Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Form S-1 Amendment No. 1 81 508K
2: EX-1.1 Form of Underwriting Agreement 23 139K
3: EX-3.1 Amended and Restated Certificate of Incorporation 7 26K
4: EX-3.2 Amended and Restated Bylaws of the Company 13 55K
5: EX-4.1 Specimen of Common Stock Certificate 2 13K
6: EX-5.1 Opinion of O'Melveny & Myers LLP 2 12K
10: EX-10.13 Registration Rights Agreement Among Balance Bar Co 19 92K
7: EX-10.4 1993 Stock Incentive Plan 11 43K
8: EX-10.6 1998 Performance Award Plan 34 120K
9: EX-10.7 Employee Nonqualified Stock Option Agreement 6 24K
11: EX-11.1 Statement of Computation of Per Share Earnings 1 7K
12: EX-23.1 Consent of Independent Auditors 1 6K
13: EX-27.1 Financial Data Schedule 2 10K
EXHIBIT 10.6
BALANCE BAR COMPANY
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1998 PERFORMANCE AWARD PLAN
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1. THE PLAN
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1.1 Purpose. The purpose of this Plan is to promote the success of the Company
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and the interests of its stockholders by attracting, motivating, retaining
and rewarding directors, officers, employees and other eligible persons
with awards and incentives for high levels of individual performance and
improved financial performance of the Company; to attract, motivate and
retain experienced and knowledgeable independent directors through the
benefits provided under Section 8; and to further align their respective
interests with those of stockholders generally through awards of stock-
based incentives. Capitalized terms are defined in Section 7.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
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1.2.1 COMMITTEE. This Plan will be administered by the Committee. All
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Awards to Eligible Persons will be authorized by the Committee except that
all Awards to Non-Employee Directors must be approved or ratified by the
Board. All Awards to Other Eligible Persons will be subject to approval by
the Committee and ratification by the Board, unless the Board expressly (by
resolution or amendment to this Plan) provides otherwise. Action of the
Committee with respect to the administration of this Plan will be taken
pursuant to a majority vote or by written consent of its members.
1.2.2 PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the
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express provisions of this Plan, and any express limitations on the
delegated authority of a Committee, the Committee will have the
authority to:
(a) determine eligibility and the particular Eligible Persons who
will receive Awards;
(b) grant Awards to Eligible Persons, determine the effective date
of grant (which may be a date after but not before the
Committee's authorization of the Award), determine the price at
which securities will be offered or awarded and the amount of
securities to be offered or awarded to any of such persons, and
determine the other specific terms and conditions of such
Awards consistent with the express limits of this Plan, and
establish the installments
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(if any) in which such Awards will become exercisable or will
vest, or determine that no delayed exercisability or vesting is
required, and establish the events of termination or reversion of
such Awards;
(c) approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);
(d) construe and interpret this Plan and any agreements defining the
rights and obligations of the Company and Eligible Persons under
this Plan, further define the terms used in this Plan, and
prescribe, amend and rescind rules and regulations relating to
the administration of this Plan;
(e) cancel, modify, or waive the Company's rights with respect to, or
modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Eligible Persons, subject to any required consent
under Section 6.6;
(f) accelerate or extend the exercisability or extend the term of any
or all such outstanding Awards within the limitations under
Section 1.6; and
(g) make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for
the administration of this Plan and the effectuation of its
purposes.
Notwithstanding the foregoing, the provisions of Section 8 relating to Non-
Employee Director Awards will be automatic and, to the maximum extent possible,
self-effectuating. To the extent required, any interpretation or administration
of this Plan in respect of Awards under Section 8 shall be the responsibility of
the Board.
1.2.3 BINDING DETERMINATIONS. Any action taken by, or inaction of, the
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Company, the Board or the Committee relating or pursuant to this
Plan will be within the absolute discretion of that entity or body
and will be conclusive and binding upon all persons. No member of
the Board or Committee, or any officer of the Company, will be
liable for any action or inaction of the entity or body, of another
person or of the member or officer, except in circumstances
involving his or her bad faith. Subject only to compliance with the
express provisions hereof, the Board and Committee may act in their
absolute discretion in matters within their authority related to
this Plan.
1.2.4 RELIANCE ON EXPERTS. In making any determination or in taking or
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not taking any action under this Plan, the Committee or the Board,
as the
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case may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Company. No director, officer
or agent of the Company will be liable for any such action or
determination taken or made or omitted in good faith.
1.2.5 DELEGATION. The Committee may delegate ministerial, non-
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discretionary functions to individuals who are officers or employees
of the Company.
1.3 PARTICIPATION. Discretionary Awards may be granted by the Committee only
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to those persons that the Committee determines to be Eligible Persons. An
Eligible Person who has been granted an Award may, if otherwise eligible,
be granted additional Awards if the Committee so determines.
1.4 SHARES AVAILABLE FOR AWARDS; SHARE LIMITS.
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1.4.1 SHARES AVAILABLE. Subject to the provisions of Section 6.2, the
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capital stock that may be delivered under this Plan will be shares
of the Company's authorized but unissued Common Stock and any shares
of its Common Stock held as treasury shares. The shares may be
delivered for any lawful consideration.
1.4.2 SHARE LIMITS. The maximum number of shares of Common Stock that may
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be delivered pursuant to Awards granted to Eligible Persons under
this Plan will not exceed 300,000 shares (the "SHARE LIMIT"). The
number of shares subject to Awards outstanding at any time will not
exceed the number of shares remaining available for issuance under
the Plan. The maximum number of shares subject to those options and
Stock Appreciation Rights that are granted during any calendar year
to any one individual will be limited to 25,000, and the maximum
individual limit on the number of shares in the aggregate subject to
all Awards that during any calendar year are granted under this Plan
to any one individual will be 25,000. The maximum individual limit
for any Non-Employee Director, including any Option granted or to be
granted (assuming continued eligibility during the year of grant)
pursuant to Section 8 of this Plan, will be 4,000 during any
calendar year. Each of the foregoing numerical limits will be
subject to adjustment as contemplated by this Section 1.4 and
Section 6.2.
1.4.3 SHARE RESERVATION; REPLENISHMENT AND REISSUE OF UNVESTED AWARDS. No
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Award may be granted under this Plan unless, on the date of grant,
the sum of (a) the maximum number of shares issuable at any time
pursuant to such Award, plus (b) the number of shares that have
previously been issued pursuant to Awards granted under this Plan,
other than reacquired shares available for reissue consistent with
any applicable legal limitations, plus (c) the maximum number of
shares that may be issued
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at any time after such date of grant pursuant to Awards that are
outstanding on such date, does not exceed the Share Limit. Shares
that are subject to or underlie Awards that expire or for any reason
are cancelled or terminated, are forfeited, fail to vest, or for any
other reason are not paid or delivered under this Plan, as well as
reacquired shares, will again, except to the extent prohibited by law
(including Section 162(m)), be available for subsequent Awards under
the Plan. Except as limited by law (including Section 162(m)), if an
Award is or may be settled only in cash, such Award need not be
counted against any of the limits under this Section 1.4.
1.5 GRANT OF AWARDS. Subject to the express provisions of this Plan, the
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Committee will determine the number of shares of Common Stock subject to
each Award, the price (if any) to be paid for the shares or the Award and,
in the case of performance share awards, in addition to matters addressed
in Section 1.2.2, the specific objectives, goals and performance criteria
(such as an increase in sales, market value, earnings or book value over a
base period, the years of service before vesting, the relevant job
classification or level of responsibility or other factors) that further
define the terms of the performance share award. Each Award will be
evidenced by an Award Agreement signed by the Company and, if required by
the Committee, by the Participant.
1.6 AWARD PERIOD. Any Option, SAR, warrant or similar right shall expire and
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any other Award shall either vest or be forfeited not more than 10 years
after the date of grant; provided, however, that a payment of cash or
delivery of shares pursuant to an Award may be delayed until a future date
under and in accordance with the specific terms of a non-qualified deferred
compensation plan sponsored by the Company.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
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1.7.1 PROVISIONS FOR EXERCISE. Unless the Committee otherwise expressly
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provides, once exercisable an Award will remain exercisable until
the expiration or earlier termination of the Award.
1.7.2 PROCEDURE. Any exercisable Award will be deemed to be exercised
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when the Company receives written notice of such exercise from the
Participant, together with any required payment made in accordance
with Section 2.2.2 or 8.4, as the case may be, and any other
requirements of exercise, including any documents required by
Section 6.4, are satisfied.
