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Exhibit 10.6
PIONEER-STANDARD ELECTRONICS, INC.
1999 RESTRICTED STOCK PLAN
This Plan is hereby adopted by Pioneer-Standard Electronics,
Inc., a corporation organized and existing under and by virtue of the laws of
the State of Ohio (hereinafter referred to as the "Company");
W I T N E S S E T H:
WHEREAS, in consultation with and upon the recommendation of
Ernst & Young LLP, the Company has determined to provide an additional
retirement benefit for its senior executives;
WHEREAS, Ernst & Young LLP has determined that, in light of
the nearing retirement of the Chairman and Chief Executive Officer and the Vice
President, Treasurer and Assistant Secretary of the Company, the funding of such
a benefit under a supplemental executive retirement plan ("SERP") would have a
substantial negative effect on the Company's cash flow;
WHEREAS, in order to avoid such negative effect, Ernst & Young
LLP recommended that a separate restricted stock plan be established in order to
provide a retirement benefit for the Chairman and Chief Executive Officer and
the Vice President, Treasurer and Assistant Secretary of the Company that is
substantially equivalent to the benefit that such senior executives would have
received as participants in the SERP;
WHEREAS, it was determined that the provision of a retirement
benefit for the Chairman and Chief Executive Officer and the Vice President,
Treasurer and Assistant Secretary of the Company through a restricted stock plan
would additionally benefit the Company by providing an incentive for such senior
executives to continue their employment with the Company;
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WHEREAS, in light of the foregoing considerations, the Board
of Directors and the Compensation Committee of the Board of Directors have
approved the establishment of a restricted stock plan;
NOW, THEREFORE, the Company hereby adopts the Pioneer-Standard
Electronics, Inc. 1999 Restricted Stock Plan (hereinafter referred to as the
"Plan") effective April 27, 1999, as follows:
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ARTICLE 1
NAME AND PURPOSE
1.1 Name. The name of this Plan shall be the Pioneer-Standard
Electronics, Inc. 1999 Restricted Stock Plan.
1.2 Purpose. The Plan will be maintained by the Company in
order to provide a retirement benefit and retention incentive for the Chairman
and Chief Executive Officer and the Vice President, Treasurer and Secretary of
the Company by awarding Shares to such Senior Executives of the Company under
the terms and conditions of and in accordance with this Plan.
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ARTICLE 2
DEFINITIONS
Unless the context otherwise indicates, the following words
used herein shall have the following meanings whenever used in this instrument:
2.1 Beneficiary. The word "Beneficiary" shall mean the person,
persons, entity, or entities so designated, or deemed to be designated, by a
Participant pursuant to Article 10.
2.2 Board. The word "Board" shall mean the Board of Directors
of the Company.
2.3 Cause. A Participant's Termination of Employment shall be
deemed to have been for "Cause" only if:
(a) termination of his employment shall have been the
result of the Participant's conviction of any of the
following: (i) embezzlement; (ii) misappropriation of
money or other property of the Company; or (iii) any
felony; or
(b) there has been a breach by the Participant during the
Period of Employment (as defined in his Employment
Agreement) of the provisions of paragraph 3.03 of
such Employment Agreement, relating to devotion of
full time to the affairs of the Company, Section 8 of
such Employment Agreement relating to Competition,
Section 9 of such Employment Agreement relating to
Confidential Information, or Section 10 of such
Employment Agreement relating to Noninterference, and
such breach results in demonstrable significant
injury to the Company, and with respect to any
alleged breach of such paragraph 3.03, the
Participant shall have failed to remedy such breach
within thirty (30) days from his receipt of written
notice from the Company.
2.4 Change in Control. The words "Change in Control" shall
mean the occurrence of any of the following events:
(a) all or substantially all of the assets of the Company
are sold or transferred to another corporation or
entity, or the Company is
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merged, consolidated or reorganized with or into
another corporation or entity, with the result that
upon conclusion of the transaction less than
fifty-one percent (51%) of the outstanding securities
entitled to vote generally in the election of
Directors ("Voting Stock") or other capital interests
of the acquiring corporation or entity are owned,
directly or indirectly, by the holders of Voting
Stock of the Company generally prior to the
transaction; or
(b) there is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report),
each as promulgated pursuant to the Exchange Act,
disclosing that any person (as the term "person" is
used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the
term "beneficial owner") is defined under Rule 13d-3
or any successor rule or regulation promulgated under
the Exchange Act) of securities representing twenty
percent (20%) or more of the combined voting power of
the then-outstanding Voting Stock of the Company; or
(c) the Company shall file a report or proxy statement
with the Securities and Exchange Commission pursuant
to the Exchange Act disclosing in response to Item 1
of Form 8-K thereunder or Item 6(e) of Schedule 14A
thereunder (or any successor schedule, form or report
or item therein) that a change in control of the
Company has or may have occurred or will or may occur
in the future pursuant to any then-existing contract
or transaction; or
(d) the individuals who, at the beginning of any period
of two consecutive calendar years, constituted the
Directors of the Company cease for any reason to
constitute at least a majority thereof unless the
nomination for election by the Company's shareholders
of each new Director of the Company was approved by a
vote of at least two-thirds of the Directors of the
Company still in office who were Directors of the
Company at the beginning of any such period.
