<PAGE>
As filed with the Securities and Exchange Commission on December 3, 1999
Registration No. 333-______
Registration No. 333-40225*
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
LAZARE KAPLAN INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-2728690
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
529 FIFTH AVENUE, NEW YORK NEW YORK
10017 (Address, including zip code of registrant's principal executive offices)
LAZARE KAPLAN INTERNATIONAL INC.
1997 LONG TERM STOCK INCENTIVE PLAN
(Full title of the plan)
Sheldon L. Ginsberg
Executive Vice President and Chief Financial Officer
Lazare Kaplan International Inc.
529 Fifth Avenue
New York, New York 10017
(212) 972-9700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
Warshaw Burstein Cohen Schlesinger & Kuh, LLP
555 Fifth Avenue
New York, New York 10017
(212) 984-7700
Attention: Michael D. Schwamm, Esq.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be offering aggregate offering Amount of
registered(1) registered(2) price per share(2) price(2) registration fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock,
$1.00 par value 200,000 shares $7.5625 $1,512,500 $399
- ------------------------------------------------------------------------------------------------------------------
Common stock, 400,000 shares - - -
$1.00 par value
==================================================================================================================
</TABLE>
(1) The Registrant originally registered on Form S-8 (registration no.
333-40225), an aggregate of 400,000 shares of common stock issuable upon
exercise of awards granted or to be granted under the Lazare Kaplan
International
- --------
o As permitted by Rule 429 under the Securities Act of 1933, the prospectus
contained in this Registration Statement also relates to the Registrant's
Registration Statement on Form S-3 (registration no. 333-40225).
<PAGE>
Inc. 1997 Long Term Stock Incentive Plan (the "1997 Plan") and paid the
associated registration fee of $1,856. On November 4, 1999, stockholders of
the registrant approved an amendment to the 1997 Plan increasing the number
of shares authorized for issuance upon exercise of awards granted under the
plan from 400,000 to 600,000. Accordingly, this registration is intended to
cover an additional 200,000 shares of common stock issuable upon exercise
awards granted or to be granted under the 1997 Plan, in each case subject to
adjustment for antidilution as provided therein.
(2) Calculated solely for the purposes of determining the amount of the
registration fee pursuant to Rule 457(h)(1) under the Securities Act of
1933, the offering price is based upon the average high and low sales prices
of the Common Stock on the American Stock Exchange on December 1, 1999.
<PAGE>
PROSPECTUS
<TABLE>
<S> <C>
600,000 SHARES OF COMMON STOCK LAZARE KAPLAN INTERNATIONAL INC.
offered by certain stockholders of the Company 529 Fifth Avenue
New York, New York 10017
(212) 972-9700
</TABLE>
This prospectus relates to the resale of a maximum of 600,000 shares of
our common stock by our officers and directors and other affiliates who have
acquired or may acquire shares of our common stock upon (a) the receipt of a
stock based award under the Lazare Kaplan International Inc. 1997 Long Term
Stock Incentive Plan or (b) the exercise of an option granted or to be granted
under this plan.
Our common stock is traded on the American Stock Exchange under the
symbol "LKI." On December 1, 1999, the last reported sales price of our common
stock was $7.5625.
A PURCHASE OF SHARES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE
"RISK FACTORS" BEGINNING ON PAGE 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
December 2, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
RISK FACTORS.....................................................................................3
We Are Dependent upon DeBeers for a Significant Portion of Our Rough Diamond Supply.......3
Sudden Changes in Diamond Supply or Prices By DeBeers Could Adversely Affect Our
Operations. .....................................................................3
Our Operations May Suffer if Foreign Trade is Restricted. ................................3
Our Operations May Suffer if Foreign Disturbances Limit Production........................3
We Sell a Luxury Product Which Is Subject to Changing Consumer Purchasing Patterns........3
Our Results May Suffer If We Lose Any of Our Key Personnel................................3
The Trading Market for Our Common Stock Has Been Very Limited.. .........................3
Our Principal Stockholders Have the Ability to Control Stockholder Matters. ..............3
WHERE YOU CAN FIND MORE INFORMATION..............................................................4
SELLING STOCKHOLDERS ............................................................................4
PLAN OF DISTRIBUTION.............................................................................5
Manner of Sales; Broker-Dealer Compensation...............................................5
Filing of a Post-Effective Amendment In Some Instances....................................5
Persons Deemed to be Underwriters.........................................................6
Regulation M..............................................................................6
LEGAL MATTERS....................................................................................6
EXPERTS..........................................................................................6
</TABLE>
YOU SHOULD ONLY RELY ON THE INFORMATION INCORPORATED BY REFERENCE OR PROVIDED IN
THIS PROSPECTUS OR ANY SUPPLEMENT. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN
THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE
ON THE COVER OF SUCH DOCUMENT. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU
WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF SHARES OF COMMON STOCK
IN ANY STATE WHERE THE OFFER IS NOT PERMITTED
2
<PAGE>
RISK FACTORS
Investing in Lazare Kaplan common stock is very risky. You shouldn't
purchase our common stock unless you can afford to lose your entire investment
In addition to the other information in this prospectus, you should carefully
consider the following factors before purchasing any of our common stock.
We Are Dependent upon DeBeers for a Significant Portion of Our Rough
Diamond Supply. Our business is highly dependent upon the availability of rough
diamonds, Based on published reports, we believe that approximately 60% of the
value of world diamond output is purchased for resale by DeBeers Centenary AG
and its affiliated companies. If there should be any interruption in our
relationship with DeBeers, such interruption could have a significant adverse
effect on our operations.
Sudden Changes in Diamond Supply or Prices By DeBeers Could Adversely
Affect Our Operations. Through its control of the world's rough diamond supply
and its own inventory, De Beers can exert significant control over the pricing
of rough and polished diamonds. A rapid increase in rough diamond prices could
significantly and adversely affect our revenue and operating margins if the
increased cost could not be passed along to our customers in a timely manner.
Alternatively, a rapid decrease in the price of polished diamonds could require
us to lower our prices which could result in significant inventory losses and
lower margins.
Our Operations May Suffer if Foreign Trade is Restricted. The world's
sources of rough diamonds are highly concentrated in a limited number of
countries. Varying degrees of political and economic risk exist in these
countries. As a consequence, the diamond business is subject to various
sovereign risks beyond the industry's control, such as changes in laws and
policies affecting foreign trade and investment.
Our Operations May Suffer if Foreign Disturbances Limit Production. We
are subject to various political and economic risks, including the instability
of foreign economies and governments, labor disputes, war and civil disturbances
and other risks that could cause production difficulties or stoppages, restrict
the movement of inventory or result in the deprivation or loss of contract
rights or the taking of property by nationalization or expropriation without
fair compensation.
We Sell a Luxury Product Which Is Subject to Changing Consumer
Purchasing Patterns. We produce a luxury product that we sell primarily to
quality retailers. Consumers purchase polished diamonds with discretionary,
disposable income. Consumer purchasing patterns can be influenced by general
economic conditions in consuming countries, employment levels and consumer
confidence. A negative trend in any of these items could significantly and
adverse effect our operations.
Our Results May Suffer If We Lose Any of Our Key Personnel. To date,
our success has been highly dependent upon the efforts of Maurice and Leon
Tempelsman. If we were to loss their combined services, our operations would be
significantly and adversely affected.
The Trading Market for Our Common Stock Has Been Very Limited.. The
trading activity of our common stock has been very limited. During the 12-month
period ended November 30, 1999, our average daily trading volume averaged only
9,014 shares. Accordingly, this low trading volume may have had a significant
effect on the market price of our common stock, and historic prices may not
necessarily be indicative of market price in a more liquid market.
Our Principal Stockholders Have the Ability to Control Stockholder
Matters. Maurice Tempelsman, the Chairman of the Board of the Company, and his
son, Leon Tempelsman, the Vice-Chairman and President of the Company together
have the right to vote 3,647,788 shares, or approximately 44% of the Company's
Common Stock outstanding. As a result of the ownership of such shares, the
Tempelsmans
3
<PAGE>
effectively have the ability to control the election of all of our directors and
the outcome of all other matters requiring stockholder approval.
WHERE YOU CAN FIND MORE INFORMATION
We publicly file annual, quarterly and current reports, proxy
statements and other documents with the SEC. You may read and copy any of these
document at the SEC's public reference rooms in Washington, D.C., New York City
and Chicago. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms. The SEC maintains an Internet website at
http://www.sec.gov where our publicly filed documents may be obtained.
This prospectus is part of a registration statement filed with the SEC.
