As filed with the Securities and Exchange Commission on May 21, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE STEPHAN CO.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-0676812
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 West McNab Road
Fort Lauderdale, Florida 33309
------------------------------
(Address of principal executive offices, including zip code)
1990 KEY EMPLOYEE STOCK INCENTIVE PLAN, AS AMENDED
--------------------------------------------------
(Full title of the plan)
FRANK F. FEROLA, President
1850 West McNab Road
Fort Lauderdale, Florida 33309
(305) 971-0600
--------------
(Name, address and telephone number,
including area code, of agent for service)
Copies of all communications to:
STEPHEN A. OLLENDORFF, ESQ.
STEPHEN R. CONNONI, ESQ.
Hertzog, Calamari & Gleason
100 Park Avenue
New York, New York 10017
(212) 481-9500
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CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
Securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share(1) price(2) fee
- --------------------------------------------------------------------------------
Common
Stock,
$.01 par
value 400,000
per share shares $12.56 $5,024,000 $1,482.08
- --------------------------------------------------------------------------------
(1) Based on the average of the high and low prices of the Common Stock of
the Registrant on May 13, 1998 in accordance with Rule 457(c) under the
Securities Act of 1933, as amended.
(2) This amount is the assumed aggregate option exercise price of the
shares of Common Stock being registered hereunder, based upon the market price
of the Common Stock of the Registrant on May 13 , 1998, in accordance with Rules
457(c) and (h)(1) under the Securities Act of 1933, as amended.
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In accordance with the provisions of Rule 462 promulgated under the
Securities Act of 1933, as amended, this Registration Statement will become
effective upon filing with the Securities and Exchange Commission.
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This Registration Statement covers additional securities of the same class
(i.e., Common Stock) as the securities for which Registration Statements on Form
S-8 were filed on July 26, 1991 and December 15, 1994, relating to the 1990 Key
Employee Stock Incentive Plan is already effective under the Securities Act of
1933, as amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference in this Registration
Statement the following documents: (i) the Registrant's Registration Statement
on Form S-8 (File No. 33-41954), dated July 26, 1991; (ii) the Registrant's
Registration Statement on Form S-8 (File No. 33-87454), dated December 15, 1994;
(iii) the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997; (iv) all reports filed by the Registrant with the Securities
and Exchange Commission (the "Commission") pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since December
31, 1997; and (v) the Registrant's Form 8-A filed with the Commission on May 5,
1994. In addition, all reports and other documents filed by the Registrant with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act from and after the date hereof and prior to the filing with the Commission
of a post-effective amendment hereto which indicates that all securities offered
have been sold or which deregisters any securities then remaining unsold shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such reports and other documents.
ITEM 8. Exhibits.
Exhibit No. Description
4.1 1990 Key Employee Stock Incentive Plan, as
amended.
5.1 Opinion of Bert Sager, special counsel to
Registrant with respect to the legality of the
securities being registered hereunder.
23.1 Consent of Deloitte & Touche LLP,
independent certified public
accountants for the Registrant.
23.2 Consent of Bert Sager, special counsel to the
Registrant (included in the opinion filed as
Exhibit 5.1 hereto).
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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 Fort Lauderdale, State of Florida, on this 21st day
of May 1998.
THE STEPHAN CO.
(Registrant)
By: Frank F. Ferola
--------------------------------
Frank F. Ferola, President and
Chief Executive Officer
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 dates indicated.
Signature Title Date
- --------- ----- ----
Frank F. Ferola President, Chief Executive Officer, May 21, 1998
- ------------------------ and Chairman of the Board of Directors
Frank F. Ferola (Principal Executive Officer)
David A. Spiegel Chief Financial Officer May 21, 1998
- ------------------------ (Principal Financial and
David A. Spiegel Accounting Officer)
Thomas M. D'Ambrosio Vice President, Treasurer May 21, 1998
- ------------------------ and Director
Thomas M. D'Ambrosio
John DePinto Director May 21, 1998
- ------------------------
John DePinto
Leonard Genovese Director May 21, 1998
- ------------------------
Leonard Genovese
Curtis Carlson Director May 21, 1998
- ------------------------
Curtis Carlson
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Exhibit Index
Exhibit No Description Page
4.1 1990 Key Employee Stock Incentive Plan, as 6
amended.
5.1 Opinion of Bert Sager, special counsel to 23
Registrant with respect to the legality of
the securities being registered hereunder.
23.1 Consent of Deloitte & Touche LLP, 25
certified public accountants for
the Registrant.
23.2 Consent of Bert Sager, special counsel to the 23
Registrant (included in the opinion filed as
Exhibit 5.1 hereto).
