<PAGE>
As filed with the Securities and Exchange Commission on September 18, 1998
Registration No. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
SEI INVESTMENTS COMPANY
(Exact name of issuer as specified in its charter)
Pennsylvania 23-1707341
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation of organization)
1 Freedom Valley Drive
Oaks, Pennsylvania 19456-1100
(610) 676-1000
(Address of principal executive offices)
SEI Investments Company Stock Option Plan
SEI Investments Company 1997 Stock Option Plan
SEI Investments Company Option Share Deferral Plan
SEI Investments Company Option Share Deferral Plan for Non-Employee Directors
SEI Investments Company Employee Stock Purchase Plan
SEI Investments Company 1998 Equity Compensation Plan
(Full title of the plans)
Kevin P. Robins, Esq.
SEI Investments Company
1 Freedom Valley Drive
Oaks, Pennsylvania 19456-1100
(Name and address of agent for service)
(610) 676-1000
(Telephone number, including area code, of agent for service)
-----------------------
Copy to:
N. Jeffrey Klauder
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5000
-----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Number of Proposed maximum Proposed maximum
to be shares to be offering price aggregate Amount of
registered registered (1) per share (2) offering price (2) registration fee
==================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 2,650,000 $67.44 $178,716,000 $52,722
==================================================================================================
</TABLE>
_______________
(1) This registration statement covers shares of Common Stock of SEI
Investments Company which may be offered or sold pursuant to the Plans
named above. This registration statement also relates to an indeterminate
number of shares of Common Stock that may be issued upon stock splits,
stock dividends or similar transactions in accordance with Rule 416.
106,152 shares are being registered in connection with the SEI Investments
Company Stock Option Plan and the SEI Investments Company Option Share
Deferral Plan (designed to operate in conjunction with each other).
386,000 shares are being registered in connection with the SEI Investments
Company 1997 Stock Option Plan and the SEI Investments Company Option Share
Deferral Plan for Non-Employee Directors (designed to operate in
conjunction with each other). 500,000 shares are being registered in
connection with the SEI Investments Company Employee Stock Purchase Plan.
1,657,848 shares are being registered in connection with the SEI
Investments Company 1998 Equity Compensation Plan, the SEI Investments
Company Option Share Deferral Plan and the SEI Investments Company Option
Share Deferral Plan for Non-Employee Directors (designed to operate in
conjunction with each other).
(2) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely for the
purpose of calculating the registration fee, based upon the average of the
reported high and low sales prices for a share of Common Stock on
September 11, 1998, as reported on the Nasdaq National Market.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, as filed by the Company with the Securities and
Exchange Commission, are incorporated by reference in the Registration
Statement:
1. Annual Report on Form 10-K, for the fiscal year ended December 31,
1997;
2. Quarterly Report on Form 10-Q, for the quarter ended March 31, 1998;
3. Quarterly Report on Form 10-Q, for the quarter ended June 30, 1998;
4. The description of the Common Stock of the Company contained in the
Company's most recent registration statements filed under the
Securities Exchange Act of 1934 (the "Exchange Act"), including any
amendment or report filed for the purpose of updating such
descriptions.
All reports and other documents subsequently filed by the Company or the
Plans (defined below) pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such
documents. Any statement contained in any document, all or a portion of which
is incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained or incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement. The term "Plans" used herein means the SEI Investments Company Stock
Option Plan, SEI Investments Company 1997 Stock Option Plan, SEI Investments
Company Option Share Deferral Plan, SEI Investments Company Option Share
Deferral Plan for Non-Employee Directors, SEI Investments Company Employee Stock
Purchase Plan, and SEI Investments Company 1998 Equity Compensation Plan.
Experts
- -------
The consolidated financial statements and schedule of SEI Investments
Company and subsidiaries included in SEI Investments Company's 1997 Annual
Report on Form 10-K which are incorporated by reference in this registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
reports.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Chapter 17, Subchapter D of the Pennsylvania Business Corporation Law of
1988, as amended (the
II-1
<PAGE>
"PBCL") contains provisions permitting indemnification of officers and directors
of a business corporation incorporated in Pennsylvania. Sections 1741 and 1742
of the PBCL provide that a business corporation may indemnify directors and
officers against liabilities and expenses they may incur as such in connection
with any threatened, pending or completed civil, administrative or investigative
proceeding, provided that the particular person acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal proceeding, had
no reasonable cause to believe his or her conduct was unlawful. In general, the
power to indemnify under these sections does not exist in the case of actions
against a director or officer by or in the right of the corporation if the
person otherwise entitled to indemnification shall have been adjudged to be
liable to the corporation unless it is judicially determined that, despite the
adjudication of liability but in view of all the circumstances of the case, the
person is fairly and reasonably entitled to indemnification for specified
expenses. Section 1743 of the PBCL provides that the corporation is required to
indemnify directors and officers against expenses they may incur in defending
actions against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions.
Section 1746 of the PBCL grants a corporation broad authority to indemnify
its directors and officers for liabilities and expenses incurred in such
capacity, except in circumstances where the act or failure to act giving rise to
the claim for indemnification is determined by a court to have constituted
willful misconduct or recklessness.
Section 1747 of the PBCL permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
representative of another corporation or other enterprise, against any liability
asserted against such person and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify the person against such liability under Chapter 17,
Subchapter D of the PBCL.
Section 3.01(b) of the Company's Bylaws provides that a director shall not
be personally liable for monetary damages for any action taken, or any failure
to take any action, unless the director has breached or failed to perform the
duties of his or her office and the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness. These provisions do not apply
to the responsibility or liability of a director pursuant to any criminal
statute or the liability of a director for the payment of taxes pursuant to
local, state or federal law.
Section 7.01 of the Company's Bylaws provides that the Company shall
indemnify directors and officers against any liability incurred in connection
with any proceeding in which the director or officer may be involved by reason
of the fact that such person was serving in an indemnified capacity, including
without limitation liabilities resulting from any actual or alleged breach or
neglect of duty, error, misstatement or misleading statement, negligence, gross
negligence or act giving rise to strict products liability, except where such
indemnification is expressly prohibited by applicable law or where the conduct
has been determined to constitute willful misconduct or recklessness.
Section 7.04 of the Company's Bylaws provides that the Company may maintain
insurance or use any other arrangement to satisfy or secure its indemnification
obligations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following is a list of exhibits filed as part of this Registration
Statement.
II-2
<PAGE>
Number Exhibit
- ------ -------
5 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (contained in exhibit 5)
99(a) SEI Investments Company Stock Option Plan
99(b) SEI Investments Company 1997 Stock Option Plan
99(c) SEI Investments Company Option Share Deferral Plan
99(d) SEI Investments Company Option Share Deferral Plan for Non-Employee
Directors
99(e) SEI Investments Company Employee Stock Purchase Plan
99(f) SEI Investments Company 1998 Equity Compensation Plan
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
II-3
<PAGE>
(b) The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
--------------
1933, as amended, the Registrant has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oaks, Commonwealth of Pennsylvania on September
18, 1998.
SEI INVESTMENTS COMPANY
By: /s/ Alfred P. West, Jr.
------------------------------------
Alfred P. West, Jr.
Chairman of the Board, Chief Executive Officer,
and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Alfred P. West, Jr. such person's true and lawful
attorney-in-fact and agent, for such person and in such person's name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, including post-effective amendments, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection with such filing, as
fully as such person might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent may lawfully do or cause to
be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alfred P. West, Jr. Chairman of the Board, Chief September 18, 1998
- --------------------------- Executive Officer, and Director
Alfred P. West, Jr.
- --------------------------- President, Chief Operating September 18, 1998
/s/ Henry H. Greer Officer, and Director
- ---------------------------
Henry H. Greer
/s/ Carmen V. Romeo Executive Vice President and September 18, 1998
- --------------------------- Director
Carmen V. Romeo
/s/ Richard B. Lieb Executive Vice President and September 18, 1998
- --------------------------- Director
Richard B. Lieb
/s/ William M. Doran Director September 18, 1998
- ---------------------------
William M. Doran
- --------------------------- Director September 18, 1998
/s/ Henry H. Porter, Jr.
- ---------------------------
Henry H. Porter, Jr.
</TABLE>
<PAGE>
Exhibit Index
-------------
5 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (contained in exhibit 5)
99(a) SEI Investments Company Stock Option Plan
99(b) SEI Investments Company 1997 Stock Option Plan
99(c) SEI Investments Company Option Share Deferral Plan
99(d) SEI Investments Company Option Share Deferral Plan for Non-Employee
Directors
99(e) SEI Investments Company Employee Stock Purchase Plan
99(f) SEI Investments Company 1998 Equity Compensation Plan
<PAGE>
EXHIBIT 5
---------
September 18, 1998
SEI Investments Company
1 Freedom Valley Drive
Oaks, Pennsylvania 19456-1100
Re: SEI Investments Company -- Form S-8 Registration Statement
----------------------------------------------------------
Ladies and Gentlemen:
As your counsel, we have assisted in the preparation of the above-referenced
Registration Statement on Form S-8 (the "Registration Statement") for filing
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended (the "Act"), and the rules and regulations promulgated
thereunder.
The Registration Statement relates to 2,650,000 shares of Common Stock, par
value $.01 per share (the "Common Stock"), of SEI Investments Company (the
"Company"), all of which may be issued pursuant to the Plans (as defined in the
Registration Statement). We have examined copies of the Company's Amended and
Restated Articles of Incorporation, By-Laws, resolutions adopted by the board of
directors and such other documents, and have made such inquiries of the
Company's officers, as we have deemed appropriate. In our examination, we have
assumed the genuineness of all signatures, the authenticity of all items
submitted to us as originals, and the conformity with originals of all items
submitted to us as copies.
Based upon the foregoing, it is our opinion that the Company's Common Stock,
when issued and delivered in accordance with the Plans, will be legally issued,
fully paid and non-assessable.
The opinion set forth above is limited to the laws of the Commonwealth of
Pennsylvania.
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To SEI Investments Company:
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of SEI Investments Company on Form S-8
of our report dated February 6, 1998 included in SEI Investments Company's Form
10-K for the year ended December 31, 1997 and to all references to our firm
included in this Registration Statement.
/s/ Arthur Andersen LLP
Philadelphia, Pennsylvania
September 18, 1998
<PAGE>
Exhibit 99(a)
Amended, Restated and Renewed
as of February 11, 1997
SEI INVESTMENTS COMPANY
STOCK OPTION PLAN
1. Background.
The Board of Directors of SEI Investments Company (formerly known as SEI
Corporation), a Pennsylvania corporation (the "Company"), by resolution dated
January 21, 1981, adopted the Stock Option Plan (the "Plan") providing for the
grant of stock options for the purchase of shares of Non-Voting Common Stock of
the Company, which shares were subsequently converted to Common Stock, par value
$.01 (the "Shares"), to employees of the Company and its subsidiaries. The Plan
was initially approved by the shareholders of the Company on February 9, 1981.
The Plan has been subsequently amended and restated from time to time by all
requisite action of the Board of Directors and shareholders of the Company. The
Plan was again amended and restated by action by the Board of Directors on
February 11, 1997, subject to approval by shareholders of the Company.
2. Purpose of Plan.
The purpose of the Plan is to allow for the issuance thereunder of
Incentive Stock Options and Non-Qualified Options in order to provide an
additional means through which the Company can attract and retain employees and
consultants. The Company believes that the Plan will encourage the participants
to contribute materially to the growth of the Company, thereby benefitting the
Company's shareholders, and will align the economic interests of the
participants with those of the shareholders.
3. Administration of the Plan.
(a) Committee. The Plan shall be administered and interpreted by a Stock
Option Committee (the "Committee"). The Committee shall consist of two or more
persons appointed by the Board of Directors, all of whom shall be "outside
directors" as defined under section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code") and related Treasury regulations and "non-employee
directors" as defined under Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) Committee Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise period, including the criteria for
1
<PAGE>
exercisability and the acceleration of exercisability and (iv) deal with any
other matters arising under the Plan.
(c) Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
4. Shares Subject to the Plan.
(a) Plan Share Limits. The maximum aggregate number of Shares with respect
to which options may be granted from time to time under the Plan (subject to the
provisions of Section 12) shall be 12,304,988 Shares. The maximum aggregate
number of Shares that shall be subject to grants made under the Plan to any
individual during any calendar year shall be 25,000 Shares.
(b) Other Share Requirements. If an option granted under the Plan ceases
to be exercisable in whole or in part by reason of (i) the expiration of the
term of the option; (ii) the cancellation of the option with the consent of the
optionee; (iii) upon or following termination of employment of the optionee in
accordance with Section 10; or (iv) the forfeiture, exchange or surrender of the
option, the Shares which were subject to such option, but to which the option
had not been exercised at the time of termination of the option, shall continue
to be available under the Plan. The Shares to be issued upon exercise of options
granted under the Plan shall be either authorized but unissued Shares or Shares
reacquired by the Company and held in the treasury of the Company, including
Shares purchased by the Company on the open market for purposes of the Plan.
5. Designation of Participants
(a) Eligible Individuals. Employees of the Company, and affiliates of the
Company, shall be eligible to receive options under the Plan. Consultants who
perform services to the Company or any of its affiliates shall be eligible to
participate in the Plan if the consultants render bona fide services and such
services are not in connection with the offer or sale of securities in a
capital-raising transaction. Notwithstanding the foregoing, only employees of
the Company or its subsidiaries shall be eligible to receive Incentive Stock
Options.
2
<PAGE>
(b) Selection of Optionees. From time to time, the Committee shall
designate from such eligible persons those who will receive options and the
number of Shares to be covered by each option.
(c) Rights of Participants. Nothing in the Plan shall entitle any
employee, consultant or other person to any claim or right to be granted an
option under this Plan. Nothing in this Plan, in any option granted pursuant to
this Plan, or in any action taken hereunder shall be construed as conferring on
any individual any rights to continue in the employ (or as a consultant) of the
Company or any of its subsidiaries, or any other employment (or consulting)
rights. Nothing in the Plan or in any option granted pursuant to this Plan shall
in any way interfere with the right of the Company or any of its subsidiaries to
terminate the optionee's employment (or consulting relationship) at any time.
Options may be granted to eligible persons whether or not they hold or have held
options under the Plan or under plans or arrangements previously adopted by the
Company.
(d) Definitions. For the purposes of the Plan, the term "subsidiary" shall
mean any corporation now existing or hereafter organized or acquired by the
Company in an unbroken chain of corporations beginning with the Company if, at
the time of the granting of the option, each of the corporations (including the
Company) other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one or the other corporations, in such chain. The term
"affiliate" shall mean any corporation, partnership or other entity in which the
Company holds, directly or indirectly, fifty percent (50%) or more of the
entity's equity interest.
6. Types of Options.
Options granted under the Plan may be of two types: (a) options intended to
meet the requirements of section 422 of the Code ("Incentive Stock Options") and
(b) options not intended to meet the requirements of section 422 of the Code
("Non-Qualified Options"). The Committee shall have authority and discretion to
grant to an eligible person either Incentive Stock Options, Non-Qualified
Options or both but shall clearly designate the nature of each option at the
time of option grant.
7. Stock Option Agreement.
Each option granted under the Plan shall be subject to the terms and
conditions set forth herein and shall be evidenced by a stock option agreement,
which shall be executed by the Company. The agreement shall contain such terms
and provisions, not inconsistent with the Plan, as shall be determined by the
Committee, including (a) a clear designation of the status of the options
granted thereby; and (b) in the case of Incentive Stock Options such terms as
shall be requisite to cause such options to comply with the provisions of
section 422 of the Code. The Committee shall approve the form and provisions of
each stock option agreement, and any amendment thereto. Incentive Stock Options
and Non-Qualified Options may be granted
3
<PAGE>
simultaneously and subject to a single option agreement, provided that, in no
event shall a Non-Qualified Option be granted in tandem with an Incentive Stock
Option, such that the exercise of one affects the right to exercise the other.
The terms and provisions of such option agreements may vary between optionees
and between different options granted to the same optionee. By accepting any
option granted under the Plan, an optionee will be deemed to have agreed to all
provisions contained in the option agreement.
8. Option Price.
(a) Determination of Option Price. The option price shall be determined by
the Committee and shall be not less than the Fair Market Value (as defined
below) of the Shares at the time the option is granted provided; however, that
the option price of Shares with respect to Incentive Stock Options granted to
any person possessing (at the time of option grant) over ten percent of the
total combined voting power of all classes of stock of the Company and any
parent and subsidiary corporations (such person hereinafter a "control person")
shall be 110% of such Fair Market Value of a Share on the date the Incentive
Stock Option is granted.
(b) Determination of Fair Market Value. For the purposes of this Plan, the
Fair Market Value of the Shares shall mean the average (mean) of the closing bid
and asked prices of the Shares as reported on the relevant date through the
National Association of Securities Dealers Automated Quotation System or, if the
Shares are listed or admitted to trading on the Nasdaq National Market System or
any national securities exchange or if the last reported sale price of such
Shares is generally available, the last reported sale price on such system or
exchange on the relevant date. The Fair Market Value for any day for which
there is no such bid and asked price or last reported sales price shall be the
Fair Market Value of the next preceding day for which there is such a price.
Should the Shares be traded otherwise than on the markets referred to
above, then the Fair Market Value shall be determined by the Committee. If the
Shares are not publicly traded, then the Fair Market Value shall be not less
than the value established for the Shares by an independent appraisal as of a
date not more than twelve months before such value determination by the
Committee.
9. Amount of Incentive Stock Options.
With respect to Incentive Stock Options granted after December 31, 1986, if
the aggregate Fair Market Value (determined as of the time of option grant) of
the Shares with respect to which such Incentive Stock Options first become
exercisable during any calendar year under this Plan and any other plan of the
Company or any parent or subsidiary, exceeds $100,000, then such Incentive Stock
Options, to the extent of such excess, shall be treated for all tax purposes as
Non-Qualified Options.
