exh10_1.htm
2008
NON-EMPLOYEE DIRECTOR LONG-TERM INCENTIVE PLAN
Section
1. Establishment and Purposes of the
Plan.
(a) Purpose. The
purposes of this ePlus
inc. 2008 Non-Employee Director Long-Term Incentive Plan (the
“Plan”) are to attract,
retain and compensate for service as members of the Board of Directors of ePlus inc. (the “Company”)
highly qualified
individuals who are not current employees of the Company and to enable them
to
increase their ownership in the Company’s Common Stock. The Plan will
be beneficial to the Company and its stockholders since it will allow these
Directors to have a greater personal financial stake in the Company through
the
ownership of Common Stock, in addition to underscoring their common interest
with stockholders in increasing the long-term value of the Common
Stock.
(b) Effective
Date; Shareholder Approval. The Plan is effective September 15, 2008,
subject to the approval by the Company’s shareholders.
Section
2. Definitions.
As
used
herein, the following definitions shall apply:
“Affiliate”
shall
mean (i) any
entity that, directly or through one or more intermediaries, is controlled
by
the Company and (ii) any entity in which the Company has a significant equity
interest, as determined by the Committee.
“Applicable
Laws” means the
requirements relating to the administration of equity plans under U.S. state
corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted
and
the applicable laws of any foreign country or jurisdiction where Restricted
Shares are, or will be, granted under the Plan.
“Board”
means
the Board of
Directors of the Company.
“Change
in Control” means the
occurrence of any of the following events with respect to the
Company:
(i)
the
consummation of any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which Common
Stock
would be converted into cash, securities or other property, other than a merger
of the Company in which the holders of Common Stock immediately prior to the
merger own more than fifty percent (50%) of the outstanding common stock of
the
surviving corporation immediately after the merger; or
(ii)
the
consummation of any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company, other than to a subsidiary or affiliate; or
(iii)
any
action pursuant to which any person (as such term is defined in Section 13(d)
of
the Exchange Act), corporation or other entity shall become the “beneficial
owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of shares of capital stock entitled to vote generally for the
election of directors of the Company (“Voting Securities”)
representing more than fifty (50%) percent of the combined voting power of
the
Company’s then outstanding Voting Securities (calculated as provided in Rule
13d-3(d) in the case of rights to acquire any such securities); or
(iv)
the
individuals (x) who, as of the Effective Date, constitute the Board (the “Original Directors”) and (y)
who thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of a majority of the Original
Directors then still in office (such Directors being called “Additional Original
Directors”) and (z) who thereafter are elected to the Board and whose
election or nomination for election to the Board was approved by a vote of
a
majority of the Original Directors and Additional Original Directors then still
in office, cease for any reason to constitute a majority of the members of
the
Board; or
(v)
the
dissolution or liquidation of the Company.
“Code”
means
the Internal
Revenue Code of 1986, as amended.
“Committee”
means
a committee
designated by the Board and composed of not less than two “Non-Employee
Directors” as defined in Rule 16b-3 under the Exchange Act, or any successor
rule or definition adopted by the Securities and Exchange
Commission.
“Common
Stock” means the
common stock, par value $0.01 per share, of the Company.
“Director”
means
a member of
the Board.
“Disability”
means
any illness
or other physical or mental condition of a Participant which renders the
Participant incapable of performing his or her customary and usual duties for
the Company, or any medically determinable illness or other physical or mental
condition resulting from a bodily injury, disease, or mental disorder that
in
the judgment of the Committee is permanent and continuous in nature. The
Committee may require such medical or other evidence as it deems necessary
to
judge the nature and permanency of the Participant’s condition.
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended.
“Fair
Market Value” means, as
of any date, the value of Common Stock determined as follows:
(i)
if
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq Global Market or The
Nasdaq Capital Market of The Nasdaq Stock Market, the fair market value of
a
share of Common Stock shall be the closing sales price of a share of Common
Stock as quoted on such exchange or system for such date (or the most recent
trading day preceding such date if there were no trades on such date), as
reported in The Wall
Street Journal or such other source as the Committee deems
reliable;
(ii)
if
the Common Stock is regularly quoted by a recognized securities dealer but
is
not listed in the manner contemplated by clause (i) above, the Fair Market
Value
of a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination, as reported in The Wall Street
Journal or such other source as the Committee deems reliable;
or
(iii)
if
neither clause (i) above nor clause (ii) above applies, the fair market value
of
a share of Common Stock shall be determined in good faith by the Committee
based
on the reasonable application of a reasonable valuation method.
