Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the registrant [x]
Filed by a party other than the registrant
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Cooper Life Sciences, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Board of Directors of Cooper Life Sciences, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
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and 0-11.
(1) Title of each class of securities to which
transaction applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total Fee Paid:
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|_| Fee paid previously with preliminary materials.
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|_| Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(4) Date filed:
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COOPER LIFE SCIENCES, INC.
160 Broadway
New York, New York 10038
Tel: (212) 791-5362
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 23, 1999
To the Stockholders of
COOPER LIFE SCIENCES, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Cooper Life Sciences, Inc., a Delaware corporation (the "Company"), will be held
on Tuesday, March 23, 1999, at 10:00 A.M. Eastern Standard Time, at 405
Lexington Avenue, 14th Floor, New York, New York 10174, for the purpose of
considering and acting upon the following:
1. To elect four directors to hold office until the next Annual
Meeting of Stockholders and until their respective successors
have been duly elected and qualified;
2. To approve a change in the Company's name to
Berkshire Bancorp Inc.;
3. To change the Company's authorized capital to 10,000,000
shares of Common Stock and 2,000,000 shares of Preferred
Stock;
4. To eliminate certain unnecessary provisions and modify the
language in other existing provisions of the Company's current
Certificate of Incorporation; which, if adopted at the annual
meeting, will be reflected in an Amended and Restated
Certificate of Incorporation;
5. To approve the Company's 1999 Stock Incentive Plan; and
6. To transact such other business as may properly come before
the Annual Meeting of Stockholders or any adjournments
thereof.
The Board of Directors has fixed the close of business on February 24,
1999 as the record date for the determination of stockholders entitled to notice
of, and to vote at, the annual meeting. Only stockholders of record at the close
of business on that date will be entitled to notice of, and to vote at, the
Annual Meeting of Stockholders or any adjournments thereof.
Enclosed with this Notice are a Proxy Statement, a proxy card and
return envelope, and the Company's Annual Report to Stockholders for the fiscal
year ended October 31, 1998 (which includes the Company's Annual Report on Form
10-K as filed with the Securities and Exchange Commission).
All stockholders are cordially invited to attend the meeting in person.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE POSTAGE PREPAID
ENVELOPE WHICH HAS BEEN PROVIDED.
By Order of the Board of Directors
Harold L. Schneider
Secretary
Dated: February 24, 1999
COOPER LIFE SCIENCES, INC.
160 Broadway
New York, New York 10038
Telephone No.: (212) 791-5362
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
---------------
February 24, 1999
Information Regarding Proxies
This Proxy Statement is being furnished in connection with the
solicitation of the accompanying proxy by and on behalf of the Board of
Directors of Cooper Life Sciences, Inc. (the "Company") for use at the Annual
Meeting of Stockholders to be held on March 23, 1999, at 10:00 A.M. Eastern
Standard Time, at 405 Lexington Avenue, 14th Floor, New York, New York 10174 and
at any adjournment or postponements thereof (the "Annual Meeting") for the
purposes set forth in the accompanying Notice of Meeting. This Proxy Statement
and the accompanying proxy card are first being mailed to stockholders on or
about February 25, 1999.
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by the use of the mail, directors,
officers and other employees of the Company, acting on its behalf, may solicit
proxies by telephone, telegraph, facsimile or personal interview. The Company
will, at its expense, request brokers and other custodians, nominees and
fiduciaries to forward proxy soliciting material to the beneficial owners of
shares held of record by such persons. It is estimated that said costs will be
nominal.
Outstanding Stock and Voting Rights
The Board of Directors has fixed the close of business on February 24,
1999 as the record date (the "Record Date") for the determination of
stockholders of the Company who are entitled to receive notice of, and to vote
at, the Annual Meeting. At the close of business on the Record Date, an
aggregate of 2,126,265 shares of the Company's Common Stock were outstanding,
each of which is entitled to one vote on each matter to be voted upon at the
Annual Meeting. Cumulative voting is not permitted.
Voting Procedures
When a proxy card in the form enclosed with this Proxy Statement is
returned properly executed, the shares represented thereby will be voted at the
Annual Meeting in accordance with the directions indicated thereon. If a proxy
card is properly executed but no directions are indicated, the shares will be
voted (I) FOR each of the nominees for director as shown on the form of proxy
card and (II) FOR the proposals to (i) change the Company's name to Berkshire
Bancorp Inc.; (ii) change the Company's authorized capital to 10,000,000 shares
of Common Stock and 2,000,000 shares of Preferred Stock; and (iii) eliminate
certain unnecessary provisions in the Company's current Certificate of
Incorporation and modify certain language contained in the Certificate of
Incorporation, which proposals, if approved, will be contained in the Company's
Amended and Restated Certificate of Incorporation and (III) FOR the proposal to
approve the Company's 1999 Stock Incentive Plan.
2
The Board of Directors does not know of any other business to come
before the Annual Meeting. However, if any other matters should properly come
before the Annual Meeting or any adjournment or postponement thereof for which
specific authority has not been solicited from the stockholders, then, to the
extent permissible by law, the persons voting the proxies will use their
discretionary authority to vote thereon in accordance with their best judgment.
A stockholder who executes and returns the enclosed proxy card may revoke it at
any time prior to its exercise by giving written notice of such revocation to
the Secretary of the Company, by executing a subsequently dated proxy card or by
voting in person at the Annual Meeting. Attendance at the Annual Meeting by a
stockholder who has executed and returned a proxy card does not alone revoke
such proxy. Votes will be counted and certified by one or more Inspectors of
Election who are expected to be employees of American Stock Transfer & Trust
Company, the Company's transfer agent.
The presence of the holders of a majority of the outstanding shares of
the Company's Common Stock entitled to vote, represented at the Annual Meeting
in person or by proxy, will constitute a quorum. Shares represented by proxies
that are marked "abstain" will be counted as shares present for purposes of
determining the presence of a quorum on all matters. Proxies relating to "street
name" shares that are voted by brokers on some but not all of the matters will
be treated as shares present for purposes of determining the presence of a
quorum on all matters, but they will not be treated as shares entitled to vote
at the Annual Meeting on those matters as to which authority to vote is withheld
by the broker ("Broker Non-Votes"). The four nominees receiving the highest vote
totals will be elected as Directors of the Company. Accordingly, abstentions and
Broker Non-Votes will not affect the outcome of the election. The affirmative
vote of a majority of the outstanding shares of Common Stock represented at the
Annual Meeting in person or by proxy and entitled to vote is required for the
approval of the 1999 Stock Incentive Plan; and the affirmative vote of a
majority of the outstanding shares of Common Stock of the Company entitled to
vote is required for the approval of the (i) change in the Company's corporate
name, (ii) change in the Company's authorized capital stock and (iii)
elimination of and modifications to certain portions of the Company's existing
Certificate of Incorporation, which if adopted at the Annual Meeting, will be
reflected in an Amended and Restated Certificate of Incorporation. Officers and
Directors of the Company who beneficially own more than 50% of the outstanding
shares of Common Stock have advised the Company that they intend to vote FOR the
Company's four nominees for directors and FOR the other proposals set forth
below. In the event that they do so vote their shares, the election of such
nominees and the approval of such other proposals are assured.
PROPOSAL I: ELECTION OF DIRECTORS
At this years Annual Meeting, four (4) nominees will be
elected to hold office as directors. The four persons listed below have been
nominated to serve as directors of the Company until the next annual meeting of
stockholders and until their respective successors have been duly elected and
qualified. All of the nominees are currently directors of the Company. In the
unexpected event that any of such nominees should become unable or decline to
serve, proxies may be voted for the election of substitute nominees as are
designated by the Company's Board of Directors.
The names of the nominees for election as directors are listed
below, together with certain personal information, including the present
principal occupation and recent business experience of each nominee. Each of the
persons named below has indicated to the Board of Directors of the Company that
he will be able to serve.
3
Year
Commenced
Serving as
a Director
Name, Principal Occupation of the
and Other Directorships Age Company
----------------------- --- -------
William L. Cohen 57 1993
Mr. Cohen has been a director since July 1993.
Mr. Cohen is President, Chief Executive Officer and Chairman of the
Board of Andover Togs, Inc., an apparel manufacturing company,
positions he has held for more than the past five years.
Moses Marx 63 1995
Mr. Marx has been a director since May 1995.
Mr. Marx has been a general partner in United
Equities Company (a securities brokerage firm)
since 1954 and a general partner in United
Equities Commodities Company (a commodities
brokerage firm) since 1972. He is also President
of Momar Corp. (an investment company). Mr. Marx
is a director of The Cooper Companies, Inc. (a
developer and manufacturer of healthcare
products).
Steven Rosenberg 50 1995
Mr. Rosenberg has been a director since May 1995.
