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EXHIBIT 10.19
CONCORD CAMERA CORP.
INCENTIVE PLAN
(Composite Conformed Copy, as amended through April 24, 2000)
(Where appropriate, numbers have been adjusted for the March 27, 2000
stock split)
I. Purpose
The purpose of the Concord Camera Corp. Long-Term Incentive Plan (the
"Plan") is to attract and retain and provide incentives to employees, officers,
directors and consultants of the Corporation, and to thereby increase overall
shareholders' value. The Plan generally provides for the granting of stock,
stock options, stock appreciation rights, restricted shares or any combination
of the foregoing to the eligible participants.
II. Definitions
(a) "Award" includes, without limitation, stock options (including
incentive stock options within the meaning of Section 422(b) of the Code) with
or without stock appreciation rights, dividend equivalent rights, stock awards,
restricted share awards, or other awards that are valued in whole or in part by
reference to, or are otherwise based on, the Common Stock ("other Common
Stock-based Awards"), all on a stand alone, combination or tandem basis, as
described in or granted under this Plan.
(b) "Award Agreement" means a written agreement setting forth the terms
and conditions of each Award made under this Plan.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(e) "Committee" means the Compensation Committee of the Board or such
other committee of the Board as may be designated by the Board from time to time
to administer this Plan the members of which shall consist solely of members of
the Board who are "disinterested persons" within the meaning of Rule 16b-3 of
the Exchange Act and are "outside directors" for purposes of Code Section
162(m)(4)(C) of the Code.
(f) "Common Stock" means the no par value common stock of the
Corporation.
(g) "Corporation" means Concord Camera Corp., a New Jersey
corporation.
(h) "Employee" means an employee of the Corporation or a Subsidiary.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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(j) "Fair Market Value" means the closing price for the Common Stock as
officially reported on the relevant date (or if there were no sales on such
date, on the next preceding date on which such closing price was recorded) by
the principal national securities exchange on which the Common Stock is listed
or admitted to trading, or, if the Common Stock is not listed or admitted to
trading on any such national securities exchange, the closing price as furnished
by the National Association of Securities Dealers through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information, or, if the
Common Stock is not quoted on NASDAQ, as determined in good faith by resolution
of the Board (whose determination shall be conclusive), based on the best
information available to it.
(k) "Participant" means an Employee, officer, director or consultant
who has been granted an Award under the Plan.
(l) "Plan Year" means a twelve-month period beginning with July 1 of
each year.
(m) "Subsidiary" means any corporation or other entity, whether
domestic or foreign, in which the Corporation has or obtains, directly or
indirectly, a proprietary interest of more than 50% by reason of stock ownership
or otherwise.
III. Eligibility
Any Employee, officer, director or consultant of the
Corporation or Subsidiary selected by the Committee is eligible to receive an
Award.
IV. Plan Administration
(a) Except as otherwise determined by the Board, the Plan shall be
administered by the Committee. The Board, or the Committee to the extent
determined by the Board, shall periodically make determinations with respect to
the participation of Employees, officers, directors and consultants in the Plan
and, except as otherwise required by law or this Plan, the grant terms of
Awards, including vesting schedules, price, restriction or option period,
dividend rights, post-retirement and termination rights, payment alternatives
such as cash, stock, contingent awards or other means of payment consistent with
the purposes of this Plan, and such other terms and conditions as the Board or
the Committee deems appropriate which shall be contained in an Award Agreement
with respect to a Participant.
(b) The Committee shall have authority to interpret and construe the
provisions of the Plan and any Award Agreement and make determinations pursuant
to any Plan provision or Award Agreement which shall be final and binding on all
persons. No member of the Committee shall be liable for any action or
determination made in good faith, and the members shall be entitled to
indemnification and reimbursement in the manner provided in the Corporation's
Certificate of Incorporation, as it may be amended from time to time.
(c) The Committee shall have the authority at any time to provide for
the conditions and circumstances under which Awards shall be forfeited.
