<PAGE>
<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[x] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Cooper Life Sciences, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Board of Directors of Cooper Life Sciences, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
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(4) Date filed:
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<PAGE>
<PAGE>
PRELIMINARY COPY
COOPER LIFE SCIENCES, INC.
160 BROADWAY
NEW YORK, NEW YORK 10038
TEL: (212) 791-5362
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 23, 1999
To the Stockholders of
COOPER LIFE SCIENCES, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Cooper
Life Sciences, Inc., a Delaware corporation (the "Company"), will be held on
Tuesday, March 23, 1999, at 10:00 A.M. Eastern Standard Time, at 405 Lexington
Avenue, 14th Floor, New York, New York 10174, for the purpose of considering and
acting upon the following:
1. To elect four directors to hold office until the next Annual Meeting
of Stockholders and until their respective successors have been duly
elected and qualified;
2. To approve the Company's Amended and Restated Certificate of
Incorporation;
3. To approve the Company's 1999 Stock Incentive Plan; and
4. To transact such other business as may properly come before the Annual
Meeting of Stockholders or any adjournments thereof.
The Board of Directors has fixed the close of business on February 24, 1999
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the annual meeting. Only stockholders of record at the close of
business on that date will be entitled to notice of, and to vote at, the Annual
Meeting of Stockholders or any adjournments thereof.
Enclosed with this Notice are a Proxy Statement, a proxy card and return
envelope, and the Company's Annual Report to Stockholders for the fiscal year
ended October 31, 1998 (which includes the Company's Annual Report on Form 10-K
as filed with the Securities and Exchange Commission).
All stockholders are cordially invited to attend the meeting in person.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE POSTAGE PREPAID
ENVELOPE WHICH HAS BEEN PROVIDED.
By Order of the Board of Directors
Harold L. Schneider
Secretary
Dated: February 24, 1999
<PAGE>
<PAGE>
PRELIMINARY COPY
COOPER LIFE SCIENCES, INC.
160 BROADWAY
NEW YORK, NEW YORK 10038
TELEPHONE NO.: (212) 791-5362
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF STOCKHOLDERS
--------------------
FEBRUARY 24, 1999
INFORMATION REGARDING PROXIES
This Proxy Statement is being furnished in connection with the solicitation
of the accompanying proxy by and on behalf of the Board of Directors of Cooper
Life Sciences, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held on March 23, 1999, at 10:00 A.M. Eastern Standard Time,
at 405 Lexington Avenue, 14th Floor, New York, New York 10174 and at any
adjournment or postponements thereof (the "Annual Meeting") for the purposes set
forth in the accompanying Notice of Meeting. This Proxy Statement and the
accompanying proxy card are first being mailed to stockholders on or about
February 25, 1999.
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by the use of the mail, directors,
officers and other employees of the Company, acting on its behalf, may solicit
proxies by telephone, telegraph, facsimile or personal interview. The Company
will, at its expense, request brokers and other custodians, nominees and
fiduciaries to forward proxy soliciting material to the beneficial owners of
shares held of record by such persons. It is estimated that said costs will be
nominal.
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on February 24, 1999
as the record date (the "Record Date") for the determination of stockholders of
the Company who are entitled to receive notice of, and to vote at, the Annual
Meeting. At the close of business on the Record Date, an aggregate of 2,126,265
shares of the Company's Common Stock were outstanding, each of which is entitled
to one vote on each matter to be voted upon at the Annual Meeting. Cumulative
voting is not permitted.
VOTING PROCEDURES
When a proxy card in the form enclosed with this Proxy Statement is
returned properly executed, the shares represented thereby will be voted at the
Annual Meeting in accordance with the directions indicated thereon. If a proxy
card is properly executed but no directions are indicated, the shares will be
voted FOR each of the nominees for director as shown on the form of proxy card
and FOR the proposal to approve the Company's Amended and Restated Certificate
of Incorporation and FOR the proposal to approve the Company's 1999 Stock
Incentive Plan.
The Board of Directors does not know of any other business to come before
the Annual Meeting. However, if any other matters should properly come before
the Annual Meeting or any adjournment or postponement thereof for which specific
authority has not been solicited from the stockholders, then, to the extent
permissible by law, the persons voting the proxies will use their discretionary
authority to vote thereon in accordance with their best judgment. A stockholder
who executes and returns the enclosed proxy card may revoke it at any time prior
to its exercise by giving written notice of such revocation to the Secretary of
the Company, by executing a subsequently dated proxy card or by voting in person
at the Annual Meeting. Attendance at the Annual Meeting by a stockholder who has
executed and returned a proxy card does not alone revoke such proxy. Votes will
<PAGE>
<PAGE>
be counted and certified by one or more Inspectors of Election who are expected
to be employees of American Stock Transfer & Trust Company, the Company's
transfer agent.
The presence of the holders of a majority of the outstanding shares of the
Company's Common Stock entitled to vote, represented at the Annual Meeting in
person or by proxy, will constitute a quorum. Shares represented by proxies that
are marked "abstain" will be counted as shares present for purposes of
determining the presence of a quorum on all matters. Proxies relating to "street
name" shares that are voted by brokers on some but not all of the matters will
be treated as shares present for purposes of determining the presence of a
quorum on all matters, but they will not be treated as shares entitled to vote
at the Annual Meeting on those matters as to which authority to vote is withheld
by the broker ("Broker Non-Votes"). The four nominees receiving the highest vote
totals will be elected as Directors of the Company. Accordingly, abstentions and
Broker Non-Votes will not affect the outcome of the election. The affirmative
vote of a majority of the outstanding shares of Common Stock represented at the
Annual Meeting in person or by proxy and entitled to vote is required for the
approval of the 1999 Stock Incentive Plan; and the affirmative vote of a
majority of the outstanding shares of Common Stock of the Company entitled to
vote is required for the approval of the Amended and Restated Certificate of
Incorporation. OFFICERS AND DIRECTORS OF THE COMPANY WHO BENEFICIALLY OWN MORE
THAN 50% OF THE OUTSTANDING SHARES OF COMMON STOCK HAVE ADVISED THE COMPANY THAT
THEY INTEND TO VOTE FOR THE COMPANY'S FOUR NOMINEES FOR DIRECTORS AND FOR THE
OTHER PROPOSALS SET FORTH BELOW. IN THE EVENT THAT THEY DO SO VOTE THEIR SHARES,
THE ELECTION OF SUCH NOMINEES AND THE APPROVAL OF SUCH OTHER PROPOSALS IS
ASSURED.
PROPOSAL I: ELECTION OF DIRECTORS
At this years Annual Meeting, four (4) nominees will be elected to hold
office as directors. The four persons listed below have been nominated to serve
as directors of the Company until the next annual meeting of stockholders and
until their respective successors have been duly elected and qualified. All of
the nominees are currently directors of the Company. In the unexpected event
that any of such nominees should become unable or decline to serve, proxies may
be voted for the election of substitute nominees as are designated by the
Company's Board of Directors.
The names of the nominees for election as directors are listed below,
together with certain personal information, including the present principal
occupation and recent business experience of each nominee. Each of the persons
named below has indicated to the Board of Directors of the Company that he will
be able to serve.
-4-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
YEAR
COMMENCED
SERVING AS
A DIRECTOR
NAME, PRINCIPAL OCCUPATION OF THE
AND OTHER DIRECTORSHIPS AGE COMPANY
----------------------- -- -------
<S> <C> <C>
William L. Cohen 57 1993
Mr. Cohen has been a director since July 1993.
Mr. Cohen is President, Chief Executive Officer and
Chairman of the Board of Andover Togs, Inc., an apparel
manufacturing company, positions he has held for more
than the past five years.
Moses Marx 63 1995
Mr. Marx has been a director since May 1995.
Mr. Marx has been a general partner in United Equities
Company (a securities brokerage firm) since 1954 and a
general partner in United Equities Commodities Company
(a commodities brokerage firm) since 1972. He is also
President of Momar Corp. (an investment company).
Mr. Marx is a director of The Cooper Companies, Inc.
(a developer and manufacturer of healthcare products).
Steven Rosenberg 50 1995
Mr. Rosenberg has been a director since May 1995. Mr.
Rosenberg has been Vice President-Finance and Chief
Financial Officer of the Company since 1990 and since
May 1995, he has also served as acting President. From
September 1987 through April 1990, he served as
President and Director of Scomel Industries, Inc., a
company engaged in international marketing and
consulting. Mr. Rosenberg is a director of The Cooper
Companies, Inc.
Randolph B. Stockwell 51 1988
Mr. Stockwell has been a director since July 1988. He
has been private investor for over ten years and has
served in various capacities with the Community Bank, a
commercial bank, from September 1972 to January 1987.
</TABLE>
There are no family relationships (whether by blood, marriage or adoption)
among any of the Company's current directors or executive officers.
BOARD COMMITTEES, MEETINGS AND COMPENSATION
The Board of Directors of the Company has established an Audit Committee
and a Stock Incentive Committee. The Company does not have a nominating
committee or a compensation committee. The Audit Committee and the Stock
-5-
<PAGE>
<PAGE>
Incentive Committee are comprised of Messrs. Cohen and Stockwell. The Audit
Committee's functions include reviewing with the independent auditors the plan
and result of the auditing engagement, reviewing the adequacy of the Company's
system of internal accounting controls, and considering the range of audit and
nonaudit services. The Stock Incentive Committees's functions presently consist
of the administration of the Company's 1991 Stock Incentive Plan.
During the fiscal year ended October 31, 1998, the Board met five times.
The Audit Committee and the Stock Incentive Committee did not meet during fiscal
1998.
For a description of compensation paid to Directors, see "Management
Compensation - Compensation of Directors."
Directors are elected annually by the stockholders.
SECURITIES HELD BY MANAGEMENT AND OTHERS
SECURITIES HELD BY MANAGEMENT
The following table sets forth certain information regarding ownership of
the Company's Common Stock as of the Record Date by each director, the only
executive officer named in the Summary Compensation Table set forth below (who
is also a director of the Company), and by all directors and executive officers
as a group.
