As filed with the Securities and Exchange Commission on October 22, 1998
Registration No. ______________________
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
GARAN, INCORPORATED
(Exact name of registrant as specified in its charter)
Virginia No. 13-5665557
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
350 Fifth Avenue
New York, New York 10118
(212) 563-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
Garan, Incorporated 1998 Stock Option Plan
(Full title of plan)
----------------
Marvin S. Robinson, Esq.
Tannenbaum Dubin & Robinson, LLP
1140 Avenue of the Americas
New York, New York 10036
(212) 302-2900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed Proposed
Maximum Maximum Maximum
Title of Securities Amount Offering Aggregate Amount of
to be Registered to be Price Per Offering Registration
Registered Share Price Fee
- -------------------------------------------------------------------------------
Common Stock (No Par Value) 200,000 $24.6875* $4,937,500 $1,497
===============================================================================
*The price of $ 24.6875 per share, which is the average of the high and low
prices of the Company's Common Stock as reported on the American Stock Exchange
on October 19, 1998, is set forth solely for purposes of calculating the filing
fee.
PAGE
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed with the Securities and Exchange Commission
("Commission") are incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997.
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended December 31, 1997, March 31, 1998, and June 30, 1998.
(c) All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the securities Exchange Act of 1934, as
amended ("Exchange Act") prior to the filing of a post-effective amendment
which indicates that all securities offered herein have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
The Company will provide, without charge, to each person to whom this
Registration Statement is delivered, on written or oral request, a copy of any
or all of the foregoing documents. Requests should be directed to Mr.
Alexander J. Sistarenik, Treasurer, Garan, Incorporated, 350 Fifth Avenue, New
York, New York 10118, (212) 563-2000.
Item 4. Description of Securities
Not applicable.
Item 5. Interest of Named Experts and Counsel
Counsel to the Company, Tannenbaum Dubin & Robinson, LLP, 1140 Avenue of
the Americas, New York, New York 10036, has rendered an opinion to the effect
that the Common Stock offered hereby, when issued in accordance with the Garan,
Incorporated 1998 Stock Option Plan, will be legally and validly issued, fully
paid, and non-assessable. As of October 19, 1998, Marvin S. Robinson, a
director and the Vice President-General Counsel and Secretary of the Company
and a member of Tannenbaum Dubin & Robinson, LLP, owned 5,956 shares of the
Company's Common Stock having a market value, as of such date, of $147,039.
Item 6. Indemnification of Directors and Officers
The Virginia Stock Corporation Act gives Virginia corporations the power
to indemnify their present and former officers and directors under certain
circumstances, and the Restated Articles of Incorporation of the Company state
that: "Each person made a party to any action, suit, or proceeding by reason of
the fact that he, his testator or intestate, is or was a director, officer or
employee of the Corporation, or of any corporation which he served as such at
the request of the Corporation, shall be indemnified by the Corporation against
the reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense of such action, suit or
proceeding, or in connection with any appeal therein, except in relation to
matters as to which it shall be adjudged in such action, suit or proceeding
that such officer, director or employee is liable for negligence or misconduct
in the performance of his duties. Such right of indemnification shall not be
deemed exclusive of any rights to which such director, officer, or employee may
be entitled under any By-law, agreement, vote of stockholders or otherwise."
In addition the Company has entered into indemnification agreements with each
of its officers and directors in which it has agreed to indemnify each such
individual for actions taken on behalf of the Company in which the officer or
director believed that his conduct was at least not opposed to the best
interests of the Company and the officer or director was not adjudged liable to
the Company.
The Company maintains, on behalf of its present and former directors and
officers, insurance protection against certain liabilities arising out of the
discharge of their duties and also insurance covering the Company against
indemnification payments to its directors and officers for certain liabilities.
Item 7. Exemption From Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit No. Description of Exhibit
-------------- ------------------------------------------------
Exhibit 4.1 Restated Articles of Incorporation of the Company
dated May 15, 1986 (filed as an Exhibit to the
Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1988, and
incorporated herein by reference).
Exhibit 4.2. Articles of Amendment of the Restated Articles of
Incorporation of the Company dated May 10, 1988
(filed as an Exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended
September 30, 1988, and incorporated herein by
reference).
Exhibit 4.3. Articles of Amendment of the Restated Articles of
Incorporation dated November 9, 1992 (filed as an
Exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended September 30,
1992, and incorporated herein by reference).
Exhibit 4.4 By-Laws, as amended through April 21, 1993, of
the Company (filed as an Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993, and incorporated herein by
reference).
