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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Eckerd Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-3302437
(State of Incorporation) (I.R.S. employer identification no.)
8333 Bryan Dairy Road
Largo, Florida 34647
(Address of principal executive offices) (Zip Code)
1995 Stock Option and Incentive Plan of Eckerd Corporation
(Full title of the plan)
Robert E. Lewis, Esquire
Vice President/General Counsel
8333 Bryan Dairy Road
Largo, Florida 34647
(813) 399-6000
(Name, address and telephone number, including area code,
of agent for service)
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Offering Price Per Aggregate Offering
Title of Securities Amount to be Share (1)(2) Price (2) Amount of
to be Registered Registered Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, par
value $.01 2,000,000 $31.25 $62,500,000 $21,552
per share
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1) Estimated pursuant to Rules 457 (c) and (h) under the Securities Act of 1933, as amended, on the
basis of the average of the high and low sale prices for a share of Common
Stock on the New York Stock Exchange on June 8, 1995.
2) Estimated solely for the purpose of calculating the registration fee.
3) Plus such additional number of shares of Common Stock as may be issuable
pursuant to the antidilution provisions of the 1995 Stock Option and
Incentive Plan.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Item 2. Registrant Information and Employee Plan Annual Information.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents By Reference
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the registrant, Eckerd Corporation, a Delaware
corporation (the "Company") (File No. 1-4844), pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference in this registration statement.
(1)The Company's Annual Report on Form 10-K405 for the fiscal year ended January
28, 1995;
(2) The description of the common stock, par value $.01 per share, of
the Company (the "Common Stock") set forth as Item 1 under the caption
"Description of Securities" in the Company's Registration Statement on Form 8-A,
dated July 14, 1993, as amended by Amendment No. 1 thereto, dated August 5,
1993, filed pursuant to Section 12(b) of the Exchange Act and declared effective
by the Commission on August 5, 1993, including any amendment or report filed for
the purpose of updating such information.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
other subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration statement.
Item 4. Description of Securities
Not Applicable.
-1-
Item 5. Interests of Named Experts and Counsel
Certain legal matters with respect to the offering of the shares of
Common Stock registered hereby have been passed upon by Robert E. Lewis,
Esquire, Vice President/General Counsel of the Company.
Item 6. Indemnification of Directors and Officers
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. The Company's Restated Certificate of Incorporation contains such a
provision.
Under Article VIII of the Company's Amended and Restated By-Laws as
currently in effect, as well as under Article SEVENTH of the Company's Restated
Certificate of Incorporation, each person who is or was a director or officer of
the Company, or who serves or served any other enterprise or organization at the
request of the Company, shall be indemnified by the Company to the full extent
permitted by the Delaware General Corporation Law.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify any person who, by reason of the fact that such person
is or was a director or officer of such corporation, is made (or threatened to
be made) a party to an action other than one brought by or on behalf of the
corporation, against reasonable expenses (including attorney's fees), judgments,
fines and settlement payments, if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
such corporation and, in criminal actions, in addition, had no reasonable cause
to believe his conduct was unlawful. In the case of actions on behalf of the
corporation, indemnification may extend only to reasonable expenses (including
attorneys' fees) and only if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, provided that no such indemnification is permitted in respect of
any claim as to which such person is adjudged liable to such corporation except
to the extent that a court otherwise provides. To the extent that such person
has been successful in defending any action (even one on behalf of the
corporation), he is entitled to indemnification for reasonable expenses
(including attorneys' fees).
The indemnification provided for by the Delaware General Corporation
Law is not exclusive of any other rights of indemnification, and a corporation
may maintain insurance against liabilities for which indemnification is not
expressly provided by the Delaware General Corporation Law. The Company has
entered into agreements to indemnify its directors and officers in addition to
the indemnification provided for in the Restated Certificate of Incorporation.
These agreements, among other things, indemnify the Company's directors and
officers for certain expenses (including attorneys' fees), judgments, fines and
settlement amounts incurred by such person in any action or proceeding,
including any action by or in the right of the Company, on account of services
as a director or officer of the Company or as a director or officer of any
subsidiary of the Company, or as a director or officer of any other company or
enterprise to which the person provides services at the request of the Company.
-2-
The Company maintains a liability insurance policy providing coverage
for its directors and officers in an amount up to an aggregate limit of
$10,000,000 per policy year.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended (the "Securities Act"), and
is therefore unenforceable.
Item 7. Exemption From Registration Claimed.
Not Applicable
Item 8. Exhibits.
4.1 Form of certificate for the Company's Common Stock, par value $.01 per
share (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the
Registration Statement on Form S-2 of the Company (No. 33-64906)).
4.2 Indenture by and between the Company and Mellon Bank, N.A. as trustee,
relating to the 11-1/8% Subordinated Debentures due 2001 (incorporated by
reference to the Registration Statement on Form S-1 of Eckerd Holdings,
Inc. (No. 33-4576)). (On February 6, 1991, Mellon Bank, N.A. was succeeded
by Security Pacific National Trust Company, as trustee (now known as
BankAmerica National Trust Company)).
4.3 Indenture dated as of November 1, 1993 between the Company and State Street
Bank and Trust Company of Connecticut, National Association, as Trustee
relating to the Company's 9-1/4% Senior Subordinated Notes Due 2004
(incorporated by reference to Exhibit 4.02 to the Current Report on Form
8-K dated October 26, 1993 of the Company (File No. 1-4844)).
4.4 Form of 9-1/4% Senior Subordinated Notes Due 2004 of the Company
(incorporated by reference to Exhibit 4.01 of the Current Report on Form
8-K dated October 26, 1993 of the Company (File No. 1-4844)).
5.1 Opinion and consent of Robert E. Lewis, Esquire.
23.1 Consent of KPMG Peat Marwick, LLP dated June 12, 1995.
23.2 Consent of Robert E. Lewis, Esquire (included in Exhibit 5.1 hereto).
24.1 Powers of Attorney (included in signature pages hereto).
-3-
99.1 1995 Stock Option and Incentive Plan of Eckerd Corporation.
99.2 Forms of stock option agreement relating to options granted under the 1995
Stock Option and Incentive Plan of Eckerd Corporation.
Item 9. Required Undertakings.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
-4-
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, uneforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
-5-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Largo, State of Florida, on June 12, 1995.