“Outside
Director” means any
Director who, on the date such person is to receive a grant of Restricted Shares
hereunder is not a current employee of the Company or any of the Company’s
subsidiaries.
“Participant”
shall
mean any
Outside Director who holds a Restricted Stock Award granted or issued pursuant
to the Plan.
“Plan”
means
this ePlus inc. 2008 Non-Employee
Director Long-Term Incentive Plan.
“Restricted
Shares” means
Shares subject to a Restricted Stock Award.
“Restricted
Stock Agreement”
means any written agreement, contract, or other instrument or document,
including an electronic communication, evidencing the terms and conditions
of a
Restricted Stock Award.
“Restricted
Stock Award” means
a grant of Restricted Shares pursuant to Section 7 of the Plan.
“Share”
means
a share of
Common Stock, as adjusted in accordance with Section 9 of the Plan.
Section
3. Stock Subject to the
Plan.
Subject
to the provisions of Section 9 of the Plan, the maximum aggregate number of
Shares that may be issued as Restricted Shares under the Plan is two hundred
fifty thousand (250,000) Shares. The Shares may be authorized, but
unissued, or treasury Shares. Restricted Shares that have been
transferred back to the Company shall be available for future grants of
Restricted Shares under the Plan.
Section
4. Administration of
the
Plan.
(a)
Administration. The
Plan shall be administered by the Committee. The Committee shall have
the authority, in its discretion:
(i)
to determine the Fair Market Value of Common
Stock;
(ii)
to approve forms of agreement for use under the
Plan;
(iii) to
determine the number of Shares that may be issued as Restricted Shares and
the
terms and conditions of such Restricted Shares;
(iv) to
construe and interpret the terms of the Plan;
(v)
to prescribe, amend and rescind rules and regulations relating to
the Plan;
(vi) to
allow Participants to satisfy withholding tax obligations by having the Company
withhold from the shares of Common Stock to be issued upon vesting of Restricted
Shares that number of Shares having a Fair Market Value equal to the amount
required to be withheld, provided that withholding is calculated at the minimum
statutory withholding level. The Fair Market Value of the Shares to
be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined. All determinations to have Shares
withheld for this purpose shall be made by the Committee in its
discretion;
(vii)
to instruct a corporate officer to execute on
behalf of the Company any instrument required to effect the grant of a
Restricted Stock Award granted by the Committee; and
(viii)
to make all other determinations deemed necessary
or advisable for administering the Plan.
(b) Effect
of Committee’s
Decision. The Committee’s decisions, determinations and
interpretations shall be final and binding on all Participants and anyone else
who may claim an interest in Restricted Shares.
Section
5. Eligibility.
The
only
persons who shall be eligible to receive Restricted Stock Awards under the
Plan
shall be persons who, on the date such Awards are granted, are Outside
Directors.
Section
6. Term of the Plan.
No
Restricted Stock Award may be granted under the Plan after September 15,
2018.
Section
7. Grants of Restricted
Stock
Awards.
(a) Initial
Grant. Each individual who first becomes an Outside Director
on or after the date of the approval of this Plan by the stockholders of
the
Company shall, upon first qualifying as an Outside Director, automatically
be
granted a number of Restricted Shares, on the terms and conditions set forth
in
Section 8 below, having a Fair Market Value on the date of grant (determined
without regard to the restrictions applicable thereto) equal to the product
of the amount of cash compensation earned by an individual Outside Director
during the twelve months immediately prior to his becoming an Outside
Director multiplied by the quotient of the number of days until the next
Annual Grant Date (as defined below) divided by 365; provided,
however, that grants of Restricted Shares under this Plan shall not be
made until a Form S-8 registration statement in respect of the Shares is
filed
with, and declared effective by, the Securities and Exchange
Commission.
