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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 22, 2000
REGISTRATION NO. 333-94139
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-8
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933*
-----------------------------
KIMBERLY-CLARK CORPORATION
(Exact Name of Registrant as specified in its Charter)
-----------------------------
DELAWARE 2621 39-0394230
(State or other (Primary Standard Industrial) (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
P.O. BOX 619100
DALLAS, TEXAS 75261-9100
(972) 281-1200
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-----------------------------
SAFESKIN CORPORATION AMENDED AND RESTATED EQUITY COMPENSATION PLAN
SAFESKIN CORPORATION CHIEF EXECUTIVE OFFICER PERFORMANCE OPTION
-----------------------------
O. GEORGE EVERBACH
SENIOR VICE PRESIDENT -- LAW AND GOVERNMENT AFFAIRS
KIMBERLY-CLARK CORPORATION
P.O. BOX 619100
DALLAS, TEXAS 75261-9100
(972) 281-1200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------------
Copies to:
DENNIS V. OSIMITZ
SIDLEY & AUSTIN
BANK ONE PLAZA
10 S. DEARBORN
CHICAGO, ILLINOIS 60603
*Filed as Post-Effective Amendment No. 1 on Form S-8 to Kimberly-Clark's
Registration Statement on Form S-4 (Registration No. 333-94139) pursuant to the
procedure described herein.
See "Explanatory Note."
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EXPLANATORY NOTE
Kimberly-Clark Corporation, a Delaware corporation ("Kimberly-Clark"),
hereby amends its Registration Statement on Form S-4 (Registration No.
333-94139) by filing this Post-Effective Amendment No. 1 on Form S-8 relating
to the offer and sale after the effective time of the Merger (as defined below)
of shares of Kimberly-Clark common stock, $1.25 par value per share ("Common
Stock"), together with the associated rights to purchase shares of Series A
Junior Participating Preferred Stock without par value ("Rights"), issuable
pursuant to the Safeskin Corporation Amended and Restated Equity Compensation
Plan and the Safeskin Corporation Chief Executive Officer Performance Option.
On February 8, 2000, Brooks Acquisition Corp., a Florida corporation and a
wholly-owned subsidiary of Kimberly-Clark ("Brooks Acquisition Corp."), merged
with and into Safeskin Corporation, a Florida corporation ("Safeskin") (the
"Merger"). Pursuant to the Agreement and Plan of Merger dated as of November
17, 1999, among Kimberly-Clark, Brooks Acquisition Corp. and Safeskin,
Kimberly-Clark granted substitute options to purchase shares of Common Stock,
together with the associated Rights, to current and former employees and
directors of Safeskin who elected to receive such options in lieu of cash
payments. The substitute options are subject to the same terms, conditions and
restrictions as were applicable to the Safeskin options immediately prior to
the Merger, except that the right to exercise the options did not accelerate as
a result of the Merger.
This Post-Effective Amendment relates to Common Stock, together with the
associated Rights, issuable pursuant to the terms of the Safeskin Corporation
Amended and Restated Equity Compensation Plan and the Safeskin Corporation Chief
Executive Officer Performance Option. The designation of this Post-Effective
Amendment No. 1 as Registration No. 333-94139 denotes that this Post-Effective
Amendment relates only to the shares of Common Stock, together with the
associated Rights, that are issuable pursuant to the Safeskin Corporation
Amended and Restated Equity Compensation Plan and the Safeskin Corporation Chief
Executive Officer Performance Option, and that this is the first Post-Effective
Amendment to the Form S-4.
The information required by Part I of Form S-8 will be included in the
documents sent or given to participants in the plan. Such documents are not
required to be and are not filed with the SEC pursuant to Rule 428 of the
Securities Act of 1933, as amended, (the "Securities Act") and the Note to Part
I of Form S-8. These documents and the documents incorporated by reference in
this Registration Statement pursuant to Item 3 of Part II of Form S-8, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents, which previously have been filed by Kimberly-Clark
with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated by reference and made a part hereof:
1. The Annual Report on Form 10-K for the year ended December 31, 1998;
2. The Annual Report on Form 10-K/A for the year ended December 31, 1998;
3. The Quarterly Report on Form 10-Q for the quarter ended March 31,
1999;
4. The Quarterly Report on Form 10-Q/A for the quarter ended March 31,
1999;
5. The Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;
6. The Quarterly Report on Form 10-Q for the quarter ended September 30,
1999;
7. The Current Reports on Form 8-K dated January 26, 1999, March 12,
1999, March 16, 1999, July 22, 1999, and November 30, 1999; and
8. All other reports filed by Kimberly-Clark pursuant to Section 13(a)
or 15(d) of the Exchange Act, since the end of the fiscal year ended
December 31, 1998.
All documents subsequently filed by Kimberly-Clark pursuant to Sections
13(a), 13(c), and 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment 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 or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares of Common Stock and the associated Rights
being registered hereby has been passed upon for Kimberly-Clark by O. George
Everbach, Senior Vice President-Law and Government Affairs of Kimberly-Clark.
Mr. Everbach is paid a salary by Kimberly-Clark, is a participant in various
employee benefit plans offered to employees of Kimberly-Clark generally and
owns and has options to purchase shares of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Kimberly-Clark by-laws provide, among other things, that
Kimberly-Clark shall (1) indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
other than an action by or in the right of Kimberly-Clark, by reason of the fact
that he is or was a director or officer of Kimberly-Clark, or is or was serving
at the request of Kimberly-Clark as a director or officer of another
corporation, or in the case of an officer or director of Kimberly-Clark is or
was serving as an employee or agent of a partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgements, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
Kimberly-Clark, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; and (2) indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
Kimberly-Clark to procure a judgement in its favor by reason of the fact that he
is or was a director or officer of Kimberly-Clark, or is or was serving at the
request of Kimberly-Clark as a director or officer of another corporation, or in
the case of an officer or director of Kimberly-Clark is or was serving as an
employee or agent of a partnership, joint venture, trust or other enterprise
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
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he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of Kimberly-Clark and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to Kimberly-Clark unless
and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper. The Kimberly-Clark
by-laws further provide that the indemnification provided therein shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled.
Section 145 of the Delaware General Corporation Law authorizes
indemnification by Kimberly-Clark of directors and officers under the
circumstances provided in the provisions of the Kimberly-Clark by-laws described
above, and requires such indemnification for expenses actually and reasonably
incurred to the extent a director or officer is successful in the defense of any
action or any claim, issue or matter therein.
Kimberly-Clark has purchased insurance which purports to insure
Kimberly-Clark against certain costs of indemnification which may be incurred
by it pursuant to the Kimberly-Clark by-laws and to insure the officers and
directors of Kimberly-Clark, and its subsidiary companies, against certain
liabilities incurred by them in the discharge of their functions as such
officers and directors except for liabilities resulting from their own
malfeasance.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
(a) The following is a list of Exhibits included as part of this
Registration Statement. Kimberly-Clark agrees to supply supplementally a copy
of any omitted schedule to the SEC upon request. Items marked with an asterisk
are filed herewith.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Restated Certificate of Incorporation of Kimberly-Clark dated June
12, 1997, is hereby incorporated by reference to Exhibit No. (3)(a)
of Kimberly-Clark's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997.
4.2 By-Laws of Kimberly-Clark, as amended November 22, 1996, are
hereby incorporated by reference to Exhibit No. 4.2 to the
Registration Statement on Form S-8 filed with the SEC on December
6, 1996 (Registration No. 333-17367).
4.3 Rights Agreement dated as of June 21, 1988, as amended and
restated as of June 8, 1995, between Kimberly-Clark and The
First National Bank of Boston (now known as EquiServe), as
Rights Agent, is hereby incorporated by reference to Exhibit No.
1 to the Registration Statement on Form 8-A/A of Kimberly-Clark
filed with the SEC on June 13, 1995.
4.4 Certificate of Adjustment dated March 7, 1997, filed by
Kimberly-Clark with The First National Bank of Boston (now known as
EquiServe), as Rights Agent, is hereby incorporated by reference to
Exhibit No. 2 to the Registration Statement on Form 8-A/A of
Kimberly-Clark filed with the SEC on March 17, 1997.
*4.5 Safeskin Corporation Amended and Restated Equity Compensation Plan.
*4.6 Safeskin Corporation Chief Executive Officer Performance Option.
5.1 Opinion of O. George Everbach, Senior Vice President - Law and
Government Affairs of Kimberly-Clark, is hereby incorporated by
reference to Exhibit No. 5.1 to the Registration Statement on Form
S-4 of Kimberly-Clark filed with the SEC on January 6, 2000
(Registration No. 333-94139).
