Each officer serves at the discretion of the board of directors. There are
no family relationships among any of our directors and executive officers.
We currently expect that, upon completion of the spin-off, our executive
officers will no longer serve as officers of Daisytek, although we currently
expect that Messrs. Layton and Yates will remain as directors of Daisytek.
BOARD STRUCTURE AND COMMITTEES
Our Board is divided into three classes serving staggered terms. After an
initial transition period, directors in each class will be elected to serve for
three-year terms and until their successors are elected and qualified. Each
year, the directors of one class will stand for election as their terms of
office expire. Presently, Messrs. Reilly and Vikanis are designated as Class I
directors, with their terms of office expiring in 2000; Messrs. Powell and Yates
are designated as Class II directors, with their terms of office expiring in
2001; and Messrs. Murray and Layton are designated as Class III directors, with
their terms of office expiring in 2002. We presently expect that, prior to or
following the spin-off, our Board may appoint as Class II or Class III directors
one or more additional outside directors who are not employed by Daisytek.
We have two standing committees: an Audit Committee and a Compensation
Committee. Messrs. Murray and Vikanis have been appointed as the initial members
of the Audit Committee, and Messrs. Reilly and Murray have been appointed as the
initial members of the Compensation Committee. As additional persons join our
Board following the spin-off, it is possible that membership on some of these
committees may be modified.
The Audit Committee will select the independent public accountants to audit
our annual financial statements and will establish the scope and oversee the
annual audit. The Compensation Committee will determine the compensation for
employee directors and, after receiving and considering the recommendation of
our Chief Executive Officer and the President, all officers of the company and
any other employee that the Compensation Committee may designate from time to
time and will approve and administer employee stock option and incentive plans.
Our Board may establish other committees from time to time to facilitate the
management of the business and affairs of our company.
NON-EMPLOYEE DIRECTOR COMPENSATION; STOCK OPTION AND RETAINER PLAN
Each non-employee director receives an annual director's fee of $20,000 for
each year in which he or she serves as a director. Non-employee directors do not
receive additional Board or Committee meeting fees.
We have also adopted a Non-Employee Director Stock Option and Retainer Plan
to help attract and retain non-employee directors. There are 250,000 shares of
our common stock reserved for issuance under the Plan. The Plan is administered
by our Board of Directors or a committee appointed by the Board. Under the Plan,
following the completion of the spin-off and subject to certain conditions, each
non-employee director may elect to receive payment of his or her director's fees
in shares of common stock in lieu of cash. In addition, each non-employee
director received, as of the date of the adoption of the Plan, an option to
purchase 35,000 shares of common stock with an exercise price of $10.45 per
share. The Plan also provides for the future issuance to each non-employee
director of options to purchase 10,000 shares of common stock as of the date of
each annual meeting of stockholders.
All options issued under the Plan are non-qualified options for federal
income tax purposes and have an exercise price equal to the fair market value of
a share of common stock as of the date of grant. All options have a ten year
term and are subject to a one year vesting schedule, except that any options
issued prior to the effective date of the spin-off, including the initial option
grant, have no vesting for three years, subject to acceleration, in part, upon
completion of the spin-off.