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EXHIBIT 10.11
BETTER IMAGE, INC.
1998 EMPLOYEE STOCK OPTION PLAN
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BETTER IMAGE, INC.
1998 EMPLOYEE STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the following meanings unless
the context clearly indicates to the contrary:
1.1 "Board" shall mean the Board of Directors of the Company.
1.2 "Change in Control" shall mean the occurrence of either of the
following events:
(a) any of:
(i) a reorganization, merger or consolidation of
the Company with one or more other
corporations (except with respect to a
transaction, the sole purpose of which is to
change the domicile or name of the Company),
as a result of which the Company ceases to
exist or becomes a subsidiary of another
corporation (which shall be deemed to have
occurred if another corporation shall own,
directly or indirectly, more than fifty
percent (50%) of the aggregate voting power
of all outstanding equity securities of the
Company); or
(ii) a sale of all or substantially all of the
Company's assets; or
(b) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than any person
who is a shareholder of the Company on or before the
effective date of the Plan, by the acquisition or
aggregation of securities is or becomes the
beneficial owner, directly or indirectly, of
securities of the Company representing fifty percent
(50%) or more of the combined voting power of the
Company's then outstanding securities ordinarily (and
apart from rights accruing under special
circumstances) having the right to vote at elections
of directors (the "Base Capital Stock"); except that
any change in the relative beneficial ownership of
the Company's securities by any person resulting
solely from a reduction in the aggregate number of
outstanding shares of Base Capital Stock, and any
decrease thereafter in such person's ownership of
securities, shall be disregarded until such person
increases in any manner, directly or indirectly, such
person's beneficial ownership of any securities of
the Company.
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1.3 "Code" shall mean the Internal Revenue Code of 1986, as
amended, including effective date and transition rules (whether or not
codified). Any reference herein to a specific section of the Code shall be
deemed to include a reference to any applicable corresponding provision of
future law.
1.4 "Committee" shall mean a committee of at least two (2)
Directors appointed from time to time by the Board, having the duties and
authority set forth herein in addition to any other authority granted by the
Board; provided, however, that with respect to any Options granted to an
individual who is also a Section 16 Insider, the Committee shall consist solely
of two (2) or more Directors (who need not be members of the Committee with
respect to Options granted to any other individuals) who are Non-Employee
Directors (within the meaning of Rule 16b-3), and all authority and discretion
shall be exercised by such Non-Employee Directors, and references herein to the
"Committee" shall mean such Non-Employee Directors insofar as any actions or
determinations of the Committee shall relate to or affect Options made to or
held by any Section 16 Insider. At any time that the Board shall not have
appointed a committee as described above, any reference herein to the Committee
shall mean a reference to the Board.
1.5 "Company" shall mean Better Image, Inc., a Georgia
corporation.
1.6 "Director" shall mean a member of the Board and any person who
is an advisory, honorary or emeritus director of the Company if such person is
considered a director for the purposes of Section 16 of the Exchange Act, as
determined by reference to such Section 16 and to the rules, regulations,
judicial decisions, and interpretative or "no-action" positions with respect
thereto of the Securities and Exchange Commission, as the same may be in effect
or set forth from time to time.
1.7 "Disabled Optionee" shall mean an Optionee who suffers a
Disability.
1.8 "Disability" shall mean a physical or mental infirmity which
impairs an Optionee's ability to substantially perform his duties with the
Company or a Subsidiary for a period of 180 consecutive days, as determined by
an independent physician selected by agreement between the Company and the
Optionee or, failing such agreement, selected by two physicians (one of which
shall be selected by the Company and the other by the Optionee); provided,
however, that "Disability" shall have the meaning set forth in Code Section
22(e)(3) and the regulations promulgated thereunder with respect to an Optionee
granted Incentive Stock Options.
1.9 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended. Any reference herein to a specific section of the Exchange Act shall
be deemed to include a reference to any applicable corresponding provision of
future law.
1.10 "Exercise Price" shall mean the price at which an Optionee may
purchase a share of Stock under a Stock Option Agreement.
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1.11 "Fair Market Value" on any date shall mean (i) the average
closing sales price of the Stock on such date on the national securities
exchange having the greatest volume of trading in the Stock during the thirty
(30) day period preceding such date or, if such exchange was not open for
trading on such date, the next preceding date on which it was open; (ii) if the
Stock is not traded on any national securities exchange, the average of the
closing high bid and low asked prices of the Stock on the over-the-counter
market on the date such value is to be determined, or in the absence of closing
bids on such date, the closing bids on the next preceding date on which there
were bids; or (iii) if the Stock is not traded on a national securities exchange
or the over-the-counter market, the fair market value as determined in good
faith by the Board or the Committee based on such relevant facts as may be
available, including, without limitation, the price at which recent sales of
Stock have been made, the book value of the Stock and the Company's current and
future earnings. With respect to grants that are effective upon the initial
public offering of Common Stock, Fair Market Value shall mean the price to the
public in the initial public offering.