Mr. Rosenberg has been Vice President-Finance and
Chief Financial Officer of the Company since 1990
and since May 1995, he has also served as acting
President. From September 1987 through April 1990,
he served as President and Director of Scomel
Industries, Inc., a company engaged in
international marketing and consulting.
Mr. Rosenberg is a director of The Cooper
Companies, Inc.
Randolph B. Stockwell 51 1988
Mr. Stockwell has been a director since July 1988.
He has been private investor for over ten years and has served in
various capacities with the Community Bank, a commercial bank, from
September 1972 to January 1987.
There are no family relationships (whether by blood, marriage
or adoption) among any of the Company's current directors or executive officers.
Board Committees, Meetings and Compensation
The Board of Directors of the Company has established an Audit
Committee and a Stock Incentive Committee. The Company does not have a
nominating committee or a compensation committee. The Audit Committee and the
Stock Incentive Committee are comprised of Messrs. Cohen and Stockwell. The
Audit Committee's functions include reviewing with the independent auditors the
plan and result of the auditing engagement, reviewing the adequacy of the
Company's system of internal accounting controls, and considering the range of
audit and nonaudit services. The Stock Incentive Committees's functions
presently consist of the administration of the Company's 1991 Stock Incentive
Plan.
During the fiscal year ended October 31, 1998, the Board met
five times. The Audit Committee and the Stock Incentive Committee did not meet
during fiscal 1998.
4
For a description of compensation paid to Directors, see "Management
Compensation - Compensation of Directors."
Directors are elected annually by the stockholders.
SECURITIES HELD BY MANAGEMENT AND OTHERS
Securities Held by Management
The following table sets forth certain information regarding
ownership of the Company's Common Stock as of the Record Date by each director,
the only executive officer named in the Summary Compensation Table set forth
below (who is also a director of the Company), and by all directors and
executive officers as a group.
Number of Percent
Shares of Class
------ --------
William L. Cohen 1,500(1) *
Moses Marx (2) 1,206,120(3) 56.7%
Steven Rosenberg 20,082(4) *
Randolph B. Stockwell 7,000(5) *
All executive officers and directors
as a group (4 persons) 1,234,702(6) 57.6%
- ----------------
* Less than 1%.
(1) Issuable upon the exercise of options which have been granted to Mr.
Cohen under the Company's Stock Option Plan for Non-Employee Directors.
(2) Mr. Marx's address is 160 Broadway, New York, NY 10038
(3) Includes 500 shares issuable upon the exercise of options which have been
granted to Mr. Marx under the Company's Stock Option Plan for Non-Employee
Directors.
(4) Includes 15,000 shares issuable upon the exercise of outstanding
options which have been granted to Mr. Rosenberg under the Company's
1991 Stock Incentive Plan.
(5) Includes 1,500 shares issuable upon the exercise of options which have
been granted to Mr. Stockwell under the Company's Stock Option Plan for
Non- Employee Directors.
(6) Includes 18,500 shares of Common Stock which are issuable upon the
exercise of outstanding options.
5
Principal Securityholders
The following table sets forth certain information regarding
ownership of the Company's Common Stock as of the Record Date by the only party
(other than Mr. Marx - See "Securities Held by Management" above) which has
advised the Company that it owns more than five percent (5%) of the Company's
Common Stock.
Common Stock Beneficially Owned
-------------------------------
Number of Percent
Shares of Class
------ --------
Estate of Mel Schnell(1) 150,000 6.6%
6 Maiden Lane, New York, NY 10038
- --------
(1) Based upon filings made by the estate of Mr. Schnell with the Securities and
Exchange Commission. Represents 150,000 shares of Common Stock which are
issuable upon the exercise of options granted to Mr. Schnell, while President of
the Company, under the Company's 1991 Stock Incentive Plan.
MANAGEMENT COMPENSATION
Executive Compensation
Summary Compensation Table
The table below shows compensation paid in or with respect to
each of the last three fiscal years to Mr. Steven Rosenberg, who served as the
Company's acting president and chief executive officer during fiscal 1998. Mr.
Rosenberg was the only executive officer of the Company during the fiscal year
ended October 31, 1998.
Annual Compensation
-------------------
Name and
Principal Position Year Salary
- ------------------ ---- ------
Steven Rosenberg(1) 1998 $ 90,000
Vice President (Acting 1997 $ 90,000
President) and Chief 1996 $ 90,000
Financial Officer
- -----------------
(1) Mr. Rosenberg assumed the position of Acting President in May 1995.
Option Grants in Last Fiscal Year
None
The following table sets forth information concerning the
value of unexercised options held by Mr. Rosenberg, the Company's only executive
officer, as of the fiscal year ended October 31, 1998. Mr. Rosenberg did not
exercise any options during the fiscal year ended October 31, 1998.
6
Aggregated Option Exercises in Last Fiscal Year And
Fiscal Year-End Option Values
Shares of Value of
Common Stock Unexercised
Underlying In-The-Money
Options at Options at
FY-End (#) FY-End ($)(1)
---------- -------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ---- ------------- -------------
Steven Rosenberg 15,000/-0- 480,000/-0-
- --------------
(1) Based upon the last sale price on October 31, 1998 of $32.00 per share of
Common Stock.
Compensation Committee Interlocks and Insider Participation in
Compensation Decisions
The Company does not have a Compensation Committee of its
Board of Directors. Decisions as to compensation are made by the Company's Board
of Directors. During the Company's fiscal year ended October 31, 1998, none of
the executive officers of the Company has served on the board of any other
entity, any of whose officers has served on the Board of Directors of the
Company.
Report on Executive Compensation
There is no Compensation Committee of the Board of Directors
or other committee of the Board performing equivalent functions. As noted above,
compensation of the Company's executive officers is determined by the Board of
Directors. There is no formal policy for the Company's executive officers.
The Board of Directors has appointed a Stock Option Committee
which has made grants under, and administered, the 1991 Stock Incentive Plan.
The Committee will continue to make grants and administer the 1991 Stock
Incentive Plan for the duration of the plan.
Total compensation for executive officers consists of a
combination of salaries and stock option awards. Executive officers shall be
entitled to receive such annual bonuses as the Board of Directors may in its
discretion determine to be appropriate under the circumstances, based upon, with
respect to each fiscal year, the Company's results of operations and progress
with respect to the achievement of its strategic goals, the executive officers'
performance, and such other factors as the Board of Directors deems to be
relevant. No bonuses were paid to any executive officer in 1998. Stock option
awards under the Company's 1991 Stock Incentive Plan are intended to attract,
motivate and retain senior management personnel by affording them an opportunity
to receive additional compensation based upon the performance of the Company's
Common Stock.
William L. Cohen
Moses Marx
Steven Rosenberg
Randolph B. Stockwell
Compensation of Directors
Each director who is not an employee of the Company receives
monthly fees of $1,000 for serving as a director of the Company and $1,000 for
each day during which he participates in a meeting of the Board and, if on a
separate day, $500 for each day during which he participates in a meeting of a
committee of the Board of which he is a member. In addition, see "Stock Option
Plan for Non-Employee Directors" below.
7
Benefit Plans
Except as set forth below under "Stock Plans", the Company
does not maintain any pension, profit-sharing or other incentive compensation
plans for the benefit of any of its current employees.
Stock Plans
In 1991, the Board of Directors of the Company adopted a Stock
Option Plan for Non-Employee Directors (the "Stock Option Plan for Non-Employee
Directors") and a 1991 Stock Incentive Plan (the "1991 Stock Incentive Plan"). A
brief description of each plan is as follows:
Stock Option Plan for Non-Employee Directors
Up to 25,000 shares of the Company's Common Stock may be
issued pursuant to the Stock Option Plan for Non-Employee Directors (subject to
appropriate adjustment in the event of changes in the corporate structure of the
Company). The Stock Option Plan for Non- Employee Directors provides that each
director of the Company who is not an employee of the Company or any subsidiary
(and who has not been an employee for at least one year prior to the date of
grant) shall be automatically granted an option to purchase up to 500 shares of
Common Stock of the Company on the date of each annual meeting of stockholders
at which he or she is elected as a director of the Company. Only nonqualified
options may be granted under the Stock Option Plan for Non-Employee Directors.
The option exercise price shall be equal to the fair market value of a share of
Common Stock of the Company on the date of the grant, and the options granted
become exercisable six months after issuance. The Board of Directors has
determined to terminate the Stock Option Plan for Non-Employee Directors,
subject to and effective upon, stockholder approval of the Company's 1999 Stock
Incentive Plan.
