Document:

Exhibit 10.6

 

INCENTIVE STOCK OPTION AGREEMENT UNDER THE

STRATEGIC DISTRIBUTION, INC.

1999 INCENTIVE STOCK OPTION PLAN

 

THIS
AGREEMENT, made as of this        day of       ,
200   , by and between STRATEGIC DISTRIBUTION, INC., a Delaware
corporation (the “Company”) and                        
(the “Optionee”).

 

WITNESSETH:

 

WHEREAS,
the Optionee is now employed by the Company or a subsidiary of the Company in a
key capacity, and the Company desires to have the Optionee remain in such
employment and to afford the Optionee the opportunity to acquire, or enlarge,
the Optionee’s stock ownership in the Company so that the Optionee may have a
direct proprietary interest in the Company’s success;

 

NOW,
THEREFORE, in consideration of the covenants and agreements herein contained,
the parties hereto hereby agree as follows:

 

1.                                       Grant of Option. 
Subject to the terms and conditions set forth herein and in the Company’s
1999 Incentive Stock Option Plan (the “Plan”), the Company hereby grants to the
Optionee the right and option (the “Option”) to purchase from the Company, in
compliance with the exercise schedule set forth in Section 2 of this Agreement,
during the period commencing on the date of this Agreement (the “Grant Date”)
and ending ten (10) years from the date hereof (the “Termination Date”), at a
price of $11.69 per share, up to, but not exceeding in the aggregate, Seven
Thousand Five Hundred (7,500) shares of the Company’s Common Stock (the “Stock”).  The option granted hereunder shall be an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

 

2.                                       Exercise of Option. 
Subject to the terms and conditions set forth herein, the Optionee may
purchase          shares of Stock referenced
above commencing on                      ,
                 
shares of Stock referenced above commencing on                         
and the remaining                  
shares of Stock referenced above commencing on                        .  The aggregate number of shares indicated
above will be 100% vested on                           .

 

3.                                       Termination of Employment.  (a)
If, prior to the Termination Date, the Optionee shall cease to be employed by
the Company for any reason other than death, disability or for cause, this
Option will remain exercisable by the Optionee for a period of three (3) months
after the date of cessation of employment, but in no event later than the
Termination Date, to the extent the Option was exercisable at the date of
cessation of employment.  If, prior to
the Termination Date, the Optionee shall cease to be employed by the Company
for reasons of death or disability, the Option will remain exercisable by the
Optionee or, in the event of his or her death, by the person or persons to whom
the Optionee’s rights under the Option would pass by will or the applicable
laws of descent and distribution for a period extending one (1) year after the
date of death or disability, but in no event later than the Termination Date,
to the extent the Option was exercisable at the date of death or
disability.  If, prior to the Termination
Date, the Optionee shall cease to be employed by the Company by reason of
termination of employment by the Company for “cause” (as defined in the Plan),
this Option shall terminate immediately.

 

 

(b)                                 Notwithstanding the foregoing provisions of
this Section 3, if prior to the Termination Date (i) the Optionee’s employment
with the Company terminates for any reason other than a termination by the
Company for “cause” (a “Non-cause Termination”) and (ii) within six months
after such termination such person engages in a “Competitive Action” (as
hereafter defined) without written consent of the Company, upon the first
occurrence of such Competitive Action (the “Competitive Action Date”), the
Optionee’s right to exercise the Option will terminate and all rights under
this Agreement will cease.

 

(c)                                  Whether employment has been terminated for
the purposes of this Agreement and the reason for any such termination
(including whether such termination is for “cause” or by reason of disability),
and whether the Optionee has engaged in a Competitive Action (and, if so, the
Competitive Action Date), will be determined by the Section 162(m) Committee of
the Company’s Board of Directors (the “Committee”) in its sole discretion,
whose determination shall be final, binding and conclusive. If the Committee
does not make a determination with respect to any of such foregoing events or
occurrences in the case of the Optionee, such event or occurrence shall, for
all purposes of this Agreement, be deemed to have not occurred.

