Exhibit 4.4
1997 STOCK OPTION PLAN
OF
THE QUIGLEY CORPORATION
(as amended on May 2001, July 2002 and June 2005)
1. PURPOSE OF THE PLAN.
This 1997 Stock Option Plan (the "Plan") is intended as an
incentive, to retain in the employ or as directors, of The Quigley Corporation
(the "Company") and any Subsidiary of the Company (within the meaning of Section
424(f) of the Internal Revenue Code of 1986, as amended (the "Code")), persons
of training, experience and ability, to attract new employees, and directors
whose services are considered valuable, to encourage the sense of proprietorship
and to stimulate the active interest of such persons in the development and
financial success of the Company and its Subsidiaries.
It is further intended that certain options granted pursuant to the
Plan shall constitute incentive stock options within the meaning of Section 422
of the Code ("Incentive Options") while certain other options granted pursuant
to the Plan shall be nonqualified stock options ("Nonqualified Options").
Incentive Options and the Nonqualified Options are hereinafter referred to
collectively as "Options."
The Company intends that the Plan meet the requirements of Rule
16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of
the Company pursuant to the Plan will be exempt from the operation of Section
16(b) of the Exchange Act. In all cases, the terms, provisions, conditions and
limitations of the Plan shall be construed and interpreted consistent with the
Company's intent as stated in this Section 1.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee initially consisting
of Mr. Guy J. Quigley, and Mr. Charles A. Phillips (the "Committee").
Replacements on the Committee shall be appointed by the Board of Directors of
the Company (the "Board"). The members of the Committee shall serve at the
pleasure of the Board. Notwithstanding the foregoing, with respect to any
Options granted to directors and "officers" (as such term is defined in Rule
16a-1 of the Securities and Exchange Commission ("Rule 16a-1"), if and as Rule
16b-3 is then in effect) of the Company, the Plan shall be administered by the
entire Board, unless the Committee at the time of grant, award or other
acquisition under the Plan of Options to any such person consists of two or more
directors of the Company that are "Non-Employee Directors" (as such term is
defined in Rule 16b-3 of the Securities and Exchange Commission ("Rule 16b-3"),
if and as Rule 16b-3 is then in effect).
The Committee, subject to Section 3 hereof, shall have full power
and authority to designate recipients of Options, to determine the terms and
conditions of respective Option agreements (which need not be identical) and to
interpret the provisions and supervise the administration of the Plan. Subject
to Section 7 hereof, the Committee shall have the authority, without limitation,
to designate which Options granted under the Plan shall be Incentive Options and
which shall be Nonqualified Options. To the extent any Option does not qualify
as an Incentive Option, it shall constitute a separate Nonqualified Option.
Subject to the provisions of the Plan, the Committee shall interpret
the Plan and all Options granted under the Plan shall make such rules as it
deems necessary for the proper administration of the Plan, make all other
determinations necessary or advisable for the administration of the Plan and
correct any defects or supply any omission or reconcile any inconsistency in the
Plan or in any Options granted under the Plan in the manner and to the extent
that the Committee deems desirable to carry the Plan or any Options into effect.
The act or determination of a majority of the Committee shall be deemed to be
the act or determination of the Committee and any decision reduced to writing
and signed by all of the members of the Committee shall be fully effective as if
it had been made by a majority at a meeting duly held. Subject to the provisions
of the Plan, any action taken or determination made by the Committee pursuant to
this and the other paragraphs of the Plan shall be conclusive on all parties.
In the event that for any reason the Committee is unable to act or
if the Committee at the time of any grant, award or other acquisition under the
Plan of Options or Stock as hereinafter defined does not consist of two or more
Non-Employee Directors, or if there shall be no such Committee, then the Plan
shall be administered by the Board and any such grant, award or other
acquisition may be approved or ratified in any other manner contemplated by
subparagraph (d) of Rule 16b-3.
Notwithstanding anything herein to the contrary, any options granted
to the Company's Chief Executive Officer or to any of the Company's other four
most highly compensation officers that are intended to qualify as
performance-based compensation under Section 162(m) of the Code may only be
granted by a Committee consisting of two or more directors of the Company that
are "Outside Directors" (as such term is defined in Section 162(m) of the Code).