*23.1 Consent of Deloitte & Touche LLP.
11-2
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23.2 Consent of O. George Everbach (included in Exhibit 5.1 to
this Registration Statement).
24.1 Powers of Attorney, are hereby incorporated by reference to
Exhibit No. 24.1 to the Registration Statement on Form S-4
of Kimberly-Clark filed with the SEC on January 6, 2000
(Registration No. 333-94139).
-----------
* Filed herewith
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant 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;
(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, represent 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 amount of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated offering range may be reflected in the
form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent 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, Form S-8 or Form F-3, and 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 SEC 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 the 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
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC 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 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
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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 Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Irving,
State of Texas, on February 22, 2000.
KIMBERLY-CLARK CORPORATION
By: /s/ Wayne R. Sanders
------------------------
Wayne R. Sanders
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Wayne R. Sanders Chairman of the Board and Chief February 22, 2000
- ---------------------- Executive Officer and Director (principal
Wayne R. Sanders executive officer)
/s/ John W. Donehower Senior Vice President and Chief Financial February 22, 2000
- ---------------------- Officer (principal financial officer)
John W. Donehower
/s/ Randy J. Vest Vice President and Controller (principal February 22, 2000
- ---------------------- accounting officer)
Randy J. Vest
</TABLE>
DIRECTORS
Signature Signature
--------- ---------
* *
- ------------------------------------- ---------------------------------------
John F. Bergstrom Pastora San Juan Cafferty
* *
- ------------------------------------- ---------------------------------------
Paul J. Collins Robert W. Decherd
* *
- ------------------------------------- ---------------------------------------
Thomas J. Falk William O. Fifield
* *
- ------------------------------------- ---------------------------------------
Claudio X. Gonzalez Louis E. Levy
* *
- ------------------------------------- ---------------------------------------
Frank A. McPherson Linda Johnson Rice
* *
- ------------------------------------- ---------------------------------------
Wolfgang R. Schmitt Randall L. Tobias
February 22, 2000
*By: /s/ O. George Everbach
-------------------------------------
O. George Everbach
Attorney-in-Fact
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ---------- -----------
<S> <C> <C>
4.1 Restated Certificate of Incorporation of Kimberly-Clark dated June
21, 1997, is hereby incorporated by reference to Exhibit No. (3)(a)
of Kimberly-Clark's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997.
4.2 By-Laws of Kimberly-Clark, as amended November 22, 1996, are
hereby incorporated by reference to Exhibit No. 4.2 to the
Registration Statement on Form S-8 filed with the SEC on
December 6, 1996 (Registration No. 33-17367).
4.3 Rights Agreement dated as of June 21, 1988, as amended and
restated as of June 8, 1995, between Kimberly-Clark and The
First National Bank of Boston (now known as EquiServe), as
Rights Agent, is hereby incorporated by reference to Exhibit No.
1 to the Registration Statement on Form 8-A/A of Kimberly-Clark
filed with the SEC on June 13, 1995.
4.4 Certificate of Adjustment dated March 7, 1997, filed by
Kimberly-Clark with The First National Bank of Boston (now known as
EquiServe), as Rights Agent, is hereby incorporated by reference to
Exhibit No. 2 to the Registration Statement on Form 8-A/A of
Kimberly-Clark filed with the SEC on March 17, 1997.
*4.5 Safeskin Corporation Amended and Restated Equity Compensation Plan.
*4.6 Safeskin Corporation Chief Executive Officer Performance Option.
5.1 Opinion of O. George Everbach, Senior Vice President - Law and
Government Affairs of Kimberly-Clark, is hereby incorporated by
reference to Exhibit No. 5.1 to the Registration Statement on Form
S-4 of Kimberly-Clark filed with the SEC on August 13, 1999
(Registration No. 333-85099).
*23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of O. George Everbach (included in Exhibit 5.1 to this
Registration Statement).
24.1 Powers of Attorney, are hereby incorporated by reference to
Exhibit No. 24.1 to the Registration Statement on Form S-4 of
Kimberly-Clark filed with the SEC on January 6, 2000 (Registration
No. 333-94139).
</TABLE>
- ----------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.5
SAFESKIN CORPORATION
AMENDED AND RESTATED
EQUITY COMPENSATION PLAN
SECTION 1. PURPOSE; DEFINITIONS
The purpose of the Safeskin Corporation Equity Compensation Plan (the
"Plan") is to enable key employees, officers, Eligible Directors (as
hereinafter defined) and Eligible Independent Contractors (as hereinafter
defined) of Safeskin Corporation ("the Company") to (i) own shares of stock in
the Company, (ii) participate in the shareholder value which has been created,
(iii) have a mutuality of interest with other shareholders and (iv) enable the
Company to attract, retain and motivate key employees, officers, non-employee
directors and independent contractors of particular merit. All share amounts
stated in the Plan take into account the Company's 100% stock dividend paid on
April 1, 1998.
For the purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Board" means the Board of Directors of the Company.
b. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
c. "Committee" means the Committee designated by the Board to administer
the Plan. If at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan shall be exercised
by the Board.
d. "Company" means Safeskin Corporation, its subsidiaries or any
successor organization.
e. "Designated Securities Broker" means the registered securities
broker(s) designated by the Company who agrees to effect the cashless
exercise of an Option pursuant to Section 5(m) hereof.
f. "Disability" means permanent and total disability within the meaning
of Section 22(e)(3) of the Code.
g. "Early Retirement" means retirement from active employment with the
Company pursuant to the early retirement procedures of the Company.
h. "Eligible Director" means a person who is a non-employee member of
the Board, including those who are members of the Committee.
i. "Eligible Independent Contractor" means an independent contractor
hired by the Company to provide consulting services on a regular basis
for the Company.
j. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
<PAGE> 2
k. "Fair Market Value" means the fair market value of the Stock as
determined by the Committee in good faith based on the best available
facts and circumstances at the time; provided, however, that where
there is a public market for the Stock and the Stock is registered
under the Exchange Act, Fair Market Value shall mean the per share or
aggregate value of the Stock as of any given date, as determined by
reference to the price of the last traded share of Stock on the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System for
such date or the next preceding date that Stock was traded on such
market, or, in the event the Stock is listed on a stock exchange, the
closing price per share of Stock as reported on such exchange for
such date.
l. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of
Section 422 of the Code.
m. "Insider" means a Participant who is subject to Section 16 of the
Exchange Act.
n. "IPO" shall have the meaning set forth in Section 5(n) hereof.
o. "Non-Employee Director" shall have the meaning set forth in the Rules.
p. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
q. "Normal Retirement" means retirement from active employment with the
Company pursuant to the normal retirement procedures of the Company.
r. "Outside Director" shall have the meaning set forth in the Treasury
regulations issued pursuant to section 182(m) of the Code.
s. "Participant" means a key employee, officer, Eligible Director or
Eligible Independent Contractor to whom an award is granted pursuant
to the Plan.
t. "Plan" means the Amended and Restated Safeskin Corporation Equity
Compensation Plan, as hereinafter amended from time to time.
u. "Restricted Stock" means an award of shares of Stock that is subject
to restrictions pursuant to Section 7 below.
v. "Retirement" means Normal or Early Retirement.
w. "Rules" means the regulations promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
x. "Stock" means the Common Stock of the Company, par value $.01 per
share.
y. "Stock Appreciation Right" means the right, pursuant to an award
granted under Section 6 below, to surrender to the Company all (or a
portion) of a Stock Option in exchange for an amount in cash and/or
shares of Stock equal in value to the excess of (i) the Fair Market
Value, as of the date such right is exercised and the related Stock
Option (or such portion thereof) is surrendered, of the shares of
Stock covered by such Stock Option (or such portion thereof), over
(ii) the aggregate exercise price of such Stock Appreciation Right
(or such portion thereof).
-2-
<PAGE> 3
z. "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5 below.
In addition, the terms "Change in Control," "Potential Change in Control"
and "Change in Control Price" shall have meanings set forth, respectively, in
Sections 8(b), (c) and (d) below.
SECTION 2. ADMINISTRATION
The Plan shall be administered by a Committee designated by the Board of
not less than two members of the Board who are Outside Directors and
Non-Employee Directors.
The Committee shall have the authority to grant pursuant to the terms of
the Plan: (i) Stock Options; (ii) Stock Appreciation Rights and/or (iii)
Restricted Stock to key employees and officers; (i) Stock Options and/or (ii)
Stock Appreciation Rights to Eligible Independent Contractors; and Stock
Options to Eligible Directors, pursuant to Section 5(n) hereof.
