<PAGE> 1
As filed with the Securities and Exchange Commission on April 15, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------
MARKS BROS. JEWELERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-1433610
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
155 N. Wacker Drive
Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
Marks Bros. Jewelers, Inc. 1998 Non-Employee Director Stock Option Plan
(Full title of the plan)
John R. Desjardins
Executive Vice President, Finance and Administration
Marks Bros. Jewelers, Inc.
155 N. Wacker Drive
Chicago, Illinois 60606
(Name and address of agent for service)
(312) 782-6800
(Telephone number, including
area code, of agent for service)
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
Proposed Proposed
Maximum Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price Registration Fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value(2) 25,000 shares $17.50, $19.94 $493,278.40 $146
===============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
and, pursuant to Rule 457(h) under the Securities Act of 1933, as
amended, based upon (i) as to options to purchase 2,140 shares of
Common Stock, a weighted average purchase price of $17.50 per share and
(ii) as to 22,860 shares of Common Stock relating to options available
for grant, the average of the high and low prices of the Common Stock
of the Company reported on the Nasdaq National Market on April 13,
1998, which was $19.94.
(2) Includes 25,000 associated rights ("Rights") to purchase 1/100 of a
share of Series A Junior Participating Preferred Stock, par value $.001
per share. Rights initially are attached to and trade with the Common
Stock of the Registrant. The value attributable to such Rights, if any,
is reflected in the market price of the Common Stock.
================================================================================
<PAGE> 2
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 the 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 DOCUMENTS BY REFERENCE.
The following documents which have heretofore been filed by
Marks Bros. Jewelers, Inc. (the "Company" or the "Registrant"), with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference herein and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1997;
2. The Company's Quarterly Reports on Form 10-Q for each of
the three months ended April 30, 1997, July 31, 1997 and
October 31, 1997; and
3. The description of the Common Stock, par value $.001 per
share, ("Common Stock"), of the Company contained in the
Company's Report on Form 8-A, dated April 10, 1996.
All documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment to this Registration Statement
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 in this Registration Statement and made a part hereof from their
respective dates of filing (such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents").
Any statements contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 102(b)(7) of the General Corporation
Law of Delaware, Article Eighth of the Company's Restated Certificate of
Incorporation contains a provision providing that no director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director
II-1
<PAGE> 3
except for breach of the director's duty of loyalty to the Company or its
stockholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, unlawful payment of dividends,
unlawful stock redemptions or repurchases and transactions from which the
director or officer derived an improper personal benefit.
Section 145 of the General Corporation Law of Delaware permits
or requires indemnification of directors, officers and employees of a
corporation under certain conditions and subject to certain limitations. Article
Ninth of the Company's Restated Certificate of Incorporation and Article VI of
the Company's Restated Bylaws contain provisions for the indemnification of
directors, officers and employees of the Company generally within the
limitations of Section 145.
The Company has a directors' and officers' liability insurance
policy which provides for indemnification of its directors and officers against
certain liabilities incurred in their capacities as such, which may include
liabilities under the Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The exhibits accompanying this Registration Statement are
listed on the accompanying Exhibit Index. The Plan is not intended to be
qualified under Section 401(a) of the Internal Revenue Code.
ITEM 9. UNDERTAKINGS.
(a) The Company hereby undertakes:
(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
this 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 this 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 and 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;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this Registration
Statement or any material change to such
information in this Registration Statement;
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 by
the Company pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by
reference in this 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.
II-2
<PAGE> 4
(3) To remove from registration by means of a
post-effective amendment any of the shares of Common
Stock being registered hereby which remain unsold at
the termination of the offering.
(b) The Company hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each
filing of the Company'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 hereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers
and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company 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 Company of
expenses incurred or paid by a director, officer or
controlling person of the Company 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 Company 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.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Chicago, State of Illinois, on the 15th day of
April, 1998.
MARKS BROS. JEWELERS, INC.
By: /s/ John R. Desjardins
------------------------------------
John R. Desjardins
Executive Vice President, Finance and
Administration
POWER OF ATTORNEY AND SIGNATURES
The undersigned officers and directors of Marks Bros.
