MICROAGE, INC.
1995 DIRECTOR INCENTIVE PLAN
STOCK OPTION AGREEMENT FOR
XXXXXXX X. XXXXXXXXX
April 29, 1999
Dear Xxxx:
You were earlier notified that you are eligible to receive options to
restructure your Director fees package to some extent. You completed a
Director's Xxx Xxxxxx, attached hereto as EXHIBIT A, and in the Waiver you
irrevocably elected to waive $30,000.00 (the "WAIVER AMOUNT") of your Director
fees in return for the option to purchase (the "OPTION") shares of common stock
of the Company ("SHARES"). Based on your Waiver, and pursuant to action taken by
the Board of Directors of MicroAge, Inc. (the "COMPANY") under Section 7.3 of
the MicroAge, Inc. 1995 Director Incentive Plan (Amended and Restated as of
April 1, 1998) (the "PLAN") you are hereby granted the Options as set forth
below.
1. STOCK OPTION GRANT. In exchange for electing to waive the Waiver
Amount, subject to the terms and conditions set forth below, you are hereby
granted the Option to purchase a total of Twenty Thousand Four Hundred
Twenty-Six (20,426) Shares at the price of $5.875 per Share, which was the
closing price of the Shares on April 23, 1999 (the "GRANT DATE"). The number of
Shares was calculated pursuant to the following formula:
(a) Waiver Amount $ 30,000.00
(b) $30,000.00 (Waiver Amount)
Multiplied by Four (4) (the "Leverage Factor") $120,000.00
(c) Common Stock Closing Price on Grant Date
(April 23, 1999)(the "Common Stock Price") $ 5.875
(d) Total Options Granted (b) / (c)
(rounded up): 20,426
The Option granted hereby is NOT intended to be an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2. EXERCISABILITY. You may purchase all or any of the Shares included
in any installment under this Option, on or after the later to occur of:
(1) the date the Option grant vests in accordance with the schedule
below; and
(2) the date the stock price hurdle with respect to each Option grant
is met, on or after the date the Option grant vests.
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PERCENTAGE OF SHARES
EXERCISABLE IN DATE OPTION STOCK PRICE HURDLE
OPTION XXXXX XXXXX VESTS AFTER VESTING DATE
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First 34% May 1, 2000 $5.875
Second 33% May 1, 2001 $6.46
Third 33% May 1, 2002 $7.11
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NOTWITHSTANDING THE ABOVE, YOUR OPTION UNDER THIS AGREEMENT WILL BECOME
100% EXERCISABLE ON THE NINTH ANNIVERSARY OF THE GRANT DATE, UNLESS SUCH OPTION
EXPIRES BEFORE SUCH DATE IN ACCORDANCE WITH THE TERMS OF THE PLAN AND THIS
AGREEMENT. YOU MAY NOT EXERCISE THE OPTION AT ANY TIME AFTER THE EXPIRATION DATE
IN PARAGRAPH 5 BELOW.
3. EXERCISE AND STOCK DELIVERY. Vested Options may be exercised by
delivering in writing a request to purchase Shares describing the number of
Shares to be purchased and accompanied by payment in full to the Secretary of
the Company, 0000 Xxxxx XxxxxXxx Xxx, XX #0, Xxxxx, XX 00000-1896, for the
Shares which you so elect to purchase, at the price per Share herein prescribed,
whereupon you will receive a stock certificate representing the Shares for which
you have made payment. The Company, however, shall not be obligated to deliver
any stock unless and until:
(a) there has been compliance with any federal or state laws or
regulations or national securities exchange requirements which the Company
may deem applicable; and
(b) all legal matters in connection with the sale and delivery of the
Shares have been approved by the Company's legal counsel.
Upon the exercise of an Option, the purchase price shall be paid in
cash, check, or, in the sole discretion of the Committee, in Shares, or a
combination thereof. Each Share received by the Company in payment of all or a
portion of the purchase price specified in this Option shall be valued at its
fair market value on the date of payment and must have been held by you for at
least six months prior to the tender of the Share to the Company.
