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Exhibit 99(b)
R.P. SCHERER CORPORATION
(f/k/a RPS CORPORATION)
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1990 NONQUALIFIED PERFORMANCE STOCK OPTION PLAN A
1. PURPOSE. The purpose of this 1990 Nonqualified Performance Stock Option
Plan A (this "Performance Plan") is to provide a means by which certain
employees of RPS Corporation, a Delaware corporation (the "Company"), R.P.
Scherer Corporation, a Delaware corporation and a wholly owned subsidiary of the
Company ("R.P. Scherer"), or any subsidiary thereof, may be given an opportunity
to purchase common stock, par value $.01 per share (the "Common Stock"), and
Series B Redeemable Preferred Stock, par value $.01 per share (the "Preferred
Stock" and together with the Common Stock, the "Stock") of the Company. This
Performance Plan is intended to advance the interests of the Company by
encouraging stock ownership on the part of certain employees, by enabling the
Company and R.P. Scherer to secure and retain the services of highly qualified
persons, and by providing employees with an additional incentive to advance the
success of the Company.
2. STOCK SUBJECT TO OPTION. Subject to adjustment as provided in Section
4(e) hereof, options may be granted by the Company in accordance with the
provisions of Section 4 hereof to purchase up to an aggregate of 90,798 shares
of the authorized but unissued Common Stock and up to an aggregate of 181,596
shares of the authorized but unissued Preferred Stock. Shares of Stock that by
reason of the expiration of an option or otherwise are no longer subject to
purchase pursuant to an option granted under this Performance Plan may be the
subject of other options granted under this Performance Plan or any other
option, incentive or compensatory plan adopted by the Company.
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3. PARTICIPANTS. All key employees of the Company, R.P. Scherer or any of
its subsidiaries, as determined by the Board of Directors of the Company (the
"Board") or the Committee (as such term is defined in Section 4(a) hereof), may
be granted options under this Performance Plan. A person who holds an option
granted hereunder that has not expired is referred to as an "Optionee";
PROVIDED, HOWEVER, that in the event of such person's death or Disability (as
hereinafter defined) such person's estate, personal representative or
beneficiary following the death or incapacity of such person (an "Optionee's
Representative") shall be able to exercise the rights otherwise available to the
Optionee.
4. TERMS AND CONDITIONS OF OPTIONS. The Committee may grant options from
time to time pursuant to this Performance Plan. Such options shall be evidenced
by written agreements substantially in the form of the Nonqualified Performance
Stock Option Agreement A (the "Performance Stock Option Agreement"), which is
attached hereto as Appendix A, and shall not be inconsistent with this
Performance Plan. The shares of Stock subject to each option shall, upon
issuance, become subject to the terms and conditions, including restrictions on
transferability, contained in an agreement substantially in the form of the
Stockholders Purchase Agreement attached hereto as Appendix B to be entered into
by the Company and the Optionee (the "Stockholders Purchase Agreement"), or,
with respect to certain Optionees, a Management Stock Subscription Agreement
between the Company and such Optionee (the "Stock Subscription Agreement").
Nothing in this Performance Plan or an option granted hereunder shall govern the
employment rights and duties between an Optionee and the
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Company or R.P. Scherer or any subsidiary thereof, nor in any way be deemed to
constitute an employment agreement among such parties.
(a) OPTION PRICE. The price per share of the Common Stock subject to
each option (the "Common Stock Option Price") shall be set by a
Compensation Committee (the "Committee") of the Board; PROVIDED, HOWEVER,
that the Common Stock Option Price per share may be less than the fair
market value of a share of Common Stock on the Date of Grant, as such date
is set forth in the applicable Performance Stock Option Agreement. For
purposes of the foregoing, the fair market value of the Common Stock on the
Date of Grant shall be the fair market value established by the Committee
acting in good faith, and the fair market value may be more or less than
the book value of the Common Stock. The price per share of the Preferred
Stock subject to each option (the "Preferred Stock Option Price") shall be
the liquidation preference of each such underlying share of Preferred
Stock. The Common Stock Option Price and the Preferred Stock Option Price
are collectively referred to as the "Option Price."
(b) TERM OF OPTION. Notwithstanding any other provision of this
Performance Plan, each option granted under this Performance Plan shall
expire not more than ten years and one day from the date the option is
granted, except that under the circumstances described in Sections 4(d),
4(f) and 4(g), options may expire and terminate at an earlier date.
(c) NON-TRANSFERABILITY OF OPTION RIGHTS. No option shall be
assignable or transferable otherwise than by will or by the laws of descent
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and distribution. During the lifetime of an Optionee, the option is
exercisable only by such Optionee or, as provided in Section 3, such
Optionee's Representative.
(d) TERMINATION OF EMPLOYMENT.
(i) Subject to the provisions of Sections 4(d)(ii), 4(d)(iii),
4(d)(iv) and 4(d)(v), in the event that an Optionee's employment by
the Company, R.P. Scherer or any subsidiary thereof shall terminate,
all options granted to such Optionee pursuant to this Performance Plan
shall terminate immediately and shall not be exercisable.
(ii) In the event that an Optionee's employment is terminated
because of death or Disability, the Company shall have the right, but
not the obligation, for a period of 120 days from the date of
termination of employment due to such Optionee's death or Disability
(the "Call Period"), to repurchase an Optionee's options granted
pursuant to this Performance Plan, or a portion thereof, to the extent
(and only to the extent) that such options, or a portion thereof,
entitle the Optionee to purchase the Exercisable Shares (as
hereinafter defined) existing on the date of such Optionee's death or
Disability. The Company may exercise its repurchase right under this
Section 4(d)(ii) at any time during the Call Period by delivering
written notice (the "Call Notice") to such Optionee or such Optionee's
Representative of the Company's exercise of this right. During the
Call Period, the Optionee (or the Optionee's Representative) may send
written notice to the Company (the "Put Notice") that such person
wishes the Company to repurchase, and the
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Company shall repurchase, such Optionee's options, or a portion
thereof, to the same extent as if the Company had exercised its
repurchase right under this Section 4(d)(ii). The repurchase price for
each option repurchased pursuant to this Section 4(d)(ii) shall be
equal to the sum of (A) the product obtained by multiplying the number
of Exercisable Shares which are shares of Common Stock by an amount
which shall equal the excess, if any, of the Fair Market Value (as
hereinafter defined) per share of the underlying Common Stock, over
the Common Stock Option Price, and (B) the product obtained by
multiplying the number of Exercisable Shares which are shares of
Preferred Stock by an amount which shall equal the liquidation
preference per share of the underlying Preferred Stock over the
Preferred Stock Option Price. The closing of any repurchase of any
options pursuant to this Section 4(d)(ii) shall be held at the
principal executive offices of R.P. Scherer at 10:00 a.m. local time
on the tenth business day following the date of delivery of a Call
Notice or a Put Notice, as the case may be, or at such other date,
time and place as the parties may mutually agree upon. Option granted
to an Optionee pursuant to this Performance Plan, or any portion
thereof, shall terminate immediately upon such Optionee's death or
Disability and shall not be exercisable to the extent that such
options, or any portion thereof, do not entitle such Optionee to
purchase Exercisable Shares pursuant to this Section 4(d)(ii).