1991 Stock Incentive Plan
The 1991 Stock Incentive Plan permits the granting of awards
in the forms of nonqualified stock options, incentive stock options, restricted
stock, deferred stock, and other stock-based incentives. Up to 300,000 shares of
Common Stock of the Company may be issued pursuant to the 1991 Stock Incentive
Plan (subject to appropriate adjustment in the event of changes in the corporate
structure of the Company). Officers and other key employees of the Company or
any subsidiary are eligible to receive awards under the 1991 Stock Incentive
Plan. The option exercise price of all options which are granted under the 1991
Stock Incentive Plan must be at least equal to 100% of the fair market value of
a share of Common Stock of the Company on the date of grant. If the Company's
1999 Stock Incentive Plan is adopted at this Annual Meeting no further options
will be granted under the Company's 1991 Stock Incentive Plan. However, holders
of options previously granted under the 1991 Stock Incentive Plan will continue
to have the right to exercise those options in accordance with the terms of the
options.
8
PERFORMANCE GRAPH
The following graph compares the cumulative total return on
the Company's Common Stock with the cumulative total return of The Nasdaq Stock
Market Total Return Index for the five-year period ended October 31, 1998. The
graph assumes that the value of the investment in the Company and the index was
$100 on October 31, 1993 and assumes that all dividends were reinvested. The
Company has not had significant operating businesses or operations in a primary
business segment to which a meaningful comparison of the Company's performance
for the five-year period ended October 31, 1998 can be made.
RETURN TO SHAREHOLDERS OF COOPER LIFE SCIENCES, INC.
=============================================================================================================
10/29/93 10/31/94 10/31/95 10/31/96 10/31/97 10/30/98
- ---------------------------------------------------------------------------------------------------------------------------------
Cooper Life $100.00 $125.00 $106.25 $143.75 $312.50 $400.00
Sciences, Inc.
- ---------------------------------------------------------------------------------------------------------------------------------
NASDAQ Market $100.00 $100.55 $135.43 $159.82 $210.34 $235.81
Total Return
Index
=================================================================================================================================
PROPOSALS II-IV
Proposals II-IV set forth below contemplate changes to the Company's current
Certificate of Incorporation. If all such proposals are adopted they will be
reflected in the filing of an Amended and Restated Certificate of Incorporation,
a copy of the form of which is attached as Exhibit A to this Proxy Statement.
PROPOSAL II
APPROVAL OF CHANGE IN THE COMPANY'S NAME TO BERKSHIRE BANCORP INC.
The Board of Directors has adopted a resolution proposing that
the Company amend its Certificate of Incorporation to provide for, among other
things, a change in the name of the Company to "Berkshire Bancorp Inc."
The Board of Directors and management of the Company believe
that the proposed change in the Company's name will enable the Company to
establish an image which identifies the Company's new status as the holding
company for its recently acquired operating subsidiary, The Berkshire Bank, a
private New York Banking corporation. In the event that the proposed amendment
is not approved at the Annual Meeting, the Company will not change its name.
Recommendation
The Board of Directors recommends a vote "FOR" the proposed
change in the Company's name to Berkshire Bancorp Inc.
PROPOSAL III
APPROVAL OF CHANGE IN AUTHORIZED CAPITAL
The Board of Directors has adopted a resolution proposing that
the Company amend its Certificate of Incorporation to provide for, among other
things, a change in the Company's authorized capital stock from 6,000,000 shares
of Common Stock and 6,000,000 shares of Preferred Stock to 10,000,000 shares of
Common Stock and 2,000,000 shares of Preferred Stock.
9
The proposed amendment to the Certificate of Incorporation,
although not effecting a change in the total number of authorized shares of
capital stock, which currently consists of 6,000,000 shares of common stock and
6,000,000 shares of preferred stock, will change the allocation of the
authorized capital to 10,000,000 shares of Common Stock and 2,000,000 shares of
Preferred Stock.
The Board of Directors considers the proposed amendment
advisable in order to provide flexibility for future capital requirements. The
development of the Company to date has been financed in part through the
issuance of its Common Stock or securities convertible into Common Stock and the
Board of Directors believes that it would be beneficial to the Company to be in
a position to make additional issuances of such Common Stock or securities
convertible into Common Stock if circumstances warrant such issuances. Approval
by the stockholders of the proposed amendment at the Annual Meeting could avoid
the expensive procedure of calling and holding a special meeting for that
purpose at a later date if the need to issue additional shares of Common Stock
beyond the current 6,000,000 shares authorized should arise . The Board believes
that the smaller number of shares of Preferred Stock that will remain available
for issuance if the proposed amendment is adopted will be more than adequate to
provide the Company with sufficient flexibility with respect to any possible
future equity financing proposals. As with the current authorized Preferred
Stock, the Board of Directors will be authorized to issue the remaining
Preferred Stock with such dividend, liquidation, conversion or voting rights as
the Board may determine. Moreover, the Board of Directors will be empowered to
authorize the issuance of the additional shares of Common Stock as well as the
Preferred Stock at such time or times, to such persons and for such
consideration as the Board deems appropriate, without further stockholder
action. Although such additional shares of Common Stock and the remaining
Preferred Stock could be used to dilute the stock ownership of persons seeking
to obtain control of the Company, approval of the proposed amendment is not
being sought for that purpose.
None of the Company's Common Stock has any pre-emptive rights.
Recommendation
The Board of Directors recommends a vote "FOR" the proposed
change in the Company's capital structure.
PROPOSAL IV
ELIMINATION OF CERTAIN PROVISIONS AND MODIFICATIONS TO OTHER PROVISIONS OF THE
COMPANY'S CERTIFICATE OF INCORPORATION
The Board of Directors has adopted a resolution proposing that
the Company amend and restate its Certificate of Incorporation to provide for
the elimination of the provisions contained in Articles 5-8 of the Company's
current Certificate of Incorporation since the items contained therein are
currently reflected in the Delaware General Corporation Law and the revision of
language to certain provisions of the Company's current Certificate of
Incorporation, such as the provisions regarding indemnification of officers and
directors, that does not involve a substantive change from the current
Certificate of Incorporation.
Recommendation
The Board of Directors recommends a vote "FOR" the proposed
Amended and Restated Certificate of Incorporation to provide for the elimination
of certain unnecessary provisions in the Company's current Certificate of
Incorporation.
PROPOSAL V
APPROVAL OF 1999 STOCK INCENTIVE PLAN
At the Annual Meeting, the Company's stockholders will be
asked to approve the adoption of the Company's 1999 Stock Incentive Plan (the
"1999 Plan").
10
On February 9, 1999, the Board of Directors adopted, subject
to stockholder approval, the 1999 Plan. The Board believes that, to enable the
Company to continue to attract and retain personnel of the highest caliber,
provide incentive for officers, directors, employees and other key persons and
to promote the well-being of the Company, it is in the best interest of the
Company and its stockholders to provide to officers, directors, employees,
consultants and other independent contractors who perform services for the
Company, through the granting of stock options, restricted stock, deferred stock
or other stock awards, the opportunity to participate in the value and/or
appreciation in value of the Company's Common Stock. The Board has found that
the grant of options and stock-based awards under its 1991 Stock Incentive Plan
has proven to be a valuable tool in attracting and retaining key employees.
Accordingly, the Board believes that the 1999 Plan, which provides the Board
greater flexibility with respect to certain terms under which awards that may be
granted, (a) will provide the Company with significant means to attract and
retain talented personnel, (b) will result in saving cash, which otherwise would
be required to maintain current employees and adequately attract and reward
personnel and others who perform services for the Company, and (c) consequently,
will prove beneficial to the Company's ability to be competitive. The last sale
price of the Common Stock on February 24, 1999 was $35.00.
To date, no options or stock awards have been granted under
the 1999 Plan. If the 1999 Plan is approved by the stockholders, options or
stock awards may be granted under the 1999 Plan, the timing, amounts and
specific terms of which cannot be determined at this time.
The following summary of the 1999 Plan does not purport to be
complete, and is subject to and qualified in its entirety by reference to the
full text of the 1999 Plan, set forth as Exhibit "B" hereto.
Summary of the 1999 Plan
The 1999 Plan provides for the grant of any or all of the
following types of awards (collectively, "Awards"): (1) stock options, (ii)
restricted stock, (iii) deferred stock and (iv) other stock-based awards. Awards
may be granted singly, in combination, or in tandem, as determined by the
administrators of the 1999 Plan. A total of 200,000 shares of Common Stock,
subject to anti-dilution adjustment as provided in the 1999 Plan, have been
reserved for distribution pursuant to the 1999 Plan. The maximum number of
shares of Common Stock that may be issued upon the grant of an Award to any
employee of the Company on the last day of any taxable year cannot exceed 75,000
shares during the term of the 1999 Plan.
The 1999 Plan can be administered by the Board of Directors
(the "Board") or a Compensation Committee (the "Committee") consisting of two or
more non-employee members of the Board of Directors appointed by the Board. The
Board or the Committee will determine, among other things, the persons to whom
Awards will be granted, the type of Awards to be granted, the number of shares
subject to each Award and the share price. The Board or the Committee will also
determine the term of each Award, the restrictions or limitations thereon, and
the manner in which each such Award may be exercised or, if applicable, the
extent and circumstances under which common stock and other amounts payable with
respect to an Award will be deferred. Unless sooner terminated, the 1999 Plan
will expire at the close of business on March 22, 2009.
