As filed with the Securities and Exchange Commission on July 21, 1998
Registration No 333-_____________
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MOTHERS WORK, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 13-3045573
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
456 North 5th Street, Philadelphia, Pennsylvania 19123
(Address, including zip code,
of principal executive offices)
1987 STOCK OPTION PLAN
(Full title of the plans)
Rebecca C. Matthias, President
456 North 5th Street
Philadelphia, Pennsylvania 19123
(Name and address of agent for service)
(215) 873-2200
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================================
Proposed Proposed
Title of Securities Amount to Be Maximum Offering Maximum Aggregate Amount of
to Be Registered Registered (1) Price Per Share (2) Offering Price (2) Registration Fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 500,000 shares $ 7.31 $ 3,655,000.00 $ 1,079.00
$.01 per share
==========================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(b), there shall also be deemed covered hereby such
additional securities as may result from anti-dilution adjustments
under the 1987 Stock Option Plan (the "Stock Option Plan").
(2) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
*
Item 2. Registrant Information and Employee Plan Annual Information.
*
- -------------------------
* All documents furnished to the participants in the Stock Option Plan,
the Director Stock Option Plan, the Employee Stock Purchase Plan and
the 401(k) Plan pursuant to Rule 428 contain the information required
by Part I of Form S-8 under the Securities Act of 1933, as amended (the
"Securities Act"), and are on file at the Registrant's principal
executive offices.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Pursuant to General Instruction E of Form S-8, this Registration
Statement is being filed in order to register additional shares of Common Stock,
par value $.01 per share (the "Common Stock"), of Mothers Work, Inc. (the
"Company"), with respect to the currently effective Registration Statements on
Form S-8 of the Company relating to a certain employee benefit plan of the
Company.
The contents of the Registration Statement on Form S-8 as filed on June
17, 1993, Registration No. 33-64580, as the same may be hereafter amended, the
contents of the Registration Statement on Form S-8 as filed on February 27,
1995, Registration No. 33-89726, as the same may be hereafter amended, and the
contents of the Registration Statement on Form S-8 as filed on March 18, 1996,
Registration No. 333-02404, as the same may be hereafter amended, are
incorporated by reference into this Registration Statement.
Item 5. Interests of Named Experts and Counsel.
The validity of the Common Stock registered hereunder has been passed
upon for the Company by Pepper Hamilton LLP. Elam M. Hitchner, III, a partner of
Pepper Hamilton LLP and a member of the Company's Board of Directors, owns
30,000 shares of Common Stock and options to purchase an additional 8,000 shares
of Common Stock.
<PAGE>
Item 8. Exhibits.
Exhibit No. Description
----------- -----------
4.1 1987 Stock Option Plan (as amended and restated)
5.1 Opinion of Pepper Hamilton LLP
23.1 Consent of Independent Accountants
23.2 Consent of Pepper, Hamilton & Scheetz (Included in
Exhibit 5)
24.1 Power of Attorney (See Signature Page at pages 3-4)
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Philadelphia, Pennsylvania, on July 21, 1998.
MOTHERS WORK, INC.
By: /s/ DAN W. MATTHIAS
----------------------------------------
Dan W. Matthias
Chairman of the Board and
Chief Executive Officer (the principal
executive officer)
By: /s/ THOMAS FRANK
----------------------------------------
Thomas Frank
Chief Financial Officer and
Vice President - Finance (the principal
financial officer and the principal
accounting officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Dan W. Matthias and Rebecca C.
Matthias, and each or any of them, his true and lawful attorney-in-fact and
agents, with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, or any
registration statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or 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, or any of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on July 21, 1998
in the capacities indicated.
/s/ DAN W. MATTHIAS
-----------------------------------------------
Dan W. Matthias
Chairman of the Board and
Chief Executive Officer (the
principal executive officer)
[EXECUTIONS CONTINUED]
3
<PAGE>
/s/ REBECCA C. MATTHIAS
-----------------------------------------------
Rebecca C. Matthias
President, Chief Operating Officer
and Director
/s/ THOMAS FRANK
-----------------------------------------------
Thomas Frank
Chief Financial Officer and Vice
President - Finance (the principal
financial officer and the principal
accounting officer)
/s/ VERNA K. GIBSON
-----------------------------------------------
Verna K. Gibson
Director
/s/ JOSEPH A. GOLDBLUM
-----------------------------------------------
Joseph A. Goldblum
Director
/s/ ELAM M. HITCHNER,III
-----------------------------------------------
Elam M. Hitchner, III
Director
/s/ WALTER F. LOEB
-----------------------------------------------
Walter F. Loeb
Director
/s/ WILLIAM L. RULON-MILLER
-----------------------------------------------
William L. Rulon-Miller
Director
4
EXHIBIT 4.1
MOTHERS WORK, INC.