3. DESIGNATION OF OPTIONEES.
The persons eligible for participation in the Plan as recipients of
Options ("Optionees") shall include full-time and part-time employees, officers
and directors of the Company or any Subsidiary; provided that Incentive Options
may only be granted to employees of the Company and the Subsidiaries. In
selecting Optionees, and in determining the number of shares to be covered by
each Option granted to Optionees, the Committee may consider the office or
position held by the Optionee, the Optionee's degree of responsibility for and
contribution to the growth and success of the Company or any Subsidiary, the
Optionee's length of service, promotions, potential and any other facts to which
the Committee may consider relevant. Subject to the next sentence, an employee
who has been granted an Option hereunder may be granted an additional Option or
Options, if the Committee shall so determine.
4. STOCK RESERVED FOR THE PLAN.
Subject to adjustment as provided in Section 7 hereof, a total of
four million five hundred thousand (4,500,000) shares of common stock, $.0005
par value ("Stock"), of the Company shall be subject to the Plan. The shares of
Stock subject to the Plan shall consist of unissued shares or previously issued
shares reacquired and held by the Company or any Subsidiary of the Company, and
such amount of shares of Stock shall be and is hereby reserved for such purpose.
Any of such shares of Stock which may remain unsold and which are not subject to
outstanding Options at the termination of the Plan shall cease to be reserved
for the purpose of the Plan, but until termination of the Plan the Company shall
at all times reserve a sufficient number of shares of Stock to meet the
requirements of the Plan. Should any Option expire or be canceled prior to its
exercise in full or should the number of shares of Stock to be delivered upon
the exercise in full of any Option be reduced for any reason, the shares of
Stock theretofore subject to such Option may again be subject to an Option under
the Plan.
Notwithstanding the foregoing, with respect to any options that are
intended to qualify as performance-based compensation under Section 162(m) of
the Code, the maximum number of shares of stock that may be subject to options
granted under the Plan to any individual in any calendar year shall not exceed
500,000, and the method of counting such shares shall conform to any
requirements applicable to performance-based compensation under Section 162(m)
of the Code.
5. TERMS AND CONDITIONS OF OPTIONS.
Options granted under the Plan shall be subject to the following
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) OPTION PRICE. The purchase price of each share of
Stock purchasable under an Option shall be determined by the
Committee at the time of grant but shall not be less than 100% of
the Fair Market Value (as defined below) of such share of Stock on
the date the Option is granted in the case of an Incentive Option
and not less than 100% of the fair market value of such share of
Stock on the date the Option is granted in the case of a
non-Incentive Option; PROVIDED, HOWEVER, that with respect to an
Incentive Option, in the case of an Optionee who, at the time such
Option is granted, owns (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all
classes of stock of the Company or of any Subsidiary, then the
purchase price per share of stock shall be at least 110% of the Fair
Market Value per share of Stock at the time of grant, provided,
however, that if an option granted to the Company's Chief Executive
Officer or to any of the Company's other four most highly
compensation officers is intended to qualify as performance-based
compensation under Section 162(m) of the Code, the exercise price of
such Option shall not be less than 100% of the Fair Market Value of
such share of Stock on the date the Option is granted. The purchase
price of each share of Stock purchasable under a Nonqualified Option
shall not be less than 100% of the Fair Market Value of such share
of Stock on the date the Option is granted. The exercise price for
each incentive stock option shall be subject to adjustment as
provided in Section 7 below. The fair market value ("Fair Market
Value") means (i) the closing price of publicly traded shares of
Stock on the national securities exchange on which shares of Stock
are listed (if the shares of Stock are so listed) or on the Nasdaq
National Market (if the shares of stock are regularly quoted on the
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Nasdaq National Market) on the grant date, or, (ii) if not so listed
or regularly quoted, the mean between the closing bid and asked
prices of publicly traded shares of Stock in the over-the-counter
market on the grant date, or, (iii) if such bid and asked prices
shall not be available, as reported by any nationally recognized
quotation service selected by the Company, or (iv) as determined by
the Committee in a manner consistent with the provisions of the
Code. Anything in this Section 5(a) to the contrary notwithstanding,
in no event shall the purchase price of a share of Stock be less
than the minimum price permitted under the rules and policies of the
securities exchange or automated quotation system on which the
shares of Stock are listed.