Our registration statement contains more information than this prospectus
regarding us and our common stock and includes supplemental exhibits and
schedules. You can obtain a copy of the registration statement from the SEC at
the address listed above or from its Internet website.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it. This means that we are deemed to be disclosing
information to you by referring you to those documents. This information is
important and should be reviewed. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supercede the information in this
prospectus.
We incorporate by reference into this prospectus the following
documents and any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
o Annual Report on Form 10-K for our fiscal year ended May 31, 1999.
o Quarterly Report on Form 10-Q for our fiscal quarter ended August
31, 1999.
o Current Report on Form 8-K, dated November 2, 1999.
o Description of our common stock, which is contained in Item 1 of
our Registration Statement on Form 8-A, filed with the SEC on
September 21, 1973
You may request a copy of these filings (excluding all exhibits unless
we have specifically incorporated an exhibit by reference), at no cost, by
writing or telephoning us at:
Lazare Kaplan International Inc.
529 Fifth Avenue
New York, New York 10017
Attention: Margaret James, Controller
(212) 972-9700
SELLING STOCKHOLDERS
The shares being offer by the selling stockholders consist of shares of
common stock that they may acquire upon (a) the receipt of an award under our
1997 Long-Term Stock Incentive Plan or (b) the exercise of an option granted or
to be granted under this plan. The selling stockholders named below may resell
all, a portion, or none of these shares. We will not receive any proceeds from
the resale of the common stock by the selling stockholders. We have agreed to
pay all the expenses we incur in connection with the registration of the shares.
Each selling stockholder will pay all broker commissions and other selling
expenses he or she incurs, as well as any legal and other expenses he or she may
incur in the registration or sale of his or her shares.
4
<PAGE>
From time to time, we may add other participants under the plan to the
list of selling stockholders if the participant is deemed to be "affiliate." We
made add them either by means of a post-effective amendment to the registration
statement or by use of a prospectus supplement. An "affiliate" is defined under
the Securities Act of 1933 Act as a "person that directly or indirectly, through
one or more intermediaries, controls, or is controlled by or is under common
control with" of our company.
The following table sets forth information about the ownership of our
common stock by the selling stockholders as of December 1, 1999. The number of
shares offered will be determined from time to time by each selling stockholder
at his or her sole discretion and does not constitute a commitment to sell any
or all of the stated number of shares of common stock. Maurice Tempelsman is the
Chairman of the Board and a director, Leon Tempelsman is the Vice Chairman of
the Board, President and a director, Sheldon L. Ginsberg is the Executive Vice
President, Chief Financial Officer and director, and Robert Speisman is the
Senior Vice President - Sales and Director and a director. Marcy Meiller and
Rena Speisman are each the sister of Leon Tempelsman and the daughter of Maurice
Tempelsman. Rena Speisman also is the wife of Robert Speisman. The ownership of
each of Leon Tempelsman, Marcy Meiller and Rena Speisman includes an option to
purchase 33,333 shares, which each of them received as a gift from Maurice
Tempelsman. Except as otherwise noted, none of the selling stockholders listed
below has had any other position, office or other material relationship with us
or any of our predecessors or affiliates within the past three years.
<TABLE>
<CAPTION>
Maximum Number of Shares
Subject to Outstanding Options
Name Which May Be Reoffered Hereby
- ---- -----------------------------
<S> <C>
Maurice Tempelsman 20,000
Leon Tempelsman 113,333
Sheldon L. Ginsberg 40,000
Robert Speisman 20,000
Marcy Meiller 33,333
Rena Speisman 33,334
</TABLE>
PLAN OF DISTRIBUTION
MANNER OF SALES; BROKER-DEALER COMPENSATION
The selling stockholders may resell any shares of common stock that
they acquire under the plan in privately negotiated transactions or on the
American Stock Exchange through brokers and dealers. These brokers and dealers
may act as agent or as principal and may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders or from the
purchasers of the shares of common stock for whom the broker-dealers may act as
agent or to whom the broker-dealers may sell as principal, or both. The selling
stockholders also may sell the shares in reliance upon Rule 144 under the
Securities Act at such times as they are eligible to do so. We have been advised
by each of the selling stockholders that they have not made any arrangements for
the distribution of the shares. Broker-dealers who effect sales for the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
engaged by selling stockholders will receive commissions or discounts from them
in amounts to be negotiated prior to the sale.
FILING OF A POST-EFFECTIVE AMENDMENT IN SOME INSTANCES
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<PAGE>
If any of the selling stockholders notifies us that they have entered
into a material arrangement (other than a customary brokerage account agreement)
with a broker or dealer for the sale of shares of common stock under this
prospectus through a block trade, purchase by a broker or dealer or similar
transaction, we will file a post-effective amendment to the registration
statement under the Securities Act. This post-effective amendment will disclose:
o The name of each broker-dealer.
o The number of shares involved.
o The price at which those shares were sold.
o The commissions paid or discounts or concessions allowed to the
broker-dealer(s).
o If applicable, that the broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated
by reference in this prospectus, as amended.
o Any other facts material to the transaction.
PERSONS DEEMED TO BE UNDERWRITERS
The selling stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with the sale of the shares they may
receive pursuant to the plan. In addition, any broker-dealers that participate
with the selling stockholders in the sale of those shares also will be deemed to
be "underwriters" within the meaning of the Securities Act in connection with
these sales. Accordingly, any discounts, concessions or commissions received by
any of the selling stockholders or these broker-dealers acting on their behalf
and any profits received by them on the resale of the shares of common stock may
be deemed to be underwriting discounts and commissions under the Securities Act.
REGULATION M
We have informed the selling stockholders that Regulation M promulgated
under the Securities Exchange Act may be applicable to them with respect to any
purchase or sale of our common stock. In general, Rule 102 under Regulation M
prohibits any person connected with a distribution of our common stock from
directly or indirectly bidding for, or purchasing for any account in which it
has a beneficial interest, any of our common stock or any right to purchase our
common stock for a period of one business day before and after completion of its
participation in the distribution.
During any distribution period, Regulation M prohibits the selling
stockholders and any other persons engaged in the distribution from engaging in
any stabilizing bid or purchasing our common stock except for the purpose of
preventing or retarding a decline in the open market price of our common stock.
No person may effect any stabilizing transaction to facilitate any offering at
the market. Inasmuch as the selling stockholders will be reoffering and
reselling our common stock at the market, Regulation M will prohibit them from
effecting any stabilizing transaction in contravention of Regulation M with
respect to our common stock.
LEGAL MATTERS
The law firm of Warshaw Burstein Cohen Schlesinger & Kuh, LLP will give
its opinion on the validity of our common stock. As of the date of this
prospectus, certain partners and other persons associated with this law firm
beneficially own an aggregate of 12,050 shares of common stock.
6
<PAGE>
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedules included or incorporated by reference in our
Annual report on form 10-K for the year ended May 31, 1999, as set forth in
their reports, which are incorporated by reference in this prospectus and
elsewhere in the registration statement. Our financial statements and schedules
are incorporated by reference in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
7
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed by Lazare Kaplan
International Inc. (the "Company") with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act") are incorporated by reference into this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1999.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
August 31, 1999.
(c) Current Report on Form 8-K, dated November 2, 1999.
(d) The description of the Company's Common Stock set forth under Item
1 of the Company's Registration Statement on Form 8-A, as filed with the
Commission on September 21, 1973, which incorporates by reference the
description set forth in the Prospectus, contained in the Company's Registration
Statement on Form S-1 filed with the Commission August 28, 1972 (File No.
2-45510), under the caption "Description of Common Stock."
All documents subsequently filed by the Company with the Commission
after the date of this Registration Statement pursuant to Sections 13(a), 13(c),
14, and 15(d) of the Exchange Act and prior to the filing of a post-effective
amendment to this Registration Statement, which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference into this Registration
Statement and to be part hereof from the date of filing such documents;
provided, however, that the documents enumerated above or subsequently filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
in each year during which the offering made by this Registration Statement is in
effect and prior to the filing with the Commission of the Company's Annual
Report on Form 10-K covering such year, shall not be deemed to be incorporated
by reference in this Registration Statement or be a part hereof from and after
the filing of such Annual Report on Form 10-K.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein, or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any statement contained in this Registration Statement shall be
deemed to be modified or superseded to the extent that a statement contained in
a subsequently filed document, which is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any 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.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
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The following states the general effect of all statutes, charter provisions,
by-laws, contracts or other arrangements under which any controlling person,
director or officer of the Company is insured or indemnified in any manner
against liability which he may incur in his capacity as such:
Section 145 of the Delaware General Corporation Law provides:
145. INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS:
INSURANCE.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he 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 reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other court shall deem
proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(l) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if
II-2
<PAGE>
there are no such directors, or, if such directors so direct, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect
to the resulting or surviving corporation as he would have with respect to
such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to any employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person, who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise. The Court of Chancery
may summarily determine a corporation's obligation to advance expenses
(including attorneys' fees).
