EXHIBIT 4.1
YEAR 2000 INCENTIVE STOCK OPTION PLAN
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1. Purpose of the Plan.
The purpose of the NBTY, Inc. Incentive Stock Option Plan (hereinafter
the "Plan") is to provide for the granting of stock options to officers,
directors, affiliates and employees of NBTY, Inc. and its Subsidiaries in
recognition of the valuable services provided, and contemplated to be
provided, by such individuals. The general purpose of the Plan is to promote
the interests of NBTY, Inc. and its stockholders and to reward dedicated
individuals of NBTY, Inc. and its Subsidiaries by providing them additional
incentives to continue and increase their efforts with respect to, and to
remain in the service of, NBTY, Inc. or its Subsidiaries.
2. Certain Definitions.
The following terms (whether used in the singular or plural) have the
meanings indicated when used in the Plan:
(a) "Act" means the Omnibus Budget Reconciliation Act of 1993, as
amended.
(b) "Agreement" means the incentive stock option agreement specified
in Section 10.
(c) "Approved Transaction" means any transaction in which the Board
(or, if approval of the Board is not required as a matter of law, the
stockholders of NBTY, Inc.) shall approve (i) any consolidation or merger of
NBTY, Inc. in which NBTY, Inc. is not the continuing or surviving corporation
or pursuant to which shares of Common Stock would be converted into cash,
securities or other property, other than a merger of NBTY, Inc. in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (ii) any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of NBTY, Inc., or (iii) the adoption of any
plan or proposal for the liquidation or dissolution of NBTY, Inc.
(d) "Award" means grants of Options under this Plan.
(e) "Board" means the Board of Directors of NBTY, Inc.
(f) "Board Change" means, during any period of two consecutive
years, individuals who at the beginning of such period constituted the entire
Board ceased for any reason to constitute a majority thereof unless the
election, or the nomination for election by NBTY, Inc.'s stockholders, of
each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
(g) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute or statutes thereto. Reference to any
specific Code section shall include any successor section.
(h) "Committee" means the Committee comprised of members of the
Board appointed pursuant to Section 4.
(i) "Common Stock" means the common stock par value $.008 per share,
of NBTY, Inc.
(j) "NASDAQ" means the NASDAQ National Market System.
(k) "Control Purchase" means any transaction in which any person (as
such term is defined in Sections 13(d) and 14(d)(2) of the Exchange Act),
corporation or other entity (other than NBTY or any employee benefit plan
sponsored by NBTY, Inc. or any of its Subsidiaries) (i) shall purchase any
Common Stock (or securities convertible into or exchangeable for Common
Stock) for cash, securities or any other consideration pursuant to a tender
offer or exchange offer, without the prior consent of the Board, or (ii)
shall become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of NBTY, Inc.
representing 20% or more of the combined voting power of the then outstanding
securities of NBTY, Inc. ordinarily (and apart from the rights accruing under
special circumstances) having the right to vote in the election of directors
(calculated as provided in Rule 13d-3(d) in the case of rights to acquire
NBTY Inc.'s securities).
(l) "Effective Date" means the date the Plan becomes effective
pursuant to Section 14.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute or statutes thereto.
Reference to any specific Exchange Act section shall include any successor
section.
(n) "Fair Market Value" of a share of Common Stock means the average
of the high and low sales prices of a share of Common Stock on NASDAQ on the
date in question except as otherwise provided in Section 6.1.
(o) "Holder" means an employee of NBTY, Inc. or any of its
Subsidiaries who has received an option under this Plan.
(p) "ISO" means an incentive stock option within the meaning of
Section 422A(b) of the Code.
(q) "Option" means any ISO granted pursuant to this Plan.
(r) "Plan" has the meaning ascribed thereto in Section 1.
(s) "Subsidiary" of a person means any present or future subsidiary
of such person as such term is defined in Section 425 of the Code and any
present or future trade or business, whether or not incorporated, controlled
by or under common control with such person. An entity shall be deemed a
Subsidiary of a person only for such periods as the requisite ownership or
control relationship is maintained.
(t) "NBTY" means NBTY, Inc., a Delaware corporation, and any
successor hereto.
