UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 7, 2017
ScanSource, Inc.
(Exact name of Registrant as specified in its charter)
South Carolina | 000-26926 | 57-0965380 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
6 Logue Court, Greenville, South Carolina 29615
(Address, Including Zip Code, of Principal Executive Offices)
(864) 288-2432
(Registrants Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.07. Submission of Matters to a Vote of Security Holders.
ScanSource, Inc. (the Company) held its annual meeting of the shareholders on December 7, 2017 (the Annual Meeting). At the Annual Meeting, each of the seven director nominees was elected and received greater than 97% approval of votes cast, the Companys executive compensation program was approved, on an advisory basis, with 95% approval of votes cast, one year was selected as the frequency of future advisory votes on the Companys executive compensation program with 77% approval of votes cast, and the appointment of Grant Thornton LLP as the Companys independent auditors for fiscal 2018 was ratified with 99% approval of votes cast. The Company received proxies totaling 94% of its issued and outstanding shares of common stock, representing 23,969,809 shares of common stock, as of the record date. Each of the following proposals were voted on at the Annual Meeting and are described in more detail in the Companys definitive proxy statement filed with the Securities and Exchange Commission on October 24, 2017, and the results of the voting are presented below.
Election of Directors
The Companys shareholders approved the slate of directors consisting of seven members to hold office until the next annual meeting of shareholders or until their successors are duly elected and qualified, based on the following final voting results:
Nominee |
Votes For |
Votes
Withheld |
Broker
Non-Votes |
|||
Steven R. Fischer |
22,775,785 | 455,518 | 738,506 | |||
Michael L. Baur |
22,881,112 | 350,191 | 738,506 | |||
Peter C. Browning |
22,860,927 | 370,376 | 738,506 | |||
Michael J. Grainger |
22,802,036 | 429,267 | 738,506 | |||
John P. Reilly |
22,715,620 | 515,683 | 738,506 | |||
Elizabeth O. Temple |
22,895,718 | 335,585 | 738,506 | |||
Charles R. Whitchurch |
22,890,621 | 340,682 | 738,506 |
Advisory Vote to Approve the Compensation of the Companys Named Executive Officers
The shareholders approved, on an advisory basis, the compensation of the Companys named executive officers, based on the following final voting results:
For |
Against | Abstain |
Broker
Non-Votes |
|||
22,137,666 | 1,061,186 | 32,451 | 738,506 |
Advisory Vote on the Frequency of Future Advisory Votes on the Compensation of the Companys Named Executive Officers
The shareholders approved, on an advisory basis, to conduct future advisory votes on named executive officer compensation every year, based on the following final voting results. Accordingly, the Companys policy will be to conduct a non-binding vote on named executive officer compensation every year. In the future, this policy could change based, among other things, on the outcome of the next advisory vote on the frequency of future advisory votes on named executive officer compensation, and such other factors as the Company considers appropriate.
One Year |
Two Years | Three Years | Abstain | Broker Non-Votes | ||||
17,922,301 | 9,940 | 5,292,837 | 6,225 | 738,506 |
Advisory Vote to Ratify Grant Thornton LLP as the Independent Auditors for Fiscal 2018
The Companys shareholders ratified the appointment of Grant Thornton LLP as the Companys independent auditors for fiscal 2018, based on the following final voting results:
For |
Against | Abstain |
Broker
Non-Votes |
|||
23,952,500 | 12,605 | 4,704 | |
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ScanSource, Inc. | ||||||
Date: December 7, 2017 | By: |
/s/ Michael L. Baur |
||||
Name: Michael L. Baur | ||||||
Its: Chief Executive Officer |
Exhibit 10.1
RESTRICTED STOCK UNIT AWARD CERTIFICATE
(Performance- and Service-Based)
Non-transferable
GRANT TO
(the Participant)
by ScanSource, Inc. (the Company)
The Company hereby grants to Participant a performance-based and service-based Restricted Stock Unit (RSU) Award (the Award), which represents a contingent right to acquire shares of the Companys common stock, no par value (the Shares). The Award is subject to the terms and conditions set forth in this Restricted Stock Unit Award Certificate (Performance- and Service-Based) (the Award Certificate), including Schedule A , which is attached hereto and expressly made a part of this Agreement, and the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), the terms of which are incorporated herein in their entirety.
Participant: | [Insert Participant Name] | |
Award Date: | [Insert Award Date] | |
Performance Cycle: | January 1, 2018 to December 31, 2020 | |
The actual number of Shares, if any, subject to the Award that may be earned shall be determined based on the attainment of the performance goals specified in Schedule A, as determined by the Compensation Committee (Committee) following the end of the Performance Cycle; provided, however, that no Shares shall vest and be distributable to the Participant unless the Participant is continuously employed by the Company from the Award Date until December 31, 2020 and the provisions of Section 4 of Schedule A are met, except as otherwise provided in Section 3 of the Award Certificate in the event of death, Disability or Retirement or in Section 4 of the Award Certificate in the event of a Change in Control. | ||
The aggregate target number of RSUs for the Performance Cycle is [Insert Number] RSUs (the Target RSUs). |
Number of Restricted Stock Units ( RSUs): |
The total number of RSUs that may be eligible to be earned under the Award is between 0% and 150% of the Target RSUs for the Performance Cycle based on attainment of the Operating Income (OI) performance goal, subject in all cases, to the Participants continued employment from the Award Date through December 31, 2020 except in the event of the Participants death, Disability or Retirement or a Change in Control.
If the OI performance goal is below the threshold, no RSUs are earned for Performance Cycle.
If the OI performance goal is at threshold (90% of Target OI), 50% of the RSUs are earned for the Performance Cycle.
If the OI performance goal is at target (100% of Target OI), 100% of the RSUs are earned for the Performance Cycle.
If the OI performance goal is at or above the maximum (110% of Target OI), 150% of the RSUs are earned for the Performance Cycle.
The RSUs deemed earned for OI results between (i) threshold and target and (ii) target and maximum will be calculated using interpolation. |
IN WITNESS WHEREOF, ScanSource, Inc., acting by and through its duly authorized officers, has caused this Award Certificate to be executed effective as of the Award Date.
SCANSOURCE, INC.
By: |
|
|
Its: | Authorized Officer |
Grant Date: (referred to herein as the Award Date):
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AWARD CERTIFICATE TERMS AND CONDITIONS
1. Grant of Award . ScanSource, Inc. (the Company) hereby grants to the Participant named on Page 1 hereof (the Participant), subject to the restrictions and the other terms and conditions set forth in the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), and in this Award Certificate, a performance- and service-based Restricted Stock Unit Award (the Award) for up to the number of Shares indicated on Schedule A , which is attached hereto and expressly made a part of this Award Certificate. For the purposes herein, the Shares subject to the Award are units that will be reflected in a book account maintained by the Company and that will be settled in shares of Stock if and only to the extent permitted under the Plan and this Award Certificate. Prior to issuance of any Shares upon vesting and payment of the Award, the Award shall represent an unsecured obligation of the Company, payable (if at all) only from the Companys general assets. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.