1.7.3 FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests will be
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disregarded, but may be accumulated. The Committee, however, may
determine in the case of Eligible Persons that cash, other
securities, or other property will be paid or transferred in lieu of
any fractional share
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interests. No fewer than 100 shares, irrespective of any Adjustments
under Sections 6.2 or 8.6 of this Plan, may be purchased on exercise
of any Award at one time unless the number purchased is the total
number at the time available for purchase under the Award.
1.8 ACCEPTANCE OF PROMISSORY NOTES TO FINANCE EXERCISE. The Company, in its
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sole discretion, may, with the Committee's express approval, accept one or
more promissory notes from any Eligible Person in connection with the
exercise or receipt of any outstanding Award; but any such note will be
subject to at least the following terms and conditions:
1.8.1 PRINCIPAL. The principal of the note will not exceed the amount
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required to be paid to the Company upon the exercise or receipt of
one or more Awards under the Plan and the note will be delivered
directly to the Company in consideration of such exercise or
receipt.
1.8.2 TERM. The initial term of the note will be determined by the
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Committee; but the term of the note, including extensions, will not
exceed a period of five years.
1.8.3 RECOURSE; SECURITY. The note will provide for full recourse to the
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Participant and will bear interest at a rate determined by the
Committee but not less than the interest rate necessary to avoid the
imputation of interest under the Code. If required by the Committee
or by applicable law, the note will be secured by a pledge of any
shares or rights financed thereby in compliance with applicable law.
The terms, repayment provisions, and collateral release provisions
of the note and the pledge securing the note will conform with
applicable rules and regulations of the Federal Reserve Board as
then in effect.
1.8.4 TERMINATION OF EMPLOYMENT. If the employment or service of the
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Participant terminates, the unpaid principal balance of the note
will become due and payable no later than the 10th business day
after such termination.
1.8.5 OTHER CONDITIONS. Participants who are not employees or directors
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of the Company will not be entitled to purchase shares of Common
Stock with a promissory note unless the note is adequately secured
by collateral other than the shares of Common Stock. The portion of
the exercise price for (or purchase price of) shares of Common Stock
equal to the par value, if any, of any newly issued shares under
this Plan must be paid in cash, for services rendered or other valid
consideration.
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1.9 TRANSFER RESTRICTIONS AND EXCEPTIONS.
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1.9.1 LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly provided
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in (or pursuant to) this Section 1.9, by applicable law and by the
Award Agreement, as the same may be amended, (a) all Awards are non-
transferable and will not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance
or charge; (b) Awards may be exercised only by the Participant; and
(c) amounts payable or shares issuable pursuant to an Award will be
delivered only to (or for the account of) the Participant.
1.9.2 EXCEPTIONS. The Committee may permit Awards to be exercised by and
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paid only to certain persons or entities related to the Participant
pursuant to such conditions and procedures as the Committee may
establish. Any permitted transfer will be subject to the condition
that the Committee receive evidence satisfactory to it that the
transfer is being made to related persons for estate and/or tax
planning purposes and without consideration (other than nominal
consideration). ISOs and Restricted Stock Awards, however, will be
subject to any and all additional transfer restrictions under the
Code.
1.9.3 FURTHER EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and transfer
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restrictions in Section 1.9.1 will not apply to:
(a) transfers to the Company,
(b) the designation of a beneficiary to receive benefits if the
Participant dies or, if the Participant has died, transfers to
or exercise by the Participant's beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will
or the laws of descent and distribution,
(c) except in the case of ISOs, transfers pursuant to a qualified
domestic relations order,
(d) if the Participant has suffered a disability that renders the
Participant unable to legally act on his or her own behalf,
permitted transfers or exercises on behalf of the Participant
by the Participant's legal representative, or
(e) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for the
purpose of (or who otherwise facilitate) the exercise of Awards
consistent with applicable laws and the express authorization
of the Committee.
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1.10 REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS. Subject to
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Section 1.4 and Section 6.6 and the specific limitations on Awards
contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible Person
any adjustment in the exercise or purchase price, the vesting schedule, the
number of shares subject to, the restrictions upon or the term of, an
Option, SAR or other Award granted under this Plan by cancellation of an
outstanding Award and a subsequent regranting of an Award, by amendment, by
substitution of an outstanding Award, by waiver or by other legally valid
means. Such amendment or other action may result among other changes in an
exercise or purchase price that is higher or lower than the exercise, base
or purchase price of the original or prior Award, provide for a greater or
lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
2. OPTIONS
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2.1 GRANTS. One or more Options may be granted under this Section to any
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Eligible Person. Each Option granted will be designated by the Committee,
in the applicable Award Agreement, as either an Incentive Stock Option
(subject to Section 2.3) or a Nonqualified Stock Option.
2.2 OPTION PRICE.
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2.2.1 PRICING LIMITS. The purchase price per share of the Common Stock
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covered by each Option will be determined by the Committee at the
time of the Award, but in no event will the purchase price per share
of shares covered by an Incentive Stock Option be less than 100%
(110% in the case of a Participant described in Section 2.4) of the
Fair Market Value of the Common Stock on the date of grant (or date
of amendment in the case of an amendment to the exercise price).
2.2.2 PAYMENT PROVISIONS. The purchase price of any shares purchased on
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exercise of an Option granted under this Section will be paid in
full at the time of each purchase in one or a combination of the
following methods:
(a) in cash or by electronic funds transfer;
(b) by certified or cashier's check payable to the order of the
Company;
(c) if authorized by the Committee or specified in the applicable
Award Agreement, by a promissory note of the Participant
consistent with the requirements of Section 1.8 and 6.4;
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(d) by notice and third party payment in such manner as may be
authorized by the Committee; or
(e) by the delivery of shares of Common Stock of the Company already
owned by the Participant; provided that the Committee may in its
absolute discretion limit the Participant's ability to exercise
an Award by delivering such shares, and any shares delivered that
were initially acquired from the Company must have been owned by
the Participant at least six months as of the date of delivery.
Shares of Common Stock used to satisfy the exercise price of an
Option will be valued at their Fair Market Value on the date of
exercise.
2.2.3 "CASHLESS EXERCISE" PROVISIONS. Without limiting the generality of
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the foregoing, the Committee may provide that the Option can be
exercised and payment made by delivering a properly executed
exercise notice together with irrevocable instructions to a broker
to promptly deliver to the Company the amount of sale proceeds
necessary to pay the exercise price and, unless otherwise prohibited
by the Committee or applicable law, any applicable tax withholding
under Section 6.5.
2.2.4 DELIVERY CONDITION. The Company will not be obligated to deliver
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certificates for any shares of Common Stock on exercise of an Option
unless and until it receives full payment of the exercise price and
any related withholding obligations have been satisfied.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
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2.3.1 $100,000 LIMIT. To the extent that the aggregate Fair Market Value
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of stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive Stock
Options under this Plan and Common Stock subject to incentive stock
options under all other plans of the Company or any other includable
parent or subsidiary corporations (as these terms are used under
Section 422(d) and defined in Section 424(e) and (f) of the Code),
such options will be treated as Nonqualified Stock Options. For this
purpose, the Fair Market Value of the stock subject to options will
be determined as of the date the options were awarded. In reducing
the number of options treated as incentive stock options to meet the
$100,000 limit, the most recently granted options will be reduced
first. To the extent a reduction of simultaneously granted options
is necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares of
Common Stock are to be treated as shares acquired pursuant to the
exercise of an Incentive Stock Option.
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2.3.2 OPTION PERIOD. Subject to Section 1.6, each Option and all rights
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thereunder will expire no later than 10 years after the Award Date.
2.3.3 OTHER CODE LIMITS. Incentive Stock Options may only be granted to
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Eligible Employees of the Company that meet the other eligibility
requirements of the Code. There will be imposed in any Award
Agreement relating to Incentive Stock Options such other terms and
conditions as from time to time are required in order that the
Option be an "incentive stock option" as that term is defined in
Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS. No Incentive Stock Option may be granted to any
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person who, at the time the Option is granted, owns (or is deemed to own
under Section 424(d) of the Code) shares of outstanding Common Stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Company, unless the exercise price of such Option is at
least 110% of the Fair Market Value of the stock subject to the Option and
such Option by its terms is not exercisable after the expiration of five
years from the date such Option is granted.
2.5 EFFECTS OF TERMINATION OF EMPLOYMENT/SERVICE; TERMINATION OF SUBSIDIARY
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STATUS; DISCRETIONARY PROVISIONS.
