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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 8, 1998
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BLYTH INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-13026 36-2984916
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
100 Field Point Road, Greenwich, Connecticut 06830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 661-1926
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Not Applicable
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(Former name or former address, if changed since last report)
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The Current Report on Form 8-K, dated April 8, 1998, is hereby amended
and restated to read in its entirety as set forth below:
Item 5. Other Events.
On April 8, 1998, the Board of Directors unanimously approved an amendment
to the Amended and Restated 1994 Employee Stock Option Plan (the "Amended
Employee Plan"), subject to stockholder approval, to increase the number of
shares reserved for issuance upon exercise of options by an additional 500,000
shares. The Amended Employee Plan also includes an amendment (the "162(m)
Amendment") to limit the maximum option grants that may be made to an employee
in any calendar year to 100,000 shares (subject to adjustment for capital
changes). The purpose of the 162(m) Amendment is to assure that any options
granted under the Amended Employee Plan after the Annual Meeting of Stockholders
will qualify as "qualified performance-based compensation" under Section 162(m)
of the Internal Revenue Code of 1986, as amended. See Exhibit 4.1 attached
hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
4.1 Amended and Restated 1994 Employee Stock Option Plan of the Company
(for incorporation by reference into the Registrant's Registration
Statements on Form S-8 (Nos. 33-91954 and 333-50011); this form of
plan contains corrected section references and replaces the form of
plan attached to the Registrant's Current Report on Form 8-K dated
April 8, 1998)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BLYTH INDUSTRIES, INC.
Date: April 17, 1998 By: /s/ Bruce D. Kreiger
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Name: Bruce D. Kreiger
Title: Vice President &
General Counsel
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EXHIBIT 4.1
BLYTH INDUSTRIES, INC.
1994 EMPLOYEE STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF APRIL 8, 1998)
1. PURPOSE OF THE PLAN.
The purpose of the amended and restated BLYTH INDUSTRIES, INC. 1994
EMPLOYEE STOCK OPTION PLAN (the "Plan") is (i) to further the growth and success
of Blyth Industries, Inc., a Delaware corporation (the "Company"), and its
Subsidiaries (as hereinafter defined) by enabling officers and employees of the
Company and any of its Subsidiaries to acquire shares of Common Stock, $.02 par
value (the "Common Stock"), of the Company, thereby increasing their personal
interest in such growth and success, and (ii) to provide a means of rewarding
outstanding performance by such persons to the Company and/or its Subsidiaries.
Options granted under the Plan may be either "incentive stock options" ("ISOs"),
intended to qualify as such under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified stock options
("NSOs"). For purposes of the Plan, the terms "Parent" and "Subsidiary" shall
mean "Parent Corporation" and "Subsidiary Corporation", respectively, as such
terms are defined in Sections 424(e) and (f) of the Code. Unless the context
otherwise requires, any ISO or NSO shall hereinafter be referred to as an
"Option".
This amended and restated Plan (a) increases the number of shares
issuable upon exercise of options granted under the Plan by 500,000 shares to
1,880,000 shares, (b) limits the maximum option grants to an employee in any one
year to 100,000 shares, and (c) makes certain other changes, including changes
to reflect a three-for-two stock split effected as a stock dividend in June
1997.
2. ADMINISTRATION OF THE PLAN.
(a) STOCK OPTION COMMITTEE.
So long as the Plan shall be required to comply with Rule 16b-3 ("Rule
16b-3") promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), in order to
permit transactions pursuant to the Plan by officers and employee directors of
the Company to be exempt from the provisions of Section 16(b) of the 1934 Act,
the Plan shall be administered by a committee (the "Committee") consisting of
two or more directors appointed to such Committee from time to time by the Board
of Directors of the Company (the "Board"), and each member of the Committee, at
the effective date of his or her appointment to the Committee, shall be a
"non-employee director" within the meaning of Rule 16b-3. The members of the
Committee may be removed at any time either with or without cause by the Board.
Any vacancy on the Committee, whether due to action of the Board or any other
cause, shall be filled by the Board. The term "Committee" shall, for all
purposes of the Plan other than this Section 2, be deemed to refer to the Board
if the Board is administering the Plan.
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(b) PROCEDURES.