2. Vesting and Earning of the Award . The number of Shares subject to the Award that may be earned during the Performance Cycle will be determined by the Committee following the end of the Performance Cycle, as provided in Schedule A; provided, however, that (except as otherwise provided in Section 3 or Section 4 below), the Award shall not vest, in whole or in part, and the Participant shall not be entitled to any of the Shares (that is, Shares subject to the Award shall remain subject to forfeiture), unless the Participant remains continuously employed by the Company from the Award Date until the completion of the Performance Cycle (that is, December 31, 2020). The Committee has sole discretion to determine if and the extent to which the Award has become earned and vested. One Share of Stock will be issuable for each RSU that is earned and vests. RSUs that have been earned and become vested are referred to herein as Vested RSUs. RSUs that have not become earned and vested and remain subject to forfeiture are referred to herein as Unvested RSUs. The Unvested RSUs and Vested RSUs are collectively referred to herein as the RSUs. The Award will terminate and the Unvested RSUs will be subject to forfeiture upon termination of the Participants employment as set forth in Section 3.
3. Effect of Termination; Forfeiture .
(a) If the Participants employment with the Company terminates for any reason prior to the completion of the Performance Cycle other than as set forth in Section 3(b) or Section 4 below, then the Participant shall forfeit all of the Participants right, title and interest in the Award (and the underlying Shares), to the extent not vested and earned as of the date of the Participants termination of employment, and such Unvested RSUs shall revert to the Company (without the payment by the Company of any consideration for such Shares) immediately following the event of forfeiture.
(b) Notwithstanding the provisions of Section 2, Schedule A and Section 3(a) herein, the Award shall be deemed earned and vested on the earliest to occur of the following:
(i) Upon the termination of the Participants employment due to death or Disability prior to completion of the Performance Cycle, the Award shall be deemed earned as if the goal(s) for the Performance Cycle had been met at target.
(ii) Upon the termination of the Participants employment due to Retirement prior to completion of the Performance Cycle, the Participant shall be paid a pro rata award based on the number of completed days in service during the Performance Cycle, based on actual performance through the date of termination of the Participants employment. Any amounts payable as provided herein shall be paid as described in Section 6.
(c) Any amounts payable as provided herein shall be paid as described in Section 6.
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(d) For clarification, for the purposes of this Section 3, Retirement and Cause shall have the meaning given such terms in the Plan, and Disability shall have the meaning given such term in the Plan, except that the phrase 12 months shall be replaced by the phrase six months.
4. Effect of Change in Control . In the event of a Change in Control prior to the completion of the Performance Cycle:
(a) To the extent that the successor or surviving company in the Change in Control event does not assume or substitute for the Award (or in which the Company is the ultimate parent corporation and does not continue the Award) on substantially similar terms or with substantially equivalent economic benefits (as determined by the Committee) as Awards outstanding under the Plan immediately prior to the Change in Control event, the Award shall be deemed vested, earned and payable based on attainment of the performance goal(s) at target with respect to the Performance Cycle that has not been completed as of the date of the Change in Control, provided the Participant remains employed by the Company from the Award Date until the time of the Change in Control.
(b) The Award will nonetheless become vested, earned and payable as provided herein if the employment or service of the Participant is terminated by the Company or the Participant in contemplation of a Change in Control (whether or not the Change in Control is consummated) or, in the event that the Award is substituted, assumed or continued in connection with a Change in Control, within one year after the effective date of a Change in Control, prior to the completion of the Performance Cycle, if such termination of employment or service (X) is by the Company not for Cause or (Y) is by the Participant for Good Reason. In such event, the Award shall be deemed vested, earned and payable (i) based on actual performance through the date of termination of the Participants employment if the employment or service of the Participant is terminated by the Company or the Participant in contemplation of a Change in Control (whether or not the Change in Control is consummated) and (ii) as if the performance goal(s) had been met at target with respect to the Performance Cycle that has not been completed as of the date of the Change in Control if the employment or service of the Participant is terminated by the Company or the Participant within one year after the effective date of a Change in Control. The employment or service of the Participant will be deemed to have been terminated in contemplation of a Change in Control if the Participants employment or service terminates at any time during which (i) the Company has initiated a transaction process or is engaged in discussions with a third party about a specific transaction that, if consummated, would result in a Change in Control (and before complete abandonment of such discussions without the transaction being consummated) or (ii) the Company has become a party to a definitive agreement to consummate a transaction that would result in a Change in Control (and before complete termination of such agreement without the transaction being consummated).
(c) Any amounts payable as provided herein shall be paid as described in Section 6.
(d) For clarification, for the purposes of this Section 4, Change in Control and Good Reason shall have the meaning given such terms in the Plan.
5. Restrictions; Forfeiture . In addition to other terms and conditions stated in the Plan or this Award Certificate, the Award and the underlying Shares are subject to the following restrictions. No right or interest of the Participant in the Award, to the extent restricted, may be pledged, encumbered or hypothecated to or in favor of any party other than the Company or an Affiliate or shall be subject to any lien, obligation or liability of the Participant to any other party other than the Company or an Affiliate. Except as otherwise provided in the Plan, the Award shall not be transferable (including by sale, assignment, pledge or hypothecation) other than by will or the laws of intestate succession. Prior to vesting and payment, the Shares subject to the Award may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. Except as may be otherwise provided in the Plan or this Award
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Certificate, if the Participants employment with the Company terminates for any reason (whether by the Company or the Participant and whether voluntary or involuntary) prior to completion of the Performance Cycle other than as set forth in Section 3(b) or Section 4 herein, then the Participant shall forfeit all of the Participants right, title and interest in and to the Award and the Shares to the extent the Award (and corresponding Shares) were not vested as of the date the Participants Continuous Status as a Participant terminated. The restrictions imposed under this Section 5 shall apply to all Shares or other securities issued with respect to Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Stock of the Company.
