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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended JUNE 30, 1997
-------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File Number: 1-988
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THE COLEMAN COMPANY, INC.
-------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3639257
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2111 E. 37TH STREET NORTH, WICHITA, KANSAS 67219
------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
1767 DENVER WEST BLVD., GOLDEN, COLORADO 80401
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(Former address of principal executive offices) (Zip Code)
316-832-2700
------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirement for the past 90 days. /X/ Yes No
----- -----
The number of shares outstanding of the registrant's par value $.01 common stock
was 53,368,726 shares as of August 4, 1997 of which 44,067,520 shares were held
by an indirect wholly-owned subsidiary of Mafco Holdings Inc.
Exhibit Index on Page 13.
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THE COLEMAN COMPANY, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page
----
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Statements of Earnings
Three months ended June 30, 1997 and 1996 and
Six months ended June 30, 1997 and 1996 3
Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996 4
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
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THE COLEMAN COMPANY, INC. AND SUBSIDIARIES
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C>
Net revenues $ 383,514 $ 452,654 $ 678,978 $ 726,214
Cost of sales 281,601 315,116 496,023 507,710
--------- --------- --------- ---------
Gross profit 101,913 137,538 182,955 218,504
Selling, general and administrative expenses 70,111 78,916 135,984 125,653
Interest expense, net 11,027 10,732 21,739 18,813
Amortization of goodwill and deferred charges 2,762 2,897 5,627 5,144
Other expense, net 526 627 797 657
--------- --------- --------- ---------
Earnings before income taxes,
minority interest and extraordinary item 17,487 44,366 18,808 68,237
Income tax expense 6,637 14,369 7,147 23,201
Minority interest in earnings of Camping Gaz 731 1,951 843 1,951
--------- --------- --------- ---------
Earnings before extraordinary item 10,119 28,046 10,818 43,085
Extraordinary loss on early extinguishment
of debt, net of income tax benefit -- (647) -- (647)
--------- --------- --------- ---------
Net earnings $ 10,119 $ 27,399 $ 10,818 $ 42,438
--------- --------- --------- ---------
Earnings per share:
Earnings before extraordinary item $ 0.19 $ 0.53 $ 0.20 $ 0.81
Extraordinary item -- (0.01) -- (0.01)
--------- --------- --------- ---------
Net earnings $ 0.19 $ 0.52 $ 0.20 $ 0.80
--------- --------- --------- ---------
Weighted average common shares outstanding 53,338 53,190 53,285 53,178
--------- --------- --------- ---------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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THE COLEMAN COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 17,047 $ 17,299
Accounts and notes receivable, less allowance of $9,262
in 1997 and $11,512 in 1996 312,238 231,603
Inventories 252,880 287,502
Deferred tax assets 40,040 40,466
Prepaid assets and other 15,734 14,767
---------- -----------
Total current assets 637,939 591,637
Property, plant and equipment, net 180,161 199,182
Intangible assets related to businesses acquired, net 326,683 341,715
Deferred tax assets and other 31,275 27,552
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$1,176,058 $1,160,086
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and notes payable $ 202,559 $ 132,841
Other current liabilities 126,789 113,653
---------- -----------
Total current liabilities 329,348 246,494
Long-term debt 522,819 582,866
Other liabilities 62,299 76,173
Minority interest 1,904 1,608
Contingencies
Stockholders' equity:
Common stock 534 532
Additional paid-in capital 170,739 166,690
Retained earnings 93,650 82,832
Currency translation adjustment (4,614) 3,176
Minimum pension liability adjustment (621) (285)
---------- -----------
Total stockholders' equity 259,688 252,945
---------- -----------
$1,176,058 $1,160,086
---------- -----------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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THE COLEMAN COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
--------------------------
1997 1996
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 10,818 $ 42,438
----------- ----------
Adjustments to reconcile net earnings to net cash flows
from operating activities:
Depreciation and amortization 19,393 17,112
Non-cash restructuring and other charges 9,897 --
Extraordinary loss on early extinguishment of debt -- 1,078
Minority interest in earnings of Camping Gaz 843 1,951
Change in assets and liabilities:
Increase in receivables (83,057) (141,964)
Decrease (increase) in inventories 27,526 (14,318)
Increase in accounts payable 19,992 24,298
Other, net 3,272 23,055
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(2,134) (88,788)
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Net cash provided (used) by operating activities 8,684 (46,350)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (12,660) (18,803)
Purchases of businesses, net of cash acquired -- (158,228)
Proceeds from sale of fixed assets 2,815 433
----------- ----------
Net cash used by investing activities (9,845) (176,598)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments of revolving credit agreement borrowings (49,959) (31,996)
Net change in short-term borrowings 51,594 24,068
Proceeds from issuance of long-term debt -- 235,000
Repayment of long-term debt (2,376) (5,917)
Debt issuance and refinancing costs (766) (1,765)
Purchases of Company common stock -- (2,329)
Proceeds from stock options exercised 1,443 1,655
----------- ----------
Net cash (used) provided by financing activities (64) 218,716
----------- ----------
Effect of exchange rate changes on cash 973 3,531
----------- ----------
Net decrease in cash and cash equivalents (252) (701)
Cash and cash equivalents at beginning of the period 17,299 12,065
----------- ----------
Cash and cash equivalents at end of the period $ 17,047 $ 11,364
----------- ----------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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1. BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements
of The Coleman Company, Inc. ("Coleman" or the "Company") include the
accounts of the Company and its subsidiaries after elimination of all
material intercompany accounts and transactions, and have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six months ended
June 30, 1997 are not necessarily indicative of the results that may be
expected in future periods. The balance sheet at December 31, 1996 has been
derived from the audited financial statements for that date but does not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1996.
2. INVENTORIES
The components of inventories consist of the following:
June 30, December 31,
1997 1996
--------- ------------
Raw material and supplies $ 67,937 $ 82,399
Work-in-process 11,569 12,878
Finished goods 173,374 192,225
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$252,880 $287,502
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3. RESTRUCTURING AND OTHER CHARGES
During the six months ended June 30, 1997, the Company recorded
restructuring and other charges totaling $22,551 and related tax benefits of
$8,569. The second quarter pre-tax restructuring charge of $18,623 related
primarily to (i) exiting various low margin products, including pressure
washers, (ii) closing and relocating certain administrative and sales
offices, and (iii) closing several manufacturing facilities. These
restructuring initiatives are expected to be substantially completed within
one year. Pre-tax restructuring and other costs totaling $3,928 were
recorded, primarily selling, general and administrative ("SG&A") expenses, in
the first quarter of 1997 and related primarily to executive severance costs.
The costs associated with the second quarter restructuring charge included
pre-tax charges of $12,919 related to exiting certain products and facilities of
which $10,261 was reflected in cost of sales and $2,658 in SG&A expenses.
Included in this restructuring charge was $8,632 of pre-tax charges related
primarily to the write down of inventory and fixed assets to estimated net
realizable value, and $4,287 of liabilities for other exit costs, including
carrying costs of idle facilities and relocation costs, of which $1,134 was paid
as of June 30, 1997.
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The costs associated with the second quarter restructuring charge also
included $5,704 of termination costs for 389 factory and administrative
employees of which $1,141 was reflected in cost of sales and $4,563 in SG&A
expenses. As of June 30, 1997, $1,763 of these termination benefits were paid
to the 234 employees who were terminated as of that date.
During 1996, the Company recorded restructuring charges primarily to (i)
integrate the Camping Gaz and Coleman operations, and (ii) exit certain
products. Activities associated with the implementation of those plans are
substantially completed or are in process at June 30, 1997. Remaining
liabilities of approximately $8,500 at June 30, 1997, relate primarily to
anticipated returns of discontinued products and to closing certain factory,
warehouse and office facilities.
4. RELATED PARTY TRANSACTION
As of March 31, 1997, the Company purchased an inactive subsidiary from an
affiliate for $1,000. The Company expects to realize certain foreign tax
benefits from this transaction in future years. The Company has accounted for
this transaction in a manner similar to a pooling-of-interests due to the Mafco
Holdings Inc. common control over each of the parties involved in the
transaction. The $2,608 excess value of estimated realizable tax benefits
acquired over the purchase price has been accounted for as a capital
contribution.
5. RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("FAS 128"),
which specifies the computation, presentation, and disclosure requirements for
earnings per share with the objective to simplify the computation of earnings
per share. FAS 128 is effective for financial statements for periods ending
after December 15, 1997 and earlier application is not permitted. After the
effective date, all prior period earnings per share data shall be restated to
conform with the provisions of FAS 128. The adoption of FAS 128 is not expected
to have a material impact on the Company's earnings per share data.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
As part of its strategy to improve profitability, the Company has developed
a restructuring program including plans to (i) close its executive offices in
Golden, Colorado, with most of its administrative functions relocating to its
Wichita, Kansas facility, (ii) reduce its work force by approximately
10% or 700 employees, (iii) close or relocate several of its factories, (iv)
close its Geneva, Switzerland international headquarters, (v) rationalize its
product lines, including a significant reduction in SKUs, and (vi) exit its
pressure washer business. In addition, the Company continues to evaluate the
various components of its business operations and may, as a result of those
ongoing evaluations, decide to sell certain businesses or assets if suitable
opportunities arise. Several of the initiatives involved in the Company's
restructuring plan, including closing and relocating certain administrative and
manufacturing facilities, were substantially completed as of June 30, 1997. The
remaining initiatives are expected to be substantially completed within one
year.
THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THE THREE MONTHS ENDED
JUNE 30, 1996
Net revenues of $383.5 million in 1997 were $69.1 million or 15.3% less
than in 1996 with outdoor recreation products decreasing $48.6 million or 13.7%
and hardware products decreasing $20.5 million or 21.2%. The outdoor recreation
products revenues decrease primarily reflects reduced sales in Japan due to weak
market conditions and a program to reduce wholesaler inventories and the
inclusion of Camping Gaz revenues from the date of acquisition in 1996. The
hardware products revenues decrease is primarily due to a decline in pressure
washer sales as a result of the Company's decision to exit the pressure washer
business. Geographically, United States and Canadian revenues decreased 0.3%
while international revenues decreased 38.6% reflecting the decline in outdoor
recreation products revenues outside the United States as described above.
Gross margins of 29.5%, excluding the impact of restructuring and other
charges which are more fully described below, decreased as a percent of sales
by 0.9 percentage points from 30.4% in 1996. The decrease is primarily the
result of the effect of lower sales of high margin products in Japan.
Closing several of the Company's factories as part of the Company's
restructuring initiatives is intended to reduce manufacturing costs in future
periods.
SG&A expenses, excluding the impact of restructuring and other charges
which are more fully described below, were $62.9 million or 16.4% of sales in
1997 compared to $78.9 million or 17.4% of sales in 1996. The decrease in SG&A
expenses reflects reduced promotional and advertising spending, cost reductions
from the integration of the Camping Gaz business and timing of the acquisition
in 1996, and the restructuring initiatives implemented in 1997.
During the second quarter of 1997, the Company recorded restructuring
charges totaling $18.6 million of which $11.4 million was reflected in cost of
sales and $7.2 million in SG&A expenses. These charges relate to the Company's
restructuring initiatives designed to improve profitability. Tax benefits of
$7.1 million associated with these charges are reflected in income tax expense.
Interest expense was $11.0 million in 1997 compared with $10.7 million in
1996, an
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increase of $0.3 million. This increase was primarily the result of higher
interest rates.
Minority interest in the second quarter of 1997 reflects the minority
interests held by other shareholders in certain subsidiary operations acquired
with the Camping Gaz business. On March 1, 1996, the Company acquired control
of approximately 70% of Camping Gaz and in July 1996 obtained control of the
remaining 30% of Camping Gaz and, accordingly, in the second quarter of 1996,
minority interest reflected the approximately 30% share of Camping Gaz held by
other shareholders and also the minority interests in certain subsidiary
operations acquired with the Camping Gaz business.
The Company recorded a provision for income tax expense of $6.6 million or
38.0% of pre-tax earnings in 1997 compared to a provision for income tax expense
of $14.4 million or 32.4% of pre-tax earnings in 1996.
The increase in the effective tax rate in 1997 as compared to 1996 is primarily
due to reduced tax benefits associated with certain of the Company's offshore
operations.
During the second quarter of 1996, in connection with the renegotiation
of its then existing credit agreement, the Company recorded an extraordinary
loss of $1.1 million ($0.6 million net of tax) which represented a write-off
of the related unamortized financing costs associated with its then existing
credit agreement.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 1996
Net revenues of $679.0 million in 1997 were $47.2 million or 6.5% less than
in 1996 with outdoor recreation products decreasing $19.4 million or 3.6% and
hardware products decreasing $27.8 million or 15.3%. The outdoor recreation
products revenues decrease is largely attributable to lower sales in Japan due
to weak market conditions and a program to reduce wholesaler inventories. The
hardware products revenues decrease is primarily due to a decline in pressure
washer sales as a result of the Company's decision to exit the pressure washer
business. Geographically, United States and Canadian revenues decreased 3.3%
while international revenues decreased 13.1% primarily related to lower sales in
Japan. Results in the 1996 period include the Camping Gaz operations from the
date of acquisition.
Gross margins of 28.6%, excluding the impact of restructuring and other
charges which are more fully described below, decreased as a percent of sales by
1.5 percentage points from 30.1% in 1996. The decrease is primarily the result
of the effect of lower sales of high margin products in Japan. The closing of
several of the Company's factories as part of the Company's restructuring
initiatives is intended to reduce manufacturing costs in future periods.
SG&A expenses, excluding the impact of restructuring and other charges
which are more fully described below, were $124.4 million in 1997 compared to
$125.7 million in 1996, a decrease of 1.0%. The inclusion of a full six
months of Camping Gaz SG&A costs in the 1997 period increased SG&A expenses,
however these increases were more than offset by reduced costs in the
Company's various promotional programs and benefits resulting from the
integration of Camping Gaz operations and the restructuring initiatives.
During the 1997 period, the Company recorded restructuring charges
totaling $22.6 million of which $11.0 million was reflected in cost of sales
and $11.6 million in SG&A expenses. These charges relate to the Company's
restructuring initiatives designed to improve profitability. Tax benefits of
$8.6 million associated with these charges are reflected in income tax
expense.
Interest expense was $21.7 million in 1997 compared with $18.8 million in
1996, an increase of $2.9 million. This increase was primarily the result of
higher interest rates and increased borrowings related to the Camping Gaz
acquisition.
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Minority interest in the 1997 period reflects the minority interests held
by other shareholders in certain subsidiary operations acquired with the Camping
Gaz business. On March 1, 1996, the Company acquired control of approximately
70% of Camping Gaz and in July 1996 obtained control of the remaining 30% of
Camping Gaz and, accordingly, in the 1996 period, minority interest reflected
the approximately 30% share of Camping Gaz held by other shareholders and also
the minority interests in certain subsidiary operations acquired with the
Camping Gaz business.
The Company recorded a provision for income tax expense of $7.1 million or
38.0% of pre-tax earnings in 1997 compared to a provision for income tax expense
of $23.2 million or 34.0% of pre-tax earnings in 1996. The increase in the
effective tax rate in 1997 as compared to 1996 is primarily due to reduced tax
benefits associated with certain of the Company's offshore operations.
During the second quarter of 1996, in connection with the renegotiation
of its then existing credit agreement, the Company recorded an extraordinary
loss of $1.1 million ($0.6 million net of tax) which represented a write-off
of the related unamortized financing costs associated with its then existing
credit agreement.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities provided $8.7 million of cash during the
six months ended June 30, 1997 and used $46.4 million of cash in the same period
a year ago. Net cash provided by operating activities during the 1997 period
reflects an increase in receivables and a decrease in inventories as a result of
the seasonality of the Company's sales and was also favorably impacted by
improved management of receivables and inventories. The Company's net cash used
for investing activities was $9.8 million and $176.6 million for the six months
ended June 30, 1997 and 1996, respectively. The Company used $158.2 million of
cash in the 1996 period for the Camping Gaz and Seatt business acquisitions.
The Company's capital expenditures were $12.7 million in the six months ended
June 30, 1997.
As part of its strategy to improve profitability, the Company has
announced several restructuring initiatives. The Company has recognized
year-to-date pre-tax charges of $22.6 million associated with these actions
and expects to record additional pre-tax charges of approximately $7.0
million during the remaining periods of 1997. These restructuring
initiatives are expected to generate cost savings in the future from
reductions in personnel, production facilities and administrative overhead.
There can be no assurance as to the Company's success in implementing its
planned initiatives or the results therefrom, the amount of future charges,
or against any adverse impact of the Company's restructuring initiatives.
The Company's working capital requirements are currently funded by cash
flow from operations and domestic and foreign bank lines of credit. The
Company's Amended and Restated Credit Agreement, dated as of August 3, 1995, as
amended (the "Company Credit Agreement"), consists of a $275.0 million unsecured
revolving credit facility (the "Revolving Credit Facility") and a term loan
facility of approximately 385.0 million French Francs (approximately $66.1
million at June 30, 1997 exchange rates). Availability under the Revolving
Credit Agreement is reduced by any commercial paper borrowings outstanding. The
Company Credit Agreement is available to the Company until April 30, 2001. At
June 30, 1997, $173.5 million was available for borrowings under the Company
Credit Agreement.
The outstanding loans under the Company Credit Agreement bear interest at
either of the following rates, as selected by the Company from time to time:
(i) the higher of the agent's base lending rate or the federal funds rate plus
.50% or (ii) the London Inter-Bank Offered Rate
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("LIBOR") plus a margin ranging from .25% to 2.125% based on the Company's
financial performance. If there is a default, the interest rate otherwise in
effect will be increased by 2% per annum. The Company Credit Agreement also
bears an overall facility fee ranging from .15% to .375% based on the
Company's financial performance.
