<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[_] Preliminary Information Statement
[_] Confidential, for use of the Commission Only (as permitted by Rule 14c-
5(d)(2))
[X] Definitive Information Statement
THT Inc.
................................................................................
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies.
..........................................................................
2) Aggregate number of securities to which transaction applies:
..........................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
......................................................................
4) Proposed maximum aggregate value of transaction:
..........................................................................
5) Total fee paid:
..........................................................................
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
.....................................................................
2) Form, Schedule or Registration Statement No.:
.....................................................................
3) Filing Party:
.....................................................................
4) Date Filed:
.....................................................................
<PAGE>
THT INC.
33 Riverside Avenue
Westport, Connecticut 06880
-----------------------------
NOTICE OF THE TAKING OF CORPORATE ACTION WITHOUT A MEETING BY WRITTEN CONSENT
-----------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
Dear Stockholder:
In accordance with Section 228(d) of the Delaware General Corporation Law,
notice is hereby given that holders of a majority of the outstanding shares of
Common Stock, par value $.01 per share, of THT Inc., a Delaware corporation (the
"Company"), have taken the following action on July 21, 1997. Such action was
taken by the written consent of such holders and without a stockholders meeting
in accordance with the above-referenced Section of the Delaware General
Corporation Law. Such holders approved the adoption of the Company's 1997 Stock
Option Plan (the "Plan"). A copy of the Plan is included as Exhibit A to the
Information Statement, attached hereto.
The accompanying Information Statement is furnished pursuant to Section
14(c) of the Securities Exchange Act of 1934.
By Order of the Board of Directors,
Jeffrey B. Gaynor, Secretary
Westport, Connecticut
July 30, 1997
<PAGE>
THT INC.
33 Riverside Avenue
Westport, Connecticut 06880
--------------------------------
INFORMATION STATEMENT
--------------------------------
This Information Statement is being furnished for the information of the
holders of shares of Common Stock, par value $.01 per share ("Common Stock"), of
THT Inc., a Delaware corporation ("THT" or the "Company"), pursuant to Section
14(c) of the Securities Exchange Act of 1934 (the "Exchange Act"), and
Regulation 14C promulgated thereunder. This Information Statement is being
mailed on or about July 30, 1997 to holders of shares of Common Stock of the
Company of record, as described below.
Stockholders of the Company of record at the close of business on July 21,
1997, are entitled to notice of the corporate action taken by written consent of
holders of a majority of the issued and outstanding shares of Common Stock of
the Company adopting the Company's 1997 Stock Option Plan (the "Plan"). Such
action will be effective twenty (20) days following the mailing of this
Information Statement. As of the close of business on July 21, 1997, the
Company had 3,982,605 shares of Common Stock issued and outstanding.
Stockholders who hold a majority of the issued and outstanding shares of
Common Stock have executed a written consent approving the adoption of the Plan
as of July 21, 1997. A copy of the Plan is attached hereto as Exhibit A, and
incorporated herein by reference.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
1997 STOCK OPTION PLAN
The Plan provides that options to acquire a maximum of 400,000 shares of
Common Stock may be granted to executive officers, employees (including
employees who are directors), independent contractors and consultants of the
Company.
The Plan may be administered by the Board of Directors of the Company (the
"Board of Directors") or by a committee of the Board of Directors (the
"Committee"). The Board of Directors or the Committee, as the case may be, may
determine which persons will receive options and the
<PAGE>
number of options to be granted to such persons. The Board of Directors or the
Committee, as the case may be, also interprets the provisions of the Plan and
makes all other determinations that it may deem necessary or advisable for the
administration of the Plan.
