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EXHIBIT A
2000 STOCK OPTION PLAN
OF
JACLYN, INC.
1. Purposes of the Plan. This stock option plan (the "Plan") is intended to
provide an incentive to employees (including directors and officers who are
employees) of, and consultants to, Jaclyn, Inc., a Delaware corporation (the
"Company"), or any of its Subsidiaries (as such term is defined in Paragraph
19), and to offer an additional inducement in obtaining the services of such
individuals. The Plan provides for the grant of "incentive stock options"
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and nonqualified stock options which do not
qualify as ISOs ("NQSOs"). The Company makes no representation or warranty,
express or implied, as to the qualification of any option as an "incentive
stock option" under the Code.
2. Stock Subject to the Plan. Subject to the provisions of Paragraph 12,
the aggregate number of shares of the Company's Common Stock, par value $1.00
per share ("Common Stock"), for which options may be granted under the Plan
shall not exceed 300,000 shares. Such shares of Common Stock may, in the
discretion of the Board of Directors of the Company (the "Board of
Directors"), consist either in whole or in part of authorized but unissued
shares of Common Stock or shares of Common Stock held in the treasury of the
Company. Subject to the provisions of Paragraph 13, any shares of Common Stock
subject to an option which for any reason expires, is canceled or is
terminated unexercised or which ceases for any reason to be exercisable shall
again become available for the granting of options under the Plan. The Company
shall at all times during the term of the Plan reserve and keep available such
number of shares of Common Stock as will be sufficient to satisfy the
requirements of the Plan.
3. Administration of the Plan. The Plan will be administered by the Board,
or, in the sole discretion of the Board, by a committee (the "Committee")
consisting of two or more directors appointed by the Board. Those
administering the Plan shall be referred to herein as the "Administrators."
Notwithstanding the foregoing, if the Company is or becomes a corporation
issuing any class of common equity securities required to be registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to the extent necessary to preserve any deduction under Section 162(m)
of the Code or to comply with Rule 16b-3 promulgated under the Exchange Act,
or any successor rule ("Rule 16b-3"), any Committee appointed by the Board to
administer the Plan shall be comprised of two or more directors each of whom
shall be a "non-employee director," within the meaning of Rule 16b-3, and an
"outside director," within the meaning of Treasury Regulation Section 1.162-
27(e)(3), and the delegation of powers to the Committee shall be consistent
with applicable laws and regulations (including, without limitation,
applicable state law and Rule 16b-3). Unless otherwise provided in the By-Laws
of the Company, by resolution of the Board of Directors or applicable law, a
majority of the members of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, and any acts approved in writing by all members without a meeting,
shall be the acts of the Committee.
Subject to the express provisions of the Plan, the Administrators shall
have the authority, in their sole discretion, to determine the persons who
shall be granted options; the times when they shall receive options;
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whether an option granted to an employee shall be an ISO or a NQSO; the type
and number of shares of Common Stock to be subject to each option; the term of
each option; the date each option shall become exercisable; whether an option
shall be exercisable in whole or in installments, and, if in installments, the
number of shares of Common Stock to be subject to each installment; whether
the installments shall be cumulative; the date each installment shall become
exercisable and the term of each installment; whether to accelerate the date
of exercise of any option or installment; whether shares of Common Stock may
be issued upon the exercise of an option as partly paid, and, if so, the dates
when future installments of the exercise price shall become due and the
amounts of such installments; the exercise price of each option; the form of
payment of the exercise price; the fair market value of a share of Common
Stock; whether and under what conditions to restrict the sale or other
disposition of the shares of Common Stock acquired upon the exercise of an
option and, if so, whether and under what conditions to waive any such
restriction; whether and under what conditions to subject the exercise of all
or any portion of an option to the fulfillment of certain restrictions or
contingencies as specified in the contract referred to in Paragraph 11 (the
"Contract"), including, without limitation, restrictions or contingencies
relating to (a) entering into a covenant not to compete with the Company, its
Parent (if any) (as such term is defined in Paragraph 19) and any
Subsidiaries, (b) financial objectives for the Company, any of its
Subsidiaries, a division, a product line or other category and/or (c) the
period of continued employment of the optionee with the Company or any of its
Subsidiaries, and to determine whether such restrictions or contingencies have
been met; the amount, if any, necessary to satisfy the obligation of the
Company, any of its Subsidiaries or any Parent to withhold taxes or other
amounts; whether an optionee has a Disability (as such term is defined in
Paragraph 19); with the consent of the optionee, to cancel or modify an
option, provided, however, that the modified provision is permitted to be
included in an option granted under the Plan on the date of the modification;
and provided, further, however, that in the case of a modification (within the
meaning of Section 424(h) of the Code) of an ISO, such option as modified
would be permitted to be granted on the date of such modification under the
terms of the Plan; to construe the respective Contracts and the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
approve any provision of the Plan or any option granted under the Plan or any
amendment to either, which, under Rule 16b-3 or Section 162(m) of the Code,
requires the approval of the Board of Directors, a committee of non-employee
directors or the stockholders, in order to be exempt under Section 16(b) of
the Exchange Act (unless otherwise specifically provided herein) or to
preserve any deduction under Section 162(m) of the Code; and to make all other
determinations necessary or advisable for administering the Plan. Any
controversy or claim arising out of or relating to the Plan, any option
granted under the Plan or any Contract shall be determined unilaterally by the
Administrators in their sole discretion. The determinations of the
Administrators on matters referred to in this Paragraph 3 shall be conclusive
and binding on all parties. No Administrator or former Administrator shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted hereunder.