6. Settlement of Award; Delivery of Shares . No certificate or certificates for the Shares shall be issued at the time of grant of the Award. A certificate or certificates for the Shares underlying the Award (or, in the case of uncertificated Shares, other written evidence of ownership in accordance with applicable laws) shall be issued in the name of the Participant (or his beneficiary) only in the event, and to the extent, that the Award has vested and been earned. Notwithstanding the foregoing, the following provisions shall apply: (a) except with respect to distributions following termination of employment (that is, a separation of service under Code Section 409A) due to death, Disability or Retirement or in contemplation of a Change in Control or within one year after the effective date of a Change in Control, any Shares or other benefits payable pursuant to the Award shall, upon the earning and vesting of the Award during the Performance Cycle, be distributed to the Participant (or his beneficiary) after December 31, 2020 and within the 60 days following December 31, 2020 and upon vesting in connection with a Change in Control be distributed to the Participant (or his beneficiary) within the 60 days following the Change in Control; and (b) any distributions due to termination of employment as a result of death, Disability or Retirement or in contemplation of a Change in Control or within one year after the effective date of a Change in Control shall be paid within 60 days following the date of termination (except as otherwise provided below with respect to a delay in payments if the Participant is a specified employee), and the Participant shall not have the right to designate the taxable year of the payment. Notwithstanding the foregoing, if the Participant is or may be a specified employee (as defined under Code Section 409A), and the distribution is due to separation from service, then such distribution shall be subject to delay as provided in Section 18.22 of the Plan (or any successor provision thereto).
7. Voting and Dividend Rights . The Participant shall not be deemed to be the holder of any Shares subject to the Award and shall not have any dividend rights, voting rights or other rights as a shareholder unless and until (and only to the extent that) the Award has become earned and vested and certificates for such Shares have been issued to him (or, in the case of uncertificated shares, other written evidence of ownership in accordance with applicable laws shall have been provided).
8. No Right of Continued Employment or to Future Awards . Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate the Participants employment or service at any time, nor confer upon the Participant any right to continue in the employ or service of the Company or any Affiliate. The grant of the Award does not create any obligation to grant further awards.
9. Tax Matters . The Participant will, no later than the date as of which any amount related to the Shares first becomes includable in the Participants gross income for federal income tax purposes, pay to the Company, or make other arrangements satisfactory to the Committee regarding payment of, any federal, state, local and foreign taxes (including any Federal Insurance Contributions Act (FICA) taxes) required by law to be withheld with respect to such amount. The withholding requirement may be satisfied, in whole or in part, unless the Committee determines otherwise, by withholding from this Award Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. The obligations of the Company under this Award Certificate will be conditional on such
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payment or arrangements, and the Company, or, where applicable, its Affiliates, will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. The Participant acknowledges that the Company has made no warranties or representations to the Participant with respect to the legal, tax or investment consequences (including but not limited to income tax consequences) related to the grant of the Award or receipt or disposition of the Shares (or any other benefit), and the Participant is in no manner relying on the Company or its representatives for legal, tax or investment advice related to the Award or the Shares. The Participant acknowledges that there may be adverse tax consequences upon the grant of the Award and/or the acquisition or disposition of the Shares (or other benefit) subject to the Award and that the Participant has been advised that he should consult with his or her own attorney, accountant and/or tax advisor regarding the transactions contemplated by the Award and this Award Certificate. The Participant also acknowledges that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant.
10. Plan Controls; Entire Agreement; Amendment . The terms contained in the Plan are incorporated into and made a part of this Award Certificate and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative (unless the Committee determines otherwise). This Award Certificate, including Schedule A attached hereto, sets forth all of the promises, agreements, understandings, warranties and representations between the parties with respect to the Award. This Award Certificate may be amended as provided in the Plan.
11. Successors . This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan.
12. Severability . If any one or more of the provisions contained in this Award Certificate is held to be invalid, illegal or unenforceable, the other provisions of this Award Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included.
13. Notice . Notices and communications under this Award Certificate must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to ScanSource, Inc., 6 Logue Court, Greenville, SC 29615, Attn: Secretary, or any other address designated by the Company in a written notice to the Participant. Notices to the Participant will be directed to the address of the Participant then currently on file with the Company, or at any other address given by the Participant in a written notice to the Company.
14. Beneficiary Designation . The Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant hereunder and to receive any distribution with respect to the Award upon the Participants death. A beneficiary, legal guardian, legal representative, or other person claiming any rights hereunder is subject to all terms and conditions of this Award Certificate and the Plan and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, the Participants rights with respect to the Award may be exercised by the legal representative of the Participants estate, and payment shall be made to the Participants estate. Subject to the foregoing, a beneficiary designation may be changed or revoked by the Participant at any time provided the change or revocation is filed with the Company.
15. Compliance with Recoupment, Ownership and Other Policies or Agreements . As a condition to receiving the Award, the Participant agrees that he or she shall abide by all provisions of the Companys Stock Ownership and Retention Policy, Compensation Recovery Policy and/or other similar
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policies maintained by the Company, each as in effect from time to time and to the extent applicable to Participant from time to time. In addition, the Participant shall be subject to such compensation recovery, recoupment, forfeiture, or other similar provisions as may apply at any time to the Participant under Applicable Law.
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SCHEDULE A
SCANSOURCE, INC.
2013 LONG-TERM INCENTIVE PLAN
Restricted Stock Unit Award Certificate
(Performance-and Service-Based)
This Schedule A sets forth the performance goals for the performance-based and service-based Restricted Stock Unit Award (the Award) under the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), evidenced by the Restricted Stock Unit Award Certificate (Performance-and Service-Based) (the Award Certificate) to which it is attached. Capitalized terms not expressly defined in this Schedule A but defined in the Plan or the Award Certificate shall have the same definitions as in the Plan and/or the Award Certificate, as applicable.
1. Target RSUs : The aggregate target number of RSUs for the Performance Cycle is: [Insert Number] RSUs (the Target RSUs).
2. Applicable Performance Goal : The actual number of RSUs, if any, that shall be earned is based on the level of attainment of the following performance goal: OI, which, for the purposes herein, shall mean the amount reflected for the line item identified as non-GAAP Operating Income over the 3-calendar year period which serves as the Performance Cycle. For the purposes herein, Target OI shall mean the target Operating Income as set by the Compensation Committee, which shall be within 90 days of the beginning of the Performance Cycle. The Companys calculation of OI and Target OI shall be conclusive and binding absent fraud or manifest and material error.
3. Determination of Number of Shares Earned; Additional Terms : The total number of RSUs that may be eligible to be earned under the Award is between 0% and 150% of the Target RSUs for the Performance Cycle based on attainment of the OI performance goal. If the OI performance goal is below the threshold, no RSUs are earned for Performance Cycle. If the performance goal is at threshold (90% of Target OI), 50% of the RSUs are earned for the Performance Cycle; if the performance goal is at target (100% of Target OI), 100% of the RSUs are earned for the Performance Cycle; and if the performance goal is at or above the maximum (110% of Target OI), 150% of the RSUs are earned for the Performance Cycle, subject in all cases, to the Participants continued employment from the Award Date through December 31, 2020 (except as otherwise set forth in the Award Certificate). As further clarification, the RSUs deemed earned for OI results between (i) threshold and target and (ii) target and maximum will be calculated using interpolation. Any RSUs that are earned and vest shall be settled in accordance with Section 6 of the Award Certificate.
