EXHIBIT 10.13
ANICOM, INC.
1996 STOCK INCENTIVE PLAN, AS AMENDED
ANICOM, INC.
1996 STOCK INCENTIVE PLAN, AS AMENDED
TABLE OF CONTENTS
Page
ARTICLE I
ESTABLISHMENT, AMENDMENT AND RESTATEMENT................................... 1
1.1 Purpose............................................. 1
ARTICLE II
DEFINITIONS................................................................ 1
2.1 "Affiliate"......................................... 1
2.2 "Agreement" or "Award Agreement".................... 1
2.3 "Anixter Family".................................... 1
2.4 "Award"............................................. 1
2.5 "Board of Directors" or "Board"..................... 2
2.6 "Cause"............................................. 2
2.7 "Change in Control" ................................ 2
2.8 "Code" or "Internal Revenue Code"................... 2
2.9 "Commission"........................................ 2
2.10 "Committee"......................................... 2
2.11 "Common Stock"...................................... 2
2.12 "Company"........................................... 2
2.13 "Deferred Stock".................................... 2
2.14 "Disability"........................................ 2
2.15 "Disinterested Person".............................. 3
2.16 "Effective Date".................................... 3
2.17 "Exchange Act"...................................... 3
2.18 "Fair Market Value"................................. 3
2.19 "Grant Date"........................................ 3
2.20 "Incentive Stock Option"............................ 3
2.21 "Nonqualified Stock Option"......................... 3
2.22 "Option Period"..................................... 4
2.23 "Option Price"...................................... 4
2.24 "Participant"....................................... 4
2.25 "Plan".............................................. 4
2.26 "Public Offering"................................... 4
2.27 "Representative".................................... 4
2.28 "Restricted Stock".................................. 4
2.29 "Retirement"........................................ 4
2.30 "Rule 16b-3"........................................ 4
(i)
Page
2.31 "Securities Act".................................... 4
2.32 "Stock Appreciation Right".......................... 4
2.33 "Stock Option" or "Option".......................... 5
2.34 "Termination of Employment"......................... 5
ARTICLE III
ADMINISTRATION............................................................. 5
3.1 Committee Structure and Authority................... 5
ARTICLE IV
STOCK SUBJECT TO PLAN...................................................... 7
4.1 Number of Shares.................................... 7
4.2 Release of Shares................................... 8
4.3 Restrictions on Shares.............................. 8
4.4 Stockholder Rights.................................. 8
4.5 Reasonable Efforts To Register...................... 9
4.6 Anti-Dilution....................................... 9
ARTICLE V
ELIGIBILITY................................................................ 9
5.1 Eligibility......................................... 9
ARTICLE VI
STOCK OPTIONS.............................................................. 10
6.1 General............................................. 10
6.2 Grant and Exercise.................................. 10
6.3 Terms and Conditions................................ 10
6.4 Termination by Reason of Death...................... 13
6.5 Termination by Reason of Disability................. 13
6.6 Other Termination................................... 13
6.7 Cashing Out of Option............................... 13
ARTICLE VII
STOCK APPRECIATION RIGHTS.................................................. 14
7.1 General............................................. 14
7.2 Grant............................................... 14
7.3 Terms and Conditions................................ 14
ARTICLE VIII
RESTRICTED STOCK........................................................... 16
8.1 General............................................. 16
8.2 Awards and Certificates............................. 16
(ii)
Page
8.3 Terms and Conditions................................ 16
ARTICLE IX
DEFERRED STOCK............................................................. 18
9.1 General............................................. 18
9.2 Terms and Conditions................................ 18
ARTICLE X
PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THE PLAN..................... 19
10.1 Transfer of Shares.................................. 19
10.2 Limited Transfer During Offering.................... 19
10.3 Committee Discretion................................ 20
10.4 No Company Obligation............................... 20
ARTICLE XI
CHANGE IN CONTROL PROVISIONS............................................... 20
11.1 Impact of Event..................................... 20
11.2 Definition of Change in Control..................... 20
ARTICLE XII
MISCELLANEOUS.............................................................. 21
12.1 Amendments and Termination.......................... 22
12.2 Unfunded Status of Plan............................. 22
12.3 General Provisions.................................. 23
12.4 Mitigation of Excise Tax............................ 24
12.5 Status of Awards Under Code Section 162(m).......... 24
12.6 Rights with Respect to Continuance of Employment.... 24
12.7 Awards in Substitution for Awards Granted
by Other Corporations............................. 24
12.8 Procedure for Adoption.............................. 24
12.9 Procedure for Withdrawal............................ 25
12.10 Delay............................................... 25
12.11 Headings............................................ 25
12.12 Severability........................................ 25
12.13 Successors and Assigns.............................. 25
12.14 No Obligation to Give Notice........................ 25
12.15 No Third Party Beneficiaries........................ 25
12.16 Entire Agreement.................................... 25
(iii)
ANICOM, INC.
1996 STOCK INCENTIVE PLAN, AS AMENDED
ARTICLE II
ESTABLISHMENT, AMENDMENT AND RESTATEMENT
I Purpose.
The Anicom, Inc. 1996 Stock Incentive Plan (the "Plan"), is hereby
established by Anicom, Inc. (the "Company") effective April 15, 1996. The
purpose of the Plan is to promote the overall financial objectives of the
Company and its stockholders by motivating those persons selected to participate
in the Plan to achieve long-term growth in stockholder equity in the Company and
by retaining the association of those individuals who are instrumental in
achieving this growth. This Plan and the grant of awards hereunder is expressly
conditioned upon the Plan's approval by the security holders of the Company. If
such approval is not obtained, then the Plan and all Awards hereunder shall be
null and void ab initio.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Company including, without limitation, any member of an affiliated group of
which the Company is a common parent corporation as provided in Section 1504 of
the Code.
2.2 "Agreement" or "Award Agreement" means, individually or
collectively, any agreement entered into pursuant to the Plan pursuant to which
an Award is granted to a Participant.
2.3 "Anixter Family" means Alan B. Anixter, William R. Anixter, Scott
C. Anixter, their spouses, heirs and any group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of which any of the foregoing persons is a member for purposes of
acquiring, holding or disposing of securities of the Company, any trust
established by or for the benefit of any of the foregoing and any other entity
controlled by or for the benefit of any of the foregoing.
2.4 "Award" means a Stock Option, Stock Appreciation Right, Restricted
Stock or Deferred Stock.
2.5 "Board of Directors" or "Board" means the Board of Directors of the
Company.
2.6 "Cause" shall mean, for purposes of whether and when a Participant
has incurred a Termination of Employment for Cause, any act or omission which
permits the Company to terminate the written agreement or arrangement between
the Participant and the Company or an Affiliate for Cause as defined in such
agreement or arrangement, or in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the term "cause,"
then Cause shall mean (a) an act of fraud or dishonesty by Participant that
results in gain or personal enrichment of Participant at the Company's expense,
(b) Participant's conviction of a felony-class crime or any act involving moral
turpitude, (c) any material breach by Participant of any provision of this
Agreement that has not been cured by Participant within thirty days of written
notice of such breach from the Company, (d) the Participant's willful engaging
in gross misconduct materially injurious to the Company that has not been cured
by Participant within thirty days of written notice specifying the alleged
willful gross misconduct and material injury, or (e) any intentional act or
gross negligence by Participant that has a material, detrimental effect on the
reputation or business of the Company.
2.7 "Change in Control" has the meaning set forth in Section 11.2.
2.8 "Code" or "Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended, final Treasury Regulations thereunder and any subsequent
Internal Revenue Code.
2.9 "Commission" means the Securities and Exchange Commission or any
successor agency.
