<PAGE> 1
As filed with the Securities and Exchange Commission on May 24, 2000.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ARROW ELECTRONICS, INC.
(Exact name of issuer as specified in its charter)
New York 11-1806155
(State of Incorporation) (I.R.S. Employer
Identification No.)
25 Hub Drive
Melville, New York 11747
(631) 391-1300
(Address and telephone number of principal executive offices)
Arrow Electronics, Inc.
Internet Business Group
Strategic Incentive Program
(Full Title of the Plan)
Robert E. Klatell, Esq.
Executive Vice President
Arrow Electronics, Inc.
25 Hub Drive
Melville, New York 11747
(631) 391-1300
(Name, address and telephone number of agent for service)
Copies to:
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
(212) 530-5000
Attention: Howard S. Kelberg, Esq.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Securities to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Registered Amount to be Registered Price Per Share(1) Offering Price(2) Registration Fee
====================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock (par value 500,000 $36.90 $18,450,000 $4,871
$1.00 per share)
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, based on the average of the high and low prices for Arrow
Electronics, Inc.'s common stock as reported on the New York Stock Exchange on
May 19, 2000.
(2) The proposed maximum aggregate offering price listed above has been
determined pursuant to Rule 457(h) under the Securities Act of 1933, as amended,
and represents the sum of the aggregate exercise price of all shares registered
hereunder available for future grant under the Plan.
<PAGE> 2
PART I
ITEM 1. PLAN INFORMATION
This Registration Statement relates to the registration of
500,000 shares of Common Stock, $1.00 par value per share, of ARROW ELECTRONICS,
INC. (the "Registrant") awarded under the Arrow Electronics, Inc. Internet
Business Group Strategic Incentive Program (the "Plan"). Documents containing
the information required by Part I of the Registration Statement will be sent or
given to participants in the Plan as specified by Rule 428(b). Such documents
are not filed with the Securities and Exchange Commission (the "Commission" or
the "SEC") either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 in reliance on Rule 428.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The Registrant will, upon written or oral request, provide
without charge to any person to whom the Prospectus relating to this
Registration Statement is delivered, a copy of any and all of the information
which has been incorporated by reference in such Prospectus and this
Registration Statement (pursuant to Item 3 of Part II below). Such requests
should be directed to the Secretary, Arrow Electronics, Inc., 25 Hub Drive,
Melville, New York 11747 (telephone: (631) 391-1300).
PART II
INFORMATION REQUIRED IN THE REGISTRATION
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been filed by Arrow
Electronics, Inc. (the "Company") with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Securities Act") and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable, are incorporated by reference herein and shall
be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999.
2. The description of the Company's Capital Stock contained in
the registration statement filed with the Commission under
the 1934 Act, including any amendment or report filed for
the purpose of updating such description.
3. All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act.
All documents, filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
registration statement and made a part hereof from their respective dates of
filing (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"); provided, however, that the documents
enumerated above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act in each year during which the
offering made by this registration statement is in effect prior to the filing
with the Commission of the Company's Annual Report on Form 10-K covering such
year shall not be Incorporated Documents or be incorporated by reference in this
registration statement or be a part hereof from and after the filing of such
Annual Report on Form 10-K.
Any Statement contained in an Incorporated Document shall
be deemed to be modified or superseded for purposes of this registration
statement to the extent that a statement contained herein or in any other
subsequently filed Incorporated Document modifies or supersedes such statement.
Any such statement so modified
2
<PAGE> 3
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Common Stock being registered hereunder has been
registered pursuant to Section 12 of the Exchange Act and a description of the
Common Stock is contained in the Exchange Act registration statement which has
been filed with the Commission.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 9 of the Company's Certificate of Incorporation
permits the indemnification of officers and directors under certain
circumstances to the full extent that such indemnification may be permitted by
law.
Such rights of indemnification are in addition to, and not
in limitation of, any rights to indemnification to which any officer or director
of the Company is entitled under the Business Corporation Law of the State of
New York which provides for indemnification by a corporation of its officers and
directors under certain circumstances as stated in the Business Corporation Law
and subject to specified limitations set forth in the Business Corporation Law.
