness or disability occurs.
2
<PAGE>
Sec. 2.11 "Exercise Date" means the last day of each Purchase Period,
as determined by the Administrative Committee.
Sec. 2.12 "Market Value" means, with respect to Stock, the fair
market value of such Stock, determined by such methods or procedures as shall be
established from time to time by the Administrative Committee, provided,
however, that if the Stock is listed on a national securities exchange or quoted
in an interdealer quotation system, the Market Value of such Stock on a given
date shall be based upon the last sales price or, if unavailable, the average of
the closing bid and asked prices per share of the Stock on such date (or, if
there was no trading or quotation in the Stock on such date, on the next
preceding date on which there was trading or quotation) as provided by one of
such organizations.
Sec. 2.13 "Offering" means the offering of shares of Stock under the
Plan.
Sec. 2.14 "Offering Date" means the date on which each Offering is to
commence, as determined by the Administrative Committee.
Sec. 2.15 "Participant" means each Eligible Employee who elects to
participate in the Plan.
Sec. 2.16 "Plan" means the 800-JR Cigar, Inc. Employee Stock Purchase
Plan for the Employees of MC Management, as the same is set forth herein and as
the same may hereafter be amended.
Sec. 2.17 "Purchase Agreement" means the document prescribed by the
Administrative Committee pursuant to which an Eligible Employee has enrolled to
be a Participant.
Sec. 2.18 "Purchase Period" means the period beginning on an Offering
Date and ending on the Exercise Date.
Sec. 2.19 "Purchase Price" means such term as it is defined in
Section 4.03 hereof.
Sec. 2.20 "Stock" means Common Stock of the Company.
Sec. 2.21 "Stock Purchase Account" means a noninterest bearing
account consisting of all amounts withheld from an Employee's compensation (or
otherwise paid into the Plan) for the purpose of purchasing shares of Stock for
such employee under the Plan, reduced by all amounts applied to the purchase of
Stock for such Employee under the Plan.
3
<PAGE>
ARTICLE III
Admission to Participation
Sec. 3.01 Initial Participation. Any Eligible Employee may elect to
be a Participant and may become a Participant by executing and filing with the
Administrative Committee a Purchase Agreement at such time in advance and on
such forms as prescribed by the Administrative Committee. The effective date of
an Eligible Employee's participation shall be the Offering Date next following
the date on which the Administrative Committee receives from the Eligible
Employee a properly executed and timely filed Purchase Agreement. Participation
in the Plan will continue automatically from one Purchase Period to another
unless notice is given pursuant to Section 3.02.
Sec. 3.02 Voluntary Discontinuance of Participation. Any Participant
may voluntarily withdraw from the Plan by filing a notice of withdrawal with the
Administrative Committee at such time in advance as the Administrative Committee
may specify. Upon such withdrawal, there shall be paid to the Participant the
amount, if any, standing to his credit in his Stock Purchase Account.
Sec. 3.03 Involuntary Discontinuance of Participation. If a
Participant ceases to be an Eligible Employee, the entire amount, if any,
standing to the Participant's credit in his Stock Purchase Account shall be
refunded to him.
Sec. 3.04 Readmission to Participation. Any Eligible Employee who
has previously been a Participant, who has discontinued participation, and who
wishes to be reinstated as a Participant may again become a Participant for any
subsequent Purchase Period by executing and filing with the Administrative
Committee, at such time in advance as the Administrative Committee shall
determine, a new Purchase Agreement on forms provided by the Administrative
Committee. Reinstatement to Participant status shall be effective as of the
Offering Date next following the date on which the Administrative Committee
receives from the Eligible Employee the properly executed and timely filed
Purchase Agreement.
ARTICLE IV
Stock Purchase
Sec. 4.01 Reservation of Shares. There shall be reserved for this
Plan and the 800-JR Cigar, Inc. Employee Stock Purchase Plan a total of 300,000
shares of Stock. In no event may the number of shares of Stock that may be
purchased under this Plan and the 800-JR Cigar, Inc. Employee Stock Purchase
Plan, in the aggregate, exceed 300,000, subject to (i) adjustment in accordance
with the antidilution provisions hereinafter set forth, and (ii) the Board's
authority to amend the Plan as provided in Section 6.05 (subject to
stockholder approval). Except as provided in Section 5.02 hereof, the aggregate
number of shares that may be purchased under the
4
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Plan shall not exceed the number of shares reserved for the Plan.
