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EXHIBIT 14
FORM OF
FIRST AMENDMENT TO
THE EXIDE ELECTRONICS GROUP, INC. 1989 STOCK OPTION PLAN
AND OPTIONS THEREUNDER
The Exide Electronics Group, Inc. 1989 Stock Option Plan (the "Plan"), and
all Options, SARs, Restricted Shares and Restricted Stock Units currently
outstanding under the Plan ("Outstanding Awards"), are hereby amended, effective
as of July 16, 1997, as set forth below, pursuant to the authority of the Board
set forth in Section 13 of the Plan to amend the Plan. (All capitalized terms
used in this First Amendment and not defined herein shall have the meanings
ascribed to them in the Plan.)
1. Section 8 of the Plan is hereby amended to read in its entirety as
follows:
8. Changes in Capitalization. In the event of any change in
corporate capitalization, such as a stock split or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or
other distribution of stock or property of the Corporation, any
reorganization (whether or not such reorganization comes within the
definition of such term in Section 368 of the Code) or any partial or
complete liquidation of the Corporation, the Committee or Board may make
such substitution or ad-justments in the aggregate number and kind of
shares reserved for issuance under the Plan, in the number, kind and
purchase price of shares subject to outstanding Options, SARs, Restricted
Shares and Restricted Stock Units, and/or such other equitable substitution
or adjustments, and/or such amendments to other relevant provisions as it
may determine to be appropriate in its sole discretion; provided, however,
that Section 15 hereof may not be amended in connection with or in
anticipation of a Change of Control.
2. A new Section 15 is hereby added to the Plan, reading in its entirety
as follows:
15. Change of Control. a. Notwithstanding any other provision of the
Plan to the contrary (including without limitation Section 5.a. with
respect to incentive stock options), in the event of a Change in Control
(as defined below):
i. any Options and SARs outstanding as of the date of such Change
of Control that are not then fully exercisable and vested shall become
fully exercisable and vested to the full extent of the original grant;
ii. the Restriction Period applicable to all Restricted Shares
shall expire and terminate, all other restrictions to which any
Restricted Shares are subject at the time of such Change of Control
shall lapse, and all Restricted Shares shall become free of all
restrictions and become fully vested and transferable to the full extent
of the original grant and stock certificates therefor shall be delivered
to the appropriate Participants; and
iii. the Restriction Period applicable to all Restricted Stock
Units shall expire, and payment in full with respect to such Restricted
Stock Units shall be made in cash, with the per-share fair market value
of such Restricted Stock Units being deemed to equal the Change of
Control Price (as defined below); provided, that if such payment in cash
would make a Change of Control transaction ineligible for
pooling-of-interests accounting under APB No. 16 that but for the nature
of such grant would otherwise be eligible for such accounting treatment,
the Board or the Committee shall have the ability to substitute for such
cash shares of Common Stock with a fair market value equal to the cash
that would otherwise be payable hereunder.
b. For purposes of the foregoing:
i. "Change of Control" means:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
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under the Exchange Act) of voting securities of the Corporation where
such acquisition causes such Person to own 30% or more of the
combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of
directors (the "Outstanding Corporation Voting Securities");
provided, however, that for purposes of this subsection (a), the
following acquisitions shall not be deemed to result in a Change of
Control: (i) any acquisition directly from the Corporation, (ii) any
acquisition by the Corporation, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (iv)
any acquisition pursuant to a transaction that complies with clauses
(i), (ii) and (iii) of subsection (c) below; or
(b) The individuals who, as of the date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors; provided,
however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of
Directors; or
(c) The approval by the shareholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Corporation or the
acquisition of assets of another entity ("Business Combination") or,
if consummation of such Business Combination is subject, at the time
of such approval by shareholders, to the consent of any government or
governmental agency, the obtaining of such consent (either explicitly
or implicitly by consummation); excluding, however, such a Business
Combination pursuant to which (i) all or substantially all of the
individuals and entities who were the beneficial owners of the
Outstanding Corporation Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that as a
result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Corporation Voting Securities, (ii) no
Person (excluding any employee benefit plan (or related trust) of the
Corporation or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more
of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the
Board of Directors, providing for such Business Combination; or
(d) The approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
ii. "Change of Control Price" means the higher of (i) the highest
reported sales price, regular way, of a share of Stock in any
transaction reported on the New York Stock Exchange Composite Tape or
other national exchange on which such shares are listed or on NASDAQ
during the 60-day period prior to and including the date of a Change of
Control or (ii) if the Change of Control is the
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result of a tender or exchange offer or a Business Combination, the
highest price per share of Stock paid in such tender or exchange offer
or Business Combination. To the extent that the consideration paid in
any such transaction described above consists all or in part of
securities or other noncash consideration, the value of such securities
or other noncash consideration shall be determined in the sole
discretion of the Board of Directors.
3. The foregoing amendments shall be applicable to all Outstanding Awards
to the same extent as if they were incorporated into the Agreements relating to
such Outstanding Awards, and any provisions of such Agreements with which such
amendments conflict shall be disregarded to the extent necessary to give effect
to such amendments. In addition, the following provision shall be added to each
such Agreement:
Notwithstanding anything else to the contrary contained herein, in the
event of an event described in Section 8 of the Plan as a result of which
the shareholders of the Company receive cash for all or a portion of their
shares, this Award shall be subject to adjustment pursuant to Section 8 of
the Plan but no portion of such Award shall become exercisable for cash
unless the Board or the Committee specifically so determines pursuant to
said Section 8.
4. Notwithstanding the foregoing, any amendment made by this First
Amendment to the Plan or to any Outstanding Award shall not be effective in
connection with a Change of Control or other corporate transaction that the
Corporation intends to be eligible for pooling-of-interests accounting under APB
No. 16 if and to the extent that giving effect to such amendment would make such
transaction ineligible for such accounting treatment.
5. The Plan is in all other respects ratified and affirmed without
amendment.
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