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4. TRANSFER RESTRICTIONS. Except as otherwise allowed by uniform rules
adopted by the Board or the Committee, this Option shall be exercisable during
your lifetime only by you and shall not be transferable by you, expressly or by
operation of law, other than by will and the laws of descent and distribution.
Any other attempted transfer or other disposition of this Option by you shall be
void and shall constitute valid grounds for cancellation of this Option by the
Company.
5. TERMINATION OF OPTION. THIS OPTION AND ALL YOUR RIGHTS HEREUNDER
SHALL, UNLESS SOONER TERMINATED IN ACCORDANCE WITH THE PROVISIONS HEREOF, CEASE
AND TERMINATE ON APRIL 23, 2009 (THE "EXPIRATION DATE"), AT 5:00 P.M. ARIZONA
TIME.
6. TERMINATION OF SERVICE ON THE BOARD. Upon the date your service on
the Company's Board is terminated for any reason, you, or in the event of your
death your beneficiary, will be entitled to receive the number of Options
determined by multiplying the sum of your Director fees actually earned and
waived up to the date of your termination by the Leverage Factor and dividing
the product by the Common Stock Price (and rounding up the resulting quotient);
provided, however, that only the total Director fees earned and waived by you up
to the date of termination will be considered. To the extent your Options are
fully vested and exercisable as of the date of your termination, they will
remain exercisable at any time prior to the Expiration Date. The portion of your
Option that is not fully vested and exercisable as of the date of your
termination, if any, shall continue to vest in accordance with the schedule set
forth above and will become exercisable at the time it becomes fully vested
prior to its Expiration Date. UNDER NO CIRCUMSTANCES WILL YOU BE ENTITLED TO
RECEIVE CASH EQUAL TO ALL OR ANY PORTION OF THE DIRECTOR FEES YOU ELECTED TO
WAIVE UNDER THE DIRECTOR'S XXX XXXXXX.
7. CHANGE OF CONTROL. Upon a "Change of Control" (as that term is
defined in the Plan), you will be entitled to receive the number of Options
determined by multiplying the sum of your Director fees actually earned and
waived up to the Change of Control by the Leverage Factor and dividing the
product by the Common Stock Price (and rounding up the resulting quotient);
provided, however, that only the total Director fees earned and waived by you up
to the Change of Control will be considered. In the event of a Change of
Control, all Options under this Agreement will become 100% vested and will be
exercisable until the Expiration Date. UNDER NO CIRCUMSTANCES WILL YOU BE
ENTITLED TO RECEIVE CASH EQUAL TO ALL OR ANY PORTION OF THE DIRECTOR FEES YOU
ELECTED TO WAIVE UNDER THE DIRECTOR'S XXX XXXXXX.
8. TERMINATION OF PURCHASE PROGRAM. If the Board decides to terminate
your ability to waive all or a portion of your Director fees in return for the
Option (the "Purchase Program"), you will be entitled to receive a number of
Options determined by multiplying the sum of your Director fees actually earned
and waived up to the date of the termination of the Purchase Program by the
Leverage Factor and dividing the product by the Common Stock Price (and rounding
up the resulting quotient); provided, however, that only the Director fees
earned and waived by you up to the date of the termination of the Purchase
Program will be considered. All Options received will be fully vested and
immediately exercisable. You will have up to thirty days from the date of such
termination to exercise the Options. After such thirty day period, the Options
will be canceled.
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UNDER NO CIRCUMSTANCES WILL YOU BE ENTITLED TO RECEIVE CASH EQUAL TO ALL OR ANY
PORTION OF THE DIRECTOR FEES YOU ELECTED TO WAIVE UNDER THE DIRECTOR'S XXX
XXXXXX.
9. MISSED MEETINGS. If you miss a meeting for which you have waived all
or a portion of the meeting fee, the portion of the Waiver Amount that would
have been satisfied had you attended that meeting (the "DEFICIT AMOUNT"), will
be made up by charging the special meeting fees and the regular meeting fees,
that you have not already waived, for those meetings that occur after the missed
meeting but before May 2, 2000. If, by May 1, 2000, the Deficit Amount is not
made up in full by charging subsequent meeting fees as set forth in the
preceding sentence, you must pay the Company any remaining Deficit Amount by
such date.
