<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
LANIER WORLDWIDE, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(LANIER LOGO)
September 25, 2000
Dear Stockholder:
We cordially invite you to our Annual Meeting of Stockholders. The meeting
will be held on Thursday, October 26, 2000, at Lanier's corporate headquarters,
located at 2300 Parklake Drive, N.E., Atlanta, Georgia 30345. The meeting will
begin promptly at 9:00 a.m., local time.
At this year's meeting, you will vote on the election of two directors, the
ratification of the amended and restated Lanier Worldwide, Inc. Stock Incentive
Plan, the ratification of the amended and restated Lanier Worldwide, Inc. Key
Contributor Incentive Plan, the ratification of the amended and restated Lanier
Worldwide, Inc. Long-term Incentive Plan for Key Employees and the ratification
of Ernst & Young LLP's appointment as Lanier's independent auditors.
Please date, sign and return your proxy card in the enclosed envelope as
soon as possible to assure that your shares will be represented and voted at the
Annual Meeting even if you cannot attend. If you attend the Annual Meeting, you
may vote your shares in person even though you have previously signed and
returned your proxy.
Sincerely,
/s/ Wesley E. Cantrell
Wesley E. Cantrell
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
(LANIER LOGO)
LANIER WORLDWIDE, INC.
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 26, 2000
---------------------
To the Stockholders of Lanier Worldwide, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Lanier
Worldwide, Inc. will be held on Thursday, October 26, 2000, at Lanier's
corporate headquarters, located at 2300 Parklake Drive, N.E., Atlanta, Georgia
30345, beginning at 9:00 a.m., local time, for the following purposes:
(1) To elect two directors to serve for three-year terms;
(2) To ratify the amended and restated Lanier Worldwide, Inc. Stock
Incentive Plan;
(3) To ratify the amended and restated Lanier Worldwide, Inc. Key
Contributor Incentive Plan;
(4) To ratify the amended and restated Lanier Worldwide, Inc.
Long-term Incentive Plan for Key Employees;
(5) To ratify the appointment of Ernst & Young LLP as independent
auditors; and
(6) To transact such other business as may properly come before the
meeting.
Holders of record of common stock at the close of business on September 1,
2000 are entitled to notice of and to vote upon all matters at the Annual
Meeting.
You are cordially invited to attend the Annual Meeting so that we may have
the opportunity to meet with you and discuss the affairs of the Company. EVEN IF
YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND RETURN THE ENCLOSED
PROXY, WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES, SO
THAT THE COMPANY MAY BE ASSURED OF THE PRESENCE OF A QUORUM AT THE ANNUAL
MEETING. A stamped, addressed envelope is enclosed for your convenience in
returning your proxy.
By Order of the Board of Directors,
/s/ J. Michael Kelly
J. Michael Kelly
Vice President, General
Counsel and Secretary
Atlanta, Georgia
September 25, 2000
<PAGE> 4
LANIER WORLDWIDE, INC.
2300 PARKLAKE DRIVE, N.E.
ATLANTA, GEORGIA 30345
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 26, 2000
The 2000 Annual Meeting of Stockholders of Lanier Worldwide, Inc. will be
held on October 26, 2000, at Lanier's corporate headquarters, located at 2300
Parklake Drive, N.E., Atlanta, Georgia 30345, beginning promptly at 9:00 a.m.,
local time. The enclosed form of proxy is solicited by our Board of Directors.
It is anticipated that this proxy statement and the accompanying proxy card will
first be mailed to holders of our common stock on or about September 25, 2000.
ABOUT THE MEETING
WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
You are receiving this proxy statement and proxy card because you own
shares of common stock in Lanier Worldwide, Inc. This proxy statement describes
issues on which we would like you, as a stockholder, to vote. It also gives you
information on these issues so that you can make an informed decision.
When you sign the proxy card, you appoint James A. MacLennan and J. Michael
Kelly as your representatives at the Annual Meeting. Mr. MacLennan and Mr. Kelly
will vote your shares, as you have instructed them on the proxy card, at the
Annual Meeting. This way, your shares will be voted whether or not you attend
the Annual Meeting. Even if you plan to attend the Annual Meeting, it is a good
idea to complete, sign and return your proxy card in advance of the Annual
Meeting in case your plans change.
If an issue comes up for vote at the Annual Meeting that is not on the
proxy card, Mr. MacLennan and Mr. Kelly will vote your shares, under your proxy,
in accordance with their best judgment.
WHAT AM I VOTING ON?
You are being asked to vote on (1) the election of two directors, (2) the
ratification of the amended and restated Lanier Worldwide, Inc. Stock Incentive
Plan, (3) the ratification of the amended and restated Lanier Worldwide, Inc.
Key Contributor Incentive Plan, (4) the ratification of the amended and restated
Lanier Worldwide, Inc. Long-term Incentive Plan for Key Employees, and (5) the
ratification of the appointment of Ernst & Young LLP as independent auditors. No
cumulative voting rights are authorized and dissenters' rights are not
applicable to these matters.
WHO IS ENTITLED TO VOTE?
Stockholders as of the close of business on September 1, 2000. This is
referred to as the record date. Each share of common stock is entitled to one
vote.
HOW DO I VOTE?
YOU MAY VOTE BY MAIL. You do this by signing your proxy card and mailing
it in the enclosed, prepaid and addressed envelope.
YOU MAY VOTE IN PERSON AT THE ANNUAL MEETING. Written ballots will be
passed out to anyone who wants to vote at the Annual Meeting. If you hold your
shares in "street name" (through a broker or other nominee), you must request a
legal proxy from your stockbroker in order to vote at the Annual Meeting.
<PAGE> 5
HOW MANY VOTES DO YOU NEED TO HOLD THE ANNUAL MEETING?
Shares are counted as present at the Annual Meeting if the stockholder
either is present and votes in person at the Annual Meeting or has properly
submitted a proxy card.
As of September 1, 2000, 84,728,818 shares of common stock were issued and
outstanding. A majority of the outstanding shares as of the record date, equal
to 42,364,410 shares, must be present at the Annual Meeting either in person or
by proxy in order to hold the meeting and conduct business. This is called a
quorum.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts at the transfer agent and/or with
brokers. Please sign and return all proxy cards to ensure that all your shares
are voted. You may wish to consolidate as many of your transfer agent or
brokerage accounts as possible under the same name and address for better
customer service.
WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
You may revoke your proxy and change your vote at any time before the polls
close at the meeting. You may do this by:
- sending written notice to our Corporate Secretary at 2300 Parklake Drive,
Atlanta, Georgia 30345;
- signing another proxy with a later date; or
- voting again at the Annual Meeting.
HOW MAY I VOTE FOR THE NOMINEES FOR ELECTION OF DIRECTOR?
With respect to the election of nominees for director, you may:
- vote FOR the election of the two nominees for director;
- WITHHOLD AUTHORITY to vote for the two nominees; or
- WITHHOLD AUTHORITY to vote for one of the nominees and vote FOR the
remaining nominee.
HOW MANY VOTES MUST THE NOMINEES FOR ELECTION OF DIRECTOR RECEIVE TO BE ELECTED?
If a quorum is present at the meeting, the two nominees receiving the
greatest number of affirmative votes will be elected to serve as directors.
These numbers are called a plurality. Shares that are not voted and shares whose
votes are withheld will not affect the outcome of the election for directors.
Withholding authority to vote for a particular nominee will not prevent that
nominee from being elected.
WHAT HAPPENS IF A NOMINEE IS UNABLE TO STAND FOR RE-ELECTION?
The Board of Directors may, by resolution, provide for a lesser number of
directors or designate a substitute nominee. In the latter event, shares
represented by proxies may be voted for a substitute nominee.
HOW MAY I VOTE FOR THE RATIFICATION OF THE AMENDED AND RESTATED LANIER
WORLDWIDE, INC. STOCK INCENTIVE PLAN, THE AMENDED AND RESTATED LANIER WORLDWIDE,
INC. KEY CONTRIBUTOR INCENTIVE PLAN AND THE AMENDED AND RESTATED LANIER
WORLDWIDE, INC. LONG-TERM INCENTIVE PLAN FOR KEY EMPLOYEES?
With respect to the proposals to ratify the amended and restated Lanier
Worldwide, Inc. Stock Incentive Plan, the amended and restated Lanier Worldwide,
Inc. Key Contributor Incentive Plan and the amended and restated Lanier
Worldwide, Inc. Long-term Incentive Plan for Key Employees, you may:
- vote FOR ratification;
- vote AGAINST ratification; or
- ABSTAIN from voting on the proposals.
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HOW MANY VOTES MUST THE RATIFICATION OF THE AMENDED AND RESTATED LANIER
WORLDWIDE, INC. STOCK INCENTIVE PLAN, THE AMENDED AND RESTATED LANIER WORLDWIDE,
INC. KEY CONTRIBUTOR INCENTIVE PLAN AND THE AMENDED AND RESTATED LANIER
WORLDWIDE, INC. LONG-TERM INCENTIVE PLAN FOR KEY EMPLOYEES RECEIVE TO PASS?
If a quorum is present at the Annual Meeting, the ratification of the
amended and restated Lanier Worldwide, Inc. Stock Incentive Plan, the amended
and restated Lanier Worldwide, Inc. Key Contributor Incentive Plan and the
amended and restated Lanier Worldwide, Inc. Long-term Incentive Plan for Key
Employees must receive the affirmative vote of a majority of the votes cast at
the Annual Meeting. A vote to abstain from voting on any of these proposals will
have the effect of a vote against the proposal.
HOW MAY I VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT
AUDITORS?
With respect to the proposal to ratify the appointment of Ernst & Young LLP
as Lanier's independent auditors for fiscal year 2001, you may:
- vote FOR ratification;
- vote AGAINST ratification; or
- ABSTAIN from voting on the proposal.
HOW MANY VOTES MUST THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT
AUDITORS RECEIVE TO PASS?
If a quorum is present at the Annual Meeting, the ratification of the
appointment of the independent auditors must receive the affirmative vote of a
majority of the votes cast at the Annual Meeting. A vote to abstain from voting
on this proposal will have the effect of a vote against ratification of the
auditors.
WHAT HAPPENS IF I SIGN AND RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING
INSTRUCTIONS?
If you return a signed card but do not provide voting instructions, your
shares will be voted FOR the two named director nominees, FOR the ratification
of the amended and restated Lanier Worldwide, Inc. Stock Incentive Plan, FOR the
ratification of the amended and restated Key Contributor Incentive Plan, FOR the
ratification of the amended and restated Long-term Incentive Plan for Key
Employees, and FOR the ratification of the appointment of the independent
auditors.
If you mark your voting instructions on the proxy card, your shares will be
voted as you instruct.
WILL MY SHARES BE VOTED IF I DO NOT SIGN AND RETURN MY PROXY CARD?
If your shares are held in "street name," your brokerage firm may vote your
shares under certain circumstances. These circumstances include certain routine
matters, such as the election of directors. Therefore, if you do not vote your
proxy, your brokerage firm may either vote your shares on routine matters or
leave your shares unvoted. When a brokerage firm votes its customers' unvoted
shares on routine matters, these shares are counted for purposes of establishing
a quorum to conduct business at the meeting.
A brokerage firm cannot vote customers' shares on non-routine matters.
Therefore, if your shares are held in street name and you do not vote your
proxy, your shares will not be voted on non-routine matters and will not be
counted in determining the number of shares necessary for approval. Shares
represented by such "broker non-votes" will, however, be counted in determining
whether there is a quorum.
WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
We will announce preliminary voting results at the meeting and will publish
the final results in our quarterly report on Form 10-Q for the second quarter of
fiscal 2001. The report is filed with the Securities and Exchange Commission,
and you can get a copy by contacting our Corporate Secretary at (770) 496-9500,
the
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Securities and Exchange Commission at (800) SEC-0330 for the location of the
nearest public reference room, or through the SEC's EDGAR system at www.sec.gov.
ELECTION OF DIRECTORS
Under Lanier's Certificate of Incorporation and By-laws, the Board of
Directors determines the number of directors. The Certificate of Incorporation
divides the Board of Directors into three classes with the directors in each
class serving a term of three years.
There are two directors, Sidney E. Harris and Amos R. McMullian, whose
terms expire at the Annual Meeting. Messrs. Harris and McMullian have been
nominated to stand for re-election as directors at the Annual Meeting to serve
until the 2003 annual stockholders' meeting, and until their successors have
been duly elected and qualified. In addition to Messrs. Harris and McMullian,
there are five other directors continuing to serve on the board, whose terms
expire in 2001 and 2002.
Except as otherwise provided herein, the proxy cannot be voted for the
election of a person to fill a directorship for which no nominee is named in
this proxy statement. The Board of Directors has no reason to believe that the
nominees for the office of director will be unavailable for election as a
director. However, if at the time of the Annual Meeting a nominee should be
unable to serve or, for good cause, will not serve, the persons named in the
proxy will vote as recommended by the Board of Directors to elect a substitute
nominee recommended by the Board of Directors.
The following list sets forth the names of the nominees for election to the
Board of Directors and the names of the incumbent directors. This list also
contains, as to the nominees and incumbent directors, certain information that
has been furnished by the respective individuals.
NOMINEES FOR ELECTION -- TERM EXPIRING 2003
SIDNEY E. HARRIS
Atlanta, Georgia
Mr. Harris, age 50, is the Dean of the J. Mack Robinson College of
Business, Georgia State University. From 1987 through July 1997 he was a
Professor of Management at the Peter F. Drucker Graduate Management Center at
the Claremont Graduate School, Claremont, California. He is a director of
TransAmerica Investors, Inc., ServiceMaster Company and Amresco, Inc. Mr. Harris
has been a director of Lanier since 1999 and is a member of the Audit Committee.
AMOS R. McMULLIAN
Thomasville, Georgia
Mr. McMullian, age 62, is the Chairman of the Board of Directors and Chief
Executive Officer of Flowers Industries, Inc. and has been employed by Flowers
Industries, Inc. and its predecessor companies since 1963. He is also a director
of Keebler Foods Company and serves on the Board of Trustees of the Georgia
Research Alliance. Mr. McMullian has been a director of Lanier since 1999 and is
a member of the Executive Committee and the Nominating and Compensation
Committee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR SIDNEY E. HARRIS
AND AMOS R. MCMULLIAN TO HOLD OFFICE UNTIL THE ANNUAL MEETING OF STOCKHOLDERS IN
2003 AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
INCUMBENT DIRECTORS -- TERM EXPIRING 2001
C. LANCE HERRIN
Atlanta, Georgia
Mr. Herrin, age 59, is the President and Chief Operating Officer of the
Company. He has been employed by Lanier and its predecessor companies since
1967. Mr. Herrin is also a director of GuideOne Insurance. He has been a
director of Lanier since 1999 and is a member of the Executive Committee.
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<PAGE> 8
DAVID H. HUGHES
Orlando, Florida
Mr. Hughes, age 56, has been the Chairman and Chief Executive Officer of
Hughes Supply, Inc. since 1986. Mr. Hughes is also a director of SunTrust Bank,
Inc. and Brown & Brown, Inc. He has been a director of Lanier since 1999 and is
a member of the Audit Committee and the Nominating and Compensation Committee.
INCUMBENT DIRECTORS -- TERM EXPIRING 2002
WESLEY E. CANTRELL
Atlanta, Georgia
Mr. Cantrell, age 65, is the Chairman of the Board and Chief Executive
Officer of the Company. He has been employed by Lanier and its predecessor
companies since 1955. Mr. Cantrell is also a director of Ann Taylor Stores
Corp., Environmental Design International Ltd., OneCoast Network Corporation and
Impact Ministries, a not for profit organization, and is a member of the
advisory board of First Union National Bank of Atlanta. Mr. Cantrell has been a
director of Lanier since 1999 and is Chairman of the Executive Committee.
CLARENCE B. ROGERS, JR.
Atlanta, Georgia
Mr. Rogers, age 70, is the former Chairman of the Board and Chief Executive
Officer of Equifax Inc. He served in various positions at Equifax from 1989 to
1999. Mr. Rogers is also a director of Morgan Stanley Dean Witter & Co., Briggs
& Stratton Corporation, Oxford Industries, Inc., ChoicePoint, Inc., and
Datagistics, Inc. Mr. Rogers has been a director of Lanier since 1999 and is
Chairman of the Nominating and Compensation Committee.
JOHN F. WARD
Atlanta, Georgia
Mr. Ward, age 57, is the Chairman, President and Chief Executive Officer of
Russell Corp. He has been employed by Russell Corp. since April 1998. From
September 1996 to March 1998, Mr. Ward was President of J.F. Ward Group, Inc.
From 1979 until 1993, he was President and CEO of several divisions of Sara Lee
Corporation, and from 1992 to August 1996, he was Senior Vice President of Sara
Lee Corporation. Mr. Ward is on the advisory board of the Robert C. Goizueta
Business School as well as the board of visitors at Emory University. He is a
member of the board of advisors for the Metro Atlanta Chamber of Commerce, CURE
Childhood Cancer, United Way's Alexis de Tocqueville Society and the board of
directors of The Georgian Club in Atlanta. Mr. Ward has been a director of
Lanier since 1999 and is Chairman of the Audit Committee.
MEETINGS OF THE BOARD OF DIRECTORS
During the year ended June 30, 2000, the Board of Directors held three
regular meetings and four special meetings. Each member of the Board attended at
least 75% of the meetings of the Board and the committees of which he is a
member.
COMMITTEES OF THE BOARD OF DIRECTORS
Lanier's Board of Directors has established three standing committees to
assist in the discharge of its responsibilities. The principal functions of each
committee are described below.
Executive Committee
The Executive Committee evaluates and reviews Lanier's financial position
and capital structure. The Executive Committee also approves capital asset
transactions, and acquisitions and dispositions with a value of
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up to twenty million dollars. The members of the Executive Committee are Messrs.
Cantrell (Chairman), Herrin and McMullian. The Executive Committee did not meet
during the past fiscal year.
Audit Committee
The Audit Committee serves as the representative of the Board of Directors,
responsible for oversight of the Company's affairs in the areas of financial
accounting and reporting and the underlying internal controls, as well as the
financial aspects of the Company's funded benefit plans. It also recommends the
independent auditors for appointment by the Board and approval of the
stockholders. The members of the Audit Committee are Messrs. Ward (Chairman),
Harris and Hughes. The Audit Committee held two meetings during the past fiscal
year.
The Audit Committee reviews and monitors the Company's accounting policies
and financial reporting practices, paying particular attention to any weaknesses
in internal accounting policies and controls, with the primary goal being to
help assure that the Company's financial statements present fairly its financial
results in accordance with generally accepted accounting principles. Through its
activities, the Audit Committee facilitates open communication among the
Company's directors, management, internal audit functions and the independent
accountants.