4. Committee Certification : Notwithstanding the foregoing, the Award shall not be deemed payable, in whole or in part, until the Committees written certification regarding if and to the extent the applicable performance goals have been met.
2013 Plan RSU Agreement (Performance- and Service-Based) (2018)
Exhibit 10.2
RESTRICTED STOCK UNIT AWARD CERTIFICATE
(Service-Based)
Non-transferable
GRANT TO
(the Participant)
by ScanSource, Inc. (the Company) of
the right to acquire shares of its common stock, no par value (the Shares)
pursuant to and subject to the provisions of the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), and to the terms and conditions set forth in this Award Certificate (the Award Certificate). This Award Certificate describes terms and conditions of the Restricted Stock Unit Award (the Award) granted herein and constitutes an agreement between the Participant and the Company.
Unless vesting is accelerated in accordance with the Plan or the Award Certificate, the vesting restrictions imposed under Section 2 of the Award Certificate will expire with respect to the Award and the Shares subject to the Award ratably in three annual installments (34%-33%-33%), commencing as of , 20 , provided that the Participant has been continuously employed by the Company from the Grant Date (as defined below) until each respective vesting date.
IN WITNESS WHEREOF, ScanSource, Inc., acting by and through its duly authorized officers, has caused this Award Certificate to be executed as of the Grant Date.
SCANSOURCE, INC.
By: |
|
|
Its: | Authorized Officer |
Grant Date: (the Grant Date):
AWARD CERTIFICATE TERMS AND CONDITIONS
1. Grant of Award . ScanSource, Inc. (the Company) hereby grants to the Participant named on Page 1 hereof (the Participant), subject to the restrictions and the other terms and conditions set forth in the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), and in this Award Certificate, a Restricted Stock Unit Award (the Award) for the number of Shares indicated on Page 1 hereof of the Companys common stock. For the purposes herein, the Shares subject to the Award are units that will be reflected in a book account maintained by the Company and that will be settled in shares of Stock if and only to the extent permitted under the Plan and this Award Certificate. Prior to issuance of any Shares upon vesting of the Award, the Award shall represent an unsecured obligation of the Company, payable (if at all) only from the Companys general assets. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.
2. Restrictions; Forfeiture . The Award and the underlying Shares are subject to the following restrictions. No right or interest of the Participant in the Award, to the extent restricted, may be pledged, encumbered or hypothecated to or in favor of any party other than the Company or an Affiliate or shall be subject to any lien, obligation or liability of the Participant to any other party other than the Company or an Affiliate. Except as otherwise provided in the Plan, the Award shall not be transferable (including by sale, assignment, pledge or hypothecation) other than by will or the laws of intestate succession. Prior to vesting, the Shares subject to the Award may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. Except as may be otherwise provided in the Plan or this Award Certificate, if the Participants employment with the Company terminates for any reason (whether by the Company or the Participant and whether voluntary or involuntary) other than as set forth in paragraphs (b) or (c) of Section 3 hereof, then the Participant shall forfeit all of the Participants right, title and interest in and to the Award and the Shares to the extent the Award (and corresponding Shares) are not vested as of the date the Participants Continuous Status as a Participant terminates. The restrictions imposed under this section shall apply to all Shares or other securities issued with respect to Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Stock of the Company.
3. Expiration and Termination of Restrictions . The restrictions imposed under Section 2 will expire on the earliest to occur of the following (the period prior to such expiration being referred to herein as the Restricted Period):
(a) With respect to such ratable portion of the Shares as is specified on page 1 hereof, on each of the three annual vesting installment dates as specified on page 1 hereof, provided the Participant is still employed by the Company on each respective anniversary of the Grant Date and has been employed continuously since the Grant Date; or
(b) As to all of the Shares, upon the termination of the Participants employment (meaning a separation from service (as defined under Code Section 409A)) due to death, Disability or Retirement; or
(c) As to all of the Shares, in the event of a Change in Control, as follows:
(i) To the extent that the successor or surviving company in the Change in Control event does not assume or substitute for the Award (or in which the Company is the ultimate parent corporation and does not continue the Award) on substantially similar terms or with substantially equivalent economic benefits (as determined by the Committee) as Awards outstanding under the Plan immediately prior to the Change in Control event, any restrictions, including but not limited to the restriction period, applicable to the Award shall be deemed to have been met, and the Award shall become fully vested, earned and payable to the fullest extent of the original grant of the Award, provided the Participant remains employed by the Company from the Grant Date until the time of the Change in Control.
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(ii) Further, the Award will nonetheless become vested in full if the employment or service of the Participant is terminated by the Company or the Participant in contemplation of a Change in Control (whether or not the Change in Control is consummated) or, in the event that the Award is substituted, assumed or continued as provided in Section 3(c)(i) herein, within one year after the effective date of a Change in Control, if such termination of employment or service (A) is by the Company not for Cause or (B) is by the Participant for Good Reason. The employment or service of the Participant will be deemed to have been terminated in contemplation of a Change in Control if the Participants employment or service terminates at any time during which (i) the Company has initiated a transaction process or is engaged in discussions with a third party about a specific transaction that, if consummated, would result in a Change in Control (and before complete abandonment of such discussions without the transaction being consummated) or (ii) the Company has become a party to a definitive agreement to consummate a transaction that would result in a Change in Control (and before complete termination of such agreement without the transaction being consummated).
(d) For clarification, for the purposes of this Section 3, Retirement, Cause and Good Reason shall have the meaning given such term in the Plan, and Disability shall have the meaning given such term in the Plan, except that the phrase 12 months shall be replaced by the phrase six months.
4. Settlement of Award; Delivery of Shares . No certificate or certificates for the Shares shall be issued at the time of grant of the Award. A certificate or certificates for the Shares underlying the Award (or, in the case of uncertificated Shares, other written evidence of ownership in accordance with applicable laws) shall be issued in the name of the Participant (or his beneficiary) only in the event, and to the extent, that the Award has vested. Notwithstanding the foregoing, the following provisions shall apply: (a) except as provided under Section 4(b) herein or to the extent otherwise required or permitted under Code Section 409A, any Shares or other benefits payable pursuant to the Award shall, upon vesting of the Award, be distributed to the Participant (or his beneficiary) within 60 days after the date the Award vests; and (b) in the event that the Restriction Period ends (and the Award vests) due to a separation from service (as defined under Code Section 409A) due to death, Disability or Retirement or in contemplation of a Change in Control or within one year after the effective date of the Change in Control, then the Shares shall be delivered to the Participant (or his beneficiary) within 60 days after the end of the Restriction Period (provided that if such 60-day period begins in one calendar year and ends in another, the Participant (or his beneficiaries) shall not have the right to designate the calendar year of payment), and, provided, further, if the Participant is or may be a specified employee (as defined under Code Section 409A), and the distribution is due to separation from service, then such distribution shall be subject to delay as provided in Section 18.22 of the Plan (or any successor provision thereto).