The term "Disability" shall mean an Optionee's physical or
mental disability (so that the Optionee is not reasonably able to
render his full service to the Company, R.P. Scherer or any
subsidiary thereof) for any
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consecutive period exceeding three months or as determined by
agreement of a majority of the members of the Board in their
reasonable discretion. The date of such Disability shall be on the
last day of such three-month period or the day selected by the Board,
as the case may be.
The term "Fair Market Value" shall mean, with respect to
each share of underlying Common Stock, (A) the fair market value of
the Company as determined within six months prior to the applicable
date or, if no such determination has been made within six months,
then within 75 days of the applicable date determined as of the
applicable date, in each case by the Board, divided by (B) the number
of shares of Common Stock then outstanding (assuming the exercise of
all outstanding stock options, warrants or rights for the purchase of
Common Stock).
(iii) If neither the Company nor the Optionee (or the Optionee's
Representative) has exercised its right pursuant to Section 4(d)(i)
upon the Optionee's death or Disability, such Optionee (or such
Optionee's Representative) shall have the right, at any time within
120 days following he end of the Call Period, to exercise the options
granted to such Optionee pursuant to this Performance Plan to purchase
the Exercisable Shares which existed on the date of such Optionee's
death or Disability. Options granted to an Optionee pursuant to this
Performance Plan, or any portion thereof, shall terminate at the end
of the 120 day period following the Call Period and shall not be
exercisable to the extent that such options, or any portion thereof,
are neither repurchased by the Company pursuant to Section 4(d)(ii)
nor exercised
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by the Optionee or the Optionee's Representative pursuant to this
Section 4(d)(iii).
(iv) In the event that an Optionee's employment is terminated by
reason of Termination without Cause (as hereinafter defined), the
Company shall have the right, not the obligation, for a period of 120
days from the date of termination of employment of the Optionee, to
repurchase an Optionee's options granted pursuant to this Performance
Plan, or a portion thereof, to the extent (and only to the extent)
that such options, or a portion thereof, entitle the Optionee to
purchase the Exercisable Shares existing on the date of such
Optionee's termination of employment. The Company may exercise its
repurchase right under this Section 4(d)(iv) at any time during the
120-day period by delivering written notice to the Optionee of its
exercise of this right. The repurchase price for each option, or
portion thereof, repurchased pursuant to this Section 4(d)(iv) shall
be equal to the sum of (A) the product obtained by multiplying the
number of Exercisable Shares which are shares of Common Stock by an
amount which shall equal the excess, if any, of the lesser of (x) the
Termination Book Value (as hereinafter defined) per share of the
underlying Common Stock and (y) the Fair Market Value per share of the
underlying Common Stock, over the Common Stock Option Price, and (B)
the product obtained by multiplying the number of Exercisable Shares
which are shares of Preferred Stock by an amount which shall equal the
liquidation preference per share of the underlying Preferred Stock
over the Preferred Stock Option Price. The closing of any repurchase
of any options
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pursuant to this Section 4(d)(iv) shall be held at the principal
executive offices of R.P. Scherer at 10:00 a.m. local time on the
tenth business day following the date of delivery of the Company's
written notice of the exercise of its repurchase right, or at such
other date, time and place as the parties may mutually agree upon.
Options granted to an Optionee under this Performance Plan, or any
portion thereof, shall terminate immediately upon such Optionee's
Termination without Cause and shall not be exercisable to the extent
that such options, or any portion thereof, do not entitle such
Optionee to purchase Exercisable Shares pursuant to this Section
4(d)(iv).
The term "Termination without Cause" shall mean termination
of employment of such Optionee by reason of any occurrence other than
death or Disability of such Optionee, termination for Cause or the
voluntary termination of such Optionee of his employment by
resignation or any other means, that results in such Optionee no
longer being employed by the Company, R.P. Scherer or any subsidiary
thereof.
The term "Cause" used in connection with the termination of
employment of an Optionee shall mean a termination of employment due
to (i) the commission by such Optionee of an act of fraud upon, or bad
faith or willful misconduct toward, the Company, R.P. Scherer or any
subsidiary thereof (including the unauthorized disclosure of
confidential or proprietary information of the Company, R.P. Scherer
or any subsidiary thereof), (ii) a conviction of such Optionee by a
court of competent jurisdiction (or a plea of NOLO CONTENDERE or the
equivalent under the laws of any other country or
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political subdivision thereof) of a crime involving, in the
reasonable determination of the Board, fraud or dishonesty, or a
crime which in the reasonable determination of the Board would
tend to be injurious to the reputation of the Company, R.P.
Scherer or any of its subsidiaries, or of such Optionee, (iii)
misconduct by such Optionee which, in the reasonable
determination of the Board, has been or is likely to be
materially injurious to the Company, R.P. Scherer or any
subsidiary thereof; or (iv) the failure of such Optionee
substantially to perform the duties and obligations imposed upon
him by R.P. Scherer or any subsidiary thereof.
"Termination Book Value" shall mean the book value of the
Company (excluding the amount of stockholders' equity
attributable to the Company's 17% Senior Cumulative Exchangeable
Preferred Stock, par value $.01 per share, the Preferred Stock
and to the Company's Series C Redeemable Preferred Stock, par
value $.01 per share) per outstanding share of Common Stock
(assuming the exercise of all outstanding stock options, warrants
or rights for the purchase of Common Stock) as of the last day of
the fiscal quarter ended immediately preceding the date on which
the termination of employment occurs, as determined from the
Company's consolidated balance sheet prepared, in accordance with
generally accepted accounting principles as applied in the United
States, by management of the Company and R.P. Scherer and
reviewed by the independent public accountants regularly employed
by the Company (the "Accountants").
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(v) If the Company has not, pursuant to Section 4(d)(iv),
exercised its repurchase right upon the Optionee's termination of
employment by reason of Termination Without Cause, such Optionee shall have
the right, at any time within 120 days following the end of the 120-day
period provided for in Section 4(d)(iv), to exercise the options granted to
such Optionee pursuant to this Performance Plan to purchase the Exercisable
Shares which existed on the date of such Optionee's termination of
employment. Any options granted to an Optionee pursuant to this Performance
Plan, or a portion thereof, shall terminate at the end of the 120-day
period following the 120-day period provided for in Section 4(d)(iv) and
shall not be exercisable to the extent that such options, or any portion
thereof, are neither repurchased by the Company pursuant to Section
4(d)(iv) nor exercised by the Optionee pursuant to this Section 4(d)(v).
(e) ADJUSTMENT OF OPTIONS ON RECAPITALIZATION. The aggregate number of
shares of Stock for which options may be granted to persons participating
under this Performance Plan, the number of shares of Stock covered by each
outstanding option and the Option Price for the shares of Stock subject to
each such option may be appropriately adjusted for any increase or decrease
in the number of issued shares of Stock resulting from a recapitalization,
the subdivision or consolidation of shares, or the payment of a stock
dividend after the Date of Grant; PROVIDED, HOWEVER, that any options to
purchase fractional shares of Stock resulting from any such adjustment
shall be cancelled.