2.10 "Committee" means the person or persons appointed by the Board of
Directors to administer the Plan, as further described in the Plan.
2.11 "Common Stock" means the shares of Common Stock, $.001 par value,
whether presently or hereafter issued, and any other stock or security resulting
from adjustment thereof as described hereinafter or the common stock of any
successor to the Company which is designated for the purpose of the Plan.
2.12 "Company" means Anicom, Inc., a Delaware corporation, and includes
any successor or assignee corporation or corporations into which the Company may
be merged, changed or consolidated; any corporation for whose securities all or
substantially all of the securities of the Company shall be exchanged; and any
assignee of or successor to substantially all of the assets of the Company.
2.13 "Deferred Stock" means an Award made pursuant to Article IX.
2.14 "Disability" means a mental or physical illness, injury, or
infirmity that prevents Participant from fulfilling his or her duties for the
Company or an Affiliate for a period of
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sixty (60) consecutive days in the manner ordinarily required of him or her.
Notwithstanding the foregoing, a Disability shall not qualify under the Plan if
it is the result of (i) a willfully self-inflicted injury or willfully
self-induced sickness; or (ii) an injury or disease contracted, suffered, or
incurred, while participating in a criminal offense. The determination of
Disability shall be made by the Committee. The determination of Disability for
purposes of the Plan shall not be construed to be an admission of disability for
any other purpose.
2.15 "Disinterested Person" shall have the meaning set forth in Rule
16b-3 and shall mean a person is also an "outside director" under Section 162(m)
of the Code.
2.16 "Effective Date" means April 15, 1996.
2.17 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.18 "Fair Market Value" means the value of the Common Stock determined
on the basis of the good faith determination of the Committee, without regard to
whether the Common Stock is restricted or represents a minority interest,
pursuant to the applicable method described below:
(a) if the Common Stock is listed on a national securities
exchange or quoted on The Nasdaq Stock Market (either the Nasdaq
National Market or the Nasdaq Small Cap Market (in either case,
"NASDAQ")), unless otherwise provided in an Agreement or determined by
the Committee, the closing price of the Common Stock on the relevant
date (or, if such date is not a business day or a day on which
quotations are reported, then on the immediately preceding date on
which quotations were reported), as reported by the principal national
exchange on which such shares are traded (in the case of an exchange)
or by the NASDAQ, as the case may be;
(b) if the Common Stock is not listed on a national securities
exchange or quoted on the NASDAQ, but is actively traded in the
over-the-counter market, unless otherwise provided in an Agreement or
determined by the Committee, the average of the closing bid and asked
prices for the Common Stock on the relevant date (or, if such date is
not a business day or a day on which quotations are reported, then on
the immediately preceding date on which quotations were reported), or
the most recent preceding date for which such quotations are reported;
and
(c) if, on the relevant date, the Common Stock is not publicly
traded or reported as described in (a) or (b), the value determined in
good faith by the Committee.
2.19 "Grant Date" means the date that as of which an Award is granted
pursuant to the Plan.
2.20 "Incentive Stock Option" means any Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
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2.21 "Nonqualified Stock Option" means an Option granted under the Plan
other than an incentive stock option within the meaning of Section 422 of the
Code.
2.22 "Option Period" means the period during which an Option shall be
exercisable in accordance with the Agreement and Article VI.
2.23 "Option Price" means the price at which the Common Stock may be
purchased under an Option as provided in Section 6.3.
2.24 "Participant" means a person who satisfies the eligibility
conditions of Article V and to whom an Award has been granted by the Committee
under the Plan, and in the event a person becomes a Representative, then the
term "Participant" shall mean such Representative. For purposes of this
Agreement, the term "Termination of Employment" shall be deemed to be binding on
a Representative of the Participant.
2.25 "Plan" means the Anicom, Inc. 1995 Stock Incentive Plan, as herein
set forth and as may be amended from time to time.
2.26 "Public Offering" means an initial public offering of shares of
Common Stock under the Securities Act.
2.27 "Representative" means (a) the person or entity acting as the
executor or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had the Participant's primary residence at the date of the
Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
beneficiary of the Participant upon or following the Participant's death; or (d)
any person to whom an Option has been permissibly transferred including, without
limitation, a trust for the benefit of the Participant, the Participant's
parents, spouse or descendants, or a custodian under a uniform gifts to minors
act or similar statute for the benefit of the Participant's descendants, to the
extent permitted by the Committee and not inconsistent with Rule 16b-3 or the
status of the Option as an Incentive Stock Option; provided that only one of the
foregoing shall be the Representative at any point in time as determined under
applicable law and recognized by the Committee.
2.28 "Restricted Stock" means an Award under Article VIII.
2.29 "Retirement" means the Participant's voluntary Termination of
Employment with the intent of not re-entering the work force after attaining
either the normal retirement age or the early retirement age as defined in the
principal (as determined by the Committee) tax-qualified plan of the Company or
an Affiliate. If the Participant is not covered by such a plan, then age 65
shall be deemed the age of Retirement.
2.30 "Rule 16b-3" and "Rule 16a-1(c)(3)" means Rule 16b-3 and Rule
16a-1(c)(3), as promulgated under the Exchange Act, as amended from time to
time, or any successor thereto.
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2.31 "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
2.32 "Stock Appreciation Right" means a right granted under Article
VII.
2.33 "Stock Option" or "Option" means an option granted under Article
VI.
2.34 "Termination of Employment" means the occurrence of any act or
event whether pursuant to an employment agreement or otherwise that actually or
effectively causes or results in the person's ceasing, for whatever reason, to
be an officer, independent contractor, director or employee of the Company or of
any Affiliate, or to be an officer, independent contractor, director or employee
of any entity that provides services to the Company or an Affiliate, including,
without limitation, death, Disability, dismissal, severance at the election of
the Participant, Retirement, or severance as a result of the discontinuance,
liquidation, sale or transfer by the Company or its Affiliates of all businesses
owned or operated by the Company or its Affiliates. With respect to any person
who is not an employee with respect to the Company or an Affiliate, the
Agreement shall establish what act or event shall constitute a Termination of
Employment for purposes of the Plan. A Termination of Employment shall occur to
an employee who is employed by an Affiliate if the Affiliate shall cease to be
an Affiliate and the Participant shall not immediately thereafter become an
employee of the Company or an Affiliate.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
ARTICLE III
ADMINISTRATION
3.1 Committee Structure and Authority. The Plan shall be administered
by the Committee which may be comprised of one or more persons. The Committee
shall be the Option Committee of the Board of Directors, unless such committee
does not exist or the Board establishes a committee whose sole purpose is the
administration of the Plan; provided that only those members of the Option
Committee of the Board who participate in the decision relative to Awards under
the Plan shall be deemed to be part of the "Committee" for purposes of the Plan.
In the absence of an appointment, the Board or the portion thereof that are
Disinterested Persons shall be the Committee. A majority of the Committee shall
constitute a quorum at any meeting thereof (including telephone conference) and
the acts of a majority of the members present, or acts approved in writing by a
majority of the entire Committee without a meeting, shall be the acts of the
Committee for purposes of the Plan. The Committee may authorize any one or more
of its members or an officer of the Company to execute and deliver documents on
behalf of the Committee. The Committee shall include no less than the number of
Disinterested Persons required for application of Rule 16b-3 and the deduction
of compensation under Section 162(m) of the Code. No member of the Committee
shall exercise any discretion respecting himself or herself under the Plan. The
Board shall have the authority to remove, replace or fill any vacancy
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of any member of the Committee upon notice to the Committee and the affected
member. Any member of the Committee may resign upon notice to the Board. The
Committee may allocate among one or more of its members, or may delegate to one
or more of its agents, such duties and responsibilities as it determines.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan:
(a) to select those persons to whom Awards may be granted from
time to time;
(b) to determine whether and to what extent Stock Options,
Stock Appreciation Rights, Restricted Stock and Deferred Stock or any
combination thereof are to be granted hereunder;
(c) to determine the number of shares of Common Stock to be
covered by each Award granted hereunder;
(d) to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the Option Price, the Option
Period, any exercise restriction or limitation and any exercise
acceleration or forfeiture waiver regarding any Award and the shares of
Common Stock relating thereto);
(e) to adjust the terms and conditions, at any time or from
time to time, of any Award, subject to the limitations of Section 12.1;
(f) to determine to what extent and under what circumstances
Common Stock and other amounts payable with respect to an Award shall
be deferred;
(g) to determine under what circumstances an Award may be
settled in cash or Common Stock.