The Company Credit Agreement contains various restrictive covenants
including, without limitation, requirements for the maintenance of specified
financial ratios, levels of consolidated net worth and profits, and certain
other provisions limiting the incurrence of additional debt, purchase or
redemption of the Company's common stock, issuance of preferred stock of the
Company, and also prohibits the Company from paying any dividends until on or
after January 1, 1999, and limits the amount of dividends the Company may pay
thereafter. The Company Credit Agreement also provides for a specific
requirement relating to the Company's financial leverage at December 31, 1997,
which, if not achieved, will result in the Company Credit Agreement becoming
secured by the Company's assets. For purposes of determining the Company's
compliance with certain of such covenants, the Company Credit Agreement
excludes, among other things, up to $30.0 million of pre-tax charges in
connection with the Company's restructuring initiatives. In addition to the
Company Credit Agreement, the Company has private placement notes outstanding
totaling $360.0 million (the "Private Placement Notes") which, among other
provisions, provide for the Private Placement Notes to become secured if the
Company Credit Agreement becomes secured.
The Company believes that cash flow from operations and borrowings under
the Company Credit Agreement will be sufficient for the Company to meet its
current cash operating requirements, including projected capital expenditures,
tax sharing payments and other obligations. The Company's ability to borrow
under the terms of the Company Credit Agreement is subject to the Company's
continuing requirement to meet the various covenants, including without
limitation, those described above, and the various covenants in the Private
Placement Notes. If the Company fails to meet the various restrictive covenants
of the Company Credit Agreement, the Company will need to seek a waiver of such
provisions, renegotiate its current Company Credit Agreement, and/or enter into
alternative financing arrangements. There is no assurance that the Company
would be able to obtain such waiver or that terms and conditions of such
renegotiated or alternative agreements, if any, would be as favorable as those
now contained in the Company Credit Agreement.
All of the shares of the Company's common stock owned by Coleman
Worldwide Corporation ("Coleman Worldwide") are pledged to secure
indebtedness of Coleman Worldwide and Coleman Escrow Corp. ("Coleman
Escrow"). On May 20, 1997, Coleman Escrow issued approximately $732.0 million
in principal amount at maturity of Senior Secured Discount Notes due 2001
(the "Escrow Notes"). A portion of the net proceeds from the issuance of the
Escrow Notes was contributed to Coleman Holdings Inc. ("Coleman Holdings")
and used by it to redeem, on July 15, 1997, its Senior Secured Discount Notes
due 1998 (the "Holdings Notes"). A portion of the net proceeds from the
issuance of the Escrow Notes was contributed to Coleman Worldwide and used by
it to accept for exchange on June 20, 1997, $545.1 million aggregate
principal amount at maturity of Liquid Yield Option Notes-TM- due 2013 (the
"LYONs"-TM-). Coleman Worldwide plans to redeem the remaining $16.5 million
aggregate principal amount at maturity of LYONs on May 27, 1998 with the
remaining proceeds from the issuance of the Escrow Notes. Following the
redemption of the Holdings Notes, Coleman Holdings was merged into Coleman
Escrow and the name of Coleman Escrow was changed to "Coleman Holdings Inc."
The LYONs and the Escrow Notes, to which the Company is not a
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party, provide that it is a put right or an event of default, respectively,
under these debt instruments if, among other things, the amount of debt
incurred by the Company exceeds certain limitations.
The Company periodically uses a variety of derivative financial instruments
to manage its foreign currency and interest rate exposures. The Company does
not speculate on interest rates or foreign currency rates. Instead it uses
derivatives when implementing its risk management strategies to reduce the
possible effects of these exposures.
With respect to foreign currency exposures, the Company principally uses
forward and option contracts to reduce risks arising from firm commitments,
anticipated intercompany sales transactions and intercompany receivable and
payable balances. The Company generally uses interest rate swaps and interest
rate caps to fix certain of its variable rate debt. The Company manages credit
risk related to these derivative contracts through credit approvals, exposure
limits and other monitoring procedures.
SEASONALITY
The Company's sales generally are highest in the second quarter of the year
and lowest in the fourth quarter. As a result of this seasonality, the Company
has generally incurred a loss in the fourth quarter. The Company's sales may be
affected by weather conditions, especially during the second and third quarters
of the year. The Company's annual results are generally dependent on its
results during the second quarter.
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FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. The forward-looking statements
contained in this Form 10-Q are subject to certain risks and uncertainties.
Actual results could differ materially from current expectations. Among the
factors which could affect the Company's actual results and could cause results
to differ from those contained in the forward-looking statements contained
herein are (i) difficulties or delays in the reduction of wholesaler inventories
in Japan, (ii) unanticipated costs or delays in eliminating low or unprofitable
products or businesses or closing facilities or consummating the Company's
other restructuring activities, (iii) unanticipated costs or delays in
developing new products, (iv) the possibility the Company fails to meet the
various restrictive covenants of the Company Credit Agreement, (v) a decrease in
the public's interest in camping and related activities, and (vi) adverse
weather, market or economic conditions which negatively affect demand for the
Company's products.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1997 annual meeting of shareholders was held on May 13, 1997.
Directors elected at the meeting were Ronald O. Perelman, Donald G. Drapkin,
Lawrence M. Jones, Robert J. Lanigan, Jerry W. Levin, Robert S. Miller, John A.
Moran, Bruce Slovin, and William H. Spoor, constituting the entire board of
directors. All of the directors were elected without opposition. There were no
broker nonvotes. Other matters voted on were proposals to (i) ratify the
appointment of Ernst & Young LLP as the independent certified public accountants
for the Company for 1997, (ii) ratify and adopt The Coleman Company, Inc.
Executive Annual Incentive Plan, and (iii) consider a proposal to amend The
Coleman Company, Inc. 1993 Stock Option Plan.
The tabulation of votes for each matter is as follows:
1. ELECTION OF DIRECTORS
Nominees
for Against or
Directors For Withheld Abstained
--------- --- -------- ---------
Ronald O. Perelman 51,286,138 60,864 --
Donald G. Drapkin 51,288,398 58,604 --
Lawrence M. Jones 51,286,418 60,584 --
Robert J. Lanigan 51,288,698 58,304 --
Jerry W. Levin 51,288,598 58,404 --
Robert S. Miller 51,288,098 58,904 --
John A. Moran 51,288,698 58,304 --
Bruce Slovin 51,288,698 58,304 --
William H. Spoor 51,288,098 58,904 --
<PAGE>
Page 14
Subsequent to being elected by the shareholders, Robert J. Lanigan and
Robert S. Miller resigned as directors. Ann D. Jordan and James D.
Robinson III were appointed by the remaining directors to fill these
vacancies.
2. RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
51,320,591 13,626 12,785
3. RATIFICATION AND ADOPTION OF THE EXECUTIVE ANNUAL INCENTIVE PLAN
49,165,945 185,345 37,616
4. PROPOSAL TO AMEND THE 1993 STOCK OPTION PLAN
51,115,400 190,610 40,992
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Index Description
------------- -----------
3.1+ By-Laws of The Coleman Company, Inc., as amended.
10.1*+ The Coleman Company, Inc. 1993 Stock Option
Plan, as amended.
10.2* The Coleman Company, Inc. Executive Annual
Incentive Plan, incorporated by reference to
Exhibit A, pp. 30 to 34, of the Company's 1997
Proxy Statement.
10.3*+ The Coleman Company, Inc. 1992 Stock Option
Plan, as amended.
10.4*+ The Coleman Company, Inc. 1996 Stock Option
Plan, as amended.
10.5*+ Letter agreement dated as of June 30, 1997
between the Company and Frederick van den Bergh.
27 + Financial Data Schedule
---------------
* Management Contracts and Compensatory Plans
+ Filed herewith
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
June 30, 1997.
<PAGE>
Page 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE COLEMAN COMPANY, INC.
(Registrant)
Date: August 13, 1997 By: /s/ Steven F. Kaplan
-------------------- -------------------------------
Steven F. Kaplan
Executive Vice President and
Chief Financial Officer
<PAGE>
- -------------------------------------------------------------------------------
By-laws
THE COLEMAN COMPANY, INC.
(A Delaware Corporation)
As adopted December 18, 1991
As amended May 13, 1997
- -------------------------------------------------------------------------------
<PAGE>
Page 2
TABLE OF CONTENTS
ARTICLE I 5
Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.1. Offices. . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Meetings of Stockholders . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.1. ANNUAL MEETINGS. . . . . . . . . . . . . . . . . . 5
SECTION 2.2. SPECIAL MEETINGS.. . . . . . . . . . . . . . . . . 5
SECTION 2.3. NOTICE OF MEETINGS.. . . . . . . . . . . . . . . . 5
SECTION 2.4. ADJOURNMENTS.. . . . . . . . . . . . . . . . . . . 6
SECTION 2.5. QUORUM AND MANNER OF ACTING. . . . . . . . . . . . 6
SECTION 2.6. ORGANIZATION OF MEETINGS.. . . . . . . . . . . . . 6
SECTION 2.7. ORDER OF BUSINESS. . . . . . . . . . . . . . . . . 6
SECTION 2.8. VOTING.. . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.9. CONSENT IN LIEU OF MEETING.. . . . . . . . . . . . 7
SECTION 2.10. LIST OF STOCKHOLDERS. . . . . . . . . . . . . . . 8
SECTION 2.11. INSPECTORS. . . . . . . . . . . . . . . . . . . . 8
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.1. GENERAL POWERS.. . . . . . . . . . . . . . . . . . 8
SECTION 3.2. NUMBER AND TERM OF OFFICE. . . . . . . . . . . . . 9
SECTION 3.3. ELECTION.. . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4. MEETINGS.. . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.5. COMPENSATION . . . . . . . . . . . . . . . . . . .11
SECTION 3.6. RESIGNATION, REMOVAL AND VACANCIES . . . . . . . .11
ARTICLE IV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 4.1. NUMBER, APPOINTMENT, TERM OF OFFICE, ETC.. . . . .11
SECTION 4.2. FUNCTIONS AND POWERS.. . . . . . . . . . . . . . .12
SECTION 4.3. RULES. . . . . . . . . . . . . . . . . . . . . . .12
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 5.1. ELECTION AND APPOINTMENT AND TERM OF OFFICE. . . .12
SECTION 5.2. RESIGNATION, REMOVAL AND VACANCIES.. . . . . . . .12
SECTION 5.3. DUTIES AND FUNCTIONS.. . . . . . . . . . . . . . .13
ARTICLE VI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
<PAGE>
Page 3
Waiver of Notices; Place of Meetings . . . . . . . . . . . . . . . .15
SECTION 6.1. WAIVER OF NOTICES. . . . . . . . . . . . . . . . .15
SECTION 6.2. PLACE OF MEETINGS. . . . . . . . . . . . . . . . .15
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Execution and Delivery of Documents; Deposits; Proxies; Books and
Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 7.1. EXECUTION AND DELIVERY OF DOCUMENTS; DELEGATION. .15
SECTION 7.2. DEPOSITS.. . . . . . . . . . . . . . . . . . . . .15
SECTION 7.3. PROXIES IN RESPECT OF STOCK OR OTHER SECURITIES
OF OTHER CORPORATIONS. . . . . . . . . . . . . . . . . . .15
SECTION 7.4. BOOKS AND RECORDS. . . . . . . . . . . . . . . . .16
ARTICLE VIII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Certificates; Stock Record; Transfer and Registration; New
Certificates; Record Date, etc.. . . . . . . . . . . . . . . . . . .16
SECTION 8.1. CERTIFICATES FOR STOCK.. . . . . . . . . . . . . .16
SECTION 8.2. STOCK RECORD.. . . . . . . . . . . . . . . . . . .16
SECTION 8.3. TRANSFER AND REGISTRATION OF STOCK . . . . . . . .17
SECTION 8.4. NEW CERTIFICATES. . . . . . . . . . . . . . . . .17
SECTION 8.5. REGULATIONS. . . . . . . . . . . . . . . . . . . .17
SECTION 8.6. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF
RECORD . . . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE IX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 9.1. SEAL. . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 10.1. FISCAL YEAR.. . . . . . . . . . . . . . . . . . .18
ARTICLE XI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 11.1. AMENDMENTS. . . . . . . . . . . . . . . . . . . .18
ARTICLE XIII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 13.1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR
PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT OF THE
CORPORATION. . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 13.2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR
PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. . . . .19
SECTION 13.3. AUTHORIZATION OF INDEMNIFICATION. . . . . . . . .20
SECTION 13.4. GOOD FAITH DEFINED. . . . . . . . . . . . . . . .20
SECTION 13.5. INDEMNIFICATION BY A COURT. . . . . . . . . . . .20
SECTION 13.6. EXPENSES PAYABLE IN ADVANCE.. . . . . . . . . . .21
<PAGE>
Page 4
SECTION 13.7. NONEXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT
OF EXPENSES. . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 13.8. INSURANCE.. . . . . . . . . . . . . . . . . . . .21
SECTION 13.9. CERTAIN DEFINITIONS.. . . . . . . . . . . . . . .22
SECTION 13.10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 13.11. LIMITATION ON INDEMNIFICATION. . . . . . . . . .22
SECTION 13.12. INDEMNIFICATION OF EMPLOYEES AND AGENTS. . . . .23
ARTICLE XIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Interested Directors . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 14.1. INTERESTED DIRECTORS; OUORUM. . . . . . . . . . .23
<PAGE>
Page 5
BY-LAWS
of
THE COLEMAN COMPANY, INC.
ARTICLE I
OFFICES
SECTION 1.1. OFFICES. The Coleman Company, Inc. (the "Corporation") may
have offices either within or without the State of Delaware. The registered
office of the Corporation and the name of the registered agent of the
Corporation are as is set forth in the Certificate of Incorporation of the
Corporation, or as may subsequently be or have been changed by resolution of
the Board of Directors (the "Board").
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.1. ANNUAL MEETINGS. An annual meeting of the stockholders of
the Corporation for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held on such
date as the Board may from time to time determine, and at such place and hour
as shall be designated by the Board in the notice thereof.
SECTION 2.2. SPECIAL MEETINGS. A special meeting of the stockholders
for any purpose or purposes may be called at any time by the Board and such
meeting shall be held on such date and at such place and hour as shall be
designated in the notice thereof.
SECTION 2.3. NOTICE OF MEETINGS. Notice of each meeting of the
stockholders shall be given not less than 10 nor more than 60 days before the
date of the meeting to each stockholder of record entitled to notice of, or
to vote at, such meeting by delivering a typewritten or printed notice
thereof to such stockholder personally or by depositing such notice in the
United States mail, postage prepaid, directed to such stockholder at his
address as it appears on the stock record of the Corporation. Every such
notice shall state the place, date and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is called.
<PAGE>
Page 6
SECTION 2.4. ADJOURNMENTS. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business
which might have been transacted at the original meeting. If the adjournment
is for more than thirty days, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall
be given to each stockholder of record entitled to vote at the meeting.
SECTION 2.5. QUORUM AND MANNER OF ACTING. The presence in person or by
proxy of stockholders holding of record a majority of the shares of stock of
the Corporation entitled to be voted shall constitute a quorum for the
transaction of business at any meeting of the stockholders. In the absence
of a quorum at any such meeting or any adjournment or adjournments thereof, a
majority in voting interest of those present in person or by proxy and
entitled to vote thereat, or, in the absence therefrom of all the
stockholders, any officer entitled to preside at, or to act as secretary of,
such meeting, may adjourn such meeting from time to time in the manner
provided in Section 2.4 until stockholders holding the amount of stock
requisite for a quorum shall be present in person or by proxy. The absence
from any meeting in person or by proxy of stockholders holding the number of
shares of stock of the Corporation required for action upon any given matter,
shall not prevent action at such meeting upon any other matter which may
properly come before the meeting if there shall be present thereat, in person
or by proxy, stockholders holding the number of shares of stock of the
Corporation required in respect of such other matter.
SECTION 2.6. ORGANIZATION OF MEETINGS. At each meeting of the
stockholders, one of the following shall act as chairman of the meeting and
preside thereat, in the following order of precedence:
(a) the Chairman of the Board, or, if he is not present or if no
person holds such office, any officer of the Corporation designated by
the Board; or
(b) any officer of the Corporation designated by a majority in voting
interest of the stockholders present in person or by proxy and
entitled to vote thereat.
The person whom the chairman of the meeting shall appoint, shall act as
<PAGE>
Page 7
secretary of the meeting and keep the minutes thereof.
SECTION 2.7. ORDER OF BUSINESS. The order of business at each meeting
of the stockholders shall be determined by the chairman of the meeting, but
such order of business may be changed by a majority in voting interest of
those present in person or by proxy at such meeting and entitled to vote
thereat.
SECTION 2.8. VOTING. Each stockholder shall, at each meeting of the
stockholders, be entitled to one vote in person or by proxy for each share of
stock of the Corporation which has voting power on the matter in question
held by him and registered in his name on the stock record of the Corporation:
(a) on the date fixed pursuant to the provisions of Section 8.6 of
Article VIII of these By-laws as the record date for the determination
of stockholders who shall be entitled to receive notice of and to vote
at such meeting; or
(b) if no record date shall have been so fixed! then at the close of
business on the day next preceding the day on which notice of the
meeting shall be given or, if notice of the meeting shall be waived,
at the close of business on the day next preceding the day on which
the meeting shall be held, or if no record date for determining
stockholders entitled to express consent to corporate action in
writing without a meeting shall have been fixed, the day on which the
first written consent is expressed.
Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Any vote of stock of the Corporation may be given at any meeting
of the stockholders by the person entitled to vote the same in person or by
proxy appointed by an instrument in writing delivered to the secretary of the
meeting; PROVIDED, however, that no proxy shall be voted or acted upon after
three years from its date unless such proxy provides for a longer period.
The attendance at any meeting of a stockholder who may theretofore have given
a proxy shall not have the effect of revoking the same unless he shall in
writing so notify the secretary of the meeting prior to voting of the proxy.
At all meetings of stockholders for the election of directors a plurality of
the votes cast shall be sufficient to elect. All other elections and
questions shall, unless otherwise provided by these bylaws, be decided by the
vote of the holders of shares of stock having a majority of the votes which
could be cast by the holders of all shares of stock entitled to vote thereon
which are present in person or represented by proxy at the meeting. Unless
otherwise directed by the chairman of the
<PAGE>
Page 8
meeting, the vote at any meeting of the stockholders on any question need not
be by ballot. on a vote by ballot, each ballot shall be signed by the
stockholder voting, or by his proxy if there be such proxy, and shall state
the number of shares voted.
SECTION 2.9. CONSENT IN LIEU OF MEETING. Anything herein to the
contrary notwithstanding, any action required to be taken at any annual or
special meeting of stockholders of the Corporation, or any action which may
be taken at any annual or special meeting of such stockholders, may be taken
at any annual or special meeting of such stockholders or may be taken without
a meeting, without prior notice and without a vote if a consent in writing,
setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented
in writing and any certificate filed with respect to such matter shall state
that such written notice has been given.
SECTION 2.10. LIST OF STOCKHOLDERS. It shall be the duty of the officer
of the Corporation who shall have charge of the stock ledger of record,
either directly or through another officer of the Corporation or agent
thereof, to prepare and make, at least 10 days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote thereat,
arranged in alphabetical order, and showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours for a period of at
least 10 days prior to the meeting, either at the place where the meeting is
to be held or at such other place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting. Such list
shall also be produced and kept at the time and place of the meeting during
the whole time thereof and may be inspected by any stockholder who is
present. The stock record shall be the only evidence as to who are the
stockholders entitled to examine the stock record, such list or the books of
the Corporation or to vote in person or by proxy at any meeting of the
stockholders.
SECTION 2.11. INSPECTORS. Either the Board or, in the absence of a
designation of inspectors by the Board, the chairman of the meeting may, in
its or his discretion, appoint two or more inspectors, who need not be
stockholders, who shall receive and take charge of ballots and proxies and
decide all questions relating to the qualification of those asserting the
right to vote and the validity of ballots and proxies. In the event of the
failure or refusal to serve of any inspector designated by the Board, the
chairman of the meeting shall appoint an inspector to act in place of each
such inspector designated by the Board. In the absence of a designation of
inspectors by the Board
<PAGE>
Page 9
and the chairman of the meeting, the secretary of the meeting shall perform
the duties which would otherwise have been performed by the inspectors.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1. GENERAL POWERS. The property, business, affairs and policies
of the Corporation shall be managed by or under the direction of the Board.
SECTION 3.2. NUMBER AND TERM OF OFFICE. The number of directors which
shall constitute the Board shall be one or more persons as such number shall be
fixed from time to time by a vote of a majority of the Board. Each of the
directors of the Corporation shall hold office until the annual meeting after
his election and until his successor shall be elected and shall qualify or until
his earlier death or resignation or removal in the manner hereinafter provided.
SECTION 3.3. Election. Except as provided in Section 3.6 of this
Article III, directors shall be elected by a plurality of the votes cast at
annual meetings of stockholders, and each director so elected shall hold
office until the next annual meeting and until his successor is duly elected
and qualified, or until his earlier death, resignation or removal. Directors
need not be stockholders of the Corporation or residents of the State of
Delaware.
SECTION 3.4. MEETINGS.
(a) REGULAR MEETINGS. Regular meetings of the Board or any committee
thereof shall be held as the Board or such committee thereof shall
from time to time determine. If any day fixed for a regular meeting
shall be a legal holiday at the place where the meeting is to be held,
then the meeting which would otherwise be held on that day, shall be
postponed until the next succeeding business day.
(b) SPECIAL MEETINGS. Special meetings of the Board, at which any
and all business may be transacted, shall be held whenever called by
President, Chairman or any two directors.
(c) NOTICE OF MEETINGS. No notice of regular meetings of the Board
or of any committee thereof or of any adjourned meeting thereof need
be
<PAGE>
Page 10
given. Notice shall be given to each director of each special
meeting of the Board or adjournment thereof, including the time and
place thereof. Notice of each such meeting shall be mailed to each
director, addressed to him at his residence or usual place of
business, at least two days before the day on which such meeting is
to be held, or shall be sent to him at such place by facsimile,
telegraph, cable, wireless or other form of recorded communication,
or be delivered personally or by telephone not later than the day
before the day on which such meeting is to be held, but notice need
not be given to any director who shall attend such meeting. A
written waiver of notice, signed by the person entitled thereto,
whether before or after the time of the meeting stated therein,
shall be deemed equivalent to notice. The purposes of a meeting of
the Board or any committee thereof need not be specified in the
notice thereof.
(d) TIME AND PLACE OF MEETINGS. Regular meetings of the Board or
any committee thereof shall be held at such time or times and place
or places as the Board or such committee may from time to time
determine. Each special meeting of the Board or any committee
thereof shall be held at such time and place as the caller or
callers thereof may determine. In the absence of such a
determination, each regular meeting or special meeting of the Board
or any committee thereof shall be held at such time and place as
shall be designated in the notices or waiver of notices thereof.
(e) QUORUM AND MANNER OF ACTING. A majority of the directors then
in office and a majority of the members of any committee shall be
present in person at any meeting thereof in order to constitute a
quorum for the transaction of business at such meeting and the vote
of a majority of the directors present at any such meeting at which
a quorum is present shall be necessary for the passage of any
resolution or for an act to be the act of the Board or such
committee. In the absence of a quorum, a majority of the directors
present thereat may adjourn such meeting from time to time until a
quorum shall be present thereat. Notice of any adjourned meeting
need not be given.
(f) ORGANIZATION OF MEETINGS. At each meeting of the Board, the
Chairman of the Board or, if he is not present or if no person
holds such office, any director chosen by a majority of the
directors present thereat shall act as chairman of the meeting and
preside thereat. The person whom the chairman of the meeting shall
appoint shall act as secretary of such meeting and keep the minutes
thereof. The order of business at each meeting of the Board shall
be determined by the chairman of such
<PAGE>
Page 11
meeting.
(g) CONSENT IN LIEU OF MEETINGS. Anything herein to the contrary
notwithstanding, any action required or permitted to be taken at
any meeting of the Board or any committee thereof, may be taken
without a meeting if all members of the Board or such committee, as
the case may be, consent thereto in a writing or writings and such
writing or writings are filed with the minutes of the proceedings
of the Board or such committee.
(h) ACTION BY COMMUNICATIONS EQUIPMENT. The directors may
participate in a meeting of the Board or any committee thereof by
means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear
each other and such participation shall constitute presence in
person at such meeting.
SECTION 3.5. COMPENSATION Each director, in consideration of his
serving as such, shall be entitled to receive from the Corporation such
amount per annum and such fees for attendance at meetings of the Board or of
any committee, or both, as the Board shall from to time determine. The Board
may likewise provide that the Corporation shall reimburse each director or
member of a committee for any expenses incurred by him on account of his
attendance at any such meeting. Nothing contained in this Section shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
SECTION 3.6. RESIGNATION, REMOVAL AND VACANCIES. Any director may
resign at any time by giving written notice of his resignation to the Board.
Any such resignation shall take effect at the time specified therein or, if
the time when it shall become effective shall not be specified therein, when
accepted by the Board. Except as aforesaid, the acceptance of such
resignation shall not be necessary to make it effective.
Any director may be removed at any time for cause or without cause by
vote of the holders of a majority in voting interest of shares then entitled
to vote at an election of directors. The vacancy in the Board caused by any
such removal may be filled by the stockholders at such meeting or as provided
in the next paragraph of these By-laws. Any director may also be removed at
any time for cause by vote of a majority of the Board.
In the case of any vacancy on the Board or in the case of any newly created
<PAGE>
Page 12
directorship, a director to fill the vacancy or the newly created
directorship for the unexpired portion of the term being filled may be
elected by a majority of the directors of the Corporation then in office,
though less than a quorum, or by a sole remaining director. The director
elected to fill such vacancy shall hold office for the unexpired term in
respect of which such vacancy occurred and until his successor shall be
elected and shall qualify or until his earlier death or resignation or
removal in the manner herein provided.
ARTICLE IV
COMMITTEES
SECTION 4.1. NUMBER, APPOINTMENT, TERM OF OFFICE, ETC. The Board, by
resolution or resolutions passed by a majority of the Board, may designate
one or more committees, each committee to consist of one or more directors
then in office. Each member of any such committee shall continue as such
only so long as he remains a director and may be removed at any time, with or
without cause, by a majority of the Board. Any vacancy on any committee may
be filled at any time by the vote of a majority of the Board.
In the absence or in case of the disqualification of a member or members
of any such committee, the member or members of such committee present and
not disqualified from voting at a meeting of such committee, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board to act at such meeting in place of any absent or disqualified member.
SECTION 4.2. FUNCTIONS AND POWERS. Each committee shall have such
functions and powers as the Board shall deem advisable and, subject to any
limitations or restrictions which may be prescribed by resolution of the
Board, if an Executive Committee is designated, it shall have and may
exercise all the powers and authority of the Board in the management of the
property, business, affairs and policies of the Corporation, including the
power and authority to declare dividends and to authorize the issuance of
stock of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it.
SECTION 4.3. RULES. Subject to the provisions of these By-laws, each
committee by resolution adopted by a majority of all the members thereof
shall fix its rules of procedure.
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ARTICLE V
OFFICERS
SECTION 5.1. ELECTION AND APPOINTMENT AND TERM OF OFFICE. The
Corporation shall have such officers with such titles as shall be stated in a
resolution of the Board, and with such duties as shall be given them as
hereinafter provided or as may otherwise be specifically given them by the
Board, but such officers shall include at least (a) a Chairman of the Board
or one or more Vice-Chairmen of the Board or a President or one or more Vice
Presidents, or any or all the foregoing, and (b) a Secretary or one or more
Assistant Secretaries or a Treasurer or one or more Assistant Treasurers, or
any or all of the foregoing. One of such officers shall have the duty to
record the proceedings of the meetings of stockholders and directors in a
book to be kept for that purpose. Any number of offices may be held by the
same person except that at least one person who holds an office referred to
in clause (a) of the second preceding sentence shall not be the same as at
least one person who holds any office referred to in clause (b) of the second
preceding sentence.
SECTION 5.2. RESIGNATION, REMOVAL AND VACANCIES. Any officer may resign
at any time by giving written notice of his resignation to the Board. Any
such resignation shall take effect at the time specified therein or, if the
time when it shall become effective shall not be specified therein, when
accepted by the Board. Except as aforesaid, the acceptance of such
resignation shall not be necessary to make it effective.
Any officer, agent or employee elected or appointed by the Board may be
removed, with or without cause, at any time by the Board. Any agent or
employee appointed by an officer may be removed, with or without cause, at
any time by such officer.
A vacancy in any office may be filled for the unexpired portion of the
term in the same manner as provided in these By-laws for election or
appointment to such office.
SECTION 5.3. DUTIES AND FUNCTIONS. If any of the following offices is
created and a person appointed or elected thereto, and unless the Board
otherwise provides, such offices and persons shall have the following duties
and functions:
(a) CHAIRMAN. If a Chairman of the Board is appointed or elected, he
shall be a member of the Board; shall preside at meetings of the Board
and of the stockholders at which he shall be present; shall perform
such duties as are incident to the office of the Chairman of the
Board; and shall
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perform such other duties as may from time to time be prescribed by
the Board.
(b) VICE-CHAIRMAN. If any Vice-Chairman or Vice-Chairmen of the
Board are appointed or elected, they shall be members of the Board;
shall preside at meetings of the Board and of the stockholders, unless
a Chairman of the Board is appointed or elected and is present; shall
perform such duties as are incident to the office of the Vice-Chairman
of the Board; and shall perform such other duties as may from time to
time be prescribed by the Board.
(c) CHAIRMAN OF THE EXECUTIVE COMMITTEE. If a Chairman of the
Executive Committee is appointed or elected, he shall preside at
meetings of the Executive Committee; shall when requested consult with
and advise the other officers of the Corporation; and shall perform
such other duties as may be agreed upon with them or as the Board or
the Executive Committee may from time to time determine.
(d) PRESIDENT. If a President is appointed or elected, he shall,
subject to the control of the Board, have general charge and
management of the property, business and affairs of the Corporation
and shall have the direction of and may assign duties to all other
officers (other than the Chairman and any Vice-Chairman, if either or
both is appointed or elected), agents and employees. He shall preside
at meetings of the Board and the stockholders unless a Chairman or a
Vice-Chairman of the Board is appointed or elected and is present.
(e) VICE PRESIDENTS. If any Vice President or Vice Presidents are
appointed or elected, they shall have such powers and duties as shall
be prescribed by the President, if one is appointed or elected, or the
Board. Vice Presidents for this purpose shall include Senior,
Executive, Assistant and all other categories or types of Vice
Presidents.
(f) SECRETARY. If a Secretary is appointed or elected, he shall
attend and keep the records of all meetings of the stockholders and
the Board in one or more books kept for that purpose; shall give or
cause to be given due notice of all meetings in accordance with these
By-laws and as required by law; shall notify the several officers of
the Corporation of all action taken by the Board concerning matters
relating to their duties; shall transmit to the proper officers copies
of all contracts and resolutions approved by the Board or any
committees of the Board; shall be custodian of the seal of the
Corporation and of all contracts, deeds, documents and other corporate
papers, records (except accounting records) and indicia of title to
properties owned by the Corporation as shall not be committed to
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the custody of another officer by the President, if one is
appointed or elected, or the Board; shall affix or cause to be
affixed the seal of the Corporation to instruments requiring the
same when the same have been signed on behalf of the Corporation by
a duly authorized officer; shall perform all duties and have all
powers incident to the office of Secretary; and shall perform such
other duties as shall be assigned to him by the President, if one
is appointed or elected, or the Board. One or more Assistant
Secretaries may be appointed or elected, who shall perform all the
duties and have all the powers of the Secretary in the absence of
or in case of a failure to appoint or elect or when so delegated by
the Secretary, and as the President, if one is appointed or
elected, or the Board may direct.
(g) TREASURER. If a Treasurer is appointed or elected, he shall
perform all duties incident to the office of Treasurer and such
other duties as shall be assigned to him by the President, if one
is appointed or elected, or the Board. One or more Assistant
Treasurers may be appointed or elected who shall perform all the
duties and have all the powers of the Treasurer in the absence of
or in the case of a failure to appoint or elect or when so
delegated by the Treasurer, and as the President, if one is
appointed or elected, or the Board may direct.
(h) CONTROLLER. If a Controller is appointed or elected, he shall
perform all the duties incident to the office of Controller and
such other duties as may be assigned to him by the President, if
one is appointed or elected, or the Board. One or more Assistant
Controllers may be appointed or elected who shall perform all the
duties and have all the powers of the Controller in the absence of
or in the case of a failure to appoint or elect or when so
delegated by the Controller, and as the President, if one is
appointed or elected, or the Board may direct.
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ARTICLE VI
WAIVER OF NOTICES; PLACE OF MEETINGS
SECTION 6.1. WAIVER OF NOTICES. Anything herein to the contrary
notwithstanding, whenever notice is required to be given to any director or
member of a committee or stockholder, a waiver thereof in writing, signed by
the person entitled to such notice shall be deemed equivalent to notice,
whether given before or after the time specified therein and, in the case of
a waiver of notice of a meeting, whether or not such waiver specifies the
purpose of or business to be transacted at such meeting. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting,
except where the person attends the meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened, and does so
object.
SECTION 6.2. PLACE OF MEETINGS. Any meeting of the stockholders, the
Board or any committee may be held within or without the State of Delaware.
ARTICLE VII
EXECUTION AND DELIVERY OF DOCUMENTS; DEPOSITS;
PROXIES; BOOKS AND RECORDS
SECTION 7.1. EXECUTION AND DELIVERY OF DOCUMENTS; DELEGATION. The Board
shall designate the officers, employees and agents of the Corporation who
shall have power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and
other documents for and in the name of the Corporation and may authorize such
officers, employees and agents to delegate such power (including authority to
redelegate) by written instrument to other officers, employees or agents of
the Corporation. Such delegation may be by resolution or otherwise and the
authority granted shall be general or confirmed to specific matters, all as
the Board may determine. In the absence of such designation referred to in
the first sentence of this Section, the officers of the Corporation shall
have such power so referred to, to the extent incident to the normal
performance of their duties.
SECTION 7.2. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation or otherwise as the Board or any officer of the Corporation to
whom power in that respect shall have been delegated by the Board shall
select.
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SECTION 7.3. PROXIES IN RESPECT OF STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS. Unless otherwise provided by the Board, any officer of the
Corporation shall have the authority from time to time to appoint an agent or
agents of the Corporation to exercise in the name and on behalf of the
Corporation the powers and rights which the Corporation may have as the
holder of stock or other securities in any other corporation, to vote or
consent in respect of such stock or securities and to execute or cause to be
executed in the name and on behalf of the Corporation and under its corporate
seal or otherwise, such written proxies, powers of attorney or other
instruments as he may deem necessary or proper in order that the Corporation
may exercise such powers and rights. Such officer may instruct any person or
persons appointed as aforesaid as to the manner of exercising such powers and
rights.