4. Eligibility. The Administrators may from time to time, consistent with
the purposes of the Plan, grant options to such employees (including officers
and directors who are employees) of, or consultants to, the Company or any of
its Subsidiaries, as the Administrators may determine in their sole
discretion. Such options granted shall cover such number of shares of Common
Stock as the Administrators may determine in their sole discretion; provided,
however, that the maximum number of shares subject to options that may be
granted to any employee during any calendar year under the Plan shall be
200,000 shares; provided, further, however, that the aggregate market value
(determined at the time the option is granted) of the shares of Common Stock
for which any eligible employee may be granted ISOs under the Plan or any
other plan of the Company, or of a Parent or a Subsidiary of the Company,
which are exercisable for the first time by such optionee during any calendar
year
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shall not exceed $100,000. The $100,000 ISO limitation amount shall be applied
by taking ISOs into account in the order in which they were granted. Any
option (or portion thereof) granted in excess of such ISO limitation amount
shall be treated as a NQSO to the extent of such excess.
5. Exercise Price. The exercise price of the shares of Common Stock under
each option shall be determined by the Administrators in their sole
discretion; provided, however, that the exercise price of an ISO shall not be
less than the fair market value of the Common Stock subject to such option on
the date of grant; and provided, further, however, that if, at the time an ISO
is granted, the optionee owns (or is deemed to own under Section 424(d) of the
Code) stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, of any of its Subsidiaries, or of a Parent,
the exercise price of such ISO shall not be less than 110% of the fair market
value of the Common Stock subject to such ISO on the date of grant.
The fair market value of a share of Common Stock on any day shall be (a) if
the principal market for the Common Stock is a national securities exchange,
the average of the highest and lowest sales prices per share of the Common
Stock on such day as reported by such exchange or on a consolidated tape
reflecting transactions on such exchange, (b) if the principal market for the
Common Stock is not a national securities exchange and the Common Stock is
quoted on The Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales price
information is available with respect to the Common Stock, the average of the
highest and lowest sales prices per share of the Common Stock on such day on
Nasdaq, or (ii) if such information is not available, the average of the
highest bid and the lowest asked prices per share for the Common Stock on such
day on Nasdaq, or (c) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is not quoted on Nasdaq, the
average of the highest bid and lowest asked prices per share for the Common
Stock on such day as reported on the OTC Bulletin Board Service or by National
Quotation Bureau, Incorporated or a comparable service; provided, however,
that if clauses (a), (b) and (c) of this Paragraph 5 are all inapplicable, or
if no trades have been made or no quotes are available for such day, the fair
market value of a share of Common Stock shall be determined by the
Administrators by any method consistent with any applicable regulations
adopted by the Treasury Department relating to stock options.
6. Term. Each option granted pursuant to the Plan shall be for such term as
is established by the Administrators, in their sole discretion; provided,
however, that the term of each ISO granted pursuant to the Plan shall be for a
period not exceeding 10 years from the date of grant thereof, and provided
further, that if, at the time an ISO is granted, the optionee owns (or is
deemed to own under Section 424(d) of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company, of
any of its Subsidiaries or of a Parent, the term of the ISO shall be for a
period not exceeding five years from the date of grant. Options shall be
subject to earlier termination as hereinafter provided.
