-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KgfQofkjE0T8ux8MmiV6xDJRVa1MGbNtJQsyanOqNlgHZTQXZPPtZeMEUTI5yLdt V2q2UNNuK/KZ8TckOkiviQ== 0000950172-99-000411.txt : 19990413 0000950172-99-000411.hdr.sgml : 19990413 ACCESSION NUMBER: 0000950172-99-000411 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19990412 EFFECTIVENESS DATE: 19990412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REFAC TECHNOLOGY DEVELOPMENT CORP CENTRAL INDEX KEY: 0000082788 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 131681234 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-76085 FILM NUMBER: 99592008 BUSINESS ADDRESS: STREET 1: 122 EAST 42ND ST STE 4000 CITY: NEW YORK STATE: NY ZIP: 10168 BUSINESS PHONE: 2126874741 MAIL ADDRESS: STREET 2: 122 EAST 42ND ST STE 4000 CITY: NEW YORK STATE: NY ZIP: 10168 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCES & FACILITIES CORP DATE OF NAME CHANGE: 19740509 FORMER COMPANY: FORMER CONFORMED NAME: REFAC INC DATE OF NAME CHANGE: 19720628 S-8 1 S-8 As filed with the Securities and Exchange Commission on April 12, 1999 Registration No. 333- ============================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 REFAC TECHNOLOGY DEVELOPMENT CORPORATION (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 13-1681234 (I.R.S. Employer Identification No.) 122 East 42nd Street New York, New York 10168 (Address of Principal Executive Offices) (Zip Code) 1990 STOCK OPTION AND INCENTIVE PLAN OF REFAC TECHNOLOGY DEVELOPMENT CORPORATION, AS AMENDED, REFAC TECHNOLOGY DEVELOPMENT CORPORATION 1998 STOCK OPTION AND INCENTIVE PLAN -and- STOCK OPTION AGREEMENTS BETWEEN REFAC TECHNOLOGY DEVELOPMENT CORPORATION AND EACH OF NEIL R. AUSTRIAN, ROBIN L. FARKAS, MARK N. KAPLAN, HERBERT W. LEONARD, IRA T. WENDER, CAROL BREWER, CHRISTOPHER J. BROOKS, BERT D. HEINZELMAN, KARL D. KIRK III, PAUL LACOTTA, DONALD R. LAMOND, JOHN MOLDAUER, PAUL J. MULHAUSER, ARLENE SCANLAN, DAVID SCHIFF AND DOUGLAS M. SPRANGER (Full Title of the Plan) David A. Lang, Vice President 122 East 42nd Street New York, New York 10168 (Name and Address of Agent For Service) (212) 687-4741 (Telephone Number, Including Area Code, of Agent For Service) Copies to: Stephen M Banker, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, New York 10022 (212) 735-3000
CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------- Title Of Proposed Maximum Proposed Maximum Amount Of Securities To Amount To Be Offering Price Aggregate Offering Registration Be Registered Registered Per Share Price Fee - ------------------------------------------------------------------------------------------- Common Stock, par value $.10 per share 50,000 $5.87 $ 293,500.00 $ 81.59 10,000 6.37 63,700.00 17.71 72,000 6.87 494,640.00 137.51 5,000 7.62 38,100.00 10.59 50,000 8.00 400,000.00 111.20 25,000 8.75 218,750.00 60.81 100,000 9.25 925,000.00 257.15 65,000 9.50 617,500.00 171.66 50,000 10.00 500,000.00 139.00 2,500 10.25 25,625.00 7.12 17,000 12.00 204,000.00 56.71 144,500 6.21(1) 897,345.00 249.46 50,000 5.81(2) 290,500.00 80.76 138,750 9.50(2) 1,318,125.00 366.44 50,000 10.63(2) 531,500.00 147.76 ------------- --------- Total 829,750(3) $6,818,285.00 $1,895.48(4)
(1) Estimated pursuant to Rules 457(c) and (h)(1) under the Securities Act of 1933, as amended (the "Securities Act"), on the basis of the average of the high and low sale prices for a share of Common Stock on the American Stock Exchange on April 8, 1999. (2) Computed pursuant to Rule 457(h)(1) under the Securities Act. (3) Plus such additional number of shares of Common Stock as may be issuable pursuant to the antidilution provisions of the above-referenced plans. (4) The registration fee has been calculated pursuant to Section 6(b) of the Securities Act as follows: .000278 of $6,818,285.00, the Proposed Maximum Aggregate Offering Price of the shares registered hereby. PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS ITEM 1. PLAN INFORMATION* ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION* * Information required by Part I to be contained in the Section 10(a) Prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act and the Introductory Note to Part I of Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Securities and Exchange Commission (the "Commission") by the registrant, REFAC Technology Development Corporation, a Delaware corporation (the "Company"), pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by reference in this Registration Statement. (1) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. (2) The description of the common stock, par value $.01 per share, of the Company (the "Common Stock") contained in the Company's Registration Statement on Form 8-A, filed pursuant to Section 12(b) of the Exchange Act on January 27, 1994 (File No.1-12776), including any amendment or report filed for the purpose of updating such information. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES Not Applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Certain legal matters with respect to the offering of the shares of Common Stock registered hereby have been passed upon by Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden, Arps"). Mark N. Kaplan, a director and stockholder of the Company, is of counsel to Skadden, Arps. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145 also empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted under similar standards, except that no indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless, and only to the extent that, the Court of Chancery or the court in which such action was brought shall determine that despite the adjudication of liability such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 further provides that to the extent that a director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and that the corporation is empowered to purchase and maintain insurance on behalf of a director or officer of the corporation against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liabilities under Section 145. The Company's Restated Certificate of Incorporation, as amended (the "Charter"), provides that the Company shall indemnify its directors and officers to the fullest extent authorized or permitted by the DGCL, as the same exists or may hereafter be amended, and such right to indemnification shall continue as to a person who has ceased to be a director of officer of the Company and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except for proceedings to enforce rights to indemnification, the Company shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representative) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in the Charter shall include the right to be paid by the Company the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition. The Charter provides that the Company may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Company who are not directors or officers similar to those conferred in the Charter to directors and officers of the Corporation. As permitted under Section 102(b)(7) of the DGCL, the Company's Charter also provides that no director shall be personally liable to the Company or any of its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. The Company's Charter further provides that any repeal or modification of this provision by the stockholders of the Company shall not adversely affect any right or protection of a director of the Company existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification. The By-Laws of the Company provide that the Company shall, to the fullest extent permitted by the DGCL, indemnify members of the Board and may, if authorized by the Board, indemnify its officers and any and all persons whom it shall have power to indemnify against any and all expenses, liabilities or other matters. In addition, the Company maintains liability insurance coverage for directors and officers, including, without limitation, coverage applicable in certain situations where the Company cannot pursuant to the DGCL directly indemnify such directors and officers. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not Applicable ITEM 8. EXHIBITS The exhibits accompanying this Registration Statement are listed on the accompanying Exhibit Index. ITEM 9. REQUIRED UNDERTAKINGS. The undersigned registrant hereby undertakes: (a) RULE 415 OFFERING. (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represents a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act, (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) REQUEST FOR ACCELERATION OF EFFECTIVE DATE OR FILING OF REGISTRATION STATEMENT ON FORM S-8. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (c) UNDERTAKING: The Company hereby undertakes that it will submit or has submitted the plans described herein and any amendment thereto to the Internal Revenue Service ("IRS") in a timely manner and has made or will make all changes required by the IRS in order to qualify such plans in accordance with applicable law. SIGNATURES Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this 25th day of March, 1999. REFAC TECHNOLOGY DEVELOPMENT CORPORATION By: /s/ Robert L. Tuchman ---------------------------------- Robert L. Tuchman President, Chief Executive Officer and General Counsel POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Raymond A. Cardonne, Jr. his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Registration Statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. NAME TITLE DATE ---- ----- ---- /s/ Robert L. Tuchman - ------------------------- Chairman of the Board, March 25, 1999 Robert L. Tuchman President, Chief Executive Officer & General Counsel (Principal Executive Officer) /s/ Raymond A. Cardonne, Jr. - ------------------------ Vice President and Secretary March 25, 1999 Raymond A. Cardonne, Jr. /s/ Elliott s. Greller - ------------------------ Vice President, Chief March 25, 1999 Elliott S. Greller Financial Officer and Treasurer (Principal Financial Officer & Controller) /s/ Neil R. Austrian - ------------------------ Director March 25, 1999 Neil R. Austrian /s/ Robin L. Farkas - ------------------------ Director March 25, 1999 Robin L. Farkas /s/ Mark N. Kaplan - ------------------------ Director March 25, 1999 Mark N. Kaplan /s/ Herbert W. Leonard - ------------------------ Director March 25, 1999 Herbert W. Leonard /s/ Douglas M. Spranger - ------------------------ Director March 25, 1999 Douglas M. Spranger /s/ Ira T. Wender - ------------------------ Director March 25, 1999 Ira T. Wender EXHIBIT INDEX Exhibit No. Description of Exhibit Page No. - ----------- ---------------------- -------- 4.1 Restated Certificate of Incorporation of the Company (filed as Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1988 and incorporated herein by reference). 