SEL-LEB MARKETING, INC.
AGREEMENT RELATING TO STOCK OPTIONS
WHICH ARE NOT "INCENTIVE OPTIONS"
PURSUANT TO THE 1995 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
Option granted in North Bergen, New Jersey, as of , 199_
(hereinafter referred to as the "Date of Grant") by SEL-LEB MARKETING, INC. (the
"Corporation") to (the "Grantee"):
1. THE OPTION. The Corporation hereby grants to the Grantee, effective
on the Date of Grant, a stock option (the "Option") to purchase, on the terms
and conditions herein set forth, up to 5,000 fully paid, non-assessable shares
of the Corporation's Common Stock, par value $0.01 per share (the "Shares"), at
the option price set forth in Section 2 below.
The Option is granted pursuant to the Corporation's 1995 Nonemployee
Directors' Stock Option Plan, as amended (the "Plan"), a copy of which is
delivered herewith by the Corporation and receipt thereof is acknowledged by the
Grantee. The Option is subject in its entirety to all the applicable provisions
of the Plan which are incorporated herein by reference. The Option is not an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. THE PURCHASE PRICE. The purchase price of the Shares shall be $
per share (the "Option Price").
3. EXERCISE OF OPTION.
(a) Except as otherwise provided in the Plan and this Agreement, this
Option is exercisable over a period commencing on the date hereof and ending at
the close of business ten years from the Date of Grant (the "Expiration Date").
Subject to the terms hereof, this Option may be exercised from time to time
during such period as to the total number of Shares allowable under this Section
3(a), or any lesser amount thereof, but only during the continuation of the
Grantee's service as a director of the Corporation. In the event the Grantee
shall cease to be a director of the Corporation for any reason other than death
or disability, this Option shall terminate on the earlier to occur of (i) the
later of ninety (90) days after the date of termination of service or six months
and ten days after the Grantee's last purchase or sale of shares of Common Stock
prior to his termination of service as a director and (ii) the expiration date
of this Option. If the
Grantee shall die or become disabled within the meaning of Section 22(e)(3) of
the Code, while still serving as a director or prior to the termination of this
Option in accordance with the preceding sentence, this Option shall terminate on
the earlier of (i) the first anniversary of the Grantee's death or disability,
as the case may be, and (ii) the Expiration Date. In the event of the death of
the Grantee, this Option may be exercised by the person or persons entitled to
do so under the Grantee's will (a "legatee"), or, if the Grantee shall fail to
make testamentary disposition of this Option, or shall die intestate, by the
Grantee's legal representative (a "legal representative"). If this Option shall
extend to 100 or more Shares, then this Option may not be exercised for less
than 100 Shares at any one time, and if this Option shall extend to less than
100 Shares, then this Option must be exercised for all such Shares at one time.
(b) Not less than five days nor more than thirty days prior to the
date upon which all or any portion of this Option is to be exercised, the person
entitled to exercise this Option shall deliver to the Corporation written notice
(the "Notice") of his election to exercise all or a part of this Option, which
Notice shall specify the date for the exercise of this Option and the number of
Shares in respect of which this Option is to be exercised. The date specified
in the Notice shall be a business day of the Corporation.
(c) On the date specified in the Notice, the person entitled to
exercise this Option shall pay to the Corporation the Option Price of the Shares
in respect of which this Option is exercised and the minimum amount of any
Federal and state withholding tax and any employment tax. The Option Price
shall be paid in full at the time of purchase, in cash or by check or with
Common Stock of the Corporation which has been owned by the Grantee for at least
six months prior to the exercise of this Option, the value of which shall be
determined in the same manner as provided for determining the fair market value
of a share of Common Stock as set forth in Section 7(a) of the Plan. If this
Option is exercised in accordance with the provisions of the Plan and this
Agreement, the Corporation shall deliver to such person certificates
representing the number of Shares or other securities in respect of which this
Option is being exercised which Shares or other securities shall be registered
in his name.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) The Grantee represents and warrants that he is acquiring this
Option and, in the event this Option is exercised, the Shares, for investment,
for his own account and not with a view to the distribution thereof, and that he
has no present intention of disposing of this Option or the Shares or any
interest therein or sharing ownership thereof with any other person or entity.