Exhibit 4.5 Garan, Incorporated 1998 Stock Option Plan.
Exhibit 5.1 Opinion of Tannenbaum Dubin & Robinson, LLP.
Exhibit 23.1 Consent of Tannenbaum Dubin & Robinson, LLP
(contained in Exhibit 5.1).
Exhibit 23.2 Consent of Citrin, Cooperman & Company, LLP.
Exhibit 24.1 Power of Attorney (included as part of the
signature page to this Registration Statement).
The Company will provide, without charge, to each person to whom this
Registration Statement is delivered, on written or oral request, a copy of any
and all of the foregoing documents. Requests should be directed to Mr.
Alexander J. Sistarenik, Treasurer, Garan, Incorporated, 350 Fifth Avenue, New
York, New York 10118, (212) 563-2000.
Item 9. Undertakings
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended ("Securities Act").
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company'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 contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer, or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company, unless in the opinion of its counsel the matter has
been settled by controlling precedent, will submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
PAGE
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Company, Garan,
Incorporated, certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, on this 22nd day of October, 1998.
GARAN, INCORPORATED
/S/ SEYMOUR LICHTENSTEIN
-------------------------------------------
Seymour Lichtenstein, Chairman of the Board
Principal Executive Officer
PAGE
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
We, the undersigned officers and directors of Garan, Incorporated, hereby
severally constitute and appoint Seymour Lichtenstein and William J. Wilson,
and each of them singly, our true and lawful attorneys, with full power to them
and each of them singly, to sign for us in our names in the capacities
indicated below, any amendments to this Registration Statement on Form S-8
(including post-effective amendments), and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, and generally to do all things in our names and on our
behalf in our capacities as officers and directors to enable Garan,
Incorporated to comply with the provisions of the Securities Act of 1933, as
amended, hereby ratifying and confirming our signatures as they may be signed
by our said attorneys, or any of them, to said Registration Statement and all
amendments thereto.
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 dates indicated.
Signature Title Date
- ---------- ----- ----
/S/ SEYMOUR LICHTENSTEIN Chairman of the Board October 22, 1998
- --------------------------- (Principal Executive Officer)
Seymour Lichtenstein
/S/ WILLIAM J. WILSON Vice President - Finance and October 22, 1998
- --------------------------- Administration (Principal
William J. Wilson Financial and Accounting Officer)
/S/ STEPHEN J. DONOHUE Director October 22, 1998
- -----------------------
Stephen J. Donohue
/S/ RODNEY FAVER Director October 22, 1998
- -----------------------
Rodney Faver
/S/ JERALD KAMIEL Director October 22, 1998
- -----------------------
Jerald Kamiel
/S/ FRANK MARTUCCI Director October 22, 1998
- -----------------------
Frank Martucci
/S/ MARVIN S. ROBINSON Director October 22, 1998
- -----------------------
Marvin S. Robinson
PAGE
<PAGE>
Exhibit Index
- -------------
Sequentially
Exhibit Numbered
Number Description Page
-------- ----------- ----
4.1. Restated Articles of Incorporation of the Company
dated May 15,1986 (filed as an Exhibit to the
Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1988, and
incorporated herein by reference).
4.2. Articles of Amendment of the Restated Articles of
Incorporation of the Company dated May 10, 1988
(filed as an Exhibit to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30,
1988, and incorporated herein by reference).
4.3. Articles of Amendment of the Restated Articles of
Incorporation dated November 9, 1992 (filed as an
Exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended September 30,
1992, and incorporated herein by reference)
4.4. By-Laws as amended through April 21, 1993, of the
Company (filed as an Exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31,
1993, and incorporated herein by reference).
4.5 Garan Incorporated 1998 Stock Option Plan. 9
5.1 Opinion of Tannenbaum Dubin & Robinson, LLP. 20
23.1 Consent of Tannenbaum Dubin & Robinson, LLP
(contained in Exhibit 5.1).
23.2 Consent of Citrin Cooperman & Company, LLP. 23
24.1 Power of Attorney (included as part of
the signature page to this Registration Statement).
EXHIBIT 4.5
GARAN, INCORPORATED
1998 STOCK OPTION PLAN
SECTION I
Purpose
The purpose of the Garan, Incorporated 1998 Stock Option Plan is to
provide favorable opportunities for (a) certain selected employees of Garan,
Incorporated and its subsidiaries and (b) certain selected non-employee members
of the Board of Directors of Garan, Incorporated to purchase shares of Common
Stock of Garan, Incorporated to provide an increased incentive for these
individuals to contribute to the future success and prosperity of Garan,
Incorporated, to enhance the value of the Common Stock for the benefit of its
shareholders, and to increase the ability of the Company to attract and retain
individuals of exceptional skill.
