SCI SYSTEMS, INC.
2000 STOCK INCENTIVE PLAN
SCI SYSTEMS, INC.
2000 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
PAGE
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SECTION I. DEFINITIONS............................................................. 1
1.1 DEFINITIONS............................................................. 1
SECTION 2 THE STOCK INCENTIVE PLAN................................................. 5
2.1 PURPOSE OF THE PLAN..................................................... 5
2.2 STOCK SUBJECT TO THE PLAN............................................... 5
2.3 ADMINISTRATION OF THE PLAN.............................................. 5
2.4 ELIGIBILITY AND LIMITS.................................................. 6
SECTION 3 TERMS OF STOCK INCENTIVES................................................ 6
3.1 TERMS AND CONDITIONS OF ALL STOCK INCENTIVES............................ 6
3.2 TERMS AND CONDITIONS OF OPTIONS......................................... 7
(a) Option Price..................................................... 7
(b) Option Term...................................................... 8
(c) Payment.......................................................... 8
(d) Conditions to the Exercise of an Option.......................... 8
(e) Termination of Incentive Stock Option............................ 9
(f) Special Provisions for Certain Substitute Options................ 9
3.3 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS....................... 9
(a) Settlement....................................................... 9
(b) Conditions to Exercise........................................... 10
3.4 TERMS AND CONDITIONS OF STOCK AWARDS.................................... 10
3.5 TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS...................... 10
(a) Payment.......................................................... 10
(b) Conditions to Payment............................................ 10
3.6 TERMS AND CONDITIONS OF PERFORMANCE UNIT AWARDS......................... 11
(a) Payment.......................................................... 11
(b) Conditions to Payment............................................ 11
3.7 TERMS AND CONDITIONS OF PHANTOM SHARES.................................. 11
(a) Payment.......................................................... 11
(b) Conditions to Payment............................................ 11
3.8 TREATMENT OF AWARDS UPON TERMINATION OF EMPLOYMENT...................... 11
SECTION 4 RESTRICTIONS ON STOCK.................................................... 12
4.1 ESCROW OF SHARES........................................................ 12
4.2 RESTRICTIONS ON TRANSFER................................................ 12
SECTION 5 GENERAL PROVISIONS....................................................... 12
5.1 WITHHOLDING............................................................. 12
5.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION.......................... 13
5.3 CASH AWARDS............................................................. 14
5.4 COMPLIANCE WITH CODE.................................................... 14
5.5 RIGHT TO TERMINATE EMPLOYMENT........................................... 14
5.6 NON-ALIENATION OF BENEFITS.............................................. 14
5.7 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS.................... 14
5.8 LISTING AND LEGAL COMPLIANCE............................................ 15
5.9 TERMINATION AND AMENDMENT OF THE PLAN................................... 15
5.10 STOCKHOLDER APPROVAL.................................................... 15
5.11 CHOICE OF LAW........................................................... 15
5.12 EFFECTIVE DATE OF PLAN.................................................. 16
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SCI SYSTEMS, INC.
2000 STOCK INCENTIVE PLAN
SECTION I. DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun will be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:
(a) "Affiliate" means:
(1) Any Subsidiary or Parent,
(2) An entity that directly or through one or more
intermediaries controls, is controlled by, or is under common
control with the Company, as determined by the Company, or
(3) Any entity in which the Company has such a significant
interest that the Company determines it should be deemed an
"Affiliate", as determined in the sole discretion of the Company.
(b) "Board of Directors" means the board of directors of the
Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee appointed by the Board of
Directors to administer the Plan. The Board of Directors shall consider
the advisability of whether the members of the Committee shall consist
solely of at least two members of the Board of Directors who are both
"outside directors" as defined in Treas. Reg. Section 1.162-27(e) as
promulgated by the Internal Revenue Service and "non-employee directors"
as defined in Rule 16b-3(b)(3) as promulgated under the Exchange Act. If
the Committee has not been appointed, the Board of Directors in their
entirety shall constitute the Committee. In addition, for purposes of any
Stock Incentive granted to a director of the Company who is not also an
employee of the Company, the Board of Directors in its entirety shall
constitute the Committee.
(e) "Company" means SCI Systems, Inc., a Delaware corporation.
(f) "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any Affiliate of the
Company for the Participant. If no long-term disability plan or policy
was ever maintained on behalf of the Participant or, if the determination
of Disability relates to an Incentive Stock Option, Disability means that
condition described
in Code Section 22(e)(3), as amended from time to time. In the event of a
dispute, the determination of Disability will be made by the Committee
and will be supported by advice of a physician competent in the area to
which such Disability relates.