In particular, the Committee shall, subject to the limitations and terms
of the Plan, have the authority:
(i) to select the officers and other key employees of the Company to
whom Stock Options, Stock Appreciation Rights and/or Restricted
Stock may from time to time be granted hereunder, the Eligible
Independent Contractors to whom Stock Options and Stock Appreciation
Rights may from time to time be granted hereunder and the Eligible
Directors to whom Stock Options may be granted hereunder.
(ii) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and/or
Restricted Stock, or any combination thereof, are to be granted
hereunder;
(iii) to determine the number of shares to be covered by each such award
granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder, including, but
not limited to, the option or exercise price and any restriction or
limitation, based upon such factors as the Committee shall
determine, in its sole discretion;
(v) to determine whether and under what circumstances a Stock Option
may be exercised and settled in cash or Stock or without a payment
of cash;
(vi) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an award under this
Plan shall be deferred either automatically or at the election of
the Participant; and
(vii) to amend the terms of any outstanding award (with the consent of
the Participant) to reflect terms not otherwise inconsistent with
the Plan, including amendments concerning vesting acceleration or
forfeiture waiver regarding any award or the extension of a
Participant's right with respect awards granted under the Plan, as a
result of termination of employment or service or otherwise, based
on such factors as the Committee shall determine, in its sole
discretion.
3
<PAGE> 4
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and Plan
Participants.
SECTION 3. STOCK SUBJECT TO THE PLAN
(a) Subject to adjustment pursuant to Section 3(b) below and in addition
to shares of Common Stock previously authorized under the Plan, effective
January 1, 1997, the aggregate number of shares of Common Stock that may be
subject to grants of Stock Options, Stock Appreciation Rights and Restricted
Stock under the Plan in any calendar year shall not exceed 2 1/4% of the
outstanding shares of Common Stock at the time of such grant. To the extent the
number of shares of Common Stock that are subject to grants made in a calendar
year is less than 2 1/2% of the outstanding shares of Common Stock on December
31st of such year, the number of shares of Common Stock that may be subject to
grants of Stock Options, Stock Appreciation Rights and Restricted Stock in
subsequent years shall be increased. The aggregate number of shares of Stock
that may be subject to Incentive Stock Options during the term of the Plan is
1,000,000 shares. Such shares may be authorized but unissued shares or
reacquired shares. In the event the number of shares of Stock issued under the
Plan and the number of shares of Stock subject to outstanding awards (taking
into account the share counting requirements established under the Rules) equals
the maximum number of shares of Stock authorized under the Plan, no further
awards shall be made unless the Plan is amended in accordance with the Rules or
additional shares of Stock become available for further awards under the Plan.
If and to the extent that Options or Stock Appreciation Rights granted under the
Plan terminate, expire or are canceled without having been exercised, or if any
shares of Restricted Stock are forfeited, such shares shall again be available
for subsequent awards under the Plan.
(b) If any change is made to the Stock (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, or exchange of shares or any other change in capital
structure made without receipt of consideration), then unless such event or
change results in the termination of all outstanding awards under the Plan, the
Board or the Committee shall preserve the value of the outstanding awards by
adjusting the maximum number and class of shares issuable under the Plan to
reflect the effect of such event or change in the Company's capital structure,
and by making appropriate adjustments to the number and class of shares subject
to an outstanding award and/or the option price of each outstanding Option and
Stock Appreciation Right, except that any fractional shares resulting from such
adjustments shall be eliminated by rounding any portion of a share equal to .500
or greater up, and any portion of a share equal to less than .500 down, in each
case to the nearest whole number.
SECTION 4. ELIGIBILITY; PARTICIPANT LIMITATIONS CONCERNING ISSUANCES AND STOCK
SUBJECT TO AWARDS
Officers, key employees and Eligible Independent Contractors who are
responsible for or contribute to the management, growth and/or profitability of
the business of the Company are eligible to be granted awards under the Plan.
Eligible Directors, including members of the Committee, shall be eligible for
grants under the Plan, pursuant to Section 5(n) hereof. The maximum aggregate
number of shares of Stock that shall be subject to awards granted under the
Plan to any single Participant during a calendar year shall not exceed
1,000,000 shares.
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SECTION 5. STOCK OPTIONS
Stock Options may be granted alone, in addition to or in tandem with other
awards granted under the Plan. Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve. Stock Options
granted under the Plan may be of two types: (i) Incentive Stock Options and
(ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant Incentive Stock Options,
Non-Qualified Stock Options or both types of Stock Options (in each case with
or without Stock Appreciation Rights). To the extent that any Stock Option does
not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified
Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised,
so as to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock Option
under Section 422.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) OPTION PRICE. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant
but shall be not less than 100% of the Fair Market Value of the Stock
at the time of grant.
Any Incentive Stock Option granted to any optionee who, at the time
the Option is granted, owns more than 10% of the voting power of all
classes of stock of the Company or of a Parent or Subsidiary
corporation (within the meaning of Section 424 of the Code), shall
have an exercise price no less than 110% of Fair Market Value per
share on date of the grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten
years after the date the Stock Option is granted. However, any
Incentive Stock Option granted to any optionee who, at the time the
Option is granted, owns more than 10% of the voting power of all
classes of stock of the Company or of a Parent or Subsidiary
corporation may not have a term of more than five years. No Option may
be exercised by any person after expiration of the term of the Option.
(c) EXERCISABILITY. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined
by the Committee at or after grant; provided, however, that, except as
provided in Section 5(g) and Section 8, unless otherwise determined by
the Committee at or after grant, no Stock Option shall be exercisable
during the six months following the date of the granting of such
Option. If the Committee provides, in its discretion, that any Stock
Option is exercisable only in installments, the Committee may waive
such installment exercise provisions at any time at or after grant in
whole or in part, based on such factors as the Committee shall
determine, in its sole discretion.
(d) METHOD OF EXERCISE. Subject to whatever installment exercise
provisions apply under Section 5(c), Stock Options may be exercised in
whole or in part at any time and from time to time during the Option
period, by giving written notice of exercise to the Company specifying
the number of shares to be purchased. Such notice shall be accompanied
by payment in full of the purchase price, either by certified or bank
check, or such other instrument as the Committee may accept. As
determined by the Committee, in its sole
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<PAGE> 6
discretion, at or after grant, payment in full or in part may also be
made in the form of unrestricted Stock already owned by the optionee
(based on the Fair Market Value of the Stock so tendered
as of the date the Option is exercised, as determined by the
Committee); provided, however, that, in the case of an Incentive Stock
Option, the right to make a payment in the form of unrestricted Stock
already owned by the optionee may be authorized only at the time the
Option is granted.
If payment of the Option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of unrestricted Stock
already owned by the optionee, the Company may require that the Stock
has been owned by the Participant for a minimum period of time
specified by the Committee.
No shares of Stock shall be issued until full payment therefor has
been made. An optionee shall not have any rights to dividends or other
rights of a shareholder with respect to shares subject to the Option
until such time as Stock is issued in the name of the optionee
following exercise of the Option in accordance with the Plan.
(e) REPLACEMENT OPTIONS. If an Option granted pursuant to the Plan may be
exercised by an optionee by means of a stock-for-stock swap method of
exercise as provided in 5(d) above, then the Committee may, in its
sole discretion and at the time of the original option grant,
authorize the Participant to automatically receive a replacement
Option pursuant to this part of the Plan. This replacement option
shall cover a number of shares determined by the Committee, but in no
event more than the number of shares equal to the difference between
the number of shares of the original option exercised and the net
shares received by the Participant from such exercise. The per share
exercise price of the replacement option shall equal the then current
Fair Market Value of a share of Stock, and shall have a term extending
to the expiration date of the original Option.
The Committee shall have the right, in its sole discretion and at any
time, to discontinue the automatic grant of replacement options if it
determines the continuance of such grants to no longer be in the best
interest of the Company.
(f) NON-TRANSFERABILITY OF OPTIONS. Except as provided below, no Stock
Option shall be transferable by the optionee otherwise than by will or
by the laws of descent and distribution, and all Stock Options shall
be exercisable, during the optionee's lifetime, only by the optionee.
Notwithstanding the foregoing, the Committee may provide that an
optionee may transfer Non-Qualified Stock Options to family members a
trust established for the benefit of such family members or other
persons or entities according to such terms as the Committee
may determine; provided that the optionee receives no consideration
for the transfer of an option and the transferred option shall
continue to be subject to the same terms and conditions as were
applicable to the option immediately before the transfer.