(h) to provide for the forms of Agreement to be utilized in
connection with the Plan;
(i) to determine whether a Participant has a Disability or is
in Retirement;
(j) to determine what securities law requirements are
applicable to the Plan, Awards, and the issuance of shares of Common
Stock and to require of a Participant that appropriate action be taken
with respect to such requirements;
(k) to cancel, with the consent of the Participant or as
otherwise provided in the Plan or an Agreement, outstanding Awards;
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(l) to interpret and make a final determination with respect
to the remaining number of shares of Common Stock available under the
Plan;
(m) to require as a condition of the exercise of an Award or
the issuance or transfer of a certificate of Common Stock, the
withholding from a Participant of the amount of any federal, state or
local taxes as may be necessary in order for the Company or any other
employer to obtain a deduction or as may be otherwise required by law;
(n) to determine whether and with what effect an individual
has incurred a Termination of Employment;
(o) to determine whether the Company or any other person has a
right or obligation to purchase Common Stock from a Participant and, if
so, the terms and conditions on which such Common Stock is to be
purchased;
(p) to determine the restrictions or limitations on the
transfer of Common Stock;
(q) to determine whether an Award is to be adjusted, modified
or purchased, or is to become fully exercisable, under the Plan or the
terms of an Agreement;
(r) to determine the permissible methods of Award exercise and
payment, including cashless exercise arrangements;
(s) to adopt, amend and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the Plan; and
(t) to appoint and compensate agents, counsel, auditors or
other specialists to aid it in the discharge of its duties.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any Agreement) and to otherwise
supervise the administration of the Plan. The Committee's policies and
procedures may differ with respect to Awards granted at different times or to
different Participants.
Any determination made by the Committee pursuant to the provisions of
the Plan shall be made in its sole discretion, and in the case of any
determination relating to an Award, may be made at the time of the grant of the
Award or, unless in contravention of any express term of the Plan or an
Agreement, at any time thereafter. All decisions made by the Committee pursuant
to the provisions of the Plan shall be final and binding on all persons,
including the Company and Participants. Any determination shall not be subject
to de novo review if challenged in court.
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ARTICLE IV
STOCK SUBJECT TO PLAN
4.1 Number of Shares. Subject to adjustment under Section 4.6, the
total number of shares of Common Stock reserved and available for distribution
pursuant to Options under the Plan shall be 1,800,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in whole
or in part, of authorized and unissued shares or treasury shares.
4.2 Release of Shares. The Committee shall have full authority to
determine the number of shares of Common Stock available for Award, and in its
discretion may include (without limitation) as available for distribution any
shares of Common Stock that have ceased to be subject to an Award, any shares of
Common Stock subject to any Award that are forfeited, any Award that otherwise
terminates without issuance of shares of Common Stock being made to the
Participant, or any shares (whether or not restricted) of Common Stock that are
received by the Company in connection with the exercise of an Award including
the satisfaction of any tax liability or the satisfaction of a tax withholding
obligation. If any shares could not again be available for Options to a
particular Participant under any applicable law, such shares shall be available
exclusively for Options to Participants who are not subject to such limitations.
4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise
of an Award shall be subject to the terms and conditions specified herein and to
such other terms, conditions and restrictions as the Committee in its discretion
may determine or provide in the Award Agreement. The Company shall not be
required to issue or deliver any certificates for shares of Common Stock, cash
or other property prior to (i) the listing of such shares on any stock exchange
(or other public market) on which the Common Stock may then be listed (or
regularly traded), (ii) the completion of any registration or qualification of
such shares under federal or state law, or any ruling or regulation of any
government body which the Committee determines to be necessary or advisable, and
(iii) the satisfaction of any applicable withholding obligation in order for the
Company or an Affiliate to obtain a deduction with respect to the exercise of an
Award. The Company may cause any certificate for any share of Common Stock which
is to be delivered to be properly marked with a legend or other notation
reflecting the limitations on transfer of such Common Stock as provided in the
Plan or as the Committee may otherwise require. The Committee may require any
person exercising an Award to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of the shares of Common Stock in compliance with applicable law or
otherwise. Fractional shares shall not be delivered, but shall be rounded to the
next lower whole number of shares.
4.4 Stockholder Rights. No person shall have any rights of a
stockholder as to shares of Common Stock subject to an Award until, after proper
exercise of the Award or other action required, such shares shall have been
recorded on the Company's official stockholder records as having been issued or
transferred. Upon exercise of the Award or any portion thereof, the Company will
have thirty (30) days in which to issue the shares, and the Participant will not
be treated as a stockholder for any purpose whatsoever prior to such issuance.
No adjustment shall
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be made for cash dividends or other rights for which the record date is prior to
the date such shares are recorded as issued or transferred in the Company's
official stockholder records, except as provided herein or in an Agreement.
4.5 Reasonable Efforts To Register. If there has been a Public
Offering, the Company intends to register under the Securities Act the Common
Stock delivered or deliverable pursuant to Awards on Form S-8 if available to
the Company for this purpose (or any successor or alternate form that is
substantially similar to that form to the extent available to effect such
registration), in accordance with the rules and regulations governing such
forms. If the Committee deems registration to be in the Company's best
interests, the Company will use its reasonable efforts to cause a registration
statement to become effective and will file such supplements and amendments to
the registration statement as may be necessary to keep the registration
statement in effect until the earliest of (a) one year following the expiration
of the Option Period of the last Option outstanding, (b) the date the Company is
no longer a reporting company under the Exchange Act and (c) the date all
Participants have disposed of all shares delivered pursuant to any Award. The
Company may delay the foregoing obligation if the Committee reasonably
determines that any such registration is not in the Company's best interests or
if there is no material benefit to Participants in the Plan.
4.6 Anti-Dilution. In the event of any Company stock dividend, stock
split, combination or exchange of shares, recapitalization or other change in
the capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company stockholders other than a normal cash dividend), sale by
the Company of all or a substantial portion of its assets (measured on either a
stand-alone or consolidated basis), reorganization, rights offering, a partial
or complete liquidation, or any other corporate transaction, Company share
offering or event involving the Company and having an effect similar to any of
the foregoing, then the Committee shall adjust or substitute, as the case may
be, the number of shares of Common Stock available for Awards under the Plan,
the number of shares of Common Stock covered by outstanding Awards, the maximum
number of Awards available for grant to any Participant for a stated period of
time (including the maximum number of Stock Appreciation Rights), the exercise
price per share of outstanding Awards, and any other characteristics or terms of
the Awards as the Committee shall deem necessary or appropriate to reflect
equitably the effects of such changes to the Participants; provided, however,
that the Committee may limit any such adjustment so as to maintain the
deductibility of the Awards under Section 162(m) of the Code, and that any
fractional shares resulting from such adjustment shall be eliminated by rounding
to the next lower whole number of shares with appropriate payment for such
fractional share as shall reasonably be determined by the Committee.