4.2 Certificate of Amendment of the Restated Certificate of Incorporation of the Company (filed as Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1988 and incorporated herein by reference). -- 4.3 By-Laws of the Company (filed as Exhibit 3 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference). -- 5(a) Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the legality of the securities being registered. 13 5(b) Undertaking of the Company (included as Section (c) in Item 9 above). -- 23.1 Consent of Grant Thornton LLP relating to the audited financial statements of the Company. 15 23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in their opinion filed as Exhibit 5(a)). -- 25 Power of Attorney (included on the signature page of this Registration Statement). -- 99.1 1990 Stock Option and Incentive Plan (filed as an exhibit to the Company's Proxy Statement for its Annual Meeting of Shareholders held on May 16, 1990 and incorporated herein by reference). -- 99.2 Form of Stock Option Agreement relating to options granted under the 1990 Stock Option and Incentive Plan. 16 99.3 1998 Stock Option and Incentive Plan (filed as an exhibit to the Company's Proxy Statement for its Annual Meeting of Stockholders held on May 11, 1998 and incorporated herein by reference). -- 99.4 Form of Stock Option Agreement relating to incentive stock options granted under the 1998 Stock Option and Incentive Plan. 22 99.5 Form of Stock Option Agreement relating to nonqualified stock options granted under the 1998 Stock Option and Incentive Plan. 29 99.6 Form of Stock Option Agreement between the Company and each of Neil R. Austrian, Robin L. Farkas, Mark N. Kaplan, Herbert W. Leonard and Ira T. Wender, each dated as of February 7, 1996. 36 99.7 Form of Stock Option Agreement between the Company and each of Carol Brewer, Christopher J. Brooks, Bert D. Heinzelman, Karl D. Kirk III, Paul Lacotta, Don R. Lamond, John Moldauer, Paul J. Mulhauser, David Schiff and Douglas M. Spranger, each dated as of November 25, 1997 and amended as of March 18, 1998. 41 99.8 Form of Stock Option Agreement between the Company and Arlene Scanlan dated as of January 21, 1998. 48 EX-5 2 EXHIBIT 5 - OPINION LETTER Exhibit 5 April 12, 1999 Board of Directors REFAC Technology Development Corporation 122 East 42nd Street New York, New York 10168 Re: Registration Statement on Form S-8 Ladies and Gentlemen: We have acted as special counsel to REFAC Technology Development Corporation, a Delaware corporation (the "Company"), in connection with the preparation of a registration statement on Form S-8 (the "Registration Statement"), relating to the issuance and sale of up to 829,750 shares (the "Shares") of the common stock of the Company, par value $0.10 per share (the "Common Stock"). The Shares consist of 591,000 shares of Common Stock which have been reserved for issuance upon exercise of stock options (the "Stock Option Plans Shares") that have been or may be granted under the Company's 1990 Stock Option and Incentive Plan, as amended (the "1990 Plan"), and 1998 Stock Option and Incentive Plan (the "1998 Plan" and, together, with the 1990 Plan, the "Stock Option Plans") and 238,750 shares of Common Stock which have been reserved for issuance upon exercise of outstanding stock options granted other than under the Stock Option Plans pursuant to separate stock option agreements (the "Other Option Shares" and, collectively, with the Stock Option Plans Shares, the "Option Shares"). This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933 (the "Act"). We have examined originals or copies, certified or otherwise identi fied to our satisfaction, of (i) the Registration Statement on Form S-8 to be filed with the Securities and Exchange Commission (the "Commission") relating to the Option Shares, (ii) the Stock Option Plans, (iii) a specimen certificate evidencing the Common Stock, (iv) the Restated Certificate of Incorporation of the Company, as amended and as presently in effect, (v) the By-Laws of the Company, as presently in effect, (vi) certain resolutions of the Board of Directors of the Company relating to, among other things, the Stock Option Plans and the Other Option Shares (collec tively, the "Board Resolutions"), (vii) the stock option agreements relating to the Option Shares (the "Stock Option Agreements) and (viii) such other documents as we have deemed necessary or appropriate as a basis for the opinion set forth below. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submit ted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. In making our examination of documents executed by parties other than the Company, we have assumed that such parties had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and the validity and binding effect thereof on such parties. As to any facts material to the opinions expressed herein which we did not independently establish or verify, we have relied upon certificates, statements or representations of officers of the Company and public officials. In rendering the opinion set forth below, we have assumed that (i) the certificates representing the Option Shares will be manually signed by one of the authorized officers of the transfer agent for the Common Stock and registered by such transfer agent and will conform to the specimen thereof examined by us, and (ii) prior to the issuance of any Option Shares, the Company and the relevant optionee will have duly entered into Stock Option Agreements in accordance with the Stock Option Plans and the Board Resolutions. Members of our firm are admitted to the Bar of the State of Dela ware, and we do not express any opinion as to the laws of any other jurisdiction. Based upon and subject to the foregoing, we are of the opinion that the Option Shares have been duly and validly authorized for issuance and, when delivered and paid for in accordance with the terms of the Stock Option Agree ments, will be validly issued, fully paid and nonassessable. Mark N. Kaplan is a director, stockholder and optionholder of the Company. We hereby consent to the filing of this opinion with the Commission as Exhibit 5 to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules or regulations of the Commission thereunder. Very truly yours, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP EX-23 3 EXHIBIT 23.1 - CONSENT Exhibit 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We have issued our report dated February 18, 1999 accompanying the consolidated financial statements of Refac Technology Development Corporation, appearing in the 1998 Annual Report on Form 10-K for the year ended December 31, 1998 which is incorporated by reference in this Registration Statement. We consent to the incorporation by reference in the Registration Statement of the aforementioned report. GRANT THORNTON LLP New York, New York April 7, 1999 EX-99 4 EXHIBIT 99.2 - STOCK OPTION AGREEMENT Exhibit 99.2 ------------ 1990 STOCK OPTION AND INCENTIVE PLAN OF REFAC TECHNOLOGY DEVELOPMENT CORPORATION STOCK OPTION AGREEMENT This STOCK OPTION AGREEMENT (the "Agreement") is between REFAC TECHNOLOGY DEVELOPMENT CORPORATION, a Delaware corporation (the "Employer"), and the employee whose name appears on the Schedule attached to this Agreement (the "Grantee"), under the 1990 Stock Option and Incentive Plan of the Employer (the "Plan"). Because of exceptional services provided by the Grantee to the Employer, and/or in order to provide an incentive to the Grantee to exert his utmost efforts on behalf of the Employer, the Grantee has been awarded one or more Options on the terms and conditions set forth in the Plan, the Agreement and the Schedule. Terms which are defined in the Plan will have the meanings set forth therein and the following terms will have the following meanings when used in this Agreement: "Expiration Date" is the earliest of (1) the last date on which any Options can be exercised as set forth in the Schedule, (2) 90 days after the date of termination of the Grantee other than for cause or by reason of death, disability or retirement, (3) one year after the death, disability or retirement of the Grantee, (4) the date of termination for any other reason or (5) the date 10 years after the date of grant. "Schedule" means the schedule attached to the end of this Agreement listing information about the Options being granted to the Grantee. Section 1. Options. To the extent indicated in the Schedule, the Grantee is hereby granted one or more Options to purchase shares of Common Stock, par value of $0.10, of the Employer. Section 2. Exercise of Rights. 2.1 Times when Common Stock can be Purchased. Subject to the provisions of the Plan and except as noted on the Schedule, Options will become exercisable immediately on the date of grant. 2.2 Notice. If the holder of an Option wishes to exercise any of the holder's rights, the holder must give notice of exercise to the Employer at the Employer's principal office. The holder must give the notice in writing in form satisfactory to the Committee. The holder must include with the notice full payment for any Common Stock being purchased under any Option (unless, in accordance with the Plan, the Committee shall have provided otherwise), and any taxes due under Section 2.3 hereof. 2.3 Payment. 2.3.1 Payment of the Option Price for any Common Stock being purchased under an Option must be made in cash, by certified or bank check or by delivering to the Employer stock of the Employer which the Grantee already owns. If the Grantee pays by delivering stock of the Employer, the holder must include with the notice of exercise the certificates for the stock duly endorsed for transfer. The Employer will value the stock delivered by the Grantee at its Fair Market Value on the date of receipt as set forth in the Plan and, if the value of the stock delivered by the Grantee exceeds the amount required under this Section 2.3.1, will return to the Grantee cash in an amount equal to the value, so determined, of any fractional portion of a share of stock exceeding the amount required and will issue a certificate for any whole share of stock exceeding the amount required. 