 

(d)                                 For purposes of this Agreement, an Optionee
engages in a “Competitive Action” if such person, directly or indirectly, and
whether as an employee, consultant, independent contractor, partner, joint venture
or otherwise, (i) in any geographical area where the Company is engaged in
business, engages in any business activity which is competitive, to a material
extent, with any substantial type or kind of business activity conducted by the
Company in such area, (ii) on behalf of any person or entity engaged in any
business activity of the Company, solicits or induces, or in any manner
attempts to solicit or induce, any person employed by, or as an agent of, the
Company to terminate such person’s employment or agency relationship, as the case
may be, with the Company, (iii) diverts, or attempts to divert, any person,
concern or entity from doing business with the Company or attempts to induce
any such person, concern or entity to cease being a customer or supplier of the
Company or (iv) makes use of, or attempts to make use of, any of the Company’s
property or proprietary information.

 

Notwithstanding
the foregoing provisions of this subsection 3(d), the Committee has the
authority, in its discretion, to determine that an occurrence or event
otherwise described within the definition of “cause” or “Competitive Action”,
as the case may be shall, for all purposes of this Agreement, nevertheless be
considered to not constitute a termination for “cause” or the engaging in of a
Competitive Action, respectively. The Committee’s exercise, or non-exercise, of
such discretion with respect to any particular event or occurrence by or with
respect to a particular Optionee shall not in any way reduce or eliminate the
authority of the Committee to (i) determine that any subsequent event or
occurrence by or with respect to such Optionee constitutes the engaging in by
such person of a Competitive Action and (ii) determine the related Competitive
Action Date.

 

4.                                       Recovery of Value of Options.   (a)  So
as to minimize the substantial financial harm which the Optionee recognizes and
agrees that the Company will sustain in the event that the Optionee’s
employment with the Company is terminated by the Company for “cause” or the
Optionee engages in a Competitive Action following a Noncause Termination, the
Optionee agrees that if either such described event occurs, the Optionee will
repay the following amounts to the Company.

 

(b)                                 If (i) the Optionee’s employment with the company
is terminated by the Company for “cause” and (ii) within the period which began
three months prior to the date of such termination of employment and which ends
on the date of such termination of employment the Optionee exercised all or any
portion of the Option, the Optionee shall, with respect to each share of Stock
so purchased, pay to the Company, upon written demand of the Committee, in a
single cash lump sum, the difference

 

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between
(x) the average of the high and low selling prices of the Company’s Common
Stock on the exercise date and (y) the exercise price for such share.

 

(c)                                  If (i) the Optionee terminates employment with
the Company on account of a Noncause Termination and within six months after
such termination engages in a Competitive Action and (ii) within the period
which began three months prior to the date of such termination of employment
and which ends on such Optionee’s Competitive Action Date the Optionee
exercises all or any portion of the Option, the Optionee shall, with respect to
each share of Stock so purchased pay to the Company, upon written demand of the
Committee, in ‘a single cash lump sum, the difference between (x) the average
of the high and low selling prices of the Company’s Common Stock on the
exercise date and (y) the exercise price for such share.

 

5.                                       Method of Exercising Option. The Optionee may exercise the Option by
delivering to the Company a written notice stating the number of shares of
Stock that the Optionee has elected to purchase at that date from the Company
and full payment of the purchase price of the shares of Stock then to be
purchased. Payment of the purchase price of the shares of Stock shall be made
by certified or bank cashier’s check payable to the order of the Company, by
the surrender of the Company of shares of the Company’s Common Stock or by any
combination thereof. Any shares surrendered by the Optionee to the Company in
accordance with this Section 5 must have been held by the participant for at
least six months and shall be valued as of the exercise date of the option.

 

6.                                       Issuance of Shares.  As
promptly as practical after receipt of such written notification and full
payment of such purchase price and any required income tax withholding amount,
the Company shall issue or transfer to the Optionee the number of shares of
Stock with respect to which the Option has been so exercised, and shall deliver
to the Optionee a certificate or certificates therefore, registered in the
Optionee’s name.

 

7.                                       Company.  The term ‘Company”
as used in this Agreement with reference to employment shall include subsidiaries
of the Company. The term “subsidiary” as used in this Agreement shall
mean any subsidiary of the Company as defined in Section 424(f) of the Internal
Revenue Code of 1986 as amended.

