EXHIBIT 4(C)
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
NON-EMPLOYEE DIRECTORS' STOCK OPTION AGREEMENT
NON-EMPLOYEE DIRECTORS' STOCK OPTION AGREEMENT (the "Agreement") made
as of this ____ day of _________, ____, between Children's Discovery Centers of
America, Inc. (the "Company") and ____________, who is a non-employee director
of the Company (the "Participant").
W I T N E S S E T H:
WHEREAS, the Company desires, by affording the Participant an
opportunity to purchase shares of the Company's Common Stock, $0.01 par value
per share (the "Common Stock"), as hereinafter provided, to carry out the
purpose of the Company's Non-Employee Directors' Stock Option Plan (the "Plan"),
as the same may be amended and supplemented from time to time;
WHEREAS, the Plan provides for a grant of an option to purchase an
additional 3,500 shares of the Common Stock of the Company (the "Annual Option")
upon re-election as a non-employee director following each annual meeting of the
Company's Stockholders;
WHEREAS, the participant was re-elected as a non-employee director at
the annual meeting of stockholders held June 19, 1996;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto mutually
covenant and agree as follows:
1. GRANT OF ANNUAL OPTION. This option agreement memorializes the
annual option grant to the participant as provided in the Plan, and is hereby
granted an option to purchase 3,500 shares of the Common Stock on the terms and
conditions hereof, and subject to the Plan.
2. OPTION PRICE. The option price of the shares of Common Stock
issuable upon the exercise of each Option (the "Option Price") shall be $7.625
which is the closing sale price per share of the Company's Common Stock as
reported by the NASDAQ National Market System on June 19, 1996 (Grant Date).
3. VESTING OF OPTION. Options granted hereunder, shall not be
exercisable until they become vested. All Options shall vest in a Participant
as follows: (i) with respect to 30% of the shares subject to this Option, on
the date which is six months following the date of grant, (ii) with respect to
an additional 23-1/3% of the shares subject to such Option, on the first
anniversary of the date of grant, (iii) with respect to an additional 23-1/3% of
the shares subject to this Option, on the second anniversary of the date of
grant, and (iv) with respect to the final 23-1/3% of the shares subject to such
Option, on the third anniversary of the date of grant; PROVIDED, HOWEVER, that
the vesting of any portion of an Option on any particular date is conditioned on
the Participant having continuously served as a member of the Board of Directors
through such date. The number of shares as to which an Option may be exercised
shall be cumulative, so that once the Option shall become exercisable as to any
shares, it shall continue to be exercisable as to said shares until expiration
or termination of the Option as provided in this Agreement.
4. TERM AND EXERCISE OF OPTIONS. The term of the Options shall be
for a period of ten (10) years from each date of grant, subject to earlier
termination as provided in Paragraph 6 and 7 hereof and in no event shall the
Option be exercised after the expiration of such ten (10) year period. Except
to the extent necessary to govern outstanding Options issued, this Agreement
shall terminate on, and no additional Options shall be granted after June 18,
2006, unless earlier terminated by the Board of Directors in accordance with
Section 7.
Except as provided in Paragraph 6, the Options may not be exercised
unless, at the time the Options are exercised and at all times from the date
they are granted, the Participant shall then be and shall have been a
non-employee director of the Company.
5. NONTRANSFERABILITY. The Options shall not be transferable
otherwise than pursuant to a qualified domestic relations order or by will or
the laws of descent and distribution to the extent provided in Paragraph 6, and
the Options may be exercised, during the lifetime of the Participant, only by
him. Without limiting the generality of the foregoing, the Options may not be
assigned, transferred (except as provided above), pledged or hypothecated in any
way, shall not be assignable by operation of law, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Options contrary to the
provisions hereof and of the Plan shall be null and void and without effect,
and, upon the levy of any execution, attachment, or similar process upon the
Options, the Options shall hereupon be canceled and thereafter null and void.
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6. TERMINATION OF OPTION. In the event a Participant ceases to be a
member of the Board of Directors for any reason other than cause, any then
unexercised portion of Options granted to such Participant, to the extent not
vested on the date the Participant ceases to be a director (the "Termination
Date"), will immediately terminate and become void; any portion of an Option
which is vested on the Termination Date but has not yet been exercised may be
exercised, to the extent it is vested on the Termination Date, within one year
after the Termination Date. In the event of the Participant's death, the Option
may be exercised, if and to the extent that such deceased Participant was
entitled to exercise the Option at the time of death, by the person or persons
to whom the deceased Participant's rights pass by will or by the laws of descent
and distribution of the state of his or her domicile at the time of his or her
death. In the event that a Participant ceases to serve as a director for cause,
all Options theretofore granted to such Participant under this Agreement shall,
to the extent not theretofore exercised, terminate on the Termination Date,
whether or not any portion or all of such Option is vested.