10. COMPLIANCE. The Committee hereby reserves and shall have the right
to terminate, renew, or modify the Plan in any way necessary to comply with
applicable requirements of Rule 16b-3 promulgated by the Securities and Exchange
Commission as interpreted pursuant to no-action letters and interpretive
releases.
PLEASE ACKNOWLEDGE RECEIPT OF THIS AGREEMENT BY SIGNING AND INSERTING
YOUR SOCIAL SECURITY NUMBER ON BOTH LETTERS, THEN RETURNING BOTH LETTERS TO XXXX
XXXXXXXX'X OFFICE AT MICROAGE, INC., 0000 XXXXX XXXXXXXX XXX, XXXX XXXXXXX #00,
XXXXX, XX 00000-1896 FOR HIS EXECUTION. THE ORIGINALLY EXECUTED LETTER WILL BE
RETURNED TO YOU FOR YOUR FILES AND THE COPY WILL BE RETAINED BY THE COMPANY'S
LEGAL DEPARTMENT.
MICROAGE, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
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Xxxxxxx X. XxXxxxxx
Chairman of the Board and
Chief Executive Officer
I HEREBY ACKNOWLEDGE RECEIPT OF THE FOREGOING OPTION.
Signature: /s/ Xxxxxxx X. Xxxxxxxxx
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Social Security No.:
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EXHIBIT A
MICROAGE, INC.
DIRECTOR'S FEE WAIVER
XXXXXXX X. XXXXXXXXX
RETAINER FEES
I hereby elect to waive the following amount of the retainer fees $18,000
payable to me for the next four quarters:
THE ANNUAL RETAINER IS $18,000 AND IS PAID IN ARREARS IN
QUARTERLY INSTALLMENTS OF $4,500 EACH. YOU MAY ELECT TO
WAIVE ALL OR A PORTION OF EACH QUARTERLY INSTALLMENT FOR THE
THIRD AND FOURTH QUARTERS OF THE CURRENT FISCAL YEAR AND THE
FIRST AND SECOND QUARTERS OF THE FISCAL YEAR THAT WILL END
IN 2000. IF YOU WOULD LIKE TO WAIVE ANY PORTION OF THESE
FEES, WRITE THE AMOUNT OF THE TOTAL RETAINER FEES TO BE
WAIVED ON THE BLANK LINE TO THE RIGHT. THE AMOUNT YOU WAIVE
WILL BE CHARGED EQUALLY AGAINST THE FOUR QUARTERLY
INSTALLMENTS.
BOARD MEETING FEES
I hereby elect to waive the following amount of my regular Board $ 9,000
meeting fees for the six regularly scheduled Board meetings
between May 1, 1999 and April 30, 2000:
THE MAXIMUM WAIVER IS $9,000. IF YOU WANT TO WAIVE ANY
PORTION OF THIS AMOUNT, WRITE IN THE AMOUNT TO BE WAIVED ON
THE BLANK LINE TO THE RIGHT. THE AMOUNT YOU WAIVE WILL BE
CHARGED EQUALLY AGAINST THE MEETING FEES FOR THESE SIX
MEETINGS.
COMPENSATION COMMITTEE MEETING FEES
I hereby elect to waive the following amount of my regular $ 2,000
Compensation Committee meeting fees for the two regularly
scheduled meetings between May 1, 1999 and April 30, 2000:
THE MAXIMUM WAIVER IS $2,000. IF YOU WANT TO WAIVE ANY
PORTION OF THIS AMOUNT, WRITE IN THE AMOUNT TO BE WAIVED ON
THE BLANK LINE TO THE RIGHT. THE AMOUNT YOU WAIVE WILL BE
CHARGED EQUALLY AGAINST THE MEETING FEES FOR THESE TWO
MEETINGS.
