NU HORIZONS ELECTRONICS
CORP.
2002 OUTSIDE DIRECTORS' STOCK
OPTION PLAN, AS AMENDED
1.
Purposes of the Plan . The purposes of this 2002
Outside Directors' Stock Option Plan are to attract and retain
highly skilled individuals as Directors of the Company, to provide
additional incentive to the Outside Directors of the Company to
serve as Directors, and to encourage their continued service on the
Board.
All options
granted hereunder shall be “non-statutory stock
options.”
2. Definitions. As
used herein, the following definitions shall apply:
(a) “
Board ” means the Board of Directors of the
Company.
(b) “
Code ” means the Internal Revenue Code of 1986, as
amended.
(c) “
Change in Control ” means a change of control of the
Company, or in any person directly or indirectly controlling the
Company, which shall mean:
(i) a
change in control as such term is presently defined in Regulation
240.12b-(2) under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”); or
(ii) if
any “person” (as such term is used in Section 13(d) and
14(d) of the Exchange Act) other than the Company or any
“person” who on the date of this Agreement is a
director or officer of the Company, becomes the “beneficial
owner” (as defined in Rule 13(d)-3 under the Exchange Act)
directly or indirectly, of securities of the Company representing
twenty percent (20%) or more of the voting power of the
Company’s then outstanding securities; or
(iii) if
during any period of two (2) consecutive years during the term of
this Plan, individuals who at the beginning of such period
constitute the Board of Directors, cease for any reason to
constitute at least a majority thereof.
(d) “
Common Stock ” means the Common Stock of the Company,
par value $0.0066 per share.
(e) “
Company ” means Nu Horizons Electronics Corp., a
Delaware corporation.
(f) “
Director ” means a member of the Board.
(g) “
Employee ” means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of
the Company. The payment of a Director’s fee or
consulting fee by the Company shall not be sufficient in and of
itself to constitute “employment” by the Company unless
the Director and the Company agree that, as a result of payment of
such fees in connection with services rendered, such Director
should not be considered an Outside Director.
(h)
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended.
(i) “
Fair Market Value ” means, as of any date, the value
of Common Stock determined as follows:
(i) If
the Common Stock is listed on any established stock exchange or
national market system, including without limitation the Nasdaq
National Market, the Fair Market Value of a Share of Common Stock
shall be the closing sale price for such stock (or the closing bid,
if no sales were reported), as quoted on such system or exchange
(or, if more than one, on the exchange with the greatest volume of
trading in the Company=s Common Stock) on the day of determination,
as reported in The Wall Street Journal or such other source as the
Board deems reliable;
(ii) If
the Common Stock is quoted on Nasdaq (but not on the National
Market) or regularly quoted by a recognized securities dealer, but
selling prices are not reported, the Fair Market Value of a Share
of Common Stock shall be the mean between the high and low asked
prices for the Common Stock on the date of determination, as
reported in The Wall Street Journal or such other source as the
Board deems reliable, or;
(iii) In
the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the
Board.
(j) “
Option ” means an option to purchase Common Stock
granted pursuant to the Plan.
(k) “
Optioned Stock ” means the Common Stock subject to an
Option.
(l) “
Optionee ” means an Outside Director who receives an
Option.
(m) “
Outside Director ” means a Director who is not an
Employee.
(n) “
Plan ” means this 2002 Outside Directors' Option
Plan.
(o) “
Share ” means a share of the Common Stock, as adjusted
in accordance with Section 10 of the Plan.
3.
Stock Subject to the Plan . Subject to the
provisions of Section 10 of the Plan, the maximum aggregate number
of Shares which may be optioned and sold under the Plan is 600,000
Shares (the “Pool”) of Common Stock. The
Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the
Plan (unless the Plan has terminated).
4.
Administration of and Grants under the Plan .
(a)
Administration . Except as otherwise required
herein, the Plan shall be administered by the
Board. Except as provided in Section 4(b) hereof, all
grants of Options to Outside Directors under this Plan shall be
automatic and nondiscretionary and shall be made strictly in
accordance with the following provisions:
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Discretionary Option Grants
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(i) The
Board may, in its sole discretion, determine to grant Options to
any Outside Director at or about the time that such Outside
Director first becomes elected or appointed to the
Board. The amount of any Options granted shall be as
determined by the Board at the time of such grant. The
terms of such initial Option shall be as set forth in Section
4(c)(iii) hereof.
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Automatic
Option Grants .
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(i) Except
as provided in Section 4(b), no person shall have any discretion to
select which Outside Directors shall be granted Options or to
determine the number of Shares to be covered by Options granted to
Outside Directors.
(ii) At
each annual stockholder meeting during the term of this Plan
commencing with the annual meeting held in 2004, each Outside
Director shall automatically receive an additional option to
purchase 15,000 Shares (the “Annual Option”), provided
that the grant of an Annual Option shall be subject to the
person’s continued service as an outside Director.
(iii) The
terms of each Option granted hereunder shall be as
follows:
(1) Each
Option shall terminate, if not previously exercised or otherwise
terminated, on a date ten (10) years after the date of
grant.
(2) Each
Option shall be exercisable only while the Outside Director remains
a Director of the Company, except as set forth in Section 8
hereof.
(3) The
exercise price per Share of each Option shall be 100% of the Fair
Market Value per Share on the date of grant of the
Option.
(4) Each
Option shall become exercisable in installments as follows: up to
33-1/3% on the date of grant; up to 66-2/3% on and after the first
anniversary of the date of grant; and up to 100% on and after the
second anniversary of the date of grant.
(iv) In
the event that any Option granted under the Plan would cause the
number of Shares subject to outstanding Options plus the number of
Shares previously purchased upon exercise of Options to exceed the
Pool, then each such automatic grant shall be for that number of
Shares determined by dividing the total number of Shares remaining
available for grant by the number of Outside Directors on the
automatic grant date. No further grants shall be made
until such time, if any, as additional Shares become available for
grant under the Plan through action of the stockholders to increase
the number of Shares which may be issued under the Plan or through
cancellation or expiration of Options previously granted
hereunder.
(c) The
Board has the authority to interpret the Plan and to prescribe the
rules and regulations relating thereto.
5.
Eligibility . Options may be granted only to
Outside Directors. Except as provided in Section 4(b),
all Options shall be automatically granted in accordance with the
terms set forth in Section 4(c).
The Plan shall
not confer upon any Optionee any right with respect to continuation
of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or
the Company may have to terminate his or her directorship at any
time.
6.
Term of Plan . The Plan shall become effective
upon the earlier to occur of September 12, 2002, the date of
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