5
EXHIBIT 4.1
- -----------
THE STEPHAN CO.
1990 Key Employee Stock Incentive Plan
As Amended, July 15, 1994, April 12, 1996
and February 19, 1997
Section 1. Purpose; Definitions.
The purpose of The Stephan Co. 1990 Key Employee Stock Incentive Plan (the
"Plan") is to enable The Stephan Co. to offer to its key employees and to key
employees of its subsidiaries, long term performance-based stock and/or other
equity interests in The Stephan Co., thereby enhancing its ability to attract,
retain and reward such key employees, and to increase the mutuality of interests
between those employees and the stockholders of The Stephan Co. The various
types of long-term incentive awards which may be provided under the Plan will
enable The Stephan Co. to respond to changes in compensation practices, tax
laws, accounting regulations and the size and diversity of its businesses.
For purposes of the Plan, the following terms shall be defined as set forth
herein:
(a) "Board" means the Board of Directors of The Stephan Co.
(b) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
(c) "Committee" means the Stock Option Committee of the Board or any other
committee of the Board which the Board may designate.
(d) "Company" means The Stephan Co., a corporation organized under the laws of
the State of Florida.
(e) "Deferred Stock" means Stock to be received, under an award made pursuant to
Section 7 hereof, at the end of a specified deferral period.
(f) "Disability" means disability as determined under procedures established by
the Committee for purposes of the Plan.
(g) "Early Retirement" means retirement from active employment with the Company
or any Subsidiary prior to age 65.
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(h) "Fair Market Value", unless otherwise required by any applicable provision
of the Code or any regulations issued thereunder, means, as of any given date:
(i) if the Common Stock (as hereinafter defined) is listed on a national
securities exchange or quoted on the NASDAQ National Market System, the closing
price of the Common Stock on the last preceding day on which the Common Stock
was traded, as reported on the composite tape or by NASDAQ/NMS System
Statistics, as the case may be; (ii) if the Common Stock is not listed on a
national securities exchange or quoted on the NASDAQ National Market System, but
is traded in the over-the-counter market, the average of the bid and asked
prices for the Common Stock on the last preceding day for which such quotations
are reported by NASDAQ; and (iii) if the fair market value of the Common Stock
cannot be determined pursuant to clause (i) or (ii) hereof, such price as the
Committee shall determine.
(i) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(j) "Non-Qualified Stock Option" means any Stock Option that is not an Incentive
Stock Option.
(k) "Normal Retirement" means retirement from active employment with the Company
or any Subsidiary on or after age 65.
(l) "Other Stock-Based Award" means an award under Section 8 hereof that is
valued in whole or in part by reference to, or is otherwise based upon, Stock.
(m) "Plan" means this The Stephan Co. 1990 Key Employee Stock Incentive Plan, as
hereinafter amended from time to time.
(n) "Restricted Stock" means Stock, received under an award made pursuant to
Section 6 hereof, that is subject to restrictions under said Section 6.
(o) "Retirement" means Normal Retirement or Early Retirement.
(p) "Stock" means the Common Stock of the Company, par value $.01 per share.
(q) "Stock Option" or "Option" means any option to purchase shares of Stock
which is granted pursuant to the Plan.
(r) "Subsidiary" means any present or future subsidiary corporation of the
Company, as such term is defined in Section 424(f) of the Code, or any successor
thereto.
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Section 2. Administration.
The Plan shall be administered by the Committee, the membership of which shall
be at all times constituted so as to not adversely affect the compliance of the
Plan with the requirements of Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect from time to time, or with
the requirements of any other applicable law, rule or regulation.
The Committee shall have full authority to grant, pursuant to the terms of the
Plan, to officers and other key employees eligible under Section 4 hereof: (i)
Stock Options, (ii) Restricted Stock, (iii) Deferred Stock, and/or (iv) Other
Stock-Based Awards.
For purposes of illustration and not of limitation, the Committee shall have the
authority (subject to the express provisions of this Plan):
(i) to select the officers and other key employees of the Company or
any Subsidiary to whom Stock Options, Restricted Stock, Deferred Stock and/or
Other Stock-Based Awards may from time to time be granted hereunder;
(ii) to determine the Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock, Deferred Stock and/or Other Stock-Based Awards, or
any combination thereof, if any, to be granted hereunder to one or more eligible
employees;
(iii) to determine the number of shares to be covered by each award
granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not limited
to, share price, any restrictions or limitations, and any vesting, acceleration,
or forfeiture provisions, as the Committee shall determine);
(v) to determine the terms and conditions under which awards granted
hereunder are to operate on a tandem basis and/or in conjunction with or apart
from other cash awards made by the Company or any Subsidiary outside of this
Plan;
(vi) to determine the extent and circumstances under which Stock and
other amounts payable with respect to an award hereunder shall be deferred,
which may be either automatic or at the election of the participant; and
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(vii) to substitute (A) new Stock Options for previously granted Stock
Options, which previously granted Stock Options have higher option exercise
prices and/or contain other less favorable terms, and (B) new awards of any
other type for previously granted awards of the same type, which previously
granted awards are upon less favorable terms.