(b)
Annual
Grant. On September 25th
of each year (the “Annual
Grant
Date”), beginning with September 25, 2008, or the next following business
day if September 25th
is not a business day, each Outside Director shall automatically be granted
a
number of Restricted Shares, on the terms and conditions set forth in Section
8
below, having a Fair Market Value on the date of grant (determined without
regard to the restrictions applicable thereto) equal to the aggregate dollar
amount of cash compensation earned by an individual Outside Director who
served
on the board during the Company’s entire fiscal year ended
immediately prior to the respective Annual Grant Date; provided, however,
that
grants of Restricted Shares under this Plan shall not be made until a Form
S-8
registration statement in respect of the Shares is filed with, and declared
effective by, the Securities and Exchange Commission.
(c)
Special
Grant. On the date which is two business days after the date
that a Form S-8 registration statement in respect of the Shares is filed
with,
and declared effective by, the Securities and Exchange Commission, each Outside
Director who was serving as an Outside Director on the day prior to the date
of
the approval of this Plan by the stockholders of the Company shall automatically
be granted a number of Restricted Shares, on the terms and conditions set
forth
in Section 8 below, having a Fair Market Value on the date of grant (determined
without regard to the restrictions applicable thereto) equal to thirty-five
thousand dollars ($35,000).
(d)
Stock
Fee
Election. An Outside Director may make an election (a
"Stock Fee Election") to receive Restricted Shares in lieu of all or any
part of
the cash compensation payable to him or her for service on the Board for
a
calendar year. Any Stock Fee Election and any change or revocation
thereof shall be made by delivering written notice thereof to the Committee
prior to the end of the calendar year preceding the calendar year of service
for
which it is to be effective. Such Stock Fee Election shall
remain in effect for each subsequent calendar year of service unless
changed. An Outside Director may not elect to change his or her Stock
Fee Election for a calendar year after the last day of the calendar year
preceding the calendar year of service for which the election is
made. Any Restricted Stock that relates to a Stock Fee Election shall
be treated as a Restricted Stock Award for purposes of this Plan. The
number of shares shall be determined by dividing the cash compensation deferred
for a calendar quarter of service by the Fair Market Value as of the first
business day of the following calendar quarter, and each such first business
day
shall be considered the grant date of the Restricted Stock
Award.
Section
8. Terms of Restricted Stock Awards.
Except
as
provided herein, Restricted Shares shall be subject to restrictions (“Restrictions”) prohibiting
such Restricted Shares from being sold, transferred, assigned, pledged or
otherwise encumbered or disposed of. The Restrictions with respect to
each award of Restricted Shares shall lapse as to one-half of such Restricted
Shares on each of the one-year and second-year anniversary date of the grant
of
such award; provided,
however,
that the
Restrictions with respect to such Restricted Shares shall lapse immediately
in
the event that (i) the Participant is nominated for a new term as an Outside
Director but is not elected by stockholders of the Company, or (ii) the
Participant ceases to be a member of the Board due to death, disability or
mandatory retirement (if any). Notwithstanding the foregoing, the Restrictions
with respect to all of a Participant's Restricted Shares shall lapse immediately
prior to a Change in Control provided that the Participant is a member of the
Board immediately prior to such Change in Control.
The
Company shall issue, in the name of each Participant to whom Restricted Shares
have been granted, stock certificates (in tangible or electronic form)
representing the total number of Restricted Shares granted to such Participant
as soon as reasonably practicable after the grant. However, the
Company or its transfer agent shall hold such certificates, properly endorsed
for transfer, for the Participant’s benefit until such time as the Restriction
Period applicable to such Restricted Shares lapses. Upon the
expiration or termination of the Restricted Period, the restrictions applicable
to the Restricted Shares shall lapse and a stock certificate for the number
of
Restricted Shares with respect to which the restrictions have lapsed shall
be
delivered, free of all such restrictions, to the Participant or his or her
beneficiary or estate, as the case may be. Except as described in the
above paragraph, in the event that a Participant ceases to be a member of the
Board before the applicable Restriction Period has expired or under
circumstances in which the Restriction Period does not otherwise lapse, the
Restricted Shares granted to such Participant shall thereupon be forfeited
and
transferred back to the Company.
During
the Restriction Period, a Participant shall have the right to vote his or her
Restricted Shares and shall have the right to receive any cash dividends with
respect to such Restricted Shares. All distributions, if any,
received by a Participant with respect to Restricted Shares as a result of
any
stock split, stock distribution, combination of shares, or other similar
transaction shall be subject to the same restrictions as are applicable to
the
Restricted Shares to which such distributions relate.