ECKERD CORPORATION
By: /s/ Samuel G. Wright
Samuel G. Wright
Executive Vice President/
Chief Financial Officer
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Robert E. Lewis, Esq. his
attorney-in-fact, with the power of substitution, for him in any and all
capacities, to sign any amendments to this registration statement (including
post-effective amendments), and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact, or
his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
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Signature Titles Date
<S> <C> <C>
/s/ Stewart Turley Chairman of the Board and June 12, 1995
- --------------------- Chief Executive Officer
Stewart Turley
/s/ Francis A. Newman President, Chief Operating June 12, 1995
- --------------------- Officer and Director
Francis A. Newman
/s/ Samuel G. Wright Executive Vice President/Chief June 12, 1995
- --------------------- Financial Officer (Chief
Samuel G. Wright Financial and Accounting
Officer)
/s/ John W. Boyle Director June 12, 1995
- ---------------------
John W. Boyle
/s/ James T. Doluisio Director June 12, 1995
- ---------------------
James T. Doluisio
/s/ Donald F. Dunn Director June 12, 1995
- ---------------------
Donald F. Dunn
-6-
/s/ Albert J. Fitzgibbons, III Director June 12, 1995
- ---------------------
Albert J. Fitzgibbons, III
/s/ Lewis W. Lehr Director June 12, 1995
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Lewis W. Lehr
/s/ Alexis P. Michas Director June 12, 1995
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Alexis P. Michas
/s/ Rupinder S. Sidhu Director June 12, 1995
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Rupinder S. Sidhu
-7-
</TABLE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
4.1 Form of certificate for the Company's Common Stock, par value $.01 per
share (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the
Registration Statement on Form S-2 of the Company (No. 33-64906)).
4.2 Indenture by and between the Company and Mellon Bank, N.A. as trustee,
relating to the 11-1/8% Subordinated Debentures due 2001 (incorporated by
reference to the Registration Statement on Form S-1 of Eckerd Holdings,
Inc. (No. 33-4576)). (On February 6, 1991, Mellon Bank, N.A. was succeeded
by Security Pacific National Trust Company, as trustee (now known as
BankAmerica National Trust Company)).
4.3 Indenture dated as of November 1, 1993 between the Company and State Street
Bank and Trust Company of Connecticut, National Association, as Trustee
relating to the Company's 9-1/4% Senior Subordinated Notes Due 2004
(incorporated by reference to Exhibit 4.02 to the Current Report on Form
8-K dated October 26, 1993 of the Company (File No. 1-4844)).
4.4 Form of 9-1/4% Senior Subordinated Notes Due 2004 of the Company
(incorporated by reference to Exhibit 4.01 of the Current Report on Form
8-K dated October 26, 1993 of the Company (File No. 1-4844)).
5.1 Opinion and consent of Robert E. Lewis, Esquire.
23.1 Consent of KPMG Peat Marwick, LLP dated June 12, 1995.
23.2 Consent of Robert E. Lewis, Esquire (included in Exhibit 5.1 hereto).
24.1 Powers of Attorney (included in signature pages hereto).
99.1 1995 Stock Option and Incentive Plan of Eckerd Corporation.
99.2 Forms of stock option agreement relating to options granted under the 1995
Stock Option and Incentive Plan of Eckerd Corporation.
-8-
EXHIBIT 5.1
Robert E. Lewis
Vice President - General Counsel
(813) 399-6129
June 12, 1995
Eckerd Corporation
8333 Bryan Dairy Road
Largo, FL 34647
Dear Sirs:
I have acted as General Counsel to Eckerd Corporation (formerly known
as "Jack Eckerd Corporation"), a Delaware corporation (the "Company"), in
connection with the preparation of a registration statement on Form S-8 (the
"Registration Statement") relating to 2,000,000 shares (the "Shares") of common
stock, par value $.01 per share, of the Company (the "Common Stock"), issuable
pursuant to the 1995 Stock Option and Incentive Plan of the Company (the "Option
Plan").
The opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Act").
I have examined and am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of (i) the form of the Registration
Statement to be filed with the Securities and Exchange Commission (the
"Commission") on the date hereof under the Act; (ii) the Option Plan; (iii) the
Restated Certificate of Incorporation of the Company; (iv) the Amended and
Restated By-laws of the Company, as in effect on the date hereof; (v) the
resolutions of the Board of Directors of the Company relating to, among other
things, the Shares, the Option Plan and the Registration Statement; (vi) the
resolutions of the stockholders of the Company relating to the Option Plan;
(vii) the form of a specimen certificate representing the Shares; and (viii)
such other documents as I have deemed necessary or appropriate as a basis for
the opinions set forth below. In my examination, I have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to me as certified or photostatic copies
and the authenticity of the originals of such latter documents. As to any facts
material to the opinions expressed herein which were not independently
established or verified, I have relied upon statements and representations of
officers and other representatives of the Company and others.
I express no opinion on any law other than the General Corporation Law
of the State of Delaware.
-1-
Based upon and subject to the foregoing and assuming the conformity of
the certificates representing the Shares to the form of specimen thereof
examined by me and the due execution and delivery of such certificates, I am of
the opinion that the Shares have been duly authorized by requisite corporate
action by the Company and, when issued and paid for in accordance with the terms
and conditions of the Option Plan, will be validly issued, fully paid and
non-assessable.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving such consent, I do not thereby admit that I
come within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
ECKERD CORPORATION
/s/ Robert E. Lewis
Robert E. Lewis
Vice President - General Counsel
-2-
Exhibit 23.1
Consent of Certified Public Accountants
The Board of Directors
Eckerd Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8, relating to the 1995 Stock Option and Incentive Plan, of Eckerd Corporation
of our report dated March 20, 1995, relating to the consolidated balance sheets
of Eckerd Corporation as of January 28, 1995 and January 29, 1994, and the
related consolidated statements of operations, stockholders' equity and cash
flows, and the related schedules for each of the years in the three-year period
ended January 28, 1995, which report appears on Form 10-K 405 of Eckerd
Corporation.
KPMG PEAT MARWICK LLP
Tampa, Florida
June 12, 1995
Exhibit 99.1
1995 STOCK OPTION AND INCENTIVE PLAN
OF ECKERD CORPORATION
1. Purpose; Types of Awards; Construction.
The purpose of the 1995 Stock Option and Incentive Plan of
Eckerd Corporation (the "Plan") is to afford an incentive to executive officers,
other key employees, consultants and outside directors of Eckerd Corporation
(the "Company"), or any subsidiary of the Company which now exists or hereafter
is organized or acquired by the Company, to acquire a proprietary interest in
the Company, to continue as employees or consultants, to increase their efforts
on behalf of the Company and to promote the success of the Company's business.
