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Exhibit 99(c)
ARROW ELECTRONICS, INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
ARTICLE 1
Establishment and Purpose
1.1 Establishment. Arrow Electronics, Inc., a New York corporation
(the "Company"), hereby establishes the ARROW ELECTRONICS, INC. NON-EMPLOYEE
DIRECTOR STOCK OPTION PLAN (the "Plan"). The Plan is designed to grant to
non-employee directors of the Company options which are not intended to qualify
as incentive stock options under Section 422 of the Internal Revenue Code of
1986, as amended.
1.2 Purpose. The purpose of the Plan is to secure for the Company
and its shareholders the benefits of the incentive inherent in the ownership of
the Company's common stock by nonemployee directors of the Company and to
thereby promote the Company's future growth and financial success.
ARTICLE 2
Definitions
For purposes of the Plan, the following terms shall have the
meanings provided herein:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Disability" means a disability rendering a director unable to
serve as a member of the Board, as determined by the Board.
2.3 "Change in Control" means a change in control with respect to
the Company of a nature that would be required to be reported (assuming such
event has not been "previously reported") in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the Effective Date, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); provided that, without limitation, such a change in control
shall be deemed to have occurred at such time as (a) any "person" (as the term
person is used for purposes of Section 13(d) or 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 30% or more of the combined voting power of the
Company's outstanding Shares or other securities ordinarily having the right to
vote at elections of the directors of the Company ("Voting Securities"); or (b)
individuals who constitute the Board as of the Effective Date (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company's shareholders was approved
by a vote of at least three quarters of the directors comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
objection to such nomination) shall be, for purposes of this clause (b),
considered as though such person were a member of the Incumbent Board.
Notwithstanding anything in the foregoing to the contrary, no Change in Control
shall be deemed to have occurred for purposes of the vesting of any Option if
the transaction that would otherwise constitute the change in control results in
the Optionee to whom such Option was granted acquiring, either alone or together
with a group, directly or indirectly, 30% or more of the combined voting power
of the Company's Voting Securities.
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2.4 "Effective Date" shall mean the date immediately following
approval of the Plan by the shareholders of the Company as prescribed under
Article 8.
2.5 "Fair Market Value" means the closing price of a Share reported
on the Consolidated Tape (as such price is reported in the Wall Street Journal.)
2.6 "Non-Employee Director" means a member of the Board who is not
an employee of the Company or any subsidiary of the Company.
2.7 "Option" means an option granted under the Plan to purchase
Shares.
2.8 "Optionee" means any person granted an Option under the Plan.
2.9 "Qualifying Termination" means a cessation of an Optionee's
service on the Board for any reason (or no reason) within twenty-four (24)
months following a Change in Control.
2.10 "Retirement" means retirement of an Optionee from the Board
after attainment of the mandatory retirement age under the Company's director
retirement policy as in effect from time to time.
2.11 "Shares" means shares of the Company's common stock, par value
$1 per share.
ARTICLE 3
Option Terms
3.1 Option Grants. The following Options shall be granted under
the Plan:
(a) Each Non-Employee Director serving on the Board as of the
Effective Date of the Plan shall receive an Option to purchase 7,500 Shares as
of the Effective Date.
(b) Each Non-Employee Director who becomes a member of the Board
after the Effective Date of the Plan shall receive an Option to purchase 7,500
Shares as of the earlier of the date on which he or she is initially elected to
serve on the Board by vote of the Company's stockholders or the date on which he
or she is initially appointed to serve on the Board pursuant to the Company's
bylaws and articles of incorporation as then in effect.
(c) Each Non-Employee Director serving on the Board as of the date
immediately following each annual meeting of the Company's shareholders
occurring after the Effective Date of the Plan shall receive an Option to
purchase 2,000 Shares as of each such date.
(d) A former employee of the Company or a subsidiary of the Company
shall be entitled to receive an Option under subsection 3.1(a), (b), and (c)
provided that he or she qualifies as a Non-Employee Director as of the date that
such Option would be granted under the provisions of such subsection.
