Exhibit 99
NEW ENGLAND BUSINESS SERVICE, INC.
NEBS 2000 STOCK OPTION PLAN FOR PREMIUMWEAR EMPLOYEES
1. Purpose and General Matters
(a) Purpose. The purposes of the NEBS 2000 Stock Option
Plan for PremiumWear Employees (the "Plan") are (i) to grant
options to purchase stock in New England Business Service, Inc.
(the "Company") to certain executives of PremiumWear, Inc.
("PremiumWear") as a material inducement to their entering into
employment agreements in connection with the Company's
acquisition of PremiumWear, and (ii) to provide a means whereby
the Company, by granting options to purchase stock in the
Company, can retain certain other persons of ability as key
employees of PremiumWear following its acquisition by the
Company.
(b) General Matters. It is intended that options granted
under the Plan shall constitute non-qualified stock options (that
is, options that do not qualify as incentive stock options or
other statutory options under Section 421 et seq. of the Internal
Revenue Code of 1986, as amended (the "Code"), and the terms of
the Plan and of each form of option agreement (the "Option
Agreement") shall be construed accordingly. Except as otherwise
provided herein, the words parent and subsidiary shall be
interpreted in accordance with Section 424 of the Code.
2. Administration
The Plan shall be administered and interpreted by a committee
(the "Committee") appointed by (and serving at the pleasure of)
the Company's Board of Directors (the "Board"). The Committee
shall consist of not less than two members of the Board, each of
whom while serving as such shall be a person who in the opinion
of counsel to the Company is (i) a "Non-Employee Director," as
such term is used in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934,as amended (the "Act"), and (ii) an "Outside
Director," as such term is used in regulation 1.162-27(e)(3)
under Section 162(m) of the Code. The acts of a majority of the
Committee members present at any meeting at which a quorum is
present, and any acts approved in writing by all members without
a meeting, shall constitute acts of the Committee.
Subject to the provisions of the Plan, the Committee shall
determine with respect to options granted to employees of
PremiumWear:
(a) the employees to whom options shall be granted;
(b) the number of shares to be optioned to each employee;
(c) [intentionally omitted];
(d) [intentionally omitted];
(e) the terms and conditions of each agreement between the
company and the employee to whom the Company has granted
any option under the Plan.
Consistent with the foregoing, the Committee shall have full
authority to administer the Plan, including authority to
interpret and construe any provisions of the Plan and to adopt
rules and regulations for administering the Plan, as it may deem
necessary. Decisions of the Committee shall be final and binding
on all persons who have an interest in the Plan.
No member of the Committee or of the Board shall be held
liable for any action or determination made in good faith with
respect to the Plan or any option granted hereunder.
3. Stock
(a) Shares Reserved under the Plan. Subject to the
provisions of clause (c) below, the stock which shall be the
subject of the options granted under the Plan shall be shares of
the Company's Common Stock, par value $1 per share (the "Stock"),
and the total number of shares of Stock as to which options may
be granted under the Plan shall not exceed 105,083.
(b) Status of Shares in Terminated or Surrendered Options.
If any outstanding option under the Plan expires or is terminated
for any reason, then the shares of Stock allocable to the
unexercised or surrendered portion of such option shall be added
to the remaining number of shares as to which future options may
be granted under the Plan.
(c) Adjustment of Shares Reserved under the Plan. If the
Company shall combine or split the Stock or shall declare thereon
any dividend payable in shares of Stock, or shall reclassify or
take any other action of a similar nature affecting the Stock,
then the number and class of shares of Stock which may thereafter
be optioned (in the aggregate and to any participant) shall be
adjusted accordingly, and, in the case of each option outstanding
at the time of any such action, the number and class of shares
which may thereafter be purchased pursuant to such option and the
option price per share shall be adjusted to such extent as may be
determined by the Board, upon recommendation of the Committee, to
be necessary to maintain unimpaired and unenlarged the rights of
the holder of such option, and any such determination shall be
conclusive and binding upon such holder. After any such
adjustment, the term "Stock" shall be deemed to mean the Stock as
so adjusted.
4. Eligibility
All employees of PremiumWear ("Employees") shall be eligible
to participate in the Plan and to receive grants of stock options
hereunder. Officers of PremiumWear who are full-time Employees
shall be eligible to participate in the Plan and to receive stock
options hereunder. In no event will a director or officer of the
Company be entitled to receive a grant of stock options
hereunder, except for grants which qualify for an exemption from
the New York Stock Exchange's shareholder approval policy, as set
forth in paragraph 312.03(a)(1) of the New York Stock Exchange
Listed Company Manual (or any successor provision), as in effect
on the date of grant.
5. Terms and Conditions of Options
(a) Number of Shares. Each Option Agreement shall state the
total number of shares to which it pertains. The maximum number
of shares of Stock with respect to which options may be granted
under the Plan to any Employee during any single calendar year
shall be 25,000 shares.
