<PAGE>
As filed with the Securities and Exchange Commission on January 13, 1999
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GLOBECOMM SYSTEMS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-3225567
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
45 OSER AVENUE, HAUPPAUGE, NEW YORK 11788
(Address of principal executive offices) (Zip Code)
GLOBECOMM SYSTEMS INC.
1997 STOCK INCENTIVE PLAN
1999 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plans)
DAVID E. HERSHBERG
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
GLOBECOMM SYSTEMS INC.
45 OSER AVENUE, HAUPPAUGE, NEW YORK 11788
(Name and address of agent for service)
(516) 231-9800
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered (1) per Share(2) Price(2) Fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 Stock Incentive Plan
Common Stock,
$0.001 par value 181,335 shares $5.688 $1,031,433.48 $286.74
- --------------------------------------------------------------------------------------------------
1999 Employee Stock
Purchase Plan
Common Stock,
$0.001 par value 400,000 shares $5.688 $2,275,200.00 $632.51
- --------------------------------------------------------------------------------------------------
Aggregate
Registration Fee: $919.25
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Globecomm Systems Inc.
1997 Stock Incentive Plan or the 1999 Employee Stock Purchase Plan, by
reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration
which results in an increase in the number of the outstanding shares
of Common Stock of Globecomm Systems Inc.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the average of
the high and low selling prices per share of the Common Stock of
Globecomm Systems Inc. on January 8, 1999 as reported on the Nasdaq
National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Globecomm Systems Inc. (the "Registrant") hereby incorporates
by reference into this Registration Statement the following documents
previously filed with the Securities and Exchange Commission ("SEC"):
(a) The Registrant's Annual Report on Form 10-K for the
year ended June 30, 1998, filed with the SEC on
September 28, 1998; and
(b) The Registrant's Quarterly Report on Form 10-Q for
the period ended September 30, 1998 filed with the
SEC on November 16, 1998; and
(c) The Registrant's Registration Statement No.
000-22839 on Form 8-A filed with the SEC on July 15,
1997, pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the "1934 Act"), which
describes the terms, rights and provisions
applicable to the Registrant's outstanding Common
Stock; and
(d) The Registrant's Registration Statement No.
000-22839 on Form 8-A filed with the SEC on December
4, 1998, pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the "1934 Act"), which
describes the terms, rights and provisions
applicable to the Registrant's Preferred Stock
Purchase Rights.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Registrant's Certificate of Incorporation provides that,
except to the extent prohibited by the Delaware General Corporation Law (the
"Delaware Law"), its directors shall not be personally liable to the Registrant
or its stockholders for monetary damages for any breach of fiduciary duty as
directors of the Registrant. Under Delaware law, the directors have a fiduciary
duty to the Registrant which is not eliminated by this provision of the
Certificate of Incorporation and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non monetary relief will remain
available. In addition, each director will continue to be subject to liability
under Delaware law for breach of the director's duty of loyalty to the company,
for acts or omissions which are found by a court of competent jurisdiction to
be not in good faith or involving intentional misconduct, for knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or
3
<PAGE>
approval of stock repurchases or redemptions that are prohibited by Delaware
law. This provision also does not affect the directors' responsibilities under
any other laws, such as the Federal securities laws or State or Federal
environmental laws. The Registrant has obtained liability insurance for its
officers and directors. Section 145 of the Delaware Law empowers a corporation
to indemnify its directors and officers and to purchase insurance with respect
to liability arising out of their capacity or status as directors and officers,
provided that this provision shall not eliminate or limit the liability of a
director: (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
arising under Section 174 of the Delaware Law, or (iv) for any transaction from
which the director derived an improper personal benefit. The Delaware Law
provides further that the indemnification permitted thereunder shall not be
deemed exclusive of any other rights to which the directors and officers may be
entitled under the corporation's bylaws, any agreement, vote of stockholders or
otherwise. The Registrant's Certificate of Incorporation eliminates the
personal liability of directors to the fullest extent permitted by Section
102(b)(7) of the Delaware Law and provides that to the fullest extent permitted
by law, the Corporation shall fully indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that such person is or was a director or
officer of the Corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding.