7. Exercise. An option (or any installment thereof), to the extent then
exercisable, shall be exercised by giving written notice to the Company at its
principal office stating which option is being exercised, specifying the
number of shares of Common Stock as to which such option is being exercised
and accompanied by payment in full of the aggregate exercise price therefor
(or the amount due on exercise if the applicable Contract permits installment
payments) (a) in cash or by certified check, (b) with previously acquired
shares of Common Stock having an aggregate fair market value, on the date of
exercise, equal to the aggregate exercise price of all options being
exercised, (c) any combination thereof or (d) one-tenth of the aggregate
exercise price in cash (or by certified check) and the balance by issuance of
a recourse promissory note in form satisfactory to the
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Administrators (the "Note") bearing interest at a rate equal to or greater
than one hundred ten (110%) percent of the "applicable federal rate" in effect
on the date of exercise of the stock option in accordance with Section 1274(d)
of the Code, with interest payable annually on the anniversary date of said
Note, said Note to mature and be payable as to principal and accrued but
unpaid interest in accordance with the determination of the Administrators on
the date of grant, but in no event later than the ninth anniversary of the
exercise date, with the holder of the stock option having the right to prepay
at any time all or any portion of the unpaid principal, to designate whether
said prepayment(s) shall be allocated (x) to pay fully in cash the exercise
price with respect to certain of the shares or (y) pro rata among all of the
shares which have not previously been paid for fully in cash; provided, that
the cash (or certified check) portion to be paid pursuant hereto shall in no
event be less than the product of (1) the number of shares as to which the
stock option is being exercised, multiplied by (2) the then par value per
share; and provided, further, that shares acquired by issuance of a Note shall
not be sold, assigned, pledged, hypothecated or transferred until the Note is
fully paid as to principal and accrued interest (or until certain of the
shares so acquired have been fully paid for in cash by the holder of stock
option pursuant to subsection (x) hereinabove), and that certificates
representing such shares shall bear an appropriate legend referring to said
restriction. Notwithstanding the foregoing, in no case may shares be tendered
if such tender would require the Company to incur a charge against its
earnings for financial accounting purposes. The Company shall not be required
to issue any shares of Common Stock pursuant to the exercise of any option
until all required payments with respect thereto, including payments for any
required withholding amounts, have been made. Fair market value of the shares
shall be determined in accordance with Paragraph 5.
An optionee shall not have the rights of a stockholder with respect to
shares of Common Stock to be received upon the exercise of an option until the
date of issuance of a stock certificate to the optionee for such shares or, in
the case of uncertificated shares, until the date an entry is made on the
books of the Company's transfer agent representing such shares; provided,
however, that until such stock certificate is issued or until such book entry
is made, any optionee using previously acquired shares of Common Stock in
payment of an option exercise price shall continue to have the rights of a
stockholder with respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be purchased or issued
under the Plan.
8. Termination of Relationship. Except as may otherwise be expressly
provided in the applicable Contract, any optionee whose employment or
consulting relationship with the Company (and its Parent and Subsidiaries) has
terminated for any reason other than the death or Disability of the optionee
may exercise any option granted to the optionee, to the extent exercisable on
the date of such termination, at any time within three months after the date
of termination, but not thereafter and in no event after the date the option
would otherwise have expired; provided, however, that if such relationship is
terminated either (a) for cause, or (b) without the consent of the Company,
such option shall terminate immediately.
Nothing in the Plan or in any option granted under the Plan shall confer on
any person any right to continue in the employ or as a consultant of the
Company, its Parent or any of its Subsidiaries, or interfere in any way with
any right of the Company, its Parent or any of its Subsidiaries to terminate
such relationship at any time for any reason whatsoever without liability to
the Company, its Parent or any of its Subsidiaries.
9. Death or Disability of an Optionee. Except as may otherwise be expressly
provided in the applicable Contract, if an optionee dies (a) while he is
employed by, or a consultant to, the Company, its Parent or any of its
Subsidiaries, (b) within three months after the termination of the optionee's
employment or consulting
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relationship with the Company, its Parent and its Subsidiaries (unless such
termination was for cause or without the consent of the Company) or (c) within
one year following the termination of such employment or consulting
relationship by reason of the optionee's Disability, the options granted to
the optionee as an employee of, or consultant to, the Company or any of its
Subsidiaries, may be exercised, to the extent exercisable on the date of the
optionee's death, by the optionee's Legal Representative (as such term is
defined in Paragraph 19), at any time within one year after death, but not
thereafter and in no event after the date the option would otherwise have
expired. Except as may otherwise be expressly provided in the applicable
Contract, any optionee whose employment or consulting relationship with the
Company, its Parent and its Subsidiaries has terminated by reason of the
optionee's Disability may exercise such options, to the extent exercisable
upon the effective date of such termination, at any time within one year after
such date, but not thereafter and in no event after the date the option would
otherwise have expired.