The Company also maintains directors' and officers'
liability insurance coverage which insures directors and officers of the Company
against certain losses arising from claims made, and for which the Company has
not provided reimbursement, by reason of their being directors and officers of
the Company or its subsidiaries.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index on page 7.
ITEM 9. UNDERTAKINGS.
(1) The Company hereby undertakes:
(a) 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;
(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
3
<PAGE> 4
(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 (1)(a)(i) and (1)(a)(ii)
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(a) or Section 15(d) of the 1934 Act that are
incorporated by reference in the registration statement.
(b) 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.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(2) The Company hereby undertakes that, for the purpose of
determining any liability under the Securities Act, each filing of the issuer's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act of (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at the time shall be deemed to be the initial bona fide offering hereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the above-mentioned provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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 Securities Act and will be governed by the final
adjudication of such issue.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it 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 Melville and the State of New York, on May 23,
2000.
ARROW ELECTRONICS, INC.
By: /s/ Robert E. Klatell
-----------------------------------
Robert E. Klatell
Executive Vice President
5
<PAGE> 6
POWER OF ATTORNEY
Each person whose signature appears below hereby severally
constitutes and appoints Stephen P. Kaufman, Robert E. Klatell, and John C.
Waddell and each of them acting singly, as his or her true and lawful
attorney-in-fact and agent, with full and several power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead
in any and all capacities indicated below, the registration statement on Form
S-8 filed herewith and any and all pre-effective and post-effective amendments
and supplements to the said registration statement, and to file the same, with
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 fully to all intents and purposes as he or she might or
could do in person hereby ratifying and confirming all that said
attorney-in-fact and agent, or his or her substitute, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirement of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the capacities and on the date indicated below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Stephen P. Kaufman
- ----------------------------
Stephen P. Kaufman Chairman, Principal Executive Officer, and Director May 23, 2000
/s/ Robert E. Klatell
- ----------------------------
Robert E. Klatell Executive Vice President, Secretary, and Director May 23, 2000
/s/ Sam R. Leno
- ----------------------------
Sam R. Leno Senior Vice President and Principal Financial Officer May 23, 2000
/s/ Paul J. Reilly
- ----------------------------
Paul J. Reilly Vice President, Finance and Principal Accounting Officer May 23, 2000
/s/ Daniel W. Duval
- ----------------------------
Daniel W. Duval Director May 23, 2000
- ----------------------------
Carlo Geirsch Director ________, 2000
/s/ John N. Hanson
- ----------------------------
John N. Hanson Director May 23, 2000
/s/ Roger King
- ----------------------------
Roger King Director May 23, 2000
/s/ Karen Gordon Mills
- ----------------------------
Karen Gordon Mills Director May 23, 2000
/s/ Barry W. Perry
- ----------------------------
Barry W. Perry Director May 23, 2000
/s/ Richard S. Rosenbloom
- ----------------------------
Richard S. Rosenbloom Director May 23, 2000
/s/ Francis M. Scricco
- ----------------------------
Francis M. Scricco Director May 23, 2000
- ----------------------------
Robert S. Throop Director ________, 2000
/s/ John C. Waddell
- ----------------------------
John C. Waddell Director May 23, 2000
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
5 Opinion of Milbank, Tweed, Hadley & McCloy LLP as to the legality of the Company's Common Stock.
23(a) Consent of Milbank, Tweed, Hadley & McCloy LLP (included in the Opinion filed as Exhibit 5 hereto).
23(b) Consent of Ernst & Young LLP, independent auditors.
24 Power of Attorney (set forth on the signature page hereof).
99(a) Arrow Electronics, Inc. Internet Business Group Strategic Incentive Program
</TABLE>
7
<PAGE> 1
Exhibits 5 and 23(a)
LETTERHEAD
May 17, 2000
Arrow Electronics, Inc.
25 Hub Drive
Melville, NY 11747
Re: Registration Statement on Form S-8 of Arrow Electronics, Inc.