Subject to Section 10 hereof, the Committee shall have the authority to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall, from time to time, deem advisable, to interpret the terms
and provisions of the Plan and any award issued under the Plan (and to determine
the form and substance of all agreements relating thereto), and to otherwise
supervise the administration of the Plan.
Subject to Section 10 hereof, all decisions made by the Committee pursuant to
the provisions of the Plan shall be made in the Committee's sole discretion and
shall be final and binding upon all persons, including the Company, its
Subsidiaries and Plan participants.
Section 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 870,000 shares. Such shares may consist, in whole or in
part, of authorized and unissued shares.
If any shares of Stock that have been optioned cease to be subject to a Stock
Option, or if any shares of Stock that are subject to any Restricted Stock,
Deferred Stock award or Other Stock-Based Award granted hereunder are forfeited
or any such award terminates without a payment being made to the participant in
the form of cash and/or Stock, such shares shall again be available for
distribution in connection with future grants and awards under the Plan.
In the event of any merger, reorganization, consolidation, recapitalization,
dividend (other than a dividend or its equivalent which is credited to a Plan
participant or a regular cash dividend), Stock split, or other change in
corporate structure affecting the Stock, such substitution or adjustment shall
be made in the aggregate number of shares reserved for issuance under the Plan,
in the number and option price of shares subject to outstanding Options granted
under the Plan, and in the number of shares subject to other outstanding awards
(including but not limited to awards of Restricted Stock, Deferred Stock and
Other Stock-Based Awards) granted under the Plan as may be determined to be
appropriate by the Committee in order to prevent dilution or enlargement of
rights, provided that the number of shares subject to any award shall always be
a whole number.
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Section 4. Eligibility.
Officers and other key employees of the Company or any Subsidiary (but excluding
members of the Committee and any director who receives options under a
directors' stock option plan) who are at the time of the grant of an award under
this Plan employed by the Company or any Subsidiary and who are responsible for
or contribute to the management, growth and/or profitability of the business of
the Company or any Subsidiary, are eligible to granted Options and awards under
the Plan. Eligibility under the Plan shall be determined by the Committee.
Section 5. Stock Options.
(a) Grant and Exercise. Stock Options granted under the Plan may be of two
types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms as the Committee
may from time to time approve. The Committee shall have the authority to grant
to any optionee Incentive Stock Options, Non-Qualified Stock Options, or both
types of Stock Options and may be granted alone or in addition to other awards
granted under the Plan. To the extent that any Stock Option does not qualify as
an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options or any agreement providing for Incentive
Stock Options shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be so exercised, so as to disqualify the
Plan under Section 422 of the Code, or, without the consent of the optionee(s)
affected, to disqualify any Incentive Stock Option under Section 422.
(b) Terms and Conditions. Stock Options granted under the Plan shall be subject
to the following terms and conditions:
(i) Option Price. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Committee at the time of grant but
shall be not less than 100% (110%, in the case of an Incentive Stock Option
granted to an optionee ("10% Stockholder") who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its parent (if any) or subsidiary corporations, as those
terms are defined in Sections 424(e) and (f) of the Code) of the Fair Market
Value of the Stock at the time of grant.
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(ii) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years (five years, in the case of an Incentive Stock Option granted to a 10%
Stockholder) after the date on which the Option is granted and no Non-Qualified
Stock Option shall be exercisable more than ten years and one day after the date
on which the Option is granted.
(iii) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Committee at the time of grant; provided, however, that except as otherwise
provided in this Section 5 and Section 9 below, unless waived by the Committee
at or after the time of grant, no Stock Options shall be exercisable prior to
the first anniversary date of the grant of the Option. If the Committee
provides, in its discretion, that any Stock Option is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time at or after the time of grant in whole or in part, based upon such
factors as the Committee shall determine.