(b) Option Price. Each Option Agreement shall state a
single option price applicable to all of the shares to which it
pertains. The option price per share shall be the fair market
value (the "Fair Market Value") of a share of Stock on the date
the option is granted. For purposes of determining the option
price (and for all other valuation purposes under the Plan) the
Fair Market Value of a share of Stock shall be the last sales
price per share of Stock as reported on the New York Stock
Exchange prior to the date on which such option is granted (or on
or prior to the date as to which such other valuation is made),
or, if the Stock is not then listed on the New York Stock
Exchange or if no price has been so reported within one week
prior to the date of such issuance (or within one week prior to
such other valuation date), such market value shall be as
determined by a principal market maker for the Stock designated
by the Committee.
(c) Expiration of Options. Each Option Agreement shall
state the date on which it shall expire, which (i) shall not be
more than ten (10) years from the date of grant; and (ii) shall
otherwise be as determined by the Committee.
(d) Exercise. Any option may be exercised by the holder
thereof (or his personal representative if exercised pursuant to
clause (iii) of subsection (f) below) by giving notice in writing
of such exercise to the Chief Financial Officer of the Company
during the period that it is exercisable. The option price for
the number of shares for which the option is exercised shall be
due and payable at the time of such exercise. It shall be
payable in United States dollars and may be paid in cash or by
certified check, bank cashier's check, the surrendering of shares
of the Company's Stock (which in the case of Stock acquired from
the Company shall have been owned by the participant for at least
six months prior to the date of surrender), which shall be valued
at its Fair Market Value on the date of surrender in accordance
with Section 5(b) of the Plan, or any other means approved by the
Chief Financial Officer. The time of exercise of any option
shall be the time at which such notice of exercise and payment
are received by the Chief Financial Officer.
(e) Waiting Period. The Committee may, in its discretion,
provide that an option may not be exercised in whole or in part
for any period or periods of time specified by the Committee.
Except as so provided, any option may be exercised in whole at
any time or in part from time to time during its term, provided
that no option may be exercised for less than ten (10) shares
unless the issue of a lesser number is sufficient to exhaust the
option. Notwithstanding anything to the contrary in the Plan or
in any Option Agreement (but subject to Section 11 below), the
right to purchase all of the remaining shares under each option
granted under the Plan that is outstanding on the date of
occurrence of a Change in Control (as defined in Section 11
below) of the Company shall vest and become exercisable
immediately upon the occurrence of such Change in Control.
(f) Termination of Employment.
(i) Except after a Change in Control, each option held
by an Employee whose employment with the Company or any
subsidiary terminates other than by reason of retirement or death
shall expire upon such cessation of employment unless the Board
determines, in its sole discretion and upon such terms as it
deems appropriate, that such option shall continue to be
exercisable for a period after such cessation of employment (but
in no event for a period beyond the remainder of the term
thereof). Each option held by Employee whose employment with the
Company or any subsidiary terminates upon or following a Change
in Control shall remain exercisable for a period of time as
provided in clause (v) below.
(ii) Subject to clause (iii) of this sub-section (f) and
Section 8 below, if an Employee retires holding an unexpired
option, such option shall be exercisable by him or her during the
remainder of the term thereof or for two (2) years following
retirement, whichever period is shorter, and only as to not more
than the number of shares as to which it was exercisable
immediately prior to retirement (except as may otherwise be
determined by the Board at the time of grant).
(iii) Subject to Section 8 below, if an optionee dies
holding an unexpired option, such option shall be exercisable by
his or her personal representative as to not more than the number
of shares as to which it was exercisable immediately prior to
such optionee's death (except as may otherwise be determined by
the Board at the time of grant), during, and only during, the
period beginning with such death and ending with the earlier of
the first anniversary of such death or the expiration date of the
option.
(iv) [intentionally omitted]
(v) Subject to clause (iii) of this sub-section (f) and
Section 8 below, if an Employee's employment with the Company or
any subsidiary terminates upon or within six months following a
Change in Control, any unexpired option held by such Employee at
the time of his or her termination shall remain exercisable for
the remainder of the term thereof, or for three months following
such termination, whichever period is shorter.
(g) Assignability of Options. No options shall be
assignable or transferable except by will or by the laws of
descent and distribution as provided in clause (iii) of sub-
section (f) above. During the lifetime of an optionee, any
option granted to him or her shall be exercisable only by the
optionee; provided that such option shall be exercisable on
behalf of the optionee by his or her legal representative if the
optionee is mentally incompetent.
(h) Stockholder Rights. No person shall have any rights as
a stockholder with respect to the shares of Stock subject to any
option granted under the Plan until he or she shall have been
issued a stock certificate for such shares.