(u) "Total Disability" means a permanent and total disability as
defined in Section 22(e)(3) of the Code.
(v) "Individual" means an officer, director, affiliate or employee
of NBTY, Inc. or any of its subsidiaries.
3. Stock Subject to the Plan.
3.1 Number of Shares. Subject to the provisions of Section 12 and
this Section 3, the maximum number of shares of Common Stock in respect of
which Awards may be granted under the Plan is 4,000,000 shares. If and to the
extent that any Option shall expire, terminate or be canceled for any reason
without having been exercised (or without having been considered to have been
exercised as provided in Section 6, the shares of Common Stock subject to
such expired, terminated or canceled portion of the Option shall again become
available for purposes of the Plan.
3.2 Character of Shares. Shares of Common Stock deliverable under
the terms of the Plan may be, in whole or in part, authorized and unissued
shares of Common Stock or issued shares of Common Stock held in NBTY's
treasury, or both.
3.3 Reservation of Shares. NBTY shall at all times reserve a number
of shares of Common Stock (authorized and unissued Common Stock, issued
Common Stock held in NBTY's treasury, or both) equal to the maximum number of
shares that may be subject to outstanding options and future options under
the Plan.
4. Administration.
4.1 Powers. The Plan shall be administered by the Board or a
committee of the Board. Subject to the express provisions of the Plan, the
Board or such committee shall have plenary authority, in its discretion, to
grant Options under the Plan and to determine the terms and conditions (which
need not be identical) of all Options so granted, including without
limitation, (a) the individuals to whom, and the time or times at which
Options shall be granted or awarded, (b) the number of shares to be subject
to each Option, (c) when an Option can be exercised and whether in whole or
in installments, and (d) the form, terms and provisions of any Agreement
(which terms may be amended, subject to Section 13.2).
4.2 Factors to Consider. In making determinations hereunder, the
Board may take into account the nature of the services rendered by the
respective individuals, their dedication and past contributions to NBTY and
its Subsidiaries, their present and potential contributions to the success of
NBTY and its Subsidiaries and such other factors as the Board in its
discretion shall deem relevant.
4.3 Interpretation. Subject to express provisions of the Plan, the
Board shall have plenary authority to interpret the Plan, to prescribe, amend
and rescind the rules and regulations relating to it and to make all other
determinations deemed necessary or advisable for the administration of the
Plan. The determinations of the Board on the matters referred to in this
Section 4 shall be conclusive.
4.4 Delegation to Committee. Notwithstanding anything to the
contrary contained herein, the Board may at any time, or from time to time,
appoint a Committee and delegate to such Committee the authority of the Board
to administer the Plan, including to the extent provided by the Board, the
power to further delegate such authority. Upon such appointment and
delegation, any such Committee shall have all the powers, privileges and
duties of the Board in the administration of the Plan to the extent provided
in such delegation, except for the power to appoint members of the Committee
and to terminate, modify or amend the Plan. The Board may from time to time
appoint members of any such Committee in substitution for or in addition to
members previously appointed, may fill vacancies in such Committee and may
discharge such Committee.
Any such Committee shall hold its meetings at such times and places as
it shall deem advisable. A majority of members shall constitute a quorum and
all determinations shall be made by a majority of such quorum. Any
determination reduced to writing and signed by all of the members shall be
fully as effective as if it had been made by a majority vote at a meeting
duly called and held.
5. Eligibility.
5.1 General. Options may be granted to (a) employees, officers,
directors and affiliates of NBTY or any of its Subsidiaries and (b)
prospective employees of NBTY or any of its Subsidiaries. The exercise of
Options granted to a prospective employee shall be conditioned upon such
person becoming an employee of NBTY or any of its Subsidiaries. For purposes
of the Plan, the term "prospective employee" shall mean any person who holds
an outstanding offer of employment on specific terms from NBTY or any of its
Subsidiaries. Options may be granted to employees who hold or have held
Options under this Plan or any similar or other Options under any plan of
NBTY or its Subsidiaries.