To further such purposes the Committee may grant stock options, stock
appreciation rights, limited stock appreciation rights and restricted stock. The
provisions of the Plan are intended to satisfy the requirements of Section 16(b)
of the Securities Exchange Act of 1934 and of Section 162(m) of the Internal
Revenue Code of 1986, and shall be interpreted in a manner consistent with the
requirements thereof, as now or hereafter construed, interpreted and applied by
regulations, rulings and cases.
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2. Definitions.
<S> <C>
As used in this Plan, the following words and phrases shall
have the meanings indicated:
(a) "Acceleration Date" shall have the meaning set forth in Section 12.
(b) "Agreement" shall mean an agreement entered into between the Company and a Grantee
in connection with an award under the Plan.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.
(e) "Committee" shall mean a committee established by the Board to administer the Plan.
(f) "Common Stock" shall mean shares of common stock, par value $.01 per share, of the
Company.
-1-
(g) "Company" shall mean Eckerd Corporation, a corporation
organized under the laws of the State of Delaware, or any successor corporation.
(h) "Disability" shall mean a Grantee's inability to perform
his duties with the Company or any of its affiliates by reason of any medically
determinable physical or mental impairment, as determined by a physician
selected by the Grantee and acceptable to the Company.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time, and as now or hereafter construed,
interpreted and applied by regulations, rulings and cases.
(j) "Fair Market Value" per share as of a particular date
shall mean (i) the closing sales price per share of Common Stock on the national
securities exchange on which the Common Stock is principally traded 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 in 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 sole discretion,
shall determine.
(k) "Grantee" shall mean a person who receives a grant of
Options, Stock Appreciation Rights, Limited Rights or Restricted Stock under the
Plan.
(l) "Incentive Stock Option" shall mean any option intended to
be, and designated as, an incentive stock option within the meaning of Section
422 of the Code.
(m) "Initial Public Offering" shall mean the underwritten initial public offering of
shares of Common Stock.
(n) "Insider" shall mean a Grantee who is subject to the reporting requirements of
Section 16(a) of the Exchange Act.
(o) "Limited Right" shall mean a limited stock appreciation
right granted pursuant to Section 10 which, in general, may be exercised for
cash following an Acceleration Date.
(p) "Non-Employee Director" means a member of the Board who is not an employee of the
Company or any Subsidiary.
-2-
(q) "Option" or "Options" shall mean a grant to a Grantee of
an option or options to purchase shares of Common Stock. Options granted by the
Committee pursuant to the Plan shall constitute either Incentive Stock Options
or Nonqualified Stock Options.
(r) "Option Price" shall mean the exercise price of the shares of Common Stock covered
by an Option.
(s) "Parent" shall mean any company (other than the Company)
in an unbroken chain of companies ending with the Company if, at the time of
granting an Option, each of the companies other than the Company owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other companies in such chain.
(t) "Plan" means this 1995 Stock Option and Incentive Plan of
Eckerd Corporation, as amended from time to time.
(u) "Retirement" shall mean a Grantee's retirement in
accordance with the terms of any tax-qualified retirement plan maintained by the
Company or any of its affiliates in which the Grantee participates.
(v) "Rule 16b-3" shall mean Rule 16b-3, as from time to time
in effect, promulgated by the Securities and Exchange Commission under Section
16 of the Exchange Act, including any successor to such Rule.
(w) "Stock Appreciation Right" shall mean the right, granted
to a Grantee under Section 9, to be paid an amount measured by the appreciation
in the Fair Market Value of a share of Common Stock from the date of grant to
the date of exercise of the right, with payment to be made in cash or Common
Stock as specified in the award or determined by the Committee.
(x) "Subsidiary" shall mean any company (other than the
Company) in an unbroken chain of companies beginning with the Company if, at the
time of granting an Option, each of the companies other than the last company in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
companies in such chain.
(y) "Ten Percent Stockholder" shall mean a Grantee who, at the
time an Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary.
-3-
</TABLE>
3. Administration.
The Plan shall be administered by the Committee, the members
of which shall, except as may otherwise be determined by the Board, be
"disinterested directors" under Rule 16b-3 and "outside directors" under Section
162(m) of the Code.
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, Stock Appreciation Rights, Limited Rights and Restricted Stock;
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 Limited Rights; to determine the purchase price
of the shares of Common Stock covered by each Option; to determine the persons
to whom, and the time or times at which awards shall be granted; to determine
the number of shares to be covered by each award; to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the Agreements (which need not be
identical) and to cancel or suspend awards, as necessary; 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. All decisions, determination
and interpretations of the Committee shall be final and binding on all Grantees
of any awards under this Plan.
The Board shall have the authority to fill all vacancies,
however caused, in the Committee. The Board may from time to time appoint
additional members to the Committee, and may at any time remove one or more
Committee members. One member of the Committee shall be selected by the Board as
chairman. The Committee shall hold its meetings at such times and places as it
shall deem advisable. All determinations of the Committee shall be made by a
majority of its members either present in person or participating by conference
telephone at a meeting or by written consent. The Committee may appoint a
secretary and make such rules and regulations for the conduct of its business as
it shall deem advisable, and shall keep minutes of its meetings.
-4-
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
award granted hereunder.
4. Eligibility.
Awards may be granted to executive officers and other key
employees and consultants of the Company, including officers and directors who
are employees, except as proscribed by the Exchange Act or the Code. In
determining the persons to whom awards shall be granted and the number of shares
to be covered by each award, 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.
5. Stock.
The maximum number of shares of Common Stock reserved for the
grant of awards under the Plan shall be 2,000,000, subject to adjustment as
provided in Section 12 hereof. Such shares may, in whole or in part, be
authorized but unissued shares or shares that shall have been or may be
reacquired by the Company.
If any outstanding award under the Plan should, for any reason
expire, be cancelled or be forfeited (other than in connection with the exercise
of a Stock Appreciation Right or Limited Right), without having been exercised
in full, the shares of Common Stock allocable to the unexercised, cancelled or
terminated portion of such award shall (unless the Plan shall have been
terminated) become available for subsequent grants of awards under the Plan.
In no event may a Grantee be granted during any calendar year
Options to acquire more than 500,000 shares of Common Stock or more than 500,000
shares of Restricted Stock.
6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be evidenced by
a written agreement between the Company and the Grantee (the "Option
Agreement"), in such form and containing such terms and conditions as the
Committee shall from time to time approve, which Option Agreement shall comply
with and be subject to the following terms and conditions, unless otherwise
specifically provided in such Option Agreement:
(a) NUMBER OF SHARES. Each Option Agreement shall state
the number of shares of Common Stock to which the Option relates.
