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As filed with the Securities and Exchange Commission on April 20, 1999
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MARVEL ENTERPRISES, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3711775
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
387 Park Avenue South
New York, New York 10016
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(Address of principal executive offices) (Zip Code)
Marvel Enterprises, Inc. 1998 Stock Incentive Plan
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(Full title of the plan)
Eric Ellenbogen
President and Chief Executive Officer
Marvel Enterprises, Inc.
387 Park Avenue South
New York, New York 10016
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(Name and address of agent for service)
(212) 696-0808
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(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed maximum Amount of
Amount to maximum offering aggregate offering registration
Title of securities to be registered be registered price per unit(1) price(1) fee(1)
- ----------------------------------------- ------------- ----------------- ------------------ ------------
Common stock, par value $.01 per share 200,000 $6.50 $ 1,300,000 $361.40
200,000 6.375 1,275,000 354.45
210,000 6.25 1,312,500 364.88
2,360,000 6.125 14,455,000 4,018.49
1,001,000 5.875 5,880,875 1,634.88
1,949,000 9.125 17,784,625 4,944.13
80,000 9.125 730,000 202.94
- ------------------------------------------- ------------ ------------------ ------------------ -------------
Total 6,000,000 $42,738,000 $11,881.17
=========================================== ============ ================== ================== =============
(1) Of the shares being registered, 200,000 shares are subject to stock options whose exercise price is $6.50 per share,
200,000 shares are subject to stock options whose exercise price is $6.375 per share, 210,000 shares are subject to stock
options whose exercise price is $6.25 per share, 2,360,000 shares are subject to stock options whose exercise price is
$6.125 per share, 1,001,000 shares are subject to stock options whose exercise price is $5.875 per share, 1,949,000 shares
are subject to stock options whose exercise prices are not presently determinable and 80,000 shares have prices which are
not presently determinable. Pursuant to paragraphs (c) and (h) of Rule 457 of the Securities Act of 1933, as amended, the
proposed maximum offering price per share of the 1,949,000 shares and of the 80,000 shares are estimated solely for the
purpose of determining the registration fee and are based upon the average of the high and low prices per share of the
Registrant's common stock reported on the New York Stock Exchange on April 16, 1999, within five business days prior to
the date of filing of this Registration Statement.
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797546.5
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in this Item will
be sent or given to employees who have been awarded options under the Marvel
Enterprises, Inc. 1998 Stock Incentive Plan (the "Plan"), and, in accordance
with Section 10(a) of the Securities Act of 1933 (the "Act") and Rules 424 and
428 promulgated under the Act by the Securities and Exchange Commission (the
"Commission"), are not being filed with, or included in, this Registration
Statement on Form S-8 (the "Registration Statement").
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in this Item will
be sent or given to employees who have been awarded options under the Plan and,
in accordance with Section 10(a) of the Act and Rules 424 and 428 thereunder,
are not being filed with, or included in, this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have been filed with the Commission by
Marvel Enterprises, Inc. (the "Registrant"), are incorporated by reference in
this Registration Statement. The information incorporated by reference is
considered to be part of this Registration Statement, and information that the
Registrant files later with the Commission will automatically update and
supersede this information. The Registrant incorporates by reference the
documents listed below and any future filings the Registrant makes with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934:
(a) The Registrant's annual report on Form 10-K for the fiscal
year ended December 31, 1998, filed with the Commission on March 31, 1999, as
amended by the Registrant's annual report on Form 10-K/A, dated April 1, 1999,
filed with the Commission on April 1, 1999.
(b)(i) The Registrant's current report on Form 8-K, dated
February 4, 1999, filed with the Commission on February 4, 1999.
(ii) The Registrant's current report on Form 8-K, dated
February 23, 1999, filed with the Commission on February 24, 1999.
(iii) The Registrant's current report on Form 8-K, dated
February 25, 1999, filed with the Commission on February 25, 1999.
(iv) The Registrant's current report on Form 8-K, dated
February 25, 1999, filed with the Commission on March 10, 1999.
797546.5
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(c) The description of the Registrant's common stock contained in
the Registrant's Registration Statement on Form 8-A filed with the Commission on
October 2, 1998.
(d) The section entitled "THE MARVEL PROPOSALS - Securities to be
Issued and Transferred under the Plan" on pages 82-87 of the Registrant's Proxy
Statement on Schedule 14A, as filed with the Commission on August 13, 1998,
which includes a description of the Registrant's common stock.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Lawrence Mittman, a Director of the Registrant, is a partner in the
law firm of Battle Fowler LLP, which is rendering the opinion regarding the
legality of the securities being registered in this Registration Statement. Mr.
Mittman is an optionee under the Plan.
Item 6. Indemnification of Directors and Officers.
In accordance with Section 102(b)(7) of the Delaware General
Corporation Law, Article X of the Registrant's Certificate of Incorporation
eliminates, with certain exceptions, the Registrant's directors' personal
liability to the Registrant or its stockholders for monetary damages for breach
of fiduciary duty as a director.
Article 6 of the Registrant's By-Laws provides, to the extent
permitted by the Delaware General Corporation Law, for the Registrant's
indemnification of present or former directors, officers or incorporators of the
Registrant against various costs they may incur in connection with certain
lawsuits and similar proceedings in which they become involved by reason of
their relationship to the Registrant. Only those who have acted in good faith
are entitled to the Registrant's indemnification. In certain cases, the
Registrant's indemnification payments may be made, conditionally, before the
lawsuit or similar proceeding is complete.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Marvel Enterprises, Inc. 1998 Stock Incentive Plan.
5.1 Opinion of Battle Fowler LLP regarding the legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Battle Fowler LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (contained in the signature pages hereto).
797546.5
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Item 9. Undertakings.
(a) The Registrant 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 the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
797546.5
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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 the City of New York, State of New York, on this 19th day of
April, 1999.
MARVEL ENTERPRISES, INC.
By: /s/ Morton E. Handel
-----------------------------------
Morton E. Handel
Chairman of the Board
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
William H. Hardie, III and Robert S. Hull, and each or either of them, his true
and lawful attorney-in-fact with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or 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)
and to cause the same to be filed, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
granting to said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing whatsoever requisite or
desirable to be done in and about the premises, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all acts and things that said attorneys-in-fact and agents, or either
of them, or their substitutes or substitute, 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 in the
capacities and on the date indicated.
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<CAPTION>
Signature Title Date
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<S> <C> <C>
/s/ Morton E. Handel Chairman of the Board and April 19, 1999
- ----------------------------- Director
Morton E. Handel
/s/ Eric Ellenbogen Chief Executive Officer (principal April 19, 1999
- ----------------------------- executive officer)
Eric Ellenbogen
/s/ Robert S. Hull Chief Financial Officer (principal April 19, 1999
- ----------------------------- financial and accounting officer)
Robert S. Hull
797546.5
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Signature Title Date
- --------- ----- ----
/s/ Avi Arad
- ----------------------------- Director
Avi Arad April 19, 1999
/s/ Mark Dickstein Director April 19, 1999
- -----------------------------
Mark Dickstein
/s/ Eric Ellenbogen Director April 19, 1999
- -----------------------------
Eric Ellenbogen
/s/ Shelley F. Greenhaus Director April 20, 1999
- -----------------------------
Shelley F. Greenhaus
Director April __, 1999
- -----------------------------
James F. Halpin
/s/ Michael M. Lynton Director April 20, 1999
- -----------------------------
Michael M. Lynton
/s/ Lawrence Mittman Director April 19, 1999
- -----------------------------
Lawrence Mittman
/s/ Isaac Perlmutter Director April 19, 1999
- -----------------------------
Isaac Perlmutter
/s/ Rod Perth Director April 19, 1999
- -----------------------------
Rod Perth
Director April ___, 1999
- -----------------------------
Michael J. Petrick
</TABLE>
797546.5
EXHIBIT 4.1
MARVEL ENTERPRISES, INC.