Stock Options. The 1999 Plan provides for the grant of "incentive stock options"
("Incentive Stock Options"), as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), and for options not qualifying as
Incentive Stock Options ("Non-Qualified Stock Options"). The Board or the
Committee, as the case may be, shall determine those persons to whom stock
options may be granted.
Incentive Stock Options granted pursuant to the 1999 Plan are
nontransferable by the optionee during his lifetime. Options granted pursuant
11
to the 1999 Plan will expire if not exercised within 10 years of the grant (five
years in the case of Incentive Stock Options granted to an eligible employee
owning stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or a parent or subsidiary of the Company
immediately before the grant ("10% Stockholder")), and under certain
circumstances set forth in the 1999 Plan, may be exercised within six (6)
months following termination of employment (one year in the event of death,
or disability or 3 years in the event of retirement of the optionee). Options
may be granted to optionees in such amounts and at such prices as may be
determined, from time to time, by the Board or the Committee. The exercise
price of an Incentive or Non-Qualified Stock Option will not be less than the
fair market value of the shares underlying the option on the date the option
is granted, provided, however, that the exercise price of an Incentive Stock
Option granted to a 10% Stockholder may not be less than 110% of such fair
market value.
Under the 1999 Plan, the Company may not, in the aggregate,
grant Incentive Stock Options that are first exercisable by any optionee during
any calendar year (under all such plans of the optionee's employer corporation
and its "parent" and "subsidiary" corporations, as those terms are defined in
Section 424 of the Code) to the extent that the aggregate fair market value of
the underlying stock (determined at the time the option is granted) exceeds
$100,000.
The 1999 Plan contains anti-dilution provisions authorizing
appropriate adjustments in certain circumstances. Shares of Common Stock subject
to Awards which expire without being exercised or which are cancelled as a
result of the cessation of employment are available for further grants. No
shares of Common Stock of the Company may be issued upon the exercise of any
option granted under the 1999 Plan until the full option price has been paid by
the optionee. The Board of Directors or the Committee may grant individual
options under the 1999 Plan with more stringent provisions than those specified
in the 1999 Plan.
Options become exercisable in such amounts, at such intervals
and upon such terms and conditions as the Board or the Committee provide.
Stock options granted under the 1999 Plan are exercisable until the earlier of
(i) a date set by the Board or Committee at the time of grant or (ii) the
close of business on the day before the tenth anniversary of the stock option's
date of grant (the day before the fifth anniversary in the case of an Incentive
Stock Option granted to a 10% Stockholder). The 1999 Plan will remain in effect
until all stock options are exercised or terminated. Notwithstanding the
foregoing, no options may be granted after March 22, 2009.
Restricted and Deferred Stock Awards. Under the 1999 Plan the Board or the
Committee may grant shares of restricted Common Stock either alone or in tandem
with other Awards. Restricted and Deferred Stock awards give the recipient the
right to receive a specified number of shares of Common Stock, subject to such
terms, conditions and restrictions as the Board or the Committee deem
appropriate. Restrictions may include limitations on the right to transfer the
stock until the expiration of a specified period of time and forfeiture of the
stock upon the occurrence of certain events such as the termination of
employment prior to expiration of a specified period of time. In addition, a
participant in the 1999 Plan who has received a Deferred Stock Award may
request, under certain conditions, the Board or the Committee to defer the
receipt of an award (or an installment of an award) for an additional specified
period or until the occurrence of a specified event.
Other Stock Based Awards. Other Stock-Based Awards, which may include
performance shares and shares valued by reference to the performance of the
Company or any parent or subsidiary of the Company, may be granted either alone
or in tandem with other Awards.
12
Certain Federal Income Tax Consequences of the 1999 Plan
The following is a brief summary of the Federal income tax
aspects of Awards made under the 1999 Plan based upon statutes, regulations and
interpretations in effect on the date hereof. This summary is not intended to be
exhaustive, and does not describe state or local tax consequences.
1. Incentive Stock Options. The optionee will recognize no
taxable income upon the grant or exercise of an Incentive Stock Option. Upon a
disposition of the shares after the later of two years from the date of grant
and one year after the transfer of the shares to the optionee, (i) the optionee
will recognize the difference, if any, between the amount realized and the
exercise price as long-term capital gain or long-term capital loss (as the case
may be) if the shares are capital assets in his or her hands; and (ii) the
Company will not qualify for any deduction in connection with the grant or
exercise of the options. The excess, if any, of the fair market value of the
shares on the date of exercise of an Incentive Stock Option over the exercise
price will be treated as an item of adjustment to the optionee for his or her
taxable year in which the exercise occurs and may result in an alternative
minimum tax liability for the optionee. In the case of a disposition of shares
in the same taxable year as the exercise where the amount realized on the
disposition is less than the fair market value of the shares on the date of
exercise, there will be no adjustment since the amount treated as an item of
adjustment, for alternative minimum tax purposes, is limited to the excess of
the amount realized on such disposition over the exercise price which is the
same amount included in regular taxable income.
If Common Stock acquired upon the exercise of an Incentive
Stock Option is disposed of prior to the expiration of the holding periods
described above, (i) the optionee will recognize ordinary compensation income in
the taxable year of disposition in an amount equal to the excess, if any, of the
lesser of the fair market value of the shares on the date of exercise or the
amount realized on the disposition of the shares, over the exercise price paid
for such shares; and (ii) the Company will qualify for a deduction equal to any
such amount recognized, subject to the requirements that the compensation be
reasonable and not limited under Section 162(m) of the Code. The optionee will
recognize the excess, if any, of the amount realized over the fair market value
of the shares on the date of exercise, if the shares are capital assets in his
or her hands, as short-term or long-term capital gain, depending on the length
of time that the optionee held the shares, and the Company will not qualify for
a deduction with respect to such excess.
Subject to certain exceptions for disability or death, if an
Incentive Stock Option is exercised more than three months following the
termination of the optionee's employment, the option will generally be taxed
as a Non-Qualified Stock Option. See "Non-Qualified Stock Options."
2. Non-Qualified Stock Options. With respect to Non-Qualified
Stock Options, (i) upon grant of the option, the optionee will recognize no
income; (ii) upon exercise of the option (if the shares are not subject to a
substantial risk of forfeiture), the optionee will recognize ordinary
compensation income in an amount equal to the excess, if any, of the fair market
value of the shares on the date of exercise over the exercise price, and the
Company will qualify for a deduction in the same amount, subject to the
requirements that the compensation be reasonable and not limited under Section
162(m) of the Code; (iii) the Company will be required to comply with applicable
Federal income tax withholding requirements with respect to the amount of
ordinary compensation income recognized by the optionee; and (iv) on a sale of
the shares, the optionee will recognize gain or loss equal to the difference, if
any, between the amount realized and the sum of the exercise price and the
ordinary compensation income recognized. Such gain or loss will be treated as
short-term or long-term capital gain or loss if the shares are capital assets in
the optionee's hands depending upon the length of time that the optionee held
the shares.
13
3. Stock Awards. Unless a participant otherwise elects to be
taxed upon receipt of shares of restricted or deferred stock under the 1999
Plan, the participant must include in his or her taxable income the difference
between the fair market value of the shares and the amount paid, if any, for the
shares, as of the first date the participant's interest in the shares is no
longer subject to a substantial risk of forfeiture or such shares become
transferrable. A participant's rights in stock awarded under the 1999 Plan are
subject to a substantial risk of forfeiture if the rights to full enjoyment of
the shares are conditioned, directly or indirectly, upon the future performance
of substantial services by the participant. Where shares of stock received under
the 1999 Plan are subject to a substantial risk of forfeiture, the participant
can elect to report the difference between the fair market value of the shares
on the date of receipt and the amount paid, if any, for the stock as ordinary
income in the year of receipt. To be effective, the election must be filed with
the Internal Revenue Service within 30 days after the date the shares are
transferred to the participant. The Company is entitled to a Federal income tax
deduction equal in amount to the amount includable as compensation in the gross
income of the participant, subject to the requirements that the compensation be
reasonable and not limited under Section 162(m) of the Code. The amount of
taxable gain arising from a participant's sale of shares of restricted stock
acquired pursuant to the 1999 Plan is equal to the excess of the amount realized
on such sale over the sum of the amount paid, if any, for the stock and the
compensation element included by the participant in taxable income.
4. Other Tax Matters. If unmatured installments of Awards are
accelerated as a result of a Change of Control (as defined in the 1999 Plan),
any amounts received from the exercise by a participant of a stock option, the
lapse of restrictions on restricted stock or the deemed satisfaction of
conditions of performance-based awards may be included in determining whether or
not a participant has received an "excess parachute payment" under Section 280G
of the Code, which could result in (i) the imposition of a 20% Federal excise
tax (in addition to Federal income tax) payable by the participant on certain
payments of Common Stock or cash resulting from such exercise or deemed
satisfaction of conditions of performance awards from such exercise or deemed
satisfaction of conditions of performance awards or, in the case of restricted
stock, on all or a portion of the fair market value of the shares on the date
the restrictions lapse and (ii) the loss by the Company of a compensation
deduction.
