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): November 29, 2018
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 5.02 | Departure of Directors or Certain Officer; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers. |
On November 28, 2018 the Board of Directors (the Board) of ScanSource, Inc., a South Carolina corporation (the Company) approved an amendment to the Companys Nonqualified Deferred Compensation Plan (the Amendment) to allow directors to participate. The Amendment is attached as Exhibit 10.1 to this report and is incorporated herein by reference.
Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year |
On November 28, 2018 the Board amended and restated the Companys Bylaws, effective immediately. The Bylaws include the following amendment:
Article II, Section 1 has been amended to require an annual meeting once every fiscal year instead of once every calendar year.
The amended Bylaws are attached as Exhibit 3.1 to this report and are incorporated herein by reference.
Item 5.07 | Submission of Matters to a Vote of Security Holders. |
The Company held its annual meeting of the shareholders on November 29, 2018 (the Annual Meeting). At the Annual Meeting, each of the seven director nominees was elected and received greater than 96% approval of votes cast, the Companys executive compensation program was approved, on an advisory basis, with 95% approval of votes cast, and the appointment of Grant Thornton LLP as the Companys independent auditors for fiscal 2019 was ratified with 99% approval of votes cast. The Company received proxies totaling 94% of its issued and outstanding shares of common stock, representing 24,165,890 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 18, 2018, 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 |
22,604,609 | 709,565 | 851,716 | |||||||||
Michael L. Baur |
22,888,755 | 425,419 | 851,716 | |||||||||
Peter C. Browning |
22,773,462 | 540,712 | 851,716 | |||||||||
Michael J. Grainger |
22,603,104 | 711,070 | 851,716 | |||||||||
John P. Reilly |
22,439,468 | 874,706 | 851,716 | |||||||||
Elizabeth O. Temple |
22,936,685 | 377,489 | 851,716 | |||||||||
Charles R. Whitchurch |
22,905,717 | 408,457 | 851,716 |
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 | |||
22,197,620 |
1,103,079 |
13,475 |
851,716 |
Advisory Vote to Ratify Grant Thornton LLP as the Independent Auditors for Fiscal 2019
The Companys shareholders ratified the appointment of Grant Thornton LLP as the Companys independent auditors for fiscal 2019, based on the following final voting results:
For |
Against |
Abstain |
Broker Non-Votes | |||
24,132,882 |
18,444 |
14,564 |
|
Item 9.01 | Submission of Matters to a Vote of Security Holders. |
(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: November 29, 2018 | By: | /s/ Michael L. Baur | ||||
Name: | Michael L. Baur | |||||
Its: | Chief Executive Officer |
Exhibit 3.1
AMENDED AND RESTATED BYLAWS OF
SCANSOURCE, INC.
ARTICLE I
OFFICES AND REGISTERED AGENT
Section 1.01. Principal Office. The Corporation shall maintain its Principal Office in the City of Greenville, State of South Carolina or such other place as designated from time to time by the Board of Directors for the principal executive offices of the Corporation.
Section 1.02. Registered Office. The Corporation shall maintain a Registered Office as required by the South Carolina Business Corporation Act of 1988, as amended from time to time (the Act), at a location in the State of South Carolina designated by the Board of Directors from time to time. In the absence of a contrary designation by the Board of Directors, the Registered Office of the Corporation shall be located at its Principal Office.
Section 1.03. Other Offices. The Corporation may have such other offices within and without the State of South Carolina as the business of the Corporation may require from time to time. The authority to establish or close such other offices may be delegated by the Board of Directors to one or more of the Corporations Officers.
Section 1.04. Registered Agent. The Corporation shall maintain a Registered Agent as required by the Act who shall have a business office at the Corporations Registered Office. The Registered Agent shall be designated by the Board of Directors from time to time to serve at its pleasure. In the absence of such designation the Registered Agent shall be the Corporations Secretary.
Section 1.05. Filings. In the absence of directions from the Board of Directors to the contrary, the Secretary of the Corporation shall cause the Corporation to maintain currently all filings in respect of the Registered Office and Registered Agent with the Secretary of State as required by the Act or otherwise by law.
ARTICLE II
SHAREHOLDERS
Section 2.01. Annual Meetings. An annual meeting of the Corporations shareholders shall be held once each fiscal year for the purpose of electing Directors and for the transaction of such other business as may properly come before the meeting. No matters other than those proposed by the Board of Directors may be brought before the annual meeting by any shareholder unless written notice of such other matters, together with an adequate description thereof, shall have been provided to the corporation in compliance with Section 2.13. The annual meeting shall be held at the time and place designated by the Chairman of the Board or the Board of Directors from time to time.
Section 2.02. Special Meetings. Special meetings of the Corporations shareholders may be called for any one or more lawful purposes by the Corporations Chief Executive Officer, the Chairman of the Board, or a majority of the Directors. Only such business shall be conducted at a special shareholder meeting as shall have been brought before the meeting pursuant to the Corporations notice of the meeting. Special meetings of the shareholders shall be held at a time and location as reflected in the notice of the meeting provided for hereinafter.
Section 2.03. Notice of Meetings. Written or electronic notice of all meetings of shareholders shall be delivered not less than ten nor more than sixty days before the meeting date, either personally, by mail, or by any other method permitted under the Act, by or at the direction of the Chairman of the Board or the Board of Directors, to all shareholders of record entitled to vote at such meeting. If mailed, the notice shall be deemed to be delivered when deposited with postage thereon prepaid in the United States mail, addressed to the shareholder at the shareholders address as it appears on the Corporations records. Such notice shall state the date, time, and place of the meeting and, in the case of a special meeting, the purpose or purposes for which such meeting was called. Electronic notice may be communicated to a shareholder by email or any other form of wire or wireless communication permitted by the Act. In addition, so long as the Corporation is a public corporation (as defined in the Act), a notice to a shareholder which accompanies a proxy statement or information statement is effective when it is addressed and mailed or transmitted in any manner which satisfies the applicable rules of the Securities and
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Exchange Commission requiring delivery of a proxy statement including, without limitation, rules regarding delivery to shareholders sharing an address and implied consent to such delivery. Any previously scheduled meeting of the shareholders may be postponed, and any special meeting of the shareholders may be canceled, by resolution of the Board of Directors, upon public notice given prior to the date previously scheduled for such meeting of shareholders.
Section 2.04. Quorum. Except as may otherwise be required by the Act or the Corporations Articles of Incorporation, at any meeting of shareholders the presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote thereat shall constitute a quorum for the transaction of any business properly before the meeting. Shares entitled to vote as a separate voting group on a matter may take action at a meeting on such matter only if a quorum of the shares in the separate voting group are present in person or by proxy at the meeting. Except as may otherwise be required by law or the Corporations Articles of Incorporation, at any meeting of shareholders the presence, in person or by proxy, of the holders of a majority of the outstanding shares in a separate voting group entitled to vote thereat as a separate voting group, if any, shall constitute a quorum of such separate voting group for purposes of such matter. In the absence of a quorum a meeting may be adjourned from time to time, in accordance with the provisions concerning adjournments contained elsewhere in these Bylaws, by the holders of a majority of the shares represented at the meeting in person or by proxy. At such adjourned meeting a quorum of shareholders may transact such business as might have been properly transacted at the original meeting.
Section 2.05. Transaction of Business. Business transacted at an annual meeting of shareholders may include all such business as may properly come before the meeting. Business transacted at a special meeting of shareholders shall be limited to the purposes stated in the notice of the meeting.
Section 2.06. Shareholders of Record. For the purpose of determining shareholders entitled to vote at any meeting of shareholders, or entitled to receive dividends or other distributions, or in connection with any other proper purpose requiring a determination of shareholders, the Board of Directors shall by resolution fix a record date for such determination. The date shall be not more than seventy and not less than ten days prior to the date on which the activity requiring the determination is to occur. The shareholders of record appearing in the Corporations records at the close of business on the record date so fixed shall constitute the shareholders of right in respect of the activity in question. In the absence of action by the Board of Directors to fix a record date, the record date shall be ten days prior to the date on which the activity requiring a determination of shareholders is to occur. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting to a date not later than one hundred twenty days after the date fixed for the original meeting; provided, however, that the Board of Directors may in its discretion fix a new record date for any adjourned meeting and shall fix a new record date for any meeting adjourned to a date more than one hundred twenty days after the date of the original meeting.
Section 2.07. Voting. Except as may otherwise be required by the Act or the Corporations Articles of Incorporation, each shareholder entitled to vote at any meeting of shareholders shall be entitled to one vote for each share held by such shareholder which has voting power upon the matter in question. In elections of Directors, those candidates receiving the greater number of votes cast (although not necessarily a majority of votes cast) at the meeting shall be elected. Any other corporate action shall be authorized by a majority of the votes cast at the meeting unless otherwise provided by the Act, the Corporations Articles of Incorporation, or these Bylaws.
Section 2.08 Voting Inspectors. For each meeting of shareholders one or more persons shall be appointed to serve as voting inspectors by the Board of Directors. The voting inspectors may include one or more representatives of the Corporations Transfer Agent. The voting inspectors shall by majority decision resolve all disputes which may arise concerning the qualification of voters, the validity of proxies, the existence of a quorum, the voting power of shares, and the acceptance, rejection, and tabulation of votes. Each voting inspector shall take an oath to execute his or her duties impartially and to the best of his or her ability. Such oath shall be administered by the presiding officer to each voting inspector following the call to order and before a voting inspector enters upon the discharge of his or her duties.
Section 2.09. Adjournments. The chairman of the meeting may adjourn a meeting from time to time to a date, time, and place fixed by the chairman of the meeting and announced at the original meeting prior to adjournment. If a new record date is set pursuant to Section 2.06 following an adjournment a notice of the adjourned meeting will be sent to the shareholders of record as of that date. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting.
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Section 2.10. Action Without Meeting. Holders of record of voting shares may take action without meeting by written consent as to such matters and in accordance with such requirements and procedures as may be permitted by the Act.
Section 2.11. Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy. Such proxy shall be filed with the Secretary of the Corporation or other person authorized to tabulate votes before or at the time of the meeting. A proxy must be filed (a) in writing executed by the shareholder or by his or her duly authorized attorney in fact, (b) by a telegram or cablegram appearing to have been transmitted by the shareholder, or (c) by an electronic transmission of appointment; provided, however that the Board of Directors may also establish procedures by which shareholders can file proxies with the Secretary by telecopier facsimile or electronic transmission and that any electronic transmission must contain or be accompanied by sufficient information to determine that the transmission appointing the proxy is authorized. No proxy shall be valid after three years from the date of its execution unless it qualifies as an irrevocable proxy under the Act or the proxy provides for a longer period. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary.
Section 2.12. Voting of Shares by Certain Holders. Shares standing in the name of another corporation may be voted, either in person or by proxy, by the officer, agent, or proxy as the bylaws of that corporation may prescribe, or in the absence of such provision, as the board of directors of that corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be voted by him or her, either in person or by proxy, without a transfer of such shares into his or her name. Shares standing in the name of a trustee may be voted by such trustee, either in person or by proxy, but no trustee shall be entitled to vote shares held by such trustee without a transfer of the shares into such trustees name as trustee.
Shares standing in the name of a receiver may be voted, either in person or by proxy, by the receiver, and shares held by or under the control of a receiver may be voted, either in person or by proxy, by the receiver without the transfer thereof into such receivers name if authority to do so is contained in an appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote, either in person or by proxy, the shares so transferred.
Section 2.13. Advance Notice of Shareholder Nominees for Director and Other Shareholder Proposals.
(a) The matters to be considered and brought before any annual or special meeting of shareholders of the Corporation shall be limited to only such matters, including the nomination and election of directors, as shall be brought properly before such meeting in compliance with the procedures set forth in this Section 2.13.