GOVERNANCE COMMITTEE MEETING FEES
I hereby elect to waive the following amount of my regular $ 1,000
Governance Committee meeting fees for the two regularly scheduled
meetings between May 1, 1999 and April 30, 2000:
THE MAXIMUM WAIVER IS $2,000. IF YOU WANT TO WAIVE ANY
PORTION OF THIS AMOUNT, WRITE IN THE AMOUNT TO BE WAIVED ON
THE BLANK LINE TO THE RIGHT. THE AMOUNT YOU WAIVE WILL BE
CHARGED EQUALLY AGAINST THE MEETING FEES FOR THESE TWO
MEETINGS.
LEAD DIRECTOR FEES
I hereby elect to waive the following amount of the Lead Director $ --
fees payable to me for the next four quarters:
THE ANNUAL LEAD DIRECTOR FEE IS $3,000 AND IS PAID IN
ARREARS IN QUARTERLY INSTALLMENTS OF $750 EACH. YOU MAY
ELECT TO WAIVE ALL OR A PORTION OF EACH QUARTERLY
INSTALLMENT FOR THE THIRD AND FOURTH QUARTERS OF THE CURRENT
FISCAL YEAR AND THE FIRST AND SECOND QUARTERS OF THE FISCAL
YEAR THAT WILL END IN 2000. IF YOU WOULD LIKE TO WAIVE ANY
PORTION OF THESE FEES, WRITE THE AMOUNT OF THE TOTAL LEAD
DIRECTOR FEES TO BE WAIVED ON THE BLANK LINE ABOVE. THE
AMOUNT YOU WAIVE WILL BE CHARGED EQUALLY AGAINST THE FOUR
QUARTERLY INSTALLMENTS.
COMMITTEE CHAIR FEES
I hereby elect to waive the following amount of the Committee $ --
Chair fees payable to me for the next four quarters:
THE ANNUAL COMMITTEE CHAIR FEE IS $3,000 AND IS PAID IN
ARREARS IN QUARTERLY INSTALLMENTS OF $750 EACH. YOU MAY
ELECT TO WAIVE ALL OR A PORTION OF EACH QUARTERLY
INSTALLMENT FOR THE THIRD AND FOURTH QUARTERS OF THE CURRENT
FISCAL YEAR AND THE FIRST AND SECOND QUARTERS OF THE FISCAL
YEAR THAT WILL END IN 2000. IF YOU WOULD LIKE TO WAIVE ANY
PORTION OF THESE FEES, WRITE THE AMOUNT OF THE TOTAL
COMMITTEE CHAIR FEES TO BE WAIVED ON THE BLANK LINE TO THE
RIGHT. THE AMOUNT YOU WAIVE WILL BE CHARGED EQUALLY AGAINST
THE FOUR QUARTERLY INSTALLMENTS.
WAIVER AMOUNT $30,000
By signing this Waiver, I acknowledge that I have been given, or was
offered, a copy of the Company's (i) Annual Report on Form 10-K for the fiscal
year ended November 1, 1998, and (ii) Quarterly Report on Form 10-Q for the
fiscal quarter ended January 31, 1999 (the "SEC Reports"), and that I was given
an opportunity to ask questions of any of the Company's executive officers
regarding the SEC Reports or any other matter regarding the Company.
By signing this Waiver, I recognize that purchasing options is a
speculative investment in that the success or failure of my investment depends
on the market value of the Company's stock over a several year period. I further
recognize that all or a portion of my investment (i.e., my Waiver Amount) may be
lost. I also acknowledge that I was given the opportunity to consult with my
personal advisor(s) regarding this Waiver.
I hereby elect to waive the Waiver Amount set forth above. By signing
this Waiver I agree to the terms and conditions set forth above and acknowledge
that I have read and understand the sample Stock Option Agreement that was given
to me.
SIGNATURE /s/ Xxxxxxx X. Xxxxxxxxx
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DATE April 13, 1999
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SSN
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PLEASE FAX YOUR SIGNED FORM TO XXXXXX X. XXXXXXX AT (000) 000-0000. YOUR FORM
MUST BE RECEIVED BY XX. XXXXXXX BY NOON (ARIZONA TIME) ON FRIDAY, APRIL 23,
1999.