(b) TYPE OF OPTION. Each Option Agreement shall
specifically state that the Option constitutes an Incentive Stock Option or a
Nonqualified Stock Option.
-5-
(c) OPTION PRICE. Each Option Agreement shall state the Option
Price, which, in the case of an Incentive Stock Option, shall not be less than
one hundred percent (100%) of the Fair Market Value of the shares of Common
Stock covered by the Option on the date of grant. The Option Price shall be
subject to adjustment as provided in Section 12 hereof. The date as of which the
Committee adopts a resolution expressly granting an Option shall be considered
the day on which such Option is granted, unless such resolution specifies a
different date.
(d) 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 (whether
then owned by the Grantee or issuable upon exercise of the Option) having a Fair
Market Value equal to such Option Price or in a combination of cash and Common
Stock or in such other manner as the Committee shall determine including a
cashless exercise procedure through a broker-dealer.
(e) TERM AND EXERCISABILITY OF OPTIONS. Each Option Agreement
shall provide the exercise schedule for the Option as determined by the
Committee, provided, 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 will be ten (10) years from the date of the grant of the Option unless
otherwise determined by the Committee; provided, however, that in the case of an
Incentive Stock Option, such exercise period shall not exceed ten (10) years
from the date of grant of such Option. The exercise period shall be subject to
earlier termination as provided in Sections 6(f) and 6(g) 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 written notice delivered in person or by mail
to the Secretary of the Company, specifying the number of shares of Common Stock
with respect to which the Option is being exercised.
(f) TERMINATION. Except as provided in this Section 6(f) and
in Section 6(g) hereof, an Option may not be exercised unless the Grantee is
then in the employ of or maintaining a consultant relationship with the Company
or a Subsidiary thereof (or a company or a Parent or Subsidiary company of such
company issuing or assuming the Option in a transaction to which Section 424(a)
of the Code applies), and unless the Grantee has remained continuously so
employed or in the consultant relationship since the date of grant of the
Option. In the event that the employment or consultant relationship of a Grantee
shall terminate (other than by reason of death, Disability or Retirement), all
Options of such Grantee that are exercisable at the time of such termination
may, unless earlier terminated in accordance with their terms, be exercised
within thirty (30) days after the date of such termination (or such different
period as the Committee shall prescribe).
-6-
(g) DEATH, DISABILITY OR RETIREMENT OF GRANTEE. If a Grantee
shall die while employed by, or maintaining a consultant relationship with, the
Company or a Subsidiary thereof, or within thirty (30) days after the date of
termination of such Grantee's employment or consultant relationship (or within
such different period as the Committee may have provided pursuant to Section
6(f) hereof), or if the Grantee's employment or consultant relationship shall
terminate by reason of Disability, all Options theretofore granted to such
Grantee (to the extent otherwise exercisable) may, unless earlier terminated in
accordance with their terms, be exercised by the Grantee or by the Grantee's
estate or by a person who acquired the right to exercise such Options by bequest
or inheritance or otherwise by reason of death or Disability of the Grantee, at
any time within 180 days after the death or Disability of the Grantee (or such
different period as the Committee shall prescribe). In the event that an Option
granted hereunder shall be exercised by the legal representatives of a deceased
or former Grantee, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
legal representative to exercise such Option. In the event that the employment
or consultant relationship of a Grantee shall terminate on account of such
Grantee's Retirement, all Options of such Grantee that are exercisable at the
time of such Retirement may, unless earlier terminated in accordance with their
terms, be exercised at any time within one hundred eighty (180) days after the
date of such Retirement (or such different period as the Committee shall
prescribe).
(h) OTHER PROVISIONS. The Option Agreements evidencing
awards under the Plan shall contain such other terms and conditions not
inconsistent with the Plan as the Committee may determine.
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 6 hereof.
8. Incentive Stock Options.
Options granted pursuant to this Section 8 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 6 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 Incentive Stock Options granted under this
Plan and all other option plans of any subsidiary become exercisable for the
first time by each Grantee during any calendar year shall not exceed $100,000.
-7-
(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 (110%) of the Fair Market Value of the shares
of Common Stock on the date of grant of such Incentive Stock Option, and (ii)
the exercise period shall not exceed five (5) years from the date of grant of
such Incentive Stock Option.
9. Stock Appreciation Rights.
The Committee shall have authority to grant a Stock
Appreciation Right to the Grantee of any Option under the Plan with respect to
all or some of the shares of Common Stock covered by such related Option. A
Stock Appreciation Right shall, except as provided in this Section 9 or as may
be determined by the Committee, be subject to the same terms and conditions as
the related Option. Each Stock Appreciation Right granted pursuant to the Plan
shall be evidenced by a written Agreement between the Company and the Grantee in
such form as the Committee shall from time to time approve, which Agreement
shall comply with and be subject to the following terms and conditions, unless
otherwise specifically provided in such Agreement:
(a) TIME OF GRANT. A Stock Appreciation Right may be granted
either at the time of grant of the related option, or at any time thereafter
during the term of the Option; provided, however that Stock Appreciation Rights
related to Incentive Stock Options may only be granted at the time of grant of
the related Option.
(b) PAYMENT. A Stock Appreciation Right shall entitle the
holder thereof, upon exercise of the Stock Appreciation Right or any portion
thereof, to receive payment of an amount computed pursuant to Section 9(d).
(c) EXERCISE. A Stock Appreciation Right shall be exercisable
at such time or times and only to the extent that the related Option is
exercisable, and will not be transferable except to the extent the related
Option may be transferable. A Stock Appreciation Right granted in connection
with an Incentive Stock Option shall be exercisable only if the Fair Market
Value of a share of Common Stock on the date of exercise exceeds the purchase
price specified in the related Incentive Stock Option.
(d) AMOUNT PAYABLE. Upon the exercise of a Stock Appreciation
Right, the Optionee shall be entitled to receive an amount determined by
multiplying (i) the excess of the Fair Market Value of a share of Common Stock
on the date of exercise of such Stock Appreciation Right over the Option Price
under the related Option, by (ii) the number of shares of Common Stock as to
which such Stock Appreciation Right is being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable with respect
to any Stock Appreciation Right by including such a limit at the time it is
granted.
-8-
(e) TREATMENT OF RELATED OPTIONS AND STOCK APPRECIATION RIGHTS
UPON EXERCISE. Upon the exercise of a Stock Appreciation Right, the related
Option shall be cancelled to the extent of the number of shares of Common Stock
as to which the Stock Appreciation Right is exercised and upon the exercise or
surrender of an Option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right shall be cancelled to the extent of the number of
shares of Common Stock as to which the Option is exercised or surrendered.