Pursuant to the Plan, the Company may grant Incentive Stock Options
("ISOs") as defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), and/or Non-Qualified Stock Options ("NQSOs"), not intended
to qualify under Section 422(b) of the Code. The price at which the Company's
Common Stock may be purchased upon the exercise of ISOs granted under the Plan
is required to be at least equal to the per share fair market value of the
Common Stock on the date the option is granted. The price at which the
Company's Common Stock may be purchased upon the exercise of NQSOs shall be
determined by the Board of Directors or the Committee. Options granted under
the Plan may have maximum terms of not more than 10 years and are not
transferable, except by will or the laws of descent and distribution. No ISO
under the Plan may be granted to an employee owning more than 10% of the total
combined voting power of all classes of stock issued by the Company unless the
purchase price of the Common Stock under such option is at least 110% of the
fair market value of the shares issuable upon exercise of the option determined
as of the date the option is granted, and such option is not exercisable more
than five years after the grant date.
Generally, options granted under the Plan may remain outstanding and may
be exercised only so long as the person to whom they were granted remains
employed (or retained, if a consultant) by the Company or a subsidiary thereof,
subject to certain exceptions in the case of retirement, involuntary termination
other than for cause, total and permanent disability and death of an employee.
Pursuant to the Plan, each option becomes exercisable at such time as the
Board of Directors or the Committee, as the case may be, may specifically
provide at the time the option is granted. However, options granted under the
Plan shall be come immediately exercisable if the holder of such options is
terminated by the Company or is no longer a director of the Company, as the case
may be, subsequent to certain events which are deemed to be a "change in
control" of the Company. A "change in control" of the Company generally is
deemed to occur when: (i) any person becomes the beneficial owner of or acquires
voting control with respect to more than 20% of the Common Stock; (ii) any
person acquires the right to vote more than 20% of the Common Stock for the
election of Directors; or (iii) the Company's stockholders approve the sale of
all or substantially all of the Company's assets. Such "change in control"
provisions do not apply to the beneficially ownership of those persons who
currently beneficially own in excess of 20% of the Company's Common Stock.
ISOs granted under the Plan are subject to the restriction that the
aggregate fair market value (determined as of the date of grant) of options
which first become exercisable in any calendar year cannot exceed $100,000.
2
<PAGE>
The Plan provides for appropriate adjustments in the number and type of
shares covered by the Plan and options granted thereunder in the event of any
reorganization, merger, recapitalization or certain other transactions involving
the Company. In addition, the Plan provides that the maximum number of options
that can be granted in a given fiscal year to a single person shall be limited
to 250,000 options. Such limitation is intended to comply with Section 162(m)
of the Code.
As of the date hereof, no options have been granted by the Company under
the Plan.
Federal Income Tax Aspects
In accordance with the applicable provisions of the Code, currently in
effect, neither the receipt nor the exercise of an ISO by an employee should
generally result in the recognition of income or loss for federal income tax
purposes.
Assuming an employee meets the employment requirements at the date of
exercise, no income is recognized by the employee until the stock acquired
pursuant to the exercise of an ISO is subsequently sold. This gain on the sale
will qualify for long-term capital gain treatment if such sale occurs at least
two years after the grant of the ISO and one year after its exercise ("holding
period requirements").
If the holding period requirements are not met, there should be no tax
imposed on the participant until the sale of the Company's Common Stock received
pursuant to the exercise of the ISO. Any gain realized, however, from the sale
of such stock will be taxed as ordinary income to the extent of the difference
between (a) the lesser of (i) the fair market value of the Company's Common
Stock on the date of exercise or (ii) the amount realized from such disposition,
and (b) the exercise price.
An individual who receives an NQSO will generally recognize ordinary income
on the difference between the fair market value of the Common Stock on the
exercise date and the amount paid for the Common Stock by the participant. This
gain per share of Common Stock is treated as compensation to the participant and
is subject to income and employment tax withholding. The adjusted basis in the
Common Stock equals the amount paid for the Common Stock plus any amount that
was included as compensation by the participant.
Generally, under the Code, assuming the holding period and employment
requirements are satisfied, no deduction will be allowed to the Company with
respect to the grant or the exercise of an ISO. The Company should be allowed a
deduction in the year that an NQSO is exercised to the extent that the person
realizes ordinary income.