1.12 "For Cause" termination shall mean the termination of an
Optionee's employment as a result of: (i) any act that constitutes on the part
of the Optionee, fraud, dishonesty, gross malfeasance of duty, or conduct
grossly inappropriate to the Optionee's position of employment; or (ii) the
conviction (from which no appeal may be or is timely taken) of the Optionee of a
felony.
1.13 "Incentive Stock Option" shall mean an option to purchase
Stock of the Company which complies with and is subject to the terms,
limitations, and conditions of Section 422 of the Code and any regulations
promulgated with respect thereto.
1.14 "Officer" shall mean a person who constitutes an officer of
the Company for the purposes of Section 16 of the Exchange Act, as determined by
reference to such Section 16 and to the rules, regulations, judicial decisions,
and interpretative or "no-action" positions with respect thereto of the
Securities and Exchange Commission, as the same may be in effect or set forth
from time to time.
1.15 "Option" shall mean an option, including an Incentive Stock
Option, to purchase Stock granted pursuant to the provisions of Article VI
hereof.
1.16 "Optionee" shall mean a person to whom an Option has been
granted hereunder or his permitted assign.
1.17 "Plan" shall mean the Better Image, Inc. 1998 Employee Stock
Option Plan, the terms of which are set forth herein.
1.18 "Purchasable" shall refer to Stock which may be purchased by
an Optionee under the terms of this Plan on or after a certain date specified in
an applicable Stock Option Agreement.
1.19 "Section 16 Insider" shall mean any person who is subject to
the provisions of Section 16 of the Exchange Act.
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1.20 "Stock" shall mean the Common Stock, no par value per share,
of the Company, subject to applicable provisions of Section 5.2.
1.21 "Stock Option Agreement" shall mean a written agreement
between the Company and an Optionee under which the Optionee may purchase Stock
hereunder, as provided in Article VI hereof.
1.22 "Subsidiary" shall mean any corporation in which the Company
directly or indirectly owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock of such corporation.
ARTICLE II
THE PLAN
2.1 Name. This Plan shall be known as the "Better Image, Inc.
1998 Employee Stock Option Plan."
2.2 Purpose. The purpose of the Plan is to advance the interests
of the Company, its Subsidiaries and its shareholders by affording certain
officers and employees of the Company and its Subsidiaries an opportunity to
acquire or increase their proprietary interests in the Company. The objective of
the Options is to promote the growth and profitability of the Company and its
Subsidiaries by providing Optionees with an additional incentive to achieve the
Company's objectives through participation in its success and growth and by
encouraging their continued association with or service to the Company and its
Subsidiaries.
2.3 Effective Date. The effective date of this Plan is
May 1, 1998.
ARTICLE III
PARTICIPANTS
The class of persons eligible to participate in the Plan shall consist
of all officers and employees of the Company or any Subsidiary whose
participation in the Plan the Committee determines to be in the best interests
of the Company.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee. This Plan shall be
administered by the Committee. The Committee shall select one of its members as
its Chairman and shall hold its meetings at such times and places as it may
determine. The Committee shall keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it may deem necessary.
The Committee shall have the power to act by unanimous written consent in lieu
of a meeting, and to meet telephonically. In administering this Plan, the
Committee's actions and
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determinations shall be binding on all interested parties. The Committee shall
have the power to grant Options in accordance with the provisions of this Plan.
Subject to the provisions of this Plan, the Committee shall have the discretion
and authority to determine those persons to whom Options will be granted, the
number of shares of Stock subject to each Option, such other matters as are
specified herein, and any other terms and conditions of a Stock Option
Agreement. To the extent not inconsistent with the provisions of this Plan, the
Committee may give an Optionee an election to surrender an Option in exchange
for the grant of a new Option, and shall have the authority to amend or modify
an outstanding Stock Option Agreement or to waive any provision thereof,
provided that the Optionee consents to such action.
4.2 Interpretation; Rules. Subject to the express provisions of
the Plan, the Committee shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the details and provisions of each Stock Option Agreement, and to make all other
determinations necessary or advisable for the administration of the Plan,
including, without limitation, the amending or altering of the Plan and any
Options granted hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.
4.3 No Liability. Neither any Director nor any member of the
Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option granted hereunder.
4.4 Majority Rule. A majority of the members of the Committee
shall constitute a quorum, and any action taken by a majority at a meeting at
which a quorum is present, or any action taken without a meeting evidenced by a
writing executed by all the members of the Committee, shall constitute the
action of the Committee.
4.5 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability, or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to any antidilution adjustment pursuant
to the provisions of Section 5.2 hereof, the maximum number of shares of Stock
that may be issued hereunder shall be One Million Five Hundred Thousand
(1,500,000). The amount of Stock subject to the Plan may be increased from time
to time in accordance with Article VIII hereof; provided, however, that the
total number of shares of Stock issuable pursuant to Incentive Stock Options
shall not exceed One Million Five Hundred Thousand (1,500,000) (other than
pursuant to antidilution adjustments) without shareholder approval. Shares
subject to an Option may be either authorized and unissued shares or shares
issued and later acquired by the
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Company. The shares covered by any unexercised portion of an Option that has
terminated for any reason (except as set forth in the following paragraph) may
again be optioned under this Plan, and such shares shall not be considered as
having been optioned or issued in computing the number of shares of Stock
remaining available for Options hereunder.