4
<PAGE>
10. Terms of Options.
The Committee shall have the authority to determine the term of each
option, provided that no Incentive Stock Option granted to a control person
shall be exercisable after the expiration of five (5) years from the date of
option grant and no other option shall be exercisable after the expiration of
ten (10) years from the date of option grant. Subject to the limitation periods
hereinabove set forth, no option, or portion thereof, granted under the Plan
shall vest after the optionee ceases to be employed by (and is employed by
neither) the Company or one of its subsidiaries or affiliates (a "termination of
employment") and all options shall terminate automatically on the earliest to
occur of the expiration of the option term (as described above), or one of the
following events:
a. Upon the expiration of ten (10) days after notice by the Company
pursuant to Section 12(d) of the sale of all or substantially all of its assets;
b. Thirty (30) days after a termination of employment (or within such
other period of time as may be specified by the Committee) for any reason other
than death, retirement or disability;
c. One year from the date of a termination of employment (or within such
other period of time as may be specified by the Committee) by reason of the
optionee's death;
d. Three months from the date of a termination of employment (or within
such other period of time as may be specified by the Committee) by reason of the
optionee's disability or retirement; or
e. As of the date of a termination of employment by reason of a
termination for cause.
For purpose of determining whether or not a termination of employment has
occurred, (i) the transfer of an optionee among the Company or any subsidiary or
affiliate shall not be deemed a termination of employment, (ii) the sale of any
subsidiary or affiliate to an unaffiliated party shall be deemed a termination
of employment of any optionee who continues to be employed by such subsidiary or
affiliate subsequent to such sale, (iii) a consultant shall be deemed to have
incurred a termination of employment at the time he is no longer required to
perform services for the Company or any subsidiary or affiliate, as determined
by the Committee, (iv) an optionee shall be deemed to have been terminated for
cause if the Committee finds that the optionee has breached his employment or
service contract with the Company, any subsidiary or affiliate, or has been
engaged in disloyalty to the Company, any subsidiary or affiliate, including,
without limitation, fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his employment or service, or has disclosed trade
secrets or confidential information of the Company, any subsidiary or affiliate
to persons not entitled to receive such information, and (v)
5
<PAGE>
an optionee shall be deemed to be disabled if the optionee becomes disabled
within the meaning of section 22(e)(3) of the Code. Notwithstanding the
foregoing, with respect to an option granted to a consultant, the Committee, in
its sole discretion, shall establish the provisions concerning termination of
such option at the time of option grant. In the absence of such establishment,
the provisions of (a) through (e) above shall apply.
11. Exercise of Options.
(a) Exercisability of Options. The time or times at which or during which
options granted under this Plan may be exercised, and any conditions pertaining
to such exercise, shall be determined by the Committee and specified in the
stock option agreement or an amendment to the stock option agreement; provided
however, that no Incentive Stock Option granted on or before December 31, 1986
shall become exercisable while the optionee has outstanding any previously
granted incentive stock option (as defined in section 422 of the Code) to
purchase stock in the Company, in a corporation that (at the time of option
grant) was a parent or subsidiary of the Company or in a predecessor corporation
of any of such corporations.
(b) Transferability of Options.
(i) Nontransferability of Options. Except as provided below, no
option granted under this Plan shall be assignable or otherwise transferable
except by will or the laws of descent and distribution or, with respect to Non-
Qualified Options, if permitted in any specific case by the Committee, pursuant
to a domestic relations order (as defined under the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the regulations
thereunder). Any option shall be exercisable solely by the optionee during the
lifetime of the optionee and, after the death of the optionee, an option shall
be exercisable (subject to the provision of Section 10) solely by either the
duly qualified personal representative or representatives of the optionee, or
the person or persons who acquire the right to exercise such option by will or
the laws of descent and distribution and such person or persons furnish proof
satisfactory to the Company of his or their right to receive the option under
the optionee's will or under the applicable laws of descent and distribution.
(ii) Transfer of Non-Qualified Options. Notwithstanding the
foregoing, the Committee may provide, in a stock option agreement, that an
optionee may transfer Non-Qualified Options to family members or other persons
or entities according to such terms as the Committee may determine; provided
that the optionee receives no consideration for the transfer of a Non-Qualified
Option and the transferred Option shall continue to be subject to the same terms
and conditions as were applicable to the Option immediately before the transfer.
(c) Payment of Option Price. The purchase price of the Shares as to which
an option is exercised shall be paid in full in cash or in any other manner
approved by the Committee which may include, but shall not be limited to,
payment by surrender of unrestricted Shares owned by the optionee (including
Shares acquired in connection with the exercise of the option,
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subject to such restrictions as the Committee deems appropriate) and having a
Fair Market Value on the date of exercise equal to the purchase price, or
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. The optionee shall pay the option price and the
amount of any withholding tax due (pursuant to Subsection (d)) at the time of
exercise.
(d) Withholding of Taxes.
(i) Required Withholding. All options under the Plan shall be subject
to applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the optionee or other person receiving
such Shares to pay to the Company the amount of any such taxes that the Company
is required to withhold with respect to the exercise of such options, or the
Company may deduct from other wages paid by the Company the amount of any
withholding taxes due with respect to such exercise.
(ii) Withholding Shares. If the Company is required to withhold any
taxes arising from an exercise of options under the Plan, the Treasurer of the
Company may, in such person's discretion, withhold delivery of Shares issuable
upon exercise of an option in an amount (valued at the Fair Market Value of such
Shares on the date of exercise of the option) sufficient to cover the Company's
withholding obligation with respect to such taxes.
(e) Notice of Exercise. Notice in writing shall be given by the optionee
to the Treasurer of the Company, or such other person as may be designated from
time to time by the Treasurer, on any day on which the offices of the Company
are generally open for the conduct of business, which notice shall indicate the
exercise of any option and specify the number of Shares desired at the option
price.
(f) Limitations on Issuance of Shares. The obligation of the Company to
deliver Shares upon such exercise shall be subject to all applicable laws,
rules, regulations, and such approvals by governmental agencies as may be deemed
appropriate by the Committee, including, among others, such steps as counsel for
the Company shall be deem necessary or appropriate to comply with requirements
of relevant securities laws. Such obligation shall also be subject to the
condition that the Shares reserved for issuance upon the exercise of options
granted under the Plan shall have been duly listed on any national securities
exchange which then constitutes the principal trading market for the Shares.
12. Capital Change of the Company.
(a) Adjustments. In the event that there is a change in, reclassification
of, subdivision of, combination of, split-up or spin-off with respect to, stock
dividend on, or exchange of stock of the Company for the outstanding Shares of
the Company, the maximum aggregate number and class of Shares as to which
options may be granted under the Plan, the maximum aggregate number of Shares
that any individual participating in the Plan may be granted in any calendar
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year, and the number and class of Shares as to which each outstanding option and
the option price may (but need not) be adjusted by the Committee in any manner
in which the Committee, in is absolute discretion, deems appropriate. Such
adjustment to Shares subject to the Plan or to Shares subject to options under
the Plan shall not in any event take place with respect to any dividend payable
in Shares of the Company, unless such dividend would result in either (i) an
increase of ten percent (10%) or more in the outstanding Shares of the Company
since the adoption of the Plan or the grant of the subject option thereunder, as
the case may be; or (ii) an increase in any one transaction of five percent (5%)
or more in the outstanding Shares.
(b) Consolidation or Merger of the Company. If the Company shall be
consolidated or merged with another corporation, each optionee who has an
outstanding option hereunder shall, at the time for issuance of Shares upon
exercise or partial exercise of such option, be entitled to receive the same
number and kind of shares, or the same amount of other property, cash, or
securities as the optionee would have been entitled to receive upon the
happening of such consolidation or merger if the optionee had been, immediately
prior to such event, the holder of the number of Shares to which the optionee
has an outstanding option hereunder (to the extent of such exercise or partial
exercise) adjusted in the manner provided in this Section, or, if another
corporation shall be the survivor, such other corporation shall substitute
therefor a substantially equivalent number and kind of shares of stock or other
property, cash, or securities of such other corporation. Notwithstanding
anything in the Plan to the contrary, in the event of a consolidation or merger
described above, the Committee shall not have the right to take any actions
described in the Plan that would make the consolidation or merger ineligible for
pooling of interests accounting treatment or that would make the consolidation
or merger ineligible for desired tax treatment if, in the absence of such right,
the consolidation or merger would qualify for such treatment and the Company
intends to use such treatment with respect to the consolidation or merger.
(c) Further Adjustments. In the event that there shall be any change,
other then as specified above, in the number or kind of the outstanding Shares
or of any stock or other securities into which such Shares shall have been
changed or for which they shall have been exchanged, or in the event of a
dividend to holders of the Shares payable other than in cash or stock of the
Company, then if the Committee shall determine that such change equitably
requires an adjustment in the number or kind of Shares theretofore appropriated
for the purposes of the Plan but not yet covered by an option, an adjustment in
the number or kind of Shares that may be granted to any individual during any
calendar year under the limit set forth in Section 4 of the Plan, or an
adjustment with respect to the number, price or kind of Shares then subject to
an option or options, such adjustment shall be made and shall be effective and
binding for all purposes of the Plan.
(d) Sale of Substantially all Assets. Notwithstanding the above, if all or
substantially all of the assets of the Company shall be sold or exchanged
(otherwise than by merger or consolidation), each optionee shall have the right
to exercise such option in full, to the extent that
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it has not previously been exercised within ten (10) days after the notice by
the Company of the right to exercise, and any such option not so exercised shall
lapse.
13. Termination and Amendment.
(a) Termination and Amendment of Plan. Unless the Plan shall theretofore
have been terminated as hereinafter provided, it shall terminate on, and no
option shall be granted thereunder after, January 1, 2001. The Board of
Directors may also terminate the Plan or make such modifications or amendments
thereof as it shall deem advisable; provided, however, that the Board of
Directors shall not, amend the Plan without further approval by the holders of a
majority of the outstanding common stock of the Company if such approval is
required by section 162(m) of the Code or such approval is required by section
422 of the Code.
(b) Termination and Amendment of Outstanding Options. The Committee may
authorize amendments of outstanding options including without limitation the
reduction of the option prices specified therein (or the granting of new options
at lower prices upon the cancellation of outstanding options), so long as all
options granted hereunder outstanding at any one time shall not call for
issuance of more shares of common stock than those provided in Section 4 hereof
and so long as the provisions of any amended option would have been permissible
under the Plan if such option had been originally granted as of the date of such
amendment with such amended terms. No termination, modification, or amendment
of this Plan may adversely affect any then outstanding option under such Plan
without the consent of the person to whom such option has been granted. Whether
or not the Plan has terminated, an outstanding option may be terminated or
amended under Section 18(c) or may be amended by agreement of the Company and
the optionee consistent with the Plan.
(c) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
14. Funding of the Plan.
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of grants under this Plan. In no event shall
interest be paid or accrued on any grant.
15. No Fractional Shares
No fractional Shares shall be issued or delivered pursuant to the Plan or
any option. The Committee shall determine whether cash, other awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
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16. Headings.
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
17. Effective Date.
Subject to the approval of the Company's shareholders, the Plan, as amended
and restated, shall be effective on February 11, 1997.
18. Miscellaneous.
(a) Grants in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including options to employees thereof
who become employees of the Company, or for other proper corporate purposes, or
(ii) limit the right of the Company to grant stock options or make other awards
outside of this Plan. Without limiting the foregoing, the Committee may make a
grant to an employee of another corporation who becomes an employee by reason of
a corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or any of its subsidiaries
in substitution for a stock option or restricted stock grant made by such
corporation. The terms and conditions of the substitute grants may vary from
the terms and conditions required by the Plan and from those of the substituted
stock incentives. The Committee shall prescribe the provisions of the
substitute grants.
(b) Rights of an Optionee. No optionee shall have any rights of a
shareholder with respect to any Shares unless and until the optionee has
exercised the option with respect to such Shares and has paid the full option
price therefor.
(c) Compliance with Law. The Plan and the exercise of options shall be
subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required. With respect to persons subject to section
16 of the Exchange Act, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule 16b-3
or its successors under the Exchange Act. The Committee may revoke any grant if
it is contrary to law or modify a grant to bring it into compliance with any
valid and mandatory government regulation. The Committee may also adopt rules
regarding the withholding of taxes on payments to optionees. The Committee may,
in its sole discretion, agree to limit its authority under this Section.
(d) Governing Law. The validity, construction, interpretation and effect
of the Plan and stock option agreements issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the Commonwealth of
Pennsylvania, to the extent such law is not superseded by or inconsistent with
Federal law.
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Exhibit 99(b)
SEI INVESTMENTS COMPANY
1997 STOCK OPTION PLAN
1. Background.
The Board of Directors of SEI Investments Company, a Pennsylvania
corporation (the "Company"), by resolution dated December 4, 1997, adopted the
1997 Stock Option Plan (the "Plan") providing for the grant of stock options for
the purchase of shares of Common Stock, par value $.01 (the "Shares"), to
eligible employees of and consultants to the Company and its affiliates, and
directors of the Company who are not also employees of the Company or any
affiliate of the Company ("Non-Employee Directors").
2. Purpose of Plan.
The purpose of the Plan is to allow for the issuance thereunder of stock
options in order to provide an additional means through which the Company can
attract and retain employees and independent Non-Employee Directors. The
Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefitting the Company's
shareholders, and will align the economic interests of the participants with
those of the shareholders.
3. Administration of the Plan.
(a) Committee. The Plan shall be administered and interpreted by a Stock
Option Committee (the "Committee"). The Committee shall consist of two or more
persons appointed by the Board of Directors.
(b) Committee Authority. Subject to the further terms and conditions of
the Plan, the Committee shall have the sole authority to (i) determine the
individuals to whom grants shall be made under the Plan, (ii) determine the size
and terms of the grants to be made to each such individual, (iii) determine the
time when the grants will be made and the duration of any applicable exercise
period, including the criteria for exercisability and the acceleration of
exercisability and (iv) deal with any other matters arising under the Plan.
(c) Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
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4. Shares Subject to the Plan.
(a) Plan Share Limits. The maximum aggregate number of Shares that may be
issued under the Plan with respect to options granted from time to time under
the Plan (subject to the provisions of Section 12) shall be 400,000 Shares. The
maximum aggregate number of Shares that may be issued with respect to options
granted made under the Plan to directors eligible hereunder shall be 25,000.
(b) Other Share Requirements. If an option granted under the Plan ceases
to be exercisable in whole or in part by reason of (i) the expiration of the
term of the option; (ii) the cancellation of the option with the consent of the
optionee; (iii) upon or following termination of employment of the optionee in
accordance with Section 9; or (iv) the forfeiture, exchange or surrender of the
option, the Shares which were subject to such option, but to which the option
had not been exercised at the time of termination of the option, shall continue
to be available under the Plan. The Shares to be issued upon exercise of
options granted under the Plan shall be either authorized but unissued Shares or
Shares reacquired by the Company and held in the treasury of the Company,
including Shares purchased by the Company on the open market for purposes of the
Plan.
5. Designation of Participants
(a) Eligible Individuals. Employees of the Company and affiliates of the
Company, other than any employees who are officers or directors of the Company
or an affiliate of the Company, shall be eligible to receive options under the
Plan. Consultants who perform services to the Company or any of its affiliates
shall be eligible to participate in the Plan if the consultants render bona fide
services and such services are not in connection with the offer or sale of
securities in a capital-raising transaction. Non-Employee Directors shall be
eligible to receive options under the Plan only in accordance with Section 11.
(b) Selection of Optionees. From time to time, the Committee shall
designate from such eligible persons those who will receive options and the
number of Shares to be covered by each option.
(c) Rights of Participants. Nothing in the Plan shall entitle any
employee, consultant, Non-Employee Director or other person to any claim or
right to be granted an option under this Plan. Nothing in this Plan, in any
option granted pursuant to this Plan, or in any action taken hereunder shall be
construed as conferring on any individual any rights to continue in the employ
or as a consultant or Non-Employee Director of the Company or any of its
affiliates, or any other employment, consulting or similar rights. Nothing in
the Plan or in any option granted pursuant to this Plan shall in any way
interfere with the right of the Company or any of its affiliates to terminate
the optionee's employment, consulting relationship or directorship, at any time.
Options may be granted to eligible persons whether or not they hold or have held
options under the Plan or under any other plan or arrangement of the Company or
any affiliate of the Company.
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(d) Definitions. For the purposes of the Plan, the term "affiliate" shall
mean any corporation, partnership or other entity in which the Company holds,
directly or indirectly, fifty percent (50%) or more of the entity's equity
interest. The term "director" shall mean a member of the Board of Directors of
the Company.
6. Type of Options.
Options granted under the Plan shall consist solely of options not intended
to meet the requirements of section 422 of the Code.
7. Stock Option Agreement.
Each option granted under the Plan shall be subject to the terms and
conditions set forth herein and shall be evidenced by a stock option agreement,
which shall be executed by the Company. The agreement shall contain such terms
and provisions, not inconsistent with the Plan, as shall be determined by the
Committee. The Committee shall approve the form and provisions of each stock
option agreement, and any amendment thereto. The terms and provisions of such
option agreements may vary between optionees and between different options
granted to the same optionee. By accepting any option granted under the Plan, an
optionee will be deemed to have agreed to all provisions contained in the option
agreement.
8. Option Price.
(a) Determination of Option Price. The option price shall be determined by
the Committee and shall be not less than the Fair Market Value (as defined
below) of the Shares at the time the option is granted.
(b) Determination of Fair Market Value. For the purposes of this Plan, the
Fair Market Value of the Shares shall mean the average (mean) of the closing bid
and asked prices of the Shares as reported on the relevant date through the
National Association of Securities Dealers Automated Quotation System or, if the
Shares are listed or admitted to trading on the Nasdaq National Market System or
any national securities exchange or if the last reported sale price of such
Shares is generally available, the last reported sale price on such system or
exchange on the relevant date. The Fair Market Value for any day for which
there is no such bid and asked price or last reported sales price shall be the
Fair Market Value of the next preceding day for which there is such a price.
Should the Shares be traded otherwise than on the markets referred to
above, then the Fair Market Value shall be determined by the Committee. If the
Shares are not publicly traded, then the Fair Market Value shall be not less
than the value established for the Shares by an independent appraisal as of a
date not more than twelve months before such value determination by the
Committee.
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9. Terms of Options.
The Committee shall have the authority to determine the term of each
option, provided that no option shall be exercisable after the expiration of ten
(10) years from the date of option grant. Subject to the limitation periods
hereinabove set forth, no option, or portion thereof, granted under the Plan
shall vest after the optionee ceases to be employed by (and is employed by
neither) the Company or one of its affiliates (a "termination of employment")
and all options shall terminate automatically on the earliest to occur of the
expiration of the option term (as described above), or one of the following
events:
a. Upon the expiration of ten (10) days after notice by the Company
pursuant to Section 12(d) of the sale of all or substantially all of its assets;
b. Thirty (30) days after a termination of employment (or within such
other period of time as may be specified by the Committee) for any reason other
than death, retirement or disability;
c. One year from the date of a termination of employment (or within such
other period of time as may be specified by the Committee) by reason of the
optionee's death;
d. Three months from the date of a termination of employment (or within
such other period of time as may be specified by the Committee) by reason of the
optionee's disability or retirement; or
e. As of the date of a termination of employment by reason of a
termination for cause.