3
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of July 1, 1997, by (i)
each person who is known by the Company to beneficially own 5% or more of Common
Stock, (ii) each Director of the Company, (iii) each Executive Officer of the
Company named in the Summary Compensation Table, set forth below, and (iv) all
Directors and Executive Officers of the Company as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned
-------------------------
Name and Address Number Percent
of Beneficial Owner ------ -------
- -------------------
<S> <C> <C>
Paul K. Kelly*................................. 1,991,350 (1) 50%
Frederick A. Rossetti*......................... 1 (2) - %
Jeffrey B. Gaynor*............................. 1 (2) - %
All Directors and Officers
as a Group (3 persons)......................... 1,991,352 (1)(2) 50%
PH II Holdings, Inc.*.......................... 1,811,350 (3) 45.5%
- ----------------------------
</TABLE>
* The address of each of the beneficial owners is 33 Riverside Avenue,
Westport, CT 06880.
(1) Includes 1,731,349 shares of Common Stock owned of record by PH II
Holdings, Inc. ("PH II Holdings"), a wholly-owned subsidiary of PH II,
Inc., an affiliate of the Company ("PH II"), and 80,001 shares of Common
Stock owned of record by PH II, both entities of which Mr. Kelly is
affiliated. Excludes 1,000 shares of Preferred Stock of the Company owned
of record by PH II Holdings.
(2) Mr. Rossetti is an Officer and Director of PH II and PH II Holdings. Mr.
Gaynor is a Director of PH II. Excludes shares of Common Stock
beneficially owned by PH II Holdings and PH II, as described in Note (1)
above.
(3) Excludes 1,000 shares of Preferred Stock of the Company owned of record by
PH II Holdings. In addition, includes 80,001 shares of Common Stock owned
of record by PH II.
4
<PAGE>
EXECUTIVE COMPENSATION
Compensation Table
The following table sets forth information with respect to those persons
who were, at September 30, 1996, the Co-Chief Executive Officers and the most
highly compensated executive officers of THT (collectively, the "Named
Officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
----------------------- ------------
Other Securities
Annual Underlying All Other
Compen- Warrants/ Compen-
Name and Principal Position Year Salary Bonus sation Options sation
- --------------------------- ---- ------ ----- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Paul K. Kelly 1996 (1)
Co-Chief Executive 1995 (1)
Officer 1994 (1)
Frederick A. Rossetti 1996 (1)
Co-Chief Executive 1995 (1)
Officer 1994 (1)
- ----------
</TABLE>
(1) Messrs. Kelly and Rossetti's services were provided to the Company through
PH II, Inc. ("PH II"), an affiliate of the Company. For the fiscal year
ended September 30, 1996, the Company paid PH II an aggregate $1,108,900
including $533,900 of incentive compensation, plus expenses, in
consideration for the services of Messrs. Kelly and Rossetti and for the
services of Jeffrey B. Gaynor, Executive Vice President and Secretary of
the Company. For the fiscal year ended September 30, 1995, the Company paid
PH II an aggregate $765,000, including $275,000 of incentive compensation,
plus expenses, in consideration for the services of Messrs. Kelly, Rossetti
and Gaynor. For the fiscal year ended September 30, 1994, the Company paid
PH II an aggregate $526,500, including $76,500 of incentive compensation,
plus expenses, in consideration for the services of Messrs. Kelly, Rossetti
and Gaynor.
Director Compensation
The Company does not compensate any Director of the Company for services
performed as a Director.
