Exhibit 10.6
ALCO STANDARD CORPORATION
1986 STOCK OPTION PLAN
1. Purpose. The purpose of this 1986 Stock Option Plan (the "Plan")
of Alco Standard Corporation, an Ohio corporation ("Alco"), is to secure for
Alco and its shareholders the benefits of the incentive inherent in the
ownership of common stock of Alco by employees and other persons who will be
responsible for the future growth and continued success of Alco and its
subsidiaries.
2. Effectiveness. This Plan became effective on February 21, 1986.
As of the effective date of this Plan, there were no further grants under the
prior Alco Standard Corporation 1981 Stock Option Plan.
3. Stock. There are authorized for issuance or delivery upon the
exercise of options to be granted from time to time under the Plan an aggregate
of 4,000,000 shares of Alco's common stock, no par value, subject to adjustment
as provided hereinafter in paragraph 14. Such shares may be, as a whole or in
part, authorized but unissued shares, whether now or hereafter authorized, or
issued shares which have been reacquired by Alco. If any option under this Plan
shall expire, terminate or be cancelled for any reason without having been
exercised in full, the shares which have not been purchased thereunder shall
again become available for the purpose of this Plan.
4. Administration. The Plan shall be administered by a committee
(the "Committee") of not less than three members of the board of directors of
Alco (each of whom is a "disinterested person" within the meaning of the
Securities Exchange Act of 1934, as amended from time to time) who have been
appointed by the board of directors to administer the Plan. No member or former
member of the Committee shall be liable, in the absence of bad faith or
misconduct, for any act or omission with respect to service on the Committee.
Service on the Committee shall constitute service as a director of Alco so that
members of the Committee shall be entitled to indemnification and reimbursement
as directors of Alco pursuant to its Code of Regulations. Subject to the
express provisions of paragraph 6 of the Plan with respect to eligibility, the
Committee shall determine the persons to whom, and the time or times at which,
options shall be granted and the number of shares to be subject to each option.
The Committee shall have authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to determine the terms and
provisions of particular options (which terms and provisions need not be the
same in each case) and to make all other determinations deemed necessary or
advisable in administering the Plan. The determinations of the Committee on the
matters referred to in this paragraph shall be conclusive.
5. Time of Granting. The action of the Committee with respect to the
granting of an option shall take place on such date as a majority of the members
of the Committee, at a meeting, shall make a determination with respect to the
granting of an option, or, in the absence of a meeting, on such date as a
unanimous written consent covering such option shall have been executed by all
members of the Committee. The effective date of the grant of an option
(hereinafter called the "Granting Date") shall be the date specified by the
Committee in its determination or consent relating to the grant of such option.
6. Participants. Options may be granted to key persons who on the
Granting Date are (a) employees of Alco or any of its present or future domestic
subsidiary corporations, as defined in Section 424 of the Internal Revenue Code
of 1986, as amended (the "Code"), (b) employees of any other subsidiary of Alco
as determined by the Board, or (c) persons who directly or through a corporation
in which they own a majority of the outstanding shares of voting stock provide
services to Alco or any of its subsidiaries as independent contractors. Options
may be granted only to those
persons described in the foregoing sentence who, in the opinion of the
Committee, exercise such functions or discharge such responsibilities that they
merit consideration as key persons. The Committee shall have the authority to
determine whether to grant to any employee of Alco or any of its present or
future subsidiary corporations, as defined in Section 424 of the Code, options
which may qualify for special tax treatment under the Code, as the same may be
amended from time to time.
7. Terms and Conditions; Stock Option Awards. In granting options,
the Committee shall determine the exercise prices (which may be less than the
current fair market value), the duration (which may be up to ten years), any
conditions precedent to the vesting of the right to exercise options (which, at
a minimum, shall include continued employment for a six-month period after the
Granting Date) and other terms and conditions of the options (including any
business performance criteria, any restrictions to be placed on the
transferability of shares upon exercise of options, and any provisions
considered appropriate from the standpoint of possible tax consequences). Each
grant of an option shall be reflected in an option award document.
8. Limitations.
(a) All options granted pursuant to this Plan shall be granted by
November 14, 1995.
(b) No option granted pursuant to this Plan shall be transferable
by the optionee otherwise than by will or the laws of descent and distribution,
and an option shall be exercisable during the optionee's lifetime only by the
optionee.