Nominating and Compensation Committee
The Nominating and Compensation Committee supervises the Company's general
compensation strategies, including incentive compensation, stock options and
benefit programs. The members of the Nominating and Compensation Committee are
Messrs. Rogers (Chairman), Hughes and McMullian. The Nominating and Compensation
Committee held four meetings during the past fiscal year.
The Nominating and Compensation Committee reviews Lanier's compensation
philosophy and establishes the compensation for officers of Lanier other than
the chief executive officer and president, whose compensation is recommended by
the Nominating and Compensation Committee and approved by all of the outside
directors. The Nominating and Compensation Committee generally administers
Lanier's stock incentive and stock based compensation plans and other incentive
plans. The Nominating and Compensation Committee also oversees the
administration and operation of Lanier's various retirement and pension plans,
including the selection and review of the performance of the investment funds
and the independent investment advisors for the plans.
The Nominating and Compensation Committee identifies, evaluates and
recommends director nominees to the Board of Directors and to be elected at the
annual meeting of the stockholders and to fill vacancies; recommends directors'
compensation and benefit plans to the Board of Directors; recommends committees
of the Board of Directors and committee members; and facilitates the Board of
Directors' evaluation of its effectiveness.
The Nominating and Compensation Committee will consider suggestions for
director nominees from all sources, including stockholders. Any stockholder
suggestion, together with an appropriate biographical summary, should be sent to
the Secretary of the Company. In addition, Lanier's by-laws establish certain
requirements concerning stockholder nominations for election of directors,
including that notice of such nominations be delivered to the Secretary of
Lanier not less than 90 nor more than 120 days prior to the date of the annual
meeting of stockholders. Each notice of nomination is required to contain the
name and address of the stockholder who intends to make the nomination; the
name, address and written consent of the nominee; and such other nominee
information as would be required to be disclosed in a proxy solicitation.
COMPENSATION OF DIRECTORS
Non-employee directors receive an annual retainer fee of $30,000. In
addition, non-employee directors who serve on a standing committee receive an
additional annual fee of $1,500 for their services on a committee, or $3,000 if
serving as chairperson of a committee.
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Each non-employee director also receives $1,000 for attendance at each
board meeting. In addition, each non-employee director receives $800 for
attendance at each committee meeting and for participation in a telephonic or
video conference meeting. Each non-employee director also is reimbursed for
out-of-pocket expenses incurred in connection with attendance at board and
committee meetings. In addition, each non-employee director is provided travel,
accident and disability insurance in the event that the director is involved in
an accident while traveling on business relating to Lanier.
Under the amended and restated Lanier Worldwide, Inc. Stock Incentive Plan,
each non-employee director is granted an option to purchase 10,000 shares of
Lanier common stock on the date such director joins Lanier's Board of Directors,
and is automatically granted an option to purchase 2,000 shares of Lanier common
stock on the first business day of the month following the Annual Meeting.
Neither Lanier's Board of Directors nor any committee of the Board of Directors
has any discretion with respect to the grant of options to non-employee
directors.
Under the Lanier Directors Deferred Compensation Plan (the "Directors'
Plan"), each non-employee director may elect to defer all or a portion of his or
her fees. A director's account is credited with a number of units of Lanier
common stock equivalents based upon the fair market value of the Lanier common
stock on the date the fees otherwise would be paid. Once amounts are deferred
they are only payable following a director's resignation, retirement or death.
Each Lanier common stock unit is credited with dividend equivalents, which are
deemed reinvested in additional Lanier common stock units on the dividend
payment date. Amounts deferred under the Directors Plan are paid in whole shares
of Lanier common stock and in cash for any factional shares as soon as
practicable following resignation, retirement or death. Within ninety days
following a Change in Control (as defined in the Directors' Plan), Lanier will
pay to each director (or former director) a cash lump sum payment equal to the
then remaining balance in each such director's account.
Lanier has adopted a policy that directors retire from the Board of
Directors effective at the end of the month in which they reach age seventy-two.
In addition, a director is expected to tender automatically his or her
resignation in the event of retirement or other significant change in status
from the positions held at the time of election to the Board of Directors,
although the Board of Directors may opt to have such director continue to serve
on the Board of Directors.
RATIFICATION OF THE AMENDED AND RESTATED LANIER WORLDWIDE, INC.
STOCK INCENTIVE PLAN
PLAN DESCRIPTION
The following description of the Stock Incentive Plan is a summary only and
does not purport to be complete. This summary is qualified in its entirety by
reference to the Stock Incentive Plan attached as Exhibit A, which stockholders
are urged to read.
Introduction. The Stock Incentive Plan is intended to promote the
long-term growth and performance of Lanier and its affiliates by generating
increased incentive for key employees and directors to contribute to Lanier's
growth and profitability, thereby enhancing the value of Lanier to stockholders,
and better to enable Lanier to attract and retain outstanding individuals.
The Stock Incentive Plan permits the granting of the following types of
awards: (1) stock options, (2) performance share awards, (3) restricted stock
awards, (4) stock appreciation rights, and (5) other awards valued in whole or
in part by reference to, or otherwise based on, Lanier common stock. In
addition, the Stock Incentive Plan permits the granting of awards to employees
who are foreign nationals or employed outside the United States on terms and
conditions different from those awards granted to domestic employees.
Stock Incentive Plan Administration, Eligibility and Stock Incentive Plan
Shares. The Stock Incentive Plan is administered by the Nominating and
Compensation Committee (the "Committee"), composed solely of non-employee
directors. The Committee may grant awards under the Stock Incentive Plan to such
employees of Lanier, and of certain affiliates of Lanier, as may be selected by
the Committee. Stock options intended to qualify as "incentive stock options"
under Section 422 of the Internal Revenue Code of 1986, as
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amended (the "Code"), however, only may be granted to employees of Lanier or a
subsidiary corporation of Lanier. The Committee may delegate to one or more
officers of Lanier the right to make awards to employees who are not officers or
directors of Lanier. The Stock Incentive Plan also provides for automatic grants
of non-statutory stock options to directors who are not employees of Lanier or
an affiliate of Lanier, in accordance with a formula set forth in the Stock
Incentive Plan.
The Stock Incentive Plan provides for an aggregate of 8,000,000 shares of
Lanier common stock that may be awarded, or by which awards may be valued or
otherwise based. Shares to be issued under the Stock Incentive Plan may be
authorized and unissued shares, treasury shares or any combination thereof. In
the event of certain changes in capitalization of Lanier, the Committee may make
adjustments to the number of shares of common stock reserved for issuance under
the Stock Incentive Plan and the number, class and price of shares subject to
outstanding awards.
Stock Options. The Committee may grant stock options to eligible employees
with an option price not less than 100% of the fair market value of Lanier
common stock on the date of the grant. The Committee determines, consistent with
the terms of the Stock Incentive Plan, the number of shares subject to each
option, the term of each option, the times when each option may be exercised,
and any other terms and conditions of each option; provided that no options may
be exercisable later than ten years after grant. In addition, the grant and
terms of incentive stock options are restricted to the extent required by
Section 422 of the Code. The terms of each stock option granted under the Stock
Incentive Plan are evidenced by a stock option agreement. The maximum number of
shares of Lanier common stock for which options may be granted to an employee
may not exceed 250,000 in any one fiscal year.
Upon exercise of a stock option, the option price must be fully paid in
cash, shares of Lanier common stock equal in fair market value to the purchase
price, or a combination thereof. If an optionee ceases to be an employee of
Lanier or an affiliate, his or her option will be exercisable in accordance with
the terms of the applicable stock option agreement. Options are not transferable
other than by will or the laws of descent and distribution; provided the option
agreement may permit transfers to certain permitted transferees.
Performance Share Awards. The Committee may grant performance share
awards, which are shares of Lanier common stock awarded to an employee
contingent on the attainment of performance goals during a specified performance
period. Performance shares are valued in direct relation to the fair market
value of the number of shares of common stock underlying the award. Performance
goals may include any combination of one or more of the following: Lanier's
revenue, earnings per share of Lanier common stock, net income, return on
equity, return on capital, return on assets, total shareholder return, return on
sales or cash flow.
The terms of each performance share award are evidenced by a performance
share award agreement. Shares subject to performance share awards may be
adjusted by the Committee upon a transfer of employment between one business
unit of Lanier and another business unit during a performance period. Unless the
performance share award agreement provides otherwise, recipients of performance
share awards have the right to vote the shares and to receive any cash
dividends; however, recipients are precluded from transferring the shares until
satisfaction of applicable performance goals during the performance period. The
maximum number of shares of Lanier common stock for which performance share
awards may be made to an employee may not exceed 250,000 in any one fiscal year.
Restricted Stock. The Committee may make restricted stock awards, which
are shares of common stock subject to restrictions as to vesting and otherwise,
including the attainment of applicable performance goals (described above)
within a performance period. The terms of a restricted stock award are evidenced
by a restricted stock award agreement. Unless the restricted stock award
agreement provides otherwise, recipients of restricted stock awards have the
right to vote the shares and to receive any cash dividends; however, recipients
are precluded from transferring the shares until satisfaction of applicable
restrictions. The maximum number of shares of restricted Lanier common stock
that may be awarded to an employee may not exceed 250,000 in any one fiscal
year.
Stock Appreciation Rights. The Committee may grant stock appreciation
rights to employees either in tandem with a stock option or freestanding. A
stock appreciation right entitles an employee to receive a
8
<PAGE> 12
payment from Lanier equal to the excess of the fair market value of a stated
number of shares of Lanier common stock at exercise over a price fixed at grant.
Stock appreciation rights granted in tandem with stock options may be exercised
only to the extent the related options are then exercisable. The grant price of
a stock appreciation right, which may not be less than 100% of the fair market
value on the date of grant, and other terms will be determined by the Committee
and evidenced by a stock appreciation rights agreement.
Upon the exercise of a stock appreciation right, an employee will receive
an amount in cash, Lanier common stock or both (as determined by the Committee)
equal in value to the excess of the fair market value per share of Lanier common
stock on the date of exercise over the applicable grant price per share,
multiplied by the number of shares for which the stock appreciation right is
exercised. Stock appreciation rights are not transferable other than by will or
the laws of descent and distribution; provided, the stock appreciation rights
agreement may permit transfers to certain permitted transferees under the Stock
Incentive Plan. The maximum number of shares of Lanier common stock for which
stock appreciation rights may be granted to an employee may not exceed 250,000
in any one fiscal year.
Other Share-Based Awards. In order to enable Lanier to respond quickly to
significant legislative and regulatory developments and to trends in executive
compensation practices, the Committee also is authorized to grant to employees
other share-based awards valued in whole or in part by reference to, or
otherwise based on, Lanier common stock. The maximum number of shares of Lanier
common stock, or units payable in cash based on the value of Lanier common
stock, that may be granted to an employee may not exceed 250,000 in any one
fiscal year.
Non-Employee Directors' Options. The Stock Incentive Plan provides that
each non-employee director of Lanier will upon his or her election or
appointment to the Board of Directors, receive an option to purchase 10,000
shares of Lanier common stock. Thereafter, on the first business day of the
month following the annual meeting of stockholders, each non-employee director
automatically will receive an additional option to purchase 2,000 shares of
Lanier common stock. All such options are non-statutory stock options priced at
100% of the fair market value of Lanier common stock on the date of grant.
Vesting occurs over three years (50% on the first anniversary of grant and 25%
on the next two anniversary dates), but in the event of a "change in control"
(as defined in the Stock Incentive Plan), each such option that has been
outstanding for more than one year will become immediately exercisable. Each
such option terminates on the tenth anniversary of the date of grant, unless
terminated earlier in accordance with the terms of the Stock Incentive Plan if
the director's service on the Board of Directors terminates. Neither the Board
of Directors nor the Committee has any discretion with respect to the grant of
options to non-employee directors pursuant to the Stock Incentive Plan.
Adjustment. The Committee is authorized to make adjustments in the method
of calculating attainment of performance goals for performance share awards or
in the terms and conditions of other awards (other than non-employee director
options) in recognition of unusual or non-recurring events affecting Lanier or
Lanier's financial statements or changes in applicable laws, regulations or
accounting principles. Upon the occurrence of a "change in control" (as defined
in the Stock Incentive Plan), all outstanding awards (other than non-employee
director options) will be paid in such manner and in such amounts as determined
by the Committee in its sole discretion at the time the awards are made.
Amendment or Termination; Code Section 162(m). Until a change in control
occurs, the Board of Directors or the Committee may amend or terminate the Stock
Incentive Plan. However, no amendment or termination may impair the rights of an
employee to whom an award has been made without the employee's consent. In
addition, no amendment may increase the aggregate number of shares of Lanier
common stock that may be issued under the Stock Incentive Plan, change the class
of employees eligible to participate in the Stock Incentive Plan, or change the
provisions of the Stock Incentive Plan governing non-employee director stock
options without the approval of stockholders, so long as such approval is
required by applicable law or regulation. After a change in control, the Board
of Directors or the Committee no longer has the power to amend or terminate the
Stock Incentive Plan, except to comply with changes to the Code, federal
securities law or other applicable law or stock exchange rules.
9
<PAGE> 13
Awards may, but are not required to, satisfy the exemption for
performance-based compensation under Section 162(m) of the Code. If compensation
payable under an award would not be deductible by Lanier as a result of the
application of Section 162(m) of the Code, the Committee, in its discretion, may
defer an employee's receipt of that portion of the award that is not deductible.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is only a brief summary of current United States
federal income tax law applicable to employees who receive awards under the
Stock Incentive Plan and are both citizens and residents of the United States.
It is intended solely for general information. An employee's situation may be
such that some variation of the basic rules is applicable to him or her.
The grant of a stock option or stock appreciation right will create no tax
consequences for a recipient or for Lanier. In addition, an optionee generally
will have no taxable income upon exercising an "incentive stock option" under
Section 422 of the Code, except that the alternative minimum tax rules of the
Code may apply resulting in an increase in an optionee's federal income tax
liability. Lanier generally will receive no deduction when an incentive stock
option is exercised. Upon exercising an option other than an incentive stock
option, an optionee must recognize ordinary income equal to the excess of the
fair market value of the stock on the date of exercise over the option exercise
price, and Lanier (or an applicable affiliate) normally is entitled to a
deduction for the same amount. Upon exercising a stock appreciation right, a
recipient must recognize ordinary income equal to the excess of the fair market
value of the stock on the date of exercise over the price fixed at grant, and
Lanier (or an applicable affiliate) normally is entitled to a deduction for the
same amount. The income tax treatment on disposition of shares acquired through
the exercise of an award depends on how long the shares have been held and on
whether the shares were acquired by exercising an incentive stock option.
If shares are acquired by exercising an incentive stock option and are
disposed of within two years from the date the option is granted or within one
year from the date the option is exercised (the "incentive stock option holding
periods"), an optionee generally will recognize ordinary income equal to the
lesser of (1) the gain realized (i.e., the excess of the amount realized on the
disposition over the option exercise price) or (2) the excess of the fair market
value of the shares transferred upon option exercise over the option exercise
price for the shares. The balance, if any, of the optionee's gain at disposition
over the amount treated as ordinary income generally is treated as short-term or
long-term capital gain, depending on whether the holding period applicable to
long-term capital assets is satisfied. If shares are acquired by exercising an
incentive stock option and are disposed of after the expiration of the incentive
stock option holding periods, the disposition generally will result in long-term
capital gain or loss equal to the difference between the amount realized on the
disposition and the option exercise price.
The sale or other taxable disposition of shares acquired through the
exercise of a non-statutory stock option or stock appreciation rights generally
will result in a short-term or a long-term capital gain or loss, depending on
the period between exercise and disposition, equal to the difference between the
amount realized on disposition and the fair market value of the shares
transferred to the optionee when the option or stock appreciation rights were
exercised.
Special rules not addressed above apply to any optionee who exercises an
option by paying the exercise price, in whole or in part, by the transfer of
shares of Lanier common stock. Generally, there is no tax consequence to Lanier
in connection with a disposition of shares acquired under an option, except that
Lanier (or an applicable affiliate) may be entitled to a deduction in the case
of a disposition of shares acquired under an incentive stock option before the
expiration of the applicable incentive stock option holding periods.
With respect to the other awards granted under the Stock Incentive Plan
that are settled either in cash or in shares of Lanier common stock or other
property that is either transferable or not subject to substantial risk of
forfeiture, the recipient must recognize ordinary income equal to the cash or
the fair market value of shares or other property received at the time of
receipt. Lanier (or an applicable affiliate) generally is entitled to a
deduction for the same amount. With respect to awards that are settled in shares
of Lanier common stock or other property that are restricted as to
transferability and subject to substantial risk of forfeiture, the recipient
10
<PAGE> 14
must recognize ordinary income equal to the fair market value of the shares or
other property received at the first time the shares or other property become
transferable or not subject to substantial risk of forfeiture, whichever occurs
earlier. Lanier (or an applicable affiliate) generally is entitled to a
deduction for the same amount.
Lanier's deductions for compensation paid in any taxable year to certain
executives are subject to a $1,000,000 limitation under Section 162(m) of the
Code, unless the exception for performance-based compensation under such Code
section applies.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE AMENDED AND RESTATED LANIER WORLDWIDE, INC. STOCK INCENTIVE PLAN.
RATIFICATION OF THE AMENDED AND RESTATED LANIER WORLDWIDE, INC.
KEY CONTRIBUTOR INCENTIVE PLAN
The following description of the Key Contributor Incentive Plan is a
summary only and does not purport to be complete. This summary is qualified in
its entirety by reference to the Key Contributor Incentive Plan attached as
Exhibit B, which stockholders are urged to read.
The Key Contributor Incentive Plan is intended to promote the growth and
performance of Lanier by linking a portion of total compensation for certain key
employees to the attainment of annual corporate, sector and division financial
objectives approved by the plan administrator. The plan administrator may pay
cash awards to selected salaried employees of Lanier or of an affiliate
("participants") based on attainment of pre-established performance goals.
With respect to the Chief Executive Officer and other executive officers of
Lanier, the Committee administers the Key Contributor Incentive Plan. With
respect to other participants, the Board of Directors, the Committee or the
Chief Executive Officer, in accordance with Lanier's compensation practices,
administers the Key Contributor Incentive Plan. If the Chief Executive Officer
is the plan administrator, he may delegate to one or more other officers of
Lanier the right to make awards to employees who are not officers or directors
of Lanier.