5.2 Special ISO Rule. No ISO shall be granted to an individual who,
at the time the ISO is granted, owns (or is considered as owning within the
meaning of Section 425(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of NBTY or any
Subsidiary, unless at the time such ISO is granted, the option price is at
least 110% of the Fair Market Value of the Common Stock subject to the ISO
and the ISO by its terms is not exercisable after the expiration of five
years from the date it is granted.
6. Options.
6.1 Option Prices. Subject to Section 5.2, the purchase price of the
Common Stock under each Option shall be determined by the Board and set forth
in the applicable Agreement, but shall not be less than 100% of the Fair
Market Value of the Common Stock on the date of grant.
6.2 Term of Options. The term of each Option shall be for such
period as the Board shall determine, as set forth in the applicable
Agreement, but not more than 10 years from the date of grant (except as
provided in Section 5.2).
6.3 Exercise of Options. An Option granted under the Plan shall
become (and remain) exercisable during the term of the Option to the extent
provided in the applicable Agreement and this Plan and, unless the Agreement
otherwise provides, may be exercised to the extent exercisable, in whole or
in part, at any time and from time to time during such term; provided,
however, that subsequent to the grant of an Option, the Board, at any time
before complete termination of such Option, may accelerate the time or times
at which such Option may be exercised in whole or in part (without reducing
the term of such Option). The Agreement may contain conditions precedent to
the exercisability of Options, including without limitation, the achievement
of minimum performance criteria.
6.4 Manner of Exercise. Payment of the Option purchase price shall
be made in cash or in whole shares of Common Stock already owned, and held
for more than six months, by the person exercising an Option or, partly in
cash and partly in such Common Stock; provided, however, that such payment
may be made in whole or in part in shares of Common Stock only if and to the
extent permitted by the applicable Agreement. Shares of Common Stock
delivered upon exercise of an option shall be priced at the fair market value
on the day of such delivery. An Option shall be exercised by written notice
to NBTY upon such terms and conditions as provided in the Agreement. NBTY
shall effect the transfer of the shares of Common Stock purchased under the
Option as soon as practicable, and within a reasonable time thereafter such
transfer shall be evidenced on the books of NBTY. No Holder exercising an
Option shall have any of the rights of a stockholder of NBTY with respect to
shares of Common Stock subject to an Option granted under the Plan until due
exercise and full payment has been made. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date of
such due exercise and full payment.
7. Termination of Association.
7.1. General. If a Holder's association shall terminate prior to the
complete exercise of an Option (or deemed exercise thereof, as provided in
Section 6.3), then such Option shall thereafter be exercisable in accordance
with the provisions of the applicable Agreement (including the provisions of
any other agreement referred to in the Agreement); provided, however, that
(a) no Option may be exercised after the scheduled expiration date of such
Option; (b) if the Holder's association terminates by reason of death or
Total Disability, the Option shall remain exercisable for a period of at
least one year following such termination (but no later than the scheduled
expiration of such Option); and (c) any termination for cause will be treated
in accordance with the provisions of Section 7.2.
7.2 Termination for Cause. If a Holder's association with NBTY or
any of its Subsidiaries shall be terminated for cause by NBTY or such
Subsidiary prior to the exercise of any Option, then all Options held by such
Holder shall immediately terminate. For the purposes of this Section 7.2,
cause shall have the meaning ascribed thereto in any agreement to which the
Holder is a party. In the absence of an agreement, cause shall include but
not be limited to, insubordination, dishonesty, incompetence, moral
turpitude, other misconduct of any kind and the refusal to perform his duties
and responsibilities for any reason other than illness or incapacity;
provided, however, that if such termination occurs within 12 months after an
Approved Transaction, Control Purchase or Board Change, termination for cause
in the absence of an employment agreement shall mean only a felony conviction
for fraud, misappropriation or embezzlement.
7.3 Special Rule. Notwithstanding any other provision of the Plan,
the Board may provide in the applicable Agreement that the Option shall
become and/or remain exercisable at rates and times at variance with the
rules otherwise herein set forth; provided, however, that any such Agreement
provisions at variance with the exercisability rules otherwise set forth
herein shall be effective only if reflected in the terms of an employment
agreement approved or ratified by the Board.