1998 STOCK INCENTIVE PLAN
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TABLE OF CONTENTS
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1. Purpose................................................................................................................1
2. Definitions............................................................................................................1
3. Administration.........................................................................................................3
4. Stock Subject to the Plan..............................................................................................4
5. Option Grants for Eligible Individuals.................................................................................5
5.1 Authority of Committee.......................................................................................5
5.2 Purchase Price...............................................................................................5
5.3 Maximum Duration.............................................................................................5
5.4 Vesting......................................................................................................5
5.5 Method of Exercise...........................................................................................5
5.6 Modification or Substitution.................................................................................6
5.7 Non-transferability..........................................................................................6
5.8 Rights of Optionees..........................................................................................6
5.9 Effect of Change in Control..................................................................................6
5.10 Dividend Equivalent Rights...................................................................................6
5.11 Grants to Certain Outside Directors..........................................................................7
6. Stock Appreciation Rights..............................................................................................7
6.1 Time of Grant................................................................................................7
6.2 Stock Appreciation Right Related to an Option................................................................7
(a) Exercise...........................................................................................7
(b) Amount Payable.....................................................................................7
(c) Treatment of Related Options and Stock Appreciation Rights Upon Exercise...........................7
6.3 Stock Appreciation Right Unrelated to an Option..............................................................7
6.4 Method of Exercise...........................................................................................8
6.5 Form of Payment..............................................................................................8
6.6 Modification or Substitution.................................................................................8
6.7 Effect of Change in Control..................................................................................8
7. Restricted Stock.......................................................................................................8
7.1 Grant........................................................................................................8
7.2 Rights of Grantee............................................................................................8
7.3 Non-transferability..........................................................................................9
7.4 Lapse of Restrictions........................................................................................9
(a) Generally..........................................................................................9
(b) Effect of Change in Control........................................................................9
7.5 Modification or Substitution.................................................................................9
7.6 Treatment of Dividends.......................................................................................9
7.7 Delivery of Shares...........................................................................................9
8. Performance Awards.....................................................................................................9
8.1 Performance Objectives.......................................................................................9
8.2 Performance Units...........................................................................................10
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(a) Vesting and Forfeiture............................................................................10
(b) Payment of Awards.................................................................................10
8.3 Performance Shares..........................................................................................10
(a) Rights of Grantee.................................................................................10
(b) Non-transferability...............................................................................11
(c) Lapse of Restrictions.............................................................................11
(d) Treatment of Dividends............................................................................11
(e) Delivery of Shares................................................................................11
8.4 Effect of Change in Control.................................................................................11
8.5 Non-transferability.........................................................................................12
8.6 Modification or Substitution................................................................................12
9. Effect of a Termination of Employment or Service......................................................................12
10. Adjustment Upon Changes in Capitalization.............................................................................12
11. Effect of Certain Transactions........................................................................................12
12. Interpretation........................................................................................................13
13. Pooling Transactions..................................................................................................13
14. Termination and Amendment of the Plan.................................................................................13
15. Non-Exclusivity of the Plan...........................................................................................13
16. Limitation of Liability...............................................................................................14
17. Regulations and Other Approvals; Governing Law........................................................................14
18. Miscellaneous.........................................................................................................15
18.1 Multiple Agreements.........................................................................................15
18.2 Withholding of Taxes........................................................................................15
19. Effective Date........................................................................................................15
20. Termination of 1995 Stock Option Plan.................................................................................15
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MARVEL ENTERPRISES, INC.
1998 STOCK INCENTIVE PLAN
1. Purpose.
The purpose of this Plan is to strengthen Marvel
Enterprises, Inc. (the "Company") by providing an incentive to its officers,
employees, consultants and directors and thereby encouraging them to devote
their abilities and industry to the success of the Company's business
enterprise. It is intended that this purpose be achieved by extending to
officers, employees, consultants and directors of the Company and its
subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Units and
Performance Shares (as each term is hereinafter defined).
2. Definitions.
For purposes of the Plan:
2.1 "Agreement" means the written
agreement between the Company and an Optionee or Grantee evidencing the grant of
an Option or Award and setting forth the terms and conditions thereof.
2.2 "Award" means a grant of Restricted
Stock, a Stock Appreciation Right, a Performance Award or any or all of them.
2.3 "Board" means the Board of Directors
of the Company.
2.4 "Cause" means, unless otherwise
defined in the Agreement evidencing a particular Award, an individual's (i)
intentional failure to perform reasonably assigned duties, (ii) dishonesty or
willful misconduct in the performance of duties, (iii) involvement in a
transaction in connection with the performance of duties to the Company or any
of its Subsidiaries thereof which transaction is adverse to the interests of the
Company or any of its Subsidiaries and which is engaged in for personal profit,
(iv) willful violation of any law, rule or regulation in connection with the
performance of duties (other than traffic violations or similar offenses), or
(v) the commission of an act of fraud or intentional misappropriation or
conversion of assets or opportunities of the Company or any Subsidiary.
2.5 "Change in Capitalization" means any
increase or reduction in the number of Shares, or any change in the Shares or
exchange of Shares for a different number or kind of shares or other securities
of the Company, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, issuance of warrants or
rights or debentures, stock dividend, stock split or reverse stock split, cash
dividend, property dividend, combination or exchange of shares, repurchase of
shares, change in corporate structure or otherwise.
2.6 "Code" means the Internal Revenue Code
of 1986, as amended.
2.7 "Committee" means a committee as
described in Section 3.1 hereof consisting of at least two (2) Nonemployee
Directors appointed by the Board to administer the Plan and to perform the
functions set forth herein.
2.8 "Company" means Marvel Enterprises,
Inc.
<PAGE>
2.9 "Dividend Equivalent Right" means a
right to receive all or some portion of the cash dividends that are or would be
payable with respect to Shares.
2.10 "Division" means any of the operating
units or divisions of the Company designated as a Division by the Committee.
2.11 "Eligible Individual" means any
officer, employee, consultant or director of the Company or a Subsidiary
designated by the Committee as eligible to receive Options or Awards subject to
the conditions set forth herein.
2.12 "Exchange Act" means the Securities
Exchange Act of 1934, as amended.
2.13 "Fair Market Value" per Share as of a
particular date shall mean (i) the closing sales price per Share on a national
securities exchange for the last preceding date on which there was a sale of
such Shares on such exchange, or (ii) if the Shares are then traded on an
over-the-counter market, the average of the closing bid and asked prices for the
Shares in such over-the-counter market for the last preceding date on which
there was a sale of such Shares in such market, or (iii) if the Shares are not
then listed on a national securities exchange or traded in an over-the-counter
market, such value as the Committee in its discretion may determine.
