ALCO STANDARD CORPORATION 1995 STOCK OPTION PLAN
ARTICLE I
Purpose
The purpose of this 1995 Stock Option Plan (the "Plan") is to enable
Alco Standard Corporation (the "Company") to offer employees and consultants of
the Company and its subsidiaries equity interests in the Company, thereby
attracting, retaining and rewarding such persons, and strengthening the
mutuality of interests between such persons and the Company's shareholders.
ARTICLE II
Definitions
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Board" shall mean the Board of Directors of the Company.
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2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.
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2.3 "Committee" shall mean a committee appointed by the Board to
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administer the Plan, consisting of two or more Directors, each of whom is a
"disinterested person" as defined in Rule 16b-3(c) under the Securities Exchange
Act of 1934 and an "outside director" as defined in regulations under Section
162(m) of the Code.
2.4 "Common Stock" shall mean the Common Stock, no par value, of the
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Company.
2.5 "Company" shall mean Alco Standard Corporation.
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2.6 "Fair Market Value" as of any date shall mean, unless otherwise
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required by any applicable provision of the Code or any regulations issued
thereunder, the closing sales price of a share of Common Stock for the
applicable trading day as reported on the New York Stock Exchange Composite
Tape.
2.7 "Incentive Stock Option" shall mean any Stock Option awarded under
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this Plan intended to be and designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code or any successor section.
2.8 "Non-Qualified Stock Option" shall mean any Stock Option awarded
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under this Plan that is not an Incentive Stock Option.
2.9 "Participant" shall mean a person to whom an Option has been granted
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under this Plan.
2.10 "Stock Option" or "Option" shall mean any option to purchase shares
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of Common Stock granted pursuant to Article VI.
ARTICLE III
Administration
3.1 The Committee. The Plan shall be administered and interpreted by the
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Committee.
3.2 Awards. The Committee shall have full authority to grant Stock
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Options to persons eligible under Article V, including the authority:
(a) to select the persons to whom Stock Options may from time to
time be granted;
(b) to determine whether and to what extent Incentive Stock Options
or Non-Qualified Stock Options, or any combination thereof, are to be granted to
one or more persons eligible to receive Options under Article V;
(c) to determine the number of shares of Common Stock to be covered
by each Option granted; and
(d) to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Option granted (including, but not limited to, the
exercise price of the Option, the term of the Option, any restriction or
limitation affecting the exercisability of the Option and any conditions under
which the exercisability of the Option will be accelerated).
3.3 Guidelines. Subject to Article VII hereof, the Committee shall have
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the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of this Plan and any Option
granted under this Plan (and any agreements relating thereto); and to otherwise
supervise the administration of this Plan. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in this Plan or in any Option
in the manner and to the extent it shall deem necessary to carry this Plan into
effect.
3.4 Decisions Final. Any decision, interpretation or other action made
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or taken in good faith by the Committee arising out of or in connection with the
Plan shall be final, binding and conclusive on the Company, all employees and
Participants and their respective heirs, executors, administrators, successors
and assigns.
ARTICLE IV
Share Limitations
4.1 Shares. The maximum aggregate number of shares of Common Stock that
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may be issued under this Plan shall be 2,500,000 (subject to any increase or
decrease pursuant to Section 4.3), which may be either authorized and unissued
Common Stock or issued Common Stock reacquired by the Company. If any Option
granted under this Plan expires, terminates or is cancelled for any reason
without having been exercised in full, the number of unpurchased shares shall
again be available for the purposes of the Plan.
4.2 Individual Limit. The maximum aggregate number of shares with
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respect to which Options may be granted to any individual during any fiscal year
shall be 1,000,000 (subject to increase or decrease pursuant to Section 4.3).
4.3 Adjustments. If the outstanding shares of Common Stock are
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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 Common Stock or
other securities, through merger, consolidation, sale of all or substantially
all of the assets of the Company, 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 that may be issued under the Plan, (ii) the
maximum number and kind of shares with respect to which Options may be granted
to any individual during any fiscal year, (iii) the number and kind of shares or
other securities subject to then outstanding Options, and (iv) the price for
each share subject to any then outstanding Options. No fractional shares will be
issued under the Plan on account of any such adjustments.
ARTICLE V
Eligibility
5.1 Employees. Officers and other employees of the Company (including
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directors of the Company who are also employees of the Company) and employees of
any subsidiary of the Company are eligible to be granted Options under this
Plan.
5.2 Consultants. Persons who directly or through a corporation in which
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they own a majority of the outstanding shares of voting stock provide services
to the Company or any of its subsidiaries as independent contractors are
eligible to be granted Non-Qualified Stock Options under this Plan.
ARTICLE VI
Stock Options
6.1 Options. Each Stock Option granted under this Plan shall be either
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an Incentive Stock Option or a Non-Qualified Stock Option.