5
<PAGE>
Employment Contracts
For the fiscal year ended September 30, 1996, no Executive Officer of the
Company was employed as such pursuant to an employment contract with the
Company. On October 1, 1995, an agreement was entered into between the Company
and PH II, Inc. an affiliate of the Company, pursuant to which the services of
Mr. Frederick A. Rossetti, Mr. Paul K. Kelly and Mr. Jeffrey B. Gaynor are
provided to the Company, together with telephone usage, office space and all
other standard office-related services. Frederick A. Rossetti has been provided
to act on behalf of the Company as its Co-Chief Executive Officer, President and
Treasurer, Mr. Kelly as Co-Chief Executive Officer and Chairman of the Board,
and Mr. Gaynor as Secretary and Executive Vice President. PH II did not have
the right under the agreement to elect or appoint the Officers of the Company,
which right was solely the responsibility of the Company's Board of Directors.
In consideration for such services, PH II was paid a base annual fee of $575,000
plus incentive compensation of $533,900, plus expenses. On October 1, 1996, a
similar agreement was entered into between the Company and PH II, for a one-year
term at an annual fee of $725,000, plus incentive compensation and expenses.
6
<PAGE>
Exhibit A
THT INC. 1997 STOCK OPTION PLAN
1. Purposes.
The THT INC. 1997 STOCK OPTION PLAN (the "Plan") is intended to provide the
employees (including employees who are also directors), independent contractors
and consultants of THT Inc. (the "Company") with an added incentive to provide
their services to the Company and to induce them to exert their maximum efforts
toward the Company's success. By thus encouraging employees, directors,
independent contractors and consultants and promoting their continued
association with the Company, the Plan may be expected to benefit the Company
and its stockholders. The Plan allows the Company to grant Incentive Stock
Options ("ISOs") (as defined in Section 422(b) of the Internal Revenue Code of
1986, as amended [the "Code"]), and Non-Qualified Stock Options ("NQSOs"), not
intended to qualify under Section 422(b) of the Code (ISOs and NQSOs hereinafter
collectively the "Options"), to employees, directors, independent contractors
and consultants of the Company.
2. Shares Subject to the Plan.
The total number of shares of Common Stock of the Company, $.01 par value
per share, that may be subject to Options granted under the Plan shall be
400,000 shares, subject to adjustment as provided in Paragraph 8 hereunder. The
Company shall at all times while the Plan is in force reserve such number of
shares of Common Stock as will be sufficient to satisfy the requirement of
outstanding Options granted under the Plan, except as otherwise provided below.
In the event any Option granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased shares subject thereto shall
again be available for the granting of Options under the Plan.
In a given fiscal year, the maximum number of Options that can be granted
hereunder to a single person shall be limited to 250,000 Options, as adjusted
for future stock dividends and/or stock splits. Further, such limitation shall
not be deemed exceeded in the event subsequent to the date of grant of Options
under the Plan, the Company effectuates a stock split and/or stock dividend
which results in an adjustment to the number of Options previously granted. The
aforesaid limitation is intended to comply with Section 162(m) of the Code. To
the extent any provision of the Plan or action by the Board of Directors or
Committee, as hereinafter defined, fails to comply with Section 162(m), it shall
be deemed null and void to the extent required by statute and to the extent
deemed advisable by the Board of Directors and/or such Committee.
<PAGE>
3. Eligibility.
ISOs may be granted from time to time under the Plan to one or more
employees of the Company or of a "subsidiary" or "parent" of the Company, as the
quoted terms are defined within Section 424 of the Code. An Officer is an
employee for the above purposes. NQSOs may be granted from time to time under
the Plan to one or more employees of the Company, Officers, members of the Board
of Directors, independent contractors, consultants and other individuals who are
not employees of, but are involved in the continuing development and success of
the Company and/or of a subsidiary of the Company.