(c) The aggregate fair market value (determined as of the time the
option is granted) of the stock with respect to which "incentive stock options"
(within the meaning of the Code) are exercisable for the first time by such
individual during any calendar year (under all plans of the individual's
employer corporation and its parent and subsidiary corporations) shall not
exceed $100,000.
9. Relationship at Time of Exercise. Except as provided in
paragraphs 10 and 11 below, no option may be exercised at any time unless the
holder thereof is then an employee of, or rendering service as an independent
contractor to, Alco or a subsidiary.
10. Termination of Relationship. In the event of termination of the
employment of any employee with Alco and all of its subsidiaries, or the
services of any other person to whom an option has been granted, such option
may, unless not permitted under the particular option agreement, be exercised by
the optionee (to the extent that the optionee was entitled to do so at the
termination of employment or services) within three months after such
termination, but in no event after the expiration of the term of the option. If
a company ceases to be a subsidiary of Alco, such shall be deemed a termination
of the employment or services of persons employed by or serving such company for
purposes of this paragraph, and the three-month post-termination exercise period
shall apply. Notwithstanding the foregoing, the Committee may determine that
Alco's divestiture of a company shall not be considered a termination of
employment for purposes of the Plan, so that an optionee who continues to be
employed by such divested company will be entitled to exercise his or her
outstanding options (and will be entitled to continued vesting) in accordance
with the terms of the stock option award as though the optionee remained an
employee of Alco.
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11. Death of Optionee. If an optionee to whom an option has been
granted under the Plan shall die while employed by, or performing services for,
Alco or any of its subsidiaries or within three months after the termination of
the optionee's employment or services (including a deemed termination as
described in paragraph 10 above), such option may be exercised within one year
after the optionee's death (even if the optionee was not entitled to do so at
the date of death) by the person or persons to whom the optionee's rights
hereunder shall pass by will or by the laws of descent and distribution, but in
no event after the expiration of the term of the option.
12. Payment. The purchase price of shares purchased upon the
exercise of any option shall be paid in full in cash or check payable to the
order of Alco prior to the delivery of the shares, or options may be exercised
through broker-assisted exercises in which the broker pays the exercise price
out of the proceeds of a same-day sale of the shares acquired upon exercise.
13. Rights as a Shareholder. An optionee shall have no rights as a
shareholder with respect to any shares covered by an option until the date of
issuance of a share certificate to the optionee for such shares. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such share certificate is issued.
14. Adjustments. If the outstanding shares of Alco common stock are
increased, decreased or exchanged for a different number or kind of shares or
other securities, or if additional shares or other property (other than ordinary
cash dividends) are distributed with respect to such shares of Alco common stock
or other securities, through merger, consolidation, sale of all or substantially
all of the assets of Alco, reorganization, recapitalization, reclassification,
dividend stock split, reverse stock split, spin off, split off, or other
distribution with respect to such shares of common stock, or other securities,
an appropriate and proportionate adjustment may be made in (i) the maximum
number and kind of shares reserved for issuance under the Plan, (ii) the number
and kind of shares or other securities subject to then outstanding options under
the Plan, and (iii) the price for each share subject to any then outstanding
options under the Plan. No fractional shares will be issued under the Plan on
account of any such adjustments.
15. Amendment and Termination. The board of directors of Alco shall
have complete power and authority to amend the Plan, provided, however, that it
shall not without the affirmative vote of the holders of a majority of the
shares of voting stock of Alco (a) increase the maximum number of shares for
which options may be granted under the Plan, (b) reduce any minimum option price
for stock options which become entitled to special tax treatment under future
amendments to the Code, (c) extend the period during which options may be
granted or exercised, or (d) alter the class of persons eligible to receive
options. No amendment or termination of the Plan may, without the consent of
the holders of their outstanding options, adversely affect the rights of such
holders under such options.
16. Government and Other Regulations. The obligation of Alco to
sell, issue and deliver shares upon exercise of options granted under the Plan
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies as may be required, including (but not
limited to) satisfaction of the income tax withholding requirements of the Code.
17. Other Actions. Nothing contained in the Plan shall be construed
to limit the authority of Alco to exercise its corporate rights and powers
including, but not limited to, the right of Alco (a) to grant options for proper
corporate purposes otherwise than under the Plan to any employee or other
person, firm or corporation or association, or (b) to grant options to, or
assume the options of, any person in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business and assets
(in whole or in part) of any person, firm, corporation or association.
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