For purpose of determining whether or not a termination of employment has
occurred, (i) the transfer of an optionee between the Company and any affiliate
or between affiliates shall not be deemed a termination of employment, (ii) the
sale of any affiliate to an unaffiliated party, or the consummation of any other
transaction whereby an affiliate ceases to be an affiliate of the Company, shall
be deemed a termination of employment of any optionee who continues to be
employed by such affiliate subsequent to such sale or transaction, (iii) a
consultant shall be deemed to have incurred a termination of employment at the
time he is no longer required to perform services for the Company or any
affiliate, as determined by the Committee, (iv) an optionee shall be deemed to
have been terminated for cause if the Committee finds that the optionee has
breached his employment or service contract with the Company or an affiliate, or
has been engaged in disloyalty to the Company or an affiliate, including,
without limitation, fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his employment or service, or has disclosed trade
secrets or confidential information of the Company or an affiliate to persons
not entitled to receive such information, and (v) an optionee shall be deemed
to be disabled if the optionee becomes disabled within the meaning of section
22(e)(3) of the Code. Notwithstanding the foregoing, with respect to an option
granted to a consultant, the
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Committee, in its sole discretion, shall establish the provisions concerning
termination of such option at the time of option grant. In the absence of such
establishment, the provisions of (a) through (e) above shall apply.
10. Exercise of Options.
(a) Exercisability of Options. The time or times at which or during which
options granted under this Plan may be exercised, and any conditions pertaining
to such exercise, shall be determined by the Committee and specified in the
stock option agreement or an amendment to the stock option agreement.
(b) Transferability of Options.
(i) Nontransferability of Options. Except as provided below, no
option granted under this Plan shall be assignable or otherwise transferable
except by will or the laws of descent and distribution or if permitted in any
specific case by the Committee, pursuant to a domestic relations order (as
defined under the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the regulations thereunder). Any option shall be
exercisable solely by the optionee during the lifetime of the optionee and,
after the death of the optionee, an option shall be exercisable (subject to the
provision of Section 9) solely by either the duly qualified personal
representative or representatives of the optionee, or the person or persons who
acquire the right to exercise such option by will or the laws of descent and
distribution and such person or persons furnish proof satisfactory to the
Company of his or their right to receive the option under the optionee's will or
under the applicable laws of descent and distribution.
(ii) Family Transfers. Notwithstanding the foregoing, the Committee
may provide, in a stock option agreement, that an optionee may transfer options
to family members or other persons or entities according to such terms as the
Committee may determine; provided that the optionee receives no consideration
for the transfer of the option and the transferred option shall continue to be
subject to the same terms and conditions as were applicable to the option
immediately before the transfer.
(c) Payment of Option Price. The purchase price of the Shares as to which
an option is exercised shall be paid in full in cash or in any other manner
approved by the Committee which may include, but shall not be limited to,
payment by surrender of unrestricted Shares owned by the optionee (including
Shares acquired in connection with the exercise of the option, subject to such
restrictions as the Committee deems appropriate) and having a Fair Market Value
on the date of exercise equal to the purchase price, or payment through a broker
in accordance with procedures permitted by Regulation T of the Federal Reserve
Board. The optionee shall pay the option price and the amount of any
withholding tax due (pursuant to Subsection (d)) at the time of exercise.
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(d) Withholding of Taxes.
(i) Required Withholding. All options under the Plan shall be
subject to applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the optionee or other person receiving
such Shares to pay to the Company the amount of any such taxes that the Company
is required to withhold with respect to the exercise of such options, or the
Company may deduct from other wages paid by the Company the amount of any
withholding taxes due with respect to such exercise.
(ii) Withholding Shares. If the Company is required to withhold any
taxes arising from an exercise of options under the Plan, the Treasurer of the
Company may, in such person's discretion, withhold delivery of Shares issuable
upon exercise of an option in an amount (valued at the Fair Market Value of such
Shares on the date of exercise of the option) sufficient to cover the Company's
withholding obligation with respect to such taxes.
(e) Notice of Exercise. Notice in writing shall be given by the optionee
to the Treasurer of the Company, or such other person as may be designated from
time to time by the Treasurer, on any day on which the offices of the Company
are generally open for the conduct of business, which notice shall indicate the
exercise of any option and specify the number of Shares desired at the option
price.
(f) Limitations on Issuance of Shares. The obligation of the Company to
deliver Shares upon such exercise shall be subject to all applicable laws,
rules, regulations, and such approvals by governmental agencies as may be deemed
appropriate by the Committee, including, among others, such steps as counsel for
the Company shall be deem necessary or appropriate to comply with requirements
of relevant securities laws. Such obligation shall also be subject to the
condition that the Shares reserved for issuance upon the exercise of options
granted under the Plan shall have been duly listed on any national securities
exchange which then constitutes the principal trading market for the Shares.
11. Formula Option Grants to Non-Employee Directors.
A Non-Employee Director shall be entitled to receive options under the Plan
only in accordance with this Section 11.
(a) Initial Grant. Each Non-Employee Director who first becomes a member
of the Board of Directors of the Company after the effective date of this Plan
(as specified in Section 17) shall receive a grant of an option to purchase
8,000 Shares on the date as of which he or she first becomes a member of the
Board or at such other proximate time as the Committee may determine.
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(b) Annual Grants. Each Non-Employee Director shall receive an annual
grant of an option to purchase 4,000 Shares; provided that such Non-Employee
Director qualifies as such on the date of grant. The date of grant of each such
annual grant shall be December 31, the date of any year end grants to employees
under this Plan or such other proximate time as the Committee shall determine.
(c) Option Price. The option price of the Shares subject to an option
granted under this Section 11 shall be equal to the Fair Market Value of the
Shares on the date of grant.
(d) Option Term and Exercisability. The term of each option granted
pursuant to this Section 11 shall be ten years. Options granted under this
Section 11 shall become exercisable in four equal installments of whole number
of shares on the first, second, third and fourth anniversaries of the date of
grant, unless otherwise determined by the Committee. No option, or portion
thereof, granted under this Section 11 shall vest or become exercisable after
the optionee ceases to be a Non-Employee Director and all options shall
terminate automatically on the earliest to occur of the expiration of the option
term (as described above), or one of the following events:
(1) Upon expiration of ten (10) days after notice by the Company
pursuant to Section 12(d) of the sale of all or substantially all of its
assets;
(2) Thirty (30) days after the date the Non-Employee Director ceases
to be a Non-Employee Director for any reason other than death, disability
or the employment of the Non-Employee Director by the Company or an
affiliate of the Company; or
(3) One year after the date the Non-Employee Director ceases to be a
Non-Employee Director as a result of death, disability or the Non-Employee
Director's employment by the Company or an affiliate of the Company.
(e) Applicability of Plan Provisions. Except as otherwise provided in this
Section 11, options granted to Non-Employee Directors shall be subject to the
provisions of this Plan applicable to options granted to other persons.
(f) Administration. Except to the extent provided herein, the provisions
of this Section 11 are intended to operate automatically and not require
administration. To the extent that any administrative determinations are
required, any determinations with respect to the provisions of this Section 11
shall be made by the Committee. If at any time there are not sufficient Shares
available under the Plan to permit a grant as described in this Section 11, the
Grant shall be reduced pro rata (to zero, if necessary) so as not to exceed the
number of Shares then available under the Plan.
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12. Capital Change of the Company.
(a) Adjustments. In the event that there is a change in, reclassification
of, subdivision of, combination of, split-up or spin-off with respect to, stock
dividend on, or exchange of stock of the Company for the outstanding Shares of
the Company, the maximum aggregate number and class of Shares as to which
options may be granted under the Plan, but not the maximum aggregate number of
Shares that may be subject to grants to Non-Employee Directors, and the number
and class of Shares subject to each outstanding option and the option price
pertaining to such Shares, may (but need not) be adjusted by the Committee in
any manner in which the Committee, in is absolute discretion, deems appropriate.
Such adjustment to Shares that may be subject to options granted under the Plan
or to outstanding Shares subject to options under the Plan shall not in any
event take place with respect to any dividend payable in Shares of the Company,
unless such dividend would result in either (i) an increase of ten percent (10%)
or more in the outstanding Shares of the Company since the adoption of the Plan
or the grant of the subject option thereunder, as the case may be; or (ii) an
increase in any one transaction of five percent (5%) or more in the outstanding
Shares.
(b) Consolidation or Merger of the Company. If the Company shall be
consolidated or merged with another corporation, each optionee who has an
outstanding option hereunder shall, at the time for issuance of Shares upon
exercise or partial exercise of such option, be entitled to receive the same
number and kind of shares, or the same amount of other property, cash, or
securities as the optionee would have been entitled to receive upon the
happening of such consolidation or merger if the optionee had been, immediately
prior to such event, the holder of the number of Shares to which the optionee
has an outstanding option hereunder (to the extent of such exercise or partial
exercise) adjusted in the manner provided in this Section, or, if another
corporation shall be the survivor, such other corporation shall substitute
therefor a substantially equivalent number and kind of shares of stock or other
property, cash, or securities of such other corporation. Notwithstanding
anything in the Plan to the contrary, in the event of a consolidation or merger
described above, the Committee shall not have the right to take any actions
described in the Plan that would make the consolidation or merger ineligible for
pooling of interests accounting treatment or that would make the consolidation
or merger ineligible for desired tax treatment if, in the absence of such right,
the consolidation or merger would qualify for such treatment and the Company
intends to use such treatment with respect to the consolidation or merger.
(c) Further Adjustments. In the event that there shall be any change,
other then as specified above, in the number or kind of the outstanding Shares
or of any stock or other securities into which such Shares shall have been
changed or for which they shall have been exchanged, or in the event of a
dividend to holders of the Shares payable other than in cash or stock of the
Company, then if the Committee shall determine that such change equitably
requires an adjustment in the number or kind of Shares available for grants
under the Plan (other than grants to Non-Employee Directors) but not yet covered
by an option, or an adjustment with
8
<PAGE>
respect to the number, price or kind of Shares then subject to an option or
options, such adjustment shall be made and shall be effective and binding for
all purposes of the Plan.
(d) Sale of Substantially all Assets. Notwithstanding the above, if all or
substantially all of the assets of the Company shall be sold or exchanged
(otherwise than by merger or consolidation), each optionee shall have the right
to exercise such option in full, to the extent that it has not previously been
exercised within ten (10) days after the notice by the Company of the right to
exercise, and any such option not so exercised shall lapse.
13. Termination and Amendment.
(a) Termination and Amendment of Plan. Unless the Plan shall theretofore
have been terminated as hereinafter provided, it shall terminate on, and no
option shall be granted thereunder after, the second anniversary of the
effective date of the Plan (as specified in Section 17). The Board of Directors,
in its sole discretion, may, at any time and from time to time, terminate the
Plan or make such modifications or amendments thereof as it shall deem
advisable.
(b) Termination and Amendment of Outstanding Options. The Committee may
authorize amendments of outstanding options including without limitation the
reduction of the option prices specified therein (or the granting of new options
at lower prices upon the cancellation of outstanding options), so long as all
options granted hereunder outstanding at any one time shall not call for
issuance of more Shares than those provided in Section 4 and so long as the
provisions of any amended option would have been permissible under the Plan if
such option had been originally granted as of the date of such amendment with
such amended terms. No termination, modification, or amendment of this Plan may
adversely affect any then outstanding option under such Plan without the consent
of the person to whom such option has been granted. Whether or not the Plan has
terminated, an outstanding option may be terminated or amended under Section
18(c) or may be amended by agreement of the Company and the optionee consistent
with the Plan.
(c) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
14. Funding of the Plan.
This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of grants under this Plan. In no event shall interest be paid
or accrued on any grant.
9
<PAGE>
15. No Fractional Shares
No fractional Shares shall be issued or delivered pursuant to the Plan or
any option. The Committee shall determine whether cash, other awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
16. Headings.
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
17. Effective Date.
The Plan shall be effective on December 4, 1997, the date of its adoption
by the Board of Directors of the Company.
18. Miscellaneous.
(a) Grants in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including options to employees thereof
who become employees of the Company, or for other proper corporate purposes, or
(ii) limit the right of the Company to grant stock options or make other awards
outside of this Plan. Without limiting the foregoing, the Committee may make a
grant to an employee of another corporation who becomes an employee by reason of
a corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or any of its subsidiaries
in substitution for a stock option or restricted stock grant made by such
corporation. The terms and conditions of the substitute grants may vary from
the terms and conditions required by the Plan and from those of the substituted
stock incentives. The Committee shall prescribe the provisions of the
substitute grants.
(b) Rights of an Optionee. No optionee shall have any rights of a
shareholder with respect to any Shares unless and until the optionee has
exercised the option with respect to such Shares, has paid the full option price
therefor, and the Shares have been issued to the optionee on the books of the
Company.
(c) Compliance with Law. The Plan and the exercise of options shall be
subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required. With respect to persons subject to section
16 of the Exchange Act, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule
10
<PAGE>
16b-3 or its successors under the Exchange Act. The Committee may revoke any
grant if it is contrary to law or modify a grant to bring it into compliance
with any valid and mandatory government regulation. The Committee may also adopt
rules regarding the withholding of taxes on payments to optionees. The Committee
may, in its sole discretion, agree to limit its authority under this Section.
(d) Governing Law. The validity, construction, interpretation and effect
of the Plan and stock option agreements issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the Commonwealth of
Pennsylvania, to the extent such law is not superseded by or inconsistent with
Federal law.
11
<PAGE>
Exhibit 99(c)
SEI INVESTMENTS COMPANY
OPTION SHARE DEFERRAL PLAN
(EFFECTIVE DECEMBER 1, 1997)
<PAGE>
SEI INVESTMENTS COMPANY
OPTION SHARE DEFERRAL PLAN
--------------------------
In recognition of the services provided to SEI Investments Company (the
"Company") by certain of its officers and other key management and highly
compensated employees, the Company has established the SEI Investments Company
Option Share Deferral Plan (the "Plan") to offer such employees the opportunity
to defer receipt of the "profit shares," as defined herein, when they exercise
options under the Company's Stock Option Plan. The Plan shall be effective,
December 1, 1997, under the terms and conditions hereinafter set forth.
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Article 1 Definitions and Construction....................................... 1
Article 2 Participant Deferrals and Accounts................................. 3
Article 3 Distributions to Participants...................................... 4
Article 4 Death Benefits..................................................... 6
Article 5 Vesting............................................................ 6
Article 6 Nature of Company's Obligation..................................... 6
Article 7 Administration..................................................... 7
Article 8 Amendment and Termination.......................................... 8
Article 9 Miscellaneous...................................................... 8
</TABLE>
<PAGE>
ARTICLE 1
DEFINITIONS AND CONSTRUCTION
----------------------------
Sec. 1.01 DEFINITIONS. Whenever used in this Plan:
-----------
"ACCOUNT" means entries maintained in the records of the Company which
reflect the number of Profit Shares deferred by a Participant pursuant to
Section 2.01 or which otherwise stand to the credit of the Participant under the
Plan.
"AFFILIATE" means any corporation, partnership or other entity in
which the Company holds, directly or indirectly, fifty percent (50%) or more of
the entity's equity interest.
"BENEFICIARY" means any individual or entity designated by a
Participant pursuant to Section 4.02 to receive death benefits described in
Section 4.01 subsequent to the Participant's death.
"BOARD" means the Board of Directors or other governing body of the
Company.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar nature and purpose.
"COMMON STOCK" means shares of Common Stock, par value $.01 per share,
of the Company.
"COMPANY" means SEI Investments Company or any successor thereto.
"DEFERRAL ELECTION FORM" means the form provided to Participants by
the Plan Administrator on which the Participants elect (a) to defer Profit
Shares in accordance with Section 2.01, (b) to have cash dividends payable with
respect to Common Stock credited to his or her Account in the form of additional
Profit Shares or paid in cash, in accordance with Section 2.02, and (c) the time
of distribution of Profit Shares credited to his or her Account in accordance
with Section 3.01.
"EFFECTIVE DATE" means December 1, 1997.
"ELIGIBLE EMPLOYEE" means an Employee who (a) is a participant in the
Stock Option Plan, and (b) is designated and approved for participation in the
Plan by the Plan Administrator, in its sole discretion.
"EMPLOYEE" means any individual employed by the Company (as determined
in accordance with the personnel policies and practices of the Company).
-1-
<PAGE>
"FAIR MARKET VALUE" means the fair market value of Common Stock as
determined by the Plan Administrator in accordance with the rules established
under the Stock Option Plan for making such determination.
"HARDSHIP" means an unforeseeable financial emergency that is an
unexpected need for cash arising from an illness, casualty loss, sudden
financial reversal, or other such unforeseeable occurrence.
"OPTION SHARE DEFERRAL" means a deferral of Profit Shares by a
Participant pursuant to Section 2.01 upon exercise of a nonqualified stock
option under the Stock Option Plan.
"PARTICIPANT" means (a) any Eligible Employee who makes an Option
Share Deferral pursuant to Section 2.01, or (b) any former Eligible Employee who
has a balance in his or her Account greater than zero which has not been fully
distributed pursuant to Article 3 or 4.
"PLAN" means this SEI Investments Company Option Share Deferral Plan.
"PLAN ADMINISTRATOR" means the individual or committee designated as
the administrator of the Plan by the Board or its designee, or, if such position
is vacant, the Company.
"PLAN YEAR" means the calendar year.
"PROFIT SHARES" means with respect to an exercise of an option under
the Stock Option Plan, a number of shares of Common Stock (rounded to the
nearest one-one hundredth of a share) equal to (a) the excess of the Fair Market
Value per share of Common Stock at the date of exercise multiplied by the number
of shares covered by the option exercise over the aggregate exercise price of
the shares so purchased, divided by (b) the Fair Market Value per share at the
date of exercise.
"STOCK OPTION PLAN" means the SEI Investments Company Stock Option
Plan or any successor thereto.