The Committee shall from time to time select a Chairman from among its
members and shall adopt such rules and regulations as it shall deem appropriate
concerning the holding of meetings and the administration of the Plan. A
majority of the entire Committee shall constitute a quorum and the actions of a
majority of the members of the Committee present at a meeting at which a quorum
is present, or actions approved in writing by all of the members of the
Committee, shall be the actions of the Committee; PROVIDED, HOWEVER, that if the
Committee consists of only two members, both shall be required to constitute a
quorum and to act at a meeting or to approve actions in writing.
(c) INTERPRETATION.
Except as otherwise expressly provided in the Plan, the Committee
shall have all powers with respect to the administration of the Plan, including,
without limitation, full power and authority to interpret the provisions of the
Plan and any Option Agreement (as defined in Section 5(b)), and to resolve all
questions arising under the Plan. All decisions of the Board or the Committee,
as the case may be, shall be conclusive and binding on all participants in the
Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN.
(a) NUMBER OF SHARES.
Subject to the provisions of Section 9 (relating to adjustments upon
changes in capital structure and other corporate transactions), the number of
shares of Common Stock subject at any one time to Options granted under the
Plan, plus the number of shares of Common Stock theretofore issued and delivered
pursuant to the exercise of Options granted under the Plan, shall not exceed
1,880,000 shares. If and to the extent that Options granted under the Plan
terminate, expire or are cancelled without having been fully exercised, new
Options may be granted under the Plan with respect to the shares of Common Stock
covered by the unexercised portion of such terminated, expired or cancelled
Options.
(b) CHARACTER OF SHARES.
The shares of Common Stock issuable upon exercise of an Option granted
under the Plan shall be (i) authorized but unissued shares of Common Stock, (ii)
shares of Common Stock held in the Company's treasury or (iii) a combination of
the foregoing.
(c) RESERVATION OF SHARES.
The number of shares of Common Stock reserved for issuance under the
Plan shall at no time be less than the maximum number of shares which may be
purchased at any time pursuant to outstanding Options.
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4. ELIGIBILITY.
(a) GENERAL.
Options may be granted by the Committee under the Plan only to persons
who are officers or employees (including directors who are officers or
employees) of the Company or any of its Subsidiaries. Options granted under the
Plan shall be, in the discretion of the Committee, either ISOs or NSOs.
Notwithstanding the foregoing, Options may be conditionally granted to persons
who are prospective employees of the Company or any of its Subsidiaries;
PROVIDED, HOWEVER, that any such conditional grant of an ISO to a prospective
employee shall, by its terms, become effective no earlier than the date on which
such person actually becomes an employee.
(b) EXCEPTIONS.
Notwithstanding anything contained in Section 4(a) to the contrary:
(i) no ISO may be granted under the Plan to an employee who
owns, directly or indirectly (within the meaning of Sections 422(b)(6)
and 424(d) of the Code), stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of its
Parent or Subsidiaries, if any, unless (A) the Option Price (as
defined in Section 6(a)) of the shares of Common Stock subject to such
ISO is fixed at not less than 110% of the Fair Market Value on the
date of grant (as determined in accordance with Section 6(b)) of such
shares and (B) such ISO, by its terms, is not exercisable after the
expiration of five years from the date it is granted; and
(ii) no Option may be granted to a person (A) who has been
appointed pursuant to Section 2(a) to serve on the Committee effective
as of a future date at any time during the period from the date such
appointment is made to the date such appointment is to become
effective or (B) who is serving as a member of the Committee.
5. GRANT OF OPTIONS.
(a) GENERAL.
Options may be granted under the Plan at any time and from time to
time on or prior to the Expiration Date (as defined in Section 12). Subject to
the provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine:
(i) the persons (from among the class of persons eligible
to receive Options under the Plan) to whom Options shall be granted
(the "Optionees");
(ii) the time or times at which Options shall be granted;
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(iii) the number of shares subject to each Option;
(iv) the Option Price of the shares subject to each Option,
which price shall be not less than the minimum specified in Section
4(b)(i) or 6(a) (as applicable); and
(v) the time or times when, or the occurrence of the event
or events upon which, each Option shall become exercisable and the
duration of the exercise period.
(b) OPTION AGREEMENTS.
Each Option granted under the Plan shall be designated as an ISO or an
NSO and shall be subject to the terms and conditions applicable to ISOs and/or
NSOs (as the case may be) set forth in the Plan. In addition, each Option shall
be evidenced by a written agreement (an "Option Agreement"), containing such
terms and conditions and in such form, not inconsistent with the Plan, as the
Committee shall, in its discretion, provide. Each Option Agreement shall be
executed by the Company and the Optionee.