(g) TERMINATION BY REASON OF DEATH. Unless otherwise determined by the
Committee at or after grant, if an optionee's employment by the
Company terminates by reason of death, any Stock Option held by such
optionee may thereafter be exercised, to the extent then exercisable
or on such accelerated basis as the Committee may determine at or
after grant, by the legal representative of the estate or by the
legatee of the optionee under the will of the optionee, for a period
of one year (or such shorter period as the Committee may specify at
grant) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is shorter.
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<PAGE> 7
(h) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by
the Committee at or after grant, if an optionee's employment by the
Company terminates by reason of Disability, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the
extent it was exercisable at the time of termination, or on such
accelerated basis as the Committee may determine at or after grant,
for a period of one year (or such shorter period as the Committee may
specify at grant) from the date of such termination of employment or
until the expiration of the stated term of such Stock Option,
whichever period is shorter; provided, however, that, if the optionee
dies within such one-year period (or such shorter period as the
Committee shall specify at grant), any unexercised Stock Option held
by such optionee shall thereafter be exercisable to the extent to
which it was exercisable at the time of death for a period of twelve
months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is shorter. In the
event of termination of employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422 of the Code,
such Stock Option will thereafter be treated as a Non-Qualified Stock
Option.
(i) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by
the Committee at or after grant, if an optionee's employment by the
Company terminates by reason of Normal or Early Retirement, any Stock
Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of such
Retirement or on such accelerated basis as the Committee may
determine at or after grant, for a period of three months (or such
shorter period as the Committee may specify at grant) from the date
of such termination of employment or the expiration of the stated
term of such Stock Option, whichever period is shorter; provided,
however, that, if the optionee dies within such three-month period,
any unexercised Stock Option held by such optionee shall thereafter
be exercisable, to the extent to which it was exercisable at the time
of death, for a period of twelve months from the date of such death
or until the expiration of the stated term of such Stock Option,
whichever period is shorter. In the event of termination of
employment by reason of Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Option will thereafter be
treated as a Non-Qualified Stock Option.
(j) OTHER TERMINATION. Unless otherwise determined by the Committee at or
after grant, if an optionee's employment by the Company terminates
for any reason other than death, Disability or Normal or Early
Retirement, the Stock Option shall thereupon terminate.
(k) INCENTIVE STOCK OPTION LIMITATION. The aggregate Fair Market Value
(determined as of the time of grant) of the Stock with respect to
which incentive Stock Options are exercisable for the first time by
the optionee during any calendar year under the Plan and/or any other
stock option plan of the Company shall not exceed $100,000.
(l) CASH-OUT OF OPTION. If specified by the Committee in the agreement
governing a Stock Option at the time of grant, the Committee may, in
its sole discretion, upon receipt of such optionee's written notice
to exercise, elect to cash out all or part of the portion of the
Option to be exercised by paying the optionee an amount, in cash or
Stock, equal to the excess of the Fair Market Value of the Stock over
the option price on the effective date of such cash-out.
(m) CASHLESS EXERCISE. To the extent permitted under the applicable laws
and regulations, at the request of the Participant, and with the
consent of the Committee, the Company agrees to cooperate in a
"cashless exercise" of an Option. The cashless exercise shall be
effected
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by the Participant delivering to the Designated Securities Broker
instructions to sell a sufficient number of shares of Stock to cover
the costs and expenses associated therewith. The Committee may permit
a Participant to pay any applicable withholding taxes by delivering a
sufficient number of previously-owned shares of Stock to the Company
to satisfy such taxes or upon Participant's request, by having the
Company withhold the number of shares of Stock obtainable on the
exercise of an Option which when valued at Fair Market Value
(determined as of the day preceding the date of exercise) is
equivalent to the minimum required withholding taxes due.
(n) OPTION GRANTS TO ELIGIBLE DIRECTORS. An Eligible Director shall be
entitled to receive Options hereunder with such terms as shall be
established by the Committee that are not inconsistent with the terms
of the Plan. Unless the Committee determines otherwise, and in
addition to any other grants that the Committee deems appropriate, the
following formula grants ("Formula Grants") shall be made each year:
Beginning December, 1998 an Eligible Director shall receive a Formula
Grant, consisting of a Non-Qualified Stock Option to purchase 25,000
shares of Stock, on the date the Director first becomes a member of
the Board. Such Formula Grants shall become vested and exercisable
with respect to 20% of the shares of Stock underlying the Option on
each of the first through fifth anniversaries following the date of
grant, provided the optionee remains a director or employee of the
Company.
In December of each year, beginning December, 1998, each Eligible
Director who is then in office shall receive a Formula Grant of a
Non-Qualified Stock Option to purchase 8,000 shares of Stock. Such
annual Formula Grants shall become vested and exercisable with respect
to 4,000 shares of Stock on the date of grant and with respect to
2,000 shares of Stock on each of the first and second anniversaries of
the date of grant, provided the optionee remains a director or
employee of the Company.
Formula Grant Options shall have a per share exercise price equal to
the Fair Market Value of a share of Stock on the date of grant (or on
the most recently preceding business day). Upon an Eligible Director
ceasing to be an Eligible Director for any reason (except as a result
of becoming an employee of the Company or as a result of the
Director's Disability or death), any Stock Option held by such
Eligible Director may thereafter be exercised, to the extent then
exercisable, for a period of 60 days after he or she ceases to be an
Eligible Director, or until the end of the Option term, if earlier. If
an Eligible Director becomes an employee of the Company, any Stock
Option held by such Eligible Director shall continue to become vested
and exercisable while the option holder serves as an employee or
Eligible Director and may be exercised, to the extent then
exercisable, until 60 days after he or she ceases to be an employee
and Eligible Director (other than on account of Disability or death),
or until the end of the Option term, if earlier. In the event of an
Eligible Director's death or Disability, any Stock Option held by such
Eligible Director may thereafter be exercised, to the extent then
exercisable, for a period of one year from the date of such death or
Disability or until the expiration of the stated term of such Stock
Option, whichever period is shorter. Formula Grant Options shall have
a term of ten years after the date of grant, unless terminated earlier
as described above.
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SECTION 6. STOCK APPRECIATION RIGHTS
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the
Plan except those Stock Options granted to Eligible Directors
pursuant to Section 5(n). In the case of a Non-Qualified Stock
Option, such rights may be granted either at or after the time of the
grant of such Stock Option. In the case of an Incentive Stock Option,
such rights may be granted only at the time of the grant of such
Stock Option. The exercise price of each Stock Appreciation Right
shall be equal to (i) the exercise price or option price of the
related Stock Option or (ii) the Fair Market Value of a share of
Stock as of the date of grant of such Stock Appreciation Right, but
only in such circumstances where the Stock Appreciation Right is
granted subsequent to the date of grant of the related Stock Option
and an exercise price established in accordance with clause (i) above
would result in the disallowance of the Company's expense deduction
pursuant to Section 162(m) of the Code.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock
Option, except that, unless otherwise determined by the Committee, in
its sole discretion, at the time of grant, a Stock Appreciation Right
granted with respect to less than the full number of shares covered
by a related Stock Option shall not be reduced until the number of
shares covered by an exercise or termination of the related Stock
Option exceeds the number of shares not covered by the Stock
Appreciation Right.
A Stock Appreciation Right may be exercised by a Participant, in
accordance with Section 6(b), by surrendering the applicable portion
of the related Stock Option. Upon such exercise and surrender, the
Participant shall be entitled to receive an amount determined in the
manner prescribed in Section 6(b). Stock Options which have been so
surrendered, in whole or in part, shall no longer be exercisable to
the extent the related Stock Appreciation Rights have been exercised.
(b) TERMS AND CONDITIONS. Stock Appreciation 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:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they
relate, if any, shall be exercisable in accordance with the
provisions of Section 5 and this Section 6 of the Plan;
provided, however, that any Stock Appreciation Right granted
subsequent to the grant of the related Stock Option shall not be
exercisable during the first six months of its term, except that
this special limitation shall not apply in the event of death or
Disability of the Participant prior to the expiration of the
six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, a Participant
shall be entitled to receive up to, but not more than, an amount
in cash and/or shares of Stock equal in value to the excess of
the Fair Market Value of one share of Stock (as of the date the
Stock Appreciation Right is exercised and the related Stock
Option is surrendered) over the exercise price of the Stock
Appreciation Right, multiplied by the number of shares of Stock
in respect of which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the
form of payment.
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<PAGE> 10
(iii) Stock Appreciation Rights shall be transferable only when
and to the extent that the underlying Stock Option would be
transferable under Section 5(f) of the Plan.
