Exhibit 10.20
Consulting Agreement
This Consulting Agreement (this "Agreement") is entered into and effective
as of October 28, 1999 (the "Effective Date"), by and between Designs, Inc., a
Delaware corporation (the "Corporation"), with its principal executive offices
located at 00 X Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, and Jewelcor Management,
Inc., a Nevada corporation (the "Independent Contractor"), having its principal
executive offices located at 000 Xxxxx Xxxxxx-Xxxxx Xxxxxxxxx, Xxxxxx-Xxxxx,
Xxxxxxxxxxxx 00000.
Recitals
WHEREAS, the Corporation desires to retain the Independent Contractor to
act as a consultant to assist in developing and assist in implementing a
strategic plan for the Corporation and for other related consulting services to
which the parties may agree, as described in Schedule A attached hereto and
incorporated herein by reference (the "Services"); and
WHEREAS, the Independent Contractor agrees to perform the Services for the
Corporation under the terms and conditions set forth in this Agreement, it being
expressly understood that the Independent Contractor shall perform Services as
an independent contractor and nothing contained herein shall be construed to be
inconsistent with this relationship or status;
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Corporation and the Independent Contractor hereby agree as follows:
Section One
Representations and Warranties of the Independent Contractor
The Independent Contractor represents, warrants, covenants and agrees
that:
(a) the Independent Contractor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada
and is duly qualified and in good standing as a foreign corporation
in each jurisdiction where its performance of Services requires such
qualification;
(b) the Independent Contractor has all necessary power and authority to
execute and deliver this Agreement and to perform all of its
obligations under this Agreement;
(c) this Agreement has been duly and validly authorized, executed and
delivered by the Independent Contractor, and constitutes the valid
and binding obligation of the Independent Contractor, and is
enforceable against the Independent Contractor in accordance with
its terms; and
(d) the execution, delivery and performance by the Independent
Contractor of this Agreement does not (1) violate or conflict with
any provision of the Independent Contractor's charter or by-laws;
(2) violate, conflict with, or result in a breach or termination of
(or require any consent or approval under) any agreement, license,
arrangement or understanding, whether written or oral, to which the
Independent Contractor, its agents or employees (or any one of them)
is a party; or (3) violate
any law, judgment, decree, order, rule or regulation applicable to
the Independent Contractor, its agents or employees (or any one of
them).
Section Two
Representations and Warranties of the Corporation
The Corporation represents, warrants, covenants and agrees that:
(a) the Corporation is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) the Corporation has all necessary power and authority to execute and
deliver this Agreement and to perform all of its obligations under
this Agreement;
(c) this Agreement has been duly and validly authorized, executed and
delivered by the Corporation, and constitutes the valid and binding
obligation of the Corporation, and is enforceable against the
Corporation in accordance with its terms; and
(d) the execution, delivery and performance by the Corporation of this
Agreement does not (1) violate or conflict with any provision of the
Corporation's Certificate of Incorporation or by-laws; (2) violate,
conflict with, or result in a breach or termination of (or require
any consent or approval under) any agreement, license, arrangement
or understanding, whether written or oral, to which the Corporation
is a party; or (3) violate any law, judgment, decree, order, rule or
regulation applicable to the Corporation.
Section Three
Nature of the Services
In accordance with the terms and conditions of this Agreement, the
Independent Contractor shall, to the extent requested from time to time by the
Corporation, perform consulting Services for the benefit of the Corporation with
respect to all matters relating to or affecting all items contained in Schedule
A attached hereto. The Independent Contractor shall perform such additional
Services as may be agreed to by both parties from time to time in writing which,
when so agreed, shall be deemed incorporated into this Agreement. The
Independent Contractor shall perform Services at the direction of the President
and Chief Executive Officer of the Corporation (or another executive officer of
the Corporation as may be designated from time to time by the Board of Directors
of the Corporation). As a part of the Independent Contractor's consulting
Services, the Independent Contractor shall review, analyze, and make suggestions
to the Corporation on all matters included in Schedule A attached hereto. The
Independent Contractor agrees and stipulates that this Agreement is a personal
service contract under which Services shall be performed by particular agents
and employees of the Independent Contractor who are subject to the approval of
the Corporation from time to time. The Corporation initially approves Xxxxxxx X.
Xxxxxxxx, Xxxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxx X. Xxxxxxxx, and Xxxxx X.