7.4 Miscellaneous. The Board may determine whether any given leave
of absence constitutes a termination by that individual.
8. Right of Company to Terminate Association.
Nothing contained in the Plan or in any Option shall confer on any
Holder any right to continue in the employ of NBTY or any of its Subsidiaries
or interfere in any way with the right of NBTY or a Subsidiary to terminate
the association of the Holder at any time, with or without cause; subject,
however, to the provisions of any association agreement between the Holder
and NBTY or any of its Subsidiaries.
9. Non-alienation of Benefits.
Unless otherwise set forth herein, no right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment,
hypothecation, pledge, exchange, transfer, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange,
transfer, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities or torts of the person entitled to such benefits.
10. Written Agreement.
Each grant of an Option shall be evidenced by a stock option agreement,
which shall designate the Options granted thereunder as ISO's in such form
and containing such terms and provisions not inconsistent with the provisions
of the Plan as the Board from time from time to time shall approve; provided,
however, that such Option may be evidenced by a single agreement. The
effective date of the granting of an Option shall be the date on which the
Board approves such grant. Each grantee of an Option shall be notified
promptly of such grant and a written Agreement shall be promptly executed and
delivered by NBTY and the grantee, provided that such grant of Options shall
terminate if such written Agreement is not signed by such grantee (or his
attorney) and delivered to NBTY within 90 days after the date the Agreement
is sent to such grantee for signature. Any such written Agreement may contain
(but shall not be required to contain) such provisions as the Board deems
appropriate to ensure that the penalty provisions of Section 4999 of the Code
will not apply to any stock or cash received from NBTY or any of its
Subsidiaries by the Holder or a transferee of such Holder if the Option or
any part thereof, has been transferred pursuant to Section 20.
11. Adjustment Upon Changes in Capitalization, etc.
In the event of any stock split, dividend, distribution, combination,
reclassification or recapitalization that changes the character or amount of
the Common Stock while any portion of any Option theretofore granted under
the Plan is outstanding but unexercised, the Board shall make such
adjustments in the character and number of shares subject to such Option and,
in the Option price, as shall be applicable, equitable and appropriate in
order to make such Option immediately after any such change, as nearly as may
be practicable, equivalent to such Option immediately prior to any such
change. If any merger, consolidation or similar transaction affects the
Common Stock subject to any unexercised Option theretofore granted under the
Plan, the Board or any surviving or acquiring corporation shall take such
action as is equitable and appropriate to substitute a new Option for such
Option or to assume such Option in order to make such new or assumed Option,
as nearly as may be practicable, equivalent to the old Option. If any such
change or transaction shall occur, the number and kind of shares for which
Options may thereafter be granted under the Plan shall be adjusted to give
effect thereto.
12. Right of First Refusal.
The Agreements may contain such provisions as the Board shall determine
to the effect that if a Holder, or such other person exercising an Option,
elects to sell all or any shares of Common Stock that such Holder or other
person acquired upon the exercise of an Option awarded under the Plan, then
such Holder or other person shall not sell such shares unless such Holder or
other person shall have first offered in writing to sell such shares to NBTY
at Fair Market Value on a date specified in such offer (which date shall be
at least three business days and not more than 10 business days following the
date of such offer). In any such event, certificates representing shares
issued upon exercise of Options shall bear a restrictive legend to the effect
that transferability of such shares is subject to the restrictions contained
in the Plan and the applicable Agreement and NBTY may cause the registrar of
its Common Stock to place a stop transfer order with respect to such shares.
13. Termination and Amendment.
13.1 General. Unless the Plan shall theretofore have been terminated
as hereinafter provided, no Options may be granted under the Plan on or after
the tenth anniversary of the Effective Date. The Board may at any time prior
to the tenth anniversary of the Effective Date terminate the Plan, and the
Board may at any time modify or amend the Plan in such respects as it shall
deem advisable; provided, however, that any such modification or amendment
shall comply with all applicable laws, applicable stock exchange listing
requirements.