AMENDED AND RESTATED
STOCK OPTION PLAN
Section 1. Purposes.
The purposes of the Plan are (a) to recognize and compensate selected
employees and consultants of the Company and its Subsidiaries who contribute to
the development and success of the Company and its Subsidiaries; (b) to maintain
the competitive position of the Company and its Subsidiaries by attracting and
retaining employees and consultants; and (c) to provide incentive compensation
to such employees and consultants based upon the Company's performance as
measured by the appreciation in Common Stock. The Options granted pursuant to
the Plan are intended to constitute either incentive stock options within the
meaning of Section 422 of the Code, or non-qualified stock options, as
determined by the Board or the Committee at the time of grant. The type of
Options granted will be specified in the Option Agreement between the Company
and the recipient of the Options. The terms of this Plan shall be incorporated
in the Option Agreement to be executed by the Optionee.
Section 2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company, as
constituted from time to time.
(b) "Change of Control" shall mean the occurrence of any of the following
events:
(i) the acquisition in one or more transactions by any "Person" (as
the term person is used for purposes of Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial
Ownership" (as the term beneficial ownership is used for purposes of Rule 13d-3
promulgated under the 1934 Act) of fifty percent (50%) or more of the combined
voting power of the Company's then outstanding voting securities (the "Voting
Securities"), provided that for purposes of this Section 2(b)(i), the Voting
Securities acquired directly from the Company by any Person shall be excluded
from the determination of such Person's Beneficial Ownership of Voting
Securities (but such Voting Securities shall be included in the calculation of
the total number of Voting Securities then outstanding); or
(ii) Approval by shareholders of the Company of (A) a merger,
reorganization or consolidation involving the Company if the shareholders of the
Company immediately before such merger, reorganization or consolidation do not
or will not own directly or indirectly immediately following such merger,
reorganization or consolidation, more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the corporation resulting
from or surviving such merger, reorganization or consolidation in substantially
the same proportion as their ownership of the Voting Securities immediately
before such merger, reorganization or consolidation, or (B)(1) a complete
liquidation or dissolution of the Company or (2) an agreement for the sale or
other disposition of all or substantially all of the assets of the Company; or
<PAGE>
(iii) Acceptance by shareholders of the Company of shares in a share
exchange if the shareholders of the Company immediately before such share
exchange do not or will not own directly or indirectly immediately following
such share exchange more than fifty percent (50%) of the combined voting power
of the outstanding voting securities of the corporation resulting from or
surviving such share exchange in substantially the same proportion as the
ownership of the Voting Securities outstanding immediately before such share
exchange.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Committee appointed by the Board in
accordance with Section 4(a) of the Plan, if one is appointed, in which event,
in connection with this Plan, the Committee shall possess all of the power and
authority of, and shall be authorized to take any and all actions required to be
taken hereunder by, and make any and all determinations required to be made
hereunder by, the Board.
(e) "Company" shall mean Mothers Work, Inc., a Delaware corporation.
(f) "Common Stock" shall mean common stock of the Company, $.01 par value
per share.
(g) "Consultant" shall mean any person associated with the Company or any
Subsidiary who is engaged by the Company or a Subsidiary to render services and
is compensated by the Company or a Subsidiary for such services, including but
not limited to, an advisor, independent contractor or Non-Employee Director.
(h) "Disability" or "Disabled" shall mean the inability of a Participant or
Optionee, as the case may be, to perform his or her normal employment duties for
the Company resulting from a mental or physical illness, impairment or any other
similar occurrence which can be expected to result in death or which has lasted
or can be expected to last for a period of twelve (12) consecutive months, as
determined by the Board of Directors.
(i) "Employee" shall mean any person (including officers) employed by the
Company or any Subsidiary. A director of the Company or any Subsidiary shall not
be considered to be employed by the Company or any Subsidiary for purposes of
this Plan solely by reason of serving as such director or receiving compensation
from the Company or any Subsidiary for serving as such director.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect from time to time.
(k) "Fair Market Value" shall mean the fair market value of a share of
Common Stock, as determined pursuant to Section 7 hereof.
(l) "Non-Employee Director" shall have the meaning set forth in Rule
16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission under the
Exchange Act, or any successor definition adopted by the Securities and Exchange
Commission; provided, however, that if the Board or Committee (as applicable)
deems it necessary or desirable to comply with Section 162(m) of the Code and
applicable regulations thereunder, the Board or Committee shall ensure that each
Non-Employee Director also qualifies as an "outside director" as that term is
defined in the regulations under Section 162(m) of the Code.
2
<PAGE>
(m) "Option" shall mean an incentive stock option or non-qualified stock
option to purchase Common Stock that is granted pursuant to the Plan.
