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As filed with the Securities and Exchange Commission on July 23, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE COSMETIC CENTER, INC.
-------------------------
(Exact name of registrant as specified in its charter)
Delaware
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(State of incorporation)
52-1266697
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(I.R.S. employer identification no.)
8700 Robert Fulton Drive
Columbia, Maryland 21046
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(Address of principal executive offices) (Zip code)
The Cosmetic Center, Inc. 1997 Stock Option Plan
The Cosmetic Center, Inc. Amended and Restated 1991 Stock Option Plan
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(Full title of the plans)
Steven R. Isko, Esq.
Senior Vice President and General Counsel
8700 Robert Fulton Drive
Columbia, Maryland 21046
(410) 309-4600
--------------------------------
(Name, address and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
=================== ============ ================ ================= ============
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Aggregate Registration
Per Share (1)(2) Offering Price(2) Fee
=================== ============ ================ ================= ============
Class C Common 3,000(3) $ 4.00 $ 12,000.00 $ 4
Stock par value 20,000(3) 15.12 302,400.00 90
par value $.01 20,000(3) 21.17 423,400.00 125
per share 20,000(3) 9.62 192,400.00 57
15,000(3) 7.70 115,500.00 35
6,700(3) 7.00 46,900.00 14
5,011(3) 6.60 33,072.60 10
3,760(3) 4.53 17,032.80 6
1,879(3) 4.12 7,741.48 3
5,011(3) 6.32 31,669.52 10
119,500(3) 5.125 612,437.50 181
25,000(3) 2.125 53,125.00 16
100,000(3) 2.50 250,000.00 74
5,000(3) 2.325 11,625.00 4
3,500(3) 4.63 16,205.00 5
220,500(3) 3.125 689,062.50 204
250,000(3) 3.50 875,000.00 259
276,500(3) 2.50 691,250.00 204
Total: $1,301
===============================================================================
(1) Calculated in accordance with Rules 457 (c) and (h) under the Securities
Act of 1933, as amended (the "Securities Act"), solely for the purpose of
calculating the registration fee.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) This registration statement also relates to such indeterminate number of
additional Class C Common Stock as may be issuable as a result of stock
splits, stock dividends or similar transactions and, pursuant to Rule
416(c), an indeterminate number of interests in The Cosmetic Center, Inc.
1997 Stock Option Plan and The Cosmetic Center, Inc. Amended and Restated
1991 Stock Option Plan.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* Information required by Part I to be contained in a Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the registrant, The Cosmetic Center, Inc., a
Delaware corporation (the "Company"), are incorporated by reference in this
Registration Statement:
(1) The description of the Class C Common Stock, par value $.01 per
share, of the Company (the "Class C Common Stock") contained under the caption
"Description of Cosmetic Capital Stock" in the Company's Registration Statement
on Form 8-A filed with the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on February 25, 1997.
(2) Annual Report on Form 10-K of the Company for the fiscal year
ended December 27, 1997 filed with the Commission pursuant to the Exchange Act.
(3) Quarterly Report on Form 10-Q of the Company for the quarter ended
March 28, 1998 filed with the Commission pursuant to the Exchange Act.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the shares of Class C Common Stock to be issued in
connection with this Registration Statement will be passed upon by Steven R.
Isko, Esq., General Counsel of the Company.
The financial statements of The Cosmetic Center, Inc. as of December
27, 1997 and for each of the years in the three-year period ended December 27,
1997 have been incorporated by reference herein in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Set forth below is a description of certain provisions of the Delaware
General Corporation Law (the "DGCL"), as well as the Amended and Restated
By-Laws of the Company, as such provisions relate to the indemnification of the
directors and officers of the Company. This description is intended only as a
summary and is qualified in its entirety by reference to the DGCL and to the
Amended and Restated By-Laws which are incorporated herein by reference.
Article X of the Amended and Restated By-Laws provides for
indemnification of officers and directors of the Company on the same basis as
Section 145 of the DGCL. Section 145 of the DGCL provides, in general, that
each director and officer may be indemnified against expenses (including
attorneys' fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceedings in which he is involved by
reason of the fact that he is or was a director or officer if he acted in good
faith and in a manner that he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe that his conduct was
unlawful. If the legal proceeding, however, is by or in the right of the
Company, the director or officer may not be indemnified in respect of any
claim, issue or matter as to which he shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Company unless a
court determines otherwise.
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Furthermore, Article Fifth of the Company's Amended and Restated
Certificate of Incorporation eliminates the personal liability of directors to
the Company or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the DGCL or (iv) for
any transaction from which the director derived an improper personal benefit.
Section 102 of the DGCL permits a Company's certificate of incorporation to
contain these provisions. In addition, Article X, Section 8 of the Amended and
Restated By-Laws provides that the Company may purchase insurance on behalf of
any person who is or was a director or officer of the Company, or who is or was
a director or officer of the Company serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other entity or enterprise against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not the
Company would have the power or the obligation to indemnify such person against
such liability under the provisions of Article X of the Amended and Restated
By-Laws.
The Company has in effect a directors and officers liability insurance
policy under which the directors and officers of the Company are insured
against losses arising from claims made against them due to wrongful acts while
acting in their individual and collective capacities as directors and officers
of the Company, subject to certain exclusions.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
3.1 Restated Certificate of Incorporation of the Company (Incorporated
by reference to Exhibit 3(i) to the Quarterly Report on Form 10-Q
for the quarterly period ended June 27, 1997 of the Company).
3.2 Amended and Restated By-Laws of the Company (Incorporated by
reference to Exhibit 3.3 to the Annual Report on Form 10-K for the
fiscal year ended December 27, 1997 of the Company).
4.1 The Cosmetic Center, Inc. Amended and Restated 1991 Stock Option
Plan.
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4.2 The Cosmetic Center, Inc. 1997 Stock Option Plan.
5 Opinion of Steven R. Isko, Esq., General Counsel of the Company,
regarding the legality of the securities being registered.
23.1 Consent of KPMG Peat Marwick LLP, independent certified public
accountants.
23.2 Consent of Steven R. Isko, Esq. (contained in the opinion filed as
Exhibit 5 hereto).
24.1 Powers of Attorney.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
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provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbia, State of Maryland, on this 28th day of
July, 1998.
THE COSMETIC CENTER, INC.