3.2 Purchase Price. The purchase price for Shares under each Option
shall be equal to 100% of the Fair Market Value of such Shares on the date of
grant.
3.3 Vesting. Each Option shall become exercisable with respect to
25% of the Shares subject thereto effective as of each of the first, second,
third and fourth anniversaries of the grant date; provided, that the Optionee
continues to serve on the Board as of such dates. Notwithstanding the foregoing,
any and all Options held by an Optionee shall become fully (100%) exercisable in
the event of the Optionee's Retirement, Disability, Qualifying Termination or
death, or upon the earlier occurrence of a Corporate Event, as provided under
Article 7. If an Optionee ceases to serve on the Board for any reason other than
Retirement, Disability, a
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Qualifying Termination or death, that portion of an Option which is not then
vested shall automatically be forfeited.
3.4 Duration. Each Option shall terminate on the date which is the
tenth anniversary of the grant date, unless terminated earlier as follows:
(a) If an Optionee's service on the Board terminates for any reason
other than Cause, Retirement, Disability or death, the Optionee may for a period
of ninety (90) days after such termination exercise any Option to the extent,
and only to the extent, that such Option or portion thereof has become vested
and exercisable in accordance with the terms of the Plan, after which time the
Option shall automatically terminate in full.
(b) If an Optionee's service on the Board terminates for Cause, all
Options granted to the Optionee hereunder shall immediately terminate in full
and no rights thereunder may be exercised.
(c) If an Optionee's service on the Board terminates by reason of
the Optionee's Retirement or Disability, the Optionee may, for a period of one
(1) year after such termination, exercise any Option in part or in full, after
which time the Option shall automatically terminate in full, subject to
paragraph (d) immediately below.
(d) In the event of the death of an Optionee (i) while serving on
the Board, (ii) within the three-month period following the Optionee's
termination of service on the Board for any reason other than Cause, Retirement,
Disability or death or (iii) within the one-year period following the Optionee's
termination of service on the Board by reason of Retirement or Disability, any
Option granted to the Optionee shall be exercisable (to the extent provided
under Section 3.3) by the executors, administrators, legatees or distributees of
the Optionee's estate, as the case may be, for a period of one (1) year after
the Optionee's death. In the event an Option is exercised by the executors,
administrators, legatees or distributees of the estate of a deceased Optionee,
the Company shall be under no obligation to issue Shares thereunder unless and
until the Company is satisfied that the person or persons exercising the Option
are the duly appointed legal representatives of the deceased Optionee's estate
or the proper legatees or distributees thereof.
(e) For purposes of this Section 3.4, an Optionee shall not be
deemed to have terminated service on the Board during any period the Optionee
continues to serve as an honorary or emeritus Board member.
3.5 Amount of Stock. There may be issued under the Plan an aggregate
of not more than 250,000 Shares, subject to adjustment as provided in Section
3.6. Shares issued pursuant to the Plan may either be authorized but unissued
Shares or reacquired Shares, or both. In the event that Options shall terminate
or expire without being exercised in whole or in part, the Shares underlying the
unexercised portion of such Options may be the subject of future Options granted
pursuant to the terms of the Plan.
3.6 Dilution and Other Adjustments. In the event of any change in
the outstanding Shares by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, reorganization, combination or exchange
of shares or other similar event, if the Board shall determine, in its sole
discretion, that such change equitably requires an adjustment in the number or
kind of shares available under the Plan, the number and kind of shares that may
be the subject of future Options grants under the Plan, the number or kind of
shares which are subject to outstanding Options, the purchase price per share
relating thereto or the repurchase option price per share, such adjustment shall
be made by the Board and shall be conclusive and binding for all purposes of the
Plan.
3.7 Exercise of Options. An Option may be exercised in whole or in
part from time to time during the applicable exercise period by giving written
notice of exercise to the Secretary of the Company specifying the number of
Shares to be purchased. Notice of exercise of an Option must be accompanied by
payment in full of the purchase price either by cash or check or in Shares owned
by the Optionee having a Fair
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Market Value at the date of exercise equal to such purchase price, or in a
combination of the foregoing. No Shares shall be issued in connection with the
exercise of an Option until full payment therefor has been made. An Optionee
shall have the rights of a shareholder only with respect to Shares for which
certificates have been issued to the Optionee.