Xxxxxxxx, together with support staff directly reporting to and under the
personal supervision of such individuals as required for such Services, as
individuals to perform Services hereunder. The Independent Contractor shall
furnish the Corporation with a properly completed Request for Taxpayer
Identification Number and Certification on Form W-9, upon receipt of said Form
W-9 from the Corporation.
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Section Four
Compensation
Subject to the provisions of this Section 4, the consideration to be
furnished to the Independent Contractor by the Corporation for the Services
rendered by the Independent Contractor under this Agreement shall consist of (a)
a non-qualified stock option described in Section 4.1 hereof; (b) to the extent
that the total compensation for the Services so rendered as finally determined
in accordance with Section 4.2 hereof exceeds the fair market value of such
stock option, cash payments (or, at the election of the Independent Contractor,
shares of the Corporation's Common Stock, $0.01 par value per share ("Common
Stock"), in lieu of cash payments, equal in value to such cash payments); and
(c) the reimbursement of actual and direct out-of-pocket expenses incurred by
the Independent Contractor in the rendering of Services under this Agreement.
4.1 The Corporation shall grant the Independent Contractor a non-qualified
stock option exercisable for up to 400,000 shares of Common Stock at a purchase
price equal to $1.15625 per share, which price per share is equal to the closing
price on the Effective Date of shares of Common Stock as reported by the NASDAQ
Stock Market, Inc. (the "Stock Option"). The Stock Option shall become fully
vested immediately following the termination of the Corporation's Shareholder
Rights Agreement dated as of May 1, 1995, as amended. The Stock Option shall
expire and no longer be exercisable after April 30, 2002. The Stock Option shall
be evidenced by a Non-Qualified Stock Option Agreement substantially in the form
of the form of option agreement attached as Schedule B hereto. The Corporation,
in consultation with such independent consultants as the Board of Directors of
the Corporation may deem appropriate, shall determine the fair market value of
the Stock Option as of the Effective Date and such determination shall be
binding on the Corporation and the Independent Contractor.
4.2 Within fifteen (15) days following the end of each calendar month
during the term of this Agreement, the Independent Contractor shall furnish the
Corporation with an invoice with respect to the month then ended, which, pending
the determination of the final compensation rate for Services as contemplated by
this Section 4.2, shall reflect the Independent Contractor's estimated base rate
for such Services. Each invoice for Services shall include or be preceded by an
election of whether the Independent Contractor wishes to receive its
compensation in the form of cash or shares of Common Stock. The Board of
Directors of the Corporation, in consultation with such independent consultants
as the Board or a committee thereof may deem appropriate and based upon the
advice of such consultants, shall reasonably determine in good faith the final
rate of compensation for the Services on a basis consistent with rates for such
Services prevailing in the market for comparable consulting services, and
whether the amounts of any invoices are consistent therewith. The determination
of the Board based upon such advice shall be binding on the Corporation and the
Independent Contractor. If the Independent Contractor elects to receive shares
of Common Stock in respect of Services in any month, then the number of shares
of Common Stock so issued shall be determined using the closing price of Common
Stock as reported by the NASDAQ Stock Market, Inc. on the fifteenth (15th) day
of the month following the month in which such Services were rendered.
4.3 To the extent, if any, that the total compensation for the Services
rendered as finally determined in accordance with Section 4.2 hereof may be less
than the value of the Stock Option and the amounts invoiced by the Independent
Contractor, the amounts payable in respect of such invoices shall be
appropriately reduced or the Services to be provided by the Independent
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Contractor shall be appropriately extended or expanded, or additional services
provided, or both, to adjust for any such excess as reasonably determined by the
Board. The fair market value of the Stock Option shall be the first compensation
applied towards the amounts owed the Independent Contractor for Services
rendered.
4.4. Subject to Section 15 hereof, the Corporation shall reimburse the
Independent Contractor, within thirty (30) days following receipt of
documentation that satisfies the Corporation's travel and expense reimbursement
policies, an amount in cash equal to the actual and direct cost of all
reasonable out-of-pocket expenses incurred by the Independent Contractor in the
rendering of Services under this Agreement. The Independent Contractor hereby
acknowledges that it has received in writing, read and understands the
Corporation's travel and expense reimbursement policies in effect as of the
Effective Date.
Section Five
Duration
The term of this Agreement shall be for a period of six (6) months
commencing on October 28, 1999, and ending on April 28, 2000 (the "Expiration
Date"). However, either party may terminate this Agreement at any time prior to
the Expiration Date upon thirty (30) days prior written notice to the other
party. The provisions of Sections 5, 11, 12, 13 and 14 hereof shall survive any
such expiration or early termination of this Agreement.