6.2 Grants. The Committee shall have the authority to grant to any
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person eligible under Article V one or more Incentive Stock Options, Non-
Qualified Stock Options, or both types of Stock Options. To the extent that any
Stock Option does not qualify as an Incentive Stock Option (whether because of
its provisions or the time or manner of its exercise or otherwise), such Stock
Option or the portion thereof which does not qualify as an Incentive Stock
Option shall constitute a separate Non-Qualified Stock Option.
6.3 Incentive Stock Options. Anything in the Plan to the contrary
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notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, 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.
6.4 Terms of Options. Options granted under this Plan shall be subject
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to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem desirable:
(a) Stock Option Award. Each Stock Option shall be evidenced by, and
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subject to the terms of, a Stock Option Award. The Stock Option Award shall
specify whether the Option is an Incentive Stock Option or a Non-Qualified Stock
Option, the number of shares of Common Stock subject to the Stock Option, the
option price, the option term, and the other terms and conditions applicable to
the Stock Option.
(b) Option Price. The option price per share of Common Stock
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purchasable upon exercise of a Stock Option shall be determined by the Committee
at the time of grant but shall be not less than 100% of the Fair Market Value of
the Common Stock on the date of grant if the Stock Option is intended to be an
Incentive Stock Option.
(c) Option Term. The term of each Stock Option shall be fixed by the
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Committee at the time of grant but shall not be exercisable more than ten years
after the date of grant if the Stock Option is intended to be an Incentive Stock
Option.
(d) Exercisability. Stock Options shall be exercisable at such time
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or times and subject to such terms and conditions as shall be determined by the
Committee at the time of grant; provided, however, that the Committee may waive
any installment exercise or waiting period provisions, in whole or in part, at
any time after the date of grant, based on such factors as the Committee shall,
in its sole discretion, deem appropriate.
(e) Method of Exercise. Subject to such installment exercise and
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waiting period provisions as may be imposed by the Committee, Stock Options may
be exercised in whole or in part at any time during the option term, by giving
written notice of exercise to the Company specifying the number of shares of
Common Stock to be purchased and the option price for such shares. The option
exercise price shall be paid in full in cash or check payable to the order of
Alco prior to the delivery of the shares (or by tendering such other property as
Alco may approve), or the options may be exercised through broker-assisted
exercises in which the broker may forward the exercise price. Upon payment in
full of the option price, a stock certificate or stock certificates representing
the number of shares of Common Stock to which the Participant is entitled shall
be delivered to the Participant (or the broker). A Participant shall not be
deemed to be the holder of Common Stock, or to have the rights of a holder of
Common Stock, with respect to shares subject to the Option, unless and until a
stock certificate representing such shares of Common Stock is issued.
(f) Termination of Employment. Unless otherwise determined by the
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Committee, Stock Options held by a Participant who ceases to be an employee or
consultant of the Company and its subsidiaries shall be exercisable as follows:
(i) In the case of a Participant who dies, all Options that were
outstanding on the date of the Participant's death may be exercised by the legal
representative of the Participant's estate for a period of one year after the
date of death or until the expiration of the stated term of the Option,
whichever period is shorter.
(ii) In the case of a Participant who becomes disabled, all
Options that were outstanding on the date of termination of the Participant's
employment or consulting relationship may be exercised by the Participant for a
period of one year after such date or until the expiration of the stated term of
the Option, whichever period is shorter.
(iii) In the case of a Participant who ceases to be an employee
or consultant of the Company and its subsidiaries for any reason other than
death or disability, all Options that were exercisable on the date of
termination of the Participant's employment or consulting relationship may be
exercised by the Participant for a period of three months after such date or
until the expiration of the stated term of the Option, whichever period is
shorter.
(iv) Any Option that was not exercisable on the date on which the
Participant ceased to be an employee or consultant of the Company shall
generally terminate on such date.
(v) Any Option not exercised during the periods specified in
Subsections (i), (ii) or (iii) shall terminate at the end of such period;
provided, however, that the Committee may extend such period, based on such
factors as the Committee shall, in its sole discretion, deem appropriate. 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 Option will thereafter be treated as a
Non-Qualified Stock Option.
(g) Incentive Stock Option Limitations. To the extent that the
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aggregate Fair Market Value (determined as of the date of grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year under the Plan and/or any
other stock option plan of the Company or any subsidiary or parent corporation
(within the meaning of Section 424 of the Code) exceeds $100,000, such Options
shall be treated as Non-Qualified Stock Options.
Should the foregoing provisions not be necessary in order for the
Stock Options to qualify as Incentive Stock Options, or should any additional
provisions be required, the Board may amend this Plan accordingly.
ARTICLE VII
Termination or Amendment
7.1 Termination or Amendment of the Plan. The Board may at any time
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terminate this Plan or amend all or any part of this Plan; provided, however,
that, unless otherwise required by law, and subject to Article IV, the rights of
a Participant with respect to Options granted prior to such termination or
amendment may not be materially impaired without the consent of such
Participant.