The plan administrator determines the applicable annual performance goal or
goals for a participant and assigns to the participant a target award for the
fiscal year ("target annual incentive award"). The maximum amount that may be
awarded to a participant each year is 200% of his or her target annual incentive
award. Performance goals may include any combination of one or more of the
following measurements: Lanier's revenue, earnings per share of Lanier common
stock, net income, return on equity, return on capital, return on assets, total
shareholder return, return on sales or cash flow. The plan administrator also
may determine that an incentive award is to be based on attainment of comparable
performance goals but applied to a subsidiary, affiliate, division or sector of
Lanier for which the participant has substantial management responsibility. The
maximum annual incentive award payable to any executive officer is $2,000,000.
Annual incentive awards currently are paid in semi-annual installments for
executive officers and in quarterly installments for all other eligible
participants, based on the degree of attainment of the performance goals as of
the end of each such installment period. By July 1, 2003, payment of awards will
be made only on an annual basis. Upon the occurrence of a "change in control"
(as defined in the Key Contributor Incentive Plan), Lanier will pay an amount
not less than a participant's target annual incentive award for the fiscal year.
The plan administrator is authorized to make adjustments in the method of
calculating attainment of performance goals in recognition of unusual or
non-recurring events affecting Lanier or Lanier's financial statements or
changes in applicable laws, regulations or accounting principles. In addition,
the plan administrator may change a participant's target annual incentive award
or performance goals to reflect a change in his or her responsibilities, and may
decrease or increase the amount of an incentive award payable to a participant
without regard to the attainment of applicable performance goals.
Annual incentive awards made under the Key Contributor Incentive Plan may,
but are not required to, satisfy the exemption for performance-based
compensation under section 162(m) of the Code. If an award
11
<PAGE> 15
would not be deductible to Lanier as a result of the application of Section
162(m) of the Code, the plan administrator, in its discretion, may defer a
participant's receipt of that portion of the award that is not deductible.
Until a change in control of Lanier occurs, the Board of Directors or the
Committee may amend or terminate the Key Contributor Incentive Plan; provided no
termination or amendment may alter a participant's right to receive a
distribution previously earned. After a change in control, the Board of
Directors or the Committee no longer has the power to amend or terminate the Key
Contributor Incentive Plan, except to comply with changes to the Code or other
applicable law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE AMENDED AND RESTATED LANIER WORLDWIDE, INC. KEY CONTRIBUTOR INCENTIVE
PLAN.
RATIFICATION OF THE AMENDED AND RESTATED LANIER WORLDWIDE, INC.
LONG-TERM INCENTIVE PLAN FOR KEY EMPLOYEES
The following description of the Long-term Incentive Plan for Key Employees
(the "LTIP") is a summary only and does not purport to be complete. This summary
is qualified in its entirety by reference to the LTIP attached as Exhibit C,
which stockholders are urged to read.
The LTIP is intended to promote the long-term growth and performance of
Lanier by linking a portion of total compensation for certain key employees to
the attainment of corporate, sector and division financial objectives approved
by the Committee for long-term cycles of at least three years. Under the LTIP,
the Committee may pay cash awards to selected salaried employees of Lanier or of
an affiliate (the "participants") based on attainment of pre-established
performance goals. The Committee may delegate to one or more officers of Lanier
the right to make awards to employees who are not officers or directors of
Lanier.
Under the LTIP, the Committee determines the applicable performance goal or
goals for a participant, utilizing Lanier's strategic planning process, and the
period (generally three fiscal years) during which performance is to be measured
(the "performance period"). The Committee then assigns to the participant a
target award and establishes a mechanism for computing the amount of the award
that can be earned during the period based on attainment of the performance
goals. The maximum amount that may be awarded to a participant each year is 200%
of his or her target award. Performance goals under the LTIP may include any
combination of one or more of the following measurements: Lanier's revenue,
earnings per share of common stock, net income, return on equity, return on
capital, return on assets, total shareholder return, return on sales or cash
flow. The Committee also may determine that an incentive award is to be based on
attainment of comparable performance goals but applied to a subsidiary,
affiliate, division or sector of Lanier for which the participant has
substantial management responsibility. The maximum incentive award payable to
any executive officer in any performance period is $2,000,000. Upon the
occurrence of a "change in control" (as defined in the LTIP), Lanier will pay an
amount not less than a participant's target award. A participant may elect to
defer all or a portion of any award until normal retirement age, and interest
will be paid on the amount deferred based on the average long-term treasury bill
rate.
The Committee is authorized to make adjustments in the method of
calculating attainment of performance goals in recognition of unusual or
non-recurring events affecting Lanier or Lanier's financial statements or
changes in applicable laws, regulations or accounting principles. In addition,
the Committee may change a participant's target award or performance goals
during a performance period to reflect a change in his or her responsibilities,
and may decrease or increase the amount of an incentive award without regard to
the attainment of applicable performance goals.
Incentive awards made under the LTIP may, but are not required to, satisfy
the exemption for performance-based compensation under section 162(m) of the
Code. If an award would not be deductible to Lanier as a result of the
application of Section 162(m) of the Code, the Committee, in its discretion, may
defer a participant's receipt of that portion of the award that is not
deductible.
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<PAGE> 16
Until a change in control of Lanier occurs, the Board of Directors or the
Committee may amend or terminate the LTIP; provided no termination or amendment
may alter a participant's right to receive a distribution previously earned.
After a change in control, the Board of Directors or the Committee no longer has
the power to amend or terminate the LTIP, except to comply with changes to the
Code or other applicable law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE AMENDED AND RESTATED LANIER WORLDWIDE, INC. LONG-TERM INCENTIVE PLAN FOR
KEY EMPLOYEES.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has audited the accounts of Lanier Worldwide, Inc. and
its subsidiaries since 1983 and has been appointed by the Board of Directors to
continue in that capacity for Lanier's fiscal year ending June 29, 2001, subject
to ratification by the stockholders at the Annual Meeting. Should this firm be
unable to perform the requested services for any reason or not be ratified by
the stockholders, the Board of Directors will appoint other independent auditors
to serve for the remainder of the year. A representative of Ernst & Young LLP
will be present at the Annual Meeting, will have the opportunity to make a
statement and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF THE INDEPENDENT AUDITORS.
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<PAGE> 17
COMMON STOCK OWNERSHIP BY MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
SECURITY OWNERSHIP OF EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth information regarding beneficial ownership
of the Company's Common Stock by each director, the Company's Chief Executive
Officer and four other most highly compensated executive officers and the
directors and executive officers of the Company as a group, all as of September
1, 2000:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-------------------------------------------------------------
SOLE VOTING OPTIONS OTHER
AND EXERCISABLE BENEFICIAL TOTAL PERCENT
INVESTMENT WITHIN OWNERSHIP BENEFICIAL OF
INDIVIDUAL OR GROUP POWER(1) 60 DAYS(2) (3)(4) OWNERSHIP CLASS
------------------- ----------- ----------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C>
Wesley E. Cantrell................... 125,051 797,300 148,068 1,045,419 1.2%
Sidney E. Harris..................... 0 0 0 0 *
C. Lance Herrin...................... 26,253 245,046 69,913 341,212 *
David H. Hughes...................... 0 0 0 0 *
Amos R. McMullian.................... 0 0 24,301 24,301 *
Clarence B. Rogers, Jr............... 10,000 0 22,474 32,474 *
John F. Ward......................... 0 0 0 0 *
Paul M. Anderson..................... 12,194 57,694 1,287 71,175 *
James A. MacLennan................... 19,946 5,583 34,752 60,281 *
Timothy A. Vellek.................... 12,879 12,097 1,489 26,465 *
All Executive Officers and Directors
as a group (16 persons)............ 275,889 1,266,017 306,056 1,847,962 2.2%
</TABLE>
---------------
* Less than 1%.
(1) Includes shares owned under the Savings Incentive Plan as follows: Mr.
Cantrell -- 3,434; Mr. Herrin -- 3,086; Mr. Anderson -- 4,382; Mr.
MacLennan -- 4,946; and Mr. Vellek -- 4,251.
(2) Represents the shares that can be acquired through stock option exercises on
or prior to October 31, 2000.
(3) Includes shares owned under the Supplemental Executive Retirement Savings
Plan as follows: Mr. Cantrell -- 12,049; Mr. Herrin -- 7,506; Mr.
Anderson -- 1,287; Mr. MacLennan -- 2,752; and Mr. Vellek -- 1,489. The
deferred stock equivalent units are settled in cash following, or under
certain circumstances prior to, retirement, and may not be voted or
transferred.
(4) Includes performance share awards under the Stock Incentive Plan and
deferred compensation under the Director's Plan as follows: Mr.
Cantrell -- 111,018; Mr. Herrin -- 62,407; Mr. MacLennan -- 32,000; Mr.
McMullian -- 24,301; and Mr. Rogers -- 22,474. Also includes 25,000 shares
of restricted stock awarded to Mr. Cantrell under the Stock Incentive Plan.
The named individuals have voting power but no investment power over the
performance shares and the restricted stock.
14
<PAGE> 18
PRINCIPAL STOCKHOLDERS
The following table sets forth each person who, to the Company's knowledge,
had sole or shared voting or investment power over more than five percent of the
outstanding shares of common stock as of September 1, 2000:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------------------------ -------------------- --------
<S> <C> <C>
Harris Corporation(1)....................................... 8,785,958 10.4%
1025 West NASA Boulevard
Melbourne, Florida 32919
The Prudential Insurance Company of America(2).............. 6,741,825 8.0%
751 Broad Street
Newark, New Jersey 07102
Capital Research and Management Company(3).................. 6,070,000 7.2%
333 South Hope Street
Los Angeles, California 90071
</TABLE>
---------------
(1) This information is based on information provided by ChaseMellon Shareholder
Services as of September 1, 2000.
(2) This information is based on information set forth in a Schedule 13G dated
February 7, 2000 that has been filed with the Securities and Exchange
Commission. According to the Schedule 13G, Prudential has sole voting and
investment power over 7,600 of the shares, and shares voting and investment
power over 6,734,225 of the shares.
(3) This information is based on information set forth in a Schedule 13G dated
February 14, 2000 that has been filed with the Securities and Exchange
Commission.
15
<PAGE> 19
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information is furnished for the fiscal years ended June 30,
2000, July 2, 1999 and July 3, 1998 with respect to the Company's Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company during fiscal year 2000 whose salary and bonus exceeded
$100,000 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------------------
AWARDS PAYOUTS
---------- -------------
ANNUAL COMPENSATION SECURITIES
----------------------------------- UNDERLYING
OTHER ANNUAL OPTIONS/ LTIP ALL OTHER
FISCAL COMPENSATION SARS PAYOUTS(2)(3) COMPENSATION(4)
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (1)($) (#) ($) ($)
--------------------------- ------ --------- -------- ------------ ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wesley E. Cantrell.................. 2000 441,538 184,951 3,600 250,000(5) 23,264 35,268
Chairman and 1999 337,886 182,600 24,000 155,092(6) 315,000 27,879
Chief Executive Officer 1998 312,115 352,501 26,400 124,074(6) 407,100 26,386
C. Lance Herrin..................... 2000 274,423 127,197 1,440 190,000(5) 9,305 29,192
President and Chief 1999 228,077 243,180 9,600 62,037(6) 126,000 20,412
Operating Officer 1998 218,077 255,585 10,560 49,629(6) 159,300 20,046
James A. MacLennan.................. 2000 189,038 48,613 0 120,000(5) 11,000 9,712
Executive Vice President 1999 165,385 44,886 0 11,166(6) 0 8,281
and Chief Financial Officer 1998 152,462 48,921 0 0 0 1,968
Paul M. Anderson.................... 2000 131,346 57,973 240 52,500(5) 12,326 11,284
Vice President -- 1999 124,615 101,700 1,920 20,472(6) 31,500 10,382
Worldwide Marketing 1998 88,654 122,283 2,640 12,407(6) 39,825 7,443
Timothy A. Vellek................... 2000 140,769 81,859 0 52,500(5) 17,500 9,606
Senior Vice President -- 1999 108,231 84,429 0 16,129(6) 28,000 7,151
European Operations 1998 87,546 61,200 0 0 2,700 4,722
</TABLE>
---------------
(1) The amounts reported represent dividend equivalent payments on outstanding
performance shares granted under the Stock Incentive Plan for which the
performance period has not yet expired.
(2) The value of performance shares earned for the three-year performance period
ended June 30, 2000 (Mr. Cantrell -- 31,019 shares; Mr. Herrin -- 12,407
shares and Mr. Anderson -- 3,102) is based upon the closing price of Lanier
common stock on August 3, 2000 (the date on which the share awards were
approved).
(3) Payouts for fiscal 1998 and 1999 were made pursuant to grants under the
Long-term Incentive Plan for Key Employees. The payments reflected in the
table for fiscal years 1998 and 1999 are for performance during the
three-year performance periods ended June 27, 1998 and July 3, 1999,
respectively.
(4) Amounts reported include:
- Contributions to the Savings Incentive Plan for fiscal year 2000: Mr.
Cantrell -- $4,990, Mr. Herrin -- $5,003, Mr. MacLennan -- $5,570, Mr.
Anderson -- $5,049, and Mr. Vellek -- $5,290; for fiscal year 1999: Mr.
Cantrell -- $5,209, Mr. Herrin -- $5,258, Mr. MacLennan -- $3,863, Mr.
Anderson -- $5,394, and Mr. Vellek -- $4,864; for fiscal year 1998: Mr.
Cantrell -- $5,935, Mr. Herrin -- $7,415, Mr. MacLennan -- $847, Mr.
Anderson -- $6,034, and Mr. Vellek -- $4,604.
- Contributions to the Supplemental Executive Retirement Savings Plan for
fiscal year 2000: Mr. Cantrell -- $16,828, Mr. Herrin -- $11,724, Mr.
MacLennan -- $2,715, Mr. Anderson -- $2,956, and Mr. Vellek -- $1,861;
for fiscal year 1999: Mr. Cantrell -- $17,686, Mr. Herrin -- $11,509, Mr.
MacLennan -- $3,939, Mr. Anderson -- $3,529, and Mr. Vellek -- $1,861;
for fiscal year 1998: Mr. Cantrell -- $15,537, Mr. Herrin -- $7,681, Mr.
MacLennan -- $920, Mr. Anderson -- $363, and Mr. Vellek -- $118.
- The taxable portion of premiums on life insurance provided for fiscal
year 2000: Mr. Cantrell -- $1,289, Mr. Herrin -- $2,211, Mr.
MacLennan -- $433, Mr. Anderson -- $814, and Mr. Vellek $511;
16
<PAGE> 20
for fiscal year 1999: Mr. Cantrell -- $4,984, Mr. Herrin -- $3,645, Mr.
MacLennan -- $479, Mr. Anderson -- $1,659, and Mr. Vellek -- $802; for
fiscal year 1998: Mr. Cantrell -- $4,914, Mr. Herrin -- $4,950, Mr.
MacLennan -- $201, Mr. Anderson -- $1,046, and Mr. Vellek -- $344.
(5) Lanier common stock.
(6) Lanier common stock, issued in exchange for Harris common stock on the date
of the spin-off.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Shown below is additional information on grants of stock options made under
the Stock Incentive Plan during fiscal year 2000. The amounts shown for
potential realizable values are based upon assumed annualized rates of Lanier
stock price appreciation of five percent and ten percent over the full ten year
term (or shorter term) of the options, as required by the Securities and
Exchange Commission, and are not intended to represent or forecast possible
future appreciation, if any, of the price of Lanier common stock.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE
---------------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL EXERCISE RATES OF STOCK
SECURITIES OPTIONS/SARS OR PRICE APPRECIATION FOR
UNDERLYING GRANTED TO BASE OPTION TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- ------------ ------------ --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Wesley E. Cantrell.......... 125,000 3.20% 4.125 11/12/2009 0 0
125,000 3.20 2.250 4/27/2010 0 124,000
C. Lance Herrin............. 90,000 2.30 4.125 11/12/2009 0 0
100,000 2.56 2.250 4/27/2010 0 99,200
James A. MacLennan.......... 40,000 1.02 4.125 11/12/2009 0 0
80,000 2.05 2.250 4/27/2010 0 79,360
Paul M. Anderson............ 15,000 0.38 4.125 11/12/2009 0 0
37,500 0.96 2.250 4/27/2010 0 37,200
Timothy A. Vellek........... 15,000 0.38 4.125 11/12/2009 0 0
37,500 0.96 2.250 4/27/2010 0 37,200
</TABLE>
---------------
(1) All stock option grants were made under the Stock Incentive Plan. The term
of each stock option is generally ten years and is exercisable in
installments of 50% after one year, 75% after two years, and 100% after
three years. The exercise price is the closing price of a share of Lanier
common stock on the date of the grant. The exercise price may be paid in
cash and/or shares of Lanier common stock, or "cashless exercise" procedures
may be used. If shares of Lanier common stock are delivered in payment of
the exercise price, a Restoration Stock Option ("RSO") is granted equal to
the number of shares used to exercise the stock option. The expiration date
of these options is the same as the expiration date of the underlying
options. RSO grants are non-qualified, and are exercisable commencing six
months after the date of grant at the market value on the grant date. In the
event of a change of control, outstanding options become immediately
exercisable.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
Shown below for the Named Executive Officers are the number of shares
covered by exercisable and unexercisable options held by such executives on June
30, 2000. These options were granted under the Stock Incentive Plan.
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<PAGE> 21
No stock options were exercised by any of the Named Executive Officers in
fiscal year 2000, and no stock options were "in the money" on June 30, 2000,
based upon the closing price of Lanier common stock reported on the New York
Stock Exchange.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXPIRED
OPTIONS/SARS AT
FISCAL YEAR-END (#)
-----------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ------------ --------------
<S> <C> <C>
Wesley E. Cantrell.......................................... 766,678 358,565
C. Lance Herrin............................................. 229,537 233,426
James A. MacLennan.......................................... 5,583 125,583
Paul M. Anderson............................................ 44,356 65,838
Timothy A. Vellek........................................... 8,064 60,565
</TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN THE LAST FISCAL YEAR
Awards of performance shares under the Stock Incentive Plan to participants
are made at the beginning of each performance period and are earned based on the
performance of Lanier. The Stock Incentive Plan is designed to motivate key
employees to maximize stockholder value by aligning their interests with
stockholder interests. For Lanier executives, the payout is determined by the
Nominating and Compensation Committee based upon Lanier's financial performance
compared with strategic plan objectives. Performance criteria include Lanier's
net income during the three-year strategic plan cycle. Share payouts are made
following the determination of the committee and range from zero to a maximum of
200% of the original shares awarded. Participants receive quarterly cash
payments on the performance share awards in an amount equal to dividends paid to
stockholders.