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ARTICLE V
ELIGIBILITY
5.1 Eligibility. Except as herein provided, the persons who shall be
eligible to participate in the Plan and be granted Awards shall be those persons
who are officers, employees and consultants of the Company, who shall be in a
position, in the opinion of the Committee, to make contributions to the growth,
management, protection and success of the Company. Of those persons described in
the preceding sentence, the Committee may, from time to time, select persons to
be granted Awards and shall determine the terms and conditions with respect
thereto. In making any such selection and in determining the form of the Award,
the Committee may give consideration to the functions and responsibilities of
the person's contributions to the Company, the value of the individual's service
to the Company and such other factors deemed relevant by the Committee. The
Committee may designate any person who is not eligible to participate in this
Plan if such person would otherwise be eligible to participate in this Plan (and
members of the Committee are expressly excluded to the extent such persons are
intended to be Disinterested Persons).
ARTICLE VI
STOCK OPTIONS
6.1 General. The Committee shall have authority to grant Options under
the Plan at any time or from time to time. Stock Options may be granted alone or
in addition to other Awards and may be either Incentive Stock Options or
Non-Qualified Stock Options. An Option shall entitle the Participant to receive
shares of Common Stock upon exercise of such Option, subject to the
Participant's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement (the terms and
provisions of which may differ from other Agreements) including without
limitation, payment of the Option Price. During any three-calendar-year-period,
Options for no more than 300,000 shares of Common Stock (subject to adjustment
under Section 4.6) shall be granted to any Participant.
6.2 Grant and Exercise. The grant of a Stock Option shall occur as of
the date the Committee determines. Each Option granted under the Plan shall be
evidenced by an Agreement, in a form approved by the Committee, which shall
embody the terms and conditions of such Option and which shall be subject to the
express terms and conditions set forth in the Plan. Such Agreement shall become
effective upon execution by the Participant. Only a person who is a common-law
employee of the Company (as such terms are defined in Section 424 of the Code)
on the date of grant shall be eligible to be granted an Option which is intended
to be and is an Incentive Stock Option. To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option. Anything in the Plan to the contrary notwithstanding, no term of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered,
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nor shall any discretion or authority granted under the Plan be exercised, so as
to disqualify the Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any Incentive Stock Option under such
Section 422.
6.3 Terms and Conditions. Stock Options shall be subject to such terms
and conditions as shall be determined by the Committee, including the following:
(a) Option Period. The Option Period of each Stock Option
shall be fixed by the Committee; provided that no Non-Qualified Stock
Option shall be exercisable more than ten (10) years after the date the
Stock Option is granted. In the case of an Incentive Stock Option, the
Option Period shall not exceed ten (10) years from the date of grant or
five (5) years in the case of an individual who owns more than ten
percent (10%) of the voting power of all classes of stock of the
Company, a corporation which is a parent corporation of the Company or
any subsidiary of the Company (as defined in Section 424 of the Code).
No Option which is intended to be an Incentive Stock Option shall be
granted more than ten (10) years from the date the Plan is adopted by
the Company or the date the Plan is approved by the stockholders of the
Company, whichever is earlier.
(b) Option Price. The Option Price per share of the Common
Stock purchasable under an Option shall be determined by the Committee.
If such Option is intended to qualify as an Incentive Stock Option, the
Option Price per share shall be not less than the Fair Market Value per
share on the date the Option is granted, or where granted to an
individual who owns or who is deemed to own stock possessing more than
ten percent (10%) of the combined voting power of all classes of stock
of the Company, a corporation which is a parent corporation of the
Company or any subsidiary of the Company (each as defined in Section
424 of the Code), not less than one hundred ten percent (110%) of such
Fair Market Value per share.
(c) Exercisability. Subject to Section 11.1, Stock Options
shall be exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Committee. If the
Committee provides that any Stock Option is exercisable only in
installments, the Committee may at any time waive such installment
exercise provisions, in whole or in part. In addition, the Committee
may at any time accelerate the exercisability of any Stock Option. If
the Committee intends that an Option be an Incentive Stock Option, the
Committee shall, in its discretion, provide that the aggregate Fair
Market Value (determined at the Grant Date) of Incentive Stock Option
which is exercisable for the first time during the calendar year shall
not exceed $100,000.
(d) Method of Exercise. Subject to the provisions of this
Article VI, a Participant may exercise Stock Options, in whole or in
part, at any time during the Option Period by the Participant's giving
written notice of exercise on a form provided by the Committee to the
Company specifying the number of shares of Common Stock subject to the
Stock Option to be purchased. Except where waived by the Committee,
such notice shall be accompanied by payment in full of the purchase
price by cash or check or such
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other form of payment as the Company may accept. If approved by the
Committee (including approval at the time of exercise), payment in full
or in part may also be made (i) by delivering Common Stock already
owned by the Participant having a total Fair Market Value on the date
of such delivery equal to the Option Price; (ii) by the execution and
delivery of a note or other evidence of indebtedness (and any security
agreement thereunder) satisfactory to the Committee and permitted in
accordance with Section 6.3(e); (iii) by authorizing the Company to
retain shares of Common Stock which would otherwise be issuable upon
exercise of the Option having a total Fair Market Value on the date of
delivery equal to the Option Price; (iv) by the delivery of cash or the
extension of credit by a broker-dealer to whom the Participant has
submitted a notice of exercise or otherwise indicated an intent to
exercise an Option (in accordance with Part 220, Chapter II, Title 12
of the Code of Federal Regulations, a so-called "cashless" exercise);
(v) by certifying ownership of shares of Common Stock by the
Participant to the satisfaction of the Committee for later delivery to
the Company as specified by the Committee; or (vi) by any combination
of the foregoing. If payment of the Option Price of a Non-Qualified
Stock Option is made in whole or in part in the form of Restricted
Stock or Deferred Stock, the number of shares of Common Stock to be
received upon such exercise equal to the number of shares of Restricted
Stock or Deferred Stock used for payment of the Option Price shall be
subject to the same forfeiture restrictions or deferral limitations to
which such Restricted Stock or Deferred Stock was subject, unless
otherwise determined by the Committee. In the case of an Incentive
Stock Option, the right to make a payment in the form of already owned
shares of Common Stock of the same class as the Common Stock subject to
the Stock Option may be authorized only at the time the Stock Option is
granted. No shares of Common Stock shall be issued until full payment
therefor has been made. Subject to any forfeiture restrictions or
deferral limitations that may apply if a Stock Option is exercised
using Restricted Stock or Deferred Stock, a Participant shall have all
of the rights of a stockholder of the Company holding the Common Stock
that is subject to such Stock Option (including, if applicable, the
right to vote the shares and the right to receive dividends), when the
Participant has given written notice of exercise, has paid in full for
such shares and such shares have been recorded on the Company's
official stockholder records as having been issued or transferred.
(e) Non-transferability of Options. Unless otherwise provided
in an Agreement or determined by the Committee, no Stock Option or
interest therein shall be transferable by the Participant other than by
will or by the laws of descent and distribution or by a designation of
beneficiary effective upon the death of the Participant, and all Stock
Options shall be exercisable during the Participant's lifetime only by
the Participant. If and to the extent transferability is permitted by
Rule 16b-3 and except as otherwise provided herein or by an Agreement,
every Option granted hereunder shall be freely transferable, but only
if such transfer does not result in liability under Section 16 of the
Exchange Act to the Participant or other Participants and is consistent
with registration of the Option and sale of Common Stock on Form S-8
(or a successor form) or the Committee's waiver of such condition.