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V. Capital Stock Subject to the Provisions of this Plan
(a) The capital stock subject to the provisions of this Plan shall be
shares of authorized but unissued Common Stock and shares of Common Stock held
as treasury stock. Subject to adjustment in accordance with the provisions of
Section X, and subject to Section V(c) below, the total number of shares of
Common Stock available for grants of Awards shall not exceed 6,000,000.
(b) Any shares ceasing to be subject to an option because of the
surrender of such option in lieu of exercise shall become again available for
Awards under the Plan. The grant of a restricted share Award shall be deemed to
be equal to the maximum number of shares which may be issued under the Award.
Awards payable only in cash will not reduce the number of shares available for
Awards granted under the Plan.
(c) There shall be carried forward and be available for Awards under
the Plan, in addition to shares available for grant under paragraph (a) of this
Section V, all of the following: (i) any unused portion of the limit set forth
in paragraph (a) of this Section V; (ii) shares represented by Awards which are
cancelled, forfeited, surrendered, terminated, paid in cash or expire
unexercised; and (iii) the excess amount of variable Awards which become fixed
at less than their maximum limitations.
VI. Awards Under This Plan
(a) Discretionary Awards. As the Board or Committee may determine, the
following types of Awards and other Common Stock-based Awards may be granted
under this Plan on a stand alone, combination or tandem basis:
(i) Stock Option. A right to buy a specified number of shares
of Common Stock at a fixed exercise price during a specified time, all as the
Committee may determine; provided that the exercise price of any option shall
not be less than 100% of the Fair Market Value of the Common Stock on the date
of grant of the Award.
(ii) Incentive Stock Option. An Award in the form of a stock
option which shall comply with the requirements of Section 422 of the Code or
any successor section as it may be amended from time to time. Subject to
adjustment in accordance with the provisions of Section X, the aggregate number
of shares which may be subject to incentive stock option Awards under this Plan
shall not exceed 6,000,000 shares, subject to Section V above. To the extent
that Section 422 of the Code requires certain provisions to be set forth in a
written plan, said provisions are incorporated herein by this reference.
(iii) Stock Appreciation Right. A right contained in the grant
of a stock option or incentive stock option to receive the excess of the Fair
Market Value of a share of Common Stock on the date the option is surrendered
over the option exercise price contained in the Award Agreement.
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(iv) Restricted Shares. A transfer of Common Stock to a
Participant subject to forfeiture until such restrictions, terms and
conditions as the Committee may determine are fulfilled.
(v) Dividend or Equivalent. A right to receive dividends or
their equivalent in value in Common Stock, cash or in a combination of both with
respect to any new or previously existing Award.
(vi) Stock Award. An unrestricted transfer of ownership of
Common Stock which may only be made to Employees other than Employees who are
officers or directors of the Corporation for purposes of Section 16 of the
Exchange Act.
(vii) Other Stock-Based Awards. Other Common Stock-based
Awards which are related to or serve a similar function to those Awards set
forth in this Section VI(a).