Shown below is information with respect to awards of performance shares
granted under the Stock Incentive Plan during fiscal year 2000 to the Named
Executive Officers.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUT
PERFORMANCE OR UNDER NON-STOCK PRICE-BASED PLAN
OTHER PERIOD ------------------------------------
NUMBER OF UNTIL THRESHOLD TARGET MAXIMUM
LANIER MATURATION LANIER LANIER LANIER
NAME SHARES OR PAYOUT SHARES (#) SHARES (#) SHARES (#)
---- --------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Wesley E. Cantrell...................... 35,000 6/30/2002 35,000 35,000 70,000
25,000 11/27/2002 25,000 25,000 25,000
C. Lance Herrin......................... 15,000 6/30/2002 15,000 15,000 30,000
James A. MacLennan...................... 7,000 6/30/2002 7,000 7,000 14,000
Paul M. Anderson........................ -- -- -- -- --
Timothy A. Vellek....................... -- -- -- -- --
</TABLE>
RETIREMENT PLANS
The Company's defined benefit retirement program consists of:
- A tax-qualified, funded pension plan, the Pension Equity Plan, which is
available to substantially all of the United States employees of the
Company and its participating subsidiaries and affiliated companies; and
- A non-qualified, unfunded supplemental retirement income plan, the Lanier
Worldwide, Inc. Supplemental Executive Retirement Plan, which provides
benefits that would be provided, but for certain limits imposed by the
Internal Revenue Code on tax-qualified plans, under the Pension Equity
Plan.
The Pension Equity Plan is a defined benefit plan. Its benefits are fully
paid by Lanier, and employees become vested upon the completion of five years of
service.
In July 1997, the Company amended its pension plan to provide for a lump
sum retirement benefit calculated by reference to a formula based upon final
average pay, age and years of service. The lump
18
<PAGE> 22
sum may be converted to a straight life annuity or other form. Under the amended
plan, if the determination of benefits payable to individuals who were eligible
for retirement or nearing retirement at the time of the amendment, including
Messrs. Cantrell and Herrin, would have resulted in a reduction of accrued
benefits under the plan as in effect prior to the 1997 amendment, the benefits
payable to that person are as calculated under the plan without giving effect to
the amendment. Instead, those employees will receive annual pension benefits
determined by adding (a) 1.22% of the average of the employee's five highest
consecutive years' compensation in the last ten calendar years before
retirement, multiplied by the lesser of the employee's years of service or 30,
and (b) 0.33% of that part of the employee's five-year average compensation in
excess of a certain amount, multiplied by the lesser of the employee's years of
service or 30. Benefits are computed as a straight life annuity, but may be
converted to a lump sum or other form.
The following table shows the estimated annual benefits under (1) the
Pension Equity Plan for Lanier executives (including Messrs. Cantrell and
Herrin) calculating annual benefits under the terms of the Pension Equity Plan
as in effect prior to the 1997 amendment and (2) the Supplemental Executive
Retirement Plan, payable at age 65 or older.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS FOR
HIGHEST CONSECUTIVE 5-YEAR AVERAGE COMPENSATION CREDITED YEARS OF SERVICE
----------------------------------------------- -----------------------------------------
15 20 25 30
-------- -------- -------- --------
<S> <C> <C> <C> <C>
$250,000.............................................. $ 56,600 $ 75,400 $ 94,300 $113,200
500,000............................................... 114,700 152,900 191,200 229,400
750,000............................................... 172,800 230,400 288,100 345,700
1,000,000............................................. 231,000 307,900 384,900 461,900
1,250,000............................................. 289,100 385,400 481,800 578,200
</TABLE>
Under these plans, both Mr. Cantrell and Mr. Herrin are credited with the
maximum of 30 years of service. Messrs. MacLennan, Anderson and Vellek have 2,
22 and 18 years of service, respectively. For the year ended June 30, 2000, the
highest consecutive five year average compensation for Mr. Cantrell for purposes
of the above determination was $770,000 and for Mr. Herrin was $508,126.
Compensation as in effect prior to the July 1997 amendment consists of base
salary, bonuses and sales commissions and, for periods prior to 1998, income
recognized upon the exercise of Harris Corporation stock options. Compensation
as in effect after the July 1997 amendment consists of gross income, including
salary, bonuses, sales commissions, vacation pay, compensation received while on
an authorized leave of absence, and short-term disability payments, but excludes
severance pay, payments made in consideration of a release of employment with
the Company, payments attributable to domestic or foreign assignment
differential, any contest payments, any expense-related reimbursement, and
payments made under any long-term incentive plan, including income from the
exercise of stock options or the value of life insurance or other non-cash
perquisites includible in the participant's gross income. Base salary includes
certain deferred amounts.
Benefits under the Pension Equity Plan and the Lanier Supplemental
Executive Retirement Plan are not subject to any deduction for Social Security
or other offset amounts.
NONCOMPETITION AND EMPLOYMENT CONTRACTS
The Company has entered into employment agreements with Messrs. Cantrell,
Herrin and MacLennan. The agreements are for a continuous term of one year. The
agreements are terminable by the Company and by the executive upon sixty days
written notice, or immediately for "cause" (as defined in the employment
agreement) or upon the death or total disability of the executive. The agreement
specifies the compensation the executive will receive, and the benefit plans,
stock incentives, club memberships, financial planning and physical examinations
that are to be provided by the Company. The agreement provides that the
executive shall not compete with the Company nor recruit, hire or solicit any
employee of the Company during the first two years after leaving the Company's
employment.
19
<PAGE> 23
EXECUTIVE SEVERANCE AGREEMENTS
To provide continuity of management and dedication of corporate executives
in the event of a threatened or actual change in control of the Company, the
board has approved severance agreements for officers and key managers, including
the Named Executive Officers. Under these agreements, officers and key managers
of the Company are provided with severance benefits in the event the executive's
employment is terminated by the Company without cause or by the executive for
good reason within two years following a change in control (all terms as defined
in the severance agreement).
Under the severance agreement, the executive agrees not to voluntarily
terminate his or her employment with the Company during the six-month period
following a change in control. The lump sum severance benefit payable under the
severance agreement equals the sum of: (a) the executive's unpaid base salary
through date of termination, a pro rata annual bonus (as determined under the
severance agreement) and any compensation deferred by the executive other than
under a tax-qualified plan and any accrued vacation pay; and (b) from one to
three times the executive's highest annual rate of base salary during the
12-month period prior to the date of termination and from one to three times the
greater of the executive's highest annual bonus in the last three years, the
executive's target bonus for the year during which the change in control
occurred, or the executive's target bonus for the year in which the executive's
employment is terminated. Payment amounts are three times compensation for Mr.
Cantrell and the other Named Executive Officers. In addition, the executive
receives the same level of medical, dental, accident, disability, life insurance
and any similar benefits (or the highest level of coverage provided to active
executives, if more favorable). The executive also receives reimbursement for
any relocation expense related to pursuit of other business opportunities
incurred within two years following the date of termination, for recruitment or
placement services of up to $4,000 and for professional financial or tax
planning services of up to $5,000. The severance agreement also provides for a
tax gross-up payment to the executive in the event that payment of any severance
benefits are subject to excise tax imposed under Section 4999 of the Internal
Revenue Code. In addition, the Company shall reimburse the executive for any
legal fees and costs with respect to any dispute arising under the severance
agreement.
INDEMNIFICATION AGREEMENTS
Each of the directors and executive officers (including the Named Executive
Officers) enter into an indemnification agreement with Lanier pursuant to which
each director and executive officer is indemnified against expenses (including
attorneys' fees, judgments, fines, and amounts paid in settlement) actually and
reasonably incurred in connection with any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal or administrative or
investigative, to which he or she was, is, or is threatened to be made a party
by reason of being or having been such a director or officer, to the full extent
allowable under Delaware law.
NOMINATING AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Nominating and Compensation Committee consists of Messrs. Rogers,
Hughes and McMullian, each a non-employee director. No director or executive
officer of Lanier serves on the compensation committee of the board of directors
of any company for which Messrs. Rogers, Hughes and McMullian serve as executive
officers or directors.
CERTAIN TRANSACTIONS
Hughes Supply, Inc., a wholesale distributor that provides materials,
equipment, and supplies primarily to the construction industry, purchases
equipment and related services from Lanier. David H. Hughes, one of Lanier's
directors, is the Chairman and Chief Executive Officer of Hughes Supply, Inc. In
calendar year 1999, Hughes Supply, Inc. purchased $67,707.10 of equipment and
related services from Lanier, and from January 1, 2000 to July 31, 2000, Hughes
Supply, Inc. purchased $173,919.04 of equipment and related services from
Lanier.
20
<PAGE> 24
REPORT ON EXECUTIVE COMPENSATION
The Nominating and Compensation Committee, which is composed solely of
non-employee directors, approves the Company's compensation philosophy and the
compensation, perquisites, and other benefits for executive officers under
salary, incentive and other plans authorized by the board of directors or the
stockholders. In addition, the Nominating and Compensation Committee recommends
for consideration and approval by all of the non-employee directors the
compensation of the Chief Executive Officer and the President.
COMPENSATION PHILOSOPHY
The compensation program for executive officers is designed to attract,
retain and motivate high performance executives and reward them for the
achievement of short and long-term strategic goals and enhancement of
stockholder value. Currently, the compensation program is highly leveraged with
at-risk incentive compensation accounting for a larger percentage of annual cash
compensation than typically found in other companies. The main elements of the
program are:
- Annual cash compensation, which consists of base salary and a short-term
incentive component pursuant to the Key Contributor Incentive Plan; and
- Long-term compensation, which consists of cash and equity based
incentives, pursuant to the Long-term Incentive Plan for Key Employees
and the Stock Incentive Plan.
Annual cash compensation is targeted at the median, or 50th percentile, of
selected peer group companies of comparable size and other comparably sized
companies, with short-term incentive compensation opportunities having upside
potential such that high performance could bring annual cash compensation to the
75th percentile.
Long-term compensation is targeted at or slightly above the median of
selected peer group companies of comparable size and other comparably sized
companies.
In order to reinforce management's alignment with stockholder interests,
the Nominating and Compensation Committee established stock ownership guidelines
for executive officers at the time the Company became publicly traded. These
guidelines range from one to three times base salary depending on job level, and
include stock owned by the executive, vested stock options, performance shares
and other restricted stock grants, and stock acquired through the company's
401(k) and Employee Stock Purchase Plan. Failure to meet the established
guidelines within five years of becoming covered by the guidelines will be taken
into consideration when awarding future stock based grants.
Lanier's executive compensation program is designed to ensure that
executive pay remains competitive with comparable jobs, responsibilities and
performance in comparably sized companies. For this reason, we periodically
retain outside compensation and benefit consultants to review executive
compensation programs.
ANNUAL CASH COMPENSATION
Annual cash compensation consists of base salary and a short-term incentive
based on (1) Lanier's financial performance on a consolidated basis, in the case
of corporate executives, and (2) the relevant business unit's financial
performance and Lanier's performance on a consolidated basis, in the case of
business unit executives. Base salaries and short-term incentives for executive
officers, other than the Chief Executive Officer and the President, are
recommended by the Company's management and then reviewed and approved by the
Nominating and Compensation Committee.
Base Salary. Base salary for executive officers is currently positioned
below the median of the comparable group outlined in the compensation philosophy
section of this report. During fiscal year 2000, Lanier became an independent
publicly held company. Prior to this, Lanier was a wholly owned subsidiary of
Harris Corporation. This change in company status significantly expanded the
scope of responsibility of certain executive officers. As a result of this
change in scope, base salary levels for executive officers individually, and as
a group, measured significantly below targeted competitive levels. In order to
accomplish Lanier's objective
21
<PAGE> 25
of targeting base salaries at the median, base salaries for certain executives
will be adjusted over time to bring them closer to competitive market levels.
Increases in base salary are determined by individual and company performance,
the scope of the position and the relationship with competitive market data, and
are based on subjective evaluations of all relevant factors.
Short-Term Incentive. Short-term incentive payments are made under the
amended and restated Key Contributor Incentive Plan, which has been adopted by
the Board of Directors and which is being presented for ratification by the
stockholders at the Annual Meeting. Payments to executive officers are based
upon the percentage achievement of pre-established financial objectives. For
fiscal year 2000, short-term incentive payments were based upon the attainment
of net income and revenue growth objectives. The percentage of an executive's
annual cash compensation attributable to the short-term incentive component
increases proportionately with his or her level of management responsibility.
For the Named Executive Officers, short-term incentive opportunity at target
ranged from 39% to 51% of total annual cash compensation opportunity.
LONG-TERM COMPENSATION
The company maintains the Long-term Incentive Plan for Key Employees. This
plan was adopted by the Board of Directors in October 1999 and is being
presented for ratification by the stockholders at the Annual Meeting. The
Company's Board of Directors has also adopted the Stock Incentive Plan effective
October 21, 1999 in conjunction with the spin-off from Harris Corporation. This
plan is also being presented for ratification by the stockholders at the Annual
Meeting. In any given year, an executive officer may be offered participation in
a single plan or in a combination of plans. Each plan is described below.
Long-Term Incentive Plan for Key Employees. Cash based long-term incentive
compensation for executive officers is provided under this plan. The plan
permits the granting of cash awards based on pre-established performance
criteria using Lanier's strategic planning process and a period of time
(generally three years) over which performance is to be measured.
For the three-year period beginning on July 1, 1999 no new awards were
granted under the Long-term Incentive Plan for Key Employees. For the three-year
period ending on June 30, 2000, payouts made under the Long-term Incentive Plan
for Key Employees were based upon 71.4% achievement of the aggregate net income
targets for the three-year period.
Stock Incentive Plan. The Stock Incentive Plan permits the granting of any
or all of the following types of awards: performance shares conditioned upon
meeting certain performance criteria, restricted stock, stock options, stock
appreciation rights, and other awards valued by reference to, or based on,
Lanier's common stock.
In fiscal year 2000, awards made under the Stock Incentive Plan were in the
form of non-qualified stock options. Additionally, a limited group of Named
Executive Officers received a performance share award grant. Stock options and
performance shares are discussed below.
- Stock Options. Stock options are granted at fair market value as of the
date of the grant, vest over three years, and have a term of not greater
than ten years. Stock options provide value only when the price of
Lanier's common stock increases above the option grant price.
Approximately 1,100 employees received stock option grants in fiscal year
2000, including the Named Executive Officers.
- Performance Shares. Each participant is awarded a specified number of
performance shares that can be earned during the period, based on
achieving one or more pre-established financial objectives. At the
beginning of an award cycle, performance criteria are established using
the Company's strategic planning process and a period of time (generally
three years) is established during which performance is to be measured.
Performance shares are subject to forfeiture if performance objectives
are not attained or if a participant's employment is terminated for
certain reasons before the performance period has ended. The value of
performance shares is based on the value of Lanier's common stock.
Performance shares were granted to three executive officers in fiscal
year 2000.
22
<PAGE> 26
The Nominating and Compensation Committee believes that through the use of
stock incentives, the interests of Lanier's executives are directly related to
the enhancement of stockholder value.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's base salary, short-term incentive
compensation, and long-term incentive compensation are annually reviewed and
recommended by the Nominating and Compensation Committee and approved by the
non-employee directors. In recommending Mr. Cantrell's compensation for fiscal
year 2000, the Nominating and Compensation Committee considered both Lanier's
performance and Mr. Cantrell's individual performance along with recommendations
from the independent compensation consultant in light of his change in
responsibilities resulting from the spin-off from Harris Corporation and his
promotion to Chairman of the Board.
Mr. Cantrell's annual salary was increased to $500,000 from $340,000 in
November 1999 in conjunction with the spin-off and to reflect his additional
responsibilities as Chairman of the Board and Chief Executive Officer of Lanier.
Under the Key Contributor Incentive Plan, Mr. Cantrell received annual
short-term incentive compensation for fiscal year 2000 based upon 48.5%
achievement of Lanier's net income target and 86.9% achievement of Lanier's
revenue target for the year.
Mr. Cantrell's long-term incentive compensation was in the form of stock
options and performance shares. Mr. Cantrell received grants totaling 250,000
stock options and 35,000 performance shares in fiscal year 2000. For the
three-year performance period ended June 30, 2000, Mr. Cantrell's performance
share award payout was based on aggregate net income performance of Lanier
compared with the aggregate net income target established at the beginning of
the performance period. Based upon Lanier's performance and the payout formula
recommended by the Nominating and Compensation Committee, the non-employee
directors authorized a payout of 31,019 shares for Mr. Cantrell for the
three-year period ended June 30, 2000.
At the time of the spin-off from Harris Corporation the Nominating and
Compensation Committee recommended, and the non-employee directors authorized, a
restricted stock grant of 25,000 shares for Mr. Cantrell that contained vesting
requirements tied to his continued service and satisfaction of certain financial
performance objectives.
Mr. Cantrell participates in the same benefit programs as all other
employees of the Company. In addition, the Company has an employment agreement
with Mr. Cantrell which provides certain other benefits and payments in
connection with Mr. Cantrell's continued service.
23
<PAGE> 27
CONCLUSION
The Nominating and Compensation Committee believes that the executive
compensation program directly links the pay opportunities of the Company's
executives to the financial and stockholder returns of the Company. These
programs reinforce the link between pay and performance, and between executive
compensation and stockholder return, and allow the company to attract and retain
a quality management team.
Nominating and
Compensation Committee
Clarence B. Rogers, Jr., Chairman
David H. Hughes
Amos R. McMullian
September 15, 2000
THE FOREGOING REPORT SHOULD NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (TOGETHER, THE "ACTS"), EXCEPT TO THE EXTENT
THAT LANIER SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL
NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
24
<PAGE> 28
STOCK PRICE PERFORMANCE GRAPH
The following stock price performance graph compares the cumulative total
stockholder return of Lanier's common stock with the cumulative total return of
(1) the New York Stock Exchange and (2) a selected industry peer group
consisting of the following companies: Danka Business Systems, Inc., Global
Imaging Systems, Inc., IKON Office Solutions, Inc., Lexmark International Group,
Inc., and Xerox Corporation. The peer group was chosen because it is more
representative of companies comparable to Lanier than any published index. The
stock price performance graph assumes an investment of $100 in Lanier common
stock and in the two indices on November 8, 1999. Stock price performance,
presented monthly for the period from November 8, 1999 through June 30, 2000, is
not necessarily indicative of future results.