2.5 Code. The word "Code" shall mean the Internal Revenue Code
of 1986, as amended, and any regulations or other pronouncements promulgated
thereunder. Any reference made herein to a specific Code Section shall be deemed
to include any successor Code Section having the same or a similar purpose.
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2.6 Committee. The word "Committee" shall mean the
Compensation Committee of the Board, or the successor of such Committee, which
satisfies the requirements of Section 7.1 hereof.
2.7 Company. The word "Company" shall mean Pioneer-Standard
Electronics, Inc. and any successor corporation or business organization which
shall assume the duties and obligations of Pioneer-Standard Electronics, Inc.
under this Plan.
2.8 Continuous Service. The words "Continuous Service" shall
mean for any Participant the period during which he is or has been an Employee
of the Company. Such period shall be measured from his date of hire (which date
shall be considered to be the first day on which the Employee performs any
service for the Company for which he is directly or indirectly compensated as an
Employee) until his date of Termination of Employment.
2.9 Director. The word "Director" shall mean a member of the
Board of Directors of the Company.
2.10 Disability. The word "Disability" shall mean an illness
or accident which prevents the Participant from performing his duties with the
Company for a period of six (6) consecutive months. His Termination of
Employment shall be deemed to have occurred as of the close of business on the
last day of such six (6) month period.
2.11 Effective Date. The words "Effective Date" shall mean the
date on which this Plan became effective, which date is April 27, 1999.
2.12 Employee. The word "Employee" shall mean any common-law
employee of the Company, whether or not an officer or member of the Board, but
excluding any temporary employee and any person serving the Company only in the
capacity of a member of the Board.
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2.13 Employment Agreement. The words "Employment Agreement"
shall mean, in the case of a Participant, that certain Employment Agreement
between the Participant and the Company dated as of the Effective Date and any
successor thereto. References in this Plan to specific sections or articles of
an Employment Agreement shall be deemed also to be references to successor
provisions dealing with the same subject, however numbered.
2.14 Escrow Agreement. The words "Escrow Agreement" shall mean
any escrow agreement entered into between the Company and an escrow agent for
the purpose of holding Shares thereunder.
2.15 Exchange Act. The words "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
2.16 Participant. The word "Participant" shall mean James L.
Bayman and John V. Goodger, individually, commencing with the Effective Date and
thereafter, in each case, while he remains a Participant hereunder.
2.17 Period of Transition. The words "Period of Transition"
shall mean a period of reduced employment responsibilities designed to ensure a
Participant's availability and support in the transition from the Participant to
his successor as an executive officer of the Company.
2.18 Plan. The word "Plan" shall mean the Pioneer-Standard
Electronics, Inc. 1999 Restricted Stock Plan as set forth herein, as in effect
on the Effective Date, and as it may be later amended.
2.19 Plan Year. The words "Plan Year" shall mean the period
beginning on the Effective Date and ending on March 31, 2000, and each 12-month
period beginning on April 1 and ending on March 31 thereafter while the Plan
remains in existence.
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2.20 SSAT. The acronym "SSAT" shall mean The Pioneer Stock
Benefit Trust established pursuant to the Pioneer-Standard Electronics, Inc.
Share Subscription Agreement and Trust effective as of July 2, 1996.
2.21 Senior Executive. The words "Senior Executive" shall mean
James L. Bayman and John V. Goodger. A Participant who incurs a Disability at a
time when he is a Senior Executive shall be deemed to continue to be a Senior
Executive during the period of his Disability until his Termination of
Employment. A Participant shall automatically cease to be a Senior Executive on
his date of Termination of Employment.
2.22 Shareholders. The word "Shareholders" shall mean the
individuals or entities that own one or more of the Company's Common Shares.
2.23 Shares. The word "Shares" shall mean common shares,
without par value, of the Company.