"TERMINATION FROM EMPLOYMENT" means, for any Participant, his
termination from employment for any reason other than death, including
retirement, disability, discharge or any absence that causes him to cease to be
an employee of the Company and any affiliates.
Sec. 1.02 GENDER AND NUMBER. The masculine pronoun shall include
-----------------
the feminine; the singular shall include the plural; and vice versa.
-2-
<PAGE>
ARTICLE 2
PARTICIPANT DEFERRALS AND ACCOUNTS
----------------------------------
Sec. 2.01 OPTION SHARE DEFERRALS.
----------------------
(a) An Eligible Employee may irrevocably elect on the Deferral
Election Form to defer receipt of all or a portion of the Profit Shares pursuant
to the exercise of a nonqualified stock option under the Stock Option Plan for a
Plan Year, subject to such rules and procedures as the Plan Administrator deems
appropriate. Such Deferral Election Form must be provided to the Plan
Administrator by November 30 of the calendar year prior to the beginning of the
Plan Year in which the options are exercised; at any time on or before provided,
however, that such Deferral Election Form may be provided to the Administrator
at any time on or before December 31, 1997 for deferrals to be made during the
Plan Year beginning January 1, 1998. Any election hereunder shall apply only to
the extent that payment of the exercise price for the option to which the
election relates is satisfied by surrender (including a constructive surrender)
of unrestricted mature shares of Common Stock owned by the Participant having a
Fair Market Value on the date of exercise equal to the exercise price. Any
election hereunder shall be irrevocable with respect to option exercises during
the Plan Year to which it relates.
(b) Subject to such reasonable rules as may be prescribed by the
Plan Administrator, the number of Profit Shares deferred under this Section 2.01
shall be credited to a Participant's Account immediately upon the exercise of
the option from which such Profit Shares derive. The number of Profit Shares
credited to the Participant's Account shall be reduced as necessary to satisfy
any applicable employment tax withholding obligations of the Company in
connection with the option exercise, all as determined by the Plan Administrator
in accordance with procedures similar to those established under the Stock
Option Plan.
(c) The Plan Administrator shall provide a statement at least
annually to each Participant showing such information as is appropriate,
including the aggregate number of Profit Shares credited to his or her Account.
Sec. 2.02 ACCOUNT ADJUSTMENTS.
-------------------
(a) In the event a dividend is declared with respect to the Common
Stock, a Participant's Account shall be credited with additional Profit Shares
(rounded to the nearest one-one hundredth of a share) equal to the amount of the
aggregate cash dividend that would have been distributed on shares represented
by the Profit Shares then credited to a Participant's Account, divided by the
then current per share Fair Market Value of the Common Stock, unless the
Participant has made an irrevocable election on a Deferral Election Form to
receive instead an amount equal to such cash dividends at the time such
dividends become payable.
-3-
<PAGE>
(b) Unless otherwise determined by the Plan Administrator, in the
event of a stock split, stock dividend, reclassification, reorganization or
other capital adjustment in the shares of Common Stock, the number of Profit
Shares then credited to the Participant's Account shall be adjusted in the same
manner as the shares of the Common Stock are adjusted.
ARTICLE 3
DISTRIBUTIONS TO PARTICIPANTS
-----------------------------
Sec. 3.01 DISTRIBUTION UPON TERMINATION FROM EMPLOYMENT OR AFTER A
--------------------------------------------------------
FIXED PERIOD OF TIME. A Participant shall irrevocably elect on the Deferral
- --------------------
Election Form to receive a number of shares of Common Stock equal to the number
of Profit Shares credited to his or her Account, as a result of a deferral
election made pursuant to Section 2.01 or an adjustment in his or her Account
pursuant to the terms of the Plan, upon:
(a) the Participant's Termination from Employment;
(b) a specified date or the expiration of a specified number of years
after the date of exercise of the option from which the Profit Shares
are derived; provided that in no event may such specified date be less
than, or deferral period end before, three (3) years from the date of
exercise of the option from which such Profit Shares are derived;
(c) the earlier of (a) or (b); or
(d) the later of (a) or (b).
A Participant shall receive the entire number of shares of Common Stock to which
he or she is entitled in a single distribution at the time determined above,
unless the Participant has made an irrevocable election on the Deferral Election
Form or supplement thereto, at least thirteen (13) months in advance of the
distribution date determined above, to receive such shares instead in
substantially equal annual installments over a period of not more than five (5)
years from the distribution date determined above.
Sec. 3.02 WITHDRAWALS ON ACCOUNT OF HARDSHIP. Prior to the date a
----------------------------------
Participant becomes entitled to a distribution under Section 3.01, the
Participant may request, and the Plan Administrator, in its sole and absolute
discretion, may approve, a withdrawal of all or a portion of the Profit Shares
credited to the Participant's Account on account of a Hardship. The Plan
Administrator may request the Participant to provide such information as it
deems necessary and proper for it to determine the existence of a Hardship. The
Plan Administrator shall review the Participant's request and determine the
extent, if any, to which such request is justified. It is intended that the Plan
Administrator's determination as to whether a Participant
-4-
<PAGE>
has suffered a Hardship shall be made consistent with the requirements for an
"unforeseeable emergency," within the meaning of section 457(d) of the Code. Any
such withdrawal shall be limited to an amount reasonably necessary to meet the
Hardship.
Sec. 3.03 WITHDRAWALS WITH PENALTY. Prior to the date a Participant
------------------------
becomes entitled to a distribution under Section 3.01, the Participant may
request and the Plan Administrator, in its sole and absolute discretion, may
approve, a withdrawal of all or a portion of the Profit Shares credited to the
Participant's Account. In the event of a withdrawal pursuant to this Section
3.03, the Participant shall forfeit from his or her Account a number (rounded up
to the next whole number) of Profit Shares equal to ten (10%) percent of the
number of Profit Shares withdrawn. The forfeited Profit Shares shall be deducted
from the Participant's Account prior to giving effect to the requested
withdrawal, and neither the Participant, nor his or her Beneficiary or any other
person claiming an interest in the Participant's Account shall have any right or
claim to the forfeited amount.
Sec. 3.04 ACCELERATION OF PAYMENTS.
------------------------
(a) In the event of the liquidation, dissolution or winding up of the
Company or the distribution or sale of all or substantially all of the Company's
assets and property, the Company shall immediately distribute to the Participant
shares of Common Stock equal to the number of Profit Shares then credited to the
Participant's Account.
(b) In the event the Plan Administrator determines, based on a change in
the applicable tax laws, a published ruling or similar announcement issued by
the Internal Revenue Service, a regulation issued by the Secretary of the
Treasury or his or her delegate, a decision by a court of competent jurisdiction
involving a Participant, or a closing agreement involving a Participant made
under section 7121 of the Code that is approved by the Commissioner, that a
Participant has recognized or will recognize income for Federal income tax
purposes with respect to any amounts that are or will be payable to the
Participant under this Article 3 before they otherwise would be paid to the
Participant, upon the request of the Participant, the Plan Administrator shall
immediately distribute to the Participant shares of Common Stock equal to the
number of Profit Shares with a Fair Market Value at the time of such
distribution equal to the amount of income so recognized.
(c) The Company reserves the right, in its sole discretion, upon
termination of the Plan or at any other time to accelerate payments hereunder by
distributing to Participants' shares of Common Stock equal to the number of
Profit Shares then credited to the Participants' Accounts in full satisfaction
of its obligations hereunder.
-5-
<PAGE>
ARTICLE 4
DEATH BENEFITS
--------------
Sec. 4.01 DISTRIBUTION OF BENEFITS UPON DEATH OF PARTICIPANT. In
--------------------------------------------------
the event of a Participant's death prior to the complete distribution of his or
her Account pursuant to Article 3, shares of Common Stock equal to the number of
Profit Shares remaining in the Participant's Account shall be distributed to the
Participant's Beneficiary in a single distribution as soon as administratively
practicable following the Participant's death.
Sec. 4.02 DESIGNATION OF BENEFICIARY. For purposes of Section 4.01,
--------------------------
the Participant's Beneficiary shall be the person or persons so designated by
the Participant in a written instrument submitted to the Plan Administrator. In
the event the Participant fails to properly designate a Beneficiary, his or her
Beneficiary shall be the Participant's surviving spouse or, if none, his or her
estate.
ARTICLE 5
VESTING
-------
Sec. 5.01 FULL VESTING OF BENEFITS. A Participant, at all times,
------------------------
shall have a fully (100%) vested interest in his or her Account.
ARTICLE 6
NATURE OF COMPANY'S OBLIGATION
------------------------------
Sec. 6.01 FUNDING OF BENEFITS. In any event, the obligation of the
-------------------
Company hereunder shall constitute a general, unsecured obligation, payable
solely out of general assets of the Company, and anything contained herein to
the contrary notwithstanding, until delivery of Common Stock is made to the
Participant or the Participant's Beneficiary hereunder, neither the Participant,
nor the Participant's Beneficiary or any other person claiming an interest
hereunder shall have any right to or property interest in, any Common Stock or
other specific assets of the Company.
Sec. 6.02 NO RIGHTS AS SHAREHOLDER. Until delivery of Common Stock
------------------------
is made to the Participant or the Participant's Beneficiary hereunder, no
Participant, Participant's Beneficiary or any other person claiming an interest
hereunder shall have any rights as a shareholder of the Company, including the
right to any cash dividends (except as provided in
-6-
<PAGE>
Section 2.01) or the right to vote, with respect to any Common Stock or the
Profit Shares credited to the Participant's Account hereunder.
ARTICLE 7
ADMINISTRATION
--------------
Sec. 7.01 PLAN ADMINISTRATOR. The individual or committee
------------------
designated by the Board as the Plan Administrator of the Plan shall be the
administrator of the Plan for purposes of the Employee Retirement Income
Security Act of 1974 (ERISA), as amended from time to time. However, if such
position is vacant, the Company shall be the Plan Administrator.
Sec. 7.02 DUTIES AND POWERS OF PLAN ADMINISTRATOR. The Plan
---------------------------------------
Administrator shall have full discretionary power and authority to construe,
interpret and administer this Plan and may, to the extent permitted by law, make
factual determinations, correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to effectuate the Plan and, subject to
Section 7.03, the Plan Administrator's actions in doing so shall be final and
binding on all persons interested in the Plan. The Plan Administrator may from
time to time adopt rules and regulations governing the operation of this Plan
and may employ and rely on such legal counsel, such actuaries, such accountants
and such agents as it may deem advisable to assist in the administration of the
Plan.
Sec. 7.03 CLAIMS PROCEDURE.
----------------
(a) The Company will advise each Participant and Beneficiary of any
benefits to which he or she is entitled under the Plan. If any person believes
that the Company has failed to advise him or her of any benefit to which he or
she is entitled, he or she may file a written claim with the Plan Administrator.
The claim shall be reviewed, and a response provided, within a reasonable time
after receiving the claim. Any claimant who is denied a claim for benefits shall
be provided with written notice setting forth:
(1) the specific reasons or reasons for the denial;
(2) specific reference to pertinent Plan provisions on which
denial is based;
(3) a description of any additional material or information
necessary for the claimant to perfect the claim; and
(4) an explanation of the claim review procedure set forth in
paragraph (b), below.
-7-
<PAGE>
(b) Within 60 days of receipt by a claimant of a notice denying a
claim under the Plan under paragraph (a), the claimant or his or her duly
authorized representative may request in writing a full and fair review of the
claim by the Plan Administrator or a claims committee appointed by the Plan
Administrator (hereinafter the "Committee"). The Committee may extend the 60-day
period where the nature of the benefit involved or other attendant circumstances
make such extension appropriate. In connection with such review, the claimant or
his or her duly authorized representative may review pertinent documents and may
submit issues and comments in writing. The Committee shall make a decision
promptly, and not later than 60 days after the Committee's receipt of a request
for review, unless special circumstances (such as the need to hold a hearing, if
the Committee deems one necessary) require an extension of time for processing,
in which case a decision shall be rendered as soon as possible, but not later
than 120 days after receipt of a request for review. The decision on review
shall be in writing and shall include specific reasons for the decision, written
in a manner calculated to be understood by the claimant, and specific references
to the pertinent Plan provisions on which the decision is based.
ARTICLE 8
AMENDMENT AND TERMINATION
-------------------------
Sec. 8.01 AUTHORITY TO AMEND. The Board or its designee may amend
------------------
the Plan at any time in any manner whatsoever. Notwithstanding the above, no
amendment shall operate to reduce the benefit amount accrued on behalf of a
Participant on the effective date of the amendment.
Sec. 8.02 RIGHT TO TERMINATE. Continuance of the Plan is completely
------------------
voluntary and is not assumed as a contractual obligation of the Company. The
Company shall have the right at any time for any reason to terminate the Plan,
by action of the Board; provided, however, that the Plan termination shall not
operate to reduce the amount accrued on behalf of a Participant on the effective
date of the Plan's termination.
ARTICLE 9
MISCELLANEOUS
-------------
Sec. 9.01 NO RIGHT TO EMPLOYMENT. Nothing contained herein (a)
----------------------
shall be deemed to exclude a Participant from any compensation, bonus, pension,
insurance, severance pay or other benefit to which he or she otherwise is or
might become entitled to as an Employee or (b) shall be construed as conferring
upon an Employee the right to continue in the employ of the Company.
-8-
<PAGE>
Sec. 9.02 NO COMPENSATION FOR OTHER BENEFITS. Except as provided
----------------------------------
herein, any amounts paid hereunder shall not be deemed salary or other
compensation to a Participant for the purposes of computing benefits to which he
or she may be entitled under any other arrangement established by the Company
for the benefit of its employees.
Sec. 9.03 RIGHTS AND OBLIGATIONS. The rights and obligations
----------------------
created hereunder shall be binding on a Participant's heirs, executors and
administrators and on the successors and assigns of the Company.
Sec. 9.04 PAYMENTS TO REPRESENTATIVES. If any Participant or
---------------------------
Beneficiary entitled to receive any benefits hereunder is determined by the Plan
Administrator, or is adjudged to be, legally incapable of giving valid receipt
and discharge for such benefits, the benefits shall be paid to a duly appointed
and acting conservator or guardian, or other legal representative of such
Participant or Beneficiary, if any, and if no such legal representative is
appointed and acting, to such person or persons as the Plan Administrator may
designate. Such payments shall, to the extent made, be deemed a complete
discharge for such payments under this Plan.
Sec. 9.05 NO FRACTIONAL SHARES. No fractional shares of Common
--------------------
Stock shall be issued or delivered pursuant to the Plan. The Plan Administrator
shall determine whether cash shall be paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.
Sec. 9.06 NONALIENATION. Except as hereinafter provided with
-------------
respect to family disputes, the rights of any Participant under this Plan are
personal and may not be assigned, transferred, pledged or encumbered. Any
attempt to do so shall be void. In cases of family disputes, the Company will
observe the terms of the Plan unless and until ordered to do otherwise by a
state or Federal court. As a condition of participation, a Participant agrees to
hold the Company harmless from any claim that arises out of the Company's
obeying the final order of any state or Federal court, whether such order
effects a judgment of such court or is issued to enforce a judgment or order of
another court. For purposes of this Section 9.06, "family dispute" means a
dispute relating to provision of child support, alimony payments, or marital
property rights to a spouse, former spouse or other dependent of the
Participant.
Sec. 9.07 LIMITATIONS ON OBLIGATIONS. Neither the Company nor any
--------------------------
member of the Board shall be responsible or liable in any manner to any
Participant, Beneficiary or any person claiming through them for any benefit or
action taken or omitted in connection with the granting of benefits, the
continuation of benefits, or the interpretation and administration of this Plan.
Sec. 9.08 WITHHOLDING. If the Company is required to withhold
-----------
amounts under applicable federal, state or local tax laws, rules or regulations,
the Company shall be entitled to deduct and withhold such amounts from any
payment made pursuant to this Plan.
-9-
<PAGE>
Sec. 9.09 LOST PAYEES. Any benefit payable under the Plan shall be
-----------
deemed forfeited if the Plan Administrator is unable to locate the Participant
or Beneficiary to whom payment is due; provided, however, that such benefit
shall be reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
Sec. 9.10 GOVERNING LAW. The Plan shall be construed in accordance
-------------
with and governed by the laws of the Commonwealth of Pennsylvania.
-10-
<PAGE>
Exhibit 99(d)
SEI INVESTMENTS COMPANY
OPTION SHARE DEFERRAL PLAN
FOR NON-EMPLOYEE DIRECTORS
(EFFECTIVE DECEMBER 1, 1997)
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SEI INVESTMENTS COMPANY
OPTION SHARE DEFERRAL PLAN
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FOR NON-EMPLOYEE DIRECTORS
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In recognition of the services provided to SEI Investments Company (the
"Company") by its non-employee directors, as defined herein, the Company has
established the SEI Investments Company Option Share Deferral Plan For Non-
Employee Directors (the "Plan") to offer such directors the opportunity to defer
receipt of the "profit shares," as defined herein, when they exercise options
under the Company's Stock Option Plan. The Plan shall be effective, December 1,
1997, under the terms and conditions hereinafter set forth.
TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND CONSTRUCTION....................................... 1
ARTICLE 2 PARTICIPANT DEFERRALS AND ACCOUNTS................................. 3
ARTICLE 3 DISTRIBUTIONS TO PARTICIPANTS...................................... 4
ARTICLE 4 DEATH BENEFITS..................................................... 6
ARTICLE 5 VESTING............................................................ 6
ARTICLE 6 NATURE OF COMPANY'S OBLIGATION..................................... 6
ARTICLE 7 ADMINISTRATION..................................................... 7
ARTICLE 8 AMENDMENT AND TERMINATION.......................................... 8
ARTICLE 9 MISCELLANEOUS...................................................... 8
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ARTICLE 1
DEFINITIONS AND CONSTRUCTION
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Sec. 1.01 DEFINITIONS. Whenever used in this Plan:
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"ACCOUNT" means entries maintained in the records of the Company which
reflect the number of Profit Shares deferred by a Participant pursuant to
Section 2.01 or which otherwise stand to the credit of the Participant under the
Plan.
"AFFILIATE" means any corporation, partnership or other entity in
which the Company holds, directly or indirectly, fifty percent (50%) or more of
the entity's equity interest.
"AFFILIATE" means any corporation, partnership or other entity in
which the Company holds, directly or indirectly, fifty percent (50%) or more of
the entity's equity interest.