7. TERMINATION AND AMENDMENT OF AGREEMENT. This Agreement may be
terminated or amended from time to time by vote of the Board of Directors;
PROVIDED, HOWEVER, that no such termination or amendment shall materially
adversely affect or impair any then outstanding Options without the consent of
the Participants, and PROVIDED FURTHER, that the provisions of this Agreement
specified in Rule 16b-3(c)(2)(ii)(A) of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (as in
effect on the effective date of the Plan) may not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act, or the rules thereunder. In
addition to approval by the Board of Directors of any amendment to this
Agreement, if the Board further determines on advice of counsel that it is
necessary or desirable to obtain stockholder approval of any amendment to this
Agreement in order to comply with Rule 16b-3 of the Exchange Act, or any
successor rule, as it shall read as of the time of amendment, or for any other
reason, then the effectiveness of any such amendment may be conditioned upon its
approval by stockholders of the Company in accordance with the applicable laws
of the state of incorporation of the Company, or such other stockholder approval
as may be specified by the Board.
8. COMPLIANCE WITH RULE 16B-3. It is the intention of the Company
that this Agreement comply in all respects with Rule 16b-3 promulgated under the
Exchange Act and that Participants remain disinterested persons ("Disinterested
Persons") for purposes of administering other employee benefit plans of the
Company and having such other plans be exempt from Section 16(b) of the Exchange
Act. Therefore, if any provision of this Agreement is later found not to be in
compliance with
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Rule 16b-3 or if any provision would disqualify Participants from remaining
Disinterested Persons, that provision shall be deemed null and void, and in all
events this Agreement shall be construed in favor of its meeting the
requirements of Rule 16b-3.
9. ADMINISTRATION. (a) The Plan shall be administered by the Board
of Directors. A majority of the members of the Board shall constitute a quorum.
All determinations of the Board shall be made by a majority of such quorum or by
a written consent signed by all members of the Board.
(b) Options shall be automatically granted to Participants in
accordance with Section 1 hereof and shall be issued upon the terms and
conditions set forth in this Agreement. Accordingly, the persons to whom
Options shall be granted, the number of shares subject thereto and the material
terms and conditions governing the Options will not be subject to the discretion
of the Board. However, if any questions of interpretation of this Agreement or
of any Options issued hereunder shall arise, they shall be determined by the
Board and such determination shall be final and binding upon all persons having
an interest in this Agreement.
10. LEGEND ON CERTIFICATES. All certificates representing shares of
Common Stock issued pursuant to the exercise of Options granted hereunder shall
bear the following legend:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in the absence
of (i) the effective registration statement for such securities under said
act or (ii) an opinion of company counsel that such registration is not
required."
11. ADJUSTMENT OF NUMBER OF SHARES. If a dividend or other
distribution shall be declared upon the Common Stock payable in shares of Common
Stock, the number of shares of Common Stock then subject to any Option granted
hereunder, and the number of shares reserved for issuance pursuant to this
Agreement but not yet covered by an Option, shall be adjusted by adding to each
of such shares the number of shares which would be distributable thereon if such
shares had been outstanding on the date fixed for determining the shareholders
entitled to receive such stock dividend or the shareholders entitled to receive
such stock dividend or distribution. If the outstanding shares of Common Stock
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or of another corporation, whether
through reorganization, reclassification, recapitalization, stock split-
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up, combination of shares, merger or consolidation, then there shall be
substituted for each share of Common Stock then subject to any such Option and
for each share of Common Stock reserved for issuance pursuant to this Agreement
but not yet covered by an Option, the number and kind of shares of stock or
other securities into which each outstanding share of Common Stock shall be so
changed or for which each such share shall be exchangeable; PROVIDED, HOWEVER,
that in the event that such change or exchange results from a merger or
consolidation, and in the judgment of the Board such substitution cannot be
effected or would be inappropriate, or if the Company shall sell all or
substantially all of its assets, the Company shall use reasonable efforts to
effect some other adjustment of each then outstanding Option which the Board, in
its sole discretion, shall deem equitable. In the event that there shall be any
change, other than as specified above in this Section 11, in the number or kind
of outstanding shares of Common Stock or of any stock or other securities into
which such shares of Common Stock shall have been changed or for which they
shall have been exchanged, then, if the Board shall determine that such change
equitably requires an adjustment in the number or kind of shares theretofore
reserved for issuance pursuant to this Agreement but not yet covered by an
Option and of the shares then subject to an Option or Options, such adjustment
shall be made by the Board and shall be effective and binding for all purposes
of this Agreement and of each stock option agreement applicable to Options
granted hereunder. In the case of any substitution or adjustment as provided
for in this Section 11, the aggregate option price in each stock option
agreement for all shares covered thereby prior to such substitution or
adjustment will be the aggregate option price for all shares of stock or other
securities (including any fraction) which shall have been substituted therefore
pursuant to this Section 11. No adjustment or substitution provided for in this
Section 11 shall require the Company, in any stock option agreement, to sell a
fractional share. Accordingly, any fraction of a share or other security which
results from any such adjustment or substitution shall be eliminated and not
carried forward to any subsequent adjustment or substitution.