If Options are issued in respect of options to acquire stock of any
entity acquired, by merger or otherwise, by the Company or any Subsidiary, to
the extent that such issuance shall not be inconsistent with the terms,
limitations and conditions of Code Section 422 (only with respect to Options
which are Incentive Stock Options) or Rule 16b-3 under the Exchange Act, the
aggregate number of shares of Stock for which Options may be granted hereunder
shall automatically be increased by the number of shares subject to the Options
so issued.
5.2 Antidilution.
(a) If (i) the outstanding shares of Stock are increased,
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of merger (excluding mergers of
surgical practices with and into the Company), consolidation, reorganization,
recapitalization, reclassification, combination or exchange of shares, or stock
split or stock dividend, (ii) any spin-off, split-off or other distribution of
assets materially affects the price of the Company's stock, or (iii) there is
any assumption and conversion to this Plan by the Company of an acquired
company's outstanding option grants, then:
(A) the aggregate number and kind of shares of
Stock for which Options may be granted hereunder shall be
adjusted appropriately by the Committee; and
(B) the rights of Optionees (concerning the
number of shares of Stock subject to Options and the Exercise
Price) under outstanding Options shall be adjusted
appropriately by the Committee.
(b) If not provided in a Stock Option Agreement to the
contrary, if a Change in Control occurs, the Committee, in its discretion, may
provide:
(i) notwithstanding other provisions hereof,
that all Options granted under this Plan shall become
exercisable immediately, and that all such Options shall
terminate ninety (90) days after the Committee gives written
notice of the immediate right to exercise all such Options and
of the decision to terminate all Options not exercised within
such 90-day period; or
(ii) notice to all Optionees that all Options
granted under this Plan shall be assumed by the successor
corporation or substituted on an equitable basis with options
issued by such successor corporation.
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(c) If the Company is to be liquidated or dissolved in
connection with a Change in Control, the provisions of Section 5.2(b) shall
apply. In all other instances, the adoption of a plan of dissolution or
liquidation of the Company shall, notwithstanding other provisions hereof, cause
all then-remaining restrictions pertaining to Options under the Plan to lapse,
and shall cause every Option outstanding under the Plan to terminate to the
extent not exercised prior to the adoption of the plan of dissolution or
liquidation by the shareholders; provided, however, that, notwithstanding any
other provisions hereof, the Committee may declare all Options granted under the
Plan to be exercisable at any time on or before the fifth (5th) business day
following such adoption, notwithstanding the provisions of the respective Stock
Option Agreements regarding exercisability.
(d) The adjustments described in paragraphs (a) through
(c) of this Section 5.2, and the manner of their application, shall be
determined solely by the Committee, and any such adjustment may provide for the
elimination of fractional share interests; provided, however, that any
adjustment made by the Committee shall be made in a manner that will not cause
an Incentive Stock Option to be other than an Incentive Stock Option under
applicable statutory and regulatory provisions. The adjustments required under
this Article V shall apply to any successors of the Company and shall be made
regardless of the number or type of successive events requiring such
adjustments.
ARTICLE VI
OPTIONS
6.1 Types of Options Granted. The Committee may, under this Plan,
grant either Incentive Stock Options or Options which do not qualify as
Incentive Stock Options. Within the limitations provided in this Plan, both
types of Options may be granted to the same person at the same time, or at
different times, under different terms and conditions, as long as the terms and
conditions of each Option are consistent with the provisions of this Plan.
Without limitation of the foregoing, Options may be granted subject to
conditions based on the financial performance of the Company or any other factor
the Committee deems relevant. Neither the Company, nor any Subsidiary or any
other person warrants or otherwise represents that (i) any Option granted under
this Plan shall be considered an Incentive Stock Option for applicable tax
purposes, or (ii) favorable or desirable tax treatment or characterization will
be applicable in respect of any Option or Stock.
6.2 Option Grant and Agreement. Each Option granted hereunder
shall be evidenced by minutes of a meeting or the written consent of the
Committee and by a written Stock Option Agreement executed by the Company and
the Optionee. The terms of the Option, including the Option's duration, time or
times of exercise and exercise price, shall be stated in the Stock Option
Agreement. No Incentive Stock Option may be granted more than ten (10) years
after the earlier to occur of the effective date of the Plan or the date the
Plan is approved by the Company's shareholders. Every Optionee shall be given a
copy of the Plan.
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6.3 Optionee Limitations. The Committee shall not grant an
Incentive Stock Option to any person who, at the time the Incentive Stock Option
is granted:
(a) is not an employee of the Company or any of its
Subsidiaries; or
(b) owns or is considered to own stock possessing at
least 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries (within the meaning of Code Sections 422 and
424); provided, however, that this limitation shall not apply if at the time an
Incentive Stock Option is granted the Exercise Price is at least 110% of the
Fair Market Value of the Stock subject to such Option and such Option by its
terms would not be exercisable after five (5) years from the date on which the
Option is granted. For the purpose of this subsection (b), a person shall be
considered to own (i) the Stock owned, directly or indirectly, by or for his or
her brothers and sisters (whether by whole or half blood), spouse, ancestors and
lineal descendants; (ii) the stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust in proportion to such person's stock
interest, partnership interest or beneficial interest therein; (iii) or stock
otherwise considered to be owned by such person pursuant to Code Sections 422
and 424.
