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Exhibit 10.21
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HEALTH O METER PRODUCTS, INC.
1997 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. PURPOSE
The Health o meter Products, Inc. 1997 Stock Option and Incentive Plan, as
the same may be amended (the "Plan"), is designed to foster the long-term growth
and performance of the Company by: (a) enhancing the Company's ability to
attract and retain highly qualified Directors and employees; (b) motivating
Directors and employees to serve and promote the long-term interests of the
Company and its stockholders through stock ownership and performance-based
incentives; and (c) providing the Company with flexibility to provide
stock-based incentives to consultants whose services are anticipated to promote
the Company's long-term business objectives. To achieve this purpose, the Plan
provides authority for the grant of Stock Options and Stock Appreciation Rights.
SECTION 2. DEFINITIONS
(a) "Acquisition Consideration" shall be as defined in Section 12 hereof.
(b) "Affiliate" shall have the meaning ascribed to that term in Rule 12b-2
promulgated under the Exchange Act.
(c) "Award" shall mean the grant of Stock Options and Stock Appreciation
Rights under this Plan.
(d) "Award Agreement" shall mean any agreement between the Company and a
Participant that sets forth terms, conditions, and restrictions applicable to an
Award.
(e) "Board of Directors" shall mean the Board of Directors of the Company.
(f) "Change in Control" shall include, but not be limited to: (i) the first
purchase of shares by a Third Party pursuant to a tender offer or exchange
(other than a tender offer or exchange by the Company) for all or part of the
Company's Common Stock of any class or any securities convertible into such
Common Stock; (ii) the receipt by the Company of a Schedule 13D or other advice
indicating that a Third Party is the "beneficial owner" (as that term is defined
in Rule 13d-3 promulgated under the Exchange Act) of 50 percent (50%) or more of
the Company's Common Stock calculated as provided in paragraph (d) of said Rule
13d-3; (iii) the date of approval by stockholders of the Company of an agreement
providing for any consolidation or merger of the Company in which the Company
will not be the continuing or surviving corporation or pursuant to which shares
of capital stock of any class, or any securities convertible into such capital
stock, of the Company would be converted into cash, securities, or other
property, other than a merger of the Company in which the holders of common
stock of all classes of the Company immediately prior to the merger would have
the same proportion of ownership of common stock of the surviving corporation
immediately after the merger; (iv) the date of the approval by stockholders of
the Company of any sale, lease, exchange, or other transfer (in one transaction
or a series of related transactions) of all or substantially all the assets of
the Company; (v) the adoption of any plan or proposal for the liquidation (but
not a partial liquidation) or dissolution of the Company; or (vi) such other
event as the Committee shall in its sole and absolute discretion, deem to be a
"Change in Control" for purposes of this Plan or any Notice of Award or Award
Agreement entered into pursuant hereto. The manner of application and
interpretation of the foregoing provisions shall be determined by the Committee
in its sole and absolute discretion.
(g) "Code" shall mean the Internal Revenue Code of 1986, or any law that
supersedes or replaces it, as amended from time to time.
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(h) "Committee" shall mean the Compensation Committee of the Board of
Directors, or any other committee of the Board of Directors that the Board of
Directors authorizes to administer this Plan. The Committee will be constituted
in a manner that satisfies the "non-employee director" standard set forth in
Rule 16b-3 and the "outside director" requirements of Section 162(m) of the
Code.
(i) "Common Stock" shall mean shares of Common Stock, $.01 par value, of
Health o meter Products, Inc., including authorized and unissued shares and
treasury shares.
(j) "Company" shall mean Health o meter Products, Inc., a Delaware
corporation, and its direct and indirect subsidiaries.
(k) "Director" shall mean a director of Health o meter Products, Inc.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, and any
law that supersedes or replaces it, as amended from time to time.
(m) "Fair Market Value" of Common Stock shall mean the value of the Common
Stock determined by the Committee, or pursuant to rules established by the
Committee on a basis consistent with regulations under the Code.
(n) "Incentive Stock Option" shall mean a Stock Option that meets the
requirements of Section 422 of the Code.
(o) "Notice of Award" shall mean any notice by the Committee to a
Participant that advises the participant of the grant of an Award or sets forth
terms, conditions, and restrictions applicable to an Award.
(p) "Participant" shall mean any person to whom an Award has been granted
under this Plan.
(q) "Person" shall mean an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a governmental authority.