(c) NO EVIDENCE OF EMPLOYMENT.
Nothing contained in the Plan or in any Option Agreement shall confer
upon any Optionee any right with respect to the continuation of his or her
employment by the Company or any of its Subsidiaries or interfere in any way
with the right of the Company or any such Subsidiary (subject to the terms of
any separate agreement to the contrary), at any time to terminate such
employment or to increase or decrease the compensation of the Optionee from the
rate in existence at the time of the grant of an Option.
(d) DATE OF GRANT.
The date of grant of an Option under the Plan shall be the date as of
which the Committee approves the grant; PROVIDED, HOWEVER, that in the case of
an ISO, the date of grant shall in no event be earlier than the date as of which
the Optionee becomes an employee of the Company or one of its Subsidiaries.
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6. OPTION PRICE.
(a) GENERAL.
Subject to Section 9, the price (the "Option Price") at which each
share of Common Stock subject to an Option granted under the Plan may be
purchased shall be determined by the Committee at the time the Option is
granted; PROVIDED, HOWEVER, that in the case of an ISO (subject to Section
4(b)(i)) or an NSO, such Option Price shall in no event be less than 100% of the
Fair Market Value on the date of grant (as determined in accordance with Section
6(b)) of such share of Common Stock; and PROVIDED FURTHER, HOWEVER, that, in the
case of an Option granted effective on the Effective Date (as defined in Section
7(a)), such Option Price shall be the initial public offering price per share of
the Common Stock.
(b) DETERMINATION OF FAIR MARKET VALUE.
Subject to the requirements of Section 422 of the Code, for purposes
of the Plan, the "Fair Market Value" of shares of Common Stock shall be equal
to:
(i) if such shares are publicly traded, (x) if the Common
Stock is then traded on a national securities exchange, the average of
the high and low prices on the date of grant or, if such date is not a
business day on which shares are traded, the next immediately
preceding trading day, or (y) the closing price, if applicable, or the
average of the last bid and asked prices on the date of grant or, if
such date is not a business day on which shares are traded, the next
immediately preceding trading day, in the over-the-counter market as
reported by NASDAQ; or
(ii) if there is no public trading market for such shares,
the fair value of such shares on the date of grant as determined by
the Committee after taking into consideration all factors which it
deems appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions negotiated at
arms' length.
Anything contained in the Plan to the contrary notwithstanding, all
determinations pursuant to Section 6(b)(ii) shall be made without regard to any
restriction other than a restriction which, by its terms, will never lapse.
(c) REPRICING OF NSOS.
Subsequent to the date of grant of any NSO, the Committee may, at its
discretion and with the consent of the Optionee, establish a new Option Price
for such NSO so as to increase or decrease the Option Price of such NSO.
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7. EXERCISABILITY OF OPTIONS.
(a) COMMITTEE DETERMINATION.
Each Option granted under the Plan shall be exercisable at such time
or times, or upon the occurrence of such event or events, and for such number of
shares subject to the Option, as shall be determined by the Committee and set
forth in the Option Agreement evidencing such Option; PROVIDED, HOWEVER, that no
Option granted under the Plan shall be exercisable during the 180-day period
immediately following the effective date (the "Effective Date") of the
registration statement filed by the Company under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the initial public offering
of the Common Stock. Subject to the proviso of the immediately preceding
sentence, if an Option is not at the time of grant immediately exercisable, the
Committee may (i) in the Option Agreement evidencing such Option, provide for
the acceleration of the exercise date or dates of the subject Option upon the
occurrence of specified events and/or (ii) at any time prior to the complete
termination of such Option, accelerate the exercise date or dates of such
Option.
(b) AUTOMATIC TERMINATION OF OPTION.
The unexercised portion of any Option granted under the Plan shall
automatically terminate and shall become null and void and be of no further
force or effect upon the first to occur of the following:
(i) the tenth anniversary of the date on which such Option
is granted or, in the case of any ISO granted to a person described in
Section 4(b)(i), the fifth anniversary of the date on which such ISO
is granted;
(ii) the expiration of such period of time or the occurrence
of such event as the Committee in its discretion may provide in the
Option Agreement;
(iii) the effective date of a Corporate Transaction (as
defined in Section 9(b)) to which Section 9(b)(ii) (relating to
assumptions and substitutions of Options) does not apply; PROVIDED,
HOWEVER, that an Optionee's right to exercise any Option outstanding
prior to such effective date shall in all events be suspended during
the period commencing 10 days prior to the proposed effective date of
such Corporate Transaction and ending on either the actual effective
date of such Corporate Transaction or upon receipt of notice from the
Company that such Corporate Transaction will not in fact occur; and
(iv) except to the extent permitted by Section 9(b)(ii), the
date on which an Option or any part thereof or right or privilege relating
thereto is transferred (otherwise than by will or the laws of descent and
distribution), assigned, pledged, hypothecated, attached or otherwise
disposed of by the Optionee.