2.14 "Grantee" means a person to whom an
Award has been granted under the Plan.
2.15 "Incentive Stock Option" means an
Option satisfying the requirements of Section 422 of the Code and designated by
the Committee as an Incentive Stock Option.
2.16 "Nonqualified Stock Option" means an
Option which is not an Incentive Stock Option.
2.17 "Option" means an Incentive Stock
Option, a Nonqualified Stock Option or either or both of them.
2.18 "Optionee" means a person to whom an
Option has been granted under the Plan.
2.19 "Parent" means any corporation which
is a parent corporation (within the meaning of Section 424(e) of the Code) with
respect to the Company.
2.20 "Performance Awards" means Performance
Units, Performance Shares or either or both of them.
2.21 "Performance Cycle" means the time
period specified by the Committee at the time a Performance Award is granted
during which the performance of the Company, a Subsidiary or a Division will be
measured.
2.22 "Performance Shares" means Shares
issued or transferred to an Eligible Individual under Section 8.3 hereof.
2.23 "Performance Unit" means Performance
Units granted to an Eligible Individual under Section 8.2 hereof.
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2.24 "Plan" means the Marvel Enterprises
Inc. 1998 Stock Incentive Plan.
2.25 "Pooling Transaction" means an
acquisition of the Company in a transaction which is intended to be treated as a
"pooling of interests" under generally accepted accounting principles.
2.26 "Restricted Stock" means Shares issued
or transferred to an Eligible Individual pursuant to Section 7 hereof.
2.27 "Shares" means the common stock, par
value $0.01 per share, of the Company.
2.28 "Stock Appreciation Right" (SAR) means
a right to receive all or some portion of the increase in the value of the
Shares as provided in Section 6 hereof.
2.29 "Subsidiary" means any corporation
which is a subsidiary corporation (within the meaning of Section 424(f) of the
Code) with respect to the Company.
2.30 "Successor Corporation" means a
corporation, or a parent or subsidiary thereof within the meaning of Section
424(a) of the Code, which issues or assumes a stock option in a transaction to
which Section 424(a) of the Code applies.
2.31 "Ten-Percent Stockholder" means an
Eligible Individual, who, at the time an Incentive Stock Option is to be granted
to him or her, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company, or of a Parent or a Subsidiary.
3. Administration.
3.1 The Plan shall be administered by the
Committee, which shall hold meetings at such times as may be necessary for the
proper administration of the Plan. The Committee shall keep minutes of its
meetings. A quorum shall consist of not less than two members of the Committee
and a majority of a quorum may authorize any action. Any decision or
determination reduced to writing and signed by a majority of all of the members
shall be as fully effective as if made by a majority vote at a meeting duly
called and held. Each member of the Committee shall be a nonemployee director
within the meaning of Rule 16b-3 promulgated under the Exchange Act. To the
extent compliance with Section 162(m) of the Code is desired, such Committee
members shall also be "outside directors" within the meaning of Section 162(m)
of the Code. No member of the Committee shall be liable for any action, failure
to act, determination or interpretation made in good faith with respect to this
Plan or any transaction hereunder, except for liability arising from his or her
own willful misfeasance, gross negligence or reckless disregard of his or her
duties. The Company hereby agrees to indemnify each member of the Committee for
all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiating for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.
3.2 Subject to the express terms and conditions
set forth herein, the Committee shall have the power from time to time to:
(a) determine those Eligible Individuals
to whom Options shall be granted under the Plan and the number of Incentive
Stock Options and/or Nonqualified Stock Options to be granted to each Eligible
Individual and to prescribe the terms and conditions (which need not be
identical) of each Option,
3
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including the purchase price per Share subject to each Option, and make any
amendment or modification to any Agreement consistent with the terms of the
Plan; and
(b) select those Eligible Individuals to
whom Awards shall be granted under the Plan and to determine the number of Stock
Appreciation Rights, Performance Units, Performance Shares, and/or Shares of
Restricted Stock to be granted pursuant to each Award, the terms and conditions
of each Award, including the restrictions or performance criteria relating to
such Performance Units or Performance Shares, the maximum value of each
Performance Unit and Performance Share and make any amendment or modification to
any Agreement consistent with the terms of the Plan.
3.3 Subject to the express terms and
conditions set forth herein, the Committee shall have the power from time to
time:
(a) to construe and interpret the Plan
and the Options and Awards granted hereunder and to establish, amend and revoke
rules and regulations for the administration of the Plan, including, but not
limited to, correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable to make the Plan fully effective and comply
with applicable law including Rule 16b-3 under the Exchange Act and the Code to
the extent applicable. All decisions and determinations by the Committee in the
exercise of this power shall be final, binding and conclusive upon the Company,
its Subsidiaries, the Optionees and Grantees, and all other persons having any
interest therein;
(b) to determine the duration and
purposes for leaves of absence which may be granted to an Optionee or Grantee on
an individual basis without constituting a termination of employment or service
for purposes of the Plan;
(c) to exercise its discretion with
respect to the powers and rights granted to it as set forth in the Plan;
(d) generally, to exercise such powers
and to perform such acts as are deemed necessary or advisable to promote the
best interests of the Company with respect to the Plan; and
(e) to provide for the limited
transferability of Options to certain family members, family trusts or family
partnerships of Optionees.
4. Stock Subject to the Plan.
4.1 The maximum number of Shares that may
be made the subject of Options and Awards granted under the Plan is 6,000,000;
provided, however, that the maximum number of Shares that may be the subject of
Options and Awards granted to any Eligible Individual during any calendar year
may not exceed 1,000,000 Shares. Upon a Change in Capitalization the maximum
number of Shares which may be made the subject of Options and Awards granted
under the Plan and which may be granted to any Eligible Individual during any
calendar year shall be adjusted in number and kind pursuant to Section 10
hereof. The Company shall reserve for the purposes of the Plan, out of its
authorized but unissued Shares or out of Shares held in the Company's treasury,
or partly out of each, such number of Shares as shall be determined by the
Board.
4.2 Upon the granting of an Option or an Award,
the number of Shares available under Section 4.1 hereof for the granting of
further Options and Awards shall be reduced as follows:
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(a) In connection with the granting of an
Option or an Award (other than the granting of a Performance Unit denominated in
dollars), the number of Shares shall be reduced by the number of Shares in
respect of which the Option or Award is granted or denominated.
(b) In connection with the granting of a
Performance Unit denominated in dollars, the number of Shares shall be reduced
by an amount equal to the quotient of (i) the dollar amount in which the
Performance Unit is denominated, divided by (ii) the Fair Market Value of a
Share on the date the Performance Unit is granted.
4.3 Whenever any outstanding Option or
Award or portion thereof expires, is canceled or is otherwise terminated for any
reason without having been exercised or payment having been made in respect of
the entire Option or Award, the Shares allocable to the expired, canceled or
otherwise terminated portion of the Option or Award may again be the subject of
Options or Awards granted hereunder.
