1996 Non-employee Director Stock Option Plan

EXHIBIT 10(O)


JACLYN, INC.


1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN


1. PURPOSE OF THE PLAN


The purpose of this 1996 Non-Employee Director Stock Option Plan (the
"Plan") of JACLYN, INC., a Delaware corporation (the "Company"), is to make - ----- ------- available shares of the Common Stock, $1.00 par value per share, of the Company (the "Common Stock") for purchase by directors who are not employees of the
------------ Company (the "Non-Employee Directors") and thus to attract and retain the
---------------------- services of experienced and knowledgeable Non-Employee Directors for the benefit of the Company and its stockholders and to provide additional incentive for such Non-Employee Directors to continue to work for the best interests of the Company and its stockholders through continuing ownership of its Common Stock.


2. STOCK SUBJECT TO THE PLAN


Subject to the provisions of Article 10, the total number of shares of Common Stock for which options may be granted under the Plan shall be 100,000. Shares issued under the Plan may be either authorized but unissued shares or shares which shall have been purchased or acquired by the Company for this or any other purpose. Such shares are from time to time to be allotted for option and sale to Non-Employee Directors in accordance with the Plan. In the event any option granted under the Plan shall expire, be canceled or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares subject thereto shall again be available for grant under the Plan.


3. ADMINISTRATION OF THE PLAN


The Plan shall be administered by the Board of Directors of the Company (the "Board"). The Board shall, subject to the express provisions of the Plan,
----- (a) grant options pursuant to the terms of the Plan; (b) have the power to interpret the Plan; (c) correct any defect, supply any omission or reconcile any inconsistency in the Plan; (d) prescribe, amend and rescind rules and regulations relating to, but not inconsistent with, the Plan; (e) determine the terms and provisions of the respective option agreements (which need not be identical); and (f) make determinations necessary or advisable for the administration of the Plan. The determination of the Board on the matters referred to in this Article 3 shall be conclusive. No member of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any options granted hereunder.


A-1


4. OPTION GRANTS


Each individual who is a Non-Employee Director immediately following the conclusion of the Company's 1996 Annual Meeting of Stockholders at which directors are elected shall, effective as of such date, be granted an option to purchase 2,000 shares of Common Stock. Each individual who subsequent thereto becomes a Non-Employee Director shall, effective as of the date such person becomes a Non-Employee Director, be granted an option to purchase 2,000 shares of Common Stock. In addition, immediately following each annual meeting of stockholders at which directors are elected which is held subsequent to the Company's 1996 Annual Meeting of Stockholders, each Non-Employee Director in office immediately following the conclusion of such meeting (whether or not elected at such meeting) shall, effective as of the date such meeting is held, be granted an option to purchase 2,000 shares of Common Stock; provided that an
-------- individual who becomes a Non-Employee Director for the first time at such a meeting of stockholders shall be granted only one option to purchase an aggregate of 2,000 shares of Common Stock under this sentence and the preceding sentence. A director who is an employee of the Company who ceases such relationship but remains a director shall not be deemed to become a Non-Employee Director unless and until he or she is serving as a Non-Employee Director immediately following the conclusion of the next annual meeting of stockholders at which directors are elected (whether or not such person is elected as a director at such meeting). In the event the remaining shares available for grant under the Plan are not sufficient to grant options to each such Non- Employee Director at any time, the number of shares subject to the options to be granted at such time shall be reduced proportionately.


5. EXERCISE PRICE


The exercise price per share at which shares of the Common Stock may be purchased pursuant to options granted under the Plan shall be equal to the fair market value of the Common Stock on the date an option is granted, but not less than the par value of the Common Stock. The fair market value of a share of the Common Stock on any day shall be (a) if actual sales price information is generally reported for the Common Stock on its principal market, the closing price, regular way, per share of the Common Stock on such day (or the last day of trade prior to such day if not traded on such day) as reported by such market or on a consolidated tape reflecting transactions on such market, (b) if actual sales price information is not generally reported for the Common Stock on its principal market, the mean between the highest bid and lowest asked prices per share for the Common Stock on such day (or the last day quoted prior to such day if not quoted on such day) as reported by on the National Association of Securities Dealers (including under its OTC Bulletin Board Service), National Quotation Bureau Incorporated or a similar organization, or (c) if neither of the above are applicable, the fair market value of the Common Stock shall be determined by the Board by any method not i ...