SECTION II
Definitions and Construction
2.1. The following capitalized terms used in this Stock Option Plan shall
have the respective meanings set forth in this Section.
Board shall mean the Board of Directors of Garan.
Cause shall mean, with respect to an Optionee, (a) the breach by the
Optionee of any agreement between the Company and the Optionee, (b) willful and
gross misconduct on the part of the Optionee that is materially and
demonstrably detrimental to the Company, or (c) the commission by the Optionee
of one or more acts which constitute an indictable crime under Federal, state,
or local law, each as may be determined in good faith by written resolution
adopted by a majority of the members of the Board at a meeting duly called and
held for that purpose after reasonable notice to the Optionee and opportunity
for the Optionee and his or her counsel to be heard.
Change of Control shall mean: (a) Continuing Directors no longer
constitute at least a majority of the Board; (b) any person or group of persons
(as defined in Rule 13d-5 under the Exchange Act), together with its
affiliates, become the beneficial owner, directly or indirectly, of at least
40% of Garan's then outstanding Common Stock; (c) the approval by Garan's
shareholders of the merger or consolidation of Garan with any other
corporation, the sale of substantially all of the assets of Garan or the
liquidation or dissolution of Garan unless, in the case of a merger or
consolidation, the Continuing Directors in office immediately prior to such
merger or consolidation will constitute at least a majority of directors of the
surviving corporation of such merger or consolidation and any parent (as such
terms is defined in Rule 12b-2 under the Exchange Act) of such corporation, and
such surviving corporation (and such parent, if any) shall have at least five
directors; or (d) at least a majority of the Continuing Directors in office
immediately prior to any other action proposed to be taken by Garan's
shareholders or by the Board determines that such proposed action, if taken,
would constitute a change of control of Garan and such proposed action is
thereafter taken.
Change of Control Exercise Period shall mean the period during which a
Limited Right may be exercised in accordance with Section 8.2.
Change of Control Price shall mean the higher of (i) the highest price
per share of Common Stock paid or offered in any transaction related to a
Change of Control of Garan or (ii) the highest Fair Market Value per share of
Common Stock at any time during the 60-day period preceding a Change of
Control.
Code shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
Committee shall mean the Compensation Committee appointed by the Board to
administer the Plan which shall be composed of at least two persons.
Common Stock shall mean the Common Stock, no par value, of Garan.
Company shall mean Garan, Incorporated and its Subsidiaries.
Continuing Director shall mean any individual who is a member of the
Board on November 1, 1997, or is designated (before such person's initial
election as a director) as a Continuing Director by a majority of the then
Continuing Directors.
Disability shall mean disability within the meaning of Section 22(e)(3)
of the Code, as determined by the Committee.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
Exercise Price shall mean the price of a share of Common Stock payable by
the Optionee on exercise of an Option.
Fair Market Value on a specified day shall mean, if the Common Stock is
publicly traded, the reported closing price on that day, or if there was no
sale of Common Stock reported on that day, then the reported closing price on
the next preceding day on which there was such a sale, but if the Common Stock
is not publicly traded, the Committee shall make a good faith determination of
Fair Market Value.
Garan shall mean Garan, Incorporated
ISO shall mean an incentive stock option within the meaning of Section
422 of the Code.
Limited Right shall mean the right pursuant to an award granted under
Section 8.1 to surrender to Garan all or a portion of an Option in accordance
with Section 8.2.
Non-ISO shall mean a stock option which is not an ISO.
Option shall mean a stock option granted under the Plan.
Optionee shall mean an individual who has been granted one or more
Options.
Parent Corporation shall mean a parent corporation, as defined in Section
424(e) of the Code.
Plan shall mean this Garan, Incorporated 1998 Stock Option Plan.
Retirement shall mean retirement on or after age sixty-five or, with the
advance consent of the Committee, at an earlier age.
Stock Appreciation Right shall mean a right to receive cash or Common
Stock upon the exercise of an Option in accordance with Section 6.7.
Subsidiary shall mean a subsidiary corporation, as defined in Section
424(f) of the Code.
Termination Date shall mean the last day on which an Option may be
exercised, which date is fixed by the Committee but which shall not be later
than the day preceding the tenth anniversary of the date on which the Option is
granted.