(n) "Option Agreement" shall mean a written agreement in such form or forms
as the Board (subject to the terms and conditions of this Plan) may from time to
time approve evidencing and reflecting the terms of an Option.
(o) "Optionee" shall mean a Participant to whom an Option is granted.
(p) "Participant" shall mean each Employee and Consultant.
(q) "Plan" shall mean the Mothers Work Stock Option Plan (As Amended and
Restated, Effective December 9, 1997), formerly the Mothers Work 1987 Option
Plan, prior to amendment and restatement.
(r) "Proprietary Information" shall mean any and all confidential,
proprietary, business and technical information or trade secrets of the Company
or of any Subsidiary or affiliate of the Company revealed, obtained or developed
in the course of Optionee's employment with the Company or in the course of
Optionee's performance of services for the Company in any other capacity. Such
Proprietary Information shall include but shall not be limited to, methods of
production and manufacture, research, marketing and development plans and
efforts, cost information, pricing information, marketing methods and plans,
identities of customers and suppliers, the Company's relationship with actual or
potential customers and the needs and requirements of any such actual or
potential customers, and any other confidential information relating to the
business of the Company. Proprietary Information shall not include (i) such
information as may be necessary or appropriate for an Optionee to disclose in
the course of his employment or other service for the effective and efficient
discharge of his duties as an employee or consultant of the Company or as may be
required by law to be disclosed; and (ii) such information as is readily
available to the general public so long as such information did not become
available to the general public as a direct or indirect result of Optionee's
breach of his obligation to maintain confidentiality.
(s) "Securities Act" shall mean the Securities Act of 1933, as in effect
from time to time.
(t) "Shares" shall mean shares of Common Stock.
(u) "Stock Purchase Agreement" shall mean an agreement in such form as the
Board may from time to time approve (subject to the terms and conditions of this
Plan), which an Optionee may be required to execute as a condition of purchasing
Shares upon exercise of an Option.
(v) "Subsidiary" shall mean a subsidiary corporation of the Company,
whether now or hereafter existing, as defined in Sections 424(f) and (g) of the
Code.
3
<PAGE>
Section 3. Participation.
The Board may grant Options at any time and from time to time to
Participants who shall be selected by the Board. Options may be granted only to
Participants; provided that a Participant who is a Consultant shall be eligible
only for Options that are non-qualified Options. Any grant of Options may
include or exclude any Participant, as the Board shall determine in its sole
discretion. A Participant who has been granted an Option, if he or she is
otherwise eligible, may be granted additional Options.
Section 4. Administration.
(a) Procedure. The Plan shall be administered by the Board or a Committee
consisting of not less than two persons appointed by the Board; provided that if
the Company has a class of equity securities registered under Section 12 of the
Exchange Act, each such person shall be a Non-Employee Director. Members of the
Board or the Committee who are eligible for Options or have been granted Options
may vote on any matters affecting the administration of the Plan or the grant of
any Options pursuant to the Plan, except that no such member shall act upon the
granting of an Option to himself or herself, but any such member may be counted
in determining the existence of a quorum at any meeting of the Board or
Committee during which action is taken with respect to the granting of Options
to himself or herself.
If a Committee is appointed by the Board, the Committee shall have the
power to administer the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. Members of the Committee shall serve for
such period of time as the Board may determine. From time to time the Board may
increase the size of the Committee and appoint additional members thereto,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan.
(b) Powers of the Board and the Committee. Subject to the provisions of the
Plan, the Board or its Committee shall have the authority, in its discretion:
(i) to grant Options; (ii) to determine the Fair Market Value per Share in
accordance with Section 7 of the Plan; (iii) to determine the exercise price of
the Options to be granted in accordance with Sections 6 and 7 of the Plan; (iv)
to determine the Participants to whom, and the time or times at which, Options
shall be granted, and the number of Shares to be subject to each Option; (v) to
prescribe, amend and rescind rules and regulations relating to the Plan; (vi) to
determine the terms and provisions of each Option granted under the Plan, each
Option Agreement and each Stock Purchase Agreement (which need not be identical
with the terms of other Options, Option Agreements and Stock Purchase
Agreements) and, with the consent of the Optionee, to modify or amend an
outstanding Option, Option Agreement or Stock Purchase Agreement; (vii) to
accelerate the exercise date of any Option; (viii) to determine whether any
Participant will be required to execute a stock repurchase agreement or other
agreement as a condition to the exercise of an Option, and to determine the
terms and provisions of any such agreement (which need not be identical with the
terms of any other such agreement) and, with the consent of the Optionee, to
amend any such agreement; (ix) to interpret the Plan or any agreement entered
into with respect to the grant or exercise of Options; (x) to authorize any
person to execute on behalf of the Company any instrument required to effectuate
the grant of an Option previously granted by the Board or to take such other
actions as may be necessary or appropriate with respect to the Company's rights
pursuant to Options or agreements relating to the grant or exercise thereof; and
(xi) to make such other determinations and establish such other procedures as it
deems necessary or advisable for the administration of the Plan.