(iv) A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when the
market price of the Stock subject to the Incentive Stock
Option exceeds the exercise price of such Stock Option.
(v) In its sole discretion, the Committee may provide, at the
time of grant of a Stock Appreciation Right under this
Section 6, that such Stock Appreciation Right may be
exercised only in the event of a Change in Control, and/or a
Potential Change in Control, subject to such terms and
conditions as the Committee may specify at grant.
(vi) The Committee, in its sole discretion, may also provide
that, in the event of a Change in Control, and/or a
Potential Change in Control, the amount to be paid upon the
exercise of a Stock Appreciation Right shall be based on the
Change in Control Price, subject to such terms and
conditions as the Committee may specify at grant.
SECTION 7. RESTRICTED STOCK
(a) ADMINISTRATION. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under the Plan. The Committee
shall determine the officers and key employees of the Company to whom,
and the time or times at which, grants of Restricted Stock will be
made, the number of shares to be awarded, the price (if any) to be
paid by the recipient of Restricted Stock (subject to Section 7(b)),
the time or times within which such awards may be subject to
forfeiture, and all other conditions of the awards. The Committee may
condition the grant of Restricted Stock upon the attainment of
specified performance goals or such other factors as the Committee may
determine, in its sole discretion. The provisions of Restricted Stock
awards need not be the same with respect to each recipient.
(b) AWARDS AND CERTIFICATES. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing
the award and has delivered a fully executed copy thereof to the
Company, and has otherwise complied with the applicable terms and
conditions of such award.
(i) The purchase price for shares of Restricted Stock shall be
established by the Committee and may be zero.
(ii) Awards of Restricted Stock must be accepted within a period
of 60 days (or such shorter period as the Committee may
specify at grant) after the grant date, by executing a
Restricted Stock award agreement and paying whatever price
(if any) is required under Section 7(b)(i).
(iii) Each Participant receiving a Restricted Stock award shall
be issued a certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in
the name of such Participant, and shall bear an appropriate
legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following
form:
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"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) of the Amended and Restated
Safeskin Corporation Equity Compensation Plan and an Agreement
entered into between the registered owner and Safeskin
Corporation. Copies of such Plan and Agreement are on file at
the offices of Safeskin Corporation, 5100 Town Center Circle,
Suite 560, Boca Raton, Florida 33486.
(iv) The Committee shall require that the certificates evidencing
such Restricted Stock be held in custody by the Company until
the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award, the Participant shall
have delivered a stock power, endorsed in blank, relating to the
Stock covered by such award.
(c) RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of this Plan and the Restricted Stock
award agreement, during a period set by the Committee commencing
with the date of such award (the "Restriction Period"), the
Participant shall not be permitted to sell, transfer, pledge,
assign or otherwise encumber shares of Restricted Stock awarded
under the Plan. Within these links, the Committee, in its sole
discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in
whole or in part, based on service, performance and/or such
other factors or criteria as the Committee may determine, in its
sole discretion.
(ii) Except as provided in this paragraph (ii) and Section 7(c)(i),
the Participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a shareholder of the
Company, including the right to vote the shares, and the right
to receive any cash dividends. The Committee, in its sole
discretion, as determined at the time of award, may permit or
require the payment of cash dividends to be deferred and, if the
Committee so determines, reinvested in additional Restricted
Stock to the extent shares are available under Section 3.
(iii) Subject to the applicable provisions of the Restricted Stock
award agreement and this Section 7, upon termination of a
Participant's employment with the Company for any reason during
the Restriction Period, all shares still subject to restriction
shall be forfeited by the Participant.
(iv) In the event of hardship or other special circumstances of a
Participant whose employment with the Company is involuntarily
terminated, the Committee may, in its sole discretion, waive in
whole or in part any or all remaining restrictions with respect
to such Participant's shares of Restricted Stock, based on such
factors as the Committee may deem appropriate.
(v) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction
Period, the certificates for such shares shall be delivered to
the Participant promptly.
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SECTION 8. CHANGE IN CONTROL PROVISIONS
(a) IMPACT OF EVENT. In the event of:
(i) A "Change in Control" as defined in Section 8(b), unless
otherwise determined by the Committee or the Board at or
after grant, but prior to the occurrence of such Change in
Control, or
(ii) A "Potential Change in Control" as defined in Section 8(c),
but only if and to the extent so determined by the
Committee or the Board at or after grant (subject to any
right of approval expressly reserved by the Committee or
the Board at the time of such determination),
the following acceleration and valuation provisions shall apply:
(i) All Stock Appreciation Rights and Stock Options awarded
under the Plan not previously exercisable and vested shall
become fully vested and exercisable.
(ii) The restrictions applicable to any Restricted Stock awards
under the Plan shall lapse and such shares and awards shall
be deemed fully vested.
(iii) The Committee may determine that the value of all
outstanding Stock Options, Stock Appreciation Rights and
Restricted Stock Awards shall be cashed out on the basis
of the "Change in Control Price" as defined in Section 8(d)
as of the date of such Change in Control or such Potential
Change in Control is determined to have occurred or such
other date as the Committee may determine prior to the
Change in Control.
(iv) Upon a Change in Control where the Company is not the
surviving corporation (or survives only as a subsidiary of
another corporation), unless the Committee determines
otherwise, all outstanding Options and Stock Appreciation
Rights that are not exercised shall be assumed by, or
replaced with comparable options or rights by, the
surviving corporation. In the case of Incentive Stock
Options, such assumption or replacement shall be made
consistent with Section 424 of the Code.
(v) Notwithstanding anything in the Plan to the contrary, in
the event of a Change in Control or Potential Change in
Control, the Committee shall not have the right to take any
actions described in the Plan (including without limitation
actions described in paragraph (iii) above) that would make
the Change in Control ineligible for pooling of interests
accounting treatment or that would make the Change in
Control ineligible for desired tax treatment if, in the
absence of such right, the Change in Control would qualify
for such treatment and the Company intends to use such
treatment with respect to the Change in Control. In
addition, notwithstanding anything in the Plan to the
contrary, if and to the extent that any amendment to the
Plan would make a Change in Control ineligible for pooling
of interests accounting treatment and the Company intends
to use such treatment with respect to the Change in
Control, such amendment shall not be effective and the Plan
shall be administered as if that amendment had not been
adopted.
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<PAGE> 13
(vi) Notwithstanding anything in the Plan to the contrary, the
amendments made to the Plan in February, 1998 shall not
apply to outstanding Incentive Stock Options if and to the
extent that such amendments would result in a modification
of such Incentive Stock Options under Section 424 of the
Code. To the extent required by the preceding sentence,
paragraph (iii) above shall not apply to Incentive Stock
Options that are outstanding in February, 1998 Plan unless
the Board does not approve the transaction or event
constituting the Change in Control prior to the occurrence
of the event described in paragraph 8(b)(iii) below.
(b) DEFINITION OF "CHANGE IN CONTROL". For purposes of the Plan, a "Change
in Control" means the happening of any of the following:
(i) When any "person," as such term is used in Sections 13(d)
and 14(d) of the Exchange Act, other than the Company, an
"affiliate" (as defined in Rule 12b-2 under the Exchange
Act) of the Company immediately prior to its IPO or any
Company employee benefit plan (including any trustee of such
plan acting as trustee), 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 30% or more of the combined voting power of the
Company's then outstanding securities;
(ii) The occurrence of any transactions or event relating to the
Company required to be described pursuant to the
requirements of item 6(e) of Schedule 14A of the Exchange
Act;
(iii) When, during any period of two consecutive years during the
existence of the Plan, the individuals who, at the beginning
of such period, constitute the Board of Directors of the
Company cease for any reason other than death to constitute
at least a two-thirds majority thereof, provided, however,
that a director who was not a director at the beginning of
such period shall be deemed to have satisfied the two year
requirement if such director was elected by, or on the
recommendation of, at least two-thirds of the directors who
were directors at the beginning of such period (either
actually or by prior operation of this Section 8(c)(iii));
or
(iv) The occurrence of a transaction requiring shareholder
approval for the acquisition of the Company or substantially
all of its assets by an entity other than the Company
through purchase, by merger, or otherwise.
(c) DEFINITION OF POTENTIAL CHANGE IN CONTROL. For purposes of the Plan, a
"Potential Change in Control" means the happening of any one of the
following:
(i) The entering into an agreement by the Company, the
consummation of which would result in a Change in Control of
the Company as defined in Section 8(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group other than the
Company or any Company employee benefit plan (including any
trustee of such plan acting as such trustee) of securities
of the Company representing five percent or more of the
combined voting power of the Company's outstanding
securities and the adoption by the Board of Directors of a
resolution to the effect that a Potential Change in Control
of the Company has occurred for the purposes of this Plan.