(iv) Method of Exercise. Subject to whatever installment, exercise and
waiting period provisions are applicable in a particular case, Stock Options may
be exercised in whole or in part at any time during the option period, by giving
written notice of exercise to the Company specifying the number of shares of
Stock to be purchased. Such notice shall be accompanied by payment in full of
the purchase price, which shall be (i) in cash; (ii) unless otherwise provided
in the Stock Option agreement referred to in Section 5(b)(xii) below, in whole
shares of Stock which are already owned by the holder of the Option; (iii)
unless otherwise provided in the Stock Option agreement referred to in Section
5(b)(xii) below, partly in cash and partly in such Stock; or (iv) any other form
of consideration which has been approved by the Committee, including any
approved cashless exercise mechanism (including, if so approved, by means of
irrevocable broker's instruction letter and of the application of a specified
portion of the shares of Stock issuable upon exercise of a Stock Option as
payment of the exercise price therefor). Cash payments shall be made by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; provided, however, that the Company shall not be required
to deliver certificates for shares of Stock with respect to which an Option is
exercised by payment of cash until the Company has confirmed the receipt of good
and available funds in payment of the purchase price thereof. Payments in the
form of Stock (which shall be valued at the Fair Market Value of a share of
Stock on the date of exercise) shall be made by delivery of stock certificates
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in negotiable form which are effective to transfer good and valid title thereto
to the Company, free of any liens or encumbrances. The right to deliver in full
or partial payment of the exercise price of a Stock Option any consideration
other than cash shall be limited to such frequency and/or amount as the
Committee shall determine in its sole and absolute discretion. Except as
otherwise expressly provided in this Plan, no Option may be exercised at any
time unless the holder thereof is then an employee of the Company or of a
Subsidiary. The holder of an Option shall have none of the rights of a
stockholder with respect to the shares subject to the Option until such shares
shall be transferred to the holder upon the exercise of the Option.
(v) Transferability; Exercisability. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(vi) Termination by Reason of Death. Subject to Section 5(b)(x) below,
if an optionee's employment by the Company or a Subsidiary terminates by reason
of death, any Stock Option held by such optionee, unless otherwise determined by
the Committee at grant, shall be fully vested and may thereafter be exercised by
the legal representative of the estate or by the legatee of the optionee under
the will of the optionee, for a period of one year (or such other period as the
Committee may specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(vii) Termination by Reason of Disability. Subject to Section 5(b)(x)
below, if an optionee's employment by the Company or any Subsidiary terminates
by reason of Disability, any Stock Option held by such optionee, unless
otherwise determined by the Committee at the time of grant, shall be fully
vested and may thereafter be exercised by the optionee for a period of three
years (or such other period as the Committee may specify at the time of grant)
from the date of such termination of employment or until the expiration of the
stated term of such Stock Option, whichever period is the shorter; provided,
however, that if the optionee dies within such three-year period (or such other
period as the Committee shall specify at the time of grant), any unexercised
Stock Option held by such optionee shall thereafter be exercisable to the extent
to which it was exercisable at the time of death for a period of one year from
the date of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
(viii) Termination by Reason of Retirement. Subject to Section 5(b)(x)
below, if an optionee's employment by the Company or a Subsidiary terminates by
reason of Normal Retirement, any Stock Option held by such optionee, unless
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otherwise determined by the Committee at grant, shall be fully vested and may
thereafter be exercised by the optionee for a period of three years (or such
other period as the Committee may specify at the time of grant) from the date of
such termination of employment or the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however, that if the
optionee dies within such three-year period, any unexercised Stock Option held
by such optionee shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one year from the date of such
death or until the expiration of the stated term of such Stock Option, whichever
period is the shorter. If an optionee's employment with the Company or any
Subsidiary terminates by reason of Early Retirement, any Stock Option held by
such optionee, unless otherwise determined by the Committee at the time of
grant, shall be fully vested and may thereafter be exercised by the optionee for
a period of one (1) year (or such longer period as the Committee may specify at
the time of grant, but in no event more than three (3) years) from the date of
such termination of employment or the expiration of the stated term of such
Stock Option, whichever period is the shorter.
(ix) Other Termination. Subject to the provisions of Section 12(g)
below and unless otherwise determined by the Committee at the time of grant, if
an optionee's employment by the Company or any Subsidiary terminates for any
reason other than death, Disability or Retirement, the Stock Option shall
thereupon automatically terminate, except that if the optionee is involuntarily
terminated by the Company or a Subsidiary without cause, such Stock Option may
be exercised for the lesser of three months after termination of employment or
the balance of such Stock Option's term.
(x) Additional Incentive Stock Option Limitation. In the case of an
Incentive Stock Option, the amount of aggregate Fair Market Value of Stock
(determined at the time of grant of the Option) with respect to which Incentive
Stock Options are exercisable for the first time by an optionee during any
calendar year (under all such plans of optionee's employer corporation and its
parent and subsidiary corporations, as defined in Sections 424(e) and (f) of the
Code) shall not exceed $100,000.