10. Compliance with Securities Laws. It is a condition to the exercise of
any option that either (a) a Registration Statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the shares of
Common Stock to be issued upon such exercise shall be effective and current at
the time of exercise, or (b) there is an exemption from registration under the
Securities Act for the issuance of the shares of Common Stock upon such
exercise. Nothing herein shall be construed as requiring the Company to
register shares subject to any option under the Securities Act or to keep any
Registration Statement effective or current. The Administrators may require,
in their sole discretion, as a condition to the grant or exercise of an
option, that the optionee execute and deliver to the Company the optionee's
representations and warranties, in form, substance
and scope satisfactory to the Administrators, which the Administrators
determine is necessary or convenient to facilitate the perfection of an
exemption from the registration requirements of the Securities Act, applicable
state securities laws or other legal requirements, including without
limitation, that (a) the shares of Common Stock to be issued upon exercise of
the option are being acquired by the optionee for the optionee's own account,
for investment only and not with a view to the resale or distribution thereof,
and (b) any subsequent resale or distribution of shares of Common Stock by
such optionee will be made only pursuant to (i) a Registration Statement under
the Securities Act which is effective and current with respect to the shares
of Common Stock being sold, or (ii) a specific exemption from the registration
requirements of the Securities Act. In addition, if at any time the
Administrators shall determine that the listing or qualification of the shares
of Common Stock subject to such option on any securities exchange, Nasdaq or
under any applicable law, or that the consent or approval of any governmental
agency or regulatory body, is necessary or desirable as a condition to, or in
connection with, the granting of an option or the issuance of shares of Common
Stock thereunder, such option may not be granted or exercised in whole or in
part, as the case may be, unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Administrators.
11. Stock Option Contracts. Each option shall be evidenced by an
appropriate Contract which shall be duly executed by the Company and the
optionee. Such Contract shall contain such terms, provisions and conditions
not inconsistent herewith as may be determined by the Administrators in their
sole discretion. The terms of each option and Contract need not be identical.
12. Adjustments upon Changes in Common Stock. Notwithstanding any other
provision of the Plan, in the event of any change in the outstanding Common
Stock by reason of a stock dividend, recapitalization, merger in which the
Company is the surviving corporation, spinoff, split-up, combination or
exchange of shares or the like which results in a change in the number or kind
of shares of Common Stock which are outstanding
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immediately prior to such event, the aggregate number and kind of shares
subject to the Plan, the aggregate number and kind of shares subject to each
outstanding option and the exercise price thereof, and the maximum number of
shares subject to options that may be granted to any employee in any calendar
year, shall be appropriately adjusted by the Board of Directors, whose
determination shall be conclusive and binding on all parties. Such adjustment
may provide for the elimination of fractional shares that might otherwise be
subject to options without payment therefor.
Notwithstanding the foregoing, no adjustment shall be made pursuant to this
Paragraph 12 if such adjustment (a) would cause the Plan to fail to comply
with Section 422 of the Code or with Rule 16b-3 of the Exchange Act (if
applicable to such option), or (b) would be considered as the adoption of a
new plan requiring stockholder approval.
In the event of a proposed dissolution or liquidation of the Company, or in
the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, the
Board of Directors of the Company shall, as to outstanding options, either (a)
make appropriate provision for the protection of any such outstanding options
by the substitution on an equitable basis of appropriate stock of the Company
or of the merged, consolidated or otherwise reorganized corporation which will
be issuable in respect to one share of Common Stock of the Company; provided
that the excess of the aggregate fair market value of the shares subject to
the options immediately after such substitution over the purchase price
thereof is not more than the excess of the aggregate fair market value of the
shares subject to such options immediately before such substitution over the
purchase price thereof, or (b) upon written notice to
an optionee, provide that all unexercised options must be exercised within a
specified number of days of the date of such notice or they will be
terminated. In any such case, the Board of Directors may, in its discretion,
advance the lapse of any waiting or installment periods and exercise dates.