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<PAGE> 14
(d) DEFINITION OF CHANGE IN CONTROL PRICE. For purposes of the Plan,
"Change in Control Price" means the highest bid price per share paid
in any transaction as reported by NASDAQ or quoted on a national
securities exchange, or the highest price paid or offered in any bona
fide transaction related to a potential or actual Change in Control of
the Company, at any time during the preceding sixty-day period as
determined by the Committee, except that, in the case of Incentive
Stock Options and Stock Appreciation Rights relating to Incentive
Stock Options, such price shall be based only on transactions reported
for the date on which the Committee decides to cash out such Options.
SECTION 9. AMENDMENTS AND TERMINATION
The Board may amend, alter or discontinue the Plan at any time and from
time to time, but no amendment, alteration, or discontinuation shall be made
which would impair the rights of an optionee or Participant under a Stock
Option, Stock Appreciation Right and/or Restricted Stock award theretofore
granted, without the optionee's or Participant's consent, or which, without the
approval of the Company's shareholders, would require shareholder approval
under the Rules.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without the holder's consent. The
Committee may also substitute new Stock Options for previously granted Stock
Options, including previously granted Stock Options having higher option
prices. Subject to the above provisions, the Board shall have broad authority
to amend the Plan to take into account changes in applicable tax laws,
securities laws and accounting rules, as well as other developments.
SECTION 10. UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant or optionee by the Company, nothing contained herein shall give any
such Participant or optionee any rights that are greater than those of a
general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments in lieu of or with respect
to awards hereunder; provided, however, that, unless the Committee otherwise
determines with the consent of the affected Participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
SECTION 11. GRANTS IN CONNECTION WITH CORPORATE TRANSACTIONS
The Committee may grant Stock Options, Stock Appreciation Rights and
Restricted Stock to persons who become officers, key employees, Eligible
Independent Contractors or Eligible Directors by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization, liquidation or
other transaction involving the Company or any of its subsidiaries in
substitution for stock option, stock appreciation right or restricted stock
grants made by the other corporation or entity involved in the transaction. The
terms and conditions of the substitute grants may vary from the terms and
conditions required by the Plan and from those of the substituted stock
incentives. The Committee shall prescribe the provisions of the substitute
grants as it deems appropriate.
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<PAGE> 15
SECTION 12. GENERAL PROVISIONS
(a) The Committee may require each person purchasing shares pursuant to
a Stock Option or receiving Stock upon the expiration of any
Restriction Period under the Plan to represent to and agree with the
Company in writing that the Participant is acquiring the shares
without a view to distribution thereof. The certificates for such
shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer under the Securities Act or any
state securities law.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities Act, the
Exchange Act, any stock exchange upon which the Stock is then listed,
and any applicable federal or state securities law, and the Committee
may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to shareholder
approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any Participant any
right to continued employment with the Company, nor shall it interfere
in any way with the right of the Company to terminate its relationship
with any of its employees, directors or independent contractors at any
time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of the Participant for federal income tax purposes
with respect to any award under the Plan, the Participant who is an
officer or key employee of the Company, shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment
of, any federal, state, or local taxes of any kind required by law to
be withheld with respect to such amount. Unless otherwise determined
by the Committee, the minimum required withholding obligations may be
settled with Stock, including Stock that is part of the award that
gives rise to the withholding requirement. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements and the Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant.
(e) At the time of grant, the Committee may provide in connection with
any grant made under this Plan that the shares of Stock received as a
result of such grant shall be subject to a right of first refusal,
pursuant to which the Participant shall be required to offer to the
Company any shares that the Participant wishes to sell, with the price
being the then Fair Market Value of the Stock, subject to such other
terms and conditions as the Committee specify at the time of grant.
(f) The reinvestment of dividends in additional Restricted Stock at the
time of any dividend payment shall only be permissible if sufficient
shares of Stock are available under Section 3 for such reinvestment.
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<PAGE> 16
(g) The Committee shall establish such procedures as it deems appropriate
for a Participant to designate a beneficiary to whom any amounts
payable in the event of the Participant's death are to be paid.
(h) The Plan shall be governed by and subject to all applicable laws and
to the approvals by any governmental or regulatory agency as may be
required.
SECTION 13. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall be effective as of June 15, 1993, subject to the consent or
approval of the Company's shareholders. No Stock Option, Stock Appreciation
Right or Restricted Stock award shall be granted pursuant to the Plan on or
after June 15, 2003, but awards granted prior to such tenth anniversary may
extend beyond that date.
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<PAGE> 1
EXHIBIT 4.6
SAFESKIN CORPORATION
CHIEF EXECUTIVE OFFICER
PERFORMANCE OPTION
SECTION 1. PURPOSE; GRANT OF OPTION
The purpose of the Safeskin Corporation Chief Executive Officer
Performance Option is to give the Chief Executive Officer of Safeskin
Corporation (the "Company"), Richard Jaffe, an incentive to work toward
increasing substantially the value of the Company's Common Stock.
The Company hereby grants to Richard Jaffe an option (the "Option") to
purchase 1,200,000 shares of Common Stock of the Company on the terms described
herein, subject to approval by the shareholders of the Company. The Option
shall be effective as of the conclusion of the 1998 annual meeting of the
Company's shareholders if the shareholders approve the Option grant at that
meeting. If the shareholders do not approve the Option grant, the Option will
be void and of no effect.
SECTION 2. DEFINITIONS
For the purposes of this Agreement, the following terms shall be defined
as set forth below:
a. "Board" means the Board of Directors of the Company.
b. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
c. "Committee" means the Committee designated by the Board to administer
this Agreement.
d. "Company" means Safeskin Corporation, its subsidiaries or any
successor organization.
e. "Disability" means permanent and total disability within the meaning
of Section 22(e)(3) of the Code.
f. "Early Retirement" means retirement from active employment with the
Company pursuant to the early retirement procedures of the Company.
g. "Effective Date" means the conclusion of the 1998 annual meeting of
the Company's shareholders.
h. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
i. "Fair Market Value" means, if there is a public market for the Stock
and the Stock is registered under the Exchange Act, the per share
value of the Stock as of any given date, as determined by reference to
the price of the last traded share of Stock on the over-the-counter
market, as reported by the Nasdaq National Market ("Nasdaq") for such
date or the next preceding date that Stock was traded on such market,
or, in the event the Stock is listed on a stock exchange, the closing
price per share of Stock as reported on such exchange for such date.
If the Stock is not traded on Nasdaq or an exchange, Fair Market Value
shall
<PAGE> 2
mean the fair market value of the Stock as determined by the
Committee in good faith based on the best available facts and
circumstances at the time.
j. "Normal Retirement" means retirement from active employment with the
Company pursuant to the normal retirement procedures of the Company.
k. Participant" means the Chief Executive Officer of the Company, Richard
Jaffe.
l. "Performance Period" means the period beginning on the Effective Date
during which the Fair Market Value of the Stock must attain a
specified level in order for a Tranche of the Option to become
exercisable pursuant to Section 5(b).
m. "Retirement" means Normal or Early Retirement.
n. "Securities Act" means the Securities Act of 1933, as amended.
o. "Stock" means the Common Stock of the Company, par value $.01 per
share.
p. "Stock Option" or "Option" means the option to purchase shares of
Stock granted pursuant to this Agreement.
q. "Tranche," "First Tranche," "Second Tranche," and "Third Tranche"
shall have the meanings given those terms in Section 5(a).
In addition, the terms "Change in Control," "Potential Change in Control"
and "Change in Control Price" shall have meanings set forth, respectively, in
Sections 6(b), (c) and (d) below.
SECTION 3. ADMINISTRATION
This Agreement shall be administered by a Committee designated by the
Board consisting of not less than two members of the Board who may be "outside
directors" under section 162(m) of the Code and "non-employee directors" under
Rule 16b-3 of the Exchange Act. The Committee shall, subject to the limitations
and terms of this Agreement, have the authority to determine the terms and
condition, not inconsistent with the terms of this Agreement, of the Option
and to amend the terms of the Option (with the consent of the Participant) to
reflect terms not otherwise inconsistent with this Agreement.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Agreement as it
shall, from time to time, deem advisable; to interpret the terms and provisions
of this Agreement and the Option (and any agreements relating thereto); and to
otherwise supervise the administration of this Agreement. All decisions made by
the Committee pursuant to the provisions of this Agreement shall be final and
binding on all persons, including the Company and the Participant.