(b) OPTION TERM. The term of each Option shall be fixed
by the Committee, but no Option shall be exercisable more than ten
years after the date such Option is granted; provided, however, that
in the case of an Optionee who, at the time such Option is granted,
owns more than 10% of the total combined voting power of all classes
of stock of the Company or any Subsidiary, then such Incentive Stock
Option shall not be exercisable with respect to any of the shares
subject to such Incentive Stock Option later than the date which is
five years after the date of grant.
(c) EXERCISABILITY. Subject to paragraph (j) of this
Section 5, Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the
Committee at or after grant.
(d) METHOD OF EXERCISE. Options may be exercised in
whole or in part at any time during the option period, by giving
written notice to the Company specifying the number of shares to be
purchased, accompanied by payment in full of the purchase price, in
cash, by check or such other instrument as may be acceptable to the
Committee, including a cashless exercise. As determined by the
Committee, in its sole discretion, at or after grant, payment in
full or in part may also be made in the form of Stock owned by the
Optionee (based on the Fair Market Value of the Stock owned by the
Optionee (based on the Fair Market Value of the Stock on the trading
day before the Option is exercised); provided, however, that if such
Stock was issued pursuant to the exercise of an Incentive Option
under the Plan, the holding requirements for such Stock under the
Code shall first have been satisfied. An Optionee shall have the
rights to dividends or other rights of a shareholder with respect to
shares subject to the Option after the Optionee (i) has given
written notice of exercise and (ii) has paid in full for such shares
and becomes a shareholder of record.
(e) TRANSFERABILITY OF OPTIONS. No Option granted
hereunder shall be transferable otherwise than by (i) will, (ii) the
laws of descent and distribution or (iii) pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code or
Title 1 of the Employee Retirement Income Security Act of 1986, as
amended, or the rules and regulations promulgated thereunder;
provided however, that to the extent the option agreement provisions
do not disqualify such option for exemption under Rule 16b-3 under
the Act of 1934, as amended, Nonqualified Options may be
transferable during an Optionee's lifetime to immediate family
members of an optionee, partnerships in which the only partners are
members of the Optionee's immediate family, and trusts established
solely for the benefit of such immediate family members with the
prior written consent of the Committee.
(f) TERMINATION BY DEATH. Unless otherwise determined by
the Committee at grant, if any Optionee's employment with the
Company or any Subsidiary terminates by reason of death, the Option
may thereafter be immediately exercised, to the extent then
exercisable (or on such accelerated basis as the Committee shall
determine at or after grant), by the legal representative of the
estate or by the legatee or the Optionee under the will of the
Optionee, for a period of one year from the date of such death or
until the expiration of the stated term of such Option as provided
under the Plan, whichever period is shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless
otherwise determined by the Committee at grant, if any Optionee's
employment with the Company or any Subsidiary terminates by reason
of total and permanent disability as determined under the Company's
long term disability policy ("Disability"), any Option held by such
Optionee may thereafter be exercised, to the extent it was
exercisable at the time of termination due to Disability (or on such
accelerated basis as the Committee shall determine at or after
grant), but may not be exercised after one year from the date of
such termination of employment or the expiration of the stated term
of such Option, whichever period is shorter; provided, however,
that, if the Optionee dies within such one-year period, any
unexercised Option held by such Optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time of
death for a period of one year from the date of such death or for
the stated term of such Option, whichever period is shorter.