SECTION 7.4. BOOKS AND RECORDS. The books and records of the
Corporation may be kept at such places within or without the State of
Delaware as the proper officers of the Corporation may from time to time
determine.
ARTICLE VIII
CERTIFICATES; STOCK RECORD; TRANSFER AND REGISTRATION;
NEW CERTIFICATES; RECORD DATE, ETC.
SECTION 8.1. CERTIFICATES FOR STOCK. Every holder of stock of the
Corporation shall be entitled to have a certificate certifying the number of
shares owned by him in the Corporation and designating the class of stock to
which such shares belong, which shall otherwise be in such form as the Board
shall prescribe. Each such certificate shall be signed by, or in the name of
the Corporation by, the Chairman, a Vice-Chairman, the President or a Vice
President of the Corporation and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Corporation. Any of or all
such signatures may be facsimiles. In case any officer or authorized agent
who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer or authorized agent before
such certificate is issued, it may nevertheless be issued by the Corporation
with the same effect as if he were such officer or authorized agent at the
date of issue. Every certificate surrendered to the Corporation for exchange
or transfer shall be canceled and a new certificate or certificates shall not
be issued in exchange for any existing certificate until such existing
certificate shall have been so canceled, except in cases provided for in
Section 8.4 of this Article.
SECTION 8.2. STOCK RECORD. A stock record in one or more counterparts
shall be kept of the name of the person, firm or corporation owning the stock
represented
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by each certificate for stock of the Corporation issued, the number of shares
represented by each such certificate, the date thereof and, in the case of
cancellation, the date of cancellation. The person in whose name shares of
stock stand on the stock record of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation.
SECTION 8.3. TRANSFER AND REGISTRATION OF STOCK.
(a) TRANSFER. The transfer of stock and certificates of stock
which represent the stock of the Corporation shall be governed by
Article 8 of Subtitle I of Title 6 of the Delaware Code (as amended
from time to time, the "Uniform Commercial Code").
(b) REGISTRATION. Registration of transfers of shares of the
Corporation shall be made only on the books of the Corporation by
the registered holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with an
officer of the Corporation, and on the surrender of the certificate
or certificates for such shares properly endorsed or accompanied by
a stock power duly executed.
SECTION 8.4. NEW CERTIFICATES.
(a) LOST, STOLEN OR DESTROYED CERTIFICATES. Where a stock
certificate has been lost, apparently destroyed or wrongfully
taken, the issuance of a new stock certificate or the claims based
on such certificate shall be governed by the Uniform Commercial
Code.
(b) MUTILATED CERTIFICATES. Where the holder of any certificate
for stock of the Corporation notifies the Corporation of the
mutilation of such certificate within a reasonable time after he
has notice of it, the Corporation will issue a new certificate for
stock in exchange for such mutilated certificate theretofore issued
by it.
(c) BOND. The Board may, in its discretion, require the owner of
the lost, stolen, destroyed or mutilated certificate to give the
Corporation a bond in such sum, limited or unlimited, in such form
and with such surety or sureties sufficient to indemnify the
Corporation against any claim that may be made against it on
account of the loss, theft, destruction or mutilation of any such
certificate or the issuance of any such new certificate.
SECTION 8.5. REGULATIONS. The Board may make such rules and regulations as
it may deem expedient, concerning the issue, transfer and registration of
certificates for stock of the Corporation.
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SECTION 8.6. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board may fix, in advance, a record date, which shall not
be more than 60 nor less than 10 days before the date of such meeting, nor
more than 60 days prior to any other action. A determination of stockholders
entitled to notice of or to vote at a meeting of the stockholders shall apply
to any adjournment of the meeting; PROVIDED, HOWEVER, that the Board may fix
a new record date for the adjourned meeting.
ARTICLE IX
SEAL
SECTION 9.1. SEAL. The Board shall provide a corporate seal which shall
be in the form of a circle and shall bear the full name of the Corporation
and the word "Delaware".
ARTICLE X
FISCAL YEAR
SECTION 10.1. FISCAL YEAR. The fiscal year of the Corporation shall end
on the last day of December in each year, or such other date as the Board may
determine.
ARTICLE XI
AMENDMENTS
SECTION 11.1. AMENDMENTS. These By-laws may be amended, altered or
repealed by the vote of a majority of the Board, subject to the power of the
holders of a majority of the outstanding stock of the Corporation entitled to
vote in respect thereof, by their vote given at an annual meeting or at any
special meeting, to amend, alter or repeal any By-law made by the Board.
ARTICLE XII
SUBJECT TO LAW
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SECTION 12.1. SUBJECT TO LAW. All provisions of these By-laws are subject
to requirements of applicable law and the Certificate of Incorporation of the
Corporation.
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ARTICLE XIII
INDEMNIFICATION
SECTION 13.1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER
THAN THOSE BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 13.3 of
this Article XIII, the Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law, any person who is or was 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, employee benefit plan 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 CONTENDERS 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.
SECTION 13.2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS BY OR
IN THE RIGHT OF THE CORPORATION. Subject to Section 13.3 of this Article
XIII, the Corporation shall indemnify and hold harmless, to the fullest
extent permitted by applicable law, any person who is or was 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 a director or officer of the
Corporation serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan 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; 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,
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
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such other court shall deem proper.
SECTION 13.3. AUTHORIZATION OF INDEMNIFICATION. Any indemnification
under this Article XIII (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 Section 13.1 or Section 13.2 of this Article XIII, as the case may be.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders. To the
extent, however, that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, 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, without the necessity of authorization in the specific case.
SECTION 13.4. GOOD FAITH DEFINED. For purposes of any determination
under Section 13.3 of this Article XIII, a person shall be deemed to have
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, or, with respect to any
criminal action or proceeding, to have had no reasonable cause to believe his
conduct was unlawful, if his action is taken in reliance on the records or
books of account of the Corporation or another enterprise, or on information
supplied to him by the officers of the Corporation or another enterprise in
the course of their duties, or on the advice of legal counsel for the
Corporation or another enterprise or on information or records given or
reports made to the corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Corporation or another enterprise. The term "another
enterprise" as used in this Section 13.4 shall mean any other corporation or
any partnership, joint venture, trust, employee benefit plan or other
enterprise of which such person is or was serving at the request of the
Corporation as a director, officer, employee or agent. The provisions of
this Section 13.4 shall not be deemed to be exclusive or to limit in any way
the circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in Sections 13.1 or 13.2 of this Article XIII,
as the case may be.
SECTION 13.5. INDEMNIFICATION BY A COURT. Notwithstanding any contrary
determination in the specific case under Section 13.3 of this Article XIII,
and notwithstanding the absence of any determination thereunder, any
director, officer, employee or agent may apply to any court of competent
jurisdiction in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 13.1 and 13.2 of this Article XIII. The
basis of such indemnification by a court shall be a determination by such
court that indemnification of the director, officer, employee or
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agent is proper in the circumstances because he has met the applicable
standards of conduct set forth in Sections 13.1 or 13.2 of this Article XIII,
as the case may be. Neither a contrary determination in the specific case
under Section 13.3 of this Article XIII nor the absence of any determination
thereunder shall be a defense to such application or create a presumption
that the director, officer, employee or agent seeking indemnification has not
met any applicable standard of conduct. Notice of any application for
indemnification pursuant to this Section 13.5 shall be given to the
Corporation promptly upon the filing of such application. If successful, in
whole or in part, the director, officer, employee or agent seeking person
shall be deemed to have acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
or, with respect to any criminal action or proceeding, to have had no
reasonable cause to believe his conduct was unlawful, if his action is taken
in reliance on the records or books of account of the Corporation or another
enterprise, or on information supplied to him by the officers of the
corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the corporation or another
enterprise by an independent certified public accountant or by an appraiser
or other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 13.4 shall
mean any other corporation or any partnership, joint venture, trust, employee
benefit plan or other enterprise of which such person is or was serving at
the request of the Corporation as a director, officer, employee or agent. The
provisions of this Section 13.4 shall not be deemed to be exclusive or to
limit in any way the circumstances in which a person may be deemed to have
met the applicable standard of conduct set forth in Sections 13.1 or 13.2 of
this Article XIII, as the case may be.
SECTION 13.6. EXPENSES PAYABLE IN ADVANCE. Expenses incurred by a
director or officer in defending or investigating a threatened or pending
action, suit or proceeding shall 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 Article XIII.
SECTION 13.7. NONEXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. The indemnification and advancement of expenses provided by or
granted pursuant to this Article XIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of
expenses may be entitled under any By-Law, agreement, contract, vote of
stockholders or disinterested directors or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office, it being the policy of the Corporation
that indemnification of the persons specified in Section 13.1 and 13.2 of
this Article XIII shall be made to the
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fullest extent permitted by law. The provisions of this Article XIII shall
not be deemed to preclude the indemnification of any person who is not
specified in Section 13.1 or 13.2 of this Article XIII but whom the
Corporation has the power or obligation to indemnify under the provisions of
the DGCL, or otherwise.
SECTION 13.8. INSURANCE. The Corporation may 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 a director or officer of the
Corporation serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan 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 or the
obligation to indemnify him against such liability under the provisions of
this Article XIII.
SECTION 13.9. CERTAIN DEFINITIONS. For purposes of this Article XIII
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, 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 a director or officer of such constituent corporation serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, shall stand in the same position under the
provisions of this Article XIII with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued and shall include any Corporation
(whether or not its separate existence continues) that transfers all or
substantially all its assets to the Corporation. For purposes of this
Article XIII, references to "fines" shall include any excise taxes assessed
on a person with respect to an 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 an 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 Article XIII.
SECTION 13.10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
The indemnification and advancement of expenses provided by, or granted
pursuant to,
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this Article XIII 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.
SECTION 13.11. LIMITATION ON INDEMNIFICATION. Notwithstanding anything
contained in this Article XIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 13.5
hereof), the Corporation shall not be obligated to indemnify any director,
officer, employee or agent in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was
authorized or consented to by the Board of Directors.
SECTION 13.12. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article XIII to directors and officers of the Corporation.
ARTICLE XIV
INTERESTED DIRECTORS
SECTION 14.1. INTERESTED DIRECTORS; OUORUM. No contract or transaction
between the corporation and one or more of its directors or officers, or
between the corporation and any other corporation, partnership, association,
or other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or
voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the Board of Directors or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if: (1) the material
facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the
committee, and the Board of Directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than
a quorum; or (2) the material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (3) the contract or
transaction is fair as to the corporation as of the time it is authorized,
approved or ratified, by the Board of Directors, a committee thereof, or the
stockholders. Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or of a
committee which
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authorizes the contract or transaction.
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Page 1
FOR STOCK OPTIONS
GRANTED AFTER 7/22/93
THE COLEMAN COMPANY, INC.
1993 STOCK OPTION PLAN
-------------------------
(As Amended)
1. PURPOSE.
This 1993 Stock Option Plan ("Plan") is intended to encourage stock
ownership by employees of The Coleman Company, Inc. (the "Company") and
employees of Affiliated Corporations (as defined in Section 2(a) hereof), so
that they may acquire or increase their proprietary interest in the Company, and
to encourage such employees to remain in the employ of the Company and to put
forth maximum efforts for the success of the business. It is further intended
that options granted by the Committee (as defined herein) pursuant to Section 6
of this Plan shall constitute "incentive stock options" ("Incentive Stock
Options") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, and the regulations issued thereunder (the "Code"), and
options granted by the Committee pursuant to Section 7 of this Plan shall
constitute "nonqualified stock options" ("Nonqualified Stock Options"). Options
granted under the Plan ("Options") may be accompanied by stock appreciation
rights ("Rights"), as hereinafter set forth. Rights may also be granted alone.
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "Affiliate Corporation" or "Affiliate" shall mean any corporation,
directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with the Company.
(b) "Disability" shall mean an inability of an Optionee (as defined
herein) to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than twelve months.
(c) "Fair Market Value" per share as of a particular date shall mean (i)
the closing sales price per share of Common Stock (as defined herein) on a
national securities exchange on the date on which a resolution is adopted to
expressly grant an Option, or (ii) if the shares of Common Stock are then traded
on an over-the-counter market, the average of the closing bid and asked prices
for the shares of Common Stock in such over-the-counter market for the last
preceding date on which there was a sale of such common Stock in such market, or
(iii) if the shares of Common Stock are
<PAGE>
Page 2
not then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Committee in its discretion may
determine.
(d) "Parent Corporation" shall mean any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of granting an Option, each of such corporations (other than the Company)
owns stock possessing fifty percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
(e) "Subsidiary Corporation" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting an Option, each of such corporations other than the last
corporation in an unbroken chain owns stock possessing fifty percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(f) "Ten Percent Stockholder" shall mean an Optionee who, at the time an
Incentive Stock Option is granted, owns stock possessing more than ten percent
of the total combined voting power of all classes of stock of the Company or of
its Parent Corporations or Subsidiary Corporations.
3. ADMINISTRATION.
The Plan shall be administered by the Management Compensation and Stock
Option Committee (the "Committee"), consisting of at least two members of the
Board of Directors of the Company (the "Board"), none of whom is or shall have
been for at least one year prior to such appointment granted or awarded equity
securities pursuant to the Plan or any other plan of the Company or any of its
Affiliates entitling the participants therein to acquire stock, stock options or
stock appreciation rights of the Company or any of its Affiliates.
The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Options; to determine
which Options shall constitute Incentive Stock Options and which Options shall
constitute Nonqualified Stock Options; to determine which Options (if any) shall
be accompanied by Rights; to determine the purchase price of the shares of
Common Stock covered by each Option (the "Option Price"); to determine the
persons to whom, and the time or times at which, Options shall be granted; to
determine the number of shares to be covered by each Option; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions relating to the Plan; to determine
the terms and provisions of the Option Agreements (which need not be identical)
entered into in connection with Options granted under the Plan; and to make all
other determinations
<PAGE>
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deemed necessary or advisable for the administration of the Plan. The
Committee may delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable, and the Committee or any
person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Plan.
No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Option or Right
granted hereunder.
4. ELIGIBILITY.
Options or Rights, or both, may be granted to key employees (including,
without limitation, officers, and directors who are employees) of the Company or
its present or future Affiliate Corporations, except that Incentive Stock
Options shall be granted only to individuals who, on the date of such grant, are
employees of the Company or a Parent Corporation or a Subsidiary Corporation.
In determining the persons to whom Options and Rights shall be granted and the
number of shares to be covered by each Option and any Rights, the Committee
shall take into account the duties of the respective persons, their present and
potential contributions to the success of the Company and such other factors as
the Committee shall deem relevant in connection with accomplishing the purpose
of the Plan. A person to whom an Option has been granted hereunder is sometimes
referred to herein as an "Optionee."
An Optionee shall be eligible to receive more than one grant of an Option
during the term of the Plan, but only on the terms and subject to the
restrictions hereinafter set forth.
5. STOCK.
The stock subject to Options and Rights hereunder shall be shares of the
Company's common stock, par value $0.01 per share ("common Stock"). Such shares
may, in whole or in part, be authorized but unissued shares or shares that shall
have been or that may be reacquired by the Company. The aggregate number of
shares of Common Stock as to which Options and Rights may be granted from time
to time under the Plan shall not exceed 850,000. The limitation established by
the preceding sentence shall be subject to adjustment as provided in Section
8(h) hereof.
In the event that any outstanding Option under the Plan for any reason
expires or is terminated without having been exercised in full or without having
been surrendered in full in connection with the exercise of a Right, the shares
of Common Stock allocable to the unexercised portion of such Option shall
(unless the Plan shall have been terminated) become available for subsequent
grants of Options and Rights under the Plan.
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Page 4
6. INCENTIVE STOCK OPTIONS.
Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in Section
8 hereof.
(a) VALUE OF SHARES. The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the shares of Common stock
with respect to which Options granted under this Plan and all other option plans
of the Company, any Parent Corporation and any Subsidiary Corporation become
exercisable for the first time by an Optionee during any calendar year shall not
exceed $100,000.
(b) TEN PERCENT STOCKHOLDER. In the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, (i) the Option Price shall not be less
than one hundred ten percent of the Fair Market Value of a share of Common Stock
of the Company on the date of grant of such Incentive Stock Option, and (ii) the
exercise period shall not exceed five years from the date of grant of such
Incentive Stock Options.
7. NONQUALIFIED STOCK OPTIONS.
Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms and
conditions specified in Section 8 hereof.
8. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to the Plan shall be evidenced by a written
Option Agreement between the company and the Optionee, which agreement shall
comply with and be subject to the following terms and conditions:
(a) NUMBER OF SHARES. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates.
(b) OPTION PRICE. Each Option Agreement shall state the Option Price per
share of Common Stock, which, in the case of Incentive Stock Options, shall be
not less than one hundred percent of the Fair Market Value of a share of Common
Stock of the Company on the date of grant of the Option. The Option Price shall
be subject to adjustment as provided in Section 8(h) hereof. The date on which
the Committee adopts a resolution expressly granting an Option shall be
considered the day on which such Option is granted.
(c) MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in full,
at
<PAGE>
Page 5
the time of exercise, in cash or in shares of Common Stock having a Fair
Market Value equal to such Option Price or in a combination of cash and such
shares, and may be effected in whole or in part (i) with monies borrowed from
the Company pursuant to repayment terms and conditions as shall be determined
from time to time by the Committee, in its discretion, separately with
respect to each exercise of Options and each Optionee; provided, however,
that each such method and time for payment and each such borrowing and terms
and conditions of security, if any, and repayment shall be permitted by and
be in compliance with applicable law.