(r) "Rule 16b-3" shall mean Rule 16b-3 promulgated under the Exchange Act,
or any rule that supersedes or replaces it, as amended from time to time.
(s) "Stock Appreciation Right" shall mean an Award granted pursuant to
Section 6(b)(i) hereof.
(t) "Stock Equivalent Unit" shall mean an Award that is valued by reference
to the value of shares of Common Stock.
(u) "Stock Option" shall mean an Award granted pursuant to Section 6(b)(ii)
hereof.
(v) "Third Party" shall mean any person, group or entity other than the Lee
Group Investors or the Fund, each as defined in the Stock Subscription and
Stockholder's Agreement dated as of April 28, 1988, as amended and restated.
SECTION 3. ELIGIBILITY
All Directors and employees of, and consultants to, the Company and its
Affiliates, are eligible for the grant of Awards. The selection of any such
persons to receive Awards will be within the discretion of the Committee. More
than one Award may be granted to the same person.
Notwithstanding the foregoing, (i) no member of the Committee shall be
eligible to receive Awards under the Plan during the period of his or her
service thereon and (ii) any individual that renounces in writing any right that
he or she may have to receive Awards under the Plan shall not be eligible to
receive any Awards hereunder.
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SECTION 4. SHARES OF COMMON STOCK AVAILABLE FOR AWARDS; ADJUSTMENT
(a) Number of Shares of Common Stock. The aggregate number of shares of
Common stock that may be subject to Awards granted under this Plan during the
term of this Plan will be equal to 270,000 shares of Common Stock, subject to
any adjustments made in accordance with the terms of this Section 4.
The assumption of obligations in respect of awards granted by an
organization acquired by the Company, or the grant of Awards under this Plan in
substitution for any such awards, will not reduce the number of shares of Common
Stock available in any fiscal year for the grant of Awards under this Plan.
Shares of Common Stock subject to an Award that is forfeited, terminated,
or canceled without having been exercised (other than shares of Common Stock
subject to a Stock Option that is canceled upon the exercise of a related Stock
Appreciation Right) will again be available for grant under this Plan, without
reducing the number of shares of Common Stock available in any fiscal year for
grant of Awards under this Plan, except to the extent that the availability of
those shares of Common Stock would cause this Plan or any Awards granted under
this Plan to fail to qualify for the exemption provided by Rule 16b-3. In
addition, any shares of Common Stock which are retained to satisfy a
participant's withholding tax obligations or which are transferred to the
Company by a participant to satisfy such obligations or to pay all or any
portion of the exercise price of the Award in accordance with the terms of the
Plan, the Award Agreement or the Notice of Award, may be made available for
reoffering under the Plan to any Participant, except to the extent that the
availability of those shares of Common Stock would cause this Plan or any Awards
granted under this Plan to fail to qualify for the exemption provided by Rule
16b-3.
(b) No Fractional Shares. No fractional shares of Common Stock will be
issued, and the Committee will determine the manner in which the value of
fractional shares of Common Stock will be treated.
(c) Adjustment. In the event of any change in the Common Stock by reason
of a merger, consolidation, reorganization, recapitalization, or similar
transaction, including any transaction described under Section 424(a) of the
Code, or in the event of a stock dividend, stock split, or distribution to
stockholders (other than normal cash dividends), the Committee will have
authority to adjust, in any manner that it deems equitable, the number and class
of shares of Common Stock subject to outstanding Awards, the exercise price
applicable to outstanding Awards, and the Fair Market Value of the shares of
Common Stock and other value determinations applicable to outstanding Awards,
including as may be allowed or required under Section 424(a) of the Code.
SECTION 5. ADMINISTRATION
(a) Committee. This Plan will be administered by the Committee. The
Committee will, subject to the terms of this Plan, have the authority to: (i)
select the eligible Directors, employees and consultants who will receive
Awards; (ii) grant Awards; (iii) determine the number and types of Awards to be
granted to eligible Directors, employees and consultants; (iv) determine the
terms, conditions, vesting periods, and restrictions applicable to Awards,
including timing and price; (v) adopt, alter, and repeal administrative rules
and practices governing this Plan; (vi) interpret the terms and provisions of
this Plan and any Awards granted under this Plan, including, where applicable,
determining the method of valuing any Award and certifying as to the
satisfaction of such Awards; (vii) prescribe the forms of any Notices of Award,
Award Agreements, or other instruments relating to Awards; and (viii) otherwise
supervise the administration of this Plan.