"BENEFICIARY" means any individual or entity designated by a
Participant pursuant to Section 4.02 to receive death benefits described in
Section 4.01 subsequent to the Participant's death.
"BOARD" means the Board of Directors or other governing body of the
Company.
"CESSATION OF SERVICES" means ceasing to serve on the Board or, with
respect to a Participant who has ceased to be a Non-Employee Director by reason
of his or her becoming an employee of the Company or any Affiliate, his or her
termination from employment with the Company and any Affiliates, if later.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar nature and purpose.
"COMMON STOCK" means shares of Common Stock, par value $.01 per share,
of the Company.
"COMPANY" means SEI Investments Company or any successor thereto.
"DEFERRAL ELECTION FORM" means the form provided to Participants by
the Plan Administrator on which the Participants elect (a) to defer Profit
Shares in accordance with Section 2.01, (b) to have cash dividends payable with
respect to Common Stock credited to his or her Account in the form of additional
Profit Shares or paid in cash, in accordance with Section 2.02, and (c) the time
of distribution of Profit Shares credited to his or her Account in accordance
with Section 3.01.
"EFFECTIVE DATE" means December 1, 1997.
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"FAIR MARKET VALUE" means the fair market value of Common Stock as
determined by the Plan Administrator in accordance with the rules established
under the Stock Option Plan for making such determination.
"HARDSHIP" means an unforeseeable financial emergency that is an
unexpected need for cash arising from an illness, casualty loss, sudden
financial reversal, or other such unforeseeable occurrence.
"NON-EMPLOYEE DIRECTOR" means a member of the Board who is not also an
employee of the Company or any Affiliate.
"OPTION SHARE DEFERRAL" means a deferral of Profit Shares by a
Participant pursuant to Section 2.01 upon exercise of a stock option under the
Stock Option Plan.
"PARTICIPANT" means (a) a Non-Employee Director who makes an Option
Share Deferral pursuant to Section 2.01, or (b) any former Non-Employee Director
who has a balance in his or her Account greater than zero which has not been
fully distributed pursuant to Article 3 or 4.
"PLAN" means this SEI Investments Company Option Share Deferral Plan
for Non-Employee Directors.
"PLAN ADMINISTRATOR" means the individual or committee designated as
the administrator of the Plan by the Board or its designee, or, if such position
is vacant, the Company.
"PLAN YEAR" means the calendar year.
"PROFIT SHARES" means with respect to an exercise of an option under
the Stock Option Plan, a number of shares of Common Stock (rounded to the
nearest one-one hundredth of a share) equal to (a) the excess of the Fair Market
Value per share of Common Stock at the date of exercise multiplied by the number
of shares covered by the option exercise over the aggregate exercise price of
the shares so purchased, divided by (b) the Fair Market Value per share at the
date of exercise.
"STOCK OPTION PLAN" means the SEI Investments Company Stock Option
Plan for Non-Employee Directors or the 1997 Stock Option Plan or any successor
thereto.
Sec. 1.02 GENDER AND NUMBER. The masculine pronoun shall include
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the feminine; the singular shall include the plural; and vice versa.
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ARTICLE 2
PARTICIPANT DEFERRALS AND ACCOUNTS
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Sec. 2.01 OPTION SHARE DEFERRALS.
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(a) A Non-Employee Director may irrevocably elect on the Deferral
Election Form to defer receipt of all or a portion of the Profit Shares pursuant
to the exercise of a stock option under the Stock Option Plan for a Plan Year,
subject to such rules and procedures as the Plan Administrator deems
appropriate. Such Deferral Election Form must be provided to the Plan
Administrator by November 30 of the calendar year prior to the beginning of the
Plan Year in which the options are exercised; at any time on or before provided,
however, that such Deferral Election Form may be provided to the Administrator
at any time on or before December 31, 1997 for deferrals to be made during the
Plan Year beginning January 1, 1998. Any election hereunder shall apply only to
the extent that payment of the exercise price for the option to which the
election relates is satisfied by surrender (including a constructive surrender)
of unrestricted mature shares of Common Stock owned by the Participant having a
Fair Market Value on the date of exercise equal to the exercise price. Any
election hereunder shall be irrevocable with respect to option exercises during
the Plan Year to which it relates.
(b) Subject to such reasonable rules as may be prescribed by the
Plan Administrator, the number of Profit Shares deferred under this Section 2.01
shall be credited to a Participant's Account immediately upon the exercise of
the option from which such Profit Shares derive.
(c) The Plan Administrator shall provide a statement at least
annually to each Participant showing such information as is appropriate,
including the aggregate number of Profit Shares credited to his or her Account.
Sec. 2.02 ACCOUNT ADJUSTMENTS.
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(a) In the event a dividend is declared with respect to the Common
Stock, a Participant's Account shall be credited with additional Profit Shares
(rounded to the nearest one-one hundredth of a share) equal to the amount of the
aggregate cash dividend that would have been distributed on shares represented
by the Profit Shares then credited to a Participant's Account, divided by the
then current per share Fair Market Value of the Common Stock, unless the
Participant has made an irrevocable election on a Deferral Election Form to
receive instead an amount equal to such cash dividends at the time such
dividends become payable.
(b) Unless otherwise determined by the Plan Administrator, in the
event of a stock split, stock dividend, reclassification, reorganization or
other capital adjustment in the
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shares of Common Stock, the number of Profit Shares then credited to the
Participant's Account shall be adjusted in the same manner as the shares of the
Common Stock are adjusted.
ARTICLE 3
DISTRIBUTIONS TO PARTICIPANTS
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Sec. 3.01 DISTRIBUTION UPON TERMINATION FROM EMPLOYMENT OR AFTER A
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FIXED PERIOD OF TIME. A Participant shall irrevocably elect on the Deferral
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Election Form to receive a number of shares of Common Stock equal to the number
of Profit Shares credited to his or her Account, as a result of a deferral
election made pursuant to Section 2.01 or an adjustment in his or her Account
pursuant to the terms of the Plan, upon:
(a) the Participant's Cessation of Services;
(b) a specified date or the expiration of a specified number of years
after the date of exercise of the option from which the Profit Shares
are derived; provided that in no event may such specified date be less
than, or deferral period end before, three (3) years from the date of
exercise of the option from which such Profit Shares are derived;
(c) the earlier of (a) or (b); or
(d) the later of (a) or (b).
A Participant shall receive the entire number of shares of Common Stock to which
he or she is entitled in a single distribution at the time determined above,
unless the Participant has made an irrevocable election on the Deferral Election
Form or supplement thereto, at least thirteen (13) months in advance of the
distribution date determined above, to receive such shares instead in
substantially equal annual installments over a period of not more than five (5)
years from the distribution date determined above.
Sec. 3.02 WITHDRAWALS ON ACCOUNT OF HARDSHIP. Prior to the date a
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Participant becomes entitled to a distribution under Section 3.01, the
Participant may request, and the Plan Administrator, in its sole and absolute
discretion, may approve, a withdrawal of all or a portion of the Profit Shares
credited to the Participant's Account on account of a Hardship. The Plan
Administrator may request the Participant to provide such information as it
deems necessary and proper for it to determine the existence of a Hardship. The
Plan Administrator shall review the Participant's request and determine the
extent, if any, to which such request is justified. It is intended that the
Plan Administrator's determination as to whether a Participant has suffered a
Hardship shall be made consistent with the requirements for an "unforeseeable
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emergency," within the meaning of section 457(d) of the Code. Any such
withdrawal shall be limited to an amount reasonably necessary to meet the
Hardship.
Sec. 3.03 WITHDRAWALS WITH PENALTY. Prior to the date a
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Participant becomes entitled to a distribution under Section 3.01, the
Participant may request and the Plan Administrator, in its sole and absolute
discretion, may approve, a withdrawal of all or a portion of the Profit Shares
credited to the Participant's Account. In the event of a withdrawal pursuant to
this Section 3.03, the Participant shall forfeit from his or her Account a
number (rounded up to the next whole number) of Profit Shares equal to ten (10%)
percent of the number of Profit Shares withdrawn. The forfeited Profit Shares
shall be deducted from the Participant's Account prior to giving effect to the
requested withdrawal, and neither the Participant, nor his or her Beneficiary or
any other person claiming an interest in the Participant's Account shall have
any right or claim to the forfeited amount.
Sec. 3.04 ACCELERATION OF PAYMENTS.
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(a) In the event of the liquidation, dissolution or winding up of the
Company or the distribution or sale of all or substantially all of the Company's
assets and property, the Company shall immediately distribute to the Participant
shares of Common Stock equal to the number of Profit Shares then credited to the
Participant's Account.
(b) In the event the Plan Administrator determines, based on a change in
the applicable tax laws, a published ruling or similar announcement issued by
the Internal Revenue Service, a regulation issued by the Secretary of the
Treasury or his or her delegate, a decision by a court of competent jurisdiction
involving a Participant, or a closing agreement involving a Participant made
under section 7121 of the Code that is approved by the Commissioner, that a
Participant has recognized or will recognize income for Federal income tax
purposes with respect to any amounts that are or will be payable to the
Participant under this Article 3 before they otherwise would be paid to the
Participant, upon the request of the Participant, the Plan Administrator shall
immediately distribute to the Participant shares of Common Stock equal to the
number of Profit Shares with a Fair Market Value at the time of such
distribution equal to the amount of income so recognized.
(c) The Company reserves the right, in its sole discretion, upon
termination of the Plan or at any other time to accelerate payments hereunder by
distributing to Participants' shares of Common Stock equal to the number of
Profit Shares then credited to the Participants' Accounts in full satisfaction
of its obligations hereunder.
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ARTICLE 4
DEATH BENEFITS
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Sec. 4.01 DISTRIBUTION OF BENEFITS UPON DEATH OF PARTICIPANT. In
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the event of a Participant's death prior to the complete distribution of his or
her Account pursuant to Article 3, shares of Common Stock equal to the number of
Profit Shares remaining in the Participant's Account shall be distributed to the
Participant's Beneficiary in a single distribution as soon as administratively
practicable following the Participant's death.
Sec. 4.02 DESIGNATION OF BENEFICIARY. For purposes of Section 4.01,
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the Participant's Beneficiary shall be the person or persons so designated by
the Participant in a written instrument submitted to the Plan Administrator. In
the event the Participant fails to properly designate a Beneficiary, his or her
Beneficiary shall be the Participant's surviving spouse or, if none, his or her
estate.
ARTICLE 5
VESTING
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Sec. 5.01 FULL VESTING OF BENEFITS. A Participant, at all times,
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shall have a fully (100%) vested interest in his or her Account.
ARTICLE 6
NATURE OF COMPANY'S OBLIGATION
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Sec. 6.01 FUNDING OF BENEFITS. In any event, the obligation of the
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Company hereunder shall constitute a general, unsecured obligation, payable
solely out of general assets of the Company, and anything contained herein to
the contrary notwithstanding, until delivery of Common Stock is made to the
Participant or the Participant's Beneficiary hereunder, neither the Participant,
nor the Participant's Beneficiary or any other person claiming an interest
hereunder shall have any right to, or property interest in, any Common Stock or
other specific assets of the Company.
Sec. 6.02 NO RIGHTS AS SHAREHOLDER. Until delivery of Common Stock
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is made to the Participant or the Participant's Beneficiary hereunder, no
Participant, Participant's Beneficiary or any other person claiming an interest
hereunder shall have any rights as a shareholder of the Company, including the
right to any cash dividends (except as provided in Section 2.01) or the right to
vote, with respect to any Common Stock or the Profit Shares credited to the
Participant's Account hereunder.
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ARTICLE 7
ADMINISTRATION
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Sec. 7.01 PLAN ADMINISTRATOR. The individual or committee
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designated by the Board as the Plan Administrator of the Plan shall be the
administrator of the Plan for purposes of the Employee Retirement Income
Security Act of 1974 (ERISA), as amended from time to time. However, if such
position is vacant, the Company shall be the Plan Administrator.
Sec. 7.02 DUTIES AND POWERS OF PLAN ADMINISTRATOR. The Plan
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Administrator shall have full discretionary power and authority to construe,
interpret and administer this Plan and may, to the extent permitted by law, make
factual determinations, correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to effectuate the Plan and, subject to
Section 7.03, the Plan Administrator's actions in doing so shall be final and
binding on all persons interested in the Plan. The Plan Administrator may from
time to time adopt rules and regulations governing the operation of this Plan
and may employ and rely on such legal counsel, such actuaries, such accountants
and such agents as it may deem advisable to assist in the administration of the
Plan.
Sec. 7.03 CLAIMS PROCEDURE.
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(a) The Company will advise each Participant and Beneficiary of any
benefits to which he or she is entitled under the Plan. If any person believes
that the Company has failed to advise him or her of any benefit to which he or
she is entitled, he or she may file a written claim with the Plan Administrator.
The claim shall be reviewed, and a response provided, within a reasonable time
after receiving the claim. Any claimant who is denied a claim for benefits
shall be provided with written notice setting forth:
(1) the specific reasons or reasons for the denial;
(2) specific reference to pertinent Plan provisions on which
denial is based;
(3) a description of any additional material or information
necessary for the claimant to perfect the claim; and
(4) an explanation of the claim review procedure set forth in
paragraph (b), below.
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(b) Within 60 days of receipt by a claimant of a notice denying a
claim under the Plan under paragraph (a), the claimant or his or her duly
authorized representative may request in writing a full and fair review of the
claim by the Plan Administrator or a claims committee appointed by the Plan
Administrator (hereinafter the "Committee"). The Committee may extend the 60-day
period where the nature of the benefit involved or other attendant circumstances
make such extension appropriate. In connection with such review, the claimant or
his or her duly authorized representative may review pertinent documents and may
submit issues and comments in writing. The Committee shall make a decision
promptly, and not later than 60 days after the Committee's receipt of a request
for review, unless special circumstances (such as the need to hold a hearing, if
the Committee deems one necessary) require an extension of time for processing,
in which case a decision shall be rendered as soon as possible, but not later
than 120 days after receipt of a request for review. The decision on review
shall be in writing and shall include specific reasons for the decision, written
in a manner calculated to be understood by the claimant, and specific references
to the pertinent Plan provisions on which the decision is based.
ARTICLE 8
AMENDMENT AND TERMINATION
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Sec. 8.01 AUTHORITY TO AMEND. The Board or its designee may amend
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the Plan at any time in any manner whatsoever. Notwithstanding the above, no
amendment shall operate to reduce the benefit amount accrued on behalf of a
Participant on the effective date of the amendment.
Sec. 8.02 RIGHT TO TERMINATE. Continuance of the Plan is completely
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voluntary and is not assumed as a contractual obligation of the Company. The
Company shall have the right at any time for any reason to terminate the Plan,
by action of the Board; provided, however, that the Plan termination shall not
operate to reduce the amount accrued on behalf of a Participant on the effective
date of the Plan's termination.
ARTICLE 9
MISCELLANEOUS
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Sec. 9.01 NO RIGHT TO CONTINUED DIRECTORSHIP. Nothing contained
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herein (a) shall be deemed to exclude a Participant from any compensation or
other benefit to which he or she otherwise is or might become entitled to as a
Non-Employee Director or (b) shall be construed as conferring upon a Non-
Employee Director the right to continue as a member of the Board.
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Sec. 9.02 NO COMPENSATION FOR OTHER BENEFITS. Except as provided
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herein, any amounts paid hereunder shall not be deemed compensation to a
Participant for the purposes of computing benefits to which he or she may be
entitled under any other arrangement established by the Company for the benefit
of its Non-Employee Directors.
Sec. 9.03 RIGHTS AND OBLIGATIONS. The rights and obligations
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created hereunder shall be binding on a Participant's heirs, executors and
administrators and on the successors and assigns of the Company.
Sec. 9.04 PAYMENTS TO REPRESENTATIVES. If any Participant or
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Beneficiary entitled to receive any benefits hereunder is determined by the Plan
Administrator, or is adjudged to be, legally incapable of giving valid receipt
and discharge for such benefits, the benefits shall be paid to a duly appointed
and acting conservator or guardian, or other legal representative of such
Participant or Beneficiary, if any, and if no such legal representative is
appointed and acting, to such person or persons as the Plan Administrator may
designate. Such payments shall, to the extent made, be deemed a complete
discharge for such payments under this Plan.
Sec. 9.05 NO FRACTIONAL SHARES. No fractional shares of Common
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Stock shall be issued or delivered pursuant to the Plan. The Plan Administrator
shall determine whether cash shall be paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.
Sec. 9.06 NONALIENATION. Except as hereinafter provided with
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respect to family disputes, the rights of any Participant under this Plan are
personal and may not be assigned, transferred, pledged or encumbered. Any
attempt to do so shall be void. In cases of family disputes, the Company will
observe the terms of the Plan unless and until ordered to do otherwise by a
state or Federal court. As a condition of participation, a Participant agrees to
hold the Company harmless from any claim that arises out of the Company's
obeying the final order of any state or Federal court, whether such order
effects a judgment of such court or is issued to enforce a judgment or order of
another court. For purposes of this Section 9.06, "family dispute" means a
dispute relating to provision of child support, alimony payments, or marital
property rights to a spouse, former spouse or other dependent of the
Participant.
Sec. 9.07 LIMITATIONS ON OBLIGATIONS. Neither the Company nor any
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member of the Board shall be responsible or liable in any manner to any
Participant, Beneficiary or any person claiming through them for any benefit or
action taken or omitted in connection with the granting of benefits, the
continuation of benefits, or the interpretation and administration of this Plan.
Sec. 9.08 WITHHOLDING. If the Company is required to withhold
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amounts under applicable federal, state or local tax laws, rules or regulations,
the Company shall be entitled to deduct and withhold such amounts from any
payment made pursuant to this Plan.
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Sec. 9.09 LOST PAYEES. Any benefit payable under the Plan shall be
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deemed forfeited if the Plan Administrator is unable to locate the Participant
or Beneficiary to whom payment is due; provided, however, that such benefit
shall be reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
Sec. 9.10 GOVERNING LAW. The Plan shall be construed in accordance
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with and governed by the laws of the Commonwealth of Pennsylvania.