2.2. When used in this Plan, unless the context clearly indicates to the
contrary, (a) the masculine gender shall include the feminine and neuter
genders, (b) the feminine gender shall include the masculine and neuter
genders, (c) the neuter gender shall include the masculine and feminine
genders, (d) the singular shall include the plural, and (e) if a defined term
is intended, it shall be capitalized.
SECTION III
Administration
3.1. Except as otherwise provided in the Plan, and subject to Section
3.2, the Committee shall administer the Plan and shall have full power to grant
Options, construe and interpret the Plan, establish and amend rules and
regulations for its administration, and perform all other acts relating to the
Plan including the delegation of administrative responsibilities which it
believes reasonable and proper.
3.2. Subject to the provisions of the Plan and the right of the Board to
give specific direction, the Committee shall establish the policies and
criteria pursuant to which it shall grant Options and administer the Plan and,
in its discretion, shall determine which employees of the Company and/or
members of the Board shall be granted Options, the number of shares covered by
any such Options, and the terms and conditions of the Options.
3.3. The Committee may at any time, with the consent of the Optionee, in
its sole discretion cancel any Option and issue to the Optionee a new Option
for an equivalent or lesser number of shares of Common Stock and at a lower
Exercise Price.
3.4. Any decision made, or action taken, by the Committee or the Board
arising out of or in connection with the interpretation and administration of
the Plan shall be final and conclusive.
SECTION IV
Shares Subject to the Plan
4.1. The total number of shares of Common Stock available for grants of
Options under the Plan shall be 200,000, subject to adjustment in accordance
with Section IX. These shares may be either authorized and unissued or
reacquired shares of Common Stock. If an Option or portion thereof shall expire
or terminate for any reason without having been exercised in full, the
unpurchased shares covered by such Option shall be available for future grants
of Options. An Option or portion thereof exercised through the exercise of a
Stock Appreciation Right pursuant to Section 6.7 or related to a Limited Right
exercised pursuant to Section VIII shall be treated, for the purposes of this
Section IV, as though the Option or portion thereof had been exercised through
the purchase of Common Stock with the result that the shares of Common Stock
subject to the Option or portion thereof that was so exercised shall not be
available for future grants of Options.
SECTION V
Eligibility
5.1. Options may be granted to key employees of the Company or to persons
who have been engaged to become key employees of the Company. Key employees
will comprise, those who contribute to the management, direction, and/or
overall success of the Company.
5.2. Options also may be granted to members of the Board who are not
employees of the Company. Such Optionees will comprise, in general, those who,
while not employees of the Company, have an ongoing relationship with the
Company and make significant contributions to the overall success of the
Company.
SECTION VI
Terms of Options
6.1.a. All Options shall be evidenced by written agreements executed by
the Company and the Optionee. Such Options shall be subject to the applicable
provisions of the Plan and shall contain such provisions as are required by the
Plan and any other provisions the Committee may prescribe. All agreements
evidencing Options shall specify the total number of shares subject to each
grant, the Exercise Price, and the Termination Date. Those Options that comply
with the requirements for an ISO set forth in Section 422 of the Code and that
the Committee wishes to designate as an ISO shall be ISOs, and all other
Options (including any Option that would otherwise qualify as an ISO but which
the Committee designates as a Non-ISO) shall be Non-ISOs. Only Non-ISOs shall
be granted to any Optionee who is not an employee of the Company on the date
the Option is granted.
6.1.b. The written agreement referred to in Section 6.1.a also shall
provide that unless the shares of Common Stock acquired on the exercise of the
Option are then currently registered under the Securities Act of 1933, as
amended, if counsel to Garan advises that the same is required, prior to
delivery of the shares acquired upon the exercise of the Option the Optionee
shall agree to hold such shares for investment only and not with a view to
resale or distribution thereof to the public, and such Optionee shall deliver
to Garan a letter to that effect in a form specified by counsel to Garan
together with any additional documents specified by counsel. In the event that
issuance of shares of Common Stock on exercise of the Option is subject to
laws, rules, and/or regulations of a jurisdiction other than the United States
of America, the Optionee simultaneously shall comply with requirements of
counsel to Garan to satisfy the same.
6.2. The Exercise Price for an ISO shall not be less than the Fair Market
Value of a share of Common Stock on the date the Option is granted.
6.3.a. The Committee shall determine the dates after which Options may be
exercised in whole or in part. If Options are exercisable in installments,
installments or portions thereof that are exercisable and not exercised shall
accumulate and remain exercisable. The Committee also may amend an Option to
accelerate the dates after which Options may be exercised in whole or in part.