4. Administration of the Plan.
(a) The Plan may be administered by the Board of Directors of the Company
(the "Board of Directors") or by a committee of the Board of Directors of the
Company (the "Committee") comprised of at least two outside directors, and in
accordance with the requirement of Section 162(m) of the Code, appointed by the
Board of Directors of the Company. In the event such Committee is not comprised
of said outside directors, any Option granted hereunder by it shall not be
deemed automatically null and void, except as otherwise provided below. Within
the limits of the express provisions of the Plan, each of the Board of Directors
and the Committee shall have the authority, in its discretion, to determine the
individuals to whom, and the time or times at which, Options shall be granted,
the character of such Options (whether ISOs or NQSOs), and the number of shares
of Common Stock to be subject to each Option, and to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of option agreements that may be entered into
in connection with Options (which need not be identical), subject to the
limitation that option agreements granting ISOs must be consistent with the
requirements for the ISOs being qualified as "incentive stock options" as
provided in Section 422 of the Code, and to make all other determinations and
take all other actions necessary or advisable for the administration of the
Plan. In making such determinations, each of the Board of Directors and the
Committee may take into account the nature of the services rendered by such
individuals, their present and potential contributions to the Company's success,
and such other factors as the Board of Directors or the Committee, in its
discretion, shall deem relevant. The Board of Directors or the Committee's
determinations, as the case may be, on the matters referred to in this Paragraph
shall be conclusive.
(b) Notwithstanding anything contained herein to the contrary, each of the
Board of Directors or the Committee shall have the right to grant Options to
persons subject to Section 16 of the Securities Exchange Act of 1934 (the "1934
Act") and set forth the terms and conditions thereof. With respect to persons
subject to Section 16 of the 1934 Act, transactions under the Plan are intended
to comply with all applicable conditions of Rule 16b-3, as amended from time to
time (and its successor provisions, if any), under the 1934 Act. To the extent
any provision of the Plan or action by the Board of Directors or Committee fails
to so comply, it shall be deemed null and void
A-2
<PAGE>
to the extent required by law and to the extent deemed advisable by the Board of
Directors and/or such Committee.
5. Terms of Options.
Within the limits of the express provisions of the Plan, each of the Board
of Directors and the Committee may grant either ISOs or NQSOs. An ISO or an NQSO
enables the optionee to purchase from the Company, at any time during a
specified exercise period, a specified number of shares of Common Stock at a
specified price (the "Option Price"). The character and terms of each Option
granted under the Plan shall be determined by the Board of Directors or the
Committee consistent with the provisions of the Plan, including the following:
(a) An Option granted under the Plan must be granted within 10 years from
the date the Plan is adopted, or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.
(b) The Option Price of the shares of Common Stock subject to each ISO
shall not be less than the fair market value of such shares of Common Stock as
of the time such ISO is granted. Such fair market value shall be determined by
the Board of Directors or the Committee and if the shares of Common Stock are
then listed on any national securities exchange or traded on the over-the-
counter market, the fair market value shall be the closing price on such
exchange, or the average of the closing bid and asked prices of the shares of
Common Stock on the over-the-counter market, as reported by Nasdaq, the National
Association of Securities Dealers OTC Bulletin Board or the National Quotation
Bureau, Inc., as the case may be, on the day on which the Option is granted or,
if there is no closing price or bid or asked price on that day, the closing
price or average of the closing bid and asked prices on the most recent day
preceding the day on which the Option is granted for which such prices are
available. If an ISO is granted to an individual who, immediately before the ISO
is to be granted, owns directly or through attribution) more than 10% of the
total combined voting power of all classes of capital stock of the Company or a
subsidiary or parent of the Company, the Option Price of the shares of Common
Stock subject to such ISO shall not be less than 110% of the fair market value
per share of the shares of Common Stock at the time such ISO is granted.
(c) The Option Price of the shares of Common Stock subject to an NQSO
granted pursuant to the Plan shall be determined by the Board of Directors or
the Committee, in its sole discretion.
(d) In no event shall any Option granted under the Plan have an expiration
date later than ten (10) years from the date of its grant, and all Options
granted under the Plan shall be subject to earlier termination as expressly
provided in Paragraph 6 hereof. If an ISO is granted to any individual who,
immediately before the ISO is granted, owns (directly or through attribution)
more than 10% of the total combined voting power of all classes of capital stock
of the Company or of a
A-3
<PAGE>
subsidiary or parent of the Company, such ISO shall by its terms expire and
shall not be exercisable after the expiration of five (5) years from the date of
its grant.