4
<PAGE>
(c) Effect of the Board's or Committee's Decision. All decisions,
determinations and interpretations of the Board or the Committee shall be final
and binding on all Optionees and any other holders of any Options granted under
the Plan.
(d) Limitation of Liability. Notwithstanding anything herein to the
contrary, no member of the Board or of the Committee shall be liable for any
good faith determination, act or failure to act in connection with the Plan or
any Option granted hereunder.
Section 5. Stock Subject to the Plan.
Subject to this Section 5 and to the provisions of Section 8 of the Plan,
the maximum aggregate number of Shares which may be optioned and sold under the
Plan is One Million Two Hundred Twenty Five Thousand (1,225,000), which amount
consists of the 725,000 Shares available for grant under the Plan prior to its
amendment and restatement and an additional 500,000 Shares authorized for grant
under the amended and restated Plan. Options may be either incentive stock
options or non-qualified stock options, as determined by the Board. If an Option
expires or becomes unexercisable for any reason without having been exercised in
full, the Shares subject to such Option shall, unless the Plan shall have been
terminated, return to the Plan and become available for future grant under the
Plan. Notwithstanding the foregoing, no individual shall receive, over the term
of the Plan, Options for more than an aggregate of Six Hundred Thousand
(600,000) Shares.
Section 6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be authorized by the Board
and shall be evidenced by an Option Agreement. Each Option Agreement shall
incorporate by reference all other terms and conditions of the Plan, and shall
contain the following terms and conditions:
(a) Number of Shares. The number of shares subject to the Option.
(b) Option Price. The price per share payable on the exercise of any Option
shall be stated in the Option Agreement and shall be no less than the Fair
Market Value per share of the Common Stock on the date such option is granted,
without regard to any restriction other than a restriction which will never
lapse. Notwithstanding the foregoing, if an Option which is an incentive stock
Option shall be granted under this Plan to any person who, at the time of the
grant of such Option, owns capital stock possessing more than 10% of the total
combined voting power of all classes of the Company's capital stock, the price
per share payable upon exercise of such incentive stock Option shall be no less
than 110 percent (110%) of the Fair Market Value per share of the Common Stock
on the date such Option is granted.
(c) Consideration. The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Board and may consist entirely of cash, check, promissory notes or Shares
having a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, or any
combination of such methods of payment, or such other consideration and method
of payment permitted under any laws to which the Company is subject which is
approved by the Board. In making its determination as to the type of
consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.
5
<PAGE>
(i) If the consideration for the exercise of an Option is a promissory
note, it may, in the discretion of the Board, be either full recourse or
nonrecourse and shall bear interest at a per annum rate which is not less than
the applicable federal rate determined in accordance with Section 1274(d) of the
Code as of the date of exercise. In such an instance, the Company may, in its
sole discretion, retain the Shares purchased upon exercise of the Option in
escrow as security for payment of the promissory note.
(ii) If the consideration for the exercise of an Option is the surrender of
previously acquired and owned Shares, the Optionee will be required to make
representations and warranties satisfactory to the Company regarding his title
to the Shares used to effect the purchase (the "Payment Shares"), including
without limitation, representations and warranties that the Optionee has good
and marketable title to such Payment Shares free and clear of any and all liens,
encumbrances, charges, equities, claims, security interests, options or
restrictions, and has full power to deliver such Payment Shares without
obtaining the consent or approval of any person or governmental authority other
than those which have already given consent or approval in a manner satisfactory
to the Company. The value of the Payment Shares shall be the Fair Market Value
of such Payment Shares on the date of exercise as determined by the Board in its
sole discretion, exercised in good faith. If such Payment Shares were acquired
upon previous exercise of incentive stock options granted within two years prior
to the exercise of the Option or acquired by the Optionee within one year prior
to the exercise of the Option, such Optionee shall be required, as a condition
to using the Payment Shares in payment of the exercise price of the Option, to
acknowledge the tax consequences of doing so, in that such previously exercised
incentive stock options may have, by such action, lost their status as incentive
stock options, and the Optionee may have to recognize ordinary income for tax
purposes as a result.
(d) Form of Option. The Option Agreement will state whether the Option
granted is an incentive stock option or a non-qualified stock option, and will
constitute a binding determination as to the form of Option granted.