Section Six
Place of Work
It is understood that the Services shall be rendered primarily from the
Independent Contractor's offices in Xxxxxx-Xxxxx, Pennsylvania and Boca Raton,
Florida, but that any approved agent or employee of the Independent Contractor
shall, upon request of the Corporation, travel to the Corporation's executive
offices located at 00 X Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, or such other places as
may be designated by the Corporation.
Section Seven
Time Devoted To Work
In performing the Services, the hours that approved agents and employees
of the Independent Contractor work on any given day shall be entirely within the
Independent Contractor's control and the Corporation shall rely upon the
Independent Contractor to determine the number of hours as is reasonably
necessary to fulfill the spirit and purpose of this Agreement.
Section Eight
Status of Independent Contractor
The Independent Contractor and the Corporation acknowledge and agree that
the Independent Contractor shall perform the Services hereunder as an
"independent contractor" and not as agent or employee of the Corporation, and
nothing herein shall be construed to be inconsistent with this relationship or
status. The Independent Contractor, its agents and employees shall have no
express or implied authority to act for, represent, bind or obligate the
Corporation in any manner whatsoever. Accordingly, it is expressly understood
and agreed between the parties hereto that the Independent Contractor is solely
responsible for all labor and expenses in connection with the performance of
every obligation of the Independent Contractor
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hereunder. The Independent Contractor assumes the responsibility for furnishing
the Services hereunder and shall withhold and pay when due all employment taxes
required by federal, state and local laws, including, without limitation, all
social security and withholding taxes, and contributions for unemployment and
compensation funds. The Independent Contractor acknowledges and understands that
the Corporation will not maintain worker's compensation, health or liability
insurance on behalf of the Independent Contractor.
Section Nine
Materials and Equipment
Except as provided herein, the Independent Contractor shall furnish, at
its own expense, all materials and equipment necessary to carry out the terms of
this Agreement.
Section Ten
Work Standards
The Independent Contractor shall adhere to professional standards and
shall perform all Services required under this Agreement in a manner consistent
with generally accepted procedural standards.
Section Eleven
Copyrights and Patents
The Corporation shall own all copyrights and/or patents developed by the
Independent Contractor while performing the Services provided under this
Agreement. All improvements, discoveries, ideas, inventions, concepts, trade
names, trademarks, service marks, logos, processes, products, computer programs
or software, subroutines, source codes, object codes, algorithms, machines,
apparatuses, items of manufacture or composition of matter, or any new uses
therefore or improvements thereon, or any new designs or modifications or
configurations of any kind, or work of authorship of any kind, including without
limitation, compilations and derivative works, and techniques (whether or not
copyrightable or patentable) conceived, developed, reduced to practice or
otherwise made by the Independent Contractor, or any of the Independent
Contractor's agents or employees, and in any ways related to the rendering of
Services under this Agreement shall become property of the Corporation. The
Independent Contractor agrees to assign, and hereby does assign (and hereby
agrees to cause its agents and employees to assign), to the Corporation any and
all copyrights, patents and propriety rights in any such invention to the
Corporation, together with the right to file and/or own wholly without
restrictions applications for United States and foreign patents, trademark
registration and copyright registration and any patent, or trademark or
copyright registration issuing thereon.
Section Twelve
Privileged and Confidential Information
12.1 The Corporation and the Independent Contractor acknowledge that the
Corporation has acquired and developed, and will continue to acquire and
develop, information related to its business and its industry which is secret
and confidential in character and is and will continue to be of great and unique
value to the Corporation and its subsidiaries and affiliates. The term
"confidential information" as used in this Agreement shall mean all trade
secrets, propriety information and other data or information (and any tangible
evidence, record or representation thereof), whether prepared, conceived or
developed by an employee of the
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Corporation or received by the Corporation from an outside source (including the
Independent Contractor), which is in the possession of the Corporation, which is
maintained in confidence by the Corporation or any subsidiary or affiliate of
the Corporation or which might permit the Corporation or any subsidiary or
affiliate of the Corporation or any of their respective customers to obtain a
competitive advantage over competitors who do not have access to such trade
secrets, proprietary information, or other data or information, including,
without limitation, information concerning the Corporation's seasonal product
line plans, store and brand image and trade dress developments and strategies,
business plans, real estate leasing terms, conditions and plans, occupancy
costs, customers, suppliers, designs, advertising plans, marketing plans
merchandising plans, market studies and forecasts, competitive analyses, pricing
policies, employee lists, and the substance of agreements with landlords,
tenants, subtenants, customers, suppliers and others. The term "confidential
information" also includes information that the Corporation has in its
possession from third parties, that such third parties claim to be confidential
or proprietary, and which the Corporation has agreed to keep confidential.