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2.5.1 OPTIONS - RESIGNATION OR DISMISSAL. Unless the Committee otherwise
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provides, if the Participant's employment by (or other service
specified in the Award Agreement to) the Company terminates for any
reason (the date of such termination being referred to as the
"SEVERANCE DATE") other than Retirement, Total Disability or death,
or a "TERMINATION FOR CAUSE" (as determined in the discretion of the
Committee), the Participant will have, subject to earlier expiration
or termination pursuant to or as contemplated by Section 1.6 or 6.2,
until three (3) months after the Severance Date to exercise any
Option to the extent it has become exercisable on or before the
Severance Date. In the case of a Termination For Cause, the Option
will terminate on the Severance Date. To the extent not exercisable
on the Severance Date, the Option will terminate on the Severance
Date.
2.5.2 OPTIONS - DEATH OR TOTAL DISABILITY. Unless the Committee otherwise
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provides, if the Participant's employment by (or specified service
to) the Company terminates as a result of Total Disability or death,
the Participant, Participant's Personal Representative or the
Participant's Beneficiary, as the case may be, will have, subject to
earlier expiration or termination pursuant to or as contemplated by
Section 1.6 or 6.2, until twelve (12) months after the Severance
Date to exercise any Option to the extent it has become exercisable
on or prior to the Severance
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Date. To the extent not exercisable on the Severance Date, the
Option will terminate on the Severance Date.
2.5.3 OPTIONS - RETIREMENT. Unless the Committee otherwise provides, if
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the Participant's employment by (or specified service to) the
Company termi nates as a result of Retirement, the Participant,
Participant's Personal Representative or the Participant's
Beneficiary, as the case may be, will have, subject to earlier
termination pursuant to or as contemplated by Section 1.6 or 6.2,
until twelve (12) months after the Severance Date to exercise any
Nonqualified Stock Option (three (3) months after the Severance Date
in the case of an Incentive Stock Option) to the extent it has
become exercisable on or prior to the Severance Date. To the extent
not exercisable on the Severance Date, the Option will terminate on
the Severance Date.
2.5.4 CERTAIN SARS. Any SAR granted concurrently or in tandem with an
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Option will have the same post-termination provisions and
exercisability periods as the Option to which it relates, unless the
Committee other wise provides.
2.5.5 COMMITTEE DISCRETION. Notwithstanding the foregoing provisions of
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this Section 2.5, in the event of, or in anticipation of, a
termination of employment or service with the Company for any
reason, other than Termination For Cause, the Committee may increase
the portion of the Participant's Award available to the Participant,
or Participant's Beneficiary or Personal Representative, as the case
may be, or, subject to the provisions of Section 1.6, extend the
exercisability period, upon such terms as the Committee expressly
approves by resolution or by amendment to the Award Agreement.
3. STOCK APPRECIATION RIGHTS
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(INCLUDING LIMITED STOCK APPRECIATION RIGHTS)
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3.1 GRANTS. The Committee may grant to any Eligible Person Stock Appreciation
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Rights either concurrently with the grant of another Award or in respect of
an outstanding Award, in whole or in part, or independently of any other
Award. Any Stock Appreciation Right granted in connection with an
Incentive Stock Option will contain such terms as may be required to comply
with the provi sions of Section 422 of the Code and the regulations
promulgated thereunder, unless the holder otherwise agrees.
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3.2 PRICING LIMITS. The pricing restrictions applicable to Options under
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Section 2.2.1 of this Plan shall apply as well to the base or reference
price of SARs granted under this Plan.
3.3 EXERCISE OF STOCK APPRECIATION RIGHTS.
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3.3.1 EXERCISABILITY. Unless the Award Agreement or the Committee
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otherwise provides, a Stock Appreciation Right related to another
Award will be exercisable at such time or times, and to the extent,
that the related Award will be exercisable.
3.3.2 EFFECT ON AVAILABLE SHARES. To the extent that a Stock Appreciation
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Right is exercised, only the actual number of delivered shares of
Common Stock will be charged against the maximum amount of Common
Stock that may be delivered pursuant to Awards under this Plan. The
number of shares subject to the Stock Appreciation Right and the
related Option of the Participant will, however, be reduced by the
number of underlying shares as to which the exercise related, unless
the Award Agreement otherwise provides.
3.3.3 STAND-ALONE SARS. A Stock Appreciation Right granted independently
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of any other Award will be exercisable pursuant to the terms of the
Award Agreement.
3.3.4 PROPORTIONATE REDUCTION If an SAR extends to less than all the
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shares covered by the related Award and if a portion of the related
Award is thereafter exercised, the number of shares subject to the
unexercised SAR shall be reduced only if and to the extent that the
remaining number of shares covered by such related Award is less
than the remaining number of shares subject to such SAR.
3.4 PAYMENT.
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3.4.1 AMOUNT. Unless the Committee otherwise provides, upon exercise of a
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Stock Appreciation Right and the attendant surrender of an
exercisable portion of any related Award, the Participant will be
entitled to receive subject to Section 6.5 payment of an amount
determined by multiplying
(a) the difference obtained by subtracting the exercise or base
reference price per share of Common Stock under the related
Award (if applicable) or the initial share value specified
in the Award, from the Fair Market Value of a share of
Common Stock on the date of exercise of the Stock
Appreciation Right, by
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(b) the number of shares with respect to which the Stock
Appreciation Right has been exercised.
3.4.2 FORM OF PAYMENT. The Committee, in its sole discretion, will
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determine the form in which payment will be made of the amount
determined under Section 3.4.1 above, either solely in cash, solely
in shares of Common Stock (valued at Fair Market Value on the date
of exercise of the Stock Appreciation Right), or partly in such
shares and partly in cash, provided that the Committee has
determined that such exercise and payment are consistent with
applicable law. If the Committee permits the Participant to elect to
receive cash or shares (or a combination thereof) upon such
exercise, the election will be subject to any further conditions
that the Committee may impose.
3.5 LIMITED STOCK APPRECIATION RIGHTS. The Committee may grant to any Eligible
---------------------------------
Person Stock Appreciation Rights exercisable only upon or in respect of a
change in control or any other specified event ("LIMITED SARS") and such
Limited SARs may relate to or operate in tandem or combination with or
substitution for Options, other SARs or other Awards (or any combination
thereof), and may be payable in cash or shares based on the spread between
the base price of the SAR and a price based upon or equal to the Fair
Market Value of the Shares during a specified period or at a specified time
within a specified period before, after or including the date of such
event.
4. RESTRICTED STOCK AWARDS
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4.1 GRANTS. Subject to Section 4.2.4, the Committee may grant one or more
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Restricted Stock Awards to any Eligible Person. Each Restricted Stock
Award Agreement will specify the number of shares of Common Stock to be
issued to the Participant, the date of such issuance, the consideration for
such shares (but not less than the minimum lawful consideration under
applicable state law) to be paid by the Participant, the extent (if any) to
which and the time (if ever) at which the Participant will be entitled to
dividends, voting and other rights in respect of the shares prior to
vesting, and the restrictions (which may be based on performance criteria,
passage of time or other factors or any combination thereof) imposed on
such shares and the conditions of release or lapse of such restrictions.
Unless the Committee otherwise provides, such restrictions will lapse in
respect of 20% of the shares subject to the Award on the first anniversary
of the Award Date and in respect of an additional 20% of the shares subject
to the Award on the second, third, fourth and fifth anniversaries of the
Award Date. Stock certificates evidencing shares of Restricted Stock
pending the lapse of the restrictions ("RESTRICTED SHARES") will bear a
legend making appropriate reference to the restrictions imposed hereunder
and will be held by the Company or by a third party designated by the
Committee until the restrictions on the shares have lapsed and the shares
have vested in
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accordance with the provisions of the Award and Section 1.7. Upon issuance
of the Restricted Stock Award, the Participant may be required to provide
such further assurance and documents as the Committee may require to
enforce the restrictions.
4.2 RESTRICTIONS.
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4.2.1 PRE-VESTING RESTRAINTS. Except as provided in Sections 4.1 and 1.9,
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Restricted Shares comprising any Restricted Stock Award may not be
sold, assigned, transferred, pledged or otherwise disposed of or
encumbered, either voluntarily or involuntarily, until the
restrictions on such shares have lapsed and the shares have become
vested.
4.2.2 DIVIDEND AND VOTING RIGHTS. Unless otherwise provided in the
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applicable Award Agreement;
(a) a Participant receiving a Restricted Stock Award shall be
entitled to vote such shares but shall not be entitled to dividends
on any of the shares until the shares have vested; and
(b) all dividends shall be retained in a restricted account until
the shares have vested and shall revert to the Balance Bar Company
to the extent that they fail to vest.