(xi) Buyout and Settlement Provisions. The Committee may at any time
offer to buy out a Stock Option previously granted, based upon such terms and
conditions as the Committee shall establish and communicate to the optionee at
the time that such offer is made.
(xii) Stock Option Agreement. Each grant of a Stock Option shall be
confirmed by, and shall be subject to the terms of, an agreement executed by the
Company and the participant.
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Section 6. Restricted Stock.
(a) Grant and Exercise. Shares of Restricted Stock may be issued either alone or
in addition to other awards granted under the Plan. The Committee shall
determine the eligible persons to whom, and the time or times at which, grants
of Restricted Stock will be made, the number of shares to be awarded, the price
(if any) to be paid by the recipient, the time or times within which such awards
may be subject to forfeiture (the "Restriction Period"), the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the
awards.
The Committee may condition the grant of Restricted Stock upon the attainment of
specified performance goals or such other factors as the Committee may
determine.
(b) Terms and Conditions. Each Restricted Stock award shall be subject to the
following terms and conditions:
(i) Issuance; Certificates. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name of the
holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
restrictive legend to the effect that ownership of the Restricted Stock (and
such Retained Distributions), and the enjoyment of all rights appurtenant
thereto, are subject to the restrictions, terms and conditions provided in the
Plan and the applicable Restricted Stock agreement. Such certificates shall be
deposited by the holder with the Company, together with stock powers or other
instruments of assignment, each endorsed in blank, which will permit transfer to
the Company of all or any portion of the Restricted Stock and any securities
constituting Retained Distributions that shall be forfeited or that shall not
become vested in accordance with the Plan and the applicable Restricted Stock
agreement.
(ii) Rights of Holder. Restricted Stock shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. The holder will
have the right to vote such Restricted Stock, to receive and retain all regular
cash dividends and other cash equivalent distributions as the Board may in its
sole discretion designate, pay or distribute on such Restricted Stock and to
exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (A) the holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (B) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
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Restriction Period; (C) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (D) the holder may not sell,
assign, transfer, pledge, exchange, encumber or dispose of the Restricted Shares
or any Retained Distributions during the Restriction Period; and (E) a breach of
any of the restrictions, terms or conditions contained in this Plan or the
Restricted Stock agreement referred to in the following clause (iv) or otherwise
established by the Committee with respect to any Restricted Stock or Retained
Distributions will cause a forfeiture of such Restricted Stock and any Retained
Distributions with respect thereto.
(iii) Expiration of Restriction Period. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (A) all
or part of such Restricted Stock shall become vested in accordance with the
terms of the Restricted Stock agreement referred to in the following clause
(iv), and (B) any Retained Distributions with respect to such Restricted Stock
shall become vested to the extent that the Restricted Stock related thereto
shall have become vested. Any such Restricted Stock and Retained Distributions
that do not vest shall be forfeited to the Company and the holder shall not
thereafter have any rights with respect to such Restricted Stock and Retained
Distributions that shall have been so forfeited.
(iv) Restricted Stock Agreement. Each Restricted Stock award shall be
confirmed by, and shall be subject to the terms of, an agreement executed by the
Company and the participant.
Section 7. Deferred Stock.
(a) Grant and Exercise. Deferred Stock may be awarded either alone or
in addition to other awards granted under the Plan. The Committee shall
determine the eligible persons to whom, and the time or times at which Deferred
Stock shall be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period (the "Deferral Period") during which, and
the conditions under which, receipt of the stock will be deferred, and all the
other terms and conditions of the awards.
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The Committee may condition the grant of Deferred Stock upon the attainment of
specified performance goals or such other factors or criteria as the Committee
may determine.
(b) Terms and Conditions. Each Deferred Stock award shall be subject to
the following terms and conditions:
(i) Transferability. Subject to the provisions of this Plan and the
award agreement referred to in Section 7(b)(vii) below, Deferred Stock awards
may not be sold, assigned, transferred, pledged or otherwise encumbered during
the Deferral Period. At the expiration of the Deferral Period (or the Additional
Deferral Period referred to in Section 7(b)(vi) below, where applicable), share
certificates shall be delivered to the participant, or his legal representative,
in a number equal to the shares covered by the Deferred Stock award.
(ii) Dividends. As determined by the Committee at the time of award,
amounts equal to any dividends declared during the Deferral Period (or the
Additional Deferral Period referred to in Section 7(b)(vi) below, where
applicable) with respect to the number of shares covered by a Deferred Stock
award may be paid to the participant currently or deferred and deemed to be
reinvested in additional Deferred Stock.