(e) Unless otherwise provided in any option agreement under the Plan, and
except as otherwise provided below, an Option granted under the Plan shall
become exercisable, in whole at any time or in part from time to time, but in no
case may an Option (i) be exercised as to less than one hundred (100) shares of
Common Stock at any one time, or the remaining shares of Common Stock covered by
the Option if less than one hundred (100), and (ii) become fully exercisable
more than ten years from the date of its grant.
(f) An Option granted under the Plan shall be exercised by the delivery by
the holder thereof to the Company at its principal office (to the attention of
the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment in
full, in cash or by certified or bank check payable to the order of the Company,
of the Option Price for such shares of Common Stock, or, by the delivery of
unexercised Options and/or shares of Common Stock having a fair market value
equal to the Option Price, or by a combination of cash and such unexercised
Options and/or shares held by an optionee that have a fair market value equal to
the Option Price, and, in the case of a NQSO, by having the Company withhold
from the shares of Common Stock to be issued upon exercise of the Option that
number of shares having a fair market value equal to the tax withholding amount
due, or otherwise provide for withholding as set forth in Paragraph 9(c) hereof.
The Option Price may also be paid in full by a broker-dealer to whom the
optionee has submitted an exercise notice consisting of a fully endorsed Option,
or through any other medium of payment as the Board of Directors or the
Committee, in its discretion, shall authorize.
(g) The holder of an Option shall have none of the rights of a stockholder
with respect to the shares of Common Stock covered by such holder's Option until
such shares of Common Stock shall be issued to such holder upon the exercise of
the Option.
(h) All Options granted under the Plan shall not be transferable otherwise
than by will or the laws of descent and distribution, and any Option granted
under the Plan may be exercised during the lifetime of the holder thereof only
by the holder. No Option granted under the Plan shall be subject to execution,
attachment or other process.
(i) Subject to the provisions of Section 6 hereof, each Option shall become
exercisable at such time or times as the Board of Directors or the Committee may
in its discretion specifically provide at the time the Option is granted.
Notwithstanding the foregoing, each of the Board of Directors and the Committee
may: (i) accelerate the exercisability of any Option subject to such terms and
conditions as the Committee deems necessary and appropriate; or (ii) at any time
prior to the expiration or termination of any Option previously granted, extend
the term of any Option for such additional period as the Committee in its
discretion shall determine. In no event, however, shall the aggregate term of
any Option, including the original term of the Option and any extensions
thereof, exceed ten years. Subject to the foregoing, and except as otherwise
provided herein, all or
A-4
<PAGE>
any part of the shares underlying the Option with respect to which the Option is
exercisable may be purchased commencing at the time and to the extent such
Option became exercisable or at any time or times thereafter during the term of
the Option.
(j) The aggregate fair market value, determined as of the time any ISO is
granted and in the manner provided for by Subparagraph (b) of this Paragraph 5,
of the shares of Common Stock with respect to which ISOs granted under the Plan
are exercisable for the first time during any calendar year and under incentive
stock options qualifying as such in accordance with Section 422 of the Code
granted under any other incentive stock option plan maintained by the Company or
its parent or subsidiary corporations, shall not exceed $100,000. Any grant of
Options in excess of such amount shall be deemed a grant of a NQSO. In addition,
and notwithstanding anything contained herein to the contrary, in the event an
ISO granted hereunder does not, for any reason, at the time of grant or during
the term of the ISO satisfy all of the conditions under the Code with respect to
being deemed an ISO, then said ISO shall be deemed a NQSO, but only to the
extent, if applicable, said ISO exceeds any such conditions, and any said
determination that said ISO is deemed an NQSO shall not be deemed the grant of a
new Option hereunder.