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(h) OTHER TERMINATION. Unless otherwise determined by
the Committee at grant, if any Optionee's employment with the
Company or any Subsidiary terminates for any reason other than
death, or disability, any Option held by such Optionee may
thereafter be exercised to the extent it was exercisable at the time
of such termination of employment (or on such accelerated basis as
the Committee shall determine at or after grant), but may not be
exercised after one year from the date of such termination of
employment or the expiration of the stated term of such Option,
whichever period is shorter. Notwithstanding the foregoing, if any
Optionee's employment with the Company or any Subsidiary terminates
for Cause, such Option may not be exercised on or after the date of
such termination of employment. "Cause" shall mean a felony
conviction or the failure of an Optionee to contest prosecution for
a felony or, an Optionee's material dishonesty, or material theft by
an Optionee from the Company or its Subsidiaries. The transfer of an
Optionee from the employ of the Company to a Subsidiary, or vice
versa, or from one Subsidiary to another, shall not be deemed to
constitute a termination of employment for purposes of the Plan.
(i) LIMIT ON VALUE OF INCENTIVE OPTION. The aggregate
Fair Market Value, determined as of the date the Option is granted,
of the Stock for which Incentive Options are exercisable for the
first time by any Optionee during any calendar year under the Plan
(and/or any other stock option plans of the Company or any
Subsidiary) shall not exceed $100,000.
(j) DISPOSITION OF INCENTIVE OPTION SHARES. The stock
option agreement evidencing any Incentive Options granted under this
Plan shall provide that if the Optionee makes a disposition, within
the meaning of Section 424(c) of the Code and regulations
promulgated thereunder, of any share or shares of Stock issued to
him pursuant to his exercise of an Incentive Option granted under
the Plan within the two-year period commencing on the day after the
date of the grant of such Incentive Option or within a one-year
period commencing on the day after the date of transfer of the share
or shares to him pursuant to the exercise of such Incentive option,
he shall, within ten days of such disposition, notify the Company
thereof and immediately deliver to the Company any amount of federal
income tax withholding required by law.
6. TERM OF PLAN.
No Option shall be granted pursuant to the Plan on or after December
2, 2007, but Options granted may extend beyond that date.
7. CAPITAL CHANGE OF THE COMPANY.
In the event of any merger, reorganization or consolidation of the
Company with one or more corporations as a result of which the Company is not
the surviving corporation, or upon a sale of substantially all of the property
or more than 80% of the then-outstanding shares of Stock of the Company to
another corporation, all Options granted under the Plan shall immediately vest.
In the event of a stock dividend or recapitalization, a change in corporate
structure affecting the Stock in a manner other than as set forth in the first
sentence of this Section 7 or in the event of a merger, reorganization or
consolidation where the Optionee has not held the Option for at last six months,
the Committee shall make an appropriate and equitable adjustment in the number
and kind of shares reserved for issuance under the Plan and in the number and
option price of shares subject to outstanding Options granted under the Plan, to
the end that after such event each Optionees's proportionate interest shall be
maintained as immediately before the occurrence of such event. The adjustments
described above will be made only to the extent consistent with continuted
qualification of the Option under Section 422 of the Code (in the case of
Incentive Options) or as provided in Section 162 (m) and 409A of the Code.
8. PROPORTIONATE ADJUSTMENTS.
If the outstanding shares of Stock are increased, decreased, changed
into or exchanged into a different number or kind of shares of Stock or
securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, an appropriate and proportionate adjustment shall be made
to the maximum number and kind of shares of Stock as to which Options may be
granted under this Plan. A corresponding adjustment changing the number or kind
of shares of Stock allocated to unexercised Options or portions thereof, which
shall have been granted prior to any such change, shall likewise be made. Any
such adjustment in the outstanding Options shall be made without change in the
purchase price applicable to the unexercised portion of the Option with a
corresponding adjustment in the exercise price of the shares of Stock covered by
the Option. Notwithstanding the foregoing, there shall be no adjustment for the
issuance of shares of Stock on conversion of notes, preferred stock or exercise
of warrants or shares of Stock issued by the Board for such consideration as the
Board deems appropriate. The adjustments described above will be made only to
the extent consistent with continuted qualification of the Option under Section
422 of the Code (in the case of Incentive Options) or as provided in Section 162
(m) and 409A of the Code.