5. Option Grants for Eligible Individuals.
5.1 Authority of Committee. Subject to
the provisions of the Plan and to Section 4.1 hereof, the Committee shall have
full and final authority to select those Eligible Individuals who will receive
Options, the terms and conditions of which shall be set forth in an Agreement;
provided, however, that no person shall receive any Incentive Stock Options
unless he or she is an employee of the Company, a Parent or a Subsidiary at the
time the Incentive Stock Option is granted. The aggregate Fair Market Value
(determined as of the date of grant of an Incentive Stock Option) of the Shares
with respect to which Incentive Stock Options granted under this Plan and all
other option plans of the Company, any Parent and any Subsidiary become
exercisable for the first time by an Optionee during any calendar year shall not
exceed $100,000. Any such Options granted in excess of the $100,000 limitation
shall be deemed to be Nonqualified Stock Options.
5.2 Purchase Price. The purchase price or
the manner in which the purchase price is to be determined for Shares under each
Option shall be determined by the Committee and set forth in the Agreement;
provided, however, that the purchase price per Share under each Option shall not
be less than 100% of the Fair Market Value of a Share on the date the Option is
granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).
5.3 Maximum Duration. Options granted
hereunder shall be for such term as the Committee shall determine, provided that
an Incentive Stock Option shall not be exercisable after the expiration of ten
(10) years from the date it is granted (five (5) years in the case of an
Incentive Stock Option granted to a Ten- Percent Stockholder) and a Nonqualified
Stock Option shall not be exercisable after the expiration of ten (10) years
from the date it is granted. The Committee may, subsequent to the granting of
any Option, extend the term thereof, but in no event shall the term as so
extended exceed the maximum term provided for in the preceding sentence.
5.4 Vesting. Subject to Section 5.9
hereof, each Option shall become exercisable in such installments (which need
not be equal) and at such times as may be designated by the Committee and set
forth in the Agreement. If the Committee does not so designate, Options shall
become exercisable in three equal or nearly equal installments on the first,
second and third anniversaries of the date of grant. To the extent not
exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Option expires. The Committee may accelerate the exercisability of any Option or
portion thereof at any time.
5.5 Method of Exercise. The exercise of
an Option shall be made only by a written notice delivered in person or by mail
to the Secretary of the Company at the Company's principal executive office,
specifying the number of Shares to be purchased and accompanied by payment
therefor and
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otherwise in accordance with the Agreement pursuant to which the Option was
granted. The purchase price for any Shares purchased pursuant to the exercise of
an Option shall be paid in full upon such exercise by any one or a combination
of the following: (i) cash or (ii) with the consent of the Committee,
transferring Shares to the Company upon such terms and conditions as determined
by the Committee (such as, for example, a requirement that such Shares have been
held for at least six months if necessary to avoid adverse accounting
consequences). Any Shares transferred to the Company as payment of the purchase
price under an Option shall be valued at their Fair Market Value on the day
preceding the date of exercise of such Option, unless otherwise provided in an
Agreement. Notwithstanding the foregoing, the Committee shall have discretion to
determine at the time of grant of each Option or at any later date (up to and
including the date of exercise) the form of payment acceptable in respect of the
exercise of such Option. The written notice pursuant to this Section 5.5 may
also provide instructions from the Optionee to the Company that upon receipt of
the purchase price in cash from the Optionee's broker or dealer, designated as
such on the written notice, in payment for any Shares purchased pursuant to the
exercise of an Option, the Company shall issue such Shares directly to the
designated broker or dealer. If requested by the Committee, the Optionee shall
deliver the Agreement evidencing the Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued
upon exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
5.6 Modification or Substitution. The
Committee may, in its discretion, modify outstanding Options or accept the
surrender of outstanding Options (to the extent not exercised) and grant new
Options in substitution for them. Notwithstanding the foregoing, no modification
of an Option shall adversely alter or impair any rights or obligations under the
Option without the Optionee's consent.
5.7 Non-transferability. No Option
granted hereunder shall be transferable by the Optionee to whom granted
otherwise than by will or the laws of descent and distribution unless
specifically authorized by the Committee, and unless transferred in a manner
permitted by the Committee an Option may be exercised during the lifetime of
such Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Optionee.
5.8 Rights of Optionees. No Optionee
shall be deemed for any purpose to be the owner of any Shares subject to any
Option unless and until (i) the Option shall have been exercised pursuant to the
terms thereof, (ii) the Company shall have issued and delivered the Shares to
the Optionee and (iii) the Optionee's name shall have been entered as a
stockholder of record on the books of the Company. Thereupon, the Optionee shall
have full voting, dividend and other ownership rights with respect to such
Shares, subject to such terms and conditions as may be set forth in the
applicable Agreement.
5.9 Effect of Change in Control.
Notwithstanding anything contained in the Plan to the contrary, the Committee
may provide in an Agreement for the accelerated vesting of all or any portion of
an Option in the event of a change in control of the Company.
5.10 Dividend Equivalent Rights. Dividend
Equivalent Rights may be granted to Eligible Individuals in tandem with an
Option. The terms and conditions applicable to each Dividend Equivalent Right
shall be specified in the Agreement under which the Dividend Equivalent Rights
may be payable currently or deferred until the lapsing of restrictions on such
Dividend Equivalent Rights or until the vesting, exercise, payment, settlement
or other lapse of restrictions on the Option to which the Dividend Equivalent
Rights relate. In the event that the amounts payable in respect of Dividend
Equivalent Rights are to be deferred, the Committee shall determine whether such
amounts are to be held in cash or reinvested in Shares or deemed (notionally) to
be reinvested in Shares. If amounts payable in respect to Dividend Equivalent
Rights are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning
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of the year at a rate per annum as the Committee, in its discretion, may
determine. Dividend Equivalent Rights may be settled in cash or Shares or a
combination thereof, in a single installment or multiple installments.
5.11 Grants to Certain Outside Directors.
In the event a Director of the Company is required by contract to deliver any
compensation from the Company to the Director's employer, the Director may
elect, with the consent of the Committee to have Awards pursuant to this Plan
made to such Director's employer. In such case, the vesting, exercisability and
termination provisions shall be applied with respect to the service of the
Director.
6. Stock Appreciation Rights. The Committee may, in its
discretion, either alone or in connection with the grant of an Option, grant
Stock Appreciation Rights in accordance with the Plan, the terms and conditions
of which shall be set forth in an Agreement. If granted in connection with an
Option, a Stock Appreciation Right shall cover the same Shares covered by the
Option (or such lesser number of Shares as the Committee may determine) and
shall, except as provided in this Section 6, be subject to the same terms and
conditions as the related Option.
6.1 Time of Grant. A Stock Appreciation Right
may be granted (i) at any time if unrelated to an Option, or (ii) if related to
an Option, either at the time of grant, or at any time thereafter during the
term of the Option.
6.2 Stock Appreciation Right Related to an
Option.
(a) Exercise. Subject to Section 6.7
hereof, a Stock Appreciation Right granted in connection with an Option shall be
exercisable at such time or times and only to the extent that the related Option
is exercisable, and will not be transferable even if the related Option is
transferable. A Stock Appreciation Right granted in connection with an Incentive
Stock Option shall be exercisable only if the Fair Market Value of a Share on
the date of exercise exceeds the purchase price specified in the related
Incentive Stock Option Agreement.
(b) Amount Payable. Upon the exercise of a
Stock Appreciation Right related to an Option, the Grantee shall be entitled to
receive an amount determined by multiplying (A) the excess of the Fair Market
Value of a Share on the date preceding the date of exercise of such Stock
Appreciation Right over the per Share purchase price under the related Option,
by (B) the number of Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may limit in any manner
the amount payable with respect to any Stock Appreciation Right by including
such a limit in the Agreement evidencing the Stock Appreciation Right at the
time it is granted.