(b) For any matter to be brought properly before any annual meeting of shareholders, the matter must be (i) specified in the notice of the annual meeting given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors or (iii) brought before the annual meeting by a shareholder who is a shareholder of record of the Corporation on the date the notice provided for in this Section 2.13 is delivered to the Secretary of the Corporation, who is entitled to vote at the annual meeting and who complies with the procedures set forth in this Section 2.13. In addition to any other requirements under applicable law and the Articles of Incorporation and By-laws of the Corporation, written notice (the Shareholder Notice) of any nomination or other proposal must be timely and any proposal, other than a nomination, must constitute a proper matter for shareholder action. To be timely, the Shareholder Notice must be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not less than 90 nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year; provided, however, that if (and only if) the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends within 60 days after such anniversary date (an annual meeting date outside such period being referred to herein as an Other Meeting Date), the Shareholder Notice shall be given in the manner provided
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herein by the later of the close of business on (i) the date 90 days prior to such Other Meeting Date or (ii) the tenth day following the date such Other Meeting Date is first publicly announced or disclosed. A Shareholder Notice must contain the following information: (i) whether the shareholder is providing the notice at the request of a beneficial holder of shares, whether the shareholder, any such beneficial holder or any nominee has any agreement, arrangement or understanding with, or has received any financial assistance, funding or other consideration from, any other person with respect to the investment by the shareholder or such beneficial holder in the Corporation or the matter the Shareholder Notice relates to, and the details thereof, including the name of such other person (the shareholder, any beneficial holder on whose behalf the notice is being delivered, any nominees listed in the notice and any persons with whom such agreement, arrangement or understanding exists or from whom such assistance has been obtained are hereinafter collectively referred to as Interested Persons), (ii) the name and address of all Interested Persons, (iii) a complete listing of the record and beneficial ownership positions (including number or amount) of all equity securities and debt instruments, whether held in the form of loans or capital market instruments, of the Corporation or any of its subsidiaries held by all Interested Persons, (iv) whether and the extent to which any hedging, derivative or other transaction is in place or has been entered into within the prior six months preceding the date of delivery of the Shareholder Notice by or for the benefit of any Interested Person with respect to the Corporation or its subsidiaries or any of their respective securities, debt instruments or credit ratings, the effect or intent of which transaction is to give rise to gain or loss as a result of changes in the trading price of such securities or debt instruments or changes in the credit ratings for the Corporation, its subsidiaries or any of their respective securities or debt instruments (or, more generally, changes in the perceived creditworthiness of the Corporation or its subsidiaries), or to increase or decrease the voting power of such Interested Person, and if so, a summary of the material terms thereof, and (v) a representation that the shareholder is a holder of record of stock of the Corporation that would be entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose the matter set forth in the Shareholder Notice. As used herein, beneficially owned has the meaning provided in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934. The Shareholder Notice shall be updated not later than 10 days after the record date for the determination of shareholders entitled to vote at the meeting to provide any material changes in the foregoing information as of the record date. Any Shareholder Notice relating to the nomination of directors must also contain (i) the information regarding each nominee required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission (or the corresponding provisions of any successor regulation), (ii) each nominees signed consent to serve as a director of the Corporation if elected, and (iii) whether each nominee is eligible for consideration as an independent director under the relevant standards contemplated by Item 407(a) of Regulation S-K (or the corresponding provisions of any successor regulation). The Corporation may also require any proposed nominee to furnish such other information, including completion of the Corporations directors questionnaire, as it may reasonably require to determine whether the nominee would be considered independent as a director or as a member of the audit committee of the Board of Directors under the various rules and standards applicable to the Corporation. Any Shareholder Notice with respect to a matter other than the nomination of directors must contain (i) the text of the proposal to be presented, including the text of any resolutions to be proposed for consideration by shareholders and (ii) a brief written statement of the reasons why such shareholder favors the proposal. Notwithstanding anything in this Section 2.13(b) to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and either all of the nominees for director or the size of the increased Board of Directors is not publicly announced or disclosed by the Corporation at least 100 days prior to the first anniversary of the preceding years annual meeting, a Shareholder Notice shall also be considered timely hereunder, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not later than the close of business on the tenth day following the first date all of such nominees or the size of the increased Board of Directors shall have been publicly announced or disclosed.
(c) For any matter to be brought properly before a special meeting of shareholders, the matter must be set forth in the Corporations notice of the meeting given by or at the direction of the Board of Directors. In the event that the Corporation calls a special meeting of shareholders for the purpose of electing one or more persons to the Board of Directors, any shareholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporations notice of the meeting, if the Shareholder Notice required by Section 2.13(b) hereof shall be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not later than the close of business on the tenth day following the day on which the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting is publicly announced or disclosed.
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(d) For purposes of this Section 2.13, a matter shall be deemed to have been publicly announced or disclosed if such matter is disclosed in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission.
(e) Only persons who are nominated in accordance with the procedures set forth in this Section 2.13 shall be eligible for election as directors of the Corporation. In no event shall the postponement or adjournment of an annual meeting already publicly noticed, or any announcement of such postponement or adjournment, commence a new period (or extend any time period) for the giving of notice as provided in this Section 2.13. This Section 2.13 shall not apply to (i) shareholders proposals made pursuant to Rule 14a-8 under the Exchange Act or (ii) the election of directors selected by or pursuant to the provisions of Article 3(b) of the Articles of Incorporation relating to the rights of the holders of any class or series of stock of the Corporation having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances.
(f) The person presiding at any meeting of shareholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall have the power and duty to determine whether notice of nominees and other matters proposed to be brought before a meeting has been duly given in the manner provided in this Section 2.13 and, if not so given, shall direct and declare at the meeting that such nominees and other matters are not properly before the meeting and shall not be considered. Notwithstanding the foregoing provisions of this Section 2.13, if the shareholder or a qualified representative of the shareholder does not appear at the annual or special meeting of shareholders of the Corporation to present any such nomination, or make any such proposal, such nomination or proposal shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation.
Section 2.14. Inspection Rights. The shareholders shall have only such rights to inspect records of this Corporation to the extent, and according to the procedures and limitations, prescribed by the Act.
Section 2.15. Conduct of Meetings. The Chairman of the Board of Directors shall be the chairman of each meeting of shareholders. In the absence of the Chairman, the meeting shall be chaired by such person as shall be appointed by the Nominating Committee of the Board of Directors or, in the absence of such appointment, an officer of the Corporation in accordance with the following order: Chief Executive Officer, Vice Chairman of the Board, President and Vice President. In the absence of all such officers, the meeting shall be chaired by an officer of the Corporation chosen by the vote of a majority in interest of the shareholders present in person or represented by proxy and entitled to vote thereat. The Secretary or in his or her absence an Assistant Secretary or in the absence of the Secretary and all Assistant Secretaries a person whom the chairman of the meeting shall appoint shall act as secretary of the meeting and keep a record of the proceedings thereof.
The Board of Directors of the Corporation shall be entitled to make such rules or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to shareholders of record of the Corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comment by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. Unless, and to the extent, determined by the Board of Directors or the chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with rules of parliamentary procedure.
Section 2.16. Dissenters Rights. Each shareholder shall have the right to dissent from, and obtain payment for, the shareholders shares only when so authorized by the Act.
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ARTICLE III
DIRECTORS
Section 3.01. Authority. The Board of Directors shall have ultimate authority over the conduct and management of the business and affairs of the Corporation.
Section 3.02. Number. The number of Directors that shall constitute the whole Board of Directors shall be established from time to time without amendment to these Bylaws by resolution of the Board of Directors. The established number of Directors may be increased or decreased from time to time by resolution of the Board of Directors. No decrease in the established number of Directors shall have the effect of shortening the term of any incumbent Director.
Section 3.03. Tenure. Each Director shall hold office from the date of such Directors election and qualification until such Directors successor shall have been duly elected and qualified, or until such Directors earlier removal, resignation, death, or incapacity. An election of all Directors by the shareholders shall be held at each annual meeting of the Corporations shareholders. A Director need not be a shareholder or a resident of the State of South Carolina. In case of any increase in the number of Directors, the additional directorships so created may be filled in the first instance in the same manner as a vacancy in the Board of Directors.
Section 3.04. Removal. Any Director may be removed from office, with or without cause, if by a vote of the shareholders the number of votes cast to remove such Director exceeds the number of votes cast not to remove such Director. A Director may be removed from office by the shareholders only at a meeting called for the purpose of removing such Director and the meeting notice must state the purpose, or one of the purposes, of the meeting is removal of the Director.
Section 3.05. Vacancies. The Board of Directors may by majority vote of the Directors then in office, regardless of whether such Directors constitute a quorum, elect a new Director to fill a vacancy on the Board of Directors; provided, however, that no person may be elected to fill a vacancy created by such persons removal from office pursuant to these Bylaws.
Section 3.06. Annual and Regular Meetings. An annual meeting of the Board of Directors shall be called and held for the purpose of annual organization, appointment of Officers and committees, and transaction of any other business. If such meeting is held promptly after and at the place specified for the annual meeting of shareholders, no notice of the annual meeting of the Board of Directors need be given. Otherwise, such annual meeting of the Board of Directors shall be held at such time (at any time prior to and not more than thirty days after the annual meeting of shareholders) and place as may be specified in the notice of the meeting. The Board of Directors may by resolution provide for the holding of additional regular meetings without notice other than such resolution provided, however, the resolution shall fix the dates, times, and places (which may be anywhere within or without the State of South Carolina) for these regular meetings. Except as otherwise provided by law, any business may be transacted at any annual or regular meeting of the Board of Directors.
Section 3.07. Special Meetings; Notice of Special Meeting. Special meetings of the Board of Directors may be called for any lawful purpose or purposes by two Directors or by the Chief Executive Officer of the Corporation. The person(s) calling a special meeting shall give, or cause to be given, to each Director at his or her business address, reasonable notice of the date, time and place of the meeting by any normal means of communication. The notices may, but need not, describe the purpose of the meeting. If mailed, the notice shall be deemed to be delivered when deposited in the United States mail addressed to the Directors business address, with postage thereon prepaid. If notice is given by telecopier or other electronic transmission, the notice shall be deemed delivered when the notice is transmitted to a telecopier facsimile receipt number or electronic mail address designated by the receiving Director. Any time or place fixed for a special meeting must permit participation in the meeting by means of telecommunications as authorized in Section 3.09 below.
Section 3.08. Waiver of Notice of Special Meetings. Notice of a special meeting need not be given to any Director who signs a waiver of notice either before or after the meeting. A Directors attendance at or participation in a meeting waives any required notice to him of the meeting unless the Director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
Section 3.09. Participation by Telecommunications. Any Director may participate in, and be regarded as present at, any meeting of the Board of Directors by means of conference telephone or any other means of communication by which all persons participating in the meeting can hear each other at the same time.
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Section 3.10. Quorum. A majority of Directors in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
Section 3.11. Action. The Board of Directors shall take action pursuant to resolutions adopted by the affirmative vote of a majority of the Directors participating in a meeting at which a quorum is present, or the affirmative vote of a greater number of Directors where required by the Corporations Articles of Incorporation or otherwise by law.
Section 3.12. Action Without Meeting. Any action required or permitted by the Act and required or permitted to be taken by the Board of Directors at an annual, regular, or special meeting may be taken without a meeting if the action is assented to by all members of the Board. The action may be evidenced by one or more written consents describing the action taken, signed by each Director, and included in the minutes or filed with the corporate records reflecting the action taken. Action evidenced by written consents under this Section 3.12 is effective when the last Director signs the consent, unless the consent specifies a different effective date. A consent signed under this Section 3.12 has the effect of a meeting vote and may be described as such in any document.
Section 3.13. Presumption of Assent. A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is considered to have assented to the action taken unless: (1) he objects at the beginning of the meeting (or promptly upon his arrival) to holding it or transacting business at the meeting; (2) his dissent or abstention from the action taken is entered in the minutes of the meeting; or (3) he delivers written notice of his dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.