At present, there is no pending litigation or proceeding
involving any director, officer, employee or agent as to which indemnification
will be required or permitted under the Certificate of Incorporation. The
Registrant is not aware of any threatened litigation or proceeding that may
result in a claim for such indemnification.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit Number Exhibit
4 Instruments Defining the Rights of Stockholders. Reference is
made to the Registrant's Registration Statements No. 000-22839
on Form 8-A which are incorporated herein by reference
pursuant to Item 3(c) to this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page 6 of this
Registration Statement.
99.1 1997 Stock Incentive Plan.
99.2* Notice of Grant.
99.3* Stock Option Agreement.
99.4* Addendum to Stock Option Agreement (limited Stock Appreciation
Right).
99.5* Stock Issuance Agreement.
99.6* Notice of Grant of Automatic Stock Option.
99.7* Automatic Stock Option Agreement.
99.8 1999 Employee Stock Purchase Plan.
99.9 Employee Stock Purchase Plan Enrollment/Change Form.
99.10 Stock Purchase Agreement.
* Exhibits 99.2 through 99.7 are incorporated by reference to Exhibits 99.2
through 99.7, respectively, to Registrant's Registration Statement
No. 333-33137 on Form S-8, filed with the Commission on August 7, 1997.
4
<PAGE>
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the 1933 Act to reflect in the prospectus any facts or
events arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii)
shall not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
Registrant's 1997 Stock Incentive Plan and 1999 Employee Stock Purchase Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the 1933 Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8, and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in City of Hauppauge, State of New
York, on this 13th day of January, 1999.
GLOBECOMM SYSTEMS INC.
By: /s/ Kenneth A. Miller
-----------------------------
Kenneth A. Miller
President and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Globecomm
Systems Inc., a Delaware corporation, do hereby constitute and appoint David E.
Hershberg, Kenneth A. Miller and Andrew C. Melfi, and each of them
individually, with full powers of substitution and resubstitution, the lawful
attorneys-in-fact and agents with full power and authority to do any and all
acts and things and to execute any and all instruments which said attorneys and
agents, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any
rules or regulations or requirements of the Securities and Exchange Commission
in connection with this Registration Statement. Without limiting the generality
of the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that said attorneys and agents, shall do or cause to be done by virtue hereof.
This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ David E. Hershberg Chairman and Chief Executive Officer January 13, 1999
- ----------------------------------- and Director (Principal Executive Officer)
David E. Hershberg
/s/ Kenneth A. Miller President and Director January 13, 1999
- -----------------------------------
Kenneth A. Miller
/s/ Andrew C. Melfi Vice President and Chief Financial Officer January 13, 1999
- -----------------------------------
Andrew C. Melfi
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Stephen C. Yablonski Vice President and Director January 13, 1999
- -----------------------------------
Stephen C. Yablonski
/s/ Donald G. Woodring Vice President and Director January 13, 1999
- -----------------------------------
Donald G. Woodring
/s/ Herman Fialkov Director January 13, 1999
- -----------------------------------
Herman Fialkov
/s/ Shelly A. Harrison Director January 13, 1999
- -----------------------------------
Shelley A. Harrison
/s/ Benjamin Duhov Director January 13, 1999
- -----------------------------------
Benjamin Duhov
/s/ C. J. Waylan Director January 13, 1999
- -----------------------------------
C. J. Waylan
/s/ A. Robert Towbin Director January 13, 1999
- -----------------------------------
A. Robert Towbin
</TABLE>
7
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
GLOBECOMM SYSTEMS INC.
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining the Rights of Stockholders. Reference is made to the Registrant's
Registration Statements No. 000-22839 on Form 8-A which are incorporated herein by reference
pursuant to Item 3(c) to this Registration Statement.
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page 6 of this Registration Statement.
99.1 1997 Stock Incentive Plan.
99.2* Notice of Grant.
99.3* Stock Option Agreement.
