MICROAGE, INC.
1999 MANAGEMENT EQUITY PROGRAM
AWARD AGREEMENT
(_______________________)
April 7, 1999
Dear __________:
Pursuant to the action taken by the Board of Directors of MicroAge,
Inc. (the "COMPANY") and the Compensation Committee of the Board of Directors,
you are hereby offered participation in the 1999 Management Equity Program (the
"1999 MEP") under the MicroAge, Inc. Long-Term Incentive Plan (the "PLAN").
Under the 1999 MEP, you have the opportunity to receive options to restructure
your compensation package to some extent. Essentially, you may elect to purchase
shares of the common stock of the Company if you irrevocably elect to waive all
or a portion of your base salary you may receive from May 1, 1999 through May 1,
2000 under the following terms and conditions.
BEFORE YOU ELECT TO PARTICIPATE IN THE 1999 MEP, READ THIS AWARD AGREEMENT. YOU
WILL BE REQUIRED TO SIGN THIS AWARD AGREEMENT, AND YOUR SIGNATURE WILL EVIDENCE
THAT YOU HAVE READ THIS AWARD AGREEMENT, UNDERSTAND IT, AND AGREE WITH ITS TERMS
AND CONDITIONS.
TO PARTICIPATE IN THE 1999 MEP, YOU MUST COMPLETE AND SIGN THIS AWARD
AGREEMENT AND RETURN IT TO XXXXXX XXXXXX (EXTENSION 65150) BY 12:00 P.M.
NOON ON FRIDAY, APRIL 23, 1999.
1. EFFECTIVE DATE. The effective date of your participation in the 1999
MEP, and the grant date of your MEP options, is April 23, 1999.
2. SALARY WAIVER. You hereby elect to waive a portion of your salary
during the period from May 1, 1999 through May 1, 2000 (the "WAIVER PERIOD") in
the following amount (the "WAIVER AMOUNT"): $____________________. NOTE: the
MINIMUM Waiver Amount is $__________ (10% of your current base salary) and the
MAXIMUM Waiver Amount is $____________ (25% of your current base salary).
1
3. NUMBER OF OPTIONS GRANTED. In exchange for electing to waive the
Waiver Amount specified in Paragraph 2, above, you are hereby granted an option
to purchase the number of shares of MicroAge, Inc. Common Stock calculated
pursuant to the formula below (TO BE COMPLETED BY MICROAGE):
(1) Waiver Amount: $___________
(2) $ ____________________ (Waiver Amount)
Multiplied by Four (4) (the "LEVERAGE FACTOR"): $___________
(3) Common Stock Closing Price on Effective Date
(April 23, 1999) (the "COMMON STOCK PRICE"): $___________
(4) Total Options Granted (2) / (3) (rounded up): $___________
4. VESTING OF OPTIONS. Your options will vest in one-third (1/3)
increments beginning on May 1, 2000, and will be fully vested on May 1, 2002.
5. EXPIRATION OF OPTIONS. Subject to Section 6 and 7 of this Award
Agreement, your options will expire, unless sooner exercised, on April 23, 2009.
6. TERMINATION OF EMPLOYMENT.
DEATH. Upon your death, your beneficiary will be entitled to receive
the number of options determined by multiplying the sum of your compensation
actually waived up to the date of your death by the Leverage Factor and dividing
the product by the Common Stock Price; provided, however, that only the total
compensation waived by you up to the date of your death will be considered. All
options received by your beneficiary will be fully vested and immediately
exercisable. Your beneficiary will have up to one year from the date of your
death to exercise the options. After that one year period, the options will be
canceled. UNDER NO CIRCUMSTANCES WILL YOU OR YOUR BENEFICIARY BE ENTITLED TO
RECEIVE CASH EQUAL TO ALL OR ANY PORTION OF THE COMPENSATION YOU ELECTED TO
WAIVE UNDER THE 1999 MEP.
DISABILITY. Upon your termination of employment due to a "Disability"
(as that term is defined in the Plan) you will be entitled to receive the number
of options determined by multiplying the sum of your compensation actually
waived up to the date of your termination by the Leverage Factor and dividing
the product by the Common Stock Price; provided, however, that only the total
compensation waived by you up to the date of your termination will be
considered. All options received will be fully vested and immediately
exercisable. You will have up to one year from the date of termination of
employment to exercise the options. After that one year period, the options will
be canceled. UNDER NO CIRCUMSTANCES WILL YOU BE ENTITLED TO RECEIVE CASH EQUAL
TO ALL OR ANY PORTION OF THE COMPENSATION YOU ELECTED TO WAIVE UNDER THE 1999
MEP.