2.3.2 The holder cannot buy any Common Stock under an Option unless, at the time the holder gives notice of exercise to the Employer, the holder includes with such notice payment in cash or by certified or bank check of all local, state or federal withholding taxes due, if any, on account of buying Common Stock under the Option or gives other assurance to the Employer satisfactory to the Committee of the payment of those withholding taxes. 2.4 Transfer. 2.4.1 The Employer shall deliver certificates for Common Stock bought under an Option as soon as practicable after receiving payment for the Common Stock and for any taxes under Section 2.3 hereof, and all documents required under the Plan and the Agreement. The certificates will be made out in the name of the holder and shall be legended as follows: "The shares represented by this certificate have not been registered under the Securities Act of 1933 and may not be sold, transferred, pledged, hypothecated or offered for sale in the absence of an effective registration statement relating to such shares under such Act or a written opinion of counsel to REFAC Technology Development Corporation that such registration is not required." 2.4.2 If the Plan or any law, regulation or interpretation requires the Employer to take any action regarding the Common Stock, before the Employer issues certificates for the Common Stock being purchased, the Employer may delay delivering the certificates for the Common Stock for the period necessary to take that action. Section 3. Termination. In the event that the employment of a Grantee shall terminate (other than for cause or by reason of death, disability or retirement), all Options then outstanding (and not earlier terminated in accordance with their terms), may be exercised by such Grantee within ninety (90) days after the date of such termination. If a Grantee dies (a) while employed by the Company or a subsidiary thereof or (b) within ninety (90) days after the date of such Grantee's termination (other than for cause), or, if the Grantee's employment is terminated by reason of disability or retirement, all Options then outstanding (and not earlier terminated in accordance with their terms), may be exercised by such Grantee (or his legal representative) within one year after the date of death, disability or retirement. In the case of the termination of a Grantee for any other reason no Common Stock may be purchased by or on behalf of the holder under any Option. Section 4. Cancellation of Rights and Limited Rights. Pursuant to the provisions of the Plan, upon the exercise of a Right or Limited Right granted in tandem with an Option, the Related SAR Option or Related LSAR Option shall cease to be exercisable to the extent of the shares of Common Stock with respect to which such Right or Limited Right is exercised. Upon the exercise or termination of a Related SAR Option or Related LSAR Option, the Right or Limited Right with respect to such Related SAR Option or Related LSAR Option shall terminate to the extent of the shares of Common Stock with respect to which the Related SAR Option or Related LSAR Option was exercised or terminated. Section 5. Governing Provisions. The Agreement is made under and subject to the provisions of the Plan, and all of the provisions of the Plan are also provisions of the Agreement. If there is a difference or conflict between the provisions of the Agreement and the provisions of the Plan, the provisions of the Plan will govern. By signing the Agreement, the Grantee confirms that he has received a copy of the Plan. 5.1 Entire Agreement. This Agreement, the Plan and the Schedule contain all of the understandings between the Employer and Grantee concerning all Options granted under the Plan, and includes all earlier negotiations and understandings. The Employer and Grantee have made no promises, agreements, conditions or understandings, either orally or in writing, that are not included in the Agreement, the Plan or the Schedule. 5.2 Employment. By establishing the Plan, granting rights under the Plan and entering into the Agreement, the Employer does not give Grantee any right to continue to be employed by the Employer or to be entitled to any remuneration or benefits not set forth in the Agreement, the Plan or the Schedule. None of the provisions of the Agreement, the Plan or the Schedule will interfere with or limit the right of the Employer to end Grantee's employment at any time. 5.3 Captions. The captions and section numbers appearing in the Agreement are inserted only as a matter of convenience. They do not define, limit, construe or describe the scope or intent of the provisions of the Agreement. 5.4 Counterparts. The Agreement may be executed in counterparts, each of which when signed by the Employer and Grantee will be deemed an original and all of which together will be deemed the same Agreement. 5.5 Notice. Any notice or communication having to do with the Agreement must be given by personal delivery or by certified mail, return receipt requested, addressed, if to the Employer or the Committee, to the principal office of the Employer and, if to Grantee, to Grantee's last known address on the personnel records of the Employer. 5.6 Amendment. The Agreement may be amended by the Employer as provided by the Plan. However, unless Grantee consents, the Employer cannot amend the Agreement if the amendment will materially change or impair the holder's rights under the Agreement and such change is not to the holder's benefit. 5.7 Succession and Transfer. Each and all of the provisions of the Agreement are binding upon and inure to the benefit of the Employer and Grantee and their heirs, successors and assigns. However, the holder may not sell, give, transfer, encumber or assign, or use as collateral, any of the holder's rights under the Agreement or the Plan. 5.8 Governing Law. The Agreement shall be governed and construed exclusively in accordance with the law of the State of New York applicable to agreements to be performed in the State of New York to the extent it may apply. The Employer and Grantee have caused Agreement to be signed and delivered as of the date set forth on the Schedule. REFAC TECHNOLOGY DEVELOPMENT CORPORATION By:____________________________________ Robert L. Tuchman, President & CEO Read and Agreed to: By:________________ 1990 STOCK OPTION AND INCENTIVE PLAN OF REFAC TECHNOLOGY DEVELOPMENT CORPORATION STOCK OPTION AGREEMENT SCHEDULE Identification: 1. Name of Grantee: ______________________________ 2. Address of Grantee: ______________________________ ______________________________ 3, Social Security Number of Grantee: ______________________________ 4. Date of Option Agreement: ______________________________ Terms of Grant. 1. INCENTIVE STOCK OPTIONS a. Dates of grant ______________________________ b. Number of shares granted ______________________________ c. Option prices ______________________________ d. Expiration dates ______________________________ e. Times at which options ______________________________ become exercisable EX-99 5 EXHIBIT 99.4 - INCENTIVE STOCK OPTION AGREEMENT Exhibit 99.4 ------------ REFAC TECHNOLOGY DEVELOPMENT CORPORATION 1998 STOCK OPTION AND INCENTIVE PLAN INCENTIVE STOCK OPTION AGREEMENT INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") entered into as of _______, _____, pursuant to the REFAC Technology Development Corporation 1998 Stock Option and Incentive Plan (the "Plan"), by and between REFAC TECHNOLOGY DEVELOPMENT CORPORATION, a Delaware corporation ("REFAC"), and _____________ (the "Optionee"). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. WHEREAS, REFAC desires, by affording the Optionee an opportunity to purchase shares of its Stock as hereinafter provided and subject to the terms and conditions hereof, to carry out the purpose of the Plan; NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed and do hereby agree as follows: 1. Number of Shares. REFAC hereby grants to the Optionee an option (the "Option") to purchase an aggregate of [ ] shares of Stock, subject to adjustment as provided in Section 2 hereof, on the terms and conditions herein set forth. The Option is intended to be an "incentive stock option" within the meaning of Section 422 of the Code. 2. Adjustments. In the event that the Board shall determine that any dividend or other distribution (whether in the form of cash, Stock or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of the Optionee hereunder, then the Board shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares of Stock which may thereafter be issued in connection with the Option, (ii) the number and kind of shares of Stock issued or issuable in respect of the Option, and (iii) the Exercise Price (as defined below) of the Option. 3. Option Price. The purchase price of the Stock subject to the Option shall be $____ per share, subject to adjustment as provided in Section 2 hereof.(1) 4. Term and Exercisability of Option. (a) Unless the Option is previously cancelled pursuant to this Agreement, the Option Term shall commence on the date hereof (the "Date of Grant") and terminate on the tenth anniversary of the Date of Grant.(2) Upon the termination of the Option, all rights of the Optionee hereunder shall cease. --------------------------- 1 Option Price must be no less than 110% of fair market value on date of grant if ISO is granted to an employee owning more than 10% of REFAC's voting securities. 2 Term must be no longer than 5 years if ISO is granted to an employee owning more than 10% of REFAC's voting securities. (b) Exercisability of Option. [TO COME] 5. Payment. Upon the exercise of all or any portion of the Option, the exercise price of the shares being purchased (the "Exercise Price") shall be paid in full either (a) in cash or by check, (b) by tendering previously acquired shares of Stock having an aggregate fair market value at the time of exercise equal to the total Exercise Price, (c) by a combination of (a) and (b), or (d) through a broker cashless exercise procedure, if such procedure has been established by the Company at the time of exercise. 