6.4 $100,000 Limitation. Except as provided below, the Committee
shall not grant an Incentive Stock Option to, or modify the exercise provisions
of, any outstanding Incentive Stock Option held by any person who, at the time
the Incentive Stock Option is granted (or modified), would thereby receive or
hold any Incentive Stock Options of the Company and any Subsidiary, such that
the aggregate Fair Market Value (determined as of the respective dates of grant
or modification of each Option) of the Stock with respect to which such
Incentive Stock Options are exercisable for the first time during any calendar
year is in excess of $100,000 (or such other limit as may be prescribed by the
Code from time to time); provided, that the foregoing restriction on
modification of outstanding Incentive Stock Options shall not preclude the
Committee from modifying an outstanding Incentive Stock Option if, as a result
of such modification and with the consent of the Optionee, such Option no longer
constitutes an Incentive Stock Option; and provided further that, if the
$100,000 limitation (or such other limitation prescribed by the Code) described
in this Section 6.4 is exceeded, the Incentive Stock Option, the granting or
modification of which resulted in the exceeding of such limit, shall be treated
as an Incentive Stock Option up to the limitation and the excess shall be
treated as an Option not qualifying as an Incentive Stock Option.
6.5 Exercise Price. The Exercise Price of the Stock subject to
each Option shall be determined by the Committee. The Exercise Price of an
Incentive Stock Option shall not be less than the Fair Market Value of the Stock
as of the date such Option is granted (or in the case of an Incentive Stock
Option that is subsequently modified, on the date of such modification). The
Exercise Price of an Option that does not qualify as an Incentive Stock Option
shall not be less than adequate consideration as determined by the Committee.
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6.6 Exercise Period. The period for the exercise of each Option
granted hereunder shall be determined by the Committee, but the Stock Option
Agreement with respect to each Option intended to be an Incentive Stock Option
shall provide that such Option shall not be exercisable after the expiration of
ten (10) years from the date of grant (or modification) of the Option.
6.7 Option Exercise.
(a) Unless otherwise provided in the Stock Option
Agreement or Section 6.6 hereof, an Option may be exercised at any time or from
time to time during the term of the Option as to any or all full shares which
have become Purchasable under the provisions of the Option, but not at any time
as to less than one hundred (100) shares unless the remaining shares that have
become so Purchasable are less than one hundred (100) shares. The Committee
shall have the authority to prescribe in any Stock Option Agreement that the
Option may be exercised only in accordance with a vesting schedule during the
term of the Option.
(b) An Option shall be exercised by (i) delivery to the
Company at its principal office of a written notice of exercise with respect to
a specified number of shares of Stock and (ii) payment to the Company at that
office of the full amount of the Exercise Price for such number of shares in
accordance with Section 6.7(c). If requested by an Optionee, an Option may be
exercised with the involvement of a stockbroker in accordance with the federal
margin rules set forth in Regulation T (in which case the certificates
representing the underlying shares will be delivered by the Company directly to
the stockbroker).
(c) The Exercise Price is to be paid in full in cash by a
certified or cashier's check payable to the Company upon the exercise of the
Option and the Company shall not be required to deliver certificates for the
shares purchased until such payment has been made; provided, however, that the
Committee may provide in a Stock Option Agreement (or may otherwise determine in
its sole discretion at the time of exercise) that in lieu of cash, all or any
portion of the Exercise Price may be paid by tendering to the Company shares of
Stock duly endorsed for transfer and owned by the Optionee, or by authorization
to the Company to withhold shares of Stock otherwise issuable upon exercise of
the Option, in each case to be credited against the Exercise Price at the Fair
Market Value of such shares on the date of exercise (however, no fractional
shares may be so transferred, and the Company shall not be obligated to make any
cash payments in consideration of any excess of the aggregate Fair Market Value
of shares transferred over the aggregate Exercise Price); provided further, the
Committee may provide in a Stock Option Agreement (or may otherwise determine in
its sole discretion at the time of exercise) that, in lieu of cash or shares,
full payment may be effected through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (i) shall provide irrevocable written
instructions to a designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate Exercise Price
(plus all applicable Federal and State income and employment taxes required to
be withheld by the Company by reason of such purchase) and (ii) shall provide
written directives to the Company to deliver the certificates for the purchased
shares directly to such
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brokerage firm in order to complete the sale transaction; or that all or a
portion of the Exercise Price may be paid by the Optionee's execution of a
recourse promissory note the principal amount of which shall be equal to at
least the Exercise Price or relevant portion thereof, subject to compliance with
applicable state and federal laws, rules and regulations.