<TABLE>
<CAPTION>
LANIER NEW YORK PEER
------ -------- ----
<S> <C> <C> <C>
Nov1999 100.00 100.00 100.00
Dec1999 137.78 103.16 94.75
Jan2000 124.44 98.63 89.12
Feb2000 100.00 94.01 91.15
Mar2000 73.33 102.74 82.98
Apr2000 68.89 102.18 81.98
May2000 64.44 102.09 70.88
Jun2000 35.56 101.99 63.11
</TABLE>
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS EXCEPT TO THE EXTENT THAT LANIER
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACT.
OTHER MATTERS
STOCKHOLDER PROPOSALS
The next annual meeting of stockholders is expected to be held on October
25, 2001, and stockholders of the Company may submit proposals for consideration
for inclusion in the proxy statement of the Company relating to such annual
meeting of stockholders. However, in order for such proposals to be considered
for inclusion in the proxy statement of the Company relating to such annual
meeting, such proposals must be received by the Secretary of the Company not
earlier than June 28, 2001 nor later than July 28, 2001.
The By-laws of the Company provide that any stockholder proposals which are
intended to be presented
25
<PAGE> 29
from the floor at the Company's 2001 Annual Meeting of Stockholders must be
submitted to the Secretary of the Company on or after June 28, 2001 but on or
before July 28, 2001 or such proposal cannot properly come before the meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Lanier's executive officers and directors and persons who beneficially own more
than ten percent of Lanier common stock to file with the Securities and Exchange
Commission certain reports, and to furnish copies thereof to Lanier, with
respect to each such person's beneficial ownership of such equity securities.
Based solely upon a review of the copies of such reports furnished to Lanier and
certain representations of such persons, Lanier believes that all filings were
timely.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report of Lanier Worldwide, Inc. for the year ended June 30,
2000, including audited financial statements, accompanies this proxy statement.
The Annual Report does not form any part of the material for the solicitation of
proxies.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter for action at the Annual Meeting other than those matters
stated in the Notice of the Annual Meeting. Accordingly, if other matters should
properly come before the Annual Meeting, it is intended that the holders of the
proxies will act in respect thereto in accordance with their best judgment.
EXPENSES OF SOLICITATION
Lanier actively solicits proxy participation. Lanier will bear the cost of
soliciting proxies. In addition to this notice by mail, Lanier requests and
encourages brokers, custodians, nominees and others to supply proxy materials to
stockholders, and Lanier will reimburse them for their expenses. Lanier's
officers and employees may, by letter, telephone, electronic mail or in person,
make additional requests for the return of proxies, although Lanier does not
reimburse its employees for soliciting proxies. Lanier has hired ChaseMellon
Shareholder Services, L.L.C. for a fee of $8,500 plus out-of-pocket expenses to
help solicit proxies.
By Order of the Board of Directors,
/s/ J. Michael Kelly
J. Michael Kelly
Secretary
Atlanta, Georgia
September 25, 2000
26
<PAGE> 30
EXHIBIT A
AMENDED AND RESTATED
LANIER WORLDWIDE, INC.
STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of the Lanier Worldwide, Inc. Stock Incentive Plan (the "Plan")
is to promote the long-term growth and performance of Lanier Worldwide, Inc.
(the "Corporation") and its Affiliates and to attract and retain outstanding
individuals by awarding directors and employees performance based stock awards,
restricted stock, stock options, stock appreciation rights and/or other
stock-based awards.
2. DEFINITIONS
The following definitions are applicable to the Plan:
2.1 "Affiliate" means any entity controlling, controlled by or under common
control with the Corporation, through ownership, directly or indirectly, of a
50% or more interest in voting rights or profits.
2.2 "Award" means the grant of Options, Performance Shares, Restricted
Stock, Stock Appreciation Rights or other share-based awards under the Plan.
2.3 "Board" means the Board of Directors of the Corporation.
2.4 "Change in Control" means "change in control" as defined in Section 12.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
2.6 "Commission" means the Securities and Exchange Commission.
2.7 "Committee" means a committee of the Board to which the Board has
delegated authority and responsibility under the Plan and which shall be
appointed by, and serve at the pleasure of, the Board and shall be constituted
so as to be comprised solely of two or more Outside Directors and which shall
satisfy any applicable legal requirements, including the requirements of Rule
16b-3 promulgated by the Commission under the 1934 Act, or under any successor
rule adopted by the Commission, and Section 162(m) of the Code and the
regulations promulgated thereunder.
2.8 "Distribution Date" has the meaning given to such term in the
Registration Statement on Form 10 and any amendments thereto filed by the
Corporation with the Commission.
2.9 "Fair Market Value" means as of any date that the New York Stock
Exchange is open for business, the closing price of a share of Stock on a
particular day as such price is reported in The Wall Street Journal or in any
successor to The Wall Street Journal or, if there is no such successor, any
similar trade publication selected by the Committee; provided if the New York
Stock Exchange is not open for business or if no such price is so reported for
such day, Fair Market Value means on such day the closing price of a share of
Stock that was so reported on the immediately preceding business day and if no
such price is so reported for such preceding business day, Fair Market Value on
such day shall be determined in good faith by the Committee.
2.10 "Grant Date" means the date on which the grant of an Option or an SAR
becomes effective pursuant to the terms of the Stock Option Agreement or SAR
Agreement, as the case may be, relating thereto.
2.11 "1933 Act" means the Securities Act of 1933, as amended.
2.12 "1934 Act" means the Securities Exchange Act of 1934, as amended.
2.13 "Non-employee Director" means a member of the Board who is not an
employee of the Corporation or any Affiliate thereof.
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2.14 "Non-employee Director Stock Option Agreement" means an agreement
described in Section 10.1 which evidences the grant of an Option to a
Non-employee Director.
2.15 "Option" means an option to purchase shares of Stock granted under
this Plan.
2.16 "Option Price" means the purchase price of each share of Stock under
an Option.
2.17 "Outside Director" means a member of the Board who is not an employee
of the Corporation or any Affiliate thereof and who qualifies as (a) a
"non-employee director" under Rule 16b-3(b)(3) under the 1934 Act, as amended
from time to time, and (b) an "outside director" under Section 162(m) of the
Code and the regulations promulgated thereunder.
2.18 "Participant" means any employee of the Corporation or its Affiliates
designated by the Committee to receive an Award under the Plan.
2.19 "Performance Goal" means any one or more of the following
measurements, or any combination thereof: the Corporation's revenue, earnings
per share of common stock, net income, return on equity, return on capital,
return on assets, total shareholder return, return on sales or cash flow.
2.20 "Performance Period" means the period of time established by the
Committee for achievement of certain objectives as described in the agreement or
other documentation of an Award.
2.21 "Performance Share Award Agreement" means an agreement described in
Section 6.1 which evidences the grant of a Performance Share Award.
2.22 "Performance Shares" means shares subject to the attainment of certain
Performance Goals during the Performance Period as described in Section 6.
2.23 "Permitted Non-employee Director Transferees" means "Permitted
Non-employee Director Transferees" as described in Section 10.2.
2.24 "Permitted Transferees" means "Permitted Transferees" as described in
Section 5.4.
2.25 "Restricted Stock" means Shares awarded subject to restrictions as
described in Section 7.
2.26 "Restricted Stock Award Agreement" means an agreement described in
Section 7.1 which evidences the grant of a Restricted Stock Award.
2.27 "Restriction Period" means the period of time established by the
Committee during which certain restrictions as to vesting and the sale or other
disposition of Shares awarded under the Plan remain in effect.
2.28 "Retirement" means retirement of a Non-employee Director from the
Board at the end of the month in which he or she reaches age 72, in accordance
with the Board retirement policy of the Corporation.
2.29 "Shares" means shares of Stock, subject to adjustments made under
Section 3.2 or by operation of law.
2.30 "Stock" means the common stock of the Corporation, together with the
associated preferred stock purchase rights.
2.31 "Stock Appreciation Rights" or "SARs" means the right to receive a
payment from the Corporation equal to the excess of the fair market value of a
stated number of Shares at the exercise date over a fixed price for such Shares.
2.32 "Stock Appreciation Rights Agreement" means an agreement described in
Section 8.1 which evidences the grant of Stock Appreciation Rights.
2.33 "Stock Option Agreement" means an agreement described in Section 5.1
which evidences the grant of an Option.
2.34 "Units" means units under an Award that is payable solely in cash, and
the value of a Unit shall be equal to the value of one Share.
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3. SHARES SUBJECT TO PLAN
3.1 In General.
(a) Shares Reserved under the Plan. Under the Plan, there shall be
8,000,000 Shares which may be awarded, or by which Awards may be valued or
otherwise based. Shares to be issued pursuant to the Plan may be authorized and
unissued Shares, treasury Shares, or any combination thereof.
(b) Reissue of Shares and Units. If any Shares or Units subject to an
Award hereunder are forfeited or any such Award otherwise terminates without the
issuance of such Shares or payment of the value of Units to a Participant, or if
any Shares are surrendered by a Participant in full or partial payment of the
Option Price of an Option, such Shares, and the Shares with respect to which
such Units were awarded, shall again be available for Awards under the Plan to
the extent of any such forfeiture, termination or surrender.
3.2 Adjustments. Subject to Section 13 hereof, the aggregate number and
class of Shares which may be awarded under the Plan and the number, class and
price of Shares subject to outstanding Awards shall be adjusted by the Board or
the Committee to reflect a change in the capitalization of the Corporation
resulting from a stock dividend or split, and may be adjusted by the Board or
the Committee to reflect a change in the capitalization of the Corporation
resulting from a merger, consolidation, acquisition, separation (including a
spin-off or spin-out), reorganization or liquidation; provided that the number
of shares subject to any Award shall always be a whole number; provided further
that the number and price of Shares subject to outstanding Options granted to
Non-employee Directors pursuant to Section 10 hereof and the number of Shares
subject to future Options to be granted pursuant to Section 10 shall be subject
to adjustment only as set forth in Section 10 hereof. Notwithstanding the
foregoing, the issuance by the Corporation of shares of any class or securities
convertible into shares of any class, for cash or property, or for labor or
services, either upon direct sale or upon exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the
Corporation convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the Shares
authorized for issuance under Section 3.1(a) or the Shares subject to
outstanding Awards.
4. ADMINISTRATION OF PLAN
4.1 Administration by the Committee. The Plan shall be administered by the
Committee. The Committee shall have authority to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan, to
prescribe the form of any agreement or instrument executed in connection
herewith, and to make all other determinations necessary or advisable for the
administration of the Plan. All such interpretations, rules, regulations and
determinations shall be conclusive and binding on all persons and for all
purposes. Notwithstanding the foregoing, neither the Board nor the Committee
shall have any discretion with respect to Options granted to Non-employee
Directors pursuant to Section 10 hereof.
4.2 Designation of Participants. Participants shall be selected, from time
to time, by the Committee from those employees of the Corporation and its
Affiliates who, in the opinion of the Committee, have the capacity to contribute
materially to the continued growth and successful performance of the
Corporation.
5. STOCK OPTIONS
5.1 Grants. Options (including incentive stock options within the meaning
of Section 422 of the Code) may be granted, from time to time, to such
Participants as may be selected by the Committee; provided, however, that
incentive stock options may be granted only to those Participants who are
employees of the Corporation or an Affiliate that is "subsidiary" of the
Corporation within the meaning of Section 424(f) of the Code or a "parent" of
the Corporation within the meaning of Section 424(e) of the Code. The Option
Price shall be determined by the Committee effective on the Grant Date;
provided, however, that such price shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date. Notwithstanding
the foregoing, Options granted under this Plan in substitution for stock options
canceled as a result of a recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, spin-off, spin-out or other
transaction may have an Option Price less than one hundred percent (100%) of the
Fair
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Market Value on the Grant Date. The number of Shares subject to each Option
granted to each Participant, the term of each Option, and any other terms and
conditions of an Option granted hereunder shall be determined by the Committee,
in its sole discretion, effective on the Grant Date; provided, however, that no
Option shall be exercisable any later than ten (10) years from the Grant Date.
Each Option shall be evidenced by a Stock Option Agreement between the
Participant and the Corporation which shall specify the type of Option granted,
the Option Price, the term of the Option, the number of Shares to which the
Option pertains, the conditions upon which the Option becomes exercisable and
such other terms and conditions as the Committee shall determine.
5.2 Payment of Option Price. No Shares shall be issued upon the exercise
of an Option until full payment of the Option Price therefor by the Participant.
Upon exercise, the Option Price may be paid in cash, in Shares having a Fair
Market Value on the date of exercise equal to the Option Price, or in any
combination thereof.
5.3 Rights as Shareholders. Participants shall not have any of the rights
of a shareholder with respect to any shares subject to an Option until such
Shares have been issued upon the proper exercise of such Option.
5.4 Transferability of Options. Except as permitted by this Section 5.4,
Options granted under the Plan may not be sold, transferred, pledged, assigned,
hypothecated or otherwise disposed of other than by will or by the laws of
descent and distribution, and all Options granted to a Participant under the
Plan shall be exercisable during the lifetime of such Participant only by such
Participant; however, the person or persons to whom an Option is transferred by
will or by the laws of descent and distribution thereafter shall be treated as
the Participant under this Plan. The Committee may, in its discretion, authorize
all or a portion of the Options to be granted to a Participant (other than
incentive stock options (within the meaning of Section 422 of the Code)) to be
on terms which permit transfer by such Participant by gift or under a domestic
relations order to (a) family members of the Participant or to a trust,
corporation, foundation, partnership or limited liability company, provided the
transfer of such Options to such transferee would not adversely affect the
qualification of the Options or the underlying Shares for registration on a
Registration Statement on Form S-8, and (b) to other transferees permitted by
the Committee in its discretion (such transferees of a Participant are referred
to as "Permitted Transferees"); provided that (x) the Stock Option Agreement
shall specifically provide for transferability in a manner consistent with this
Section and (y) subsequent transfers of transferred Options shall be prohibited
except by gift or under a domestic relations order to the Participant or a
Permitted Transferee of the Participant. Following transfer, Options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer; the Participant shall remain subject to
applicable tax withholding; the events of termination of employment of a
Participant shall continue to be applied with respect to the Permitted
Transferee; and all other terms of the Option shall remain unchanged.
5.5 Termination of Employment. If a Participant ceases to be an employee
of either the Corporation or of any of its Affiliates, the Options granted
hereunder shall be exercisable in accordance with the Stock Option Agreement
between the Participant and the Corporation.
5.6 Individual Share Limitation. The number of Shares for which Options
may be granted to any Participant shall not exceed 250,000 Shares in any one
fiscal year. In addition, the number of Shares for which Options may be granted
to any Participant upon exercise by such Participant of an Option for which the
Option Price is paid in whole or in part in Shares shall not exceed 250,000
Shares in any one fiscal year.
6. PERFORMANCE SHARE AWARDS
6.1 Awards. Awards of Shares may be made, from time to time, to such
employees of the Corporation and its Affiliates as may be selected by the
Committee. The release of such Shares to the Participant shall be contingent
upon (a) the degree of attainment, as determined by the Committee, of the
applicable Performance Goals during the Performance Period, and (b) the
expiration of the Performance Period. Except as provided in Section 12 hereof
and the Performance Share Award Agreement between the Participant and the
Corporation, Shares subject to such Awards under this Section 6.1 shall be
released to the Participant only after the expiration of the relevant
Performance Period. Each Award under this Section 6.1 shall be evidenced by a
Performance Share Award Agreement between the Participant and the Corporation
which shall specify
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the applicable Performance Goals, the Performance Period, any forfeiture
conditions and such other terms and conditions as the Committee shall determine.
6.2 Payouts. Upon expiration of the Performance Period, the Corporation
shall, at its option, cause such Shares as to which a Participant is entitled
either (a) to be issued by a certificate registered in the name of the
Participant or the Participant's designee evidencing the Shares to which the
Participant is entitled and released to the custody of the Participant or (b) to
be credited to an account for the benefit of the Participant maintained by the
Corporation's stock transfer agent or its designee.
6.3 Rights as Shareholders. Subject to the provisions of the Performance
Share Award Agreement between the Participant and the Corporation, during the
Performance Period Participants may exercise full voting rights with respect to
all Shares awarded thereto under Section 6.1 hereof and shall be entitled to
receive cash dividends paid with respect to those Shares. A Participant's right
to receive stock dividends or any other distributions with respect to Shares
subject to a Performance Share Award shall be contingent upon the Participant's
receipt of the underlying Shares.
6.4 Transferability of Shares. Shares awarded under Performance Share
Awards shall not be sold, exchanged, assigned, transferred, pledged,
hypothecated or otherwise disposed of until the expiration of the Performance
Period.
6.5 Termination of Employment. If a Participant ceases to be an employee
of either the Corporation or one of its Affiliates, the number of Shares subject
to the Award, if any, to which the Participant shall be entitled shall be
determined in accordance with the Performance Share Award Agreement between the
Participant and the Corporation.
6.6 Transfer of Employment. If a Participant transfers employment from one
business unit of the Corporation or any of its Affiliates to another business
unit during a Performance Period, the Committee may, in its sole discretion,
adjust the number of Shares the Participant is eligible to receive based upon
such factors as the Committee may deem appropriate.
6.7 Individual Share Limitation. The number of Shares for which
Performance Share Awards may be granted to any Participant shall not exceed
250,000 Shares in any one fiscal year.
7. RESTRICTED STOCK AWARDS
7.1 Awards. Awards of Shares, subject to such restrictions as to vesting
and otherwise, for example, the attainment of applicable Performance Goals
within a Performance Period, as the Committee shall determine, may be made, from
time to time, to employees of the Corporation and its Affiliates as may be
selected by the Committee. The Committee may in its sole discretion at the time
an Award is made or at any time thereafter provide for the early vesting of such
Award prior to the satisfaction of applicable conditions, the attainment of
applicable Performance Goals or the expiration of the Restriction Period. Each
Award under this Section 7.1 shall be evidenced by a Restricted Stock Award
Agreement between the Participant and the Corporation which shall specify the
vesting schedule, applicable Performance Goals, any rights of acceleration, any
forfeiture conditions, and such other terms and conditions as the Committee
shall determine.
7.2 Payouts. Upon expiration of the Restriction Period, the Corporation
shall at its option, cause such Shares as to which a Participant is entitled
either (a) to be issued by a stock certificate registered in the name of the
Participant or the Participant's designee and released to the custody of the
Participant or (b) to be credited to an account for the benefit of the
Participant maintained by the Corporation's stock transfer agent or its
designee.
7.3 Rights as Shareholders. Subject to the provisions of the Restricted
Stock Award Agreement between the Participant and the Corporation, during the
Restriction Period Participants may exercise full voting rights with respect to
all Shares awarded thereto under Section 7.1 hereof and shall be entitled to
receive cash dividends paid with respect to those Shares. A Participant's right
to receive stock dividends or any other distributions with respect to Shares
awarded under a Restricted Stock Award shall be contingent upon vesting and
expiration of such other restrictions otherwise applicable to the Award.