Sec. 4.02 Limitation on Shares Available. The maximum number of
shares of Stock that may be purchased for each Participant on an Exercise Date
is the least of (a) the number of shares of Stock that can be purchased by
applying the full balance of his Stock Purchase Account to such purchase of
shares at the Purchase Price (as hereinafter determined), or (b) the
Participant's proportionate part of the maximum number of whole shares of Stock
available within the limitation established by the maximum aggregate number of
such shares reserved for the Plan, as stated in Section 4.01 hereof.
Notwithstanding the foregoing, if any person entitled to purchase shares
pursuant to any offering hereunder would be deemed for the purposes of section
423(b)(3) of the Code to own stock (including any number of shares that such
person would be entitled to purchase hereunder) possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of
Company, the maximum number of shares that such person shall be entitled to
purchase pursuant to the Plan shall be reduced to that number which, when added
to the number of shares of Stock that such person is so deemed to own (excluding
any number of shares that such person would be entitled to purchase hereunder),
is one less than such five percent (5%). Any portion of a Participant's Stock
Purchase Account that cannot be applied by reason of the foregoing limitation
shall remain in the Participant's Stock Purchase Account for application to the
purchase of Stock on the next Offering Date (unless withdrawn before that
Offering Date).
Sec. 4.03 Purchase Price of Shares. The Purchase Price per share of
the Stock sold to Participants pursuant to any Offering shall be the sum of (a)
eighty-five percent (85%) of the Market Value of such share on the Offering Date
on which such Offering commences or on the Exercise Date on which such Offering
expires, whichever is lower, and (b) any transfer, excise or similar tax imposed
on the transaction pursuant to which such share of Stock is purchased. If the
Exercise Date with respect to the purchase of Stock is a day on which the stock
is selling ex-dividend but is on or before the record date for such dividend,
then for Plan purposes the Purchase Price per share will be increased by an
amount equal to the dividend per share. In no event shall the Purchase Price be
less than the par value of the Stock.
Sec. 4.04 Exercise of Purchase Privilege.
(a) Subject to the provisions of Section 4.02 above, if on the
date of the last paycheck of a Participant issued prior to any Exercise
Date there is a credit balance in the Participant's Stock Purchase Account,
there shall be purchased for the Participant at the Purchase Price for the
Purchase Period that expires on such Exercise Date the largest number of
whole shares of Stock, as can be purchased with the entire amount standing
to the Participant's credit in his Stock Purchase Account on such paycheck
issue date. Each such purchase shall be deemed to have occurred on the
Exercise Date occurring at the close of the Offering for which the purchase
was made.
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(b) Any amount remaining in the Stock Purchase Account on the
Exercise Date after the purchase of the maximum number of whole shares
shall remain in the Stock Purchase Account to the credit of the Participant
and applied to purchase additional shares of Stock on subsequent Exercise
Dates.
(c) Notwithstanding anything contained herein to the contrary, a
Participant may not during any calendar year purchase shares of Stock
having an aggregate Market Value, determined at the time of each Offering
Date during such calendar year, of more than $25,000.
Sec. 4.05 Establishment of Stock Purchase Account. Each Participant
shall authorize payroll deductions from Compensation for the purposes of funding
his Stock Purchase Account. In the Purchase Agreement, each Participant shall
authorize a deduction from each payment of his Compensation during a Purchase
Period, subject to Section 4.04(c). Subject to Section 3.02, a Participant may
not reduce or increase his payroll deduction rate during any Purchase Period.
However, a Participant may change the deduction to any permissible level for any
subsequent Offering by filing notice thereof at such time preceding the Offering
Date on which such subsequent Offering commences as the Administrative Committee
shall determine.
Sec. 4.06 Payment for Stock. The Purchase Price for all shares of
Stock purchased by a Participant under the Plan shall be paid out of the
Participant's Stock Purchase Account. As of each Exercise Date, the entire
amount standing to the credit of each Participant in his Stock Purchase Account
on the date of the last paycheck issued to the Participant prior to the Exercise
Date in the Purchase Period that expires on such Exercise Date shall be charged
with the aggregate Purchase Price of the shares of Stock purchased by such
Participant on the Exercise Date. No interest shall be paid or payable with
respect to any amount held in the Participant's Stock Purchase Account.