(e) Exercise of Options. Any Option granted hereunder shall be exercisable
at such times and under such conditions as shall be set forth in the Option
Agreement (as may be determined by the Board and as shall be permissible under
the terms of the Plan), which may include performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible under the terms of
the Plan; provided however, that any Option granted hereunder which is
outstanding but not vested seven (7) years after the date of award shall become
vested at that time.
An Option may be exercised in accordance with the provisions of this Plan
as to all or any portion of the Shares then exercisable under an Option from
time to time during the term of the Option. An Option may not be exercised for a
fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company at its principal executive office in
accordance with the terms of the Option Agreement by the person entitled to
exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company, accompanied by any
agreements required by the terms of the Plan and/or Option Agreement, including
an executed Stock Purchase Agreement. Full payment may consist of such
consideration and method of payment allowable under Section 6 of the Plan. No
adjustment shall be made for a dividend or other right for which the record date
is prior to the date the Option is exercised, except as provided in Section 8 of
the Plan.
6
<PAGE>
As soon as practicable after any proper exercise of an Option in accordance
with the provisions of the Plan, the Company shall, without transfer or issue
tax to the Optionee, deliver to the Optionee at the principal executive office
of the Company or such other place as shall be mutually agreed upon between the
Company and the Optionee, a certificate or certificates representing the Shares
for which the Option shall have been exercised. The time of issuance and
delivery of the certificate(s) representing the Shares for which the Option
shall have been exercised may be postponed by the Company for such period as may
be required by the Company, with reasonable diligence, to comply with any
applicable listing requirements of any national or regional securities exchange
or any law or regulation applicable to the issuance or delivery of such Shares.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(f) Term and Vesting of Options.
(i) Notwithstanding any other provision of this Plan, no Option shall
be (A) granted under this Plan after ten (10) years from the date on which this
Plan is adopted by the Board, or (B) exercisable more than ten (10) years from
the date of grant; provided, however, that if an incentive stock Option shall be
granted under this Plan to any person who, at the time of the grant of such
Option, owns stock possessing more than 10% of the total combined voting power
for all classes of the Company's stock, the foregoing clause (B) shall be read
by substituting "five (5) years" for the term "ten (10) years" that appears
therein.
(ii) No Option granted to any Optionee shall be treated as an
incentive stock option, to the extent such Option would cause the aggregate Fair
Market Value (determined as of the date of grant of each such Option) of the
Shares with respect to which incentive stock Options are exercisable by such
Optionee for the first time during any calendar year to exceed $100,000. For
purposes of determining whether an incentive stock Option would cause the
aggregate Fair Market Value of the stock to exceed the $100,000 limitation, such
incentive stock Options shall be taken into account in the order granted. For
purposes of this subsection, incentive stock Options include all incentive stock
options under all plans of the Company that are incentive stock option plans
within the meaning of Section 422 of the Code.
Except as provided in Section 6(g)(iv), Options granted hereunder shall
mature and become exercisable in whole or in part, in accordance with such
vesting schedule as the Board shall determine, which schedule shall be stated in
the Option Agreement. Options may be exercised in any order elected by the
Optionee whether or not the Optionee holds any unexercised Options under this
Plan or any other plan of the Company.
(g) Termination of Options.
(i) Unless sooner terminated as provided in this Plan, each Option
shall be exercisable for the period of time as shall be determined by the Board
and set forth in the Option Agreement, and shall be void and unexercisable
thereafter.
(ii) Except as otherwise provided herein or in the Option Agreement,
upon the termination of the Optionee's service with the Company for any reason,
Options exercisable on the date of termination of service shall be exercisable
by the Optionee (or in the case of the Optionee's death
7
<PAGE>
subsequent to termination of service, by the Optionee's executor(s) or
administrator(s)) for a period of three (3) months from the date of the
Optionee's termination of service.
(iii) Except as otherwise provided herein or in the Option Agreement,
upon the Disability or death of an Optionee while in the service of the Company,
Options held by such Optionee which are exercisable on the date of Disability or
death shall be exercisable for a period of twelve (12) months commencing on the
date of the Optionee's Disability or death, by the Optionee or his legal
guardian or, in the case of death, by his executor(s) or administrator(s);
provided, however, that if such disabled Optionee shall commence any employment
during such one (1) year period with a competitor of the Company (including, but
not limited to, full or part-time employment or independent consulting work), as
determined solely in the judgment of the Board, all Options held by such
Optionee which have not yet been exercised shall terminate immediately upon the
commencement thereof.
(iv) Options may be terminated at any time by agreement between the
Company and the Optionee.