(f) METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercised by a Grantee only by a written notice delivered in person or by mail
to the Secretary of the Company, specifying the number of shares of Common Stock
with respect to which the Stock Appreciation Right is being exercised. If
requested by the Committee, the Grantee shall deliver the Agreement evidencing
the Stock Appreciation Right being exercised and the Option Agreement evidencing
any related Option to the Secretary of the Company who shall endorse thereon a
notation of such exercise and return such Agreements to the Grantee.
(g) FORM OF PAYMENT. Payment of the amount determined under
Section 9(d), may be made solely in whole shares of Common Stock in a number
determined based upon their Fair Market Value on the date of exercise of the
Stock Appreciation Right or, alternatively, at the sole discretion of the
Committee, solely in cash, or in a combination of cash and shares of Common
Stock as the Committee deems advisable. If the Committee decides to make full
payment in shares of Common Stock, and the amount payable results in a
fractional share, payment for the fractional share will be made in cash.
Notwithstanding the foregoing, to the extent required by Rule 16b-3 no payment
in the form of cash may be made upon the exercise of a Stock Appreciation Right
pursuant to Section 9(d) to an Insider, unless the exercise of such Stock
Appreciation Right is made during the period beginning on the third business day
and ending on the twelfth business day following the date of release for
publication of the Company's quarterly or annual statements of earnings.
10. Limited Stock Appreciation Rights.
The Committee shall have authority to grant a Limited Right to
the Grantee of any Option under the Plan with respect to all or some of the
shares of Common Stock covered by such related Option. Each Limited Right
granted pursuant to the Plan shall be evidenced by a written Agreement between
the Company and the Grantee, in such form as the Committee shall from time to
time approve, which Agreement shall comply with and be subject to the following
terms and conditions, unless otherwise specifically provided in such Agreement:
(a) TIME OF GRANT. A Limited Right granted in tandem with a
Nonqualified Stock Option may be granted either at the time of grant of the
related Option or any time thereafter during its term. A Limited Right granted
in tandem with an Incentive Stock Option may only be granted at the time of
grant of the related Option.
-9-
(b) EXERCISE. A Limited Right may be exercised only during the
ninety-day period beginning on an Acceleration Date. Each Limited Right shall be
exercisable only if, and to the extent that, the related Option is exercisable
and, in the case of a Limited Right granted in tandem with an Incentive Stock
Option, only when the Fair Market Value per share of Common Stock exceeds the
Option Price per share. Notwithstanding the provisions of the two immediately
preceding sentences, a Limited Right granted to a Grantee who is an Insider must
be (i) held by the Insider for at least six (6) months from the date of grant of
the Limited Right before it becomes exercisable and (ii) automatically paid out
in cash to the Insider on an Acceleration Date (provided such six (6) month
holding period requirement has been met).
<TABLE><CAPTION>
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(c) AMOUNT PAYABLE. Upon the exercise of a Limited Right, the Grantee thereof shall
receive in cash whichever of the following amounts is applicable:
(i) in the case of the realization of Limited Rights by reason of an
acquisition of Common Stock described in Section 12 (b)(i) below, an amount
equal to the Acquisition Spread as defined in Section 10(d)(ii) hereof; or
(ii) in the case of the realization of Limited Rights by reason of
shareholder approval of an agreement or plan described in Section 12(b)(iii)
below, an amount equal to the Merger Spread as defined in Section 10(d)(iv)
hereof; or
(iii) in the case of the realization of Limited Rights by reason of the
change in composition of the Board described in Section 12(b)(ii) or shareholder
approval of a plan or agreement described in Section 12(b)(iv) below, an amount
equal to the Spread as defined in Section 10(d)(v) hereof.
Notwithstanding the foregoing provisions of this Section
10(c), in the case of a Limited Right granted in respect of an Incentive Stock
Option, the Grantee may not receive an amount in excess of the maximum amount
that will enable such option to continue to qualify as an Incentive Stock
Option.
(d) DETERMINATION OF AMOUNTS PAYABLE. The amounts to be paid to a Grantee pursuant to
Section 10(c) shall be determined as follows:
(1) The term "Acquisition Price per Share" as used herein shall mean, with respect
to the exercise of any Limited Right by reason of an acquisition of Common Stock
described in Section 12(b)(i) below, the greatest of (A) the highest price per
share shown on the Statement of Schedule 13D or amendment thereto filed by the
holder of 25% or more of the voting power of the Company that gives rise to the
exercise of such Limited Right, (B) the highest price paid in any tender or
exchange offer which is in effect at any time during the ninety-day period
ending on the date of exercise of the Limited Right, or (C) the highest Fair
Market Value per share of Common Stock during the ninety-day period ending on
the date the Limited Right is exercised.
-10-
(2) The term "Acquisition Spread" as used herein shall mean an amount equal to the
product computed by multiplying (A) the excess of (1) the Acquisition Price per
Share over (2) the Option Price per share of Common Stock at which the related
Option is exercisable, by (B) the number of shares of Common Stock with respect
to which such Limited Right is being exercised.
(3) The term "Merger Price per Share" as used herein shall mean, with respect to
the exercise of any Limited Right by reason of shareholder approval of an
agreement described in Section 12(b)(iii) below, the greatest of (A) the fixed
or formula price for the acquisition of shares of Common Stock specified in such
agreement, if such fixed or formula price is determinable on the date on which
such Limited Right is exercised, (B) the highest price paid in any tender or
exchange offer which is in effect at any time during the ninety-day period
ending on the date of exercise of the Limited Right, (C) the highest Fair Market
Value per share of Common Stock during the ninety-day period ending on the date
on which such Limited Right is exercised.
(4) The term "Merger Spread" as used herein shall mean an amount equal to the
product computed by multiplying (A) the excess of (1) the Merger Price per Share
over (2) the Option Price per share of Common Stock at which the related Option
is exercisable, by (B) the number of shares of Common Stock with respect to
which such Limited Right is being exercised.
(5) The term "Spread" as used herein shall mean, with respect to the exercise of
any Limited Right by reason of a change in the composition of the Board
described in Section 12(b)(ii) or shareholder approval of a plan or agreement
described in Section 12(b)(iv) below, an amount equal to the product computed by
multiplying (i) the excess of (A) the greater of (1) the highest price paid in
any tender or exchange offer which is in effect at any time during the
ninety-day period ending on the date of exercise of the Limited Right or (2) the
highest Fair Market Value per share of Common Stock during the ninety-day period
ending on the date the Limited Right is exercised over (B) the Option Price per
share of Common Stock at which the related Option is exercisable, by (ii) the
number of shares of Common Stock with respect to which the Limited Right is
being exercised.