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9. TAXES.
The Company may make such provisions as it may deem appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the withholding of any taxes or any other tax matters.
10. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on December 2, 1997 (the date that it
was approved by the Board), provided, however, that the Plan shall subsequently
be approved by majority vote of the Company's shareholders not later than
December 1, 1998.
11. AMENDMENT AND TERMINATION.
The Board may amend, suspend, or terminate the Plan, except that
no amendment shall be made which would impair the right of any Optionee under
any Option theretofore granted without his consent, and except that no amendment
shall be made which, without the approval of the shareholders, would:
(a) materially increase the number of shares which may be
issued under the Plan, except as is provided in Sections 7 and 8;
(b) materially increase the benefits accruing to the
Optionees under the Plan;
(c) materially modify the requirements as to eligibility for
participation in the Plan;
(d) decrease the exercise price of an Incentive Option to
less than 100% of the Fair Market Value on the date of grant thereof
or the exercise price of a Nonqualified option to less than 100% of
the Fair Market Value on the date of grant thereof; or
(e) extend the Option term provided for in Section 5(b).
The Committee may also substitute new Options for previously granted
Options, including options granted under other plans applicable to the
participant and previously granted Options having higher option prices, upon
such terms as the Committee may deem appropriate.
Except to the extent expressly required or permitted by the Plan, no
amendment of the Plan or an Option will, without the approval of the
stockholders of the Company, effectuate a change for which stockholder approval
is required in order for the Plan or Option to continue to qualify for the award
of incentive stock options under Section 422 of the Code or for the award of
performance-based compensation under Section 162(m) of the Code.
It is the intention of the Board that the Plan comply strictly with
the provisions of Section 409A of the Code and Treasury Regulations and other
Internal Revenue Service guidance promulgated thereunder (the "Section 409A
Rules") and the Committee shall exercise its discretion in granting Options
hereunder (and the terms of such Options) accordingly. The Plan and any grant of
an Option hereunder may be amended from time to time (without, in the case of an
Option, the consent of the Optionee) as may be necessary or appropriate to
comply with the Section 409A Rules.
12. GOVERNMENT REGULATIONS.
The Plan, and the granting and exercise of Options hereunder, and
the obligation of the Company to sell and deliver shares under such Options,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
13. GENERAL PROVISIONS.
(a) CERTIFICATES. All certificates for shares of Stock
delivered under the Plan shall be subject to such stock transfer
orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which
the Stock is then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to
be placed on any such certificates to make appropriate reference to
such restrictions.
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(b) EMPLOYMENT MATTERS. The adoption of the Plan shall not
confer upon any Optionee of the Company or any Subsidiary, any right
to continued employment (or, in case the Optionee is also a
director,
continued retention as a director) with the Company or a Subsidiary,
as the case may be, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any
of its employees at any time.
(c) LIMITATION OF LIABILITY. No member of the Board or the
Committee, or any officer or employee of the Company acting on
behalf of the Board or the Committee, shall be personally liable for
any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board of the
Committee and each and any officer or employee of the Company acting
on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such
action, determination or interpretation.
(d) REGISTRATION OF STOCK. Notwithstanding any other
provision in the Plan, no Option may be exercised unless and until
the Stock to be issued upon the exercise thereof has been registered
under the Securities Act and applicable state securities laws, or
are, in the opinion of counsel to the Company, exempt from such
registration. The Company shall not be under any obligation to
register under applicable federal or state securities laws any Stock
to be issued upon the exercise of any Option granted hereunder, or
to comply with an appropriate exemption from registration under such
laws in order to permit the exercise of an Option and the issuance
and sale of the Stock subject to such Option, however, the Company
may in its sole discretion register such Stock at such time as the
Company shall determine. If the Company chooses to comply with such
an exemption from registration, the Stock issued under the Plan may,
at the direction of the Committee, bear an a appropriate restrictive
legend restricting the transfer or pledge of the Stock represented
thereby, and the Committee may also give appropriate stop-transfer
instructions to the transfer agent to the Company.
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