Sec. 4.07 Share Ownership; Issuance of Certificates.
(a) The shares purchased by a Participant on an Exercise
Date shall, for all purposes, be deemed to have been issued and/or
sold at the close of business on such Exercise Date. Prior to that
time, none of the rights or privileges of a stockholder of the Company
shall inure to the Participant with respect to such shares. All the
shares of Stock purchased under the Plan shall be delivered by the
Company in a manner as determined by the Administrative Committee.
(b) The Administrative Committee, in its sole discretion,
may determine that the shares of Stock shall be delivered by the
Company (i) by issuing and delivering to the Participant a certificate
for the number of whole shares of Stock purchased by such Participant
on an Exercise Date or during a Calendar year, or (ii) by issuing and
delivering a certificate or certificates for the number of shares of
Stock purchased by all Participants on an Exercise Date or during a
Calendar year to a member firm of the New York Stock Exchange which is
also a member of the
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National Association of Securities Dealers, as selected by the
Administrative Committee from time to time, which shares shall be
maintained by such member firm in separate brokerage accounts of each
Participant, or (iii) by issuing and delivering a certificate or
certificates for the number of shares of Stock purchased by all
Participants on an Exercise Date or during the calendar year to a bank
or trust company or affiliate thereof, as selected by the
Administrative Committee from time to time, which shares shall be
maintained by such bank or trust company or affiliate in separate
accounts for each Participant or, if he designates on his Stock
Purchase Agreement, in his name jointly with his spouse, with right of
survivorship. A Participant who is a resident of a jurisdiction that
does not recognize such joint tenancy may have a certificate or
account in his name as tenant in common with his spouse, without right
of survivorship. Such designation may be changed by filing a notice
thereof signed by the Participant and his spouse. Such spouse shall
be bound by all of the terms and conditions of the Plan as if such
spouse were a Participant.
Sec. 4.08 Restrictions on Resale. Stock acquired under the Plan may
not be sold or otherwise disposed of for at least six months after the Exercise
Date on which the shares were acquired, except in the case of death or
disability, provided, however, that the six-month restriction on resale shall
not apply to stock acquired in respect of the first Purchase Period, which
begins January 1, 1998, and ends June 30, 1998.
ARTICLE V
Special Adjustments
Sec. 5.01 Shares Unavailable. If, on any Exercise Date, the
aggregate funds available for the purchase of Stock would purchase a number of
shares in excess of the number of shares then available for purchase under the
Plan, the following events shall occur:
(a) The number of shares that would otherwise be purchased
by each Participant shall be proportionately reduced on the Exercise
Date in order to eliminate such excess;
(b) The Plan shall automatically terminate immediately
after the Exercise Date as of which the supply of available shares is
exhausted; and
(c) Any amount remaining in the Stock Purchase Account of
each of the Participants shall be repaid to such Participants.
Sec. 5.02 Antidilution Provisions. The aggregate number of shares of
Stock reserved for purchase under the Plan, as hereinabove provided, and the
calculation of the Purchase Price per share may be appropriately adjusted to
reflect any increase or decrease in the number of issued
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shares of Stock resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend, or other increase or
decrease in such shares, if effected without receipt of consideration by the
Company. Any such adjustment shall be made by the Administrative Committee
acting with the consent of, and subject to the approval of, the Board.
Sec. 5.03 Effect of Certain Transactions. Subject to any required
action by the stockholders, if the Company shall be the surviving or resulting
corporation in any merger or consolidation, or if the Company shall be merged
for the purpose of changing the jurisdiction of its incorporation, any Offering
hereunder shall pertain to and apply to the shares of stock of the Company or
the survivor. However, in the event of a dissolution or liquidation of the
Company, or of a merger or consolidation in which the Company is not the
surviving or resulting corporation, the Plan and any Offering hereunder shall
terminate upon the effective date of such dissolution, liquidation, merger or
consolidation, and the balance then standing to the credit of each Participant
in his Stock Purchase Account shall be returned to him.