(g) "Dividend Equivalent Rights" means certain rights to receive
cash payments as described in Section 3.5.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(i) "Fair Market Value" with regard to a date means:
(1) the price at which Stock shall have been sold on that
date or the last trading date prior to that date as reported by
the national securities exchange selected by the Committee on
which the shares of Stock are then actively traded or, if
applicable, as reported by the NASDAQ Stock Market.
(2) if such market information is not published on a
regular basis, the price of Stock in the over-the-counter market
on that date or the last business day prior to that date as
reported by the NASDAQ Stock Market or, if not so reported, by a
generally accepted reporting service.
(3) if Stock is not publicly traded, as determined in good
faith by the Committee with due consideration being given to (i)
the most recent independent appraisal of the Company, if such
appraisal is not more than twelve months old and (ii) the
valuation methodology used in any such appraisal.
For purposes of Paragraphs (1), (2), or (3) above, the Committee may use
the closing price as of the applicable date or the trading day prior to
the applicable date, the average of the high and low prices as of the
applicable date or for a period certain ending on such date, the price
determined at the time the transaction is processed, the tender offer
price for shares of Stock, or any other method which the Committee
determines is reasonably indicative of the fair market value.
(j) "Incentive Stock Option" means an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code.
(k) "Option" means a Non-Qualified Stock Option or an Incentive
Stock Option.
(l) "Over 10% Owner" means an individual who at the time an
Incentive Stock Option is granted owns Stock possessing more than ten
percent (10%) of the total combined voting power of the Company or one of
its Subsidiaries, determined by applying the attribution rules of Code
Section 424(d).
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(m) "Non-Qualified Stock Option" means a stock option that is not
an Incentive Stock Option.
(n) "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, with respect
to Incentive Stock Options, at the time of the granting of the Option,
each of the corporations other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A Parent
shall include any entity other than a corporation to the extent
permissible under Section 424(f) or regulations and rulings thereunder.
(o) "Participant" means an individual who receives a Stock
Incentive hereunder.
(p) "Performance Goals" means the measurable performance
objectives, if any, established by the Committee for a Performance Period
that are to be achieved with respect to a Stock Incentive granted to a
Participant under the Plan. Performance Goals may be described in terms
of Company-wide objectives or in terms of objectives that are related to
performance of the division, Affiliate, department or function within the
Company or an Affiliate in which the Participant receiving the Stock
Incentive is employed or on which the Participant's efforts have the most
influence. The achievement of the Performance Goals established by the
Committee for any Performance Period will be determined without regard to
the effect on such Performance Goals of any acquisition or disposition by
the Company of a trade or business, or of substantially all of the assets
of a trade or business, during the Performance Period and without regard
to any change in accounting standards by the Financial Accounting
Standards Board or any successor entity. The Performance Goals
established by the Committee for any Performance Period under the Plan
will consist of one or more of the following:
(i) earnings per share and/or growth in earnings per share
in relation to target objectives, excluding the effect of
extraordinary or nonrecurring items;
(ii) operating cash flow and/or growth in operating cash
flow in relation to target objectives;
(iii) cash available in relation to target objectives;
(iv) net income and/or growth in net income in relation to
target objectives, excluding the effect of extraordinary or
nonrecurring items;
(v) revenue and/or growth in revenue in relation to target
objectives;
(vi) total shareholder return (measured as the total of the
appreciation of and dividends declared on the Common Stock) in
relation to target objectives;
(vii) economic value added;
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(viii) stock price;
(viii) return on invested capital in relation to target
objectives;
(ix) return on shareholder equity in relation to target
objectives;
(x) return on assets in relation to target objectives; and
(xi) return on common book equity in relation to target
objectives
If the Committee determines that, as a result of a change in the
business, operations, corporate structure or capital structure of the
Company, or the manner in which the Company conducts its business, or any
other events or circumstances, the Performance Goals are no longer
suitable, the Committee may in its discretion modify such Performance
Goals or the related minimum acceptable level of achievement, in whole or
in part, with respect to a period as the Committee deems appropriate and
equitable.
(q) "Performance Period" means, with respect to a Stock Incentive,
a period of time within which the Performance Goals relating to such
Stock Incentive are to be measured. The Performance Period will be
established by the Committee at the time the Stock Incentive is granted.
(r) "Performance Unit Award" refers to a performance unit award as
described in Section 3.6.
(s) "Phantom Shares" refers to the rights described in Section
3.7.
(t) "Plan" means the SCI Systems, Inc. 2000 Stock Incentive Plan.
(u) "Stock" means the Company's common stock.
(v) "Stock Appreciation Right" means a stock appreciation right
described in Section 3.3.
(w) "Stock Award" means a stock award described in Section 3.4.
(x) "Stock Incentive Agreement" means an agreement between the
Company and a Participant or other documentation evidencing an award of a
Stock Incentive.