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Exhibit 99(e)
SEI INVESTMENTS COMPANY
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
INTRODUCTION
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Section 1.01 Statement of Purpose. The purpose of the SEI Investments
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Company Employee Stock Purchase Plan is to provide eligible employees of SEI
Investments Company and its participating subsidiaries who wish to become
shareholders or to increase their share holdings, an opportunity to purchase
common stock of SEI Investments Company. The Board of Directors of the Company
believes that employee participation in ownership will be to the mutual benefit
of both the employees and the Company. The Plan was approved by the Board of
Directors and shareholders of the Company on February 9, 1981 and was amended
and restated from time to time thereafter. On October 15, 1997, the Plan was
again amended and thereafter restated as set forth herein, subject to approval
of the Company's shareholders.
Section 1.02 Internal Revenue Code Considerations. The Plan is intended
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to qualify as an "employee stock purchase plan" within the meaning of Section
423 of the Internal Revenue Code of 1986, as amended.
ARTICLE II
DEFINITIONS
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Section 2.01 "Administrative Committee," which may be referred to as the
"Stock Purchase Plan Committee," means the committee appointed by the Board of
Directors to administer this Plan, as provided in Section 6.03 hereof.
Section 2.02 "Board of Directors" means the Board of Directors of the
Company.
Section 2.03 "Company" shall mean SEI Investments Company, a Pennsylvania
corporation.
Section 2.04 "Compensation" shall mean the regular salary, wages and
commissions paid, during the period of reference, to an Employee by Employer,
including the employee's
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elective contribution to deferral accounts under a Salary Reduction Agreement
pursuant to a plan established under Section 401(k) of the Internal Revenue
Code, but excluding bonuses, overtime payments, shift differential payments,
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expense reimbursements of all types, payments in lieu of expenses, Employer
contributions to any qualified retirement plan or other program of deferred
compensation, Employer contributions to Social Security, the costs paid by
Employer in connection with fringe benefits (whether or not the Employee could
have elected to receive cash in lieu of such benefits), and any amounts accrued
for the benefit of Employee but not paid during the period of reference.
Notwithstanding the foregoing, effective May 21, 1998, "Compensation" shall mean
the wages and other compensation paid during the period of reference, to an
Employee by the Employer, that is reported on Form W-2, and the Employee's
elective contributions to deferral accounts under a Salary Reduction Agreement
pursuant to a plan established under Section 401(k) or 125 of the Internal
Revenue Code.
Section 2.05 "Effective Date" shall mean January 1, 1981.
Section 2.06 "Eligible Employee" shall mean each person who, on the first
date of the Purchase Period meets all of the following requirements:
(a) He/she is an Employee of Employer;
(b) He/she is not deemed for purposes of Section 423(b)(3) of the Internal
Revenue Code to own stock possessing five percent ( 5%) or more of the
total combined voting power or value of all classes of Stock of
Company or Employer.
Section 2.07 "Employee" shall mean each person employed by Employer whose
customary employment is for more than twenty (20) hours per week and for more
than five (5) months per year.
Section 2.08 "Employer" shall mean Company and each subsidiary of Company
that, with the consent of the Board of Directors, has adopted this Plan.
Section 2.09 "Internal Revenue Code" shall mean the United States
Internal Revenue Code of 1986, as the same is presently constituted and as it
may hereafter be amended, and successor statutes of similar purpose.
Section 2.10 "Market Value" shall mean for any day the average of the
closing bid and asked prices of the Stock in the over-the-counter market, as
reported through the National Association of Securities Dealers ("NASD")
Automated Quotation System or, if the stock is listed or admitted to trading on
the NASD National Market System or any national securities exchange or if the
last reported sale price of such Stock is generally available, the last reported
sale price on such system or exchange. The Market Value for any day for which
there is no such bid and asked or last reported sales price shall be the Market
Value of the next preceding day for which there is such a price.
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Section 2.11 "Offering" shall mean the offering of shares of Stock under
this Plan.
Section 2.12 "Offering Date" shall mean the last business day of each
Purchase Period and shall be the date upon which all purchase privileges under
this Plan are exercised with respect to each such Purchase Period.
Section 2.13 "Participant" shall mean each Employee who elects to
participate in this Plan.
Section 2.14 "Plan" shall mean the SEI Investments Company Employee Stock
Purchase Plan, as amended and restated as set forth herein, and as the same may
hereafter be amended.
Section 2.15 "Plan Year" shall mean the twelve month period commencing
each January 1 and ending on the following December 31.
Section 2.16 "Purchase Agreement" shall mean the document prescribed by
the Administrative Committee pursuant to which an Eligible Employee has enrolled
to be a Participant in this Plan.
Section 2.17 "Purchase Period" shall mean the period beginning on the
first day of the calendar month next following the occurrence of an Offering
Date and ending on the last business day of such calendar month.
Section 2.18 "Stock" shall mean the common stock, par value $.01, of SEI
Investments Company.
Section 2.19 "Stock Purchase Account" shall mean a non-interest bearing
account consisting of all amounts withheld from the Employee's compensation (or
otherwise paid into the Plan) for the purpose of purchasing shares of Stock
under this Plan, reduced by all amounts applied to the purchase of Stock under
this Plan.
ARTICLE III
ADMISSION TO PARTICIPATION
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Section 3.01 Initial Participation. Any Eligible Employee may elect to
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be a Participant and may become a Participant by executing and filing with the
Administrative Committee, within the timeframe established by the Committee, but
in any event a reasonable time prior to an Offering Date, a Purchase Agreement
on forms provided by the Administrative Committee. The effective date of an
Eligible Employee's participation shall be the first day of the earliest
Purchase Period for which it is reasonably possible for the Administrative
Committee to effect such Employee's participation.
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Section 3.02 Discontinuance of Participation. Any Participant may
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voluntarily withdraw from the Plan by filing a Notice of Withdrawal with the
Administrative Committee within the timeframe established by the Committee but
in any event within a reasonable time prior to an Offering Date. Within sixty
(60) days after such withdrawal, there shall be paid to the Participant the
amount, if any, standing to his/her credit in his/her Stock Purchase Account.
Amounts paid to a Participant or former Participant pursuant to this Section
3.02 shall not be eligible for redeposit in the Participant's Stock Purchase
Account in the event of the person's readmission to participation.
Section 3.03 Involuntary Withdrawal: Termination of Eligible Employee
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Status. If a Participant's continuous service terminates for any reason, or if
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a Participant ceases to be an Eligible Employee, the entire amount standing to
the Participant's credit in his/her Stock Purchase Account on the effective date
of such occurrence shall be used to purchase whole shares of Stock under this
Plan as of the next succeeding Offering Date, and any balance thereafter
remaining to his/her credit in his/her Stock Purchase Account shall be refunded
to him/her. Notwithstanding the foregoing, if the Plan is amended to provide
Purchase Periods in excess of three (3) calendar months in duration, and if a
Participant's continuous service is terminated for any reason three (3) months
or more prior to the next succeeding Offering Date, the entire amount, if any,
standing to his/her credit in that Stock Purchase Account shall be refunded to
him/her.
Section 3.04 Involuntary Withdrawal: Abuse of Purpose. It is a purpose
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of the Plan to facilitate Eligible Employees in becoming shareholders in the
Company. In furtherance of this purpose, the Administrative Committee has
determined that under normal circumstances Stock purchased under the Plan should
be held as a long term investment by Employees. Accordingly, the Administrative
Committee, in its sole discretion, may exclude from participation in Offerings
under the Plan any Employee who purchases Stock under the Plan and, other than
in isolated cases, sells such Stock in violation of the foregoing purpose. Any
Employee excluded from participation in Offerings under the Plan pursuant to the
provisions of this Section, is not eligible for readmission to participation
under the provisions of Section 3.05, and may only be readmitted with the
consent of the Administrative Committee.
Section 3.05 Readmission to Participation. Any Eligible Employee who has
----------------------------
previously been a Participant, who has discontinued Participation (whether by
interruption of continuous service or otherwise), and who wishes to be
reinstated as a Participant may again become a participant by executing and
filing with the Administrative Committee a new Purchase Agreement on forms
provided by the Administrative Committee. Reinstatement to Participant status
shall be effective as of the first day of the first Purchase Period reasonably
possible following the date on which the Administrative Committee receives from
the Eligible Employee the properly executed Purchase Agreement.
4
<PAGE>
ARTICLE IV
STOCK PURCHASE
--------------
Section 4.01 Reservation of Shares. As of the Effective Date, one
---------------------
hundred thousand (100,000) shares of Stock were reserved for the Plan, subject
to adjustment in accordance with the anti-dilution provisions hereinafter set
forth. As of November 17, 1988, four hundred thousand (400,000) shares of Stock
were reserved for the Plan, subject to adjustment as provided in the Plan. In
1993, the preceding four hundred thousand (400,000) share limit was adjusted to
eight hundred thousand (800,000) shares of Stock to reflect a stock split.
Except as provided in Section 4.02 hereof, the aggregate number of shares that
may be purchased under the Plan shall not exceed the number of shares reserved
for the Plan. Shares of Stock purchased from the Company under the Plan may be
either authorized and unissued shares or shares reacquired by the Company and
held in its treasury. Effective May 21, 1998, one million three hundred thousand
(1,300,000) shares of Stock were reserved for the Plan, subject to adjustment as
provided in the Plan.
Section 4.02 Limitation on Shares Available. The maximum number of
------------------------------
shares of Stock that may be purchased for each Participant on an Offering Date
is the lesser of (a) the number of whole shares of Stock that can be purchased
by applying the full balance of his/her Stock Purchase Account (with such
balance determined as of the close of business on the Offering Date of
reference) to such purchase of shares at the Purchase Price (as hereinafter
determined) or (b) the Participant's proportionate part of the maximum number of
shares of Stock available within the limitation established by the maximum
aggregate number of such shares reserved for this Plan, as stated in Section
4.01 hereof.
Notwithstanding the foregoing, if any person entitled to purchase shares
pursuant to any offering hereunder would be deemed for the purposes of Section
423(b)(3) of the Internal Revenue Code to own stock (including any number of
shares that such person would be entitled to purchase hereunder) possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company, the maximum number of shares that such person shall be
entitled to purchase pursuant to the Plan shall be reduced to that number which,
when added to the number of shares of Stock that such person is so deemed to own
(excluding any number of shares that such person would be entitled to purchase
hereunder), is one less share than the number of shares required to attain such
five percent (5%) threshold. Any portion of a Participant's Stock Purchase
Account that cannot be applied by reason of the foregoing limitation, or by
reason of the fact that no fractional shares are purchased or issued under this
Plan, shall remain in the Participant's Stock Purchase Account for application
to purchase of Stock on the next Offering Date (unless withdrawn before that
Offering Date).
5
<PAGE>
Section 4.03 Purchase Price of Shares. The Purchase Price per share of
------------------------
the Stock sold to Participants pursuant to any Offering shall be eighty-five
percent (85%) of the Market Value of such share on the Offering Date on which
such Purchase Period expires. If the Offering Date with respect to the purchase
of Stock is a day on which the Stock is selling ex-dividend but is on or before
the record date for such dividend, then for Plan purposes the Purchase Price per
share will be increased by an amount equal to the dividend per share. In no
event shall the Purchase Price be less than the par value of the Stock.
Section 4.04 Exercise of Purchase Privilege.
------------------------------
(a) Subject to the provisions of Section 4.02 above and of
paragraph (b) of this Section 4.04, if at the close of business on any Offering
Date there is standing to the credit of the Participant in his/her Stock
Purchase Account an amount equal to, or greater than, the Purchase Price of one
share of Stock for the Offering that shall occur on such Offering Date, there
shall be purchased for the Participant at such Purchase Price the largest number
of whole shares of Stock as can be purchased with the amount then standing to
the Participant's credit in his/her Stock Purchase Account. Each such purchase
shall be deemed to have occurred on the Offering Date occurring at the close of
the Purchase Period from which the purchase was made.
(b) Participant may not purchase shares of Stock having an
aggregate Market Value of more than twenty-five thousand dollars ($25,000),
determined at the time of the Offering Date(s) for each calendar year in which
one or more such Offering(s) is/are outstanding at any time, and a Participant
may not purchase a share of Stock under any Offering after the Offering Date
occurring on the last business day of the Purchase Period for such Offering.
Section 4.05 Establishment of Stock Purchase Account.
---------------------------------------
(a) Payroll Deductions. The Participant shall authorize payroll
------------------
deductions from Compensation for the purposes of funding his/her Stock Purchase
Account. In the Purchase Agreement, each Participant shall authorize a deduction
from each payment of his/her Compensation during a Purchase Period, which
deduction shall be stated as a fixed dollar amount or as a percentage of
Compensation, whichever method shall be specified by the Administrative
Committee. The amount of any deduction may not be less than one percent (1%) nor
more than ten percent (10%) of the gross amount of such payment of Compensation,
rounded to the nearest whole dollar amount; provided, however, that effective
May 21, 1998, the foregoing ten percent (10%) Compensation limit on the amount
of any deduction shall not apply.
The payroll deduction rate or amount may not be reduced or increased during
any Purchase Period. However, a Participant may reduce or increase his/her
payroll deduction rate or amount for any subsequent Offering by filing a notice
thereof within the timeframe established by the Committee but in any event
within a reasonable time prior to the first day of the Purchase Period on which
such subsequent Offering commences; provided in the case of a reduction that
such reduction shall not reduce the payroll deduction rate or amount below one
percent (1%) of
6
<PAGE>
each payment of Compensation per pay period, unless the Participant discontinues
participation under Section 3.02 of this Plan, and further provided in the case
of an increase the resulting deduction rate or amount shall not be more than ten
percent (10%) of each payment of Compensation; provided, however, that effective
May 21, 1998, the foregoing ten percent (10%) Compensation limit on increases in
a Participant's deduction rate or amount shall not apply.
(b) Lump Sum Contributions. Effective October 15, 1997,
----------------------
Participants may also make either lump sum cash payments or payments by check to
their Stock Purchase Accounts subject to the following rules:
(i) Timing of Contributions.
(A) Participants at the time of their initial
participation or readmission to participation pursuant to Section
3.01 or 3.05 hereof, respectively, may make lump sum contributions
to their Stock Purchase Accounts as described herein.
(B) Participants on whose behalf payroll deductions
are being made for the purpose of funding their Stock Purchase
Accounts may make additional lump sum contributions to those Stock
Purchase Accounts during any Purchase Period as described herein.
(ii) Contribution Limitations. Only one such lump sum
contribution shall be accepted from any Participant in each Purchase Period
and such contribution shall be subject to a minimum of twenty-five dollars
($25).
Section 4.06 Payment for Stock. The Purchase Price for all shares of
-----------------
Stock purchased by any Participant under this Plan shall be paid out of the
Participant's Stock Purchase Account. As of each Offering Date, the
Participant's Stock Purchase Account shall be charged with the aggregate
Purchase Price of the shares of Stock purchased by such Participant on the
Offering Date. The remaining balance standing to the Participant's credit in
his/her Stock Purchase Account shall remain credited to such Stock Purchase
Account for the next succeeding Offering under this Plan. No interest shall be
paid or payable with respect to any amount held in the Participant's Stock
Purchase Account.
Section 4.07 Share Ownership: Issuance of Certificates.
-----------------------------------------
(a) The shares purchased by a Participant on an Offering Date
shall, for all purposes, be deemed to have been issued and/or sold at the close
of business on such Offering Date. Prior to that time, none of the rights or
privileges of a shareholder of the Company shall inure to the Participant with
respect to such shares. All the shares of Stock purchased under the Plan shall
be delivered by the Company in a manner as determined by the Administrative
Committee, provided, however, that all shares acquired by Participants during
any Purchase
7
<PAGE>
Period shall be delivered not later than one hundred twenty (120) days following
the last day of such Purchase Period.
(b) The Administrative Committee, in its sole discretion, may
determine that the shares of Stock shall be delivered by the Company to the
Participant by issuing and delivering a certificate for the number of shares of
Stock purchased by a Participant on an Offering Date or during a Plan Year, or
that the shares of Stock purchased by all Participants shall be delivered to a
member of the National Association of Securities Dealers, as selected by the
Administrative Committee from time to time, which shares shall be maintained by
such member firm in separate brokerage accounts for each Participant. Each
certificate or brokerage account, as the case may be, may be in the name of the
Participant or, if he/she designates on his/her Stock Purchase Agreement, in
his/her name jointly with his/her spouse, with right of survivorship. A
Participant who is a resident of a jurisdiction that does not recognize such
joint tenancy may have a certificate or brokerage account in his/her name as
tenant in common with his/her spouse, without right of survivorship. Such
designation may be changed by filing notice thereof.
ARTICLE V
SPECIAL ADJUSTMENTS
-------------------
Section 5.01 Shares Unavailable. If, on any Offering Date, the aggregate
------------------
funds available for the purchase of Stock would purchase a number of shares in
excess of the number of shares then available for purchase under the Plan, the
following events shall occur:
(a) The number of shares that would otherwise be purchased by
each Participant shall be proportionately reduced on the Offering Date in order
to eliminate such excess;
(b) The Plan shall automatically terminate immediately after the
Offering Date as of which the supply of available shares is exhausted; and
(c) Any amount remaining in the Stock Purchase Accounts of each
of the Participants shall be repaid to such Participants.
Section 5.02 Anti-Dilution Provisions. The aggregate number of shares of
------------------------
Stock reserved for purchase under the Plan, as hereinabove provided, and the
calculation of the Purchase Price per share may (but need not) be adjusted by
the Administrative Committee in any manner in which the Committee, in its
absolute discretion subject only to the approval of the Board of Directors,
deems appropriate to reflect any change in, reclassification of, subdivision of,
combination of, split-up or spin off with respect to, stock dividend on,
exchange of, or other increase or decrease in the number of issued shares of
Stock.
8
<PAGE>
Section 5.03 Effect of Certain Transactions. Subject to any required
------------------------------
action by the shareholders, if the Company shall be the surviving or resulting
corporation in any merger or consolidation, any Offering hereunder shall pertain
to and apply to the shares of stock of the Company. However, in the event of a
dissolution or liquidation of the Company, or of a merger or consolidation in
which the Company is not the surviving or resulting corporation, this Plan and
any Offering hereunder shall terminate upon the effective date of such
dissolution, liquidation, merger, or consolidation, and the balance then
standing to the credit of each Participant in his/her Stock Purchase Account
shall be returned to him/her.