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(f) SALE OF THE COMPANY. In the event the Company proposes to engage
in a Sale of the Company (as hereinafter defined), the Company shall give
each Optionee written notice of such Sale on or before 15 days (or shorter
time if, in the sole discretion of the Company, 15 days' notice is
impracticable) before the consummation of such Sale, and, unless otherwise
agreed to by the Company and the Optionee, each option shall, after receipt
of such notice and prior to such Sale, automatically become exercisable for
the Exercisable Shares existing on the date the Company gives written
notice of the Sale. Options not exercised prior to such Sale shall expire
on the occurrence of such Sale, and no payment shall be owed to such
Optionee with respect to such options; PROVIDED, HOWEVER, that if the
proposed Sale of the Company is not consummated and the Board in good faith
determines that the proposed Sale of the Company will not be consummated,
the options granted hereunder shall, upon such determination of the Board,
cease to be exercisable pursuant to this Section 4(f). A "Sale of the
Company" shall mean (i) a merger or consolidation of the Company with or
into another entity (other than a subsidiary or affiliate of the Company)
in which the holders of Stock are required to exchange their Stock for
cash, property and/or securities, or (ii) a sale or lease of all or
substantially all of the assets of the Company or R.P. Scherer except to a
subsidiary or affiliate of the Company.
(g) DISSOLUTION OF ISSUER OF THE STOCK. In the event of the proposed
dissolution or liquidation of the Company, the Company shall give each
Optionee not less than 30 days prior written notice of the date of the
proposed
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dissolution or liquidation, and, unless otherwise agreed to be the Company
and the Optionee, each Optionee shall have the right during the 30-day
period preceding the dissolution or liquidation to exercise such Optionee's
option for the Exercisable Shares existing on the date the Company gives
written notice of the proposed dissolution or liquidation of the Company.
Any options (or any portion thereof) granted hereunder, if not exercised
prior to the dissolution or liquidation of the Company, shall expire upon
the consummation of a dissolution or liquidation of the Company, and no
payment shall be owed to any Optionee; PROVIDED, HOWEVER, that if the
proposed dissolution or liquidation of the Company is not consummated and
the Board in good faith determines that the proposed dissolution or
liquidation of the Company will not be consummated, the options granted
hereunder shall, upon such determination of the Board, cease to be
exercisable pursuant to this Section 4(g). The provisions of this Section
4(g) shall not be applicable if the Optionee receives notice under Section
4(f) at a time earlier than the notice provided for herein.
(h) RIGHTS AS A STOCKHOLDER. An Optionee shall have no rights as a
stockholder with respect to any shares of Stock held under option until the
date of issuance of the stock certificates to him for such shares. Except
as provided in Section 4(e) hereof, no adjustment to the option shall be
made for dividends, distributions or rights attributable to shares of Stock
the record date for which is prior to the date of issuance of Stock upon
exercise of the option.
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(i) TIME OF GRANTING OPTIONS. The grant of an option shall occur only
when a Performance Stock Option Agreement shall have been duly executed and
delivered by or on behalf of the Company and the employee to whom such
option shall be granted.
(j) STOCK LEGEND. Certificates evidencing shares of Stock purchased
upon the exercise of options issued under this Performance Plan shall be
endorsed with a legend in substantially the form contained in the
Optionee's Stock Subscription Agreement, or Stockholders Purchase
Agreement, as the case may be, as provided for in this Section 4 hereof.
(k) DEFERRAL OF PURCHASES.
(i) The Company shall not be obligated to purchase any options
granted pursuant to this Performance Plan at any time pursuant to
Section 4(d)(ii) or 4(d)(iv) hereof, regardless of whether it has
delivered a notice of its election to purchase any such shares, (A) to
the extent that the purchase of such options (together with any other
purchases of options or Stock, as the case may be, pursuant to
Sections 4(d)(ii) or 4(d)(iv) hereof from other Optionees, and
pursuant to similar provisions in the 1990 RPS Corporation
Nonqualified Stock Option Plan (the "Stock Option Plan") and the
agreements relating thereto and pursuant to similar provisions in any
Optionee's Stock Subscription Agreement or Stockholder's Purchase
Agreement, of which the Company has at such time been given or has
given notice) would (1) result in a violation of any law, statute,
rule, regulation, policy, guideline, order, writ, injunction, decree
or judgment promulgated or
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entered by any federal, state, local or foreign court or governmental
authority applicable to the Company, R.P. Scherer or any of their
subsidiaries or any of its or their property or (2) after giving
effect thereto, result in a Financing Default, or (B) if immediately
prior to such purchase there exists a Financing Default. The term
"Financing Default" shall mean an event which constitutes (or with
notice or lapse of time or both would constitute) an event of default
(which event of default has not been cured or waived) under any of the
following as they may be amended from time to time: (A) the Credit
Facilities Agreement (the "Credit Facilities Agreement") dated as of
October 3, 1989, among R.P. Scherer and the other borrowers named
therein (the "Borrowers"), the guarantors named therein (the
"Guarantors"), Citibank, N.A. and CIBC International Trust Limited as
lead managers, Citicorp Investment Bank Limited, as facility agent and
the banks parties thereto, and any extensions, renewals, refinancing
or refunding thereof in whole or in part; (B) the Credit Agreement
(the "Revolving Credit Agreement") dated as of October 3, 1989 between
R.P. Scherer and Citibank, N.A. and any extensions, renewals,
refinancing or refunding thereof in whole or in part; (C) any notes
executed and delivered by any of the Borrowers under the Credit
Facilities Agreement, or by R.P. Scherer under the Revolving Credit
Agreement and any extensions, renewals, refinancing or refunding
thereof in whole or in part; (D) any guaranties executed by any of the
Guarantors under the Credit Facilities Agreement and any extensions,
renewals, refinancing or refunding thereof in whole or in part; (E)
the Senior Subordinated Loan Agreement,
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dated as of June 5, 1989, among Shearson Lehman Hutton Holdings Inc.,
the Company and RPS Acquisition Corporation ("Acquisition") and any
extensions, renewals, refinancing or refunding thereof in whole or in
part; (F) any notes executed and delivered by Acquisition under the
Senior Subordinated Loan Agreement and any extensions, renewals,
refinancing or refunding thereof in whole or in part; (G) the
Indenture (the "Subordinated Debenture Indenture") to be entered into
between R.P. Scherer and The First National Bank of Boston, as trustee
relating to the Senior Subordinated Debentures due 1999; (H) the
Indenture (the "Exchange Debenture Indenture") to be entered into
between the Company and Ameritrust Company National Association, as
trustee, relating to the 17% Subordinated Exchange Debentures; and (I)
any of the securities issued pursuant to or whose terms are governed
by the terms of any of the agreements set forth in clauses (A) through
(H) above.