(y) "Stock Incentive Program" means a written program established
by the Committee, pursuant to which Stock Incentives are awarded under
the Plan under uniform terms, conditions and restrictions set forth in
such written program.
(z) "Stock Incentives" means, collectively, Dividend Equivalent
Rights, Incentive Stock Options, Non-Qualified Stock Options, Phantom
Shares, Stock Appreciation Rights and Stock Awards and Performance Unit
Awards.
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(aa) "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing
fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain. A
"Subsidiary" shall include any entity other than a corporation to the
extent permissible under Section 424(f) or regulations or rulings
thereunder.
(bb) "Termination of Employment" means the termination of the
employee-employer relationship between a Participant and the Company and
its Affiliates, regardless of whether severance or similar payments are
made to the Participant for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability or
retirement. The Committee will, in its absolute discretion, determine the
effect of all matters and questions relating to a Termination of
Employment, including, but not by way of limitation, the question of
whether a leave of absence constitutes a Termination of Employment.
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide incentive to
officers, employees, directors and consultants of the Company and its Affiliates
to stimulate their efforts toward the continued success of the Company and to
operate and manage the business in a manner that will provide for the long-term
growth and profitability of the Company; (b) encourage stock ownership by
officers, employees, directors and consultants by providing them with a means to
acquire a proprietary interest in the Company, acquire shares of Stock, or to
receive compensation which is based upon appreciation in the value of Stock; and
(c) provide a means of obtaining, rewarding and retaining officers, employees,
directors and consultants.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance with
Section 5.2, seven million five hundred thousand (7,500,000) shares of Stock,
plus the number of shares of Common Stock which are released from reservation
under the SCI Systems, Inc. 1994 Stock Option Incentive Plan immediately prior
to the adoption of this Plan, (the "Maximum Plan Shares") are hereby reserved
exclusively for issuance upon exercise or payment pursuant to Stock Incentives.
The shares of Stock attributable to the nonvested, unpaid, unexercised,
unconverted or otherwise unsettled portion of any Stock Incentive that is
forfeited or cancelled or expires or terminates for any reason without becoming
vested, paid, exercised, converted or otherwise settled in full will again be
available for grant under the Plan.
2.3 Administration of the Plan. The Plan is administered by the
Committee. The Committee has full authority in its discretion to determine the
officers, employees, directors and consultants of the Company or its Affiliates
to whom Stock Incentives will be granted and the terms and provisions of Stock
Incentives, subject to the Plan. Subject to the provisions of the Plan, the
Committee has full and conclusive authority to interpret the Plan; to prescribe,
amend and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the respective Stock Incentive Agreements and to make
all other determinations necessary or
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advisable for the proper administration of the Plan. The Committee's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, awards under
the Plan (whether or not such persons are similarly situated). The Committee's
decisions are final and binding on all Participants. Notwithstanding the
foregoing, for purposes of any Stock Incentive granted to a director of the
Company who is not also an employee of the Company, the Board of Directors in
its entirety shall constitute the Committee.
2.4 Eligibility and Limits. Stock Incentives may be granted only to
officers, employees, directors, and consultants of the Company, or any Affiliate
of the Company; provided, however, that an Incentive Stock Option may only be
granted to an employee of the Company or any Subsidiary. In the case of
Incentive Stock Options, the aggregate Fair Market Value (determined as at the
date an Incentive Stock Option is granted) of stock with respect to which stock
options intended to meet the requirements of Code Section 422 become exercisable
for the first time by an individual during any calendar year under all plans of
the Company and its Subsidiaries may not exceed $100,000; provided further, that
if the limitation is exceeded, the Incentive Stock Option(s) which cause the
limitation to be exceeded will be treated as Non-Qualified Stock Option(s).
SECTION 3 TERMS OF STOCK INCENTIVES
3.1 Terms and Conditions of All Stock Incentives.
(a) The number of shares of Stock as to which a Stock Incentive
may be granted will be determined by the Committee in its sole
discretion, subject to the provisions of Section 2.2 as to the total
number of shares available for grants under the Plan and subject to the
limits on Options and Stock Appreciation Rights in the following
sentence. On such date as required by Section 162(m) of the Code and the
regulations thereunder for compensation to be treated as qualified
performance based compensation, the maximum number of shares of Stock
with respect to which any Stock Incentives may be granted during any
calendar year to any employee may not exceed 500,000. If, after grant, an
Option is cancelled, the cancelled Option shall continue to be counted
against the maximum number of shares for which options may be granted to
an employee as described in this Section 3.1. NOTWITHSTANDING ANY OTHER
PROVISION HEREOF, AND EXCEPT FOR ADJUSTMENTS TO THE EXERCISE PRICE AS
CONTEMPLATED BY SECTION 5.2 HEREOF, IN NO EVENT WILL THE EXERCISE PRICE
PER SHARE OF STOCK PURCHASABLE UNDER ANY OPTION OR THE BASE AMOUNT ON
WHICH A STOCK APPRECIATION RIGHT IS CALCULATED BE REDUCED AFTER THE DATE
OF GRANT OF THE OPTION OR STOCK APPRECIATION RIGHT AND NO OPTION OR STOCK
APPRECIATION RIGHT MAY BE CANCELED OR SURRENDERED IN EXCHANGE FOR AN
OPTION OR STOCK APPRECIATION RIGHT, AS APPLICABLE, WITH A LOWER EXERCISE
PRICE.
