Attached files
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| EX-10.1 - NU HORIZONS ELECTRONICS CORP | v192309_ex10-1.htm |
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): July 29, 2010
Nu Horizons Electronics
Corp.
(Exact
name of registrant as specified in its charter)
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DELAWARE
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1-8798
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11-2621097
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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70
Maxess Road, Melville, New York
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11747
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(Address
of principal executive offices)
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(Zip
Code)
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(631)
396-5000
Registrant's
telephone number, including area code
Not
Applicable
(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 (see General
Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive
Agreement.
At the
Annual Meeting of Stockholders of Nu Horizons Electronics Corp. (the
“Company” or “Nu Horizons”) held on
July 29, 2010, (the “2010 Annual Meeting”), the stockholders of the Company
approved the proposed adoption of the Company’s 2010 Outside Directors’ Stock
Incentive Plan (“2010 Director Plan”).
The
principal features of the 2010 Director Plan are summarized below but the
summary is qualified in its entirety by the full text of the 2010 Director Plan,
a copy of which is filed as Exhibit 10.1 to this
Form 8-K.
Stock
Subject to the Plan
Nu Horizons
will be able to issue up to 255,000 shares of common stock under the 2010
Director Plan. The stock to be offered under the 2010 Director Plan consists of
shares of our common stock, whether authorized but unissued or reacquired. The
number of shares issuable and the exercise price of outstanding options are
subject to adjustment upon the occurrence of certain events, including stock
dividends, stock splits, mergers, consolidations, reorganizations,
recapitalizations, or other capital adjustments.
Administration
of the Plan
The Board
will have the discretion to grant awards to non-employee directors. The Board
will determine whether to make any such grant and, if it so determines, the
nature of the award and the number of shares applicable to such award.
Initially, the Board intends to continue to grant to each non-employee director
options to purchase 15,000 shares of common stock at the time of each Annual
Meeting of Stockholders. However, as a result of the fact that at the time of
the 2011 Annual Meeting of Stockholders there will be 15,000 shares of stock
remaining available for grant under the 2002 Outside Directors’ Stock Option
Plan (the “2002 Director Plan”) and the provisions of the 2002 Director Plan
will grant those options ratably to the non-employee directors then serving, the
Board anticipates that the initial grant of options to non-employee directors
under the 2010 Director Plan will consist of options to purchase 12,500 shares.
In addition, in accordance with its charter, the Compensation Committee intends
to periodically review non-employee director compensation and, following such
review, may recommend to the Board changes to the timing, nature and number of
shares underlying the awards to non-employee directors.
The Board
has authority to interpret the 2010 Director Plan, including to prescribe, amend
and rescind the rules and regulations relating to the 2010 Director
Plan.
Repricing
Except in
connection with a corporate transaction involving the Company, the Board does
not have the right to reprice any outstanding awards without the affirmative
vote of a majority of the stockholders voting on the repricing
proposal.
2
Participants
Only
non-employee directors are eligible to participate in the 2010 Director
Plan.
Forms
of Equity-Based Awards Available
Under the
2010 Director Plan, the Board may grant stock options, stock appreciation rights
and other stock-based awards, restricted stock, and restricted stock units, all
of which will vest over the period of time established by the Board at the time
of the grant of the award.
Stock
Options — Exercise Price, Term and Vesting Schedule
Stock
options granted under the 2010 Director Plan will be non-qualified stock
options. The exercise price for the options will be not less than the market
value of our common stock on the date of grant of the stock option. Stock
options granted under the 2010 Director Plan shall expire not later than ten
years from the date of grant and will become exercisable in installments, as
determined at the time of the grant.
The Board
expects that initially, stock options granted under the 2010 Director Plan will
become exercisable in the same installments as those provided by the 2002
Director Plan, as follows:
•
up to thirty-three and one-third percent (33 1/3%) on the date of
grant;
•
up to sixty-six and two-thirds percent (66 2/3%) of the subject shares on and
after the first anniversary of the date of grant; and
•
up to all of the subject shares on and after the second anniversary of the date
of the grant of such option.
Upon the
exercise of a stock option, optionees may pay the exercise price in cash, by
certified or bank cashier’s check or, at our option, in shares of common stock
valued at their fair market value on the date of exercise, or a combination of
cash and stock.
A stock
option is exercisable during the optionee’s lifetime only by him and cannot be
exercised by him unless, at all times since the date of grant and at the time of
exercise, he is serving as a director, except that, upon termination of his
service (other than by death or by total disability), he may exercise an option
for a period of three months after his termination but only to the extent such
option is exercisable on the date of such termination.
Upon
termination of directorship by total disability or death, the optionee, the
optionee’s estate or any person who acquires the right to exercise such option
by bequest or inheritance or by reason of the total disability or death of the
optionee, as the case may be, may exercise such option at any time within twelve
months after his or her termination, but only to the extent such option is
exercisable on the date of such termination.