7.2 Amendment of Options. The Committee may amend the terms of any
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outstanding Option, prospectively or retroactively, but, subject to Article IV,
no such amendment or other action by the Committee shall materially impair the
rights of any holder without the holder's consent.
ARTICLE VIII
General Provisions
8.1 Nonassignment. Except as otherwise provided in this Plan, Options
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granted hereunder and the rights and privileges conferred thereby shall not be
sold, transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or similar process.
8.2 Legend. All certificates representing shares of Common Stock
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delivered under this Plan shall be subject to such stock transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is listed or traded, any
applicable Federal or state securities law, and any applicable corporate law,
and the Committee may cause a legend or legends to be put on stock certificates
to make appropriate reference to such restrictions.
8.3 Other Plans. Nothing contained in this Plan shall prevent the Board
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from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
8.4 No Right to Employment. Neither this Plan nor the grant of any
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Option shall give any Participant or other employee or consultant any right with
respect to continuance of employment or consulting relationship with the Company
or any subsidiary of the Company, nor shall there be a limitation in any way on
the right of the Company or a subsidiary, as the case may be, to terminate such
Participant's employment or consulting arrangement at any time.
8.5 Withholding of Taxes. The Company shall have the right, prior to
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delivering a stock certificate representing the shares of Common Stock otherwise
deliverable to a Participant upon exercise of an Option, to (i) require the
Participant to remit to the Company an amount sufficient to satisfy all federal,
state, local and non-U.S. tax withholding requirements (including social
security and Medicare withholding requirements, if applicable), (ii) reduce the
number of shares of Common Stock otherwise deliverable to the Participant by an
amount that would have a Fair Market Value on the date of exercise equal to the
amount of all federal, state, local and non-U.S. taxes (including social
security and Medicare taxes, if applicable) required to be withheld, or
(iii) deduct the amount of such taxes from cash payments otherwise to be made to
the Participant. In connection with such withholding, the Committee may make
such arrangements as are consistent with this Plan as it may deem appropriate.
8.6 Listing and Other Conditions.
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(a) The issuance of any shares of Common Stock upon exercise of an
Option shall be conditioned upon such shares being listed on the New York Stock
Exchange. The Company shall have no obligation to issue any shares of Common
Stock unless and until the shares are so listed, and the right to exercise any
Option shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock upon exercise of an Option
is or may in the circumstances be unlawful or result in the imposition of excise
taxes under the statutes, rules or regulations of any applicable jurisdiction,
the Company shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or registration
under the Securities Act of 1933 or otherwise with respect to shares of Common
Stock or Options, and the right to exercise any Option shall be suspended until,
in the opinion of such counsel, such sale or delivery shall be lawful or shall
not result in the imposition of excise taxes.
(c) Upon termination of any period of suspension under this
Section 8.6, any Option affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before such
suspension and as to shares which would otherwise have become available during
the period of such suspension, but no such suspension shall extend the term of
any Option.
8.7 Governing Law. This Plan and actions taken in connection herewith
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shall be governed and construed in accordance with the laws of the Commonwealth
of Pennsylvania.
8.8 Construction. Wherever any words are used in this Plan in the
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masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
8.9 Liability of Committee Members. No member or former member of the
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Committee shall be liable, in the absence of bad faith or willful misconduct,
for any act or omission with respect to service on the Committee. Service on the
Committee shall constitute service as a director of the Company so that members
of the Committee shall be entitled to indemnification and reimbursement as
directors of the Company pursuant to its Code of Regulations.
8.10 Other Benefits. The grant of an Option shall not be deemed
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compensation for purposes of computing benefits under any retirement plan nor
affect any benefits under any other benefit plan now or hereafter in effect
under which the availability or amount of benefits is related to the level of
compensation.
8.11 Costs. Unless otherwise determined by the Board of Directors, the
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Company shall bear all expenses incurred in administering this Plan, including
expenses of issuing Common Stock upon the exercise of Options.
8.12 Severability. If any part of this Plan shall be determined to be
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invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify the remaining provisions of this Plan which shall continue
in full force and effect.
8.13 Successors. This Plan shall be binding upon and inure to the
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benefit of any successor or successors of the Company.
8.14 Headings. Article and section headings contained in this Plan are
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included for convenience only and are not to be used in construing or
interpreting this Plan.
ARTICLE IX
Effective Date of Plan
9.1 Effective Date. This Plan shall be effective as of November 10,
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1994, subject to approval by the Company's shareholders.
ARTICLE X
Term of Plan
10.1 Term. No Stock Option shall be granted pursuant to this Plan on or
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after November 10, 2004, but Options granted prior to such date may extend
beyond that date.
/s/Hugh G. Moulton
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Date: May 9, 1996 Hugh G. Moulton
Executive Vice President