(d) In addition to and at the time of payment of the
Exercise Price, the Company may withhold, or require the Optionee to pay to the
Company in cash, the amount of any federal, state and local income, employment
or other withholding taxes which the Committee determines are required to be
withheld under federal, state or local law in connection with the exercise of an
Option; provided, however, the Committee may provide in a Stock Option Agreement
(or may otherwise determine in its sole discretion at the time of exercise) that
all or any portion of such tax obligations may, upon the election of the
Optionee, be paid by tendering to the Company whole shares of Stock duly
endorsed for transfer and owned by the Optionee, or by authorization to the
Company to withhold shares of Stock otherwise issuable upon exercise of the
Option, in either case in that number of shares having a Fair Market Value on
the date of exercise equal to the amount of such taxes thereby being paid, and
subject to such restrictions as to the approval and timing of any such election
as the Committee may from time to time determine to be necessary or appropriate
to satisfy the conditions of the exemption set forth in Rule 16b-3 under the
Exchange Act, if such rule is applicable. To the extent tax withholding is
required at an applicable time with respect to Options or Stock acquired under
this Plan by an Optionee, the Company, applicable Subsidiary or other entity
upon which such withholding obligation arises shall be entitled to withhold from
such Optionee's compensation (derived from this Plan or otherwise) the
applicable amount required to be withheld.
(e) The holder of an Option shall not have any of the
rights of a shareholder with respect to the shares of Stock subject to the
Option until such shares have been issued and transferred to the Optionee upon
the exercise of the Option.
(f) Notwithstanding anything to the contrary herein or in
a Stock Option Agreement, a given Option shall not be exercisable to the extent
the exercise thereof would cause the Company to be a reporting company under the
Exchange Act.
6.8 Nontransferability of Option. No Option shall be transferable
by an Optionee other than by will or the laws of descent and distribution.
During the lifetime of an Optionee, Options shall be exercisable only by such
Optionee (or by such Optionee's guardian or legal representative, should one be
appointed).
6.9 Termination of Employment or Service. The Committee shall have
the power to specify, with respect to the Options granted to a particular
Optionee, the effect upon such Optionee's right to exercise an Option as a
result of termination of such Optionee's employment or service under various
circumstances, which effect may include immediate or deferred termination of
such Optionee's rights under an Option, or acceleration of the date at which an
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Option may be exercised in full; provided, however, that in no event may an
Incentive Stock Option be exercised after the expiration of ten (10) years from
the date of grant thereof.
6.10 Employment Rights. Nothing in the Plan or in any Stock Option
Agreement shall confer on any person any right to continue in the employ of the
Company or any of its Subsidiaries, or shall interfere in any way with the right
of the Company or any of its Subsidiaries to terminate such person's employment
at any time.
6.11 Certain Successor Options. To the extent not inconsistent with
the terms, limitations and conditions of Code Section 422 and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or any Subsidiary of the Company) may contain terms that differ
from those stated in this Article, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code Section 424(a).
ARTICLE VII
STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate
for shares of Stock purchased upon the exercise of any Option granted hereunder
or any portion thereof, prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed;
(b) The completion of any registration or other
qualification of such shares which the Committee shall deem necessary or
advisable under any federal or state law or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory
body;
(c) The obtaining of any approval or other clearance from
any federal or state governmental agency or body which the Committee shall
determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following
the exercise of the Option as the Board from time to time may establish for
reasons of administrative convenience.
Stock certificates issued and delivered to Optionees shall bear such
restrictive legends as the Company shall deem necessary or advisable pursuant to
applicable federal and state securities laws.
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ARTICLE VIII
TERMINATION AND AMENDMENT OF PLAN
8.1 Termination and Amendment. The Board may at any time terminate
the Plan, and may at any time and from time to time and in any respect amend the
Plan; provided, however, that the Board (unless its actions are approved or
ratified by the shareholders of the Company within twelve (12) months of the
date that the Board amends the Plan) may not amend the Plan to:
(a) Increase the total number of shares of Stock issuable
pursuant to Incentive Stock Options under the Plan or materially increase the
number of shares of Stock subject to the Plan, in each case except as
contemplated in Section 5.2 hereof;
(b) Change the class of employees eligible to receive
Incentive Stock Options that may participate in the Plan or materially change
the class of persons that may participate in the Plan; or
(c) Otherwise materially increase the benefits accruing
to participants under the Plan.
8.2 Effect on Optionee's Rights. No termination, amendment or
modification of the Plan shall affect adversely an Optionee's rights under a
Stock Option Agreement without the consent of the Optionee or his legal
representative.
ARTICLE IX
RELATIONSHIP TO OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option,
incentive, or other compensation plans in effect for the Company or any of its
Subsidiaries; nor shall the adoption of the Plan preclude the Company or any of
its Subsidiaries from establishing any other form of incentive or other
compensation plan for employees or Directors of the Company or any of its
Subsidiaries.
ARTICLE X
MISCELLANEOUS
10.1 Replacement or Amended Grants. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or accept the surrender of outstanding Options and grant new
Options in substitution for them. However no modification of an Option shall
adversely affect an Optionee's rights under a Stock Option Agreement without the
consent of the Optionee or his legal representative.
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10.2 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.
10.3 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural and the masculine pronoun shall include the
feminine gender and vice versa.