<TABLE>
<CAPTION>
Number of Percent
Shares of Class
--------- --------
<S> <C> <C>
William L. Cohen 1,500(1) *
Moses Marx (2) 1,206,120(3) 56.7%
Steven Rosenberg 20,082(4) *
Randolph B. Stockwell 7,000(5) *
All executive officers and directors
as a group (4 persons) 1,234,702(6) 57.6%
</TABLE>
- ----------------
* Less than 1%.
(1) Issuable upon the exercise of options which have been granted to Mr. Cohen
under the Company's Stock Option Plan for Non-Employee Directors.
(2) Mr. Marx's address is 160 Broadway, New York, NY 10038.
(3) Includes 500 shares issuable upon the exercise of options which have been
granted to Mr. Marx under the Company's Stock Option Plan for Non-Employee
Directors.
(4) Includes 15,000 shares issuable upon the exercise of outstanding options
which have been granted to Mr. Rosenberg under the Company's 1991 Stock
Incentive Plan.
(5) Includes 1,500 shares issuable upon the exercise of options which have been
granted to Mr. Stockwell under the Company's Stock Option Plan for
Non-Employee Directors.
(6) Includes 18,500 shares of Common Stock which are issuable upon the
exercise of outstanding options.
-6-
<PAGE>
<PAGE>
PRINCIPAL SECURITYHOLDERS
The following table sets forth certain information regarding ownership of
the Company's Common Stock as of the Record Date by the only party (other than
Mr. Marx - See "Securities Held by Management" above) which has advised the
Company that it owns more than five percent (5%) of the Company's Common Stock.
<TABLE>
<CAPTION>
Common Stock Beneficially Owned
-------------------------------
Number of Percent
Shares of Class
--------- --------
<S> <C> <C>
Estate of Mel Schnell(1) 150,000 6.6%
6 Maiden Lane, New York, NY 10038
</TABLE>
- --------
(1) Based upon filings made by the estate of Mr. Schnell with the Securities and
Exchange Commission. Represents 150,000 shares of Common Stock which are
issuable upon the exercise of options granted to Mr. Schnell, while President of
the Company, under the Company's 1991 Stock Incentive Plan.
MANAGEMENT COMPENSATION
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below shows compensation paid in or with respect to each of the
last three fiscal years to Mr. Steven Rosenberg, who served as the Company's
acting president and chief executive officer during fiscal 1998. Mr. Rosenberg
was the only executive officer of the Company during the fiscal year ended
October 31, 1998.
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Name and
Principal Position Year Salary
- ------------------ ---- ------
<S> <C> <C>
Steven Rosenberg(1) 1998 $ 90,000
Vice President (Acting 1997 $ 90,000
President) and Chief 1996 $ 90,000
Financial Officer
</TABLE>
- --------
(1) Mr. Rosenberg assumed the position of Acting President in May 1995.
OPTION GRANTS IN LAST FISCAL YEAR
None
The following table sets forth information concerning the value of
unexercised options held by Mr. Rosenberg, the Company's only executive officer,
as of the fiscal year ended October 31, 1998. Mr. Rosenberg did not exercise any
options during the fiscal year ended October 31, 1998.
-7-
<PAGE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares of Value of
Common Stock Unexercised
Underlying In-The-Money
Options at Options at
FY-End (#) FY-End ($)(1)
---------- -------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ---- ------------- -------------
<S> <C> <C>
Steven Rosenberg 15,000/-0- 480,000/-0-
</TABLE>
- --------
(1) Based upon the last sale price on October 31, 1998 of $32.00 per share of
Common Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The Company does not have a Compensation Committee of its Board of
Directors. Decisions as to compensation are made by the Company's Board of
Directors. During the Company's fiscal year ended October 31, 1998, none of the
executive officers of the Company has served on the board of any other entity,
any of whose officers has served on the Board of Directors of the Company.
REPORT ON EXECUTIVE COMPENSATION
There is no Compensation Committee of the Board of Directors or other
committee of the Board performing equivalent functions. As noted above,
compensation of the Company's executive officers is determined by the Board of
Directors. There is no formal policy for the Company's executive officers.
The Board of Directors has appointed a Stock Option Committee which has
made grants under, and administered, the 1991 Stock Incentive Plan. The
Committee will continue to make grants and administer the 1991 Stock Incentive
Plan for the duration of the plan.
Total compensation for executive officers consists of a combination of
salaries and stock option awards. Executive officers shall be entitled to
receive such annual bonuses as the Board of Directors may in its discretion
determine to be appropriate under the circumstances, based upon, with respect to
each fiscal year, the Company's results of operations and progress with respect
to the achievement of its strategic goals, the executive officers' performance,
and such other factors as the Board of Directors deems to be relevant. No
bonuses were paid to any executive officer in 1998. Stock option awards under
the Company's 1991 Stock Incentive Plan are intended to attract, motivate and
retain senior management personnel by affording them an opportunity to receive
additional compensation based upon the performance of the Company's Common
Stock.
William L. Cohen
Moses Marx
Steven Rosenberg
Randolph B. Stockwell
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company receives monthly fees
of $1,000 for serving as a director of the Company and $1,000 for each day
during which he participates in a meeting of the Board and, if on a separate
day, $500 for each day during which he participates in a meeting of a committee
of the Board of which he is a member. In addition, see "Stock Option Plan for
Non-Employee Directors" below.
-8-
<PAGE>
<PAGE>
BENEFIT PLANS
Except as set forth below under "Stock Plans", the Company does not
maintain any pension, profit-sharing or other incentive compensation plans for
the benefit of any of its current employees.
STOCK PLANS
In 1991, the Board of Directors of the Company adopted a Stock Option Plan
for Non-Employee Directors (the "Stock Option Plan for Non-Employee Directors")
and a 1991 Stock Incentive Plan (the "1991 Stock Incentive Plan"). A brief
description of each plan is as follows:
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Up to 25,000 shares of the Company's Common Stock may be issued pursuant to
the Stock Option Plan for Non-Employee Directors (subject to appropriate
adjustment in the event of changes in the corporate structure of the Company).
The Stock Option Plan for Non-Employee Directors provides that each director of
the Company who is not an employee of the Company or any subsidiary (and who has
not been an employee for at least one year prior to the date of grant) shall be
automatically granted an option to purchase up to 500 shares of Common Stock of
the Company on the date of each annual meeting of stockholders at which he or
she is elected as a director of the Company. Only nonqualified options may be
granted under the Stock Option Plan for Non-Employee Directors. The option
exercise price shall be equal to the fair market value of a share of Common
Stock of the Company on the date of the grant, and the options granted become
exercisable six months after issuance. The Board of Directors has determined to
terminate the Stock Option Plan for Non-Employee Directors, subject to and
effective upon, stockholder approval of the Company's 1999 Stock Option Plan.
1991 STOCK INCENTIVE PLAN
The 1991 Stock Incentive Plan permits the granting of awards in the forms
of nonqualified stock options, incentive stock options, restricted stock,
deferred stock, and other stock-based incentives. Up to 300,000 shares of Common
Stock of the Company may be issued pursuant to the 1991 Stock Incentive Plan
(subject to appropriate adjustment in the event of changes in the corporate
structure of the Company). Officers and other key employees of the Company or
any subsidiary are eligible to receive awards under the 1991 Stock Incentive
Plan. The option exercise price of all options which are granted under the 1991
Stock Incentive Plan must be at least equal to 100% of the fair market value of
a share of Common Stock of the Company on the date of grant. If the Company's
1999 Stock Incentive Plan is adopted at this Annual Meeting no further options
will be granted under the Company's 1991 Stock Incentive Plan. However, holders
of options previously granted under the 1991 Stock Option Plan will continue to
have the right to exercise those options in accordance with the terms of the
options.
-9-
<PAGE>
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of The Nasdaq Stock Market Total
Return Index for the five-year period ended October 31, 1998. The graph assumes
that the value of the investment in the Company and the index was $100 on
October 31, 1993 and assumes that all dividends were reinvested. The Company has
not had significant operating businesses or operations in a primary business
segment to which a meaningful comparison of the Company's performance for the
five-year period ended October 31, 1998 can be made.
RETURN TO SHAREHOLDERS OF COOPER LIFE SCIENCES, INC.
<TABLE>
<CAPTION>
=====================================================================
10/29/93 10/31/94 10/31/95 10/31/96 10/31/97 10/30/98
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cooper Life $100.00 $125.00 $106.25 $143.75 $312.50 $400.00
Sciences, Inc.
- -------------------------------------------------------------------------------------
NASDAQ Market $100.00 $100.55 $135.43 $159.82 $210.34 $235.81
Total Return
Index
=====================================================================================
</TABLE>
PROPOSAL II
APPROVAL OF THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has adopted a resolution proposing that the
Company amend and restate its Certificate of Incorporation to provide for, among
other things, (i) a change in the name of the Company to Berkshire Bancorp Inc.,
(ii) a change in the Company's authorized capital stock from 6,000,000 shares of
Common Stock and 6,000,000 shares of Preferred Stock to 10,000,000 shares of
Common Stock and 2,000,000 shares of Preferred Stock and (iii) elimination of
the provisions contained in Articles 5-8 of the Company's current Certificate of
Incorporation since the items contained therein are currently reflected in the
Delaware General Corporation Law ("DGCL"). The Amended and Restated Certificate
of Incorporation also contains revised language to certain provisions of the
Company's current Certificate of Incorporation, such as the provisions regarding
indemnification of officers and directors, that does not involve a substantive
change from the current Certificate of Incorporation. The form of the proposed
Amended and Restated Certificate of Incorporation is attached as Exhibit A to
this Proxy Statement. The only substantive changes to the current Certificate of
Incorporation to be effected by the proposed amendment are as follows:
PURPOSE OF AMENDMENT
Change of Company's Name to Berkshire Bancorp Inc.