Section
9. Adjustments Upon Changes in
Capitalization.
Subject
to any required action by the stockholders of the Company, the number of shares
of Common Stock covered by each outstanding Restricted Stock Award, and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but as to which no Restricted Stock Awards have yet been granted or
which have been returned to the Plan upon cancellation or expiration of a
Restricted Stock Award, shall be proportionately adjusted for any increase
or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification
of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however,
that conversion of
any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by
the Committee, whose determination in that respect shall be final, binding
and
conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to a Restricted Stock Award.
Section
10. Grant Agreement.
Each
grant of a Restricted Stock Award under the Plan will be evidenced by a
Restricted Stock Agreement. Such document will contain such
provisions as the Committee may in its discretion deem advisable, provided that such provisions
are not inconsistent with any of the provisions of the Plan.
Section
11. Amendment and Termination
of the
Plan.
(a) Amendment
and
Termination. The Board may at any time amend, alter, suspend
or terminate the Plan.
(b) Shareholder
Approval. The Company shall obtain shareholder approval of any
Plan amendment to the extent necessary to comply with Applicable
Laws.
(c) Effect
of Amendment or
Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Committee, which
agreement must be in writing and signed by the Participant and the
Company. Termination of the Plan shall not affect the Committee’s
ability to exercise the powers granted to it hereunder with respect to
Restricted Shares granted under the Plan prior to the date of such
termination.
Section
12. Conditions Upon Issuance
of
Shares.
(a) Legal
Compliance. Shares shall not be issued pursuant to a
Restricted Stock Award unless the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment
Representations. As a condition to the issuance of Restricted
Shares, the Company may require the Participant to represent and warrant at
the
time of any such issuance that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required. Not in limitation of any of the foregoing, in any such case
referred to in the preceding sentence the Committee may also require the
Participant to execute and deliver documents containing such representations
(including the investment representations described in this Section 12(b) of
the
Plan), warranties and agreements as the Committee or counsel to the Company
shall deem necessary or advisable to comply with any exemption from registration
under the Securities Act of 1933, as amended, any applicable State securities
laws, and any other applicable law, regulation or rule.
(c) Additional
Conditions. The Committee shall have the authority to
condition the grant of any Restricted Shares in such other manner that the
Committee determines to be appropriate, provided that such condition is not
inconsistent with the terms of the Plan.
Section
13. Inability to Obtain
Authority.
The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.
Section
14. Reservation of
Shares.
The
Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
Section
15. Stockholder
Approval.
The
Plan
shall be subject to approval by the stockholders of the Company. Such
stockholder approval shall be obtained in the manner and to the degree required
under Applicable Laws.
Section
16. Withholding; Notice
of
Sale.
Each
Participant shall, no later than the date as of which the value of a Restricted
Stock Award or of any Shares or other amounts received thereunder first becomes
includable in the gross income of the Participant for Federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the Committee
regarding payment of, any Federal, state, or local taxes of any kind required
by
law to be withheld with respect to such income. The Company shall, 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 Company’s
obligation to deliver stock certificates to any Participant is subject to and
conditioned on any such tax obligations being satisfied by the
Participant. Subject to approval by the Committee, a Participant may
elect to have the minimum required tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from Shares to
be
issued pursuant to any Restricted Stock Award a number of Shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
Shares owned by the Participant with an aggregate Fair Market Value (as of
the
date the withholding is effected) that would satisfy the minimum withholding
amount due.
Section
17. Code Section 83(b) Elections
Neither
the Company, any Affiliate, nor the Committee shall have any responsibility
in
connection with a Participant’s election, or attempt to elect, under Code
section 83(b) to include the value of a Restricted Stock Award in the
Participant’s gross income for the year of payment. Any Participant
who makes a Code section 83(b) election with respect to any such Restricted
Stock Award shall promptly notify the Committee of such election and provide
the
Committee with a copy thereof.
Section
18. No Right to Continue as a
Director
Neither
this Plan, nor the granting of a Restricted Stock Award under this Plan, nor
any
other action taken pursuant to this Plan shall constitute or be evidence of
any
agreement or understanding, express or implied, that the Company will retain
a
director for any period of time, or at any particular rate of
compensation.
Section
19. Governing Law.
This
Plan
shall be governed by the laws of the State of Delaware.