II-3
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The Certificate of Incorporation of the Company provides:
SEVENTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have
power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
The Certificate of Incorporation further provides:
EIGHTH: No director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for breach of his
fiduciary duty as a director, provided that nothing contained herein shall
eliminate or limit the liability of a director (i) for any breach of such
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation Law or any amendment thereto of any successor thereto,
or (iv) for any transaction from which the director derived an improper
personal benefit. Neither the amendment nor repeal of this Article EIGHTH
nor the adoption of any provision of the certificate of incorporation
inconsistent with this Article EIGHTH, shall eliminate or reduce the effect
of this Article EIGHTH in respect of any matter occurring, or any cause of
action, suit or claim that, but for this Article EIGHTH would accrue or
arise, prior to such amendment, repeal or adoption of an inconsistent
provision.
The By-Laws of the Company provide:
ARTICLE VI
INDEMNIFICATION
1. EXECUTIVE OFFICERS. The corporation shall indemnify its executive
officers and those of its subsidiaries to the same extent as they would have
been insured under the terms of an insurance policy issued to the
corporation by National Union Fire Insurance Company of Pittsburgh,
Pennsylvania for the policy year beginning September 26, 1984 and ending
September 26, 1985 had such policy been in effect at the time a claim is
made against any such executive officers. The executive officers of the
corporation and its subsidiaries entitled to indemnification pursuant to
this Article VI, Section l, shall include such persons who may hold the
offices, either currently or in the future, as were covered under the
aforementioned policy in the policy year indicated.
Any indemnification pursuant to this Article VI, Section l shall be
applicable to acts or omissions that occurred prior to the adoption of this
Article VI, Section l provided they would have been covered under the
insurance policy mentioned above. The right to indemnification under this
Article VI, Section l shall continue after any person has ceased to serve in
the capacity which would have entitled him to such indemnification. Any
subsequent repeal or amendment of this Article VI, Section l or any
provision hereof, which shall have the effect of limiting, qualifying or
restricting the powers or rights of indemnification provided or permitted
hereunder shall not, solely by reason of such repeal or amendment,
eliminate, restrict or otherwise affect the right or power of
II-4
<PAGE>
the corporation to indemnify any person or affect any right of
indemnification of such person with respect to claims made prior to such
repeal or amendment.
The indemnification provided under this Article VI, Section l shall not
be deemed exclusive of any other rights to which directors, officers, agents
or employees of the corporation may be entitled under Article SEVENTH of the
Certificate of Incorporation of the corporation, or any agreement, vote of
the stockholders or disinterested directors, or otherwise.
The corporation shall have the right to impose, as conditions to any
indemnification provided or permitted pursuant to this Article VI, Section
l, such reasonable requirements and conditions as the Board of Directors or
stockholders may deem appropriate in each specific case and circumstance,
including but not limited to (i) that any counsel representing the person to
be indemnified in connection with the defense or settlement of any action
shall be selected by the corporation, subject to the approval of the person
to be indemnified, which consent shall not be unreasonably withheld, (ii)
that the corporation shall have the right, at its option, to assume and
control the defense or settlement of any claim or proceeding made, initiated
or threatened against the person to be indemnified, and (iii) that the
corporation shall be subrogated, to the extent of any payments made by way
of indemnification, to all of the indemnified person's right of recovery,
and that the person to be indemnified shall execute all writings and do
everything necessary to assure such rights of subrogation to the
corporation.
2. OUTSIDE DIRECTORS. The corporation shall indemnify its outside (i.e.
non-officer) directors and those of its subsidiaries to the same extent as
they would have been insured under the terms of an insurance policy issued
to the corporation by National Union Fire Insurance Company of Pittsburgh,
Pennsylvania, for the policy year beginning September 26, 1984 and ending
September 26, 1985 had such policy been in effect at the time a claim is
made against any such outside director. The outside directors of the
corporation and its subsidiaries entitled to indemnification pursuant to
this Article VI, Section 2 shall include such persons who may hold the
offices, either currently or in the future, as were covered under the
aforementioned policy in the policy year indicated.
Any indemnification pursuant to this Article VI, Section 2 shall be
applicable to acts or omissions that occurred prior to the adoption of this
Article VI, Section 2 provided they would have been covered under the
insurance policy mentioned above. The right to indemnification under Article
VI, Section 2 shall continue after any person has ceased to serve in the
capacity which would have entitled him to such indemnification. Any
subsequent repeal or amendment of this Article VI, Section 2 or any
provision hereof, which shall have the effect of limiting, qualifying or
restricting the powers or rights of indemnification provided or permitted
hereunder shall not, solely by reason of such repeal or amendment,
eliminate, restrict or otherwise affect the right or power of the
corporation to indemnify any person or affect any right of indemnification
of such person with respect to claims made prior to such repeal or
amendment.
The indemnification provided under this Article VI, Section 2 shall not
be deemed exclusive of any other rights to which directors, officers, agents
or employees of the corporation may be entitled under Article SEVENTH of the
Certificate of Incorporation of the corporation, or any agreement, vote of
the stockholders or disinterested directors, or otherwise.
The corporation shall have the right to impose, as conditions to any
indemnification provided or permitted pursuant to Article VI, Section 2,
such reasonable requirements and condi tions as the Board of Directors or
stockholders may deem appropriate in each specific case and circumstance,
including but not limited to (i) that any counsel representing the person to
be indemnified in connection with the defense or settlement of any action
shall be selected by the corporation, subject to the approval of the person
to be indemnified, which consent shall not be
II-5
<PAGE>
unreasonably withheld, (ii) that the corporation shall have the right, at
its option, to assume and control the defense or settlement of any claim or
proceeding made, initiated or threatened against the person to be
indemnified, and (iii) that the corporation shall be subrogated, to the
extent of any payments made by way of indemnification, to all of the
indemnified person's right of recovery, and that the person to be
indemnified shall execute all writings and do everything necessary to assure
such rights of subrogation to the corporation.
3. EXECUTIVE OFFICERS AND DIRECTORS PRIOR TO APRIL 9, 1984. The
corporation shall indemnify its directors and executive officers and those
of its subsidiaries who were in office prior to April 9, 1984 to the same
extent as they would have been insured under the terms of an insurance
policy issued to the corporation by National Union Fire Insurance Company of
Pittsburgh, Pennsylvania for the policy year beginning September 26, 1984
and ending September 26, 1985 had such policy been in effect at the time a
claim is made against any such director or officer. The directors and
officers of the corporation and its subsidiaries entitled to indemnification
pursuant to this Article VI, Section 3 shall include such persons who held
the offices as were covered under the aforementioned policy in the policy
year indicated.
Any indemnification pursuant to this Article VI, Section 3 shall be
applicable to acts or omissions that occurred prior to the adoption of this
Article VI, Section 3, provided they would have been covered under the
insurance policy mentioned above. The right to indemnification under this
Article VI, Section 3 shall continue after any person has ceased to serve in
the capacity which would have entitled him to such indemnification
hereunder. Any subsequent repeal or amendment of this Article VI, Section 3
or any provision hereof, which shall have the effect of limiting, qualifying
or restricting the powers or rights of indemnification provided or permitted
hereunder shall not, solely by reason of such repeal or amendment,
eliminate, restrict or otherwise affect the right or power of the
corporation to indemnify any person or affect any right of indemnification
of such person with respect to claims made prior to such repeal or
amendment.
The indemnification provided under this Article VI, Section 3 shall not
be deemed exclusive of any other rights to which directors, officers, agents
or employees of the corporation may be entitled under Article SEVENTH of the
Certificate of Incorporation of the corporation, or any agreement, vote of
the stockholders or disinterested directors, or otherwise. The corporation
shall have the right to impose, as conditions to any indemnification
provided or permitted pursuant to this Article VI, Section 3, such
reasonable requirements and conditions as the Board of Directors or
stockholders may deem appropriate in each specific case and circumstance,
including but not limited to (i) that any counsel representing the person to
be indemnified in connection with the defense or settlement of any action
shall be selected by the corporation, subject to the approval of the person
to be indemnified, which consent shall not be unreasonably withheld, (ii)
that the corporation shall have the right, at its option, to assume and
control the defense or settlement of any claim or proceeding made, initiated
or threatened against the person to be indemnified, and (iii) that the
corporation shall be subrogated, to the extent of any payments made by way
of indemnification, to all of the indemnified person's right of recovery,
and that the person to be indemnified shall execute all writings and do
everything necessary to assure such rights of subrogation to the
corporation.
