HSIC » Topics » 1994 STOCK INCENTIVE PLAN

This excerpt taken from the HSIC DEF 14A filed Apr 10, 2007.
1994 STOCK INCENTIVE PLAN
 
The Company maintains the Henry Schein, Inc. 1994 Stock Incentive Plan, as amended from time to time (the “1994 Incentive Plan”), for the benefit of key employees and consultants of the Company and its subsidiaries. The proposed amendment and restatement to the 1994 Incentive Plan, which was unanimously adopted by the Board of Directors on March 27, 2007 subject to stockholder approval at the 2007 Annual Meeting, would (i) increase the maximum aggregate number of shares of the Company’s common stock issuable under the 1994 Incentive Plan by 3.62 million shares (approximately 4.1% of the currently outstanding shares of common stock) to a maximum of 23,779,270 shares and (ii) extend the term of the 1994 Incentive Plan through March 26, 2017. We are not requesting, at this time, an increase in the maximum number of shares issuable with respect to restricted stock or restricted stock units. A maximum of 2.1 million shares of common stock were, and remain, authorized for issuance with respect to restricted stock and/or restricted stock units. Any remaining shares will be reserved for issuance of Class B Options and stock appreciation rights. A total of 475,794 shares were previously granted in the form of Class A Options. No new Class A Options may be issued under the 1994 Incentive Plan. The Board of Directors believes that it is desirable to increase the total number of shares available under the 1994 Incentive Plan in order to attract, motivate and retain key employees of, and consultants to, the Company and its subsidiaries, including key employees of corporations or businesses that are acquired by the Company, and since the current share reserve under the 1994 Incentive Plan is expected to be fully utilized in the near term.
 
As of March 30, 2007, under the 1994 Incentive Plan, (i) options to purchase 7,081,683 shares were granted and remain outstanding (with a weighted average exercise price of $33.69 and a weighted average remaining term of 6.89 years), (ii) 518,068 shares of restricted stock and/or restricted stock units were granted and remain outstanding and (iii) 1,389,538 shares remain available for future grants of options, restricted stock and/or restricted stock units. As of March 30, 2007, under the 1996 Non-Employee Director Stock Incentive Plan (the “1996 Director Plan”), (i) options to purchase 474,739 shares were granted and remain outstanding (with a weighted average exercise price of $33.08 and a weighted average remaining term of 6.96 years), (ii) 28,924 shares of restricted stock and/or restricted stock units were granted and remain outstanding and (iii) 266,837 shares remain available for future of options, restricted stock and/or restricted stock units. In each case, these share amounts exclude any shares that may become available as a result of the expiration or termination without exercise of currently outstanding options, restricted stock and restricted stock units. Options to purchase an additional 6,614 shares of common stock that were not issued under the 1994 Incentive Plan or the 1996 Director Plan were granted and remain outstanding as of March 30, 2007. These non-plan options represent options that had been issued by public companies acquired by the Company and were assumed by the Company that converted into options to purchase shares of common stock in such acquisitions. The 1994 Incentive Plan and the 1996 Director Plan are the only plans that are currently active from which shares will be issued.
 
In addition, the Board of Directors is also submitting the 1994 Incentive Plan to the stockholders of the Company to re-approve the performance goals under the 1994 Incentive Plan so that certain incentive awards granted under the 1994 Incentive Plan to executive officers of the Company may qualify as exempt performance-based compensation under Section 162(m) of the Code, which otherwise generally disallows the corporate tax deduction for certain compensation paid in excess of $1,000,000 annually to each of the chief executive officer and the four other most highly paid executive officers of publicly held companies. Section 162(m) of the Code generally requires such performance goals to be approved by stockholders every five years.
 
Finally, the Board of Directors has also adopted certain other minor clarifying amendments to the 1994 Incentive Plan, which do not require stockholder approval, to reflect developments in applicable law and equity compensation practices.
 
In the event that the requisite stockholder approval of the 1994 Incentive Plan, as amended and restated, is not obtained, the amended and restated plan will not take effect to the extent stockholder approval is required, but the Company may continue to grant awards under the 1994 Incentive Plan in accordance with its terms and the current share reserve under the 1994 Incentive Plan.


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Table of Contents

 
The following description of the 1994 Incentive Plan, as amended and restated, is a summary of its principal provisions and is qualified in its entirety by reference to the 1994 Incentive Plan, as amended and restated, a copy of which is appended hereto as Appendix A.
 
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