Section 3.14. Executive Committee. The Board of Directors may by resolution, adopted in accordance with the Act, designate and delegate authority to an Executive Committee with any or all such authority as may be permitted by the Act. The Executive Committee may be a standing committee appointed annually. The Executive Committee, if appointed, shall be composed of two or more members, who shall serve at the pleasure of the Board of Directors. All voting members of the Executive Committee must be Directors of the Corporation appointed by the Board of Directors in accordance with Section 33-8-250 of the Act. The Chairman of the Executive Committee shall be elected by the Board of Directors from the Directors appointed to the Executive Committee. The Chairman of the Executive Committee shall have such duties and authority as set forth by the Board of Directors. The duties, constitution, and procedures of the Executive Committee shall be prescribed by the Board of Directors.
Section 3.15. Other Committees. The Board of Directors may from time to time by resolution, adopted in accordance with the Act, designate and delegate authority to an Audit Committee, a Compensation Committee, and other committees, with any or all such authority as may be permitted by the Act. Any such committee may be designated as a standing committee appointed annually or as a special committee for specific circumstances or transactions with a limited duration. Each committee shall be composed of two or more members, who shall serve at the pleasure of the Board of Directors. All committee members must be Directors of the Corporation appointed by the Board of Directors in accordance with Section 33-8-250 of the Act. The Chairman of the Board shall be given notice of all committee meetings and may in the Chairmans discretion attend meetings of any committee to which he or she is not appointed as a member. The duties, constitution, and procedures of any committee shall be prescribed by the Board of Directors. The Board of Directors shall designate one member of each committee as its chairman.
Section 3.16. Committee Meetings. A majority of each committees voting members shall constitute a quorum for the transaction of business by the committee, and each committee shall take action pursuant to resolutions adopted by a majority of the committees voting members participating in a meeting at which a quorum of the committee is present. Each committee may also take action without a meeting if a consent in writing, setting forth the action taken, shall be signed by all of the committees voting members in accordance with the procedures authorized by the Act. Special meetings of any committee may be called at any time by any Director who is a member of the committee or by any person entitled to call a special meeting of the full Board of Directors. Except as otherwise provided in this section, the conduct of all meetings of any committee, including notice thereof, and the taking of any action by such committee, shall be governed by Sections 3.06 through 3.13 of this Article.
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Section 3.17. Authority. Unless limited by the Articles of Incorporation, each committee may exercise those aspects of the authority of the Board of Directors which the Board of Directors confers upon such committee in the resolution creating the committee. Provided, however, a committee may not:
(1) | authorize distributions; |
(2) | approve or propose to shareholders action that the Act requires be approved by shareholders; |
(3) | fill vacancies on the Board of Directors or on any of its committees; |
(4) | amend the Articles of Incorporation pursuant to the authority of Directors; |
(5) | adopt, amend, or repeal bylaws; |
(6) | approve a plan of merger not requiring shareholder approval; |
(7) | authorize or approve reacquisition of shares, except according to a formula or method prescribed by the Board of Directors; or |
(8) | authorize or approve the issuance or sale or contract for sale of shares or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except that the Board of Directors may authorize a committee (or an executive officer of the Corporation) to do so within limits specifically prescribed by the Board of Directors. |
Section 3.18. Compensation. The Board of Directors may by resolution authorize payment to all Directors of a uniform fixed sum or other benefit, including equity awards, such as capital stock of the Corporation, options to purchase capital stock of the Corporation, or other forms of equity, for attendance at each meeting or a stated salary (which need not be uniform) as a Director, or a combination thereof, in such amounts as the Board may determine from time to time. The Board of Directors may, in its discretion, authorize payments of greater amounts or different forms to the Chairman of the Board or particular Directors or committee members than are paid to other Directors. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. The Board of Directors may also by resolution authorize the payment or reimbursement of all expenses of each Director related to the Directors attendance at meetings or other service to the Corporation.
Section 3.19. Notification of Nominations. Nominations for the election of Directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors. Any shareholder entitled to vote for the election of directors at a meeting may nominate persons for election as Directors only by complying with the procedures set forth above in Section 2.13.
ARTICLE IV
OFFICERS
Section 4.01. In General. The Officers of the Corporation shall consist of a Chief Executive Officer, a President, one or more Vice Presidents, a Chief Financial Officer, a Secretary, a Treasurer, and such additional vice presidents, assistant secretaries, assistant treasurers and such other officers and agents as the Board of Directors deems advisable from time to time. The Chairman of the Board may by action of the Board be an officer of the Corporation. All Officers shall be appointed by the Board of Directors to serve at the pleasure of the Board. Except as may otherwise be provided by the Act or in the Articles of Incorporation, any Officer may be removed by the Board of Directors at any time, with or without cause. Any vacancy, however occurring, in any office may be filled by the Board of Directors for the unexpired term. One person may hold two or more offices. Each Officer shall exercise the authority and perform the duties as may be set forth in these Bylaws, the Board of Directors or by direction of an officer authorized by the Board of Directors to prescribe the duties of other officers.
Section 4.02. Chairman of the Board. The Board of Directors shall elect from the Directors a Chairman of the Board to serve at the pleasure of the Board of Directors. The Chairman of the Board shall whenever possible preside at all meetings of shareholders and all meetings of the Board of Directors. Except as otherwise provided herein and as may be specifically limited by resolution of the Board of Directors or Executive Committee, the Chairman of the Board may execute on the Corporations behalf any and all contracts, agreements, notes, bonds, deeds, mortgages, certificates, instruments, and other documents. The Chairman of the Board shall exercise such additional authority and duties as set forth in these Bylaws and as the Board of Directors shall determine from time to time.
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Section 4.03. Chief Executive Officer. The Chief Executive Officer, subject to the authority of the Board of Directors, shall manage the business and affairs of the Corporation. The Chief Executive Officer shall see that the resolutions of the Board of Directors are put into effect. Except as otherwise provided herein and as may be specifically limited by resolution of the shareholders or the Board of Directors or an authorized committee thereof, the Chief Executive Officer shall have full authority to execute on the Corporations behalf any and all contracts, agreements, notes, bonds, deeds, mortgages, certificates, instruments, and other documents. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as are incident to the office of Chief Executive Officer and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors, or an authorized committee thereof.
Section 4.04. President. The President, subject to the authority of the Board of Directors and the Chief Executive Officer, shall manage the business and affairs of the Corporation. The President shall serve under the direction of the Chief Executive Officer. Except as otherwise provided herein and as may be specifically limited by resolution of the shareholders or the Board of Directors or an authorized committee thereof, the President shall have full authority to execute on the Corporations behalf any and all contracts, agreements, notes, bonds, deeds, mortgages, certificates, instruments, and other documents. The President shall also perform such other duties and may exercise such other powers as are incident to the office of President and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors or an authorized committee thereof, or the Chief Executive Officer.
Section 4.05. Chief Financial Officer. The Chief Financial Officer, subject to the authority of the Board of Directors, the Chief Executive Officer, and the President, shall be the chief financial officer of the Corporation and shall perform all of the duties customary to that office. The Chief Financial Officer shall be responsible for all of the Corporations financial affairs, subject to the supervision and direction of the Chief Executive Officer and President, and shall have and perform such further powers and duties as the Board of Directors may, from time to time, prescribe and as the Chief Executive Officer or President may, from time to time, delegate. The Chief Financial Officer shall also perform such other duties and may exercise such other powers as are incident to the office of Chief Financial Officer and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors or an authorized committee thereof, or the Chief Executive Officer.
Section 4.06. Vice Presidents. Except as otherwise determined by the Board of Directors or the Chief Executive Officer, each Vice President shall serve under the direction of the President and the Chief Executive Officer. Except as otherwise provided herein, each Vice President shall perform such duties and may exercise such powers as are incident to the office of vice president and as are from time to time assigned to him or her by the Act, these Bylaws, the Board of Directors, the Chairman of the Board, the President or the Chief Executive Officer.
Section 4.07. Secretary. Except as otherwise provided by these Bylaws or determined by the Board of Directors, the Secretary shall serve under the direction of the Chief Executive Officer. The Secretary shall whenever possible attend all meetings of the shareholders and the Board of Directors, and whenever the Secretary cannot attend such meetings, such duty shall be delegated by the presiding officer for such meeting to a duly authorized assistant secretary. The Secretary shall record or cause to be recorded under the Secretarys general supervision the proceedings of all such meetings and any other actions taken by the shareholders or the Board of Directors (or by any committee of the Board in place of the Board) in a book or books (or similar collection) to be kept for such purpose. The Secretary shall give, or cause to be given, all notices in connection with such meetings. The Secretary shall be the custodian of the Corporate seal and affix the seal to any document requiring it, and to attest thereto by signature. The Secretary may delegate the Secretarys authority to affix the Corporations seal and attest thereto by signature to any Assistant Secretary. The Board of Directors may give general authority to any other officer or specified agent to affix the Corporations seal and to attest thereto by signature. Unless otherwise required by law, the affixing of the Corporations seal shall not be required to bind the Corporation under any documents duly executed by the Corporation and the use of the seal shall be precatory in the discretion of the Corporations duly authorized signing officers. The Secretary shall properly keep and file, or cause to be properly kept and filed under the Secretarys supervision, all books, reports, statements, notices, waivers, proxies, tabulations, minutes, certificates, documents, records, lists, and instruments required by the Act or these Bylaws to be kept or filed, as the case may be. The Secretary may when requested, and shall when required, authenticate any records of the
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Corporation. Except to the extent otherwise required by the Act, the Secretary may maintain, or cause to be maintained, such items within or without the State of South Carolina at any reasonable place. In the event the Board of Directors designates and engages a Transfer Agent, as permitted by these Bylaws, such duties of keeping such shareholder records and the like accepted by such Transfer Agent shall be deemed delegated from the Secretary to such Transfer Agent, but such Transfer Agent shall be subject to supervision of the Secretary. The Secretary shall perform such other duties and may exercise such other powers as are incident to the office of secretary and as are from time to time assigned to such office by the Act, these Bylaws, the Board of Directors, the Chairman of the Board, or the Chief Executive Officer.
Section 4.08. Treasurer. Except as otherwise provided by these Bylaws or determined by the Board of Directors or the Chief Executive Officer, the Treasurer shall serve under the direction of the Chief Financial Officer. The Treasurer shall, under the direction of the Chief Financial Officer, keep safe custody of the Corporations funds and securities, maintain and give complete and accurate books, records, and statements of account, give and receive receipts for moneys, and make deposits of the Corporations funds, or cause the same to be done under the Treasurers supervision. The Treasurer shall upon request report to the Board of Directors or the Chief Executive Officer on the financial condition of the Corporation. The Treasurer may be required by the Board of Directors or the Chief Executive Officer at any time and from time to time to give such bond as the Board of Directors or the Chief Executive Officer may determine. The Treasurer shall perform such other duties and may exercise such other powers as are incident to the office of treasurer and as are from time to time assigned to such office by the Act, these Bylaws, the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the Chief Financial Officer.
Section 4.09. Assistant Officers. Except as otherwise provided by these Bylaws or determined by the Board of Directors or the Chief Executive Officer, the Assistant Secretaries and Assistant Treasurers, if any, shall serve under the immediate direction of the Secretary and the Treasurer, respectively, and under the ultimate direction of the Chief Executive Officer. The Assistant Officers shall assume the authority and perform the duties of their respective immediate superior officer as may be necessary at the direction of such immediately superior officer, or in the absence, incapacity, inability, or refusal of such immediate superior officer to act. The seniority of Assistant Officers shall be determined from their dates of appointment unless the Board of Directors or the Chief Executive Officer shall otherwise specify.
Section 4.10. Salaries. The salaries and other compensation of the Corporations executive officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving a salary or other compensation by reason of the fact that such officer is also a Director of the Corporation.