(ii) If at any time consummation of all purchases of options to
be made by the Company pursuant to Sections 4(d)(ii) or 4(d)(iv)
hereof (and pursuant to similar provisions for the purchase of options
or Stock, as the case may be, contained in the Stock Option Plan and
the agreements relating thereto and in the Stock Subscription
Agreements and Stockholders Purchase Agreements) is not required
because of the applicability of clause (A) of Section 4(k)(i) hereof
and similar provisions for the purchase of options or Stock, as the
case may be, in the Stock Option Plan and the agreements relating
thereto and in the Stock Subscription Agreements and Stockholders
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Purchase Agreements, but clause (B) of Section 4(k)(i) hereof or
similar provisions for the purchase of options or Stock, as the case
may be, in the Stock Option Plan and the agreements relating thereto
and in the Stock Subscription Agreements and Stockholders Purchase
Agreements are not applicable, then the Company shall purchase (in
accordance with the following sentence) from the Optionee or the
Optionee's Representative, as the case may be, desiring or obligated
to sell to the Company options pursuant to this Performance Plan and
from the other persons and entities having the right or obligation to
sell options or Stock, as the case may be, pursuant to provisions in
the Stock Option Plan and the agreements relating thereto and in the
Stock Subscription Agreements and Stockholders Purchase Agreements,
the maximum number of options of which it is able to repurchase
without the events described in Section 4(k)(i)(A) resulting;
PROVIDED, HOWEVER, that, subject to the last sentence of this Section
4(k)(ii), the provisions of Section 4(k)(iii) hereof shall apply in
respect of all options not purchased under Section 4(d)(ii) or
4(d)(iv) hereof because of the operation of Sections 4(k)(i) or
4(k)(ii) hereof. In the event any of the events described in Section
4(k)(i)(A) would result from the purchase of any options pursuant to
Sections 4(d)(ii) or 4(d)(iv) hereof, the Board, in its sole
discretion, may determine priorities among the Optionee or the
Optionee's Representative, as the case may be, and the other persons
having the right or obligation to sell options or Stock, as the case
may be, pursuant to the Stock Option Plan and the agreements relating
thereto and in the Stock Subscription Agreements and
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Stockholders Purchase Agreements, taking into account relative
hardship and such other factors as it deems relevant, and may elect to
cause the Company to consummate purchases of options hereunder
according to such priorities (such options which are to be so
purchased are hereinafter called the "Purchased Options" and such
options which are not to be so purchased are hereinafter called the
"Unpurchased Options"); the Company shall pay the Optionee or the
Optionee's Representatives, as the case may be, holding Unpurchased
Options the applicable purchase price for such options on the tenth
business day after the Company learns it is no longer precluded from
paying for such options.
(iii) Anything to the contrary contained in Section 4(d)(ii) or
4(d)(iv) hereof notwithstanding, any options which the Optionee or the
Optionee's Representative, as the case may be, has elected to sell to
the Company or which the Company has elected to purchase from the
Optionee or the Optionee's Representative, as the case may be, but
which in accordance with Sections 4(k)(i) and 4(k)(ii) hereof are not
purchased at the applicable time provided in Section 4(d)(ii) or
4(d)(iv) hereof shall be purchased by the Company on the tenth day
after such date or dates that the Company after due inquiry learns
that (after taking into account any purchases of options or Stock, as
the case may be, to be made at such time pursuant to the Stock Option
Plan and the agreements relating thereto, and in the Stock
Subscription Agreements and Stockholders Purchase Agreements) it is no
longer permitted to defer purchasing such options under Sections
4(k)(i) and 4(k)(ii) hereof, and
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the Company shall give seven days prior notice of any such purchase;
PROVIDED, HOWEVER, that the Optionee (or the Optionee's Representative)
shall not be obligated to sell a lesser number of options at any one time
pursuant to this Section 4(k)(iii) had they not been so delayed; and,
PROVIDED, FURTHER, that if the Optionee (or the Optionee's Representative)
exercises its right to have options repurchased pursuant to Section
4(d)(ii) or the Company exercises its repurchase rights pursuant to Section
4(d)(ii), and the purchase of the options cannot be consummated by reason
of Sections 4(k)(i) and 4(k)(ii), the purchase price for such options hall
be calculated pursuant to Section 4(d)(ii) as of the time the repurchase
right is exercised, including interest on the aggregate purchase price for
such options at a rate per annum equal to the yield to maturity on U.S.
Treasury obligations having a maturity equal to a period of three months.
If the Optionee elects pursuant to Section 4(k)(ii) to rescind or defer his
election to sell any or all of the Purchased Options, the Optionee or the
Optionee's Representative, as the case may be, may exercise his right
pursuant to Section 4(d)(ii) to require the Company to purchase his options
for a period of ten days after receiving notice that the Company is no
longer precluded from purchasing such options.
(l) PAYMENT FOR OPTIONS. If at any time the Company elects or is
required to purchase any options pursuant to Sections 4(d)(ii) or 4(d)(iv),
the Company shall pay the purchase price for the options it purchases to
the extent permitted by any loan agreement, indenture or other agreement to
which the Company is a party, by the Company's delivery of a bank cashier's
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check or certified check for the purchase price, if any, and, then, at the
Company's sole discretion, to the extent permitted by any loan agreement,
indenture or other agreement to which the Company or R.P. Scherer is a
party, by the Company's delivery of a junior subordinated promissory note
(which shall be subordinated and subject in right of payment to the prior
payment of all indebtedness of the Company including, without limitation,
any debt outstanding under the Credit Facilities Agreement, Senior
Subordinated Loan Agreement, the Subordinated Debenture Indenture, the
Exchange Debenture Indenture and any modifications, renewals, extensions,
replacements and refunding of all such indebtedness) of the Company (a
"Junior Subordinated Note") equal to the remainder, if any, of the purchase
price payable in five equal annual installments commencing on the first
anniversary of the issuance thereof and bearing interest payable annually
at the publicly announced prime rate of the facility agent under the Credit
Facilities Agreement on the date of issuance, against delivery of the
certificates or other instruments representing the options so purchased.
If, in a purchase pursuant to Section 4(d)(ii), the Company elects to pay
all or any portion of the purchase price for the options with a Junior
Subordinated Note, the Company shall give the Optionee or the Optionee's
Representative, as the case may be, notice of the amount of such note at
least twenty days prior to such purchase, and the Optionee or the
Optionee's Representative, as the case may be, shall have ten days
thereafter to rescind their election to sell the options.
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5. EXERCISE OF OPTIONS. During the term of this Performance Plan, as set
forth in Section 7 hereof, the Committee shall determine the exercisability of
options granted to each Optionee hereunder in accordance with the terms and
conditions of this Section 5.
(A) DEFINITIONS. The following terms shall have the following meanings
when used in this Section:
(i) "Cumulative EDITA" shall mean the aggregate of (a) Total
Corporate Income and (b) Total Subsidiary EBITA.