(e) TREATMENT OF RELATED OPTIONS AND LIMITED RIGHTS UPON
EXERCISE. Upon the exercise of a Limited Right, the related Option shall cease
to be exercisable to the extent of the shares of Common Stock with respect to
which such Limited Right is exercised, but shall be considered to have been
exercised to that extent for purposes of determining the number of shares of
Common Stock available for the grant of further awards pursuant to this Plan.
Upon the exercise or termination of a related Option, the Limited Right with
respect to such related Option shall terminate to the extent of the shares of
Common Stock with respect to which the related Option was exercised or
terminated.
-11-
(f) METHOD OF EXERCISE. To exercise a Limited Right, the
Grantee shall (i) deliver written notice to the Secretary of the Company
specifying the number of shares of Common Stock with respect to which the
Limited Right is being exercised, and (ii) if requested by the Committee,
deliver the Agreement evidencing the Limited Rights being exercised and, if
applicable, the Option Agreement evidencing the related Option to the Secretary
of the Company, who shall endorse thereon a notation of such exercise and return
such Agreements to the Grantee. The date of exercise of a Limited Right that is
validly exercised shall be deemed to be the date on which there shall have been
delivered the instruments referred to in the first sentence of this paragraph
(f).
11. Restricted Stock.
The Committee may award shares of Restricted Stock to any
eligible employee or consultant. Each award of Restricted Stock under the Plan
shall be evidenced by a written Agreement between the Company and the Grantee,
in such form as the Committee shall from time to time approve, which Agreement
shall comply with and be subject to the following terms and conditions, unless
otherwise specifically provided in such Agreement:
(a) NUMBER OF SHARES. Each Agreement shall state the number of shares of Restricted
Stock to be subject to an award.
(b) RESTRICTIONS. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of, except by
will or the laws of descent and distribution, for such period as the Committee
shall determine from the date on which the award is granted (the "Restricted
Period"). The Committee may also impose such additional or alternative
restrictions and conditions on the shares as it deems appropriate including the
satisfaction of performance criteria. Such performance criteria may include
sales, earnings before interest and taxes, return on investment, earnings per
share, any combination of the foregoing or rate of growth of any of the
foregoing, as determined by the Committee. Certificates for shares of stock
issued pursuant to Restricted Stock awards shall bear an appropriate legend
referring to such restrictions, and any attempt to dispose of any such shares of
stock in contravention of such restrictions shall be null and void and without
effect. During the Restricted Period, such certificates shall be held in escrow
by an escrow agent appointed by the Committee. In determining the Restricted
Period of an award, the Committee may provide that the foregoing restrictions
shall lapse with respect to specified percentages of the awarded shares on
successive anniversaries of the date of such award.
-12-
(c) FORFEITURE. Subject to such exceptions as may be
determined by the Committee, if the Grantee's continuous employment or
consultant relationship with the Company or any Subsidiary shall terminate for
any reason prior to the expiration of the Restricted Period of an award, any
shares remaining subject to restrictions (after taking into account the
provisions of Subsection (e) of this Section 11) shall thereupon be forfeited by
the Grantee and transferred to, and reacquired by, the Company or a subsidiary
at no cost to the Company or subsidiary.
(d) OWNERSHIP. During the Restricted Period the Grantee shall
possess all incidents of ownership of such shares, subject to Subsection (b) of
this Section 11, including the right to receive dividends with respect to such
shares and to vote such shares.
(e) ACCELERATED LAPSE OF RESTRICTIONS. Upon the occurrence of
an Acceleration Event, all restrictions then outstanding with respect to shares
of Restricted Stock awarded hereunder shall automatically expire and be of no
further force and effect. The Committee shall have the authority (and the
Agreement may so provide) to cancel all or any portion of any outstanding
restrictions prior to the expiration of the Restricted Period with respect to
any or all of the shares of Restricted Stock awarded on such terms and
conditions as the Committee shall deem appropriate.
12. Effect of Certain Changes.
(a) In the event of any extraordinary dividend, stock
dividend, recapitalization, merger, consolidation, stock split, warrant or
rights issuance, or combination or exchange of such shares, or other similar
transactions, the number of shares of Common Stock available for awards, the
number of such shares covered by outstanding awards, and the price per share of
Options or the applicable market value of Stock Appreciation Rights or Limited
Rights shall be equitably adjusted by the Committee to reflect such event and
preserve the value of such awards; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(b) If, while any awards remain outstanding under the Plan,
any of the following events shall occur (which events shall constitute a "Change
in Control of the Company") :
(i) any "person," as such term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than (1) the Company, (2) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, (3) any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of Common Stock, or (4)
any person who, immediately prior to the Initial Public Offering, owned more
than 25% of the combined voting power of the Company's then outstanding voting
securities), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding voting securities;
-13-
(ii) during any period of not more than two consecutive years, not including
any period prior to the adoption of this Plan by the Board, individuals who at
the beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (i), (iii), or (iv) of
this Section 12(b)) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
parent entity) 80% or more of the combined voting power of the voting securities
of the Company or such surviving or parent entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquired 25% or more of the combined voting
power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or substantially all of the
Company's assets (or any transaction having a similar effect)--
then from and after the date on which any such Change in Control shall have
occurred (the "Acceleration Date"), the award covered by such Agreement shall be
exercisable or otherwise nonforfeitable in full, whether or not otherwise
exercisable or forfeitable.
(b) In the event of a change in the Common Stock of the
Company as presently constituted that is limited to a change of all of its
authorized shares of Common Stock 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.
13. Non-Employee Director Options.
Notwithstanding any of the other provisions of the Plan to the
contrary, the provisions of this Section 13 shall apply only to grants of
Options to Non-Employee Directors. Except as set forth in this Section 13, the
other provisions of the plan shall apply to grants of
Options to Non-Employee Directors to the extent not inconsistent with this
Section. For purposes of interpreting Section 6 of the Plan, a Non-Employee
Director's service as a member of the Board shall be deemed to be employment
with the Company.
-14-
(a) GENERAL. Non-Employee Directors shall receive Nonqualified
Stock Options in accordance with this Section 13 and may not be granted Stock
Appreciation Rights, Incentive Stock Options or other awards under this Plan.
The Option Price per share of Common Stock purchasable under Options granted to
Non-Employee Directors shall be the Fair Market Value of a share on the date of
grant. No Agreement with any Non-Employee Director may alter the provisions of
this Section 13 and no Option granted to a Non-Employee Director may be subject
to a discretionary acceleration of exercisability.
