<PAGE> 1
EXHIBIT 99.1
JOHN H. HARLAND COMPANY
2000 STOCK OPTION PLAN
-------------------
ADOPTED AUGUST 25, 2000
<PAGE> 2
JOHN H. HARLAND COMPANY
2000 STOCK OPTION PLAN
P. 1
BACKGROUND AND PURPOSE
The purpose of this Plan is to promote the interest of the John H.
Harland Company through the granting of Options and Restricted Stock in order to
(1) attract and retain Employees, (2) provide an additional incentive to
Employees to work to increase the value of Stock and (3) provide Employees with
a stake in the future of the Company which corresponds to the stake of each of
the Company's stockholders.
P. 2
DEFINITIONS
Each term set forth in this ss. 2 shall have the meaning set forth
opposite such term and any reference to the plural of a defined term shall
include the singular.
2.1 Board -- the Board of Directors of the Company.
2.2 Code -- Internal Revenue Code of 1986, as amended.
2.3 Committee -- a committee of the Board comprised of at least three
directors. Each Committee member shall be a "non-employee director"
within the meaning of Rule 16b-3 and an "outside director" within the
meaning of Code ss. 162(m).
2.4 Company -- John H. Harland Company and any successor thereto.
2.5 Effective Date -- the date described in ss.4.
2.6 Employee -- an employee of the Company or any entity that
would be treated as a single employer with the Company under Code ss.
414(c) if "50 percent" were substituted for "80 percent" in the
regulations under such section.
2.7 Fair Market Value -- either (1) the closing price of the Stock
on any date on the national quotation system selected by the Committee,
(2) if there was no quotation of the Stock on such date, the closing
price on the next preceding business day on which there was a
quotation, or (3) if the Stock is not quoted on a national quotation
system, the price that the Committee acting in good faith determines
through any reasonable valuation
<PAGE> 3
method.
2.8 1933 Act -- Securities Act of 1933, as amended.
2.9 1934 Act -- Securities Exchange Act of 1934, as amended.
2.10 Officer - the Company's president, principal financial
officer, principal accounting officer, any vice president of the Company in
charge of a principal business unit, division or function (such as sales,
administration or finance), or any other person who performs a significant
policy-making function for the Company. Officers of the Company's subsidiaries
shall be deemed officers of the Company if they perform such policy-making
functions for the Company.
2.11 Option -- an option to purchase Stock granted in accordance
with ss.7.
2.12 Option Agreement -- the document that sets forth the terms and
conditions of an Option.
2.13 Option Price -- the price to purchase one share of Stock upon
the exercise of an Option.
2.14 Plan -- this John H. Harland Company 2000 Stock Option Plan,
as amended from time to time.
2.15 Restricted Stock - means Stock granted in accordance with
ss.8.
2.16 Restricted Stock Agreement - means the document that sets
forth the terms and conditions of a Restricted Stock grant.
2.17 Rule 16b-3 -- the exemption under Rule 16b-3 to Section 16(b)
of the 1934 Act or any successor to such rule.
2.18 Stock -- Common Stock of the Company, $1.00 par value.
2.19 Subsidiary -- a subsidiary corporation of the Company within
the meaning of Code ss. 424(f).
P. 3
SHARES RESERVED UNDER THE PLAN
There shall be 1,000,000 shares of Stock authorized for issuance under
this Plan. To the
<PAGE> 4
extent the Company deems appropriate, such shares of Stock may be reserved from
authorized but unissued shares of Stock or from shares of Stock that have been
reacquired by the Company. Any shares of Stock subject to an Option that remain
unissued after the cancellation, expiration or exchange of the Option shall be
available for use in future grants under this Plan. However, any shares of Stock
used to exercise an Option or to satisfy a withholding obligation shall not be
available for use in future grants under this Plan. Any shares of Restricted
Stock issued under this Plan shall not be available for future issuance, unless
forfeited, in which event such shares shall be available for future grants under
this Plan.
P. 4
EFFECTIVE DATE
The effective date of this Plan shall be the date of its adoption by
the Board.
P. 5
COMMITTEE
This Plan shall be administered by the Committee. The Committee acting
in its absolute discretion shall interpret this Plan and take such action in the
administration and operation of this Plan as the Committee deems appropriate
under the circumstances. Any action of the Committee shall be binding on the
Company, on each affected Employee and on each other person directly or
indirectly affected by such action.