(ii) "Cumulative EBITA Goal" shall mean for each fiscal year of
the Company set forth below, ending on March 31 of the year, the
amount set forth opposite each such year:
Full Fiscal Years Cumulative EBITA
of the Company Goal ($ millions)
----------------- -----------------
1990 $ 31.78
1991 $ 78.67
1992 $135.93
1993 $198.76
1994 $268.25
(iii) "Exercise Factor" shall mean that number which results from
dividing Cumulative EBITA by the Cumulative EBITA Goal for the last
completed fiscal year prior to the Initial Exercise Date, and, if
necessary, rounding the result up to the nearest one-hundredth.
(iv) "Initial Exercise Date" shall mean, with respect to an
Optionee, the earliest to occur of (1) October 5, 1994, (2) the
Initial Public Offering, (3) the date the Company gives written notice
of the proposed Sale of the Company as provided in
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Section 4(f) hereof, (4) the date the Company gives written notice of
the proposed dissolution or liquidation of the Company as provided in
Section 4(g) hereof, and (5) the termination of employment of an
Optionee as provided in Sections 4(d)(iii) and 4(d)(v) hereof.
(v) "Initial Public Offering" shall mean the sale of shares of
Common Stock pursuant to one or more effective registration statements
under the Securities Act of 1933, as amended (the "Securities Act")
(other than a registration statement relating to shares of Common
Stock issuable upon exercise of employee stock options or in
connection with any employee benefit plan of the Company), relating to
the sale of shares of Common Stock representing, when taken together
with all shares of Common Stock sold pursuant to Rule 144 under the
Securities Act or under previous registration statements (which were
not in connection with employee stock options or employee benefit
plans), more than 33-1/3% of the Common Stock outstanding prior to
such sale (assuming exercise of all options, warrants or rights for
purchase of shares of Common Stock).
(vi) "Subsidiary" shall mean each of the following entities:
(A) R.P. Scherer N.A.;
(B) R.P. Scherer GmbH;
(C) R.P. Scherer Leasing Company;
(D) R.P. Scherer Canada Inc.;
(E) R.P. Scherer SpA;
(F) R.P. Scherer S.A.;
(G) R.P. Scherer Limited and R.P. Scherer
Holdings Limited, on a consolidated basis;
(H) R.P. Scherer Pty. Ltd. and R.P. Scherer
Holdings Pty. Ltd., on a consolidated basis;
(I) R.P. Scherer Korea Limited; and
(J) R.P. Scherer K.K.
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(vii) "Subsidiary EBITA" shall mean for each Subsidiary, (a) for
all full fiscal years of the Company, commencing with the fiscal year
beginning April 1, 1989 and ending with the fiscal year which is last
completed prior to the Initial Exercise Date, the annual results of
operations before interest, taxes and amortization of good will of
such Subsidiary, calculated in the currency of the country in which
such Subsidiary operates, as determined from the annual financial
statements of such Subsidiary prepared, in accordance with generally
accepted accounting principles as applied in the United States, by
management of the Company and R.P. Scherer and reviewed by the
Accountants, excluding certain items set forth on Annex III hereto;
PROVIDED, HOWEVER, that for the fiscal year commencing April 1, 1989,
each Subsidiary's annual results of operations before interest, taxes
and amortization of good will shall be determined on a pro forma basis
after giving effect to the acquisition of R.P. Scherer as if such
acquisition occurred on April 1, 1989; multiplied by (b) the
percentage representing the extent of R.P. Scherer's beneficial
ownership of the Subsidiary as set forth on Annex I hereto. Subsidiary
EBITA shall then be converted into U.S. dollars by multiplying it by
the rate of exchange, applicable to the currency in which such number
was determined, as set forth on Annex II hereto.
(viii) "Total Corporate Income" shall equal (a) for all full
fiscal years of the Company, commencing with the fiscal years of the
Company, commencing with the fiscal year beginning April 1, 1989 and
ending with the fiscal year which is last completed prior to the
Initial Exercise Date, earned royalties received or accrued by R.P.
Scherer (on an unconsolidated basis) from each Subsidiary (which
royalties shall, where necessary, be converted into U.S. dollars at
the appropriate rate of exchange set
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forth on Annex II hereto), net of withholding taxes paid or accrued,
as determined from the annual unconsolidated financial statements of
R.P. Scherer prepared, in accordance with generally accepted
accounting principles as applied in the United States, by the
management of the Company and R.P. Scherer and reviewed by the
Accountants, excluding certain items set forth on Annex III hereto,
MINUS (b) for all full fiscal years of the Company, commencing with
the fiscal year beginning April 1, 1989 and ending with the fiscal
year which is last completed prior to the Initial Exercise Date,
corporate operating expense of the Company and R.P. Scherer each on an
unconsolidated basis as determined from the unconsolidated annual
financial statements of the Company and R.P. Scherer prepared, in
accordance with generally accepted accounting principles as applied in
the United States, by the management of the Company and R.P. Scherer
and reviewed by the Accountants, excluding certain items set forth on
Annex III hereto; and PROVIDED, HOWEVER, that for the fiscal year
commencing April 1, 1989, both (a) and (b) above shall be determined
on a pro forma basis after giving effect to the acquisition of R.P.
Scherer as if such acquisition occurred on April 1, 1989. For purposes
of calculating "corporate operating expense", costs incurred in
connection with the acquisition of R.P. Scherer and the financing
thereof shall not be included.
(ix) "Total Subsidiary EBITA" shall mean the sum of all
Subsidiary EBITA.
(b) EXERCISABLE SHARES. The total number of shares of Stock for which
an Optionee's option shall be exercisable (the "Exercisable Shares") shall
be determined as follows: (i) if the Exercise Factor is equal to or exceeds
1.1, the number of
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Exercisable Shares shall be 100% of an Optionee's Option Shares; (ii) if
the Exercise Factor is equal to or is less than .9, there shall be no
Exercisable Shares; and (iii) if the Exercise Factor exceeds .9, but is
less than 1.1, the number of Exercisable Shares shall be calculated by (A)
subtracting .1 from the Exercise Factor and (B) multiplying the result
produced in (A) by the maximum number of shares of Stock for which an
Optionee's option, granted pursuant to this Performance Plan, can be
exercised. The number of Exercisable Shares which are shares of Common
Stock and the number of Exercisable Shares which are shares of Preferred
Stock shall be in the same proportion to the total number of shares of
Common Stock and Preferred Stock, respectively, issuable upon exercise of
any option granted hereunder.
(c) EXERCISE OF OPTION. Except as otherwise provided in this
Performance Plan, or in the applicable Performance Stock Option Agreement,
no option granted pursuant to this Performance Plan shall be exercisable,
in whole or in any part, until the Initial Exercise Date applicable to such
Optionee. Thereafter, any option granted pursuant to this Performance Plan
shall be exercisable for the number of Exercisable Shares as determined
pursuant to Section 5(b) hereof and (i) in the case of a Sale of the
Company, pursuant to Section 4(f) hereof, (ii) in the case of dissolution
or liquidation of the Company, pursuant to Section 4(g) hereof and (iii) in
the case of termination of employment of an Optionee pursuant to Section
4(d)(iii) and 4(d)(v) hereof. The Committee may accelerate the time at
which an option may be exercised and may delay and/or reduce the periods
during which options may be exercised in order to comply with federal and
state securities laws.