(h) Forfeiture. Notwithstanding any other provision of this Plan, if the
Optionee's employment or other engagement is terminated by the Company and the
Board makes a determination that the Optionee (i) has engaged in any type of
disloyalty to the Company, including without limitation, fraud, embezzlement,
theft, or dishonesty in the course of his service, or (ii) has been convicted of
a felony or (iii) has disclosed any Proprietary Information without the consent
of the Company or (iv) has breached the terms of any written confidentiality
agreement or any non-competition agreement with the Company in any material
respect, all unexercised Options held by such Optionee shall terminate upon the
earlier of the date of termination of service for "cause" or the date of such a
finding.
Section 7. Determination of Fair Market Value of Common Stock.
(a) Except to the extent otherwise provided in this Section 7, the Fair
Market Value of a share of Common Stock shall be determined by the Board in its
sole discretion.
(b) In the event that Shares are traded in the over-the-counter market, the
Fair Market Value of a share of Common Stock shall be the mean of the bid and
asked prices for a share of Common Stock on the relevant valuation date as
reported in The Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ")), as applicable or, if there is no trading on such date, on
the next preceding trading date. In the event Shares are listed on a national or
regional securities exchange or traded in the NASDAQ National Market System, the
Fair Market Value of a share of Common Stock shall be the closing price of a
share of Common Stock on the exchange or on NASDAQ/NMS, as reported in The Wall
Street Journal on the relevant valuation date, or if there is no trading on that
date, on the next preceding trading date.
(c) "Adjusted Fair Market Value" shall mean in the event of a Change of
Control, the greater of (A) the highest price per share of Common Stock paid or
payable to holders of the Common Stock in any transaction (or series of
transactions) constituting or resulting (or as to which approval by shareholders
of the Company constitutes or results) in the Change of Control or (B) the
highest Fair Market Value of a share of Common Stock on any business day during
the ninety (90) day period ending on the date of the Change of Control.
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Section 8. Adjustments.
(a) Subject to required action by the shareholders, if any, the number of
shares of Common Stock as to which Options may be granted under this Plan and
the number of shares subject to outstanding Options and the option prices
thereof shall be adjusted proportionately for any increase or decrease in the
number of outstanding shares of Common Stock of the Company resulting from stock
splits, reverse stock splits, stock dividends, reclassifications and
recapitalizations.
(b) No fractional shares of Common Stock shall be issuable on account of
any action mentioned in paragraph 8(a) above, and the aggregate number of shares
into which Shares then covered by the Option, when changed as the result of such
action, shall be reduced to the number of whole shares resulting from such
action, unless the Board, in its sole discretion, shall determine to issue scrip
certificates with respect to any fractional shares, which scrip certificates, in
such event, shall be in a form and have such terms and conditions as the Board
in its discretion shall prescribe.
Section 9. Rights as a Shareholder.
The Optionee shall have no rights as a shareholder of the Company and shall
have neither the right to vote nor receive dividends with respect to any Shares
subject to an Option until such Option has been exercised.
Section 10. Time of Granting Options.
The date of grant of an Option shall, for all purposes, be the date on
which the Board authorizes the granting of such Option. Notice of the grant
shall be given to each Participant to whom an Option is so granted within a
reasonable time after the date of such grant.
Section 11. Modification, Extension and Renewal of Option.
Subject to the terms and conditions of the Plan, the Board may modify,
extend or renew an Option, or accept the surrender of an Option (to the extent
not theretofore exercised). Notwithstanding the foregoing, (a) no modification
of an Option which adversely affects an Optionee shall be made without the
consent of such Optionee, and (b) no incentive stock Option may be modified,
extended or renewed if such action would cause it to cease to be an "incentive
stock option" under the Code, unless the Optionee specifically acknowledges and
consents to the tax consequences of such action.
Section 12. Conditions to Issuance of Shares Upon Exercise.
(a) The obligation of the Company to issue and sell Shares to an Optionee
upon the exercise of an Option granted under the Plan is conditioned upon (i)
the Company obtaining any required permit or order from appropriate governmental
agencies, authorizing the Company to issue and sell such Shares, and (ii) such
issuance and sale complying with all relevant provisions of law, including,
without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed.