Recommendation
The Board of Directors recommends a vote "FOR" the adoption of
the 1999 Stock Incentive Plan.
OTHER MATTERS
The Board of Directors of the Company knows of no other
matters to be presented at the Annual Meeting, but if any such matters properly
come before the Annual Meeting, it is intended that the persons holding the
accompanying proxy will vote in accordance with their best judgement.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Grant Thornton LLP has audited and and reported upon the
financial statements of the Company for the fiscal year ended October 31, 1998
and it is currently anticipated that Grant Thornton LLP will be selected by
the Board of Directors to examine and report upon the financial statements
of the Company for the fiscal year ending October 31, 1999. A representative of
Grant Thornton LLP is expected to be present at the Annual Meeting with the
opportunity to make a statement if he or she desires to do so and is expected
to be available to respond to appropriate questions.
SUBMISSION OF STOCKHOLDER PROPOSALS
A stockholder proposal must be received by the Company on or
prior to October 26, 1999 at the address of the Company set forth on the first
page of this Proxy Statement in order to be eligible for inclusion in the
Company's proxy statement for the next annual meeting of stockholders. Any such
proposal should be directed to the Secretary of the Company.
By Order of the Board of Directors
Harold L. Schneider
Secretary
Dated: February 24, 1999
14
Exhibit A
FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
COOPER LIFE SCIENCES, INC.
The Corporation was incorporated under the name "Cooper
Medical Devices Corporation" by the filing of its original Certificate of
Incorporation with the Secretary of State of the State of Delaware on March 1,
1979. This Amended and Restated Certificate of Incorporation of the Corporation,
which both restates and amended the provisions of the Corporation's Certificate
of Incorporation (as amended, this "Certificate of Incorporation"), was duly
adopted in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware (the "DGCL"). The Certificate of
Incorporation of the Corporation is hereby amended and restated to read in its
entirety as follows:
ARTICLE I.
The name of the corporation (which is hereinafter referred to
as the "Corporation") is BERKSHIRE BANCORP INC.
ARTICLE II.
The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle, State of Delaware 19801. The name of the
Corporation's registered agent is The Corporation Trust Company.
ARTICLE III.
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the DGCL.
ARTICLE IV.
4.1 Capital Stock. The total number of shares of capital stock
which the Corporation shall have authority to issue is twelve million
(12,000,000) shares, of which ten million (10,000,000) shares shall be common
stock, par value $.10 per share ("Common Stock"), and two million (2,000,000)
shares shall be preferred stock, par value $.01 per share ("Preferred Stock").
4.2 Common Stock. The shares of authorized Common Stock of the
Corporation shall be identical in all respects and shall have equal rights and
privileges.
4.3 Preferred Stock. The Preferred Stock may be issued from
time to time in one or more series. The Board of Directors of the Corporation is
hereby expressly authorized to provide, by resolution or resolutions duly
adopted by it prior to issuance, for the creation of each such series and to fix
the designation and the powers, preferences, rights, qualifications, limitations
and restrictions relating to the shares of each such series. The authority of
the Board of Directors with respect to each series of Preferred Stock shall
include, but not be limited to, determining the following:
(a) the designation of such series, the number of shares to
constitute such series and the stated value if different from the par
value thereof;
(b) whether the shares of such series shall have voting
rights, in addition to any voting rights provided by law, and, if so,
the terms of such voting rights, which may be general or limited;
15
(c) the dividends, if any, payable on such series, whether any
such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, and
the preference or relation which such dividends shall bear to the
dividends payable on any shares of stock of any other class or any
other series of Preferred Stock;
(d) whether the shares of such series shall be subject to
redemption by the Corporation, and, if so, the times, prices and other
conditions of such redemption;
(e) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such series for retirement
or other corporate purposes and the terms and provisions relating to
the operation thereof;
(g) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or any
other series of Preferred Stock or any other securities and, if so, the
price or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same, and any other terms and
conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the Corporation of, the
Common Stock or shares of stock of any other class or any other series
of Preferred Stock;
(i) the conditions or restrictions, if any, upon the creation
of indebtedness of the Corporation or upon the issue of any additional
stock, including additional shares of such series or of any other
series of Preferred Stock or of any other class; and
(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations
and restrictions, thereof.
The powers, preferences and relative, participating, optional
and other special rights of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding. All shares of any one
series of Preferred Stock shall be identical in all respects with all other
shares of such series, except that shares of any one series issued at different
times may differ as to the dates from which dividends thereof shall be
cumulative.
ARTICLE V.
Unless required by law or determined by the chairman of the
meeting to be advisable, the vote by stockholders on any matter, including the
election of directors, need not be by written ballot.
16
ARTICLE VI.
The Corporation reserves the right to increase or decrease its
authorized capital stock, or any class or series thereof, and to reclassify the
same, and to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation or the Bylaws of the Corporation; and other
provisions authorized by the DGCL at the time in force may be added or inserted,
in the manner now or hereafter prescribed by law, and all rights conferred upon
stockholders, Directors or any other person pursuant to this Certificate of
Incorporation and the Bylaws of the Corporation are granted subject to the
aforementioned reservation.
ARTICLE VII.
The Board of Directors shall have the power at any time, and
from time to time, to adopt, amend and repeal any and all Bylaws of the
Corporation.
ARTICLE VIII.
8.1 Elimination of Certain Liability of Directors. To the
fullest extent permitted by the DGCL, as the same exists or may hereafter be
amended, no Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director. No amendment of this Certificate of Incorporation or repeal
of any of its provisions shall limit or eliminate any right or protection of a
Director of this Corporation under this Section 8.1 for or with respect to any
acts or omissions of such Director occurring prior to such amendment or repeal.
8.2 Indemnification. The Corporation shall indemnify (A) its
Directors and officers, whether serving the Corporation or at its request, any
other entity, to the full extent required or permitted by the DGCL now or
hereafter in force, including the advance of expenses under the procedures and
to the full extent permitted by law, and (B) other employees and agents of the
Corporation to such extent as shall be expressly authorized by the Board of
Directors or the ByLaws and as permitted by law. The foregoing rights of
indemnification shall not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of Directors may take such
action as is necessary to carry out these indemnification provisions and is
expressly empowered to adopt, approve and amend from time to time such Bylaws,
resolutions or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No amendment of this
Certificate of Incorporation or repeal of any of its provisions shall limit or
eliminate the right to indemnification provided under this Section 8.2 with
respect to any acts or omissions occurring prior to such amendment or repeal.
IN WITNESS WHEREOF, this Restated Certificate of
Incorporation, which restates, integrates and amends the provisions of the
certificate of incorporation of the Corporation, and which has been duly adopted
by the stockholders of the Corporation in accordance with the provisions of
Sections 242 and 245 of the Delaware General Corporation Law, has been executed
by Steven Rosenberg, its Vice President, this_____day of March, 1999.
COOPER LIFE SCIENCES, INC.
By: ------------------------
Steven Rosenberg
Vice President
17
EXHIBIT B
BERKSHIRE BANCORP INC.
1999 Stock Incentive Plan
Section 1. Purposes; Definitions.
The purpose of this Plan is to enable the Company to offer to its key
employees and to key employees of its Subsidiaries and other persons who are
expected to contribute to the success of the Company, long term
performance-based stock and/or other equity interests in the Company, thereby
enhancing their ability to attract, retain and reward such key employees or
other persons, and to increase the mutuality of interest between those employees
or other persons and the stockholders of the Company.
For purposes of this Plan, the following terms shall be defined as set
forth below:
(a) "Board" means the Board of Directors of Berkshire Bancorp Inc.
(b) "Cause" shall have the meaning ascribed thereto in Section 5(b)(ix)
below.
(c) "Change of Control" shall have the meaning ascribed thereto in
Section 9 below.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(e) "Committee" means the Stock Incentive Committee of the Board
or any other committee of the Board which the Board may
designate.
(f) "Company" means Berkshire Bancorp Inc., a corporation
organized under the laws of the State of Delaware.
(g) "Deferred Stock" means Stock to be received, under an award
made pursuant to Section 7 below, at the end of a specified
deferral period.
(h) "Disability" means disability as determined under procedures
established by the Committee for purposes of this Plan.
(i) "Early Retirement" means retirement from active employment
with the Company or any Parent or Subsidiary prior to age 65,
with the approval of the Board or the Committee, for purposes
of one or more award(s) under this Plan.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, as in effect from time to time.
(k) "Fair Market Value" of a share of Stock means, as of any given
date: (i) if the Stock is listed on a national securities exchange
or quoted on the National Association of Securities Dealers, Inc.