However, the term "confidential information" as used in this Agreement shall not
include information that is generally known to the public or in the trade as a
result of having been disclosed by the Corporation in a press release or in a
filing by the Corporation with the U.S. Securities and Exchange Commission. The
Independent Contractor shall keep and maintain all confidential information in
complete secrecy, and shall not use for itself or others, or divulge to others,
any knowledge, data or other information relating to any matter which is
confidential information relating to the Corporation obtained by the Independent
Contractor as a result of its Services, unless authorized in writing by the
Corporation in advance of such use or disclosure. All written information made
available to the Independent Contractor by the Corporation, which concerns the
business activities of the Corporation, shall be the Corporation's property and
shall, if requested in writing by the Corporation, be delivered to it on the
termination or expiration of this Agreement.
12.2 The Independent Contractor acknowledges that money alone will not
adequately compensate the Corporation for breach of any confidentiality
agreement herein and, therefore, agrees that in the event of the breach or
threatened breach of such agreement, in addition to other rights and remedies
available to the Corporation, at law, in equity or otherwise, the Corporation
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms hereof, and such rights and remedies shall be
cumulative.
Section Thirteen
Indemnification
13.1 The Independent Contractor shall defend, indemnify and hold harmless
the Corporation (including, without limitation, the Corporation's successors,
assigns, subsidiaries, affiliates and contractors and their respective officers,
directors, employees, agents and other representatives) from and against all
liabilities, losses, claims, actions, damages, expenses (including but not
limited to attorneys' fees), suits and assessments (whether proven or not) based
upon or arising out of damage or injury (including death) to persons or property
caused by Independent Contractor in connection with the performance of Services,
or based upon any violation of any applicable statute, law, ordinance, code or
regulation. The Independent Contractor shall also defend, indemnify and hold
harmless the Corporation against all liability and loss in connection with, and
shall assume full responsibility for, payment of all federal, state, or local
income taxes imposed or required under applicable laws with respect to Services
performed and compensation paid the Independent Contractor under this Agreement.
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13.2 Notwithstanding anything contained in the preceding paragraph, the
Corporation shall defend, indemnify and hold harmless the Independent Contractor
(including, without limitation, the Independent Contractor's successors,
assigns, subsidiaries, affiliates and contractors and their respective officers,
directors, employees, agents and other representatives) from and against all
liabilities, losses, claims, actions, damages, expenses (including but not
limited to attorneys' fees), suits and assessments (whether proven or not) based
upon or arising out of damage or injury (including death) to persons or property
caused by the Corporation in connection with the Corporation's performance of
its obligations under this Agreement (including, but not limited to, claims
based upon the material supplied to the Independent Contractor by the
Corporation and utilized by the Independent Contractor in performing the
Services), or based upon any violation of any applicable statute, law,
ordinance, code or regulation.
Section Fourteen
Compliance with Laws
The parties agree that all obligations to be performed by the parties
under this Agreement shall be performed in compliance with all then applicable
federal, state and local laws and regulations.
Section Fifteen
Approvals
15.1 In addition to approvals required by other Sections of this
Agreement, the Independent Contractor shall seek to obtain the Corporation's
written approval in advance of all expenditures in excess of four thousand
dollars ($4,000.00) incurred in connection with the rendering of Services and
for which the Independent Contractor seeks reimbursement from the Corporation.
In addition, all estimates presented to the Corporation by the Independent
Contractor for the Corporation's consideration and/or approval shall be
carefully prepared and shall be based upon reasonable assumptions using the
Independent Contractor's best judgment.
15.2 All approvals by the Corporation must be in writing and shall be
sought from the President and Chief Executive Officer of the Corporation, or
such other person that the Board of Directors may designate in writing from time
to time. As of the date of this Agreement the President and Chief Executive
Officer of the Corporation is Xxxx X. Xxxxxxx. If the Corporation fails to
approve in writing any matter submitted for approval within fifteen (15) days
from the date of its submission, then the matter submitted for approval shall be
deemed to be disapproved.