13. Amendments and Termination of the Plan. The Plan was adopted by the
Board of Directors on October 13, 2000. No option may be granted under the
Plan after October 12, 2010. The Board of Directors, without further approval
of the Company's stockholders, may at any time suspend or terminate the Plan,
in whole or in part, or amend it from time to time in such respects as it may
deem advisable, including without limitation, in order that ISOs granted
hereunder meet the requirements for "incentive stock options" under the Code,
or to comply with the provisions of Rule 16b-3 or Section 162(m) of the Code
or any change in applicable laws or regulations, ruling or interpretation of
any governmental agency or regulatory body; provided, however, that no
amendment shall be effective, without the requisite prior or subsequent
stockholder approval, which would (a) except as contemplated in Paragraph 12,
increase the maximum number of shares of Common Stock for which options may be
granted under the Plan or change the maximum number of shares for which
options may be granted to employees in any calendar year, (b) change the
eligibility requirements for individuals entitled to receive options
hereunder, or (c) make any change for which applicable law or any governmental
agency or regulatory body requires stockholder approval. No termination,
suspension or amendment of the Plan shall adversely affect the rights of an
optionee under any option granted under the Plan without such optionee's
consent. The power of the Administrators to construe and administer any option
granted under the Plan prior to the termination or suspension of the Plan
shall continue after such termination or during such suspension.
14. Non-Transferability. No option granted under the Plan shall be
transferable other than by will or the laws of descent and distribution, and
options may be exercised, during the lifetime of the optionee, only by the
optionee or the optionee's Legal Representatives. Except to the extent
provided above, options may not be
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assigned, transferred, pledged, hypothecated or disposed of in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process, and any such attempted assignment,
transfer, pledge, hypothecation or disposition shall be null and void ab
initio and of no force or effect.
15. Withholding Taxes. The Company, or its Subsidiary or Parent, as
applicable, may withhold (a) cash or (b) with the consent of the
Administrators (in the Contract or otherwise), shares of Common Stock to be
issued upon exercise of an option or a combination of cash and shares, having
an aggregate fair market value (determined in accordance with Paragraph 5)
equal to the amount which the Administrators determine is necessary to satisfy
the obligation of the Company, a Subsidiary or Parent to withhold Federal,
state and local income taxes or other amounts incurred by reason of the grant,
vesting, exercise or disposition of an option or the disposition of the
underlying shares of Common Stock. Alternatively, the Company may require the
optionee to pay to the Company such amount, in cash, promptly upon demand.
16. Legends; Payment of Expenses. The Company may endorse such legend or
legends upon the certificates for shares of Common Stock issued upon exercise
of an option under the Plan and may issue such "stop transfer" instructions to
its transfer agent in respect of such shares as it determines, in its sole
discretion, to be necessary or appropriate to (a) prevent a violation of, or
to perfect an exemption from, the registration requirements of the Securities
Act, applicable state securities laws or other legal requirements, (b)
implement the provisions of the Plan or any agreement between the Company and
the optionee with respect to such shares of
Common Stock, or (c) permit the Company to determine the occurrence of a
"disqualifying disposition," as described in Section 421(b) of the Code, of
the shares of Common Stock transferred upon the exercise of an ISO granted
under the Plan.
17. Use of Proceeds. The proceeds to be received upon the exercise of an
option under the Plan shall be added to the general funds of the Company and
used for such corporate purposes as the Board of Directors may determine, in
its sole discretion.
18. Substitutions and Assumptions of Options of Certain Constituent
Corporations. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as such term is
defined in Paragraph 19) or assume the prior options of such Constituent
Corporation.
19. Definitions.
(a) "Constituent Corporation" shall mean any corporation which engages
with the Company, its Parent or any Subsidiary in a transaction to which
Section 424(a) of the Code applies (or would apply if the option assumed or
substituted were an ISO), or any Parent or any Subsidiary of such corporation.
(b) "Disability" shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Code.
(c) "Legal Representative" shall mean the executor, administrator or
other person who at the time is entitled by law to exercise the rights of a
deceased or incapacitated optionee with respect to an option granted under the
Plan.
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(d) "Parent" shall mean a "parent corporation" within the meaning of
Section 424(e) of the Code.
(e) "Subsidiary" shall mean a "subsidiary corporation" within the meaning
of Section 424(f) of the Code.
20. Governing Law. The Plan, such options as may be granted hereunder, the
Contracts and all related matters shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to conflict
or choice of law provisions.
21. Partial Invalidity. The invalidity, illegality or unenforceability of
any provision in the Plan, any option or Contract shall not affect the
validity, legality or enforceability of any other provision, all of which
shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.
22. Stockholder Approval. The Plan shall be subject to approval by a
majority of the votes present in person and by proxy entitled to vote hereon
at a duly held meeting of the Company's stockholders at which a quorum is
present. No options granted hereunder may be exercised prior to such approval,
provided, however, that the date of grant of any option shall be determined as
if the Plan had not been subject to such approval.
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