Automated Quotation System
18
("NASDAQ"), the last sale price of a share of Stock on the
last preceding day on which the Common Stock was traded, as
reported by such exchange or NASDAQ, or on a composite tape
reflecting transactions on such exchange or by NASDAQ, as the
case may be; (ii) if the Stock is not listed on a national
securities exchange or quoted on the NASDAQ, but is traded in
the over-the-counter market, the average of the high bid and
asked prices for a share of Stock on the last preceding day
for which such quotations are reported by the National
Quotation Bureau, Inc.; and (iii) if the fair market value of
a share of Stock cannot be determined pursuant to clause (i)
or (ii) above, such price as the Board of Directors or the
Committee, as the case may be, shall determine, which
determination shall be conclusive as to the Fair Market Value
of the Stock.
(l) "Incentive Stock Option" means any Stock Option which is
intended to be and is designated as an "incentive stock
option" within the meaning of Section 422 of the Code.
(m) "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active employment
with the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 8 below
that is valued in whole or in part by reference to, or is
otherwise based upon Stock.
(p) "Parent" means any present or future parent of the Company, as
such term is defined in Section 424(e) of the Code, or any
successor thereto.
(q) "Performance Objectives" means performance objectives adopted by
the Committee pursuant to the Plan for key employees who have
received awards under the Plan. With respect to any award to a key
employee who is, or is determined by the Committee to be likely to
become a "covered employee" within the meaning of Section 162(m) of
the Code, the Performance Objectives shall be limited to specified
levels of growth in or peer company comparisons based upon (i)
appreciation in the price of Stock plus reinvested dividends over
a specified period of time, (ii) return on assets or (iii) book
value per share, as the Committee may determine, and the attainment
of such Performance Objectives shall not be deemed to have occurred
until certified by the Committee. Except in the case of a covered
employee, if the Committee determines that a change in business,
operations, corporate structure or capital structure of the
Company, or the manner in which it conducts its business, or
other events or circumstances under the Performance Objectives to
be unsuitable, the Committee may modify such Performance
Objectives or the related minimum acceptable level of achievement,
in whole or in part, as the Committee deems appropriate.
19
(r) "Plan" means this Berkshire Bancorp Inc. 1999 Stock Incentive
Plan, as hereinafter amended from time to time.
(s) "Restricted Stock" means Stock, received under an award made
pursuant to Section 6 below, that is subject to restrictions
imposed pursuant to said Section 6.
(t) "Retirement" means Normal Retirement or Early Retirement.
(u) "Rule 16b-3" means Rule 16b-3 of the General Rules and
Regulations under the Exchange Act, as in effect from time to
time, and any successor thereto.
(v) "Section 162(m)" means Section 162(m) of the Code, as in
effect from time to time, and any successor thereto.
(w) "Securities Act" means the Securities Act of 1933, as amended,
as in effect from time to time.
(x) "Stock" means the Common Stock of the Company, par value $.10 per
share.
(y) "Stock Option" or "Option" means any option to purchase shares
of Stock which is granted pursuant to the Plan.
(z) "Subsidiary" means any present or future (A) subsidiary
corporation of the Company, as such term is defined in Section
424(f) of the Code, or (B) unincorporated business entity in
which the Company owns, directly or indirectly, 50% or more of
the voting rights, capital or profits.
Section 2. Administration.
The Plan shall be administered by the Board, or at its discretion,
the Committee, the membership of which shall consist solely of two or more
members of the Board, each of whom shall serve at the pleasure of the Board and
shall be a "Non-Employee Director," as defined in Rule 16b-3, and an "outside
director," as defined in Section 162(m) of the Code, and shall be at all times
constituted so as not to adversely affect the compliance of the Plan with the
requirements of Rule 16b-3 or with the requirements of any other applicable law,
rule or regulation.
The Board or the Committee, as the case may be, shall have the
authority to grant, pursuant to the terms of the Plan, to officers and other key
employees or other persons eligible under Section 4 below: (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 Board or the
Committee, as the case may be, shall have the authority (subject to the express
provisions of this Plan):
20
(i) to select the officers and other key employees of the
Company or any Parent or Subsidiary and other persons
to whom Stock Options, Restricted Stock, Deferred
Stock and/or Other Stock-Based Awards may be from
time to time 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 persons;
(iii) to determine the number of shares of Stock 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, exercisability and/or
forfeiture provisions);
(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
awards made by the Company or any Parent or
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; and
(vii) to substitute (A) new Stock Options for previously
granted Stock Options, including previously granted
Stock Options which have higher option exercise
prices and/or containing other less favorable terms,
and (B) new awards of any other type for previously
granted awards of the same type, including previously
granted awards which contain less favorable terms.
Subject to Section 10 hereof, The Board or the Committee, as the case
may be, shall have the authority to (i) adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan as it shall,
from time to time, deem advisable, (ii) interpret the terms and provisions of
this Plan and any award issued under this Plan (and to determine the form and
substance of all agreements relating thereto), and (iii) to otherwise supervise
the administration of the Plan.
Subject to the express provisions of the Plan, all decisions made by
the Board or the Committee, as the case may be, pursuant to the provisions of
the Plan shall be made in the Board or the Committee's sole and absolute
discretion and shall be final and binding upon all persons, including the
Company, its Parent and Subsidiaries and the Plan participants.
21
Section 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution under this Plan shall be 200,000 shares. Such shares may consist,
in whole or in part, of authorized and unissued shares or treasury shares.
If any shares of Stock that have been optioned cease to be subject to a
Stock Option for any reason, or if any shares of Stock that are subject to any
Restricted Stock award, Deferred Stock award or Other Stock-Based Award are
forfeited or any such award otherwise terminates without the issuance of such
shares, such shares shall again be available for distribution under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary distribution with
respect to the Stock or other change in corporate structure affecting the Stock,
such substitutions or adjustments shall be made in the (A) aggregate number and
kind of shares reserved for issuance under this Plan, (B) number, kind and
exercise price of shares of Stock subject to outstanding Options granted under
this Plan, and (C) number, kind, purchase price and/or appreciation base of
shares of Stock subject to other outstanding awards granted under this Plan, as
may be determined to be appropriate by the Board or the Committee, as the case
may be, in its sole discretion, in order to prevent dilution or enlargement of
rights; provided, however, that the number of shares subject to any award shall
always be a whole number. Such adjusted exercise price shall also be used to
determine the amount which is payable to the optionee upon the exercise by the
Board or the Committee, as the case may be, of the alternative settlement right
which is set forth in Section 5(b)(xi) below.
Subject to the provisions of the immediately preceding paragraph, the
maximum numbers of shares subject to Options, Restricted Stock awards, Deferred
Stock awards, and other Stock-Based awards to any employee who is employed by
the Company or any Parent or Subsidiary on the last day of any taxable year of
the Company, shall be 75,000 shares during the term of the Plan.
Section 4. Eligibility.
Officers and other key employees of the Company or any Parent or
Subsidiary (but excluding any person whose eligibility would adversely affect
the compliance of the Plan with the requirements of Rule 16b-3) who are at the
time of the grant of an award under this Plan employed by the Company or any
Parent or Subsidiary and who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company or any
Parent or Subsidiary, are eligible to be granted Options and awards under this
Plan. In addition, Non-Qualified Stock Options and other awards may be granted
under the Plan to any person, including, but not limited to, independent agents,
consultants and attorneys who the Board or the Committee, as the case may be,
believes has contributed or will contribute to the success of the Company.
Eligibility under the Plan shall be determined by the Board or the Committee, as
the case may be.
22
The grants of Restricted Stock, Deferred Stock and Other Stock-Based
Awards under this Plan shall be earned by a participant on the basis of the
Company's financial performance over the period or periods for which the grants
were awarded on the basis of pre-established performance goals determined by the
Board or the Committee, as the case may be, in its sole discretion. The
performance measurement criteria used for such grants shall be limited to one or
more of: earnings per share, return on stockholders' equity, return on assets,
growth in earnings, growth in sales revenue, and stockholder returns. Such
criteria may be measured by the Company's results or the Company's performance
as measured against a group of comparable companies selected by the Committee.
In applying such criteria, earnings may be calculated based on the exclusion of
discontinued operations and extraordinary items. Subject to the adjustments
permitted by Section 3 of this Plan, the maximum number of shares of Stock that
can be earned by, or for which Options can be granted to, any one individual
over any consecutive two year period commencing on the effective date of this
Plan is 100,000 shares. Subject to such maximum number of shares of Stock, the
amount, if any, that may be earned by a participant receiving such grant or
grants may vary in accordance with the level of achievement of the performance
goal or goals established by the Board or the Committee, as the case may be. The
Board or the Committee, as the case may be, may, in its sole discretion, include
additional conditions and restrictions in the agreement entered into in
connection with such awards under this Plan.
Section 5. Stock Options.