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Section Sixteen
Notices
All notices and other communications required or permitted to be given
under this Agreement by one party to another shall be in writing and the same
shall be deemed effective when delivered (i) in person, (ii) by United States
certified or registered first class or priority mail, return receipt requested,
(iii) by nationally-recognized overnight delivery or courier service, or (iv) by
facsimile transmission (000-000-0000 for the Corporation, and 000-000-0000 for
the Independent Contractor), and addressed to the party's principal offices set
forth on page one of this Agreement, or at such other address or facsimile
telephone number as may be designated in writing by such party to the other in
accordance with the requirements of this Section 16.
Section Seventeen
Governing Law
The place of this Agreement, its status, or forum is at all times in the
County of Norfolk, Commonwealth of Massachusetts, in which County and
Commonwealth all matters, whether sounding in contract or in tort relating to
the validity, construction, interpretation, and enforcement of this Agreement,
shall be determined. This Agreement shall be construed and enforced according to
the laws of Massachusetts without regard to its principles of conflicts of laws.
Any action on the Agreement or arising out of its terms and conditions shall be
instituted and litigated in the courts of the Commonwealth of Massachusetts. In
accordance, the parties submit to the jurisdiction of the courts of the
Commonwealth of Massachusetts. The prevailing party in any such litigation shall
be entitled to recover its reasonable attorneys' fees in addition to any damages
that may result from a breach of this Agreement.
Section Eighteen
Miscellaneous
This Agreement may not be modified, amended, or waived, except by a
writing executed by both parties hereto. This Agreement, and all attached or
referenced schedules, exhibits and attachments, constitutes the full and entire
understanding and agreement between the two parties with regard to the subject
matter hereof and supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter. The section headings herein are
for convenience of reference only, are not part of this Agreement and shall have
no effect on the interpretation of this Agreement or the provisions hereof.
Neither this Agreement nor any interest therein, or claim thereunder, shall be
assigned or transferred by the Independent Contractor to any party or parties.
If any provision of this Agreement shall to any extent be invalid or
unenforceable, such invalid or unenforceable provision shall be reformed to the
extent required to make it valid and enforceable to the maximum extent possible
under law, and the remainder of this Agreement shall not be affected thereby,
with each provision hereof being valid and enforceable to the fullest extent
permitted by law. This Agreement shall be binding upon, and inure to the benefit
of, the parties and their respective successors and permitted assigns. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
Agreement.
IN WITNESS WHEREOF, the parties have signed, sealed and delivered this
Consulting Agreement in duplicate, each of which is deemed an original, as of
the Effective Date.
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ATTEST: DESIGNS, INC.
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx
(Signature)
Print Name: Xxxx X. Xxxxxxx
Print Title: President and Chief
Executive Officer
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx, Xx.
(Signature)
Print Name: Xxxxxxx X. Xxxxxx, Xx.
Print Title: Senior Vice President, Chief
Financial Officer and Treasurer
ATTEST: JEWELCOR MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Huffsmiths
(Signature)
Print Name: Xxxxxxx X. Huffsmiths
Print Title: Vice President/ General
Counsel
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SCHEDULE A
Consulting Agreement
Between
JEWELCOR MANAGEMENT, INC.
And
DESIGNS, INC.
Dated as of
October 28, 1999
SERVICES
The services to be performed by the Independent Contractor are to assist
in developing and assist in implementing a strategic operating plan, which
assistance shall include:
(a) assist in seeking to reduce operating expenses and overhead,
merchandising, budgeting, financing, real estate, insurance,
corporate development, and investor relations;
(b) assist in seeking to identify and hire certain management level
employees;
(c) assist in analysis and negotiation of business relationships;
(d) assist in analysis, drafting and negotiation of arrangements with
certain executive officers and others; and
(e) such other services as the Board of Directors may reasonably request
from time to time.
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SCHEDULE B
Form of Non-Qualified Stock Option
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DESIGNS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
400,000 October 28, 1999
------- ----------------
No. of Shares Date
Designs, Inc., a Delaware corporation (the "Company"), hereby grants to
Jewelcor Management, Inc., a Nevada corporation
--------------------------------------------------------------------------------
(the "Optionee"), an Option to purchase on or prior to April 28, 2002 (the
"Expiration Date") all or any part of 400,000 shares (the "Option Shares") of
the Company's Common Stock, $0.01 par value per share ("Common Stock"), at a
price of $1.15625 per share in accordance with the schedule set forth in Section
1 hereof. This Option shall be governed by the laws of The Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws.