ARTICLE V
INDEMNIFICATION
Section 5.01. Scope. Every person who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that such person or a person of whom such person is the legal representative is or was a Director or Officer of the Corporation or is or was serving at the request of the Corporation or for its benefit as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under and pursuant to the Act (and regardless of whether such proceeding is by or in the right of the Corporation), against all expenses, liabilities, and losses (including without limitation attorneys fees, judgments, fines, and amounts paid or to be paid in settlement) suffered, or reasonably incurred by such person in connection therewith. Such right of indemnification shall be a contract right that may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such Directors, Officers, or representatives may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of shareholders, insurance, provision of law, or otherwise, as well as their rights under this Article V. The Corporation may contract in advance to provide indemnification.
Section 5.02. Advances and Reimbursements. The determination that indemnification under this Article V is permissible and the evaluation as to the reasonableness of expenses in a specific case shall be made, in the case of a Director, as provided by the Act, and in the case of an Officer or other person indemnified under Section 5.03, if
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any, as provided in Section 5.03 of this Article; provided, however, that if a majority of the Directors of the Corporation has changed after the date of the alleged conduct giving rise to a claim for indemnification, such determination and evaluation shall, at the option of the person claiming indemnification, be made by special legal counsel agreed upon by the Board of Directors and such person. Unless a determination has been made that indemnification is not permissible, and upon receipt of such written affirmation as required by the Act from the person to be indemnified, the Corporation shall make advances and reimbursements for expenses incurred by a Director or Officer or other person indemnified under Section 5.03, if any, in a proceeding upon receipt of an undertaking from such person to repay the same if it is ultimately determined that such person is not entitled to indemnification. Such undertaking shall be an unlimited, unsecured general obligation of the Director or Officer and shall be accepted without reference to such persons ability to make repayment. The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that a Director or Officer acted in such a manner as to make such person ineligible for indemnification.
Section 5.03. Indemnification of Other Persons. The Corporation may, to a lesser extent or to the same extent that the Corporation is required to provide indemnification to its Directors and Officers, provide indemnification and make advances and reimbursements for expenses to (a) its employees, agents, and advisors, (b) the directors, officers, employees, agents, and advisors of its subsidiaries and predecessor entities, and (c) any person serving any other legal entity in any capacity at the request of the Corporation; and, if authorized by general or specific action of the Board of Directors, may contract in advance to do so. The determination that indemnification under this Section is permissible, the authorization of such indemnification, and the advance or reimbursement, if any, and the evaluation as to the reasonableness of expenses in a specific case, shall be made as authorized from time to time by general or specific action of the Board of Directors, which action may be taken before or after a claim for indemnification is made, or as otherwise provided by the Act. No persons rights under Sections 5.01 or 5.02 of this Article shall be limited by the provisions of this Section 5.03.
Section 5.04. Indemnification Plan. The Board of Directors may from time to time adopt an Indemnification Plan implementing the rights granted in Section 5.01. This Indemnification Plan shall set forth in detail any other mechanics for exercise of the indemnification rights granted in this Article V, and shall be binding upon all parties except to the extent it is proven to be inconsistent with these Bylaws or the Act. The absence of the adoption of such plan, however, shall not vitiate the effectiveness of the rights conferred by this Article V.
Section 5.05. Insurance. The Board of Directors may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, or any other person indemnified or described as the subject of potential indemnification in this Article V, against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person.
Section 5.06. Miscellaneous. Every reference in this Article V to persons who are or may be entitled to indemnification shall include all persons who formerly occupied any of the positions referred to and their respective heirs, executors, and administrators. Special legal counsel selected to make determinations under this Article V may be counsel for the Corporation. Indemnification pursuant to this Article V shall not be exclusive of any other right of indemnification to which any person may be entitled, including indemnification pursuant to valid contract, indemnification by legal entities other than the Corporation and indemnification under policies of insurance purchased and maintained by the Corporation or others. However, no person shall be entitled to indemnification by the Corporation to the extent prohibited by the Act or to the extent such person is indemnified by another, including an insurer; provided, however, that the Corporation may make advances and reimbursements, subject to appropriate repayment obligations, under Section 5.02 if the effectiveness of such other indemnification will be delayed. The provisions of this Article shall not be deemed to prohibit the Corporation from entering into contracts otherwise permitted by law with any individuals or legal entities, including those named above, for the purpose of conducting the business of the Corporation. Indemnification of any person under this Article V shall be implemented only in accordance with procedures and requirements mandated by the Act and by plans, if any, adopted pursuant to Section 5.04.
Should the Act be amended subsequent to the date of these Bylaws so as to place limitations or restrictions on the indemnification rights granted to any person by this Article V, such restriction or limitation shall not apply to any indemnification provided by the Corporation for acts or events that occurred prior to the effective date of such
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revised statutory provision or provisions. If any provision of this Article V or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity shall not affect other provisions or applications of this Article V, and to this end the provisions of this Article V are severable.
ARTICLE VI
TRANSACTIONS
Section 6.01. Contracts. The Board of Directors may authorize any Officer or Officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
Section 6.02. Loans. The Board of Directors may authorize any Officer or Officers, or agent or agents, to contract any indebtedness and grant evidence of indebtedness and collateral therefor in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
Section 6.03. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select.
ARTICLE VII
STOCK
Section 7.01. Certificates for Shares. Shares may be represented by certificates, but need not be so represented. Unless the Act expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates. Certificates representing shares of capital stock of the Corporation shall state upon the face thereof the name of the person to whom issued, the number of shares, the fact that the Corporation is organized under the laws of the State of South Carolina, and such other matters as the Board of Directors may approve or as may be required by the Act. Each certificate shall be signed by (a) any one of the Chairman of the Board, the Chief Executive Officer, the President, or a Vice President, and (b) by any one of the Secretary or an Assistant Secretary. Where a certificate is countersigned by (i) a Transfer Agent other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any Officer whose facsimile signature has been placed upon a certificate shall have ceased to be such Officer before such certificate is issued it may be issued by the Corporation with the same effect as if he or she were such Officer at the date of issue. All certificates for shares shall be consecutively numbered. Certificates for shares of different classes, and different series within a class, to the extent authorized, if any, shall bear appropriate designations to identify the class or series as required by the Act.
Section 7.02. Shares without Certificates. The Board of Directors of the Corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates in accord with the provisions of Chapter 8 of Title 36 of the South Carolina Uniform Commercial Code. Within a reasonable time after the issue or transfer of shares without certificates, the Corporations Transfer Agent shall send the shareholder a written statement containing the following information: (a) the name of the Corporation and a statement that it is organized under the laws of South Carolina; (b) the name of the person to whom the shares are issued; (c) the number and class of shares and the designation of the series, if any, of the shares; (d) if at such time the Corporation is authorized to issue different classes of shares or different series within a class, a summary of the designations, relative rights, preferences and limitations applicable to each class and the variations in rights, preferences and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series) or, in lieu thereof, a statement that the Corporation will furnish the shareholder this information in writing, on request, and without charge; and (e) if applicable, a conspicuous notation that the shares are subject to a restriction on their transfer.
Section 7.03. Stock Transfer Books. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issuance, shall be entered on the stock transfer books of the Corporation. Such stock transfer books shall be maintained by the Secretary or Transfer Agent as a record of the Corporations shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each shareholder.
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Section 7.04. Transfer of Shares. Subject to the provisions of the Act and to any transfer restrictions binding on the Corporation, transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by the holder of record thereof or by such holders agent, attorney-in-fact or other legal representative, who shall furnish proper evidence of authority to transfer, upon surrender for cancellation of the certificate for such shares. Unless the Board of Directors in its discretion has by resolution established procedures, if any, by which a beneficial owner of shares held by a nominee may be recognized by the Corporation as the owner thereof, the person in whose name shares stand on the stock transfer books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes. The Corporations stock transfer books maintained by the Secretary or the Transfer Agent shall be conclusive in all such regards absent a determination by the Board of Directors of manifest error. All certificate surrendered to the Corporation for transfer shall be canceled.
Section 7.05. New or Replacement Certificates. No new stock certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed, or mutilated certificate a substitute certificate may be issued therefor upon: (a) the making of an affidavit by the holder of record of the shares represented by such certificate setting forth the facts concerning the loss, theft, or mutilation thereof; (b) delivery of such bond and/or indemnity to the Corporation as the Secretary or Board of Directors may prescribe or as may be required by law; and (c) satisfaction of such other reasonable requirements as the Secretary or Board of Directors may prescribe. To the extent permitted by applicable law (including Section 36-8-405 of the South Carolina Uniform Commercial Code), a new certificate may be issued without requiring any bond when, in the judgment of the Board of Directors, it is not imprudent to do so; and without limiting the generality of the foregoing, the Secretary or the Board of Directors may in their discretion waive (except as prohibited by law) any bond requirement otherwise applicable where the aggregate fair market value of the shares represented by such lost, stolen, or mutilated certificate is less than five hundred dollars based upon indicia deemed reasonable by the waiving party.
Section 7.06. Beneficial Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its stock transfer books as the owner of shares to receive dividends or other distributions, and to vote as such owner, a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have express or other notice thereof, except as otherwise provided by the Act or by procedures, if any, established by resolution of the Board of Directors in its discretion by which a beneficial owner of shares held by a nominee may be recognized as the owner thereof. Such procedures, if any, shall also set forth the extent of such recognition.
Section 7.07. Transfer Agent. The Board of Directors may, in its discretion, appoint an independent institutional Transfer Agent to serve as transfer agent and registrar for the Corporations stock at the pleasure of the Board. Such Transfer Agent shall assist the Corporations Secretary and voting inspectors in performance of their duties respecting shares of the Corporations stock. Such Transfer Agent shall maintain the Corporations stock transfer books and stock certificates in accordance with the Act, these Bylaws, instructions of the Board of Directors, and customary procedures consistently applied. Such Transfer Agent shall perform such other duties and shall be entitled to exercise such other powers, as may be assigned to the Transfer Agent from time to time by the Secretary or the Board of Directors.
Section 7.08. Transfer Restrictions. The Secretary shall have full power and authority to place or cause to be placed on any and all stock certificates restrictive legends to the extent reasonably believed necessary or appropriate to ensure the Corporations compliance with federal or any states securities laws, and to issue to any Transfer Agent stop transfer orders to effect compliance with such legends.
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ARTICLE VIII
EMERGENCY BYLAWS
Section 8.01. Emergency Bylaws. Unless the Articles of Incorporation provide otherwise, the following provisions of this Article VIII shall be effective during an emergency, which is defined as when a quorum of the Corporations Directors cannot be readily assembled because of some catastrophic event.
During such emergency:
(a) Notice of Board Meetings. Any one member of the Board of Directors or any one of the following officers: Chief Executive Officer, President, any Vice-President, Secretary, Chief Financial Officer or Treasurer, may call a meeting of the Board of Directors. Notice of such meeting need be given only to those Directors whom it is practicable to reach, and may be given in any practical manner, including by publication and radio. Such notice shall be given at least six hours prior to commencement of the meeting.
(b) Temporary Directors and Quorum. One or more officers of the Corporation present at the emergency board meeting, as is necessary to achieve a quorum, shall be considered to be Directors for the meeting, and shall so serve in order of rank, and within the same rank, in order of seniority. In the event that less than a quorum (as determined by Section 3.10) of the Directors are present (including any officers who are to serve as Directors for the meeting), those Directors present (including the officers serving as Directors) shall constitute a quorum.
(c) Actions Permitted to be taken. The Board of Directors may, as constituted in paragraph (b), and after notice as set forth in paragraph (a):
(1) | Officers Powers. Prescribe emergency powers to any officer of the Corporation; |
(2) | Delegation of any Power. Delegate to any officer or Director, any of the powers of the Board of Directors |
(3) | Lines of succession. Designate lines of succession of officers and agents, in the event that any of them is unable to discharge their duties; |
(4) | Relocate principal place of business. Relocate the principal place of business, or designate successive or simultaneous principal places of business; and |
(5) | All Other Action. Take any other action, convenient, helpful, or necessary, to carry on the business of the Corporation. |
ARTICLE IX
MISCELLANEOUS
Section 9.01. Fiscal Year. The fiscal year of the Corporation shall be established, and may be altered, by resolution of the Board of Directors from time to time as the Board deems advisable.