4. DIRECTORS. The corporation shall indemnify its existing directors
and those of its subsidiaries to the same extent as they would have been
insured under the terms of an insurance policy issued to the corporation by
National Union Fire Insurance Company of Pittsburgh, Pennsylvania for the
policy year beginning September 26, 1984 and ending September 26, 1985 had
such policy been in effect at the time a claim is made against any such
director. The directors of the corporation and its subsidiaries entitled to
indemnification pursuant to this Article VI, Section 4 shall include such
persons who may hold the offices, either currently or in the future, as were
covered under the aforementioned policy in the policy year indicated.
II-6
<PAGE>
Any indemnification pursuant to this Article VI, Section 4 shall be
applicable to acts or omissions that occurred prior to the adoption of this
Article VI, Section 4 provided they would have been covered under the
insurance policy mentioned above. The right to indemnification under this
Article VI, Section 4 shall continue after any person has ceased to serve in
the capacity which would have entitled him to such indemnification
hereunder. Any subsequent repeal or amendment of this Article VI, Section 4
or any provision hereof, which shall have the effect of limiting, qualifying
or restricting the powers or rights of indemnification provided or permitted
hereunder shall not, solely by reason of such repeal or amendment,
eliminate, restrict or otherwise affect the right or power of the
corporation to indemnify any person or affect any right of indemnification
of such person with respect to claims made prior to such repeal or
amendment.
The indemnification provided under this Article VI, Section 4 shall not
be deemed exclusive of any other rights to which directors, officers, agents
or employees of the corporation may be entitled under Article SEVENTH of the
Certificate of Incorporation of the corporation, or any agreement, vote of
the stockholders or disinterested directors, or otherwise.
The corporation shall have the right to impose, as conditions to any
indemnification provided or permitted pursuant to this Article VI, Section
4, such reasonable requirements and conditions as the Board of Directors or
stockholders may deem appropriate in each specific case and circumstance,
including but not limited to (i) that any counsel representing the person to
be indemnified in connection with the defense or settlement of any action
shall be selected by the corporation, subject to the approval of the person
to be indemnified, which consent shall not be unreasonably withheld, (ii)
that the corporation shall have the right, at its option, to assume and
control the defense or settlement of any claim or proceeding made, initiated
or threatened against the person to be indemnified, and (iii) that the
corporation shall be subrogated, to the extent of any payments made by way
of indemnification, to all of the indemnified person's right of recovery,
and that the person to be indemnified shall execute all writings and do
everything necessary to assure such rights of subrogation to the
corporation.
5. SEVERABILITY. If any of the provisions of this Article VI, or any
part hereof, is hereafter construed to be invalid or unenforceable, the same
shall not affect the remaining provisions of this Article VI, which shall
remain in full effect without regard to the invalid portion or portions.
In addition, the Company has obtained directors and officers liability
insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4 Instruments defining the rights of security holders, including
indentures
4.1(a) (i) Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3(a) to Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1987
filed with the Commission on August 26, 1987, as amended
January 14, 1988).
(ii) Certificate of Amendment of the Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on
November 1, 1990 (incorporated
</TABLE>
II-7
<PAGE>
<TABLE>
<S> <C>
by reference to Exhibit 3(b) to Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1992 filed with
the Commission on August 28, 1992).
(iii) Certificate of Amendment of the Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on
November 6, 1997 (incorporated by reference to Exhibit
4.1(a)(iii) to the Company's Registration Statement on Form
S-8 filed with the Commission on November 17, 1997).
4.1(b) Certificate of Designations of Series A Junior Participating
Preferred Stock filed with the Secretary of State of the State of
Delaware on November 6, 1997 (incorporated by reference to Exhibit
4.1(b) to the Company's Registration Statement on Form S-8 filed
with the Commission on November 17, 1997).
4.2 By-Laws of the Company, as amended (incorporated by reference to
Exhibit 3(b) to Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1987 filed with the Commission on August 26,
1987, as amended January 14, 1988).
4.3 Form of certificate representing shares of the Company's Common
Stock (incorporated by reference to Exhibit 4(a) to Amendment No. 1
to Registration Statement on Form S-2 filed with the Commission on
October 4, 1990 ).
4.4 (a) The Lazare Kaplan International Inc. 1997 Long Term Stock
Incentive Plan.*
(b) Form of Incentive Stock Option Agreement for options granted
pursuant to the Lazare Kaplan International Inc. 1997 Long
Term Stock Incentive Plan.(incorporated by reference to
Exhibit 4.5(a) to the Company's Registration Statement on
Form S-8 filed with the Commission on November 17, 1997).
(c) Form of Non-Qualified Stock Option Agreement for options
granted pursuant to the Lazare Kaplan International Inc.
1997 Long Term Stock Incentive Plan. (incorporated by
reference to Exhibit 4.5(b) to the Company's Registration
Statement on Form S-8 filed with the Commission on November
17, 1997).
5 Opinion re legality
5.1 Opinion of Warshaw Burstein Cohen Schlesinger & Kuh, LLP*
15 Letter on unaudited interim financial information - not applicable
23 Consent of experts and counsel
23.1 Consent of Warshaw Burstein Cohen Schlesinger & Kuh, LLP (contained
in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP*
24 Power of attorney (contained in the signature pages hereto)*
</TABLE>
- -------------
*Filed herewith
ITEM 9. UNDERTAKINGS.
II-8
<PAGE>
The Company will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement
to include any additional or changed material information on the plan
of distribution;
(2) For determining liability under the Securities Act of 1933
(the "Securities Act"), treat each post-effective amendment as a new
registration statement of the securities offered, and the offering of
the securities at that time to be the initial bona fide offering; and
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
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 Securities and Exchange 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 Company 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-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on December 2, 1999.
LAZARE KAPLAN INTERNATIONAL INC.
--------------------------------
By:/s/ Sheldon L. Ginsberg
Sheldon L. Ginsberg,
Executive Vice President and
Chief Financial Officer
Each person whose signature appears below hereby constitutes and
appoints Leon Tempelsman and Lucien Burstein, and each of them, his true and
lawful attorney-in-fact, with full power of substitution and resubstitution, for
him in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission under the
Securities Act of 1933, hereby ratifying and confirming all that either such
attorneys-in-fact or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/ Maurice Tempelsman Chairman of the Board December 2, 1999
- --------------------------- of Directors
Maurice Tempelsman
/s/ Leon Tempelsman Vice Chairman of the December 2, 1999
- --------------------------- Board of Directors and
Leon Tempelsman President (principal
executive officer)
/s/ Lucien Burstein Director December 2, 1999
- ---------------------------
Lucien Burstein
/s/ Myer Feldman Director December 2, 1999
- ---------------------------
Myer Feldman
/s/ Sheldon L. Ginsberg Director and Executive December 2, 1999
- --------------------------- Vice President and
Sheldon L. Ginsberg Chief Financial Officer
(principal financial and
accounting officer)
/s/ Robert Speisman Director December 2, 1999
- ---------------------------
Robert Speisman
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.4(a) The Lazare Kaplan International Inc. 1997 Long Term Stock Incentive Plan.
5.1 Opinion of Warshaw Burstein Cohen Schlesinger & Kuh, LLP
23.2 Consent of Ernst & Young LLP
</TABLE>
II-11
<PAGE>
Exhibit 4.4(a)
LAZARE KAPLAN INTERNATIONAL INC.
1997 LONG-TERM STOCK INCENTIVE PLAN
SECTION 1. PURPOSES
The general purposes of this 1997 Long-Term Stock Incentive Plan (the
"Plan") are to encourage selected employees and directors of and consultants to
LAZARE KAPLAN INTERNATIONAL INC. (the "Company") and its Affiliates (as
hereinafter defined) to acquire a proprietary interest in the Company in order
to create an increased incentive to contribute to the Company's future success
and prosperity, and to enhance the ability of the Company and its Affiliates to
attract and retain exceptionally qualified individuals upon whom the sustained
progress, growth, and profitability of the Company depend, thus enhancing the
value of the Company for the benefit of its stockholders.
SECTION 2. CERTAIN ADDITIONAL DEFINITIONS
The following terms have the following respective meanings under the
Plan:
"Affiliate" means any entity in which the Company directly or
indirectly has a significant equity interest under generally accepted
accounting principles and any other entity in which the Company has a
significant direct or indirect equity interest as determined by the
Committee.
"Award" means any Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, or
Other Stock-Based Award granted under the Plan.
"Award Agreement" means a written agreement, contract,
instrument or document evidencing an Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Board or a committee of the Company's
directors designated by the Board to administer the Plan and composed of
not less than two directors, each of whom is a Non-Employee Director.