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25
(d) MANNER OF EXERCISE. Shares of Stock purchased upon exercise of
options shall at the time of purchase be paid for in full in cash or as
otherwise permitted by the Committee. Options may be exercised in whole or
in part from time to time by written notice to the Company stating the full
number of shares of Stock with respect to which the option is being
exercised and the time of delivery thereof, which shall be at least 15 days
after the giving of such notice unless an earlier date shall have been
mutually agreed upon, accompanied by full payment for the shares of Stock
by certified or official bank check or the equivalent thereof acceptable to
the Company; PROVIDED, HOWEVER, that any such exercise must be for both
Common Stock and Preferred Stock in the same proportion to the total number
of shares of Common Stock and Preferred Stock, respectively, issuable to
the Optionee upon exercise of the option granted hereunder. At the time of
delivery, the Company shall, without stock transfer or issue tax to an
Optionee, deliver to such Optionee at the principal executive offices of
R.P. Scherer or such other place as shall be mutually agreed upon, a
certificate or certificates for such shares of Stock; PROVIDED, HOWEVER,
that the time of delivery may be postponed by the Company for such period
as may be required for it with reasonable diligence to comply with any
requirements of law, including making provision for the deduction and
withholding of amounts required to be deducted and withheld under
applicable local, state, and federal income tax laws (which provision may
require additional payment by such Optionee). The Company shall pay any
stock transfer tax or issue tax resulting from the issuance of shares of
Stock upon the exercise of any option. If Stock issuable upon exercise of
any option is not registered under the Securities Act, the Company at the
time of exercise shall require in addition
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25
26
that the Optionee or Optionee's Representative deliver an investment
representation in form acceptable to the Company and its counsel, and the
Company shall place a legend on the certificate for such Stock restricting
the transfer of such Stock. At no time shall the Company have any
obligation or duty to register under the Securities Act the Stock issuable
upon exercise of options. The Company shall not be required to issue or
deliver any certificate for shares of Stock purchased upon the exercise of
any option or portion thereof prior to the execution of the Stockholders
Purchase Agreement by the Optionee or the Optionee's Representative;
PROVIDED, HOWEVER, that those Optionees who have executed a Stock
Subscription Agreement shall not be required to execute a Stockholders
Purchase Agreement.
6. ADMINISTRATION.
(a) This Performance Plan shall be administered by the Committee
consisting of not fewer than three directors to be appointed by the Board.
If necessary to secure the exemption pursuant to Rule 16b-3 which has been
adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (as such Rule or its equivalent is then in
effect) ("Rule 16b-3"), no person shall be eligible to serve on the
Committee unless he is then a "disinterested person" within the meaning of
paragraph (d)(3) of Rule 16b-3. The Board may, from time to time, remove
members from or add members to the Committee. Vacancies in the Committee,
however caused, shall be filled by the Board. The Committee shall select a
chairman from among its members and shall hold meetings at such times and
places as it may determine. The Committee may appoint a secretary and,
subject to the provisions of this Performance Plan and to policies
determined by the Board, may
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make such rules and regulations for the conduct of its business as it shall
deem advisable. A majority of the Committee shall constitute a quorum. All
action of the Committee shall be taken by a majority of its members. Any
action may be taken by a written instrument signed by a majority of the
members, and action so taken shall be fully as effective as if it had been
taken by a vote of the majority of the members at a meeting duly called and
held. The Board may act in lieu of the Committee and shall act in lieu of a
Committee at any time such a Committee has not been created.
(b) Subject to the express terms and conditions of this Performance
Plan, the Committee shall have full power to grant options under this
Performance Plan, to construe or interpret this Performance Plan, to
prescribe, amend and rescind rules and regulations relating to it and to
make all other determinations necessary or advisable for its
administration.
(c) The Committee may, from time to time, determine which employees of
the Company, R.P. Scherer and any subsidiary thereof shall be granted
options under this Performance Plan, the number of shares of Stock subject
to each option, and the time or times at which options shall be granted,
and the Company may grant such options under this Performance Plan.
(d) No member of the Board or of the Committee shall be liable for any
action or determination made in good faith with respect to this Performance
Plan or to any option.
7. EFFECTIVE DATE AND TERMINATION.
(a) The effective date of this Performance Plan is _________, 1990.
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28
(b) This Performance Plan shall terminate on ________, 2000, but the
Board may terminate this Performance Plan at any time prior to such date.
Termination of this Performance Plan shall not alter or impair, without the
consent of the Optionee, any of the rights or obligations and any option
theretofore granted under this Performance Plan.
8. NOTICES. Whenever it is provided in this Performance Plan that any
notice to be given between the Company and an Optionee, such notice shall be
delivered in person or by registered or certified mail, return receipt
requested, postage prepaid, first class mail, to the following address:
If to the Company:
RPS Corporation
c/o R.P. Scherer Corporation
2075 W. Big Beaver Road
Troy, Michigan 48007-7060
If to an Optionee:
At the address listed beside such Optionee's name on the
signature page of the Performance Stock Option Agreement executed
by such Optionee
Any party hereto may change the address designated for mailing by written
notice to the other party. All such notices shall be deemed to be delivered when
delivered in person, or if placed in the mail, two days thereafter.
9. GOVERNING LAW. THIS PERFORMANCE PLAN SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.
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29
10. AMENDMENTS. The Board may, from time to time, alter, amend, suspend or
discontinue this Performance Plan, or alter or amend any and all option
agreements granted thereunder; PROVIDED, HOWEVER, that no such action of the
Board may alter the provisions of this Performance Plan so as to alter any
outstanding Stock Option Agreement to the detriment of an Optionee without his
consent.
11. STATUS OF OPTIONS. Options granted pursuant to this Performance Plan
are not intended to qualify as Incentive Stock Options within the meaning of
Section 422A of the Internal Revenue Code of 1986 (the "Code"), and the terms of
this Performance Plan and options granted hereunder shall be so construed;
PROVIDED, HOWEVER, that nothing in this Performance Plan shall be interpreted as
an representation, guarantee or other undertaking on the part of the Company
that the options granted pursuant to this Performance Plan are not, or will not
be, determined to be Incentive Stock Options, within the meaning of Section 422A
of the Code.
I hereby certify that the foregoing Performance Plan was duly adopted by
the Board on June __, 1990.
Executed as of this ____ day of _________ 1990.