4.2.3 CASH PAYMENTS. If the Participant has been paid or received cash
-------------
(including any dividends) in connection with the Restricted Stock
Award, the Award Agreement will specify whether and to what extent
such cash will be returned (with or without an earnings factor) as
to any Restricted Shares that cease to be eligible for vesting.
4.2.4 LIMIT ON NUMBER OF RESTRICTED SHARES. In no event shall more than
------------------------------------
75,000 shares of Common Stock be available for Awards issued (or
reissued) under this Plan as time-based Restricted Stock Awards for
nominal or no consideration other than the par value. This limit on
Restricted Shares does not apply to shares issued principally for
past services, to shares issued in respect of compensation earned
but deferred, or to shares issued in respect of Performance-Based
Awards under Section 5.2.
4.3 RETURN TO THE COMPANY. Unless the Committee otherwise expressly provides,
---------------------
Restricted Shares that remain subject to restrictions at the time of
termination of employment or service, or are subject to other conditions to
vesting that have not been satisfied by the time specified in the
applicable Award Agreement, will not vest and will be returned to the
Company in such manner and on such terms as the Committee provides.
13
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES
------------------------------------------
5.1 GRANTS OF PERFORMANCE SHARE AWARDS. The Committee may grant Performance
----------------------------------
Share Awards to Eligible Employees based upon such factors as the Committee
deems relevant in light of the specific type and terms of the award. An
Award Agreement will specify the maximum number of shares of Common Stock
(if any) subject to the Performance Share Award, the consideration (but not
less than the minimum lawful consideration) to be paid for any such shares
as may be issuable to the Participant, the duration of the Award and the
conditions upon which delivery of any shares or cash to the Participant
will be based. The amount of cash or shares or other property that may be
deliverable pursuant to such Award will be based upon the degree of
attainment over a specified period of not more than 10 years (a
"PERFORMANCE CYCLE") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part thereof) or the
Participant as may be established by the Committee. The Committee may
provide for full or partial credit, prior to completion of such performance
cycle or the attainment of the performance achievement specified in the
Award, in the event of the Participant's death, Retirement, or Total
Disability, a Change in Control Event or in such other circumstances as the
Committee (consistent with Section 6.10.3(b), if applicable) may determine.
5.2 SPECIAL (SECTION 162(M)) PERFORMANCE-BASED SHARE AWARDS. Options or SAR's
-------------------------------------------------------
granted with an exercise price not less than Fair Market Value at the
applicable date of grant for Section 162(m) purposes to Eligible Employees
which otherwise satisfy the conditions to deductibility under Section
162(m) of the Code are deemed "Qualifying Awards". Without limiting the
generality of the foregoing, and in addition to Qualifying Awards granted
under other provisions of this Plan, other performance-based awards within
the meaning of Section 162(m) of the Code ("PERFORMANCE-BASED AWARDS"),
whether in the form of restricted stock, performance stock, phantom stock
or other rights, the vesting of which depends on the performance of the
Company on a consolidated, segment, subsidiary, or division basis, with
reference to revenue growth, net earnings (before or after taxes or before
or after taxes, interest, depreciation, and/or amortization), cash flow,
return on equity, return on assets or return on net investment, or cost
containment or reduction, or any combination thereof (the "BUSINESS
CRITERIA") relative to preestablished performance goals, may be granted
under this Section 5.2. These terms are used as applied under generally
accepted accounting principles and in the Company's financial reporting.
The applicable business criterion or criteria, the specific performance
goals and, if applicable, the objective formula or standard for computing
the amount payable or the number of shares to be delivered if the
performance goal is (or the performance goals are) attained, must be
approved by the Committee in advance of applicable deadlines under the Code
and while the performance relating to such goals remains substantially
uncertain. The applicable performance measurement period may be not less
than one (except
14
as provided in Section 1.6) nor more than 10 years. No more than one
performance cycle for awards payable only in cash and not related to
shares, shall begin in any year. Other types of performance and non-
performance awards may also be granted under the other provisions of this
Plan. The following provisions relate to all Performance-Based Awards
(other than Qualifying Awards) granted under this Plan:
5.2.1 ELIGIBLE CLASS. The eligible class of persons for Awards under this
--------------
Section is officers of the Company.
5.2.2 MAXIMUM AWARD. Grants or awards under this Section 5.2 may be paid
-------------
in cash or shares or any combination thereof. In no event shall
grants of share-based Awards made in any calendar year to any
Eligible Employee under this Section 5.2 relate to more than 25,000
shares. In no event shall grants to any Eligible Employee under this
Plan of Awards payable only in cash and not related to shares
provide for payment of more than $500,000, times the number of years
(not more than five), in the applicable performance period.
5.2.3 COMMITTEE CERTIFICATION. To the extent required by Section 162(m),
-----------------------
before any Performance-Based Award under this Section 5.2 is paid,
the Committee must certify that the specific performance goals and
any other material terms of the Performance-Based Award were
satisfied.
5.2.4 TERMS AND CONDITIONS OF AWARDS. The Committee will have discretion
------------------------------
to determine the restrictions or other limitations of the individual
Awards under this Section 5.2 (including the authority to reduce
Awards, payouts or vesting or to pay no Awards, in its sole
discretion, if the Committee preserves such authority at the time of
grant by language to this effect in its authorizing resolutions or
otherwise). Notwithstanding anything contained in this Plan to the
contrary, the Committee shall have no discretion to increase the
amount of cash or number of shares to be delivered upon attainment
of the performance goals set forth in the Performance Award
Agreement.
5.2.6 ADJUSTMENTS FOR MATERIAL CHANGES. Performance goals or other
---------------------------------
features of an Award under this Section 5.2 may provide that they
(a) shall be adjusted to reflect a change in corporate
capitalization, a corporate transaction (such as a reorganization,
combination, separation, or merger) or a complete or partial
corporate liquidation, or (b) shall be calculated either without
regard for or to reflect any change in accounting policies or
practices affecting the Company and/or the business criteria or
performance goals or targets, or (c) shall be adjusted for any other
circumstance or event, or (d) any combination of (a)
15
through (c), but only to the extent in each case that such adjustment
or determination in respect of Performance-Based Awards would be
consistent with the requirements of Section 162(m) to qualify as
performance-based compensation.
5.3 OTHER STOCK BONUSES. The Committee may grant a Stock Bonus to any Eligible
-------------------
Person to reward exceptional or special services, contributions or
achievements in the manner and on such terms and conditions (including any
restrictions on such shares) as determined from time to time by the
Committee. The number of shares so awarded will be determined by the
Committee. The Award may be granted independently or in lieu of a cash
bonus and may be paid in the form of Common Stock, Restricted Shares, an
Option, Stock Units (payable in Common Stock or cash) or other Award.
5.4 DEFERRED PAYMENTS. The Committee may provide for the deferral of payment
-----------------
of any Qualifying Award, Performance Share Award or Stock Bonus under and
in accordance with the specific terms of a non-qualified deferred
compensation plan sponsored by the Company, provided that in the case of
Qualifying Awards and Performance-Based Awards, the amount deferred shall
be credited with earnings or dividend equivalents in accordance with
Section 162(m).
5.5 CASH BONUSES. The Committee may establish a program of annual incentive
------------
awards that are payable in cash to Eligible Persons based upon the extent
to which performance goals are met during the performance period. The
performance goals may depend upon the performance of the Company on a
consolidated, subsidiary or division basis with reference to revenues, net
earnings (before or after interest, taxes, depreciation, or amortization),
cash flow, return on equity or on assets or net investment, cost
containment or reduction, or achievement of strategic goals (or any
combination of such factors). In addition, the award may depend upon the
Eligible Employee's individual performance.
5.6 ALTERNATIVE PAYMENTS. In lieu of a cash payment of an Award payable in
--------------------
cash, the Committee may require or allow all or a portion of the Award to
be paid or credited in the form of shares of Common Stock, Restricted
Shares, Stock Units, an Option or other Award.
6. OTHER PROVISIONS
----------------
6.1 RIGHTS OF ELIGIBLE PERSONS, PARTICIPANTS AND BENEFICIARIES.
----------------------------------------------------------
6.1.1 EMPLOYMENT STATUS. Status as an Eligible Person will not be
-----------------
construed as a commitment that any Award will be made under this
Plan to an Eligible Person or to Eligible Persons generally.
16
6.1.2 NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any
----------------------
other documents related to this Plan or to any Award) will confer
upon any Eligible Person or other Participant any right to continue
in the employ or other service of the Company or constitute any
contract or agreement of employment or other service, nor will
interfere in any way with the right of the Company to otherwise
change such person's compensation or other benefits or to terminate
the employment or other service of such person, with or without
cause, but nothing contained in this Plan or any related document
will adversely affect any independent contractual right of such
person without the Participant's consent.