3.8 Nontransferability of Options. No Option granted under the Plan
shall be transferable by the Optionee otherwise than by will or by the laws of
descent and distribution and such Option shall be exercisable, during the
Optionee's lifetime, only by the Optionee.
3.9 Right of First Refusal. Shares acquired under the Plan by an
Optionee may not be sold or otherwise disposed of in any way (including a
transfer by gift or by reason of the death of the Optionee) until the Optionee
(or his legal representative, legatee or distributee of his estate) first offers
to sell the Shares to the Company as herein provided. The price per share at
which the Shares shall be offered to the Company shall be the Fair Market Value
on the date the Optionee's offer is received by the Secretary of the Company. If
the Company fails to accept the offer to purchase such Shares within seven (7)
days after such date, the Shares shall thereafter be free of all restrictions
under the Plan.
ARTICLE 4
Administration
The Plan is intended to be self-effectuating and does not require
the exercise of discretion with respect to the granting or terms of any Options.
However, to the extent necessary, the Board shall act as the Plan administrator
for the purpose of resolving any ambiguities, claims or disputes arising with
respect to the Plan or any agreements or Options under the Plan. As such the
Board is authorized to make any rulings and determinations that it deems to be
appropriate and consistent with the terms and intent of the Plan and all such
rulings and determinations shall be final and binding upon all parties for all
purposes. Any member of the Board making a claim or request to the Board with
respect to his or her rights or interests under the Plan shall recuse himself or
herself from the Board's determination with respect to such claim or request.
ARTICLE 5
Miscellaneous Provisions
5.1 No Implied Rights. Neither the Plan nor any action taken
hereunder shall be construed as giving any individual any right to be retained
as a member of the Board.
5.2 Securities Law Compliance. No Shares shall be issued hereunder
unless counsel for the Company shall be satisfied that such issuance will be in
compliance with applicable Federal and State securities laws.
5.3 Ratification of Actions. By accepting any Option or other
benefits under the Plan, each Optionee and each person claiming under or through
the Optionee shall be conclusively deemed to have indicated acceptance and
ratification of, and consent to, any action taken under the Plan by the Company
and the Board.
ARTICLE 6
Amendments or Discontinuance
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The Plan shall continue in effect until December 31, 2001 unless it
is earlier terminated by action of the Board. The Plan may be amended at any
time and from time to time by the Board, except that (other than as provided in
Section 3.6) no such amendment shall increase the aggregate number of Shares
available under the Plan or the number of Shares that may be the subject of the
Option grants prescribed under the Plan unless such amendment is approved by the
shareholders of the Company. No such termination or amendment of the Plan shall
adversely affect any right of any Optionee with respect to any Option
theretofore granted without such Optionee's written consent.
ARTICLE 7
Corporate Event
Upon a dissolution or liquidation of the Company, or a sale of
substantially all of the assets of the Company and its Subsidiaries in which the
acquiring entity does not substitute new and equivalent options for the
outstanding Options hereunder, or a merger or consolidation in which the Company
is not to be the surviving corporation and the surviving corporation does not
substitute new and equivalent Options for the outstanding Options hereunder (a
"Corporate Event"), each Optionee shall be given at least ten days prior written
notice of the occurrence of such event, every Option outstanding hereunder shall
become fully exercisable, and each Optionee may exercise his Option, in whole or
in part, prior to or simultaneously with such event. Upon the occurrence of any
such event, any Option not exercised pursuant hereto shall terminate.
ARTICLE 8
Shareholder Approval and Adoption
The Plan shall be submitted to the shareholders of the Company for
their approval and adoption. The shareholders of the Company shall be deemed to
have approved and adopted the Plan only if it is approved and adopted at a
meeting of the shareholders duly held by vote taken in the manner required by
the laws of the State of New York.
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