(b) Each Stock Incentive will either be evidenced by a Stock
Incentive Agreement in such form and containing such terms, conditions
and restrictions as the Committee may determine to be appropriate,
including without limitation, Performance Goals that must be achieved as
a condition to vesting or payment of the Stock Incentive,
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or be made subject to the terms of a Stock Incentive Program, containing
such terms, conditions and restrictions as the Committee may determine to
be appropriate, including without limitation, Performance Goals that must
be achieved as a condition to vesting or payment of the Stock Incentive.
Each Stock Incentive Agreement or Stock Incentive Program is subject to
the terms of the Plan and any provisions contained in the Stock Incentive
Agreement or Stock Incentive Program that are inconsistent with the Plan
are null and void.
(c) The date a Stock Incentive is granted will be the date on
which the Committee has approved the terms and conditions of the Stock
Incentive and has determined the recipient of the Stock Incentive and the
number of shares covered by the Stock Incentive, and has taken all such
other actions necessary to complete the grant of the Stock Incentive.
(d) Any Stock Incentive may be granted in connection with all or
any portion of a previously or contemporaneously granted Stock Incentive.
Exercise or vesting of a Stock Incentive granted in connection with
another Stock Incentive may result in a pro rata surrender or
cancellation of any related Stock Incentive, as specified in the
applicable Stock Incentive Agreement or Stock Incentive Program.
(e) Stock Incentives are not transferable or assignable except by
will or by the laws of descent and distribution and are exercisable,
during the Participant's lifetime, only by the Participant; or in the
event of the Disability of the Participant, by the legal representative
of the Participant; or in the event of death of the Participant, by the
legal representative of the Participant's estate or if no legal
representative has been appointed, by the successor in interest
determined under the Participant's will; provided, however, that the
Committee may waive any of the provisions of this Section or provide
otherwise as to any Stock Incentives other than Incentive Stock Options.
(f) The terms of any Stock Incentive Agreement award to a
Participant under the Plan may be modified with the consent of the
Committee and the Participant.
3.2 Terms and Conditions of Options. Each Option granted under the Plan
must be evidenced by a Stock Incentive Agreement. At the time any Option is
granted, the Committee will determine whether the Option is to be an Incentive
Stock Option described in Code Section 422 or a Non-Qualified Stock Option, and
the Option must be clearly identified as to its status as an Incentive Stock
Option or a Non-Qualified Stock Option. Incentive Stock Options may only be
granted to employees of the Company or any Subsidiary. At the time any Incentive
Stock Option granted under the Plan is exercised, the Company will be entitled
to legend the certificates representing the shares of Stock purchased pursuant
to the Option to clearly identify them as representing the shares purchased upon
the exercise of an Incentive Stock Option. An Incentive Stock Option may only be
granted within ten (10) years from the earlier of the date the Plan is adopted
or approved by the Company's stockholders.
(a) Option Price. Subject to adjustment in accordance with Section
5.2 and the other provisions of this Section 3.2, the exercise price (the
"Exercise Price") per share
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of Stock purchasable under any Option must be as set forth in the
applicable Stock Incentive Agreement, but in no event may it be less than
the Fair Market Value on the date the Option is granted with respect to
an Incentive Stock Option or any option issued to an employee who is a
"covered employee" within the meaning of Code Section 162(m).
Notwithstanding the foregoing, the Exercise Price of any Option which is
not an Incentive Stock Option, is not granted to a covered employee and
is granted within four months of the employee's date of employment with
the Company or Subsidiary, may not be less than the lesser of Fair Market
Value on the date of grant or Fair Market Value as of the date of the
employee's employment with the Company or Subsidiary commenced. With
respect to each grant of an Incentive Stock Option to a Participant who
is an Over 10% Owner, the Exercise Price may not be less than 110% of the
Fair Market Value on the date the Option is granted.