"Disability" means, with respect to a given Participant at a
given time, any medically determinable physical or mental impairment
that the Committee, on the basis of competent medical evidence,
reasonably determines has rendered or will render the Participant
permanently and totally disabled with the meaning of Section 422(c)(6)
of the Code (or such successor section as is in effect at the time).
"Dividend Equivalent" means a right granted under Section 6(e)
of the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, with respect to a Share on a given
date: (a) if the Shares are listed for trading on a national securities
exchange (including, for this purpose, the Nasdaq National Market
["NNM"] of the National Association of Securities Dealers Automated
Quotation System ["Nasdaq"]) on such date, the closing Share price on
such exchange (or, if there is more than one, the principal such
exchange), or, for the NNM, the last sale price, on the day immediately
preceding the date as of which Fair Market Value is being determined, or
on the next preceding day on which Shares were traded if no Shares were
traded on the immediately preceding day; (b) if the Shares are not
listed for trading on any securities exchange (including the NNM) on
such date but are reported by Nasdaq, and market information concerning
the Shares is published on a regular basis in The New York Times or The
Wall Street Journal, the average of the daily bid and asked prices of
the Shares, as so published, on the day nearest preceding
<PAGE>
the date in question for which such prices were published; (c) if (a) is
inapplicable and market information concerning the Shares is not
regularly published as described in (b), the average of the high bid and
low asked prices of the Shares in the over-the-counter market on the day
nearest preceding the date in question as recorded by Nasdaq (or, if
Nasdaq does not record such prices for the Shares, another generally
accepted reporting service); or (d) if none of the foregoing are
applicable, the fair market value of a Share as of the date in question,
as determined by the Committee.
"Family Member" means an individual who is the spouse, child
(including a legally adopted child), grandchild or parent of a
Participant.
"Incentive Stock Option" means an Option that meets the
requirements of Section 422 of the Code (or any successor provision in
effect at the relevant time) and that is identified as intended to be an
Incentive Stock Option in the Award Agreement evidencing the Option.
"Non-Employee Director" means a director of the Company who
comes within the definition of "non-employee director" under Rule 16b-3.
"Non-Qualified Stock Option" means an Option that is not an
Incentive Stock Option.
"Option" means an option to purchase Shares granted under
Section 6(a) of the Plan.
"Other Stock-Based Award" means a right granted under Section
6(f) of the Plan.
"Participant" means an employee of or consultant to the Company
or any Affiliate designated to be granted any Award under the Plan.
"Performance Award" means a right granted under Section 6(d) of
the Plan.
"Restricted Period" means the period of time during which an
Award of Restricted Stock or Restricted Stock Unit is subject to
transfer restrictions and potential forfeiture.
"Restricted Stock" means a Share granted under Section 6(c) of
the Plan.
"Restricted Stock Unit" means a right granted under Section 6(c)
of the Plan that is denominated in Shares.
"Rule 16b-3" means Securities and Exchange Commission Rule 16b-3
(or any successor rule or regulation), as applicable with respect to the
Company at a given time.
"Section 16" means Section 16 of the Exchange Act and the and
regulations thereunder, or any successor provision or regulation in
effect at a given time.
"Section 16 Reporting Person" means a person who is a director
or officer of the Company for purposes of Section 16.
"Shares" means shares of the Company's common stock, par value
$1.00 per share, or such other securities or property as may become the
subject of Awards, or become subject to Awards, pursuant to an
adjustment made under Section 4(b) of the Plan.
"Stock Appreciation Right" means a right granted under Section
6(b) of the Plan.
SECTION 3. ADMINISTRATION
The Committee shall administer the Plan. Subject to the terms and
limitations set forth in the Plan (including, without limitation those set forth
in Section 6(a)), and to applicable law, the Committee's authority shall include
without limitation the power to:
2
<PAGE>
(a) designate Participants;
(b) determine the types of Awards to be granted and the times at
which Awards will be granted;
(c) determine the number of Shares to be covered by Awards and
any payments, rights, or other matters to be calculated in connection
therewith;
(d) determine the terms and conditions of Awards and amend the
terms and conditions of outstanding Awards;
(e) determine how, whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
Awards, or other securities or property, or canceled, forfeited, or
suspended;
(f) determine how, whether, to what extent, and under what
circumstances cash, Shares, other Awards, other securities or property,
or other amounts payable with respect to an Award shall be deferred,
whether automatically or at the election of the holder thereof or of the
Committee;
(g) determine the methods and procedures for establishing the
value of any property (including, without limitation, Shares or other
securities) transferred, exchanged, given, or received with respect to
the Plan or any Award;
(h) prescribe and amend the forms of Award Agreements and other
instruments required under or advisable with respect to the Plan;
(i) designate Options as Incentive Stock Options;
(j) interpret and administer the Plan, Award Agreements, Awards,
and any contract, document, instrument, or agreement relating thereto;
(k) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
administration of the Plan;
(l) decide all questions and settle all controversies and
disputes which may arise in connection with the Plan, Award Agreements,
or Awards;
(m) make any other determination and take any other action that
the Committee deems necessary or desirable for the interpretation,
application, or administration of the Plan, Award Agreements, or Awards.
All designations, determinations, interpretations, and other decisions
under or with respect to the Plan, Award Agreements, or any Award shall be
within the sole discretion of the Committee, may be made at any time, and shall
be final, conclusive, and binding.
SECTION 4. SHARES AVAILABLE FOR AWARDS
(a) Shares Available. Subject to adjustment as provided in Section 4(b):
(i) Initial Authorization. There shall be 600,000 Shares
initially available for issuance under the Plan.
(ii) Accounting for Awards. For purposes of this Section 4:
(A) if an Award (other than a Dividend Equivalent) is
denominated in Shares, the number of Shares covered by such
Award, or to which such Award relates, shall be counted on the
date of grant of such Award against the aggregate number of
3
<PAGE>
Shares available for granting Awards under the Plan, to the
extent determinable on such date, and, insofar as the number of
Shares is not then determinable, under procedures adopted by the
Committee consistent with the purposes of the Plan; and
(B) Dividend Equivalents and Awards not denominated in
Shares shall be counted against the aggregate number of Shares
available for granting Awards under the Plan in such amount and
at such time as the Committee shall determine under procedures
adopted by the Committee consistent with the purposes of the
Plan;
provided, however, that Awards that operate in tandem with (whether
granted simultaneously with or at a different time from), or that are
substituted for, other Awards or restricted stock awards or stock
options granted under any other plan of the Company may be counted or
not counted under procedures adopted by the Committee in order to avoid
double counting.
(iii) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized but unissued Shares or of Shares reacquired by the Company,
including but not limited to Shares purchased on the open market.
(b) Adjustments. Upon the occurrence of any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), change in the capital or shares of capital stock, re capitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Shares or other
securities of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company, or extraordinary transaction or event
which affects the Shares, then the Committee shall have the authority to make
such adjustment, if any, in such manner as it deems appropriate, in (i) the
number and type of Shares (or other securities or property) which thereafter may
be made the subject of Awards, (ii) outstanding Awards, including, without limi
tation, the number and type of Shares (or other securities or property) subject
thereto, and (iii) the grant, purchase, or exercise price with respect to
outstanding Awards, and, if deemed appropriate, make provision for cash payments
to the holder of outstanding Awards; provided, however, that the number of
Shares subject to any Award denominated in Shares shall always be a whole
number.
SECTION 5. ELIGIBILITY
Any employee of or consultant to the Company or any Affiliate, including
any officer or officer-director of the Company, but excluding (i) any
Non-Employee Director of the Company and (ii) any consultant to the Company or
an Affiliate who is not rendering services pursuant to a written agreement with
the entity in question or who would not be considered an "employee" under the
instructions to Securities and Exchange Commission Form S-8 (or such successor
form as may be in effect at the relevant time), as may be selected from time to
time by the Committee in its discretion is eligible to be designated a
Participant with respect to any Award, except that an Other Stock-Based Award
may not be granted to a Section 16 Reporting Person.
SECTION 6. AWARDS
(a) Options. The Committee is authorized to grant Options to eligible
Participants.
(i) Committee Determinations. Subject to the terms and
limitations of the Plan, the Committee shall determine:
(A) the number of Shares subject to each Option and the
exercise price per Share;
(B) the term of each Option;
(C) the time or times at which an Option may be
exercised, in whole or in part, the method or methods by which
and the form or forms (including, without limitation, cash,
Shares, other Awards, or other property, or any combination
thereof, having a fair market value on the exercise date equal
to the relevant exercise price) in
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which payment of the exercise price with respect thereto may be
made or deemed to have been made; and
(D) whether the Option is intended to be an Incentive
Stock Option or a Nonqualified Stock Option.