----------------------------------------
Secretary
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FIRST AMENDMENT TO
RPS CORPORATION
1990 NONQUALIFIED STOCK OPTION PLANS
WHEREAS, RPS Corporation, a Delaware corporation, established the RPS
CORPORATION 1990 NONQUALIFIED STOCK OPTION PLAN, the RPS CORPORATION 1990
NONQUALIFIED PERFORMANCE STOCK OPTION PLAN A and the RPS CORPORATION 1990
NONQUALIFIED PERFORMANCE STOCK OPTION PLAN B; and
WHEREAS, RPS CORPORATION changed its name to R.P. Scherer Corporation in
1991 (the "Company"); and
WHEREAS, the Company desires to amend the RPS CORPORATION 1990 NONQUALIFIED
STOCK OPTION PLAN, the RPS CORPORATION 1990 NONQUALIFIED PERFORMANCE STOCK
OPTION PLAN A and the RPS CORPORATION 1990 NONQUALIFIED PERFORMANCE STOCK OPTION
PLAN B.
NOW, THEREFORE, the RPS CORPORATION 1990 NONQUALIFIED STOCK OPTION PLAN,
the RPS CORPORATION 1990 NONQUALIFIED PERFORMANCE STOCK OPTION PLAN A and the
RPS CORPORATION 1990 NONQUALIFIED PERFORMANCE STOCK OPTION PLAN B (each
individually referred to respectively as the "1990 Plan," the "1990 Plan A" and
the "1990 Plan B" and collectively, the "1990 Plans") are amended effective
February __, 1994, with respect to each of the 1990 Plans subject to subsequent
shareholder approval as follows:
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31
1. The last sentence of Section 3 of each of the 1990 Plans is amended
by adding the phrase "to the extent options are not transferred to a
grantor trust pursuant to Section 4(c)."
2. Effective as of February 18, 1994, Section 4(c) of each of the 1990
Plans is amended in its entirety to read as follows:
(c) NON-TRANSFERABILITY OF OPTION RIGHTS. No option shall be
assignable or transferable otherwise than (i) by will, (ii) by the
laws of descent and distribution, or (iii) to one or more grantor
trusts provided that with regard to a transfer to one or more such
grantor trusts the Optionee's Stock Option Agreement expressly so
provides for such transfer, is approved by the Committee, and the
Optionee does not receive any consideration for the transfer. The
option is exercisable only by such Optionee or grantor trust trustee
or, as provided in Section 3, such Optionee's Representative.
3. Effective as of February 18, 1994, a new Section 12 is added to
each of the 1990 plans -- as follows:
12. TRUSTS. For all purposes of the Plan, a grantor trust trustee
that is a transferee pursuant to Section 4(c) is the "Optionee";
provided, however, for purposes of determining the rights and
obligations of the Company and such grantor trust trustee under
Section 4(d), the employee granted the Options shall be deemed the
Optionee whose termination, disability or death will effectuate such
rights or obligations.
IN WITNESS WHEREOF, these Amendments have been adopted by the Company this
18TH day of February, 1994.
ATTEST R.P. SCHERER CORPORATION
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32
/s/ By: /s/ Aleksandar Erdeljan
- ---------------------------------- ------------------------------------
Its: President
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33
SECOND AMENDMENT TO
RPS CORPORATION
1990 NONQUALIFIED STOCK OPTION PLANS
The RPS Corporation 1990 Nonqualified Stock Option Plan, the RPS
Corporation 1990 Nonqualified Performance Stock Option Plan A, and the RPS
Corporation 1990 Nonqualified Performance Stock Option Plan B (each individually
referred to respectively as the "1990 Plan," the "1990 Plan A" and the "1990
Plan B" and collectively referred to as the "1990 Plans") are amended effective
September 1, 1994, as follows:
1. AMENDMENT TO SECTION 1. The first sentence of Section 1 of each of
the 1990 Plans is amended in its entirety to read as follows:
"The purpose of this plan (this "Option Plan") is to provide a
means by which certain employees of R.P. Scherer Corporation (formerly
RPS Corporation), a Delaware corporation (the "Company"), R.P. Scherer
International Corporation (formerly R.P. Scherer Corporation) , a
Delaware corporation and a wholly owned subsidiary of the Company
("R.P. Scherer"), or any subsidiary thereof, may be given an
opportunity to purchase common stock, par value $0.01 per share (the
"Common Stock") , and prior to conversion to Common Stock of Series B
Redeemable Preferred Stock and conversion of the related options by
operation of Section 4(e) to options for Common Stock (the
"Conversion"), Series B Redeemable Preferred Stock, par value $0.01
per share (the "Preferred Stock," and together with the Common Stock,
the "Stock") of the Company."
2. AMENDMENT TO SECTION 2. Section 2 of each of the 1990 Plans is
amended by adding the phrase "prior to the Conversion" immediately
following the phrase "Subject to adjustment as provided in Section 4(e)
hereof," and by adding at the end of the first sentence the phrase, "and
after the Conversion a number of shares of Common Stock pursuant to Section
4(e)."
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34
3. AMENDMENTS TO SECTION 4 OF THE PLANS. Section 4 of the 1990 Plans
is amended as follows:
(i) Subject to shareholder ratification, Section 4(a) of each of
the 1990 Plans is deleted and a new Section 4(a) is included to read as
follows:
"(a) TERMS AND CONDITIONS OF OPTIONS. The Committee may
grant options from time to time pursuant to this Option Plan.
Such options shall be evidenced by written agreements
substantially in the form of the Nonqualified Stock Option
Agreement (the "Stock Option Agreement"), Appendix A to the
Option Plan as originally adopted, but pursuant to and
interpreted in accordance with, and not inconsistent with, this
Option Plan as amended. The shares of Stock subject to each
option shall, (i) upon issuance, but in no event after September
1, 1994, be subject to the terms and conditions, including
restrictions on transferability, contained in an agreement
substantially in the form of the Stockholders Purchase Agreement,
Appendix B to the Option Plan as originally adopted, entered into
by the Company and the Optionees (the "Stockholders Purchase
Agreement"), or, (ii) with respect to certain Optionees, unless
terminated by the Company, the Management Stock Subscription
Agreement between the Company and such Optionees (the "Stock
Subscription Agreement") as amended and restated from time to
time. Notwithstanding anything to the contrary herein, however,
no insider, as defined for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended, may sell shares of
Stock subject to an option granted hereunder after August 31,
1994, and prior to March 2, 1995. Nothing in this Option Plan or
an option granted hereunder shall govern the employment rights
and duties between an Optionee and the Company or R.P. Scherer,
or any subsidiary thereof, nor in any way be deemed to constitute
an employment agreement among such parties. Effective September
1, 1994 any Stockholders Purchase Agreement in the form attached
hereto as Appendix B entered into by the Company and Optionee
shall be terminated."
(ii) Section 4(b) of each of the 1990 Plans is amended by
inserting the phrase "(as effective, pursuant thereto, prior to September
1, 1994)" immediately after the reference to Section 4(d) and adding a new
sentence to the end of Section 4(b) to read "The termination date, which is
not more than 10 years and 1 day from the date the option is granted and
which is set forth in an Optionee's Option Agreement, shall be referred to
as the "Termination Date."