6. Termination of Employment. (a) Except as provided in this Section 6, the Option may not be exercised after the Optionee has ceased to be employed by the Company. (b) If the Optionee's employment with the Company is terminated by the Company for "Cause" (as defined below), the Option shall be cancelled as of the date of such termination. For purposes of this Agreement, "Cause" shall mean the occurrence of any of the following, as reasonably determined by the Company: (i) the willful and continued failure, in the reasonable judgment of the Board, by the Optionee to perform substantially his duties with the Company (other than any such failure resulting from his death or Disability) after a written demand for substantial performance is delivered to the Optionee by the Board which specifically identifies the manner in which it is believed that the Optionee has not substantially performed his duties; (ii) the willful engaging by the Optionee in conduct which in the reasonable opinion of the Board is materially and demonstrably injurious to the Company or any of its parents, subsidiaries or affiliates; or (iii) the conviction of the Optionee (or the entering by the Optionee of a plea of guilty or nolo contendere) for any felony or any lesser crime which involved the Company or its property, or any of the Company's parents, subsidiaries or affiliates or any such entity's property. Notwithstanding the foregoing, the Optionee will not be deemed to have been terminated for Cause within the meaning of clause (i) or (ii) without (x) reasonable notice to the Optionee setting forth the reasons for the Company's intention to terminate for Cause, (y) an opportunity for the Optionee, together with his counsel, to be heard before the Board, and (z) delivery to the Optionee of a notice of termination from the Board finding that, in the good faith opinion of the Board, clause (i) or (ii) hereof may be invoked, and specifying the particulars thereof in detail. (c) If the Optionee's employment with the Company is terminated for any reason other than for Cause, the Optionee (or his beneficiary or representative, as applicable) shall have the right to exercise the Option, to the extent exercisable as of the date of such termination of employment (i) in the case of a termination of employment because of the Optionee's death or Disability (as defined below), for a period of one (1) year following the date of such termination, and (ii) in the case of any other termination of employment other than for Cause or as provided in clause (i), for a period of thirty (30) days following the date of such termination. For purposes of this Agreement, "Disability" shall be deemed the reason for such termination if, as a result of the Optionee's incapacity due to physical or mental illness, the Optionee shall have been absent from the full-time performance of the Optionee's duties with the Company for a period of one hundred twenty (120) consecutive days during the Term, or a period or periods aggregating more than one hundred twenty (120) days in any six (6) consecutive month period during the Term. The Optionee agrees to submit to such medical examinations as may be necessary to determine whether a Disability exists, pursuant to reasonable requests which may be made by the Company from time to time. (d) Notwithstanding anything to the contrary in this Section 6, the Option shall not be exercisable later than the date of its termination as set forth in Section 4(a) hereof. (e) For purposes of this Section 6, the transfer of employment of an Optionee between the Company and any one of its subsidiaries (or between subsidiaries) shall not be deemed a termination of employment. 7. Rights of Optionee. (a) The Optionee shall have none of the rights of a stockholder with respect to the shares covered by the Option until the shares are issued or transferred to such Optionee upon exercise of the Option. (b) The Option shall not interfere with or limit in any way the right of the Company to terminate any Optionee's employment at any time, nor confer upon any Optionee any right to continue in the employ of the Company or any subsidiary. 8. Nontransferability of Option. The Option shall not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and shall be exercisable during the Optionee's lifetime only by the Optionee. 9. Notification. (a) The Option shall be exercised by written notification of exercise substantially in the form of Exhibit A hereto and delivered to the Secretary of REFAC in accordance with subsection (b) of this Section 9. Such notification shall specify the number of shares of Stock to be purchased and the manner in which payment is to be made. (b) Any notification required or permitted hereunder shall be addressed to REFAC, to the attention of the Secretary, 122 East 42nd Street, New York, New York 10168 or to the Optionee at the address set forth below, as the case may be, and deposited, postage prepaid, in the United States mail; provided, however, that a notification of exercise pursuant to subsection (a) of this Section 9 shall be effective only upon receipt by the Secretary of REFAC of such notification and all necessary documentation, including full payment for the shares. Either party may, by notification to the other given in the manner aforesaid, change the address for future notices. 10. Tax Withholding. (a) If the Optionee fails to comply with the requirements of Section 422(a) of the Code (as from time to time redesignated or amended), subsection (a)(1) of which currently requires that any shares of Stock acquired upon exercise of the Option not be disposed of within two (2) years of the Date of Grant and one (1) year from the date on which such shares are acquired, Optionee understands that the tax treatment otherwise applicable to the Option shall not be available. (b) The Company shall have the power and the right to require an Optionee to remit to the Company an amount sufficient to satisfy any Federal, state, local, employment and other taxes required by law to be withheld as a result of any taxable event arising in connection with the Option (including, but not limited to, a disqualifying disposition within the meaning of sections 421 and 422 of the Code) in accordance with the terms of the Plan. (c) The Optionee agrees to notify the Company in writing immediately after the Optionee makes a disqualifying disposition (within the meaning of sections 421 and 422 of the Code) of any Stock acquired pursuant to the exercise of the Option. 11. Conditions to Issuance. The Option and exercise of the Option, and the other obligations of the Company under the Plan and the Option shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. REFAC, in its discretion, may postpone the issuance or delivery of Stock under the Option as REFAC may consider appropriate and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules and regulations. 12. Potential Change in Control. Notwithstanding any other provision of this Agreement, upon the occurrence of a Potential Change in Control, the Option, to the extent outstanding at the time of such Potential Change in Control, shall become immediately exercisable in full. 13. Incorporation of Plan; Governing Law; Interpretation. (a) The Plan is hereby incorporated by reference and made a part hereof, and the Option and this Agreement are subject to all terms and conditions of the Plan. To the extent that any provision in this Agreement is inconsistent with the Plan, the provisions of the Plan shall control. (b) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. (c) The Board shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its determination and decisions shall be final, conclusive and binding upon the Optionee and his legal representative in respect of any questions arising under the Plan or this Agreement. 14. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of the Company, its successors and assigns, and the Optionee and his personal representatives and assigns. (b) The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. 15. Amendment. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer thereunder duly authorized and the Optionee has hereunto set his hand, all as of the day and year set forth above. REFAC TECHNOLOGY DEVELOPMENT CORPORATION By ________________________________ Name: Title: ACCEPTED: ________________________ Optionee Date ________________________ ________________________ Address EX-99 6 EXHIBIT 99.5 - NON-QUALIFIED STOCK OPTION AGREEMENT Exhibit 99.5 ------------ REFAC TECHNOLOGY DEVELOPMENT CORPORATION 1998 STOCK OPTION AND INCENTIVE PLAN NONQUALIFIED STOCK OPTION AGREEMENT NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") entered into as of _______, _____, pursuant to the REFAC Technology Development Corporation 1998 Stock Option and Incentive Plan (the "Plan"), by and between REFAC TECHNOLOGY DEVELOPMENT CORPORATION, a Delaware corporation, ("REFAC")and _____________ (the "Optionee"). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. WHEREAS, REFAC desires, by affording the Optionee an opportunity to purchase shares of its Stock as hereinafter provided and subject to the terms and conditions hereof, to carry out the purpose of the Plan; NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed and do hereby agree as follows: 1. Number of Shares. REFAC hereby grants to the Optionee an option (the "Option") to purchase an aggregate of [ ] shares of Stock, subject to adjustment as provided in Section 2 hereof, on the terms and conditions herein set forth. 2. Adjustments. In the event that the Board shall determine that any dividend or other distribution (whether in the form of cash, Stock or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of the Optionee hereunder, then the Committee shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares of Stock which may thereafter be issued in connection with the Option, (ii) the number and kind of shares of Stock issued or issuable in respect of the Option, and (iii) the Exercise Price (as defined below) of the Option. 3. Option Price. The purchase price of the Stock subject to the Option shall be $____ per share, subject to adjustment as provided in Section 2 hereof. 4. Term and Exercisability of Option. (a) Unless the Option is previously cancelled pursuant to this Agreement, the Option Term shall commence on the date hereof (the "Date of Grant") and terminate on the tenth anniversary of the Date of Grant. Upon the termination of the Option, all rights of the Optionee hereunder shall cease. (b) Exercisability of Option. [TO COME] 5. Payment. Upon the exercise of all or any portion of the Option, the exercise price of the shares being purchased (the "Exercise Price") shall be paid in full either (a) in cash or by check, (b) by tendering previously acquired shares of Stock having an aggregate fair market value at the time of exercise equal to the total Exercise Price, (c) by a combination of (a) and (b), or (d) through a broker cashless exercise procedure, if such procedure has been established by the Company at the time of exercise. 