6.1.3 PLAN NOT FUNDED. Awards payable under this Plan will be payable in
---------------
shares or from the general assets of the Company, and (except as
provided in Section 1.4.3) no special or separate reserve, fund or
deposit will be made to assure payment of such Awards. No
Participant, Beneficiary or other person will have any right, title
or interest in any fund or in any specific asset (including shares
of Common Stock, except as expressly otherwise provided) of the
Company by reason of any Award hereunder. Neither the provisions of
this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the
provisions of this Plan will create, or be construed to create, a
trust of any kind or a fiduciary relationship between the Company
and any Participant, Beneficiary or other person. To the extent that
a Participant, Beneficiary or other person acquires a right to
receive payment pursuant to any Award hereunder, such right will be
no greater than the right of any unsecured general creditor of the
Company.
6.2 ADJUSTMENTS; ACCELERATION.
-------------------------
6.2.1 ADJUSTMENTS. Upon or in contemplation of any reclassification,
-----------
recapitalization, stock split (including a stock split in the form
of a stock dividend) or reverse stock split; any merger,
combination, consolidation, or other reorganization; any spin-off,
split-up, or similar extraordinary dividend distribution ("spin-
off") in respect of the Common Stock (whether in the form of
securities or property); any exchange of Common Stock or other
securities of the Company, or any similar, unusual or extraordinary
corporate transaction in respect of the Common Stock; or a sale of
all or substantially all the assets of the Company as an entirety
("asset sale"); then the Committee shall, in such manner, to such
extent (if any) and at such time as it deems appropriate and
equitable in the circumstances:
(a) in any of such events, proportionately adjust any or all of (1)
the number and type of shares of Common Stock (or other securities)
that thereafter may be made the subject of Awards (including the
specific
17
maxima and numbers of shares set forth elsewhere in this Plan), (2)
the number, amount and type of shares of Common Stock (or other
securities or property) subject to any or all outstanding Awards,
(3) the grant, purchase, or exercise price of any or all outstanding
Awards, (4) the securities, cash or other property deliverable upon
exercise of any outstanding Awards, or (5) (subject to limitations
under Section 6.10.3(b)) the performance standards appropriate to
any outstanding Awards, or
(b) in the case of a reclassification, recapitalization, merger,
consolidation, combination, or other reorganization, spin off or
asset sale, make provision for a cash payment or for the
substitution or exchange of any or all outstanding share-based
Awards or the cash, securities or property deliverable to the holder
of any or all outstanding share-based Awards, based upon the
distribution or consideration payable to holders of the Common Stock
upon or in respect of such event.
In each case, with respect to Awards of Incentive Stock Options, no
adjustment will be made that would cause the Plan to violate Section
424(a) of the Code or any successor provisions without the written
consent of holders materially adversely affected thereby.
In any of such events, the Committee may take such action prior to
such event to the extent that the Committee deems the action
necessary to permit the Participant to realize the benefits intended
to be conveyed with respect to the underlying shares in the same
manner as is or will be available to stockholders generally.
6.2.2 ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. Unless prior to a
---------------------------------------------
Change in Control Event the Committee determines that, upon its
occurrence, benefits under any or all Awards will not be accelerated
or determines that only certain or limited benefits under any or all
Awards will be accelerated and the extent to which they will be
accelerated, and/or establishes a different time in respect of such
Event for such acceleration, then upon the occurrence of a Change in
Control Event:
(a) each Option and Stock Appreciation Right will become
immediately exercisable,
(b) Restricted Stock will immediately vest free of restrictions,
and
(c) each Performance Share Award will become payable to the
Participant.
18
Any discretion with respect to these events shall be limited to the
extent required by applicable accounting requirements in the case of
a transaction intended to be accounted for as a pooling of interests
transaction.
The Committee may override the limitations on acceleration in this
Section 6.2.2 by express provision in the Award Agreement and may
accord any Eligible Person a right to refuse any acceleration,
whether pursuant to the Award Agreement or otherwise, in such
circumstances as the Committee may approve. Any acceleration of
Awards will comply with applicable legal requirements and, if
necessary to accomplish the purposes of the acceleration or if the
circumstances require, may be deemed by the Committee to occur
(subject to Section 6.2.4) a limited period of time not greater than
30 days before the event.
6.2.3 POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If any Option or
------------------------------------------------
other right to acquire Common Stock under this Plan has been fully
accelerated as required or permitted by Section 6.2.2 but is not
exercised prior to (a) a dissolution of the Company, or (b) an event
described in Section 6.2.1 that the Company does not survive, or (c)
the consummation of an event described in Section 6.1 involving a
Change of Control approved by the Board, such Option or right will
terminate, subject to any provision that has been expressly made by
the Board, the Committee through a plan of reorganization approved
by the Board or otherwise for the survival, substitution,
assumption, exchange or other settlement of such Option or right.
6.2.4 POSSIBLE RECISION OF ACCELERATION. If the vesting of an Award has
----------------------------------
been accelerated expressly in anticipation of an event or subject to
stockholder approval of an event and the Committee or the Board
later determines that the event will not occur, the Committee may
rescind the effect of the acceleration as to any then outstanding
and unexercised or otherwise unvested Awards.
6.2.5 ACCELERATION UPON TERMINATION OF SERVICE IN ANTICIPATION OF, OR
---------------------------------------------------------------
FOLLOWING A CHANGE IN CONTROL. Unless the Committee otherwise
-----------------------------
provides prior to a Change in Control, if any Participant's
employment is terminated by the Company for any reason other than
For Cause either in express anticipation of and within three months
of, or within one year after a Change of Control, then all
Options/Awards held by the Participant shall be deemed fully vested
immediately prior to the date of termination, irrespective of the
vesting provisions of the Participant's Award Agreement.
19
6.3 EFFECT OF TERMINATION OF SERVICE ON AWARDS. The Committee will establish
------------------------------------------
the effect of a termination of employment or service on the rights and
benefits for each Award under this Plan and in so doing may make
distinctions based upon the cause of termination.
6.3.1 TERMINATION OF CONSULTING OR AFFILIATE SERVICES. If the Participant
-----------------------------------------------
is not an Eligible Employee or director and provides services as an
Other Eligible Person,the Committee shall be the sole judge of
whether the Participant continues to render services to the Company,
unless a contract or the Award otherwise provides. If in these
circumstances the Committee notifies the Participant in writing that
a termination of services of the Participant for purposes of this
Plan has occurred, then (unless the contract or Award otherwise
expressly provides), the Participant's termination of services for
purposes of Section 2.6, 3, 4.3 or 5 shall be the date which is 10
days after the Committee's mailing of the notice or, in the case of
a Termination For Cause, the date of the mailing of the notice.
6.3.2 EVENTS NOT DEEMED TERMINATIONS OF SERVICE. Unless Company policy or
-----------------------------------------
the Committee otherwise provides, the employment or service
relationship shall not be considered terminated in the case of (i)
sick leave, (ii) military leave, or (iii) any other leave of absence
authorized by the Company or the Committee; provided that unless
reemployment upon the expiration of such leave is guaranteed by
contract or law, such leave is for a period of not more than 90
days. In the case of any Eligible Employee on an approved leave of
absence, continued vesting of the Award while on leave from the
employ of the Company shall be suspended, unless the Committee
otherwise provides or applicable law otherwise requires. In no event
shall an Award be exercised after the expiration of the term set
forth in the Award Agreement.
6.3.3 EFFECT OF CHANGE OF SUBSIDIARY STATUS. For purposes of this Plan
-------------------------------------
and any Award, if an entity ceases to be a Subsidiary a termination
of employment or service will be deemed to have occurred with
respect to each Eligible Person in respect of the Subsidiary who
does not continue as an Eligible Person in respect of another entity
within the Company.
6.4 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of Awards under
--------------------
this Plan, the offer, issuance and delivery of shares of Common Stock, the
acceptance of promissory notes and/or the payment of money under this Plan
or under Awards are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal securities law, federal margin requirements) and to such approvals
by any listing, regulatory or governmental authority as may, in the opinion
of counsel for the Company, be necessary or advisable in connection
therewith. In
20
addition, any securities delivered under this Plan may be subject to any
special restrictions that the Committee may require to preserve a pooling
of interests under generally accepted accounting principles. The person
acquiring any securities under this Plan will, if requested by the Company,
provide such assurances and representations to the Company as the Committee
may deem necessary or desirable to assure compliance with all applicable
legal and accounting requirements.