5. Voting and Dividend Rights . The Participant shall not be deemed to be the holder of any Shares subject to the Award and shall not have any dividend rights, voting rights or other rights as a shareholder unless and until (and only to the extent that) the Award has vested and certificates for such Shares have been issued to him (or, in the case of uncertificated shares, other written evidence of ownership in accordance with applicable laws shall have been provided).
6. No Right of Continued Employment or to Future Awards . Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate the Participants employment or service at any time, nor confer upon the Participant any right to continue in the employ or service of the Company or any Affiliate. The grant of the Award does not create any obligation to grant further awards.
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7. Tax Matters . The Participant will, no later than the date as of which any amount related to the Shares first becomes includable in the Participants gross income for federal income tax purposes, pay to the Company, or make other arrangements satisfactory to the Committee regarding payment of, any federal, state, local and foreign taxes (including any Federal Insurance Contributions Act (FICA) taxes) required by law to be withheld with respect to such amount. The withholding requirement may be satisfied, in whole or in part, unless the Committee determines otherwise, by withholding from this Award Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. The obligations of the Company under this Award Certificate will be conditional on such payment or arrangements, and the Company, or, where applicable, its Affiliates, will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. The Participant acknowledges that the Company has made no warranties or representations to the Participant with respect to the legal, tax or investment consequences (including but not limited to income tax consequences) related to the grant of the Award or receipt or disposition of the Shares (or any other benefit), and the Participant is in no manner relying on the Company or its representatives for legal, tax or investment advice related to the Award or the Shares. The Participant acknowledges that there may be adverse tax consequences upon the grant of the Award and/or the acquisition or disposition of the Shares (or other benefit) subject to the Award and that the Participant has been advised that he should consult with his or her own attorney, accountant and/or tax advisor regarding the transactions contemplated by the Award and this Award Certificate. The Participant also acknowledges that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant.
8. Plan Controls; Entire Agreement; Amendment . The terms contained in the Plan are incorporated into and made a part of this Award Certificate and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative (unless the Committee determines otherwise). This Award Certificate sets forth all of the promises, agreements, understandings, warranties and representations between the parties with respect to the Award. This Award Certificate may be amended as provided in the Plan.
9. Successors . This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan.
10. Severability . If any one or more of the provisions contained in this Award Certificate is held to be invalid, illegal or unenforceable, the other provisions of this Award Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included.
11. Notice . Notices and communications under this Award Certificate must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to ScanSource, Inc., 6 Logue Court, Greenville, SC 29615, Attn: Secretary, or any other address designated by the Company in a written notice to the Participant. Notices to the Participant will be directed to the address of the Participant then currently on file with the Company, or at any other address given by the Participant in a written notice to the Company.
12. Beneficiary Designation . The Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant hereunder and to receive any distribution with respect to the Award upon the Participants death. A beneficiary, legal guardian, legal representative, or other person claiming any rights hereunder is subject to all terms and conditions of this Award Certificate and the Plan and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, the Participants rights with respect to the
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Award may be exercised by the legal representative of the Participants estate, and payment shall be made to the Participants estate. Subject to the foregoing, a beneficiary designation may be changed or revoked by the Participant at any time provided the change or revocation is filed with the Company.
13. Compliance with Recoupment, Ownership and Other Policies or Agreements . As a condition to receiving the Award, the Participant agrees that he or she shall abide by all provisions of any equity retention policy, compensation recovery policy, stock ownership guidelines and/or other similar policies maintained by the Company, each as in effect from time to time and to the extent applicable to Participant from time to time. In addition, the Participant shall be subject to such compensation recovery, recoupment, forfeiture, or other similar provisions as may apply at any time to the Participant under Applicable Law.
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Exhibit 10.3
NON-QUALIFIED STOCK OPTION AWARD CERTIFICATE
Non-transferable
GRANT TO
(the Participant)
the right to purchase from ScanSource, Inc. (the Company)
shares of its common stock, no par value, at the exercise price of $ per share (the Shares)
pursuant to and subject to the provisions of the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), and to the terms and conditions set forth in this Award Certificate (the Award Certificate). This Award Certificate describes terms and conditions of the Non-Qualified Stock Option (the Option) granted herein and constitutes an agreement between the Participant and the Company.
Unless vesting is accelerated in accordance with the Plan or the Award Certificate, the Option shall vest and become exercisable ratably in three annual installments (34%-33%-33%), commencing as of , 20 , provided that Participant has been continuously employed by the Company from the Grant Date (as defined below) until each respective vesting date.
IN WITNESS WHEREOF, ScanSource, Inc., acting by and through its duly authorized officers, has caused this Award Certificate to be executed as of the Grant Date.
SCANSOURCE, INC.