The Board of Directors and management of the Company believe that the
proposed change in the Company's name will enable the Company to establish an
image which identifies the Company's new status as the holding company for its
recently acquired operating subsidiary, The Berkshire Bank, a private New York
Banking corporation. In the event that the proposed amendment is not approved at
the Annual Meeting, the Company will not change its name.
Change in the Company's Capital Structure
The proposed Amended and Restated Certificate of Incorporation,
although not effecting a change in the total number of authorized shares of
capital stock, which currently consists of 6,000,000 shares of common stock and
6,000,000 shares of preferred stock, will change the allocation of the
authorized capital to 10,000,000 shares of Common Stock and 2,000,000 shares of
Preferred Stock.
-10-
<PAGE>
<PAGE>
The Board of Directors considers the proposed amendment advisable in
order to provide flexibility for future capital requirements. The development of
the Company to date has been financed in part through the issuance of its Common
Stock or securities convertible into Common Stock and the Board of Directors
believes that it would be beneficial to the Company to be in a position to make
additional issuances of such Common Stock or securities convertible into Common
Stock if circumstances warrant such issuances. Approval by the stockholders of
the proposed amendment at the Annual Meeting could avoid the expensive procedure
of calling and holding a special meeting for that purpose at a later date if the
need to issue additional shares of Common Stock beyond the current 6,000,000
shares authorized should arise. The Board believes that the smaller number of
shares of Preferred Stock that will remain available for issuance if the
proposed amendment is adopted will be more than adequate to provide the Company
with sufficient flexibility with respect to any possible future equity financing
proposals. As with the current authorized Preferred Stock, the Board of
Directors will be authorized to issue the remaining Preferred Stock with such
dividend, liquidation, conversion or voting rights as the Board may determine.
Moreover, the Board of Directors will be empowered to authorize the issuance of
the additional shares of Common Stock as well as the Preferred Stock at such
time or times, to such persons and for such consideration as the Board deems
appropriate, without further stockholder action. Although such additional shares
of Common Stock and the remaining Preferred Stock could be used to dilute the
stock ownership of persons seeking to obtain control of the Company, approval of
the proposed amendment is not being sought for that purpose.
None of the Company's Common Stock has any pre-emptive rights.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION TO PROVIDE FOR, AMONG OTHER THINGS, A
CHANGE IN THE COMPANY'S NAME AND CAPITAL STRUCTURE.
PROPOSAL III
APPROVAL OF 1999 STOCK INCENTIVE PLAN
At the Annual Meeting, the Company's stockholders will be asked to
approve the adoption of the Company's 1999 Stock Incentive Plan (the "1999
Plan").
On February 9, 1999, the Board of Directors adopted, subject to
stockholder approval, the 1999 Plan. The Board believes that, to enable the
Company to continue to attract and retain personnel of the highest caliber,
provide incentive for officers, directors, employees and other key persons and
to promote the well-being of the Company, it is in the best interest of the
Company and its stockholders to provide to officers, directors, employees,
consultants and other independent contractors who perform services for the
Company, through the granting of stock options, restricted stock, deferred stock
or other stock awards, the opportunity to participate in the value and/or
appreciation in value of the Company's Common Stock. The Board has found that
the grant of options and stock-based awards under its 1991 Stock Incentive Plan
has proven to be a valuable tool in attracting and retaining key employees.
Accordingly, the Board believes that the 1999 Plan, which provides the Board
greater flexibility with respect to certain terms under which awards that may be
granted, (a) will provide the Company with significant means to attract and
retain talented personnel, (b) will result in saving cash, which otherwise would
be required to maintain current employees and adequately attract and reward
personnel and others who perform services for the Company, and (c) consequently,
will prove beneficial to the Company's ability to be competitive. The last sale
price of the Common Stock on February 24, 1999 was $_____.
-11-
<PAGE>
<PAGE>
To date, no options or stock awards have been granted under the 1999
Plan. If the 1999 Plan is approved by the stockholders, options or stock awards
may be granted under the 1999 Plan, the timing, amounts and specific terms of
which cannot be determined at this time.
The following summary of the 1999 Plan does not purport to be
complete, and is subject to and qualified in its entirety by reference to the
full text of the 1999 Plan, set forth as Exhibit "B" hereto.
SUMMARY OF THE 1999 PLAN
The 1999 Plan provides for the grant of any or all of the following
types of awards (collectively, "Awards"): (1) stock options, (ii) restricted
stock, (iii) deferred stock and (iv) other stock-based awards. Awards may be
granted singly, in combination, or in tandem, as determined by the
administrators of the 1999 Plan. A total of 200,000 shares of Common Stock,
subject to anti-dilution adjustment as provided in the 1999 Plan, have been
reserved for distribution pursuant to the 1999 Plan. The maximum number of
shares of Common Stock that may be issued upon the grant of an Award to any
employee of the Company on the last day of any taxable year cannot exceed 75,000
shares during the term of the 1999 Plan.
The 1999 Plan can be administered by the Board of Directors (the
"Board") or a Compensation Committee (the "Committee") consisting of two or more
non-employee members of the Board of Directors appointed by the Board. The Board
or the Committee will determine, among other things, the persons to whom Awards
will be granted, the type of Awards to be granted, the number of shares subject
to each Award and the share price. The Board or the Committee will also
determine the term of each Award, the restrictions or limitations thereon, and
the manner in which each such Award may be exercised or, if applicable, the
extent and circumstances under which common stock and other amounts payable with
respect to an Award will be deferred. Unless sooner terminated, the 1999 Plan
will expire at the close of business on March 22, 2009.
Stock Options. The 1999 Plan provides for the grant of "incentive stock options"
("Incentive Stock Options"), as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), and for options not qualifying as
Incentive Stock Options ("Non-Qualified Stock Options"). The Board or the
Committee, as the case may be, shall determine those persons to whom stock
options may be granted.
Incentive Stock Options granted pursuant to the 1999 Plan are
nontransferable by the optionee during his lifetime. Options granted pursuant to
the 1999 Plan will expire if not exercised within 10 years of the grant (five
years in the case of Incentive Stock Options granted to an eligible employee
owning stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or a parent or subsidiary of the Company
immediately before the grant ("10% Stockholder")), and under certain
circumstances set forth in the 1999 Plan, may be exercised within [three (3)
months] following termination of employment (one year in the event of death,
retirement or disability of the optionee). Options may be granted to optionees
in such amounts and at such prices as may be determined, from time to time, by
the Board or the Committee. The exercise price of an Incentive or Non-Qualified
Stock Option will not be less than the fair market value of the shares
underlying the option on the date the option is granted, provided, however, that
the exercise price of an Incentive Stock Option granted to a 10% Stockholder may
not be less than 110% of such fair market value.
Under the 1999 Plan, the Company may not, in the aggregate, grant
Incentive Stock Options that are first exercisable by any optionee during any
calendar year (under all such plans of the optionee's employer corporation and
its "parent" and "subsidiary" corporations, as those terms are defined in
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Section 424 of the Code) to the extent that the aggregate fair market value of
the underlying stock (determined at the time the option is granted) exceeds
$100,000.
The 1999 Plan contains anti-dilution provisions authorizing
appropriate adjustments in certain circumstances. Shares of Common Stock subject
to Awards which expire without being exercised or which are cancelled as a
result of the cessation of employment are available for further grants. No
shares of Common Stock of the Company may be issued upon the exercise of any
option granted under the 1999 Plan until the full option price has been paid by
the optionee. The Board of Directors or the Committee may grant individual
options under the 1999 Plan with more stringent provisions than those specified
in the 1999 Plan.
Options become exercisable in such amounts, at such intervals and upon
such terms and conditions as the Board of Directors or the Committee provide.
Stock options granted under the 1999 Plan are exercisable until the earlier of
(i) a date set by the Board of Directors or Committee at the time of grant or
(ii) the close of business on the day before the tenth anniversary of the stock
option's date of grant (the day before the fifth anniversary in the case of an
Incentive Stock Option granted to a 10% Stockholder). The 1998 Plan will remain
in effect until all stock options are exercised or terminated. Notwithstanding
the foregoing, no options may be granted after March 22, 2009.
Restricted and Deferred Stock Awards. Under the 1999 Plan the Board or the
Committee may grant shares of restricted Common Stock either alone or in tandem
with other Awards. Restricted and Deferred Stock awards give the recipient the
right to receive a specified number of shares of Common Stock, subject to such
terms, conditions and restrictions as the Board or the Committee deem
appropriate. Restrictions may include limitations on the right to transfer the
stock until the expiration of a specified period of time and forfeiture of the
stock upon the occurrence of certain events such as the termination of
employment prior to expiration of a specified period of time. In addition, a
participant in the 1999 Plan who has received a Deferred Stock Award may
request, under certain conditions, the Board or the Committee to defer the
receipt of an award (or an installment of an award) for an additional specified
period or until the occurrence of a specified event.
Other Stock Based Awards. Other Stock-Based Awards, which may include
performance shares and shares valued by reference to the performance of the
Company or any parent or subsidiary of the Company, may be granted either alone
or in tandem with other Awards.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 1999 PLAN
The following is a brief summary of the Federal income tax aspects of
Awards made under the 1999 Plan based upon statutes, regulations and
interpretations in effect on the date hereof. This summary is not intended to be
exhaustive, and does not describe state or local tax consequences.