Section 9.02. Dividends. The Board of Directors may from time to time at any regular or special meeting (or by any other manner of action permitted by these Bylaws and the Act) declare, and the Corporation may pay, dividends or other distributions on its outstanding shares of stock in the manner and upon the terms and conditions as the Board of Directors deems advisable and as may be permitted by the Articles of Incorporation, the Act, and any other lawful restrictions imposed upon the Corporation. Such dividends or other distributions, when declared and permitted, may be paid in cash, stock, property, or any other permitted means lawfully declared by the Board of Directors.
Section 9.03. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by the Officer or Officers, or agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.
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Section 9.04. Seal. The seal of the Corporation shall be circular in form and shall have inscribed thereon the name of the Corporation, the year of its organization, and the words Corporate Seal, State of South Carolina.
Section 9.05. Amendments. Any or all of these Bylaws may be altered, amended, or repealed and new Bylaws may be adopted by the Board of Directors, subject to the following: (a) the right of the shareholders to alter, adopt, amend, or repeal Bylaws as provided in the Act; and (b) action of the shareholders in adopting, amending, or repealing a particular Bylaw wherein the Board of Directors is expressly prohibited by such shareholder action from amending or repealing the particular Bylaw acted upon by the shareholders. The shareholders may amend or repeal any or all of these Bylaws even though these Bylaws may also be amended or repealed by the Board of Directors. Any notice of a meeting of shareholders at which Bylaws are to be adopted, amended, or repealed by the shareholders shall state that the purpose, or one of the purposes, of the meeting is to consider the adoption, amendment, or repeal of Bylaws and contain or be accompanied by a copy or summary of the proposal.
Section 9.06. Usage. In construing these Bylaws, feminine or neuter pronouns shall be substituted for masculine forms and vice versa, and plural terms shall be substituted for singular forms and vice versa, in any place in which the context so requires. The section and paragraph headings contained in these Bylaws are for reference purposes only and shall not affect in any way the meaning or interpretation of these Bylaws. Terms such as hereof, hereunder, hereto, and words of similar import shall refer to these Bylaws in the entirety and all references to Articles, Paragraphs, Sections, and similar cross references shall refer to specified portions of these Bylaws, unless the context clearly requires otherwise. Terms used herein which are not otherwise defined shall have the meanings ascribed to them in the Act. All references to statutory provisions shall be deemed to include corresponding sections of succeeding laws.
The foregoing are certified to be the true and complete amended and restated Bylaws of the Corporation as adopted by the Board of Directors as of November 29, 2018.
/s/ John Harvey |
Secretary |
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Exhibit 10.1
FIRST AMENDMENT TO THE
SCANSOURCE, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
THIS FIRST AMENDMENT (this Amendment) to the ScanSource, Inc. Nonqualified Deferred Compensation Plan (the Plan) is made as of November 28, 2018 by ScanSource, Inc. (the Company). All capitalized terms used but not defined herein shall have the same meanings set forth in the Plan.
W I T N E S S E T H:
WHEREAS, the Company maintains the Plan to provide certain eligible employees with the opportunity to defer portions of their compensation and to receive certain Company contributions under the Plan, all in accordance with the provisions of the Plan; and
WHEREAS, under Section 12.1 of the Plan, the Plan Administrative Committee has reserved the right to amend the Plan, in whole or in part, at any time, so long as the amendment does not affect a Participants right to receive vested amounts previously deferred under the Plan or otherwise cause the Plan to fail to be in compliance with Section 409A of the Code; and
WHEREAS, the Company now desires to amend the Plan primarily to provide non-employee directors with the opportunity to defer any common stock, no par value per share (Common Stock), of the Company that such directors may otherwise receive in lieu of cash fees and/or on settlement of any Restricted Stock Units (as defined under the ScanSource, Inc. 2013 Long-Term Incentive Plan (the Incentive Plan)) that such directors may be granted under the Incentive Plan or any similar compensatory plan or arrangement of the Company; and
WHEREAS, the Plan Administrative Committee has approved this Amendment.
NOW, THEREFORE, the Company hereby amends the Plan as set forth herein effective as of the date set forth above:
1.
Appendix A is hereby added to the Plan as set forth below:
APPENDIX A
DEFERRAL BY DIRECTORS OF COMMON STOCK
ISSUABLE IN LIEU OF CASH FEES AND/OR UPON SETTLEMENT OF RESTRICTED STOCK UNITS
1.1 Deferral of Non-Employee Director Fees
(a) Effective for Non-Employee Director Fees payable for service on or after January 1, 2019, a Non-Employee Director may elect to defer the receipt of shares of the common stock, no par value per share, of the Company (Common Stock) otherwise issuable in lieu of any Non-Employee Director Fees the Non-Employee Director otherwise is entitled to receive in
cash. Any Deferral Election the Non-Employee Director makes with respect to Non-Employee Director Fees will be deemed to be an election to receive such Non-Employee Director Fees in the form of shares of Common Stock in lieu of cash. For purposes of the Plan, (i) a Non-Employee Director means any individual who is a member of the Board and who is not an employee of the Company or any of its Affiliates, and (ii) Non-Employee Director Fees mean the quarterly cash retainer for Board and committee service, special assignment fees, meeting fees, committee chair or presiding director fees and any other cash amounts payable to the Non-Employee Director for service to the Company as a Non-Employee Director, if and only to the extent the Non-Employee Director has elected or is deemed to elect, on a timely basis, to receive such Non-Employee Director Fees in the form of shares of Common Stock (in lieu of cash).
(b) A Non-Employee Director may only make an election to defer the receipt of shares of Common Stock to be received in lieu of Non-Employee Director Fees (otherwise payable in cash) by filing a Deferral Election with the Plan Administrative Committee by December 31st (or such earlier date as specified by the Plan Administrative Committee on the Deferral Election) of the calendar year immediately preceding the calendar year in which the Non-Employee Director will render the related services in return for the Non-Employee Director Fees. The Non-Employee Directors Deferral Election shall become irrevocable as of December 31st (or such earlier date as specified by the Plan Administrative Committee on the Deferral Election) of such immediately preceding calendar year (except as otherwise permitted by Section 409A of the Code). The Deferral Election shall be made on such form, in such percentages and in such manner as the Plan Administrative Committee may specify. Once irrevocable, a Deferral Election with respect to Non-Employee Director Fees shall evergreen and shall remain effective with respect to subsequent calendar years unless and until the Non-Employee Director revokes or changes the Deferral Election by filing a revocation or new Deferral Election with the Plan Administrative Committee by December 31st (or such earlier date as specified by the Plan Administrative Committee) of the calendar year immediately preceding the calendar year in which the revocation or new Deferral Election is to be effective. A Deferral Election may be cancelled by the Plan Administrative Committee only to the extent permitted under the Plan and Section 409A of the Code.
(c) Notwithstanding the foregoing, in the case of the first calendar year in which the Non-Employee Director becomes a Non-Employee Director, an initial Deferral Election to defer the receipt of shares of Common Stock otherwise issuable in lieu of Non-Employee Director Fees to be paid in cash for that calendar year may be made no later than 30 days after the date the Non-Employee Director first becomes a Non-Employee Director. Such election shall apply only to Non-Employee Director Fees payable for services as a Non-Employee Director to be performed subsequent to the Deferral Election. This special rule only applies to the extent permitted by Code Section 409A.
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1.2 Deferral of Annual Equity Awards.
(a) Effective for annual equity awards granted on or after January 1, 2019, a Non-Employee Director may elect to defer the receipt of shares of the Common Stock otherwise issuable upon settlement of any such annual equity awards granted to the Non-Employee Director. Any Deferral Election the Non-Employee Director makes with respect to any annual equity awards the Non-Employee Director may be granted will be deemed to be an election to receive such annual award in the form of restricted stock units (RSUs). For purposes of the Plan, (i) a Deferral Election may only apply to annual equity awards otherwise elected or deemed elected to be made in the form of restricted stock units and (ii) RSUs or restricted stock units refer to an award granted under the ScanSource, Inc. 2013 Long-Term Incentive Plan, as amended, or any similar compensatory plan or arrangement of the Company or any Subsidiary (an Incentive Plan) of the right to receive shares of Common Stock and, if applicable, dividend equivalents on such shares of Common Stock, pursuant to the terms of the award certificate.
(b) A Non-Employee Director may only make an election to defer the receipt of shares of Common Stock to be received upon settlement of the Non-Employee Directors RSUs by filing a Deferral Election with the Plan Administrative Committee by December 31st (or such earlier date as specified by the Plan Administrative Committee on the Deferral Election) of the calendar year immediately preceding the calendar year in which the RSUs are granted to the Non-Employee Director. The Non-Employee Directors Deferral Election shall become irrevocable as of December 31st (or such earlier date as specified by the Plan Administrative Committee on the Deferral Election) of such immediately preceding calendar year (except as otherwise permitted by Section 409A of the Code). A Non-Employee Director may not elect to defer RSUs under the rules otherwise applicable to Non-Employee Directors in the first calendar year in which they become Non-Employee Directors. The Deferral Election shall be made on such form, in such percentages and in such manner as the Plan Administrative Committee may specify. Once irrevocable, a Deferral Election with respect to RSUs shall evergreen and shall remain effective with respect to subsequent calendar years unless and until the Non-Employee Director revokes or changes the Deferral Election by filing a revocation or new Deferral Election with the Plan Administrative Committee by December 31st (or such earlier date as specified by the Plan Administrative Committee) of the calendar year immediately preceding the calendar year in which the revocation or new Deferral Election is to be effective. A Deferral Election may be cancelled by the Plan Administrative Committee only to the extent permitted under the Plan and Section 409A of the Code.
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1.3 Amount Deferred.
A Non-Employee Director shall designate on the Deferral Election if the Non-Employee Directors Non-Employee Director Fees and/or RSUs are to be deferred in accordance with this Appendix A. If a Director elects to defer the receipt of shares of Common Stock otherwise issuable as Non-Employee Director Fees and/or upon settlement of the Non-Employee Directors RSUs, the Non-Employee Director must elect to defer his Non-Employee Director Fees and/or RSUs for the respective calendar year in increments of no less than 25%, e.g., 25%, 50%, 75% or 100%. A Director shall not be permitted to defer less than 25% of his Non-Employee Director Fees and/or RSUs for any calendar year, and any such attempted deferral shall not be effective.
1.4 Form of Payment.
A Non-Employee Director shall designate on the Deferral Election whether the Non-Employee Directors Non-Employee Director Fees and/or RSUs that are to be deferred will be distributed in a single lump sum or in a number of approximately equal annual installments over a specified period not to exceed five (5) years. The form of payment designated on the Deferral Election will apply to all Non-Employee Director Fees and/or RSUs credited to the Non-Employee Directors Account or Sub-Account as the result of such Deferral Election unless changed as permitted by the Plan and Section 409A of the Code. The Non-Employee Director may elect different forms of payment for the Non-Employee Director Fees and/or RSUs subject to each specific Deferral Election. Unless the Non-Employee Director elects otherwise in the Deferral Election, all Non-Employee Director Fees and/or RSUs credited to the Non-Employee Directors Account or Sub-Account as the result of such Deferral Election will be distributed in a single lump sum.