ARTICLE VI
MISCELLANEOUS
-------------
Section 6.01 Non-Alienation. The right to purchase shares of Stock under
--------------
this Plan is personal to the Participant, is exercisable only by the Participant
during his/her lifetime except as hereinafter set forth, and may not be assigned
or otherwise transferred by the Participant. Notwithstanding the foregoing,
there shall be delivered to the executor, administrator or other personal
representative of a deceased Participant such shares of Stock and such residual
balance as may remain in the Participant's Stock Purchase Account as of the
Offering Date occurring at the close of the Purchase Period in which the
Participant's death occurs, including shares of Stock purchased by the
Participant and/or withheld from the Participant's compensation.
Section 6.02 Administrative Costs. The Company shall pay all
--------------------
administrative expenses associated with the operation of this Plan. No
administrative charges shall be levied against the Stock Purchase Accounts of
the Participants.
Section 6.03 Administrative Committee. The Board of Directors shall
------------------------
appoint an Administrative Committee (which may be referred to as the "Stock
Purchase Plan Committee"), which shall have the authority and power to
administer the Plan and to make, adopt, construe, and enforce rules and
regulations not inconsistent with the provisions of the Plan. The Administrative
Committee shall adopt and prescribe the contents of all forms required in
connection with the administration of this Plan, including, but not limited to,
the Purchase Agreement, payroll withholding authorizations, withdrawal
documents, and all other notices required hereunder. The Administrative
Committee's interpretations and decisions in respect of this Plan, the rules and
regulations pursuant to which it is operated, and the rights of Participants
hereunder shall be final and conclusive.
Section 6.04 Amendment of the Plan. The Board of Directors may, at any
---------------------
time and from time to time, amend the Plan in any respect, except that no
amendment may
(a) except as provided in Section 5.02 hereof, increase the
number of shares reserved for purposes of this Plan;
9
<PAGE>
(b) allow any person who is not an Eligible Employee to become a
Participant; or
(c) prior to May 21, 1998 materially increase the benefits
accruing to Participants under the Plan;
without the approval of the shareholders, nor may any amendment provide for (i)
Purchase Periods shorter in duration than one (1) calendar month nor longer in
duration than twelve (12) calendar months (treating as a calendar month any
month commencing an the first day thereof and ending on either the last day
thereof or the last business day thereof) or (ii) overlapping Purchase Periods.
Section 6.05 Expiration and Termination of the Plan. The Plan shall
---------------------------------------
continue in effect through May 20, 2008 unless terminated prior thereto
pursuant to the provisions of this Plan or pursuant to action by the Board of
Directors, which shall have the right to terminate the Plan at any time without
prior notice to any Participant. Upon the expiration or termination of this
Plan, the balance, if any, then standing to the credit of each Participant in
his/her Stock Purchase Account shall be refunded to him/her.
Section 6.06 Repurchase of Stock. The Company shall not be required to
-------------------
purchase or repurchase from any Participant any of the shares of Stock that the
Participant acquired under this Plan.
Section 6.07 Notice. A Purchase Agreement and any notice that a
------
Participant files pursuant to the Plan shall be on the form prescribed by the
Administrative Committee and shall be effective only when received by the
Administrative Committee. Delivery of such forms may be made by hand or by
certified mail, sent postage prepaid, to SEI Investments Company, One Freedom
Valley Drive, Oaks, Pennsylvania 19456, Attention: Stock Purchase Plan
Committee.
Section 6.08 Government Regulation. The Company's obligation to sell and
---------------------
to deliver the Stock under the Plan is at all times subject to compliance with
all laws and administrative regulations pertaining to the authorization,
issuance, sale, or delivery of such stock, including state and federal
securities laws and the regulations of any securities exchange, if applicable.
Section 6.09 Headings, Captions, Gender. The headings and captions
--------------------------
herein are for convenience of reference only and shall not be considered as a
part of the text.
Section 6.10 Severability of Provisions; Prevailing Law The provisions
------------------------------------------
of this Plan shall be deemed severable. In the event any such provision is
determined to be unlawful or unenforceable by a court of competent jurisdiction
or by reason of a change in an applicable statute, the Plan shall continue to
exist as though such provisions had never been included therein. This Plan
shall be governed by the laws of the Commonwealth of Pennsylvania, to the extent
such laws are not in conflict with or superseded by federal law.
10
<PAGE>
Exhibit 99(f)
SEI INVESTMENTS COMPANY
1998 EQUITY COMPENSATION PLAN
-----------------------------
The purpose of the SEI Investments Company 1998 Equity Compensation Plan
(the "Plan") is to provide (i) designated employees of SEI Investments Company
(the "Company") and its subsidiaries, (ii) certain consultants and advisors who
perform services for the Company or its subsidiaries and (iii) non-employee
members of the Board of Directors of the Company (the "Board") with the
opportunity to receive grants of incentive stock options, nonqualified stock
options, stock appreciation rights, restricted stock and performance units. The
Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefitting the Company's
shareholders, and will align the economic interests of the participants with
those of the shareholders. For purposes of the Plan, the term subsidiary shall
refer to any company (whether a corporation, partnership, joint venture or other
entity) in which the Company owns, directly or indirectly, a majority of the
shares of capital stock or other equity interest.
1. Administration
--------------
(a) Committee. The Plan shall be administered and interpreted by a
---------
committee consisting of two or more persons appointed by the Board (the
"Committee"), each of whom may, but need not, be an "outside director" as
defined under section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), and related Treasury regulations and a "non-employee director" as
defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). However, the Board may ratify or approve (and, in the
case of grants to the members of the Committee, shall approve) grants, in which
case references to the Committee shall be deemed to include the Board.
(b) Committee Authority. The Committee shall have the sole authority to
-------------------
(i) determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability and (iv) deal
with any other matters arising under the Plan. Notwithstanding the foregoing, in
addition to any other grants made by the Committee to Non-Employee Directors in
accordance with the terms of the Plan, Non-Employee Directors shall receive
stock option grants pursuant to the provisions of Section 6.
<PAGE>
(c) Committee Determinations. The Committee shall have full power and
------------------------
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. Grants
------
Awards under the Plan may consist of grants of stock options as described
in Section 5 and Section 6 ("Options"), restricted stock as described in Section
7 ("Restricted Stock"), stock appreciation rights as described in Section 8
("SARs"), performance units as described in Section 9 ("Performance Units") or a
combination of the foregoing (hereinafter collectively referred to as "Grants").
All Grants shall be subject to the terms and conditions set forth herein and to
such other terms and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the individual
in a grant instrument or an amendment to the grant instrument (the "Grant
Instrument"). The Committee shall approve the form and provisions of each Grant
Instrument. Grants under a particular Section of the Plan need not be uniform as
among the grantees.
3. Shares Subject to the Plan
--------------------------
(a) Shares Authorized. Subject to the adjustment specified below, the
-----------------
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is the sum of (i) 1,500,000 shares
and (ii) the number of shares of Company Stock reserved for issuance, but not
subject to outstanding or previously exercised option grants, as of the
Effective Date of the Plan, under the Company's Stock Option Plan and 1997 Stock
Option Plan, plus any shares of Company Stock that, but for the termination of
such plans, would have again become available for grants after the Effective
Date of this Plan, by reason of the termination, expiration, cancellation,
forfeiture or surrender of options previously granted under such plans;
provided, however, that the maximum number of shares of Company Stock for which
Incentive Stock Options may be granted during the term of the Plan is 1,500,000
shares. The maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any individual during any calendar year
shall be 100,000 shares. The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan. If and to the
extent Options or SARs granted under the Plan terminate, expire, or are
canceled, forfeited, exchanged or surrendered without having been exercised or
if any shares of Restricted Stock or Performance Units are forfeited, the shares
subject to such Grants shall again be available for purposes of the Plan. Any
shares of Company Stock delivered to the Company
-2-
<PAGE>
to exercise an Option granted under the Plan, or to satisfy the Company's
withholding obligation with respect to any Grant, shall also become available
for the issuance of Grants under the Plan.
(b) Adjustments. If there is any change in the number or kind of shares of
-----------
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the price per share or the applicable market value of such Grants may
be appropriately adjusted by the Committee to reflect any increase or decrease
in the number of, or change in the kind or value of, issued shares of Company
Stock to preclude, to the extent practicable, the enlargement or dilution of
rights and benefits under such Grants; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated. Any adjustments
determined by the Committee shall be final, binding and conclusive.
4. Eligibility for Participation
-----------------------------
(a) Eligible Persons. All employees of the Company and its subsidiaries
----------------
("Employees"), including Employees who are officers or members of the Board, and
members of the Board who are not Employees ("Non-Employee Directors") shall be
eligible to participate in the Plan. Consultants and advisors who perform
valuable services to the Company or any of its subsidiaries ("Key Advisors")
shall be eligible to participate in the Plan if the Key Advisors render bona
fide services and such services are not rendered in connection with the offer or
sale of securities in a capital-raising transaction.
(b) Selection of Grantees. The Committee shall select the Employees and
---------------------
Key Advisors to receive Grants and shall determine the number of shares of
Company Stock subject to a particular Grant in such manner as the Committee
determines; provided, however, that Non-Employee Directors shall receive Grants
in accordance with Section 6 hereof, in addition to any other Grants that the
Committee determines shall be made in accordance with the terms of the Plan.
Employees, Key Advisors and Non-Employee Directors who receive Grants under this
Plan shall hereinafter be referred to as "Grantees".
-3-
<PAGE>
5. Granting of Options
-------------------
(a) Number of Shares. The Committee shall determine the number of shares
----------------
of Company Stock that will be subject to each Grant of Options under this
Section 5 to Employees, Non-Employee Directors and Key Advisors.
(b) Type of Option and Price.
------------------------
(i) The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the meaning of section
422 of the Code ("Incentive Stock Options") or Options that are not intended to
so qualify ("Nonqualified Stock Options") or any combination of Incentive Stock
Options and Nonqualified Stock Options, all in accordance with the terms and
conditions set forth herein. Incentive Stock Options may be granted only to
Employees. Nonqualified Stock Options under this Section 5 may be granted to
Employees, Non-Employee Directors and Key Advisors.
(ii) The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and shall not be less
than the Fair Market Value (as defined below) of a share of Company Stock on the
date the Option is granted; provided, however, that an Incentive Stock Option
may not be granted to an Employee who, at the time of grant, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any "parent corporation" or "subsidiary
corporation" of the Company (within the meaning of sections 424(e) and 424(f) of
the Code, respectively), unless the Exercise Price per share is not less than
110% of the Fair Market Value of Company Stock on the date of grant.
Notwithstanding the foregoing, the Exercise Price of Company Stock subject to a
Nonqualified Stock Option may be less than the Fair Market Value of a share of
Company Stock on the date the Option is granted ("Discounted Option"), if the
grant thereof is subject to the satisfaction of specified performance goals
which may, but need not, be in accordance with Section 10 hereof.
(iii) If the Company Stock is publicly traded, then the Fair Market
Value per share shall be determined as follows: (x) if the principal trading
market for the Company Stock is a national securities exchange or the Nasdaq
National Market, the last reported sale price thereof on the relevant date or
(if there were no trades on that date) the latest preceding date upon which a
sale was reported, or (y) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and "asked" prices
of Company Stock on the relevant date, as reported on Nasdaq or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid" or "asked"
quotations as set forth above, the Fair Market Value per share shall be as
determined by the Committee.
-4-
<PAGE>
(c) Option Term. The Committee shall determine the term of each Option.
-----------
The term of any Option shall not exceed ten years from the date of grant.
However, an Incentive Stock Option that is granted to an Employee who, at the
time of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
of the Company, may not have a term that exceeds five years from the date of
grant.
(d) Exercisability of Options. Options shall become exercisable in
-------------------------
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument. The Committee
may accelerate the exercisability of any or all outstanding Options at any time
for any reason.
(e) Termination of Employment or Service.
------------------------------------
(i) Except as provided below, an Option may only be exercised while
the Grantee is employed by, or providing service to, the Company as an Employee,
Key Advisor or member of the Board. In the event that a Grantee ceases to be
employed by, or provide service to, the Company for any reason other than a
"disability", death, or termination for "cause", any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within 90 days after
the date on which the Grantee ceases to be employed by, or provide service to,
the Company (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or provide service to, the Company shall terminate as
of such date.
(ii) In the event the Grantee ceases to be employed by, or provide
service to, the Company on account of a termination for "cause" by the Company,
any Option held by the Grantee shall terminate as of the date the Grantee ceases
to be employed by, or provide service to, the Company.
(iii) In the event the Grantee ceases to be employed by, or provide
service to, the Company because the Grantee is "disabled", any Option which is
otherwise exercisable by the Grantee shall terminate unless exercised within one
year after the date on which the Grantee ceases to be employed by, or provide
service to, the Company (or within such other period of time as may be specified
by the Committee), but in any event no later than the date of expiration of the
Option term. Except as otherwise provided by the Committee, any of the
Grantee's Options which are not otherwise exercisable as of the date on which
the Grantee ceases to be employed by, or provide service to, the Company shall
terminate as of such date.
(iv) If the Grantee dies while employed by, or providing service to,
the Company or within 90 days after the date on which the Grantee ceases to be
employed or provide service on account of a termination specified in Section
5(e)(i) above (or within such other period
-5-
<PAGE>
of time as may be specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised within one year
after the date on which the Grantee ceases to be employed by, or provide service
to, the Company (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or provide service to, the Company shall terminate as
of such date.
(v) For purposes of this Section 5(e) and Sections 7, 8 and 9:
(A) The term "Company" shall mean the Company and its subsidiaries.
(B) "Employed by, or provide service to, the Company" shall mean
employment or service as an Employee, Key Advisor or member of the Board
(so that, for purposes of exercising Options and SARs and satisfying
conditions with respect to Restricted Stock and Performance Units, a
Grantee shall not be considered to have terminated employment or service
until the Grantee ceases to be an Employee, Key Advisor and member of the
Board), unless the Committee determines otherwise.
(C) "Disability" shall mean a Grantee's becoming disabled within the
meaning of section 22(e)(3) of the Code.
(D) "Cause" shall mean, (i) the Grantee's willful misconduct with
respect to the business and affairs of the Company; (ii) the Grantee's
gross neglect of duties or failure to act which materially and adversely
affects the business or affairs of the Company; (iii) the Grantee's
commission of an act involving embezzlement or fraud or conviction for any
felony; or the (iv) the Grantee's breach of an employment or consulting
agreement with the Company.
(f) Exercise of Options. A Grantee may exercise an Option that has become
-------------------
exercisable, in whole or in part, by delivering a notice of exercise to the
Company with payment of the Exercise Price. The Grantee shall pay the Exercise
Price for an Option as specified by the Committee (x) in cash, (y) with the
approval of the Committee, by delivering shares of Company Stock owned by the
Grantee (including Company Stock acquired in connection with the exercise of an
Option, subject to such restrictions as the Committee deems appropriate) and
having a Fair Market Value on the date of exercise equal to the Exercise Price
or (z) by such other method as the Committee may approve, including payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board. Shares of Company Stock used to exercise an Option shall
have been held by the Grantee for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. The Grantee
shall pay the Exercise Price and the amount of any withholding tax due (pursuant
to Section 11) at the time of exercise.
-6-
<PAGE>
(g) Limits on Incentive Stock Options. Each Incentive Stock Option shall
---------------------------------
provide that, if the aggregate Fair Market Value of the Company Stock on the
date of the grant with respect to which Incentive Stock Options are exercisable
for the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a subsidiary, exceeds $100,000, then
such Option, as to the excess, shall be treated as a Nonqualified Stock Option.
An Incentive Stock Option shall not be granted to any person who is not an
Employee of the Company or a parent corporation or a subsidiary corporation
(within the meaning of sections 424(e) and 424(f) of the Code, respectively).
6. Formula Option Grants to Non-Employee Directors.
-----------------------------------------------
In addition to any other Grants made by the Committee to a Non-Employee
Director, a Non-Employee Director shall be entitled to receive Options under the
Plan in accordance with this Section 6.
(a) Initial Grant. Each Non-Employee Director who first becomes a member
-------------
of the Board of Directors of the Company after the Effective Date of this Plan
(as specified in Section 21) shall receive a grant of a Nonqualified Stock
Option to purchase 8,000 shares of Company Stock on the date as of which he or
she first becomes a member of the Board or at such other proximate time as the
Committee may determine.
(b) Annual Grants. Each Non-Employee Director shall receive an annual
-------------
grant of a Nonqualified Stock Option to purchase 4,000 shares of Company Stock;
provided that such Non-Employee Director qualifies as such on the date of grant.
The date of grant of each such annual grant shall be December 31, the date of
any year end grants to employees under this Plan or such other proximate time as
the Committee shall determine.
(c) Option Price. The option price of the shares of Company Stock subject
------------
to an Option granted under this Section 6 shall be equal to the Fair Market
Value of the shares of Company Stock on the date of grant.
(d) Option Term and Exercisability. The term of each Option granted
------------------------------
pursuant to this Section 6 shall be ten years. Options granted under this
Section 6 shall become exercisable in four equal installments of whole number of
shares on the first, second, third and fourth anniversaries of the date of
grant, unless otherwise determined by the Committee. No option, or portion
thereof, granted under this Section 6 shall vest or become exercisable after the
Grantee ceases to provide services to the Company and all Options shall
terminate automatically on the earliest to occur of the expiration of the option
term (as described above), or one of the following events:
(i) Upon expiration of ten (10) days after notice by the Company
pursuant to Section 13(b)(ii) of the sale of all or substantially all of its
assets;
-7-
<PAGE>
(ii) Thirty (30) days after the date the Non-Employee Director
ceases to provide services to the Company for any reason other than death or
disability; or
(iii) One year after the date the Non-Employee Director ceases to
provide services to the Company as a result of death or disability.
(e) Applicability of Plan Provisions. Except as otherwise provided in this
--------------------------------
Section 6, options granted to Non-Employee Directors shall be subject to the
provisions of this Plan applicable to Options granted to other persons.
(f) Administration. Except to the extent provided herein, the provisions
--------------
of this Section 6 are intended to operate automatically and not require
administration. To the extent that any administrative determinations are
required, any determinations with respect to the provisions of this Section 6
shall be made by the Committee. If at any time there are not sufficient shares
of Company Stock available under the Plan to permit a grant as described in this
Section 6, the Grant shall be reduced pro rata (to zero, if necessary) so as not
to exceed the number of shares then available under the Plan.