Anything contained in the Plan to the contrary notwithstanding, unless
otherwise
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provided in an Option Agreement, no Option granted under the Plan shall be
affected by any change of duties or position of the Optionee (including a
transfer to or from the Company or one of its Subsidiaries), so long as such
Optionee continues to be an officer or employee of the Company or one of its
Subsidiaries.
(c) LIMITATIONS ON EXERCISE.
Anything contained in the Plan to the contrary notwithstanding, an ISO
granted under the Plan to an Optionee shall not be exercisable to the extent
that the aggregate Fair Market Value on the date of grant of such ISO (as
determined in accordance with Section 6(b)) of all stock with respect to which
incentive stock options are exercisable for the first time by such Optionee
during any calendar year (under all plans of the Company and its Subsidiaries)
exceeds $100,000.
8. PROCEDURE FOR EXERCISE.
(a) PAYMENT.
At the time an Option is granted under the Plan, the Committee shall,
in its discretion, specify one or more of the following forms of payment which
may be used by an Optionee upon exercise of his Option:
(i) cash or personal or certified check payable to the
Company in an amount equal to the aggregate Option Price of the shares
with respect to which the Option is being exercised;
(ii) stock certificates (in negotiable form) representing
whole shares of Common Stock having a Fair Market Value on the date of
exercise (as determined in accordance with Section 6(b) as if the date
of exercise were the date of grant) equal to the aggregate Option
Price of the shares with respect to which the Option is being
exercised;
(iii) (x) by arrangements which are acceptable to the Committee
whereby the Optionee delivers irrevocable instructions to a broker promptly
to deliver to the Company the amount of sale proceeds from the sale of
shares subject to the Option as is necessary to pay the Option Price and,
unless otherwise allowed by the Committee, any applicable tax withholding
obligation (provided that, in the case of an ISO, if this form of payment
is approved by the Committee, and if this form of payment is utilized by
the Optionee, a Disqualifying Disposition (as defined in Section 15 below)
will be deemed to have occurred) or (y) in compliance with any other
cashless exercise program authorized by the Company for use in connection
with the Plan at the time of such exercise (provided that, in the case of
an ISO, if this form of payment is approved by the Committee, and if this
form of payment is utilized by the Optionee, a Disqualifying Disposition
may be deemed to have occurred); or
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(iv) a combination of the methods set forth in clauses (i), (ii)
and (iii);
(b) NOTICE.
An Optionee (or other person, as provided in Section 10(b)) may
exercise an Option granted under the Plan in whole or in part (but for the
purchase of whole shares only), as provided in the Option Agreement evidencing
his or her Option, by delivering a written notice (the "Notice") to the
Secretary of the Company. The Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares with respect to which the
Option is being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned Shares
(which method must be available to the Optionee under the terms of his
or her Option Agreement);
(iv) state the date upon which the Optionee desires to
consummate the purchase (which date must be prior to the termination
of such Option and no later than 30 days from the delivery of such
Notice);
(v) include any representations of the Optionee required
pursuant to Section 10(a);
(vi) if the Option is exercised pursuant to Section 10(b) by any
person other than the Optionee, include evidence to the satisfaction of the
Committee of the right of such person to exercise the Option; and
(vii) include such further provisions consistent with the Plan
as the Committee may from time to time require.
The exercise date of an Option shall be the date on which the Company
receives the Notice from the Optionee.
Within 30 days of the exercise of the Option, the Optionee shall
deliver to the Company a copy of any election filed by the Optionee with the
Internal Revenue Service under Section 83(b) of the Code.
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(c) ISSUANCE OF CERTIFICATES.