(c) Treatment of Related Options and Stock
Appreciation Rights Upon Exercise. Upon the exercise of a Stock Appreciation
Right granted in connection with an Option, the Option shall be canceled to the
extent of the number of Shares as to which the Stock Appreciation Right is
exercised, and upon the exercise of an Option granted in connection with a Stock
Appreciation Right, the Stock Appreciation Right shall be canceled to the extent
of the number of Shares as to which the Option is exercised.
6.3 Stock Appreciation Right Unrelated to
an Option. The Committee may grant to Eligible Individuals Stock Appreciation
Rights unrelated to Options. Stock Appreciation Rights unrelated to Options
shall contain such terms and conditions as to exercisability (subject to Section
6.7 hereof), vesting and duration as the Committee shall determine, but in no
event shall they have a term of greater than ten (10) years. If the Committee
does not designate a vesting schedule, the schedule shall be in equal or nearly
equal installments on the first, second and third anniversaries of the date of
grant. Upon exercise of a Stock Appreciation Right unrelated to an Option, the
Grantee shall be entitled to receive an amount determined by multiplying (A) the
excess of the Fair Market Value of a Share on the date preceding the date of
exercise of such Stock Appreciation
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Right over the Fair Market Value of a Share on the date the Stock Appreciation
Right was granted, by (B) the number of Shares as to which the Stock
Appreciation Right is being exercised. Notwithstanding the foregoing, the
Committee may limit in any manner the amount payable with respect to any Stock
Appreciation Right by including such a limit in the Agreement evidencing the
Stock Appreciation Right at the time it is granted.
6.4 Method of Exercise. Stock Appreciation
Rights shall be exercised by a Grantee only by a written notice delivered in
person or by mail to the Secretary of the Company at the Company's principal
executive office, specifying the number of Shares with respect to which the
Stock Appreciation Right is being exercised. If requested by the Committee, the
Grantee shall deliver the Agreement evidencing the Stock Appreciation Right
being exercised and the Agreement evidencing any related Option to the Secretary
of the Company who shall endorse thereon a notation of such exercise and return
such Agreement to the Grantee.
6.5 Form of Payment. Payment of the amount
determined under Sections 6.2(b) or 6.3 hereof may be made in the discretion of
the Committee, solely in whole Shares in a number determined at their Fair
Market Value on the date preceding the date of exercise of the Stock
Appreciation Right, or solely in cash, or in a combination of cash and Shares.
If the Committee decides to make full payment in Shares and the amount payable
results in a fractional Share, payment for the fractional Share will be made in
cash.
6.6 Modification or Substitution. Subject
to the terms of the Plan, the Committee may modify outstanding Awards of Stock
Appreciation Rights or accept the surrender of outstanding Awards of Stock
Appreciation Rights (to the extent not exercised) and grant new Awards in
substitution for them. Notwithstanding the foregoing, no modification of an
Award shall adversely alter or impair any rights or obligations under the
Agreement without the Grantee's consent.
6.7 Effect of Change in Control.
Notwithstanding anything contained in this Plan to the contrary, the Committee
may provide in an Agreement for the accelerated vesting of all or a portion of
any Stock Appreciation Right in the event of a change in control of the Company.
7. Restricted Stock.
7.1 Grant. The Committee may grant to
Eligible Individuals Awards of Restricted Stock, and may issue Shares of
Restricted Stock in payment in respect of vested Performance Units (as
hereinafter provided in Section 8.2 hereof), which shall be evidenced by an
Agreement between the Company and the Grantee. Each Agreement shall contain such
restrictions, terms and conditions as the Committee may, in its discretion,
determine and (without limiting the generality of the foregoing) such Agreements
may require that an appropriate legend be placed on Share certificates. Awards
of Restricted Stock shall be subject to the terms and provisions set forth below
in this Section 7.
7.2 Rights of Grantee. Shares of
Restricted Stock granted pursuant to an Award hereunder shall be issued in the
name of the Grantee as soon as reasonably practicable after the Award is granted
provided that the Grantee has executed an Agreement evidencing the Award, the
appropriate blank stock powers and, in the discretion of the Committee, an
escrow agreement and any other documents which the Committee may require as a
condition to the issuance of such Shares. If a Grantee shall fail to execute the
Agreement evidencing a Restricted Stock Award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow agreement and any
other documents which the Committee may require within the time period
prescribed by the Committee at the time the Award is granted, the Award shall be
null and void. At the discretion of the Committee, Shares issued in connection
with a Restricted Stock Award shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the Committee.
Unless the Committee determines otherwise and as set forth in the Agreement,
upon delivery of the Shares to the escrow agent, the Grantee shall have all of
the rights of a stockholder with respect to such Shares, including the right to
vote the Shares and to receive all dividends or other distributions paid or made
with respect to the Shares.
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7.3 Non-transferability. Until any
restrictions upon the Shares of Restricted Stock awarded to a Grantee shall have
lapsed in the manner set forth in Section 7.4 hereof, such Shares shall not be
sold, transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee.
7.4 Lapse of Restrictions.
(a) Generally. Restrictions upon
Shares of Restricted Stock awarded hereunder shall lapse at such time or times
and on such terms and conditions as the Committee may determine, which
restrictions shall be set forth in the Agreement evidencing the Award. If the
Committee does not so provide, restrictions shall lapse in three equal or nearly
equal installments on the first, second and third anniversaries of the date of
grant.
(b) Effect of Change in Control.
Notwithstanding anything contained in the Plan to the contrary, the Committee
may provide in an Agreement for the lapsing of all restrictions imposed upon any
or all Shares of Restricted Stock in the event of a change in control of the
Company.
7.5 Modification or Substitution.
Subject to the terms of the Plan, the Committee may modify outstanding Awards of
Restricted Stock or accept the surrender of outstanding Shares of Restricted
Stock (to the extent the restrictions on such Shares have not yet lapsed) and
grant new Awards in substitution for them. Notwithstanding the foregoing, no
modification of an Award shall adversely alter or impair any rights or
obligations under the Agreement without the Grantee's consent.
7.6 Treatment of Dividends. At the
time the Award of Shares of Restricted Stock is granted, the Committee may, in
its discretion, determine that the payment to the Grantee of dividends, or a
specified portion thereof, declared or paid on such Shares by the Company shall
be (i) deferred until the lapsing of the restrictions imposed upon such Shares
and (ii) held by the Company for the account of the Grantee until such time. In
the event that dividends are to be deferred, the Committee shall determine
whether such dividends are to be reinvested in Shares (which shall be held as
additional Shares of Restricted Stock) or held in cash. If deferred dividends
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends in respect of Shares of Restricted Stock (whether
held in cash or as additional Shares of Restricted Stock), together with
interest accrued thereon, if any, shall be made upon the lapsing of restrictions
imposed on the Shares in respect of which the deferred dividends were paid, and
any dividends deferred (together with any interest accrued thereon) in respect
of any Shares of Restricted Stock shall be forfeited upon the forfeiture of such
Shares.
7.7 Delivery of Shares. Upon the lapse of
the restrictions on Shares of Restricted Stock, the Committee shall cause a
stock certificate to be delivered to the Grantee with respect to such Shares,
free of all restrictions hereunder.