However, no Option or portion thereof shall be exercisable after the
Termination Date.
6.3.b. Notwithstanding any contrary provisions of Section 6.3.a, upon a
Change of Control (i) each Option or portion thereof which, by its terms, is
not yet exercisable shall vest and become exercisable in full and (ii) each
Option which has a Termination Date falling within 90 days after a Change of
Control shall have its Termination Date extended until the earlier of the 90th
day after the Change of Control or the day before the tenth anniversary of the
date such Option was granted.
6.4. Notwithstanding any contrary provisions of Sections 6.2 and 6.3.a,
no ISO shall be granted to any employee who, at the time the Option is granted,
owns (directly, or within the meaning of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of Garan or of
any Subsidiary or Parent Corporation thereof unless (a) the Exercise Price
under such Option is at least 110% of the Fair Market Value of a share of
Common Stock on the date the Option is granted and (b) the Termination Date of
such Option is a date not later than the day preceding the fifth anniversary of
the date on which the Option is granted.
6.5. An Option or portion thereof shall be exercised by delivery of a
written notice of exercise to Garan and payment of the full price of the shares
being purchased pursuant to the Option. An Optionee may exercise an Option with
respect to less than the full number of shares for which the Option may then be
exercised, but an Optionee must exercise the Option in full shares of Common
Stock. The price of Common Stock purchased pursuant to an Option or portion
thereof may be paid:
6.5.a. In United States dollars in cash or by check, bank draft, or money
order payable to the order of Garan, by wire transfer to an account designated
by Garan, or by such other payment method as the Committee, in its discretion,
may authorize;
6.5.b. Through the delivery of shares of Common Stock with an aggregate
Fair Market Value on the date of exercise equal to the Exercise Price, or
6.5.c. By any combination of the above methods of payment. The Committee
may also permit a participant to pay the Exercise Price by authorizing a third
party to sell shares of Common Stock acquired upon exercise of the Option and
remit to the Company a sufficient portion of the sale proceeds to pay the
entire Exercise Price and any tax withholding resulting from such exercise. The
Committee shall determine acceptable methods for tendering Common Stock as
payment upon exercise of an Option and may impose such limitations and
prohibitions on the use of Common Stock to exercise an Option as it deems
appropriate including, without limitation, any limitation or prohibition
designed to avoid certain accounting consequences which may result from the use
of Common Stock as payment upon exercise of an Option.
6.6. Garan, in its discretion, may require an Optionee to pay to Garan at
the time of exercise the amount that Garan deems necessary to satisfy its
obligation to withhold Federal, state, or local income or other taxes incurred
by reason of the exercise. Upon the exercise of an Option requiring tax
withholding, an Optionee may make a written election to have shares of Common
Stock withheld by Garan from the shares otherwise to be received. The number of
shares so withheld shall have an aggregate Fair Market Value on the date of
exercise sufficient to satisfy the applicable withholding taxes. The approval
of any such election by an Optionee shall be at the sole discretion of the
Committee. Where the exercise of an Option does not give rise to an obligation
to withhold income taxes on the date of exercise, Garan, in its discretion, may
require an Optionee to place shares of Common Stock purchased under the Option
in escrow for the benefit of Garan until such time as income tax withholding is
required on amounts included in the gross income of the Optionee as a result of
the exercise of an Option. At such time, Garan in its discretion may require an
Optionee to pay to Garan the amount that Garan deems necessary to satisfy its
obligation to withhold Federal, state, or local income or other taxes incurred
by reason of the exercise of the Option, in which case the shares of Common
Stock will be released from escrow to the Optionee. Alternatively, subject to
acceptance by the Committee, in its sole discretion, an Optionee may make a
written election to have shares of Common Stock held in escrow applied toward
Garan's obligation to withhold Federal, state, or local income or other taxes
incurred by reason of the exercise of the Option, based on the Fair Market
Value of the shares on the date of the termination of the escrow arrangement.
Upon application of such shares toward Garan's withholding obligation, any
shares of Common Stock held in escrow and, in the judgment of the Committee,
not necessary to satisfy such obligation shall be released from escrow to the
Optionee.