13.2 Modification. Except as otherwise set forth herein, no
termination, modification or amendment of the Plan may, without the consent
of the person to whom any Option shall theretofore have been granted (or a
transferee of such person if the Option, or any part thereof, has been
transferred pursuant to Section 20), adversely affect the rights of such
person with respect to such Option. No modification, extension, renewal or
other change in any Option granted under the Plan shall be made after the
grant of such Option, unless the same is consistent with the provisions of
the Plan. With the consent of the Holder (or a transferee of such Holder if
the Option, or any part thereof, has been transferred pursuant to Section 20)
and subject to the terms and conditions of the Plan (including Section 13),
the Board may amend outstanding Agreements with any Holder (or any such
transferee), including without limitation, any amendment which would (a)
accelerate the time or times at which the Option may be exercised and/or (b)
extend the scheduled expiration date of the Option. Without limiting the
generality of the foregoing, the Board may but solely with the Holder's
consent, agree to cancel any Option under the Plan held by such Holder and
issue a new Option in substitution therefor, provided that the Option so
substituted shall satisfy all of the requirements of the Plan as of the date
such new Option is granted.
14. Effectiveness of the Plan.
The Plan shall become effective upon notification by the affirmative
vote of a majority of the votes duly case thereon, either in person or by
proxy, by the holders of voting securities of NBTY entitled to vote thereon,
voting together as a single class, at a duly called and held meeting of
stockholders of NBTY.
15. Government and Other Regulations
The obligation of NBTY with respect to Options shall be subject to all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the effectiveness
of any registration statement required under the Securities Act of 1933, and
the rules and regulations of any securities exchange on which the Common
Stock may be listed. For so long as the Common Stock is registered under the
Exchange Act, NBTY shall use its reasonable efforts to comply with any legal
requirements (a) to maintain a registration statement in effect under the
Securities Act of 1933, as amended, with respect to all shares of Common
Stock that may be issued to Holders under the Plan, and (b) to file in a
timely manner all reports required to be filed by it under the Exchange Act.
16. Withholding.
NBTY's obligation to deliver shares of Common Stock or pay cash in
respect of any Option under the Plan shall be subject to applicable federal,
state and local tax withholding requirements.
17. Separability.
If any of the terms or provisions of this Plan conflict with the
requirements of applicable law or applicable rules and regulations
thereunder, including the requirements of Section 162(m) of the Code, Rule
16b-3 under the Exchange Act and/or Section 422A of the Code, then such terms
or provisions shall be deemed inoperative to the extent necessary to avoid
the conflict with applicable law, or applicable rules and regulations,
without invalidating the remaining provisions hereof. If this Plan does not
contain any provisions required to be included herein under Section 422A of
the Code, such provision shall be deemed to be incorporated herein with the
same force and effect as if such provision had been set out at length herein;
provided, further, that to the extent any option which is intended to qualify
as an ISO cannot so qualify, such Option, to that extent, shall be deemed to
be a Nonqualified Stock Option for all purposes of the Plan.
18. Non-Exclusivity of the Plan.
Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of NBTY for approval shall be construed as creating
any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific. cases.
19. Exclusion from Pension and Profit-Sharing Computation.
By acceptance of an Option, each Holder shall be deemed to have agreed
that such Option is special incentive compensation that will not be taken
into account, in any manner, as salary, compensation or bonus in determining
the amount of any payment under any pension, retirement or other employee
benefit plan of NBTY or any of its Subsidiaries. In addition, each
beneficiary of a deceased Holder shall be deemed to have agreed that such
Option will not affect the amount of any life insurance coverage, if any,
provided by NBTY or any of its Subsidiaries on the life of the Holder which
is payable to such beneficiary under any life insurance plan covering
employees of NBTY or any of its Subsidiaries.
20. Beneficiaries.
Each Holder may designate any person(s) or legal entity(ies), including
his or her estate, as his or her beneficiary under the Plan. Such designation
shall be made in writing on a form filed with the Secretary of NBTY or his or
her designee and may be revoked or changes by such Holder at any time by
filing written notice of such revocation or change with the Secretary of NBTY
or his or her designee. If no person shall be designated by a Holder as his
or her beneficiary or if no person designated as a beneficiary survives such
Holder, the Holder's beneficiary shall be his or her estate.
21. Governing Law.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of New York.