Relating to the Issuance Shares of Common Stock Pursuant to
the Arrow Electronics, Inc. Internet Business Group Strategic
Incentive Program.
Ladies and Gentlemen:
We have acted as counsel to Arrow Electronics, Inc., a New York
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission") under the
securities Act of 1933, as amended, (the "Act") relating to the offering of up
to 500,000 shares of the Company's Common Stock, par value $1.00 per share (the
"Shares"), to be issued pursuant to the provisions of the Arrow Electronics,
Inc. Internet Business Group Strategic Incentive Program (the "Program"). We
have examined such records, documents, statues and decisions as we have deemed
relevant in rendering this opinion.
We are of the opinion that when:
(a) the applicable provisions of the Act and of State securities or
blue sky laws shall have been complied with;
(b) the Company's Board of Directors shall have duly authorized the
issuance of the Shares; and
(c) the Shares shall have been duly issued and paid for in an amount
not less than par value of $1.00 per share;
the Shares will be legally issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement. In giving such opinion, 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 Commission thereunder.
Very truly yours,
/s/ Milbank, Tweed, Hadley & McCloy LLP
HSK/MLW
<PAGE> 1
Exhibit 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorportion by reference in the Registration Statement (Form
S-8) pertaining to the registration of 500,000 shares of common stock of Arrow
Electronics, Inc., issuable pursuant to the Arrow Electronics, Inc. Internet
Business Group Strategic Incentive Program, of our report dated February 16,
2000, with respect to the consolidated financial statements and schedule of
Arrow Electronics, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1999, as filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
May 18, 2000
<PAGE> 1
ARROW ELECTRONICS, INC.
INTERNET BUSINESS GROUP
STRATEGIC INCENTIVE PROGRAM
* * * * *
1. INTRODUCTION.
1.1. This instrument sets forth the terms and conditions of the Arrow
Electronics, Inc. Internet Business Group Strategic Incentive Program,
as adopted effective December 16, 1999.
1.2. The purpose of the Program is to provide incentive benefits to, or on
account of, certain employees of the Company who meet the eligibility
requirements and are selected for participation in the Program. It is
intended that the Program shall aid the Company in retaining and
attracting employees whose abilities, experience and judgment can
contribute to the continued progress of the Company.
2. DEFINITIONS.
2.1. "Accounts" means a Participant's Cash Account and Common Stock Account.
2.2. "Beneficiary" means the person or persons designated by the Participant
on his or her most recent Beneficiary Designation Form to receive any
death benefits payable under the Program.
2.3. "Beneficiary Designation Form" means the form pursuant to which a
Participant designates his or her Beneficiary, in such form as the
Board determines from time to time in its sole discretion.
2.4. "Board" means the Board of Directors of the Company, as constituted
from time to time.
2.5. "Cash Account" means the bookkeeping account established for a
Participant under the Program and to which the Cash Component of a
Participant's SIP Unit award is credited from time to time, as adjusted
from time to time as provided in the Program.
2.6. "Cash Component" shall have the meaning ascribed thereto in Section
2.19.
2.7. "Company" means Arrow Electronics, Inc., a New York corporation, or any
successor corporation to Arrow Electronics, Inc.
2.8. "Common Stock" means the Common Stock, par value $1.00 per share, of
the Company or any security of the Company issued by the Company in
substitution or exchange therefor.
2.9. "Common Stock Account" means the bookkeeping account established for a
Participant under the Program and to which the Common Stock Component
of a Participant's SIP
<PAGE> 2
-2-
Unit award is credited from time to time, as adjusted from time to time
as provided in the Program.
2.10. "Common Stock Component" shall have the meaning ascribed thereto in
Section 2.19.
2.11. "Contribution" means a bookkeeping entry to a Participant's Accounts
determined pursuant to Section 6 of the Plan.
2.12. "Disability" means disability as defined in the Participant's then
effective employment agreement with the Company, or if the Participant
is not then a party to an effective employment agreement with the
Company which defines disability, "Disability" means disability as
determined by the Board, in accordance with standards and procedures
similar to those under the Company's long-term disability plan, if any.