8. Performance Awards.
8.1 Performance Objectives.
Performance objectives for Performance Awards may be expressed in terms of (i)
earnings per Share, (ii) pre-tax profits, (iii) net earnings or net worth, (iv)
return on equity or assets, (v) any combination of the foregoing, or (vi) any
other standard or standards deemed appropriate by the Committee at the time the
Award is granted. Performance objectives may be in respect of the performance of
the Company and its Subsidiaries (which may be on a consolidated basis), a
Subsidiary or a Division. Performance objectives may be absolute or relative and
may be expressed in terms of a progression within a specified range. Prior to
the end of a Performance Cycle, the Committee, in its discretion, may adjust the
performance objectives to reflect a Change in the Capitalization, a change in
the tax rate or book tax rate of
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the Company or any Subsidiary, or any other event which may materially affect
the performance of the Company, a Subsidiary or a Division, including, but not
limited to, market conditions or a significant acquisition or disposition of
assets or other property by the Company, a Subsidiary or a Division.
8.2 Performance Units. The
Committee, in its discretion, may grant Awards of Performance Units to Eligible
Individuals, the terms and conditions of which shall be set forth in an
Agreement between the Company and the Grantee. Performance Units may be
denominated in Shares or a specified dollar amount and, contingent upon the
attainment of specified performance objectives within the Performance Cycle,
represent the right to receive payment as provided in Section 8.2(b) hereof of
(i) in the case of Share-denominated Performance Units, the Fair Market Value of
a Share on the date the Performance Unit was granted, the date the Performance
Unit became vested or any other date specified by the Committee, (ii) in the
case of dollar-denominated Performance Units, the specified dollar amount or
(iii) a percentage (which may be more than 100%) of the amount described in
clause (i) or (ii) depending on the level of performance objective attainment;
provided, however, that the Committee may at the time a Performance Unit is
granted, specify a maximum amount payable in respect of a vested Performance
Unit. Each Agreement shall specify the number of the Performance Units to which
it relates, the performance objectives which must be satisfied in order for the
Performance Units to vest and the Performance Cycle within which such objectives
must be satisfied.
(a) Vesting and Forfeiture. A
Grantee shall become vested with respect to the Performance Units to the extent
that the performance objectives set forth in the Agreement are satisfied for the
Performance Cycle.
(b) Payment of Awards. Payment to
Grantees in respect of vested Performance Units shall be made within sixty (60)
days after the last day of the Performance Cycle to which such Award relates
unless the Agreement evidencing the Award provides for the deferral of payment,
in which event the terms and conditions of the deferral shall be set forth in
the Agreement. Subject to Section 8.4 hereof, such payments may be made entirely
in Shares valued at their Fair Market Value as of the last day of the applicable
Performance Cycle or such other date specified by the Committee, entirely in
cash, or in such combination of Shares and cash as the Committee in its
discretion, shall determine at any time prior to such payment; provided,
however, that if the Committee in its discretion determines to make such payment
entirely or partially in Shares of Restricted Stock, the Committee must
determine the extent to which such payment will be in Shares of Restricted Stock
and the terms of such Restricted Stock at the time the Award is granted.
8.3 Performance Shares. The Committee, in
its discretion, may grant Awards of Performance Shares to Eligible Individuals,
the terms and conditions of which shall be set forth in an Agreement between the
Company and the Grantee. Each Agreement may require that an appropriate legend
be placed on Share certificates. Awards of Performance Shares shall be subject
to the following terms and provisions:
(a) Rights of Grantee. The
Committee shall provide at the time an Award of Performance Shares is made, the
time or times at which the actual Shares represented by such Award shall be
issued in the name of the Grantee; provided, however, that no Performance Shares
shall be issued until the Grantee has executed an Agreement evidencing the
Award, the appropriate blank stock powers and, in the discretion of the
Committee, an escrow agreement and any other documents which the Committee may
require as a condition to the issuance of such Performance Shares. If a Grantee
shall fail to execute the Agreement evidencing an Award of Performance Shares,
the appropriate blank stock powers and, in the discretion of the Committee, an
escrow agreement and any other documents which the Committee may require within
the time period prescribed by the Committee at the time the Award is granted,
the Award shall be null and void. At the discretion of the Committee, Shares
issued in connection with an Award of Performance Shares shall be deposited
together with the stock powers with an escrow agent (which may be the Company)
designated by the Committee. Except as restricted by the terms of the Agreement,
upon delivery of the Shares to the escrow agent, the Grantee shall have, in the
discretion of the Committee, all of the rights of a stockholder with respect to
such Shares,
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including the right to vote the Shares and to receive all dividends or other
distributions paid or made with respect to the Shares.
(b) Non-transferability. Until any
restrictions upon the Performance Shares awarded to a Grantee shall have lapsed
in the manner set forth in Sections 8.3(c) or 8.4 hereof, such Performance
Shares shall not be sold, transferred or otherwise disposed of and shall not be
pledged or otherwise hypothecated, nor shall they be delivered to the Grantee.
The Committee may also impose such other restrictions and conditions on the
Performance Shares, if any, as it deems appropriate.
(c) Lapse of Restrictions. Subject
to Section 8.4 hereof, restrictions upon Performance Shares awarded hereunder
shall lapse and such Performance Shares shall become vested at such time or
times and on such terms, conditions and satisfaction of performance objectives
as the Committee may, in its discretion, determine at the time an Award is
granted.
(d) Treatment of Dividends. At the
time the Award of Performance Shares
is granted, the Committee may, in its discretion, determine that the payment to
the Grantee of dividends, or a specified portion thereof, declared or paid on
actual Shares represented by such Award which have been issued by the Company to
the Grantee shall be (i) deferred until the lapsing of the restrictions imposed
upon such Performance Shares and (ii) held by the Company for the account of the
Grantee until such time. In the event that dividends are to be deferred, the
Committee shall determine whether such dividends are to be reinvested in Shares
(which shall be held as additional Performance Shares) or held in cash. If
deferred dividends are to be held in cash, there may be credited at the end of
each year (or portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum as the Committee, in its discretion,
may determine. Payment of deferred dividends in respect of Performance Shares
(whether held in cash or in additional Performance Shares), together with
interest accrued thereon, if any, shall be made upon the lapsing of restrictions
imposed on the Performance Shares in respect of which the deferred dividends
were paid, and any dividends deferred (together with any interest accrued
thereon) in respect of any Performance Shares shall be forfeited upon the
forfeiture of such Performance Shares.
(e) Delivery of Shares. Upon the
lapse of the restrictions on Performance Shares awarded hereunder, the Committee
shall cause a stock certificate to be delivered to the Grantee with respect to
such Shares, free of all restrictions hereunder.
8.4 Effect of Change in Control.
Notwithstanding anything contained in the Plan to the contrary:
(a) With respect to the Performance
Units, the Committee may determine that a Grantee shall (i) become vested in a
percentage of Performance Units as a result of a change in control of the
Company and (ii) be entitled to receive in respect of all Performance Units
which become vested as a result of a change in control of the Company, a cash
payment in an amount as determined by the Committee and as set forth in the
Agreement.
(b) With respect to the Performance
Shares, the Committee may provide in an Agreement for the lapse of restrictions
imposed upon all or a portion of the Performance Shares in the event of a change
in control of the Company.