-2-
(b) The Grantee agrees that he will not offer, sell, hypothecate,
transfer or otherwise dispose of any of the Shares unless either:
(i) A registration statement covering the Shares which are to be so
offered has been filed with the Securities and Exchange Commission pursuant
to the Securities Act of 1933 (the "Securities Act") and such sale,
transfer or other disposition is accompanied by a prospectus relating to a
registration statement which is in effect under the Securities Act covering
the Shares which are to be sold, transferred or otherwise disposed of and
meeting the requirements of Section 10 of the Securities Act; or
(ii) Counsel satisfactory to the Corporation renders a reasoned
opinion in writing and addressed to the Corporation, satisfactory in form
and substance to the Corporation and its counsel, that in the opinion of
such counsel such proposed sale, offer, transfer or other disposition of
the Shares is exempt from the provisions of Section 5 of the Securities Act
in view of the circumstances of such proposed offer, sale, transfer or
other disposition.
(c) The Grantee acknowledges that (i) the Shares and this Option
constitute "securities" under the Securities Act and/or the Securities Exchange
Act of 1934 and/or the Rules and Regulations promulgated under said acts; (ii)
the Shares must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available; and (iii)
the Corporation shall not be obligated to issue or deliver any shares upon
exercise of this Option if to do so would violate the Securities Act or any
state securities law and the Corporation shall have no obligation to file any
registration statement or take any other action required or permitted by any
such law.
(d) The certificate or certificates representing the Shares shall
have an appropriate legend referring to the terms of this Option.
(e) The Grantee is advised that he or his legatee or legal
representative, as the case may be and as defined above, may be required to make
an appropriate representation at the time of any exercise of this Option in form
and substance similar to the representations contained herein, relating to the
Shares then being purchased.
(f) The Grantee acknowledges that, in the event of termination of his
or her service as a director of the Corporation, his or her rights to exercise
this Option are restricted as set
-3-
forth in Section 3(a) above.
5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of any successor or assign of the Corporation and, to
the extent herein provided, shall be binding upon and inure to the benefit of
the Grantee's legatee or legal representative, as defined above.
6. ADJUSTMENT OF OPTIONS.
(a) The number of Shares issuable upon exercise of this Option, or
the amount and kind of other securities issuable in addition thereto or in lieu
thereof upon the occurrence of the events specified in Section 8 of the Plan,
and any changes to the Option Price or other terms contemplated thereby, shall
be determined and subject to adjustment, as the case may be, in accordance with
the procedures therein specified.
(b) Fractional shares resulting from any adjustment in options
pursuant to this Section may be settled in cash or otherwise as the Stock Option
and Compensation Committee shall determine. Notice of any adjustment in this
Option shall be given by the Corporation to the holder of this Option and such
adjustment (whether or not such notice is given) shall be effective and binding
for all purposes of the Plan.
7. EXERCISE AND TRANSFERABILITY OF OPTION. During the lifetime of the
Grantee, this Option is exercisable only by him and shall not be assignable or
transferable by him and no other person shall acquire any rights therein, except
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order. If the Grantee, while still serving as a director of
the Corporation, shall die within the Option Period, his or her legatee or legal
representative shall have the rights provided in Section 3(a) above.
If the foregoing is in accordance with the Grantee's understanding and
approved by him, he may so confirm by signing and returning the duplicate of
this Agreement delivered for that purpose.
SEL-LEB MARKETING, INC.
By
--------------------------
Title:
The foregoing is in accordance with my understanding and is hereby confirmed and
agreed to as of the Date of Grant.
---------------------------
-4-