1. Vesting Schedule. This Option shall become vested and exercisable with
respect to the following number of Option Shares according to the timetable set
forth below:
Cumulative
Percentage of Option Shares Percentage
Becoming Available for Exercise Available
------------------------------- ---------
Before November 11, 1999 0% 0%
On and after November 11, 1999 100% 100%
2. Manner of Exercise. The Optionee may exercise this Option only in the
following manner: from time to time on or prior to the Expiration Date of this
Option, the Optionee may give written notice to the Company of its election to
purchase some or all of the vested Option Shares purchasable at the time of such
notice. Said notice shall specify the number of shares to be purchased.
Payment of the purchase price for the Option Shares may be made by one or
more of the following methods: (1) in cash, by certified or bank check or other
instrument acceptable to the Board of Directors of the Company; or (2) in the
form of shares of Common Stock that are not then subject to any restrictions
(subject to the discretion of the Board of Directors of the Company); or (3) by
the Optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company to pay the option
purchase price; provided that in the event the Optionee chooses to pay the
option purchase price as so provided, the Optionee and the broker shall comply
with such procedures and enter into such agreements of indemnity and other
agreements as the Board of Directors of the Company shall prescribe, if any, as
a condition of such payment procedure. Payment instruments will be received
subject to collection.
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The delivery of certificates representing the Option Shares will be
contingent upon the Company's receipt from the Optionee of full payment
therefor, as set forth above, and any agreement, statement or other evidence as
the Company may require to satisfy to itself that the issuance of Option Shares
to be purchased pursuant to the exercise of Options and any subsequent resale of
the shares will be in compliance with applicable laws and regulations.
If requested upon the exercise of this Option, certificates for shares may
be issued in the name of the Optionee jointly with another person, and the
foregoing representations shall be modified accordingly.
Notwithstanding any other provision hereof, no portion of this Stock
Option shall be exercisable after the Expiration Date hereof.
3. Non-transferability of Option. This Option shall not be transferable by
the Optionee and shall be exercisable only by the Optionee, except, upon written
notice to the Company, the Optionee may transfer this Option to an entity wholly
owned by the Optionee.
4. Option Shares. The Option Shares are shares of the Common Stock of the
Company as constituted on the date of grant of this Option. In the event that
the Company effects a stock dividend, stock split or similar change in
capitalization affecting Common Stock, the Board of Directors of the Company
shall make appropriate adjustments in (i) the number of Option Shares remaining
subject to this Option, and (ii) the purchase price per share at which the
Optionee may purchase Option Shares hereunder. In the event of any merger,
consolidation, dissolution or liquidation of the Company, the Board of
Directors, in its sole discretion may make such substitution or adjustment in
the number of Option Shares purchasable pursuant to this Option and in the
purchase price per share at which the Optionee may purchase Option Shares
hereunder at it may determine and as may be permitted by the terms of such
transaction, or accelerate, amend or terminate this Option upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of the Option Shares hereunder, shall require payment or other
consideration which the Board of Directors deems equitable in the
circumstances).
5. No Special Rights. This Option will not confer upon the Optionee any
additional rights other than those described herein.
6. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares of Common Stock which may be purchased by
exercise of this Option unless and until a certificate or certificates
representing such shares are duly issued and delivered to the Optionee. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
7. Qualification under Section 422. It is understood and intended that the
Option granted hereunder shall not qualify as an "incentive stock option" as
defined in Section 422 of the Code.
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8. Miscellaneous. Notices hereunder shall be mailed or delivered to the
Company at its principal place of business and shall be mailed or delivered to
Optionee at the address set forth below or, in either case, at such other
address for a party as such party may subsequently furnish to the other party in
writing.
DESIGNS, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
(Signature)
Print Name: Xxxxxxx X. Xxxxxx, Xx.
Print Title: Senior VP & CFO
Receipt of the foregoing Option is acknowledged and its terms and
conditions are hereby agreed to:
JEWELCOR MANAGEMENT, INC.
Date: March 31, 2000 By: /s/ Xxxxxxx X. Huffsmiths
(Signature)
Print Name: Xxxxxxx X. Huffsmiths
Print Title: Vice President/General Counsel
000 Xxxxx Xxxxxx-Xxxxx Xxxxxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000
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