Any Option intended to be an Incentive Stock Option shall be so
designated in the Award Agreement evidencing such Option, and the terms
and conditions of any Option intended to be Incentive Stock Option shall
be such as are determined by the Committee, after consulting with
Company counsel, to be necessary, appropriate, or advisable to cause
such Option to comply at the time of grant in all respects with all
applicable requirements of Section 422 of the Code [(or any successor
thereto then in effect)] and any regulations promulgated thereunder. The
Committee may impose such additional or other conditions or re
strictions on any Option as it deems appropriate and as are not
inconsistent with the terms of the Plan.
(ii) Other Terms. Unless otherwise determined by the Committee:
(A) A Participant electing to exercise an Option shall
give written notice to the Company, as may be specified by the
Committee, of exercise of the Option and the number of Shares
elected for exercise, such notice to be accompanied by such
instruments or documents as may be required by the Committee,
and shall tender the aggregate exercise price of the Shares
elected for exercise.
(B) At the time of exercise of an Option, payment in
full in cash shall be made for all Shares then being purchased.
(C) If the employment of or consulting arrangement with
a Participant terminates for any reason (including termination
by reason of the fact that an entity is no longer an Affiliate)
other than the Participant's death, the Participant may
thereafter exercise the Option as provided below, except that
the Committee may terminate the unexercised portion of the
Option concurrently with or at any time following termination of
the employment or consulting arrangement (including termination
of employment upon a change of status from employee to
consultant) if it shall determine, in its sole discretion, that
the Participant has engaged in any activity detrimental to the
interests of the Company or an Affiliate. If such termination is
voluntary on the part of the Participant (other than by reason
of retirement of an employee-Participant on or after normal
retirement date), the Option may be exercised within such period
as may be provided for in the Award Agreement but not to exceed
the earlier of the balance of the Option period or three months
after the date of termination. If such termination is
involuntary on the part of the Participant, or if an
employee-Participant retires on or after normal retirement date,
the Option may be exercised within the period as may be provided
in the Award Agreement but not to exceed the earlier of the
balance of the Option period or three months after the date of
termination or retirement. If the Participant's employment or
consulting relationship is terminated by reason of Disability,
the Option may be exercised within the period as may be provided
in the Award Agreement but not to exceed the earlier of the
balance of the Option period or one year after the date of
termination. For purposes of this subsection (C), a
Participant's employment or consulting arrangement shall not be
considered terminated (i) in the case of approved sick leave or
other bona fide leave of absence (not to exceed one year), (ii)
in the case of a transfer of employment or the consulting
arrangement among the Company and Affiliates, or (iii) by virtue
of a change of status from employee to consul tant or from
consultant to employee, except as provided above.
(D) If a Participant dies at a time when such
Participant is entitled to exercise an Option, then at any time
or times within one year after the death of such Participant
such Option may be exercised, as to all or any of the Shares
which the Participant was entitled to purchase immediately prior
to death. The Company may decline to deliver Shares to a
designated beneficiary until it receives indemnity against
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claims of third parties satisfactory to the Company. Except as
so exercised, such Option shall expire at the end of such
period.
(E) An Option may be exercised only if and to the extent
such Option was exercisable at the date of termination of
employment or the consulting arrangement, and an Option may not
be exercised at any time when the Option would not have been
exercisable had the Participant's employment or consulting
arrangement continued, provided that the Committee may in its
sole discretion authorize the purchase of such additional Shares
subject to the Option as are not exercisable.
(iii) Restoration Options. At the time of grant of an Option
(for purposes of this subsection, an "original Option") that is not
itself a Restoration Option (as hereinafter defined), or at the time a
Restoration Option arises, or at any other time while the grantee
continues to be eligible for Awards and the original Option or a
Restoration Option (either, a "predecessor Option") is outstanding, the
Committee may provide that the predecessor Option shall carry with it a
right to receive an Option (for purposes of this subsection, a
"Restoration Option") if, while still eligible to be granted an Option,
the grantee exercises the predecessor Option (or a portion thereof) and
pays some or all of the applicable exercise price in Shares that have
been owned by the grantee for at least six months prior to exercise. In
addition to being subject to any other terms and conditions (including
additional limitations on exercisability) that the Committee deems
appropriate, and ex cept to the extent the Committee otherwise provides
with respect to a given Restoration Option, each Restoration Option
shall be subject to the following:
(A) the number of Shares subject to the Restoration
Option shall be the lesser of: (x) the number of whole Shares
delivered in exercise of the predecessor Option, and (y) the
number of Shares available for grant under the Plan at the time
the Restoration Option arises;
(B) the Restoration Option automatically shall arise and
be granted (if ever) at the time of payment of the exercise
price in respect of the predecessor Option;
(C) the per Share exercise price of the Restoration
Option shall be the Fair Market Value of a Share on the date the
Restoration Option is granted;
(D) the expiration date of the Restoration Option shall
be the same as that of the predecessor Option;
(E) the Restoration Option shall first become
exercisable six months after it is granted; and
(F) the Restoration Option shall be a Nonqualified Stock
Option.
(b) Stock Appreciation Rights. The Committee is authorized to grant
Stock Appreciation Rights to eligible Participants. Subject to the terms of the
Plan, a Stock Appreciation Right granted under the Plan shall confer on the
holder thereof a right to receive, upon exercise thereof, the excess of (i) the
Fair Market Value of one Share on the date of exercise or, if the Committee
shall so determine in the case of any such right other than one related to any
Incentive Stock Option, at any time during a specified period before or after
the date of exercise over (ii) the grant price of the right as specified by the
Committee. Subject to the terms of the Plan, the Committee shall determine the
grant price, term, methods of exercise and settlement of such Stock Appreciation
Right, the effect thereon of termination of the Participant's employment and/or
consulting relationships, and any other terms of the Stock Appreciation Right
the Committee deems appropriate, and the Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.
(c) Restricted Stock and Restricted Stock Units.
(i) Grants. The Committee is authorized to grant to eligible
Participants Awards of Restricted Stock, which shall consist of Shares,
and Awards of Restricted Stock Units, which shall
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give the Participant the right to receive cash, Shares, other
securities, other Awards, or other property, in each case subject to the
termination of the Restricted Period for such Award determined by the
Committee.
(ii) Restrictions. The Restricted Period determined by the
Committee for Restricted Stock and Restricted Stock Units may differ
among Participants, and any Restricted Period may have different
expiration dates with respect to portions of Shares or Units covered by
the same Award. During the applicable Restriction Period, Restricted
Stock Units and Restricted Stock shall be nontransferable (except as
provided in Section 6(g)(v) of the Plan) and subject to forfeiture as
provided in subsection (iv) of this Section 6(c). Subject to the terms
of the Plan, Awards of Restricted Stock and Restricted Stock Units also
shall be subject to such other restrictions as the Committee may impose
(including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive any dividend or other right or
property), which restrictions may lapse separately or in combination, at
such time or times, in installments or otherwise, as the Committee may
determine. Unless the Committee shall otherwise determine, any Shares or
other securities distributed with respect to Restricted Stock or which a
Participant is otherwise entitled to receive by reason of such Shares
shall be subject to the restrictions contained in the applicable Award
Agreement. Subject to the aforementioned restrictions and the provisions
of the Plan, Participants shall have all of the rights of a stockholder
with respect to Shares of Restricted Stock.
(iii) Certificates. Any Shares granted as Restricted Stock shall
be evidenced by certificates bearing such restrictive transfer legends
as the Committee determines to be advisable in order to prevent
impermissible transfer of the Shares prior to the end of the applicable
Restricted Period, and such certificates shall be retained in the
possession of the Company until the Shares no longer are subject to
forfeiture. EACH AWARD AGREEMENT CONCERNING AN AWARD OF RESTRICTED STOCK
SHALL INCLUDE THE GRANTEE'S CONSENT TO TRANSFER TO THE COMPANY OF ANY
FORFEITED RESTRICTED STOCK WITHOUT THE NEED FOR ANY FURTHER CONSENT,
DIRECTION, OR OTHER ACTION BY THE GRANTEE.
(iv) Forfeiture. Except as otherwise determined by the
Committee:
(A) If the employment of or consulting arrangement with
a Participant terminates for any reason (including termination
by reason of the fact that any entity is no longer an
Affiliate), other than the Participant's death or Disability or,
in the case of an employee, retirement on or after normal
retirement date, all Shares of Restricted Stock and all
Restricted Stock Units theretofore awarded to the Participant
which are still subject to restrictions shall upon such
termination of employment or the consulting relationship be
forfeited and (in the case of Restricted Stock) transferred back
to the Company. For purposes of this subsection (A), a
Participant's employment or consulting arrangement shall not be
considered terminated (i) in the case of approved sick leave or
other bona fide leave of absence (not to exceed one year), (ii)
in the case of a transfer of employment or the consulting
arrangement among the Company and Affiliates, or (iii) other
than as provided in subsection (D) of this Section 6(c)(iv), by
virtue of a change of status from employee to consultant or from
consultant to employee.