(i) Securities Law Compliance and Other Conditions. The
delivery of Stock upon the exercise of an option shall be subject
to compliance with (i) applicable federal and state laws and
regulations, (ii) if the outstanding Stock is at the time listed
on any stock exchange, the listing requirements of such exchange,
and (iii) Company counsel's approval of all other legal matters
in connection with the issuance and delivery of such Stock. If
the sale of Stock has not been registered under the Securities
Act of 1933, the Company may require, as a condition to exercise
of the option, such representations or agreements as counsel for
the Company may consider appropriate to avoid violation of such
Act and may require that the certificates evidencing such Stock
bear an appropriate legend restricting transfer. Any Option
Agreement may contain such other provisions (not inconsistent
with the express provisions of the Plan) as the Committee shall
deem advisable.
(j) Tax Withholding. No shares of Stock shall be delivered
pursuant to the exercise of an option unless arrangements
satisfactory to the Company's Chief Financial Officer have been
made for any required federal, state or local income tax or other
withholdings.
6. [intentionally omitted]
7. Replacement Options
The Committee may permit the voluntary surrender of all or a
portion of any option granted under this Plan conditioned upon
the granting to the option holder of a new option issued under
the Plan for the same or a different number of shares. The new
option shall be exercisable at such price, during such period and
in accordance with such other terms and conditions as the
Committee may determine, consistent with the provisions of this
Plan, without regard to the price, period of exercise, or other
terms or conditions of the option surrendered.
8. Reorganization
In case of any one or more reclassifications, changes, or
exchanges of outstanding shares of the Company's Stock (other
than as provided in sub-section (c) of Section 3), or
consolidations of the Company with, or mergers of the Company
into, other corporations, or other recapitalizations (other than
consolidations with a subsidiary in which the Company is the
continuing corporation and which do not result in any
reclassifications, change or exchange of outstanding shares of
the Company's Stock), or in case of any one or more sales or
conveyances to another corporation of the property of the Company
as an entirety (any and all of which are hereinafter in this
section called "Reorganizations"), the holder of each option then
or thereafter outstanding shall have the right, upon any
subsequent exercise thereof, to acquire the same kind and amount
of securities and property which such holder would then hold if
such holder had exercised such option immediately before the
first of such Reorganizations and continued to hold all
securities and property which came to such holder as a result of
that and subsequent Reorganizations, less all securities and
property surrendered or canceled pursuant to any of same (the
rights provided by Section 3(c) and this Section 8 being
continuing and cumulative) except that, notwithstanding any
provision of clause (ii), (iii) or (v) of sub-section (f) of
Section 5 to the contrary, the Board shall have the right, upon
no less than thirty (30) days' notice to the holder of each
outstanding option, to terminate the period n which all
outstanding options may be exercised at the time of such
Reorganization. Such notice shall be effective when mailed to
such option holder by certified or registered mail addressed to
him or her at the holder's address of record or when delivered in
hand to such option holder. In such event all outstanding
options, other than options as to which one of the events
referred to in Sections 5(f)(ii) or (iii) has occurred, may be
exercised, in whole or in part, and all outstanding options as to
which one of the events referred to in Sections 5(f)(ii) or (iii)
has occurred may be exercised, but only to the extent therein
permitted, and only at any time prior to such Reorganization. A
liquidation shall be deemed a Reorganization for the foregoing
purposes.
9. Amendment
The Board may alter, amend, suspend or terminate the Plan at
any time and from time to time and may alter and amend all Option
Agreements granted hereunder. No amendment of the Plan or of any
Option Agreement may, without the consent of the holder of an
outstanding option granted under the Plan, adversely affect the
rights of such holder under such option.
10. Effective Date and Term of Plan
(a) Effective Date. The Plan shall become effective on the
date of its approval by the Board (the "Effective Date"). The
Committee may grant options under the Plan at any time on or
after the Effective Date and before the date fixed herein for
termination of the Plan.
(b) Term of Plan. The Plan shall terminate on the 10th
anniversary of the Effective Date. Any options outstanding under
the Plan at the time of its termination shall continue to have
force and effect in accordance with the provisions set forth in
the Option Agreements evidencing such options.