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7.4 Transferability of Shares. Shares awarded under Restricted Stock
Awards shall not be sold, exchanged, assigned, transferred, pledged,
hypothecated or otherwise disposed of until the expiration of the Restriction
Period.
7.5 Termination of Employment. If a Participant ceases to be an employee
of either the Corporation or any of its Affiliates, the number of Shares subject
to the Award, if any, to which the Participant shall be entitled shall be
determined in accordance with the Restricted Stock Award Agreement between the
Participant and the Corporation. All remaining shares as to which restrictions
apply at the date of termination of employment shall be forfeited subject to
such exceptions, if any, authorized by the Committee.
7.6 Individual Share Limitation. The number of Shares of Restricted Stock
which may be granted to any Participant shall not exceed 250,000 Shares in any
one fiscal year.
8. STOCK APPRECIATION RIGHTS
8.1 Grants. Stock Appreciation Rights may be granted, from time to time,
to such employees of the Corporation and its Affiliates as may be selected by
the Committee. SARs may be granted at the discretion of the Committee either (a)
in connection with an Option or (b) independent of an Option. The price from
which appreciation shall be computed shall be established by the Committee at
the Grant Date; provided, however, that such price shall not be less than one
hundred percent (100%) of the Fair Market Value of the number of Shares subject
to the grant on the Grant Date. In the event a SAR is granted in connection with
an Option, the fixed price from which appreciation shall be computed shall be
the Option Price. Notwithstanding the foregoing, SARs granted under the Plan in
substitution for SARs canceled as a result of a recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
spin-off, spin-out or other transaction may have a fixed price less than one
hundred percent (100%) of the Fair Market Value on the Grant Date. Each grant of
a SAR shall be evidenced by a Stock Appreciation Rights Agreement between the
Participant and the Corporation which shall specify the type of SAR granted, the
number of SARs, the conditions upon which the SARs vest and such other terms and
conditions as the Committee shall determine.
8.2 Exercise of SARs. SARs may be exercised upon such terms and conditions
as the Committee shall determine; provided, however, that SARs granted in
connection with Options may be exercised only to the extent the related Options
are then exercisable. Upon exercise of a SAR granted in connection with an
Option as to all or some of the Shares subject to such Award, the related Option
shall automatically be canceled to the extent of the number of Shares subject to
the exercise. Conversely, if the related Option is exercised as to some or all
of the Shares subject to such Award, the related SAR shall automatically be
canceled to the extent of the number of Shares subject to the exercise.
8.3 Payment upon Exercise. Upon exercise of a SAR, the holder shall be
paid in cash, in Shares, or in any combination thereof, the excess of the Fair
Market Value of the number of Shares subject to the exercise over the fixed
price.
8.4 Rights of Shareholders. Participants shall not have any of the rights
of a shareholder with respect to any Options granted in connection with a SAR
until Shares have been issued upon the proper exercise of an Option.
8.5 Transferability of SARs. Except as permitted by this Section 8.5, SARs
granted under the Plan may not be sold, transferred, pledged, assigned,
hypothecated or otherwise disposed of other than by will or by the laws of
descent and distribution, and all SARs granted to a Participant under the Plan
shall be exercisable during the lifetime of such Participant only by such
Participant; however, the person or persons to whom an SAR is transferred by
will or by the laws of descent and distribution thereafter shall be treated as
the Participant under this Plan. The Committee may, in its discretion, authorize
all or a portion of the SARs to be granted to a Participant to be on terms which
permit transfer by such Participant by gift or under a domestic relations order
to Permitted Transferees; provided that (a) the Stock Appreciation Rights
Agreement shall specifically provide for transferability in a manner consistent
with this Section 8.5 and (b) subsequent transfers of transferred SARs shall be
prohibited except by gift or under a domestic relations order to the Participant
or a Permitted Transferee of the Participant. Following transfer, SARs shall
continue to be subject
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to the same terms and conditions as were applicable immediately prior to
transfer; the Participant shall remain subject to applicable tax withholding;
the events of termination of employment of a Participant shall continue to be
applied with respect to the Permitted Transferee; and all other terms of the
SARs shall remain unchanged.
8.6 Termination of Employment. If a Participant ceases to be an employee
of either the Corporation or of any of its Affiliates, SARs granted hereunder
shall be exercisable in accordance with the Stock Appreciation Rights Agreement
between the Participant and the Corporation.
8.7 Individual Share Limitation. The number of Shares for which SARs may
be granted to any Participant shall not exceed 250,000 Shares in any one fiscal
year.
9. OTHER SHARE-BASED AWARDS
Awards of Shares, Units and other Awards that are valued by reference to,
or are otherwise based on, Shares or Units (including, but not limited to
phantom stock performance units, bonus stock or similar securities or rights)
may be made, from time to time, to employees of the Corporation and its
Affiliates as may be selected by the Committee. Such Awards may be made alone or
in addition to or in connection with any other Award hereunder. The Committee
may in its sole discretion determine the terms and conditions of any such Award,
including the attainment of applicable Performance Goals within a Performance
Period. Each such Award shall be evidenced by an agreement between the
Participant and the Corporation which shall specify the number of Shares or
Units subject to the Award, any consideration therefor, any vesting or
performance requirements and such other terms and conditions as the Committee
shall determine. The number of Shares or Units subject to any Awards under this
Section 9 which may be granted to a Participant shall not exceed 250,000 Shares
or Units, as the case may be, in any one fiscal year.
10. NON-EMPLOYEE DIRECTORS' OPTIONS
10.1 Grants. Each Non-employee Director shall automatically be granted an
Option to purchase 10,000 Shares on the later of the Distribution Date or the
date such Non-employee Director joins the Board. Effective the first business
day of the month following the annual meeting of shareholders in the year 2000
and each annual meeting of shareholders thereafter, each Non-employee Director
shall automatically be granted an Option to purchase 2,000 Shares. All such
Options shall be nonstatutory stock options. The Option Price shall be one
hundred percent (100%) of the Fair Market Value of the Shares on the Grant Date.
Each Option shall be evidenced by a Non-employee Director Stock Option Agreement
between the Participant and the Corporation.
10.2 Transferability of Options. Except as permitted by this Section 10.2,
Options granted under the Plan to Non-employee Directors may not be sold,
transferred, pledged, assigned, hypothecated or otherwise disposed of other than
by will or by the laws of descent and distribution, and all Options granted to a
Non-employee Director under the Plan shall be exercisable during the lifetime of
such Non-employee Director only by such Non-employee Director; however, the
person or persons to whom an Option is transferred by will or by the laws of
descent and distribution thereafter shall be treated as the Non-employee
Director under this Plan. Notwithstanding the foregoing, an Option granted to a
Non-employee Director shall permit transfer by such Participant by gift or under
a domestic relations order to family members of the Non-employee Director or to
a trust, provided the transfer of such Option to such transferee would not
adversely affect the qualification of such Options or the underlying Shares for
registration on a Registration Statement on Form S-8 (such transferees of a
Non-employee Director are referred to as "Permitted Non-employee Director
Transferees"), and provided further that subsequent transfers of transferred
Options shall be prohibited except by gift or under a domestic relations order
to the Non-employee Director or a Permitted Non-employee Director Transferee of
the Non-employee Director. Following transfer, Options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer; the Non-employee Director shall remain subject to applicable tax
withholding; the events of death and Retirement shall continue to be applied
with respect to the Non-employee Director; and all other terms of the Option
shall remain unchanged.
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10.3 Exercise of Options. Except as set forth in this Section 10, fifty
percent (50%) of the total number of Shares subject to an Option granted to a
Non-employee Director shall become exercisable on the first anniversary of the
Grant Date and twenty-five percent (25%) on the second and third anniversary of
the Grant Date. The right to purchase Shares subject to an Option which has
become exercisable shall be cumulative during the term of the Option. Any Option
granted to a Non-employee Director that has been outstanding for more than one
(1) year shall immediately become exercisable in the event of a Change in
Control, as hereinafter defined. The Option may be exercised by the Non-employee
Director during the period that the Non-employee Director remains a member of
the Board and for a period of three (3) years following Retirement, or for a
period of three (3) months following termination of service on the Board upon
expiration of the Non-employee Director's term on the Board prior to Retirement,
provided that only those Options exercisable at the date of the Non-employee
Director's Retirement, or the Non-employee Director's termination of service on
the Board upon expiration of his or her term on the Board prior to Retirement,
may be exercised during the period following Retirement, or termination of
service on the Board upon expiration of the Non-employee Director's term on the
Board prior to Retirement, and provided further that in no event shall the
Option be exercisable more than ten (10) years after the Grant Date.
In the event of the death of a Non-employee Director, the Option shall be
exercisable only within the twelve (12) months next succeeding the date of
death, and then only (a) by the executor or administrator of the Non-employee
Director's estate or by the person or persons to whom the Non-employee
Director's rights under the Option shall pass by the Non-employee Director's
will or the laws of descent and distribution, or by a Permitted Non-employee
Director Transferee to whom the Option has been transferred, and (b) if and to
the extent that the Option was exercisable at the date of the Non-employee
Director's death, provided that in no event shall the Option be exercisable more
than ten (10) years after the Grant Date.
10.4 Payment of Option Price. No Shares shall be issued upon exercise of
an Option until full payment of the Option Price therefor by the Non-employee
Director. Payment for the Shares may be paid in cash, in Shares having a Fair
Market Value equal to the Option Price, or any combination thereof.
10.5 Adjustments. Subject to Section 13 hereof, the number and class of
Shares subject to Options to be granted to Non-employee Directors pursuant to
the provisions of this Section 10 and the number, class and Option Price of
Shares subject to outstanding Options granted to Non-employee Directors shall be
adjusted by the Board or the Committee to reflect a change in the capitalization
of the Corporation resulting from a stock dividend or split, and may be adjusted
by the Board or the Committee to reflect a change in the capitalization of the
Corporation resulting from a merger, consolidation, acquisition, separation
(including a spin-off or spin-out), reorganization or liquidation; provided that
the number of shares subject to any Option shall always be a whole number. In
the case of any such adjustment, the number of Shares shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of Shares by reason of such change in capitalization, and the
Option Price shall be proportionately reduced in the case of an increase in the
number of Shares and proportionately increased in the case of a decrease in the
number of Shares. The issuance by the Corporation of shares of any class or
securities convertible into shares of any class, for cash or property, or for
labor or services, either upon direct sale or upon exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Corporation convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
Shares subject to Options to be granted to Non-employee Directors pursuant to
the provisions of this Section 10 or the Shares subject to outstanding Options
granted to Non-employee Directors.
11. AWARDS TO FOREIGN NATIONALS OR OTHER EMPLOYEES OUTSIDE UNITED STATES
The Committee shall have authority to grant Awards hereunder to
Participants who are foreign nationals or employed outside the United States, or
both, on terms and conditions different from those specified herein as may, in
the sole judgment and discretion of the Committee, be necessary or desirable to
further the purpose of the Plan or to comply with foreign legal or regulatory
requirements. Each such Award shall be evidenced by an agreement between the
Participant and the Corporation which shall specify the number of Shares or
Units subject to the Award, any consideration therefor, any vesting or
performance requirements and such other terms and conditions as the Committee
shall determine. The number of Shares or Units subject to any Awards
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under this Section 11 which may be granted to a Participant shall not exceed
250,000 Shares or Units, as the case may be, in any one fiscal year.
12. CHANGE IN CONTROL
12.1 Definition of Change in Control. For purposes hereof, a "change in
control" shall be deemed to have occurred if:
(i) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation's then outstanding
securities eligible to vote for the election of the Board (the "Corporation
Voting Securities"); provided, however, that the event described in this
paragraph (i) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions: (a) by the Corporation or any
subsidiary, (b) by any employee benefit plan sponsored or maintained by the
Corporation or any subsidiary, (c) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (d) pursuant to a
Non-Control Transaction (as defined in paragraph (iii)), or (e) by a
corporate officer of the Corporation or by any group of persons including a
corporate officer or acting in concert with a corporate officer;
(ii) individuals who, on the Distribution Date, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to the Distribution Date, whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent
Directors who remain on the Board (either by a specific vote or by approval
of the proxy statement of the Corporation in which such person is named as
a nominee for director, without objection to such nomination), shall also
be deemed to be an Incumbent Director; provided, however, that no such
individual initially elected or nominated as a director of the Corporation
as a result of an actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed
to be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share exchange or
similar form of corporate reorganization of the Corporation or any such
type of transaction involving the Corporation or any of its subsidiaries
that requires the approval of the Corporation's shareholders (whether for
such transaction or the issuance of securities in the transaction or
otherwise) (a "Business Combination"), unless immediately following such
Business Combination: (a) more than 66 2/3% of the total voting power of
the company resulting from such Business Combination (including, without
limitation, any company which directly or indirectly has beneficial
ownership of 100% of the Corporation Voting Securities) eligible to elect
directors of such company is represented by shares that were Corporation
Voting Securities immediately prior to such Business Combination (either by
remaining outstanding or being converted), and such voting power is in
substantially the same proportion as the voting power of such Corporation
Voting Securities immediately prior to the Business Combination, (b) no
person (other than any publicly traded holding company resulting from such
Business Combination, any employee benefit plan sponsored or maintained by
the Corporation (or the company resulting from such Business Combination))
becomes the beneficial owner, directly or indirectly, of 20% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the company resulting from such Business Combination, and (c)
at least a majority of the members of the board of directors of the company
resulting from such Business Combination were Incumbent Directors at the
time of the Board's approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which
satisfies the conditions specified in (a), (b) and (c) shall be deemed to
be a "Non-Control Transaction"); or
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<PAGE> 39
(iv) the shareholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or the direct or indirect
sale or other disposition of all or substantially all of the assets of the
Corporation and its subsidiaries.
Notwithstanding the foregoing, a "change in control" of the Corporation
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than 20% of the Corporation Voting Securities as a result of
the acquisition of Corporation Voting Securities by the Corporation which
reduces the number of Corporation Voting Securities outstanding; provided that
if after such acquisition by the Corporation such person becomes the beneficial
owner of additional Corporation Voting Securities that increases the percentage
of outstanding Corporation Voting Securities beneficially owned by such person,
a "change in control" of the Corporation shall then occur.
12.2 Acceleration of Benefits. In the event of a Change in Control, all
outstanding Awards (except Options granted pursuant to Section 10 hereof) shall
be paid in such manner and in such amounts as determined by the Committee in its
sole discretion at the time such Awards are made.
13. AMENDMENT OR TERMINATION OF PLAN
Until such time as a Change in Control shall have occurred, the Board or
the Committee may amend, suspend or terminate the Plan or any part thereof from
time to time, provided that no change may be made which would impair the rights
of a Participant to whom an Award has been made without the consent of said
Participant, and provided further that neither the Board nor the Committee may
make any alteration or amendment to the Plan which would increase the aggregate
number of Shares which may be issued under the Plan (other than an increase
reflecting a change in capitalization of the Corporation), change the class of
employees eligible to participate in the Plan, or amend, modify or delete
Section 10 hereof without the approval of the shareholders of the Corporation,
so long as such approval is required by applicable law or regulation. After a
Change in Control, the Board or the Committee shall no longer have the power to
amend, suspend or terminate the Plan or any part thereof, except to comply with
changes to the Code, the 1933 Act, the 1934 Act, or other applicable law or
stock exchange rules.
14. MISCELLANEOUS
14.1 Rights of Employees. Nothing in the Plan shall interfere with or
limit in any way the right of the Corporation or any of its Affiliates to
terminate any Participant's employment at any time, nor confer upon any
Participant any right to continued employment with the Corporation or any of its
Affiliates.
14.2 Withholding for Taxes. The Corporation shall have the authority to
withhold, or to require a Participant to remit to the Corporation, prior to
issuance or delivery of any Shares or cash hereunder, an amount sufficient to
satisfy federal, state and local tax or withholding requirements associated with
any Award. In addition, the Corporation may, in its sole discretion, permit a
Participant to satisfy any tax withholding requirements, in whole or in part, by
(a) delivering to the Corporation Shares held by such Participant having a Fair
Market Value equal to the amount of the tax or (b) directing the Corporation to
retain Shares otherwise issuable to the Participant under the Plan.
14.3 Status of Awards. Awards hereunder shall not be deemed compensation
for purposes of computing benefits under any retirement plan of the Corporation
or an Affiliate and shall not affect any benefits under any other benefit plan
now or hereafter in effect under which the availability or amount of benefits is
related to the level of compensation.
14.4 Waiver of Restrictions. The Committee may, in its sole discretion,
based on such factors as the Committee may deem appropriate, waive in whole or
in part any remaining restrictions or vesting requirements in connection with
any Award hereunder.
14.5 Delegation to Management. The Committee may delegate to one or more
officers of the Corporation, or a committee of officers, the right to grant
Awards hereunder to employees who are not officers or directors of the
Corporation and to adjust, in accordance with the terms of the Plan, Awards to
employees who are not officers or directors of the Corporation.
A-10
<PAGE> 40
14.6 Adjustment of Awards. Subject to Section 13, the Committee shall be
authorized to make adjustments in the method of calculating attainment of
Performance Goals for Performance Share Awards or Restricted Stock Awards or in
the terms and conditions of other Awards (except Options granted pursuant to
Section 10 hereof) in recognition of unusual or nonrecurring events affecting
the Corporation or its financial statements or changes in applicable laws,
regulations or accounting principles, whenever the Committee determines that
such adjustments are appropriate; provided, however, that to the extent an Award
is intended to come within the exception for performance-based compensation
under Section 162(m) of the Code, any such adjustments shall be made in a manner
consistent with such Code section and the regulations promulgated thereunder. In
addition, no such adjustments shall impair the rights of any Participant without
his or her consent. Subject to Section 10 in the case of Options granted to
Non-employee Directors, the Committee may also make Awards hereunder in
replacement of, or as alternatives to, Awards previously granted to
Participants, including, without limitation, previously granted Options having
higher Option Prices and grants or rights under any other plan of the
Corporation or of any acquired entity. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem desirable to carry it into effect.
The Committee shall have the right to amend any Award or to withhold or
otherwise restrict the transfer of any Shares or cash under this Plan to a
Participant as the Committee deems appropriate in order to satisfy any condition
or requirement under Rule 16b-3 to the extent Section 16 of the 1934 Act might
be applicable to such grant or transfer.