2.13. "Eligible Employee" means any employee of the Company's Internet
Business Group.
2.14. "Fair Market Value" means the fair market value of a share of Common
Stock as determined by the Board in good faith, from time to time.
2.15. "Participant" means (i) any Eligible Employee who is selected for
participation in the Program pursuant to Section 3 below, or (ii) an
individual with positive Account balances under the Program.
2.16. "Payment Date" means the last business day immediately preceding each
anniversary of the date on which a SIP Unit is first contributed to a
Participant's Account, or such other date as determined by the Board in
its sole discretion.
2.17. "Program" means the Arrow Electronics, Inc. Internet Business Group
Strategic Incentive Program, as set forth herein and as amended from
time to time.
2.18. "Retirement" means the voluntary retirement by the Participant from
active employment with the Company and its Subsidiaries on or after the
attainment of normal retirement age under Company-sponsored pension or
retirement plans or any other age with the consent of the Board.
2.19. "SIP Unit" means a unit having a value determined by the Board from
time to time in its sole discretion, one-half of which shall be
comprised of the Cash Component, and the remaining one-half of which
shall be comprised of the Common Stock Component. The value of a SIP
Unit for any year in which the Program is in effect shall be the same
with respect to all Participants.
2.20. "Subsidiary(ies)" means any corporation (other than the Company) in an
unbroken chain of corporations, including and beginning with the
Company, if each of such corporations, other than the last corporation
in the unbroken chain, owns, directly or indirectly, more than fifty
percent (50%) of the voting stock in one of the other corporations in
such chain.
<PAGE> 3
-3-
3. ELIGIBILITY.
Participation in the Program shall be limited to Eligible Employees selected as
Participants by the Board, or by such other individual(s) to whom the Board has
delegated such authority; provided, however, that the selection of an Eligible
Employee as a Participant with respect to one year shall not obligate the Board
or such other designated individual(s) to select such Eligible Employee as a
Participant with respect to any subsequent year in which the Program is in
effect.
4. ADMINISTRATION.
4.1 The Board will have full authority to administer, construe and
interpret the Program and to promulgate, amend and rescind rules and
regulations relating to the implementation, administration and
maintenance of the Program.
4.2 Subject to the terms and conditions of the Program, the Board shall
make all determinations necessary or advisable for the implementation,
administration and maintenance of the Program, including, without
limitation, correcting any technical defect(s) or technical
omission(s), or reconciling any technical inconsistency(ies), in the
Program. The Board's determinations under the Program need not be
uniform and may be made selectively among Participants, whether or not
such Participants are similarly situated. Any determination, decision
or action of the Board in connection with the Eligible Employee or the
interpretation, administration, implementation or maintenance of the
Program shall be final, conclusive and binding upon all Eligible
Employees and any person(s) claiming under or through any Eligible
Employee. The Board may designate persons other than itself to carry
out the day-to-day administration of the Program under such conditions
and limitations as it may prescribe. In addition, the Board may
delegate all of its authority under the Program to any individual or
group of individuals, including, but not limited to, a committee of the
Board comprised solely of two or more Non-Employee Directors (as
defined in the Securities Exchange Act of 1934, as amended).
4.3 The Company will indemnify and hold harmless the Board and each member
thereof (and any party to whom the Board has delegated its authority
under the Program) against any cost or expense (including, without
limitation, reasonable attorneys' fees and expenses) or liability
(including without limitation any sum paid in settlement of a claim
with the approval of the Company) arising out of any act or omission to
act, except in the case of willful gross misconduct or gross
negligence.
4.4 All fees and expenses incurred in administering the Program will be
paid by the Company.
5. PARTICIPANT ACCOUNTS.
The Board shall establish as bookkeeping accounts a Cash Account and a Common
Stock Account for each Participant under the Program. Thereafter, the Board
shall credit each Participant's Accounts with (i) all Contributions under the
Program with respect to the Participant and (ii) deemed investment returns
pursuant to Section 7 below.