(b) Option Term. Any Incentive Stock Option granted to a
Participant who is not an Over 10% Owner is not exercisable after the
expiration of ten (10) years after the date the Option is granted. Any
Incentive Stock Option granted to an Over 10% Owner is not exercisable
after the expiration of five (5) years after the date the Option is
granted. The term of any Non-Qualified Stock Option must be as specified
in the applicable Stock Incentive Agreement.
(c) Payment. Payment for all shares of Stock purchased pursuant to
exercise of an Option will be made in any form or manner authorized by
the Committee in the Stock Incentive Agreement or by amendment thereto,
including, but not limited to, cash or, if the Stock Incentive Agreement
provides:
(i) by delivery to the Company of a number of shares of
Stock which have been owned by the holder for at least six (6)
months prior to the date of exercise having an aggregate Fair
Market Value of not less than the product of the Exercise Price
multiplied by the number of shares the Participant intends to
purchase upon exercise of the Option on the date of delivery;
(ii) in a cashless exercise through a broker; or
(iii) by having a number of shares of Stock withheld, the
Fair Market Value of which as of the date of exercise is
sufficient to satisfy the Exercise Price.
In its discretion, the Committee also may authorize (at the time an
Option is granted or thereafter) Company financing to assist the
Participant as to payment of the Exercise Price on such terms as may be
offered by the Committee in its discretion. Payment must be made at the
time that the Option or any part thereof is exercised, and no shares may
be issued or delivered upon exercise of an option until full payment has
been made by the Participant. The holder of an Option, as such, has none
of the rights of a stockholder.
(d) Conditions to the Exercise of an Option. Each Option granted
under the Plan is exercisable by the Participant or any other designated
person, at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the
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Committee specifies in the Stock Incentive Agreement; provided, however,
that subsequent to the grant of an Option, the Committee, at any time
before complete termination of such Option, may accelerate the time or
times at which such Option may be exercised in whole or in part,
including, without limitation, upon a Change in Control as defined in the
Stock Incentive Agreement and may permit the Participant or any other
designated person to exercise the Option, or any portion thereof, for all
or part of the remaining Option term, notwithstanding any provision of
the Stock Incentive Agreement to the contrary.
(e) Termination of Incentive Stock Option. With respect to an
Incentive Stock Option, in the event of Termination of Employment of a
Participant, the Option or portion thereof held by the Participant which
is unexercised will expire, terminate, and become unexercisable no later
than the expiration of three (3) months after the date of Termination of
Employment; provided, however, that in the case of a holder whose
Termination of Employment is due to death or Disability, one (1) year
will be substituted for such three (3) month period; provided, further
that such time limits may be exceeded by the Committee under the terms of
the grant, in which case, the Incentive Stock Option will be a
Non-Qualified Option if it is exercised after the time limits that would
otherwise apply. For purposes of this Subsection (e), Termination of
Employment of the Participant will not be deemed to have occurred if the
Participant is employed by another corporation (or a parent or subsidiary
corporation of such other corporation) which has assumed the Incentive
Stock Option of the Participant in a transaction to which Code Section
424(a) is applicable.
(f) Special Provisions for Certain Substitute Options.
Notwithstanding anything to the contrary in this Section 3.2, any Option
issued in substitution for an option previously issued by another entity,
which substitution occurs in connection with a transaction to which Code
Section 424(a) is applicable, may provide for an exercise price computed
in accordance with such Code Section and the regulations thereunder and
may contain such other terms and conditions as the Committee may
prescribe to cause such substitute Option to contain as nearly as
possible the same terms and conditions (including the applicable vesting
and termination provisions) as those contained in the previously issued
option being replaced thereby.
3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock
Appreciation Right granted under the Plan must be evidenced by a Stock Incentive
Agreement. A Stock Appreciation Right entitles the Participant to receive the
excess of (1) the Fair Market Value of a specified or determinable number of
shares of the Stock at the time of payment or exercise over (2) a specified or
determinable price which, in the case of a Stock Appreciation Right granted in
connection with an Option, may not be less than the Exercise Price for that
number of shares subject to that Option. A Stock Appreciation Right granted in
connection with a Stock Incentive may only be exercised to the extent that the
related Stock Incentive has not been exercised, paid or otherwise settled.
(a) Settlement. Upon settlement of a Stock Appreciation Right, the
Company must pay to the Participant the appreciation in cash or shares of
Stock (valued at the
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aggregate Fair Market Value on the date of payment or exercise) as
provided in the Stock Incentive Agreement or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Exercise. Each Stock Appreciation Right granted
under the Plan is exercisable or payable at such time or times, or upon
the occurrence of such event or events, and in such amounts, as the
Committee specifies in the Stock Incentive Agreement; provided, however,
that subsequent to the grant of a Stock Appreciation Right, the
Committee, at any time before complete termination of such Stock
Appreciation Right, may accelerate the time or times at which such Stock
Appreciation Right may be exercised or paid in whole or in part.