(b) AUTOMATIC GRANTS. Each Non-Employee Director who is
serving as such as of the day following the annual meeting of the Company's
stockholders at which this Plan is approved by the Company's stockholders (the
"Approval Date") will, on the Approval Date and on the day following each
subsequent annual meeting on which such Non-Employee Director continues to serve
as such, be granted automatically, without action by the Committee, an Option to
purchase 2,000 shares of Common Stock. Each Non-Employee Director who is first
elected or appointed to serve as such after the Approval Date will be granted
automatically, without action by the Committee, (i) an Option to purchase 5,000
shares of Common Stock on the day following the date such director is first
elected (or appointed) and duly qualified and (ii) an option to purchase 2,000
shares of Common Stock on the day following each subsequent annual meeting on
which the Non-Employee Director continues to serve as such, commencing with the
annual meeting occurring in the first fiscal year of the Company following the
grant to such Non-Employee Director pursuant to clause (i) above.
(c) VESTING. Subject to Section 12(b) hereof, each Option
shall be exercisable as to 50 percent of the shares covered by the Option on the
third anniversary of the date the Option is granted and as to an additional 25
percent of the shares covered by the Option on each of the following two
anniversaries of such date of grant provided, however, that upon the Retirement
of a Non-Employee Director all Options held by such Non-Employee Director shall
become 100 percent exercisable. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time after becoming
exercisable, but no later than the date the option expires. Sections 6(e), 6(f)
and 6(g) hereof shall not apply to Options granted to Non-Employee Directors.
(d) DURATION. Each Option granted to a Non-Employee Director shall expire on the first
to occur of (i) the tenth anniversary of the date of grant of the Option, (ii) the second anniversary of the
Non-Employee Director's termination of service as a member of
the Board other than for Cause or (iii) thirty days following the Non-Employee
Director's removal from the Board for Cause. The Committee may not provide for
an extended exercise period beyond the periods set forth in this Section 13.
-15-
(e) DEFINITIONS. For purposes of this Section 13, the following terms shall have the
following meanings:
"Cause" shall mean the termination of service as a member of
the Board by a Non-Employee Director due to any act of (i) fraud or intentional
misrepresentation, or (ii) embezzlement, misappropriation or conversion of
assets or opportunities of the Company or any Subsidiary.
"Retirement" shall mean the termination of service as a member
of the Board by a Non-Employee Director that occurs (i) after having served as a
member of the Board for at least 10 years and (ii) other than for Cause.
14. Surrender and Exchange of Awards.
The Committee may permit the voluntary surrender of all or a
portion of any Option granted under the Plan or any option granted under any
other plan, program or arrangement of the Company or any Subsidiary
("Surrendered Option"), to be conditioned upon the granting to the Grantee of a
new Option for the same number of shares of Common Stock as the Surrendered
Option, or may require such voluntary surrender as a condition precedent to a
grant of a new Option to such Grantee. Subject to the provisions of the Plan,
such new Option may be (1) an Incentive Stock Option or a Nonqualified Stock
Option and (2) in tandem with Limited Rights, and shall be exercisable at the
price, during such period and on such other terms and conditions as are
specified by the Committee at the time the new Option is granted. The Committee
may also grant Limited Rights or Restricted Stock in exchange for Surrendered
Options to any holder of such Surrendered Option.
15. Period During Which Awards May Be Granted.
Awards may be granted pursuant to the Plan from time to time
within a period of ten (10) years from the date the Plan is adopted by the
Board, or the date the Plan is approved by the shareholders of the Company,
whichever is earlier.
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16. Nontransferability of Awards.
Awards granted under the Plan shall not be transferable
otherwise than by will or by the laws of descent and distribution, and awards
may be exercised or otherwise realized, during the lifetime of the Grantee, only
by the Grantee or by his guardian or legal representative.
17. Approval of Shareholders.
The Plan shall take effect upon its adoption by the Board and
shall terminate on the tenth anniversary of such date, but the Plan (and any
grants of awards made prior to the shareholder approval mentioned herein) shall
be subject to the approval of Company's shareholders, which approval must occur
within twelve months of the date the Plan is adopted by the Board.
18. Agreement by Grantee Regarding Withholding Taxes.
If the Committee shall so require, as a condition of exercise
of an Option, Stock Appreciation Right or Limited Right or the expiration of the
Restricted Period (each a "Tax Event"), each Grantee shall agree that no later
than the date of the Tax Event, the Grantee 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 Tax
Event. Alternatively, the Committee may provide that a Grantee may elect, to the
extent permitted or required by law, to have the Company deduct federal, state
and local taxes of any kind required by law to be withheld upon the Tax Event
from any payment of any kind due to the Grantee. The withholding obligation may
be satisfied by the withholding or delivery of Common Stock.
19. Amendment and Termination of the Plan.
The Board at any time and from time to time may suspend,
terminate, modify or amend the Plan; provided, however, that, unless otherwise
determined by the Board, an amendment which requires stockholder approval in
order for the Plan to continue to comply with Rule 16b-3 or any other law,
regulation or stock exchange requirement shall not be effective unless approved
by the requisite vote of stockholders. Except as provided in Section 12(a)
hereof, no suspension, termination, modification or amendment of the Plan may
adversely affect any award previously granted, unless the written consent of the
Grantee is obtained.
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20. Rights as a Shareholder.
Except as provided in Section 11(d) hereof, a Grantee or a
transferee of an award shall have no rights as a shareholder with respect to any
shares covered by the award 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 12(a) hereof.
21. No Rights to Employment.
Nothing in the Plan or in any award granted or Agreement
entered into pursuant hereto shall confer upon any Grantee the right to continue
in the employ of, or in a consultant relationship with, the Company or any
Subsidiary or to be entitled to any remuneration or benefits not set forth in
the Plan or such Agreement or to interfere with or limit in any way the right of
the Company or any such Subsidiary to terminate such Grantee's employment.
Awards granted under the Plan shall not be affected by any change in duties or
position of a Grantee as long as such Grantee continues to be employed by, or in
a consultant relationship with, the Company or any Subsidiary.
22. Beneficiary.
A Grantee may file with the Committee a written designation of
a beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Grantee, the executor or administrator of the Grantee's estate
shall be deemed to be the Grantee's beneficiary.
23. Governing Law.
The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Florida.
