GROUP TECHNOLOGIES CORPORATION
INDEPENDENT DIRECTORS COMPENSATION PROGRAM
ADOPTED ON SEPTEMBER 1, 1995
AMENDED AND RESTATED ON JUNE 25, 1997
Description of the Program
Name. The name of this benefit program shall be the "Independent
Directors Compensation Program."
Purpose. The purpose of the Independent Directors Compensation
Program is to enable Group Technologies Corporation (the "Company") to
attract, retain and motivate experienced directors by providing
compensation that is competitive with compensation offered to independent
directors of other similarly-situated public corporations in the United
States.
Eligibility and Participation. Only "Independent Directors," defined
as those members of the Board of Directors of the Company (the "Board") who
are not otherwise employed by the Company, its subsidiaries or any
affiliate of the Company in any other capacity, are eligible to participate
in the Independent Directors Compensation Program. Any Independent
Director on the Board as of September 1, 1995 (the "Effective Date") and
thereafter shall be eligible for compensation under the Independent
Directors Compensation Program.
Compensation. Independent Directors shall be compensated as set forth
below:
a) Stock Options Upon Election and Reelection to the Board.
The Company shall grant each Independent Director a nonstatutory stock
option for the purchase of up to 10,000 shares of the Company's common
stock, $.01 par value (the "Common Stock") at the time the Independent
Director is initially elected to serve on the Board and at each time he or
she is subsequently reelected by the shareholders to serve on the Board.
In the event that an Independent Director is initially elected to the Board
at a time other than the date of the Company's annual shareholders'
meeting, he or she shall receive, at the time he or she is elected, stock
options for a pro rated number of shares to be determined by multiplying
10,000 by a fraction, the numerator of which shall be twelve (12) minus the
number of full months which have elapsed since the date of the Company's
last annual shareholders' meeting and the denominator of which shall be
twelve (12). All such stock options shall be granted by the Company to the
Independent Directors pursuant to the Company's Independent Directors'
Stock Option Plan (the "Option Plan"). Each of the options shall be: (i)
granted on the dates each of the respective Independent Directors is
elected and reelected to the Board, (ii) priced at the fair market value of
the Company's common stock, as determined in accordance with Section 7.C.
of the Option Plan, on the respective date of grant, (iii) immediately
exercisable by each of the Independent Directors on the respective dates of
grant, and (iv) subject to the terms and conditions of the Option Plan and
any other terms and conditions which, in accordance with the Option Plan,
are specified in the applicable Stock Option Agreement entered into by and
between the Company and each of the Independent Directors.
b) Annual Retainer.
(i) Amount. Each Independent Director elected to the Board
at the Company's annual shareholders' meeting shall receive an annual
retainer in the amount of $15,000.00 (the "Annual Retainer"). In the event
that an Independent Director is elected to the Board at a time other than
the date of the Company's annual shareholders' meeting, he or she shall
receive a pro rated Annual Retainer (the "Pro Rated Annual Retainer") the
amount of which is to be determined by multiplying $15,000.00 by a
fraction, the numerator of which shall be twelve (12) minus the number of
full months which have elapsed since the date of the Company's last annual
shareholders' meeting and the denominator of which shall be twelve (12).
(ii) Payment. The Annual Retainer or the Pro Rated Annual
Retainer, as applicable, shall be earned by the Independent Directors and
paid by the Company in equal quarterly installments for each Independent
Director. The quarterly installments of the Annual Retainer or Prorated
Annual Retainer shall be payable, together with any attendance fees
(defined below), in arrears by checks issued to each Independent Director
no later than the fifteenth (15th) calendar day following the end of each
of the Company's fiscal quarters during which the respective Independent
Director served on the Board. Alternatively, pursuant to Paragraph d)
below, each Independent Director may elect to receive his or her Annual
Retainer or Prorated Annual Retainer, together with any attendance fees, in
the form of nonstatutory stock options in lieu of cash.
c) Attendance Fees.
(i) Board Meetings. Each Independent Director shall receive
the sum of $1,000.00 for each meeting of the Board he or she attends in
person or, alternatively, the sum of $300.00 for each meeting of the Board
which he or she participates in by telephone (collectively, the "Board
Meeting Attendance Fees"). For purposes of the Independent Directors
Compensation Program, "attendance" shall not include execution of an action
by written consent of the Board. Board Meeting Attendance Fees earned by
each Independent Director during a fiscal quarter shall be payable,
together with the quarterly installment of the Annual Retainer or Prorated
Annual Retainer, by a check issued no later than the fifteenth (15th)
calendar day following the end of the fiscal quarter. Alternatively,
pursuant to Paragraph d) below, each Independent Director may elect to
receive his or her Board Meeting Attendance Fees in the form of
nonstatutory stock options in lieu of cash.