10.4 Headings Not Part of Plan. Headings of Articles and Sections
hereof are inserted for convenience and reference and do not constitute part of
the Plan.
10.5 Interpretation. With respect to Section 16 Insiders,
transactions under this Plan, are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Plan administrators fails to so
comply, it shall be deemed void to the extent permitted by law and deemed
advisable by the Plan administrators.
10.6 Governing Law. This Plan shall be governed by, and construed
in accordance with, the laws of the State of Georgia without regard to conflicts
of laws principles.
* * * *
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Better Image, Inc.
1998 Employee Stock Option Plan
Form of Stock Option Agreement
BETTER IMAGE, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), entered into as of this
_____ day of ________________, 1998 by and between Better Image, Inc., a Georgia
corporation (the "Company"), and _________________ (the "Optionee").
WHEREAS, on _____________, 1998, the Board of Directors of the Company
adopted a stock option plan known as the "Better Image, Inc. 1998 Employee Stock
Option Plan" (the "Plan") and recommended that the Plan be approved by the
Company's shareholders; and
WHEREAS, on __________, 1998, the shareholders of the Company approved
the Plan; and
WHEREAS, the Committee has granted the Optionee an Option (as described
below) to purchase the number of shares of the Company's Common Stock (the
"Stock") as set forth below, and in consideration of the granting of the Option
the Optionee intends to remain in the employ of the Company; and
WHEREAS, the Company and the Optionee desire to enter into a written
agreement with respect to the Option in accordance with the Plan; and
WHEREAS, capitalized terms not defined herein shall have the meanings
ascribed to them in the Plan;
NOW, THEREFORE, as an employment incentive and to encourage stock
ownership, and also in consideration of the mutual covenants contained herein,
the parties hereto agree as follows.
1. Incorporation of Plan. This Option is granted pursuant to the
provisions of the Plan and the terms and definitions of the Plan are
incorporated herein by reference and made a part hereof. A copy of the Plan has
been delivered to, and receipt is hereby acknowledged by, the Optionee.
Notwithstanding anything in this Agreement to the contrary, to the extent the
terms of this Agreement conflict with or otherwise attempt to exceed the
authority set forth under the Plan, the Plan shall govern and control in all
respects.
2. Grant of Option. Subject to the terms, restrictions,
limitations, and conditions stated herein and the terms of the Plan, the Company
hereby evidences its grant to the Optionee, not in lieu of salary or other
compensation, of the right and option to purchase all or any part of the number
of shares of Stock (as defined under the Plan), set forth on Schedule A attached
hereto and incorporated herein by reference (the "Option"). The Option shall be
exercisable in the amounts and at the times specified on Schedule A. The Option
shall expire and shall not be
16
exercisable after the date specified on Schedule A as the expiration date or on
such earlier date as determined pursuant to the Plan. Schedule A states whether
or not the Option is intended to be an Incentive Stock Option.
3. Purchase Price. The price per share to be paid by the Optionee
for the shares subject to this Option (the "Exercise Price") shall be as
specified on Schedule A, which price shall be an amount not less than the Fair
Market Value of a share of Stock as of the Date of Grant (as defined in Section
11 below) if the Option is an Incentive Stock Option.
4. Exercise Terms. In the event this Option is not exercised with
respect to all or any part of the shares subject to this Option prior to its
expiration, the shares with respect to which this Option was not exercised shall
no longer be subject to this Option.
5. Restrictions on Transferability. No Option shall be
transferable by Optionee other than by will or the laws of descent and
distribution. During the lifetime of Optionee, Options shall be exercisable only
by Optionee (or by Optionee's guardian or legal representative, should one be
appointed).
6. Notice of Exercise of Option. This Option may be exercised by
the Optionee, or by the Optionee's administrators, executors or personal
representatives, by a written notice (in substantially the form of the Notice of
Exercise attached hereto as Schedule B) signed by the Optionee, or by such
administrators, executors or personal representatives, and delivered or mailed
to the Company as specified in Section 15 hereof to the attention of the Senior
Vice President, General Counsel or such other officer as the Company may
designate. Any such notice shall (a) specify the number of shares of Stock which
the Optionee or the Optionee's administrators, executors or personal
representatives, as the case may be, then elects to purchase hereunder, (b)
contain such information as may be reasonably required pursuant to Section 12
hereof, and (c) be accompanied by (i) a certified or cashier's check payable to
the Company in payment of the total Exercise Price applicable to such shares as
provided herein, (ii) shares of Stock (valued at the fair market value of such
shares on the date of exercise of the Option) owned by the Optionee and duly
endorsed or accompanied by stock transfer powers having a Fair Market Value
equal to the total Exercise Price applicable to such shares purchased hereunder,
or (iii) a certified or cashier's check accompanied by the number of shares of
Stock whose Fair Market Value when added to the amount of the check equals the
total Exercise Price applicable to such shares purchased hereunder, (iv) payment
through a broker-dealer sale and remittance procedure pursuant to which Optionee
shall provide irrevocable written instructions to a designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate Exercise Price (plus all applicable Federal and State income and
employment taxes required to be withheld by the Company by reason of such
exercise) and written directives to the Company to deliver the certificates for
the purchased shares directly to such brokerage firm in order to complete the
sale transaction, or (v) payment of all or a portion of the Exercise Price by
Optionee's execution of a recourse promissory note, subject to compliance with
applicable federal and state laws. Upon
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receipt of any such notice and accompanying payment, and subject to the terms
hereof, the Company agrees to issue to the Optionee or the Optionee's
administrators, executors or personal representatives, as the case may be, stock
certificates for the number of shares specified in such notice registered in the
name of the person exercising this Option.