99.4* Addendum to Stock Option Agreement (limited Stock Appreciation Right).
99.5* Stock Issuance Agreement.
99.6* Notice of Grant of Automatic Stock Option.
99.7* Automatic Stock Option Agreement.
99.8 1999 Employee Stock Purchase Plan.
99.9 Employee Stock Purchase Plan Enrollment/Change Form.
99.10 Stock Purchase Agreement.
</TABLE>
* Exhibits 99.2 through 99.7 are incorporated by reference to Exhibits 99.2
through 99.7, respectively, to Registrant's Registration Statement
No. 333-33137 on Form S-8, filed with the Commission on August 7, 1997.
<PAGE>
EXHIBIT 5
Opinion and consent of Brobeck, Phleger & Harrison LLP
January 13, 1999
Globecomm Systems Inc.
45 Oser Avenue
Hauppauge, New York 11788
Re: Globecomm Systems Inc. (the "Company")
Registration Statement for 581,335 Shares of Common Stock
---------------------------------------------------------
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of 581,335 shares of
Common Stock available for issuance under the Company's 1997 Stock Incentive
Plan and 1999 Employee Stock Purchase Plan. We advise you that, in our opinion,
when such shares have been issued and sold pursuant to the applicable
provisions of the Company's 1997 Stock Incentive Plan and 1999 Employee Stock
Purchase Plan, and in accordance with the Registration Statement, such shares
will be validly issued, fully paid and nonassessable shares of the Company's
Common Stock.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
Exhibit 23.1
Consent of Ernst & Young LLP Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Globecomm Systems Inc. 1997 Stock Incentive
Plan and 1999 Employee Stock Purchase Plan of our report dated August 7, 1998,
with respect to the consolidated financial statements of Globecomm Systems Inc.
included in its Annual Report (Form 10-K) for the year ended June 30, 1998,
filed with the Securities and Exchange Commission.
Ernst & Young LLP
Melville, New York
January 13, 1999
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated August 23, 1996,
except as to the stock split described in Note 1 which is as of
August 5, 1997, relating to the financial statements of Globecomm Systems,
Inc., which appears on page F-2 of the Globecomm Systems, Inc.
Annual Report on Form 10-K, dated September 28, 1998.
PRICEWATERHOUSECOOPERS LLP
New York, New York
January 11, 1999
<PAGE>
EXHIBIT 99.1
GLOBECOMM SYSTEMS INC.
1997 STOCK INCENTIVE PLAN
-------------------------
I.
GENERAL PROVISIONS
A. PURPOSE OF THE PLAN
This 1997 Stock Incentive Plan is intended to promote the
interests of Globecomm Systems Inc., a Delaware corporation, by providing
eligible persons with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation.
Capitalized terms shall have the meanings assigned to such
terms in the attached Appendix.
B. STRUCTURE OF THE PLAN
1. The Plan shall be divided into five separate equity
programs:
(i) the Discretionary Option Grant Program under
which eligible persons may, at the discretion
of the Plan Administrator, be granted options
to purchase shares of Common Stock,
(ii) the Salary Investment Option Grant Program
under which eligible employees may elect to
have a portion of their base salary invested
each year in special option grants,
(iii) the Stock Issuance Program under which
eligible persons may, at the discretion of
the Plan Administrator, be issued shares of
Common Stock directly, either through the
immediate purchase of such shares or as a
bonus for services rendered the Corporation
(or any Parent or Subsidiary),
(iv) the Automatic Option Grant Program under
which eligible non-employee Board members
shall automatically receive option grants at
periodic intervals to purchase shares of
Common Stock, and
(v) the Director Fee Option Grant Program under
which non-employee Board members may elect to
have all or any portion of their annual
retainer fee otherwise payable in cash
applied to a special option grant.
4
<PAGE>
2. The provisions of Articles One and Seven shall apply to
all equity programs under the Plan and shall govern the interests of all
persons under the Plan.