7. Restricted Stock Grants
-----------------------
The Committee may issue or transfer shares of Company Stock to an Employee,
Non-Employee Director or Key Advisor under a Grant of Restricted Stock, upon
such terms as the Committee deems appropriate. The following provisions are
applicable to Restricted Stock:
(a) General Requirements. Shares of Company Stock issued or transferred
--------------------
pursuant to Restricted Stock Grants may be issued or transferred for
consideration or for no consideration, as determined by the Committee in its
sole discretion. The Committee may establish conditions under which restrictions
on shares of Restricted Stock shall lapse over a period of time or according to
such other criteria as the Committee deems appropriate. The period of time
during which the Restricted Stock will remain subject to restrictions will be
designated in the Grant Instrument as the "Restriction Period."
(b) Number of Shares. The Committee shall determine the number of shares
----------------
of Company Stock to be issued or transferred pursuant to a Restricted Stock
Grant and the restrictions applicable to such shares.
(c) Requirement of Employment or Service. If the Grantee ceases to be
------------------------------------
employed by, or provide service to, the Company (as defined in Section 5(e))
during a period designated in the Grant Instrument as the Restriction Period, or
if other specified conditions are not met, the Restricted Stock Grant shall
terminate as to all shares covered by the Grant as to which the restrictions
have not lapsed, and those shares of Company Stock must be immediately returned
to the Company. The Committee may, however, provide for complete or partial
exceptions to this requirement as it deems appropriate.
-8-
<PAGE>
(d) Restrictions on Transfer and Legend on Stock Certificate. During the
--------------------------------------------------------
Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Restricted Stock except to a Successor
Grantee under Section 12(a). Each certificate for a share of Restricted Stock
shall contain a legend giving appropriate notice of the restrictions in the
Grant. The Grantee shall be entitled to receive a stock certificate or
certificates, or have the legend removed from the stock certificate or
certificates covering any of the shares subject to restrictions, as applicable,
when all restrictions on such shares have lapsed. The Committee may determine,
in its sole discretion, that the Company will not issue certificates for shares
of Restricted Stock until all restrictions on such shares have lapsed, or that
the Company will retain possession of certificates for any shares issued
pursuant to a Restricted Stock Grant, until all restrictions on such shares have
lapsed.
(e) Right to Vote and to Receive Dividends. Unless the Committee
--------------------------------------
determines otherwise, during the Restriction Period, the Grantee shall have the
right to vote shares of Restricted Stock for which certificates have been issued
or transferred to the Grantee and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee.
(f) Lapse of Restrictions. All restrictions imposed on Restricted Stock
---------------------
shall lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Restricted Stock Grants, that the restrictions shall
lapse without regard to any Restriction Period.
8. Stock Appreciation Rights
-------------------------
(a) General Requirements. The Committee may grant stock appreciation
--------------------
rights ("SARs") to an Employee, Non-Employee Director or Key Advisor separately
or in tandem with any Option (for all or a portion of the applicable Option).
Tandem SARs may be granted either at the time the Option is granted or at any
time thereafter while the Option remains outstanding; provided, however, that,
in the case of an Incentive Stock Option, SARs may be granted only at the time
of the Grant of the Incentive Stock Option. The Committee shall establish the
base amount of the SAR at the time the SAR is granted. Unless the Committee
determines otherwise, the base amount of each SAR shall be equal to the per
share Exercise Price of the related Option or, if there is no related Option,
the Fair Market Value of a share of Company Stock as of the date of Grant of the
SAR.
(b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to
-----------
a Grantee that shall be exercisable during a specified period shall not exceed
the number of shares of Company Stock that the Grantee may purchase upon the
exercise of the related Option during such period. Upon the exercise of an
Option, the SARs relating to the Company Stock covered by such Option shall
terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.
-9-
<PAGE>
(c) Exercisability. An SAR shall be exercisable during the period
--------------
specified by the Committee in the Grant Instrument and shall be subject to such
vesting and other restrictions as may be specified in the Grant Instrument. The
Committee may accelerate the exercisability of any or all outstanding SARs at
any time for any reason. SARs may only be exercised while the Grantee is
employed by the Company or during the applicable period after termination of
employment as described in Section 5(e). A tandem SAR shall be exercisable only
during the period when the Option to which it is related is also exercisable.
(d) Value of SARs. When a Grantee exercises SARs, the Grantee shall
-------------
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised, payable in cash, Company Stock or
a combination thereof. The stock appreciation for an SAR is the amount by which
the Fair Market Value of the underlying Company Stock on the date of exercise of
the SAR exceeds the base amount of the SAR as described in Subsection (a).
(e) Form of Payment. The Committee shall determine whether the
---------------
appreciation in an SAR shall be paid in the form of cash, shares of Company
Stock, or a combination of the two, in such proportion as the Committee deems
appropriate. For purposes of calculating the number of shares of Company Stock
to be received, shares of Company Stock shall be valued at their Fair Market
Value on the date of exercise of the SAR. If shares of Company Stock are to be
received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.
9. Performance Units
-----------------
(a) General Requirements. The Committee may grant performance units
--------------------
("Performance Units") to an Employee or Key Advisor. Each Performance Unit
shall represent the right of the Grantee to receive an amount based on the value
of the Performance Unit, if performance goals established by the Committee are
met. A Performance Unit shall be based on the Fair Market Value of a share of
Company Stock or on such other measurement base as the Committee deems
appropriate. The Committee shall determine the number of Performance Units to be
granted and the requirements applicable to such Units.
(b) Performance Period and Performance Goals. When Performance Units are
----------------------------------------
granted, the Committee shall establish the performance period during which
performance shall be measured (the "Performance Period"), performance goals
applicable to the Units ("Performance Goals") and such other conditions of the
Grant as the Committee deems appropriate. Performance Goals may relate to the
financial performance of the Company or its operating units, the performance of
Company Stock, individual performance, or such other criteria as the Committee
deems appropriate.
(c) Payment with respect to Performance Units. At the end of each
-----------------------------------------
Performance Period, the Committee shall determine to what extent the Performance
Goals and other conditions of the Performance Units are met and the amount, if
any, to be paid with respect to the
-10-
<PAGE>
Performance Units. Payments with respect to Performance Units shall be made in
cash, in Company Stock, or in a combination of the two, as determined by the
Committee.
(d) Requirement of Employment or Service. If the Grantee ceases to be
------------------------------------
employed by, or provide service to, the Company (as defined in Section 5(e))
during a Performance Period, or if other conditions established by the Committee
are not met, the Grantee's Performance Units shall be forfeited. The Committee
may, however, provide for complete or partial exceptions to this requirement as
it deems appropriate.
10. Qualified Performance-Based Compensation.
----------------------------------------
(a) Designation as Qualified Performance-Based Compensation. The Committee
-------------------------------------------------------
may determine that Performance Units, Discounted Options or Restricted Stock
granted to an Employee shall be considered "qualified performance-based
compensation" under section 162(m) of the Code. The provisions of this Section
10 shall apply to Grants of Discounted Options, Performance Units and Restricted
Stock that are to be considered "qualified performance-based compensation" under
section 162(m) of the Code.
(b) Performance Goals. When Discounted Options, Performance Units or
-----------------
Restricted Stock that are to be considered "qualified performance-based
compensation" are granted, the Committee shall establish in writing (i) the
objective performance goals that must be met in order for Discounted Options to
be granted, restrictions on the Restricted Stock to lapse or amounts to be paid
under the Performance Units, (ii) the Performance Period during which the
performance goals must be met, (iii) the threshold, target and maximum amounts
that may be paid if the performance goals are met, and (iv) any other
conditions, including without limitation provisions relating to death,
disability, other termination of employment or Change of Control, that the
Committee deems appropriate and consistent with the Plan and section 162(m) of
the Code. The performance goals may relate to the Employee's business unit or
the performance of the Company and its subsidiaries as a whole, or any
combination of the foregoing. The Committee shall use objectively determinable
performance goals based on one or more of the following criteria: stock price,
earnings per share, net earnings, operating earnings, return on assets,
shareholder return, return on equity, growth in assets, unit volume, sales,
market share, or strategic business criteria consisting of one or more
objectives based on meeting specified revenue goals, market penetration goals,
geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures.
(c) Establishment of Goals. The Committee shall establish the performance
----------------------
goals in writing either before the beginning of the Performance Period or during
a period ending no later than the earlier of (i) 90 days after the beginning of
the Performance Period or (ii) the date on which 25% of the Performance Period
has been completed, or such other date as may be required or permitted under
applicable regulations under section 162(m) of the Code. The performance goals
shall satisfy the requirements for "qualified performance-based compensation,"
including the requirement that the achievement of the goals be substantially
uncertain at the time they are
-11-
<PAGE>
established and that the goals be established in such a way that a third party
with knowledge of the relevant facts could determine whether and to what extent
the performance goals have been met. The Committee shall not have discretion to
increase the amount of compensation that is payable upon achievement of the
designated performance goals.
(d) Maximum Payment. If Discounted Options, Restricted Stock, or
---------------
Performance Units measured with respect to the fair market value of Company
Stock, are granted, not more than 100,000 shares of Company Stock may be granted
to an Employee under Discounted Options, Performance Units or Restricted Stock
for any Performance Period. If Performance Units are measured with respect to
other criteria, the maximum amount that may be paid to an Employee with respect
to a Performance Period is $1,000,000.
(e) Announcement of Grants. The Committee shall certify and announce the
----------------------
results for each Performance Period to all Grantees immediately following the
announcement of the Company's financial results for the Performance Period. If
and to the extent that the Committee does not certify that the performance goals
have been met, the grants of Restricted Stock or Performance Units for the
Performance Period shall be forfeited.
11. Withholding of Taxes
--------------------
(a) Required Withholding. All Grants under the Plan shall be subject to
--------------------
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the Grantee or other person receiving
shares to pay the Company the amount of any such taxes that the Company is
required to withhold with respect to such Grants or the Company may deduct from
the amount payable under a Grant or from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.
(b) Election to Withhold Shares. If the Committee so permits, a Grantee
---------------------------
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option, SAR, Restricted Stock or Performance Units paid in Company
Stock by having shares withheld up to an amount that does not exceed the
Grantee's minimum applicable withholding tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and shall be subject to the prior approval of the
Committee.
12. Transferability of Grants
-------------------------
(a) Nontransferability of Grants. Except as provided below, only the
----------------------------
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Grants other than Incentive Stock Options,
if permitted in any specific case by the Committee, in its sole discretion,
pursuant to a domestic relations order (as defined under the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended, or the
regulations thereunder).
-12-
<PAGE>
When a Grantee dies, the personal representative or other person entitled to
succeed to the rights of the Grantee ("Successor Grantee") may exercise such
rights. A Successor Grantee must furnish proof satisfactory to the Company of
his or her right to receive the Grant under the Grantee's will or under the
applicable laws of descent and distribution.
(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing,
--------------------------------------
the Committee may provide, in a Grant Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members, one or more trusts for the benefit
of family members, one or more partnerships of which family members are the only
partners, or other persons or entities, according to such terms as the Committee
may determine; provided that the Grantee receives no consideration for the
transfer of an Option and the transferred Option shall continue to be subject to
the same terms and conditions as were applicable to the Option immediately
before the transfer.
13. Change of Control of the Company
--------------------------------
As used herein, a "Change of Control" shall be deemed to have occurred if:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than Alfred P. West, Jr., becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the voting power of the
then outstanding securities of the Company;
(b) The shareholders of the Company approve (or, if shareholder approval
is not required, the Board approves) an agreement providing for (i) the merger
or consolidation of the Company with another corporation where the shareholders
of the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to 50% or more of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company;
(c) Any person, other than the Company, has commenced a tender offer or
exchange offer for 30% or more of the voting power of the then outstanding
shares of the Company; or
(d) At least a majority of the Board does not consist of individuals who
were elected, or nominated for election, by the directors in office at the time
of such election or nomination.
14. Consequences of a Change of Control
-----------------------------------
(a) Notice and Acceleration. Upon a Change of Control, unless the Board
-----------------------
determines otherwise, (i) the Company shall provide each Grantee with
outstanding Grants written notice of
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<PAGE>
such Change of Control, (ii) all outstanding Options and SARs shall
automatically accelerate and become fully exercisable, (iii) the restrictions
and conditions on all outstanding Restricted Stock shall immediately lapse, and
(iv) Grantees holding Performance Units shall receive a payment in settlement of
such Performance Units, in an amount determined by the Committee, based on the
Grantee's target payment for the Performance Period and the portion of the
Performance Period that precedes the Change of Control.
(b) Assumption of Grants. Upon a Change of Control where the Company is
--------------------
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Board determines otherwise, all outstanding Options and
SARs that are not exercised shall be assumed by, or replaced with comparable
options or rights by, the surviving corporation.
(c) Other Alternatives. Notwithstanding the foregoing, subject to
------------------
subsection (d) below, in the event of a Change of Control, the Board may take
one or both of the following actions: the Board may (i) require that Grantees
surrender their outstanding Options and SARs in exchange for a payment by the
Company, in cash or Company Stock as determined by the Board, in an amount equal
to the amount by which the then Fair Market Value of the shares of Company Stock
subject to the Grantee's unexercised Options and SARs exceeds the Exercise Price
of the Options or the base amount of the SARs, as applicable, or (ii) after
giving Grantees an opportunity to exercise their outstanding Options and SARs,
terminate any or all unexercised Options and SARs at such time as the Board
deems appropriate. Such surrender or termination shall take place as of the date
of the Change of Control or such other date as the Board may specify.
(d) Board. The Board making the determinations under this Section 14
-----
following a Change of Control must be comprised of the same members as those on
the Board immediately before the Change of Control. If the Board members do not
meet this requirement, the automatic provisions of Subsections (a) and (b) shall
apply, and the Board shall not have discretion to vary them.
(e) Limitations.
-----------
(i) Notwithstanding anything in the Plan to the contrary, in the
event of a Change of Control, neither the Committee nor the Board shall have the
right to take any actions described in the Plan (including without limitation
actions described in Subsection (c) above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
(ii) The Committee shall limit the application of Section 14 if it
determines that: (i) a Grantee will receive an "excess parachute payment," as
defined in section 280G of the Code, that will be subject to an excise tax under
section 4999 of the Code, and (ii) the
-14-
<PAGE>
Committee's imposition of limits on the application Section 14 will result in a
Grantee receiving a larger amount on an after-tax basis than he would have
received had the Committee not imposed such limitations. If the Committee must
limit application of Section 14 as a result of the foregoing, it shall do so in
manner that (A) maximizes total compensation paid to the Grantee without causing
any compensation to be subject to excise tax under section 4999 of the Code, and
(B) unless the Committee determines otherwise, restores, in the following order,
Options, SARs, Restricted Stock and Performance Units on a share-by-share or
unit-by-unit basis, to the terms that applied before the Change of Control.
15. Requirements for Issuance or Transfer of Shares
-----------------------------------------------
No Company Stock shall be issued or transferred in connection with any
Grant hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Grant made to any Grantee hereunder on such Grantee's undertaking in writing
to comply with such restrictions on his or her subsequent disposition of such
shares of Company Stock as the Committee shall deem necessary or advisable as a
result of any applicable law, regulation or official interpretation thereof, and
certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued or
transferred under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.
16. Amendment and Termination of the Plan
-------------------------------------
(a) Amendment. The Board may amend or terminate the Plan at any time;
---------
provided, however, that the Board shall not amend the Plan without shareholder
approval if such approval is required in order to meet the requirements for
Incentive Stock Options under section 422 of the Code (and the Board has
determined that compliance with section 422 of the Code is desirable), or such
approval is required in order to exempt compensation under the Plan from the
deduction limit under section 162(m) of the Code.
(b) Termination of Plan. The Plan shall terminate on the day immediately
-------------------
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the shareholders.
(c) Termination and Amendment of Outstanding Grants. A termination or
-----------------------------------------------
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 22(b). The termination of the Plan shall not impair
the power and authority of the Committee with respect to an outstanding Grant.
Whether or not the Plan has terminated, an outstanding Grant may be terminated
or amended under Section 22(b) or may be amended by agreement of the Company and
the Grantee consistent with the Plan.
-15-
<PAGE>
(d) Governing Document. The Plan shall be the controlling document. No
------------------
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
17. Funding of the Plan
-------------------
This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Grants under this Plan. In no event shall interest be
paid or accrued on any Grant, including unpaid installments of Grants.
18. Rights of Participants
----------------------
Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee
Director or other person to any claim or right to be granted a Grant under this
Plan. Neither this Plan nor any action taken hereunder shall be construed as
giving any individual any rights to be retained by or in the employ of the
Company or any other employment rights.
19. No Fractional Shares
--------------------
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Grant. The Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
20. Headings
--------
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
21. Effective Date of the Plan.
--------------------------
(a) Effective Date. Subject to approval by the Company's shareholders, the
--------------
Plan shall be effective on May 21, 1998.
22. Miscellaneous
-------------
(a) Grants in Connection with Corporate Transactions and Otherwise.
--------------------------------------------------------------
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including Grants to employees thereof
who become Employees of the Company, or for other
-16-
<PAGE>
proper corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee of another corporation
who becomes an Employee by reason of a corporate merger, consolidation,
acquisition of stock or property, reorganization or liquidation involving the
Company or any of its subsidiaries in substitution for a stock option or
restricted stock grant made by such corporation. The terms and conditions of the
substitute grants may vary from the terms and conditions required by the Plan
and from those of the substituted stock incentives. The Committee shall
prescribe the provisions of the substitute grants.
(b) Compliance with Law. The Plan, the exercise of Options and SARs and
-------------------
the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. In addition,
it is the intent of the Company that the Plan and applicable Grants under the
Plan comply with the applicable provisions of section 162(m) of the Code and
section 422 of the Code. To the extent that any legal requirement of section 16
of the Exchange Act or section 162(m) or 422 of the Code as set forth in the
Plan ceases to be required under section 16 of the Exchange Act or section
162(m) or 422 of the Code, that Plan provision shall cease to apply. The
Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation. The
Committee may also adopt rules regarding the withholding of taxes on payments to
Grantees. The Committee may, in its sole discretion, agree to limit its
authority under this Section.
(c) No Shareholder Rights. Except as otherwise provided by the Committee,
---------------------
a Grantee or Successor Grantee shall have no rights as a shareholder with
respect to any shares of Company Stock covered by a Grant until the shares are
issued or transferred to the Grantee or Successor Grantee on the stock transfer
records of the Company.
(d) Governing Law. The validity, construction, interpretation and effect
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of the Plan and Grant Instruments issued under the Plan shall exclusively be
governed by and determined in accordance with the law of the Commonwealth of
Pennsylvania.
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