2.24 Termination of Employment. The words "Termination of
Employment" shall mean the cessation of a Participant's service with the Company
as an Employee for any reason whatsoever, whether voluntary or involuntary,
including by reason of retirement, death, or Disability.
2.25 Vested Percentage. The words "Vested Percentage" shall
mean for any Participant a percentage determined on the basis of his Continuous
Service during his Period of Transition in accordance with the following table:
If his Continuous Service ends as follows: His Vested Percentage Shall be:
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Before March 31 of the first year of his 0%
Period of Transition
On or after such first March 31 but before 33-1/3% March 31 of
the second year of his Period of Transition
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On or after such second March 31 but 66-2/3%
before March 31 of the third year
of his Period of Transition
On or after such third March 31 100%
Notwithstanding the foregoing, the Vested Percentage of a
Participant who has a Termination of Employment as a result of his death,
Disability or termination by the Company without "Cause" shall be one hundred
percent (100%) as of the date of such Termination of Employment. In addition,
the Vested Percentage of a Participant shall be one hundred percent (100%) as of
the date of termination of the Plan or upon a Change in Control.
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ARTICLE 3
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. As of the Effective Date, the following two
Senior Executives are eligible to participate in the Plan:
(a) James L. Bayman; and
(b) John V. Goodger.
3.2 Participation. As of the Effective Date, the following two
eligible Senior Executives shall become Participants in the Plan:
(a) James L. Bayman; and
(b) John V. Goodger.
Each Senior Executive shall remain a Participant in the Plan during his
continued employment with the Company. (a)
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ARTICLE 4
AWARDS OF SHARES
4.1 Award. As of the Effective Date, Shares are hereby awarded
to each Participant hereunder as follows:
James L. Bayman 611,567
John V. Goodger 112,231
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Total 723,798
4.2 Source of Shares. The Shares which are hereby awarded to
the Participants under this Plan shall be obtained from the SSAT.
4.3 Maximum Number of Shares. Subject to the provisions of
Section 4.4, the aggregate number of Shares which may be issued under this Plan
shall not exceed Seven Hundred Twenty-Three Thousand, Seven Hundred Ninety-Eight
(723,798) Shares.
4.4 Effect of Changes in Shares. In the event that after the
date of adoption of the Plan by the Board, the Shares should, as a result of a
stock split, stock dividend, combination or exchange of shares, exchange for
other securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or other such change, be increased or decreased
or changed into or exchanged for a different number or kind of shares of stock
or other securities of the Company or of another corporation, then the Shares
awarded hereunder shall be subject to such change as any other outstanding
Shares.
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ARTICLE 5
TRANSFER RESTRICTIONS
5.1 In General. The Shares awarded hereunder shall not be
sold, transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated (and any such sale, transfer or other disposition, pledge or other
hypothecation being hereinafter referred to as "to dispose of" or "a
disposition") until the earliest of (a) the lapse of the right of the Company to
a return of such Shares pursuant to Section 5.2 below; (b) a Change in Control
with respect to the Company; or (c) the termination of the Plan. An appropriate
number of Shares may be sold by a Participant (or, at the Participant's request,
withheld by the Company) after the date that any Shares become nonforfeitable
under Section 5.2 below to enable such Participant to pay any applicable taxes
incurred as a result of such Shares becoming nonforfeitable.
5.2 Forfeiture. Any Shares awarded hereunder shall be subject
to forfeiture as of the Participant's Termination of Employment for any reason
except to the extent of the Participant's Vested Percentage in such Shares. Any
Shares forfeited in accordance with this Section 5.2 shall be sold on the open
market as soon as reasonably practicable and subject to any applicable legal
requirements, and the proceeds from such sale shall be utilized for one or more
purposes authorized by the SSAT.
5.3 Change in Control. The Committee has the sole authority to
determine whether a Change in Control has occurred. If the Committee shall
determine that a Change in Control has occurred, it shall cause to be issued a
written notice to the Participants of such fact and shall cause a certificate or
certificates representing all Shares owned by the Participants which shall have
become nonforfeitable to be delivered to the Participants as soon as practicable
after such notice.
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5.4 Plan Termination. If the Plan is terminated, the Committee
shall cause to be issued a written notice to the Participants of such fact and
shall cause a certificate or certificates representing all Shares owned by the
Participants which have become nonforfeitable to be delivered to the
Participants as soon as practicable after such notice.
5.5 Disability. The Committee has the sole authority to
determine whether a Disability has occurred. If the Committee shall determine
that a Disability has occurred, it shall cause to be issued a written notice to
the disabled Participant of such fact and shall cause a certificate or
certificates representing all Shares owned by Participant which have become
nonforfeitable to be delivered to such Participant as soon as practicable after
such notice.