(Registrant)
By: /s/ Dwight W. Crawley
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Dwight W. Crawley
Senior Vice President and
Chief Financial Officer
(Principal Accounting
Officer)
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
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SIGNATURE TITLE DATE
* Chairman of the Board and July 28, 1998
- -------------------------- Director
Jerry W. Levin
/s/ Mary Elizabeth Burton
- -------------------------- President and Chief Executive July 28, 1998
Mary Elizabeth Burton Officer and Director
(Principal Executive Officer)
/s/ Dwight W. Crawley Senior Vice President and Chief July 28, 1998
- -------------------------- Financial Officer
Dwight W. Crawley (Principal Financial Officer and
Principal Accounting Officer)
* Vice Chairman of the Board and July 28, 1998
- -------------------------- Director
William J. Fox
* Vice President and Director July 28, 1998
- --------------------------
Wade H. Nichols III
* Director July 28, 1998
- --------------------------
Donald G. Drapkin
* Director July 28, 1998
- --------------------------
Richard Halperin
* Director July 28, 1998
- --------------------------
George Fellows
* Director July 28, 1998
- --------------------------
David N. Dinkins
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* Director July 28, 1998
- --------------------------
Harvey Rosenthal
*Robert K. Kretzman, by signing his name hereto, does hereby execute
this Registration Statement on Form S-8 on behalf of the directors and officers
of the Registrant indicated above by asterisks, pursuant to powers of attorney
duly executed by such directors and officers and filed as exhibits to the
Registration Statement on Form S-8.
By /s/ Robert K. Kretzman
--------------------------------
Robert K. Kretzman
Attorney in Fact
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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4.1 The Cosmetic Center, Inc. Amended and Restated 1991 Stock Option
Plan.
4.2 The Cosmetic Center, Inc. 1997 Stock Option Plan.
5 Opinion of Steven R. Isko, Esq., General Counsel of the
Company, regarding the legality of the securities being
registered.
23.1 Consent of KPMG Peat Marwick LLP, independent certified
public accountants.
23.2 Consent of Steven R. Isko, Esq. (contained in the opinion filed
as Exhibit 5 hereto).
24.1 Powers of Attorney.
<PAGE>
THE COSMETIC CENTER, INC.
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
1. PURPOSE
This Stock Option Plan (the "Plan") for The Cosmetic Center, Inc. (the
"Company") is intended to provide incentive to directors, officers and key
employees of the Company by providing those persons with opportunities to
purchase shares of the Company's Common Stock under (a) incentive stock options
("Incentive Stock Options") as such term is defined under Section 422A of the
Internal Revenue Code of 1986, as amended and (b) other stock options. (As used
herein, "Options" refers to Incentive Stock Options and other options
hereunder.)
2. DEFINITIONS
As used in this Plan, the following words and phrases shall have the
meanings indicated: (a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Class A Stock" shall mean the Class A Common Stock of The
Cosmetic Center, Inc.
(d) "Class B Stock" shall mean the Class B Common Stock of The
Cosmetic Center, Inc.
(e) "Common Stock" shall mean the Class A Stock and/or the Class B
Stock of The Cosmetic Center, Inc.
(f) "Company" shall mean The Cosmetic Center, Inc., the employer which
has established this Plan.
(g) "Disability" shall mean an Optionee's inability to engage in any
substantial gainful activity by reason of any medically determinable physical
of mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than
twelve (12) months.
(h) "Fair Market Value" per share as of a particular date shall mean
(i) the closing sales price per share of Common Stock on the principal national
securities exchange, if any, on which the shares of Common Stock shall then be
listed for the last preceding date on which there was a sale of such Common
Stock on such exchange, or (ii) if the shares of Common Stock are not then
listed on a national securities exchange, the last sales price per share of
Common Stock entered on a national inter-dealer quotation system for the last
preceding date on which there was a sale of such Common Stock on such national
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inter-dealer quotation system, or (iii) if no closing or last sales price per
share of Common Stock is entered on a national inter-dealer quotation system,
the average of the closing bid and asked prices for the shares of Common Stock
in the over-the-counter market for the last preceding date on which there was a
quotation for such Common Stock in such market, or (iv) if no price can be
determined under the preceding alternatives, then the price per share as most
recently determined by the Board, which shall make such determinations of value
at least once annually.
(i) "Incentive Stock Option" means one or more options to purchase
Common Stock which, at the time such options are granted under this Plan or any
other such plan of the Company, qualify as incentive stock options under
Section 422A of the Code.
(j) "Parent" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of
granting an Option, each of the corporations other than the Company owns stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
(k) "Plan" shall mean this Stock Option Plan.
(l) "Option" shall mean any option issued pursuant to this Plan.
(m) "Optionee" shall mean any person to whom an Option is granted
under this Plan.
(n) "Recapitalization" shall mean the recapitalization of the
Company's Common Stock consummated on March 13, 1992 pursuant to which the
common stock was changed into Class A Stock and Class B Stock.
(o) "Subsidiary" shall mean any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of granting an Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(p) "Ten Percent Shareholder" shall mean on Optionee who, at the time
an Option is granted, owns directly or indirectly (within the meaning of
section 425(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company, its Parent
or a Subsidiary.
3. GENERAL ADMINISTRATION
(a) Unless otherwise determined by the Board, the Plan shall be
administered by a committee of the Board ("Committee"), which shall consist of
two or more members of the Board who are "outside directors" within the meaning
of section 162(m) of the
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Code. The Committee may, in its discretion, delegate to a subcommittee or to an
officer of the Company its duties hereunder, including the grant of Awards. The
full Board shall also have the authority, in its discretion, to grant Awards
under the Plan and to administer the Plan. For all purposes under the Plan, any
entity which performs the duties described herein, shall be referred to as the
"Committee."
(b) Except as set forth in Section 4, the Committee shall have the
authority in its discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all the powers
and authorities either specifically granted to it under the Plan or necessary
or advisable in the administration of the Plan, including, without limitation,
the authority to grant Options; to determine the purchase price of shares of
Common Stock covered by each Option (the "Option Price") to determine the
persons to whom, and the time or times at which, Options shall be granted; to
determine the number of shares to be covered by each Option; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the Option Agreements (which
need not be identical) entered into in connection with Options granted under
the Plan; and to make all other determinations deemed necessary or advisable
for the administration of the Plan.
(c) The Board shall fill all vacancies, however caused, in the
Committee. The Board may from time to time appoint additional members to the
Committee, and may at any time remove one of more Committee members and
substitute others.
(d) No member of the Board or Committee shall be liable for any action
taken or determination made in good faith will respect to the Plan or any
Option granted hereunder.
4. NON-DISCRETIONARY GRANTS
Directors serving on the Committee are not eligible to receive Options
except pursuant to this Section 4. Provided Class A Shares are available under
this Plan, the Committee shall be required annually beginning 1991 to grant the
following Options for the following amount of Class A Shares:
(1) Any director serving on the Committee who is not an employee of
the Company shall be granted a non-incentive Option for 1,000 shares of Class A
Stock on January 15, or the closest business day if January 15 is not a
business day. The Option price shall be one hundred percent (100%) of the Fair
Market Value of the shares of Class A Stock on the date of grant of the Option.
The Options shall be fully vested upon grant and shall be exercisable for a
period of ten (10) years from the date of grant.