3
Stock
Appreciation Rights and Other Stock-Based Awards
The Board
may grant stock appreciation rights (“SARs”), which represent the right to
receive an amount equal to the excess of the fair market value of a share of
stock on the date of redemption over an amount set by the Board that is not less
than the fair market value of a share of stock on the date of the award. Amounts
paid on the exercise of a SAR may be paid in cash, in stock or in any
combination thereof; provided that a SAR, including one that entitles the holder
to a cash payment on redemption, will have terms that ensure that participants
will not incur a tax penalty under Section 409A of the Internal Revenue Code.
Upon termination of directorship, including by death or disability, awards of
SARs shall be payable in accordance with their terms.
The Board
may also grant rights to dividends and dividend equivalents (which may not be
granted in connection with options or stock appreciation rights). The terms of
any rights to dividends or dividend equivalents will be determined by the Board
at the time of grant.
Restricted
Stock
The Board
may grant awards of restricted stock which are awards of common stock of the
Company subject to such terms, conditions and restrictions as the Board may
provide in the award instruments granting the restricted stock. Conditions
attached to the restricted stock may include, but are not limited to,
restrictions upon the sale, assignment, transfer or other disposition of the
restricted stock and the requirement of forfeitures of the restricted stock upon
certain terminations of service with the Company. Restricted stock will vest
over such period as the Board determines at the time of grant. When the period
of restriction on restricted stock terminates, the unrestricted shares are
delivered to the participant. Upon termination of directorship, including by
death or disability, rights to awards of restricted stock shall vest or be
forfeited in accordance with their terms.
Restricted
Stock Units
The Board
may grant awards of restricted stock units which units represent the
participant’s right to receive shares of stock subject to such terms, conditions
and restrictions as the Board may provide in the award instruments granting the
restricted stock units. Restricted stock units awarded generally will vest over
such period as the Board determines at the time of grant. The award agreement
will specify whether dividend equivalents on the restricted stock units will be
paid in cash or deemed reinvested in additional restricted stock units. Our
stock will be paid to the participant, or the participant’s beneficiary in case
of the participant’s death, in exchange for restricted stock units within ninety
days following the participant’s separation from service, the expiration of a
director’s service, or death.
Change
in Control
In the
event of a “change in control,” at the option of the Board, (a) all options
and other awards outstanding on the date of the change in control shall become
immediately and fully exercisable and/or payable, and (b) an optionee will
be permitted to surrender for cancellation within 60 days after the change
in control any option or portion of an option which was granted more than six
months prior to the date of such surrender, to the extent not yet exercised, and
to receive a cash payment in an amount equal to the excess, if any, of the fair
market value (on the date of surrender) of the shares of common stock subject to
the option or portion thereof surrendered, over the aggregate purchase price for
such shares.
4
For
purposes of the 2010 Director Plan, a change in control is defined
as
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•
a change in control as such term is presently defined in Rule 12b-2
under the Securities Exchange Act of 1934;
or
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•
if any “person” (as such term is used in Section 13(d) and 14(d) of
the Exchange Act) other than Nu Horizons or any “person” who on the
date of the adoption of the 2010 Director Plan is a director or officer of
Nu Horizons, becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act) directly or indirectly, of
securities representing thirty percent (30%) or more of the voting power
of our then outstanding securities;
or
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•
if during any period of two consecutive years during the term of the 2010
Director Plan, individuals who at the beginning of such period constitute
the Board of Directors, cease for any reason to constitute at least a
majority of the Board.
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Federal
Income Tax Consequences
The
following is a brief summary of the Federal income tax consequences as of the
date hereof with respect to awards under the 2010 Director Plan for participants
who are both citizens and residents of the United States. This description of
the Federal income tax consequences is based upon law and Treasury
interpretations in effect on the date hereof (including proposed and temporary
regulations which may be changed when finalized), and it should be understood
that this summary is not exhaustive, that the law may change and further that
special rules may apply with respect to situations not specifically discussed
herein, including Federal employment taxes, foreign, state and local taxes and
estate or inheritance taxes. As such, participants have been urged to consult
with their own qualified tax advisors. The 2010 Director Plan is not qualified
under Section 401(a) of the Internal Revenue Code. In addition, this summary
assumes that all awards are exempt from, or comply with, the rules under
Section 409A of the Internal Revenue Code regarding nonqualified deferred
compensation.
Stock
Options
The
options to be granted under the 2010 Director Plan are non-qualified stock
options. No taxable income will be realized by the participant upon the grant of
a non-qualified option and Nu Horizons will not receive a tax
deduction.
Exercise
with Cash
On
exercise, the excess of the fair market value of the stock at the time of
exercise over the option price of such stock will be compensation and
(i) will be taxable at ordinary income tax rates in the year of exercise,
(ii) will be subject to withholding for Federal income tax purposes and
(iii) generally will be an allowable income tax deduction to
Nu Horizons. The participant’s tax basis for stock acquired upon exercise
of a non-qualified option will be equal to the option price paid for the stock,
plus any amounts included in income as compensation.
5
Exercise
with Common Stock
The
participant’s compensation income and our deduction will not be affected by
whether the exercise price is paid in cash or in shares of common stock.