6.5 TAX MATTERS.
-----------
6.5.1 PROVISION FOR TAX WITHHOLDING OR OFFSET. Upon any exercise,
---------------------------------------
vesting, or payment of any Award or upon the disposition of shares
of Common Stock acquired pursuant to the exercise of an Incentive
Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code, the Company shall have the
right at its option to (a) require the Participant (or Personal
Representative or Beneficiary, as the case may be) to pay or provide
for payment of the amount of any taxes which the Company may be
required to withhold with respect to such Award event or payment or
(b) deduct from any amount payable in cash the amount of any taxes
which the Company may be required to withhold with respect to such
cash payment. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this
Plan, the Committee may in its sole discretion (subject to Section
6.4) grant (either at the time of the Award or thereafter) to the
Participant the right to elect, pursuant to such rules and subject
to such conditions as the Committee may establish, to have the
Company reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares valued at their Fair
Market Value, to satisfy such withholding obligation, determined in
each case as of the trading day next preceding the applicable date
of exercise, vesting or payment.
6.5.2 TAX LOANS. If so provided in the Award Agreement, the Company may,
---------
to the extent permitted by law, authorize a short-term loan of not
more than nine (9) months to an Eligible Person in the amount of any
taxes that the Company may be required to withhold with respect to
shares of Common Stock received (or disposed of, as the case may be)
pursuant to a transaction described in Section 6.5.1. Such a loan
will be for a term, at a rate of interest and pursuant to such other
terms and conditions as the Committee, under applicable law, may
establish and such loan need not comply with the other provisions of
Section 1.8.
21
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
------------------------------------------
6.6.1 BOARD AUTHORIZATION. The Board may, at any time, terminate or, from
-------------------
time to time, amend, modify or suspend this Plan, in whole or in
part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee will retain
jurisdiction as to Awards then outstanding in accordance with the
terms of this Plan.
6.6.2 STOCKHOLDER APPROVAL. To the extent then required under Sections
--------------------
162, 422 and 424 of the Code or any other applicable law, or deemed
necessary or advisable by the Board, any amendment to this Plan
shall be subject to stockholder approval.
6.6.3 AMENDMENTS TO AWARDS. Without limiting any other express authority
--------------------
of the Committee under (but subject to) the express limits of this
Plan, the Committee by agreement or resolution may waive conditions
of or limitations on Awards to Participants that the Committee in
the prior exercise of its discretion has imposed, without the
consent of a Participant, and may make other changes to the terms
and conditions of Awards that do not affect in any manner materially
adverse to the Participant, the Participant's rights and benefits
under an Award.
6.6.4 LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
--------------------------------------------
suspension or termination of this Plan or change of or affecting any
outstanding Award will, without written consent of the Participant,
affect in any manner materially adverse to the Participant any
rights or benefits of the Participant or obligations of the Company
under any Award granted under this Plan prior to the effective date
of such change. Changes contemplated by Section 6.2 will not be
deemed to constitute changes or amendments for purposes of this
Section 6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise expressly authorized by
-----------------------------
the Committee or this Plan, a Participant will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by the Participant. No adjustment will be
made for dividends or other rights as a stockholder for which a record date
is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THE PLAN. This Plan is effective as of April 7, 1998,
--------------------------
the date of approval by the Board. The Plan shall be submitted for and
subject to stockholder approval.
6.9 TERM OF THE PLAN. No Award will be granted under this Plan after April 6,
----------------
2008 (the "TERMINATION DATE"). Unless otherwise expressly provided in this
Plan or in an applicable Award Agreement, any Award granted prior to the
termination
22
date may extend beyond such date, and all authority of the Committee with
respect to Awards hereunder, including the authority to amend an Award,
will continue during any suspension of this Plan and in respect of Awards
outstanding on the termination date.
6.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
---------------------------------------
6.10.1 CHOICE OF LAW. This Plan, the Awards, all documents evidencing
-------------
Awards and all other related documents will be governed by, and
construed in accordance with the laws of the State of Delaware.
6.10.2 SEVERABILITY. If a court of competent jurisdiction holds any
------------
provision invalid and unenforceable, the remaining provisions of
this Plan will continue in effect.
6.10.3 PLAN CONSTRUCTION.
-----------------
(A) RULE 16B-3. It is the intent of the Company that the Awards and
----------
transactions permitted by Awards generally satisfy and be
interpreted in a manner that, in the case of Participants who
are or may be subject to Section 16 of the Exchange Act,
satisfies the applicable requirements of Rule 16b-3 so that
such persons (unless they otherwise agree) will be entitled to
the benefits of Rule 16b-3 or other exemptive rules under
Section 16 of the Exchange Act in respect of those transactions
and will not be subjected to avoidable liability.
(B) SECTION 162(M). It is the further intent of the Company that
--------------
(to the extent the Company or Awards under this Plan may be or
become subject to limitations on deductibility under Section
162(m) of the Code), the Initial Options and Options or SARs
subsequently granted with an exercise or base price not less
than Fair Market Value on the date of grant and Performance-
Based Awards under Section 5.2 of this Plan that are granted to
or held by a person subject to Section 162(m) of the Code will
qualify as performance-based compensation or otherwise be
exempt from deductibility limitations under Section 162(m) of
the Code, to the extent that the Committee authorizing the
Award (or the payment thereof, as the case may be) satisfies
any applicable administrative requirements thereof. This Plan
will be interpreted consistent with such intent.
6.11 CAPTIONS. Captions and headings are given to the sections and subsections
--------
of this Plan solely as a convenience to facilitate reference. Such
headings will not
23
be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
6.12 STOCK-BASED AWARDS IN SUBSTITUTION FOR STOCK OPTIONS OR AWARDS GRANTED BY
-------------------------------------------------------------------------
OTHER CORPORATIONS. Awards may be granted to Eligible Persons under this
------------------
Plan in substitution for employee stock options, SARs, restricted stock or
other stock-based awards granted by other entities to persons who are or
who will become Eligible Persons in respect of the Company, in connection
with a distribution, merger or reorganization by or with the granting
entity or an affiliated entity, or the acquisition by the Company, directly
or indirectly, of all or a substantial part of the stock or assets of the
employing entity.
6.13 NON-EXCLUSIVITY OF PLAN. Nothing in this Plan will limit or be deemed to
-----------------------
limit the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the Common
Stock, under any other plan or authority.
7. DEFINITIONS
-----------
"AWARD" means an award of any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, performance share award, dividend equivalent or deferred
payment right or other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.
"AWARD AGREEMENT" means any writing setting forth the terms of an Award that has
been authorized by the Committee.
"AWARD DATE" means the date upon which the Committee took the action granting an
Award or such later date as the Committee designates as the grant or award date
at the time of the Award or, in the case of Awards under Section 8, the
applicable dates set forth therein.
"AWARD PERIOD" means the period beginning on an Award Date and ending on the
expiration date of such Award.
"BALANCE BAR COMPANY" means Balance Bar Company, a Delaware corporation, and its
successors (if any).
"BENEFICIARY" means the person, persons, trust or trusts designated by a
Participant or, in the absence of a designation, entitled by will or the laws of
descent and distribution, to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies, and means the
Participant's executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.
24
"BOARD" means the Board of Directors of Balance Bar Company.
"CHANGE IN CONTROL EVENT" means any of the following:
(a) An acquisition by any Person (excluding one or more Excluded Persons)
of beneficial ownership (within the meaning of Rule 13d 3 under
Exchange Act or a pecuniary interest in (either comprising "ownership
---------
of") more than 50% of the Common Stock or voting securities entitled
--
to then vote generally in the election of directors of Balance Bar
Company ("Voting Stock"), after giving effect to any new issue in the
------ -----
case of an acquisition from Balance Bar Company; or
(b) Approval by the stockholders of Balance Bar Company of a plan of
merger, consolidation, or reorganization of Balance Bar Company or
for sale or other disposition of all or substantially all of Balance
Bar Company's consolidated assets as an entirety (collectively, a
"Business Combination"), other than a Business Combination (1) in
---------------------
which all or substantially all of the holders of Voting Stock hold or
receive directly or indirectly 50% or more of the voting stock of the
entity resulting from the Business Combination (or a parent company),
and (2) after which no Person (other than any one or more of the
Excluded Persons) owns more than 50% of the voting stock of the
resulting entity (or a parent company) who did not own directly or
indirectly at least that amount of Voting Stock immediately before
the Business Combination, and (3) after which one or more Excluded
Persons own an aggregate number of shares of the voting stock at
least equal to the aggregate number of shares of voting stock owned
by any other Person who is not an Excluded Person (except for any
person described in and satisfying the conditions of Rule 13d-1(b)(1)
under the Exchange Act), if any, and who owns more than 30% of the
voting stock.