(2) Any director serving on the Committee who is an employee of the
Company shall be granted an Incentive Stock Option on January 15, or the
closest business day if January 15 if not a business day. Each such grant shall
be for 20,000 shares of Class A Stock, provided, however, that if the Company's
consolidated net income as reflected in
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its audited financial statements for the fiscal year immediately preceding the
date of grant (the "Subject Year") reflects an increase over the last prior
fiscal year (the "Prior Year") of 100% or more, such grant shall be for 30,000
shares of Class A Stock, (the "Bonus Increase"). No Bonus Increase shall be
granted with respect to a Subject Year when the consolidated net income for the
Prior Year is less than the consolidated net income for the fiscal year
preceding the Prior Year. The Option Price shall be one hundred percent (100%)
of the Fair Market Value of the shares of Class A Stock on the date of grant of
the Option; provided, however, that in the case of an Incentive Stock Option
granted to a Ten Percent Shareholder, the Option price shall be one hundred ten
percent (110%) of such Fair Market Value. The Incentive Stock Options shall be
exercisable for a period of ten (10) years from the data of grant, except
Options granted to a Ten Percent Shareholder shall be exercisable for a period
of five (5) years from the date of grant.
5. GRANTING OF OPTIONS
Options may be granted under the Plan at any time prior to December
31, 2000.
6. ELIGIBILITY
(a) Except as set forth in Section 4, Options may be granted to any
director, officer or key employee of the Company. In determining from time to
time the officers and employees to whom Options shall be granted and the number
of shares to be covered by each Option, the Committee shall take into account
the duties of the respective officers and employees, their present and
potential contributions to the success of the Company and such other factors as
the Committee shall deem relevant in connection with accomplishing the purposes
of the Plan.
(b) Except as set forth in Section 4, at the time of the grant of each
Option under the Plan, the Committee shall determine whether such Option is to
be designated an Incentive Stock Option. Incentive Stock Options shall not be
granted to a director who is not an employee of the Company. The length of the
exercise period of Incentive Stock Options shall be governed by Section 8(e)(1)
of the Plan; the exercise period of all other Options will be governed by
Section 8(e)(2).
(c) Except Options granted pursuant to Section 4, an Option designated
an Incentive Stock Option can, prior to its exercise, be changed to a
non-incentive Option if the Optionee consents to amend his Option Agreement to
provide that the exercise period of such Option will be governed by Section
8(e)(2) of the Plan.
7. STOCK
(a) The stock subject to the Options shall be shares of Class A Stock
except for options granted pursuant to the Recapitalization, for which the
Stock subject to options shall be Class A Stock and Class B Stock, as provided
in Section 8(i)(1). Such shares may, in whole or in part, be authorized but
unissued shares contributed directly by the
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Company or shares which shall have been or which may be acquired by the
Company. The aggregate number of shares of Common Stock as to which Options may
be granted from time to time under the Plan shall be 362,888 shares of Class A
Stock and 137,112 shares of Class B Stock, including 137,112 shares of Class A
Stock and 137,112 shares of Class B Stock subject to Options previously granted
pursuant to (i) the Company's 1986 Stock Option Plan and (ii) this Plan prior
to the Recapitalization. The limitation established by the preceding sentence
shall be subject to adjustment as provided in Section 8(i) hereof. No Options
for shares of Class B Stock shall be granted under this Plan after the
Recapitalization.
(b) If any outstanding Option under the Plan for any reason expires or
is terminated without having been exercised in full, the shares of Class A
Stock allocable to the unexercised portion or such Option shall (unless the
Plan shall have been terminated) become available for subsequent grants of
Options under the Plan.
8. TERMS AND CONDITIONS OF OPTIONS
Each Option granted pursuant to the Plan shall be evidenced by Option
Agreements in such forms as the Committee may from time to time approve.
Options shall comply with the be subject to the following terms and conditions:
(a) OPTION PRICE. Each Option shall state the Option Price, which with
respect to Incentive Stock Options shall be not less than one hundred percent
(100%) of the Fair Market Value of the shares of Common Stock on the date of
grant of the Option; provided, however, that in the case of an Incentive Stock
Option granted to a Ten Percent Shareholder, the Option Price shall not be less
than one hundred ten percent (110%) of such fair market value. The Option Price
for Options that are not Incentive Stock Options shall not be less than fifty
percent (50%) of the Fair Market Value of the shares of Common Stock on the
date of grant of the Option. The Option price shall be subject to adjustment as
provided in Section 8(i) hereof. The date on which the Committee adopts a
resolution expressly granting an Option, or the date specified in Section 4,
shall be considered the day on which such Option is granted.
(b) RESTRICTIONS. Except for Options granted pursuant to Section 4,
any Common Stock issued under the Plan may contain restrictions including, but
not limited to, limitations on transferability that may constitute substantial
risks of forfeiture, as the Committee may determine.
(c) VALUE OF SHARES. Options may be granted to any eligible person for
shares of Common Stock of any value, provided that the aggregate Fair market
Value (determined at the time the Option is granted) of the stock with respect
to whish Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year (under all the plans of the Company, its
Parent and its Subsidiaries) shall not exceed $100,000.
(d) MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in
full, at the
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time of exercise, in cash, in shares of Common Stock owned by the optionee free
and clear of all liens having a Fair Market Value in the aggregate equal to
such Option Price or in a combination of cash and such shares. Shares acquired
upon exercise of an Option shall not be accepted as payment unless such Option
exercise occurred at least six months prior to the exercise of the Option, the
Option Price of which is proposed to be paid in part or in full by the tender
of shares of Common Stock.
(e) TERM AND EXERCISE OF OPTIONS.
(1) Except as set forth in Section 4, Incentive Stock Options
shall be exercisable over the exercise period specified by the Committee in the
Option Agreement, but in no event shall such period exceed ten (10) years from
the date of the grant of each such Incentive Stock Option; provided, however,
that in the case of an Incentive Stock Option granted to a Ten Percent
Shareholder, the exercise period shall not exceed five (5) years from the date
of grant of such Option. The exercise period of an Option shall be subject to
earlier termination as provided in Section 8(f) and 8(g) hereof. An Option may
be exercised, as to any or all full shares of Common Stock as to which the
Option has become exercisable, by giving written notice of such exercise to the
Committee; provided that an Option may not be exercised at any one time as to
less than 100 shares (or such number of shares as to which the Option is then
exercisable if such number of shares is less than 100). Incentive Stock Options
granted to any person prior to January 1, 1987 shall not be exercisable by the
Optionee while any Incentive Stock Option of the Company (or any incentive
stock option of any Parent or Subsidiary of the Company or the predecessor of
any of them) granted to such Optionee prior to the Incentive Stock Options in
question remains outstanding (that is, has not been exercised in full or lapsed
because of time).
(2) NON-INCENTIVE STOCK OPTIONS. Except as set forth in Section
4, Options which have not been designated by the Committee as Incentive Stock
Options shall be exercisable over a period of eleven (11) years.