12. METHOD OF EXERCISING OPTIONS. Subject to the terms and
conditions of this Agreement, the Option may be exercised by written notice to
the Company in accordance with this paragraph. Such notice shall state that the
Option is being exercised thereby and the number of shares of Common Stock in
respect of which it is being exercised. It shall be signed by the person or
persons so exercising the Option and shall be accompanied by payment (i) in full
either in cash or by check, (ii) by delivery (I.E., surrender) of shares of
Common Stock of the Company which have been owned by the Participant for at
least six months prior to the exercise of the Option with a Fair Market Value
(as defined above) at the time of the exercise of the Option equal to the
exercise price, or (iii) by a combination of (i) and (ii). In addition, to the
extent permitted by applicable law, the exercise price may be paid by one or
more brokerage
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firms pursuant to arrangements whereby such firm or firms, on behalf of a
Participant, shall pay to the Company the exercise price of the Option being
exercised, and the Company, pursuant to an irrevocable notice from the
Participant, shall deliver shares being purchased to such firm. The Company
shall issue, in the name of the person or persons exercising the Option and
deliver, a certificate or certificates representing such shares as soon as
practicable after the notice and payment shall be received.
In the event the Option shall be exercised by any person or persons
other than the Participant, pursuant to Section 6 hereof, such notice shall be
accompanied by appropriate proof, reasonably satisfactory to the Company, of the
right of such person or persons to exercise the Option.
The Participant shall have no rights of a stockholder with respect to
shares of Common Stock to be acquired by the exercise of the Option until the
issuance to him of a certificate or certificates representing said shares. All
shares of Common Stock purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable.
13. GENERAL. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Agreement, shall pay all
original issue taxes with respect to the issuance of shares of Common Stock
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith, and shall, from time to time, use its best
efforts to comply with all federal and state securities laws and regulations
which, in the opinion of counsel for the Company, shall be applicable thereto.
14. NOTICES. Each notice relating to this Agreement shall be in
writing and delivered in person, by overnight courier or by first class mail,
postage prepaid, to the proper address. Each notice shall be deemed to have
been given on the date it is received. Each notice to the Company shall be
addressed to it at its then principal office, currently
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxx, XX 00000
Each notice to the Participant or other person or persons then entitled to
exercise the Option shall be addressed to the Participant or such other person
or persons at the Participant's address set forth below:
_______________________
_______________________
_______________________
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Anyone to whom a notice may be given under this Agreement may designate a new
address by notice to that effect given in accordance with this Section 14.
15. INCORPORATION OF PLAN. Notwithstanding the terms and conditions
herein, this Agreement shall be subject to and governed by all the terms and
conditions of the Plan. A copy of the Plan, which is herein incorporated by
reference has been delivered to Participant who hereby acknowledges receipt
thereof. In the event of any discrepancy or inconsistency between the terms and
conditions of the Agreement and of the Plan, the terms and conditions of the
Plan shall control.
16. CONTINUANCE AS DIRECTOR. The granting of the Option is in
consideration of the Participant's continuing relationship with the Company as a
non-employee director; however, nothing in this Agreement shall confer upon the
Participant the right to continue as a director of the Company or any of its
subsidiaries.
17. ENFORCEABILITY. This Agreement shall be binding upon the
Participant, his estate, his personal representatives and beneficiaries and
shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officers thereunto duly authorized, and the Participant has
hereunto set his hand all as of the day and year first above written.
CHILDREN'S DISCOVERY CENTERS
OF AMERICA, INC.
By:_________________________
PARTICIPANT:
____________________________
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