P. 6
ELIGIBILITY AND ANNUAL GRANT CAPS
Only Employees who are not Officers or Board members shall be eligible
for the grant of Options. No Employee in any calendar year shall be granted an
Option to purchase more than 100,000 shares of Stock.
P. 7
OPTIONS
7.1 Committee Action. The Committee acting in its absolute
discretion may grant Options to Employees from time to time. An Option may be
granted by the Committee to an Employee in exchange for the cancellation of any
option to purchase Stock or under any other circumstances under which the
Committee deems appropriate. Each grant of an Option shall be
<PAGE> 5
evidenced by an Option Agreement, which shall incorporate such terms and
conditions of the grant as the Committee acting in its absolute discretion deems
appropriate.
7.2 Option Price. The Option Price shall be no less than the Fair
Market Value of a share of Stock on the date the Option is granted; provided,
however, if the Committee grants an Option to an Employee for a number of shares
of Stock in exchange for the cancellation of any Option to purchase the same
number of shares of Stock, the Option Price under such Option for such shares
shall be the same as the Option Price for such shares under the Option that is
canceled. The Option Price shall be payable in full upon the exercise of any
Option. At the discretion of the Committee, an Option Agreement can provide for
the payment of the Option Price either in cash, by check or in Stock that is
acceptable to the Committee, or in any combination of cash, check and such
Stock. A payment by a check acceptable to the Committee shall be treated as a
payment in cash under this Plan. The Option Price may be paid through any broker
facilitated cashless exercise procedure acceptable to the Committee or its
delegate. The value of any Stock surrendered as payment in the exercise of an
Option shall be equal to the Fair Market Value of such Stock on the date the
properly endorsed certificate for such Stock is delivered to the Committee or
its delegate.
7.3 Exercise Period. Each Option shall be exercisable in whole or
in part at such time or times as set forth in the related Option Agreement, but
no Option shall be exercisable after the tenth anniversary of the date the
Option is granted. An Option Agreement may provide for the exercise of an Option
after the employment of an Employee has terminated for any reason whatsoever,
including death or disability.
P. 8
RESTRICTED STOCK
8.1 Committee Action. The Committee acting in its absolute
discretion may grant Restricted Stock to Employees from time to time and may
make Restricted Stock grants in exchange for the cancellation of an outstanding
Restricted Stock grant. Each grant of Restricted Stock shall be evidenced by a
Restricted Stock Agreement, which shall describe the conditions under which the
Employee's interest in the underlying Stock will become nonforfeitable.
8.2 Conditions to Issuance. The Committee acting in its absolute
discretion may make the issuance of Restricted Stock subject to the satisfaction
of any conditions that the Committee deems appropriate for Employees generally
or for an Employee in particular, and the Restricted Stock Agreement shall
describe each such condition and the deadline for satisfying each such
condition. Restricted Stock shall be issued in the name of an Employee only
after each such condition has been satisfied, and any Restricted Stock that is
so issued shall be held by the Company pending the satisfaction of any
forfeiture conditions applicable thereto.
<PAGE> 6
8.3 Forfeiture Conditions. The Committee acting in its absolute
discretion may make Restricted Stock subject to one or more objective
employment, performance or other forfeiture condition that the Committee deems
appropriate for Employees generally or for an Employee in particular, and the
related Restricted Stock Agreement shall set forth each forfeiture condition and
the deadline for satisfying same. A Restricted Stock Agreement may contain both
the conditions precedent to the issuance of Restricted Stock and the forfeiture
conditions applicable thereto. An Employee's nonforfeitable interest in
Restricted Stock shall depend on the extent he or she timely satisfies each
condition.
8.4 Dividends and Voting Rights. Any cash dividend declared on
Stock underlying Restricted Stock shall be paid directly to the Employee granted
such Restricted Stock. If a Stock dividend is declared on Stock underlying
Restricted Stock, such Stock dividend shall be treated as Restricted Stock, and
an Employee's interest in such Stock dividend shall be forfeited or shall become
nonforfeitable at the same time as the Restricted Stock is forfeited or becomes
nonforfeitable. The disposition of each other form of dividend declared on
Restricted Stock shall be made in accordance with such rules as the Committee
shall adopt. An Employee shall have the right to vote Restricted Stock. The
dividend and voting rights described in this ss. 8.4 shall apply to a grant of
Restricted Stock from the date of issuance as determined by the Committee.