(f) TERMINATION OF EMPLOYMENT. Except as provided in this Section 8(f)
and Section 8(g) hereof, an Option may not be exercised unless the Optionee is
then a director of or in the employ of the Company or any Parent or Subsidiary
of the Company (or a corporation or a Parent of Subsidiary of such corporation
issuing or assuming the Option in a transaction to which Section 425(a) of the
Code applies), and unless the Optionee has remained continuously a director or
so employed since the date of grant of the Option. In the event all association
of an Optionee with the Company (as an employee, a director or both) shall
terminate (other than by reason of death or Disability), all Options or
unexercised portions thereof granted to such Optionee which are then
exercisable may, unless earlier terminated in accordance with their terms, be
exercised within thirty (30) days after such termination; provided, however,
that if the association of the Optionee with the Company shall terminate for
"cause" (as determined by the Committee), all Options theretofore granted to
such Optionee shall, to the extent not theretofore exercised, terminate
forthwith. A bona fide leave of absence shall not be considered a
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termination or break in continuity of employment for any purpose of the Plan so
long as the period of such leave does not exceed ninety (90) days or such
longer period during which the Optionee's right to reemployment is guaranteed
by statute or by contract. Where the period of such leave exceeds ninety (90)
days and the Optionee's right to reemployment is not guaranteed, the Optionee's
employment will be deemed to have terminated on the ninety-first (91st) day of
such leave. Nothing in the Plan or in any Option granted pursuant hereto shall
confer upon an employee any right to continue in the employ of the Company or
any of its divisions or Parent or Subsidiaries or interfere in any way with the
right of the Company or any such divisions or Parent or Subsidiary to terminate
such employment at any time.
(g) DEATH OR DISABILITY OF OPTIONEE. If an Optionee shall die while a
director of or employed by the Company or any Parent or Subsidiary of the
Company, or if the Optionee's employment shall terminate by reason of
Disability, all Options theretofore granted to such Optionee may, unless
earlier terminated in accordance with their terms, be exercised by the Optionee
or by the personal representative of the Optionee's estate or by a person who
acquired the right to exercise such Option by bequest or inheritance or
otherwise by reason of death of the Optionee, at any time within nine (9)
months after the date of death or Disability of the Optionee, but in no event
later than the date of expiration of the Option, provided that during the
lifetime of the Optionee any Option granted to him may be exercised only by the
Optionee.
(h) NONTRANSFERABILITY OF OPTIONS. Options granted under the Plan
shall not be transferable other than by will or by the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act ("ERISA") or
the rules thereunder.
(i) EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of Common
Stock through the declaration of stock dividends, recapitalization resulting in
stock splits, or combinations or exchanges of such shares, then the number of
shares of Common Stock available for Options, the number of such shares covered
by outstanding Options, and the price per share of such Options shall be
proportionately adjusted to reflect any increase or decrease in the number of
issued shares of Common Stock; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(2) In the event of the proposed dissolution or liquidation of
the Company, or in the event of any corporate separation or division,
including, but not limited to, a split-up, a split-off or spin-off, the
Committee may provide that the holder of each Option then exercisable shall
have the right to exercise such Option (at its then Option Price) solely for
the kind and amount of shares of stock and other securities, property, cash or
any combination thereof receivable upon such dissolution or liquidation, or
corporate separation or division; or the Committee may provide, in the
alternative, that each Option granted under the Plan shall terminate as of a
date to be fixed by the Board,
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provided, however, that no less than thirty (30) days' written notice of the
date so fixed shall be given to each Optionee, who shall have the right, during
the period of thirty (30) days preceding such termination, to exercise the
Options as to all or any part of the shares of Common Stock covered thereby,
including shares as to which such Options would not otherwise be exercisable.
(3) If while unexercised Options remain outstanding under the
Plan (i) the Company executes a definitive agreement to merge or consolidate
with or into another corporation or to sell or otherwise dispose of
substantially all its assets, or (ii) more than 50% of the Company's then
outstanding voting stock is acquired by any person or group (other than any
group existing on the date hereof composed of members of the Weinstein family),
or (iii) during any year, individuals who at the beginning of such period were
members of the Board cease for any reason to constitute at least a majority
thereof (unless the election, or the nomination for election by the Company's
shareholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period), then from and after the date of any such agreement or
the date on which public announcement of the acquisition of such percentage
shall have been made or the date on which the change in the composition of the
Board set forth above shall have occurred (any such date being referred to
herein as the "Acceleration Date"), all Options shall be exercisable in full,
whether or not otherwise exercisable. Following the Acceleration Date, (a) the
Committee shall, in the case of a merger, consolidation or sale or disposition
of assets, promptly make an appropriate adjustment to the number and class of
shares of Common Stock available for Options, and to the amount and kind of
shares or other securities or property receivable upon exercise of any
outstanding Options after the effective date of such transaction, and the price
thereof, and (b) the Committee may, in its discretion, permit the cancellation
of outstanding Options in exchange for a cash payment in an amount per share
subject to any such Option determined by the Committee in its sole discretion,
but not less than the difference between the Option Price per share and the
Fair Market Value per share of Common Stock on the Acceleration Date.
(4) Paragraphs (2) and (3) of this Section 8(i) shall not apply
to a merger or consolidation in which the Company is the surviving corporation
and shares of Common Stock are not converted into or exchanged for stock,
securities of any other corporation, cash or any other thing of value.
Notwithstanding the preceding sentence, in case of any consolidation or merger
of another corporation into the Company in which the Company is the continuing
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from par value to no par value, or
as a result of a subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the Committee may provide
that the holder of each Option then exercisable shall have the right to
exercise such Option solely for the kind and amount of shares of stock and
other securities (including those of any new direct or indirect Parent of the
Company), property, cash or any combination thereof receivable by
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<PAGE>
the holder of the number of shares of Common Stock for which such Option might
have been exercised upon such reclassification, change, consolidation or
merger.
(5) In the event of a change in the Common Stock as presently
constituted, which is limited to a change of all of its authorized shares, with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.
(6) To the extent that the foregoing adjustments related to stock
or securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that each Option granted pursuant to this Plan and designated an
Incentive Stock Option shall not be adjusted in a manner that causes the Option
to fail to continue to qualify as an Incentive Stock Option within the meaning
of section 422A of the Code.
(7) Except as hereinbefore expressly provided in this Section
8(i), the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or
consolidation, and any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
Option Price of shares of Common Stock subject to an Option. The grant of an
Option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or
assets.
(j) RIGHTS AS A SHAREHOLDER. An Optionee or a transferee or an Option
shall have no rights as a shareholder with respect to any shares covered by his
Option until the date of the issuance of a stock certificate to him for such
shares. No adjustments shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such certificate is issued,
except as provided in Section 8(i) hereof.
(k) OTHER PROVISIONS. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitation, (i) the
imposition of restrictions upon the exercise of an Option and (ii) the
inclusion of any condition not inconsistent with such Option qualifying as an
Incentive Stock Option, as the Committee shall deem advisable, including
provision with respect to compliance with federal and applicable state
securities laws.