1. INCENTIVE STOCK OPTIONS. The optionee will recognize no taxable
income upon the grant or exercise of an Incentive Stock Option. Upon a
disposition of the shares after the later of two years from the date of grant
and one year after the transfer of the shares to the optionee, (i) the optionee
will recognize the difference, if any, between the amount realized and the
exercise price as long-term capital gain or long-term capital loss (as the case
may be) if the shares are capital assets in his or her hands; and (ii) the
Company will not qualify for any deduction in connection with the grant or
exercise of the options. The excess, if any, of the fair market value of the
shares on the date of exercise of an Incentive Stock Option over the exercise
price will be treated as an item of adjustment to the optionee for his or her
taxable year in which the exercise occurs and may result in an alternative
minimum tax liability for the optionee. In the case of a
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disposition of shares in the same taxable year as the exercise where the amount
realized on the disposition is less than the fair market value of the shares on
the date of exercise, there will be no adjustment since the amount treated as an
item of adjustment, for alternative minimum tax purposes, is limited to the
excess of the amount realized on such disposition over the exercise price which
is the same amount included in regular taxable income.
If Common Stock acquired upon the exercise of an Incentive Stock
Option is disposed of prior to the expiration of the holding periods described
above, (i) the optionee will recognize ordinary compensation income in the
taxable year of disposition in an amount equal to the excess, if any, of the
lesser of the fair market value of the shares on the date of exercise or the
amount realized on the disposition of the shares, over the exercise price paid
for such shares; and (ii) the Company will qualify for a deduction equal to any
such amount recognized, subject to the requirements that the compensation be
reasonable and not limited under Section 162(m) of the Code. The optionee will
recognize the excess, if any, of the amount realized over the fair market value
of the shares on the date of exercise, if the shares are capital assets in his
or her hands, as short-term or long-term capital gain, depending on the length
of time that the optionee held the shares, and the Company will not qualify for
a deduction with respect to such excess.
Subject to certain exceptions for disability or death, if an Incentive
Stock Option is exercised more than three months following the termination of
the optionee's employment, the option will generally be taxed as a Non-Qualified
Stock Option. See "Non-Qualified Stock Options."
2. NON-QUALIFIED STOCK OPTIONS. With respect to Non-Qualified Stock
Options, (i) upon grant of the option, the optionee will recognize no income;
(ii) upon exercise of the option (if the shares are not subject to a substantial
risk of forfeiture), the optionee will recognize ordinary compensation income in
an amount equal to the excess, if any, of the fair market value of the shares on
the date of exercise over the exercise price, and the Company will qualify for a
deduction in the same amount, subject to the requirements that the compensation
be reasonable and not limited under Section 162(m) of the Code; (iii) the
Company will be required to comply with applicable Federal income tax
withholding requirements with respect to the amount of ordinary compensation
income recognized by the optionee; and (iv) on a sale of the shares, the
optionee will recognize gain or loss equal to the difference, if any, between
the amount realized and the sum of the exercise price and the ordinary
compensation income recognized. Such gain or loss will be treated as short-term
or long-term capital gain or loss if the shares are capital assets in the
optionee's hands depending upon the length of time that the optionee held the
shares.
3. STOCK AWARDS. Unless a participant otherwise elects to be taxed
upon receipt of shares of restricted or deferred stock under the 1998 Plan, the
participant must include in his or her taxable income the difference between the
fair market value of the shares and the amount paid, if any, for the shares, as
of the first date the participant's interest in the shares is no longer subject
to a substantial risk of forfeiture or such shares become transferrable. A
participant's rights in stock awarded under the 1999 Plan are subject to a
substantial risk of forfeiture if the rights to full enjoyment of the shares are
conditioned, directly or indirectly, upon the future performance of substantial
services by the participant. Where shares of stock received under the 1999 Plan
are subject to a substantial risk of forfeiture, the participant can elect to
report the difference between the fair market value of the shares on the date of
receipt and the amount paid, if any, for the stock as ordinary income in the
year of receipt. To be effective, the election must be filed with the Internal
Revenue Service within 30 days after the date the shares are transferred to the
participant. The Company is entitled to a Federal income tax deduction equal in
amount to the amount includable as compensation in the gross income of the
participant, subject to the requirements that the compensation be reasonable and
not
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limited under Section 162(m) of the Code. The amount of taxable gain arising
from a participant's sale of shares of restricted stock acquired pursuant to the
1998 Plan is equal to the excess of the amount realized on such sale over the
sum of the amount paid, if any, for the stock and the compensation element
included by the participant in taxable income.
4. OTHER TAX MATTERS. If unmatured installments of Awards are
accelerated as a result of a Change of Control (as defined in the 1999 Plan),
any amounts received from the exercise by a participant of a stock option, the
lapse of restrictions on restricted stock or the deemed satisfaction of
conditions of performance-based awards may be included in determining whether or
not a participant has received an "excess parachute payment" under Section 280G
of the Code, which could result in (i) the imposition of a 20% Federal excise
tax (in addition to Federal income tax) payable by the participant on certain
payments of Common Stock or cash resulting from such exercise or deemed
satisfaction of conditions of performance awards from such exercise or deemed
satisfaction of conditions of performance awards or, in the case of restricted
stock, on all or a portion of the fair market value of the shares on the date
the restrictions lapse and (ii) the loss by the Company of a compensation
deduction.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 1999
STOCK INCENTIVE PLAN.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters to be
presented at the Annual Meeting, but if any such matters properly come before
the Annual Meeting, it is intended that the persons holding the accompanying
proxy will vote in accordance with their best judgement.
SUBMISSION OF STOCKHOLDER PROPOSALS
A stockholder proposal must be received by the Company on or prior to
October 26, 1999 at the address of the Company set forth on the first page of
this Proxy Statement in order to be eligible for inclusion in the Company's
proxy statement for the next annual meeting of stockholders. Any such proposal
should be directed to the Secretary of the Company.
By Order of the Board of Directors
Harold L. Schneider
Secretary
Dated: February 24, 1999
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Exhibit A
FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
COOPER LIFE SCIENCES, INC.
The Corporation was incorporated under the name "Cooper Medical
Devices Corporation" by the filing of its original Certificate of Incorporation
with the Secretary of State of the State of Delaware on March 1, 1979. This
Amended and Restated Certificate of Incorporation of the Corporation, which both
restates and amended the provisions of the Corporation's Certificate of
Incorporation (as amended, this "Certificate of Incorporation"), was duly
adopted in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware (the "DGCL"). The Certificate of
Incorporation of the Corporation is hereby amended and restated to read in its
entirety as follows:
ARTICLE I.
The name of the corporation (which is hereinafter referred to as the
"Corporation") is BERKSHIRE BANCORP INC.
ARTICLE II.
The address of the registered office of the Corporation in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, State of Delaware 19801. The name of the
Corporation's registered agent is The Corporation Trust Company.
ARTICLE III.
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the DGCL.
ARTICLE IV.
4.1 Capital Stock. The total number of shares of capital stock which
the Corporation shall have authority to issue is twelve million (12,000,000)
shares, of which ten million (10,000,000) shares shall be common stock, par
value $.10 per share ("Common Stock"), and two million (2,000,000) shares shall
be preferred stock, par value $.01 per share ("Preferred Stock").
4.2 Common Stock. The shares of authorized Common Stock of the
Corporation shall be identical in all respects and shall have equal rights and
privileges.
4.3 Preferred Stock. The Preferred Stock may be issued from time to
time in one or more series. The Board of Directors of the Corporation is hereby
expressly authorized to provide, by resolution or resolutions duly adopted by it
prior to issuance, for the creation of each such series and to fix the
designation and the powers, preferences, rights, qualifications, limitations and
restrictions relating to the shares of each such series. The authority of the
Board of Directors with respect to each series of Preferred Stock shall include,
but not be limited to, determining the following:
(a) the designation of such series, the number of shares to constitute
such series and the stated value if different from the par value thereof;
(b) whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the terms of
such voting rights, which may be general or limited;
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(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the conditions
and dates upon which such dividends shall be payable, and the preference or
relation which such dividends shall bear to the dividends payable on any
shares of stock of any other class or any other series of Preferred Stock;
(d) whether the shares of such series shall be subject to redemption
by the Corporation, and, if so, the times, prices and other conditions of
such redemption;
(e) the amount or amounts payable upon shares of such series upon, and
the rights of the holders of such series in, the voluntary or involuntary
liquidation, dissolution or winding up, or upon any distribution of the
assets, of the Corporation;
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for retirement or other
corporate purposes and the terms and provisions relating to the operation
thereof;
(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other series of
Preferred Stock or any other securities and, if so, the price or prices or
the rate or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of conversion or
exchange;
(h) the limitations and restrictions, if any, to be effective while
any shares of such series are outstanding upon the payment of dividends or
the making of other distributions on, and upon the purchase, redemption or
other acquisition by the Corporation of, the Common Stock or shares of
stock of any other class or any other series of Preferred Stock;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional stock,
including additional shares of such series or of any other series of
Preferred Stock or of any other class; and
(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions, thereof.
The powers, preferences and relative, participating, optional and
other special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereof shall be cumulative.
ARTICLE V.
Unless required by law or determined by the chairman of the meeting to
be advisable, the vote by stockholders on any matter, including the election of
directors, need not be by written ballot.
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ARTICLE VI.
The Corporation reserves the right to increase or decrease its
authorized capital stock, or any class or series thereof, and to reclassify the
same, and to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation or the Bylaws of the Corporation; and other
provisions authorized by the DGCL at the time in force may be added or inserted,
in the manner now or hereafter prescribed by law, and all rights conferred upon
stockholders, Directors or any other person pursuant to this Certificate of
Incorporation and the Bylaws of the Corporation are granted subject to the
aforementioned reservation.
ARTICLE VII.
The Board of Directors shall have the power at any time, and from time
to time, to adopt, amend and repeal any and all Bylaws of the Corporation.
ARTICLE VIII.
8.1 Elimination of Certain Liability of Directors. To the fullest
extent permitted by the DGCL, as the same exists or may hereafter be amended, no
Director of the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a Director. No
amendment of this Certificate of Incorporation or repeal of any of its
provisions shall limit or eliminate any right or protection of a Director of
this Corporation under this Section 8.1 for or with respect to any acts or
omissions of such Director occurring prior to such amendment or repeal.