By: |
|
|
Its: Authorized Officer |
Grant Date (the Grant Date):
AWARD CERTIFICATE TERMS AND CONDITIONS
1. | Grant of Option . ScanSource, Inc. (the Company) hereby grants to the Participant named on Page 1 hereof (the Participant), under the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), a Non-Qualified Stock Option (the Option) to purchase from the Company, on the terms and conditions set forth in the Plan and this Award Certificate, the number of shares indicated on Page 1 of the Companys common stock, at the exercise price per share set forth on Page 1. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. |
2. | Vesting of Option . The Option shall vest and become exercisable in accordance with the schedule shown on page 1 of this Award Certificate. In addition, notwithstanding the foregoing vesting schedule, the following shall apply: |
(a) | Upon the Participants death or Disability during his or her Continuous Status as a Participant, or upon the Participants Retirement, the Option shall become fully vested and exercisable. |
(b) | In the event of a Change in Control, the following shall apply: |
(i) | To the extent that the successor or surviving company in the Change in Control event does not assume or substitute for the Option (or in which the Company is the ultimate parent corporation and does not continue the Option) on substantially similar terms or with substantially equivalent economic benefits (as determined by the Committee) as Awards outstanding under the Plan immediately prior to the Change in Control event, then the Option shall become fully vested and exercisable, whether or not then otherwise vested and exercisable. |
(ii) | Further, in the event that the Option is substituted, assumed or continued as provided in Section 2(b)(i) herein, the Option will nonetheless become vested and exercisable in full if the employment or service of the Participant is terminated by the Company within six months before (in which case vesting shall not occur until the effective date of the Change in Control) or one year after the effective date of a Change in Control if such termination of employment or service (A) is by the Company not for Cause or (B) is by the Participant for Good Reason. For clarification, for the purposes of this Section 2(b, the Company shall include any successor to the Company. |
(c) | For clarification, for the purposes of this Section 2, Retirement, Cause and Good Reason shall have the meaning given such term in the Plan, and Disability shall have the meaning given such term in the Plan, except that the phrase 12 months shall be replaced by the phrase six months. |
3. | Term of Option and Limitations on Right to Exercise . The term of the Option will be for a period of ten (10) years, expiring at 5:00 p.m., Eastern Time, on the tenth anniversary of the Grant Date (the Expiration Date). To the extent not previously exercised, the Option will lapse prior to the Expiration Date upon the date that is the earliest to occur of the following circumstances: |
(a) | Three months after the termination of the Participants Continuous Status as a Participant for any reason other than (i) termination for Cause or (ii) by reason of the Participants death, Disability or Retirement. |
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(b) | Twelve months after the date of the termination of the Participants Continuous Status as a Participant by reason of Disability. |
(c) | Twelve months after the date of the Participants death, if the Participant dies while employed, or during the three-month period described in subsection (a) above or during the twelve-month period described in subsection (b) above and before the Option otherwise lapses. Upon the Participants death, the Option may be exercised by the Participants beneficiary designated pursuant to the Plan. |
(d) | Thirty six months after the date of the termination of the Participants Continuous Status as a Participant by reason of the Participants Retirement. |
(e) | 5:00 p.m., Eastern Time, on the date of the termination of the Participants Continuous Status as a Participant if such termination is for Cause. |
Subject to compliance with Section 409A of the Code, the Committee may, prior to the lapse of the Option under the circumstances described in Section 3(a), Section 3(b), Section 3(c), Section 3(d) or Section 3(e) above, extend the time to exercise the Option as determined by the Committee in writing. In addition, notwithstanding the foregoing, the post-termination exercise periods provided in Section 3(a), Section 3(b), Section 3(c) and Section 3(d) herein shall (unless the Committee determines otherwise) automatically be extended if exercise at the end of the original expiration date provided in each such section would violate applicable laws or the Companys insider trading compliance program (including any blackout periods related thereto) with respect to the Stock; provided, however, that (i) such extension may not exceed thirty (30) days from the expiration of the period during which exercise is prohibited, (ii) any such extension must be in accordance with Reg. Section 1.409A-1(b)(5)(v)(C)(1) (to the extent applicable), (iii) the Option shall only be exercisable to the extent vested as of the date of the termination of the Participants Continuous Status as a Participant, and (iv) in no event shall the term of the Option be extended beyond the original ten (10)-year term. Upon its termination, the Option shall have no further force or effect and Participant shall have no further rights under the Option or to any Shares which have not been purchased pursuant to the prior exercise of the Option. The Company undertakes no obligation to notify the Participant regarding the Options termination prior to its expiration. If the Participant or his or her beneficiary exercises the Option after termination of employment or service, the Option may be exercised only with respect to the portion of the Option that was otherwise vested on the date of the Participants termination of employment or service, including any portion of the Option that became vested by acceleration under Section 2.
4. | Exercise of Option . The Option shall be exercised by (a) written notice directed to the Secretary of the Company or his or her designee at the address and in the form specified by the Secretary from time to time, and (b) payment to the Company in full for the Shares subject to such exercise (unless the exercise is a broker-assisted cashless exercise, as described below). If the person exercising the Option is not the Participant, such person shall also deliver with the notice of exercise appropriate proof of his or her right to exercise the Option. Payment for such Shares shall be in (a) cash, (b) Shares previously acquired by the purchaser, (c) withholding of Shares from the Option, or (d) any combination thereof (in each case, subject to any restrictions imposed by the Committee), for the number of Shares specified in such written notice. The value of surrendered or withheld Shares for this purpose shall be the Fair Market Value as of the last trading day immediately prior to the exercise date. To the extent permitted under Regulation T of the Federal Reserve Board, and subject to applicable securities laws and any limitations as may be applied from time to time by the Committee (which need not be uniform), the Option may be exercised through a broker in a so-called cashless exercise whereby the broker sells Shares subject to the Option on behalf of the Participant and delivers cash sales proceeds to the Company in payment of the exercise price. In such case, the date of exercise shall be deemed to be the date on which notice of exercise is received by the Company and the exercise price shall be delivered to the Company by the settlement date. |
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5. | Beneficiary Designation . The Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant hereunder and to receive any distribution with respect to the Option upon the Participants death. A beneficiary, legal guardian, legal representative, or other person claiming any rights hereunder is subject to all terms and conditions of this Award Certificate and the Plan and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, the Option may be exercised by the legal representative of the Participants estate, and payment shall be made to the Participants estate, unless the Committee determines otherwise. Subject to the foregoing, a beneficiary designation may be changed or revoked by the Participant at any time provided the change or revocation is filed with the Company in accordance with any procedures or other requirements established by the Committee. |
6. | Withholding; Tax Matters . The Company or any Affiliate has the authority and the right to deduct or withhold, or require the Participant to remit to the Company or an Affiliate, an amount sufficient to satisfy any federal, state, local and foreign taxes (including any Federal Insurance Contributions Act (FICA) obligation) required by law to be withheld with respect to the Option or the Shares. The withholding requirement may be satisfied, in whole or in part, unless the Committee determines otherwise, by withholding from the Shares otherwise issuable that number of Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. The obligations of the Company under this Award Certificate will be conditional on such payment or arrangements, and the Company or, where applicable, its Affiliates, will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. The Participant acknowledges that the Company has made no warranties or representations to the Participant with respect to the legal, tax or investment consequences (including but not limited to income tax consequences) related to the grant of the Option or the acquisition or disposition of the Shares (or any other benefit), and the Participant is in no manner relying on the Company or its representatives for legal, tax or investment advice related to the Option or the Shares. The Participant acknowledges that there may be adverse tax consequences upon the grant of the Option and/or the acquisition or disposition of the Shares subject to the Option and that the Participant has been advised that he or she should consult with his or her own attorney, accountant and/or tax advisor regarding the transactions contemplated by the Option and this Award Certificate. The Participant also acknowledges that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant. |
7. | Limitation of Rights . The Option does not confer to the Participant or the Participants beneficiary designated pursuant to Section 5 any rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection with the exercise of the Option. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate the Participants employment or service at any time, nor confer upon the Participant any right to continue in the employ or service of the Company or any Affiliate. Except as otherwise provided in the Plan or this Award Certificate, in the event that the employment or service of the Participant is terminated for any reason (whether by the Company or the Participant and whether voluntary or involuntary), the Option shall be forfeited immediately and the Participant shall have no further rights with respect thereto. The grant of the Option does not create any obligation to grant further awards. |
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8. | Nontransferability . The Option shall not be transferable (including by sale, assignment, pledge or hypothecation) other than transfers by will or the laws of intestate succession (or as otherwise provided in the Plan). Except as may be permitted by the preceding, the Option may be exercised during the lifetime of the Participant only by the Participant. |
9. | Plan Controls; Entire Agreement; Amendment . The terms contained in the Plan are incorporated into and made a part of this Award Certificate and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative (unless the Committee determines otherwise). This Award Certificate sets forth all of the promises, agreements, understandings, warranties and representations between the parties with respect to the Award. This Award Certificate may be amended as provided in the Plan. |
10. | Successors . This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan. |
11. | Severability . If any one or more of the provisions contained in this Award Certificate is held to be invalid, illegal or unenforceable, the other provisions of this Award Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included. |
12. | Notice . Notices and communications under this Award Certificate must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to: ScanSource, Inc., 6 Logue Court, Greenville, SC 29615, Attn: Secretary, or any other address designated by the Company in a written notice to the Participant. Notices to the Participant will be directed to the address of the Participant then currently on file with the Company, or at any other address given by the Participant in a written notice to the Company. |
13. | Compliance with Recoupment, Ownership and Other Policies or Agreements . As a condition to receiving the Option, the Participant agrees that he or she shall abide by all provisions of any equity retention policy, compensation recovery policy, stock ownership guidelines and/or other similar policies maintained by the Company, each as in effect from time to time and to the extent applicable to Participant from time to time. In addition, the Participant shall be subject to such compensation recovery, recoupment, forfeiture, or other similar provisions as may apply at any time to the Participant under Applicable Law. |
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Exhibit 10.4
INCENTIVE STOCK OPTION AWARD CERTIFICATE
Non-transferable
GRANT TO
(the Participant)
the right to purchase from ScanSource, Inc. (the Company)
shares of its common stock, no par value, at the exercise price of $ per share (the Shares)
pursuant to and subject to the provisions of the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), and to the terms and conditions set forth in this Award Certificate (the Award Certificate). This Award Certificate describes terms and conditions of the Incentive Stock Option (the Option) granted herein and constitutes an agreement between the Participant and the Company.