1.5 No Deferral of Dividend Equivalents.
To the extent dividends are paid on shares of Common Stock after the RSUs are granted and prior to settlement or forfeiture of the RSUs, a Non-Employee Director may become entitled to receive an amount in cash or shares of Common Stock equal in value to the dividends the Non-Employee Director would have received had the Non-Employee Director been the actual owner of the number of shares of Common Stock represented by the Non-Employee Directors RSUs. A Non-Employee Director may not elect to defer, and the Non-Employee Directors Deferral Election will not apply to, any such dividend equivalents that may accrue and become payable with respect to the Non-Employee Directors RSUs prior to settlement or forfeiture of the RSUs that are payable in cash or other property (other than shares of Common Stock). Such dividend equivalents shall be paid in accordance with the terms of the Non-Employee Directors RSUs and shall not be deferred into the Plan. Any stock dividends payable with respect to the Non-Employee Directors RSUs will be subject to the Non-Employees Deferral Election the same as the related RSUs.
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1.6 Account; Company Stock Unit Fund.
(a) The Non-Employee Directors Account under the Plan shall consist of the Non-Employee Directors Account and/or Sub-Accounts, which shall be credited with deferrals of shares of Common Stock otherwise issuable as Non-Employee Director Fees and/or upon settlement of RSUs with respect to which the Non-Employee Director has made a timely Deferral Election. The shares of Common Stock that a Non-Employee Director elects to defer shall be treated as if they were set aside in the Non-Employee Directors Account or Sub-Account on the date the shares of Common Stock would otherwise have been paid to the Non-Employee Director. A Non-Employee Directors Account or Sub-Account then will be credited with gains, losses and earnings as provided herein and will be debited for any payments made to the Non-Employee Director from such Account or Sub-Account. A Non-Employee Directors Account or Sub-Account means each bookkeeping Account or Sub-Account maintained by the Committee on behalf of each Non-Employee Director pursuant to this Appendix A. A separate Sub-Account will be established and maintained as part of the Non-Employee Directors Account for each different form of payment that may apply to the Non-Employee Director Fees and/or RSUs that are deferred under the Plan.
(b) A Non-Employee Directors shares of Common Stock that are deferred into the Plan and allocated to the Non-Employee Directors Account or Sub-Account will be deemed invested in an investment fund that tracks the performance of the Companys Common Stock (the Company Stock Unit Fund) (irrevocably until such amounts are distributed to the Non-Employee Director). Any stock dividends, cash dividends or other non-cash dividends that are paid thereafter with respect to the shares of Common Stock deemed to be held in the Non-Employee Directors Account or Sub-Account shall be credited to the Non-Employee Directors Account or Sub-Account in the form of additional shares of Common Stock and shall automatically be deemed to be invested in the Company Stock Unit Fund (irrevocably until distribution to the Non-Employee Director of the shares of Common Stock with respect to which the dividends were credited). The number of shares credited to the Non-Employee Director for a particular stock dividend with respect to shares of Common Stock credited to the Non-Employee Directors Account or Sub-Account shall be equal to (A) the number of shares of Common Stock credited to the Non-Employee Directors Account or Sub-Account as of the record date for such dividend in respect of each share of Common Stock, multiplied by (B) the number of additional or fractional shares of Common Stock actually paid as a dividend in respect of each share of Common Stock. The number of shares credited to the Non-Employee Director for a cash dividend or other non-cash (non-Stock) dividend with respect to shares of Common Stock credited to the Non-Employee Directors Account or Sub-Account shall be equal to (A) the number of shares of Common Stock credited to the Non-Employee Directors Account or Sub-Account as of the record date for such dividend in respect of each share of Common Stock, multiplied by (B) the fair market value of the dividend, divided by (C) the fair market value of the Common Stock on the payment date for such dividend. Non-Employee Directors may not select any other investment fund to which any such amounts are to be credited.
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(c) The number of shares of Common Stock credited to the Non-Employee Directors Account or Sub-Account may be adjusted by the Plan Administrative Committee, in its sole discretion, to prevent dilution or enlargement of Non-Employee Directors rights with respect to the portion of his Account or Sub-Account allocated to the Company Stock Unit Fund in the event of any reorganization, reclassification, stock split, or other unusual corporate transaction or event which affects the value or type of security of the Common Stock, provided that any such adjustment shall be made taking into account any crediting of shares of Common Stock to the Non-Employee Director otherwise required herein.
(d) For purposes of this Appendix A, the fair market value of the Common Stock shall be determined to be an amount equal to the closing sales price of a share of Common Stock on The NASDAQ Stock Market (NASDAQ) (as reported in The Wall Street Journal) on the applicable date or, if no sales of shares of Common Stock occur on said date, the closing sales price of the Common Stock on the last preceding day on which there was a sale of shares of Common Stock on that exchange.
1.7 Vested Interest.
Each Non-Employee Director shall have at all times a fully vested and nonforfeitable interest in his Account and/or Sub-Account.
1.8 Time and Form of Payment.
(a) Notwithstanding any other provision of the Plan, a Non-Employee Directors Account and/or Sub-Account shall be distributed, in the form of payment elected by the Non-Employee Director in the applicable Deferral Election or as otherwise set forth in the Plan, upon the Non-Employee Directors Separation from Service, subject to delay to the extent required by Section 409A of the Code. If the Non-Employee Directors Account or Sub-Account is to be distributed in a single lump sum, such Account or Sub-Account shall be distributed in full no later than sixty (60) days after the date of the Non-Employee Directors Separation from Service. If the Non-Employee Directors Account or Sub-Account is to be distributed in the form of annual installments, such Account or Sub-Account shall be distributed in that number of approximately equal annual installments over the specified period (not to exceed five (5) years) elected by the Non-Employee Director in the applicable Deferral Election, with the first installment to be made no later than sixty (60) days after the date of the Non-Employee Directors Separation from Service and subsequent installments on each subsequent anniversary of the date of the Non-Employee Directors Separation from Service until the entire Account or Sub-Account is distributed in full. Notwithstanding the foregoing, if the Non-Employee Director is a specified
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employee within the meaning of Section 409A(a)(2)(B) of the Code as of the Non-Employee Directors Separation from Service, the Non-Employee Directors Account or Sub-Account may not be distributed before the first day of the seventh (7th) calendar month following the Non-Employee Directors Separation from Service (or, if earlier, upon the Non-Employee Directors death) to the extent required to be delayed by Section 409A of the Code, and any distribution that would otherwise be paid before such date shall be delayed and paid within the thirty (30) days following the first day of the seventh (7th) calendar month following the Non-Employee Directors Separation from Service (or, if earlier, upon the Non-Employee Directors death).
(b) The portion of the Non-Employee Directors Account or Sub-Account relating to deferrals of shares of Common Stock otherwise issuable under RSUs with respect to which the Non-Employee Director made a timely Deferral Election and any related stock dividends shall be distributed in actual whole shares of Common Stock equal to the number of shares of Common Stock credited to that portion of the Non-Employee Directors Account or Sub-Account rounded down to the nearest whole share of Common Stock). Such shares of Common Stock shall be paid from the Incentive Plan under which the RSUs subject to the Deferral Election were granted originally. The portion of a Non-Employee Directors Account or Sub-Account relating to deferrals of Non-Employee Director Fees, and/or cash dividends, or other non-cash (non-stock) dividends that are credited with respect to the shares of Common Stock deemed to be held in the Non-Employee Directors Account or Sub-Account shall be distributed in cash, provided, however, if shares of Common Stock are otherwise available for distribution under an Incentive Plan to pay any such deferrals of Non-Employee Director Fees and/or cash dividends or other non-cash (non-stock) dividends that are credited with respect to the shares of Common Stock deemed to be held in the Non-Employee Directors Account or Sub-Account, the Plan Administrative Committee may determine, in its sole discretion, that such amounts shall be distributed in whole shares of Common Stock (rounded down to the nearest whole share of Common Stock). The portion of a Non-Employee Directors Account or Sub-Account relating to any deferrals of Non-Employee Director Fees and/or cash dividends or other non-cash (non-stock) dividends that are to be paid in cash shall be determined by multiplying the number of shares of Common Stock credited to the portion of the Non-Employee Directors Account or Sub-Account that is to be paid in cash by the fair market value of a share of the Common Stock as of the end of the calendar month immediately preceding the date such portion of the Non-Employee Directors Account or Sub-Account is to be distributed in cash (rounded down to the nearest whole cent).
1.9 Termination.
A Non-Employee Directors right to defer Non-Employee Director Fees and/or annual equity awards shall cease with respect to the calendar year following the calendar year in which he ceases to be a Non-Employee Director, although such Non-Employee Director shall continue to be subject to the terms and conditions of the Plan for so long as the Non-Employee Director remains a Participant.
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2.
Sections 2.19 and 2.20 of the Plan are hereby amended by adding the following to the end thereof of each such Section:
Effective solely for purposes of any determination to be on or after January 1, 2019 (with no inference with respect to determinations made prior to such date), for purposes of determining the Participants years of service under this definition, (i) the Participant will be credited with a year of service if (A) he or she is actively employed by a Participating Employer for a continuous period of at least six (6) full months during a Plan Year and is actively employed by a Participating Employer as of the last day of the Plan Year, or (B) the Participant fails to meet the active employment requirement in clause (i)(A) above solely as a result of an approved leave of absence, and (ii) the Participants years of service shall include all years of service the Participant has accrued as described above, whether before, on or after the Participant commenced participation in the Plan, whether or not the years of service are consecutive, and whether accrued before, on or after one or more breaks in employment or service.
3.
Section 11 of the Plan is hereby amended by deleting Section 11 in its entirety and inserting in lieu thereof:
SECTION 11
CLAIMS PROCEDURE
11.1 Filing a Claim. A Participant or Beneficiary shall make a claim for Plan benefits by filing a written request with the Plan Administrative Committee or, upon a form to be furnished by the Plan Administrative Committee for such purpose. No legal action to recover benefits or enforce or clarify rights under the Plan can be commenced until claims and review procedures provided hereunder have been exhausted. Any Participant or Beneficiary who disputes the amount of his or her entitlement to Plan benefits must file a claim in writing within two-hundred seventy (270) days of the event that the Participant or Beneficiary is asserting constitutes an entitlement to such Plan benefits or, if later, within ninety (90) days of the date the payment is due. Failure by the Participant or Beneficiary to submit such claim within such time periods shall bar the Participant or Beneficiary from any claim for benefits under the Plan as the result of the occurrence of such event or the failure to make such payment. In no event shall the Participant or other claimant be entitled to challenge a decision of the Plan Administrative Committee with respect to a claim unless and until the claims procedures herein have been complied with and exhausted.
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11.2 Initial Review.
(a) The Plan Administrative Committee (or its delegate) shall review each claim for benefits and shall provide a response to the claimant regarding the claim within 90 days. However, if special circumstances require an extension of time for the Plan Administrative Committee (or its delegate) to process the claim, the 90-day period may be extended for an additional 90 days. Prior to the termination of the initial 90-day period, the Plan Administrative Committee (or its delegate) shall provide the claimant with a written notice setting forth the reason for the extension. The notice shall indicate the special circumstance requiring the extension of time and the date by which the Plan Administrative Committee (or its delegate) expects to render the benefit determination. A claim for benefits that depends on a determination of a Total Disability (a Disability claim) is subject to different time periods as described in paragraph (b) below.
(b) A response to a Disability claim shall be provided within 45 days after receipt of the claim. This 45-day period may be extended up to 30 days if an extension is necessary due to matters beyond the control of the Plan and the claimant is notified, prior to the expiration of the initial 45-day period, of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision. If, prior to the end of the first 30-day extension period, the Plan Administrative Committee (or its delegate) determines that, due to matters beyond the control of the Plan, a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to an additional 30 days, provided that the Plan Administrative Committee (or its delegate) notifies the claimant, prior to the expiration of the first 30-day extension period, of the circumstances requiring the extension and the date as of which the Plan expects to render a decision. In the case of any such extension with respect to a Disability claim, the notice of extension also shall specifically explain the standards on which entitlement to a benefit upon Disability is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and the claimant shall have at least 45 days within which to provide the specified information, if any.