(b) At the option of the Board, the obligation of the Company to issue and
sell Shares to an Optionee upon the exercise of an Option granted under the Plan
may be conditioned upon obtaining appropriate representations, warranties and
agreements of the Optionee set forth in the Stock Purchase
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Agreement. Among other representations, warranties, restrictions and agreements,
the Optionee may be required to represent and agree that the purchase of Shares
of Common Stock under the Option Agreement shall be for investment, and not with
a view to the public resale or distribution thereof, unless the Shares subject
to the Option are registered under the Securities Act and the issuance and sale
of the Shares complies with all other laws, rules and regulations applicable
thereto. Unless the issuance of such Shares is registered under the Securities
Act, the Optionee shall acknowledge that the Shares purchased on exercise of the
Option are not registered under the Securities Act and may not be sold or
otherwise transferred unless such Shares have been registered under the
Securities Act in connection with the sale or other transfer, or counsel
satisfactory to the Company has issued an opinion satisfactory to the Company
that the sale or other transfer is exempt from registration under the Securities
Act, and unless said sale or other transfer is in compliance with any other
applicable laws, rules and regulations including all applicable federal and
state securities laws, rules and regulations. Unless the Shares subject to an
Option are registered under the Securities Act, the certificates representing
all Shares issued upon exercise of such Option shall contain the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY
APPLICABLE STATE SECURITIES LAWS. THESE SHARES HAVE NOT BEEN
ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR DISPOSED OF, BY GIFT OR OTHERWISE, OR
IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR A
SATISFACTORY OPINION OF COUNSEL SATISFACTORY TO MOTHERS WORK,
INC. THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND
UNDER APPLICABLE STATE SECURITIES LAWS.
Section 13. Transferability.
No Option shall be assignable or transferable otherwise than by will or by
the laws of descent and distribution, except as otherwise permitted by the
Board. During the lifetime of the Optionee, his Options shall be exercisable
only by him, or, in the event of his or her legal incapacity or illness, by his
legal guardian or representative, except as otherwise permitted by the Board.
Section 14. Other Provisions.
The Option Agreement and Stock Purchase Agreement may contain such other
provisions as the Board of Directors in its discretion deems advisable and which
are not inconsistent with the provisions of this Plan.
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Section 15. Change of Control.
(a) For purposes of the Plan, "Option Cancellation Date" shall mean, as to
each option, the later of: (i) the first business day after the expiration of a
period of six (6) months from the date of grant of the option; (ii) in the event
of a Change of Control as defined in Section 2(b)(ii)(A) or 2(b)(ii)(B)(2), the
date on which the transaction approved by shareholders of the Company (as
provided in Section 2(b)(ii)) is consummated; and (iii) in the event of a Change
of Control as defined in Section 2(b)(i) or 2(b)(iii), the first business day
after the expiration of a period of sixty (60) days after the occurrence of such
event.
(b) Upon a Change of Control, all Options (whenever granted) outstanding on
the date of such Change of Control shall be or become immediately and fully
exercisable.
(c) In the event of a Change of Control as defined in Section 2(b)(i),
2(b)(ii)(A), 2(b)(ii)(B)(2) or 2(b)(iii), all Options (whenever granted)
outstanding on the Option Cancellation Date which are not exercised on or before
the Option Cancellation Date shall be canceled on such date by the Company, and
the Company shall on such date pay to each holder of each such canceled Option a
cash amount equal to the excess, if any, in respect of each Option canceled, of
(i) the greater of (A) the Fair Market Value of the shares of Common Stock
subject to the Option on the business day immediately preceding the Option
Cancellation Date or (B) the Adjusted Fair Market Value of the Common Stock
subject to the Option over (ii) the aggregate purchase price for such shares of
Common Stock.
Section 16. Amendment of the Plan.
Insofar as permitted by law and the Plan, the Board may from time to time
suspend, terminate or discontinue the Plan or revise or amend it in any respect
whatsoever with respect to any Shares at the time not subject to an Option;
provided, however, that without approval of the shareholders, no such revision
or amendment may change the aggregate number of Shares for which Options may be
granted hereunder, change the designation of the class of persons eligible to
receive Options or decrease the price at which Options may be granted.
Any other provision of this Section 16 notwithstanding, the Board
specifically is authorized to adopt any amendment to this Plan deemed by the
Board to be necessary or advisable to assure that the incentive stock Options or
the non-qualified stock Options available under the Plan continue to be treated
as such, respectively, under the law.
Section 17. Application of Funds.
The proceeds received by the Company from the sale of shares pursuant to
the exercise of Options shall be used for general corporate purposes or such
other purpose as may be determined by the Company.
Section 18. No Obligation to Exercise Option.
The granting of an Option shall impose no obligation upon the Optionee to
exercise such Option.
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Section 19. Reservation of Shares.
The Company, during the term of this Plan, shall at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
The Company, during the term of this Plan, shall use its best efforts to
seek to obtain from appropriate regulatory agencies any requisite authorization
in order to issue and sell such number of Shares as shall be sufficient to
satisfy the requirements of the Plan. The inability of the Company to obtain
from any such regulatory agency having jurisdiction the requisite
authorization(s) deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any Shares hereunder, or the inability of the Company to
confirm to its satisfaction that any issuance and sale of any Shares hereunder
will meet applicable legal requirements, shall relieve the Company of any
liability in respect to the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
Section 20. Taxes, Fees, Expenses and Withholding of Taxes.