Unless vesting is accelerated in accordance with the Plan or the Award Certificate, the Option shall vest and become exercisable ratably in three annual installments (34%-33%-33%), commencing as of , 20 , provided that Participant has been continuously employed by the Company from the Grant Date (as defined below) until each respective vesting date.
IN WITNESS WHEREOF, ScanSource, Inc., acting by and through its duly authorized officers, has caused this Award Certificate to be executed as of the Grant Date.
SCANSOURCE, INC.
By: |
|
|
Its: | Authorized Officer |
Grant Date (the Grant Date):
AWARD CERTIFICATE TERMS AND CONDITIONS
1. Grant of Option . ScanSource, Inc. (the Company) hereby grants to the Participant named on Page 1 hereof (the Participant), under the ScanSource, Inc. 2013 Long-Term Incentive Plan, as it may be amended and/or restated (the Plan), an Incentive Stock Option (the Option) to purchase from the Company, on the terms and conditions set forth in the Plan and this Award Certificate, the number of shares indicated on Page 1 of the Companys common stock, at the exercise price per share set forth on Page 1. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.
2. Vesting of Option. The Option shall vest and become exercisable in accordance with the schedule shown on page 1 of this Award Certificate. In addition, notwithstanding the foregoing vesting schedule, the following shall apply:
(a) Upon the Participants death or Disability during his or her Continuous Status as a Participant, or upon the Participants Retirement, the Option shall become fully vested and exercisable.
(b) In the event of a Change in Control, the following shall apply:
(i) To the extent that the successor or surviving company in the Change in Control event does not assume or substitute for the Option (or in which the Company is the ultimate parent corporation and does not continue the Option) on substantially similar terms or with substantially equivalent economic benefits (as determined by the Committee) as Awards outstanding under the Plan immediately prior to the Change in Control event, then the Option shall become fully vested and exercisable, whether or not then otherwise vested and exercisable.
(ii) Further, in the event that the Option is substituted, assumed or continued as provided in Section 2(b)(i) herein, the Option will nonetheless become vested and exercisable in full if the employment or service of the Participant is terminated by the Company within six months before (in which case vesting shall not occur until the effective date of the Change in Control) or one year after the effective date of a Change in Control if such termination of employment or service (A) is by the Company not for Cause or (B) is by the Participant for Good Reason. For clarification, for the purposes of this Section 2(b), the Company shall include any successor to the Company.
(c) For clarification, for the purposes of this Section 2, Retirement, Cause, Good Reason and Disability shall have the meanings given such terms in the Plan.
3. Term of Option and Limitations on Right to Exercise . The term of the Option will be for a period of ten (10) years, expiring at 5:00 p.m., Eastern Time, on the tenth anniversary of the Grant Date (the Expiration Date). To the extent not previously exercised, the Option will lapse prior to the Expiration Date upon the date that is the earliest to occur of the following circumstances:
(a) Three months after the termination of the Participants Continuous Status as a Participant for any reason other than (i) termination for Cause or (ii) by reason of the Participants death, Disability or Retirement.
(b) Twelve months after the date of the termination of the Participants Continuous Status as a Participant by reason of Disability.
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(c) Twelve months after the date of the Participants death, if the Participant dies while employed, or during the three-month period described in subsection (a) above or during the twelve-month period described in subsection (b) above and before the Option otherwise lapses. Upon the Participants death, the Option may be exercised by the Participants beneficiary designated pursuant to the Plan.
(d) Thirty six months after the date of the termination of the Participants Continuous Status as a Participant by reason of the Participants Retirement.
(e) 5:00 p.m., Eastern Time, on the date of the termination of the Participants Continuous Status as a Participant if such termination is for Cause.
Subject to compliance with Section 409A of the Code, the Committee may, prior to the lapse of the Option under the circumstances described in Section 3(a), Section 3(b), Section 3(c), Section 3(d) or Section 3(e) above, extend the time to exercise the Option as determined by the Committee in writing, but if the Option is so extended, then to the extent that the Option is exercised more than three months after the termination of the Participants employment other than by death or Disability, or more than one year after the Participants Disability, the Option will automatically become a Non-Qualified Stock Option. In addition, notwithstanding the foregoing, the post-termination exercise periods provided in Section 3(a), Section 3(b), Section 3(c) and Section 3(d) herein shall (unless the Committee determines otherwise) automatically be extended if exercise at the end of the original expiration date provided in each such section would violate applicable laws or the Companys insider trading compliance program (including any blackout periods related thereto) with respect to the Stock; provided, however, that (i) such extension may not exceed thirty (30) days from the expiration of the period during which exercise is prohibited, (ii) any such extension must be in accordance with Reg. Section 1.409A-1(b)(5)(v)(C)(1) (to the extent applicable), (iii) the Option shall only be exercisable to the extent vested as of the date of the termination of the Participants Continuous Status as a Participant, (iv) in no event shall the term of the Option be extended beyond the original ten (10)-year term; and (v) such extension shall not apply if and to the extent that the extension would result in the loss of incentive stock option status under Code Section 422. Upon its termination, the Option shall have no further force or effect and Participant shall have no further rights under the Option or to any Shares which have not been purchased pursuant to the prior exercise of the Option. The Company undertakes no obligation to notify the Participant regarding the Options termination prior to its expiration. If the Participant or his or her beneficiary exercises the Option after termination of employment or service, the Option may be exercised only with respect to the portion of the Option that was otherwise vested on the date of the Participants termination of employment or service, including any portion of the Option that became vested by acceleration under Section 2.