3.4 Terms and Conditions of Stock Awards. The number of shares of Stock
subject to a Stock Award and restrictions or conditions on such shares, if any,
will be as the Committee determines, and the certificate for such shares will
bear evidence of any restrictions or conditions. In no event shall Stock Awards
under the Plan be made for more than seven hundred fifty thousand (750,000)
shares of Stock; provided that the shares of Stock attributable to the nonvested
portion of any Stock Award that is forfeited or cancelled or terminates for any
reason without becoming vested will again be available for grant under the Plan
as a Stock Award. Subsequent to the date of the grant of the Stock Award, the
Committee has the power to permit, in its discretion, an acceleration of the
expiration of an applicable restriction period with respect to any part or all
of the shares awarded to a Participant. The Committee may require a cash payment
from the Participant in an amount no greater than the aggregate Fair Market
Value of the shares of Stock awarded determined at the date of grant in exchange
for the grant of a Stock Award or may grant a Stock Award without the
requirement of a cash payment.
3.5 Terms and Conditions of Dividend Equivalent Rights. A Dividend
Equivalent Right entitles the Participant to receive payments from the Company
in an amount determined by reference to any cash dividends paid on a specified
number of shares of Stock to Company stockholders of record during the period
such rights are effective. The Committee may impose such restrictions and
conditions on any Dividend Equivalent Right as the Committee in its discretion
shall determine, including the date any such right shall terminate and may
reserve the right to terminate, amend or suspend any such right at any time.
(a) Payment. Payment in respect of a Dividend Equivalent Right may
be made by the Company in cash or shares of Stock (valued at Fair Market
Value as of the date payment is owed) as provided in the Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Payment. Each Dividend Equivalent Right granted
under the Plan is payable at such time or times, or upon the occurrence
of such event or events, and in such amounts, as the Committee specifies
in the applicable Stock Incentive Agreement or Stock Incentive Program;
provided, however, that subsequent to the grant of a Dividend Equivalent
Right, the Committee, at any time before complete termination of such
Dividend Equivalent Right, may accelerate the time or times at which such
Dividend Equivalent Right may be paid in whole or in part.
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3.6 Terms and Conditions of Performance Unit Awards. A Performance Unit
Award shall entitle the Participant to receive, at a specified future date,
payment of an amount equal to all or a portion of the value of a specified or
determinable number of units (stated in terms of a designated or determinable
dollar amount per unit) granted by the Committee. At the time of the grant, the
Committee must determine the base value of each unit, the number of units
subject to a Performance Unit Award, and the Performance Goals applicable to the
determination of the ultimate payment value of the Performance Unit Award. The
Committee may provide for an alternate base value for each unit under certain
specified conditions.
(a) Payment. Payment in respect of Performance Unit Awards may be
made by the Company in cash or shares of Stock (valued at Fair Market
Value as of the date payment is owed) as provided in the applicable Stock
Incentive Agreement or Stock Incentive Program or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Payment. Each Performance Unit Award granted
under the Plan shall be payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee
shall specify in the applicable Stock Incentive Agreement or Stock
Incentive Program; provided, however, that subsequent to the grant of a
Performance Unit Award, the Committee, at any time before complete
termination of such Performance Unit Award, may accelerate the time or
times at which such Performance Unit Award may be paid in whole or in
part.
3.7 Terms and Conditions of Phantom Shares. Phantom Shares shall entitle
the Participant to receive, at a specified future date, payment of an amount
equal to all or a portion of the Fair Market Value of a specified number of
shares of Stock at the end of a specified period. At the time of the grant, the
Committee will determine the factors which will govern the portion of the
phantom shares so payable, including, at the discretion of the Committee, any
performance criteria that must be satisfied as a condition to payment. Phantom
Share awards containing performance criteria may be designated as performance
share awards.
(a) Payment. Payment in respect of Phantom Shares may be made by
the Company in cash or shares of Stock (valued at Fair Market Value as of
the date payment is owed) as provided in the applicable Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Payment. Each Phantom Share granted under the
Plan is payable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee specify in the
applicable Stock Incentive Agreement or Stock Incentive Program;
provided, however, that subsequent to the grant of a Phantom Share, the
Committee, at any time before complete termination of such Phantom Share,
may accelerate the time or times at which such Phantom Share may be paid
in whole or in part.
3.8 Treatment of Awards Upon Termination of Employment. Except as
otherwise provided by Plan Section 3.2(e), any award under this Plan to a
Participant who has experienced
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a Termination of Employment may be cancelled, accelerated, paid or continued, as
provided in the applicable Stock Incentive Agreement or Stock Incentive Program,
or, in the absence of such provision, as the Committee may determine. The
portion of any award exercisable in the event of continuation or the amount of
any payment due under a continued award may be adjusted by the Committee to
reflect the Participant's period of service from the date of grant through the
date of the Participant's Termination of Employment or such other factors as the
Committee determines are relevant to its decision to continue the award.