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<PAGE>
9. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES
(a) No later than the date of exercise of any Option granted
hereunder, the Optionee will pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes or any kind required by law to be withheld upon the exercise of such
Option, and
(b) The Company shall, to the extent permitted or required by law,
have the right to deduct from any payment of any kind otherwise due to the
Optionee any federal, state or local taxes or any kind required by law to be
withheld upon the exercise of such Option.
10. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time within a
period of ten (10) years from the date on which the Plan is adopted by the
Board, provided that no Options granted under the Plan (except the Options
described in Section 13) shall become exercisable unless and until the Plan
shall have been approved by the Company's shareholders.
11. SAVINGS CLAUSE
Notwithstanding any other provision hereof, this Plan is intended to
qualify as a plan pursuant to which Incentive Stock Options may be issued under
Section 422A of the Code. If this Plan or any provision of this Plan shall be
held to be invalid or to fail to meet the requirements of Section 422A of the
Code or the regulations promulgated thereunder, such invalidity or failure
shall not affect the remaining parts of this Plan, but rather it shall be
construed and enforced as if the Plan or the affected provision thereof, as the
case may be, complied in all respects with the requirements of Section 422A of
the Code.
12. AMENDMENT AND TERMINATION OF THE PLAN
The Board may at any time and from time to time suspend, terminate,
modify or amend the Plan, provided that (a) any amendment that would materially
increase the aggregate number of shares of Class A Stock or Class B Stock as to
which Options may be granted under the Plan, materially increase the benefits
accruing to participants under the Plan, or materially modify the requirements
as to eligibility for participation in the Plan shall be subject to the
approval of the holders of a majority of the Class B Stock issued and
outstanding, except that any such increase or modification that may result from
adjustments authorized by Section 8(i) hereof shall not require such approval
and (b) Section 4 shall not be amended more than once every six months, other
than to comport with changes in the Code, ERISA or the rules thereunder. Except
as provided in Section 8 hereof, no suspension, termination, modification or
amendment of the Plan may adversely affect any Option previously granted unless
the written consent or the Optionee is obtained.
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<PAGE>
13. OPTIONS GRANTED UNDER PRIOR PLAN
Under adoption of the Plan, Options granted under the Company's 1986
Plan, as amended, shall become Options under this Plan, but shall be deemed to
remain outstanding and not to have been regranted.
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<PAGE>
THE COSMETIC CENTER, INC.
1997 STOCK OPTION PLAN
1. PURPOSE
This Stock Option Plan (the "Plan") for The Cosmetic Center, Inc. (the
"Company") is intended to provide incentive to directors, officers and key
employees of the Company by providing those persons with opportunities to
purchase shares of the Company's Class C Common Stock under (a) incentive stock
options ("Incentive Stock Options") as such term is defined under Section 422
of the Internal Revenue Code of 1986, as amended and (b) other stock options.
2. DEFINITIONS
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "Affiliate" shall mean any person or entity that, at the time of
reference, directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the Company.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Common Stock" shall mean the Class C Common Stock of the Company.
(e) "Company" shall mean The Cosmetic Center, Inc., the employer which
has established this Plan.
(f) "Compliance Opinion" shall mean an opinion of counsel acceptable
to the Board to the effect that (i) delivery of shares of Common Stock as
payment of the exercise price of an Option or as payment of the withholding
taxes or other like taxes related to the delivery of shares of Common Stock in
connection with the exercise of an Option (a) would not result in the Optionee
incurring any liability under Section 16(b) of the Exchange Act and (b) does
not require (x) any listings, registrations or qualifications in respect
thereof upon any securities exchange or other self-regulatory organization or
under any federal, state, local or foreign law, rule or regulation or (y) the
expiration, elimination or satisfaction of any prohibitions, restrictions or
limitations under any federal, state, local or foreign law, rule or regulation
or the rules of any securities exchange or other self-regulatory organization,
and (ii) any and all written agreements or
<PAGE>
representations by the Optionee with respect to the disposition of shares, or
with respect to any other matter that the Board deems necessary or desirable to
comply with the terms of any such listing, registration or qualification or to
obtain an exemption from the requirement that any such listing, qualification
or registration be made, and any and all consents, clearances or approvals by
any governmental or other regulatory bodies or any parties to any loan
agreements or other contractual obligations of the Company or any Subsidiaries
have been obtained.
(g) "Disability" shall mean an Optionee's inability to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than
twelve (12) months.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "Fair Market Value" per share of Common Stock as of a particular
date shall mean (i) the closing sales price per share of Common Stock on the
principal national securities exchange, if any, on which the shares of Common
Stock shall then be listed for the last preceding date on which there was a
sale of Common Stock on such exchange, or (ii) if the shares of Common Stock
are not then listed on a national securities exchange, the last sales price per
share of Common Stock entered on a national inter-dealer quotation system for
the last preceding date on which there was a sale of Common Stock on such
national inter-dealer quotation system, or (iii) if no closing or last sales
price per share of Common Stock is entered on a national inter-dealer quotation
system, the average of the closing bid and asked prices for the shares of
Common Stock in the over-the-counter market for the last preceding date on
which there was a quotation for Common Stock in such market, or (iv) if no
price can be determined under the preceding alternatives, then the price per
share as most recently determined by the Board, which shall make such
determinations of value at least once annually.
(j) "Immediate Family" means an Optionee's spouse, children or
grandchildren (including adopted and stepchildren and grandchildren).
(k) "Incentive Stock Option" means one or more options to purchase
Common Stock which, at the time such options are granted under this Plan or any
other such plan of the Company, qualify as incentive stock options under
Section 422 of the Code.
(l) "Option Agreement" means a written instrument evidencing an
Option, in such form as the Board may from time to time approve.
<PAGE>
(m) "Options" means Incentive Stock Options and other options granted
hereunder.
(n) "Optionee" shall mean any person to whom an Option is granted
under this Plan.
(o) "Permitted Transferee" shall have the meaning given in Section
7(h)(2) of this Plan.
(p) "Plan" shall mean this Stock Option Plan.
(q) "Subsidiary" of any person shall mean any corporation or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or other ownership interests having power only
by reason of the happening of a contingency) to elect a majority of the
directors of such corporation, or other Persons performing similar functions
for such entity, are owned, directly or indirectly, by such person.
(r) "Ten Percent Shareholder" shall mean an Optionee who, at the time
an Option is granted, owns directly or indirectly (within the meaning of
section 425(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company, its parent
or a Subsidiary.
3. GENERAL ADMINISTRATION.
(a) Unless otherwise determined by the Board, the Plan shall be
administered by a committee of the Board ("Committee"), which shall consist of
two or more members of the Board who are "outside directors" within the meaning
of section 162(m) of the Code. The Committee may, in its discretion, delegate
to a subcommittee or to an officer of the Company its duties hereunder,
including the grant of Awards. The full Board shall also have the authority, in
its discretion, to grant Awards under the Plan and to administer the Plan. For
all purposes under the Plan, any entity which performs the duties described
herein, shall be referred to as the "Board.""