ARTICLE VI
Miscellaneous
Sec. 6.01 Nonalienation. The right to purchase shares of Stock under
the Plan is personal to the Participant, is exercisable only by the Participant
during his lifetime except as hereinafter set forth, and may not be assigned or
otherwise transferred by the Participant. Notwithstanding the foregoing, there
shall be delivered to the executor, administrator or other personal
representative of a deceased Participant such shares of Stock and such residual
balance as may remain in the Participant's Stock Purchase Account as of the date
the Participant's death occurs. However, such representative shall be bound by
the terms and conditions of the Plan as if such representative were a
Participant.
Sec. 6.02 Administrative Costs. The Company shall pay all
administrative expenses associated with the operation of the Plan. No
administrative charges shall be levied against the Stock Purchase Accounts of
the Participants.
Sec. 6.03 Collection of Taxes. The Company and MC Management shall
be entitled to require any Participant to remit, through payroll withholding or
otherwise, any tax that it determines it is so obligated to collect with respect
to the issuance of Stock hereunder, or the subsequent sale or disposition of
such Stock, and the Administrative Committee shall institute such mechanisms as
shall insure the collection of such taxes.
Sec. 6.04 Administrative Committee. The Compensation Committee of
the Board shall appoint an Administrative Committee, which shall have the
authority and power to administer the Plan and to make, adopt, construe, and
enforce rules and regulations not inconsistent with the provisions of the Plan.
The Administrative Committee shall adopt and prescribe the contents of all
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forms required in connection with the administration of the Plan, including, but
not limited to, the Purchase Agreement, payroll withholding authorizations,
withdrawal documents, and all other notices required hereunder. The
Administrative Committee shall have the fullest discretion permissible under law
in the discharge of its duties. The Administrative Committee's interpretations
and decisions in respect of the Plan, the rules and regulations pursuant to
which it is operated, and the rights of Participants hereunder shall be final
and conclusive.
Sec. 6.05 Amendment of the Plan. The Board may amend the Plan
without the consent of stockholders or Participants, except that any such action
shall be subject to the approval of the Company's stockholders at or before the
next annual meeting of stockholders for which the record date is after such
Board action if such stockholder approval is required by any federal or state
law or regulation or the rules of any stock exchange or automated quotation
system on which the Stock may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit other such changes to the Plan
to stockholders for approval; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under any award theretofore granted to him.
Sec. 6.06 Termination of the Plan. The Plan shall continue in effect
unless terminated pursuant to action by the Board, which shall have the right to
terminate the Plan at any time without prior notice to any Participant and
without liability to any Participant. Upon the termination of the Plan, the
balance, if any, then standing to the credit of each Participant in his Stock
Purchase Account shall be refunded to him.
Sec. 6.07 Repurchase of Stock. Neither the Company nor MC Management
shall be required to purchase or repurchase from any Participant any of the
shares of Stock that the Participant acquired under the Plan.
Sec. 6.08 Notice. A Purchase Agreement and any notice that a
Participant files pursuant to the Plan shall be on the form prescribed by the
Administrative Committee and shall be effective only when received by the
Administrative Committee. Delivery of such forms may be made by hand or by
certified mail, sent postage prepaid, to 800-JR Cigar, Inc. 301 Route 10 East,
Whippany, NJ 07981, Attention: Stock Purchase Plan Committee. Delivery by any
other mechanism shall be deemed effective at the option and discretion of the
Administrative Committee.
Sec. 6.09 Government Regulation. The Company's obligation to sell
and to deliver the Stock under the Plan is at all times subject to all approvals
of any governmental authority required in connection with the authorization,
issuance, sale or delivery of such Stock.
Sec. 6.10 Headings, Captions, Gender. The headings and captions
herein are for convenience of reference only and shall not be considered as part
of the text. The masculine shall include the feminine, and vice versa.
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Sec. 6.11 Severability of Provisions; Prevailing Law. The provisions
of the Plan shall be deemed severable. In the event any such provision is
determined to be unlawful or unenforceable by a court of competent jurisdiction
or by reason of a change in an applicable statute, the Plan shall continue to
exist as though such provision had never been included therein (or, in the case
of a change in an applicable statute, had been deleted as of the date of such
change). The Plan shall be governed by the laws of the State of Delaware, to
the extent such laws are not in conflict with, or superseded by, federal law.
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