(d) TERM AND EXERCISE OF OPTIONS. Options shall be exercisable over the
exercise period as and at the times and upon the conditions that the Committee
may determine, as reflected in the Option Agreement; provided, however, that the
Committee shall have the authority to accelerate the exercisability of any
outstanding Option at such time and under such circumstances as it, in its sole
discretion, deems appropriate. The exercise period shall be determined by the
Committee; provided, however, that in the case of an Incentive Stock Option,
such exercise period shall not exceed ten years from the date of grant of such
Incentive Stock Option. The exercise period shall be subject to earlier
termination as provided in Section 8(e) and 8(f) hereof. An Option may be
exercised, as to any or all full shares of Common Stock as to which the Option
has become exercisable, by giving written notice of such exercise to the
Committee; provided, however, that an Option may not be exercised at any time as
to fewer than one hundred shares (or such number of shares as to which the
Option is then exercisable if such number of shares is less than one hundred).
(e) TERMINATION OF EMPLOYMENT. Except as provided in this Section 8(e)
and in Section 8(f) hereof, an Option may not be exercised unless the Optionee
is then in the employ of (1) the Company, (2) an Affiliate Corporation or (3) a
corporation issuing or assuming the Option in a transaction to which Section
424(a) of the Code applies or a parent corporation or subsidiary corporation of
the corporation described in this Clause 3, and unless the Optionee has the
remained continuously so employed since the date of grant of the Option. In the
event that the employment of an Optionee shall terminate (other than by reason
of death, Disability or retirement), all Options of such Optionee that are
exercisable at the time of such termination may, unless earlier terminated in
accordance with their terms, be exercised within three months after such
termination. Nothing in the Plan or in any Option or Right granted pursuant
hereto shall confer upon an individual any right to continue in the employ of
the Company or any of its Affiliate Corporations or interfere in any way with
the right of the Company or any such Affiliate Corporation to terminate such
employment at any time.
(f) DEATH, DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall die
while employed by the Company or an Affiliate Corporation, or within three
months after the termination of such Optionee's employment, or if the Optionee's
employment shall terminate by reason of Disability or retirement, all Options
theretofore granted to such Optionee (to the extent otherwise exercisable) may,
unless earlier terminated in
<PAGE>
Page 6
accordance with their terms, be exercised by the Optionee or by the
Optionee's estate or by a person who acquired the right to exercise such
Option by bequest or inheritance or otherwise by reason of the death or
Disability of the Optionee, at any time within one year after the date of
death, Disability or retirement of the Optionee.
(g) NONTRANSFERABILITY OF OPTIONS. The Options are nontransferable except
(1) by will or by laws of descent and distribution, or (2) as specifically
provided below. The Optionee may transfer Nonqualified Stock Options to members
of his or her Immediate Family (as defined below) (any such transferee,
"Permitted Transferee") if the Optionee does not receive any consideration for
the transfer. "Immediate Family" refers to children, grandchildren, and spouse
of the Optionee or one or more trusts solely for the benefit of such family
members, or partnerships in which such family members, or partnerships in which
such family members are the only partners. "Affiliate" refers to any person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Optionee. Options may be
exercised during the lifetime of the Optionee. Options may be exercised during
the lifetime of the Optionee, only by the Optionee, or by the guardian or legal
representative of the Optionee or the Permitted Transferee as described in this
Section 8(h). The Optionee shall give notice to the Company of any transfer
hereunder as soon as practicable following the date of such transfer. Any such
Permitted Transferee must agree in writing to be bound by all the provisions of
the Option Agreement relating to such transferred option, and the Company must
be given a copy of such instrument.
(h) EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of Common Stock
through the declaration of stock dividends, or through recapitalization
resulting in stock splits, or combinations or exchanges of such shares, the
number of shares of Common Stock available for Options and Rights, the
number of such shares covered by outstanding Options and Rights, and the
price per share of such Options or the applicable market value of Rights,
shall be proportionately adjusted by the Committee to reflect any increase
or decrease in the number of issued shares of Common Stock; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated.
(2) In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be the Common stock within the meaning of
the Plan.
(3) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that each Incentive Stock Option granted pursuant to this Plan
shall not be adjusted
<PAGE>
Page 7
in a manner that causes such option to fail to continue to qualify as an
Incentive Stock Option within the meaning of Section 422 of the Code.
(i) RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any shares covered by the
Option until the date of the issuance of a stock certificate to him for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distribution of other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 8(h) hereof.
(j) OTHER PROVISIONS. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitations, (i) the
granting of Rights, (ii) the imposition of restrictions upon the exercise of an
Option, and (iii) in the case of an Incentive Stock Option, the inclusion of any
condition not inconsistent with such Options qualifying as an Incentive Stock
Option, as the Committee shall deem advisable.
9. STOCK APPRECIATION RIGHTS.
(a) GRANT AND EXERCISE. Rights may be granted either alone ("Free
Standing Rights") or in conjunction with all or part of any Stock Option granted
under the Plan ("Related Rights"). In the case of a Nonqualified Stock Option,
Related Rights may be granted either at or after the time of the grant of such
Stock Option. In the case of an Incentive Stock Option, Related Rights may be
granted only at the time of the grant of the Incentive Stock Option.
A Related Right or applicable portion thereof granted with respect to a
given Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Stock Option, except that, unless
otherwise provided by the Committee at the time of grant, a Related Right
granted with respect to less than the full number of shares covered by a related
Stock Option shall only be reduced if and to the extent that the number of
shares covered by the exercise of termination of the related Stock Option
exceeds the number of shares not covered by the Right.
A Related Right may be exercised by an Optionee, in accordance with
paragraph (b) of this Section 9, by surrendering the applicable portion of the
related Stock Option. Upon such exercise and surrender, the Optionee shall be
entitled to receive an amount determined in the manner prescribed in paragraph
(b) of this Section 9. Stock Options which have been so surrendered, in whole
or in part, shall no longer be exercisable to the extent the Related Rights have
been exercised.
(b) TERMS AND CONDITIONS. Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee, including the following:
<PAGE>
Page 8
(1) Rights which are Related Rights shall be exercisable only at such
time or times and to the extent that the Options to which they relate shall
be exercisable in accordance with the provisions of Sections 6, 7, 8 and
this Section 9 of the Plan; provided, however, that any Related Right shall
not be exercisable during the first six months of the term of the Related
Right, except that this additional limitation shall not apply in the event
of death or Disability of the Optionee prior to the expiration of the six-
month period.
(2) Upon the exercise of a Related Right, an Optionee shall be entitled
to receive up to, but not more than, an amount in cash or shares of Common
Stock equal in value to the excess of the Fair Market Value as of the date
of exercise of one share of Common Stock over the option price per share
specified in the related Option multiplied by the number of shares in
respect of which the Related Right shall have been exercised, with the
Committee having the right to determine the form of payment.
(3) Related Rights shall be transferable only when and to the extent that
the underlying Option would be transferable under paragraph (g) of Section
8 of the Plan.
(4) Upon the exercise of a Related Right, the Option or part thereof to
which such Related Right is related shall be deemed to have been exercised
for the purpose of the limitation set forth in Section 5 of the Plan on the
number of shares of Common Stock to be issued under the Plan, but only to
the extent of the number of shares issued under the Related Right.
(5) [Not used]
(6) Rights which are Free Standing Rights shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant; provided, however, that Free
Standing Rights shall not be exercisable during the first six months of the
term of the Free Standing Right, except that this limitation shall not
apply in the event of death or Disability of the recipient of the Free
Standing Right prior to the expiration of the six-month period.
(7) The term of each Free Standing Right shall be fixed by the Committee,
but no Free Standing Right shall be exercisable more than ten years after
the date such right is granted.
(8) Upon the exercise of a Free Standing Right, a recipient shall be
entitled to receive up to, but not more than, an amount in cash or shares
of Common Stock equal in value to the excess of the Fair Market Value as of
the date of exercise
<PAGE>
Page 9
of one share of Common Stock over the price per share specified in the
Free Standing Right (which shall be no less than one hundred percent of
the Fair Market Value of the Common Stock on the date of grant)
multiplied by the number of shares in respect to which the Right is
being exercised, with the Committee having the right to determine the
form of payment.
(9) Free Standing Rights shall be transferable to the same extent and
subject to the same conditions as set forth in Section 8(g) of the Plan.
(10) In the event of the termination of employment of a recipient of a
Free Standing Right, such Right shall be exercisable to the same extent
that an Option would have been exercisable in the event of the termination
of employment of an Optionee.
10. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES.
If the Committee shall so require, as a condition of exercise, each
Optionee shall agree that
(a) no later than the date of exercise of any Option or Right granted
hereunder, the Optionee will pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any Federal, state or local
taxes of any kind required by law to be withheld upon the exercise of such
Option or Right; and
(b) the Company shall, to the extent permitted or required by law, have
the right to deduct from any payment of any kind otherwise due to the Optionee,
Federal, state and local taxes of any kind required by law to be withheld upon
the exercise of such Option or Right.
11. TERM OF PLAN.
Options and Rights may be granted pursuant to the Plan from time to time
within a period of ten years from the date the Plan is adopted by the Board.
12. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan. Except as provided in Section 8 hereof, no suspension,
termination, modification or amendment of the Plan may adversely affect any
Option or Right previously granted, unless the written consent of the Optionee
is obtained.
13. APPROVAL OF STOCKHOLDERS.
The Plan shall take effect upon its adoption by the Board of Directors
but shall
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Page 10
be subject to the approval of the holders of a majority of the issued and
outstanding shares of Common Stock of the Company, which approval must occur
within twelve months after the date the Plan is adopted by the Board.
14. EFFECT OF HEADINGS.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
August 8, 1997
<PAGE>
Page 1
THE COLEMAN COMPANY, INC.
1992 STOCK OPTION PLAN
AS AMENDED
----------
1. PURPOSE.
This 1992 Stock Option Plan ("Plan") is intended to encourage stock
ownership by employees of The Coleman Company, Inc. (the "Company") and
employees of Affiliated Corporations (as defined in Section 2(a) hereof), so
that they may acquire or increase their proprietary interest in the Company, and
to encourage such employees to remain in the employ of the Company and to put
forth maximum efforts for the success of the business. It is further intended
that options granted by the Committee (as defined herein) pursuant to Section 6
of this Plan shall constitute "incentive stock options" ("Incentive Stock
Options") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, and the regulations issued thereunder (the "Code"), and
options granted by the Committee pursuant to Section 7 of this Plan shall
constitute "nonqualified stock options" ("Nonqualified Stock Options"). Options
granted under the Plan ("Options") may be accompanied by stock appreciation
rights ("Rights"), as hereinafter set forth. Rights may also be granted alone.
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "Affiliate Corporation" or "Affiliate" shall mean any corporation,
directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with the Company.
(b) "Disability" shall mean an inability of an Optionee (as defined
herein) to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than twelve months.
(c) "Fair Market Value" per share as of a particular date shall mean (i)
the closing sales price per share of Common Stock (as defined herein) on a
national securities exchange for the last preceding date on which there was a
sale of such Common Stock on such exchange, or (ii) if the shares of Common
Stock are then traded on an over-the-counter market, the average of the closing
bid and asked prices for the shares of Common Stock in such over-the-counter
market for the last preceding date on which there was a sale of such Common
Stock in such market, or (iii) if the shares of Common Stock are not then listed
on a national securities exchange or traded in an over-the-counter market, such
value as the Committee in its discretion may
<PAGE>
Page 2
determine.
(d) "Parent Corporation" shall mean any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of granting an Option, each of such corporations (other than the Company)
owns stock possessing fifty percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
(e) "Subsidiary Corporation" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting an Option, each of such corporations other than the last
corporation in an unbroken chain owns stock possessing fifty percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(f) "Ten Percent Stockholder" shall mean an Optionee who, at the time an
Incentive Stock Option is granted, owns stock possessing more than ten percent
of the total combined voting power of all classes of stock of the Company or of
its Parent Corporations or Subsidiary Corporations.
3. ADMINISTRATION.
The Plan shall be administered by the Management Compensation and Stock
Option Committee (the "Committee"), consisting of at least two members of the
Board of Directors of the Company (the "Board"), none of whom is or shall have
been for at least one year prior to such appointment granted or awarded equity
securities pursuant to the Plan or any other plan of the Company or any of its
Affiliates entitling the participants therein to acquire stock, stock options or
stock appreciation rights of the Company or any of its Affiliates.
The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Options; to determine
which Options shall constitute Incentive Stock Options and which Options shall
constitute Nonqualified Stock Options; to determine which Options (if any) shall
be accompanied by Rights; to determine the purchase price of the shares of
Common Stock covered by each Option (the "Option Price"); to determine the
persons to whom, and the time or times at which, Options shall be granted; to
determine the number of shares to be covered by each Option; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the Option Agreements (which need
not be identical) entered into in connection with Options granted under the
Plan; and to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Committee may delegate to one or more of its
members or to one or
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Page 3
more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan.
No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Option or Right
granted hereunder.
4. ELIGIBILITY.
Options or Rights, or both, may be granted to key employees (including,
without limitation, officers, and directors who are employees) of the Company or
its present or future Affiliate Corporations, except that Incentive Stock
Options shall be granted only to individuals who, on the date of such grant, are
employees of the Company or a Parent Corporation or a Subsidiary Corporation.
In determining the persons to whom Options and Rights shall be granted and the
number of shares to be covered by each Option and any Rights, the Committee
shall take into account the duties of the respective persons, their present and
potential contributions to the success of the Company and such other factors as
the Committee shall deem relevant in connection with accomplishing the purpose
of the Plan. A person to whom an Option has been granted hereunder is sometimes
referred to herein as an "Optionee."
An Optionee shall be eligible to receive more than one grant of an Option
during the term of the Plan, but only on the terms and subject to the
restrictions hereinafter set forth.
5. STOCK.
The stock subject to Options and Rights hereunder shall be shares of the
Company's common stock, par value $0.01 per share ("Common Stock"). Such shares
may, in whole or in part, be authorized but unissued shares or shares that shall
have been or that may be reacquired by the Company. The aggregate number of
shares of Common Stock as to which Options and Rights may be granted from time
to time under the Plan shall not exceed 500,000. The limitation established by
the preceding sentence shall be subject to adjustment as provided in Section
8(h) hereof.
In the event that any outstanding Option under the Plan for any reason
expires or is terminated without having been exercised in full or without having
been surrendered in full in connection with the exercise of a Right, the shares
of Common Stock allocable to the unexercised portion of such Options shall
(unless the Plan shall have been terminated) become available for subsequent
grants of Options and Rights under the Plan.
<PAGE>
Page 4
6. INCENTIVE STOCK OPTIONS.
Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in Section
8 hereof.
(a) VALUE OF SHARES. The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Options granted under this Plan and all other option plans
of the Company, any Parent Corporation and any Subsidiary Corporation become
exercisable for the first time by an Optionee during any calendar year shall not
exceed $100,000.
(b) TEN PERCENT STOCKHOLDER. In the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, (i) the Option Price shall not be less
than one hundred ten percent of the Fair Market Value of a share of Common Stock
of the Company on the date of grant of such Incentive Stock Option, and (ii) the
exercise period shall not exceed five years from the date of grant of such
Incentive Stock Options.
7. NONQUALIFIED STOCK OPTIONS.
Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms and
conditions specified in Section 8 hereof.
8. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to the Plan shall be evidenced by a written
Option Agreement between the Company and the Optionee, which agreement shall
comply with and be subject to the following terms and conditions:
(a) NUMBER OF SHARES. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates.
(b) OPTION PRICE. Each Option Agreement shall state the Option Price per
share of Common Stock, which, in the case of Incentive Stock Options, shall be
not less than one hundred percent of the Fair Market Value of a share of Common
Stock of the Company on the date of grant of the Option. The Option Price shall
be subject to adjustment as provided in Section 8(h) hereof. The date on which
the Committee adopts a resolution expressly granting an Option shall be
considered the day on which such Option is granted.
(c) MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in full,
at the time of exercise, in case or in shares of Common Stock having a Fair
Market Value
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Page 5
equal to such Option Price or in a combination of cash and such shares, and
may be effected in whole or in part (i) with monies borrowed from the Company
pursuant to repayment terms and conditions as shall be determined from time
to time by the Committee, in its discretion, separately with respect to each
exercise of Options and each Optionee; provided, however that each such
method and time for payment and each such borrowing and terms and conditions
of security, if any, and repayment shall be permitted by and be in compliance
with applicable law.
(d) TERM AND EXERCISE OF OPTIONS. Options shall be exercisable over the
exercise period as and at the times and upon the conditions that the Committee
may determine, as reflected in the Option Agreement; provided, however, that the
Committee shall have the authority to accelerate the exercisability of any
outstanding Option at such time and under such circumstances as it, in its sole
discretion, deems appropriate. The exercise period shall be determined by the
Committee; provided, however, that in the case of an Incentive Stock Option,
such exercise period shall not exceed ten years from the date of grant of such
Incentive Stock Option. The exercise period shall be subject to earlier
termination as provided in Section 8(e) and 8(f) hereof. An Option may be
exercised, as to any or all full shares of Common Stock as to which the Option
has become exercisable, by giving written notice of such exercise to the
Committee; provided, however, that an Option may not be exercised at any time as
to fewer than one hundred shares (or such number of shares as to which the
Option is then exercisable if such number of shares is less than one hundred).