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6.4 Termination by Reason of Death. Unless otherwise provided in an
Agreement or determined by the Committee, if a Participant incurs a Termination
of Employment due to death, any vested, unexpired and unexercised Stock Options
held by such Participant shall thereafter be fully exercisable for a period of
one (1) year (or such other period or no period as the Committee may specify)
immediately following the date of such death or until the expiration of the
Option Period, whichever period is the shorter.
6.5 Termination by Reason of Disability. Unless otherwise provided in
an Agreement or determined by the Committee, if a Participant incurs a
Termination of Employment due to a Disability, any vested, unexpired and
unexercised Stock Options held by such Participant shall thereafter be fully
exercisable by the Participant for the period of one (1) year (or such other
period or no period as the Committee may specify) immediately following the date
of such Termination of Employment or until the expiration of the Option Period,
whichever period is shorter, and the Participant's death at any time following
such Termination of Employment due to Disability shall not affect the foregoing.
In the event of Termination of Employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.
6.6 Other Termination. Unless otherwise provided in an Agreement or
determined by the Committee, if a Participant incurs a Termination of Employment
due to Retirement, any vested, unexpired and unexercised Stock Option held by
such Participant shall thereafter be fully exercisable by the Participant for
the period of one (1) year (or such other period or no period as the Committee
may specify) immediately following the date of such Termination of Employment or
until the expiration of the Option Period, whichever period is shorter. Unless
otherwise provided in an Agreement or determined by the Committee, if a
Participant voluntarily incurs a Termination of Employment (other than due to
Retirement) or incurs a Termination of Employment by the Company for Cause, any
vested, unexpired and unexercised Stock Option held by such Participant shall
terminate immediately upon notice of termination by the Participant or the
Company, as the case may be. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment by the Company without Cause (other than due to death or Disability),
any vested, unexpired and unexercised Stock Options held by such Participant
shall thereafter be fully exercisable for a period of three (3) months (or such
other period or no period as the Committee may specify) immediately following
the date of such Termination of Employment or until the expiration of the Option
Period, whichever period is shorter. Unless otherwise provided in an Agreement
or determined by the Committee, the death or Disability of a Participant after a
Termination of Employment otherwise provided herein shall not extend the
exercisability of the time permitted to exercise an Option.
6.7 Cashing Out of Option. On receipt of written notice of exercise,
the Committee may elect to cash out all or part of the portion of any Stock
Option for which at least six months has elapsed since the Grant Date (provided
that such limitation shall not apply to an Option granted to a Participant who
has subsequently died) to be exercised by paying the Participant an amount, in
cash or Common Stock, equal to the excess of the Fair Market Value of the Common
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Stock that is subject to the Option over the Option Price times the number of
shares of Common Stock subject to the Option on the effective date of such cash
out. Cash outs relating to Options held by Participants who are actually or
potentially subject to Section 16(b) of the Exchange Act shall comply with the
"window period" provisions of Rule 16b-3, to the extent applicable, and, in the
case of cash outs of Non-Qualified Stock Options held by such Participants, the
Committee may determine Fair Market Value under the pricing rule set forth in
Section 2.18.
ARTICLE VII
STOCK APPRECIATION RIGHTS
7.1 General. The Committee shall have authority to grant Stock
Appreciation Rights under the Plan at any time or from time to time. Subject to
the Participant's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement, a Stock
Appreciation Right shall entitle the Participant to surrender to the Company the
Stock Appreciation Right and to be paid therefor in shares of the Common Stock,
cash or a combination thereof as herein provided, the amount described in
Section 7.3(b).
7.2 Grant. Stock Appreciation Rights may be granted in conjunction
with all or part of any Stock Option granted under the Plan and the exercise of
such a Stock Appreciation Right shall require the cancellation of a
corresponding portion of the Stock Option (and the exercise of a Stock Option
shall result in a corresponding cancellation of the Stock Appreciation Right).
In the case of a Non-Qualified Stock Option, such rights may be granted either
at or after the time of grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right may also be granted on a stand alone basis.
The grant of a Stock Appreciation Right shall occur as of the date the Committee
determines. Each Stock Appreciation Right granted under the Plan shall be
evidenced by an Agreement, which shall embody the terms and conditions of such
Stock Appreciation Right and which shall be subject to the terms and conditions
set forth in the Plan. During any three-calendar-year-period, Stock Appreciation
Rights in respect of no more than 300,000 shares of Common Stock (subject to
adjustment under Section 4.6) shall be granted to any Participant.
7.3 Terms and Conditions. Stock Appreciation Rights shall be subject
to such terms and conditions as shall be determined by the Committee, including
the following:
(a) Period and Exercise. The term of a Stock Appreciation
Right shall be established by the Committee. If granted in conjunction
with a Stock Option, the Stock Appreciation Right shall have a term
which is the same as the Option Period and shall be exercisable only at
such time or times and to the extent the related Stock Options would be
exercisable in accordance with the provisions of Article VI. A Stock
Appreciation Right which is granted on a stand alone basis shall be for
such period and shall be exercisable at such times and to the extent
provided in an Agreement. Stock Appreciation Rights shall be exercised
by the Participant's giving written notice of exercise on a form
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provided by the Committee (if available) to the Company specifying the
portion of the Stock Appreciation Right to be exercised.
(b) Amount. Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount in cash, shares of
Common Stock or both as determined by the Committee or as otherwise
permitted in an Agreement equal in value to the excess of the Fair
Market Value per share of Common Stock over the Option Price per share
of Common Stock specified in the related Agreement multiplied by the
number of shares in respect of which the Stock Appreciation Right is
exercised. In the case of a Stock Appreciation Right granted on a stand
alone basis, the Agreement shall specify the value to be used in lieu
of the Option Price per share of Common Stock. The aggregate Fair
Market Value per share of the Common Stock shall be determined as of
the date of exercise of such Stock Appreciation Right.
(c) Special Rules. In the case of Stock Appreciation Rights
relating to Stock Options held by Participants who are actually or
potentially subject to Section 16(b) of the Exchange Act:
(i) The Committee may require that such Stock
Appreciation Rights be exercised only in accordance with the
applicable "window period" provisions of Rule 16b-3;
(ii) The Committee may provide that the amount to be
paid upon exercise of such Stock Appreciation Rights (other
than those relating to Incentive Stock Options) during a Rule
16b-3 "window period" shall be based on the highest mean sales
price of the Common Stock on the principal exchange on which
the Common Stock is traded, NASDAQ or other relevant market
for determining value on any day during such "window period";
and
(iii) no Stock Appreciation Right shall be
exercisable during the first six months of its term, except
that this limitation shall not apply in the event of death or
Disability of the Participant prior to the expiration of the
six-month period.
(d) Non-transferability of Stock Appreciation Rights. Stock
Appreciation Rights shall be transferable only when and to the extent
that a Stock Option would be transferable under the Plan unless
otherwise provided in an Agreement.
(e) Termination. A Stock Appreciation Right shall terminate at
such time as a Stock Option would terminate under the Plan, unless
otherwise provided in an Agreement.
(f) Effect on Shares Under the Plan. To the extent required by
Rule 16b-3, upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is
related shall be deemed to have been exercised for the
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purpose of the limitation set forth in Section 4.2 on the number of
shares of Common Stock to be issued under the Plan, but only to the
extent of the number of shares of Common Stock covered by the Stock
Appreciation Right at the time of exercise based on the value of the
Stock Appreciation Right at such time.
(g) Incentive Stock Option. A Stock Appreciation Right granted
in tandem with an Incentive Stock Option shall not be exercisable
unless the Fair Market Value of the Common Stock on the date of
exercise exceeds the Option Price. In no event shall any amount paid
pursuant to the Stock Appreciation Right exceed the difference between
the Fair Market Value on the date of exercise and the Option Price.