Jewelers, Inc. hereby severally constitutes and appoints Hugh M. Patinkin and
John R. Desjardins, and each of them singly, our true and lawful attorneys, with
full power to them and each of them singly, to sign for us in our names in the
capacities indicated below, all pre- effective and post-effective amendments to
this registration statement, and generally to do all things in our names and on
our behalf in such capacities to enable Marks Bros. Jewelers, Inc. to comply
with the provisions of the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities indicated and on the 15th day of April, 1998.
/s/ Hugh M. Patinkin Chairman, President and Chief Executive Officer
- ------------------------ (principal executive officer) and Director
Hugh M. Patinkin
/s/ John R. Desjardins Executive Vice President, Finance and
- ------------------------ Administration and Treasurer
John R. Desjardins (principal financial and accounting officer) and
Director
/s/ Matthew M. Patinkin Director
- ------------------------
Matthew M. Patinkin
/s/ Norman J. Patinkin Director
- ------------------------
Norman J. Patinkin
/s/ Jack A. Smith Director
- ------------------------
Jack A. Smith
/s/ Daniel H. Levy Director
- ------------------------
Daniel H. Levy
II-4
<PAGE> 6
EXHIBIT INDEX
The following documents are filed herewith or incorporated
herein by reference.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 of the Company's Registration Statement on Form S-1, as amended
(Commission File No. 333-1794) (the "Common Stock Registration Statement")).
4.2 Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 of the
Common Stock Registration Statement).
4.3 Stockholders Rights Plan (incorporated by reference to Exhibit
4.1 of the Company's Registration Statement on Forms S-1, as
amended (Commission File No. 333-04043) (the "Notes
Registration Statement")).
4.4 Certificate of Designation of Series A Junior Participating
Preferred Stock (incorporated by reference to Exhibit 4.2 of
the Common Stock Registration Statement).
5 Opinion of Sidley & Austin.
23.1 Consent of Independent Public Accountants.
23.2 Consent of Sidley & Austin (contained in Exhibit 5 hereto).
24.1 Powers of Attorney (included on signature page).
99.1 Marks Bros. Jewelers, Inc. 1998 Non-Employee Director Stock Option Plan.
</TABLE>
II-5
<PAGE> 1
EXHIBIT 5
April 15, 1998
Marks Bros. Jewelers, Inc.
155 N. Wacker Drive
Suite 500
Chicago, Illinois 60606
Re: Marks Bros. Jewelers, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We are counsel to Marks Bros. Jewelers, Inc., a Delaware
corporation (the "Company"), and have represented the Company in connection with
the Registration Statement on Form S-8 (the "Registration Statement") being
filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
issuance and delivery of up to 25,000 shares of common stock, par value $.001
per share, of the Company (the "Common Stock"), together with 25,000 Preferred
Stock Purchase Rights of the Company (the "Rights") associated therewith. The
terms of the Rights are set forth in the Stockholders Rights Agreement dated as
of May 1, 1996 (the "Rights Agreement") between the Company and The First
National Bank of Boston, as Rights Agent. Up to 25,000 shares of Common Stock
(the "Directors Plan Shares") may be issued and delivered pursuant to the
Company's 1998 Non-Employee Director Stock Option Plan (the "Directors Plan").
In rendering this opinion, we have examined and relied upon a
copy of the Directors Plan, and the Registration Statement. We have also
examined and relied upon originals, or copies of originals certified to our
satisfaction, of such agreements, documents, certificates and other statements
of governmental officials and other instruments, and have examined such
questions of law and have satisfied ourselves as to such matters of fact, as we
have considered relevant and necessary as a basis for this opinion. We have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to us for
our examination.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing under
the laws of the State of Delaware.
2. The Directors Plan Shares will be legally issued, fully
paid and nonassessable when (i) the Registration Statement shall have become
effective under the Securities Act; (ii) the Directors Plan Shares shall have
been duly issued and delivered in the manner contemplated by the Directors Plan;
and (iii) certificates representing the Directors Plan Shares shall have been
duly executed, countersigned and registered and duly delivered to the persons
entitled thereto against receipt of the agreed consideration therefor (not less
than the par value thereof) in accordance with the Directors Plan.
3. The Rights associated with the newly issued shares of
Common Stock referred to in paragraph 2 will be legally issued when such Rights
have been duly issued in accordance with the terms of the Rights Agreement and
such associated shares have been duly issued and delivered as set forth in
paragraphs 2.