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(b) Delegation. The Committee may delegate any of its authority to any
other person or persons that it deems appropriate, provided the delegation does
not cause this Plan or any Awards granted under this Plan to fail to qualify for
the exemption provided by Rule 16b-3.
(c) Decisions Final. All decisions by the Committee, and by any other
Person or Persons to whom the Committee has delegated authority, to the extent
permitted by law, will be final and binding on all Persons.
(d) No Liability. Neither the Committee nor any of its members shall be
liable for any act taken by the Committee pursuant to the Plan. No member of the
Committee shall be liable for the act of any other member.
SECTION 6. AWARDS
(a) Grant of Awards. The Committee will determine the type or types of
Awards to be granted to each Participant and will set forth in the related
Notice of Award or Award Agreement the terms, conditions, vesting periods, and
restrictions applicable to each Award. Awards may be granted singly or in
combination or tandem with other Awards. Awards may also be granted in
replacement of, or in substitution for, other awards granted by the Company,
whether or not granted under this Plan; without limiting the foregoing, if a
Participant pays all or part of the exercise price or taxes associated with an
Award by the transfer of shares of Common Stock or the surrender of all or part
of an Award (including the Award being exercised), the Committee may, in its
discretion, grant a new Award to replace the shares of Common Stock that were
transferred or the Award that was surrendered. The Company may assume
obligations in respect of awards granted by any Person acquired by the Company
or may grant Awards in replacement of, or in substitution for, any such awards.
(b) Types of Awards. Awards may include, but are not limited to, the
following:
(i) Stock Appreciation Rights. A Participant who is granted an Award
which is a Stock Appreciation Right shall have the right to receive a
payment in cash or shares of Common Stock, equal to the excess of (A) the
Fair Market Value, or other specified valuation, of a specified number of
shares of Common Stock on the date the right is exercised over (B) the Fair
Market Value, or other specified valuation, of such shares of Common Stock
on the date the right is granted, all as determined by the Committee. The
right may be conditioned upon the occurrence of certain events, such as a
Change in Control of the Company, or may be unconditional, as determined by
the Committee.
(ii) Stock Options. A Participant who is granted an Award which is a
Stock Option shall have the right to purchase a specified number of shares
of Common Stock, during a specified period, and at a specified exercise
price, all as determined by the Committee. A Stock Option may be an
Incentive Stock Option or a Stock Option that does not qualify as an
Incentive Stock Option. In addition to the terms, conditions, vesting
periods, and restrictions established by the Committee, Incentive Stock
Options must comply with the requirements of Section 422 of the Code. The
exercise price of a Stock Option that does not qualify as an Incentive
Stock Option may be more or less than the Fair Market Value of the shares
of Common Stock on the date the Stock Option is granted.
(c) Limits on Awards. The maximum aggregate number of shares of Common
Stock (i) for which Stock Options may be granted, and (ii) with respect to which
Stock Appreciation Rights may be granted, to any particular employee during any
calendar year during the term of this Plan is 75,000, subject to adjustment in
accordance with Section 4(c).
(d) Termination of Awards. Any Award granted under this Plan shall expire,
and the Participant to whom such Award was granted shall have no further rights
with respect thereto, on the tenth anniversary of the date of grant of such
Award, or on such earlier date as may be established by the Committee and
provided in the Notice of Award or Award Agreement with respect to such Award.
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SECTION 7. DEFERRAL OF PAYMENT
With the approval of the Committee, the delivery of the shares of Common
Stock cash, or any combination thereof subject to an Award may be deferred,
either in the form of installments or a single future delivery. The Committee
may also permit selected Participants to defer the receipt of some or all of
their Awards, as well as other compensation, in accordance with procedures
established by the Committee to assure that the recognition of taxable income is
deferred under the Code. Deferred amounts may, to the extent permitted by the
Committee, be credited as cash or Stock Equivalent Units. The Committee may also
establish rules and procedures for the crediting of interest on deferred cash
payments and dividend equivalents on Stock Equivalent Units.
SECTION 8. PAYMENT OF EXERCISE PRICE
The exercise price of a Stock Option (other than an Incentive Stock Option)
and any other Award for which the Committee has established an exercise price
may be paid in cash, by the transfer of shares of Common Stock, by the surrender
of all or part of an Award (including the Award being exercised), or by a
combination of these methods, as and to the extent permitted by the Committee.