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Exhibit 99.2
1995 STOCK OPTION AND INCENTIVE PLAN
NON-MANAGEMENT
BOARD OF DIRECTOR
Date:
To: SS# (hereinafter referred to as the Optionee):
Eckerd Corporation (the "Company") hereby grants to the Optionee a
Nonqualifed Stock Option to purchase ____ shares of common stock of the par
value of $.01 per share of the Company at an option price of $_______ per share
and agrees to cause a certificate for any shares purchased hereunder to be
delivered to the Optionee upon receipt of the purchase price, all subject,
however, to the terms and conditions hereinafter set forth.
1. This option (unless terminated as hereinafter provided) shall be
exercisable only to the extent of 50% of the shares specified above,
after the Optionee shall have been a member of the Board of Directors
of the Company (the "Board") for three (3) full years from the date
hereof and to the extent of an additional 25% of such shares after each
of the next two (2) successive years thereafter during which the
Optionee shall have been a member of the Board. Upon the Retirement of
the Optionee, this option will become 100% exercisable. To the extent
exercisable, this option may be exercised in whole or in part from time
to time.
2. The Optionee may exercise his option to the extent exercisable, or any
portion thereof, by sending written notice to the Company at its
principal office. The notice must state the number of shares the
Optionee wishes to purchase and the date, not more than ninety (90)
days after the date of such notice, upon which payment will be made.
Payment for shares, together with any taxes to be collected or withheld
thereon, shall be made in cash or by certified or cashier's check on
the date set forth in the notice.
3. This option shall terminate on the earliest of the following dates:
a. The second anniversary of the Optionee's termination of
service as a member of the Board other than for Cause.
b. Thirty (30) days following the Optionee's removal from the Board
for Cause.
c. On the tenth (10th) anniversary of the date hereof.
For purposes of Subparagraphs a and b hereof, the Optionee, his heirs
or estate, as the case may be, shall be entitled to exercise this
option during the period of time set forth therein only to the extent
that the Optionee would have been entitled to exercise this option,
pursuant to Paragraph 1 hereof, immediately prior to the date of his
termination of service as a member of the Board other than for Cause or
his removal from the Board for Cause, and the portion of the option
that is not so exercisable shall expire immediately upon termination of
the Optionee's service as a member of the Board. Nothing contained in
this option shall limit whatever right the Company might otherwise have
to remove the Optionee from the Board.
4. This option is not transferable by the Optionee otherwise than by the
laws of descent and distribution, and is exercisable, during the
lifetime of the Optionee, only by him.
5. This option is further subject to the provisions of the 1995 Stock
Option and Incentive Plan of Eckerd Corporation (the "Plan"), a copy of
which is on file at the Company office and available for examination by
Optionee during regular business hours and the terms of which shall
govern in the event of any conflict between the provisions thereof and
the provisions hereof.
6. Capitalized terms not defined herein shall have the meaning ascribed to
them in the Plan.
ECKERD CORPORATION
By:
Chairman of the Board and CEO
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1995 STOCK OPTION AND INCENTIVE PLAN
OFFICER/EMPLOYEE
Date:
To: SS# (hereinafter referred to as the Optionee):
Eckerd Corporation (the "Company") hereby grants to the Optionee a
Nonqualifed Stock Option to purchase ____ shares of common stock of the par
value of $.01 per share of the Company at an option price of $_______ per share
and agrees to cause a certificate for any shares purchased hereunder to be
delivered to the Optionee upon receipt of the purchase price, all subject,
however, to the terms and conditions hereinafter set forth.
1. This option (unless terminated as hereinafter provided) shall be
exercisable only to the extent of 50% of the shares specified above, after
the Optionee shall have been in the continuous employment (whether as an
employee or as a consultant) of the Company or its subsidiaries for three
(3) full years from the date hereof and to the extent of an additional 25%
of such shares after each of the next two (2) successive years thereafter
during which the Optionee shall have been in the continuous employment
(whether as an employee or as a consultant) of the Company or its
subsidiaries. To the extent exercisable, this option may be exercised in
whole or in part from time to time.
2. The Optionee may exercise his option to the extent exercisable, or any
portion thereof, by sending written notice to the Company at its principal
office. The notice must state the number of shares the Optionee wishes to
purchase and the date, not more than ninety (90) days after the date of
such notice, upon which payment will be made. Payment for shares, together
with any taxes to be collected or withheld thereon, shall be made in cash
or by certified or cashier's check on the date set forth in the notice.
3. This option shall terminate on the earliest of the following dates: a. On
the date ninety (90) days following the date upon which the Optionee ceases
to be an employee or consultant of the Company or its subsidiaries unless
he ceases to be an employee or consultant by reason of death or Disability.
b. One hundred eighty (180) days after the death or Disability of the
Optionee, if the Optionee dies while an employee or consultant of the
Company or its subsidiaries (or within thirty (30) days after terminating
such employment) or suffers a Disability while an employee or consultant of
the Company or its subsidiaries. c. On the date of the commission of an
intentional act by the Optionee, determined by the Committee to be contrary
to the interests of the Company or any of its subsidiaries. d. On the date
of a change in the position held by the Optionee with the Company or one of
its subsidiaries, unless: (i) within thirty (30) days after the Optionee is
notified of the change of position, he shall submit to the Committee a
written request for a determination as to whether the responsibilities of
the new position to which the Optionee is being assigned are equal to or
greater than the responsibilities to the position held by the Optionee at
the time the option was granted; and (ii) the Committee shall thereafter
determine that the option period shall remain unaltered with respect to
all, or a portion, of the shares covered by this option which are not then
exercisable. e. On the tenth (10th) anniversary of the date hereof. For
purposes of this paragraph 3, the Optionee, his heirs or estate, as the
case may be, shall be entitled to exercise this option during the period of
time set forth therein only to the extent that the Optionee would have been
entitled to exercise this option, pursuant to Paragraph 1 hereof,
immediately prior to the date of his death or Disability, or termination of
employment (whether as an employee or as a consultant), and the portion of
the option that is not so exercisable shall expire immediately upon such
death, Disability or termination of employment (whether as an employee or
as a consultant). Nothing contained in this option shall limit whatever
right the Company or any of its subsidiaries might otherwise have to
terminate the employment of the Optionee.
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4. This option is not transferable by the Optionee otherwise than by the laws
of descent and distribution, and is exercisable, during the lifetime of the
Optionee, only by him.
5. This option is further subject to the provisions of the 1995 Stock Option
and Incentive Plan of Eckerd Corporation (the "Plan"), a copy of which is
on file at the Company office and available for examination by Optionee
during regular business hours and the terms of which shall govern in the
event of any conflict between the provisions thereof and the provisions
hereof.
6. Capitalized terms not defined herein shall have the meaning ascribed to
them in the Plan.
ECKERD CORPORATION
By:
Chairman of the Board and CEO
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