C. ADMINISTRATION OF THE PLAN
1. Prior to the Section 12 Registration Date, the
Discretionary Option Grant and Stock Issuance Programs
shall be administered by the Board. Beginning with the
Section 12 Registration Date, the Primary Committee
shall have sole and exclusive authority to administer
the Discretionary Option Grant and Stock Issuance
Programs with respect to Section 16 Insiders and shall
have sole and exclusive authority to administer the
Salary Investment Option Grant Program with respect to
all eligible individuals.
2. Administration of the Discretionary Option Grant and Stock
Issuance Programs with respect to all other persons
eligible to participate in those programs may, at the
Board's discretion, be vested in the Primary Committee
or a Secondary Committee, or the Board may retain the
power to administer those programs with respect to all
such persons. The members of the Secondary Committee
may be Board members who are Employees eligible to
receive discretionary option grants or direct stock
issuances under the Plan or any other stock option,
stock appreciation, stock bonus or other stock plan of
the Corporation (or any Parent or Subsidiary).
3. Members of the Primary Committee or any Secondary
Committee shall serve for such period of time as the
Board may determine and may be removed by the Board at
any time. The Board may also at any time terminate the
functions of any Secondary Committee and reassume all
powers and authority previously delegated to such
committee.
4. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full
power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it
may deem appropriate for proper administration of the
Discretionary Option Grant, Salary Investment Option
Grant and Stock Issuance Programs and to make such
determinations under, and issue such interpretations
of, the provisions of such programs and any
outstanding options or stock issuances thereunder as
it may deem necessary or advisable. Decisions of the
Plan Administrator within the scope of its
administrative functions under the Plan shall be final
and binding on all parties who have an interest in the
Discretionary Option Grant, Salary Investment Option
Grant and Stock Issuance Programs under its
jurisdiction or any option or stock issuance
thereunder.
5. Service on the Primary Committee or the Secondary
Committee shall constitute service as a Board member,
and members of each such committee shall accordingly
be entitled to full indemnification and reimbursement
as Board members for their service on such committee.
No member of the Primary Committee or the Secondary
Committee shall be liable for any act or omission made
in good faith with respect to the Plan or any option
grants or stock issuances under the Plan.
6. Administration of the Automatic Option Grant and Director
Fee Option Grant Programs shall be self-executing in
accordance with the terms of those programs, and no
Plan Administrator shall exercise any discretionary
functions with respect to any option grants or stock
issuances made under those programs.
D. ELIGIBILITY
1. The persons eligible to participate in the Discretionary
Option Grant and Stock Issuance Programs are as
follows:
(i) Employees,
5
<PAGE>
(ii) non-employee members of the Board or the
board of directors of any Parent or
Subsidiary, and
(iii) consultants and other independent advisors
who provide services to the Corporation (or
any Parent or Subsidiary).
6
<PAGE>
2. Only Employees who are Section 16 Insiders or other highly
compensated individuals shall be eligible to
participate in the Salary Investment Option Grant
Program.
3. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full
authority to determine, (i) with respect to the option
grants under the Discretionary Option Grant Program,
which eligible persons are to receive option grants,
the time or times when such option grants are to be
made, the number of shares to be covered by each such
grant, the status of the granted option as either an
Incentive Option or a Non-Statutory Option, the time
or times when each option is to become exercisable,
the vesting schedule (if any) applicable to the option
shares and the maximum term for which the option is to
remain outstanding and (ii) with respect to stock
issuances under the Stock Issuance Program, which
eligible persons are to receive stock issuances, the
time or times when such issuances are to be made, the
number of shares to be issued to each Participant, the
vesting schedule (if any) applicable to the issued
shares and the consideration for such shares.
4. The Plan Administrator shall have the absolute discretion
either to grant options in accordance with the
Discretionary Option Grant Program or to effect stock
issuances in accordance with the Stock Issuance
Program.
5. The individuals who shall be eligible to participate in
the Automatic Option Grant Program shall be limited to
those individuals who first become non-employee Board
members on or after the Underwriting Date, whether
through appointment by the Board or election by the
Corporation's stockholders. A non-employee Board
member who has previously been in the employ of the
Corporation (or any Parent or Subsidiary)or who serves
as a member of the Board pursuant to contractual
rights granted to certain groups of stockholders in
connection with their purchase of stock in the
Corporation shall not be eligible to receive an option
grant under the Automatic Option Grant Program.