(B) If a Participant ceases to be employed or retained
by the Company or an Affiliate by reason of death or Disability,
or if following retirement a Participant continues to have
rights under an Award of Restricted Stock or Restricted Stock
Units and thereafter dies, the Award shall fully vest and no
longer be subject to forfeiture.
(C) If an employee ceases to be employed by the Company
or an Affiliate by reason of retirement on or after normal
retirement date, the restrictions contained in the Award of
Restricted Stock shall continue to lapse in the same manner as
though employment had not terminated.
(D) However, notwithstanding the provisions of
subsections (B) and (C) above, if a Participant continues to
hold an Award of Restricted Stock or Restricted Stock Units
following termination of his employment or consulting
arrangement (including retirement and termination of employment
upon a change of status from employee to
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consultant), the Restricted Stock or Restricted Stock Units
which remain subject to restrictions shall nonetheless be
forfeited, and (in the case of Restricted Stock) transferred
back to the Company, if the Committee at any time thereafter
determines that the Participant has engaged in any activity
detrimental to the interests of the Company or an Affiliate.
(E) At the expiration of the Restricted Period as to
Shares covered by an Award of Restricted Stock, or as to
Restricted Stock Units to be settled in Shares, the Company
shall deliver the Shares as to which the Restricted Period has
expired, as follows:
(1) if an assignment to a trust has been made in
accordance with Section 6(g)(v)(B)(2)(c), to such trust;
or
(2) if the Restricted Period has expired by reason
of death and a beneficiary has been designated in form
approved by the Company, to the beneficiary so
designated; or
(3) in all other cases, to the Participant or the
legal representative of the Participant's estate.
(d) Performance Awards. The Committee is authorized to grant Performance
Awards to eligible Participants. Subject to the terms of the Plan, a Performance
Award granted under the Plan (i) may be denominated or payable in cash, Shares
(including, without limitation, Restricted Stock), other securities, other
Awards, or other property and (ii) shall confer on the holder thereof rights
valued as determined by the Committee and payable to, or exercisable by, the
holder of the Performance Award, in whole or in part, upon the achievement of
such performance goals during such performance periods as the Committee shall
establish. Subject to the terms of the Plan, the performance goals to be
achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and the other terms and
conditions of any Performance Award, including the effect upon such Award of
termina tion of the Participant's employment and/or consulting relationships,
shall be determined by the Committee.
(e) Dividend Equivalents. The Committee is authorized to grant to
eligible Participants Awards under which the holders thereof shall be entitled
to receive payments equivalent to dividends or interest with respect to a number
of Shares determined by the Committee, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional Shares or
otherwise reinvested. Subject to the terms of the Plan, such Awards may have
such terms and conditions as the Committee shall determine.
(f) Other Stock-Based Awards. The Committee is authorized to grant to
eligible Participants such other Awards that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to
Shares (including, without limitation, securities convertible into Shares), as
are deemed by the Committee to be consistent with the purposes of the Plan;
provided, however, that such grants may not be made to Section 16 Reporting
Persons. Subject to the terms of the Plan, the Committee shall determine the
terms and conditions of such Other Stock-Based Awards. Shares or other
securities delivered pursuant to a purchase right granted under this Section
6(f) shall be purchased for such consideration, which may be paid by such method
or methods and in such form or forms, including, without limitation, cash,
Shares, other securities, other Awards, other property, or any combination of
the foregoing, as the Committee shall determine.
(g) General.
(i) Effect of Incentive Stock Option Disqualification. If an
Option intended to be an Incentive Stock Option (or any portion of such
Option) for any reason does not qualify as an Incentive Stock Option
under the Code, whether at the time of grant or subsequently, such
failure to qualify shall not invalidate the Option (or Option portion),
and instead the nonqualified portion (or, if necessary, the entire
Option) shall be deemed to have been granted as a Nonqualified Stock
Option irrespective of the manner in which it is designated in the
applicable Award Agreement.
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(ii) No Cash Consideration for Awards. Awards may be granted for
no cash consideration or for such minimal cash consideration as may be
required by applicable law.
(iii) Awards May Be Granted Separately or Together. Awards may,
in the discretion of the Committee, be granted either alone or in
addition to, in tandem with (or in substitution for) any other Award or
any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or in
addition to or in tandem with awards granted under another plan of the
Company or an Affiliate, may be granted either at the same time as or at
a different time from the grant of such other Awards or awards.
(iv) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise, or payment
of an award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other
securities, other Awards, or other property, or any combination thereof,
and may be made in a single payment or transfer, in installments, or on
a deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of Dividend Equivalents in respect of installment or deferred
payments.
(v) Limits on Transfer of Awards.
(A) Except as the Committee may otherwise determine, no
Award or right under any Award may be sold, encumbered, pledged,
alienated, attached, assigned, or otherwise transferred in any
manner, and any attempt to do any of the foregoing shall be void
and unenforceable against the Company.
(B) Notwithstanding the provisions of paragraph (A)
above, except as provided in paragraph (C) below:
(1) An Option may be transferred:
(a) to a beneficiary designated by the
Participant in writing on a form approved by the
Committee; or
(b) by will or the applicable laws of
descent and distribution to the personal
representative, executor or administrator of the
Participant's estate; or
(c) to a Family Member, to a partnership of
which the only partners are Family Members, or a
trust established solely for the benefit of Family
Members provided however, that such Option is NOT
an Incentive Stock Option;
(2) A Participant may assign or transfer rights
under an Award of Restricted Stock or Restricted Stock
Units:
(a) to a beneficiary designated by the
Participant in wri ting on a form approved by the
Committee;
(b) by will or the applicable laws of
descent and distribution to the personal
representative, executor or administrator of the
Participant's estate; or
(c) to a revocable grantor trust established
by the Partici pant for the sole benefit of the
Participant during the Participant's life, and
under the terms of which the Participant is and
remains the sole trustee until death or physical
or mental incapacity. Such assignment
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shall be effected by a written instrument in form
and content satisfactory to the Committee, and the
Participant shall deliver to the Committee a true
copy of the agreement or other document evidencing
such trust. If in the judgment of the Committee
the trust to which a Participant may attempt to
assign rights under such an Award does not meet
the criteria of a trust to which an assignment is
permitted by the terms hereof, or if, after
assignment (whether because of amendment, by
operation of law, or for any other reason) such
trust no longer meets such criteria, such
attempted assignment shall be void and may be
disregarded by the Committee and the Company and
all rights to any such Awards shall revert to and
remain solely in the Participant. Notwithstanding
a qualified assignment, the Participant, and not
the trust to which rights under such an Award may
be assigned, for the purpose of determining
compensation arising by reason of the Award shall
continue to be considered an employee or
consultant, as the case may be, of the Company or
an Affiliate, but such trust and the Participant
shall be bound by all of the terms and conditions
of the Award Agreement and this Plan. Shares
issued in the name of and delivered to such trust
shall be conclusively considered issuance and
delivery to the Participant.
(3) The Committee shall not permit Section 16
Reporting Persons to transfer or assign Awards except as
and to the extent (if any) permitted under Rule 16b-3.
(C) The Committee, the Company, and its officers,
agents, and employees may rely upon any beneficiary designation,
assignment, or other instrument of transfer, copies of trust
agreements, and any other documents delivered to any of them by
or on behalf of a Participant, which they believe genuine, and
any action taken by any of them in reliance thereon shall be
conclusive and binding upon the Participant, the personal
representatives of the Participant's estate, and all persons
asserting a claim based on an Award to the Participant. The
delivery by a Participant of a beneficiary designation, or an
assignment of rights under an Award as permitted hereunder,
shall constitute the Participant's irrevocable undertaking to
hold the Committee, the Company, and its officers, agents, and
employees harmless against claims, including any cost or expense
incurred in defending against claims, of any person (including
the Participant) which may be asserted or alleged to be based on
an Award subject to a beneficiary designation or an assignment.
In addition, the Company may decline to deliver Shares to a
beneficiary until it receives indemnity against claims of third
parties satisfactory to the Company.