7. Adjustment in Option. The number of shares of Stock subject to
this Option, the Exercise Price and other matters are subject to adjustment
during the term of this Option in accordance with the Plan.
8. Termination of Employment.
(a) Except as otherwise specified in Schedule A hereto,
in the event of the termination of the Optionee's employment with the Company or
any of its Subsidiaries, other than a termination that is either (i) For Cause,
or (ii) for reasons of death or Disability or retirement, the Optionee (or his
or her personal representative) may exercise this Option at any time within
ninety (90) days after such termination to the extent of the number of shares
which were Purchasable hereunder at the date of such termination.
(b) Except as specified in Schedule A, in the event of a
termination of the Optionee's employment that is For Cause, this Option, to the
extent not previously exercised, shall terminate immediately and shall not
thereafter be or become exercisable.
(c) Unless and to the extent otherwise provided in
Schedule A, in the event of the retirement of the Optionee at the normal
retirement date as prescribed from time to time by the Company or any
Subsidiary, the Optionee shall continue to have the right to exercise any
Options for shares which were Purchasable at the date of the Optionee's
retirement until the expiration date of such Option; provided however, that any
Incentive Stock Option may not be exercised after three (3) months from the
Optionee's termination date.
(d) This Option does not confer upon the Optionee any
right with respect to continuance of employment by the Company or by any of its
Subsidiaries. This Option shall not be affected by any change of employment so
long as the Optionee continues to be an employee of the Company or any of its
Subsidiaries.
9. Disabled Optionee. In the event of termination of employment
because of the Optionee's becoming a Disabled Optionee, the Optionee (or his or
her legal representative) may exercise this Option within a period ending on the
earlier of (a) the last day of the one (1) year period following the beginning
of the Optionee's Disability or (b) the expiration date of this Option, to the
extent of the number of shares which were Purchasable hereunder at the date of
such termination.
10. Death of Optionee. Except as otherwise set forth in Schedule A
with respect to the rights of the Optionee upon termination of employment under
Section 8(a) above, in the event of
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the Optionee's death, the appropriate persons described in Section 6 hereof or
persons to whom all or a portion of this Option is transferred in accordance
with Section 5 hereof may exercise this Option at any time within a period
ending on the earlier of (a) the last day of the one (1) year period following
the Optionee's death or (b) the expiration date of this Option. If the Optionee
was an employee of the Company at the time of death, this Option may be so
exercised to the extent of the number of shares that were Purchasable hereunder
at the date of death. If the Optionee's employment terminated prior to his or
her death, this Option may be exercised only to the extent of the number of
shares covered by this Option which were Purchasable hereunder at the date of
such termination.
11. Date of Grant. This Option was granted by the Board or
Committee on the date set forth in Schedule A (the "Date of Grant").
12. Compliance with Regulatory Matters. The Optionee acknowledges
that the issuance of capital stock of the Company is subject to limitations
imposed by federal and state law and the Optionee hereby agrees that the Company
shall not be obligated to issue any shares of Stock upon exercise of this Option
that would cause the Company to violate law or any rule, regulation, order or
consent decree of any regulatory authority (including without limitation the
Securities and Exchange Commission) having jurisdiction over the affairs of the
Company. The Optionee agrees that he or she will provide the Company with such
information as is reasonably requested by the Company or its counsel to
determine whether the issuance of Stock complies with the provisions described
by this Section.
13. Restriction on Disposition of Shares. The shares of Stock
purchased pursuant to the exercise of this Option shall not be transferred by
the Optionee except pursuant to the Optionee's will or the laws of descent and
distribution until such date which is the later of two (2) years after the Date
of Grant or one (1) year after the transfer of the shares of Stock to the
Optionee pursuant to the exercise of such Option.
14. Investment Representation of Optionee
(a) Optionee represents to the Company the following:
(i) that Optionee has read and understands the
terms and provisions of the Plan, and hereby accepts this
Agreement subject to all the terms and provisions of the Plan;
(ii) that Optionee shall accept as binding and
final all decisions or interpretations of the Board or of the
Committee upon any questions arising under the Plan;
(iii) Optionee understands that the existence of
the Plan and the execution of this Agreement are not
sufficient by themselves to cause any exercise of any
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Incentive Stock Options granted under the Plan and this
Agreement to qualify for favorable tax treatment through the
application of Section 422(a) of the Code; and that Optionee
must, in order to so qualify, individually meet by Optionee's
own action all applicable requirements of Section 422,
including without limitation, the requirement that no
disposition of Stock may be made by Optionee within two (2)
years from the date of the grant of the Option nor within one
(1) year after the transfer of such Stock to Optionee; and
(iv) Optionee understands that, unless at the
time of exercise of the Option, a registration statement under
the Securities Act of 1933, as amended, is in effect covering
the Stock, as a condition to the exercise of the Option the
Company may require Optionee to represent that Optionee is
acquiring the Stock for Optionee's own account only and not
with a view to, or for sale in connection with, any
distribution of the Stock.