(b) The Board, or if so appointed, the Committee, shall have the
authority (i) to exercise all of the powers granted to it under this Plan, (ii)
to construe, interpret and implement this Plan and any Option Agreements
executed pursuant to Section 7 below, (iii) to prescribe, amend and rescind
rules and regulations relating to this Plan, including rules governing the
Committee's own operations, (iv) to make all determinations necessary or
advisable in administering this Plan, (v) to correct any defect, supply any
<PAGE>
omission and reconcile any inconsistency in this Plan, and (vi) to amend this
Plan to reflect changes in applicable law.
(c) The Board shall fill all vacancies, however caused, in the
Committee. The Board may from time to time appoint additional members to the
Committee, and may at any time remove one or more Committee members and
substitute others.
(d) No member of the Board or the Committee shall be liable for any
action taken or determination made in good faith with respect to the Plan or
any Option granted hereunder.
4. GRANTING OF OPTIONS
Options may be granted under the Plan at any time prior to December
31, 2006.
5. ELIGIBILITY
(a) Options may be granted to any director, officer or key employee of
the Company. In determining from time to time the directors, officers and
employees to whom Options shall be granted and the number of shares to be
covered by each Option, the Board shall take into account the duties of the
respective persons, their present and potential contributions to the success of
the Company and such other factors as the Board shall deem relevant in
connection with accomplishing the purposes of the Plan.
(b) At the time of the grant of each Option under the Plan, the Board
shall determine whether such Option is to be designated an Incentive Stock
Option. Unless the applicable Option Agreement explicitly states that an Option
is intended to be an Incentive Stock Option, such Option shall be a
nonqualified Option. Incentive Stock Options shall not be granted to a director
who is not an employee of the Company. The length of the exercise period of
Incentive Stock Options shall be governed by Section 7(e)(1) of the Plan; the
exercise period of all other Options will be governed by Section 7(e)(2).
(c) If an Option is granted with the stated intent that it be an
Incentive Stock Option, and if for any reason such Option (or any portion
thereof) shall not qualify as an Incentive Stock Option, then, to the extent of
such nonqualification, such Option (or portion) shall be regarded as a
nonqualified Option appropriately granted under the Plan, PROVIDED that such
Option (or portion) otherwise satisfies the terms and conditions of the Plan
relating to nonqualified Options generally.
<PAGE>
6. STOCK
(a) The stock subject to the Options shall be shares of Common Stock.
Such shares may, in whole or in part, be authorized but unissued shares
contributed directly by the Company or shares which shall have been or which
may be acquired by the Company. The aggregate number of shares of Common Stock
as to which Options may be granted from time to time under the Plan shall be
1,000,000 shares and the maximum number of shares of Common Stock as to which
Options may be granted to any employee in any calendar year shall be 100,000.
The limitation established by the preceding sentence shall be subject to
adjustment as provided in Section 7 (i) hereof.
(b) If any outstanding Option under the Plan for any reason expires or
is terminated without having been exercised in full, the shares of Common Stock
allocable to the unexercised portion of such Option shall (unless the Plan
shall have been terminated) become available for subsequent grants of Options
under the Plan.
7. TERMS AND CONDITIONS OF OPTIONS
Each Option granted pursuant to the Plan shall be evidenced by an
Option Agreement. Options shall comply with and be subject to the following
terms and conditions:
(a) OPTION PRICE. Each Option shall state the Option Price, which
shall be not less than one hundred percent (100%) of the Fair Market Value of
the shares of Common Stock subject to the Option on the date of grant of the
Option; PROVIDED, HOWEVER, that in the case of an Incentive Stock Option
granted to a Ten Percent Shareholder, the Option Price shall not be less than
one hundred ten percent (110%) of such fair market value. The Option Price
shall be subject to adjustment as provided in Section 7(i) hereof. The date on
which the Board adopts a resolution expressly granting an Option shall be
considered the day on which such Option is granted.
(b) RESTRICTIONS. Any Common Stock issued under the Plan may contain
restrictions including, but not limited to, limitations on transferability that
may constitute substantial risks of forfeiture, as the Board may determine.
(c) VALUE OF SHARES. Options may be granted to any eligible person for
shares of Common Stock of any value, PROVIDED that the aggregate Fair Market
Value (determined at the time the Option is granted) of the stock with respect
to which Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year (under all the plans of the Company, its
Parent and its Subsidiaries) shall not exceed $100,000.
<PAGE>
(d) MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in
full, at the time of exercise, in cash, in shares of Common Stock owned by the
Optionee free and clear of all liens and owned by the Optionee for at least six
months (or such shorter or longer period as the Board may in its discretion
determine that will not result in variable accounting treatment) having a Fair
Market Value in the aggregate equal to such Option Price, or in a combination
of cash and such shares. Shares acquired upon exercise of an Option shall not
be accepted as payment unless such Option exercise occurred at least six months
prior to the exercise of the Option the Option Price of which is proposed to be
paid in part or in full by the tender of shares of Common Stock. The Board may
require, as a condition of accepting any such delivery of shares of Common
Stock, that the Optionee furnish the Board with a Compliance Opinion.
(e) TERM AND EXERCISE OF OPTIONS.
(1) Incentive Stock Options shall be exercisable over the exercise
period specified by the Board in the Option Agreement, but in no event shall
such period exceed ten (10) years from the date of the grant of each such
Incentive Stock Option; PROVIDED, HOWEVER, that in the case of an Incentive
Stock Option granted to a Ten Percent Shareholder, the exercise period shall
not exceed five (5) years from the date of grant of such Option. The exercise
period shall be subject to earlier termination as provided in Section 7(f) and
7(g) hereof. An Option may be exercised, as to any or all full shares of Common
Stock as to which the Option has become exercisable, by giving written notice
of such exercise to the Board, PROVIDED that an Option may not be exercised at
any one time as to less than 100 shares (or such number of shares as to which
the Option is then exercisable if such number of shares is less than 100).
(2) Options that have not been designated by the Board as Incentive
Stock Options shall be exercisable over the exercise period specified by the
Board in the Option Agreement, but in no event shall such period exceed ten
(10) years from the date of the grant of each such option.