(iii) Termination of Employment. Subject to the provisions of the award
agreement and this Section 7 and Section 12(g) below, upon termination of a
participant's employment with the Company or any Subsidiary for any reason
during the Deferral Period (or the Additional Deferral Period referred to in
Section 7(b)(vi) below, where applicable) for a given award, the Deferred Stock
in question will vest or be forfeited in accordance with the terms and
conditions established by the Committee at the time of grant.
(iv) Modification by Committee. The Committee may, after grant,
accelerate the vesting of all or any part of any Deferred Stock award and/or
waive the deferral limitations for all or any part of a Deferred Stock award.
(v) Waiver of Deferral Limitations. In the event of hardship or other
special circumstances of a participant whose employment with the Company or any
Subsidiary is involuntarily terminated (other than for cause), the Committee may
waive in whole or in part any or all of the remaining deferral limitations
imposed hereunder or pursuant to the award agreement referred to in Section
7(b)(vii) below with respect to any or all of the participant's Deferred Stock.
(vi) Request for Modification. A participant may request to, and the
Committee may at any time, defer the receipt of an award (or an installment of
an award) for an additional specified period or until a specified event (the
"Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).
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(vii) Deferred Stock Agreement. Each Deferred Stock award shall be
confirmed by, and shall be subject to the terms of, an agreement executed by the
Company and the participant.
Section 8. Other Stock-Based Awards.
(a) Grant and Exercise. Other Stock-Based Awards which may include performance
shares, and shares valued by reference to the performance of the Company or any
subsidiary, may be granted either alone or in addition to or in tandem with
Stock Options, Restricted Stock or Deferred Stock.
The Committee shall determine the eligible persons to whom and the time or times
at which, such awards shall be made, the number of shares of Stock to be awarded
pursuant to such awards, and all other terms and conditions of the awards. The
Committee may also provide for the grant of Stock under such awards upon the
completion of a specified performance period.
(b) Terms and Conditions. Each Other Stock-Based Award shall be subject to the
following terms and conditions:
(i) Transferability. Shares of Stock subject to an Other Stock-Based
Award may not be sold, assigned, transferred, pledged or otherwise encumbered
prior to the date on which the shares are issued, or, if later, the date on
which any applicable restriction, performance or deferral period lapses.
(ii) Dividends. The recipient of an Other Stock-Based Award shall be
entitled to receive, currently or on a deferred basis, dividends or dividend
equivalents with respect to the number of shares covered by the award, as
determined by the Committee at the time of the award. The Committee may provide
that such amounts (if any) shall be deemed to have been reinvested in additional
Stock.
(iii) Vesting. Any Other Stock-Based Award and any Stock covered by an
Other Stock-Based Award shall vest or be forfeited to the extent so provided in
the award agreement, as determined by the Committee.
(iv) Disability; Death. In the event of a participant's Retirement,
Disability or death, or in cases of special circumstances, the Committee may
waive in whole or in part any or all of the limitations imposed hereunder (if
any) with respect to any or all of an Other Stock-Based Award.
(v) Other Stock-Based Award Agreement. Each Other Stock-Based Award
shall be confirmed by, and shall be subject to the terms of, an agreement
executed by the Company and by the participant.
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Section 9. Change in Control Provisions.
(a) A "Change of Control" shall be deemed to have occurred on the tenth day
after:
(i) any individual, firm, corporation or other entity, or any group (as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Act"))
becomes, directly or indirectly, the beneficial owner (as defined in the General
Rules and Regulations of the Securities and Exchange Commission with respect to
Sections 13(d) and 13(g) of the Act) of more than 20% of the then outstanding
shares of the Company's capital stock entitled to vote generally in the election
of directors of the Company; or
(ii) the commencement of, or the first public announcement of the
intention of any individual, firm, corporation or other entity or of any group
(as defined in Section 13(d)(3) of the Act) to commence, a tender or exchange
offer subject to Section 14(d)(1) of the Act for any class of the Company's
capital stock; or
(iii) the stockholders of the Company approve (A) a definitive
agreement for the merger or other business combination of the Company with or
into another corporation, pursuant to which the stockholders of the Company do
not own, immediately after the transaction, more than 50% of the voting power of
the corporation that survives and is a publicly owned corporation and not a
subsidiary of another corporation, or (B) a definitive agreement for the sale,
exchange or other disposition of all or substantially all of the assets of the
Company, or (C) any plan or proposal for the liquidation or dissolution of the
Company;
provided, however, that a "Change of Control" shall not be deemed to have taken
place if beneficial ownership is acquired by, or a tender or exchange offer is
commenced or announced by, the Company, any profit-sharing, employee ownership
or other employee benefit plan of the Company, or any trustee of or fiduciary
with respect to any such plan when acting in such capacity, or any group
comprised solely of such entities.