6. All non-employee Board members shall be eligible to
participate in the Director Fee Option Grant Program.
E. STOCK SUBJECT TO THE PLAN
1. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock,
including shares repurchased by the Corporation on the
open market. The maximum number of shares of Common
Stock initially reserved for issuance over the term of
the Plan shall not exceed 2,461,335* shares. Such
authorized share reserve is comprised of (i) the
number of shares which remain available for issuance,
as of the Plan Effective Date, under the Predecessor
Plan as last approved by the Corporation's
stockholders, including the shares subject to the
outstanding options to be incorporated into the Plan
and the additional shares which would otherwise be
available for future grant, plus (ii) an additional
increase of 285,000* shares authorized by the Board
and subsequently approved by the stockholders plus
(iii) an additional increase of 90,818 shares effected
on January 2, 1998 pursuant to Section V.B. below,
plus (iv) an additional increase of 90,517 effected on
January 4 pursuant to Section V.B. below.
2. The number of shares of Common Stock available for
issuance under the Plan shall automatically increase
on the first trading day of each calendar year during
the term of the Plan, beginning with the 1998 calendar
year, by an amount equal to one percent (1%) of the
shares of Common Stock outstanding on the last trading
day of the immediately preceding calendar year. No
Incentive Options may be granted on the basis of the
additional shares of Common Stock resulting from such
annual increases.
7
<PAGE>
3. No one person participating in the Plan may receive
options, separately exercisable stock appreciation
rights and direct stock issuances for more than
1,425,000* shares of Common Stock in the aggregate per
calendar year, beginning with the 1998 calendar year.
4. Shares of Common Stock subject to outstanding options
(including options incorporated into this Plan from
the Predecessor Plan) shall be available for
subsequent issuance under the Plan to the extent those
options expire or terminate for any reason prior to
exercise in full. Unvested shares issued under the
Plan and subsequently cancelled or repurchased by the
Corporation, at the original issue price paid per
share, pursuant to the Corporation's repurchase rights
under the Plan shall be added back to the number of
shares of Common Stock reserved for issuance under the
Plan and shall accordingly be available for reissuance
through one or more subsequent option grants or direct
stock issuances under the Plan. However, should the
exercise price of an option under the Plan be paid
with shares of Common Stock or should shares of Common
Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding
taxes incurred in connection with the exercise of an
option or the vesting of a stock issuance under the
Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced
by the gross number of shares for which the option is
exercised or which vest under the stock issuance, and
not by the net number of shares of Common Stock issued
to the holder of such option or stock issuance.
5. If any change is made to the Common Stock by reason of any
stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a
class without the Corporation's receipt of
consideration, appropriate adjustments shall be made
to (i) the maximum number and/or class of securities
issuable under the Plan, (ii) the number and/or class
of securities for which any one person may be granted
stock options, separately exercisable stock
appreciation rights and direct stock issuances under
this Plan per calendar year, (iii) the number and/or
class of securities for which grants are subsequently
to be made under the Automatic Option Grant Program to
new non-employee Board members, (iv) the number and/or
class of securities and the exercise price per share
in effect under each outstanding option under the Plan
and (v) the number and/or class of securities and
price per share in effect under each outstanding
option incorporated into this Plan from the
Predecessor Plans. Such adjustments to the outstanding
options are to be effected in a manner which shall
preclude the enlargement or dilution of rights and
benefits under such options. The adjustments
determined by the Plan Administrator shall be final,
binding and conclusive.
- ---------------
All figures have been adjusted to reflect the 2.85-for-1 stock split
effected prior to the closing of the initial public offering of the Common
Stock.*
8
<PAGE>
II.
DISCRETIONARY OPTION GRANT PROGRAM
A. OPTION TERMS
Each option shall be evidenced by one or more documents in
the form approved by the Plan Administrator; provided, however, that each such
document shall comply with the terms specified below. Each document evidencing
an Incentive Option shall, in addition, be subject to the provisions of the
Plan applicable to such options.