The exercise price of an Incentive Stock Option may be paid in cash, by the
transfer of shares of Common Stock, or by a combination of these methods, as and
to the extent permitted by the Committee but may not be paid by the surrender of
all or part of an Award. The Committee may prescribe any other method of paying
the exercise price that it determines to be consistent with applicable law and
the purpose of this Plan.
SECTION 9. TAXES ASSOCIATED WITH AWARDS
Prior to the payment of an Award or upon the exercise or release thereof,
the Company may withhold, or require a Participant to remit to the Company, an
amount sufficient to pay any federal, state, and local taxes associated with the
Award. The Committee may, in its discretion and subject to such rules as the
Committee may adopt, permit a Participant to pay any or all taxes associated
with the Award (other than an Incentive Stock Option) in cash, by the transfer
of shares of Common Stock, by the surrender of all or part of an Award
(including the Award being exercised), or by a combination of these methods. The
Committee may permit a Participant to pay any or all taxes associated with an
Incentive Stock Option in cash, by the transfer of shares of Common Stock, or by
a combination of these methods or by any other method which does not disqualify
the option as an Incentive Stock Option under applicable provisions of the Code.
SECTION 10. TERMINATION OF EMPLOYMENT
If the employment of a Participant terminates for any reason, all
unexercised, deferred, and unpaid Awards may be exercisable or paid only in
accordance with rules established by the Committee or as specified in the
particular Award Agreement or Notice of Award. Such rules may provide, as the
Committee deems appropriate, for the expiration, continuation, or acceleration
of the vesting of all or part of the Awards.
SECTION 11. TERMINATION OF AWARDS UNDER CERTAIN CONDITIONS
The Committee may cancel any unexpired, unpaid, or deferred Awards at any
time if the Participant is not in compliance with all applicable provisions of
this Plan or with any Notice of Award or Award Agreement or if the Participant,
without the prior written consent of the Company, engages in any of the
following activities:
(i) Renders services for an organization, or engages in a business,
that is, in the judgment of the Committee, in competition with the Company.
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(ii) Discloses to anyone outside of the Company, or uses for any
purpose other than the Company's business any confidential information or
material relating to the Company, whether acquired by the Participant
during or after employment with the Company, in a fashion or with a result
that the Committee, in its judgment, deems is or may be injurious to the
best interests of the Company.
The Committee may, in its discretion and as a condition to the exercise of
an Award, require a Participant to acknowledge in writing that he or she is in
compliance with all applicable provisions of this Plan and of any Notice of
Award or Award Agreement and has not engaged in any activities referred to in
clauses (i) and (ii) above.
SECTION 12. CHANGE IN CONTROL
In the event of a Change in Control of the Company, the Committee shall
have the right, in its sole discretion, to (i) accelerate the exercisability of
any Stock Options and Stock Appreciation Rights, notwithstanding any limitations
set forth in the Plan; (ii) cancel all outstanding Stock Options and Stock
Appreciation Rights in exchange for the kind and amount of shares of the
surviving or new corporation, cash, securities, evidences of indebtedness, other
property or any combination thereof receivable in respect of one share of Common
Stock upon consummation of the transaction in question (the "Acquisition
Consideration") that (a) with respect to Awards of Stock Options, the
Participant would have received had the Stock Option been exercised prior to
such transaction, less the applicable exercise price therefor, and (b) with
respect to a Stock Appreciation Right, the Participant would have received had
payment therefor been made by the Company prior to such transaction in shares of
Common Stock; (iii) cause the Participant to have the right thereafter and
during the term of the Stock Option or Stock Appreciation Right, to receive upon
exercise thereof the Acquisition Consideration receivable upon the consummation
of such transaction by a holder of the number of shares of Common Stock which
might have been obtained upon exercise of all or any portion thereof; or (iv)
take such other action as it deems appropriate to preserve the value of the
Award to the Participant. Alternatively, the Committee shall also have the right
to require any purchaser of the Company's assets or stock, as the case may be,
to take any of the actions set forth in the preceding sentence as such purchaser
may determine to be appropriate or desirable.