<PAGE> 4
-4-
6. CONTRIBUTIONS.
6.1 On April 1 of each year in which the Program remains in effect, or such
other date as determined by the Board in its sole discretion, the
Company shall credit to the Cash Account of each Eligible Employee who
has been selected as a Participant with respect to such year, the Cash
Component of the SIP Unit(s) that the Board, in its sole discretion,
has determined to award to such Participant for such year; provided,
however, that the number of SIP Units awarded to each such Participant
with respect to such year need not be the same.
6.2 On April 1 of each year in which the Program remains in effect, or such
other date as determined by the Board in its sole discretion, the
Company shall credit to the Common Stock Account of each Eligible
Employee who has been selected as a Participant with respect to such
year, the Common Stock Component of the SIP Unit(s) that the Board, in
its sole discretion, has determined to award to such Participant for
such year; provided, however, that the number of SIP Units awarded to
each such Participant with respect to such year need not be the same.
6.3 No Participant contributions to the Program are required or permitted.
7. DEEMED INVESTMENT OF ACCOUNTS.
7.1 During and for each year in which the Program is in effect, the balance
in each Participant's Cash Account will be deemed to be invested as of
the date the Cash Component of the SIP Unit(s) is credited to such
Participant's Cash Account under the Program in an account bearing a
rate of interest compounded monthly as determined from time to time by
the Board in its sole discretion.
7.2 During and for each year in which the Program is in effect, the balance
in each Participant's Common Stock Account will be deemed to be
invested as of the date the Common Stock Component of the SIP Unit(s)
is credited to such Common Stock Account under the Program.
7.3 At the end of each calendar month, or such other period as the Board
shall determine in its sole discretion, each Participant's Accounts
shall be adjusted pursuant to Section 8 below, and such adjusted
Account balances shall then be deemed reinvested for the immediately
succeeding calendar month, or such other applicable period.
8. VALUATION.
At the end of each calendar month, the balance in the Accounts of each
Participant shall be determined by the Board, taking into account (i) any
increase therein resulting from Contributions for such calendar month under
Section 6, if any, (ii) any earnings with respect to Participant's existing Cash
Account balance, (iii) any dividends or other distributions made with respect to
the Common Stock or any reorganizations, mergers, or other transactions
affecting the Common Stock and (iv) any decrease therein resulting from the
distribution to such Participant, or such Participant's Beneficiary(ies), of any
portion of such Accounts pursuant to Section 9 below.
<PAGE> 5
-5-
9. DISTRIBUTIONS.
9.1 Except as otherwise provided in this Section 9, commencing on the first
Payment Date and on each Subsequent Payment Date, the Participant shall
receive a distribution from each of his or her Accounts equal to twenty
percent (20%) of the balance in each such Account as determined
immediately prior to such Payment Date.
9.2 If a Participant's employment with the Company's Internet Business
Group is terminated for any reason other than his or her death,
Disability or Retirement, such Participant shall forfeit his or her
Account balances as of the date of such termination of employment and
shall not be entitled to any further distributions under the Program.
9.3 If a Participant's employment with the Company's Internet Business
Group is terminated by reason of his or her death, Disability or
Retirement, the balance of the Participant's Accounts will be
distributed to the Participant, or his or her Beneficiary, as
appropriate in annual installments over a period not to exceed five (5)
years; provided, however, that the Board, in its sole discretion, may
provide that any such amounts shall be paid by the Company in a lump
sum.
9.4 All distributions from a Participant's Cash Account shall be payable in
cash, or such other form as determined by the Board in its sole
discretion.
9.5 All distributions from a Participant's Common Stock Account shall be
payable in shares of Common Stock, with any fractional shares payable
in cash in an amount determined by the Board in its sole discretion;
provided, however, that the Participant or his or her Beneficiary, as
appropriate, may request prior to any Payment Date to receive a
percentage of his or her Common Stock Account distribution sufficient
to pay his or her tax liability associated with such distribution, and
the Board may, in its sole discretion, elect to have the Company pay in
cash such amount or any lesser amount as determined by the Board in its
sole discretion.