(b) Formula Awards. Each member of the Board who is not, on the date on
which any option is to be granted pursuant to this paragraph (b) to such member,
an Employee (a "Non-Employee Director") shall be granted stock options (which
shall not comply with the requirements of Section 422 of the Code) in accordance
with the following formula: (i) a stock option to acquire 20,000 (40,000 if the
Grant Date occurred after March 27, 2000) shares of Common Stock shall be
granted on the Grant Date (defined below) at the Exercise Price (defined below)
which option shall become exercisable as to 4,000 (8,000 if the Grant Date
occurred after March 27, 2000) shares on the January 1 next following the Grant
Date and as to an additional 4,000 (8,000 if the Grant Date occurred after March
27, 2000) shares on each January 1 thereafter through the fourth such January 1
and (ii) a stock option to acquire 6,500 (13,000 if the Grant Date occurred
after March 27, 2000) shares of Common Stock shall be granted on the Grant Date
and on each anniversary thereof at the Exercise Price which options shall be
exercisable immediately upon grant. [Prior to April 22, 1999 the annual grant
provided for in clause (ii) of the preceding sentence was for 1,000 shares of
common stock.] Notwithstanding the foregoing, commencing with the 1994 calendar
year, in the event a Non-Employee Director fails to attend at least 75% of the
Board meetings in any calendar year, such person shall automatically forfeit his
right to exercise that portion of the option provided for in clause (i) above
that would have otherwise become exercisable on the next following January 1
which portion shall cease to be of any force or effect. For purposes of this
Section VI(b), "Grant Date" shall mean (x) November 29, 1993, with respect to
each Non-Employee Director serving in such capacity on such date and (y) the
date of his election to the Board after November 29, 1993, with respect to each
Non-Employee Director who was not serving in such capacity on November 29, 1993,
and "Exercise Price" shall mean (x) the Fair Market Value of the Common Stock on
the respective Grant Dates with respect to each option granted pursuant to
clause (i) above and (y) the Fair Market Value of the Common Stock on each date
of grant with respect to options granted pursuant to clause (ii) above. Options
granted pursuant to this Section VI(b) shall expire and cease to be of any force
or effect on the earlier of the fifth anniversary of the date any such option
was granted or the first anniversary of the date on which an optionee ceases to
be a member of the Board.
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VII. Award Agreements
Each Award under the Plan shall be evidenced by an Award Agreement
setting forth the terms and conditions of the Award and executed by the
Corporation and Participant.
VIII. Other Terms and Conditions
(a) Assignability. Unless provided to the contrary in any Award, no
Award shall be assignable or transferable except by will, by the laws of descent
and distribution and, during the lifetime of a Participant, the Award shall be
exercisable only by such Participant. Notwithstanding the foregoing, options
granted pursuant to the Plan which are not intended to qualify as Incentive
Stock Options may be assigned to or otherwise transferred by the Optionee to
family members of the Optionee or trusts or partnerships in which the
participants or beneficiaries are limited to the Optionee and/or such family
members; provided, however, that as so transferred or assigned, all provisions
of any such option, including provisions relating to forfeiture and vesting,
shall continue in full force and effect.
(b) Termination of Employment. The Committee shall determine the
disposition of the grant of each Award in the event of the retirement,
disability, death or other termination of a Participant's employment or other
relationship with the Corporation or a Subsidiary.
(c) Rights as a Stockholder. A Participant shall have no rights as a
stockholder with respect to shares covered by an Award until the date the
Participant is the holder of record. No adjustment will be made for dividends or
other rights for which the record date is prior to such date.
(d) No Obligation to Exercise. The grant of an Award shall impose no
obligation upon the Participant to exercise the Award.
(e) Payments by Participants. The Committee may determine that Awards
for which a payment is due from a Participant may be payable: (i) in U.S.
dollars by personal check, bank draft or money order payable to the order of the
Corporation, by money transfers or direct account debits; (ii) through the
delivery or deemed delivery based on attestation to the ownership of shares of
Common Stock with a Fair Market Value equal to the total payment due from the
Participant; (iii) pursuant to a broker-assisted "cashless exercise" program if
established by the Corporation; (iv) by a combination of the methods described
in (i) through (iii) above; or (v) by such other methods as the Committee may
deem appropriate.
(f) Withholding. Except as otherwise provided by the Committee, (i) the
deduction of withholding and any other taxes required by law will be made from
all amounts paid in cash and (ii) in the case of payments of Awards in shares of
Common Stock, the Participant shall be required to pay the amount of any taxes
required to be withheld prior to receipt of such stock, or alternatively, a
number of shares the Fair Market Value of which equals the amount required to be
withheld may be deducted from the payment.
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(g) Restrictions on Sale and Exercise. With respect to officers and
directors for purposes of Section 16 of the Exchange Act, and if required to
comply with rules promulgated thereunder, (i) no Award providing for exercise, a
vesting period, a restriction period or the attainment of performance standards
shall permit unrestricted ownership of Common Stock by the Participant for at
least six months from the date of grant, and (ii) Common Stock acquired pursuant
to this Plan (other than Common Stock acquired as a result of the granting of a
"derivative security") may not be sold for at least six months after
acquisition.