(b) The Optionee understands and agrees that the
certificate or certificates representing any shares of Stock acquired hereunder
may bear an appropriate legend relating to registration and resale under federal
and state securities laws.
(c) The Optionee shall not have any rights of a
shareholder of the Company with respect to the shares of Stock which may be
purchased upon exercise of this Option, unless and until such shares shall have
been issued and delivered and his/her name has been entered as a shareholder on
the stock transfer records of the Company.
15. Miscellaneous.
(a) This Agreement shall be binding upon the parties
hereto and their representatives, successors and assigns.
(b) This Agreement shall be governed by the laws of the
State of Georgia, without regard to conflicts of laws principles.
(c) Any notice, request, document or other communication
given hereunder shall be deemed to be sufficiently given upon personal delivery
to the other party or upon the expiration of three (3) days after depositing
same in the United States mail, return receipt requested, properly addressed to
the respective parties or such other address as they may give to the other party
in writing in the same manner as follows:
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Company: Better Image, Inc.
Two Midtown Plaza
Suite 1220
1360 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: ______________________
Telecopier: (404) 898-1247
Telephone: (404) 898-1240
Optionee: ___________________________________
___________________________________
___________________________________
___________________________________
(d) This Agreement may not be modified except in writing
executed by each of the parties hereto.
(e) This Agreement, together with the Plan, contains the
entire understanding of the parties hereto and supersedes any prior
understanding and/or written or oral agreement between them respecting the
subject matter hereof.
(f) The parties agree that the provisions of this
Agreement are severable and the invalidity or unenforceability of any provision
in whole or part shall not affect the validity or enforceability of any
enforceable part of such provision or any other provisions hereof.
(g) The headings with Sections herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
(h) No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.
(i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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21
IN WITNESS WHEREOF, the Board or Committee has caused this
Stock Option Agreement to be executed on behalf of the Company and attested by
the Secretary or an Assistant Secretary of the Company, and the Optionee has
executed this Stock Option Agreement, all as of the day and year first above
written.
COMPANY:
BETTER IMAGE, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
OPTIONEE:
By:
---------------------------------------
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SCHEDULE A
TO
STOCK OPTION AGREEMENT
BETWEEN
BETTER IMAGE, INC.
AND
[Name of Optionee]
Dated ________________
1. Number of Shares Subject to Option: ________________ shares of Stock.
2. This Option (Check one) [ ] is [ ] is not an Incentive Stock Option.
3. Option Exercise Price: $______________ per share.
4. Date of Grant: ________________________
5. Option Vesting Schedule:
Options are exercisable with respect to the number of shares of Stock indicated
below on or after the date indicated next to the number of shares:
No. of Shares Vesting Date
Notwithstanding the vesting schedule set forth above, upon a Change in
Control, as defined in the Plan, all Options granted hereunder shall become
exercisable immediately upon the occurrence of such Change in Control for a
period of ninety (90) days after written notice to Optionee of the right to such
Options. Any Options not exercised within such ninety (90) day period shall
terminate after the expiration of such period.
6. Option Exercise Period:
23
SCHEDULE B
TO
STOCK OPTION AGREEMENT
BETWEEN
BETTER IMAGE, INC.
AND
[Name of Optionee]
Dated ________________
NOTICE OF EXERCISE
The undersigned hereby notifies Better Image, Inc. (the
"Company") of this election to exercise the undersigned's stock option to
purchase ________________ shares of Stock (as defined under the Plan) pursuant
to the Stock Option Agreement (the "Agreement") between the undersigned and the
Company dated ________________. Accompanying this Notice is (1) a certified or a
cashier's check in the amount of $________________ payable to the Company,
and/or (2) _______________ shares of Stock (as defined under the Plan) presently
owned by the undersigned and duly endorsed or accompanied by stock transfer
powers, having an aggregate Fair Market Value (as defined under the Plan) as of
the date hereof of $__________________, such amounts being equal, in the
aggregate, to the purchase price per share set forth in Section 3 of the
Agreement multiplied by the number of shares being purchased hereby (in each
instance subject to appropriate adjustment pursuant to Section 5 of the
Agreement) (3) evidence of a cashless exercise as set forth in Section 6 of the
Agreement, and/or (4) delivery of a recourse promissory note.
The undersigned is a resident of the State of _______________.
IN WITNESS WHEREOF, the undersigned has set his/her hand and
seal, this ________ day of ________________, ______.
OPTIONEE [OR OPTIONEE'S ADMINISTRATOR,
EXECUTOR OR PERSONAL REPRESENTATIVE]
----------------------------------------
Name:
-----------------------------------
Position (if other than Optionee):