(ii) Committee Meetings. Independent Directors are entitled
to compensation for attending or participating in meetings of committees of
the Board only if such meetings are held on dates other than the dates of
meetings of the full Board. In the event that committee meetings are held
on dates other than the dates of meetings of the full Board, each
Independent Director who attends a committee meeting in person and serves
as the chairperson of the meeting shall receive the sum of $1,250.00 per
meeting, and each of the other Independent Directors who attend such a
committee meeting in person shall receive the sum of $1,000.00 per meeting.
Alternatively, each Independent Director who, as the chairperson or as a
committee member, participates by telephone in committee meetings of the
Board which are held on dates other than the dates of meetings of the full
Board, shall receive the sum of $300.00 per meeting. (All of the
aforementioned fees in this subparagraph shall hereafter be collectively
referred to as the "Committee Meeting Attendance Fees"). For purposes of
the Independent Directors Compensation Program, "attendance" shall not
include execution of an action by written consent for any committee.
Committee Meeting Attendance Fees earned by each Independent Director
during a fiscal quarter shall be payable, together with the Annual Retainer
or Prorated Annual Retainer and the Board Meeting Attendance Fees, by a
check issued to the Independent Director no later than the fifteenth (15th)
calendar day following the end of the fiscal quarter. Alternatively,
pursuant to Paragraph d) below, each Independent Director may elect to
receive his or her Committee Meeting Attendance Fees in the form of
nonstatutory stock options in lieu of cash.
d) Form of Payment. Each Independent Director may elect to
receive his or her Annual Retainer or Prorated Annual Retainer, Board
Meeting Attendance Fees and Committee Meeting Attendance Fees in the form
of nonstatutory stock options in lieu of cash. The election to receive
stock options in lieu of cash must be made by the Independent Director no
later than ten (10) calendar days after being elected to a term on the
Board. Such election to receive stock options in lieu of cash shall be
irrevocable for the remainder of the director's current term and shall
apply to all compensation described in Paragraphs b) and c) above.
Any stock options issued to an Independent Director in lieu of
cash compensation shall be granted to the respective Independent Directors
pursuant to the Option Plan on a quarterly basis, with each grant to be
made no later than the fifteenth (15th) calendar day following the end of
each of the Company's fiscal quarters (the "Date of Grant"). The number of
shares to be granted under such options shall be determined by dividing the
total of the quarterly installment of the Annual Retainer or Prorated
Annual Retainer, as applicable, plus any Board Meeting Attendance Fees and
any Committee Meeting Attendance Fees earned by the respective Independent
Director during the previous fiscal quarter by 33% of the fair market value
of the Company's common stock, as determined in accordance with Section
7.C. of the Option Plan, on the Date of Grant. The options shall be: (i)
priced at the fair market value of the Company's common stock, as
determined in accordance with Section 7.C. of the Option Plan, on the Date
of Grant, (ii) immediately exercisable by each of the Independent Directors
on the respective date of grant, and (iii) subject to the terms and
conditions of the Option Plan and any other terms and conditions which, in
accordance with the Option Plan, are specified in the applicable Stock
Option Agreement entered into by and between the Company and each of the
Independent Directors.
Expense Reimbursement. Each Independent Director shall be reimbursed
for travel and other expenses incurred in the performance of his or her
duties.
Ability to Defer Cash Compensation. Each Independent Director may
elect to participate in the Company's Management Deferred Compensation
Plan. This plan, which effectively enables each Independent Director to
defer recognition of any cash compensation earned hereunder, provides for a
range of investment alternatives, including mutual funds.
Administration. The Independent Directors Compensation Program is
administered by the Compensation Committee of the Board. The Committee
members are selected by the Board and have no specific term of office.
Resignation from the Board of Directors. The resignation of any
Independent Director shall cause such director to be ineligible to receive
any amount of the Annual Retainer or Prorated Annual Retainer installments
not yet paid to him or her as of the date of resignation. Any attendance
fees which have been earned by the Independent Director in accordance with
Paragraph c) above prior to the date of resignation shall be paid in the
same form and according to the same timetables described in Paragraph c)
above. To the extent the resigning director has opted to defer any cash
compensation under the Company's Management Deferred Compensation Plan, all
such compensation will be distributed to him or her in accordance with the
provisions of the Company's Management Deferred Compensation Plan as
applicable to terminated or resigning employees.
Program Termination or Modification. The Compensation Committee shall
review the Independent Directors Compensation Program on at least an annual
basis and may make changes, alterations or modifications to the program
which are deemed to be in the Company's best interest, provided, however,
that the provisions of the program shall not be changed, altered or
modified more than once every six months. Any change, alteration or
modification shall be made by a written instrument consented to by the
Board. The Board may similarly terminate the Independent Directors
Compensation Program at any time if, in the judgment of the Board, such
termination is in the Company's best interest.
IN WITNESS WHEREOF, the Company has caused this Independent Directors
Compensation Program to be executed in its name and on its behalf on June
25, 1997.
GROUP TECHNOLOGIES CORPORATION
Attest: /s/ Michael L. Schuman By: /s/ Jeffrey T. Gill
Michael L. Schuman Jeffrey T. Gill
Secretary Chairman of the Board