1. EXERCISE PRICE.
a. The exercise price per share shall be fixed by the
Plan Administrator but shall not be less than
eighty-five percent (85%) of the Fair Market Value
per share of Common Stock on the option grant date.
b. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the
provisions of Section I of Article Six and the
documents evidencing the option, be payable in one
or more of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite
period necessary to avoid a charge to the
Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on
the Exercise Date, or
(iii) to the extent the option is exercised for
vested shares, through a special sale and
remittance procedure pursuant to which the
Optionee shall concurrently provide
irrevocable written instructions to (a) a
Corporation-designated brokerage firm to
effect the immediate sale of the purchased
shares and remit to the Corporation, out of
the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate
exercise price payable for the purchased
shares plus all applicable Federal, state and
local income and employment taxes required to
be withheld by the Corporation by reason of
such exercise and (b) the Corporation to
deliver the certificates for the purchased
shares directly to such brokerage firm in
order to complete the sale.
Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made
on the Exercise Date.
2. EXERCISE AND TERM OF OPTIONS. Each option shall be
exercisable at such time or times, during such period and
for such number of shares as shall be determined by the
Plan Administrator and set forth in the documents
evidencing the option. However, no option shall have a
term in excess of ten (10) years measured from the option
grant date.
3. EFFECT OF TERMINATION OF SERVICE.
a. The following provisions shall govern the exercise of
any options held by the Optionee at the time of
cessation of Service or death:
(i) Any option outstanding at the time of the
Optionee's cessation of Service for any reason
shall remain exercisable for such period of time
thereafter as shall be determined by the Plan
Administrator and set forth in the documents
evidencing the option, but no such option shall be
exercisable after the expiration of the option
term.
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(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently
exercised by the personal representative of the
Optionee's estate or by the person or persons to
whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of
descent and distribution.
(iii) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by
the Optionee shall terminate immediately and cease
to be outstanding.
(iv) During the applicable post-Service exercise
period, the option may not be exercised in the
aggregate for more than the number of vested
shares for which the option is exercisable on the
date of the Optionee's cessation of Service. Upon
the expiration of the applicable exercise period
or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be
outstanding for any vested shares for which the
option has not been exercised. However, the option
shall, immediately upon the Optionee's cessation
of Service, terminate and cease to be outstanding
to the extent the option is not otherwise at that
time exercisable for vested shares.
b. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or
at any time while the option remains outstanding, to:
(i) extend the period of time for which the option is
to remain exercisable following the Optionee's
cessation of Service from the limited exercise
period otherwise in effect for that option to such
greater period of time as the Plan Administrator
shall deem appropriate, but in no event beyond the
expiration of the option term, and/or
(ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only
with respect to the number of vested shares of
Common Stock for which such option is exercisable
at the time of the Optionee's cessation of Service
but also with respect to one or more additional
installments in which the Optionee would have
vested had the Optionee continued in Service.
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4. STOCKHOLDER RIGHTS. The holder of an option shall have no
stockholder rights with respect to the shares subject
to the option until such person shall have exercised
the option, paid the exercise price and become a
holder of record of the purchased shares.
5. REPURCHASE RIGHTS. The Plan Administrator shall have the
discretion to grant options which are exercisable for
unvested shares of Common Stock. Should the Optionee
cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase, at the
exercise price paid per share, any or all of those
unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and
procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in
the document evidencing such repurchase right.
6. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of
the Optionee, Incentive Options shall be exercisable
only by the Optionee and shall not be assignable or
transferable other than by will or by the laws of
descent and distribution following the Optionee's
death. However, a Non-Statutory Option may, in
connection with the Optionee's estate plan, be
assigned in whole or in part during the Optionee's
lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively
for one or more such family members. The assigned
portion may only be exercised by the person or persons
who acquire a proprietary interest in the option
pursuant to the assignment. The terms applicable to
the assigned portion shall be the same as those in
effect for the option immediately prior to such
assignment and shall be set forth in such documents
issued to the assignee as the Plan Administrator may
deem appropriate.