 

8.                                       Non-Transferability.  The
Option is not transferable by the Optionee and is exercisable, during the
lifetime of the Optionee, only by him or her. No assignment or transfer of the
Option, or of the rights represented thereby, whether voluntary or involuntary,
by operation of law or otherwise, except by will or the laws of descent and
distribution as set forth in Section 3 herein, shall vest in the assignee or
transferee any interest or right herein whatsoever, but immediately upon such
assignment or transfer the Option shall terminate and become of no further
effect.

 

9.                                       Rights of Stockholder. The Optionee shall have no rights as a
stockholder with respect to any share of Stock covered by the Option until he
or she shall have become the holder of record of such share of Stock, and
except as set forth in subsection 10(b) hereof, no adjustment shall be made for
dividends or distributions or other rights in respect of such share of Stock
for which the record date is prior to the date upon which he or she shall
become the holder of record thereof.

 

10.                                 Recapitalization, Reorganizations, etc.     (a) The
existence of the Option shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures preferred or prior preference stocks ahead of or affecting
the Stock or the rights thereof or convertible into or exchangeable for stock,
or the

 

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dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

 

(b)                                 The shares with respect to which the Option
is granted are shares of stock of the Company as presently constituted, but if,
and whenever, prior to the delivery by the Company of all of the shares of
Stock with respect to which the Option is granted, the Company shall effect a
subdivision or consolidation of shares of the stock outstanding, without
receiving consideration therefor, the number and price per share of shares remaining
under the Option shall be appropriately adjusted. Such adjustment shall be made
by the Committee under the Plan whose determination as to what adjustment shall
be made, and the extent thereof, shall be final, binding and conclusive. Any
such adjustment may provide for the elimination of any fractional share which
might otherwise become subject to the Option.

 

(c)                                  After a merger of one or more corporations into
the Company or of the Company into one or more corporations, or after a
reorganization or other business combination of the Company with one or more
corporations after which the Company shall be the surviving corporation, the
Optionee shall, at no additional cost be entitled upon any exercise of the
Option, to receive (subject to any required action by stockholders) in lieu of
the number of shares as to which the Option shall then be so exercised, the
number and class of shares of stock or other securities to which the Optionee
would have been entitled pursuant to the terms of the agreement of merger,
reorganization or other business combination, if immediately prior to such
merger, reorganization or other business combination the Optionee had been the holder
of record of a number of shares of Stock of the Company equal to the total
number of shares as to which this Option may be exercised. Such adjustment
shall be made by the Committee, whose determination as to what adjustment shall
be made, and the extent thereof, shall be final, binding and conclusive. Any
such adjustment may provide for the elimination of any fractional share which
might otherwise become subject to the Option. Anything herein contained to the
contrary notwithstanding, upon any merger, reorganization or other business
combination in which the Company is not the surviving corporation or a
dissolution or liquidation of the Company or a sale of all or substantially all
of its assets, the Option shall terminate and become of no further effect.

 

(d)                                 Except as hereinbefore expressly provided,
the issue by the Company of shares of stock of any class, or securities
convertible into or exchangeable for shares of stock of any class, for cash or
property, or for labor or services, either upon direct sale or the exercise of
options, rights or warrants to subscribe therefor, or to purchase the same, or,
upon conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Stock
subject to the Option.

 

11.                                 Compliance with Law.  Notwithstanding any of the provisions hereof,
the Optionee hereby agrees that the Company will not be obligated to issue or transfer
any shares to the Optionee hereunder, if the issuance or transfer of such
shares shall constitute a violation by the Optionee or the Company of any
provisions of any law or regulation of any governmental authority. Any
determination in this connection by the Committee shall be final, binding and
conclusive. The Company shall in no event be obliged to register any securities
pursuant to the Securities Act of 1933 (as now in effect or as hereafter
amended) or to take any other affirmative action in order to cause the issuance
or transfer of shares of Stock pursuant hereto to comply with any law or
regulation of any governmental authority.