(a) Grant and Exercise. Stock Options granted under this Plan may be
of two types: (i) Incentive Stock Options and (ii) Non-Qualified
Stock Options. Any Stock Option granted under this Plan shall
contain such terms as the Board or the Committee, as the case may
be, may from time to time approve. The Board or the Committee, as
the case may be, shall have the authority to grant to any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both
types of Stock Options, and they may be granted alone or in
addition to other awards granted under this Plan. To the extent
that any Stock Option is not designated as an Incentive Stock
Option or does not qualify as an Incentive Stock Option, it shall
constitute a Non-Qualified Stock Option. The grant of an Option
shall be deemed to have occurred on the date on which the Board or
the Committee, as the case may be, by resolution, designates an
individual as a grantee thereof, and determines the number of
shares of Stock subject to, and the terms and conditions of, said
Option.
Anything in this Plan to the contrary notwithstanding, no term
of this 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 exercised, so as to
disqualify this 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.
23
(b) Terms and Conditions. Stock Options granted under this 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
Board or the Committee, as the case may be, 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 its Subsidiaries of the Fair Market Value of the
Stock at the time of grant.
(ii) Option Term. The term of each Stock Option shall be fixed
by the Board or the Committee, as the case may be, 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.
(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 Board or the Committee, as the
case may be, at the time of grant; provided, however, that
except as otherwise provided in this Section 5 and Section
9 below, unless waived by the Board or the Committee, as
the case may be, at or after the time of grant, no Stock
Option shall be exercisable prior to the first anniversary
date of the grant of the Option. If the Board or the
Committee, as the case may be, provides, in its discretion,
that any Stock Option is exercisable only in installments,
the Board or the Committee, as the case may be, 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 Board or the Committee, as the case may
be, 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 in cash unless otherwise provided in
this clause (iv) or in Section 5(b)(xi) below or, 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 or
unless otherwise provided in the Stock Option agreement
referred to in Section 5(b)(xii) below, partly in cash and
partly in such Stock. 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
24
certificates for shares of Stock with respect to which an
Option is exercised 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 in negotiable form which are
effective to transfer good and valid title thereto to the
Company, free of any liens or encumbrances. In addition to
the foregoing, payment of the exercise price may be made by
delivery to the Company by the optionee of an executed
exercise form, together with irrevocable instructions to a
broker-dealer to sell or margin a sufficient portion of the
shares covered by the option and deliver the sale or margin
loan proceeds directly to the Company. Except as otherwise
expressly provided in this Plan, no Option which is granted
to a person who is at the time of grant an employee of the
Company or a Subsidiary or Parent of the Company may be
exercised at any time unless the holder thereof is then an
employee of the Company or of a Parent or 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 the optionee has given written notice of
exercise, has paid in full for those shares of Stock and,
if requested by the Board or Committee, as the case may be,
has given the representation described in Section 12(a)
below.
(v) Transferability; Exercisability. No Stock Option shall be
transferable by the optionee other than by will or by the
laws of descent and distribution; provided, however, that a
Non-Qualified Stock Option shall be transferable or
pursuant to a qualified domestic relations order, and
except as may be otherwise required with respect to a Non-
Qualified Option pursuant to a qualified domestic relations
order, all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee or his or her
guardian or legal representative.
(vi) Termination by Reason of Death. Subject to Section 5(b)(x)
below, if an optionee's employment by the Company or any
Parent or Subsidiary terminates by reason of death, any
Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable or on such
accelerated basis as the Board or Committee, as the case
may be, may determine at or after the time of grant, for a
period of one year (or such other period as the Board or
the Committee, as the case may be, may specify at or after
the time of grant) from the date of 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 may thereafter be
exercised by the optionee, to the extent it
25
was exercisable at the time of termination or on such
accelerated basis as the Board or the Committee, as the
case may be, may determine at or after the time of grant,
for a period of three years (or such other period as the
Board or the Committee, as the case may be, may specify at
or after 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
Board or the Committee, as the case may be, shall specify
at or after 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
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 any Parent or Subsidiary terminates by reason of Normal
Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it
was exercisable at the time of termination or on such
accelerated basis as the Board or the Committee, as the
case may be, may determine at or after the time of grant,
for a period of three years (or such other period as the
Board or the Committee, as the case may be, may specify at
or after the time of grant) from the date of such
termination of employment or the expiration of the stated
terms 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 Board
or the Committee, as the case may be, shall specify at or
after 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 death or until the
expiration of the stated terms of such Stock Option,
whichever period is the shorter. If an optionee's
employment with the Company or any Parent or Subsidiary
terminates by reason of Early Retirement, the Stock Option
shall thereupon terminate; provided, however, that if the
Board or the Committee, as the case may be, so approves at
the time of Early Retirement, any Stock Option held by the
optionee may thereafter be exercised by the optionee as
provided above in connection with termination of employment
by reason of Normal Retirement.
(ix) Other Termination. Subject to the provisions of Section
12(g) below and unless otherwise determined by the
Committee at or after the time of grant, if an optionee's
employment by the Company or any Parent or 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
26
or any Parent or a Subsidiary without Cause (as hereinafter
defined), such Stock Option may be exercised for a period
of six months from the date of such termination or until
the expiration of the stated terms of such Stock Option,
whichever period is the shorter. For purposes of this Plan,
"Cause" shall mean (1) the conviction of the optionee of a
felony under Federal law or the law of the state in which
such action occurred, (2) dishonesty by the optionee in the
course of fulfilling his or her employment duties, or (3)
the willful and deliberate failure on the part of the
optionee to perform his or her employment duties in any
material respect. In addition, with respect to an option
granted to an employee of the Company, a Parent or a
Subsidiary, for purposes of this Plan, "Cause" shall also
include any definition of "Cause" contained in any
employment agreement between the optionee and the Company,
Parent or Subsidiary, as the case may be.
(x) Additional Incentive Stock Option Limitation. In the case
of an Incentive Stock Option, the 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, if any, and Subsidiaries) shall
not exceed $100,000.
(xi) Alternative Settlement of Option. Upon the receipt of
written notice of exercise, the Board or the Committee, as
the case may be, may elect to settle all or part of any
Stock Option by paying to the optionees an amount, in cash
or Stock (valued at Fair Market Value on the date of
exercise), equal to the excess of the Fair Market Value of
one share of Stock, on the date of exercise over the Option
exercise price, multiplied by the number of shares of Stock
with respect to which the optionee proposes to exercise the
Option. Any such settlements which relate to Options which
are held by optionees who are subject to Section 16(b) of
the Exchange Act shall comply with the "window period"
provisions of Rule 16b-3, to the extent applicable and with
such other conditions as the Board or Committee may impose.
No such discretion may be exercised unless the option
agreement permits the payment of the purchase price in that
manner.
(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.
27
Section 6. Restricted Stock.
(a) Grant and Exercise. Shares of Restricted Stock may be issued
either alone or in addition to or in tandem with other awards
granted under this Plan. The Board or the Committee, as the case
may be, 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 Board or the Committee, as the
case may be, may condition the grant of Restricted Stock upon the
attainment of specified Performance Objectives or such other
factors as the Board or the Committee, as the case may be, may
determine.
(b) Terms and Conditions. Each Restricted Stock award shall be subject
to the following terms and conditions:
(i) 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 this Plan and the Restricted Stock
agreement referred to in Section 6(b)(iv) below. Such
certificates shall be deposited by the holder with the
Company, together with stock powers or other instruments of
assignment, 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 this Plan and the
applicable Restricted Stock agreement.
(ii) Restricted Stock shall constitute issued and outstanding
shares of Common Stock for all corporate purposes, and the
issuance thereof shall be made for at least the minimum
consideration (if necessary) to permit the shares of
Restricted Stock to be deemed to be fully paid and
nonassessable. 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 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
28
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 Restriction
Period; (C) other than regular cash dividends and other
cash equivalent distribution 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 Stock 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 Section 6(b)(iv) below, or otherwise
established by the Committee with respect to any Restricted
Stock and Retained Distributions will cause a forfeiture of
such Restricted Stock and any Retained Distributions with
respect thereto.
(iii) 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 Section 6(b)(iv) below, 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) 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 or in tandem with other awards granted under
the Plan. The Board or the Committee, as the case may be,
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
29
which, receipt of the Deferred Stock will be deferred, and all
the other terms and conditions of the awards. The Board or the
Committee, as the case may be, may condition the grant of the
Deferred Stock upon the attainment of specified Performance
Objectives or such other factors or criteria as the Board or
the Committee, as the case may be, shall determine.
(b) Terms and Conditions. Each Deferred Stock award shall be subject
to the following terms and conditions:
(i) Subject to the provisions of this Plan and Deferred Stock
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 of Stock covered by the Deferred Stock
award.