This opinion is limited to the General Corporation Law of the
State of Delaware.
<PAGE> 2
Marks Bros. Jewelers, Inc.
April 15, 1998
Page 2
We do not find it necessary for the purposes of this opinion
to cover, and accordingly we express no opinion as to, the application of the
securities or "Blue Sky" laws of the various states to the issuance and delivery
of the Directors Plan Shares.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to all references to our Firm in or made a
part of the Registration Statement.
Very truly yours,
SIDLEY & AUSTIN
2
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
We consent to the incorporation by reference in this
registration statement of Marks Bros. Jewelers, Inc. on Form S-8 of our report
dated March 17, 1997, on our audits of the financial statements and financial
statement schedules of Marks Bros. Jewelers, Inc. as of January 31, 1997, and
1996 and for the years ended January 31, 1997, 1996 and 1995, which report is
included in the Marks Bros. Jewelers, Inc. Annual Report on Form 10-K for the
fiscal year ended January 31, 1997.
Chicago, Illinois
April 15, 1998
<PAGE> 1
EXHIBIT 99.1
MARKS BROS. JEWELERS, INC.
1998 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
I. INTRODUCTION
1.1 PURPOSES. The purposes of the 1998 Non-Employee Director
Stock Option Plan (the "Plan") of Marks Bros. Jewelers, Inc. (the "Company") are
(a) to align the interests of the Company's stockholders and the recipients of
options under this Plan by increasing the proprietary interest of such
recipients in the Company's growth and success, (b) to advance the interests of
the Company by attracting and retaining well-qualified persons who are not
officers or employees of the Company for service as directors of the Company and
(c) to motivate such non-employee directors to act in the long-term best
interests of the Company's stockholders.
1.2 CERTAIN DEFINITIONS.
"AGREEMENT" shall mean the written agreement evidencing an
option grant hereunder between the Company and the recipient of such option.
"BOARD" shall mean the Board of Directors of the Company.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COMMITTEE" shall mean the Committee designated by the Board,
consisting of two or more members of the Board, each of whom shall be a
"Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange Act.
"COMMON STOCK" shall mean the common stock, $.001 par value,
of the Company.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"FAIR MARKET VALUE" shall mean the average of the high and low
transaction prices of a share of Common Stock as reported in the National
Association of Securities Dealers Automated Quotation National Market System on
the date as of which such value is being determined, or, if the Common Stock is
listed on a national securities exchange, the average of the high and low
transaction prices of a share of Common Stock on the principal national stock
exchange on which the Common Stock is traded on the date as of which such value
is being determined, or, if there shall be no reported transactions for such
date, on the next preceding date for which transactions were reported; provided,
however, that if Fair Market Value for any date cannot be so determined, Fair
Market Value shall be determined by the Committee by whatever means or method as
the Committee, in the good faith exercise of its discretion, shall at such time
deem appropriate.
"MATURE SHARES" shall mean shares of Common Stock for which
the holder thereof has good title, free and clear of all liens and encumbrances
and which such holder either (a) has held for at least six months or (b) has
purchased on the open market.
"NON-EMPLOYEE DIRECTOR" shall mean any director of the Company
who is not an officer or employee of the Company or any subsidiary of the
Company (except in the definition of Committee, in which case "Non-Employee
Director" shall have the meaning set forth in Rule 16b-3 under the Exchange
Act).
1.3 ADMINISTRATION. This Plan shall be administered by the
Committee. Options which are not incentive stock options within the meaning of
Section 422 of the Code may be granted under this Plan to eligible
-1-
<PAGE> 2
persons. The Committee shall, subject to the terms of this Plan, select eligible
persons for participation in this Plan and determine the number of shares of
Common Stock subject to an option, the exercise price, the time and conditions
of exercise of the option and all other terms and conditions of the option,
including, without limitation, the form of the Agreement evidencing the option.
The Committee shall, subject to the terms of this Plan, interpret this Plan and
the application thereof, establish rules and regulations it deems necessary or
desirable for the administration of this Plan and may impose, incidental to the
grant of an option, conditions with respect to the option, such as limiting
competitive employment or other activities. All such interpretations, rules,
regulations and conditions shall be conclusive and binding on all parties.