8.2 Indemnification. The Corporation shall indemnify (A) its Directors
and officers, whether serving the Corporation or at its request, any other
entity, to the full extent required or permitted by the DGCL now or hereafter in
force, including the advance of expenses under the procedures and to the full
extent permitted by law, and (B) other employees and agents of the Corporation
to such extent as shall be expressly authorized by the Board of Directors or the
ByLaws and as permitted by law. The foregoing rights of indemnification shall
not be exclusive of any other rights to which those seeking indemnification may
be entitled. The Board of Directors may take such action as is necessary to
carry out these indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such Bylaws, resolutions or contracts
implementing such provisions or such further indemnification arrangements as may
be permitted by law. No amendment of this Certificate of Incorporation or repeal
of any of its provisions shall limit or eliminate the right to indemnification
provided under this Section 8.2 with respect to any acts or omissions occurring
prior to such amendment or repeal.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates, integrates and amends the provisions of the certificate of
incorporation of the Corporation, and which has been duly adopted by the
stockholders of the Corporation in accordance with the provisions of Sections
242 and 245 of the Delaware General Corporation Law, has been executed by Steven
Rosenberg, its Vice President, this ______ day of March, 1999.
COOPER LIFE SCIENCES, INC.
By:________________________
Steven Rosenberg
Vice President
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EXHIBIT B
BERKSHIRE BANCORP INC.
1999 Stock Incentive Plan
SECTION 1. PURPOSES; DEFINITIONS.
The purpose of this Plan is to enable the Company to offer to its key
employees and to key employees of its Subsidiaries and other persons who are
expected to contribute to the success of the Company, long term
performance-based stock and/or other equity interests in the Company, thereby
enhancing their ability to attract, retain and reward such key employees or
other persons, and to increase the mutuality of interest between those employees
or other persons and the stockholders of the Company.
For purposes of this Plan, the following terms shall be defined as set
forth below:
(a) "Board" means the Board of Directors of Berkshire
Bancorp Inc.
(b) "Cause" shall have the meaning ascribed thereto in Section 5(b)(ix)
below.
(c) "Change of Control" shall have the meaning ascribed thereto in Section
9 below.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(e) "Committee" means the Stock Incentive Committee of the Board or any
other committee of the Board which the Board may designate.
(f) "Company" means Berkshire Bancorp Inc., a corporation organized under
the laws of the State of Delaware.
(g) "Deferred Stock" means Stock to be received, under an award made
pursuant to Section 7 below, at the end of a specified deferral
period.
(h) "Disability" means disability as determined under procedures
established by the Committee for purposes of this Plan.
(i) "Early Retirement" means retirement from active employment with the
Company or any Parent or Subsidiary prior to age 65, with the approval
of the Board or the Committee, for purposes of one or more award(s)
under this Plan.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
as in effect from time to time.
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(k) "Fair Market Value" of a share of Stock means, as of any given date:
(i) if the Stock is listed on a national securities exchange or quoted
on the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), the last sale price of a share of Stock
on the last preceding day on which the Common Stock was traded, as
reported by such exchange or NASDAQ, or on a composite tape reflecting
transactions on such exchange or by NASDAQ, as the case may be; (ii)
if the Stock is not listed on a national securities exchange or quoted
on the NASDAQ, but is traded in the over-the-counter market, the
average of the high bid and asked prices for a share of Stock on the
last preceding day for which such quotations are reported by the
National Quotation Bureau, Inc.; and (iii) if the fair market value of
a share of Stock cannot be determined pursuant to clause (i) or (ii)
above, such price as the Board of Directors or the Committee, as the
case may be, shall determine, which determination shall be conclusive
as to the Fair Market Value of the Stock.
(l) "Incentive Stock Option" means any Stock Option which is intended to
be and is designated as an "incentive stock option" within the meaning
of Section 422 of the Code.
(m) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(n) "Normal Retirement" means retirement from active employment with the
Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 8 below that is
valued in whole or in part by reference to, or is otherwise based upon
Stock.
(p) "Parent" means any present or future parent of the Company, as such
term is defined in Section 424(e) of the Code, or any successor
thereto.
(q) "Performance Objectives" means performance objectives adopted by the
Committee pursuant to the Plan for key employees who have received
awards under the Plan. With respect to any award to a key employee who
is, or is determined by the Committee to be likely to become a
"covered employee" within the meaning of Section 162(m) of the Code,
the Performance Objectives shall be limited to specified levels of
growth in or peer company comparisons based upon (i) appreciation in
the price of Stock plus reinvested dividends over a specified period
of time, (ii) return on assets or (iii) book value per share, as the
Committee may determine, and the attainment of such Performance
Objectives shall not be deemed to have occurred until certified by the
Committee. Except in the case of a covered employee, if the Committee
determines that a change in business, operations, corporate structure
or capital structure of the Company, or the manner in which it
conducts its business, or other events or circumstances under the
Performance Objectives to be unsuitable, the Committee may modify such
Performance Objectives or the
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related minimum acceptable level of achievement, in whole or in
part, as the Committee deems appropriate.
(r) "Plan" means this Berkshire Bancorp Inc. 1999 Stock Incentive Plan, as
hereinafter amended from time to time.
(s) "Restricted Stock" means Stock, received under an award made pursuant
to Section 6 below, that is subject to restrictions imposed pursuant
to said Section 6.
(t) "Retirement" means Normal Retirement or Early Retirement.
(u) "Rule 16b-3" means Rule 16b-3 of the General Rules and Regulations
under the Exchange Act, as in effect from time to time, and any
successor thereto.
(v) "Section 162(m)" means Section 162(m) of the Code, as in effect from
time to time, and any successor thereto.
(w) "Securities Act" means the Securities Act of 1933, as amended, as in
effect from time to time.
(x) "Stock" means the Common Stock of the Company, par value $.10 per
share.
(y) "Stock Option" or "Option" means any option to purchase shares of
Stock which is granted pursuant to the Plan.
(z) "Subsidiary" means any present or future (A) subsidiary corporation of
the Company, as such term is defined in Section 424(f) of the Code, or
(B) unincorporated business entity in which the Company owns, directly
or indirectly, 50% or more of the voting rights, capital or profits.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Board, or at its discretion, the
Committee, the membership of which shall consist solely of two or more members
of the Board, each of whom shall serve at the pleasure of the Board and shall be
a "Non-Employee Director," as defined in Rule 16b-3, and an "outside director,"
as defined in Section 162(m) of the Code, and shall be at all times constituted
so as not to adversely affect the compliance of the Plan with the requirements
of Rule 16b-3 or with the requirements of any other applicable law, rule or
regulation.
The Board or the Committee, as the case may be, shall have the authority to
grant, pursuant to the terms of the Plan, to officers and other key employees or
other persons eligible under Section 4 below: (i) Stock Options, (ii) Restricted
Stock, (iii) Deferred Stock, and/or (iv) Other Stock-Based Awards.
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For purposes of illustration and not of limitation, the Board or the
Committee, as the case may be, shall have the authority (subject to the express
provisions of this Plan):
(i) to select the officers and other key employees of the Company
or any Parent or Subsidiary and other persons to whom Stock
Options, Restricted Stock, Deferred Stock and/or Other
Stock-Based Awards may be from time to time granted hereunder;
(ii) to determine the Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock, Deferred Stock and/or Other
Stock-Based Awards, or any combination thereof, if any, to be
granted hereunder to one or more eligible persons;
(iii) to determine the number of shares of Stock to be covered by
each 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, share price, any restrictions
or limitations, and any vesting acceleration, exercisability
and/or forfeiture provisions);
(v) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in
conjunction with or apart from other awards made by the Company
or any Parent or Subsidiary outside of this Plan;
(vi) to determine the extent and circumstances under which Stock and
other amounts payable with respect to an award hereunder shall
be deferred; and
(vii) to substitute (A) new Stock Options for previously granted
Stock Options, including previously granted Stock Options which
have higher option exercise prices and/or containing other less
favorable terms, and (B) new awards of any other type for
previously granted awards of the same type, including
previously granted awards which contain less favorable terms.
Subject to Section 10 hereof, The Board or the Committee, as the case may
be, shall have the authority to (i) adopt, alter and repeal such administrative
rules, guidelines and practices governing this Plan as it shall, from time to
time, deem advisable, (ii) interpret the terms and provisions of this Plan and
any award issued under this Plan (and to determine the form and substance of all
agreements relating thereto), and (iii) to otherwise supervise the
administration of the Plan.
Subject to the express provisions of the Plan, all decisions made by the
Board or the Committee, as the case may be, pursuant to the provisions of the
Plan shall be made in the
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Board or the Committee's sole and absolute discretion and shall be final and
binding upon all persons, including the Company, its Parent and Subsidiaries and
the Plan participants.
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for distribution
under this Plan shall be 200,000 shares. Such shares may consist, in whole or in
part, of authorized and unissued shares or treasury shares.
If any shares of Stock that have been optioned cease to be subject to a
Stock Option for any reason, or if any shares of Stock that are subject to any
Restricted Stock award, Deferred Stock award or Other Stock-Based Award are
forfeited or any such award otherwise terminates without the issuance of such
shares, such shares shall again be available for distribution under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary distribution with
respect to the Stock or other change in corporate structure affecting the Stock,
such substitutions or adjustments shall be made in the (A) aggregate number and
kind of shares reserved for issuance under this Plan, (B) number, kind and
exercise price of shares of Stock subject to outstanding Options granted under
this Plan, and (C) number, kind, purchase price and/or appreciation base of
shares of Stock subject to other outstanding awards granted under this Plan, as
may be determined to be appropriate by the Board or the Committee, as the case
may be, in its sole discretion, in order to prevent dilution or enlargement of
rights; provided, however, that the number of shares subject to any award shall
always be a whole number. Such adjusted exercise price shall also be used to
determine the amount which is payable to the optionee upon the exercise by the
Board or the Committee, as the case may be, of the alternative settlement right
which is set forth in Section 5(b)(xi) below.