B. INCENTIVE OPTIONS
The terms specified below shall be applicable to all
Incentive Options. Except as modified by the provisions of this Section II, all
the provisions of Articles One, Two and Seven shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section
II.
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1. ELIGIBILITY. Incentive Options may only be granted to
Employees.
2. EXERCISE PRICE. The exercise price per share shall not be
less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option
grant date.
3. DOLLAR LIMITATION. The aggregate Fair Market Value of the
shares of Common Stock (determined as of the
respective date or dates of grant) for which one or
more options granted to any Employee under the Plan
(or any other option plan of the Corporation or any
Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one
calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which
become exercisable for the first time in the same
calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options
shall be applied on the basis of the order in which
such options are granted. The provisions of this
Section C shall apply to options previously issued
under the Corporation's Incentive Stock Option Plan,
and shall be in substitution for the limitation set
forth in Section 2.05 of such Plan.
4. 10% STOCKHOLDER. If any Employee to whom an Incentive
Option is granted is a 10% Stockholder, then the
exercise price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value
per share of Common Stock on the option grant date,
and the option term shall not exceed five (5) years
measured from the option grant date.
C. CORPORATE TRANSACTION/CHANGE IN CONTROL
1. In the event of any Corporate Transaction, each
outstanding option shall automatically accelerate so
that each such option shall, immediately prior to the
effective date of the Corporate Transaction, become
fully exercisable with respect to the total number of
shares of Common Stock at the time subject to such
option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock.
2. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject
to those terminated rights shall immediately vest in
full, in the event of any Corporate Transaction.
3. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate
and cease to be outstanding.
4. In the event of a Change in Control each outstanding
option shall automatically accelerate so that each
such option shall, immediately prior to the effective
date of the Change in Control, become fully
exercisable with respect to the total number of shares
of Common Stock at the time subject to such option and
may be exercised for any or all of those shares as
fully-vested shares of Common Stock. Each option so
accelerated shall remain exercisable for fully-vested
shares until the earlier of (i) the expiration of the
option term or (ii) the expiration of the one (1)-year
period measured from the effective date of the
Optionee's cessation of Service. In addition, all of
the Corporation's outstanding repurchase rights with
respect to shares held by the Optionee at the time of
such Change in Control shall immediately terminate,
and the shares subject to those terminated repurchase
rights shall accordingly vest in full.
5. The portion of any Incentive Option accelerated in
connection with a Corporate Transaction or Change in
Control shall remain exercisable as an Incentive
Option only to the extent the applicable One Hundred
Thousand Dollar limitation is not exceeded. To the
extent such dollar limitation is exceeded, the
accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the
Federal tax laws.
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6. The outstanding options shall in no way affect the right
of the Corporation to adjust, reclassify, reorganize
or otherwise change its capital or business structure
or to merge, consolidate, dissolve, liquidate or sell
or transfer all or any part of its business or assets.
D. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected option
holders, the cancellation of any or all outstanding options under the
Discretionary Option Grant Program (including outstanding options incorporated
from the Predecessor Plan) and to grant in substitution new options covering
the same or different number of shares of Common Stock but with an exercise
price per share based on the Fair Market Value per share of Common Stock on the
new grant date.
E. STOCK APPRECIATION RIGHTS
1. The Plan Administrator shall have full power and
authority to grant to selected Optionees tandem stock
appreciation rights and/or limited stock appreciation
rights.
2. The following terms shall govern the grant and exercise of
tandem stock appreciation rights:
(i) One or more Optionees may be granted the right,
exercisable upon such terms as the Plan
Administrator may establish, to elect between the
exercise of the underlying option for shares of
Common Stock and the surrender of that option in
exchange for a distribution from the Corporation
in an amount equal to the excess of (a) the Fair
Market Value (on the option surrender date) of the
number of shares in which the Optionee is at the
time vested under the surrendered option (or
surrendered portion thereof) over (b) the
aggregate exercise price payable for such shares.