11. Change in Control
For purposes of this Plan a "Change in Control" shall mean:
(a) The acquisition by any individual, entity or group
(within the meaning of Sections 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35%
or more of either (i) the then outstanding shares of Stock or
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of the directors ("Outstanding Company Voting
Securities"); provided, however, that the following acquisitions
shall not constitute a Change in Control: (A) any acquisition
directly from the Company (excluding an acquisition by virtue of
the exercise of a conversion privilege); (B) any acquisition by
the Company or by any corporation controlled by the Company; (C)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company; or (D) any acquisition by any
corporation pursuant to a consolidation or merger if, following
such consolidation or merger, the conditions described in clauses
(i), (ii) and (iii) of subsection (c) of this Section are
satisfied; or
(b) Individuals who, as of the effective date of the Plan
determined pursuant to Section 10(a) above, constitute the Board
(the "Incumbent Board") ceasing for any reason to constitute at
least a majority of the Board; provided, however, that any
individual becoming a director subsequent to such effective date
whose election, or nomination for election by the Company's
stockholders, was approved by a vote or resolution of at least a
majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result
of either an actual or threatened solicitation in opposition (as
such terms are used in Rule 14a-6 of Regulation 14A promulgated
under the Exchange Act) to the election of directors conducted or
to be conducted by or on behalf of a Person other than the Board;
or
(c) Adoption by the Board of a resolution approving an
agreement of consolidation of the Company with or merger of the
Company into another corporation or business entity in each case,
unless, following such consolidation or merger, (i) more than 60%
of, respectively, the then outstanding shares of common stock of
the corporation resulting from such consolidation or merger
and/or the combined voting power of the then outstanding voting
securities of such corporation or business entity entitled to
vote generally in the election of directors (or other persons
having the general power to direct the affairs of such entity) is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Stock and Outstanding
Company Voting Securities immediately prior to such consolidation
or merger in substantially the same proportions as their
ownership, immediately prior to such consolidation or merger, of
the Stock and/or Outstanding Company Voting Securities, as the
case may be, (ii) no Person (excluding the Company, any employee
benefit plan (or related trust) of the Company or such
corporation or other business entity resulting from such
consolidation or merger and any Person beneficially owning,
immediately prior to such consolidation or merger, directly or
indirectly, 35% or more of the Stock and/or Outstanding Company
Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 35% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting
from such consolidation or merger or the combined voting power of
the then outstanding voting securities of such corporation or
business entity entitled to vote generally in the election of its
directors (or other persons having the general power to direct
the affairs of such entity) and (iii) at least a majority of the
members of the board of directors (or other group of persons
having the general power to direct the affairs of the corporation
or other business entity) resulting from such consolidation or
merger were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such
consolidation or merger; provided, that any right to purchase
shares of Stock which shall vest by reason of the action of the
Board pursuant to this subsection (c) shall be divested, with
respect to any shares not already purchased by the optionee or
his or her personal representative or transferee, upon (A) the
rejection of such agreement of consolidation or merger by the
stockholders of the Company or (B) its abandonment by either
party thereto in accordance with its terms; or
(d) Adoption by the requisite majority of the whole Board,
or by the holders of such majority of stock of the Company as is
required by law or by the Certificate of Incorporation or By-Laws
of the Company as then in effect, of a resolution or consent
authorizing (i) the dissolution of the Company or (ii) the sale
or other disposition of all or substantially all of the assets of
the Company, other than to a corporation or other business entity
with respect to which, following such sale or other disposition,
(A) more than 60% of, respectively, the then outstanding shares
of common stock of such corporation and/or the combined voting
power of the outstanding voting securities of such corporation or
other entity entitled to vote generally in the election of its
directors (or other persons having the general power to direct
its affairs) is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Stock and
Outstanding Company Voting Securities immediately prior to such
sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other
disposition, of the Stock and/or Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding the
Company and any employee benefit plan (or related trust) of the
Company or such corporation or other business entity and any
Person beneficially owning, immediately prior to such sale or
other disposition, directly or indirectly, 35% or more of the
Stock and/or Outstanding Company Voting Securities, as the case
may be) beneficially owns, directly or indirectly, 35% or more
of, respectively, the then outstanding shares of common stock of
such corporation and/or the combined voting power of the then
outstanding voting securities of such corporation or other
business entity entitled to vote generally in the election of
directors (or other persons having the general power to direct
its affairs), and (C) at least a majority of the members of the
board of directors (or other group of persons having the general
power to direct its affairs of such corporation or other entity)
were members of the Incumbent Board at the time of the execution
of the initial agreement of action of the Board providing for
such sale or other disposition of assets of the Company;
provided, that any right to purchase shares of Stock which shall
vest by reason of the action of the Board or the stockholders
pursuant to this subsection (d) shall be divested, with respect
to any shares not already purchased by the optionee or his or her
personal representative or transferee, upon the abandonment by
the Company of such dissolution, or such sale of or other
disposition of assets, as the case may be.
12. Employment Rights
Neither the adoption of the Plan nor the grant of options shall
confer upon any participant any right to continue as an employee
of the Company or any parent or subsidiary (including without
limitation PremiumWear) or affect in any way the right of the
Company or parent or subsidiary (including without limitation
PremiumWear) to terminate them at any time. Except as
specifically provided by the Board in any particular case, the
loss of existing or potential profit in options granted under
this Plan shall not constitute an element of damages in the event
of termination of the employment of a participant even if the
termination is in violation of an obligation of the Company or
parent or subsidiary to the participant by contract or otherwise.
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