11.3 Denial of Claim. If a claim for benefits is denied, in whole or in part, the Plan Administrative Committee (or its delegate) shall provide written notice to the claimant providing the following information:
(a) The specific reason(s) stating why the claim was denied;
(b) Reference to the specific plan provisions on which the determination is based;
(c) A description of any additional material or information needed to process the claim, and an explanation of why such material or information is necessary;
(d) An explanation of the claims review procedure, including the time limits applicable to such procedure, as well as a statement notifying the claimant of his or her right to bring a civil action under Code Section 502(a) of ERISA following denial of a final appeal; and
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(e) In the case of a Disability claim filed before April 2, 2018, the notice will be written in a manner calculated to be understood by the claimant and:
(1) | If an internal rule, guideline, protocol or other similar criteria was relied on in making the adverse benefit determination with respect to a Disability claim, either provide the specific rule, guideline, protocol or other similar criteria, or provide a statement that such a rule, guideline, protocol or other similar criteria was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol or other criteria will be provided free of charge to the claimant or his duly authorized representative upon request in writing; and |
(2) | If the adverse benefit determination is based on a medical necessity or experimental treatment or a similar exclusion or limit, either provide an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimants medical circumstances, or provide a statement that such explanation will be provided free of charge upon request in writing; or |
(f) In the case of a Disability claim filed on or after April 2, 2018, the notice will be provided in a culturally and linguistically appropriate manner as described in 29 CFR § 2560.503-1(o)(1)(i) (iii) and:
(1) | Provide a discussion of the decision, including an explanation of the basis for disagreeing with or not following the views presented by the claimant to the Plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant, the views of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a claimants adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination, or a disability determination regarding the claimant presented by the claimant to the Plan made by the Social Security Administration; |
(2) | If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either provide an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimants medical circumstances, or provide a statement that such explanation will be provided free of charge upon request in writing; |
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(3) | Explain the specific internal rules, guidelines, protocols, standards or other similar criteria of the Plan relied upon in making the adverse determination or, alternatively, provide a statement that such rules, guidelines, protocols, standards or other similar criteria of the Plan do not exist; and |
(4) | Provide a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits. |
11.4 Appeal of Denial. The claimant or the claimants representative may appeal any denial of benefits and may review pertinent Plan documents to help prepare for the appeal. Any such appeal must be filed with the Plan Administrative Committee in writing within 60 days (180 days in the case of a Disability claim) after the claimant receives written notice of denial of the claim for benefits and must set forth the grounds on which such appeal is made and any issues or comments which the claimant deems pertinent to his or her claim. The claimant may submit written comments, documents, records, and other information relating to his or her claim for benefits. Upon request, and free of charge, the claimant shall be provided reasonable access to, and copies of, all documents and records relevant to his or her claim.
11.5 Review on Appeal. The Plan Administrative Committee (or its delegate) will consider the claimants appeal made in accordance with this Section 11.5 and will notify the claimant in writing of its decision within 60 days (45 days in the case of a Disability claim) of the receipt of the appeal unless there are special circumstances that require an extension of time for processing the claim. If the Plan Administrative Committee (or its delegate) determines that an extension of time for processing is required, the claimant will be notified in writing prior to the termination of the initial 60-day period (or 45-day period, as applicable), indicating the special circumstances that require an extension of time and the date the Plan Administrative Committee (or its delegate) expects to render a determination on appeal. In no event shall such extension period exceed a period of 120 days (90 days in the case of a disability claim) from the receipt of the claimants appeal. The Plan Administrative Committee shall conduct a full and fair review of the claim that takes into account all comments, documents, records, and other information submitted by the claimant or the claimants authorized representative relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination, and
(a) In the case of a Disability claim filed before April 2, 2018:
(1) | Provide for a review that shall not afford deference to the initial benefit determination and that shall be conducted by an appropriate named fiduciary of the Plan who is neither the individual who made the initial adverse benefit determination, nor the subordinate of such individual; |
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(2) | In making its decision on a review of any claim denial that is based in whole or in part on a medical judgment, including determinations with regard to whether a particular treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate, consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment; |
(3) | Provide to the claimant or his authorized representative, either upon request in writing and free of charge or automatically, the identification of any medical or vocational experts who advised the Plan Administrative Committee (or its delegate) in connection with the original benefit decision, even if that advice was not relied upon in making the decision; and |
(4) | Ensure that the medical professional will not be the same person consulted during the initial determination of the claim, nor be the subordinate to such person. |
(b) In the case of a Disability claim filed on or after April 2, 2018:
(1) | Before issuing an adverse benefit determination on review, the Plan Administrative Committee shall provide the claimant, free of charge, with any new or additional evidence considered, relied upon, or generated by the Plan or other person making the benefit determination (or at the direction of the Plan or such other person) in connection with the clam; such evidence must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided under this Section 11.5 to give the claimant a reasonable opportunity to respond prior to that date; and |
(2) | Before the Plan can issue an adverse benefit determination on review based on a new or additional rationale, the Plan Administrative Committee shall provide the claimant, free of charge, with the rationale; such rationale must be provided as soon as possible and sufficiently in advance of the date on which notice of adverse benefit determination on review is required to be provided under this Section 11.5 to give the claimant a reasonable opportunity to respond prior to that date. |
11.6 Decision on Review. If the Plan Administrative Committee (or its delegate) denies the claim on appeal, it will notify the claimant or his duly authorized representative in writing, in a manner calculated to be understood by the claimant, and the notice shall set forth:
(a) The specific reason or reasons for the denial;
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(b) References to the pertinent Plan provisions on which the decision is based;
(c) A statement of the claimants right to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits;
(d) A statement of the claimants right to bring a civil action under Section 502(a) of ERISA;
(e) In the case of a Disability claim filed before April 2, 2018:
(1) | If an internal rule, guideline, protocol or other similar criteria was relied upon in making the adverse determination, either provide the specific rule, guideline, protocol or other similar criteria, or provide a statement that such a rule, guideline, protocol or other similar criteria was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol or other criteria will be provided free of charge to the claimant or his duly authorized representative upon request in writing; |
(2) | If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either provide an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimants medical circumstance, or provide a statement that such explanation will be provided free of charge upon request in writing; and |
(3) | Provide a statement advising the claimant to contact the local U.S. Department of Labor office and the State insurance regulatory agency to find out if any other voluntary alternative resolution options, such as mediation, are available. |
(f) In the case of a Disability claim filed on or after April 2, 2018:
(1) | Provide a discussion of the decision, including an explanation of the basis for disagreeing with or not following the views presented by the claimant to the Plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant, the views of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a claimants adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination, or a disability determination regarding the claimant presented by the claimant to the Plan made by the Social Security Administration; |
(2) | If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either provide an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimants medical circumstances, or provide a statement that such explanation will be provided free of charge upon request in writing; |
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(3) | Provide the specific internal rules, guidelines, protocols, standards or other similar criteria of the Plan in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria of the Plan do not exist; |
(4) | Be provided in a culturally and linguistically appropriate manner as described in 29 C.F.R. § 2560.503-1(o)(1)(i) (iii); and |
(5) | Include a statement of the claimants right to bring a civil action in state or federal court under Section 502(a) of ERISA following the adverse determination on review, and any applicable contractual limitations period that applies to the claimants right to bring such an action, including the calendar date on which the contractual limitations period expires for the claim. |
The decision upon appeal, or the initial decision if no appeal is taken, shall be final, conclusive and binding on all parties, subject, however, to the provisions of the Internal Revenue Code and ERISA.
11.7 Statute of Limitations. Except for any action against a fiduciary for a breach of fiduciary duty, any action filed in state or federal court regarding any rights or obligations under this Plan must be brought within one (1) year from the date of final determination.
11.8 Disability Claim: Deemed Exhaustion of Claims Procedure. In the case of a Disability claim filed on or after April 2, 2018:
(a) If the Plan fails to strictly adhere to all the requirements of the procedures set out in this Article XI with respect to a claim, the claimant is deemed to have exhausted the administrative remedies available under the Plan, except as provided in subsection (b) of this Section 11.8. Accordingly, the claimant is entitled to pursue any available remedies under Section 502(a) of ERISA on the basis that the Plan failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim. If a claimant chooses to pursue remedies under Section 502(a) of ERISA under such circumstances, the claim or appeal is deemed denied on review without the exercise of discretion by an appropriate fiduciary.
(b) The administrative remedies available under the Plan with respect to a Disability claim will not be deemed exhausted based on de minimis violations that do not cause, and are not likely to cause, prejudice or harm to the claimant so long as the Plan demonstrates that the violation was for good cause or due to matters beyond the control of the Plan and that the violation occurred in the context on an ongoing, good faith
14
exchange of information between the Plan and the claimant. This exception is not available if the violation is part of a pattern or practice of violations by the Plan. The claimant may request a written explanation of the violation from the Plan, and the Plan must provide such explanation within ten (10) days, including a specific description of its bases, if any, for asserting that the violation should not cause the administrative remedies available under the Plan to be deemed exhausted. If a court rejects the claimants request for immediate review under subsection (a) of this Section 11.8 on the basis that the Plan met the standards for the exception under this subsection (b), the claim shall be considered as re-filed on appeal upon the Plans receipt of the courts decision. Within a reasonable time after the receipt of the decision, the Plan shall provide the claimant with notice of the resubmission.
11.9 Disability Claim: Independence and Impartiality of Decision Maker. In the case of a Disability claim filed on or after April 2, 2018, the Plan shall ensure that all claims and appeals for disability benefits are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision. Accordingly, decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individual (such as a claims adjudicator or medical or vocational expert) shall not be based on the likelihood that the individual will support the denial of benefits.
11.10 Adverse Benefit Determination Defined. For purposes of this Section 11, adverse benefit determination means:
(a) any of the following: a denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit, including any such denial, reduction, termination, or failure to provide or make payment that is based on a determination of a Participants or Beneficiarys eligibility to participate in the Plan; and
(b) in the case of a Disability claim filed on or after April 2, 2018, the term adverse benefit determination also means any rescission (i.e., cancellation or discontinuance of coverage that has a retroactive effect) of disability coverage with respect to a Participant or Beneficiary (whether or not, in connection with the rescission, there is an adverse effect on any particular benefit at that time).
15
4.
The Plan is amended by adding at the end thereof the following Exhibit A General Plan Information:
SCANSOURCE, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
(Effective January 1, 2015)
Exhibit A General Plan Information
Plan Name
ScanSource, Inc. Nonqualified Deferred Compensation Plan
Plan Sponsor
ScanSource, Inc.
6 Logue Court
Greenville, South Carolina 29615
(864) 286-4682
Employer Identification Number (EIN)
57-0965380
Plan Type
The Plan is a nonqualified deferred compensation plan that pays retirement benefits to eligible employees and directors.
Plan Administrator
Plan Administrative Committee
ScanSource, Inc.
6 Logue Court
Greenville, South Carolina 29615
(864) 286-4682
Agent for Service of Legal Process
c/o Corporate Creations Network Inc.
ScanSource, Inc.
6650 Rivers Avenue
North Charleston, South Carolina 29406
Plan Year
The calendar year.
16
5.
The Plan is amended by adding at the end thereof the following Exhibit B Statement of ERISA Rights:
SCANSOURCE, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
(Effective January 1, 2015)
Exhibit B Statement of ERISA Rights
As participant in this Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:
| examine, without charge at the Plan Administrative Committees office and at other specified locations, such as worksites and union halls, all documents governing the Plan, including collective bargaining agreements, and a copy of the latest Annual Report (Form 5500 series), if any, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration (f/k/a the Pension Welfare Benefits Administration). |
| obtain copies of all documents governing the operation of the Plan including collective bargaining agreements and copies of the latest Annual Report (Form 5500 series), if any, and an updated summary plan description, by making a written request to the Plan Administrative Committee and paying a reasonable charge for the copies. |
| receive a summary of the Plans annual financial report. The Plan Administrative Committee is required by law to furnish each participant under the Plan with a copy of this summary annual report. |
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan, called fiduciaries of the Plan, have a duty to do so prudently and in your interest and in the interest of the other Plan participants and beneficiaries.