ARTICLE VIII
RESTRICTED STOCK
8.1 General. The Committee shall have authority to grant Restricted
Stock under the Plan at any time or from time to time. Shares of Restricted
Stock may be awarded either alone or in addition to other Awards granted under
the Plan. The Committee shall determine the persons to whom and the time or
times at which grants of Restricted Stock will be awarded, the number of shares
of Restricted Shares to be awarded to any Participant, the time or times within
which such Awards may be subject to forfeiture and any other terms and
conditions of the Awards. Each Award shall be confirmed by, and be subject to
the terms of, an Agreement. The Committee may condition the grant of Restricted
Stock upon the attainment of specified performance goals by the Participant or
by the Company or an Affiliate (including a division or department of the
Company or an Affiliate) for or within which the Participant is primarily
employed or upon such other factors or criteria as the Committee shall
determine. The provisions of Restricted Stock Awards need not be the same with
respect to any Participant.
8.2 Awards and Certificates. Notwithstanding the limitations on
issuance of shares of Common Stock otherwise provided in the Plan, each
Participant receiving an Award of Restricted Stock shall be issued a certificate
in respect of such shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award as
determined by the Committee. The Committee may require that the certificates
evidencing such shares be held in custody by the Company until the restrictions
thereon shall have lapsed and that, as a condition of any Award of Restricted
Stock, the Participant shall have delivered a stock power, endorsed in blank,
relating to the Common Stock covered by such Award.
8.3 Terms and Conditions. Shares of Restricted Stock shall be subject
to the following terms and conditions:
(a) Limitations on Transferability. Subject to the provisions
of the Plan and the Agreement, during a period set by the Committee,
commencing with the date of such
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Award (the "Restriction Period"), the Participant shall not be
permitted to sell, assign, transfer, pledge or otherwise encumber any
interest in shares of Restricted Stock.
(b) Rights. Except as provided in Section 8.3(a), the
Participant shall have, with respect to the shares of Restricted Stock,
all of the rights of a stockholder of the Company holding the class of
Common Stock that is the subject of the Restricted Stock, including, if
applicable, the right to vote the shares and the right to receive any
cash dividends. Unless otherwise determined by the Committee and
subject to the Plan, cash dividends on Common Stock that are the
subject of the Restricted Stock shall be automatically deferred and
reinvested in additional Restricted Stock, and dividends on Common
Stock that are the subject of the Restricted Stock shall be paid in the
form of Restricted Stock of Common Stock on which such dividend was
paid.
(c) Criteria. Based on service, performance by the Participant
or by the Company or the Affiliate, including any division or
department for which the Participant is employed or such other factors
or criteria as the Committee may determine, the Committee may provide
for the lapse of restrictions in installments and may accelerate the
vesting of all or any part of any Award and waive the restrictions for
all or any part of such Award.
(d) Forfeiture. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment during the Restriction Period due to death or Disability,
the restrictions shall lapse and the Participant shall be fully vested
in the Restricted Stock. Except to the extent otherwise provided in the
applicable Agreement and the Plan, upon a Participant's Termination of
Employment for any reason during the Restriction Period other than
death or Disability, all shares of Restricted Stock still subject to
restriction shall be forfeited by the Participant, except the Committee
shall have the discretion to waive in whole or in part any or all
remaining restrictions with respect to any or all of such Participant's
shares of Restricted Stock.
(e) Delivery. If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, unlegended certificates for such shares shall be
delivered to the Participant.
(f) Election. A Participant may elect to further defer receipt
of the Restricted Stock for a specified period or until a specified
event, subject in each case to the Committee's approval and to such
terms as are determined by the Committee. Subject to any exceptions
adopted by the Committee, such election must be made one (1) year prior
to completion of the Restriction Period.
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ARTICLE IX
DEFERRED STOCK
9.1 General. The Committee shall have authority to grant Deferred
Stock under the Plan at any time or from time to time. Shares of Deferred Stock
may be awarded either alone or in addition to other Awards granted under the
Plan. The Committee shall determine the persons to whom and the time or times at
which Deferred Stock will be awarded, the number of shares of Deferred Stock to
be awarded to any Participant, the duration of the period (the "Deferral
Period") prior to which the Common Stock will be delivered, and the conditions
under which receipt of the Common Stock will be deferred and any other terms and
conditions of the Awards. Each Award shall be confirmed by, and be subject to
the terms of, an Agreement. The Committee may condition the grant of Deferred
Stock upon the attainment of specified performance goals by the Participant or
by the Company or an Affiliate, including a division or department of the
Company or an Affiliate for or within which the Participant is primarily
employed or upon such other factors or criteria as the Committee shall
determine. The provisions of Deferred Stock Awards need not be the same with
respect to any Participant.
9.2 Terms and Conditions. Deferred Stock Awards shall be subject to
the following terms and conditions:
(a) Limitations on Transferability. Subject to the provisions
of the Plan and except as provided in an Agreement, Deferred Stock
Awards, or any interest therein, may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Deferral
Period. At the expiration of the Deferral Period (or Elective Deferral
Period as defined in Section 9.2(e), where applicable), the Committee
may elect to deliver Common Stock, cash equal to the Fair Market Value
of such Common Stock or a combination of cash and Common Stock, to the
Participant for the shares covered by the Deferred Stock Award.
(b) Rights. Unless otherwise determined by the Committee and
subject to the Plan, cash dividends on the Common Stock that is the
subject of the Deferred Stock Award shall be automatically deferred and
reinvested in additional Deferred Stock, and dividends on the Common
Stock that is the subject of the Deferred Stock Award payable in Common
Stock shall be paid in the form of Deferred Stock of Common Stock on
which such dividend was paid.
(c) Criteria. Based on service, performance by the Participant
or by the Company or the Affiliate, including any division or
department for which the Participant is employed or such other factors
or criteria as the Committee may determine, the Committee may provide
for the lapse of deferral limitations in installments and may
accelerate the vesting of all or any part of any Award and waive the
deferral limitations for all or any part of such Award.
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(d) Forfeiture. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment during the Deferral Period due to death or Disability, the
restrictions shall lapse and the Participant shall be fully vested in
the Deferred Stock. Unless otherwise provided in an Agreement or
determined by the Committee, upon a Participant's Termination of
Employment for any reason during the Deferral Period other than death
or Disability, the rights to the shares still covered by the Award
shall be forfeited by the Participant, except the Committee shall have
the discretion to waive in whole or in part any or all remaining
deferral limitations with respect to any or all of such Participant's
Deferred Stock.
(e) Election. A Participant may elect to further defer receipt
of the Deferred Stock payable under an Award (or an installment of an
Award) for a specified period or until a specified event, subject in
each case to the Committee's approval and to such terms as are
determined by the Committee. Subject to any exceptions adopted by the
Committee, such election must be made at one (1) year prior to
completion of the Deferral Period for the Award.
ARTICLE XXI
PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THE PLAN
10.1 Transfer of Shares. A Participant may at any time make a transfer
of shares of Common Stock received pursuant to the exercise of an Award to his
parents, spouse or descendants or to any trust for the benefit of the foregoing
or to a custodian under a uniform gifts to minors act or similar statute for the
benefit of any of the Participant's descendants. Any transfer of shares received
pursuant to the exercise of an Award shall not be permitted or valid unless and
until the transferee agrees to be bound by the provisions of the Plan, and any
provision respecting Common Stock under the Agreement, provided that
"Termination of Employment" shall continue to refer to the Termination of
Employment of the Participant.