5.6 Death. Upon notification of the death of a Participant,
the Committee shall cause to be issued a written notice to the Beneficiary of
the Participant determined pursuant to Article 10 hereof of such fact and shall
cause a certificate or certificates representing all Shares which have become
nonforfeitable to be delivered to such Beneficiary as soon as practicable after
such notice.
5.7 Rights with Respect to the Shares. Notwithstanding
retention of certificates representing some or all of the Shares awarded
hereunder by the Company or an agent of the Company, the Participant in whose
name certificates are issued shall have all rights (including dividend and
voting rights) with respect to the Shares represented by such certificates,
subject to the terms, conditions and restrictions specified under this Plan, and
the Shares represented by such certificates shall be considered as issued and
outstanding.
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ARTICLE 6
ESCROW AGREEMENT AND LEGENDS
In order to enforce the restrictions imposed upon Shares
issued hereunder, the Committee also may require any Participant to enter into
an Escrow Agreement providing that the certificates representing Shares issued
pursuant to this Plan shall remain in the physical custody of an escrow agent
until any or all of the restrictions imposed pursuant to this Plan have
terminated. Alternatively, the Committee may make such arrangements in lieu of
an Escrow Agreement as it shall deem appropriate hereunder. The Committee may
impose such additional restrictions on any Shares awarded pursuant to the Plan
as it may deem advisable, including, without limitation, restrictions under the
Securities Act of 1933, as amended, as required by the New York Stock Exchange
or any other stock exchange or reporting system upon which such Shares are then
listed or under any state blue sky or securities laws applicable to such Shares.
In addition, the Committee may cause a legend or legends to be placed on any
certificates representing Shares issued pursuant to this Plan, which legend or
legends shall make appropriate reference to the various restrictions imposed
hereunder or by law.
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ARTICLE 7
ADMINISTRATION OF THE PLAN
7.1 Composition of Committee. This Plan shall be administered
by the Committee, which shall consist of at least three members of the Board,
each of whom shall be a "non-employee director" within the meaning of Rule 16b-3
promulgated under the Exchange Act. The Committee may, from time to time,
designate one or more persons or agents to carry out any or all of its
administrative duties hereunder, provided that none of the duties required to be
performed by the Committee under Rule 16b-3 promulgated under the Exchange Act
or Section 7.2 of the Plan may be delegated to any other person.
7.2 Duties and Rights of Committee. The Committee shall
interpret the Plan, and to the extent and in the manner contemplated herein, it
shall exercise the discretion granted to it. The Committee may issue from time
to time such rules and interpretations as in its judgment are necessary in order
to administer the Plan effectively. The Committee shall have the exclusive right
to prescribe the form, which shall be consistent with this Plan, of the
instruments evidencing any award and issuance under this Plan and the legend, if
any, to be affixed to the certificates representing Shares issued under this
Plan.
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ARTICLE 8
AMENDMENTS
This Plan may be amended at any time by the Board; provided,
however, that if this Plan shall have received Shareholder approval, no such
amendment shall increase the maximum number of Shares that may be issued
pursuant to this Plan, except pursuant to Section 4.4 hereof, without
Shareholder approval of such amendment; and provided further, that no amendment
to this Plan shall impair the rights of Participants who have been awarded
Shares.
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ARTICLE 9
DURATION AND TERMINATION
This Plan shall terminate on March 31, 2005, or such earlier
date as may be determined by the Board; provided, however, that such termination
shall not impair the rights of any Participant hereunder with respect to any
grant of Shares made prior to such termination. Notwithstanding anything in the
foregoing to the contrary, this Plan shall terminate and all awards of Shares
under the Plan shall be revoked if, within twelve (12) months of the date of its
adoption by the Board, the Plan does not receive the approval of a majority of
the outstanding Shares present in person or by proxy and entitled to vote at a
meeting of Shareholders of the Company.
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ARTICLE 10
BENEFICIARY DESIGNATION
Unless a Participant has designated a Beneficiary in
accordance with the provisions of the following sentence, any Shares that become
unrestricted on account of the death of a Participant shall be distributed to
the person or persons in the first of the following classes in which there are
any survivors of such Participant, which person or persons shall be deemed to
have been designated a Beneficiary or Beneficiaries by the Participant:
(a) his spouse at the time of death;
(b) his children per stirpes;
(c) his parents; and
(d) the executor or administrator of his estate.
Instead of having any Shares that become payable on account of a Participant's
death paid to a Beneficiary as determined above, a Participant may designate a
Beneficiary or Beneficiaries to receive such Shares.
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