(b) In the event of a "Change of Control" as defined in subsection (a) above,
awards granted under the Plan will be subject to the following provisions,
unless the provisions of this Section 9 are suspended or terminated by an
affirmative vote of a majority of the Board prior to the occurrence of a "Change
of Control":
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(i) all outstanding Stock Options, which have been outstanding for at
least six months, shall become exercisable in full, whether or not otherwise
exercisable at such time, and any such Stock Option shall remain exercisable in
full thereafter until it expires pursuant to its terms; and
(ii) all restrictions and deferral limitations contained in Restricted
Stock awards, Deferred Stock awards and Other Stock-Based awards granted under
the Plan shall lapse.
Section 10. Amendments and Termination.
The Board may at any time, and from time to time, amend any of the provisions of
the Plan, and may at any time suspend or terminate the Plan; provided, however,
that no such amendment shall be effective unless and until it has been duly
approved by the holders of the outstanding shares of Stock if (a) it increases
the aggregate number of shares of Stock which are available pursuant to the
Plan, (except as provided in Section 3 above) or (b) the failure to obtain such
approval would adversely affect the compliance of the Plan with the requirements
of Rule 16b-3 under the Exchange Act, as in effect from time to time, or with
the requirements of any other applicable law, rule or regulation. The Committee
may amend the terms of any Stock Option or other award theretofore granted under
the Plan; provided, however, that subject to Section 3 above, no such amendment
may be made by the Committee which in any material respect impairs the rights of
the participant without the participant's consent.
Section 11. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a participant or
optionee by the Company, nothing contained herein shall give any such
participant or optionee any rights that are greater than those of a general
creditor of the Company.
Section 12. General Provisions.
(a) Investment Representations; Legend. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the optionee or
participant is acquiring the shares for investment without a view to
distribution thereof.
All certificates for shares of Stock delivered under the Plan shall be subject
to such stop transfer orders and other restrictions as the Committee may deem
advisable under the rules and regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, any applicable Federal or state securities law, and any applicable
corporate law, and the Committee may cause a legend or legends to be put on any
such certificate to make appropriate reference to such restrictions.
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(b) Additional Incentive Arrangements. Nothing contained in the Plan shall
prevent the Board from adopting such other or additional incentive arrangements
as it may deem desirable, including, but not limited to, the granting of stock
options and the awarding of stock and cash otherwise than under the Plan; and
such arrangements may be either generally applicable or applicable only in
specific cases.
(c) No Right of Employment. Nothing contained in the Plan or in any award
hereunder shall be deemed to confer upon any employee of the Company or any
Subsidiary any right to continued employment with the Company or any Subsidiary,
nor shall it interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of any of its employees at any time.
(d) Payment of Taxes. Not later than the date as of which an amount first
becomes includible in the gross income of the participant for Federal income tax
purposes with respect to any option or other award under the Plan, the
participant shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any Federal, state and local taxes of any
kind required by law to be withheld or paid with respect to such amount. If
permitted by the Committee, tax withholding or payment obligations may be
settled with Stock, including Stock that is part of the award that gives rise to
the withholding requirement. The obligations of the Company under the Plan shall
be conditional upon such payment or arrangements and the Company or the
participant's employer (if not the Company) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant from the Company or any Subsidiary.
(e) Applicable Law. The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Florida (without regard to choice of law provisions).
(f) Compensation. Any Stock Option granted or other award made under the Plan
shall not be deemed compensation for purposes of computing benefits under any
retirement plan of the Company or any Subsidiary and shall not affect any
benefits under any other benefit plan now or subsequently in effect under which
the availability or amount of benefits is related to the level of compensation
(unless required by specific reference in any such other plan to awards under
this Plan).
(g) Leave of Absence; Change of Employment. A leave of absence, unless otherwise
determined by the Committee prior to the commencement thereof, shall not be
considered a termination of employment. Any Stock Option granted or awards made
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under the Plan shall not be affected by any change of employment, so long as the
holder continues to be an employee of the Company or any Subsidiary.
(h) Transferability. Except as otherwise expressly provided in the Plan, no
right or benefit under the Plan may be alienated, sold, assigned, hypothecated,
pledged, exchanged, transferred, encumbered or charged, and any attempt to
alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or
charge the same shall be void. No right or benefit hereunder shall in any manner
be liable for or subject to the debts, contracts, liabilities or torts of the
person entitled to such benefit.
(i) Securities Laws. The obligations of the Company with respect to all Stock
Options and awards under the Plan shall be subject to (i) all applicable laws,
rules and regulations and such approvals by any governmental agencies as may be
required, including, without limitation, the effectiveness of a registration
statement under the Securities Act of 1933, as amended, and (ii) the rules and
regulations of any securities exchange on which the Stock may be listed.