6. Termination of Employment. (a) Except as provided in this Section 6, the Option may not be exercised after the Optionee has ceased to be employed by the Company. (b) If the Optionee's employment with the Company is terminated by the Company for "Cause" (as defined below), the Option shall be cancelled as of the date of such termination. For purposes of this Agreement, "Cause" shall mean the occurrence of any of the following, as reasonably determined by the Company: (i) the willful and continued failure, in the reasonable judgment of the Board, by the Optionee to perform substantially his duties with the Company (other than any such failure resulting from his death or Disability) after a written demand for substantial performance is delivered to the Optionee by the Board which specifically identifies the manner in which it is believed that the Optionee has not substantially performed his duties; (ii) the willful engaging by the Optionee in conduct which in the reasonable opinion of the Board is materially and demonstrably injurious to the Company or any of its parents, subsidiaries or affiliates; or (iii) the conviction of the Optionee (or the entering by the Optionee of a plea of guilty or nolo contendere) for any felony or any lesser crime which involved the Company or its property, or any of the Company's parents, subsidiaries or affiliates or any such entity's property. Notwithstanding the foregoing, the Optionee will not be deemed to have been terminated for Cause within the meaning of clause (i) or (ii) without (x) reasonable notice to the Optionee setting forth the reasons for the Company's intention to terminate for Cause, (y) an opportunity for the Optionee, together with his counsel, to be heard before the Board, and (z) delivery to the Optionee of a notice of termination from the Board finding that, in the good faith opinion of the Board, clause (i) or (ii) hereof may be invoked, and specifying the particulars thereof in detail. (c) If the Optionee's employment with the Company is terminated for any reason other than for Cause, the Optionee (or his beneficiary or representative, as applicable) shall have the right to exercise the Option, to the extent exercisable as of the date of such termination of employment (i) in the case of a termination of employment because of the Optionee's death or Disability (as defined below), for a period of one (1) year following the date of such termination, and (ii) in the case of any other termination of employment other than for Cause or as provided in clause (i), for a period of thirty (30) days following the date of such termination. For purposes of this Agreement, "Disability" shall be deemed the reason for such termination if, as a result of the Optionee's incapacity due to physical or mental illness, the Optionee shall have been absent from the full-time performance of the Optionee's duties with the Company for a period of one hundred twenty (120) consecutive days during the Term, or a period or periods aggregating more than one hundred twenty (120) days in any six (6) consecutive month period during the Term. The Optionee agrees to submit to such medical examinations as may be necessary to determine whether a Disability exists, pursuant to reasonable requests which may be made by the Company from time to time. (d) Notwithstanding anything to the contrary in this Section 6, the Option shall not be exercisable later than the date of its termination as set forth in Section 4(a) hereof. (e) For purposes of this Section 6, the transfer of employment of an Optionee between the Company and any one of its subsidiaries (or between subsidiaries) shall not be deemed a termination of employment. 7. Rights of Optionee. (a) The Optionee shall have none of the rights of a stockholder with respect to the shares covered by the Option until the shares are issued or transferred to such Optionee upon exercise of the Option. (b) The Option shall not interfere with or limit in any way the right of the Company to terminate any Optionee's employment at any time, nor confer upon any Optionee any right to continue in the employ of the Company or any subsidiary. 8. Nontransferability of Option. The Option shall not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than (a) by will or by the laws of descent and distribution, (b) through a gratuitous transfer by the Optionee to a member of his immediate family or to a trust for the benefit of any such immediate family member or members or (c) if then permitted by Rule 16b-3 under the Exchange Act, pursuant to a Qualified Domestic Relations Order (as defined under the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended). 9. Notification. (a) The Option shall be exercised by written notification of exercise substantially in the form of Exhibit A hereto and delivered to the Secretary of REFAC in accordance with subsection (b) of this Section 9. Such notification shall specify the number of shares of Stock to be purchased and the manner in which payment is to be made. (b) Any notification required or permitted hereunder shall be addressed to REFAC, to the attention of the Secretary, 122 East 42nd Street, New York, New York 10168 or to the Optionee at the address set forth below, as the case may be, and deposited, postage prepaid, in the United States mail; provided, however, that a notification of exercise pursuant to subsection (a) of this Section 9 shall be effective only upon receipt by the Secretary of REFAC of such notification and all necessary documentation, including full payment for the shares. Either party may, by notification to the other given in the manner aforesaid, change the address for future notices. 10. Tax Withholding. The Company shall have the power and the right to require an Optionee to remit to the Company an amount sufficient to satisfy any Federal, state, local, employment and other taxes required by law to be withheld as a result of any taxable event arising in connection with the Option, in accordance with the terms of the Plan. The Optionee may satisfy such withholding obligation by any of the following methods, or by a combination of such methods: (a) tendering a cash payment; (b) authorizing the Company to withhold from the shares of Stock otherwise payable to the Optionee one or more of such shares having an aggregate Fair Market Value, determined as of the date the withholding tax obligation arises, less than or equal to the amount of the total withholding tax obligation; or (c) delivering to the Company previously acquired shares of Stock (none of which shares may be subject to any claim, lien, security interest, community property right or other right of spouses or present or former family members, pledge, option, voting agreement or other restriction or encumbrance of any nature whatsoever) having an aggregate Fair Market Value, determined as of the date the withholding tax obligation arises, less than or equal to the amount of the total withholding tax obligation. 11. Conditions to Issuance. The Option and exercise of the Option, and the other obligations of the Company under the Plan and the Option shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. REFAC, in its discretion, may postpone the issuance or delivery of Stock under the Option as REFAC may consider appropriate and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules and regulations. 12. Potential Change in Control. Notwithstanding any other provision of this Agreement, upon the occurrence of a Potential Change in Control, the Option, to the extent outstanding at the time of such Potential Change in Control, shall become immediately exercisable in full. 13. Incorporation of Plan; Governing Law; Interpretation. (a) The Plan is hereby incorporated by reference and made a part hereof, and the Option and this Agreement are subject to all terms and conditions of the Plan. To the extent that any provision in this Agreement is inconsistent with the Plan, the provisions of the Plan shall control. (b) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. (c) The Board shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its determination and decisions shall be final, conclusive and binding upon the Optionee and his legal representative in respect of any questions arising under the Plan or this Agreement. 14. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of the Company, its successors and assigns, and the Optionee and his personal representatives and assigns. (b) The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. 15. Amendment. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer and the Optionee has hereunto set his hand, all as of the day and year set forth above. REFAC TECHNOLOGY DEVELOPMENT CORPORATION By _____________________________ Name: Title: ACCEPTED: _________________________ Optionee Date _________________________ _________________________ Address EX-99 7 EXHIBIT 99.6 - STOCK OPTION AGREEMENT Exhibit 99.6 ------------ STOCK OPTION AGREEMENT This STOCK OPTION AGREEMENT (the "Agreement") is between REFAC TECHNOLOGY DEVELOPMENT CORPORATION, a Delaware corporation ("REFAC"), and the Grantee whose name appears on the Schedule attached to this Agreement (the "Grantee"). Because of exceptional services provided as a Director of REFAC by the Grantee, the Grantee has been granted an option on the terms and conditions set forth in this Agreement and the Schedule. Terms which are defined in the Stock Purchase Agreement will have the meanings set forth therein and the following terms will have the following meanings when used in this Agreement: "Expiration Date" is the earliest of (1) the last date on which any Options can be exercised as set forth in the Schedule, (2) the date 5 years after the date of grant. "Schedule" means the schedule attached to the end of this Agreement listing information about the Options being granted to the Grantee. Section 1. OPTIONS. To the extent indicated in the Schedule, the Grantee is hereby granted an option to purchase shares of Common Stock, par value of $0. 10, of REFAC (an 'Option'), at a price per share equal to the Option Price set forth on the attached schedule. Section 2. EXERCISE OF RIGHTS. 2.1 TIMES WHEN COMMON STOCK CAN HE PURCHASED. Except as noted on the Schedule, Options will become exercisable immediately on the date of grant. 