Subject to the provisions of the immediately preceding paragraph, the
maximum numbers of shares subject to Options, Restricted Stock awards, Deferred
Stock awards, and other Stock-Based awards to any employee who is employed by
the Company or any Parent or Subsidiary on the last day of any taxable year of
the Company, shall be 75,000 shares during the term of the Plan.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Company or any Parent or Subsidiary
(but excluding any person whose eligibility would adversely affect the
compliance of the Plan with the requirements of Rule 16b-3) who are at the time
of the grant of an award under this Plan employed by the Company or any Parent
or Subsidiary and who are responsible for or contribute to the management,
growth and/or profitability of the business of the Company or any Parent or
Subsidiary, are eligible to be granted Options and awards under this Plan. In
addition, Non-Qualified Stock Options and other awards may be granted under the
Plan to any person, including, but not limited to, independent agents,
consultants and attorneys who the Board or the Committee, as the case may be,
believes has contributed or will contribute
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to the success of the Company. Eligibility under the Plan shall be determined by
the Board or the Committee, as the case may be.
The grants of Restricted Stock, Deferred Stock and Other Stock-Based Awards
under this Plan shall be earned by a participant on the basis of the Company's
financial performance over the period or periods for which the grants were
awarded on the basis of pre-established performance goals determined by the
Board or the Committee, as the case may be, in its sole discretion. The
performance measurement criteria used for such grants shall be limited to one or
more of: earnings per share, return on stockholders' equity, return on assets,
growth in earnings, growth in sales revenue, and stockholder returns. Such
criteria may be measured by the Company's results or the Company's performance
as measured against a group of comparable companies selected by the Committee.
In applying such criteria, earnings may be calculated based on the exclusion of
discontinued operations and extraordinary items. Subject to the adjustments
permitted by Section 3 of this Plan, the maximum number of shares of Stock that
can be earned by, or for which Options can be granted to, any one individual
over any consecutive two year period commencing on the effective date of this
Plan is 100,000 shares. Subject to such maximum number of shares of Stock, the
amount, if any, that may be earned by a participant receiving such grant or
grants may vary in accordance with the level of achievement of the performance
goal or goals established by the Board or the Committee, as the case may be. The
Board or the Committee, as the case may be, may, in its sole discretion, include
additional conditions and restrictions in the agreement entered into in
connection with such awards under this Plan.
SECTION 5. STOCK OPTIONS.
(a) GRANT AND EXERCISE. Stock Options granted under this Plan may be of
two types: (i) Incentive Stock Options and (ii) Non-Qualified Stock
Options. Any Stock Option granted under this Plan shall contain such
terms as the Board or the Committee, as the case may be, may from time
to time approve. The Board or the Committee, as the case may be, shall
have the authority to grant to any optionee Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options, and they
may be granted alone or in addition to other awards granted under this
Plan. To the extent that any Stock Option is not designated as an
Incentive Stock Option or does not qualify as an Incentive Stock
Option, it shall constitute a Non-Qualified Stock Option. The grant of
an Option shall be deemed to have occurred on the date on which the
Board or the Committee, as the case may be, by resolution, designates
an individual as a grantee thereof, and determines the number of
shares of Stock subject to, and the terms and conditions of, said
Option.
Anything in this Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options or any agreement providing
for Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify this 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.
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(b) TERMS AND CONDITIONS. Stock Options granted under this Plan shall be
subject to the following terms and conditions:
(i) OPTION PRICE. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Board or the
Committee, as the case may be, at the time of grant but shall
be not less than 100% (110% in the case of an Incentive Stock
Option granted to an optionee ("10% Stockholder") who, at the
time of grant, owns Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or
its Parent, if any, or its Subsidiaries of the Fair Market
Value of the Stock at the time of grant.
(ii) OPTION TERM. The term of each Stock Option shall be fixed by
the Board or the Committee, as the case may be, but no
Incentive Stock Option shall be exercisable more than ten years
(five years, in the case of an Incentive Stock Option granted
to a 10% Stockholder) after the date on which the Option is
granted.
(iii) EXERCISABILITY. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be
determined by the Board or the Committee, as the case may be,
at the time of grant; provided, however, that except as
otherwise provided in this Section 5 and Section 9 below,
unless waived by the Board or the Committee, as the case may
be, at or after the time of grant, no Stock Option shall be
exercisable prior to the first anniversary date of the grant of
the Option. If the Board or the Committee, as the case may be,
provides, in its discretion, that any Stock Option is
exercisable only in installments, the Board or the Committee,
as the case may be, may waive such installment exercise
provisions at any time at or after the time of grant in whole
or in part, based upon such factors as the Board or the
Committee, as the case may be, shall determine.
(iv) METHOD OF EXERCISE. Subject to whatever installment, exercise
and waiting period provisions are applicable in a particular
case, Stock Options may be exercised in whole or in part at any
time during the option period by giving written notice of
exercise to the Company specifying the number of shares of
Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price which shall be in cash
unless otherwise provided in this clause (iv) or in Section
5(b)(xi) below or, unless otherwise provided in the Stock
Option agreement referred to in Section 5(b)(xii) below, in
whole shares of Stock which are already owned by the holder of
the Option or unless otherwise provided in the Stock Option
agreement referred to in Section 5(b)(xii) below, partly in
cash and partly in such Stock. Cash payments shall be made by
wire transfer, certified or bank check or personal check, in
each case payable to the order of the Company;
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provided, however, that the Company shall not be required to
deliver certificates for shares of Stock with respect to which
an Option is exercised until the Company has confirmed the
receipt of good and available funds in payment of the purchase
price thereof. Payments in the form of Stock (which shall be
valued at the Fair Market Value of a share of Stock on the date
of exercise) shall be made by delivery of stock certificates in
negotiable form which are effective to transfer good and valid
title thereto to the Company, free of any liens or
encumbrances. In addition to the foregoing, payment of the
exercise price may be made by delivery to the Company by the
optionee of an executed exercise form, together with
irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares covered by the option and
deliver the sale or margin loan proceeds directly to the
Company. Except as otherwise expressly provided in this Plan,
no Option which is granted to a person who is at the time of
grant an employee of the Company or a Subsidiary or Parent of
the Company may be exercised at any time unless the holder
thereof is then an employee of the Company or of a Parent or a
Subsidiary. The holder of an Option shall have none of the
rights of a stockholder with respect to the shares subject to
the Option until the optionee has given written notice of
exercise, has paid in full for those shares of Stock and, if
requested by the Board or Committee, as the case may be, has
given the representation described in Section 12(a) below.
(v) TRANSFERABILITY; EXERCISABILITY. No Stock Option shall be
transferable by the optionee other than by will or by the laws
of descent and distribution; provided, however, that a
Non-Qualified Stock Option shall be transferable or pursuant to
a qualified domestic relations order, and except as may be
otherwise required with respect to a Non-Qualified Option
pursuant to a qualified domestic relations order, all Stock
Options shall be exercisable, during the optionee's lifetime,
only by the optionee or his or her guardian or legal
representative.
(vi) TERMINATION BY REASON OF DEATH. Subject to Section 5(b)(x)
below, if an optionee's employment by the Company or any Parent
or Subsidiary 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
Board or Committee, as the case may be, may determine at or
after the time of grant, for a period of one year (or such
other period as the Board or the Committee, as the case may be,
may specify at or after the time of grant) from the date of
death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
(vii) TERMINATION BY REASON OF DISABILITY. Subject to Section 5(b)(x)
below, if an optionee's employment by the Company or any
Subsidiary
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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 Board or the Committee, as the
case may be, may determine at or after the time of grant, for a
period of three years (or such other period as the Board or the
Committee, as the case may be, may specify at or after the time
of grant) from the date of such termination of employment or
until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the
optionee dies within such three-year period (or such other
period as the Board or the Committee, as the case may be, shall
specify at or after the time of 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 one year from the date of death or until the
expiration of the stated term of such Stock Option, whichever
period is the shorter.
(viii) TERMINATION BY REASON OF RETIREMENT. Subject to Section 5(b)(x)
below, if an optionee's employment by the Company or any Parent
or Subsidiary terminates by reason of Normal 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 termination or on such accelerated basis as the Board or the
Committee, as the case may be, may determine at or after the
time of grant, for a period of three years (or such other
period as the Board or the Committee, as the case may be, may
specify at or after the time of grant) from the date of such
termination of employment or the expiration of the stated terms
of such Stock Option, whichever period is the shorter;
provided, however, that if the optionee dies within such
three-year period (or such other period as the Board or the
Committee, as the case may be, shall specify at or after the
time of 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 one
year from the date of death or until the expiration of the
stated terms of such Stock Option, whichever period is the
shorter. If an optionee's employment with the Company or any
Parent or Subsidiary terminates by reason of Early Retirement,
the Stock Option shall thereupon terminate; provided, however,
that if the Board or the Committee, as the case may be, so
approves at the time of Early Retirement, any Stock Option held
by the optionee may thereafter be exercised by the optionee as
provided above in connection with termination of employment by
reason of Normal Retirement.
(ix) OTHER TERMINATION. Subject to the provisions of Section 12(g)
below and unless otherwise determined by the Committee at or
after the time of grant, if an optionee's employment by the
Company or any Parent or
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Subsidiary terminates for any reason other than death,
Disability or Retirement, the Stock Option shall thereupon
automatically terminate, except that if the optionee is
involuntarily terminated by the Company or any Parent or a
Subsidiary without Cause (as hereinafter defined), such Stock
Option may be exercised for a period of six months from the
date of such termination or until the expiration of the stated
terms of such Stock Option, whichever period is the shorter.
For purposes of this Plan, "Cause" shall mean (1) the
conviction of the optionee of a felony under Federal law or the
law of the state in which such action occurred, (2) dishonesty
by the optionee in the course of fulfilling his or her
employment duties, or (3) the willful and deliberate failure on
the part of the optionee to perform his or her employment
duties in any material respect. In addition, with respect to an
option granted to an employee of the Company, a Parent or a
Subsidiary, for purposes of this Plan, "Cause" shall also
include any definition of "Cause" contained in any employment
agreement between the optionee and the Company, Parent or
Subsidiary, as the case may be.