(c) The Agreements evidencing
Performance Shares and Performance Units shall provide for the treatment of such
Awards (or portions thereof) which do not become vested as the result of a
change in control of the Company, including, but not limited to, provisions for
the adjustment of applicable performance objectives.
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8.5 Non-transferability. No Performance
Awards shall be transferable by the Grantee otherwise than by will or the laws
of descent and distribution.
8.6 Modification or Substitution. Subject
to the terms of the Plan, the Committee may modify outstanding Performance
Awards or accept the surrender of outstanding Performance Awards and grant new
Performance Awards in substitution for them. Notwithstanding the foregoing, no
modification of a Performance Award shall adversely alter or impair any rights
or obligations under the Agreement without the Grantee's consent.
9. Effect of a Termination of Employment or Service.
The Agreement evidencing the grant of
each Option and each Award shall set forth the terms and conditions applicable
to such Option or Award upon a termination or change in the status of the
employment or service of the Optionee or Grantee by the Company, a Subsidiary or
a Division (including a termination or change by reason of the sale of a
Subsidiary or a Division or a change in status from employee or director to
consultant), as the Committee may, in its discretion, determine at the time the
Option or Award is granted or thereafter. Notwithstanding the foregoing and
unless specifically set forth in an Agreement to the contrary, (i) in the event
an Optionee's or Grantee's employment or service with the Company is terminated
for Cause, the Option or Award granted to the Optionee or Grantee hereunder
shall immediately terminate in full and in the case of Options, no rights
thereunder may be exercised, and in all other cases, no payment will be made
with respect thereto, and (ii) in the event the Optionee's or Grantee's
employment or service with the Company is terminated other than for Cause, the
Option or Award granted to the Optionee or Grantee hereunder shall terminate in
full on the ninetieth (90th) day following such termination and in the case of
Options, no rights thereunder may be exercised, and in all other cases, no
payment will be made with respect thereto.
10. Adjustment Upon Changes in Capitalization.
(a) In the event of a Change in
Capitalization, the Committee shall conclusively determine the appropriate
adjustments, if any, to the (i) maximum number and class of Shares or other
stock or securities with respect to which Options or Awards may be granted under
the Plan, (ii) maximum number of class of Shares or other stock or securities
with respect to which Options may be granted to any Eligible Individual during
the term of the Plan and (iii) the number and class of Shares or other stock or
securities which are subject to outstanding Options or Awards granted under the
Plan, and the purchase price therefor, if applicable.
(b) Any such adjustment in the Shares or
other stock or securities subject to outstanding Incentive Stock Options
(including any adjustments in the purchase price) shall be made in such manner
as not to constitute a modification as defined by Section 424(h)(3) of the Code
and only to the extent otherwise permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in
Capitalization, a Grantee of an Award shall be entitled to, or an Optionee shall
be entitled to exercise an Option with respect to, new, additional or different
shares of stock or securities, such new, additional or different shares shall
thereupon be subject to all of the conditions, restrictions and performance
criteria which were applicable to the Shares subject to the Award or Option, as
the case may be, prior to such Change in Capitalization.
11. Effect of Certain Transactions. Subject to
Sections 5.9, 6.7, 7.4(b) and 8.4 hereof, in the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Plan and the Options and Awards issued hereunder shall
continue in effect in accordance with their respective terms except that
following a Transaction each Optionee and Grantee shall be entitled to receive
in respect of each Share subject to any outstanding Options or Awards, as the
case may be, upon exercise of any Option or SAR or payment or transfer in
respect of any Award, the same number and kind of stock, securities,
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cash, property, or other consideration that each holder of a Share was entitled
to receive in the Transaction in respect of a Share; provided, however, that
such stock, securities, cash, property, or other consideration shall remain
subject to all of the conditions, restrictions and performance criteria which
were applicable to the Options or Awards prior to such Transaction.
12. Interpretation.
(a) Awards under the Plan are intended to
comply with Rule 16b-3 promulgated under the Exchange Act and the Committee
shall interpret and administer the provisions of the Plan or any Agreement in a
manner consistent therewith. Any provisions inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Plan.
(b) Unless otherwise expressly stated in
the relevant Agreement, each Award granted under the Plan (other than Restricted
Stock) is intended to be performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code. Except in cases of the death, disability or
change in control, the Committee shall not be entitled to exercise any
discretion otherwise authorized hereunder with respect to such Awards if the
ability to exercise such discretion or the exercise of such discretion itself
would cause the compensation attributable to such Awards to fail to qualify as
performance-based compensation.
13. Pooling Transactions. Notwithstanding anything
contained in the Plan or any Agreement to the contrary, in the event of a change
in control of the Company which is also intended to constitute a Pooling
Transaction, the Committee shall take such actions, if any, which are
specifically recommended by an independent accounting firm retained by the
Company to the extent reasonably necessary in order to assure that the Pooling
Transaction will qualify as such, including but not limited to (i) deferring the
vesting, exercise, payment or settlement with respect to any Option or Award,
(ii) providing that the payment or settlement in respect of any Option or Award
be made in the form of cash, Shares or securities of a successor or acquired of
the Company, or a combination of the foregoing and (iii) providing for the
extension of the term of any Option or Award to the extent necessary to
accommodate the foregoing, but not beyond the maximum term permitted for any
Option or Award.
14. Termination and Amendment of the Plan.
The Plan shall terminate on the day preceding the
tenth anniversary of the date of its adoption by the Board and no Option or
Award may be granted thereafter. The Board may sooner terminate the Plan and the
Board may at any time and from time to time amend, modify or suspend the Plan;
provided, however, that:
(a) No such amendment, modification,
suspension or termination shall impair or adversely alter any Options, SARs or
Awards theretofore granted under the Plan, except with the consent of the
Optionee or Grantee, nor shall any amendment, modification, suspension or
termination deprive any Optionee or Grantee of any Shares which he or she may
have acquired through or as a result of the Plan; and
(b) To the extent necessary under Section
16(b) of the Exchange Act and the rules and regulations promulgated thereunder
or applicable law or securities exchange rule, no amendment shall be effective
unless approved by the stockholders of the Company in accordance with applicable
law and regulations.
15. Non-Exclusivity of the Plan.
The adoption of the Plan by the Board shall not
be construed as amending, modifying or rescinding any previously approved
incentive arrangement or as creating any limitations on the power of the Board
to adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of
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stock options otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
16. Limitation of Liability.
As illustrative of the limitations of liability
of the Company, but not intended to be exhaustive thereof, nothing in the Plan
shall be construed to:
(a) give any person any right to be
granted an Option or Award other than at the sole discretion of the Committee;
(b) give any person any rights whatsoever
with respect to Shares except as specifically provided in the Plan;
(c) limit in any way the right of the
Company to terminate the employment of any person at any time; or
(d) be evidence of any agreement or
understanding, expressed or implied, that the Company will employ any person at
any particular rate of compensation or for any particular period of time.
17. Regulations and Other Approvals; Governing Law.
17.1 Except as to matters of federal law,
this Plan and the rights of all persons claiming hereunder shall be construed
and determined in accordance with the laws of the State of New York without
giving effect to conflicts of law principles thereof.
17.2 The obligation of the Company to sell
or deliver Shares with respect to Options and Awards granted under the Plan
shall be subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Committee.