(e) TERMINATION OF EMPLOYMENT. Except as provided in this Section 8(e)
and in Section 8(f) hereof, an Option may not be exercised unless the Optionee
is then in the employ of (1) the Company, (2) an Affiliate Corporation or (3) a
corporation issuing or assuming the Option in a transaction to which Section
424(a) of the Code applies or a parent corporation or subsidiary corporation of
the corporation described in this Clause 3, and unless the Optionee has remained
continuously so employed since the date of grant of the Option. In the event
that the employment of an Optionee shall terminate (other than by reason of
death, disability or retirement), all Options of such Optionee that are
exercisable at the time of such termination may, unless earlier terminated in
accordance with their terms be exercised within three months after such
termination. Nothing in the Plan or in any Option or Right granted pursuant
hereto shall confer upon an individual any right to continue in the employ of
the Company or any of its Affiliate Corporations or interfere in any way with
the right of the Company or any such Affiliate Corporation to terminate such
employment at any time.
(f) DEATH, DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall die
while employed by the Company or an Affiliate Corporation, or within three
months after the termination of such Optionee's employment, or if the Optionee's
employment shall terminate by reason of disability or retirement, all Options
theretofore granted to such Optionee (to the extent otherwise exercisable) may,
unless earlier terminated in accordance with their terms, be exercised by the
Optionee or by the Optionee's estate
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Page 6
or by a person who acquired the right to exercise such Option by bequest or
inheritance or otherwise by reason of the death or disability of the
Optionee, at any time within one year after the date of death, disability or
retirement of the Optionee.
(g) NONTRANSFERABILITY OF OPTIONS. The Options are nontransferable except
(1) by will or by laws of descent and distribution, or (2) as specifically
provided below. The Optionee may transfer Nonqualified Stock Options to members
of his or her Immediate Family (as defined below) (any such transferee,
"Permitted Transferee") if the Optionee does not receive any consideration for
the transfer. "Immediate Family" refers to children, grandchildren, and spouse
of the Optionee or one or more trusts solely for the benefit of such family
members, or partnerships in which such family members are the only partners.
"Affiliate" refers to any person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Optionee. Options may be exercised during the lifetime of the
Optionee, only by the Optionee, or by the guardian or legal representative of
the Optionee or the Permitted Transferee as described in this Section 8(h). The
Optionee shall give notice to the Company of any transfer hereunder as soon as
practicable following the date of such transfer. Any such Permitted Transferee
must agree in writing to be bound by all the provisions of the Option Agreement
relating to such transferred option, and the Company must be given a copy of
such instrument.
(h) EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of Common Stock
through the declaration of stock dividends, or through recapitalization
resulting in stock splits, or combinations or exchanges of such shares, the
number of shares of Common Stock available for Options and Rights, the
number of such shares covered by outstanding Options and Rights, and the
price per share of such Options or the applicable market value of Rights,
shall be proportionately adjusted by the Committee to reflect any increase
or decrease in the number of issued shares of Common Stock; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated.
(2) In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be the Common Stock within the meaning of
the Plan.
(3) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that each Incentive Stock Option granted pursuant to this Plan
shall not be adjusted in a manner that causes such option to fail to
continue to qualify as
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Page 7
an Incentive Stock Option within the meaning of Section 422 of the Code.
(i) RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any shares covered by the
Option until the date of the issuance of a stock certificate to him for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distribution of other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 8(h) hereof.
(j) OTHER PROVISIONS. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitation, (i) the
granting of Rights, (ii) the imposition of restrictions upon the exercise of an
Option, and (iii) in the case of an Incentive Stock Option, the inclusion of any
condition not inconsistent with such Options qualifying as an Incentive Stock
Option, as the Committee shall deem advisable.
9. STOCK APPRECIATION RIGHTS.
(a) GRANT AND EXERCISE. Rights may be granted either alone ("Free
Standing Rights") or in conjunction with all or part of any Stock Option granted
under the Plan ("Related Rights"). In the case of a Nonqualified Stock Option,
Related Rights may be granted either at or after the time of the grant of such
Stock Option. In the case of an Incentive Stock Option, Related Rights may be
granted only at the time of the grant of the Incentive Stock Option.
A Related Right or applicable portion thereof granted with respect to a
given Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Stock Option, except that, unless
otherwise provided by the Committee at the time of grant, a Related Right
granted with respect to less than the full number of shares covered by a related
Stock Option shall only be reduced if an to the extent that the number of shares
covered by the exercise of termination of the related Stock Option exceeds the
number of shares not covered by the Right.
A Related Right may be exercised by an Optionee, in accordance with
paragraph (b) of this Section 9, by surrendering the applicable portion of the
related Stock Option. Upon such exercise and surrender, the Optionee shall be
entitled to receive an amount determined in the manner prescribed in paragraph
(b) of this Section 9. Stock Options which have been so surrendered, in whole
or in part, shall no longer be exercisable to the extent the Related Rights have
been exercised.
(b) TERMS AND CONDITIONS. Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee, including the following:
(1) Rights which are Related Rights shall be exercisable only at such
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Page 8
time or times and to the extent that the Options to which they relate shall
be exercisable in accordance with the provisions of Sections 6, 7, 8 and
this Section 9 of the Plan; provided, however, that any Related Right shall
not be exercisable during the first six months of the term of the Related
Right, except that this additional limitation shall not apply in the event
of death or disability of the Optionee prior to the expiration of the six-
month period.
(2) Upon the exercise of a Related Right, an Optionee shall be
entitled to receive up to, but not more than, an amount in cash or shares
of Common Stock equal in value to the excess of the Fair Market Value as of
the date of exercise of one share of Common Stock over the option price per
share specified in the related Option multiplied by the number of shares in
respect of which the Related Right shall have been exercised, with the
Committee having the right to determine the form of payment.
(3) Related Rights shall be transferable only when and to the extent
that the underlying Option would be transferable under paragraph (g) of
Section 8 of the Plan.
(4) Upon the exercise of a Related Right, the Option or part thereof
to which such Related Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in Section 5 of the
Plan on the number of shares of Common Stock to be issued under the Plan,
but only to the extent of the number of shares issued under the Related
Right.
(5) [not used]
(6) Rights which are Free Standing Rights shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant; provided, however, that Free
Standing Rights shall not be exercisable during the first six months of the
term of the Free Standing Right, except that this limitation shall not
apply in the event of death or disability of the recipient of the Free
Standing Right prior to the expiration of the six-month period.
(7) The term of each Free Standing Right shall be fixed by the
Committee, but no Free Standing Right shall be exercisable more than ten
years after the date such right is granted.
(8) Upon the exercise of a Free Standing Right, a recipient shall be
entitled to receive up to, but not more than, an amount in cash or shares
of Common Stock equal in value to the excess of the Fair Market Value as of
the date of exercise of one share of Common Stock over the price per share
specified in the Free Standing Right (which shall be no less than one
hundred percent of the Fair Market Value of the Common Stock on the date of
grant)
<PAGE>
Page 9
multiplied by the number of shares in respect to which the Right is being
exercised, with the committee having the right to determine the for of
payment.
(9) Free Standing Rights shall be transferable to the same extent and
subject to the same conditions as set forth in Section 8(g) of the Plan.
(10) In the event of the termination of employment of a recipient of a
Free Standing Right, such Right shall be exercisable to the same extent
that an Option would have been exercisable in the event of the termination
of employment of an Optionee.
10. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES.
If the Committee shall so require, as a condition of exercise, each
Optionee shall agree that
(a) no later than the date of exercise of any Option or Right granted
hereunder, the Optionee will pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any Federal, state or local
taxes of any kind required by law to be withheld upon the exercise of such
Option or Right; and
(b) the Company shall, to the extent permitted or required by law, have
the right to deduct from any payment of any kind otherwise due to the Optionee,
Federal, state and local taxes of any kind required by law to be withheld upon
the exercise of such Option or Right.
11. TERM OF PLAN.
Options and Rights may be granted pursuant to the Plan from time to time
within a period of ten years from the date the Plan is adopted by the Board.
12. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan. Except as provided in Section 8 hereof, no suspension,
termination, modification or amendment of the Plan may adversely affect any
Option or Right previously granted, unless the written consent of the Optionee
is obtained.
13. APPROVAL OF STOCKHOLDERS.
The Plan shall take effect upon its adoption by the Board of Directors but
shall be subject to the approval of the holders of a majority of the issued and
outstanding shares of Common Stock of the Company, which approval must occur
within twelve months after the date the Plan is adopted by the Board.
<PAGE>
Page 10
14. EFFECT OF HEADINGS.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
August 8, 1997
<PAGE>
Page 1
THE COLEMAN COMPANY, INC.
1996 STOCK OPTION PLAN
----------------------
(As Amended)
1. PURPOSE.
This 1996 Stock Option Plan (the "Plan") is intended to encourage stock
ownership by employees of The Coleman Company, Inc. (the "Company") and
employees of Affiliated Corporations (as defined in Section 2(a) hereof),
so that they may acquire or increase their proprietary interest in the
Company, and to encourage such employees to remain in the employ of the
Company and to put forth maximum efforts for the success of the business.
It is further intended that options granted by the Committee (as defined
herein) pursuant to Section 6 of this Plan shall constitute "incentive
stock options" ("Incentive Stock Options") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended, and the regulations
issued thereunder (the "Code"), and options granted by the Committee
pursuant to Section 7 of this Plan shall constitute "nonqualified stock
options" ("Nonqualified Stock Options"). Options granted under the Plan
("Options") may be accompanied by stock appreciation rights ("Rights"), as
hereinafter set forth. Rights may also be granted alone.
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "Affiliate Corporation" or "Affiliate" shall mean any corporation,
directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Company.
(b) "Disability" shall mean an inability of an Optionee (as defined
herein) to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to
last for a continuous period of not less than twelve months.
(c) "Change of Control" shall mean that any of the following events will
be deemed to have taken place:
(i) any "person" (as defined in Section 3(a)(9) of the Securities
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Page 2
Exchange Act of 1934, as amended (the "Exchange Act"), and as
modified in Sections 13(d) and 14(d) of the Exchange Act) other
than (A) the Corporation or any of its subsidiaries, (B) any
employee benefit plan of the Corporation or one of its
subsidiaries, or (C) MacAndrews & Forbes Holdings Inc. or any
affiliate thereof (collectively, "MAFCO"), (D) a corporation
owned, directly or indirectly, by shareholders of the Corporation
in substantially the same proportions as their ownership of the
Corporation, or (E) an underwriter temporarily holding securities
pursuant to an offering of such securities (a "Person"), becomes
a "beneficial owner" (as defined in Rule 13(d)(3) of the Exchange
Act), directly or indirectly, of securities of the Corporation
representing 20% or more of the shares of common stock of the
Corporation then outstanding, and such Person's beneficial
ownership level then exceeds the percentage of the Corporation's
outstanding shares beneficially owned by MAFCO;
(ii) the consummation of any merger or consolidation of the
Corporation or one of its subsidiaries with or into another
corporation, other than a merger or consolidation which would
result in the holders of the voting securities of the Corporation
outstanding immediately prior thereto holding securities which
represent immediately after such merger or consolidation more
than 80% of the combined voting power of the voting securities of
the Corporation or the surviving corporation or the parent of
such surviving corporation;
(iii) the shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of
the Corporation's assets; or
(iv) a majority of the Board of Directors votes in favor of a decision
that a Change of Control has occurred.
(d (c) "Fair Market Value" per share as of a particular date shall mean
(i) the closing sales price per share of Common Stock (as defined
herein) on a specified date which is on or after the date on
which a resolution is adopted to expressly grant an Option, or
(ii) if the shares of Common Stock are then traded on an over-
the-counter market, the average of the closing bid and asked
prices for the shares of Common Stock in such over-the-counter
market for the last preceding date on which there was a sale of
such Common Stock in such market, or (iii) if the shares of
Common Stock are not
<PAGE>
Page 3
then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Committee in its
discretion may determine.
(e) "Parent Corporation" shall mean any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company
if, at the time of granting an Option, each of such corporations
(other than the Company) owns stock possessing fifty percent or more
of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
(f) "Subsidiary Corporation" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if, at the time of granting an Option, each of such
corporations other than the last corporation in an unbroken chain owns
stock possessing fifty percent or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
(g) "Ten Percent Stockholder" shall mean an Optionee who, at the time an
Incentive Stock Option is granted, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of
the Company or of its Parent Corporations or Subsidiary Corporations.
3. ADMINISTRATION.
The Plan shall be administered by the Management Compensation and Stock
Option Committee (the "Committee"), consisting of at least two members
of the Board of Directors of the Company (the "Board"), none of whom is
or shall have been for at least one year prior to such appointment
granted or awarded equity securities pursuant to the Plan or any other
plan of the Company or any of its Affiliates entitling the participants
therein to acquire stock, stock options or stock appreciation rights of
the Company or any of its Affiliates.
The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities
either specifically granted to it under the Plan or necessary or
advisable in the administration of the Plan, including, without
limitation, the authority to grant Options; to determine which Options
shall constitute Incentive Stock Options and which Options shall
constitute Nonqualified Stock Options; to determine which Options (if
any) shall be accompanied by Rights; to determine the purchase price of
the shares of Common Stock covered by each Option (the "Option Price");
to determine the persons to whom, and the time or
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Page 4
times at which, Options shall be granted; to determine the number of
shares to be covered by each Option; to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions relating to the Plan; to
determine the terms and provisions of the Option Agreements (which need
not be identical) entered into in connection with Options granted under
the Plan; and to make all other determinations deemed necessary or
advisable for the administration of the Plan. The Committee may
delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or
any person to whom it has delegated duties as aforesaid may employ one
or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan.
No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or
any Option or Right granted hereunder.
<PAGE>
Page 5
4.4 ELIGIBILITY.
Options or Rights, or both, may be granted to key employees (including,
without limitation, officers and directors who are employees) of the
Company or its present or future Affiliate Corporations, except that
Incentive Stock Options shall be granted only to individuals who, on
the date of such grant, are employees of the Company or a Parent
Corporation or a Subsidiary Corporation. In determining the persons to
whom Options and Rights shall be granted and the number of shares to be
covered by each Option and any Rights, the Committee shall take into
account the duties of the respective persons, their present and
potential contributions to the success of the Company and such other
factors as the Committee shall deem relevant in connection with
accomplishing the purpose of the Plan. A person to whom an Option has
been granted hereunder is sometimes referred to herein as an "Optionee."
An Optionee shall be eligible to receive more than one grant of an
Option during the term of the Plan, but only on the terms and subject
to the restrictions hereinafter set forth.
5. STOCK.
The stock subject to Options and Rights hereunder shall be shares of the
Company's common stock, par value $0.01 per share ("Common Stock"). Such
shares may, in whole or in part, be authorized but unissued shares or
shares that shall have been or that may be reacquired by the Company. The
aggregate number of shares of Common Stock as to which Options and Rights
may be granted from time to time under the Plan shall not exceed 1,000,000.
The limitation established by the preceding sentence shall be subject to
adjustment as provided in Section 8(h) hereof.
In the event that any outstanding Option under the Plan for any reason
expires or is terminated without having been exercised in full or without
having been surrendered in full in connection with the exercise of a Right,
the shares of Common Stock allocable to the unexercised portion of such
Option shall (unless the Plan shall have been terminated) become available
for subsequent grants of Options and Rights under the Plan.
6. INCENTIVE STOCK OPTIONS.
Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms
and conditions, in addition to the general terms and conditions specified
in Section 8 hereof.
<PAGE>
Page 6
(a) VALUE OF SHARES. The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the shares of
Common stock with respect to which Options granted under this Plan and
all other option plans of the Company, any Parent Corporation and any
Subsidiary Corporation become exercisable for the first time by an
Optionee during any calendar year shall not exceed $100,000.
(b) TEN PERCENT STOCKHOLDER. In the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, (i) the Option Price shall not
be less than one hundred ten percent of the Fair Market Value of a
share of Common Stock of the Company on the date of grant of such
Incentive Stock Option, and (ii) the exercise period shall not exceed
five years from the date of grant of such Incentive Stock Options.
7. NONQUALIFIED STOCK OPTIONS.
Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms
and conditions specified in Section 8 hereof.
8. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to the Plan shall be evidenced by a written
Option Agreement between the company and the Optionee, which agreement
shall comply with and be subject to the following terms and conditions:
(a) NUMBER OF SHARES. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates. The maximum
number of shares that can be granted to an Optionee in a particular
calendar year is 150,000 shares.
(b) OPTION PRICE. Each Option Agreement shall state the Option Price per
share of Common Stock, which, in the case of Incentive Stock Options,
shall be not less than one hundred percent of the Fair Market Value of
a share of Common Stock of the Company on the date of grant of the
Option. The Option Price shall be subject to adjustment as provided
in Section 8(h) hereof. The date on which the Committee adopts a
resolution expressly granting an Option shall be considered the day on
which such Option is granted, unless a subsequent date is specified in
such resolution.
(c) MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in full,
at the time of exercise, in cash or in shares of Common Stock having a
Fair Market Value equal to such Option Price or in a combination of
cash and
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Page 7
such shares, and may be effected in whole or in part (i) with
monies borrowed from the Company pursuant to repayment terms and
conditions as shall be determined from time to time by the
Committee, in its discretion, separately with respect to each
exercise of Options and each Optionee; provided, however, that each
such method and time for payment and each such borrowing and terms
and conditions of security, if any, and repayment shall be
permitted by and be in compliance with applicable law.
<PAGE>
Page 8
(d) TERM AND EXERCISE OF OPTIONS. Options shall be exercisable over the
exercise period as and at the times and upon the conditions that the
Committee may determine, as reflected in the Option Agreement;
provided, however, that the Committee shall have the authority to
accelerate the exercisability of any outstanding Option at such time
and under such circumstances as it, in its sole discretion, deems
appropriate. The exercise period shall be determined by the
Committee; provided, however, that in the case of an Incentive Stock
Option, such exercise period shall not exceed ten years from the date
of grant of such Incentive Stock Option. The exercise period shall be
subject to earlier termination as provided in Section 8(e) and 8(f)
hereof. An Option may be exercised, as to any or all full shares of
Common Stock as to which the Option has become exercisable, by giving
written notice of such exercise to the Committee; provided, however,
that an Option may not be exercised at any time as to fewer than one
hundred shares (or such number of shares as to which the Option is
then exercisable if such number of shares is less than one hundred).