10.2 Limited Transfer During Offering. In the event there is an
effective registration statement under the Securities Act pursuant to which
shares of Common Stock shall be offered for sale in an underwritten offering, a
Participant shall not, during the period requested by the underwriters managing
the registered public offering, effect any public sale or distribution of shares
received directly or indirectly pursuant to an exercise of an Award.
10.3 Committee Discretion. The Committee may in its sole discretion
include in any Agreement an obligation that the Company purchase a Participant's
shares of Common Stock received upon the exercise of an Award (including the
purchase of any unexercised Awards which have not expired), or may obligate a
Participant to sell shares of Common Stock to the Company upon such terms and
conditions as the Committee may determine and set forth in an Agreement. The
provisions of this Article X shall be construed by the Committee in its sole
discretion, and shall be subject to such other terms and conditions as the
Committee may from time to time determine. Notwithstanding any provision herein
to the contrary, the Company may upon determination by the Committee assign its
right to purchase shares of Common Stock this Article
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X, whereupon the assignee of such right shall have all the rights, duties and
obligations of the Company with respect to purchase of the shares of Common
Stock.
10.4 No Company Obligation. None of the Company, an Affiliate or the
Committee shall have any duty or obligation to affirmatively disclose to a
record or beneficial holder of Common Stock or an Award, and such holder shall
have no right to be advised of any material information regarding the Company or
any Affiliate at any time prior to, upon or in connection with receipt or the
exercise of an Award or the Company's purchase of Common Stock or an Award from
such holder in accordance with the terms hereof.
ARTICLE XI
CHANGE IN CONTROL PROVISIONS
11.1 Impact of Event. Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change in Control (as defined in Section
11.2):
(a) Any Stock Appreciation Rights and Stock Options
outstanding as of the date such Change in Control and not then
exercisable shall become fully exercisable to the full extent of the
original grant;
(b) The restrictions and deferral limitations applicable to
any Restricted Stock and Deferred Stock shall lapse, and such
Restricted Stock and Deferred Stock shall become free of all
restrictions and become fully vested and transferable to the full
extent of the original grant.
11.2 Definition of Change in Control. For purposes of the Plan, a
"Change in Control" shall mean the happening of any of the following events:
(a) An acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of fifty percent (50%) or more of
the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the approval by the
stockholders of the Company of a reorganization, merger, consolidation,
complete liquidation or dissolution of the Company, the sale or
disposition of all or substantially all of the assets of the Company or
similar corporate transaction (in each case referred to in this Section
11.2(a) as a "Corporate Transaction") or, if consummation of such
Corporate Transaction is subject, at the time of such approval by
stockholders, to the consent of any government or governmental agency,
the obtaining of such consent (either explicitly or implicitly)
provided such acquisition or beneficial ownership would result in any
other Person's beneficially owning fifty percent (50%) or more of the
Outstanding Company Common Stock; excluding, however, the following:
(A) any acquisition by the Company or by an employee benefit plan (or
related trust) sponsored or maintained by the Company or an
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Affiliate, (B) any acquisition by a member of the Anixter Family, or
(C) any acquisition by or consummation of a Corporate Transaction with
an Affiliate.
(b) A change in the composition of the Board such that the
individuals who, as of the date of the Initial Public Offering (the
"Public Offering"), constitute the Board (such Board shall be
hereinafter referred to as the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided, however, for
purposes of this Section 11.2(b), that any individual who becomes a
member of the Board subsequent to the date of the Company's Public
Offering whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of
the Incumbent Board (or deemed to be such pursuant to this provision)
shall be considered as though such individual were a member of the
Incumbent Board; but, provided, further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be so considered as a member of
the Incumbent Board.
ARTICLE XII
MISCELLANEOUS
12.1 Amendments and Termination. The Board may amend, alter, or
discontinue the Plan at any time, but no amendment, alteration or
discontinuation shall be made which would impair the rights of a Participant
under a Stock Option, Stock Appreciation Right, Restricted Stock Award or
Deferred Stock Award theretofore granted without the Participant's consent,
except such an amendment (a) made to avoid an expense charge to the Company or
an Affiliate, (b) made to cause the Plan to qualify for the exemption provided
by Rule 16b-3, (c) made to prevent the Plan from being disqualified from the
exemption provided by Rule 16b-3 or (d) made to permit the Company or an
Affiliate a deduction under the Code. In addition, no such amendment shall be
made without the approval of the Company's stockholders to the extent such
approval is required by law or agreement.
The Committee may amend the terms of the Plan or any Award theretofore
granted, prospectively or retroactively, subject to the same limitations (and
exceptions to limitations) as applied to the Board and further subject to any
approval or limitations the Board may impose.
Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in law and tax and accounting rules,
as well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval. Notwithstanding the
foregoing, if any right under the Plan would cause a transaction to be
ineligible for pooling of interest accounting that would but for the right
hereunder be eligible for such accounting treatment, the Committee may modify or
adjust the right so that pooling of interest accounting shall be available.
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25.2 Unfunded Status of Plan. It is intended that the Plan be an
"unfunded" plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or make payments; provided,
however, that, unless the Committee otherwise determines, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
12.3 General Provisions.
(a) Representation. The Committee may require each person
purchasing or receiving shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the
shares without a view to the distribution thereof. The certificates for
such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
(b) No Additional Obligation. Nothing contained in the Plan
shall prevent the Company or an Affiliate from adopting other or
additional compensation arrangements for its employees.
(c) Withholding. No later than the date as of which an amount
first becomes includible in the gross income of the Participant for
Federal income tax purposes with respect to any Award, the Participant
shall pay to the Company (or other entity identified by the Committee),
or make arrangements satisfactory to the Company or other entity
identified by the Committee regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount required in order for the Company
or an Affiliate to obtain a current deduction. Unless otherwise
determined by the Committee, withholding obligations may be settled
with Common Stock, including Common Stock that is part of the Award
that gives rise to the withholding requirement provided that any
applicable requirements under Section 16 of the Exchange Act are
satisfied. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the
Participant. If the Participant disposes of shares of Common Stock
acquired pursuant to an Incentive Stock Option in any transaction
considered to be a disqualifying transaction under the Code, the
Participant must give written notice of such transfer and the Company
shall have the right to deduct any taxes required by law to be withheld
from any amounts otherwise payable to the Participant.
(d) Reinvestment. The reinvestment of dividends in additional
Deferred or Restricted Stock at the time of any dividend payment shall
only be permissible if sufficient shares of Common Stock are available
for such reinvestment (taking into account then outstanding Options and
other Awards).
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(e) Representation. The Committee shall establish such
procedures as it deems appropriate for a Participant to designate a
Representative to whom any amounts payable in the event of the
Participant's death are to be paid.
(f) Controlling Law. The Plan and all Awards made and actions
taken thereunder shall be governed by and construed in accordance with
the laws of the State of Delaware (other than its law respecting choice
of law). The Plan shall be construed to comply with all applicable law,
and to avoid liability to the Company, an Affiliate or a Participant,
including, without limitation, liability under Section 16(b) of the
Exchange Act.
(g) Offset. Unless otherwise provided in an Agreement, any
amounts owed to the Company or an Affiliate by the Participant of
whatever nature may be offset by the Company from the value of any
shares of Common Stock, cash or other thing of value under the Plan or
an Agreement to be transferred to the Participant, and no shares of
Common Stock, cash or other thing of value under the Plan or an
Agreement shall be transferred unless and until all disputes between
the Company and the Participant have been fully and finally resolved
and the Participant has waived all claims to such against the Company
or an Affiliate.
(h) Right to Capitalize. The grant of an Award shall in no way
affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of
its business or assets.