14.7 Consideration for Awards. Except as otherwise required in any
applicable agreement or by the terms of the Plan, Participants under the Plan
shall not be required to make any payment or provide consideration for an Award
other than the rendering of services.
14.8 Deferral. Notwithstanding anything contained herein to the contrary,
in the event that any Award shall be ineligible for treatment as
performance-based compensation under Section 162(m) of the Code, the Committee,
in its sole discretion, shall have the right with respect to any Participant who
is in the year any Award hereunder becomes deductible by the Corporation a
"covered employee" under Section 162(m) of the Code, to defer, in whole or in
part, such Participant's receipt of such Award until the Participant is no
longer a "covered employee" or until such time as shall be determined by the
Committee, provided that the Committee may effect such a deferral only in a
situation where the Corporation would be prohibited a deduction under Section
162(m) of the Code and such deferral shall be limited to the portion of the
Award that is not deductible.
A-11
<PAGE> 41
EXHIBIT B
AMENDED AND RESTATED
LANIER WORLDWIDE, INC.
KEY CONTRIBUTOR INCENTIVE PLAN
1. Purpose. The purpose of the Lanier Worldwide, Inc. Key Contributor
Incentive Plan (the "Plan") is to promote the growth and performance of Lanier
Worldwide, Inc. (the "Corporation") by linking a portion of the total
compensation for certain key employees to attainment of such corporate, sector
and division financial objectives as shall be approved by the applicable Plan
Administrator for each Plan Year.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" means any entity controlling, controlled by or under
common control with the Corporation, through ownership, directly or
indirectly, of a 50% or more interest in voting rights or profits.
"Board" means the Board of Directors of the Corporation.
"Committee" means a committee of the Board to which the Board has
delegated authority and responsibility under the Plan and which shall be
appointed by, and serve at the pleasure of, the Board, and shall consist
solely of two or more members of the Board who are not employees of the
Corporation or any Affiliate thereof and who qualify as "outside directors"
under Section 162(m) of the Internal Revenue Code, as amended from time to
time, and the regulations promulgated thereunder.
"Executive Officer" means the Chief Executive Officer of the
Corporation and each other individual the Board has designated as an
executive officer of the Corporation for purposes of reporting under
Section 16 of the Securities Exchange Act of 1934, as amended from time to
time, or any successor thereto.
"Participant" means any salaried employee of the Corporation and its
subsidiaries and Affiliates designated by the Plan Administrator to
participate in the Plan.
"Plan Administrator" means with respect to any Participant, the person
or group designated to administer the Plan with respect to such Participant
as provided in Section 3.
"Plan Year" means the fiscal year of the Corporation.
3. Administration of Plan. With respect to participation in the Plan by
the Chief Executive Officer of the Corporation and each other Executive Officer,
the Plan shall be administered by the Committee. With respect to participation
in the Plan by Participants who are not Executive Officers, the Plan shall be
administered by the Board, the Committee, or the Chief Executive Officer, in
accordance with the Corporation's compensation practices. The Plan Administrator
shall have authority to interpret the Plan, to establish, amend, and rescind any
rules and regulations relating to the Plan, to prescribe the form of any
agreement or instrument executed in connection herewith, and to make all other
determinations necessary or advisable for the administration of the Plan. All
such interpretations, rules, regulations and determinations shall be conclusive
and binding on all persons and for all purposes. If the Chief Executive Officer
is the Plan Administrator, the Chief Executive Officer may delegate to one or
more other officers of the Corporation, or a committee of officers, the right to
award annual incentive awards hereunder to employees who are not officers or
directors of the Corporation and to adjust, in accordance with the terms of the
Plan, awards to employees who are not officers or directors of the Corporation.
4. Designation of Participants. Participants in the Plan shall be selected
by the Plan Administrator on an annual basis from among the salaried employees
of the Corporation and its subsidiaries and Affiliates.
5. Annual Incentive Awards.
(a) Each Participant in the Plan shall be eligible to receive such annual
incentive award, if any, for each Plan Year as may be payable pursuant to the
satisfaction of the performance criteria described below. The
B-1
<PAGE> 42
Plan Administrator shall, on an annual basis, establish a "target annual
incentive award" for each Participant, and the maximum amount of an annual
incentive award that may be awarded to a Participant for a Plan Year shall be
200% thereof.
(b) Participants shall have their annual incentive awards, if any,
determined on the basis of the degree of achievement of performance goals that
shall be established by the Plan Administrator in writing and that shall be
stated in terms of the attainment of specified levels of, or percentage changes
(as compared to a prior measurement period) in, any one or more of the following
measurements, or any combination thereof: the Corporation's revenue, earnings
per share of common stock of the Corporation, net income, return on equity,
return on capital, return on assets, total shareholder return, return on sales
or cash flow. The Plan Administrator shall, for each Plan Year, establish the
performance goal or goals from among the foregoing to apply to each Participant
and a formula or matrix prescribing the extent to which such Participant's
annual incentive award shall be earned based upon the degree of achievement of
such performance goal or goals. The Plan Administrator may determine that the
annual incentive award payable to any Participant shall be based upon the
attainment of performance goals comparable to those specified above but in whole
or in part applied to the results of a subsidiary, Affiliate, division or sector
of the Corporation for which such Participant has substantial management
responsibility. Subject to Section 8, each Participant's period of performance
will be the Plan Year.
(c) A Participant's target annual incentive award or performance goals may
be changed by the Plan Administrator during the Plan Year to reflect a change in
responsibilities, provided that to the extent that at the time of such change an
award is intended to come within the exception for performance-based
compensation under Section 162(m) of the Internal Revenue Code, as amended from
time to time, any such change shall be made in a manner consistent with such
Internal Revenue Code section and the regulations promulgated thereunder.
(d) Except as provided in Section 6(a), the Plan Administrator may, in its
sole discretion, (i) award or increase the amount of an annual incentive award
payable to a Participant even though not earned in accordance with the
performance goals established pursuant to this Section 5, or (ii) decrease the
amount of an annual incentive award otherwise payable to a Participant even
though earned in accordance with the performance goals established pursuant to
this Section 5.
6. Participation by Executive Officers. The following provisions shall be
applicable to participation in the Plan by an Executive Officer to the extent an
award made to such Executive Officer is intended to come within the exception
for performance-based compensation under Section 162(m) of the Internal Revenue
Code, as amended from time to time:
(a) Each such Participant's annual incentive award under the Plan for a
Plan Year shall be based solely on achievement of one or more of the performance
goals as established by the Plan Administrator pursuant to Section 5, and the
Plan Administrator shall not have the discretion provided in Section 5(d) to
increase the amount of the award.
(b) With respect to each such Participant, no annual incentive award shall
be payable hereunder except upon written certification by the Plan Administrator
that the performance goals have been satisfied to a particular extent and that
any other material terms and conditions precedent to payment of an annual
incentive award pursuant to the Plan have been satisfied.
(c) The maximum annual incentive award payable to any such Participant for
any Plan Year shall be $2,000,000.
B-2
<PAGE> 43
7. Payment of Annual Incentive Award. Payment to a Participant of any
amount of an annual incentive award shall be made, in cash, (i) following each
incentive period(1) of the Plan Year (so long as the incentive period is shorter
than the Plan Year), based on the degree of attainment in the incentive period
of the applicable performance goals, and (ii) following the Plan Year, based on
the degree of attainment in the Plan Year of the applicable performance goals.
Incentive period payment potential as a percent of the target annual incentive
award is as follows:
<TABLE>
<CAPTION>
QUARTERLY SEMI-ANNUALLY ANNUALLY
--------- ------------- --------
<S> <C> <C> <C> <C>
First Quarter 15% First Half 30% 100%
Second Quarter 25% Second Half 70%
Third Quarter 20%
Fourth Quarter 40%
</TABLE>
Payment to a Participant of any amount of an annual incentive award earned based
on the degree of attainment in the Plan Year of the applicable performance goals
shall be reduced by payments made to the Participant for such Plan Year.
Payments are made for an incentive period that does not end with the last day of
the Plan Year approximately six weeks following the end of each such incentive
period. Final year-end payments are made following the formal audit
certification for the Plan Year. If the maximum incentive period payment
opportunity is not achieved in any incentive period ending prior to the last day
of the Plan Year, the deficiency can be eliminated based on total performance
for the Plan year. A Participant may earn in excess of the target annual
incentive award for exceeding the applicable performance goals for the Plan
Year. The preceding sentence does not apply to incentive periods ending prior to
the last day of the Plan Year.
8. Special Provisions.
(a) A Participant's initial period of performance will be prorated
according to his or her selection for participation in the Plan. The initial
period of performance for an employee who begins participation prior to or on
the 15th day of a calendar month will begin on the first day of the calendar
month in which he or she first becomes a Participant. The initial period of
performance for an employee who begins participation on or after the 16th day of
a calendar month will begin on the first day of the immediately following
calendar month. The initial period of performance will end on the last day of
the Plan Year in which participation begins.
(b) Except as provided in paragraph (c) below, a Participant must be
actively employed on the last day of an incentive period to qualify for a
payment calculated for that time frame.
(c) In the event that a Participant retires or dies during the Plan Year,
the Participant (or his or her estate) will be eligible for prorated payments
following the end of the last incentive period worked and the end of the Plan
Year, provided the applicable performance goals are attained.
---------------
(1) Incentive periods for plan participants other than Executive Officers are as
follows:
<TABLE>
<CAPTION>
PLAN YEAR PERIOD
--------- ------
<S> <C>
2001...................................................... Plan Quarter
2002...................................................... Six Months
2003 (Forward)............................................ Plan Year
</TABLE>
The incentive periods for Executive Officers are as follows:
<TABLE>
<CAPTION>
PLAN YEAR PERIOD
--------- ------
<S> <C>
2001...................................................... Six Months
2002 (Forward)............................................ Plan Year
</TABLE>
B-3
<PAGE> 44
(d) A Participant's performance period shall not include any period while
he or she is on a leave of absence and he or she will not be eligible for an
award for the period beginning the first day of the calendar month following the
last day of active employment and ending when the performance period recommences
following his or her return to work. The performance period shall recommence on
the first day of the calendar month in which the Participant returns to work, if
he or she returns to work on or before the 15th day of such calendar month. If
such Participant returns to work on or after the 16th day of a calendar month,
his or her performance period will recommence on the first day of the calendar
month following his or her return to work.
(e) In the event a Participant is demoted or transferred to a position not
eligible to participate in this Plan, participation for the incentive period in
which the demotion or transfer takes place will be prorated, provided the
Participant is actively employed by the Corporation or a subsidiary or Affiliate
on the last day of the incentive period. The same criteria applied to determine
the beginning of the Performance Period in paragraph (a) above will be applied
to determine eligibility for the calendar month in which a Participant's
position changes. If a Participant is demoted or transferred to a position
qualifying to participate in the Plan at a lesser award level, participation in
the Plan will continue for the Plan Year of the demotion or transfer with
appropriate prorations based on the same criteria as described in paragraph (a)
above.
(f) When a Participant's performance period is less than the entire Plan
Year as a result of leaving or entering the Plan after the beginning of the Plan
Year, the target award for such Participant shall be adjusted. For Participants
leaving the Plan, this adjustment shall be made at the end of the Plan Year
based on the final year-end results. An adjusted payment shall be made to
provide total incentive payments that are proportional to total year results,
prorated for the number of months of participation in the Plan and subject to
paragraph (b) above. For Participants entering the Plan, this adjustment also
shall be made to provide total incentive payments that are proportional to total
year results, prorated for the number of months of participation in the Plan.
9. Participant's Interests. A Participant's interest in any annual
incentive awards hereunder shall at all times be reflected on the Corporation's
books as a general unsecured and unfunded obligation of the Corporation subject
to the terms and conditions of the Plan. The Plan shall not give any person any
right or security interest in any asset of the Corporation or any fund in which
any deferred payment is deemed invested. Neither the Corporation, the Board, nor
the Plan Administrator shall be responsible for the adequacy of the general
assets of the Corporation to discharge the payment of its obligations hereunder
nor shall the Corporation be required to reserve or set aside funds therefor.
10. Non-Alienation of Benefits; Beneficiary Designation. All rights and
benefits under the Plan are personal to the Participant and neither the Plan nor
any right or interest of a Participant or any other person arising under the
Plan is subject to voluntary or involuntary alienation, sale, transfer, or
assignment without the Corporation's consent. Subject to the foregoing, the
Corporation shall establish such procedures as it deems necessary for a
Participant to designate one or more beneficiaries to whom any payment the Plan
Administrator determines to make would be payable in the event of the
Participant's death.
11. Withholding for Taxes. Notwithstanding any other provisions of this
Plan, the Corporation may withhold from any payment made by it under the Plan
such amount or amounts as may be required for purposes of complying with any
federal, state and local tax or withholding requirements.
12. Rights of Employees. Nothing in the Plan shall interfere with or limit
in any way the right of the Corporation or any of its subsidiaries or Affiliates
to terminate a Participant's employment at any time, or confer upon any
Participant any right to continued employment with the Corporation or any of its
subsidiaries or Affiliates.
13. Determinations Final. Each determination provided for in the Plan
shall be made by the Plan Administrator under such procedures as may from time
to time be prescribed by the Plan Administrator and shall be made in the sole
discretion of the Plan Administrator. Any such determination shall be
conclusive.
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<PAGE> 45
14. Change in Control.
(a) Notwithstanding anything to the contrary provided elsewhere herein, in
the event of a "change in control" of the Corporation, as defined in Section
14(b) below, then the Corporation shall as promptly as practicable pay any
annual incentive awards awarded to Participants. The payment to each Participant
shall be an amount not less than the target annual incentive award as originally
approved for the Plan Year (net of any incentive period payments previously made
for the Plan Year under Section 7), notwithstanding actual results or any
changes or modifications occurring after any such change in control.
(b) "Change in control" means the occurrence of any one of the following
events:
(i) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation's then outstanding
securities eligible to vote for the election of the Board (the "Corporation
Voting Securities"); provided, however, that the event described in this
paragraph (i) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions: (a) by the Corporation or any
subsidiary, (b) by any employee benefit plan sponsored or maintained by the
Corporation or any subsidiary, (c) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (d) pursuant to a
Non-Control Transaction (as defined in paragraph (iii)), or (e) with
respect to any Participant, by such Participant or by any group of persons
including such Participant or acting in concert with such Participant;
(ii) individuals who, on the "Distribution Date" as defined in the
Registration Statement on Form 10 and any amendments thereto filed by the
Corporation with the Securities and Exchange Commission, constitute the
Board (the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the Distribution Date, whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent
Directors who remain on the Board (either by a specific vote or by approval
of the proxy statement of the Corporation in which such person is named as
a nominee for director, without objection to such nomination), shall also
be deemed to be an Incumbent Director; provided, however, that no such
individual initially elected or nominated as a director of the Corporation
as a result of an actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed
to be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share exchange or
similar form of corporate reorganization of the Corporation or any such
type of transaction involving the Corporation or any of its subsidiaries
that requires the approval of the Corporation's shareholders (whether for
such transaction or the issuance of securities in the transaction or
otherwise) (a "Business Combination"), unless immediately following such
Business Combination: (a) more than 66 2/3% of the total voting power of
the company resulting from such Business Combination (including, without
limitation, any company which directly or indirectly has beneficial
ownership of 100% of the Corporation Voting Securities) eligible to elect
directors of such company is represented by shares that were Corporation
Voting Securities immediately prior to such Business Combination (either by
remaining outstanding or being converted), and such voting power is in
substantially the same proportion as the voting power of such Corporation
Voting Securities immediately prior to the Business Combination, (b) no
person (other than any publicly traded holding company resulting from such
Business Combination, any employee benefit plan sponsored or maintained by
the Corporation (or the company resulting from such Business Combination))
becomes the beneficial owner, directly or indirectly, of 20% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the company resulting from such Business Combination, and (c)
at least a majority of the members of the board of directors of the company
resulting from such Business Combination were Incumbent Directors at the
time of the Board's approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which
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<PAGE> 46
satisfies the foregoing conditions specified in (a), (b) and (c) shall be
deemed to be a "Non-Control Transaction"); or
(iv) the shareholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or the direct or indirect
sale or other disposition of all or substantially all of the assets of the
Corporation and its subsidiaries.
Notwithstanding the forgoing, a "change in control" of the Corporation
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than 20% of the Corporation Voting Securities as a result of
the acquisition of Corporation Voting Securities by the Corporation which
reduces the number of Corporation Voting Securities outstanding; provided that
if after such acquisition by the Corporation such person becomes the beneficial
owner of additional Corporation Voting Securities that increases the percentage
of outstanding Corporation Voting Securities beneficially owned by such person,
a "change in control" of the Corporation shall then occur.
15. Adjustment of Awards. The Plan Administrator shall be authorized to
make adjustments in the method of calculating attainment of performance goals in
recognition of unusual or nonrecurring events affecting the Corporation or its
financial statements or changes in applicable laws, regulations or accounting
principles, whenever the Plan Administrator determines that such adjustments are
appropriate; provided, however, that to the extent an annual incentive award is
intended to come within the exception for performance-based compensation under
Section 162(m) of the Internal Revenue Code of 1986, as amended from time to
time, any such adjustments shall be made in a manner consistent with such
Internal Revenue Code section and the regulations promulgated thereunder. The
Plan Administrator may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any annual incentive award in the manner and to the
extent it shall be deemed desirable to carry it into effect. In the event the
Corporation shall assume outstanding employee benefit awards or the right or
obligation to make future such awards in connection with the acquisition of
another corporation or business entity, the Plan Administrator may, in its
discretion, make such adjustments in the terms of annual incentive awards under
the Plan as it shall deem appropriate.
16. Deferral. Notwithstanding anything contained herein to the contrary,
in the event that an annual incentive award shall be ineligible for treatment as
performance-based compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended from time to time, the Plan Administrator, in its sole
discretion, shall have the right, with respect to any Executive Officer who is a
"covered employee" under Section 162(m) of the Internal Revenue Code of 1986, as
amended from time to time, to defer, in whole or in part, such Executive
Officer's receipt of his or her annual incentive award until the Executive
Officer is no longer a "covered employee" or until such time as shall be
determined by the Plan Administrator, provided that the Plan Administrator may
effect such a deferral only in a situation where the Corporation would be
prohibited a deduction under Section 162(m) and such deferral shall be limited
to the portion of the award that is not deductible.