(x) ADDITIONAL INCENTIVE STOCK OPTION LIMITATION. In the case of an
Incentive Stock Option, the aggregate Fair Market Value of
Stock (determined at the time of grant of the Option) with
respect to which Incentive Stock Options are exercisable for
the first time by an optionee during any calendar year (under
all such plans of optionee's employer corporation and its
Parent, if any, and Subsidiaries) shall not exceed $100,000.
(xi) ALTERNATIVE SETTLEMENT OF OPTION. Upon the receipt of written
notice of exercise, the Board or the Committee, as the case may
be, may elect to settle all or part of any Stock Option by
paying to the optionees an amount, in cash or Stock (valued at
Fair Market Value on the date of exercise), equal to the excess
of the Fair Market Value of one share of Stock, on the date of
exercise over the Option exercise price, multiplied by the
number of shares of Stock with respect to which the optionee
proposes to exercise the Option. Any such settlements which
relate to Options which are held by optionees who are subject
to Section 16(b) of the Exchange Act shall comply with the
"window period" provisions of Rule 16b-3, to the extent
applicable and with such other conditions as the Board or
Committee may impose. No such discretion may be exercised
unless the option agreement permits the payment of the purchase
price in that manner.
(xii) STOCK OPTION AGREEMENT. Each grant of a Stock Option shall be
confirmed by, and shall be subject to the terms of, an
agreement executed by the Company and the participant.
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SECTION 6. RESTRICTED STOCK.
(a) GRANT AND EXERCISE. Shares of Restricted Stock may be issued either
alone or in addition to or in tandem with other awards granted under
this Plan. The Board or the Committee, as the case may be, shall
determine the eligible persons 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, the
time or times within which such awards may be subject to forfeiture
(the "Restriction Period"), the vesting schedule and rights to
acceleration thereof, and all other terms and conditions of the
awards. The Board or the Committee, as the case may be, may condition
the grant of Restricted Stock upon the attainment of specified
Performance Objectives or such other factors as the Board or the
Committee, as the case may be, may determine.
(b) TERMS AND CONDITIONS. Each Restricted Stock award shall be subject to
the following terms and conditions:
(i) Restricted Stock, when issued, will be represented by a stock
certificate or certificates registered in the name of the
holder to whom such Restricted Stock shall have been awarded.
During the Restriction Period, certificates representing the
Restricted Stock and any securities constituting Retained
Distributions (as defined below) shall bear a restrictive
legend to the effect that ownership of the Restricted Stock
(and such Retained Distributions), and the enjoyment of all
rights appurtenant thereto, are subject to the restrictions,
terms and conditions provided in this Plan and the Restricted
Stock agreement referred to in Section 6(b)(iv) below. Such
certificates shall be deposited by the holder with the
Company, together with stock powers or other instruments of
assignment, endorsed in blank, which will permit transfer to
the Company of all or any portion of the Restricted Stock and
any securities constituting Retained Distributions that shall
be forfeited or that shall not become vested in accordance
with this Plan and the applicable Restricted Stock agreement.
(ii) Restricted Stock shall constitute issued and outstanding
shares of Common Stock for all corporate purposes, and the
issuance thereof shall be made for at least the minimum
consideration (if necessary) to permit the shares of
Restricted Stock to be deemed to be fully paid and
nonassessable. The holder will have the right to vote such
Restricted Stock, to receive and retain all regular cash
dividends and other cash equivalent distributions as the Board
may in its sole discretion designate, pay or distribute on
such Restricted Stock and to exercise all other rights, powers
and privileges of a holder of Stock with respect to such
Restricted Stock, with the exceptions that (A) the holder will
not be entitled to delivery of the stock certificate or
certificates representing
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such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect
thereto shall have been fulfilled; (B) the Company will retain
custody of the stock certificate or certificates representing
the Restricted Stock during the Restriction Period; (C) other
than regular cash dividends and other cash equivalent
distribution as the Board may in its sole discretion
designate, pay or distribute, the Company will retain custody
of all distributions ("Retained Distributions") made or
declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same
restrictions, terms and conditions as are applicable to the
Restricted Stock) until such time, if ever, as the Restricted
Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and
with respect to which the Restriction Period shall have
expired; (D) the holder may not sell, assign, transfer,
pledge, exchange, encumber or dispose of the Restricted Stock
or any Retained Distributions during the Restriction Period;
and (E) a breach of any of the restrictions, terms or
conditions contained in this Plan or the Restricted Stock
agreement referred to in Section 6(b)(iv) below, or otherwise
established by the Committee with respect to any Restricted
Stock and Retained Distributions will cause a forfeiture of
such Restricted Stock and any Retained Distributions with
respect thereto.
(iii) Upon the expiration of the Restriction Period with respect to
each award of Restricted Stock and the satisfaction of any
other applicable restrictions, terms and conditions (A) all or
part of such Restricted Stock shall become vested in
accordance with the terms of the Restricted Stock agreement
referred to in Section 6(b)(iv) below, and (B) any Retained
Distributions with respect to such Restricted Stock shall
become vested to the extent that the Restricted Stock related
thereto shall have become vested. Any such Restricted Stock
and Retained Distributions that do not vest shall be forfeited
to the Company and the holder shall not thereafter have any
rights with respect to such Restricted Stock and Retained
Distributions that shall have been so forfeited.
(iv) Each Restricted Stock award shall be confirmed by, and shall
be subject to the terms of, an agreement executed by the
Company and the participant.
SECTION 7. DEFERRED STOCK.
(a) GRANT AND EXERCISE. Deferred Stock may be awarded either alone or in
addition to or in tandem with other awards granted under the Plan. The
Board or the Committee, as the case may be, shall determine the
eligible persons to whom and the time or times at which Deferred Stock
shall be awarded, the
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number of shares of Deferred Stock to be awarded to any person, the
duration of the period (the "Deferral Period") during which, and the
conditions under which, receipt of the Deferred Stock will be
deferred, and all the other terms and conditions of the awards. The
Board or the Committee, as the case may be, may condition the grant of
the Deferred Stock upon the attainment of specified Performance
Objectives or such other factors or criteria as the Board or the
Committee, as the case may be, shall determine.
(b) TERMS AND CONDITIONS. Each Deferred Stock award shall be subject to
the following terms and conditions:
(i) Subject to the provisions of this Plan and Deferred Stock
agreement referred to in Section 7(b)(vii) below, Deferred
Stock awards may not be sold, assigned, transferred, pledged
or otherwise encumbered during the Deferral Period. At the
expiration of the Deferral Period (or the Additional Deferral
Period referred to in Section 7(b)(vi) below, where
applicable), share certificates shall be delivered to the
participant, or his legal representative, in a number equal to
the shares of Stock covered by the Deferred Stock award.
(ii) As determined by the Committee at the time of award, amounts
equal to any dividends declared during the Deferral Period (or
the Additional Deferral Period referred to in Section 7(b)(vi)
below, where applicable) with respect to the number of shares
covered by a Deferred Stock award may be paid to the
participant currently or deferred and deemed to be reinvested
in additional Deferred Stock.
(iii) Subject to the provisions of the Deferred Stock agreement
referred to in Section 7(b)(vii) below and this Section 7 and
Section 12(g) below, upon termination of participant's
employment with the Company or any Subsidiary for any reason
during the Deferral Period (or the Additional Deferral Period
referred to in Section 7(b)(vi) below, where applicable) for a
given award, the Deferred Stock in question will vest or be
fortified in accordance with the terms and conditions
established by the Board or the Committee, as the case may be,
at the time of grant.
(iv) The Board or the Committee, as the case may be, may, after
grant, accelerate the vesting of all or any part of any
Deferred Stock award and/or waive the deferral limitations for
all or any part of a Deferred Stock award.
(v) In the event of hardship or other special circumstances of a
participant whose employment with the Company or any Parent or
Subsidiary is involuntarily terminated (other than for Cause),
the Board or the Committee, as the case may be, may waive in
whole or in part any or all of the remaining deferral
limitations imposed hereunder or pursuant
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to the Deferred Stock agreement referred to in Section
7(b)(vii) below with respect to any or all of the
participant's Deferred Stock.
(vi) A participant may request to, and the Board or the Committee,
as the case may be, may at any time, defer the receipt of an
award (or an installment of an award) for an additional
specified period or until a specified period or until a
specified event (the "Additional deferral Period"). Subject to
any exceptions adopted by the Board or the Committee, as the
case may be, such request must be made at least one year prior
to expiration of the Deferral Period for such Deferred Stock
award (or such installment).
(vii) Each Deferred Stock award shall be confirmed by, and shall be
subject to the terms of, an agreement executed by the Company
and the participant.
SECTION 8. OTHER STOCK-BASED AWARDS.
(a) GRANT AND EXERCISE. Other Stock-Based Awards, which may include
performance shares and shares valued by reference to the performance
of the Company or any Subsidiary, may be granted either alone or in
addition to or in tandem with Stock Options, Restricted Stock or
Deferred Stock. The Board or the Committee, as the case may be, shall
determine the eligible persons to whom, and the time or times at
which, such awards shall be made, the number of shares of Stock to be
awarded pursuant to such awards, and all other terms and conditions of
the awards. The Board or the Committee, as the case may be, may also
provide for the grant of Stock under such awards upon the attainment
of specified Performance Objectives and/or completion of a specified
performance period.
(b) TERMS AND CONDITIONS. Each Other Stock-Based Award shall be subject to
the following terms and conditions:
(i) Shares of Stock subject to an Other Stock-Based Award may
not be sold, assigned, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued,
or, if later, the date on which any applicable restriction or
period of deferral lapses.