SECTION 13. AMENDMENT, SUSPENSION, OR TERMINATION OF THIS PLAN;
AMENDMENT OF OUTSTANDING AWARDS
(a) Amendment, Suspension, or Termination of this Plan. The Board of
Directors may amend, suspend, or terminate this Plan at any time; provided,
however, that in no event, without the approval of the Company's shareholders,
shall any action of the Committee or the Board of Directors result in:
(i) increasing, except as provided in Section 4(c) hereof, the maximum
number of shares of Common Stock that may be subject to Awards granted
under the Plan;
(ii) making any changes which would cause any option granted under the
Plan as an Incentive Stock Option not to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code; or
(iii) making any change which would eliminate the exemption provided
by Rule 16b-3 for this Plan and for Awards granted under this Plan.
(b) Amendment of Outstanding Awards. The Committee may, in its discretion,
amend the terms of any Award, prospectively or retroactively, but no such
amendment may impair the rights of any Participant without his or her consent.
The Committee may, in whole or in part, waive any restrictions or conditions
applicable to, or accelerate the vesting of, any Award.
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SECTION 14. AWARDS TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE THE UNITED STATES
To the extent that the Committee deems appropriate to comply with foreign
law or practice and to further the purpose of this Plan, the Committee may,
without amending this Plan, (i) establish special rules applicable to Awards
granted to Participants who are foreign nationals, are employed outside the
United States, or both, including rules that differ from those established under
this Plan, and (ii) grant Awards to such Participants in accordance with those
rules.
SECTION 15. NONASSIGNABILITY
Unless otherwise determined by the Committee, (i) no Award granted under
the Plan may be transferred or assigned by the Participant to whom it is granted
other than by will, pursuant to the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined in the Code, and (ii) an
Award granted under this Plan may be exercised, during the Participant's
lifetime, only by the Participant or by the Participant's guardian or legal
representative. Notwithstanding the foregoing, no Incentive Stock Option may be
transferred or assigned pursuant to a qualified domestic relations order or
exercised, during the Participant's lifetime, by the Participant's guardian or
legal representative.
SECTION 16. TERMS OF AWARDS AND RELATED AGREEMENTS NEED NOT BE IDENTICAL
The form and substance of Awards, Award Agreements and Notices of Awards,
whether granted at the same or different times, need not be identical. Subject
only to the terms of the Plan, the Committee shall have the authority to
prescribe the terms of any Awards and the provisions of any Award Agreements,
Notices of Award or other instruments entered into with respect to the same; it
being expressly understood that the Committee shall have the authority to
include in any such Award Agreements, Notices of Award or other instruments
relating to Awards, such representations, warranties, covenants and agreements
on behalf of the Company or the participant as it deems necessary or
appropriate, including, without limitation, covenants relating to
non-competition, non-solicitation and non-disclosure of confidential
information.
SECTION 17. GOVERNING LAW
The interpretation, validity, and enforcement of this Plan will, to the
extent not otherwise governed by the Code or the securities laws of the United
States, be governed by the laws of the State of Delaware.
SECTION 18. NO RIGHTS AS EMPLOYEES/STOCKHOLDERS
Nothing in the Plan or in any Award Agreement or Notice of Award shall
confer upon any Participant any right to continue in the employ of the Company
or an Affiliate, or to serve as a member of the Board or to be entitled to
receive any remuneration or benefits not set forth in the Plan or such Award
Agreement or Notice of Award, or to interfere with or limit either the right of
the Company or an Affiliate to terminate the employment of such Participant at
any time or the right of the stockholders of the Company to remove him or her as
a member of the Board with or without cause. Nothing contained in the Plan or in
any Award Agreement or Notice of Award shall be construed as entitling any
Participant to any rights of a stockholder as a result of the grant of an Award
until such time as shares of Common Stock are actually issued to such
Participant pursuant to the exercise of a Stock Option or Stock Appreciation
Right.
SECTION 19. EFFECTIVE AND TERMINATION DATES
(a) Effective Date. This Plan was approved by the Board of Directors on
January 21, 1997 and becomes effective upon adoption by the affirmative vote of
the holders of a majority of the voting power of the Company represented by the
shares of Common Stock represented in
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person or by proxy, at any annual or special meeting of stockholders at which a
quorum is present. The Plan shall be deemed to be adopted on the date of such
stockholder meeting.
(b) Termination Date. This Plan will continue in effect until midnight on
March 5, 2007; provided, however, that Awards granted on or before that date may
extend beyond that date and restrictions and other terms and conditions imposed
on Restricted Stock or any other Award granted on or before that date may extend
beyond such date.