(vi) Change in Control. (A) Notwithstanding any of the
provisions of this Plan or any Award Agreement, upon Change in Control
of the Company (as hereinafter defined) the vesting of all rights of
Participants under outstanding Awards shall be accelerated and all
restrictions thereon shall terminate in order that Participants may
fully realize the benefits intended to be made available under such
Awards. Such acceleration shall include, without limitation, the
immediate exercisability in full of all Options and the termination of
restrictions on Restricted Stock and Restricted Stock Units. Further,
upon such Change in Control, in addition to the Committee's authority
set forth in Section 4(b), the Committee, as constituted before such
Change in control, is authorized and has sole discretion, as to any
Award, to take any one or more of the following actions: (i) cause any
such Award then outstanding to be assumed, or new rights substituted
therefor, by the acquiring or surviving entity or other person giving
rise to such change in Control; (ii) make such adjustment to any such
Award then outstanding as the Committee deems appropriate to reflect
such Change in Control; and (iii) provide for the purchase of any such
Award, upon the Participant's request, for an amount of cash equal to
the amount that could have been attained upon the exercise of such Award
or realization of the Participant's rights had such Award been currently
exercisable or payable.
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(B) A Change in Control shall occur if:
(1) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act and
the regulations thereunder), other than pursuant to a
transaction or agreement previously approved by the
Board, directly or indirectly purchases or otherwise
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of voting securities
representing 30 percent or more of the combined voting
power of all outstanding voting securities of the
Company;
(2) during any period of two consecutive years,
the individuals who at the beginning of such period
constitute the Board cease for any reason to constitute
at least a majority thereof, unless the appointment or
nomination for election by the Company's stockholders of
each new director during such period has been approved
by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of
such period; or
(3) the stockholders of the Company approve (i) an
agreement to merge or consolidate the Company in a
transaction in which the Company is not the surviving
entity, (ii) an agreement to sell or dispose of
substantially all of the Company's assets, or (iii) a
plan to liquidate the Company, unless, in the case of an
event described in (i), (ii), or (iii), the Board
determines prior to the occurrence of the event that the
effects de scribed in Section 6(g)(vi)(A) will not apply
with respect to such event.
(vii) Cash Settlement. Notwithstanding any provision of
this Plan or of any Award Agreement to the contrary, any Award
outstanding hereunder, may at any time be canceled in the
Committee's sole discretion upon payment of the value of such
Award to the holder thereof in cash or in another Award
hereunder, such value to be determined by the Committee at its
sole discretion.
(viii) Certain Securities Law Considerations. The
Company intends, as soon as possible, to re gister with the
Securities and Exchange Commission on Form S-8 the total number
of Shares that may be acquired by Participants under the Plan.
Until such Form S-8 Registration Statement is filed and
effective, no Awards shall vest or be exercisable under the
Plan.
(ix) Award Agreements. Each Award shall be evidenced by
an Award Agreement in such form as the Committee shall
prescribe.
SECTION 7. AMENDMENT, SUSPENSION, OR TERMINATION; CERTAIN OTHER MATTERS
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments, Suspension, or Termination. The Board may amend,
suspend, or terminate the Plan or any portion thereof at any time, with
or without stockholder approval, and the Board or the Committee may
amend any outstanding Award; provided, however, that (i) no Plan
amendment shall be effective until approved by stockholders of the
Company, insofar as stockholder approval thereof is required in order
for the Plan to continue to satisfy the conditions of Rule 16b-3 or any
applicable requirements of a national securities exchange or the NNM or
to permit the further grant of Incentive Stock Options, and (ii) without
the consent of an affected Participant no amendment of the Plan or of
any Award may impair the rights of the Participant under any outstanding
Award.
(b) Adjustments of Awards Upon the Occurrence of Certain Unusual
or Nonrecurring Events. The Committee shall be authorized to make
adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4 (b) hereof or a
Change in Control as defined in Section 6(g)(vi) hereof) affecting the
Company, any Affiliate, or the financial statements of the Company or
any Affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that
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such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available to holders of outstanding Awards under the Plan.
(c) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent
it shall deem desirable to effectuate the Plan.
SECTION 8. MISCELLANEOUS
(a) No Rights to Awards. Subject only to the express
requirements of the Plan, there is no obligation for uniformity of
treatment of Participants or holders or beneficiaries of Awards under
the Plan, and no Participant or other person shall have any claim to be
granted any Award. The terms and conditions of Awards of the same type,
and the determination of the Committee to grant a waiver or modification
of the terms and conditions of any Award, need not be the same with
respect to each Participant.
(b) Withholding. The Company or any Affiliate shall be
authorized to withhold from any Award granted or any payment due or
transfer made under any Award or under the Plan the amount (in cash,
Shares, other securities, other Awards or other property) of withholding
taxes due in respect of an Award, its exercise, or any payment or
transfer under such Award or under the Plan and to take such other
action as may be necessary in the opinion of the Company or Affiliate to
satisfy all obligations for the payment of such taxes.
(c) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from
adopting or continuing in effect other or additional compensation
arrangements, including the grant of Options and other stock-based
awards, and such arrangements may be either generally applicable or
applicable only in specific cases.
(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ
of the Company or any Affiliate. Further, the Company or an Affiliate
may at any time dismiss a Participant from employment, free from any
liability, or any claim under the Plan, unless otherwise expressly
provided in the Award Agreement or another written agreement with the
Participant.
(e) Governing Law. Except to the extent, if any, preempted by
Federal law, the validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan established by the Committee,
and any Award Agreement shall be determined in accordance with the laws
of the State of New York.
(f) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan
or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or Award, and the remainder of the Plan and any
such Award shall remain in full force and effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any Affiliate
and a Participant or any other person. To the extent that any person
acquires a right to receive payments from the Company or any Affiliate
pursuant to an Award, such right shall be no greater than the right of
any unsecured general creditor of the Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities, or other property shall be
paid or transferred in lieu of any fractional Shares, or whether such
fractional Shares or any right thereto shall be canceled, terminated, or
otherwise eliminated.
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(i) Stockholder Status. Neither the grantee of an Award, nor any
other person to whom the Award or the grantee's rights thereunder may
pass, shall be, or have any right or privileges of, a holder of Shares
in respect of any Shares issuable pursuant to or in settlement of such
Award, unless and until certificates representing such Shares have been
issued in the name of such grantee or other person.
(j) Headings. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.
SECTION 9. EFFECTIVENESS AND DURATION
The Plan shall be effective as of the date of its approval by the
Company's stockholders and shall continue in effect thereafter until terminated
by the Board.
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Exhibit 5
WARSHAW BURSTEIN COHEN
SCHLESINGER & KUH, LLP
555 Fifth Avenue
New York, New York 10017
Telephone: (212) 984-7700
Facsimile: (212) 972-9150
December 2, 1999
Lazare Kaplan International Inc.
529 Fifth Avenue
New York, NY 10017
Re: Registration Statement on Form S-8
Gentlemen:
You have requested our opinion, as securities counsel for Lazare Kaplan
International Inc., a Delaware corporation (the "Registrant"), in connection
with a registration statement on Form S-8 (the "Registration Statement"), under
the Securities Act of 1933 (the "Act"), being filed by the Registrant with the
Securities and Exchange Commission (the "Commission").
The Registration Statement relates to the registration of an additional
200,000 shares (the "Shares") of common stock, $1.00 par value, of the
Registrant issuable, pursuant to the Lazare Kaplan International Inc. 1997 Long
Term Stock Incentive Plan (the "1997 Plan"), including upon the exercise of
options granted or to be granted under the 1997 Plan.
In preparation of this opinion, we have examined the original,
photostatic, conformed or certified copies of (1) the Certificate of
Incorporation, as amended to date, of the Registrant, (2) the By-Laws of the
Registrant, in effect on the date hereof, (3) the records of corporate
proceedings of the Registrant in our possession and as delivered to us by the
executive officers of the Registrant, (4) the Registration Statement, and (5)
the 1997 Plan. In our examinations, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to the originals of all documents submitted to us as certified,
photostatic or conformed copies, and the authenticity of the originals of all
such latter documents.
Based upon the foregoing, we are of the opinion that the Shares, when
issued in accordance with the terms of the 1997 Plan, will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of our opinion as an exhibit to the
Registration Statement.
Partners of, and other persons associated with, our Firm beneficially
own 12,050 shares of Common Stock.
Sincerely yours,
WARSHAW BURSTEIN COHEN
SCHLESINGER & KUH, LLP
<PAGE>
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the Lazare Kaplan International
Inc. 1997 Long Term Stock Incentive Plan and to the incorporation by reference
therein of our reports dated August 25, 1999, with respect to the consolidated
financial statements of Lazare Kaplan International Inc. incorporated by
reference in its Annual Report (Form 10-K) for the year ended May 31, 1999 and
the related financial statement schedule included therein, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
December 2, 1999