17.3 The Board may make such changes as may
be necessary or appropriate to comply with the rules and regulations of any
government authority, or to obtain for Eligible Individuals granted Incentive
Stock Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
17.4 Each Option and Award is subject to
the requirement that, if at any time the Committee determines, in its
discretion, that the listing, registration or qualification of Shares issuable
pursuant to the Plan is required by any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory body
is necessary or desirable as a condition of, or in connection with, the grant of
an Option or Award or the issuance of Shares, no Options or Awards shall be
granted or payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
17.5
Notwithstanding anything contained in the Plan or any Agreement to the
contrary, in the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended, (the "Securities Act") and is not otherwise
exempt from such registration, such Shares shall be restricted against transfer
to the extent required by the Securities Act and Rule 144 or other regulations
thereunder. The Committee may require any individual receiving Shares pursuant
to an Option or Award granted under the Plan, as a condition precedent to
receipt of such Shares or Awards, to represent and warrant to the Company in
writing that the Shares acquired by such individual are
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<PAGE>
acquired without a view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration thereof under said
Act or pursuant to an exemption applicable under the Securities Act or the rules
and regulations promulgated thereunder. The certificates evidencing any of such
Shares or Awards shall be appropriately amended to reflect their status as
restricted securities as aforesaid.
18. Miscellaneous.
18.1 Multiple Agreements. The terms of each
Option or Award may differ from other Options or Awards granted under the Plan
at the same time, or at some other time. The Committee may also grant more than
one Option or Award to a given Eligible Individual during the term of the Plan,
either in addition to, or in substitution for, one or more Options or Awards
previously granted to that Eligible Individual.
18.2 Withholding of Taxes. (a) The Company
may make such provisions and take such steps as it may deem necessary or
appropriate for the withholding of any taxes which the Company is required by
any law or regulation of any governmental authority, whether federal, state or
local, domestic or foreign, to withhold in connection with any Option or the
exercise thereof, any Stock Appreciation Right or the exercise thereof, or the
grant of any other Award, including, but not limited to, the withholding of cash
or Shares which would be paid or delivered pursuant to such exercise or Award or
another exercise of Award under this Plan until the Grantee reimburses the
Company for the amount the Company is required to withhold with respect to such
taxes, or canceling any portion of such Award or another Award under this Plan
in an amount sufficient to reimburse itself for the amount it is required to so
withhold. The Committee may permit a Grantee (or any beneficiary or other person
authorized to act) to elect to pay a portion or all of any amounts required or
permitted to be withheld to satisfy federal, state, local or foreign tax
obligations by directing the Company to withhold a number of whole Shares which
would otherwise be distributed and which have a Fair Market Value sufficient to
cover the amount of such required or permitted withholding taxes.
(b) If an Optionee makes a
disposition, within the meaning of Section 424(c) of the Code and regulations
promulgated thereunder, of any Share or Shares issued to such Optionee pursuant
to the exercise of an Incentive Stock Option within the two-year period
commencing on the day after the date of the grant or within the one-year period
commencing on the day after the date of transfer of such Share or Shares to the
Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of
such disposition, notify the Company thereof, by delivery of written notice to
the Company at its principal executive office.
(c) The Committee shall have the
authority, at the time of grant of an Option or Award under the Plan or at any
time thereafter, to award tax bonuses to designated Optionees or Grantees, to be
paid upon their exercise of Options or payment in respect of Awards granted
hereunder. The amount of any such payments shall be determined by the Committee.
The Committee shall have full authority in its absolute discretion to determine
the amount of any such tax bonus and the terms and conditions affecting the
vesting and payment thereof.
19. Effective Date. The effective date of the Plan
shall be the date of its adoption by the Board, subject only to the approval by
the holders of a majority of the securities of the Company in accordance with
the applicable laws of the State of Delaware within twelve (12) months of such
adoption.
20. Termination of 1995 Stock Option Plan. Upon the
effectiveness of the Plan, the Company's 1995 Stock Option Plan shall terminate.
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EXHIBIT 5.1
BATTLE FOWLER LLP
A LIMITED LIABILITY PARTNERSHIP
75 East 55th Street
New York, New York 10022
(212) 339-9150
April 20, 1999
Board of Directors
Marvel Enterprises, Inc.
685 Third Avenue
New York, NY 10017
Re: Marvel Enterprises, Inc.
Registration Statement on Form S-8
----------------------------------
Gentlemen:
We have acted as counsel for Marvel Enterprises, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of the
registration statement on Form S-8, and any amendments thereto (the
"Registration Statement"), as filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), for the
registration under the Securities Act of 6,000,000 shares (the "Shares") of
Common Stock, par value $.01 per share (the "Common Stock") issued or issuable
under the Company's 1998 Stock Incentive Plan (the "Plan"), including shares
issuable upon the exercise of options granted or to be granted under the Plan
(the "Options"). Capitalized terms used and not defined in this opinion have the
meanings ascribed to them in the Registration Statement.
In rendering this opinion, we have relied upon, among other
things, our examination of such records of the Company, including without
limitation, the Company's Restated Certificate of Incorporation, the Company's
Amended and Restated Bylaws and the Plan as we have deemed necessary for the
purpose of the opinion expressed below.
In addition, we have assumed the genuineness of all signatures and
the authenticity of all documents submitted to us as originals, and the
conformity to original documents of all
804516.1
<PAGE>
2
Board of Directors April 20, 1999
documents submitted to us as certified or photostatic copies. As to various
questions of fact material to this opinion, we have relied, to the extent we
deem reasonably appropriate, upon representations or certificates of officers or
directors of the Company and upon documents, records and instruments furnished
to us by the Company, without independently checking or verifying the accuracy
of such documents, records and instruments furnished to us by the Company.
We are not admitted to the practice of law in any jurisdiction but
the State of New York, and we do not express any opinion as to the laws of other
states or jurisdictions other than the General Corporation Law of the State of
Delaware and the federal law of the United States. No opinion is expressed as to
the effect that the law of any other jurisdiction may have upon the subject
matter of the opinion expressed herein under conflicts of law principles, rules
and regulations or otherwise.
Based on the foregoing, we are of the opinion that:
1. the Shares which are currently issued and outstanding have been
validly issued and are fully paid and nonassessable; and
2. the Shares which are issuable under the Plan, including the
Shares issuable pursuant to the Options will, when issued in accordance with the
Plan, be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the use
of our name under the Item 5 section "Interests of Named Experts and Counsel"
included therein. In giving this consent, we do not admit that we are within the
category of persons whose consent is required by Section 7 of the Securities Act
of 1933 or the rules and regulations promulgated thereunder by the Securities
and Exchange Commission.
Very truly yours,
/s/BATTLE FOWLER LLP
------------------------------------
BATTLE FOWLER LLP
804516.1
EXHIBIT 23.1
Consent of Ernst & Young LLP
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Marvel Enterprises, Inc. pertaining to the Marvel Enterprises, Inc. 1998
Stock Incentive Plan of our report dated February 5, 1999, except for Note 3, as
to which the date is February 11, 1999 and Notes 1 and 5, as to which the date
is February 25, 1999, with respect to the consolidated financial statements of
Marvel Enterprises, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1998, filed with the Securities and Exchange Commission.
/s/Ernst & Young LLP
April 20, 1999