(c) Approval by the Board and (if required by law) by stockholders of
Balance Bar Company of a plan to consummate the dissolution or
complete liquidation of Balance Bar Company; or
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board and any new director
(other than a director designated by a person who has entered into an
agreement or arrangement with Balance Bar Company to effect a
transaction described in clause (a) or (b) of this definition) whose
appointment, election, or nomination for election was approved by a
vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose appointment, election or nomination for election was previously
so approved, cease for any reason to constitute a majority of the
Board;
25
For purposes of determining whether a Change in Control Event has occurred, a
transaction includes all transactions in a series of related transactions.
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
"COMMISSION" means the Securities and Exchange Commission.
"COMMITTEE" means the Board or a committee appointed by the Board to administer
this Plan, provided that any committee shall be comprised only of two or more
directors subject to the following restrictions:
(a) In respect of any decision of the Committee made at a time when the
Participant affected by the decision may be subject to Section 162(m)
of the Code, and the Awards subject to such decision are intended to
satisfy the requirements for exemption therefrom, the decision shall
be approved by a committee comprised of "outside directors" (as this
term is defined in Section 162(m)) to the extent required by Section
162(m).
(b) In respect of any decision of the Committee made at a time when the
Participant affected by the decision may be subject to Section 16(b)
of the Exchange Act, and the Awards subject to such decision are
intended to satisfy the requirements for exemption therefrom, the
decision shall be approved by the Board or by a committee comprised
of Non-Employee Directors (as this term is as defined in Rule 16(b)-3
of the Exchange Act) to the extent required by Rule 16(b)-3.
"COMMON STOCK" means the Common Stock of Balance Bar Company and such other
securities or property as may become the subject of Awards, or become subject to
Awards, pursuant to an adjustment made under Section 6.2 of this Plan.
"COMPANY" means Balance Bar Company, a Delaware corporation, its successors,
and/or its Subsidiaries, as the context requires, provided that with respect to
the Common Stock, or the grant, exercise, or disposition of an Award or the
provisions of Sections 1.8, 5.2.1, 6.2.1, 6.2.3, 6.4 and 6.10, Company means
only Balance Bar Company.
"ELIGIBLE EMPLOYEE" means an officer (whether or not a director) or employee of
the Company.
"ELIGIBLE PERSON" means an Eligible Employee, or any Other Eligible Person, as
determined by the Committee.
26
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time
to time.
"EXCLUDED PERSON" means
(a) the Company
(b) any person described in and satisfying the conditions of Rule 13d-
1(b)(1) under the Exchange Act);
(c) any employee benefit plan of the Balance Bar Group;
(d) Thomas R. Davidson, James A. Wolfe or Richard G. Lamb; or
(e) any affiliates (within the meaning of the Exchange Act), successors,
or heirs, descendants or members of the immediate families of the
individuals identified in part (d) of this definition.
"FAIR MARKET VALUE" on any date means
(a) if the stock is listed or admitted to trade on a national securities
exchange, the closing price of the stock on the Composite Tape of the
principal national securities exchange on which the stock is so
listed or admitted to trade, on such date, or, if there is no trading
of the stock on such date, then the closing price of the stock as
quoted on such Composite Tape on the next preceding date on which
there was trading in such shares;
(b) if the stock is not listed or admitted to trade on a national
securities exchange, the closing price for the stock on such date, as
furnished by the National Association of Securities Dealers, Inc.
("NASD") through the NASDAQ National Market Reporting System or a
similar organization if the NASD is no longer reporting such
information;
(c) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported on the National Market
Reporting System, the mean between the bid and asked price for the
stock on such date, as furnished by the NASD or a similar
organization; or
(d) if the stock is not listed or admitted to trade on a national
securities exchange, is not reported on the National Market Reporting
System and if bid and asked prices for the stock are not furnished by
the NASD or
27
a similar organization, the value as established by the Committee at
such time for purposes of this Plan.
Notwithstanding the foregoing, the Fair Market Value of the Common Stock for
purposes of determining the exercise price of the Initial Options granted to
employees under this Plan will be deemed to be the initial price at which the
Common Stock is offered to the public in the IPO.
"INCENTIVE STOCK OPTION" or "ISO" means an Option that is designated and
intended as an incentive stock option within the meaning of Section 422 of the
Code, the award of that contains such provisions (including but not limited to
the receipt of stockholder approval of this Plan, if the award is made prior to
such approval) and is made under such circumstances and to such persons as may
be necessary to comply with that section.
"INITIAL OPTIONS" means Options granted during or at the completion of an IPO.
"IPO" means a bona fide, firm commitment underwritten public offering of the
Common Stock pursuant to a registration statement on Form S-1 (or other
applicable form) that is declared effective under the Securities Act that
results in Balance Bar Company becoming a registered company in respect of the
Common Stock under the Exchange Act.
"NONQUALIFIED STOCK OPTION" means an Option that is designated as a Nonqualified
Stock Option and will include any Option intended as an Incentive Stock Option
that fails to meet the applicable legal requirements thereof. Any Option
granted hereunder that is not designated as an incentive stock option will be
deemed to be designated a nonqualified stock option under this Plan and not an
incentive stock option under the Code.
"NON-EMPLOYEE DIRECTOR" for purposes of Section 8 means a member of the Board of
Directors of Balance Bar Company who is not an officer or employee of the
Company or any 50% or greater parent corporation.
"NON-EMPLOYEE DIRECTOR PARTICIPANT" means a Non-Employee Director who holds an
outstanding Award under the provisions of Section 8.
"OPTION" means an option to purchase Common Stock granted under this Plan. The
Committee will designate any Option granted to an Eligible Person as a
Nonqualified Stock Option or an Incentive Stock Option.
"OTHER ELIGIBLE PERSON" means (a) any director, or (b) any individual consultant
or advisor or agent who renders or has rendered bona fide services (other than
---- ----
services in connection with the offering or sale of securities of the Company in
a capital raising transaction) to the Company, and who (to the extent provided
in the next sentence)
28
is selected to participate in this Plan by the Committee. A person who is
neither an employee nor officer who provides bona fide services to the Company
---- ----
may be selected as an Other Eligible Person only if such person's participation
in this Plan would not adversely affect (a) Balance Bar Company's eligibility to
use Form S-8 to register under the Securities Act of 1933, as amended, the
offering and sale of shares issuable under this Plan by Balance Bar Company or
(b) Balance Bar Company's compliance with any other applicable laws.
"PERFORMANCE SHARE AWARD" means an Award of a right to receive shares of Common
Stock under Section 5.1, or to receive shares of Common Stock or other
compensation (including cash) under Section 5.2, the issuance or payment of that
is contingent upon, among other conditions, the attainment of performance
objectives specified by the Committee.
"PERSON" means an association, a corporation, an individual, a partnership, a
trust or any other entity or organization, including a governmental entity and a
"person" as that term is used under Section 13(d) or 14(d) of the Exchange Act.
"PERSONAL REPRESENTATIVE" means the person or persons who, upon the disability
or legal incompetence of a Participant, has acquired on behalf of the
Participant, by legal proceeding or otherwise, the power to exercise the rights
or receive benefits under this Plan by virtue of having become the legal
representative of the Participant.
"PLAN" means this 1998 Performance Award Plan, as may be amended from time to
time.
"RESTRICTED SHARES" or "RESTRICTED STOCK" means shares of Common Stock awarded
to a Participant under this Plan, subject to payment of such consideration, if
any, and such conditions on vesting (which may include, among others, the
passage of time, specified performance objectives or other factors) and such
transfer and other restrictions as are established in or pursuant to this Plan
and the related Award Agreement, for so long as such shares remain unvested or
restricted under the terms of the applicable Award Agreement.
"RETIREMENT" means retirement from active service as an employee or officer of
the Company on or after age 55 with 10 or more years of service, or after age
65.
"RULE 16B-3" means Rule 16b-3 as promulgated by the Commission pursuant to the
Exchange Act, as amended from time to time.
"SECTION 16 PERSON" means a person subject to Section 16(a) of the Exchange Act.
"SECTION 162(M)" means Section 162(m) of the Code and the regulations
promulgated thereunder.
29
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to time.
"STOCK APPRECIATION RIGHT" OR "SAR" means a right authorized under this Plan to
receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.