6.7. At or after the grant of an Option, the Committee, in its
discretion, may provide an Optionee with an alternate means of exercising an
Option, or a designated portion thereof, by granting the Optionee a Stock
Appreciation Right. A Stock Appreciation Right is a right to receive, upon
exercise of an Option or any portion thereof, in the Committee's sole
discretion, an amount of cash equal to, and/or shares of Common Stock having a
Fair Market Value on the date of exercise equal to, the excess of the Fair
Market Value of a share of Common Stock on the date of exercise over the
Exercise Price, multiplied by the number of shares of Common Stock that the
Optionee would have received had the Option or portion thereof been exercised
through the purchase of shares of Common Stock at the Exercise Price, provided
that (a) such Option or portion thereof has been designated as exercisable in
this alternative manner, (b) such Option or portion thereof is otherwise
exercisable, and (c) the Fair Market Value of a share of Common Stock on the
date of exercise exceeds the Exercise Price.
6.8. Each Option, during the Optionee's lifetime, shall be exercisable
only by the Optionee, and neither it nor any right hereunder shall be
transferable otherwise than by Will or the laws of descent and distribution or
be subject to attachment, execution, or other similar process. In the event of
any attempt by the Optionee to alienate, assign, pledge, hypothecate, or
otherwise dispose of an Option or of any right under the Plan, except as
provided for in the Plan, or in the event of any levy or any attachment,
execution, or similar process upon the rights or interest conferred by the
Plan, Garan may terminate the Option by notice to the Optionee and the Option
shall thereupon become null and void.
6.9.a. If an Optionee's employment with the Company is terminated for
Cause, each Option held by such Optionee together with all rights under the
Plan shall terminate on the date of termination of employment to the extent not
previously exercised.
6.9.b. If a non-employee Optionee engages in conduct which constitutes
Cause, each Option held by such Optionee together with all rights under the
Plan shall terminate on the date the Board determines that the Optionee has
engaged in conduct constituting Cause to the extent not previously exercised.
6.10. If an Optionee's employment with the Company terminates for any
reason other than for Cause, or if a non-employee Optionee shall cease to serve
as a member of the Board for any reason other than for Cause, each Option held
by such Optionee shall remain exercisable, to the extent it was exercisable at
the time of termination of employment or cessation of ongoing relationship,
until the earliest of:
6.10.a. The Termination Date;
6.10.b. The death of the Optionee, or such later date not more than six
months after the death of the Optionee as may be provided pursuant to Section
6.11;
6.10.c. Two months after the date of termination of the Optionee's
employment or service as a member of the Board by reason of Retirement;
6.10.d. Six months after the date of termination of the Optionee's
employment or service as a member of the Board by reason of Disability;
6.10.e. Two months after the date of the termination by the Company of
the Optionee's employment or service as a member of the Board other than for
Cause; or
6.10.f. One month after the date of the termination by the Optionee of
the Optionee's employment or service as a member of the Board other than by
reason of Retirement, Disability, or death.
After such date all Options shall terminate, together with all rights
under the Plan, to the extent not previously exercised.
6.11. In the event of the death of the Optionee while employed by the
Company or serving as a member of the Board, an Option may be exercised at any
time or from time to time prior to the earlier of the Termination Date and a
date six months after the date of the Optionee's death by the person or persons
to whom the Optionee's rights under each Option shall pass by Will or by the
applicable laws of descent and distribution to the extent that the Optionee was
entitled to exercise it on the date of the Optionee's death. In the event of
the death of the Optionee while entitled to exercise an Option pursuant to
Section 6.10, the Committee, in its discretion, may permit such Option to be
exercised at any time or from time to time prior to the Termination Date during
a period of up to six months from the death of the Optionee, as determined by
the Committee, by the person or persons to whom the Optionee's rights under
each Option shall pass by Will or by the applicable laws of descent and
distribution to the extent that the Option was exercisable at the time of
cessation of the Optionee's employment or service as a member of the Board. Any
person or persons to whom an Optionee's rights under an Option have passed by
Will or by the applicable laws of descent and distribution shall be subject to
all terms and conditions of the Plan and the Option applicable to the Optionee.
6.12. Any Optionee who disposes of shares of Common Stock acquired upon
the exercise of an ISO either (a) within two years after the date of the grant
of the ISO under which the Common Stock was acquired or (b) within one year
after the transfer of such shares to the Optionee, shall notify Garan of such
disposition and of the amount realized upon such disposition.
SECTION VII
Limitation on Grants of ISOs
7.1. To the extent the aggregate Fair Market Value of the Common Stock
subject to an Option which is exercisable for the first time during any one
calendar year by an employee exceeds $100,000, such excess portion of the
Option may not be treated as an ISO.