SECTION 4. STOCK SUBJECT TO THIS AGREEMENT
(a) Subject to adjustment pursuant to Section 4(b) below, the aggregate
number of shares of Stock that may be issued under this Agreement to the
Participant is 1,200,000 shares. Such shares may be authorized but unissued
shares or reacquired shares.
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<PAGE> 3
(b) If any change is made to the Stock (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, or exchange of shares or any other change in capital
structure made without receipt of consideration), then unless such event or
change results in the termination of the Option, the Committee shall preserve
the value of the outstanding Option by adjusting the maximum number and class
of shares issuable under this Agreement to reflect the effect of such event or
change in the Company's capital structure, and by making appropriate
adjustments to the number and class of shares subject to the Option and the
Option price, except that any fractional shares resulting from such adjustments
shall be eliminated by rounding any portion of a share equal to .500 or
greater up, and any portion of a share equal to less than .500 down, in each
case to the nearest whole number.
SECTION 5. TERMS OF STOCK OPTION
The Stock Option shall be a nonqualified stock option (and not an
incentive stock option under Section 422 of the Code). The Stock Option shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this
Agreement, as the Committee shall deem appropriate:
(a) OPTION PRICE. The option price per share of Stock subject to the
Stock Option shall be determined as follows:
(i) With respect to 400,000 shares (the "First Tranche"), the Option
price is $32.50 per share.
(ii) With respect to an additional 400,000 shares (the "Second
Tranche"), the Option price is $40.00 per share.
(iii) With respect to an additional 400,000 shares (the "Third
Tranche"), the Option price is $50.00 per share.
(iv) Notwithstanding the foregoing, if, on the Effective Date, the
Fair Market Value of a share of Stock equals or exceeds any of
the Option prices described above, that Tranche of the Option
will have an Option price equal to the Fair Market Value of the
Stock on the Effective Date.
(b) EXERCISABILITY. The Stock Option shall become exercisable if and when
the Fair Market Value of the Stock attains each of the following
price goals during the applicable Performance Period, if the
Participant is then employed by the Company:
(i) The First Tranche will become exercisable if and when the Fair
Market Value of the Stock attains $32.50 during the Performance
Period beginning on the Effective Date and ending on
December 31, 1999.
(ii) The Second Tranche will become exercisable if and when the Fair
Market Value of the Stock attains $40.00 during the Performance
Period beginning on the Effective Date and ending on
December 31, 2000.
(iii) The Third Tranche will become exercisable if and when the Fair
Market Value of the Stock attains $50.00 during the Performance
Period beginning on the Effective Date and ending on
December 31, 2001.
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<PAGE> 4
(iv) Notwithstanding the foregoing, if the Fair Market Value of the
Stock on the Effective Date equals or exceeds any of the price
goals described above, that Tranche of the Option shall be fully
exercisable as of the Effective Date.
If any of the foregoing Tranches fails to become exercisable during
the applicable Performance Period, that Tranche of the Option shall
terminate at the end of the Performance Period.
For purposes of this Agreement, the Participant shall be considered
to be employed by the Company as long as he is an employee of the
Company or a member of the Board.
(c) OPTION TERM. The term of the Stock Option shall be ten years from the
Effective Date. The Option may not be exercised by any person after
expiration of the Option term.
(d) METHOD OF EXERCISE. After the Stock Option becomes exercisable, the
exercisable portion of the Stock Option may be exercised in whole or
in part at any time and from time to time during the Option period,
by giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, either by certified or bank
check, or such other instrument as the Committee may accept. Payment
in full or in part may also be made in the form of unrestricted Stock
already owned by the Participant (based on the Fair Market Value of
the Stock so tendered as of the date the Option is exercised, as
determined by the Committee). If payment of the Option price is made
in whole or in part in the form of unrestricted Stock already owned
by the Participant, the Company may require that the Stock have been
owned by the Participant for a minimum period of time specified by
the Committee.
The Participant shall not have any rights to dividends or other
rights of a shareholder with respect to shares subject to the Option
until such time as Stock is issued upon exercise of the Option in
accordance with this Agreement.
(e) NON-TRANSFERABILITY OF OPTIONS. Except as provided below, the Stock
Option shall not be transferable by the Participant otherwise than by
will or by the laws of descent and distribution, and the Stock Option
shall be exercisable, during the Participant's lifetime, only by the
Participant. Notwithstanding the foregoing, the Participant may
transfer the Stock Option to family members, a trust established for
the benefit of such family members or other persons or entities
according to such terms as the Committee may determine; provided that
the Participant receives no consideration for the transfer of the
Stock Option and the transferred Option shall continue to be subject
to the same terms and conditions as were applicable to the Option
immediately before the transfer.
Upon a transfer by will or by the laws of descent or distribution, or
a transfer to a family member or entity as described above, the
person to whom the Option is transferred shall have the right to
exercise the Option in accordance with this Agreement. Any attempt to
assign, transfer, pledge or dispose of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without
effect.
(f) TERMINATION BY REASON OF DEATH. Unless the Committee determines
otherwise, if the Participant's employment by the Company terminates
by reason of death, any portion of the Stock Option held by the
Participant may thereafter be exercised, to the extent then
exercisable or on such accelerated basis as the Committee may
determine at or after grant, by the legal representative of the
estate or by the legatee of the Participant under the will of
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<PAGE> 5
the Participant, for a period of one year from the date of such death
or until the expiration of the stated term of the Stock Option,
whichever period is shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless the Committee determines
otherwise, if the Participant's employment by the Company terminates
by reason of Disability, any portion of the Stock Option held by the
Participant may thereafter be exercised by the Participant, to the
extent it was exercisable at the time of termination, or on such
accelerated basis as the Committee may determine at or after grant,
for a period of one year from the date of such termination of
employment or until the expiration of the stated term of the Stock
Option, whichever period is shorter; provided, however, that, if the
Participant dies within such one-year period (or such shorter period
as the Committee shall specify at grant), the unexercised Stock
Option held by the Participant shall thereafter be exercisable to the
extent to which it was exercisable at the time of death for a period
of twelve months from the date of such death or until the expiration
of the stated term of the Stock Option, whichever period is shorter.
(h) TERMINATION BY REASON OF RETIREMENT. Unless the Committee determines
otherwise, if the Participant's employment by the Company terminates
by reason of Normal or Early Retirement, any portion of the Stock
Option held by the Participant may thereafter be exercised by the
Participant, to the extent it was exercisable at the time of such
Retirement or on such accelerated basis as the Committee may
determine at or after grant, for a period of 90 days from the date of
such termination of employment or the expiration of the stated term
of the Stock Option, whichever period is shorter; provided, however,
that, if the Participant dies within such 90-day period, any
unexercised portion of the Stock Option held by the Participant shall
thereafter be exercisable, to the extent to which it was exercisable
at the time of death, for a period of twelve months from the date of
such death or until the expiration of the stated term of the Stock
Option, whichever period is shorter.
(i) INVOLUNTARY TERMINATION. Unless the Committee determines otherwise,
if the Company involuntarily terminates the Participant's employment
without cause (as determined by the Committee), any portion of the
Stock Option held by the Participant may be exercised by the
Participant, to the extent that it was exercisable at the time of
such termination of employment or on such accelerated basis as the
Committee may determine at or after grant, for a period of 90 days
from the date of termination of employment or the expiration of the
stated term of the Stock Option, whichever period is shorter;
provided, however, that if the Participant dies within such 90-day
period, any unexercised portion of the Stock Option held by the
Participant shall thereafter be exercisable, to the extent to which
it was exercisable at the time of death, for a period of twelve
months from the date of such death or until the expiration of the
stated term of the Stock Option, whichever period is shorter.
(j) OTHER TERMINATION. Unless the Committee determines otherwise, if the
Participant's employment by the Company terminates for any reason
other than death, Disability, Normal or Early Retirement, or
involuntary termination without cause, the Stock Option shall
thereupon terminate.
(k) FORFEITURE OF OPTION UPON TERMINATION OF EMPLOYMENT. Except as
described above, any portion of the Option that is not exercisable at
the date of the Participant's termination of employment shall
immediately terminate.
(l) CASHLESS EXERCISE. To the extent permitted under the applicable laws
and regulations, at the request of the Participant, and with the
consent of the Committee, the Company agrees to cooperate in a
"cashless exercise" of an Option. The cashless exercise shall be
effected
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<PAGE> 6
by the Participant delivering to a registered securities broker designated
by the Company instructions to sell a sufficient number of shares of Stock
to cover the costs and expenses associated therewith. The Committee may
permit the Participant to pay any applicable withholding taxes by
delivering a sufficient number of previously-owned shares of Stock to the
Company to satisfy such taxes or, upon the Participant's request, by having
the Company withhold the number of shares of Stock obtainable on the
exercise of the Option which when valued at Fair Market Value (determined
as of the day preceding the date of exercise) is equivalent to the minimum
required withholding taxes due.