(ii) The recipient of an Other Stock-Based Award shall be entitled
to receive, currently or on a deferred basis, dividends or
dividend equivalents with respect to the number of shares
covered by the award, as determined by the Board or the
Committee, as the case may be, at the time of the award. The
Board or the Committee, as the case may be, may provide that
such amounts (if any) shall be deemed to have been reinvested
in additional Stock.
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(iii) Any Other Stock-Based Award and any Stock covered by any Other
Stock-Based Award shall vest or be forfeited to the extent so
provided in the award agreement referred to in Section 8(b)(v)
below, as determined by the Board or the Committee, as the
case may be.
(iv) In the event of the participant's Retirement, Disability or
death, or in case of special circumstances, the Board or the
Committee, as the case may be, may waive in whole or in part
any or all of the limitations imposed hereunder (if any) with
respect to any or all of an Other Stock-Based Award.
(v) Each Other Stock-Based Award shall be confirmed by, and shall
be subject to the terms of, an agreement executed by the
Company and by the participant.
SECTION 9. CHANGE OF CONTROL PROVISIONS.
(a) A "Change of Control" shall be deemed to have occurred on the tenth day
after:
(i) any individual, entity or group (as defined in Section
13(d)(3) of the Exchange Act), other than Moses Marx, becomes,
directly or indirectly, the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
more than 25% of the then outstanding shares of the Company's
capital stock entitled to vote generally in the election of
directors of the Company; or
(ii) the commencement of, or the first public announcement of the
intention of any individual, firm, corporation or other entity
or of any group (as defined in Section 13(d)(3) of the
Exchange Act) to commence, a tender or exchange offer subject
to Section 14(d)(1) of the Exchange Act for any class of the
Company's capital stock; or
(iii) the stockholders of the Company approve (A) a definitive
agreement for the merger or other business combination of the
Company with or into another corporation pursuant to which the
stockholders of the Company do not own, immediately after the
transaction, more than 50 of the voting power of the
corporation that survives, or (B) a definitive agreement for
the sale, exchange or other disposition of all or
substantially all of the assets of the Company, or (C) any
plan or proposal for the liquidation or dissolution of the
Company; provided, however, that a "Change of Control" shall
not be deemed to have taken place if beneficial ownership is
acquired (A) directly from the Company, other than an
acquisition by virtue of the exercise or conversion of another
security unless the security so converted or exercised was
itself acquired directly from the Company, or (B) by, or
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a tender or exchange offer is commenced or announced by, the
Company, any profit-sharing, employee ownership or other
employee benefit plan sponsored or maintained by the Company;
or any trustee of or fiduciary with respect to any such plan
when acting in such capacity.
(b) In the event of a "Change of Control" as defined in Section 9(a)
above, awards granted under this Plan shall be subject to the
following provisions, unless the provisions of this Section 9 are
suspended or terminated by the Board prior to the occurrence of such a
"Change of Control":
(i) all outstanding Stock Options which have been outstanding for
at least six months shall become exercisable in full, whether
or not otherwise exercisable at such time, and any such Stock
Option shall remain exercisable in full thereafter until it
expires pursuant to its terms; and
(ii) all restrictions and deferral limitations contained in
Restricted Stock awards, Deferred Stock awards and Other
Stock-Based Awards granted under the Plan shall lapse.
SECTION 10. AMENDMENTS AND TERMINATION.
The Board may at any time, and from time to time, amend any of the
provisions of this Plan, and may at any time suspend or terminate the Plan;
provided, however, that no such amendment shall be effective unless and until it
has been duly approved by the holders of the outstanding shares of Stock if the
failure to obtain such approval would adversely affect the compliance of the
Plan with the requirements of Rule 16b-3, Section 162(m) or any other applicable
law, rule or regulation. The Board or the Committee, as the case may be, may
amend the terms of any Stock Option or other award theretofore granted under the
Plan; provided, however, that subject to Section 3 above, no such amendment may
be made by the Board or the Committee, as the case may be, which in any material
respect impairs the rights of the optionee or participant without the optionee's
or participant's consent, except for such amendments which are made to cause
this Plan to qualify for the exemption provided by Rule 16b-3 or to be in
compliance with the provisions of Section 162(m).
SECTION 11. 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 creditor of
the Company.
SECTION 12. GENERAL PROVISIONS.
(a) The Board or the Committee, as the case may be, may require each
person acquiring shares of Stock Option or other award under this Plan
to represent to and agree with the Company in writing that the
optionee or participant is
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acquiring the shares for investment without a view towards the
distribution thereof.
All certificates for shares of Stock delivered under this Plan shall
be subject to such stop transfer orders and other restrictions as the
Board or the Committee, as the case may be, may deem to be advisable
in order to assure compliance with the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange or association upon which the Stock is then listed or quoted,
any applicable Federal or state securities law, and any applicable
corporate law, and the Board or the Committee, as the case may be, may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Board from adopting
such other or additional incentive arrangements as it may deem
desirable, including, but not limited to, the granting of stock
options and the awarding of stock and cash otherwise than under this
Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
(c) Nothing contained in this Plan or in any award hereunder shall be
deemed to confer upon any employee of the Company or any Parent or
Subsidiary any right to continued employment with the Company or any
Parent or Subsidiary, nor shall it interfere in any way with the right
of the Company or any Parent or Subsidiary to terminate the employment
of any of its employees at any time.
(d) No later than the date as of which an amount first becomes includable
in the gross income of the participant for Federal income tax purposes
with respect to any Option or other award under this Plan, the
participant shall pay to the Company, or make arrangements
satisfactory to the Board or the Committee, as the case may be,
regarding the payment of, any Federal, state and local taxes of any
kind required by law to be withheld or paid with respect to such
amount. If permitted by the Board or the Committee, as the case may
be, tax withholding or payment 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 this
Plan shall be conditional upon such payment or arrangements, and the
Company and any Subsidiary 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 from the Company or any Parent or
Subsidiary.
(e) This Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware (without regard to choice of law provisions).
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<PAGE>
(f) Any Stock Option granted or other award made under this Plan shall not
be deemed compensation for purposes of computing benefits under any
retirement plan of the Company or any Parent or Subsidiary and shall
not affect any benefits under any other benefit plan now or
subsequently in effect under which the availability or amount of
benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
(g) A leave of absence, unless otherwise determined by the Committee prior
to the commencement thereof, shall not be considered a termination of
employment. Any Stock Option granted or awards made under this Plan
shall not be affected by any change of employment, so long as the
holder continues to be an employee of the Company or any Parent or
Subsidiary.
(h) Except as otherwise expressly provided in this Plan, no right or
benefit under this Plan may be alienated, sold, assigned,
hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to 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 subject to the
debts, contracts or liabilities of the person entitled to such
benefit.
(i) The obligations of the Company with respect to all Stock Options and
awards under this Plan shall be subject to (A) all applicable laws,
rules and regulations, and such approvals by any governmental agencies
as may be required, including, without limitation, the effectiveness
of a registration statement under the Securities Act, and (B) the
rules and regulations of any securities exchange or association on
which the Stock may be listed or quoted.
(j) It is the intention of the Company that this Plan complies with the
requirements of Rule 16b-3, Section 162(m) and all other applicable
laws, rules and regulations, and any ambiguities or inconsistencies in
the construction of any of the provisions of this Plan shall be
interpreted to give effect to such intention. If any of the terms or
provisions of this Plan conflict with the requirements of Rule 16b-3,
or with the requirements of Section 162(m) or any other applicable
law, rule or regulation, and with respect to Incentive Stock Options
under Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict. With respect to
Incentive Stock Options, if this Plan does not contain any provision
required to be included herein under Section 422 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.
(k) The Board or the Committee, as the case may be, may terminate any
Stock Option or other award made under this Plan if a written
agreement relating thereto is not executed and returned to the Company
within 30 days after such
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<PAGE>
agreement has been delivered to the optionee or participant
for his or her execution.
(l) The grant of awards pursuant to this Plan shall not in any way effect
the right or power of the Company to make reclassifications,
reorganizations or other changes of or to its capital or business
structure or to merge, consolidate, liquidate, sell or otherwise
dispose of all or any part of its business or assets.
SECTION 13. EFFECTIVE DATE OF PLAN.
The Plan shall be effective as of the date of the approval and adoption
thereof at a meeting of the stockholders of the Company.
SECTION 14. TERM OF PLAN.
This Plan shall terminate on the tenth anniversary of its effective date,
and no Stock Option, Restricted Stock Award, Deferred Stock award or Other
Stock-Based Award shall be granted pursuant to this Plan after said date. Awards
granted on or prior to such date may extend beyond that date.
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<PAGE>
Appendix 1
PRELIMINARY COPY
COOPER LIFE SCIENCES, INC.
160 BROADWAY
NEW YORK, NEW YORK 10038
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MARCH 23, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven Rosenberg and Harold L. Schneider,
and each of them, Proxies, with full power of substitution in each of them, in
the name, place and stead of the undersigned, to vote at the Annual Meeting of
Stockholders of Cooper Life Sciences, Inc. on Tuesday, March 23, 1999, at 405
Lexington Avenue, New York, New York, or at any adjournment or adjournments
thereof, according to the number of votes that the undersigned would be entitled
to vote if personally present, upon the following matters:
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees listed below.
</TABLE>
William L. Cohen, Moses Marx, Steven Rosenberg and Randolph B. Stockwell
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.)
- -----------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES LISTED ABOVE.
2. APPROVAL OF AMENDED AND RESTATED CERTIFICATE OF INCOPORATION.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION.
(Continued and to be signed on reverse side)
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<PAGE>
3. ADOPTION OF 1999 STOCK INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 1999 STOCK
INCENTIVE PLAN.
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE. IF
NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL BOARD NOMINEES
LISTED IN PROPOSAL 1 AND "FOR" PROPOSALS 2 AND 3 LISTED ABOVE.
DATED: ______________________, 1999 Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
______________________________
Signature
______________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
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