10. AMENDMENT OR TERMINATION.
The Program may be amended, modified or terminated at any time by the Board;
provided, however, that upon the termination of the Program, Participants'
Accounts shall be distributed in such manner and over such period as the Board,
in its sole discretion, shall determine.
11. NATURE OF OBLIGATIONS OF THE COMPANY.
11.1 The Company will make all benefit payments under the Program to
Participants or Beneficiaries, where applicable. No funds or assets of
the Company or any Subsidiary will be segregated or physically set
aside with respect to the Program.
11.2 No Participant or Beneficiary will have an interest as a shareholder of
the Company or in any specific asset of the Company or any Subsidiary
as a result of the Program. The only right of a Participant or
Beneficiary(ies) to receive benefits under the Program will be that of
an unsecured general creditor of the Company.
<PAGE> 6
-6-
11.3 Nothing in the Program shall preclude the Company or any Subsidiary
from consolidating or merging into or with, or transferring all or
substantially all of its assets to, another corporation, or engaging in
any other corporate transaction.
12. NON-ASSIGNMENT OF INTEREST.
The Program shall be binding upon and inure to the benefit of (a) the Company
and its respective successors and assigns, and (b) each Participant, his or her
Beneficiary(ies) and estate. Benefits payable under the Program will not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, levy or charge. Any attempt to do so shall be void; nor
shall any amount in any manner be subject to any claims for the debts,
contracts, liabilities, engagements or torts of the Participant (or the
Participant's Beneficiary or personal representative) entitled to such benefit.
No Participant shall be entitled to borrow at any time any portion of the
Participant's Account balances under the Program.
13. NOT AN EMPLOYMENT CONTRACT.
The existence of this Program and/or participation in it shall not create any
right of the Participant to continue in the employ of the Company and/or any
Subsidiary.
14. WITHHOLDING.
All benefits payable under the Program shall be subject to applicable Federal,
foreign, state, local, income, or other taxes imposed in accordance with
applicable law. The Participants, their Beneficiaries and personal
representatives shall bear any and all federal, foreign, state, local, income,
or other taxes imposed in accordance with applicable law on amounts credited
and/or paid under the Program. The Company shall have the right to deduct from
any payment or settlement under the Program or from any other compensation
payable by the Company or any Subsidiary to a Participant, any federal, foreign,
state, local, income, or other taxes of any kind which the Board, in its sole
discretion, deems necessary to be withheld to comply with any applicable law,
rule or regulation.
15. DESIGNATION OF BENEFICIARY(IES).
Each Participant under the Program shall designate on his or her Beneficiary
Designation Form a Beneficiary or Beneficiaries to receive any payment which
under the terms of the Program becomes payable on, after or as a result of the
Participant's death. At any time, and from time to time, any such designation
may be changed or cancelled by the Participant without the consent of any such
Beneficiary(ies). Any such designation, change or cancellation must be on a
Beneficiary Designation Form and shall not be effective until received by the
Board. If no Beneficiary(ies) has been designated by a deceased Participant, or
if the designated Beneficiary(ies) have predeceased the Participant, the
Beneficiary shall be the Participant's estate. If the Participant designates
more than one Beneficiary, any payments under the Program to such Beneficiaries
shall be made in equal shares unless the Participant has expressly designated
otherwise, in which case the payments shall be made in the shares designated by
the Participant.
<PAGE> 7
-7-
16. SEVERABILITY OF PROVISIONS.
In the event any provision of the Program would serve to invalidate the Program,
that provision shall be deemed to be null and void, and the Program shall be
construed as if it did not contain the particular provision that would make it
invalid.
17. GOVERNING LAW AND INTERPRETATION.
The Program shall be construed and enforced in accordance with, and the rights
of the parties hereto shall be governed by, the laws of the State of New York,
without regard to the principles of conflict of laws thereof. This Program shall
not be interpreted as either an employment agreement or trust agreement.
18. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS.
Payments and other benefits received by a Participant under the Program shall
not be deemed a part of a Participant's compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary.