12.4 Mitigation of Excise Tax. If any payment or right accruing to a
Participant under the Plan (without the application of this Section 12.4),
either alone or together with other payments or rights accruing to the
Participant from the Company or an Affiliate ("Total Payments") would constitute
a "parachute payment" (as defined in Section 280G of the Code and regulations
thereunder) that is subject to the excise tax imposed by Section 4999 of the
Code (or similar tax and/or assessment), the Company (or its successor or
assigns) shall increase the amounts payable hereunder to the extent necessary to
place Participant in the same after-tax position as he or she would have been in
had no such excise tax been imposed on the payments hereunder. The determination
of the amount of any such excise taxes shall initially be made by an independent
accounting firm employed by the Company. The Participant shall cooperate in good
faith with the Committee in making such determination and providing the
necessary information for this purpose. If, at a later date, it is determined
that the amount of excise taxes payable by Participant is greater than the
amount initially so determined, then the Company (or its successor or assigns)
shall pay Participant an amount equal to the sum of (i) such additional excise
taxes, (ii) any interest, fines and penalties resulting from such underpayment,
plus (iii) an amount necessary to reimburse Participant for any income, excise
or other taxes payable by Participant with respect to the amount specified in
(i) and (ii) above, and the reimbursement provided by this (iii).
-23-
12.5 Status of Awards Under Code Section 162(m). It is the intent of
the Company that Awards granted to persons who are Covered Employees within the
meaning of Code Section 162(m) shall constitute "qualified performance-based
compensation" satisfying the requirements of Code Section 162(m). Accordingly,
the provisions of the Plan shall be interpreted in a manner consistent with Code
Section 162(m). If any provision of the Plan or any agreement relating to such
an Award does not comply or is inconsistent with the requirements of Code
Section 162(m), such provision shall be construed or deemed amended to the
extent necessary to conform to such requirements.
12.6 Rights with Respect to Continuance of Employment. Nothing
contained herein shall be deemed to alter the relationship between the Company
or an Affiliate and a Participant, or the contractual relationship between a
Participant and the Company or an Affiliate if there is a written contract
regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment between the Company or an Affiliate and a
Participant. The Company or an Affiliate and each of the Participants continue
to have the right to terminate the employment or service relationship at any
time for any reason, except as provided in a written contract. The Company or an
Affiliate shall have no obligation to retain the Participant in its employ or
service as a result of the Plan. There shall be no inference as to the length of
employment or service hereby, and the Company or an Affiliate reserves the same
rights to terminate the Participant's employment or service as existed prior to
the individual becoming a Participant in the Plan.
12.7 Awards in Substitution for Awards Granted by Other Corporations.
Awards may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become officers, directors or employees of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or an Affiliate, or the acquisition by the Company
or an Affiliate of the assets of the employing corporation, or the acquisition
by the Company or Affiliate of the stock of the employing corporation, as the
result of which it becomes a designated employer under the Plan. The terms and
conditions of the Awards so granted may vary from the terms and conditions set
forth in the Plan at the time of such grant as the majority of the members of
the Committee may deem appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.
12.8 Procedure for Adoption. Any Affiliate of the Company may by
resolution of such Affiliate's board of directors, with the consent of the Board
of Directors and subject to such conditions as may be imposed by the Board of
Directors, adopt the Plan for the benefit of its employees as of the date
specified in the board resolution.
12.9 Procedure for Withdrawal. Any Affiliate which has adopted the Plan
may, by resolution of the board of directors of such direct or indirect
subsidiary, with the consent of the Board of Directors and subject to such
conditions as may be imposed by the Board of Directors, terminate its adoption
of the Plan.
-24-
12.10 Delay. If at the time a Participant incurs a Termination of
Employment (other than due to Cause) or if at the time of a Change in Control,
the Participant is subject to "short-swing" liability under Section 16 of the
Exchange Act, any time period provided for under the Plan or an Agreement to the
extent necessary to avoid the imposition of liability shall be suspended and
delayed during the period the Participant would be subject to such liability,
but not more than six (6) months and one (1) day and not to exceed the Option
Period, or the period for exercise of a Stock Appreciation Right as provided in
the Agreement, whichever is shorter. The Company shall have the right to suspend
or delay any time period described in the Plan or an Agreement if the Committee
shall determine that the action may constitute a violation of any law or result
in liability under any law to the Company, an Affiliate or a stockholder of the
Company until such time as the action required or permitted shall not constitute
a violation of law or result in liability to the Company, an Affiliate or a
stockholder of the Company. The Committee shall have the discretion to suspend
the application of the provisions of the Plan required solely to comply with
Rule 16b-3 if the Committee shall determine that Rule 16b-3 does not apply to
the Plan.
12.11 Headings. The headings contained in the Plan are for reference
purposes only and shall not affect the meaning or interpretation of the Plan.
12.12 Severability. If any provision of the Plan shall for any reason
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not effect any other provision hereby, and the Plan shall be construed as
if such invalid or unenforceable provision were omitted.
12.13 Successors and Assigns. The Plan shall inure to the benefit of
and be binding upon each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the Company hereunder,
shall be binding upon the Participant's heirs, legal representatives and
successors.
12.14 No Obligation to Give Notice. No provision of the Plan shall be
deemed to create an obligation on the Company to give notice to any person or
entity of any event, except as expressly set forth in this Agreement.
12.15 No Third Party Beneficiaries. Nothing in this Agreement expressed
or implied is intended to confer any right or remedy under or by reason of this
Agreement on any person other than the parties hereto and their respective
heirs, representatives, successors and assigns, nor is anything set forth herein
intended to affect or discharge the obligation or liability of any third persons
to any party to this Agreement nor shall any provision give any third party any
right of subrogation or action over against any part to this Agreement.
12.16 Entire Agreement. The Plan and the Agreement constitute the
entire agreement with respect to the subject matter hereof and thereof, provided
that in the event of any inconsistency between the Plan and the Agreement, the
terms and conditions of the Agreement shall control.
-25-
EXECUTED effective as of April 15, 1996.
ANICOM, INC.
/s/ SCOTT C. ANIXTER
------------------------
Scott C. Anixter
Chief Executive Officer
-26-
AMENDMENT TO THE
1996 STOCK INCENTIVE PLAN
RESOLVED, that the 1996 Stock Incentive Plan (the "Plan") be and hereby
is amended, subject to and effective upon stockholders' approval at the Annual
Meeting of Stockholders on May 21, 1997, as follows:
Section 4.1 of the Plan is amended to read as follows:
"4.1 Number of Shares. Subject to adjustment under Section 4.6, the
total number of shares of Common Stock reserved and available for distribution
pursuant to Options under the Plan shall be 1,800,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in whole
or in part, of authorized and unissued shares or treasury shares."
Except as herein amended, the Plan shall remain in full force and
effect.
ANICOM, INC.
By: /s/ SCOTT C. ANIXTER
-------------------------
Scott C. Anixter
Chief Executive Officer
-27-
AMENDMENT TO THE
1996 STOCK INCENTIVE PLAN
RESOLVED, that the 1996 Stock Incentive Plan (the "Plan") be and hereby
is amended, subject to and effective upon stockholders' approval at the Annual
Meeting of Stockholders on May 20, 1998, as follows:
Section 4.1 of the Plan is amended to read as follows:
"4.1 Number of Shares. Subject to adjustment under Section 4.6, the
total number of shares of Common Stock reserved and available for distribution
pursuant to Options under the Plan shall be 2,600,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in whole
or in part, of authorized and unissued shares or treasury shares."
Except as herein amended, the Plan shall remain in full force and
effect.
ANICOM, INC.
By:/s/ SCOTT C. ANIXTER
----------------------------------------
Scott C. Anixter
Chairman and Chief Executive Officer