"STOCK BONUS" means an Award of shares of Common Stock granted under this Plan
for no consideration other than past services and without restriction other than
such transfer or other restrictions as the Committee may deem advisable to
assure compliance with law.
"STOCK UNIT" means a bookkeeping entry which serves as a unit of measurement
relative to a share of Common Stock for purposes of determining the payment of a
deferred benefit or right under the Plan.
"SUBSIDIARY" means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by Balance Bar Company.
"TERMINATION FOR CAUSE" means (unless otherwise expressly provided in the Award
Agreement or another contract) a termination of service, based upon a finding by
the Company, acting in good faith and based on its reasonable belief at the
time, that the Participant:
(a) is or has been dishonest, incompetent, or negligent in the discharge
of his or her duties to the Company; or has refused to perform stated
or assigned duties; or
(b) has committed a theft or embezzlement, or a breach of confidentiality
or unauthorized disclosure or use of inside information, customer
lists, trade secrets or other confidential information, or a breach
of fiduciary duty involving personal profit, or a willful or
negligent violation of any law, rule or regulation or of Company
rules or policy, in any material respect; or has been convicted of a
felony or misdemeanor (other than minor traffic violations or similar
offenses); or
(c) has materially breached any of the provisions of any agreement with
the Company or a parent corporation; or
(d) has engaged in unfair competition with, or otherwise acted
intentionally in a manner injurious to the reputation, business or
assets of the Company; or has induced a customer to break or
terminate any contract with the Company or an affiliate; or has
induced any principal
30
for whom the Company (or an affiliate) acts as agent to terminate
such agency relationship.
A Termination For Cause shall be deemed to occur (subject to reinstatement upon
a contrary final determination by the Board or Committee) on the date when the
Company first delivers notice to the Participant of a finding of Termination For
Cause and shall be final in all respects on the date following the opportunity
to be heard and written notice to the Participant that his or her service is
terminated.
"TOTAL DISABILITY" means any medically determinable physical or mental condition
or impairment which prevents the Participant from performing the essential
functions of his or her job with the Company that can be expected to result in
death or that has lasted or can be expected to last for a period of 90
consecutive days or for shorter periods aggregating 180 days in any consecutive
12 month period.
8. NON-EMPLOYEE DIRECTOR OPTIONS
-----------------------------
8.1 PARTICIPATION. Awards under this Section 8 will be made only to Non-
-------------
Employee Directors and will be evidenced by Award Agreements substantially
in the form of EXHIBIT A or the form approved by the Board.
8.2 OPTION GRANTS.
-------------
8.2.1 INITIAL AWARD. Any person who is not an officer or employee of the
-------------
Company and who is or who thereafter becomes a director of Balance
---
Bar Company upon completion of an IPO and the registration of the
Common Stock of Balance Bar Company under the Exchange Act, will
automatically be granted (without any action by the Board or
Committee) a Nonqualified Stock Option (the Award Date of which will
be the tenth (10th) trading day after the date of such registration
or the time such person takes office, as the case may be) to
purchase 1,000 shares of Common Stock.
8.2.2 SUBSEQUENT ANNUAL AWARDS. Subject to Section 8.2.3, at the close of
------------------------
trading on the day of the annual stockholders meeting in each year
during the term of the Plan commencing in 1999, there will be
granted automatically (without any action by the Committee or the
Board) a Nonqualified Stock Option (the Award Date of which will be
such date) to each Non-Employee Director then continuing in office
to purchase 1,000 shares of Common Stock.
8.2.3 MAXIMUM NUMBER OF OPTIONS/SHARES. Annual grants that would
--------------------------------
otherwise exceed the maximum number of shares under Section 1.4.1
will be prorated within such limitation. A Non-Employee Director
will
31
not receive more than one Nonqualified Stock Option under this
Section 8.2 in any calendar year.
8.3 OPTION PRICE. The purchase price per share of the Common Stock covered by
------------
each Option granted pursuant to Section 8.2 will be 100% of the Fair Market
Value of the Common Stock on the Award Date. The exercise price of any
Option granted under this Section will be paid in full at the time of each
(i) purchase in cash or by check, (ii) in shares of Common Stock valued at
their Fair Market Value on the date of exercise of the Option and, if the
shares were acquired from the Company, owned by the Participant at least
six months prior to the date of exercise, (iii) delivery of a properly
executed exercise notice together with irrevocable instructions to a broker
to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, or (iv) any combination of the
foregoing methods of payment.
8.4 OPTION PERIOD AND EXERCISABILITY. Each Option granted under this Section 8
--------------------------------
and all rights or obligations thereunder will expire on the day before the
10th anniversary of the Award Date and will be subject to earlier
termination as provided below. Unless the Committee provides otherwise, an
Option granted under Section 8.2 will become exercisable on the Award Date.
8.5 TERMINATION OF DIRECTORSHIP. If a Non-Employee Director's services as a
---------------------------
member of the Board terminate for any reason, an Option granted pursuant to
this Section 8 and then held by the director, to the extent the Option is
then exercisable, will remain exercisable for 12 months after the date of
termination or until the expiration of the stated term of the Option,
whichever first occurs. Any portion of an Option granted pursuant to this
Section 8 that is not exercisable at the time of the termination of service
will terminate upon the termination of service.
8.6 ADJUSTMENTS; ACCELERATION UPON A CHANGE IN CONTROL EVENT; TERMINATION.
---------------------------------------------------------------------
Options granted under this Section 8 will be subject to adjustment,
assumption, conversion, substitution or exchange, termination and
acceleration as provided in Section 6.2, but in the case of a Change in
Control Event only to the extent that the changes and any Board or
Committee action in respect thereof (i) are effected pursuant to the terms
of a reorganization agreement approved by stockholders of Balance Bar
Company or otherwise consistent with the effect of the event on Options
held by persons other than executive officers or directors of Balance Bar
Company and (ii) are consistent in respect of the underlying shares with
the effect on stockholders generally.
32
Exhibit A
---------
BALANCE BAR COMPANY
DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of _____________, ____, is between Balance Bar
Company (the "CORPORATION") and _____________________(the "DIRECTOR"). The
Corporation and the Director agree to the terms and conditions set forth herein
as required by the terms of the Plan.
BACKGROUND
A. The Corporation has adopted and the stockholders of the Company
have approved the 1998 Performance Award Plan (the "PLAN").
B. Pursuant to the Plan, the Corporation has granted an option to
purchase shares of Common Stock of the Corporation (the "OPTION") to the
Director upon the terms and conditions evidenced hereby, as required by the
Plan, which Option is not intended as and shall not be an Incentive Stock
Option.
1. OPTION GRANT. This Agreement evidences the grant to the Director, as of
------------
____________ __,____ (the "OPTION DATE"), of an Option to purchase an aggregate
_______ shares of Common Stock, under Section 8 of the Plan, subject to the
terms and conditions and to adjustment as set forth herein or in pursuant to the
Plan.
2. EXERCISE PRICE. The Option entitles the Director to purchase (subject to
--------------
the terms of Sections 3 through 5 below and to the extent exercisable) all or
any part of the Option shares at a price per share of $_______, which represents
the Fair Market Value of the shares on the Option Date.
3. OPTION EXERCISABILITY AND TERM. Subject to adjustment pursuant to the
------------------------------
Plan, the Option will first become and remain exercisable on the Award Date, in
each case subject to adjustments and acceleration under Section 8.6 of the Plan.
The Option will terminate on ____________ __, ____ 1 unless earlier terminated
in accordance with the terms of the Plan.
---------------------
/1/insert [day before] [10th] anniversary of date of grant.
A-1
4. EFFECT OF TERMINATION OF SERVICE. If the Director's services as a member
--------------------------------
of the Board terminate, this Option will terminate at the times and to the
extent set forth in Section 8 of the Plan.
5. GENERAL TERMS. The Option and this Agreement are subject to, and the
-------------
Corporation and the Director agree to be bound by, the provisions of the Plan
that apply to the Option. Such provisions are incorporated herein by this
reference. The Director acknowledges receipt of a copy of the Plan.
Capitalized terms not otherwise defined herein have the meaning set forth in the
Plan.
The parties have signed this Agreement as of the date on page 1.
BALANCE BAR COMPANY
(a Delaware corporation)
By __________________________
Title ______________________
OPTIONEE DIRECTOR
_____________________________
(Signature)
_____________________________
(Print Name)
_____________________________
(Address)
_____________________________
(City, State, Zip Code)
_____________________________
social security number
A-2
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 5/8/98 | | | | | | | None on these Dates |
| | 4/7/98 | | 22 |
| List all Filings |
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