17. Amendment or Termination. Until such time as a "change in control"
shall have occurred, the Board or the Committee may, in its sole discretion,
amend, suspend or terminate the Plan from time to time. No such amendment,
suspension or termination shall alter a Participant's right to receive a
distribution as previously earned, as to which this Plan shall remain in effect
following its termination until all such amounts have been paid, except as the
Board or the Committee may otherwise determine. After a "change in control," the
Board or the Committee shall no longer have the power to amend, suspend or
terminate the Plan, except to comply with changes to the Internal Revenue Code
of 1986, as amended from time to time, or other applicable law.
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<PAGE> 47
EXHIBIT C
AMENDED AND RESTATED
LANIER WORLDWIDE, INC.
LONG-TERM INCENTIVE PLAN FOR KEY EMPLOYEES
1. Purpose. The purpose of the Lanier Worldwide, Inc. Long-term Incentive
Plan for Key Employees (the "Plan") is to promote the growth and performance of
Lanier Worldwide, Inc. (the "Corporation") by linking a portion of the total
compensation for certain key employees to attainment of such corporate, sector
and division financial objectives as shall be approved by the Committee, as
appropriate, for long-term cycles of at least three (3) years.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" means any entity controlling, controlled by or under
common control with the Corporation, through ownership, directly or
indirectly, of a 50% or more interest in voting rights or profits.
"Board" means the Board of Directors of the Corporation.
"Committee" means a committee of the Board to which the Board has
delegated authority and responsibility under the Plan and which shall be
appointed by, and serve at the pleasure of, the Board, and shall consist
solely of two or more members of the Board who are not employees of the
Corporation or any Affiliate thereof and who qualify as "outside directors"
under Section 162(m) of the Internal Revenue Code, as amended from time to
time, and the regulations promulgated thereunder.
"Executive Officer" means the Chief Executive Officer of the
Corporation and each other individual the Board has designated as an
executive officer of the Corporation for purposes of reporting under
Section 16 of the Securities Exchange Act of 1934, as amended from time to
time, or any successor thereto.
"Participant" means any salaried employee of the Corporation and its
subsidiaries and Affiliates designated by the Committee to participate in
the Plan for a Performance Period.
"Performance Period" means a period of three (3) or more consecutive
fiscal years of the Corporation established by the Committee for
measurement of achievement of the established performance goal or goals
described in Section 5(b).
3. Administration of Plan. The Plan shall be administered by the
Committee. The Committee shall have authority to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan, to
prescribe the form of any agreement or instrument executed in connection
herewith, and to make all other determinations necessary or advisable for the
administration of the Plan. All such interpretations, rules, regulations and
determinations shall be conclusive and binding on all persons and for all
purposes. The Committee may delegate to one or more officers of the Corporation,
or a committee of officers, the right to award incentive awards hereunder to
employees who are not officers or directors of the Corporation and to adjust, in
accordance with the terms of the Plan, awards to employees who are not officers
or directors of the Corporation.
4. Designation of Participants. Each Performance Period, Participants, if
any, in the Plan shall be selected by the Committee from among the salaried
employees of the Corporation and its subsidiaries and Affiliates recommended to
the Committee by the Chief Executive Officer.
5. Incentive Awards.
(a) Each Participant in the Plan for a Performance Period shall be eligible
to receive such incentive award, if any, for the Performance Period as may be
payable pursuant to the performance criteria described below. The Committee
shall establish a "target incentive award" for each Participant for the
Performance
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<PAGE> 48
Period, and the maximum amount of an incentive award that may be awarded to the
Participant for the Performance Period shall be 200% thereof.
(b) Participants shall have their incentive awards, if any, determined on
the basis of the degree of achievement of performance goals that shall be
established by the Committee in writing and that shall be stated in terms of the
attainment of specified levels of, or percentage changes (as compared to a prior
measurement period) in, any one or more of the following measurements, or any
combination thereof: the Corporation's revenue, earnings per share of common
stock of the Corporation, net income, return on equity, return on capital,
return on assets, total shareholder return, return on sales or cash flow.
Percentage payments of each award shall range from 0% to 200%, in increments of
10%. The Committee shall, for each Performance Period, establish the performance
goal or goals from among the foregoing to apply to each Participant and a
formula or matrix prescribing the extent to which such Participant's incentive
award shall be earned based upon the degree of achievement of such performance
goal or goals. The Committee may determine that the incentive award payable to
any Participant shall be based upon the attainment of performance goals
comparable to those specified above but in whole or in part applied to the
results of a subsidiary, Affiliate, division or sector of the Corporation for
which such Participant has substantial management responsibility.
(c) Awards shall be expressed in U.S. dollar amounts. For Participants
ordinarily paid in currency other than U.S. dollars, the dollar amount of the
award that is earned at the conclusion of the performance period shall be
translated into the currency in which the Participant is ordinarily paid. The
translation from the dollar amount to the local currency shall be based on a
single average of the currency exchange rates at the end of each calendar
quarter, as published in the Wall Street Journal, for the twelve quarters that
comprise the performance period. The result of this calculation shall be used
for the actual award payment.
(d) A Participant's target incentive award or performance goals may be
changed by the Committee during the Performance Period to reflect a change in
responsibilities, provided that to the extent that at the time of such change an
award is intended to come within the exception for performance-based
compensation under Section 162(m) of the Internal Revenue Code, as amended from
time to time, any such change shall be made in a manner consistent with such
Internal Revenue Code section and the regulations promulgated thereunder.
(e) Except as provided in Section 6(a), the Committee may, in its sole
discretion, (i) award or increase the amount of an incentive award payable to a
Participant even though not earned in accordance with the performance goals
established pursuant to this Section 5, or (ii) decrease the amount of an
incentive award otherwise payable to a Participant even though earned in
accordance with the performance goals established pursuant to this Section 5.
6. Participation by Executive Officers. The following provisions shall be
applicable to participation in the Plan by an Executive Officer to the extent an
award made to such Executive Officer is intended to come within the exception
for performance-based compensation under Section 162(m) of the Internal Revenue
Code, as amended from time to time:
(a) Each such Participant's incentive award under the Plan for a
Performance Period shall be based solely on achievement of one or more of the
performance goals as established by the Committee pursuant to Section 5, and the
Committee shall not have the discretion provided in Section 5(e) to increase the
amount of the award.
(b) With respect to each such Participant, no incentive award shall be
payable hereunder except upon written certification by the Committee that the
performance goals have been satisfied to a particular extent and that any other
material terms and conditions precedent to payment of an incentive award
pursuant to the Plan have been satisfied.
(c) The maximum incentive award payable to any such Participant for any
Performance Period shall be two million U.S. dollars ($2,000,000 U.S.).
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<PAGE> 49
7. Payment of Incentive Award.
(a) Payment of any amount to be paid to a Participant based upon the degree
of attainment of the applicable performance goals shall be made at such time(s)
as the Committee may in its discretion determine.
(b) A Participant may elect to defer all or a portion of his or her award
until a specified future date or event, but not later than age 65, by giving
written notification of his or her intent to make such a voluntary deferral
election. The election to defer part or all of the award must be made prior to
the end of the second year of the performance period. During the voluntary
deferral period, the deferred amounts shall accumulate interest based on the
average long-term Treasury bill rate. However, Participants shall have no
security interest in the deferred amounts, and the rights to these deferred
awards shall be the same as those of general creditors of the Corporation.
Deferred awards are payable in a lump sum or installments as elected by a
Participant.
In consideration of overseas assignments, the Corporation may agree to
defer payments until completion of the assignment.
8. Termination of Employment. If the Participant ceases to be an employee
of the Corporation and its Affiliates prior to the expiration of the Performance
Period: (i) for any reason other than death, disability or retirement pursuant
to an established retirement plan or policy of the Corporation or of its
applicable Affiliates, all awards to the Participant hereunder shall be
forfeited; or (ii) due to death, disability or retirement pursuant to an
established retirement plan or policy of the Corporation or of its Affiliates,
the Participant (or his or her beneficiary) shall be eligible to receive a
pro-rata portion of the amount which would have been paid to him or her under
any outstanding awards at the end of the Performance Period within a reasonable
period after the end of such Performance Period, such pro-rata portion to be
measured by a fraction, the numerator of which is the number of months of the
Performance Period during which the Participant's employment continued, and the
denominator of which is the full number of months of the Performance Period. For
purposes hereof, employment for any period of a month shall be deemed employment
for a full month and employment is deemed discontinued on the day following the
last day of active employment prior to termination.
9. Participant's Interests. A Participant's interest in any incentive
awards hereunder shall at all times be reflected on the Corporation's books as a
general unsecured and unfunded obligation of the Corporation subject to the
terms and conditions of the Plan. The Plan shall not give any person any right
or security interest in any asset of the Corporation or any fund in which any
deferred payment is deemed invested. Neither the Corporation, the Board, nor the
Committee shall be responsible for the adequacy of the general assets of the
Corporation to discharge the payment of its obligations hereunder nor shall the
Corporation be required to reserve or set aside funds therefor.
10. Non-Alienation of Benefits; Beneficiary Designation. All rights and
benefits under the Plan are personal to the Participant and neither the Plan nor
any right or interest of a Participant or any other person arising under the
Plan is subject to voluntary or involuntary alienation, sale, transfer, or
assignment without the Corporation's consent. In the event of a Participant's
death or incapacity, the Committee may authorize the payment of an award to the
Participant's designated beneficiary or guardian, or, in the absence of such
written designation, to the person specified by will or by the applicable laws
of descent and distribution. Any such beneficiary designation may be revoked and
new beneficiaries appointed by the Participant by written instrument delivered
to the Committee. Subject to the foregoing, the Corporation shall establish such
procedures as it deems necessary for a Participant to designate one or more
beneficiaries to whom any payment the Committee determines to make would be
payable in the event of the Participant's death.
11. Withholding for Taxes. Notwithstanding any other provisions of this
Plan, the Corporation may withhold from any payment made by it under the Plan
such amount or amounts as may be required for purposes of complying with any
federal, state and local tax or withholding requirements.
12. Rights of Employees. Nothing in the Plan shall interfere with or limit
in any way the right of the Corporation or any of its subsidiaries or Affiliates
to terminate a Participant's employment at any time, or
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<PAGE> 50
confer upon any Participant any right to continued employment with the
Corporation or any of its subsidiaries or Affiliates.
13. Determinations Final. Each determination provided for in the Plan
shall be made by the Committee under such procedures as may from time to time be
prescribed by the Committee and shall be made in the sole discretion of the
Committee. Any such determination shall be conclusive.
14. Change in Control.
(a) Notwithstanding anything to the contrary provided elsewhere herein, in
the event of a "change in control" of the Corporation, as defined in Section
14(b) below, then the Corporation shall as promptly as practicable pay any
incentive awards awarded to Participants. The payment to each Participant shall
be an amount not less than the target incentive award as originally approved for
the Performance Period, notwithstanding actual results or any changes or
modifications occurring after any such change in control.
(b) "Change in control" means the occurrence of any one of the following
events:
(i) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation's then outstanding
securities eligible to vote for the election of the Board (the "Corporation
Voting Securities"); provided, however, that the event described in this
paragraph (i) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions: (a) by the Corporation or any
subsidiary, (b) by any employee benefit plan sponsored or maintained by the
Corporation or any subsidiary, (c) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (d) pursuant to a
Non-Control Transaction (as defined in paragraph (iii)), or (e) with
respect to any Participant, by such Participant or by any group of persons
including such Participant or acting in concert with such Participant;
(ii) individuals who, on the "Distribution Date" as defined in the
Registration Statement on Form 10 and any amendments thereto filed by the
Corporation with the Securities and Exchange Commission, constitute the
Board (the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the Distribution Date, whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent
Directors who remain on the Board (either by a specific vote or by approval
of the proxy statement of the Corporation in which such person is named as
a nominee for director, without objection to such nomination), shall also
be deemed to be an Incumbent Director; provided, however, that no such
individual initially elected or nominated as a director of the Corporation
as a result of an actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed
to be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share exchange or
similar form of corporate reorganization of the Corporation or any such
type of transaction involving the Corporation or any of its subsidiaries
that requires the approval of the Corporation's shareholders (whether for
such transaction or the issuance of securities in the transaction or
otherwise) (a "Business Combination"), unless immediately following such
Business Combination: (a) more than 66 2/3% of the total voting power of
the company resulting from such Business Combination (including, without
limitation, any company which directly or indirectly has beneficial
ownership of 100% of the Corporation Voting Securities) eligible to elect
directors of such company is represented by shares that were Corporation
Voting Securities immediately prior to such Business Combination (either by
remaining outstanding or being converted), and such voting power is in
substantially the same proportion as the voting power of such Corporation
Voting Securities immediately prior to the Business Combination, (b) no
person (other than any publicly traded holding company resulting from such
Business Combination, any employee benefit plan sponsored or maintained by
the Corporation (or the company resulting from such Business Combination))
becomes
C-4
<PAGE> 51
the beneficial owner, directly or indirectly, of 20% or more of the total
voting power of the outstanding voting securities eligible to elect
directors of the company resulting from such Business Combination, and (c)
at least a majority of the members of the board of directors of the company
resulting from such Business Combination were Incumbent Directors at the
time of the Board's approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which
satisfies the foregoing conditions specified in (a), (b) and (c) shall be
deemed to be a "Non-Control Transaction"); or
(iv) the shareholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or the direct or indirect
sale or other disposition of all or substantially all of the assets of the
Corporation and its subsidiaries.
Notwithstanding the forgoing, a "change in control" of the Corporation shall not
be deemed to occur solely because any person acquires beneficial ownership of
more than 20% of the Corporation Voting Securities as a result of the
acquisition of Corporation Voting Securities by the Corporation which reduces
the number of Corporation Voting Securities outstanding; provided that if after
such acquisition by the Corporation such person becomes the beneficial owner of
additional Corporation Voting Securities that increases the percentage of
outstanding Corporation Voting Securities beneficially owned by such person, a
"change in control" of the Corporation shall then occur.
15. Adjustment of Awards. The Committee shall be authorized to make
adjustments in the method of calculating attainment of performance goals in
recognition of unusual or nonrecurring events affecting the Corporation or its
financial statements or changes in applicable laws, regulations or accounting
principles, whenever the Committee determines that such adjustments are
appropriate; provided, however, that to the extent an award is intended to come
within the exception for performance-based compensation under Section 162(m) of
the Internal Revenue Code of 1986, as amended from time to time, any such
adjustments shall be made in a manner consistent with such Internal Revenue Code
section and the regulations promulgated thereunder. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any incentive award in the manner and to the extent it shall be deemed desirable
to carry it into effect. In the event the Corporation shall assume outstanding
employee benefit awards or the right or obligation to make future such awards in
connection with the acquisition of another corporation or business entity, the
Committee may, in its discretion, make such adjustments in the terms of
incentive awards under the Plan as it shall deem appropriate.
16. Deferral. Notwithstanding anything contained herein to the contrary,
in the event that an incentive award shall be ineligible for treatment as
performance-based compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended from time to time, the Committee, in its sole discretion,
shall have the right, with respect to any Executive Officer who is a "covered
employee" under Section 162(m) of the Internal Revenue Code of 1986, as amended
from time to time, to defer, in whole or in part, such Executive Officer's
receipt of his or her incentive award until the Executive Officer is no longer a
"covered employee" or until such time as shall be determined by the Committee,
provided that the Committee may effect such a deferral only in a situation where
the Corporation would be prohibited a deduction under Section 162(m) and such
deferral shall be limited to the portion of the award that is not deductible.
17. Amendment or Termination. Until such time as a "change in control"
shall have occurred, the Board or the Committee may, in its sole discretion,
amend, suspend or terminate the Plan from time to time. No such amendment,
suspension or termination shall alter a Participant's right to receive a
distribution as previously earned, as to which this Plan shall remain in effect
following its termination until all such amounts have been paid, except as the
Board or the Committee may otherwise determine. After a "change in control," the
Board or the Committee shall no longer have the power to amend, suspend or
terminate the Plan, except to comply with changes to the Internal Revenue Code
of 1986, as amended from time to time, or other applicable law.
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<TABLE>
<S> <C>
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED Please mark
FOR THE PROPOSALS STATED BELOW. your votes as
indicated in [X]
this example
1. To elect two directors to serve Nominees: Sidney E. Harris, Amos R. McMullian 2. To ratify the amended and restated
for three-year terms: Lanier Worldwide, Inc. Stock
Incentive Plan:
FOR all nominees WITHHOLD To withhold authority to vote for
listed to the right AUTHORITY any individual nominee,
(except as marked to vote for all nominees strike a line through
to the contrary) listed to the right the nominee's name above.
FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
3. To ratify the amended and restated Lanier 4. To ratify the amended and restated Lanier 5. To ratify the appointment of
Worldwide, Inc. Key Contributor Incentive Worldwide, Inc. Long-term Incentive Plan for Ernst & Young LLP as independent
Plan: Key Employees: auditors for fiscal year 2001:
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
In the discretion of the proxies, on any other matter that
may properly come before the meeting or any adjournment
thereof.
Date: , 2000
----------------------------------------------
-----------------------------------------------------------
Signature
-----------------------------------------------------------
Signature
Please sign exactly as your name or names appear hereon. For
more than one owner as shown above, each should sign. When
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT signing in a fiduciary or representative capacity, please
PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO give full title. If this proxy is submitted by a corporation,
ATTEND THE ANNUAL MEETING ON OCTOBER 26, 2000. IF YOU ATTEND it should be executed in the full corporate name by a duly
THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN authorized officer, if a partnership, please sign in the
IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY. partnership name by an authorized person.
------------------------------------------------------------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
</TABLE>
<PAGE> 53
LANIER WORLDWIDE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
ON OCTOBER 26, 2000
The undersigned hereby appoints James A. MacLennan and J. Michael Kelly,
and each of them, proxies, with full power of substitution and resubstitution,
for and in the name of the undersigned, to vote all shares of common stock of
Lanier Worldwide, Inc. (the "Company") that the undersigned would be entitled
to vote if personally present at the Annual Meeting of Stockholders or any
adjournment of the Annual Meeting. The Annual Meeting will be held on Thursday,
October 26, 2000, at 9:00 a.m., local time, at the Company's headquarters,
located at 2300 Parklake Drive, N.E., Atlanta, Georgia 30345.
This appointment relates to the matters described in the accompanying
Notice of Annual Meeting of Stockholders and Proxy Statement and upon any other
business that may properly come before the Annual Meeting or any adjournment
thereof. By signing this Proxy, the undersigned acknowledges receipt of the
accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. The
proxies are directed to vote on the matters described in the Notice of Annual
Meeting of Stockholders and Proxy Statement as follows, and otherwise in their
discretion upon such other business as may properly come before the Annual
Meeting of Stockholders or any adjournment of the Annual Meeting.
* FOLD AND DETACH HERE *