(j) Conflict of Plan with Certain Laws. If any of the terms or provisions of the
Plan conflict with the requirements of Rule 16b-3 under the Exchange Act, as in
effect from time to time, or with the requirements of any other applicable law,
rule or regulation, and/or with respect to Incentive Stock Options, Section 422
of the Code, then such terms or provisions shall be deemed inoperative to the
extent they so conflict with the requirements of said Rule 16b-3, and/or with
respect to Incentive Stock Options, Section 422 of the Code. With respect to
Incentive Stock Options, if this Plan does not contain any provision required to
be included herein under Section 422 of the Code, such provision shall be deemed
to be incorporated herein with the same force and effect as if such provision
had been set out at length herein.
(k) Termination for Failure to Execute Agreement. The Committee may terminate
any Stock Option or other award made under the Plan if a written agreement
relating thereto is not executed and returned to the Company within 30 days
after such agreement has been delivered to the participant for his or her
execution.
Section 13. Effective Date of Plan.
The Plan shall be effective as of April 16, 1990, subject to the approval of the
Plan by the holders of the Company's Stock at a meeting of stockholders held
within one year after the effective date. Any grants of Stock Options or awards
under the Plan prior to such approval shall be effective when made (unless
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otherwise specified by the Committee at the time of grant), but shall be
conditioned upon, and subject to, such approval of the Plan by the Company's
stockholders (and no Stock Options may be exercised, and no awards of Restricted
Stock, Deferred Stock or Other Stock-Based Awards shall vest or otherwise become
free of restrictions, prior to such approval).
Section 14. Term of Plan.
No Stock Option, Restricted Stock award, Deferred Stock award or Other
Stock-Based Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the effective date, but awards granted prior to such tenth
anniversary may extend beyond that date.
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EXHIBIT 5.1
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LAW OFFICES OF BERT. SAGER
P.O. BOX 43-1495
6129 S.W. 70th Street
Miami, Florida 33143
(305) 661-5055
May 20, 1998
The Stephan Company
1850 W. McNab Road
Ft. Lauderdale, Florida 33309
The Stephan Co.
Registration Statement on Form S-8
Dear Sirs:
I have acted as special counsel for The Stephan Co., a Florida corporation
(the "Company"), in connection with Registration Statement on Form S-8 (the
"Registration Statement") that is being filed by the Company with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"1933 Act"). This Registration Statement is being filed with respect to 400,000
additional shares of common stock, par value $.01 per share (the "Common
Stock"), of the Company relating to the Company's 1990 Key Employee Stock
Incentive Plan, as amended (the "Plan").
You have requested me to render to you the following opinion. In connection
with the opinion, I have examined originals, or copies certified or otherwise
identified to my satisfaction, of all corporate and other documents and records
of the Company and all certificates of public officials and officers of the
Company, and have made such other investigations, as I have deemed necessary or
appropriate in connection with rendering this opinion. As to questions of fact
material to this opinion, I have, when relevant facts were not independently
established by me, relied upon certificates of public officials and information
supplied to me by officers of the Company.
For purposes of this opinion, I have assumed the genuineness of all
signatures and the authenticity of all documents submitted to me as originals
and the conformity to authentic originals of all documents submitted to me as
certified, conformed or photostatic copies. Based upon the foregoing, I am of
the opinion that:
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1. The Company is a corporation duly organized and validly existing under
the laws of the State of Florida.
2. All requisite corporate actions have been taken to authorize the
issuance of the shares of Common Stock being registered under the Registration
Statement pursuant to the 1933 Act.
3. The shares of Common Stock, when issued and sold in accordance with
the provisions of the Plan, will be legally issued, fully paid and
non-assessable when the Company shall have received therefor the consideration
provided in the Plan (but not less than the par value thereof).
I am an attorney admitted to practice in the State of Florida and do not
purport to be an expert in, or to render any opinions concerning, the laws of
any jurisdiction other than the United States of America and the State of
Florida.
This opinion is rendered to you and is solely for your benefit in
connection with the above transaction. This opinion may not be relied upon by
you for any other purpose, or furnished to, quoted to or relied upon by any
other person, firm or corporation without my prior written consent.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement, to the use of
my name as your counsel with respect to the Registration Statement and to all
references made to us therein.
Very truly yours,
Bert. Sager
BERT. SAGER
24
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Stephan Co. on Form S-8 of our report dated April 9, 1998, appearing in the
Annual Report on Form 10-K of the Company for the year ended December 31, 1997,
and to the reference to us under the heading "Experts" in such Registration
Statement.
Deloitte & Touche L.L.P.
Deloitte & Touche L.L.P.
May 18, 1998
25