The Company shall issue a stock certificate in the name of the
Optionee (or such other person exercising the Option in accordance with the
provisions of Section 10(b)) for the Optioned Shares as soon as practicable
after receipt of the Notice and payment of the aggregate Option Price for such
shares. Neither the Optionee nor any person exercising an Option in accordance
with the provisions of Section 10(b) shall have any privileges as a stockholder
of the Company with respect to any shares of stock subject to an Option granted
under the Plan until the date of issuance of a stock certificate pursuant to
this Section 8(c).
9. ADJUSTMENTS.
(a) CHANGES IN CAPITAL STRUCTURE.
Subject to Section 9(b), if the Common Stock is changed by reason of a
stock split, reverse stock split, stock dividend or recapitalization, or
converted into or exchanged for other securities as a result of a merger,
consolidation or reorganization, the Committee shall make such adjustments in
the number and class of shares of stock with respect to which Options may be
granted under the Plan as shall be equitable and appropriate in order to make
such Options, as nearly as may be practicable, equivalent to such Options
immediately prior to such change. A corresponding adjustment changing the
number and class of shares allocated to, and the Option Price of, each Option or
portion thereof outstanding at the time of such change shall likewise be made.
Anything contained in the Plan to the contrary notwithstanding, in the case of
ISOs, no adjustment under this Section 9(a) shall be appropriate if such
adjustment (i) would constitute a modification, extension or renewal of such
ISOs within the meaning of Sections 422 and 424 of the Code, and the regulations
promulgated by the Treasury Department thereunder, or (ii) would, under Section
422 of the Code and the regulations promulgated by the Treasury Department
thereunder, be considered the adoption of a new plan requiring stockholder
approval.
(b) CORPORATE TRANSACTIONS.
The following rules shall apply in connection with the dissolution or
liquidation of the Company, a reorganization, merger or consolidation in which
the Company is not the surviving corporation or a sale of all or substantially
all of the assets of the Company to another person or entity (a "Corporate
Transaction"):
(i) each holder of an Option outstanding at such time shall
be given (A) written notice of such Corporate Transaction at least 20
days prior to its proposed effective date (as specified in such
notice) and (B) an opportunity, during the period commencing with
delivery of such notice and ending 10 days prior to such proposed
effective date, to exercise the Option to the full extent to which
such Option would have been exercisable by the Optionee at the
expiration of such 20-day period; PROVIDED, HOWEVER, that upon the
effective date of a Corporate Transaction, all Options granted under
the Plan not so exercised shall automatically terminate; and
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(ii) anything contained in the Plan to the contrary
notwithstanding, Section 9(b)(i) shall not be applicable if provision
shall be made in connection with such Corporate Transaction for the
assumption of outstanding Options by, or the substitution for such
Options of new options covering the stock of, the surviving, successor
or purchasing corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number, kind and option prices of
shares subject to such options; PROVIDED, HOWEVER, that in the case of
ISOs, the Committee shall, to the extent not inconsistent with the
best interests of the Company or its Subsidiaries (such best interests
to be determined in good faith by the Committee in its sole
discretion), use its best efforts to ensure that any such assumption
or substitution will not constitute a modification, extension or
renewal of the ISOs within the meaning of Section 424(h) of the Code
and the regulations promulgated by the Treasury Department thereunder.
(c) SPECIAL RULES.
The following rules shall apply in connection with Section 9(a) and
(b) above:
(i) no fractional shares shall be issued as a result of any
such adjustment, and any fractional shares resulting from the
computations pursuant to Section 9(a) or (b) shall be eliminated
without consideration from the respective Options;
(ii) no adjustment shall be made for cash dividends or the
issuance to stockholders of rights to subscribe for additional shares
of Common Stock or other securities; and
(iii) any adjustments referred to in Section 9(a) or (b)
shall be made by the Committee in its sole discretion and shall be
conclusive and binding on all persons holding Options granted under
the Plan.
10. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.
(a) COMPLIANCE WITH SECURITIES LAWS.
No Options shall be granted under the Plan, and no shares of Common
Stock shall be issued and delivered upon the exercise of Options granted under
the Plan, unless and until the Company and/or the Optionee shall have complied
with all applicable Federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.
The Committee in its discretion may, as a condition to the exercise of
any Option granted under the Plan, require an Optionee (i) to represent in
writing that the shares of Common Stock received upon exercise of an Option are
being acquired for investment and not with a view to distribution and (ii) to
make such other representations and warranties as are deemed appropriate by
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counsel to the Company. Stock certificates representing shares of Common Stock
acquired upon the exercise of Options that have not been registered under the
Securities Act shall, if required by the Committee, bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
(b) NONASSIGNABILITY OF OPTION RIGHTS.