8.5 Satisfaction of Forfeiture Conditions. Shares of Stock shall
cease to be Restricted Stock at such time as provided in the Restricted Stock
Agreement, and a certificate representing the unrestricted Stock shall be
transferred to the Employee as soon as practicable thereafter.
8.6 Tax Bonus Payment. The Committee acting in its absolute
discretion shall have the power to authorize and direct the payment of a cash
bonus to an Employee to pay all, or a portion of his or her federal, state and
local income and excise tax liability that the Committee deems attributable (a)
to his or her interest in Restricted Stock becoming nonforfeitable and (b) to
such cash bonus.
8.7 Section 162(m). If the Committee deems it in the best
interests of the Company, it shall use its best efforts to grant Restricted
Stock in a manner such that (a) the compensation resulting from the grant is
"performance-based compensation" within the meaning of Code ss. 162(m) or (b)
the Company otherwise gets an income tax deduction for the compensation
attributable to such grant.
P. 9
NONTRANSFERABILITY
An Option or Restricted Stock grant shall not be transferable by an
Employee other than by will or by the laws of descent and distribution. During
an Employee's lifetime, an Option shall be exercisable and a Restricted Stock
grant shall be held only by the Employee; however,
<PAGE> 7
the person or persons to whom an Option or Restricted Stock grant is transferred
by will or by the laws of descent and distribution thereafter shall be treated
as the Employee under this Plan. The restriction on transfer described in this
ss. 9 shall be incorporated in each Option Agreement and Restricted Stock
Agreement.
P. 10
SECURITIES REGISTRATION
Each Option Agreement and Restricted Stock Agreement shall provide
that, upon the receipt of Stock, the Employee shall, if so requested by the
Company, (a) hold such Stock for investment and not with a view of resale or
distribution to the public and (b) deliver to the Company a written statement
satisfactory to the Company to that effect. As for Stock issued pursuant to this
Plan, the Company at its expense shall take such action as it deems necessary or
appropriate to register the original issuance of such Stock to an Employee under
the 1933 Act or under any other applicable securities laws or to qualify such
Stock for an exemption under any such laws prior to the issuance of such Stock
to an Employee; however, the Company shall have no obligation whatsoever to take
any such action in connection with the transfer, resale or other disposition of
such Stock by an Employee.
P. 11
LIFE OF PLAN
No Option or Restricted Stock shall be granted under this Plan on or
after the earlier of (a) the tenth anniversary of the Effective Date, in which
event this Plan shall continue in effect until all outstanding Options have been
exercised in full or are no longer exercisable and all Restricted Stock has been
forfeited or the forfeiture conditions on such Restricted Stock have been
satisfied in full, or (b) the date on which all of the Stock authorized for
issuance has been issued, in which event this Plan also shall terminate on such
date.
P. 12
ADJUSTMENT
12.1 Capital Structure. In the event of any change in the
capitalization of the Company, including, but not limited to, such changes as
stock dividends or stock splits, the Committee may adjust in an equitable manner
the number, kind or class (or any combination thereof) of shares of Stock
authorized for issuance under ss. 3 and subject to (a) Options and the Option
Price of such Options and (b) Restricted Stock grants to reflect such change.
Notwithstanding the foregoing, no adjustment shall be required to the extent
that the Committee, in its absolute discretion, determines that an adjustment is
not appropriate in respect of any
<PAGE> 8
change in capitalization. Further, no adjustment shall be made as a result of
the issuance by the Company of shares of any class or securities convertible
into shares of any class, for cash or property, or for labor or services, either
upon direct sale or upon exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into such
shares or other securities.
12.2 Mergers. The Committee as part of any corporate transaction
described in Code ss. 424(a) shall have the right to adjust (in any manner that
the Committee in its discretion deems consistent with Code ss. 424(a)) the
number, kind or class (or any combination thereof) of shares of Stock subject to
(a) Options and the Option Price of such Options and (b) Restricted Stock
grants. The Committee may in its similar discretion grant Options and Restricted
Stock to effect the assumption of, or the substitution for, options previously
granted by any other corporation to the extent called for by such corporate
transaction.
12.3 Fractional Shares. If any adjustment under this ss. 12 would
create a fractional share of Stock or a right to acquire a fractional share of
Stock, such fractional share shall be disregarded and the number of shares of
Stock that otherwise would result from such adjustment shall be the next lower
number of shares of Stock, rounding all fractions downward. An adjustment made
under this ss. 12 by the Committee shall be conclusive and binding on all
affected persons.