6. Death, Termination of Employment, or Disability.
(a) Except as otherwise provided herein, upon termination of employment or
retention with the Company, a holder of an Option under the Plan may exercise
such Options to the extent such Options were exercisable as of the date of
termination at any time within three (3) months after the date of such
termination, subject to the provisions of Subparagraph (c) of this Paragraph 6.
For purposes hereof, termination of employment or retention shall include, but
shall not be limited to, termination due to retirement, layoffs, or the
permanent disability of the optionee. Notwithstanding anything contained herein
to the contrary, any Options granted hereunder to an optionee and then
outstanding shall immediately terminate in the event the optionee is convicted
of a felony committed against the Company, and the provisions of this
Subparagraph (a) shall not be applicable thereto. In addition, and anything
contained herein to the contrary notwithstanding, the term during which an
optionee may exercise Options subsequent to the date of termination may, in the
Committee's discretion, be modified, subject to applicable law and regulation,
from the term specified above, as of the date of grant and as specified in an
option agreement evidencing the grant of Options under the Plan.
(b) If the holder of an Option granted under the Plan dies (i) while
employed by the Company or a subsidiary or parent corporation or (ii) within
three (3) months after the termination of such holder's employment or retention,
such Options may, subject to the provisions of Subparagraph (c) of this
Paragraph 6, be exercised by a legatee or legatees of such Option under such
individual's last will or by such individual's personal representatives or
distributees at any time within twelve (12) months after the individual's death,
to the extent, except as otherwise provided herein, such Options were
exercisable as of the date of death or date of termination of employment,
whichever date is earlier.
A-5
<PAGE>
(c) An Option may not be exercised pursuant to this Paragraph 6 except to
the extent that the holder was entitled to exercise the Option at the time of
termination of employment or retention or death, and in any event may not be
exercised after the original expiration date of the Option.
(d) Notwithstanding anything in this Plan to the contrary, any Options
granted hereunder and then outstanding shall become immediately exercisable in
full in the event the optionee's employment with the Company is terminated by
the Company subsequent to the consummation of a tender offer or exchange offer
made by any "person" within the meaning of Section 14(d) of the 1934 Act or
subsequent to a Change in Control, as defined below. For purposes of this
Subparagraph, a "Change in Control" shall have occurred if:
(1) any "person" within the meaning of Section 14(d) of the 1934 Act
becomes the "beneficial owner" as defined in Rule 13d-3 thereunder,
directly or indirectly, of more than 20% of the Company's Common Stock,
exclusive of those persons who beneficially own more than 20% of the
Company's Common Stock as of July 1, 1997.
(2) any "person" acquires by proxy or otherwise the right to vote more
than 20% of the Company's Common Stock for the election of Directors,
exclusive of those persons who beneficially own more than 20% of the
Company's Common Stock as of July 1, 1997, and/or other than solicitation
of proxies by the Incumbent Board (as hereinafter defined), for any merger
or consolidation of the Company or for any other matter or question.
(3) the Company's stockholders have approved the sale of all or
substantially all of the assets of the Company.
(4) Notwithstanding the foregoing, a Change of Control shall not occur
if the event causing the Change of Control is a repurchase by the Company
of its own shares (although subsequent acquisitions of shares of Common
Stock by any "person" owning more than the percentage interest set forth
above shall constitute a Change of Control).
(e) In addition, and notwithstanding anything contained herein to the
contrary, in the event an optionee dies during such time as the optionee is
employed or retained by the Company, then fifty percent (50%) of any outstanding
Options which have not vested and are not exercisable by the optionee as of the
date of death shall be automatically deemed vested and exercisable by the
optionee's estate and/or his legatees in accordance with Subparagraph 6(b)
hereof.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to re-employment is guaranteed either by statute or by
contract.
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8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Common Stock are hereafter
changed by reason of recapitalization, reclassification, stock split,
combination or exchange of shares of Common Stock or the like, or by the
issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Committee, in the aggregate number of shares of
Common Stock available under the Plan, in the number of shares of Common Stock
issuable upon exercise of outstanding Options, and the Option Price per share.