2.2 NOTICE. If the holder of an Option wishes to exercise any of the holder's rights, the holder must give notice of exercise to REFAC at REFAC's principal office. The holder must give the notice in writing in form satisfactory to the REFAC. The holder must include with the notice full payment for any Common Stock being purchased under any Option (unless, REFAC shall have provided otherwise), and a fully executed Stock Purchase Agreement in the form attached hereto. 2.3 PAYMENT. 2.3.1. Payment of the Option Price for any Common Stock being purchased under an Option must be made in cash, by certified or bank check or by delivering to REFAC stock of REFAC which the Grantee already owns. If the Grantee pays by delivering stock of REFAC, the holder must include with the notice of exercise the certificates for the stock duly endorsed for transfer. REFAC will value the stock delivered by the Grantee at its fair market value on the date of receipt and, if the value of the stock delivered by the Grantee exceeds the amount required under this Section 2.3.1., will return to the Grantee cash in an amount equal to the value, so determined, of any fractional portion of a share of stock exceeding the amount required and will issue a certificate for any whole share of stock exceeding the amount required. 2.3.2. The holder cannot buy any Common Stock under an Option unless, at the time the holder gives notice of exercise to REFAC, the holder includes with such notice payment in cash or by certified or bank check of all local, state or federal withholding taxes due, if any, on account of buying Common Stock under the Option or gives other assurance to REFAC of the payment of those withholding taxes. 2.4 TRANSFER. REFAC shall deliver certificates for Common Stock bought under an Option as soon as practicable after receiving payment for the Common Stock and for any taxes under Section 2.3, and all documents required under the Stock Purchase Agreement and the Agreement. The certificates will be made out in the name of the holder and shall be legended as set forth in the Stock Purchase Agreement. If any law, regulation or interpretation requires REFAC to take any action regarding the Common Stock, before REFAC issues certificates for the Common Stock being purchased, REFAC may delay delivering the certificates for the Common Stock for the period necessary to take that action. Section 3. TERMINATION. In the event that the services of Grantee shall terminate (other than for reason of death), all Options then outstanding (and not earlier terminated in accordance with their terms), may be exercised by such Grantee within ninety (90) days after the date of such termination. If Grantee dies while a Director of REFAC, all Options then outstanding (and not earlier terminated in accordance with their terms), may be exercised by the heirs, distributees, or legal representatives of the Grantee within one year after the date of death. Section 4. GOVERNING PROVISIONS. The Agreement is subject to the Stock Purchase Agreement and all of the provisions of the Stock Purchase Agreement are also provisions of this Agreement. If there is a difference or conflict between the provisions of the Agreement and/or the provisions of the Stock Purchase Agreement, the provisions of the Stock Purchase Agreement will govern as to the limitations on the resale of Common Stock purchased. By signing the Agreement, the Grantee confirms that he has received a copy of the Stock Purchase Agreement attached to this Agreement. Section 5. MISCELLANEOUS. 5.1 ENTIRE AGREEMENT. This Agreement and the Stock Purchase Agreement contain all of the understandings between REFAC and Grantee concerning all Options granted, and includes all earlier negotiations and understandings. REFAC and Grantee have made no promises, agreements, conditions or understandings, either orally or in writing, that are not included in the Agreement, the Stock Purchase Agreement. 5.2 TERM OF SERVICES. By entering into this Agreement, REFAC does not give Grantee any right to continue to be a Director of REFAC or to be entitled to any remuneration or benefits not set forth in the Agreement or the Stock Purchase Agreement. None of the provisions of this Agreement or the Stock Purchase Agreement will interfere with or limit the right of REFAC to end Grantee's services at any time. 5.3 CAPTIONS. The captions and section numbers appearing in the Agreement are inserted only as a matter of convenience. They do not define, limit, construe or describe the scope or intent of the provisions of the Agreement. 5.4 COUNTERPARTS. This Agreement may be executed in counterparts, each of which when signed by REFAC and Grantee will be deemed an original and all of which together will be deemed the same Agreement. 5.5 NOTICE. Any notice or communication having to do with this Agreement must be given by personal delivery or by certified mail, return receipt requested, addressed, if to REFAC, at the principal office of REFAC and, if to Grantee, to Grantee's last known address on the personnel records of REFAC. 5.6 SUCCESSION AND TRANSFER. Options are not transferable other than by will or by the laws of descent and distribution, and Options may be exercised during the lifetime of the Grantee only by the Grantee. In the event of the Grantee's death, Options may be exercised by heirs, distributees or legal representatives of the Grantee, but only with respect to such number of shares which could have been acquired by the Grantee at the time of the Grantee's death. 5.7 GOVERNING LAW. The Agreement shall be governed and construed exclusively in accordance with the law of the State of New York applicable to agreements to be performed in the State of New York to the extent it may apply. REFAC and Grantee have caused Agreement to be signed and delivered as of the date set forth on the Schedule. REFAC TECHNOLOGY DEVELOPMENT CORPORATION By:______________________________________ _______________________________________ Title _______________________________________ (Grantee) REFAC TECHNOLOGY DEVELOPMENT CORPORATION STOCK OPTION AGREEMENT SCHEDULE IDENTIFICATION. 1. Name of Grantee: * 2. Address of Grantee: 3. Social Security Number of Grantee: 4. Date of Option Agreement: February 7, 1996 TERMS OF GRANT. 1. Stock Options. a. Number of Common Stock: 10,000 (1) Incentive Stock Option: --------- (2) Nonincentive Stock Option: 10,000 ---------- b. Fair Market Value per share as of date of grant: $ 5.81 ----------- c. Option Price: (1) Incentive Stock Option: $ ------------ (2) Nonincentive Stock Option: $ 5.81 ------------ d. Date of grant: (1) Incentive Stock Option: (2) Nonincentive Stock Option: February 7, 1996 e. Expiration Date: (1) Incentive Stock Option: (2) Nonincentive Stock Option: February 7, 2001 f. Time(s) at which Options become(s) exercisable: 2,000 Immediately and 2,000 per year commencing on the first anniversary ----------------- * Same schedule provided for each of Neil R. Austrian, Robin L. Farkas, Mark N. Kaplan, Herbert W. Leonard and Ira T. Wender. EX-99 8 EXHIBIT 99.7 - FORM OF STOCK OPTION Exhibit 99.7 ------------ FORM OF STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT, entered into as of November 25, 1997 and amended on March 18, 1998, between REFAC Technology Development Corporation, a Delaware Corporation ("REFAC"), and ___________(1) (the "Optionee"), an employee of Human Factors Industrial Design, Inc. ("HFID"). WHEREAS, REFAC and HFID have entered into that certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of November 25, 1997, by and among REFAC, HFID Acquisition Corporation ("New HFID"), HFID and the Principal Stockholders (as defined in the Merger Agreement) of HFID, pursuant to which New HFID will be merged with and into HFID (the "Merger"), and, as a result of which Merger, HFID shall operate as a subsidiary of REFAC; WHEREAS, in connection with the Merger, the Optionee has entered into that certain Employment Agreement, dated as of November 25, 1997 (the "Employment Agreement"), pursuant to which the Optionee is entitled to receive the stock option evidenced hereby; WHEREAS, the Board of Directors of REFAC has determined that it is in its and its stockholders' best interests to grant to the Optionee an option to purchase shares of REFAC's common stock, par value $.10 per share ("Stock") in the amount and on the terms and conditions set forth herein; and WHEREAS, the Board of Directors of REFAC has determined that it is in its and its stockholders' best interests that the Option granted hereby shall not be subject to the terms and provisions of REFAC's 1990 Stock Option and Incentive Plan. NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed and do hereby agree as follows: Section 1. GRANT OF OPTION. The Optionee is hereby granted an option (the "Option") to purchase an aggregate of ______1 shares of Stock, subject to adjustment as provided in Section 3 hereof, on the terms and conditions herein set forth. - ------------- (1) Same agreement entered into with Paul J. Mulhauser, Christopher I. Brooks, Karl D. Kirk III, Bert D. Heinzelman, Douglas M. Spranger, Donald R. Lamond, Carol Brewer, John Moldauer, Paul Lacotta and Dave Schiff for 30,000, 7,500, 7,500, 30,000, 45,000, 3,750, 3,750, 3,750, 3,750 and 3,750 shares of common stock, respectively. Section 2. EXERCISE PRICE. The exercise price per share of the Stock subject to the Option shall be equal to $9.50. Section 3. EFFECT OF CERTAIN CHANGES. If there is any change in the Stock through the declaration of extraordinary dividends, stock dividends, recapitalization, stock splits, or combinations or exchanges of such shares, or other similar transactions, the number of shares of Stock subject to the Option and the exercise price per share of the Option shall be proportionately adjusted by the committee (the "Committee") established by the Board of Directors of REFAC to administer REFAC's executive incentive programs to reflect such change in the issued shares of Stock. Section 4. TERM AND EXERCISABILITY OF OPTION. (a) Term of Option. Unless the Option is previously cancelled pursuant to this Agreement, the term of the Option and of this Agreement shall commence March 18, 1998 (the "Date of Grant") and terminate on the tenth anniversary of the Date of Grant (such tenth anniversary, the "Expiration Date"). Upon the termination of the Option, all rights of the Optionee hereunder shall cease. (b) Exercisability of Option. The Option shall be exercisable as to twenty percent (20%) of the aggregate number of shares covered hereby on the Date of Grant. Subject to Section 7 hereof, the Option will become exercisable as to sixteen percent (16%) of the aggregate number of shares of Stock covered hereby on each of the first five (5) anniversaries of the Date of Grant. Subject to Section 7 hereof, the right of the Optionee to purchase shares with respect to which this Option has become exercisable as herein provided may be exercised in whole or in part at any time or from time to time, prior to the tenth anniversary of the Date of Grant. Section 5. PAYMENT OF PURCHASE PRICE; WITHHOLDING TAXES. (a) Payment of Purchase Price. Payment of the exercise price for any shares of Stock being purchased hereunder (the "Purchase Price") must be made in cash, by certified or bank check or by delivering to REFAC previously acquired shares of Stock (none of which shares may be subject to any claim, lien, security interest, community property right or other right of spouses or present or former family members, pledge, option, voting agreement or other restriction or encumbrance of any natures whatsoever). If the Optionee pays by delivering shares of Stock, the Optionee must include with the notice of exercise the certificates for such shares, duly endorsed for transfer. REFAC will value the shares of Stock delivered by the Optionee at their Fair Market Value (as defined below) on the date of receipt and, if the value of such shares exceeds the Purchase Price, will return to the Optionee cash in an amount equal to the value, so determined, of any fractional portion of a share of Stock exceeding the Purchase Price and will issue a certificate for any whole shares of Stock exceeding the Purchase Price. (b) Withholding Taxes. At the time the Optionee gives notice of exercise of the Option, the Optionee shall include with such notice payment in cash or by certified or bank check in an amount equal to all Federal, state, local, employment or other withholding taxes due, if any, at the time of exercise of the Option or shall give other assurance to REFAC satisfactory to the Committee of the payment of such withholding taxes. (c) Fair Market Value. For purposes of this Agreement, the "Fair Market Value" of the Stock as of a particular date shall be (i) the closing sales price of the Stock on a national securities exchange for the last preceding date on which there was a sale of such Stock on such exchange, or (ii) if the Stock is then traded on an over-the-counter market, the average of the closing bid and asked prices for the Stock in such over-the-counter market for the last preceding date on which there was a sale of such Stock in such market, or (iii) if the Stock is not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee in its discretion may determine. Section 6. TRANSFER OF SHARES. (a) REFAC shall deliver certificates for the shares of Stock purchased hereunder as soon as practicable after receiving the payments required under Section 5 hereof and all other documents as may be required by law or the terms hereof. (b) The sale and delivery of any shares purchased hereunder are subject to approval of any governmental agency which may, in the opinion of counsel to REFAC, be required in connection with the authorization, issuance or sale of Stock. REFAC shall use its best efforts to obtain any such approval. No shares of Stock shall be issued under the Option prior to compliance with such requirements and with REFAC's listing agreement with the American Stock Exchange (or other exchange upon which the Stock may then be listed). The Committee may impose such restrictions on any shares of Stock acquired pursuant to the exercise of the Option as is required by applicable Federal securities laws, under the requirements of any stock exchange or market upon which such shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such shares. Section 7. TERMINATION OF EMPLOYMENT. (a) Except as provided in this Section 7, the Option may not be exercised after the Optionee has ceased to be employed by HFID. (b) If the Optionee's employment with HFID is terminated by HFID for Cause (as defined in the Employment Agreement), the Option shall be cancelled as of the date of such termination of employment. (c) If the Optionee's employment with HFID is terminated (i) by reason of the Optionee's death (A) during the term of the Employment Agreement or (B) within ninety (90) days following the effective date of termination of the Optionee's employment with HFID for any reason other than for Cause or (ii) by reason of the Optionee's Disability (as defined in the Employment Agreement) or retirement, the Option shall be exercisable by the Optionee (or his beneficiary, if appropriate), to the extent exercisable on the effective date of such termination of employment for a period of one (1) year following the effective date of such termination of employment. (d) If the Optionee's employment with HFID is terminated for any reason other than for Cause (as defined in the Employment Agreement) or by reason of the optionee's death, Disability (as defined in the Employment Agreement) or retirement, the Optionee shall have the right to exercise the Option, to the extent exercisable on the effective date of such termination of employment, for a period of ninety (90) days following the effective date of such termination of employment. (e) Notwithstanding anything to the contrary in this Section 7, the Option shall not be exercisable later than the Expiration Date. Section 8. RIGHTS OF OPTIONEE. (a) The Optionee shall have none of the rights of a stockholder with respect to the shares covered by the Option until the shares are issued or transferred to such Optionee pursuant to Section 6 hereof. (b) The Option shall not interfere with or limit in any way the right of HFID to terminate the Optionee's employment at any time, nor confer upon the Optionee any right to continue in the employ of HFID. Section 9. NONTRANSFERABILITY OF OPTION. The Option shall not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and shall be exercisable during the Optionee's lifetime only by him or his legal representative. Section 10. NOTIFICATION. (a) The Option shall be exercised by written notification of exercise substantially in the form of Exhibit A hereto and delivered to the Secretary of REFAC in accordance with subsection (b) of this Section 10. Such notification shall specify the number of shares of Stock to be purchased and the manner in which payment is to be made. (b) Any notification required or permitted hereunder shall be in writing and must be given by personal delivery or by certified mail, return receipt requested, addressed, if to REFAC or the Committee, to REFAC, at 122 East 42nd Street, New York, New York 10168, or to the Optionee at the address set forth below, as the case may be, and deposited, postage prepaid, in the United States mail; provided, however, that a notification of exercise pursuant to subsection (a) of this Section 10 shall be effective only upon receipt by REFAC of such notification and all necessary documentation, including full payment for the Shares. Either party may, by notification to the other given in the manner aforesaid, change the address for future notices. Section 11. CANCELLATION AND REISSUANCE. The Committee shall have the authority to provide for the cancellation of the Option and the reissuance of a replacement Option upon such terms as the Committee, in its sole discretion, deems appropriate, provided that such terms shall not adversely affect the Optionee in any material way. Section 12. RESERVATION OF SHARES. REFAC agrees that, until the exercise or expiration of the Option, at all times there shall be reserved for issuance and/or delivery upon exercise of this Option such number of shares of Stock as shall be required for issuance and delivery upon exercise of the Option. Section 13. GOVERNING LAW; INTERPRETATION. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its conflicts of law principles. (b) The Committee shall have final authority to interpret and construe this Agreement and to make any and all determinations under them, and its determination and decisions shall be final, conclusive and binding upon the Optionee and his legal representative in respect of any questions arising under this Agreement. Section 14. MISCELLANEOUS. (a) This Agreement shall bind and inure to the benefit of REFAC, its successors and assigns, and the Optionee and his personal representatives and assigns. (b) The failure of REFAC to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. (c) Amendment. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto. IN WITNESS WHEREOF, REFAC has caused this Agreement to be duly executed by its officer thereunder duly authorized and the Optionee has hereunto set his hand, all as of the day and year set forth above. REFAC TECHNOLOGY DEVELOPMENT CORPORATION By _______________________________ Name: Title: ACCEPTED: ______________________________ Optionee Date Address: ______________________________ ______________________________ ______________________________ EX-99 9 EXHIBIT 99.8 - STOCK OPTION AGREEMENT Exhibit 99.8 ------------ REFAC TECHNOLOGY DEVELOPMENT CORPORATION STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT, entered into as of January 21, 1998, by and between REFAC Technology Development Corporation, a Delaware corporation ("REFAC");, and Arlene Scanlan (the "Optionee"), an employee of REFAC Licensing Corporation, a Connecticut corporation ("RLC"). W I T N E S S E T H: WHEREAS, the Optionee has entered into that certain Employment Agreement, dated as of January 21, 1998 (the "Employment Agreement"), pursuant to which the Optionee is entitled to receive the stock option evidenced hereby; WHEREAS, the Board of Directors of REFAC has determined that it is in its and its stockholders' best interests to grant to the Optionee an option to purchase shares of REFAC's common stock, par value $.10 per share ("Stock") in the amount and on the terms and conditions set forth herein; and WHEREAS, the Board of Directors of REFAC has determined that it is in its and its stockholders' best interests that the Option granted hereby shall not be subject to the terms and provisions of REFAC's 1990 Stock Option and Incentive Plan. NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed and do hereby agree as follows: Section 1. Grant of Option. The Optionee is hereby granted an option (the "Option") to purchase an aggregate of 50,000 shares of Stock, subject to adjustment as provided in Section 3 hereof, on the terms and conditions herein set forth. Section 2. Exercise Price. The exercise price per share of the