Exhibit 10.2
Annex B
SUNSOURCE INC.
STOCK COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
1. Purpose
1.1 SunSource Inc. (the "Company") has established the Equity Plan for
Non-Employee Directors (the "Plan") to further its long-term financial success
by providing for stock awards to non-employee directors of the Company. The
Plan is intended to increase the proprietary interest of such persons by
providing further opportunity for ownership of the Company's Common Shares
("Shares") and to more closely align the interests of such persons with the
interests of the Company's stockholders.
1.2 All elections and transactions under the Plan by persons subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") involving Shares are intended to comply with all exemptive conditions
under Rule 16b-3. The Board may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the
Exchange Act, as it may deem necessary or proper for the administration and
operation of the Plan and the transaction of business thereunder. To the extent
that any provision of the Plan, the administrative guidelines, or any action or
omission with respect to the Plan (including any action by an Eligible
Director, as hereinafter defined, that does not satisfy the exemptive
conditions under Rule 16b-3 or otherwise) is inconsistent with Section 16, the
provision, guidelines or act or omission shall be deemed null and void, as
permitted by applicable law.
2. Administration
2.1 The Plan shall be administered by the Board of Directors of the
Company (the "Board").
2.2 The Board may make such rules and establish such procedures for the
administration of the Plan as it deems appropriate to carry out the purpose of
the Plan. The interpretation and application of the Plan or of any rule or
procedure, and any other matter relating to or necessary to the administration
of the Plan, shall be determined in the sole discretion of the Board, and any
such determination shall be final and binding on all persons. All
determinations of the Board shall be made by a majority of its members at a
meeting duly called pursuant to the provisions of the By-laws of the Company.
The Board may delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable.
2.3 All costs and expenses involved in administering the Plan shall be
borne by the Company.
2.4 For purposes of the Plan, an "Eligible Director" shall be a member of
the Board who is not an employee of the Company or any subsidiary or affiliate
of the Company. If any Eligible Director at any time becomes such an employee,
he or she shall thereupon cease to be an Eligible Director.
3. Common Shares
3.1 Shares Reserved. Shares which may be issued under the Plan may be
either authorized and unissued Shares or issued Shares which have been
reacquired by the Company, provided that the total number of Shares which may
be issued under the Plan shall not exceed 75,000 Shares, subject to adjustment
in accordance with Section 3.2 hereof.
3.2 Capital Adjustments. In the event that the Board shall determine that
any reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger, consolidation, spin-off or a similar corporate transaction
affects the Shares such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Eligible Directors under the Plan,
then the Board shall make such equitable changes or adjustments as it deems
necessary to the maximum number or class of Shares available under the Plan,
and the number or class of Shares of Stock to be delivered hereunder.
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4. Delivery of Shares
4.1 Mandatory Portion. For each calendar year commencing with the calendar
year beginning January 1, 1998, each Eligible Director who is elected a
director of the Company at the annual meeting of stockholders or chosen as a
director thereafter shall receive a whole number of Shares equal in value to
50% of his or her retainer fee payable for services as a director during such
calendar year (including any additional retainer fee payable for service as a
chairperson of a committee of the Board) in lieu of payment of such percentage
of the retainer fee in cash. Such Shares shall be issued to each such Eligible
Director quarterly (the "Share Payment Date").
Each such Share shall be valued at the average of the high and low prices
of a Common Share on the Composite Tape for New York Stock Exchange Listed
Stocks, as reported in The Wall Street Journal on the last business day
preceding the Share Payment Date (the "Share Value Price"). The value of
fractional shares shall be paid to the Eligible Director in cash.
4.2 Elective Portion. For each calendar year commencing with the calendar
year beginning January 1, 1999, each Eligible Director elected at the annual
meeting of stockholders in such year or chosen as a director thereafter may
elect to receive a whole number of Shares equal in value (based on the Share
Value Price) to up to 100 percent of the balance of his or her retainer fee
payable for services as a director during such calendar year (including any
additional retainer fee payable for serving as a chairperson of a committee of
the Board) in lieu of payment of such percentage of the retainer fee in cash.
Such election may be made in incremental amounts of 5 percent of the total
retainer fee. Such Shares shall be delivered to each Eligible Director on the
Share Payment Date. The value of fractional shares shall be paid to the
Eligible Director in cash. Any such election shall be irrevocable and shall be
made in writing in accordance with written procedures adopted by the Board of
Directors.
4.3 Withholding Taxes. The Company shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any obligations it
may have to withhold federal, state, or local income or other taxes incurred by
reason of payments pursuant to the Plan. In lieu thereof, the Company shall
have the right to withhold the amount of such taxes from any other sums due or
to become due from the Company to an Eligible Director upon such terms and
conditions as the Company may prescribed.
5. Term of Plan
5.1 The Plan is subject to approval by the stockholders of the Company at
the 1998 Annual Meeting of Shareholders. In no event shall any delivery of
Shares be made to any director or other person under the Plan until such time
as stockholder approval of the Plan is obtained.
5.2 The Plan shall remain in effect until December 31, 2007, unless sooner
terminated by the Board.
6. Amendment; Termination
6.1 The Board may at any time and from time to time alter, amend, suspend,
or terminate the Plan in whole or in part; provided, however, no amendment
which requires stockholder approval under applicable Delaware law, under the
rules of any securities exchange on which the Shares may be listed, or in order
for the Plan to continue to comply with Rule 16b-3 shall be effective unless
the same shall be approved by the requisite vote of the stockholders of the
Company.
7. Miscellaneous
7.1 Nothing in this Plan shall be construed as conferring any right upon
any director to continuance as a member of the Board.
7.2 This Plan and all rights hereunder shall be construed in accordance
with and governed by the laws of the State of Delaware.
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7.3 This Plan shall not be construed to require the Company to fund any
amount payable under the Plan, to create a trust of any kind or to set aside or
earmark any monies or other assets specifically for payments under the Plan.
7.4 Notwithstanding any other provision of this Plan, the Company shall
not be required to award or deliver any certificate for Common Shares under
this Plan prior to fulfillment of all of the following conditions:
(a) Any required listing or approval or notice of issuance of such
Shares on any securities exchange on which the Common Shares may then be
traded;
(b) Any registration or other qualification of such Shares under any
state or federal law or regulation or other qualification which the Board
shall upon the advice of counsel deem necessary or advisable; and
(c) The obtaining of any other required consent or approval or permit
from any state or federal government agency.
7.5 No right under this Plan shall be transferable or otherwise subject to
anticipation, sale, assignment, pledge, encumbrance or charge except by will or
the law of descent and distribution.
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