Washington Eligible Directors' Stock Option Plan of Wyle Electronics

• Category: Corporations - Public - Stock Options
• State: Multi-State
• Control #: US-CC-18-362C
• Format: Word; Rich Text

Description

18-362C 18-362C . . . Eligible Directors' Stock Option Plan under which (a) each outside director who was in office on October 1, 1996 was granted, subject to stockholder approval of Plan, option to purchase 4,000 shares of stock and each outside director who first takes office after October 1, 1996 will receive a one-time initial option to purchase 10,000 shares of stock, and (b) each outside director in office on October 1, 1996 will be granted an option on April 1 of each year commencing in 1997 to purchase 4,000 shares of stock provided he or she is in office on date of grant, and each outside director who takes office after October 1, 1996 will be granted an option on April 1 of each year to purchase 6,000 shares of stock provided he or she is in office on date of grant. Exercise price of all options is fair market value on date of grant. All options are exercisable six months after date of grant

The Washington Eligible Directors' Stock Option Plan is a specialized equity compensation program designed specifically for directors affiliated with Kyle Electronics, a prominent electronic component distributor. This comprehensive plan aims to incentivize and reward eligible directors by granting them stock options, which provide the opportunity to purchase company shares at a predetermined price, within specific guidelines outlined by Washington state laws and regulations. Under the Washington Eligible Directors' Stock Option Plan, there are several types of stock options available to directors, each with its own unique characteristics: 1. Nonqualified Stock Options (Nests): This type of option is not compliant with certain IRS regulations and is subject to taxation upon exercise. Nests provide eligible directors with the ability to purchase company shares at a predetermined price (the grant price), typically below the market rate on the date of grant. 2. Incentive Stock Options (SOS): These options offer potential tax advantages, as they may qualify for special federal tax treatment. SOS are subject to strict eligibility requirements and can only be granted at fair market value on the date of grant. To enjoy favorable tax treatment, directors must adhere to holding period requirements before selling the acquired shares. 3. Restricted Stock Units (RSS): Although not technically stock options, RSS are another form of equity compensation commonly included in the plan. Directors receive a set number of RSS that represent the underlying shares' value, granted at zero cost. These units typically vest over a specific period or based on the company's performance, entitling directors to receive the shares upon vesting completion. 4. Performance Stock Options (SOS): This type of option grants eligible directors the right to purchase company shares at a predetermined price upon achieving predetermined performance metrics established by the company. SOS align directors' incentives with the company's overall performance and success. The Washington Eligible Directors' Stock Option Plan is tailored to comply with Washington state legislation governing stock-based compensation plans, ensuring its alignment with state requirements and guidelines. By implementing this plan, Kyle Electronics aims to attract and retain skilled directors, align their interests with shareholders, and motivate them to contribute to the company's growth and success.