Stock subject to the Option shall be equal to 100 percent (100%) of the Fair Market Value of such stock on the date of grant, as determined pursuant to Section 5(c). Section 3. Effect of Certain Changes. If there is any change in the Stock through the declaration of extraordinary dividends, stock dividends, recapitalization, stock splits, or combinations or exchanges of such shares, or other similar transactions, the number of shares of Stock subject to the Option and the exercise price per share of the Option shall be proportionately adjusted by the committee (the "Committee") established by the Board of Directors of REFAC to administer REFAC's executive incentive programs to reflect such change in the issued shares of Stock. Section 4. Term and exercisability of Option. (a) Term of Option. Unless the Option is previously cancelled pursuant to this Agreement, the term of the Option and of this Agreement shall commence on the date hereof (the "Date of Grant") and terminate on the tenth anniversary of the Date of Grant (such tenth anniversary, the "Expiration Date"). Upon the termination of the Option, all rights of the Optionee hereunder shall cease. (b) Exercisability of Option. The Option shall be exercisable as to twenty percent (20%) of the aggregate number of shares covered hereby on the Date of Grant. Subject to Section 7 hereof, the Option will become exercisable in cumulative fashion as to an additioinal twenty percent (20%) of the aggregate number of shares of Stock covered hereby on each of the first four (4) anniversaries of the Date of Grant. Subject to Section 7 hereof, the right of the Optionee to purchase shares with respect to which this Option has become exercisable as herein provided may be exercised in whole or in part at any time from time to time, prior to the tenth anniversary of the Date of Grant. Section 5. Payment of Purchaser Price; Withholding Taxes. (a) Payment of Purchase Price. Payment of the exercise price for any shares of Stock being purchased hereunder (the "Purchase Price") must be made in cash, by certified or bank check or by delivering to REFAC previously acquired shares of Stock (none of which shares may be subject to any claim, lien, security interest, community property right or other right of spouses or present or former family members, pledge, option, voting agreement or other restriction or encumbrance of any nature whatsoever). If the Optionee pays by delivering shares of Stock, the Optionee must include with the notice of exercise the certificates for such shares, duly endorsed for transfer. REFAC will value the shares of Stock delivered by the Optionee at their Fair Market Value (as defined below) on the date of receipt and, if the value of such shares exceeds the Purchase Price, will return to the Optionee cash in an amount equal to the value, so determined, of any fractional portion of a share of Stock exceeding the Purchase Price and will issue a certificate for any whole shares of Stock exceeding the Purchase Price. (b) Withholding Taxes. At the time the Optionee gives notice of exercise of the Option, the Optionee shall include with such notice payment in cash or by certified or bank check in an amount equal to all Federal, state, local, employment or other withholding taxes due, if any, at the time of exercise of the Option or shall give other assurance to REFAC satisfactory to the Committee of the payment of such withholding taxes. (c) Fair Market Value. For purposes of this Agreement, the "Fair Market Value" of the stock as of a particular date shall be (i) the closing sales price of the Stock on a national securities exchange for the last preceding date on which there was a sale of such Stock on such exchange, or (ii) if the Stock is then traded on an over-the-counter market, the average of the closing bid and asked prices for the Stock in such over-the-counter market for the last preceding date on which there was a sale of such Stock in such market, or (iii) if the Stock is not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee in its discretion may determine. Section 6. Transfer of Shares. (a) REFAC shall deliver certificates for the shares of Stock purchased hereunder as soon as practicable after receiving the payments required under Section 5 hereof and all other documents as may be required by law or the terms hereof. (b) The sale and delivery of any shares purchased hereunder are subject to approval of any governmental agency which may, in the option of counsel to REFAC, be required in connection with the authorization, issuance or sale of Stock. REFAC shall use its best efforts to obtain any such approval. No shares of Stock shall be issued under the Option prior to compliance with such requirements and with REFAC's listing agreement with the American Stock Exchange (or other exchange upon which the Stock may then be listed). The Committee may impose such restrictions on any shares of Stock acquired pursuant to the exercise of the Option as is required by applicable Federal securities laws, under the requirements of any stock exchange or market upon which such shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such shares. Section 7. Termination of Employment. (a) Except as provided in this Section 7, the Option may not be exercised after the Optionee has ceased to be employed by RLC. (b) If the Optionee's employment with RLC is terminated by RLC for Cause (as defined in the Employment Agreement), the Option shall be cancelled as of the date of such termination of employment. (c) If the Optionee's employment with RLC is terminated (i) by reason of the Optionee's death (A) during the term of the Employment Agreement or (B) within ninety (90) days following the effective date of termination of the Optionee's employment with RLC for any reason other than for Cause or (ii) by reason of the Optionee's Disability (as defined in the Employment Agreement ) or retirement, the Option shall be exercisable by the Optionee (or her beneficiary, if appropriate), to the extent exercisable on the effective date of such termination of employment for a period of one (1) year following the effective date of such termination of employment. (d) If the Optionee's employment with RLC is terminated for any reason other than for Cause (as defined in the Employment Agreement) or by reason of the Optionee's death, Disability (as defined in the Employment Agreement) or retirement, the Option shall become fully exercisable and the Optionee shall have the right to exercise the Option for a period of ninety (90) days following the effective date of such termination of employment. (e) Notwithstanding anything to the contrary in this Section 7, the Option shall not be exercisable later than the Expiration Date. Section 8. Rights of Optionee. (a) The Optionee shall have none of the rights of a stockholder with respect to the shares covered by the Option until the shares are issued or transferred to such Optionee pursuant to Section 6 hereof. (b) The Option shall not interfere with or limit in any way the right of RLC to terminate the Optionee's employment at any time, nor confer upon the Optionee any right to continue in the employ of RLC. Section 9. Nontransferability of Option. The Option shall not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and shall be exercisable during the Optionee's lifetime only by him or his legal representative. Section 10. Notification. (a) The Option shall be exercised by written notification of exercise substantially in the form of Exhibit A hereto and delivered to the Secretary of REFAC in accordance with subjection (b) of this Section 10. Such notification shall specify the number of shares of Stock to be purchased and the manner in which payment is to be made. (b) Any notification required or permitted hereunder shall be in writing and must be given by personal delivery or by certified mail, return receipt requested, addressed, if to REFAC or the Committee, to REFAC, at 122 East 42nd Street, New York, New York 10168, or to the Optionee at the address set forth below, as the case may be, and deposited, postage prepaid, in the United States mail; provided, however, that a notification of exercise pursuant to subsection (a) of this Section 10 shall be effective only upon receipt by REFAC of such notification and all necessary documentation, including full payment for the Shares. Either party may, by notification to the other given in the manner aforesaid, change the address for future notices. Section 11. Cancellation and Reissuance. The Committee shall have the authority to provide for the cancellation of the Option and the reissuance of a replacement Option upon such terms as the Committee, in its sole discretion, deems appropriate, provided that such terms shall not adversely affect the Optionee in any material way. Section 12. Reservation of Shares. REFAC agrees that, until the exercise or expiration of the Option, at all times there shall be reserved for issuance and/or delivery upon exercise of this Option such number of shares of Stock as shall be required for issuance and delivery upon exercise of the Option. Section 13. Governing Law; Interpretation. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its conflicts of law principles. (b) The Committee shall have final authority to interpret and construe this Agreement and to make any and all determinations under them, and its determinations and decisions shall be final, conclusive and binding upon the Optionee and his legal representative in respect of any questions arising under this Agreement. Section 14. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of REFAC, its successors and assigns, and the Optionee and his personal representatives and assigns. (b) The failure of REFAC to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. (c) Amendment. This Agreement may be amended or modified at any time by an instrument in writing signed by the parties hereto. IN WITNESS WHEREOF, REFAC has caused this Agreement to be duly executed by its officer thereunder duly authorized and the Optionee has hereunto set her hand, all as of the day and year set forth above. REFAC TECHNOLOGY DEVELOPMENT CORPORATION By: /s/ Robert L. Tuchman --------------------------------- Robert L. Tuchman, President Date: January 21, 1998 ACCEPTED: /s/ Arlene Scanlan ------------------------- Arlene Scanlan (Optionee) Date: January 21, 1998 Address: P.O. Box 1059 Green Farms, Connecticut 06430 Social Security No.: ###-##-#### -----END PRIVACY-ENHANCED MESSAGE-----