SECTION VIII
Limited Rights
8.1.a. Limited Rights may be granted by the Committee in conjunction with
all or any portion of any Option granted under the Plan and such rights may be
granted either at or after the time of the grant of such Option.
8.1.b. Limited Rights or any applicable portion thereof granted with
respect to a given Option shall terminate and no longer be exercisable upon the
termination of the related Option. Upon the exercise of an Option, the related
Limited Right shall cease to be exercisable to the extent of the shares of
Common Stock with respect to which such Option is exercised.
8.1.c. A Limited Right related to an Option may be exercised by an
Optionee, in accordance with Section 8.2, by surrendering the applicable
portion of the related Option. Upon such exercise and surrender, the Optionee
shall be entitled to receive an amount determined in the manner prescribed in
Section 8.2.
8.2. Limited 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:
8.2.a. Limited Rights can only be exercised within the Change of Control
Exercise Period, which is the 30-day period following a Change of Control, and
will become fully exercisable, if not already fully exercisable, upon the
Change of Control, provided that any Limited Right shall not exercisable by any
Optionee who is subject to Section 16(b) of the Exchange Act during the first
six months of the date of grant of a Limited Right. In the event a Change of
Control shall occur within six months of the date of grant of a Limited Right
to an Optionee who is subject to Section 16(b) of the Exchange Act, the Change
of Control Exercise Period for such Optionee shall be deemed to commence on the
first day following such six month period.
8.2.b. Upon the exercise of a Limited Right related to an Option, an
Optionee shall be entitled to receive an amount in cash equal in value to the
excess of the Change of Control Price over the Option Price specified in the
related Option, such excess to be multiplied by the number of shares of Common
Stock in respect of which the Limited Right shall have been exercised.
8.2.c. Limited Rights shall be transferable only at such time or times
and to the extent that the underlying Option would be transferable under
Section 6.8 of the Plan.
SECTION IX
Adjustments
9.1. If (a) Garan shall at any time be involved in a transaction to which
Section 424(a) of the Code is applicable, (b) Garan shall declare a dividend
payable in, or shall subdivide or combine, its Common Stock, or (c) any other
event shall occur which in the judgment of the Committee necessitates action by
way of adjusting the terms of the outstanding Options, the Committee may take
any such action as in its judgment shall be necessary to preserve the
Optionee's rights substantially proportionate to the rights existing prior to
such event and to the extent that such action shall include an increase or
decrease in the number of shares of Common Stock subject to outstanding
Options, the number of shares available under Section IV shall be increased or
decreased, as the case may be, proportionately. The judgment of the Committee
with respect to any matter referred to in this Section IX shall be conclusive
and binding upon each Optionee.
SECTION X
Amendment and Termination of Plan
10.1. The Board may at any time, or from time to time, suspend or
terminate the Plan in whole or in part or amend it in such respects as the
Board may deem appropriate, provided that no such amendment shall be made which
would, without approval of the shareholders of Garan:
10.1.a. Materially modify the eligibility requirements for receiving
Options;
10.1.b. Materially increase the total number of shares of Common Stock
which may be issued pursuant to Options, except as provided in Section IX; or
10.1.c. Materially increase in any way the benefits accruing to
Optionees.
10.2. No amendment, suspension, or termination of this Plan, without the
Optionee's consent, shall alter or impair any of the rights or obligations
under any Option theretofore granted to an Optionee under the Plan.
SECTION XI
Government and Other Regulations
11.1. The obligation of Garan to issue, or transfer and deliver, shares
for Options exercised under the Plan or to deliver cash upon exercise of a
Limited Right or with respect to a Stock Appreciation Right, shall be subject
to all applicable laws, regulations, rules, orders, and approvals which shall
then be in effect and required by governmental entities and any stock exchanges
on which Common Stock may be traded.
SECTION XII
Miscellaneous Provisions
12.1. The right of the Company to terminate (whether by dismissal,
discharge, retirement, or otherwise) the Optionee's employment or service as a
member of the Board at any time at will or as otherwise provided by any
agreement between the Company and the Optionee is specifically reserved.
Neither the Optionee nor any person entitled to exercise the Optionee's rights
in the event of the Optionee's death shall have any of the rights of a
shareholder with respect to the shares subject to each Option except to the
extent that, and until, such shares shall have been issued upon the exercise of
each Option.
12.2. All expenses of administering the Plan shall be borne by Garan.
12.3. Payments received from Optionees upon the exercise of Options shall
be used for the general corporate purposes of Garan except that any stock
received or withheld in payment may be retired or retained in Garan's treasury
and reissued.