(e) TERMINATION OF EMPLOYMENT. Except as provided in this Section 8(e)
and in Section 8(f) hereof, an Option may not be exercised unless
the Optionee is then in the employ of (1) the Company, (2) an
Affiliate Corporation or (3) a corporation issuing or assuming the
Option in a transaction to which Section 424(a) of the Code applies or
a parent corporation or subsidiary corporation of the corporation
described in this Clause 3, and unless the Optionee has remained
continuously so employed since the date of grant of the Option. In
the event that the employment of an Optionee shall terminate (other
than by reason of death, Disability or retirement), all Options of
such Optionee that are exercisable at the time of such termination
may, unless earlier terminated in accordance with their terms, be
exercised within three months after such termination. Nothing in the
Plan or in any Option or Right granted pursuant hereto shall confer
upon an individual any right to continue in the employ of the Company
or any of its Affiliate Corporations or interfere in any way with the
right of the Company or any such Affiliate Corporation to terminate
such employment at any time.
(f) DEATH, DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall die
while employed by the Company or an Affiliate Corporation, or within
three months after the termination of such Optionee's employment, or
if the Optionee's employment shall terminate by reason of Disability
or retirement, all Options previously granted to such Optionee, except
those that have previously terminated, or those that have been
exercised, may be exercised by the Optionee or by the person or
persons to whom the Optionee's rights pass, at any time within one
year after the date of death,
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Page 9
Disability or retirement of the Optionee.
(g) NONTRANSFERABILITY OF OPTIONS. The Options are nontransferable except
(1) by will or by laws of descent and distribution, or (2) as
specifically provided below. The Optionee may transfer Nonqualified
Stock Options to members of his or her Immediate Family (as defined
below) (any such transferee, "Permitted Transferee") if the Optionee
does not receive any consideration for the transfer. "Immediate
Family" refers to children, grandchildren, and spouse of the Optionee
or one or more trusts solely for the benefit of such family members,
or partnerships in which such family members are the only partners.
"Affiliate" refers to any person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, the Optionee. Options may be exercised during
the lifetime of the Optionee, only by the Optionee, or by the guardian
or legal representative of the Optionee or the Permitted Transferee as
described in this Section 8(h). The Optionee shall give notice to the
Company of any transfer hereunder as soon as practicable following the
date of such transfer. Any such Permitted Transferee must agree in
writing to be bound by all the provisions of the Option Agreement
relating to such transferred option, and the Company must be given a
copy of such instrument.
(h) EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of Common Stock
through the declaration of stock dividends, or through
recapitalization resulting in stock splits, or combinations or
exchanges of such shares, the number of shares of Common Stock
available for Options and Rights, the number of shares covered by
outstanding Options and Rights, THE MAXIMUM NUMBER OF SHARES THAT
CAN BE GRANTED TO AN OPTIONEE IN A PARTICULAR CALENDAR YEAR, and
the price per share of such Options or the applicable market
value of Rights, shall be proportionately adjusted by the
Committee to reflect any increase or decrease in the number of
issued shares of Common Stock.
(2) In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares
with a different par value or without par value, the shares
resulting from any such change shall be deemed to be the Common
Stock within the meaning of the Plan.
(3) To the extent that the foregoing adjustments relate to stock or
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securities of the Company, such adjustments shall be made by the
Committee, whose determination in that respect shall be final,
binding and conclusive, provided that each Incentive Stock Option
granted pursuant to this Plan shall not be adjusted in a manner
that causes such option to fail to continue to qualify as an
Incentive Stock Option within the meaning of Section 422 of the
Code.
(4) In the event of a Change of Control (as defined in Section 2(c)
above), all previously granted options, except those that have
been previously terminated or exercised, become immediately
exercisable by an Optionee or an Optionee's transferee.
(i) RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any shares covered by
the Option until the date of the issuance of a stock certificate to him for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution of other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 8(h)
hereof.
(j) OTHER PROVISIONS. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitations, (i)
the granting of Rights, (ii) the imposition of restrictions upon the
exercise of an Option, and (iii) in the case of an Incentive Stock Option,
the inclusion of any condition not inconsistent with such Options
qualifying as Incentive Stock Options, as the Committee shall deem
advisable.
9. STOCK APPRECIATION RIGHTS.
(a) GRANT AND EXERCISE. Rights may be granted either alone ("Free
Standing Rights") or in conjunction with all or part of any Stock
Option granted under the Plan ("Related Rights"). In the case of a
Nonqualified Stock Option, Related Rights may be granted either at or
after the time of the grant of such Stock Option. In the case of an
Incentive Stock Option, Related Rights may be granted only at the time
of the grant of the Incentive Stock Option.
A Related Right or applicable portion thereof granted with respect to
a given Stock Option shall terminate and no longer be exercisable upon
the termination or exercise of the related Stock Option, except that,
unless otherwise provided by the Committee at the time of grant, a
Related Right granted with respect to less than the full number of
shares covered by a related Stock Option shall only be reduced if and
to the extent that the number of shares covered by the exercise of
termination of the related
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Stock Option exceeds the number of shares not covered by the Right.
A Related Right may be exercised by an Optionee, in accordance with
paragraph (b) of this Section 9, by surrendering the applicable
portion of the related Stock Option. Upon such exercise and
surrender, the Optionee shall be entitled to receive an amount
determined in the manner prescribed in paragraph (b) of this
Section 9. Stock Options which have been so surrendered, in whole
or in part, shall no longer be exercisable to the extent the
Related Rights have been exercised.
(b) TERMS AND CONDITIONS. Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall
be determined from time to time by the Committee, including the
following:
(1) Rights which are Related Rights shall be exercisable only at
such time or times and to the extent that the Options to
which they relate shall be exercisable in accordance with
the provisions of Sections 6, 7, 8 and this Section 9 of the
Plan; provided, however, that any Related Right shall not be
exercisable during the first six months of the term of the
Related Right, except that this additional limitation shall
not apply in the event of death or Disability of the
Optionee prior to the expiration of the six-month period.
(2) Upon the exercise of a Related Right, an Optionee shall be
entitled to receive up to, but not more than, an amount in
cash or shares of Common Stock equal in value to the excess
of the Fair Market Value as of the date of exercise of one
share of Common Stock over the option price per share
specified in the related Option multiplied by the number of
shares 'in respect of which the Related Right shall have
been exercised, with the Committee having the right to
determine the form of payment.
(3) Related Rights shall be transferable only when and to the
extent that the underlying Option would be transferable
under paragraph (g) of Section 8 of the Plan.
(4) Upon the exercise of a Related Right, the Option or part
thereof to which such Related Right is related shall be
deemed to have been exercised for the purpose of the
limitation set forth in Section 5 of the Plan on the number
of shares of Common Stock to be issued under the Plan, but
only to the extent of the number of shares issued under the
Related Right.
(5) [Not used]
(6) Rights which are Free Standing Rights shall be exercisable
at such time or times and subject to such terms and
conditions as shall be determined by the Committee at or
after grant; provided, however, that Free Standing Rights
shall not be exercisable during the first
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six months of the term of the Free Standing Right, except
that this limitation shall not apply in the event of death
or Disability of the recipient of the Free Standing Right
prior to the expiration of the six-month period.
(7) The term of each Free Standing Right shall be fixed by the
Committee, but no Free Standing Right shall be exercisable
more than ten years after the date such right is granted.
(8) Upon the exercise of a Free Standing Right, a recipient
shall be entitled to receive up to, but not more than, an
amount in cash or shares of Common Stock equal in value to
the excess of the Fair Market Value as of the date of
exercise of one share of Common Stock over the price per
share specified in the Free Standing Right (which shall be
no less than one hundred percent of the Fair Market Value of
the Common Stock on the date of grant) multiplied by the
number of shares in respect to which the Right is being
exercised, with the Committee having the right to determine
the form of payment.
(9) Free Standing Rights shall be transferable to the same
extent and subject to the same conditions as set forth in
Section 8(g) of the Plan.
(10) In the event of the termination of employment of a recipient
of a Free Standing Right, such Right shall be exercisable to
the same extent that an Option would have been exercisable
in the event of the termination of employment of an
Optionee.
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10. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES.
If the Committee shall so require, as a condition of exercise, each
Optionee shall agree that
(a) no later than the date of exercise of any Option or Right granted
hereunder, the Optionee will pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any Federal, state
or local taxes of any kind required by law to be withheld upon the
exercise of such Option or Right; and
(b) the Company shall, to the extent permitted or required by law, have
the right to deduct from any payment of any kind otherwise due to the
Optionee, Federal, state and local taxes of any kind required by law
to be withheld upon the exercise of such Option or Right.
11. TERM OF PLAN.
Options and Rights may be granted pursuant to the Plan from time to time
within a period of ten years from the date the Plan is adopted by the
Board.
12. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan. Except as provided in Section 8 hereof, no suspension,
termination, modification or amendment of the Plan may adversely affect
any Option or Right previously granted, unless the written consent of the
Optionee is obtained.
13. APPROVAL OF STOCKHOLDERS.
The Plan shall take effect upon its adoption by the Board of Directors but
shall be subject to the approval of the holders of a majority of the issued
and outstanding shares of Common Stock of the Company, which approval must
occur within twelve months after the date the Plan is adopted by the Board.
14. EFFECT OF HEADINGS.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
August 8, 1997
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EXHIBIT 10.5
THE COLEMAN COMPANY, INC.
June 11, 1997
Mr. Frederik van den Bergh
"Le Biolet"
F-74140 - Loisin
France
Dear Mr. van den Bergh:
This letter is intended to fully settle all of our differences arising
out of or relating to your employment with The Coleman Company, Inc. ("Coleman")
and the "Company" (as hereinafter defined) and your separation from such
employment.
You will continue to serve the Company until your "Severance Date,"
which means June 30, 1997. On your Severance Date you will, by our mutual
agreement and consent, cease to be an employee, officer and director of the
Company and all affiliated companies. Certain amounts will become payable to or
in respect of you, and you will be entitled to certain rights and benefits, on
account of your separation from the Company's employ, as described below.
The term "Severance Period" as used in this Agreement means the period
from July 1, 1997 through June 30, 1998, or if earlier, the end of the month in
which your death occurs.
1. SALARY, SEVERANCE, UNEMPLOYMENT COMPENSATION:
(a) Through the Severance Date, you will be paid a monthly
salary at your current annual rate of $500,000, and you will
be entitled to continue to participate in all retirement,
health and other fringe benefit plans in which you currently
participate on a
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basis equivalent to Company executives of similar stature.
(b) You will be paid two severance payments, as follows: a lump
sum payment of $450,000 on July 3, 1997 and a lump sum
payment of $100,000 on October 3, 1997.
(c) You acknowledge and agree that any bonus to which you might
be entitled on account of services after 1996 are adequately
reflected in the payments provided for herein and that no
bonuses or other incentive or extra compensation is
presently owed to you.
(d) If you apply for, and are awarded, unemployment compensation
benefits during the Severance Period, your compensation
specified in Section 1(b) will be reduced by the amount of
unemployment compensation you receive. The decision to
apply for state unemployment compensation is your own.
2. SPECIAL PAYMENT:
(a) Coleman will pay you an additional $66,667 on July 3, 1997
if you have not exercised your right to revoke the ADEA
Release (as defined herein) as provided in Section 15(b).
(b) It is understood that any payment made under Section 2(a)
shall be a special inducement to you not to revoke the ADEA
release.
3. PENSION BENEFITS:
You agree and acknowledge that you are not entitled to any benefits
under any employee benefit plan of the Company, including but not limited to any
supplemental executive retirement plan or any other pension plan, except as
specifically provided for herein.
4. VACATION:
As soon as practicable after the Severance Date, you will be paid for
two weeks of unused accrued vacation in accordance with the Company's regular
policies. Except as provided in the preceding sentence, you shall cease to have
any right to any unused accrued vacation and no payment shall be made to you on
account of any such vacation time.
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5. MEDICAL BENEFITS:
(a) Through the last day of the Severance Period, you will
continue to be eligible to participate in Coleman's medical
program available to Coleman's senior-most executives or in
a substantially comparable program to be selected by the
Company. You and the Company acknowledge that, after the
end of the Severance Period, you will not be eligible to
participate in any of Coleman's medical programs, including
Coleman's retiree medical programs.
If you engage in regular employment after the Severance Date
(whether as an executive or as a self-employed person), and
you or your spouse are eligible to receive or receive any
medical benefits in consideration of such employment,
Coleman will be relieved of its obligation under this
Section 5 to provide medical benefits. You will promptly
notify Coleman of your employment and eligibility for, or
receipt of, medical benefits.
(b) After the Severance Date, neither you nor your spouse will
be eligible to participate in any Company welfare plans
except as provided above, and such coverage shall be in lieu
of coverage otherwise available to either you or your spouse
under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") or any other applicable continuation of
coverage laws. The benefits provided by this Section 5
shall be contingent on the execution by you and your spouse
of such acknowledgments of the foregoing, including any
waivers of your and your spouse's rights under COBRA, as the
Company may reasonably request, including a waiver in the
form of Attachment B.
6. EQUITY:
(a) STOCK OPTIONS.
You will be eligible to exercise the following stock options
for 90 days after the Severance Date:
-------------------------------------------------------
# Vested @ 6/30/97
as per Employment
Grant Date Agreement Option Price
-------------------------------------------------------
5-1-96 23,380 $23.125
-------------------------------------------------------
12-27-96 3,507 $ 15.00
-------------------------------------------------------
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-------------------------------------------------------
4-15-97 501 $ 14.00
-------------------------------------------------------
Such options, if not exercised within such 90 day period,
shall terminate and expire at the end of such 90 day period.
You acknowledge and agree that all other stock options held
by you are not presently exercisable and are not scheduled
to become exercisable before the Severance Date and
accordingly will not be exercisable after the date hereof.
Notwithstanding anything to the contrary in the agreements
governing the stock options, you agree that: if you wish to
exercise a stock option, you will provide Coleman with
written advance notice (in the manner described in Section
20 of this Agreement) stating your intention and identifying
an option exercise date at least seven days after the date
that such advance notice is received by Coleman; within
three days after the receipt by Coleman of any such advance
notice, Coleman may in its sole discretion determine to pay
you cash in lieu of allowing you to exercise some or all of
the stock options with respect to which you have provided
such advance notice of intention to exercise; if Coleman
determines to exercise its rights under this Section 6,
Coleman shall provide to you, within such three day period,
a written notice identifying the stock options as to which
Coleman has determined to so exercise its rights and the
number of shares under each such stock option as to which
Coleman has so determined to exercise its rights; any such
cash payment shall be paid to you within five days after the
option exercise date set forth in your advance notice; and
the amount of such cash payment shall (on an option-by-
option basis) equal the number of shares to which you would
otherwise would have become entitled (the "Shares") on
exercise of the stock option in respect of which Coleman has
determined to exercise its rights under this Section 6,
multiplied by the difference between (A) the closing price
of a Share on the New York Stock Exchange on the date on
which you would have exercised your stock option (but for
Coleman's exercise of its rights under this Section 6) minus
(B) the per share exercise price of such stock option.
(b) QUALIFYING SHARES
All shares of any subsidiary of the Company which you hold
on the date of this Agreement shall be returned to such
subsidiary or its designee prior to the Severance Date. You
shall receive no
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consideration for such shares.
7. OFFSET:
If there shall ever be any amount due to the Company on account of
claims which are not covered by the release provided herein, the Company shall
be entitled to offset against any amount payable to or in respect of you
hereunder, any sums owed by you to the Company provided that any such offset
shall be made only at the direction of an arbitrator conducting an arbitration
pursuant to Section 24 of this Agreement.
8. WAIVER, MUTUAL RELEASE, ETC.:
(a) You release and discharge the Company from any and all
charges, claims and causes of action of any kind, whether
known or unknown and whenever arising, including, but not
limited to, all claims arising at any time, directly or
indirectly, out of your employment or the termination of
your employment with the Company, PROVIDED, HOWEVER, that
you do not waive, and such released claims shall not
include, any of your rights to receive payments and benefits
under this Agreement or otherwise enforce this Agreement.
(b) You realize there are many laws and regulations prohibiting
employment discrimination pursuant to which you may have
rights or claims. These include, without limitation, the
Age Discrimination in Employment Act of 1967, as amended;
the National Labor Relations Act, as amended; the Civil
Rights Act of 1991; 42 U.S.C. 1981, as amended; the
Americans With Disabilities Act of 1990; Title VII of the
Civil Rights Act of 1964, as amended; the Employee
Retirement Income Security Act of 1974, as amended; and
various other foreign and U.S. federal, state and local
human rights laws. You also understand there may be other
statutes and laws of contract and tort, otherwise relating
to your employment. By signing this Agreement you
acknowledge that you intend to waive and release any rights
known or unknown you may have under these laws, as provided
in paragraph 8(a) (subject to your limited rights under
Section 15(b)).
(c) You have not filed, nor will you initiate or cause to be
initiated on your behalf, any complaint, charge, claim or
proceeding against the Company before any local, state
federal or foreign agency, court or other body relating to
your employment or the resignation thereof (each
individually a "Proceeding"), nor
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will you participate in any Proceeding, in each case,
except as required by law. You represent that you
are not aware of any basis on whichsuch a Proceeding
could reasonably be instituted. You waive any right
you may have to benefit in any manner from any
relief (whether monetary or otherwise) arising out of any
Proceeding, including any Proceeding conducted by the Equal
Employment Opportunity Commission ("EEOC"). You understand
that by entering into this Agreement, you will be limiting
the availability of certain remedies that you may have
against the Company and limiting also your ability to pursue
certain claims against the Company.