SECTION 4 RESTRICTIONS ON STOCK
4.1 Escrow of Shares. Any certificates representing the shares of Stock
issued under the Plan will be issued in the Participant's name, but, if the
applicable Stock Incentive Agreement or Stock Incentive Program so provides, the
shares of Stock will be held by a custodian designated by the Committee (the
"Custodian"). Each applicable Stock Incentive Agreement or Stock Incentive
Program providing for transfer of shares of Stock to the Custodian must appoint
the Custodian as the attorney-in-fact for the Participant for the term specified
in the applicable Stock Incentive Agreement or Stock Incentive Program, with
full power and authority in the Participant's name, place and stead to transfer,
assign and convey to the Company any shares of Stock held by the Custodian for
such Participant, if the Participant forfeits the shares under the terms of the
applicable Stock Incentive Agreement or Stock Incentive Program. During the
period that the Custodian holds the shares subject to this Section, the
Participant is entitled to all rights, except as provided in the applicable
Stock Incentive Agreement or Stock Incentive Program, applicable to shares of
Stock not so held. Any dividends declared on shares of Stock held by the
Custodian must provide in the applicable Stock Incentive Agreement or Stock
Incentive Program, to be paid directly to the Participant or, in the
alternative, be retained by the Custodian or by the Company until the expiration
of the term specified in the applicable Stock Incentive Agreement or Stock
Incentive Program and shall then be delivered, together with any proceeds, with
the shares of Stock to the Participant or to the Company, as applicable.
4.2 Restrictions on Transfer. The Participant does not have the right to
make or permit to exist any disposition of the shares of Stock issued pursuant
to the Plan except as provided in the Plan or the applicable Stock Incentive
Agreement or Stock Incentive Program. Any disposition of the shares of Stock
issued under the Plan by the Participant not made in accordance with the Plan or
the applicable Stock Incentive Agreement or Stock Incentive Program will be
void. The Company will not recognize, or have the duty to recognize, any
disposition not made in accordance with the Plan and the applicable Stock
Incentive Agreement or Stock Incentive Program, and the shares so transferred
will continue to be bound by the Plan and the applicable Stock Incentive
Agreement or Stock Incentive Program.
SECTION 5 GENERAL PROVISIONS
5.1 Withholding. The Company must deduct from all cash distributions
under the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer
shares of Stock under the Plan or upon the
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vesting of any Stock Award, the Company has the right to require the recipient
to remit to the Company an amount sufficient to satisfy the minimum statutory
federal, state and local tax withholding requirements prior to the delivery of
any certificate or certificates for such shares or the vesting of such Stock
Award. A Participant may pay the withholding obligation in cash, or, if the
applicable Stock Incentive Agreement or Stock Incentive Program provides, a
Participant may elect to have the number of shares of Stock he is to receive
reduced by, or with respect to a Stock Award, tender back to the Company, the
smallest number of whole shares of Stock which, when multiplied by the Fair
Market Value of the shares of Stock determined as of the Tax Date (defined
below), is sufficient to satisfy minimum statutory federal, state and local, if
any, withholding obligations arising from exercise or payment of a Stock
Incentive (a "Withholding Election"). A Participant may make a Withholding
Election only if both of the following conditions are met:
(a) The Withholding Election must be made on or prior to the date
on which the amount of tax required to be withheld is determined (the
"Tax Date") by executing and delivering to the Company a properly
completed notice of Withholding Election as prescribed by the Committee;
and
(b) Any Withholding Election made will be irrevocable except on
six months advance written notice delivered to the Company; however, the
Committee may in its sole discretion disapprove and give no effect to the
Withholding Election.
5.2 Changes in Capitalization; Merger; Liquidation.
(a) The number of shares of Stock reserved for the grant of
Options, Dividend Equivalent Rights, Performance Unit Awards, Phantom
Shares, Stock Appreciation Rights and Stock Awards; the number of shares
of Stock reserved for issuance upon the exercise or payment, as
applicable, of each outstanding Option, Dividend Equivalent Right,
Phantom Share and Stock Appreciation Right and upon vesting or grant, as
applicable, of each Stock Award; the number of shares of Stock with
respect to which any Stock Incentives may be granted during any calendar
year to any employee, the Exercise Price of each outstanding Option and
the specified number of shares of Stock to which each outstanding
Dividend Equivalent Right, Phantom Share and Stock Appreciation Right
pertains must be proportionately adjusted for any increase or decrease in
the number of issued shares of Stock resulting from a subdivision or
combination of shares or the payment of a stock dividend in shares of
Stock to holders of outstanding shares of Stock or any other increase or
decrease in the number of shares of Stock outstanding effected without
receipt of consideration by the Company.