No one, including your employer, your union, or any other person may fire you or otherwise discriminate against you, in any way solely to prevent you from getting a benefit or exercising your rights under ERISA. If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest Annual Report from the Plan and do not receive them within thirty (30) days, you may file suit in federal court. In such a case, the court may require the Plan Administrative Committee to provide the documents and pay you up to $110 a day until you receive them, unless they were not sent because of reasons beyond the control of the Plan Administrative Committee.
17
If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plans money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If your suit is successful, the court may order the person you have sued to pay costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions about the Plan, you should contact the Plan Administrative Committee. If you have any questions about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrative Committee, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
6.
Section 1.3 of the Plan is amended by adding the following to the end thereof:
This document is intended to serve as both the Plan document and the summary plan description of the Plan.
7.
All parts of the Plan not inconsistent herewith are hereby ratified and confirmed and shall otherwise apply with respect to deferrals of RSUs and related dividend equivalents.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as of the date set forth above.
SCANSOURCE, INC. |
By: | /s/ John Harvey | |
Name: | John Harvey | |
Title: | Executive Vice President, Worldwide Human Resources |
18
Exhibit 10.2
DIRECTOR RESTRICTED STOCK AWARD CERTIFICATE
Non-transferable
GRANT TO
(the Participant)
by ScanSource, Inc. (the Company) of
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 the terms and conditions of the Restricted Stock 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 on the six (6)-month anniversary of the Grant Date (as defined below), provided that the Participant has been continuously serving as a Director of the Company from the Grant Date until the 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):
Director RS Agreement (Service-Based) (2013 Plan)
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 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 will be issued (with appropriate legends) in the name of the Participant (or, in case of uncertificated Shares, other written evidence of ownership in accordance with applicable law shall be provided) and held in escrow by the Committee until the Restricted Stock Award vests and is no longer subject to a substantial risk of forfeiture (in which case the Shares will be released to the Participant) or is forfeited (in which case the Shares shall be returned to the Company). 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 service with the Company terminates for any reason other than as set forth in paragraphs (b) or (c) of Section 3 hereof, and unless the Board determines otherwise, 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 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) As to all of the Shares, on the six (6)-month anniversary of the Grant Date, as specified on page 1 hereof, provided the Participant is still in service as a Director of the Company on the vesting date and has been in service since the Grant Date; or
(b) As to all of the Shares, upon the termination of the Participants service as a Director due to 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.
(d) For clarification, for the purposes of this Section 3, 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, and the Participants separation from service will be deemed to be due to Retirement if and only if the Committee, in its sole and absolute discretion, determines, at the time of the Participants separation from service, that the Participant terminated service as a Director of the Company due to Retirement (and the Committee will not be required to deem the Participants separation from service as due to Retirement even if similarly-situated Directors previously were deemed to have terminated service as a Director of the Company due to Retirement).
Director RS Agreement (Service-Based) (2013 Plan)
1
4. Settlement of Award; Delivery of Shares. 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 released to the Participant (or his beneficiary) only in the event, and to the extent, that the Award has vested. Any Shares payable pursuant to the Award shall, upon vesting of the Award, be released to the Participant (or his beneficiary) within sixty (60) days after the vesting of the Award.
5. Voting and Dividend Rights. The Participant shall be deemed to be the holder of the Shares subject to the Award and shall have all dividend rights, voting rights or other rights as a shareholder with respect to the Shares subject to the Award, prior to vesting of the Award, unless and until the time the Award is forfeited. Consequently, the Participant will be entitled to receive any dividends that are payable on the Shares, provided the Participant has not forfeited the Award as of the record date of the dividend, and the Participant shall have the right to receive any such dividends no later than sixty (60) days after such record date.
6. No Right of Continued Service or to Future Awards. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or its shareholders to terminate the Participants service at any time, nor confer upon the Participant any right to continue in the service of the Company or any Affiliate. The grant of the Award does not create any obligation to grant further awards.
7. Tax Matters. 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.
Director RS Agreement (Service-Based) (2013 Plan)
2
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 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.
Director RS Agreement (Service-Based) (2013 Plan)
3
Exhibit 10.3
DIRECTOR RESTRICTED STOCK UNIT AWARD CERTIFICATE
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 the 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 on the six (6)-month anniversary of the Grant Date (as defined below), provided that the Participant has been continuously serving as a Director of the Company from the Grant Date until the 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):
Director RSU Agreement (Service-Based) (2013 Plan)
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 service with the Company terminates for any reason other than as set forth in paragraphs (b) or (c) of Section 3 hereof, and unless the Board determines otherwise, 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 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) As to all of the Shares, on the six (6)-month anniversary of the Grant Date, as specified on page 1 hereof, provided the Participant is still in service as a Director of the Company on the vesting date and has been in service since the Grant Date; or
(b) As to all of the Shares, upon the termination of the Participants service as a Director due to 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 (unless required otherwise by Section 409A of the Code).
(d) For clarification, for the purposes of this Section 3, 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, and the Participants separation from service will be deemed to be due to Retirement if and only if the Committee, in its sole and absolute discretion, determines, at the time of the Participants separation from service, that the Participant terminated service as a Director of the Company due to Retirement (and the Committee will not be required to deem the Participants separation from service as due to Retirement even if similarly-situated Directors previously were deemed to have terminated service as a Director of the Company due to Retirement).
Director RSU Agreement (Service-Based) (2013 Plan)
1
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. Except as otherwise set forth herein, 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 sixty (60) days after the vesting of the Award (provided that if such sixty (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 (b) in the event that the Participant is subject to taxation under Code Section 409A and the Restriction Period ends (and the Award vests) due to a separation from service (as defined under Code Section 409A) and the Participant is a specified employee (as defined under Code Section 409A), 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. Except as expressly set forth herein, 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). Notwithstanding the foregoing, the Participant shall have all dividend rights as a shareholder of the Shares subject to the Award as if the Participant was the holder of the Shares subject to the Award, prior to vesting of the Award, unless and until the Award is forfeited. Consequently, the Participant will be entitled to receive any dividends that would otherwise be payable on the Shares subject to the Award as if they were outstanding, provided the Participant has not forfeited the Award as of the record date of such dividends, and the Participant shall have the right to receive any such dividends no later than sixty (60) days after such record date. This dividend right will be treated as a separate award for purposes of Code Section 409A.
6. No Right of Continued Service or to Future Awards. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or its shareholders to terminate the Participants service at any time, nor confer upon the Participant any right to continue in the service of the Company or any Affiliate. The grant of the Award does not create any obligation to grant further awards.
7. Tax Matters. 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.
Director RSU Agreement (Service-Based) (2013 Plan)
2
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 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.
14. Deferral Rights. Notwithstanding any other provision of this Award Certificate, the Participant may elect to defer the receipt of any Shares that would otherwise be payable upon vesting of the Award. Any such deferral shall be subject to such terms and conditions as may be established pursuant to the plan under which such Shares will be deferred and to the extent permitted by Code Section 409A.
Director RSU Agreement (Service-Based) (2013 Plan)
3
Exhibit 10.4
DIRECTOR STOCK AWARD CERTIFICATE
Non-transferable
GRANT TO
(the Participant)
by ScanSource, Inc. (the Company) of
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 the terms and conditions of the Stock Award (the Award) granted herein and constitutes an agreement between the Participant and the Company.
The Shares subject to the Award shall be fully vested and non-forfeitable as of the Grant Date (as defined below). These Shares have been granted in lieu of certain cash fees the Participant otherwise would have received for service as a Non-Employee Director on the Board. The number of Shares subject to the Award was determined by dividing the cash fees the Participant elected to be paid in shares of Stock by the closing price of a share of Stock as of the date the cash fees otherwise would have been paid (absent the election to receive shares of Stock) or, if such date is not a trading date, the last trading date prior to such date), and no fractional Shares, or cash in lieu of fractional Shares, will be issued or paid, and the number of Shares issued to the Participant were rounded down to the nearest whole number of Shares. None of the Shares to be delivered pursuant to this Award are subject to any deferral election by the Participant.
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):
Director Stock Award Agreement (2013 Plan)
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 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 Stock Award (the Award) for the number of Shares indicated on Page 1 hereof of the Companys common stock. The Shares subject to the Award will be issued (with appropriate legends) in the name of the Participant (or, in case of uncertificated Shares, other written evidence of ownership in accordance with applicable law shall be provided). 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 not subject to any restrictions; the Award and the underlying Shares are fully vested and non-forfeitable as of the Grant Date.
3. Delivery of Shares. 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 released to the Participant (or his beneficiary) within sixty (60) days after the Grant Date.
4. Voting and Dividend Rights. The Participant shall be the owner of the Shares subject to the Award as of the Grant Date and shall have all dividend rights, voting rights or other rights as a shareholder with respect to such Shares.
5. No Right of Continued Service or to Future Awards. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or its shareholders to terminate the Participants service at any time, nor confer upon the Participant any right to continue in the service of the Company or any Affiliate. The grant of the Award does not create any obligation to grant further awards.
6. Tax Matters. 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.
7. 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.
8. 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.
Director Stock Award Agreement (2013 Plan)
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9. 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.
10. 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.
11. 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.
12. 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.
Director Stock Award Agreement (2013 Plan)
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Exhibit 10.5
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, 2019 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, 2021 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, 2021 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 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 December 31, 2021. 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 December 31, 2021 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 December 31, 2021, (A) the Award shall be deemed earned as if the goal(s) for the Performance Cycle had been met at target and the earned RSUs will vest as of the termination of the Participants employment with the Company due to death or Disability, if the termination of the Participants employment occurs prior to completion of the Performance Cycle, or (B) the Award shall vest, with respect to the previously-earned RSUs, as of the termination of the Participants employment with the Company due to death or Disability, if the termination of the Participants employment occurs after completion of the Performance Cycle.
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(ii) Upon the termination of the Participants employment due to Retirement prior to December 31, 2021, the Participant shall be paid a pro rata award based on the number of completed days in service from the Award Date until December 31, 2021, (A) based on actual performance through the date of termination of the Participants employment, if the termination of the Participants employment occurs prior to completion of the Performance Cycle, or (B) with respect to previously-earned RSUs, if the termination of the Participants employment occurs after completion of the Performance Cycle.
(c) Any amounts payable as provided herein shall be paid as described in Section 6.
(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. For purposes of this Award, termination of employment will be construed consistent with a separation from service within the meaning of Section 409A of the Code.
4. Effect of Change in Control. In the event of a Change in Control prior to December 31, 2021:
(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 (A) 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 or (B) with respect to previously-earned RSUs if the Performance Cycle has been completed by the time of the date of the Change in Control, provided the Participant remains continuously 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 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, in either event prior to December 31, 2021, if such termination of employment (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) (A) based on actual performance through the date of termination of the Participants employment if the employment 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 prior to completion of the Performance Cycle, or (B) with respect to previously-earned RSUs, if the employment 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 after completion of the Performance Cycle, and (ii) (A) 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 of the Participant is terminated by the Company or the Participant within one year after the effective date of a Change in Control or (B) with respect to previously-earned RSUs with respect to the Performance Cycle that has been completed as of the date of the Change in Control if the employment of the Participant is terminated by the Company or the Participant within one year after the effective date of the Change in Control. The employment of the Participant will be deemed to have been terminated in contemplation of a Change in Control if the Participants employment terminates at any time during which (i) the Company has initiated a transaction process or is engaged in discussions with a third
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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 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 December 31, 2021 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 earned and 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 been earned and vested. 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, be distributed to the Participant (or his beneficiary) after December 31, 2021 and within the 60 days following December 31, 2021 and upon the earning and/or vesting of the Award 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 of employment (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) to the extent required by Section 409A of the Code.
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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 at any time, nor confer upon the Participant any right to continue in the employ 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 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.
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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 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 2-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, 2021 (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)