SECTION 6. CHANGE IN CONTROL PROVISIONS
(a) IMPACT OF EVENT. In the event of:
(x) A "Change of Control" as defined in Section 6(b), unless
otherwise determined by the Committee or the Board at or after
grant, but prior to the occurrence of such Change in Control, or
(y) A "Potential Change in Control" as defined in Section 6(c), but
only if and to the extent so determined by the Committee or the
Board at or after grant (subject to any right of approval
expressly reserved by the Committee or the Board at the time of
such determination),
the following acceleration and valuation provisions shall apply:
(i) The outstanding Option shall become fully exercisable (with no
change in the Option price).
(ii) The Committee may determine that the value of the outstanding
Option shall be cashed out on the basis of the "Change in
Control Price" as defined in Section 6(d) as of the date of such
Change in Control or such Potential Change in Control is
determined to have occurred or such other date as the Committee
may determine prior to the Change in Control.
(iii) Upon a Change in Control where the Company is not the surviving
corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, any
unexercised portion of the outstanding Option shall be assumed
by, or replaced with a comparable option by, the surviving
corporation.
(iv) Notwithstanding anything in this Agreement to the contrary, in
the event of a Change in Control or Potential Change in Control,
the Committee shall not have the right to take any actions
described in this Agreement (including without limitation
actions described in paragraph (iii) above) that would make the
Change in Control ineligible for pooling of interests
accounting treatment or that would make the Change in Control
ineligible for desired tax treatment if, in the absence of such
right, the Change in Control would qualify for such treatment
and the Company intends to use such treatment with respect to
the Change in Control. In addition, notwithstanding anything in
this Agreement to the contrary, if and to the extent that any
amendment to this Agreement would make a Change in Control
ineligible for pooling of interests accounting treatment and the
Company intends to use such treatment with respect to the Change
in Control, such amendment shall not be effective and this
Agreement shall be administered as if that amendment had not
been adopted.
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<PAGE> 7
(b) DEFINITION OF "CHANGE IN CONTROL". For purposes of this Agreement, a
"Change in Control" means the happening of any of the following:
(i) When any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act, other than the Company, an
"affiliate" (as defined in Rule 12b-2 under the Exchange Act)
of the Company immediately prior to its initial public offering
or any Company employee benefit plan (including any trustee of
such plan acting as trustee), 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 30% or more of the combined voting power of the
Company's then outstanding securities;
(ii) The occurrence of any transaction or event relating to the
Company that is required to be described pursuant to the
requirements of Item 6(e) of Schedule 14A of the Exchange Act;
(iii) When, during any period of two consecutive years during the
existence of this Agreement, the individuals who, at the
beginning of such period, constitute the Board of Directors of
the Company cease for any reason other than death to constitute
at least a two-thirds majority thereof, provided, however, that
a director who was not a director at the beginning of such
period shall be deemed to have satisfied the two year
requirement if such director was elected by, or on the
recommendation of, at least two-thirds of the directors who
were directors at the beginning of such period (either actually
or by prior operation of this Section 6(b)(iii)); or
(iv) The occurrence of a transaction requiring shareholder approval
for the acquisition of the Company or substantially all of its
assets by an entity other than the Company through purchase, by
merger, or otherwise.
(c) DEFINITION OF POTENTIAL CHANGE IN CONTROL. For purposes of this
Agreement, a "Potential Change in Control" means the happening of any
one of the following:
(i) The entering into an agreement by the Company, the consummation
of which would result in a Change in Control of the Company as
defined in Section 6(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group other than the
Company or any Company employee benefit plan (including any
trustee of such plan acting as such trustee) of securities of
the Company representing five percent or more of the combined
voting power of the Company's outstanding securities and the
adoption by the Board of a resolution to the effect that a
Potential Change in Control of the Company has occurred for the
purposes of this Agreement.
(d) DEFINITION OF CHANGE IN CONTROL PRICE. For purposes of this Agreement,
"Change in Control Price" means the highest bid price per share paid
in any transaction as reported by Nasdaq or quoted on a national
securities exchange, or the highest price paid or offered in any bona
fide transaction related to a potential or actual Change in Control of
the Company, at any time during the preceding sixty-day period as
determined by the Committee.
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SECTION 7. AMENDMENTS AND TERMINATION
The Board may amend, alter or discontinue this Agreement at any time and
from time to time, but no amendment, alteration, or discontinuation shall be
made which would impair the rights of the Participant under the Stock Option,
without the Participant's consent, and no amendment, alteration or
discontinuation that would require shareholder approval under Section 162(m) of
the Code shall be made without the approval of the Company's shareholders.
The Committee may amend the terms of the Stock Option, prospectively or
retroactively, but no such amendment shall impair the rights of the Participant
without the Participant's consent. Subject to the above provisions, the Board
shall have broad authority to amend this Agreement to take into account changes
in applicable tax laws, securities laws and accounting rules, as well as other
developments.
SECTION 8. GENERAL PROVISIONS
(a) The Committee may require each person purchasing shares pursuant to
the Stock Option to represent to and agree with the Company in writing
that he or she is acquiring the shares without a view to distribution
thereof. The certificates for such shares may include any legend which
the Committee deems appropriate to reflect any restrictions on
transfer under the Securities Act or any state securities law.
All certificates for shares of Stock or other securities delivered
under this Agreement shall be subject to such stock-transfer orders
and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities Act, the
Exchange Act, any stock exchange upon which the Stock is then listed,
and any applicable federal or state securities law, and the Committee
may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) This Agreement is intended to constitute an "unfunded" agreement for
incentive compensation. With respect to any payments not yet made to
the Participant by the Company, nothing contained herein shall give
the Participant any rights that are greater than those of a general
creditor of the Company.
(c) Nothing contained in this Agreement shall prevent the Board from
adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(d) The adoption of this Agreement shall not confer upon the Participant
any right to continued employment with the Company, nor shall it
interfere in any way with the right of the Company to terminate its
relationship with the Participant at any time.
(e) No later than the date as of which an amount first becomes includible
in the gross income of the Participant for federal income tax purposes
with respect to the Stock Option, the Participant shall pay to the
Company, or make arrangements satisfactory to the Committee regarding
the payment of, any federal, state, local or other taxes of any kind
required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, the minimum required
withholding obligations may be settled with Stock, including Stock
that is subject to Option. The obligations of the Company under this
Agreement shall be conditional on such payment or arrangements and the
Company shall, to the extent permitted
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<PAGE> 9
by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Participant.
(f) The validity, construction and effect of this Agreement shall be
determined in accordance with the laws of the State of Florida,
without giving effect to the principles of conflicts of law thereof.
(g) Any notice to the Company provided for in this Agreement shall be
addressed to it in care of the Executive Vice President and Chief
Financial Officer of the Company, Safeskin Corporation, 12671 High
Bluff Drive, San Diego, California 92130 and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on the
payroll of the Company, or to such other address as the Grantee may
designate to the Company in writing. Any notice provided for hereunder
shall be delivered by hand, sent by telecopy or telex or enclosed in a
properly sealed envelope addressed as stated above, registered and
deposited, postage and registry being prepaid, in a post office or
branch post office regularly maintained by the United States Postal
Service.
SECTION 9. EFFECTIVE DATE AND TERM OF AGREEMENT
This Agreement shall be effective as of the Effective Date, subject to
approval by the Company's shareholders.
WITNESS the following signatures:
SAFESKIN CORPORATION
By: /s/ DAVID L. MORASH
- ---------------------- -------------------------
Date David L. Morash
I hereby accept the Option according to the terms described in the foregoing
Agreement, subject to shareholder approval of the Option.
/s/ RICHARD JAFFE
- ---------------------- ------------------------------
Date Richard Jaffe
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<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 on Form S-8 to Registration Statement No. 333-94139 of Kimberly-Clark
Corporation on Form S-4 of our report dated January 25, 1999, July 23, 1999, as
to Note 17 (which expresses an unqualified opinion and includes an explanatory
paragraph relating to the restatement described in Note 17), appearing in the
Annual Report on Form 10-K/A of Kimberly-Clark Corporation for the year ended
December 31, 1998.
DELOITTE & TOUCHE LLP
Dallas, Texas
February 22, 2000