The Committee may delegate such of its power and authority
hereunder to the Chief Executive Officer or other executive officer of the
Company as the Committee deems appropriate; provided, however, that the
Committee may not delegate its power and authority with regard to the selection
for participation in this Plan of a person subject to Section 16 of the Exchange
Act or decisions concerning the timing, pricing or amount of an award to such
person.
No member of the Board of Directors or Committee, and neither
the Chief Executive Officer nor any other executive officer to whom the
Committee delegates any of its power and authority hereunder, shall be liable
for any act, omission, interpretation, construction or determination made in
connection with this Plan in good faith, and the members of the Board of
Directors and the Committee and the President and Chief Executive Officer or
other executive officer shall be entitled to indemnification and reimbursement
by the Company in respect of any claim, loss, damage or expense (including
attorneys' fees) arising therefrom to the full extent permitted by law, except
as otherwise may be provided in the Company's Certificate of Incorporation
and/or Bylaws, as the same may be amended or restated from time to time, and
under any directors' and officers' liability insurance that may be in effect
from time to time.
A majority of the Committee shall constitute a quorum. The
acts of the Committee shall be either (a) acts of a majority of the members of
the Committee present at any meeting at which a quorum is present or (b) acts
approved in writing by all of the members of the Committee without a meeting.
1.4 ELIGIBILITY. Non-Employee Directors shall be eligible to
participate in this Plan in accordance with Article II.
1.5 SHARES AVAILABLE. Subject to adjustment as provided in
Section 3.6, 25,000 shares of Common Stock shall be available under this Plan,
reduced by the sum of the aggregate number of shares of Common Stock which
become subject to outstanding options. To the extent that shares of Common Stock
subject to an outstanding option are not issued or delivered by reason of the
expiration, termination, cancellation or forfeiture of such option or by reason
of the delivery or withholding of shares of Common Stock to pay all or a portion
of the exercise price of an option, then such shares of Common Stock shall again
be available under this Plan.
Shares of Common Stock to be delivered under this Plan shall
be made available from authorized and unissued shares of Common Stock, or
authorized and issued shares of Common Stock reacquired and held as treasury
shares or otherwise or a combination thereof.
II. STOCK OPTION GRANTS
2.1 ELIGIBILITY. Each Non-Employee Director shall be eligible
to be granted options to purchase shares of Common Stock in accordance with this
Article II.
2.2 ELECTIONS. Before the beginning of each fiscal quarter
that commences on or after February 1, 1998, each Non-Employee Director may
elect to receive all or a designated amount of his or her director's fee for the
quarter in the form of stock options.
2.3 GRANTS OF STOCK OPTIONS. Each electing Non-Employee
Director shall be granted stock options as follows:
(a) Option Price and Number of Shares. On the first day of
each fiscal quarter (February 1 - April 30, May 1 - July 31, August 1 - October
31, November 1 - January 31) each Non-Employee Director who has so elected in
accordance with Section 2.2 shall be granted an option to purchase that number
of shares of Common Stock as determined under the formula set forth below at a
purchase price per share equal to the Fair Market Value of a share of Common
Stock on the date of grant of such option:
-2-
<PAGE> 3
(i) The number of shares of Common Stock to be covered by the
option shall be determined by (1) dividing the amount of the director's
fee for the fiscal quarter so elected to be paid in the form of stock
options by the Fair Market Value of a share of Common Stock on the date
of grant,(2) multiplying the number determined under clause (1) by
three and (3) rounding down the number determined under clause (2) to
the nearest whole share.
(ii) Any portion of the amount of the director's fee for a
fiscal quarter that has been elected to be paid in the form of stock
option but that cannot be converted into an option for a whole share of
Common Stock shall be forfeited.
(b) Option Period and Exercisability. Except as otherwise
provided herein, each option granted under the Plan shall become fully
exercisable at the end of the fiscal quarter in which its date of grant occurs.
Each option granted under this Article II shall expire ten years after its date
of grant. An exercisable option, or portion thereof, may be exercised in whole
or in part only with respect to whole shares of Common Stock.