No Option granted under the Plan shall be assignable or otherwise
transferable by the Optionee except by will or by the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee. If an Optionee dies, his or her Option shall thereafter
be exercisable, during the period specified in the Option Agreement, by his or
her executors or administrators to the full extent to which such Option was
exercisable by the Optionee at the time of his or her death.
(c) MAXIMUM OPTION GRANT.
The maximum number of shares of Common Stock with respect to which
Options may be granted under this Plan may be made to an employee of the Company
in any calendar year shall not exceed 100,000 shares (subject to adjustment for
stock splits, reverse stock splits, stock dividends and stock combinations, and
the like).
11. EFFECTIVE DATE OF PLAN.
The Plan became effective on the Effective Date. This amendment
and restatement of the Plan is effective as of April 8, 1998; provided,
however, that no Option granted on or after April 8, 1998 (but as to Options
granted on April 8, 1998, only those Options designated by the Committee as
being exercisable for shares in excess of the 1,380,000 shares originally
reserved for issuance upon exercise of Options granted hereunder) shall be
exercisable by an Optionee unless and until the amendment to Section 3(a)
hereof increasing the number of shares subject to the Plan from 1,380,000 to
1,880,000 shall have been approved by the stockholders of the Company in
accordance with the provisions of its Certificate of Incorporation and By-laws,
which approval shall be obtained within 12 months after the adoption of such
amendment by the Board.
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12. EXPIRATION AND TERMINATION OF THE PLAN.
Except with respect to Options then outstanding, the Plan shall expire
on the date (the "Expiration Date") which is the first to occur of (i) the later
of (a) the tenth anniversary of the Effective Date and (b) the tenth anniversary
of the date on which the Plan is approved by the stockholders of the Company and
(ii) the date as of which the Board, in its sole discretion, determines that the
Plan shall terminate. Any Options outstanding as of the Expiration Date shall
remain in effect until they have been exercised or terminated or have expired by
their respective terms.
13. AMENDMENT OF PLAN.
The Board may at any time prior to the Expiration Date modify and
amend the Plan in any respect; PROVIDED, HOWEVER, that the approval of the
holders of a majority of the votes that may be cast by all of the holders of
shares of Common Stock and preferred stock of the Company, if any, entitled to
vote (voting as a single class) shall be obtained prior to any such amendment
becoming effective if such approval is required by law or is necessary to comply
with regulations promulgated by the SEC under Section 16(b) of the 1934 Act or
with Section 422 of the Code or the regulations promulgated by the Treasury
Department thereunder.
14. CAPTIONS.
The use of captions in the Plan is for convenience. The captions are
not intended to provide substantive rights.
15. DISQUALIFYING DISPOSITIONS.
If Optioned Shares acquired by exercise of an ISO granted under the
Plan are disposed of within two years following the date of grant of the ISO or
one year following the transfer of the Optioned Shares to the Optionee (a
"Disqualifying Disposition"), the holder of the Optioned Shares shall,
immediately prior to such Disqualifying Disposition, notify the Company in
writing of the date and terms of such Disqualifying
Disposition and provide such other information regarding the Disqualifying
Disposition as the Company may reasonably require.
16. WITHHOLDING TAXES.
Whenever under the Plan shares of Common Stock are to be delivered to
an Optionee upon exercise of an Option, the Company shall be entitled to require
as a condition of delivery that the Optionee remit or, in appropriate cases,
agree to remit when due, an amount sufficient to satisfy all current or
estimated future Federal, state and local withholding tax and employment tax
requirements relating thereto. At the time of a Disqualifying Disposition, the
Optionee shall remit to the Company in cash the amount of any applicable
Federal, state and local withholding taxes and employment taxes.
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17. OTHER PROVISIONS.
Each Option granted under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Committee,
in its sole discretion. Notwithstanding the foregoing, each ISO granted under
the Plan shall include those terms and conditions which are necessary to qualify
the ISO as an "incentive stock option" within the meaning of Section 422 of the
Code and the regulations thereunder and shall not include any terms or
conditions which are inconsistent therewith.
18. NUMBER AND GENDER.
With respect to words used in the Plan, the singular form shall
include the plural form, the masculine gender shall include the feminine
gender, and vice-versa, as the context requires.
19. GOVERNING LAW.
The validity and construction of the Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of Delaware.
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