In the event of any consolidation or merger of the Company with or into another
company, or the conveyance of all or substantially all of the assets of the
Company to another company, each then outstanding Option shall upon exercise
thereafter entitle the holder thereof to such number of shares of Common Stock
or other securities or property to which a holder of shares of Common Stock of
the Company would have been entitled to upon such consolidation, merger or
conveyance; and in any such case appropriate adjustment, as determined by the
Committee shall be made as set forth above with respect to any future changes in
the capitalization of the Company or its successor entity. In the event of the
proposed dissolution or liquidation of the Company, all outstanding Options
under the Plan will automatically terminate, unless otherwise provided by the
Board of Directors of the Company or any authorized committee thereof.
(b) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next higher whole number of
shares of Common Stock.
9. Further Conditions of Exercise.
(a) Unless the shares of Common Stock issuable upon the exercise of an
Option under the Plan have been registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, prior to the exercise
of the Option, an optionee must represent in writing to the Company that such
shares of Common Stock are being acquired for investment purposes only and not
with a view towards the further resale or distribution thereof, and must supply
to the Company such other documentation as may be required by the Company,
unless in the opinion of counsel to the Company such representation, agreement
or documentation is not necessary to comply with said Act.
(b) The Company shall not be obligated to deliver any shares of Common
Stock until they have been listed on each securities exchange on which the
shares of Common Stock may then be listed or until there has been qualification
under or compliance with such state or federal laws, rules or regulations as the
Company may deem applicable. The Company shall use reasonable efforts to obtain
such listing, qualification and compliance.
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(c) The Board of Directors or the Committee may make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
any taxes that the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with the exercise of any Option, including, but not
limited to, (i) the withholding of delivery of shares of Common Stock upon
exercise of Options until the holder reimburses the Company for the amount the
Company is required to withhold with respect to such taxes, (ii) the cancelling
of any number of shares of Common Stock issuable upon exercise of such Options
in an amount sufficient to reimburse the Company for the amount it is required
to so withhold, or (iii) withholding the amount due from any such person's wages
or compensation due such person.
10. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the stockholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified or amended by
the affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company voting as a single class, and entitled to vote
thereon.
(c) The Board of Directors of the Company may at any time, prior to ten
(10) years from the earlier of the date of the adoption of the Plan by such
Board of Directors or the date the Plan is approved by the stockholders,
terminate the Plan or from time to time make such modifications or amendments of
the Plan as it may deem advisable; provided, however, that the Board of
Directors shall not, without approval by the affirmative vote of the holders of
a majority of the outstanding shares of capital stock of the Company, voting as
a single class, and entitled to vote thereon, increase (except as provided by
Paragraph 8) the maximum number of shares of Common Stock as to which Options
may be granted under the Plan, materially change the standards of eligibility
under the Plan or materially increase the benefits which may accrue to
participants under the Plan. Any amendment to the Plan which, in the opinion of
counsel to the Company, will be deemed to result in the adoption of a new Plan,
will not be effective until approved by the affirmative vote of the holders of a
majority of the outstanding shares of capital stock of the Company, voting as a
single class, and entitled to vote thereon.
(d) No termination, modification or amendment of the Plan may adversely
affect the rights under any outstanding Option without the consent of the
individual to whom such Option shall have been previously granted and/or
awarded.
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11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of Directors of
the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon within one year before or after adoption of the
Plan by the Board of Directors.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed pursuant
hereto shall be deemed to confer upon any individual to whom an Option is or may
be granted hereunder any right to remain in the employ of the Company or of a
subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee, or to terminate any other relationship with an Optionee, including
that of independent contractor or consultant. Notwithstanding anything contained
herein to the contrary, and except as otherwise provided at the time of grant,
all references hereunder to termination of employment shall with respect to
consultants and independent contractors mean the termination of retention of
their services with or for the Company.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.
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