(c) Method of Exercise. An option may be exercised (i) by
giving written notice to the Company specifying the number of whole shares of
Common Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company's satisfaction) either (1) in
cash, (2) by delivery of Mature Shares having a Fair Market Value, determined as
of the date of exercise, equal to the aggregate purchase price payable by reason
of such exercise, (3) in cash by a broker-dealer acceptable to the Company to
whom the optionee has submitted an irrevocable notice of exercise or (4) a
combination of (1) and (2), in each case to the extent set forth in the
Agreement relating to the option and (ii) by executing such documents as the
Company may reasonably request. The Committee shall have sole discretion to
disapprove of an election pursuant to any of clauses (2)-(4). Any fraction of a
share of Common Stock which would be required to pay such purchase price shall
be disregarded and the remaining amount due shall be paid in cash by the
optionee. No certificate representing Common Stock shall be delivered until the
full purchase price therefor has been paid.
2.4 TERMINATION OF DIRECTORSHIP.
(a) Death. If the holder of an option ceases to be a director
of the Company by reason of death, each such option held by such holder shall be
fully exercisable and may thereafter be exercised by such holder's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be, until the earliest to occur of the (i) date which is one year after the
date of death and (ii) the expiration date of the term of such option.
(b) Other Termination. If the holder of an option ceases to be
a director of the Company for any reason other than death, each such option held
by such holder shall be exercisable only to the extent such option is
exercisable on the effective date of such holder's ceasing to be a director and
may thereafter be exercised by such holder (or such holder's legal
representative or similar person) until the earliest to occur of the (i) date
which is three months after the effective date of such holder's ceasing to be a
director and (ii) the expiration date of the term of such option.
(c) Death Following Termination of Directorship. If the holder
of an option dies during the three-month period following such holder's ceasing
to be a director of the Company for any reason other than death, each such
option held by such holder shall be exercisable only to the extent that such
option is exercisable on the date of the holder's death and may thereafter be
exercised by the holder's executor, administrator, legal representative,
beneficiary or similar person, as the case may be, until the earliest to occur
of the (i) date one year after the date of death and (ii) the expiration date of
the term of such option.
III. GENERAL
3.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan is effective as
of February 1, 1998. This Plan shall terminate ten years after its effective
date unless terminated earlier by the Board. Termination of this Plan shall not
affect the terms or conditions of any award granted prior to termination.
Options may be granted hereunder at any time prior to the termination of this
Plan, provided that no option may be granted later than ten years after the
effective date of this Plan.
3.2 AMENDMENTS. The Board may amend this Plan as it shall deem
advisable. No amendment may impair the rights of a holder of an outstanding
option without the consent of such holder.
-3-
<PAGE> 4
3.3 AGREEMENT. Each option granted under this Plan shall be
evidenced by an Agreement setting forth the terms and conditions applicable to
such option. No option shall be valid until an Agreement is executed by the
Company and the recipient of such option and, upon execution by each party and
delivery of the Agreement to the Company, such option shall be effective as of
the effective date set forth in the Agreement.
3.4 NON-TRANSFERABILITY OF STOCK OPTIONS. No option shall be
transferable other than (i) by will, the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company or (ii)
as otherwise set forth in the Agreement relating to such option. Except to the
extent permitted by the foregoing sentence, each option may be exercised or
settled during the participant's lifetime only by the holder or the holder's
legal representative or similar person. Except as permitted by the second
preceding sentence, no option may be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar process. Upon
any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of any option, such option and all rights thereunder shall
immediately become null and void.
3.5 RESTRICTIONS ON SHARES. Each option granted hereunder
shall be subject to the requirement that if at any time the Company determines
that the listing, registration or qualification of the shares of Common Stock
subject to such award upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the delivery
of shares thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
3.6 ADJUSTMENT. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities available under
this Plan, the number and class of securities subject to each outstanding option
and the purchase price per security, shall be appropriately adjusted by the
Committee, such adjustments to be made without an increase in the aggregate
purchase price. The decision of the Committee regarding any such adjustment
shall be final, binding and conclusive. If any such adjustment would result in a
fractional security being subject to an option under this Plan, such fractional
security shall be disregarded.
3.7 NO RIGHT OF CONTINUED SERVICE. Neither this Plan nor any
option granted hereunder shall confer upon any person any right to continued
service as a director of the Company.
3.8 RIGHTS AS STOCKHOLDER. No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an option hereunder unless
and until such person becomes a stockholder of record with respect to such
shares of Common Stock or equity security.
3.9 GOVERNING LAW. This Plan, each option granted hereunder
and the related Agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the Code or the laws
of the United States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.
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