(a) The Company shall pay all original issue and transfer taxes (but not
income taxes, if any) with respect to the grant of Options and/or the issue and
transfer of Shares pursuant to the exercise thereof, and all other fees and
expenses necessarily incurred by the Company in connection therewith, and will
from time to time use its best efforts to comply with all laws and regulations
which, in the opinion of counsel for the Company, shall be applicable thereto.
(b) The grant of Options hereunder and the issuance of Shares pursuant to
the exercise thereof is conditioned upon the Company's reservation of the right
to withhold in accordance with any applicable law, from any compensation or
other amounts payable to the Optionee, any taxes required to be withheld under
federal, state or local law as a result of the grant or exercise of such Option
or the sale of the Shares issued upon exercise thereof. To the extent that
compensation or other amounts, if any, payable to the Optionee is insufficient
to pay any taxes required to be so withheld, the Company may, in its sole
discretion, require the Optionee, as a condition of the exercise of an Option,
to pay in cash to the Company an amount sufficient to cover such tax liability
or otherwise to make adequate provision for the Company's satisfaction of its
withholding obligations under federal, state and local law.
Section 21. Notices.
Any notice to be given to the Company pursuant to the provisions of this
Plan shall be addressed to the Company in care of its Secretary (or such other
person as the Company may designate from time to time) at its principal
executive office, and any notice to be given to an Optionee shall be delivered
personally or addressed to him or her at the address given beneath his or her
signature on his or her Option Agreement, or at such other address as such
Participant or his or her transferee (upon the transfer of the Shares purchased
upon exercise) may hereafter designate in writing to the Company. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, registered or certified, and deposited, postage
and registry or certification fee prepaid, in a post office or branch post
office regularly maintained by the United States Postal Service. It shall be the
obligation of each Optionee and each transferee holding Shares purchased upon
exercise of an Option to provide the Secretary of the Company, by letter mailed
as provided herein, with written notice of his or her direct mailing address.
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Section 22. No Enlargement of Optionee Rights.
This Plan is purely voluntary on the part of the Company, and the
continuance of the Plan shall not be deemed to constitute a contract between the
Company and any Optionee, or to be consideration for or a condition of the
employment or service of any Optionee. Nothing contained in this Plan shall be
deemed to give any Optionee the right to be retained in the employ or service of
the Company or any Subsidiary, or to interfere with the right of the Company or
any such corporation to discharge or retire any Optionee thereof at any time,
subject to applicable law. No Optionee shall have any right to or interest in
Options authorized hereunder prior to the grant thereof to such Optionee, and
upon such grant he shall have only such rights and interests as are expressly
provided herein, subject, however, to all applicable provisions of the Company's
Certificate of Incorporation, as the same may be amended from time to time.
Section 23. Invalid Provisions.
In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions
contained herein as invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the invalid or
unenforceable provision was not contained herein.
Section 24. Applicable Law.
This Plan shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania.
13
EXHIBIT 5.1
July 21, 1998
Mothers Work, Inc.
456 North 5th Street
Philadelphia, Pennsylvania 19123
Re: Registrations Statement on Form S-8
Ladies and Gentlemen:
We have acted as special counsel to Mothers Work, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") of a registration
statement (the "Registration Statement") of the Company on Form S-8 under the
Securities Act of 1933, as amended (the "Act"), relating to shares of common
stock, par value $.01 per share, of the Company (the "Common Stock") which may
be issued pursuant to the 1987 Stock Option Plan (the "Plan"), as more fully
described in the Registration Statement.
In this connection, we have examined the Registration Statement,
including the exhibits thereto, the originals or copies, certified or otherwise
identified to our satisfaction, of the Articles of Incorporation and the By-Laws
of the Company as amended to date, and such other documents and corporate
records relating to the Company as we have deemed appropriate for the purpose of
rendering the opinion expressed herein. We express no opinion concerning the
laws of any jurisdiction other than the federal law of the United States and the
Delaware General Corporation Law.
In all examinations of documents, instruments and other papers, we have
assumed the genuineness of all signatures on original and certified documents
and the conformity with original and certified documents of all copies submitted
to us as conformed, photostatic or other copies. As to matters of fact which
have not been independently established, we have relied upon representations of
officers of the Company.
On the basis of the foregoing, we are of the opinion that the Common
Stock when issued pursuant to and in accordance with the Plan, will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to the references to our firm therein.
Such consent does not constitute a consent under Section 7 of the Securities
Act, since we have not certified any part of the Registration Statement and do
not otherwise come within the categories of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Commission
promulgated thereunder.
Very truly yours,
PEPPER HAMILTON LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-8 of our report dated
November 14, 1997 included in Mothers Work, Inc.'s Form 10-K for the year ended
September 30, 1997 and to all references to our Firm in this registration
statement.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
July 21, 1998