P. 13
SALE OR MERGER OF THE COMPANY
If the Company agrees to sell all or substantially all of its assets
for cash or property or for a combination of cash and property or agrees to any
merger, consolidation, reorganization, division or other corporate transaction
in which Stock is converted into another security or into the right to receive
securities or property and such agreement does not provide for the assumption or
substitution of Options and Restricted Stock grants, each Option Agreement and
Restricted Stock grant at the direction and discretion of the Board may be
canceled unilaterally by the Company if (1) any restrictions on the exercise of
an Option or restrictions on any Restricted Stock grant are waived or deemed
satisfied before the Option Agreement or Restricted Stock grant is canceled such
that the Employee has the opportunity to exercise the Option in full or receive
Stock subject to the Restricted Stock grant before such cancellation, or (2)
with respect to Options, (a) the Company transfers to the Employee shares of
Stock, the number of which shall be determined by the Company by dividing the
excess of (i) the fair market value of the number of shares which remain subject
to the exercise of such Option as of any date over the total Option Price for
such shares by (ii) the fair market value of a share of Stock on such date,
which number shall be rounded down to the nearest whole number, or (b) the
Company transfers to an Employee the same consideration which the Employee
otherwise would receive as a shareholder of the Company in connection with such
sale or other corporate transaction if the
<PAGE> 9
Employee held the number of shares of Stock which would have been transferable
to him or to her under ss. 13(2) if such number had been determined immediately
before such sale or other corporate transaction.
P. 14
AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the extent
that the Board deems necessary or appropriate. The Board also may suspend the
granting of Options at any time and may terminate this Plan at any time;
provided, however, neither the Board nor the Committee shall have the right
unilaterally to modify, amend or cancel any Option granted before such
suspension or termination unless (a) the Employee consents in writing to such
modification, amendment or cancellation or (b) there is a dissolution or
liquidation of the Company or a transaction described in ss. 12 or ss. 13.
P. 15
MISCELLANEOUS
15.1 Shareholder Rights. No Employee shall have any rights as a
shareholder of the Company as a result of the grant of an Option or his or her
exercise of such Option pending the actual delivery of the Stock subject to such
Option to such Employee.
15.2 No Contract of Employment. The grant of an Option or
Restricted Stock shall not constitute a contract of employment and shall not
confer on an Employee any rights upon his or her termination of employment in
addition to those rights, if any, expressly set forth in the related Option
Agreement or Restricted Stock Agreement.
15.3 Withholding. Each grant of an Option or Restricted Stock shall
be made subject to the condition that the Employee consents to whatever action
the Committee directs to satisfy the federal and state tax withholding
requirements, if any, that the Committee in its discretion deems applicable to
the exercise of such Option or Restricted Stock grant. The Committee also shall
have the right to provide in an Option Agreement or Restricted Stock Agreement
that an Employee may elect to satisfy federal and state tax withholding
requirements through a reduction in the number of shares of Stock actually
transferred to him or to her under this Plan.
15.4 Construction. All references to sections (ss.) are to sections
(ss.) of this Plan unless otherwise indicated. The headings to sections in this
Plan have been included for convenience of reference only. This Plan shall be
construed under the laws of the State of Georgia.
<PAGE> 10
15.5 Other Conditions. Each Option Agreement or Restricted Stock
Agreement may require that an Employee (as a condition to the exercise of an
Option or Restricted Stock grant) enter into any agreement or make such
representations prepared by the Company, including any agreement that restricts
the transfer of Stock acquired pursuant to the exercise of an Option or provides
for the repurchase of such Stock by the Company under certain circumstances.
15.6 Rule 16b-3. The Committee shall have the right to amend any
grant of an Option or Restricted Stock grant or to withhold or otherwise
restrict the transfer of any Stock under this Plan to an Employee as the
Committee deems appropriate in order to satisfy any condition or requirement
under Rule 16b-3 to the extent Rule 16 of the 1934 Act might be applicable to
such grant or transfer.
15.7 Loans. If approved by the Committee, the Company may lend
money to, or guarantee loans made by a third party to, any Employee to finance
the exercise of any Option, and the exercise of an Option with the proceeds of
any such loan shall be treated as an exercise for cash. If approved by the
Committee, the Company also may, in accordance with an Employee's instructions,
transfer Stock acquired in the exercise of an Option directly to a third party
in connection with any arrangement made by the Employee for financing the
exercise of such Option.