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35
(iii) Subject to shareholder ratification, Section 4(d)(i) of
both the 1990 Plan and the 1990 Plan A are deleted and replaced with a
new Section 4(d)(i)(A) and 4(d)(i)(B) to read as follows:
"(i)(A) Prior to September 1, 1994, subject to the
provisions of Sections 4(d)(ii), 4(d)(iii), 4(d)(iv) and
4(d)(v), in the event that an Optionee's employment by the
Company, R.P. Scherer or any subsidiary thereof shall terminate,
all options granted to such Optionee pursuant to this Option Plan
shall terminate immediately and shall not be exercisable; and
(i)(B) On and after September 1, 1994, Sections 4(d)(ii),
4(d)(iii), 4(d)(iv) and 4(d)(v) shall be inapplicable, and
notwithstanding an Optionee's termination of employment, options
shall not terminate until their Termination Date and shall not be
exercisable thereafter."
(iv) Subject to shareholder ratification, Section 4(d) of the
1990 Plan B is amended by adding the phrase "Prior to September 1,
1994" at the beginning of the first sentence of the Section, and a new
sentence shall be added at the end of Section 4(d) of the 1990 Plan B
to read as follows:
"On and after September 1, 1994, notwithstanding an
Optionee's termination of employment, options shall not terminate
until their Termination Date and shall not be exercisable
thereafter."
(v) Subject to shareholder ratification, Section 4(f) of both the
1990 Plan and the 1990 Plan A are deleted and a new Section 4(f) is
included to read as follows:
"(f) In the event the Company proposes to engage in a Sale
of the Company (as hereunder defined and sometimes referred to as
"Sale"), the Company shall give each Optionee written notice of
such Sale on or before 15 days (or shorter time if, in the sole
discretion of the Company, 15 days notice is impracticable)
before the consummation of such Sale, and unless otherwise agreed
to by the Company and the Optionee, each option shall, after
receipt of such notice and prior to such Sale, automatically
become exercisable for the Exercisable Shares existing on the
date the Company gives written notice of the Sale. The Committee
may, in its sole discretion, provide that the options not
exercised prior to
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36
such Sale shall expire 30 days after the occurrence of such Sale,
provided, however, that the Compensation Committee may not
terminate options pursuant to this Section prior to March 2 1995.
If options are not exercised in connection with such Sale, and
provided the Committee does not provide for the termination of
such options, then following consummation of the Sale, such
Optionee upon exercise of his options, will only be entitled to
receive the kind and amount of stock, securities, or assets that
such Optionee would have received had such Optionee exercised his
or her options immediately prior to such Sale; PROVIDED, HOWEVER,
that if the proposed Sale of the Company is not consummated and
the Board in good faith determines that the proposed Sale of the
Company will not be consummated, the options granted hereunder
shall, upon such determination of the Board, cease to be
exercisable pursuant to this Section 4(f). A "Sale of the
Company" shall mean (i) a merger or consolidation of the Company
with or into another entity (other than a subsidiary or affiliate
of the Company), (ii) a sale or lease of all or substantially all
of the assets of the Company or R.P. Scherer except to a
subsidiary or affiliate of the Company, (iii) 50% or more of the
Company's then outstanding shares of voting stock is acquired by
another corporation, person or entity (other than a subsidiary or
affiliate of the Company), or (iv) the Company recapitalizes or
enters into any similar transaction, and as a result of which the
Common Stock either (A) is no longer a voting equity security of
the Company or (B) is no longer listed on a national securities
exchange or authorized for quotation on an inter-dealer quotation
system of a national securities association."
(vi) Section 4(j) of the 1990 Plan and of the 1990 Plan A and
Section 4(h) of the 1990 Plan B are amended by adding the phrase
"Prior to September 1, 1994", at the beginning thereof.
4. AMENDMENTS TO SECTION 5.
(i) Section 5(c)(iii) of the 1990 Plan A is amended effective
September 1, 1994 to read as follows:
"(iii) in the case of termination of employment of an
Optionee pursuant to Section 4(d)."
(ii) Section 5(a) of the 1990 Plan is amended effective September
1, 1994 to read as follows:
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37
"(iii) in the case of termination of employment of an
Optionee pursuant to Section 4(d)."
(iii) Subject to shareholder ratification, Section 5(a)(vi) of
the 1990 Plan B shall be amended in its entirety to read as follows:
"(vi) "Sale of the Company" shall mean (i) a merger or
consolidation of the Company with or into another entity (except
a subsidiary or Affiliate of the Company), (ii) a sale or lease
of all or substantially all of the assets of the Company or R.P.
Scherer except to a subsidiary or Affiliate of the Company, (iii)
50% or more of the Company's then outstanding shares of voting
stock is acquired by another corporation, person or entity (other
than a subsidiary Affiliate of the Company), or (iv) the Company
recapitalizes or enters into any similar transaction, and as a
result of which the Common Stock either (A) is no longer a voting
equity security of the Company or (B) is no longer listed on a
national securities exchange or authorized for quotation on an
inter-dealer quotation system of a national securities
association."
(iv) Subject to shareholder ratification, the fourth sentence of
Section 5(c) of the 1990 Plan B is deleted and replaced with the
following:
"The Committee may, in its sole discretion, provide that the
options not exercised prior to a Sale of the Company shall expire
30 days after the occurrence of such Sale, provided, however,
that the Compensation Committee may not terminate options
pursuant to this Section prior to March 2, 1995. If options are
not exercised in connection with such Sale, and provided the
Committee does not provide for the termination of such options,
then following consummation of the Sale, such Optionee upon
exercise of his option, will only be entitled to receive the kind
and amount of stock, securities, or assets that such Optionee
would have received had such Optionee exercised his or her option
immediately prior to such Sale; PROVIDED, HOWEVER, that if the
proposed Sale of the Company is not consummated and the Board in
good faith determines that the proposed Sale of the Company will
not be consummated, the options granted hereunder shall, upon
such determination of the Board, cease to be exercisable pursuant
to this Section."
5. AMENDMENTS TO SECTION 6. Section 6 of the 1990 Plans is amended as
follows:
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38
(i) The last sentence of Section 6(a) of each of the Plans is
amended to read as follows:
"The Board may act in lieu of the Committee with directors
who are not "disinterested persons" abstaining and shall act in
lieu of a Committee with directors who are not "disinterested
persons" abstaining at any time such a Committee has not been
created."
(ii) Subject to shareholder ratification, a new paragraph is
added to Section 6(b) of the Plans to read as follows:
"Notwithstanding anything to the contrary in the Plan as
amended, other than Section 4(d) and Section 4(c), the Committee
may grant options to eligible employees who are not United States
citizens or residents on such terms and conditions as may, in the
judgment of the Committee, be necessary or desirable to foster
the purposes of the Plan. In furtherance of the purposes of the
Plan, the Committee may adopt such modifications to the terms of
Options and such procedures and guidelines, and may cause the
Company to take such other actions, as may be necessary or
advisable to comply with foreign laws and practices."
IN WITNESS WHEREOF, the Corporation has adopted this Amendment this 29 day
of September, 1994.
ATTEST: R.P. SCHERER CORPORATION
/s/ By: /s/ Aleksandar Erdeljan
- ---------------------------------- ------------------------------------
Secretary
Its: President & CEO
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