However, if the participant pays the exercise price of an option in whole or in
part with previously-owned shares of common stock, the participant’s tax basis
and holding period for the newly-acquired shares is determined as follows: As to
a number of newly-acquired shares equal to the number of previously-owned shares
used by the participant to pay the exercise price, no gain or loss will be
recognized by the participant on the date of exercise and the participant’s tax
basis and holding period for the previously-owned shares will carry over to the
newly-acquired shares on a share-for-share basis, thereby deferring any gain
inherent in the previously-owned shares. As to each remaining newly-acquired
share, the participant’s tax basis will equal the fair market value of the share
on the date of exercise and the participant’s holding period will begin on the
day after the exercise date.
Disposition
of Option Shares
When a
sale of the acquired shares occurs, a participant will recognize gain or loss
equal to the difference between the sales proceeds and the tax basis of the
shares. Such gain or loss will be treated as capital gain or loss if the shares
are capital assets. The capital gain or loss will be long-term capital gain or
loss treatment if the shares have been held for more than 12 months. There
will be no tax consequences to Nu Horizons in connection with a sale of
shares acquired under an option.
Stock
Appreciation Rights and Other Stock-Based Awards
Under
existing tax laws, a participant will not realize any taxable income when a SAR
is granted and Nu Horizons will not receive a tax deduction. When a SAR is
exercised, the spread between the price received at exercise and the fair market
value of the SAR at the time of exercise is ordinary income to the participant
(subject to withholding), and Nu Horizons receives a tax deduction for the
amount of income recognized by the participant. Further, under existing tax
laws, a participant will not realize taxable income upon the grant of a
stock-based award that provides for dividend rights, and Nu Horizons will
not receive a tax deduction. Upon payment of the dividend, the participant will
be required to include as taxable ordinary income in the year of receipt an
amount equal to the amount of cash received, and Nu Horizons will receive a
tax deduction for the same amount.
Restricted
Stock
A
participant who is granted restricted stock generally will realize taxable
income on the fair market value of the restricted stock, less any amount paid by
the employee, at the time the award is no longer subject to restrictions on
transfer or a substantial risk for forfeiture. However, a participant can elect
under Internal Revenue Code Section 83(b), within 30 days of receipt
of the award, to recognize taxable ordinary income equal to the fair market
value of Nu Horizons common stock, less any amount paid by the employee, on
the date of the award. Nu Horizons receives a deduction in an amount equal
to the ordinary income recognized by the participant in the taxable year in
which restrictions lapse (or in the taxable year of the award if, at that time,
the participant filed a timely election to accelerate recognition of income
under Section 83(b) of the Code).
6
Restricted
Stock Units
A
participant who is granted restricted stock units will not realize any taxable
income when the restricted stock unit is granted and Nu Horizons will not
receive a tax deduction at that time. A participant will realize taxable income
on the fair market value of unrestricted common shares, less any amount paid by
the participant, on the date such shares are transferred to the participant and
Nu Horizons will receive a deduction for the same amount.
Item
5.07 Submission of Matters to a Vote of Security
Holders.
At the
2010 Annual Meeting, stockholders voted on the matters set forth below. Each
issued common share was entitled to one vote on the proposals voted on at the
meeting.
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1.
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The
proposal to elect two Class II directors, to hold office for a
three-year term until the 2013 annual meeting of stockholders or until
their successors are duly elected and qualified, and to elect one
Class I director, to hold office for a two-year term until the 2012
annual meeting of stockholders or until his successor is duly elected and
qualified, was approved based upon the following
votes:
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Name
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For
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Against
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Abstain
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Broker
Non-Votes
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Class
II
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Dominic
A. Polimeni
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8,249,842
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529,442
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2,018,007
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4,259,746
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Richard
S. Schuster
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8,501,676
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276,940
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2,018,675
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4,259,746
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Kurt
Freudenberg
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8,268,534
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888,401
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1,640,356
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4,259,746
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Class
I
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Martin
Kent
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10,193,122
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495,925
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108,244
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4,259,746
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The term
of office for directors Steven J. Bilodeau, Herbert M. Gardner, Arthur
Nadata, Martin Novick and David Siegel continued after the annual meeting of
stockholders.
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2.
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The
proposal to adopt the 2010 Outside Directors’ Stock Incentive Plan was
approved based on the following
votes:
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For
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Against
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Abstain
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Broker
Non-Votes
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8,802,374
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1,553,956
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440,961
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4,259,746
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3.
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The
proposal to ratify the appointment of Ernst & Young LLP as the
Company’s auditors for fiscal 2011 was approved based on the following
votes:
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For
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Against
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Abstain
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Broker
Non-Votes
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14,676,597
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355,799
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24,641
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0
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7
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits.
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The following exhibits are filed
herewith:
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Exhibit
No.
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Description
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10.1
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2010
Outside Directors’ Stock Incentive
Plan
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8
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.
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Nu
Horizons Electronics Corp.
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(Registrant)
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Date:
August 3, 2010
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By:
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/s/
Richard S. Schuster
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Name:
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Richard
S. Schuster
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Title:
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Senior
Executive Vice President
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9