VOLUNTARY OR INVOLUNTARY. Upon your voluntary or involuntary
termination of employment, you will be entitled to receive the number of options
determined by multiplying the sum of your compensation actually waived up to the
date of your termination by the Leverage Factor and dividing the product by the
Common Stock Price; provided, however, that only the total compensation waived
by you up to the date of termination of employment will be considered. Your
options will continue to vest under the above vesting schedule as if you
continued to be employed by the Company and continued participating in the 1999
2
MEP. UNDER NO CIRCUMSTANCES WILL YOU BE ENTITLED TO RECEIVE CASH EQUAL TO ALL OR
ANY PORTION OF THE COMPENSATION YOU ELECTED TO WAIVE UNDER THE 1999 MEP.
7. TERMINATION OF 1999 MEP. If the Committee decides to terminate the
1999 MEP, you will be entitled to receive a number of options determined by
multiplying the sum of your compensation actually waived up to the date of your
termination by the Leverage Factor and dividing the product by the Common Stock
Price; provided, however, that only the total compensation waived by you up to
the date of termination will be considered. All options received will be fully
vested and immediately exercisable. You will have up to thirty days from the
date of such termination to exercise the options. After such thirty day period,
the options will be canceled. UNDER NO CIRCUMSTANCES WILL YOU BE ENTITLED TO
RECEIVE CASH EQUAL TO ALL OR ANY PORTION OF THE COMPENSATION YOU ELECTED TO
WAIVE UNDER THE 1999 MEP.
8. CHANGE OF CONTROL. Upon a "Change of Control" (as that term is
defined in the Plan), you will be entitled to receive the number of options
determined by multiplying the sum of your compensation actually waived up to the
date of the Change of Control by the Leverage Factor and dividing the product by
the Common Stock Price; provided, however, that only the total compensation
waived by you up to the date of Change of Control will be considered. All
options will be fully vested and immediately exercisable. In the event of a
dissolution or liquidation of the Company or a merger or consolidation in which
the Company would not be the surviving or resulting corporation, you will be
entitled to receive the number of options determined by multiplying the sum of
your compensation actually waived up to the date of exercise by the Leverage
Factor and dividing the product by the Common Stock Price; provided, however,
that only the total compensation waived by you up to the date of exercise will
be considered. All options will be fully vested and exercisable (a) in the case
of a dissolution or liquidation, at anytime after the Company's Board of
Directors takes action authorizing the dissolution or liquidation of the Company
or (b) in the case of a merger or consolidation in which the Company would not
be the resulting or surviving corporation, upon the Company's public
announcement that a definitive agreement regarding such a merger or
consolidation has been reached. UNDER NO CIRCUMSTANCES WILL YOU BE ENTITLED TO
RECEIVE CASH EQUAL TO ALL OR ANY PORTION OF THE COMPENSATION YOU ELECTED TO
WAIVE UNDER THE 1999 MEP.
9. COMPANY INFORMATION. By signing this Award Agreement, you
acknowledge that you have been given, or were offered, a copy of the Company's
(i) Annual Report on Form 10-K for the fiscal year ended November 1, 1998, and
(ii) Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 1999
(the "SEC REPORTS"), and that you were given an opportunity to ask questions of
any of the Company's executive officers regarding the SEC Reports or any other
matter regarding the Company.
10. RISK OF INVESTMENT. By signing this Award Agreement, you recognize
that your participation in the 1999 MEP is a speculative investment in that the
success or failure of your investment depends on the market value of the
Company's Common Stock over a several year period. You further recognize that
all or a portion of your investment (i.e., your Waiver Amount) may be lost. You
also acknowledge that you were given the opportunity to consult with your
personal advisor(s) regarding the 1999 MEP.
3
I hereby elect to participate in the 1999 MEP under the terms and
conditions set forth above and acknowledge that I have read and understood the
terms and conditions of the 1999 MEP.
SIGNATURE___________________
DATE________________________
SSN_________________________
ACCEPTED:
MICROAGE, INC.
BY _________________________
ITS_________________________
4