 

12.                                 Notice.  Every notice or other
communication relating to this Agreement shall be in writing, and shall be
mailed to or delivered to the party for whom it is intended at such address as
may from time to time be designated by it in notice mailed or delivered to the
other party as herein provided; provided that unless and until some other
address be so designated, all notices or communications by the Optionee to the
Company shall be mailed or delivered to the Company at its office at 1414 Radcliffe
Street, Suite 300, Bristol, PA 19007; Attn: General Counsel and all notices or
communications by the

 

4

 

Company to the Optionee may be
given to the Optionee personally or may be mailed to him or her at the address
shown below his or her signature to this Agreement.

 

13.                                 Disposition of Stock.  The
Optionee agrees to notify the Company in writing, within 30 days of any
disposition (whether by sale, exchange, gift or otherwise) of shares of Stock
purchased under this Option, within two years from the Grant Date or within one
year of the transfer of such shares of Stock to the Optionee.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

 

STRATEGIC
DISTRIBUTION, INC.

 

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Donald C.
  Woodring

  
	
   

  	
   

  	
  President
  & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OPTIONEE

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  —

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  of Optionee:

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

5Exhibit
10.8

 

	
  Strategic
  Distribution, Inc.

  	
   

  	
  R.C. Whitaker

  
	
  3220 Tillman Drive, Suite 200

  	
   

  	
  President
  and CEO

  
	
  Bensalem, PA 19020

  	
   

  	
   

  
	
  Phone: 215.633.1992

  	
   

  	
   

  
	
  Fax: 215.633.4427

  	
   

  	
   

  
	
  Email: ron_whitaker@isacs.com

  	
   

  	
   

  

 

 

November 21,
2000

 

Mr.
Donald C. Woodring

40
North Front Street

Sunbury,
PA 17801

 

Dear
Don:

 

I
have outlined the offer for employment at SDI below. Should you accept the
challenge based upon the summary points below, we will work together to develop
a contract that adequately addresses the summarized items and protects both
your personal and our corporate interests.

 

Summary
of Offer

 

	
  Position:

  	
   

  	
  Senior
  Vice President, Field Support

  
	
   

  	
   

  	
   

  
	
  Responsibility:

  	
   

  	
  Full
  functional, performance and budgetary responsibility for Information Systems,
  Procurement, Data Management, Training, Implementation, and e-commerce
  strategy.

  
	
   

  	
   

  	
   

  
	
  Salary:

  	
   

  	
  $200,000
  per year paid in regular bi-weekly installments

  
	
   

  	
   

  	
   

  
	
  Executive
  benefits package:

  	
   

  	
  As
  delivered.

  
	
   

  	
   

  	
   

  
	
  Target
  bonus:

  	
   

  	
  Fifty
  percent (50%) of salary based upon a combination of mutually agreed
  individual goals and corporate performance parameters. The intent will be to
  have minimum threshold performance and no cap on potential. Achievement in
  excess of 75% of salary may be “banked” for payment in future years.

  
	
   

  	
   

  	
   

  
	
  Option
  grant:

  	
   

  	
  Seventy-five
  thousand (75,000) SDI shares priced at the average closing price for the
  three days 1, 4, 5 of December 2000.

  

 

 

	
  Share
  purchase opportunity:

  	
   

  	
  Once
  this is designed and approved by the Board of Directors, you will have the
  option to participate fully along with other staff members.

  
	
   

  	
   

  	
   

  
	
  Severance:

  	
   

  	
  Dismissal
  for reasons other than “cause” will result in a payment of one year’s salary
  in monthy installments and coverage under the normal benefits package for you
  and your family for the same period.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In
  a change of control sutuation, the severance package above applies at your
  discretion.

  
	
   

  	
   

  	
   

  
	
  Perquisites:

  	
   

  	
  Temporary
  living allowance to aide in your move decision and company vehicle.

  

 

Please let me know your decision on this matter as soon as possible. We
have a series of challenges that require your immediate attention. I look
forward to working closely with you over the next few years to ensure SDI
reaches its potential.

 

	
  Best
  personal regards,

  	
   

  
	
   

  	
   

  
	
  R.
  C. Whitaker

  	
   

  
	
   

  	
  Accepted:
   /s/ Donald C. Woodring

  
	
  RCW/gs

  	
   

  
	
   

  	
   

  

2

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