(d) The Company forever releases you, your family, your estate,
your agents, successors and assigns from any and all claims,
demands, causes of action, controversies, agreements,
promises and remedies, in connection with or in relationship
to your capacity as an employee or officer or director of
the Company, whenever arising, whether known or unknown,
PROVIDED, HOWEVER, that the Company does not release any of
its rights arising under this Agreement.
(e) As referred to in this Agreement, the Company includes any
or all of Coleman, its subsidiaries and other affiliates,
divisions, respective successors and assigns, the directors,
officers, representatives, shareholders, agents, employees
of any of them and, in the case of individuals, their
respective heirs and personal representatives. References
in this Agreement to a person's employment include not only
common law employment but also service as a director or
other service as an independent contractor.
9. COOPERATION; NO RE-EMPLOYMENT:
(a) In consideration of the payments to be made under Section
1(b) and the other provisions of this Agreement, during the
two year period following the Severance Date you agree to
make reasonable efforts to cooperate with the Company, if
requested by Coleman, in the handling or investigation of
any administrative charges, government inquiries or lawsuits
involving the Company that relate to matters that arose
while you were an employee or director of the Company and to
consult with the Company and its advisors, as reasonably
requested, on business inquiries related to any such
matters. The Company will reimburse you for any reasonable
out-of-pocket expenses you incur by reason of such
cooperation.
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(b) You agree that you will not, at any time, reapply for
employment with the Company in any capacity. You expressly
waive any right or claim you may have for employment or
reemployment with the Company. You covenant that you will
not bring any suit or claim against the Company should you
seek to obtain employment with the Company in the future and
are denied such employment and you agree that this release
shall be a complete bar to your entitlement to any legal,
equitable, or administrative relief based upon any such
denial of employment.
10. DOCUMENTS, NON-SOLICITATION,
CONFIDENTIALITY AND NON-COMPETITION:
(a) Promptly following the Severance Date, you agree to return
to the Company all originals and copies of papers, notes,
and documents (in any medium, including computer disks),
whether Company property or not, prepared, received or
obtained by you or your counsel during the course of your
employment with the Company, and all equipment and property
of the Company which may be in your possession or under your
control, whether or not relating to the claims released
hereby, including all such papers, work papers, notes,
documents and equipment in the possession of your family and
counsel. You agree that you, your family and counsel shall
not retain copies of any such papers, work papers, notes and
documents. Notwithstanding the foregoing, you may keep
copies of any employment or benefits agreements between you
and the Company, this Agreement, any publicly filed
materials and any employee benefit plan and stock option
plan materials distributed generally to participants in any
such plan by the Company.
(b) You also agree that for a period of two years from the
Severance Date you will not solicit, entice or encourage any
employee or officer of the Company, or any independent
contractor, to terminate his or her relationship with the
Company or to initiate or to threaten to initiate any legal
process against the Company, and you shall not approach any
such person for such purposes or authorize or knowingly
approve the taking of such actions by any third party.
(c) As a senior executive of the Company, you acknowledge that
you have had access to proprietary information of the
Company and confidential information regarding the Company,
its
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Page 8
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personnel policies and its personnel. You agree that
you and your spouse will hold, and that you will use your
best efforts to cause your family and counsel to hold, all
such information in a fiduciary capacity for the benefit of
the Company and you will not disclose to any third party or
use for your or their benefit or that of any third party,
any such information except to the extent required by law or
agreed to by the Company. Without limiting the foregoing,
you agree that you will not at any time divulge to any other
entity or person any confidential information acquired by
you concerning the Company's financial affairs or business
processes or methods or their research, development or
marketing programs or plans, any other of its or their trade
secrets, any confidential information regarding customers or
customer lists, any confidential information regarding
personal matters of any shareholders, directors, officers,
employees or agents of the Company or their respective
family members, any confidential information concerning this
Agreement or the terms thereof, or any confidential
information concerning the circumstances of your employment
with and the termination of your employment from the
Company, or any confidential information regarding
discussions related to any of the foregoing or make, write,
publish, produce or in any way participate in placing into
the public domain any statement, opinion or information with
respect to any of the foregoing or which reflects adversely
upon or would reasonably impair the reputation or best
interests of the Company or any of its shareholders,
directors, officers, employees or agents or their respective
family members, except in each case information which is
required to be disclosed by court order, subpoena or other
judicial or governmental administrative process. The
foregoing prohibitions shall include, without limitation,
directly or indirectly publishing (or causing, participating
in, assisting or providing any statement, opinion or
information in connection with the publication of) any
diary, memoir, letter, story, photograph, interview,
article, essay, account or description (whether
fictionalized or not) concerning any of the foregoing,
publication being deemed to include any presentation or
reproduction of any written, verbal or visual material in
any communication medium, including any book, magazine,
newspaper, theatrical production or movie, or television or
radio programming or commercial. In addition to any and all
other remedies available to the Company for any violation of
this Section 10(c), you agree to immediately remit and
disgorge to the Company any and all payments paid or payable
to you in connection with or as a result of engaging in
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any of the above acts. In the event that you are required
to make disclosure under any court order, subpoena or other
judicial or governmental administrative process, you will
promptly notify the Company, take all reasonable steps (at
the Company's expense) requested by the Company to defend
against the compulsory disclosure and permit the Company to
participate with counsel of its choice and at its expense in
any proceeding relating to the compulsory disclosure. You
acknowledge that all information the disclosure of which is
prohibited by this Section is of a confidential and
proprietary character and of great value to the Company.
(d) Nothing in this Agreement is intended to prevent you from
(x) using on your behalf your general knowledge or
experience in any area of professional activity, whether or
not involving your service with the Company; (y) referring
to and describing your performance of services for the
Company as descriptive of your abilities and qualifications
for employment or engagement by any other person; or (z)
disclosing (on a confidential basis) information concerning
the financial terms of this Agreement to your legal or tax
advisors, or members of your immediate family.
(e) Coleman agrees that it will not, and it will use its best
efforts to cause the senior executive officers and directors
of Coleman to not, at any time denigrate you, in connection
with your employment or otherwise, through adverse or
disparaging communication, written or oral, whether true or
not, including without limitation, the expression of
personal views, opinions or judgments. The preceding
sentence shall not apply to any communication or disclosure
which is required to be made by court order, subpoena or
other judicial or governmental administrative process.
(f) You agree that for a period of two years from the Severance
Date (the "Non-Compete Period"), you will not serve as an
officer, director or employee or in any other way assist the
efforts of any Significant Competitor. As used herein, the
term "Significant Competitor" shall mean any corporation,
partnership or entity (i) that competes directly against the
Company in one or more product lines with such product lines
representing at least 10% of the total sales of such
competitor, and (ii) where such competing products offered
by the Company constitute at least 10% of the total sales of
any organization unit of the Company (e.g. division or
corporate) that you have been employed at
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during the previous 24 months. Coleman acknowledges that
you expect to shortly engage in employment as the President
of Black & Decker's European Power Tool Division and we
agree that, given the present scope of those operations and
the present levels of competition, you will not at this time
be engaging in employment with a Significant Competitor as
above defined.
Notwithstanding anything above, this section shall not
prohibit you from owning not more than 5% of any publicly
traded company.
11. INVENTIONS
All inventions, whether or not patentable, conceived or developed by
you, alone or with others, during your employment by the Company are the
property of the Company and have been or will be promptly and fully disclosed by
you to the Company. You will perform all necessary acts to vest title fully to
any such invention in the Company and to enable the Company, at its expense, to
secure and maintain domestic and/or foreign patents or any other rights for such
inventions.
12. REMEDIES:
(a) You and the Company agree that disgorgement is not a
complete or adequate remedy at law and that you and the
Company will be entitled, in addition to any other right and
remedy you or it may have at law or in equity related to
breaches of this Agreement, including, without limitation,
disgorgement, to an injunction, without the posting of any
bond or other security, enjoining or restraining you or the
Company from any violation or threatened violation thereof.
(b) Without denigrating the importance or materiality of the
other provisions of this Agreement, you acknowledge and
agree that the provisions of Sections 9, 10 and 11 are
material and any breach of them would be a material breach
of this Agreement and shall, in addition to claims for
damages and any other remedy available under this Agreement,
cause a recoupment and/or forfeiture of past and future
payments under Section 1(b), all without abrogating the
release granted herein.
13. NO ADMISSIONS:
Neither this Agreement nor any actions taken pursuant to them shall in
any event be construed as or deemed to be evidence of an admission or concession
by any
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party on any matter leading up to this Agreement. In addition, neither
the fact of this Agreement nor any of its provisions shall be offered or
received in evidence in any action or proceeding as an admission or concession
of liability or wrongdoing by any party or for any other purpose.
14. NON-WAIVER OF VESTED OR LEGAL RIGHTS; NON-RETALIATION:
In the event you do not sign this Agreement, you should understand
that you will still receive the benefits to which you are legally entitled under
the Company's benefit plans and/or applicable law (like COBRA).
15. ADDITIONAL ACKNOWLEDGMENTS; LIMITED REVOCATION:
(a) You acknowledge that you have been given twenty-one (21)
days from the date of receipt of this Agreement to consider
this Agreement. You acknowledge that you have read this
Agreement carefully, have been advised to consult an
attorney and any other advisors of your choice, and fully
understand that by signing below you are giving up certain
rights which you may have to sue or assert a claim against
the Company. You acknowledge that you have not been forced
or pressured in any manner whatsoever to sign this Agreement
and you agree to all of its terms voluntarily.
(b) You shall have seven days from the date of this Agreement to
revoke the release (the "ADEA Release") you are giving in
Section 9(a) and (b), but only to the extent it relates to
any claim you may have arising under the Age Discrimination
in Employment Act of 1967, as amended ("ADEA"). If you
revoke such release, you will be deemed not to have released
any claim arising under ADEA, you shall not be entitled to
the payments described in Section 2(a).
16. ENFORCEABILITY:
In the event that any provision of this Agreement is determined to be
invalid or unenforceable, the remaining terms and conditions of this Agreement
shall be unaffected and shall remain in full force and effect. In addition, if
any provision is determined to be invalid or unenforceable due to its duration
and/or scope, the duration and/or scope of such provision, as the case may be,
shall be reduced, such reduction to be to the smallest extent necessary to
comply with applicable law, and such provision shall be enforceable, in its
reduced form, to the fullest extent permitted by applicable law.
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17. INDEMNIFICATION:
Except as provided otherwise in this Agreement, Coleman shall
indemnify you to the fullest extent permitted by applicable law and the existing
By-Laws and Certificate of Incorporation of Coleman, against all costs, charges
and expenses whatsoever ("Losses") incurred or sustained by you in connection
with any action, suit or proceeding to which you may be made a party by reason
of your having been a director, officer or employee of the Company. If any
greater indemnification rights shall be provided under any change in Coleman's
By-Laws or Certificate of Incorporation, you shall be entitled to such greater
rights to the same extent as other directors, officers or employees who had
terminated their relationship with Coleman on or before June 30, 1997. You
shall hold the Company harmless against all Losses which arise out of any claims
by your spouse or any beneficiary relating to payment or benefit obligations
released or waived pursuant to this Agreement.
18. TAXATION:
You shall be responsible for the payment of any and all required
federal, state, local and foreign taxes incurred, or to be incurred, in
connection with any amounts payable to you under this Agreement. All payment
amounts specified herein are gross amounts prior to the application of any
legally required withholdings for taxes or otherwise.
19. FURTHER ACKNOWLEDGMENTS:
You agree to execute such further documents evidencing the termination
of your employment by, and directorships of, the Company as may be reasonably
requested by the Company, including a letter substantially in the form of
Attachment A.
20. NOTICES:
Any notice required or desired to be delivered under this Agreement
shall be in writing and shall be delivered personally, by courier service or by
registered mail, return receipt requested, and shall be effective upon actual
receipt by the party to which such notice shall be directed, and shall be
addressed as follows (or to such other address as the party entitled to notice
shall hereafter designate in accordance with the terms hereof):
If to the Company, to:
The Coleman Company, Inc.
625 Madison Avenue
New York, NY 10022
<PAGE>
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Page 13
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Attention: Mr. Terry C. Bridges
And if to you, to the address set forth on the first page of this
Agreement.
If Coleman gives notice to you that the provisions of this paragraph
shall apply: you agree that you will not communicate with the Company for any
reason, directly or indirectly, including, if necessary, any notice of stock
option exercise, except by notice to the Company, Attention: Mr.
Terry C. Bridges and all such notices shall be sent marked "Confidential", and a
telefacsimile copy thereof shall be sent the same date to Robert C. Fleder,
Esq., Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New
York, New York, 10019, (212) 757-3000.
21. ENTIRE AGREEMENT:
This Agreement supersedes any and all other agreements between you and
the Company and/or any other persons relating to your employment by the Company,
including, but not limited to, the Employment Agreement effective as of May 1,
1996 between you and Coleman, including the First and Second Amendments thereto
each dated August 1, 1996, whether written or oral, between the parties with
respect to the subject matter hereof and contains all of the agreements between
the parties with respect thereto. You, your spouse and beneficiaries are not
eligible for any benefits from the Company including, but not limited to,
severance benefits, except as specifically provided for herein.
22. NO ORAL MODIFICATION:
This Agreement may not be modified or changed orally and may be
modified and changed only by a written instrument executed by you and Coleman.
23. STATE LAW:
This Agreement will be construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflict of laws.
24. RESOLUTIONS OF DISPUTES:
Any disputes arising under or in connection with your employment with
the Company, or this Agreement shall be resolved by binding, confidential
arbitration to be held in Wichita, Kansas in a confidential, closed session in
accordance with the rules and procedures of the American Arbitration
Association. The arbitrators may assess expenses, including reasonable
attorneys' fees, to either or both parties, taking into account the
circumstances of the case. Except as assessed by the arbitrator pursuant to the
previous
<PAGE>
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Page 14
- -------------------------------------------------------------------------------
sentence, each party shall bear its own expenses, including attorneys'
fees, in connection with any such dispute.
25. COUNTERPARTS; FACSIMILE SIGNATURES:
This Agreement may be executed in counterparts, each of which shall be
considered part of the same Agreement. Signatures to this Agreement may be
supplied by telefacsimile signature, which shall be considered an original
signature for purposes hereof.
Very truly yours,
THE COLEMAN COMPANY, INC.
By: Jerry W. Levin
------------------------------------
Jerry W. Levin, Its Duly Authorized
Chief Executive Officer
Encl.
<PAGE>
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Page 15
- -------------------------------------------------------------------------------
I have read this letter Agreement and I understand all of its terms.
I enter into and sign this AGREEMENT knowingly and voluntarily, with full
knowledge of what it means.
Frederik van den Bergh
-------------------------------------------
Mr. Frederik van den Bergh
I have read this letter Agreement and I understand all of its terms,
including without limitation my waiver of COBRA rights under Section 5 and my
nondisclosure obligations under Section 10(c).
Erica van den Bergh
-------------------------------------------
[Spouse]
<PAGE>
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Page 16
- -------------------------------------------------------------------------------
Attachment A
June 11, 1997
CONFIDENTIAL
Jerry W. Levin
The Coleman Company, Inc.
1526 Cole Boulevard, Suite 300
Golden, Colorado 80401
Dear Jerry:
Effective as of June 30, 1997, I hereby resign from all of my
positions as director, officer and/or employee of The Coleman Company, Inc., and
all of their subsidiaries and affiliates.
Sincerely,
Frederik van den Bergh
--------------------------------
Frederik van den Bergh
<PAGE>
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Page 17
- -------------------------------------------------------------------------------
Attachment B
June 11, 1997
CONFIDENTIAL
Jerry W. Levin
The Coleman Company, Inc.
1526 Cole Boulevard, Suite 300
Golden, Colorado 80401
Dear Jerry:
The undersigned hereby acknowledge that (i) we have been provided with
notice of our rights to continue medical coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and any similar state law
("COBRA"), (ii) we understand these rights, (iii) we have consulted our legal
and tax advisors to the extent we have desired to do so and (iv) we voluntarily
waive our rights under COBRA. We understand that by making this election our
coverage under Coleman's group medical program applicable to active executive
employees will cease, except as provided in Section 5 of the Agreement dated as
of June __, 1997, between Frederik van den Bergh and The Coleman Company, Inc.
and that after such coverage ceases, we will not have any continuation coverage
rights under COBRA.
Sincerely,
Frederik van den Bergh
----------------------------------
Frederik van den Bergh
Erica van den Bergh
----------------------------------
(Spouse)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS FILED IN THE COMPANY'S
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 17,047
<SECURITIES> 0
<RECEIVABLES> 319,183
<ALLOWANCES> 9,262
<INVENTORY> 252,880
<CURRENT-ASSETS> 637,939
<PP&E> 283,619
<DEPRECIATION> 103,458
<TOTAL-ASSETS> 1,176,058
<CURRENT-LIABILITIES> 329,348
<BONDS> 522,819
0
0
<COMMON> 534
<OTHER-SE> 259,154
<TOTAL-LIABILITY-AND-EQUITY> 1,176,058
<SALES> 675,952
<TOTAL-REVENUES> 678,978
<CGS> 496,023
<TOTAL-COSTS> 496,023
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,155
<INTEREST-EXPENSE> 21,739
<INCOME-PRETAX> 18,808
<INCOME-TAX> 7,147
<INCOME-CONTINUING> 10,818
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,818
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