12.4. In addition to such other rights of indemnification as they may
have as members of the Board or the Committee, the members of the Board and the
Committee shall be indemnified by Garan against all costs and expenses
reasonably incurred by them in connection with any action, suit, or proceeding
to which they or any of them may be party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted under
the Plan, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by Garan) or
paid by them in satisfaction of a judgment in any such action, suit, or
proceeding, except a judgment based upon a finding of bad faith, provided that
upon the institution of any such action, suit, or proceeding, a Committee or
Board member, in writing, shall give Garan notice thereof and an opportunity,
at its own expense, to handle and defend the same before such Committee or
Board member undertakes to handle and defend it on such member's own behalf.
SECTION XIII
Shareholder Approval and Effective Dates
13.1. The Plan shall become effective when it is adopted by the Board.
However, if the Plan is not approved within one year after the Plan is adopted
by the Board by the vote at a meeting of the shareholders of Garan at which a
quorum is present by the holders of a majority of the shares voting at that
meeting, the Plan and all Options shall terminate at the time of that meeting
of shareholders, or, if no such meeting is held, after the passage of one year
from the date the Plan was adopted by the Board. Options may not be granted
under the Plan after the day before the 10th anniversary of adoption by the
Board.
EXHIBIT 5.1
[TANNENBAUM DUBIN & ROBINSON, LLP]
October 22, 1998
Garan, Incorporated
350 Fifth Avenue
New York, New York 10118
Re: Registration Statement on Form S-8 Relating to the
Garan, Incorporated 1998 Stock Option Plan ("Plan")
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Gentlemen:
This opinion is submitted in connection with the Registration Statement
on Form S-8 ("Registration Statement") filed by Garan, Incorporated ("Company")
on the date hereof with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to 200,000 shares of Common Stock,
no par value, of the Company issuable pursuant to the Plan.
We have examined such corporate documents and records of the Company,
certificates of public officials, and such other documents and questions of law
as we have deemed necessary or appropriate for the purpose of rendering this
opinion.
In examining the foregoing, we have assumed, without independent
verification, the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to original documents
of documents submitted to us as certified or photostatic copies. While nothing
has been brought to our attention which leads us to believe that the opinions
expressed herein are factually incorrect, we have not, beyond the examination
described above, made independent factual investigations for the purpose of
rendering this opinion, although we have made such inquiry of officers of the
Company as we have deemed necessary for the proper discharge of our
responsibilities as counsel to the Company and for the purpose of rendering
this opinion.
Notwithstanding anything herein to the contrary, whether expressly stated
or implied, the opinion hereinafter expressed is subject to the following
further qualifications and limitations, whether or not a specific reference is
made in this opinion to such qualifications and limitations:
A. The effect of applicable bankruptcy, insolvency, reorganization,
moratorium, or other similar laws, statutes, or rules of general application
relating to, or affecting, the enforcement of creditors' rights generally, now
or hereafter in effect.
B. As we are admitted to practice only in the State of New York,
this opinion is limited to the laws of the United States and State of New York,
and we offer no opinion as to the possible application of laws of other
jurisdiction, provided, however, that insofar as this opinion expresses an
opinion as to matters of Virginia law, we have relied upon the opinion of
Messrs. Hunton & Williams, Richmond, Virginia.
C. The effect of rules of law governing specific performance and
injunctive relief and such other principles of equity as the courts having
jurisdiction may apply at their discretion whether in a proceeding at law or in
equity.
Based upon the foregoing and upon such other information, documents, and
inquiry as we believe necessary to enable us to render this opinion, we are of
the opinion that the 200,000 shares of Common Stock issuable under the Plan
have been duly authorized and, when issued and paid for in accordance with the
terms of any option granted under the Plan, will be validly issued, fully paid,
and non- assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Respectfully submitted,
/s/ Tannenbaum Dubin & Robinson, LLP
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TANNENBAUM DUBIN & ROBINSON, LLP
EXHIBIT 23.2
CONSENT OF CITRIN, COOPERMAN & COMPANY, LLP
INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated November 11, 1997, on our audits of
the consolidated financial statements of Garan, Incorporated as of September
30, 1997 and 1996 filed with the Securities and Exchange Commission pursuant to
the Securities Act of 1933.
/s/ Citrin, Cooperman & Company, LLP
------------------------------------
CITRIN, COOPERMAN & COMPANY, LLP
New York, New York
October 22, 1998