4. Exercise of Option . The Option shall be exercised by (a) written notice directed to the Secretary of the Company or his or her designee at the address and in the form specified by the Secretary from time to time, and (b) payment to the Company in full for the Shares subject to such exercise (unless the exercise is a broker-assisted cashless exercise, as described below). If the person exercising the Option is not the Participant, such person shall also deliver with the notice of exercise appropriate proof of his or her right to exercise the Option. Payment for such Shares shall be in (a) cash, (b) Shares previously acquired by the purchaser, (c) withholding of Shares from the Option, or (d) any combination thereof (in each case, subject to any restrictions imposed by the Committee), for the number of Shares specified in such written notice. The value of surrendered or withheld Shares for this purpose shall be the Fair Market Value as of the last trading day immediately prior to the exercise date. To the extent permitted under Regulation T of the Federal Reserve Board, and subject to applicable securities laws and any limitations as may be applied from time to time by the Committee (which need not be uniform), the Option may be exercised through a broker in a so-called cashless exercise whereby the broker sells Shares subject to the Option on behalf of the Participant and delivers cash sales proceeds to the Company in payment of the exercise price. In such case, the date of exercise shall be deemed to be the date on which notice of exercise is received by the Company and the exercise price shall be delivered to the Company by the settlement date.
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5. Notification of Disposition; Withholding; Tax Matters . The Participant agrees to notify the Company in writing within 30 days of any disposition of Shares acquired by the Participant pursuant to the exercise of the Option, if such disposition occurs within two years of the Grant Date, or one year of the date of exercise, of the Option. The Company or any Affiliate has the authority and the right to deduct or withhold, or require the Participant to remit to the Company or an Affiliate, an amount sufficient to satisfy any federal, state, local and foreign taxes (including any Federal Insurance Contributions Act (FICA) obligation) required by law to be withheld with respect to the Option or the Shares. The withholding requirement may be satisfied, in whole or in part, unless the Committee determines otherwise, by withholding from the Shares otherwise issuable that number of Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. The obligations of the Company under this Award Certificate will be conditional on such payment or arrangements, and the Company or, where applicable, its Affiliates, will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. The Participant acknowledges that the Company has made no warranties or representations to the Participant with respect to the legal, tax or investment consequences (including but not limited to income tax consequences) related to the grant of the Option or the acquisition or disposition of the Shares (or any other benefit), and the Participant is in no manner relying on the Company or its representatives for legal, tax or investment advice related to the Option or the Shares. The Participant acknowledges that there may be adverse tax consequences upon the grant of the Option and/or the acquisition or disposition of the Shares subject to the Option and that the Participant has been advised that he or she should consult with his or her own attorney, accountant and/or tax advisor regarding the transactions contemplated by the Option and this Award Certificate. The Participant also acknowledges that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant.
6. Beneficiary Designation . The Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant hereunder and to receive any distribution with respect to the Option upon the Participants death. A beneficiary, legal guardian, legal representative, or other person claiming any rights hereunder is subject to all terms and conditions of this Award Certificate and the Plan and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, the Option may be exercised by the legal representative of the Participants estate, and payment shall be made to the Participants estate, unless the Committee determines otherwise. Subject to the foregoing, a beneficiary designation may be changed or revoked by the Participant at any time provided the change or revocation is filed with the Company in accordance with any procedures or other requirements established by the Committee.
7. Limitation of Rights . The Option does not confer to the Participant or the Participants beneficiary designated pursuant to Section 6 any rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection with the exercise of the Option. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate the Participants employment or service at any time, nor confer upon the Participant any right to continue in the employ or service of the Company or any Affiliate. Except as otherwise provided in the Plan or this Award Certificate, in the event that the employment or service of the Participant is terminated for any reason (whether by the Company or the Participant and whether voluntary or involuntary), the Option shall be forfeited immediately and the Participant shall have no further rights with respect thereto. The grant of the Option does not create any obligation to grant further awards.
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8. Nontransferability . The Option shall not be transferable (including by sale, assignment, pledge or hypothecation) other than transfers by will or the laws of intestate succession (or as otherwise provided in the Plan). Except as may be permitted by the preceding, the Option may be exercised during the lifetime of the Participant only by the Participant.
9. Interpretation . It is the intent of the parties hereto that the Option qualifies for incentive stock option treatment pursuant to, and to the extent permitted by, Section 422 of the Code. All provisions hereof are intended to have, and shall be construed to have, such meanings as are set forth in applicable provisions of the Code and Treasury Regulations to allow the Option to so qualify. Notwithstanding the foregoing, however, if the Option is exercised more than three months after termination of the Participants Continuous Status other than by reason of the Participants death or Disability as described in Section 3(b) and (c), the portion of the Option exercised at that time shall be treated as a Non-Qualified Stock Option. Additionally, to the extent that any portion of the Option fails to qualify for incentive stock option treatment pursuant to Section 422 of the Code, such nonqualifying portion of the Option shall be a Non-Qualified Stock Option.
10. Plan Controls; Entire Agreement; Amendment . The terms contained in the Plan are incorporated into and made a part of this Award Certificate and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative (unless the Committee determines otherwise). This Award Certificate sets forth all of the promises, agreements, understandings, warranties and representations between the parties with respect to the Award. This Award Certificate may be amended as provided in the Plan.
11. Successors . This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan.
12. Severability . If any one or more of the provisions contained in this Award Certificate is held to be invalid, illegal or unenforceable, the other provisions of this Award Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included.
13. Notice . Notices and communications under this Award Certificate must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to: ScanSource, Inc., 6 Logue Court, Greenville, SC 29615, Attn: Secretary, or any other address designated by the Company in a written notice to the Participant. Notices to the Participant will be directed to the address of the Participant then currently on file with the Company, or at any other address given by the Participant in a written notice to the Company.
14. Compliance with Recoupment, Ownership and Other Policies or Agreements . As a condition to receiving the Option, the Participant agrees that he or she shall abide by all provisions of any equity retention policy, compensation recovery policy, stock ownership guidelines and/or other similar policies maintained by the Company, each as in effect from time to time and to the extent applicable to Participant from time to time. In addition, the Participant shall be subject to such compensation recovery, recoupment, forfeiture, or other similar provisions as may apply at any time to the Participant under Applicable Law.
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