(ii) 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) Subject to the provisions of the Deferred Stock agreement
referred to in Section 7(b)(vii) below and this Section 7
and Section 12(g) below, upon termination of 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 fortified in accordance with the
terms and conditions established by the Board or the
Committee, as the case may be, at the time of grant.
(iv) The Board or the Committee, as the case may be, 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) In the event of hardship or other special circumstances of
a participant whose employment with the Company or any
Parent or Subsidiary is involuntarily terminated (other
than for Cause), the Board or the Committee, as the case
may be, may waive in whole or in part any or all of the
remaining deferral limitations imposed hereunder or
pursuant to the Deferred Stock agreement referred to in
Section 7(b)(vii) below with respect to any or all of the
participant's Deferred Stock.
30
(vi) A participant may request to, and the Board or the
Committee, as the case may be, 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 period or
until a specified event (the "Additional deferral Period").
Subject to any exceptions adopted by the Board or the
Committee, as the case may be, such request must be made at
least one year prior to expiration of the Deferral Period
for such Deferred Stock award (or such installment).
(vii) 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 Board or the Committee, as
the case may be, 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 Board or the
Committee, as the case may be, may also provide for the grant of
Stock under such awards upon the attainment of specified
Performance Objectives and/or 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) 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 or period of deferral lapses.
(ii) 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
Board or the Committee, as the case may be, at the time of
the award. The Board or the Committee, as the case may be,
may provide that such amounts (if any) shall be deemed to
have been reinvested in additional Stock.
(iii) Any Other Stock-Based Award and any Stock covered by any
Other Stock-Based Award shall vest or be forfeited to the
extent so provided in the award agreement referred to in
Section 8(b)(v) below, as determined by the Board or the
Committee, as the case may be.
31
(iv) In the event of the participant's Retirement, Disability or
death, or in case of special circumstances, the Board or
the Committee, as the case may be, 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) 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.
Section 9. Change of Control Provisions.
(a) A "Change of Control" shall be deemed to have occurred on the
tenth day after:
(i) any individual, entity or group (as defined in Section
13(d)(3) of the Exchange Act), other than Moses Marx,
becomes, directly or indirectly, the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 25% 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 Exchange Act) to commence, a tender or exchange offer
subject to Section 14(d)(1) of the Exchange 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 immediately prior to
the transaction do not own, immediately after the
transaction, more than 50 of the voting power of the
corporation that survives, 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 (A) directly from the Company, other than an
acquisition by virtue of the exercise or conversion of
another security unless the security so converted or
exercised was itself acquired directly from the Company, or
(B) by, or a tender or exchange offer is commenced or
announced by, the Company, any profit-sharing, employee
ownership or other employee benefit plan sponsored or
maintained by the Company; or any trustee of or fiduciary
with respect to any such plan when acting in such capacity.
32
(b) In the event of a "Change of Control" as defined in Section 9(a)
above, awards granted under this Plan shall be subject to the
following provisions, unless the provisions of this Section 9 are
suspended or terminated by the Board prior to the occurrence of
such a "Change of Control":
(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 this 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 the
failure to obtain such approval would adversely affect the compliance of the
Plan with the requirements of Rule 16b-3, Section 162(m) or any other applicable
law, rule or regulation. The Board or the Committee, as the case may be, 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 Board or the Committee, as the case may be, which in any material
respect impairs the rights of the optionee or participant without the optionee's
or participant's consent, except for such amendments which are made to cause
this Plan to qualify for the exemption provided by Rule 16b-3 or to be in
compliance with the provisions of Section 162(m).
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 creditor of
the Company.
Section 12. General Provisions.
(a) The Board or the Committee, as the case may be, may require each
person acquiring shares of Stock Option or other award under this
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 towards the distribution thereof.
All certificates for shares of Stock delivered under this Plan
shall be subject to such stop transfer orders and other
restrictions as the Board or the Committee, as the case may
be, may deem to be advisable in order to assure compliance
33
with the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange or
association upon which the Stock is then listed or quoted, any
applicable Federal or state securities law, and any applicable
corporate law, and the Board or the Committee, as the case may
be, may cause a legend or legends to be put on any such
certificates to make appropriate reference to such
restrictions.
(b) 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 this Plan; and such arrangements may be either generally
applicable or applicable only in specific cases.
(c) Nothing contained in this Plan or in any award hereunder shall be
deemed to confer upon any employee of the Company or any Parent or
Subsidiary any right to continued employment with the Company or
any Parent or Subsidiary, nor shall it interfere in any way with
the right of the Company or any Parent or Subsidiary to terminate
the employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includable in the gross income of the participant for Federal
income tax purposes with respect to any Option or other award
under this Plan, the participant shall pay to the Company, or make
arrangements satisfactory to the Board or the Committee, as the
case may be, 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 Board or the
Committee, as the case may be, 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 this Plan shall be
conditional upon such payment or arrangements, and the Company and
any Subsidiary 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 Parent or
Subsidiary.
(e) This Plan and all awards made and actions taken thereunder shall
be governed by and construed in accordance with the laws of the
State of Delaware (without regard to choice of law provisions).
(f) Any Stock Option granted or other award made under this Plan shall
not be deemed compensation for purposes of computing benefits
under any retirement plan of the Company or any Parent or
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).
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(g) 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
under this 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 Parent or Subsidiary.
(h) Except as otherwise expressly provided in this Plan, no right or
benefit under this Plan may be alienated, sold, assigned,
hypothecated, pledged, exchanged, transferred, encumbranced 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 subject
to the debts, contracts or liabilities of the person entitled to
such benefit.
(i) The obligations of the Company with respect to all Stock Options
and awards under this Plan shall be subject to (A) 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, and (B) the rules and regulations of any
securities exchange or association on which the Stock may be
listed or quoted.
(j) It is the intention of the Company that this Plan complies with
the requirements of Rule 16b-3, Section 162(m) and all other
applicable laws, rules and regulations, and any ambiguities or
inconsistencies in the construction of any of the provisions of
this Plan shall be interpreted to give effect to such intention.
If any of the terms or provisions of this Plan conflict with the
requirements of Rule 16b-3, or with the requirements of Section
162(m) or any other applicable law, rule or regulation, and with
respect to Incentive Stock Options under Section 422 of the Code,
then such terms or provisions shall be deemed inoperative to the
extent they so conflict. 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) The Board or the Committee, as the case may be, may terminate any
Stock Option or other award made under this 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 optionee or participant for his or her execution.
(l) The grant of awards pursuant to this Plan shall not in any way
affect the right or power of the Company to make
reclassifications, reorganizations or other changes of or to its
capital or business structure or to merge, consolidate, liquidate,
sell or otherwise dispose of all or any part of its business or
assets.
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Section 13. Effective Date of Plan.
The Plan shall be effective as of the date of the approval and
adoption thereof at a meeting of the stockholders of the Company.
Section 14. Term of Plan.
This Plan shall terminate on the tenth anniversary of its effective
date, and no Stock Option, Restricted Stock Award, Deferred Stock award or Other
Stock-Based Award shall be granted pursuant to this Plan after said date. Awards
granted on or prior to such date may extend beyond that date.
36
APPENDIX 1
COOPER LIFE SCIENCES, INC.
160 Broadway
New York, New York 10038
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MARCH 23, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven Rosenberg and Harold L. Schneider,
and each of them, Proxies, with full power of substitution in each of them, in
the name, place and stead of the undersigned, to vote at the Annual Meeting of
Stockholders of Cooper Life Sciences, Inc. on Tuesday, March 23, 1999, at 405
Lexington Avenue, New York, New York, or at any adjournment or adjournments
thereof, according to the number of votes that the undersigned would be entitled
to vote if personally present, upon the following matters:
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees listed below.
William L. Cohen, Moses Marx, Steven Rosenberg and Randolph B. Stockwell
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" all nominees listed above.
2. Approval of Amendment to Certificate of Incorporation Provision to Change
Corporate Name to Berkshire Bancorp Inc.
|_| FOR |_| AGAINST |_| ABSTAIN
3. Approval of Amendment to Certificate of Incorporation to Provide for
Authorized Capital Consisting of 10,000,000 shares of Common Stock and
2,000,000 shares of Preferred Stock.
|_| FOR |_| AGAINST |_| ABSTAIN
4. Approval of Amendment to Certificate of Incorporation to delete unnecessary
provisions and modify other language contained in the Current Certificate of
Incorporation.
|_| FOR |_| AGAINST |_| ABSTAIN
(Continued and to be signed on reverse side)
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5. Adoption of 1999 Stock Incentive Plan.
|_| FOR |_| AGAINST |_| ABSTAIN
6. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 2-5 LISTED ABOVE.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE.
IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED "FOR" ALL BOARD
NOMINEES LISTED IN PROPOSAL 1 AND "FOR" ALL OTHER PROPOSALS LISTED ABOVE.
DATED: ________________________, 1999 Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
Please mark, sign, date and return this proxy card promptly using
the enclosed envelope.
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