(h) Maximum Awards. The maximum number of shares of Common Stock
that may be issued to any single Participant pursuant to options under this
Plan is 4,000,000.
IX. Termination, Modification and Amendments
(a) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of the capital stock of the Corporation present or represented and entitled to
vote at a duly held stockholders meeting.
(b) The Board may at any time terminate the Plan or from time to time
make such modifications or amendments of the Plan as it may deem advisable;
provided, however, that the Board shall not make any material amendments to the
Plan without the approval of at least the affirmative vote of the holders of a
majority of the outstanding shares of the capital stock of the Corporation
present or represented and entitled to vote at a duly held stockholders meeting.
(c) No termination, modification or amendment of the Plan may adversely
affect the rights conferred by an Award without the consent of the recipient
thereof.
(d) Notwithstanding anything to the contrary contained herein, the
provisions of Section VI(b) may not be amended more than once every six months
other than to comport with changes in the Code, the Employee Retirement Income
Security Act, or the rules thereunder.
X. Recapitalization
The aggregate number of shares of Common Stock as to which Awards may
be granted to Participants, the number of shares thereof covered by each
outstanding Award and by each option award granted or to be granted in
accordance with the formula set forth in paragraph (b) of Section VI hereof, and
the price per share thereof in each such Award, shall all be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or consolidation of shares or other capital
adjustment, or the payment of a stock dividend or other increase or decrease in
such shares, effected without receipt of consideration by the Corporation, or
other change in corporate or capital structure; provided, however, that any
fractional shares resulting from any such adjustment shall be eliminated. The
Committee may also make the foregoing changes and any other changes, including
changes in the classes of securities available, to the extent it is deemed
necessary or desirable to preserve the intended benefits of the Plan for the
Corporation and the Participants in the event of any other reorganization,
recapitalization, merger, consolidation, spin-off, extraordinary dividend or
other distribution or similar transaction.
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XI. No Right to Employment
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of, or in the other relationship with, the Corporation or
a Subsidiary. Further, the Corporation and each Subsidiary expressly reserve the
right at any time to dismiss a Participant free from any liability, or any claim
under the Plan, except as provided herein or in any Award Agreement issued
hereunder.
XII. Governing Law
To the extent that federal laws do not otherwise control, the Plan
shall be construed in accordance with and governed by the laws of the State of
New York.
XIII. Savings Clause
This Plan is intended to comply in all aspects with applicable laws and
regulations, including, with respect to those Employees who are officers or
directors for purposes of Section 16 of the Exchange Act, Rule 16b-3 under the
Exchange Act. In case any one more of the provisions of this Plan shall be held
invalid, illegal or unenforceable in any respect under applicable law and
regulation (including Rule 16b-3), the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
and the invalid, illegal or unenforceable provision shall be deemed null and
void; however, to the extent permissible by law, any provision which could be
deemed null and void shall first be construed, interpreted or revised
retroactively to permit this Plan to be construed in compliance with all
applicable laws (including Rule 16b-3) so as to foster the intent of this Plan.
XIV. Effective Date and Term
The effective date of this Plan is November 29, 1993, subject to its
approval by the stockholders of the Corporation at the annual meeting to be held
on January 18, 1994, or any adjournment thereof; provided, however, that the
effectiveness of the provisions of paragraph (b) of Section VI of this Plan is
subject to the further condition that the Company shall have received either
advice of counsel or a confirmatory letter of the staff of the Securities and
Exchange Commission to the effect that said paragraph (b) of Section VI
qualifies as a formula plan within the meaning of Rule 16b-3(c)(2) of the
regulations promulgated pursuant to the Exchange Act. The Plan shall terminate
on December 1, 2003. No awards shall be granted after the termination of the
Plan.