(f) TERMINATION OF EMPLOYMENT. Except as provided in this Section 7(f)
and Section 7(g) hereof and by Permitted Transferees pursuant to Section 7(h),
an Option may not be exercised unless the Optionee is then a director or
officer of or in the employ of the Company or any Affiliate of the Company (or
a corporation or an Affiliate of such corporation issuing or assuming the
Option in a transaction to which Section 425(a) of the Code applies), and
unless the Optionee has remained continuously a director or officer or so
employed since the date of grant of the Option. In the event all association of
an Optionee with the Company (as an employee, a director or officer) shall
terminate (other than by reason of death or Disability), all Options or
unexercised portions thereof granted to such Optionee which are then
exercisable may, unless earlier
<PAGE>
terminated in accordance with their terms, be exercised within thirty (30) days
after such termination; PROVIDED, HOWEVER, that if the association of the
Optionee with the Company shall terminate for "cause" (as determined by the
Board), all Options theretofore granted to such Optionee (whether or not then
vested or exercisable) shall, to the extent not theretofore exercised,
terminate forthwith and the Optionee may not satisfy any condition or
limitation that is unsatisfied (and no additional portion shall otherwise
become vested) under any Options following the date of such termination. A bona
fide leave of absence shall not be considered a termination or break in
continuity of employment for any purpose of the Plan so long as the period of
such leave does not exceed ninety (90) days or such longer period during which
the Optionee's right to reemployment is guaranteed by statute or by contract.
Where the period of such leave exceeds ninety (90) days and the Optionee's
right to reemployment is not guaranteed, the Optionee's employment will be
deemed to have terminated on the ninety-first (91st) day of such leave. Nothing
in the Plan or in any Option granted pursuant hereto shall confer upon an
employee any right to continue in the employ of the Company or any of its
divisions or any Affiliates or interfere in any way with the right of the
Company or any such divisions or any Affiliates to terminate such employment at
any time.
(g) DEATH OR DISABILITY OF OPTIONEE. If an Optionee shall die while a
director or officer of or employed by the Company or any Affiliate, or if the
Optionee's employment shall terminate by reason of Disability, all Options
theretofore granted to such Optionee may, unless earlier terminated in
accordance with their terms, be exercised by the Optionee or by the personal
representative of the Optionee's estate or by a person who acquired the right
to exercise such Option by bequest or inheritance or otherwise by reason of
death of the Optionee, at any time within nine (9) months after the date of
death or Disability of the Optionee, but in no event later than the date of
expiration of the Option, PROVIDED that during the lifetime of the Optionee any
Option granted to him may be exercised only by the Optionee or any Permitted
Transferee pursuant to Section 7(h).
(h) TRANSFERABILITY OF OPTIONS.
(1) Options granted under the Plan shall not be transferable other
than by will or by the laws of descent and distribution.
(2) Notwithstanding Section 7(h)(1), the Board may in the applicable
Option Agreement or at any time thereafter provide that Options granted
hereunder which are not intended to qualify as Incentive Stock Options under
Code section 422 may be transferred without consideration by the Optionee,
subject to such rules as the Board may adopt to preserve the purposes of the
Plan to:
<PAGE>
(i) the Optionee's Immediate Family;
(ii) a trust solely for the benefit of the Optionee and/or members of
his or her Immediate Family; or
(iii) a partnership or limited liability company whose only partners
or shareholders are the Optionee and/or members of his or her Immediate Family.
(each transferee described in clauses (i), (ii) and (iii) above is
hereinafter referred to as a "Permitted Transferee"), PROVIDED that the
Optionee provides the Board with advance written notice describing the terms
and conditions of the proposed transfer and the Board notifies the Optionee in
writing that such a transfer would comply with the requirements of the Plan and
any applicable Option Agreement; and PROVIDED FURTHER that with respect to
Options granted to officers and directors subject to the reporting requirements
of Section 16 of the Exchange Act no such Options may be transferred within six
months of the grant date to the extent such transfer would result in the grant
of the Option being deemed to constitute a non-exempt purchase under Section 16
of the Exchange Act. The terms of any such transferred Option shall apply to
the Permitted Transferee, except that (a) Permitted Transferees shall not be
entitled to transfer any Options, other than by will or the laws of descent and
distribution; and (b) Permitted Transferees shall not be entitled to exercise
any transferred Options unless there shall be in effect a registration
statement on an appropriate form under the Securities Act of 1933, as amended,
covering the shares to be acquired pursuant to the exercise of such Option if
the Board determines that such a registration statement is necessary or
appropriate. Upon notice from a Permitted Transferee of its intent to exercise
an Option, the Board shall advise such Permitted Transferee if a registration
statement is necessary and if so whether such registration statement is in
effect.
(i) EFFECT OF CERTAIN CHANGES.
(1) If and to the extent specified by the Board, there is any change
in the number of shares of Common Stock through the declaration of stock
dividends, recapitalization resulting in stock splits, or combinations or
exchanges of such shares, then the number of shares of Common Stock available
for Options, the number of such shares covered by outstanding Options, and the
price per share of such Options may be appropriately adjusted (as the Board may
determine) to reflect any increase or decrease in the number of issued shares
of Common Stock; PROVIDED, HOWEVER, that any fractional shares resulting from
such adjustment shall be eliminated.
(2) If the Company or any successor is merged or consolidated with
another corporation and, whether or not the Company or such successor shall be
the surviving
<PAGE>
corporation, there shall be any change in the shares of Common Stock as then
constituted by reason of such merger or consolidation, or in the event that all
or substantially all of the assets of the Company are acquired by another
person, or in the event of a reorganization or liquidation of the Company or
any successor (each such event being hereinafter referred to as a
"Reorganization Event") or in the event that the Board shall propose that the
Company or any successor enter into a Reorganization Event, then the Board may
in its discretion, by written notice to an Optionee, provide that such
Optionee's Options will be terminated unless such Optionee exercises or takes
such action within 30 days (or such longer period as the Board shall determine
in its sole discretion) after the date of such notice; PROVIDED, HOWEVER, that
if the Board takes such action the Board also shall accelerate to an
appropriate earlier date the dates upon which all outstanding Options of such
Optionee shall be exercisable. The Board also may in its discretion, by written
notice to an Optionee, provided that conditions of Options shall be adjusted in
the event of a Reorganization Event upon such terms and conditions as the Board
may determine.
(3) Whenever deemed appropriate by the Board, the actions referred to
in paragraph (2) of this Section 7 (i) may be made conditional upon the
consummation of the applicable Reorganization Event.
(4) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
(5) Except as hereinbefore expressly provided in this Section 7(i),
the Optionee shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, merger, or consolidation, and any issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Option Price of shares of
Common Stock subject to an Option. The grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
(j) RIGHTS AS A SHAREHOLDER. An Optionee or a transferee of an Option
shall have no rights as a shareholder with respect to any shares covered by his
Option until the date of the issuance of a stock certificate to him for such
shares. No adjustments shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or
<PAGE>
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 7 (i) hereof.
(k) OTHER PROVISIONS. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitation, (i) the
imposition of restrictions upon the exercise of an Option and (ii) the
inclusion of any condition not inconsistent with such Option qualifying as an
Incentive Stock Option, as the Board shall deem advisable, including provisions
with respect to compliance with federal and applicable state securities laws.
8. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES
(a) No later than the date of exercise of any Option granted
hereunder, the Optionee will pay to the Company or make arrangements
satisfactory to the Board regarding payment of any federal, state or local
taxes of any kind required by law to be withheld upon the exercise of such
Option, and
(b) The Company shall, to the extent permitted or required by law,
have the right to deduct from any payment of any kind otherwise due to the
Optionee any federal, state or local taxes of any kind required by law to be
withheld upon the exercise of such Option.
An Optionee may satisfy, in whole or in part, withholding requirements
by delivery of unrestricted shares of Common Stock owned by the Optionee for at
least six months (or such shorter or longer period as the Board may approve or
require that will not result in variable accounting treatment) having a fair
market value (determined as of the date of such delivery by the grantee) equal
to the amount otherwise payable. Without limiting the generality of the
foregoing: (i) the Board may require, as a condition of accepting any such
delivery of shares of Common Stock, that the Optionee furnish a Compliance
Opinion and (ii) such delivery may be made by withholding shares of Common
Stock from the shares otherwise issuable pursuant to the exercise of the Option
giving rise to the tax withholding obligation (in which event the date of
delivery shall be deemed the date the Option was exercised).
9. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time prior to
December 31, 2006, PROVIDED that no Options granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
stockholders.
<PAGE>
10. SAVINGS CLAUSE
Notwithstanding any other provision hereof, this Plan is intended to
qualify as a plan pursuant to which Incentive Stock Options may be issued under
Section 422 of the Code. If this Plan or any provision of this Plan shall be
held to be invalid or to fail to meet the requirements of Section 422 of the
Code or the regulations promulgated thereunder, such invalidity or failure
shall not affect the remaining parts of this Plan, but rather it shall be
construed and enforced as if the Plan or the affected provision thereof, as the
case may be, complied in all respects with the requirements of Section 422 of
the Code.
11. AMENDMENT AND TERMINATION OF THE PLAN
The Board may at any time and from time to time suspend, terminate,
modify or amend the Plan, PROVIDED that no such suspension, termination,
modification or amendment shall be made without the approval of a majority of
the issued and outstanding shares of Common Stock to the extent such approval
is necessary to comply with any tax or regulatory requirement, including for
these purposes any approval requirement that is a prerequisite for exemptive
relief under Section 162(m) of the Code (provided that the Company is subject
to the requirements of Section 162(m) of the Code as of the date of such
action). Except as provided in Section 7 hereof, no suspension, termination,
modification or amendment of the Plan may adversely affect any Option
previously granted unless the written consent of the Optionee is obtained.
12. CONDITIONS
If pursuant to Section 7(g) or Section 7(i)(2) the dates upon which
Options shall be exercisable are accelerated, it shall be on the condition that
with respect to Options granted to officers and directors subject to the
reporting requirements of Section 16 of the Exchange Act the shares of Common
Stock underlying such Options may not be sold by any such individual (or their
estate or Permitted Transferee) within six months after the grant of the Option
to the extent such sale would result in the grant of the Option being deemed to
constitute a non-exempt purchase under Section 16 of the Exchange Act.
<PAGE>
July 28, 1998
The Board of Directors
The Cosmetic Center, Inc.
8700 Robert Fulton Drive
Columbia, Maryland 21046
Dear Sirs:
I am Senior Vice President and General Counsel of The Cosmetic Center,
Inc., a Delaware corporation (the "Company"), and have acted as counsel to the
Company in connection with the Company's Registration Statement on Form S-8
(the "Registration Statement"), filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act") in connection with the registration thereunder of
1,100,361 shares of the Company's Class C Common Stock, par value $.01 per
share (the "Class C Common Stock"), to be issued pursuant to or reserved for
issuance under The Cosmetic Center, Inc. 1997 Stock Option Plan (the "Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, I have examined and am familiar with
originals or copies certified or otherwise identified to my satisfaction, of
(i) the Plan; (ii) the Restated Certificate of Incorporation and the Amended
and Restated By-Laws of the Company, in each case as amended to the date
hereof; (iii) certain resolutions of the Executive Committee of the Board of
Directors of the Company relating to the adoption of the Plan and the issuance
of the Class C Common Stock pursuant to or reserved for issuance under the
Plan; (iv) the resolutions adopted by the stockholders of the Company approving
the Plan; (v) the Registration Statement and (vi) such other documents as I
have deemed necessary or appropriate as a basis for the opinion set forth
below.
In my examination, I have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies. As to
1
<PAGE>
any facts relevant to the opinion expressed herein which were not independently
established or verified, I have relied upon oral or written statements and
representations of officers and other representatives of the Company and
others.
I am admitted to the Bar in the State of New York and I do not express
any opinion as to any laws other than the laws of the State of New York and the
General Corporation Law of the State of Delaware.
Upon the basis of and subject to the foregoing, I am of the opinion
that the Company has the full power and authority under the General Corporation
Law of the State of Delaware, and under its Restated Certificate of
Incorporation and Amended and Restated By-Laws, to issue the Class C Common
Stock reserved for issuance under the Plan, and that such shares of Class C
Common Stock are validly authorized shares of Class C Common Stock, and when
issued and paid for, will be legally issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me in Item 5, Interests of Named
Experts and Counsel, of the Registration Statement.
Very truly yours,
/s/ Steven R. Isko
Steven R. Isko
Senior Vice President
and General Counsel
2
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
The Cosmetic Center, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Interests of Named Experts and
Counsel" in the Registration Statement.
/s/ KPMG PEAT MARWICK LLP
Washington, DC
July 28, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ Richard Halperin
- -----------------------------
Richard Halperin
1
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ Mary Elizabeth Burton
- -----------------------------
Mary Elizabeth Burton
2
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ George Fellows
- -----------------------------
George Fellows
3
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ Wade H. Nichols
- -----------------------------
Wade H. Nichols, III
4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ Jerry W. Levin
- -----------------------------
Jerry W. Levin
5
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ William J. Fox
- -----------------------------
William J. Fox
6
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ David N. Dinkins
- -----------------------------
David N. Dinkins
7
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ Donald G. Drapkin
- -----------------------------
Donald G. Drapkin
8
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Robert K. Kretzman and Joram C. Salig or any of them, each
acting alone, his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, in connection with The Cosmetic Center, Inc. (the "Corporation")
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), including, without
limiting the generality of the foregoing, to sign the Registration Statement in
the name and on behalf of the Corporation or on behalf of the undersigned as a
director or officer of the Corporation, to sign any amendments and supplements
relating thereto (including post-effective amendments) under the Securities Act
and to sign any instrument, contract, document or other writing of or in
connection with the Registration Statement and any amendments and supplements
thereto (including post-effective amendments) and to file the same, with all
exhibits thereto, and other documents in connection therewith, including this
power of attorney, with the Securities and Exchange Commission and any
applicable securities exchange or securities self-regulatory body, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS HEREOF, the undersigned has signed these presents this 28th day of
July, 1998.
/s/ Harvey Rosenthal
- -----------------------------
Harvey Rosenthal
9