(b) In the event of a merger, consolidation, reorganization,
extraordinary dividend, spin-off, sale of substantially all of the
Company's assets, other change in capital structure of the Company,
tender offer for shares of Stock, or a change in control of the Company
(as defined by the Committee in the applicable Stock Incentive Agreement)
the Committee may make such adjustments with respect to awards and take
such other action as it deems necessary or appropriate to reflect such
merger, consolidation, reorganization or tender offer, including, without
limitation, the
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substitution of new awards, or the adjustment of outstanding awards, the
acceleration of awards, the removal of restrictions on outstanding
awards, or the termination of outstanding awards in exchange for the cash
value determined in good faith by the Committee of the vested and/or
unvested portion of the award. Any adjustment pursuant to this Section
5.2 may provide, in the Committee's discretion, for the elimination
without payment therefor of any fractional shares that might otherwise
become subject to any Stock Incentive, but except as set forth in this
Section may not otherwise diminish the then value of the Stock Incentive.
(c) The existence of the Plan and the Stock Incentives granted
pursuant to the Plan must not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity
securities having preferences or priorities as to the Stock or the rights
thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or any other
corporate act or proceeding.
5.3 Cash Awards. The Committee may, at any time and in its discretion,
grant to any holder of a Stock Incentive the right to receive, at such times and
in such amounts as determined by the Committee in its discretion, a cash amount
which is intended to reimburse such person for all or a portion of the federal,
state and local income taxes imposed upon such person as a consequence of the
receipt of the Stock Incentive or the exercise of rights thereunder.
5.4 Compliance with Code. All Incentive Stock Options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder must be construed in
such manner as to effectuate that intent.
5.5 Right to Terminate Employment. Nothing in the Plan or in any Stock
Incentive confers upon any Participant the right to continue as an employee or
officer of the Company or any of its Affiliates or affect the right of the
Company or any of its Affiliates to terminate the Participant's employment or
services at any time.
5.6 Non-Alienation of Benefits. Other than as provided herein, no benefit
under the Plan may be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge; and any attempt to do so
shall be void. No such benefit may, prior to receipt by the Participant, be in
any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Participant.
5.7 Restrictions on Delivery and Sale of Shares; Legends. Each Stock
Incentive is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Stock
Incentive may be withheld unless and until such listing, registration or
qualification shall have been effected. If a
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registration statement is not in effect under the Securities Act of 1933 or any
applicable state securities laws with respect to the shares of Stock purchasable
or otherwise deliverable under Stock Incentives then outstanding, the Committee
may require, as a condition of exercise of any Option or as a condition to any
other delivery of Stock pursuant to a Stock Incentive, that the Participant or
other recipient of a Stock Incentive represent, in writing, that the shares
received pursuant to the Stock Incentive are being acquired for investment and
not with a view to distribution and agree that the shares will not be disposed
of except pursuant to an effective registration statement, unless the Company
shall have received an opinion of counsel that such disposition is exempt from
such requirement under the Securities Act of 1933 and any applicable state
securities laws. The Company may include on certificates representing shares
delivered pursuant to a Stock Incentive such legends referring to the foregoing
representations or restrictions or any other applicable restrictions on resale
as the Company, in its discretion, shall deem appropriate.
5.8 Listing and Legal Compliance. The Committee may suspend the exercise
or payment of any Stock Incentive so long as it determines that securities
exchange listing or registration or qualification under any securities laws is
required in connection therewith and has not been completed on terms acceptable
to the Committee.
5.9 Termination and Amendment of the Plan. The Board of Directors at any
time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of a Stock Incentive may adversely
affect the rights of the Participant under such Stock Incentive.
5.10 Stockholder Approval. The Plan must be submitted to the stockholders
of the Company for their approval within twelve (12) months before or after the
adoption of the Plan by the Board of Directors of the Company. If such approval
is not obtained, any Stock Incentive granted hereunder will be void.
5.11 Choice of Law. The laws of the State of Alabama shall govern the
Plan, to the extent not preempted by federal law, without reference to the
principles of conflict of laws.
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5.12 Effective Date of Plan. This Plan was approved by the Board of
Directors as of July 19, 2000.
SCI SYSTEMS, INC.
By: /s/ A. Eugene Sapp, Jr.
-------------------------------------
Title: President and Chief Executive
Officer
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ATTEST:
/s/ Michael Sullivan
- ------------------------------------
Title: Secretary
------------------------------
[CORPORATE SEAL]
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