(ii) No such option surrender shall be effective unless
it is approved by the Plan Administrator, either
at the time of the actual option surrender or at
any earlier time. If the surrender is so approved,
then the distribution to which the Optionee shall
be entitled may be made in shares of Common Stock
valued at Fair Market Value on the option
surrender date, in cash, or partly in shares and
partly in cash, as the Plan Administrator shall in
its sole discretion deem appropriate.
(iii) If the surrender of an option is not approved by
the Plan Administrator, then the Optionee shall
retain whatever rights the Optionee had under the
surrendered option (or surrendered portion
thereof) on the option surrender date and may
exercise such rights at any time prior to the
later of (a) five (5) business days after the
receipt of the rejection notice or (b) the last
day on which the option is otherwise exercisable
in accordance with the terms of the documents
evidencing such option, but in no event may such
rights be exercised more than ten (10) years after
the option grant date.
3. The following terms shall govern the grant and exercise of
limited stock appreciation rights:
(i) One or more Section 16 Insiders may be granted
limited stock appreciation rights with respect to
their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each
individual holding one or more options with such a
limited stock appreciation right shall have the
unconditional right (exercisable for a thirty
(30)-day period following such Hostile Take-Over)
to surrender each such option to the Corporation,
to the extent the option is at the time
exercisable for
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vested shares of Common Stock. In return for the
surrendered option, the Optionee shall receive a
cash distribution from the Corporation in an
amount equal to the excess of (A) the Take-Over
Price of the shares of Common Stock which are at
the time vested under each surrendered option (or
surrendered portion thereof) over (B) the
aggregate exercise price payable for such shares.
Such cash distribution shall be paid within five
(5) days following the option surrender date.
(iii) Neither the approval of the Plan Administrator nor
the consent of the Board shall be required in
connection with such option surrender and cash
distribution.
(iv) The balance of the option (if any) shall remain
outstanding and exercisable in accordance with the
documents evidencing such option.
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III.
SALARY INVESTMENT OPTION GRANT PROGRAM
A. OPTION GRANTS
The Primary Committee shall have the sole and exclusive
authority to determine the calendar year or years (if any) for which the Salary
Investment Option Grant Program is to be in effect and to select the Section 16
Insiders and other highly compensated Employees eligible to participate in the
Salary Investment Option Grant Program for those calendar year or years. Each
selected individual who elects to participate in the Salary Investment Option
Grant Program must, prior to the start of each calendar year of participation,
file with the Plan Administrator (or its designate) an irrevocable
authorization directing the Corporation to reduce his or her base salary for
that calendar year by an amount not less than Ten Thousand Dollars ($10,000.00)
nor more than Fifty Thousand Dollars ($50,000.00). The Primary Committee shall
have complete discretion to determine whether to approve the filed
authorization in whole or in part. To the extent the Primary Committee approves
the authorization, the individual who filed that authorization shall be granted
an option under the Salary Investment Grant Program on or before the last
trading day in January for the calendar year for which the salary reduction is
to be in effect. All grants under the Salary Investment Option Grant Program
shall be at the sole discretion of the Primary Committee.
B. OPTION TERMS
Each option shall be a Non-Statutory Option evidenced by one
or more documents in the form approved by the Plan Administrator; provided,
however, that each such document shall comply with the terms specified below.
1. EXERCISE PRICE.
a. The exercise price per share shall be thirty-three and
one-third percent (33-1/3%) of the Fair Market Value
per share of Common Stock on the option grant date.
b. The exercise price shall become immediately due upon
exercise of the option and shall be payable in one or
more of the alternative forms authorized under the
Discretionary Option Grant Program. Except to the
extent the sale and remittance procedure specified
thereunder is utilized, payment of the exercise price
for the purchased shares must be made on the Exercise
Date.
2. NUMBER OF OPTION SHARES. The number of shares of Common
Stock subject to the option shall be determined
pursuant to the following formula (rounded down to the
nearest whole number):
X = A/(B x 66-2/3%), where
X is the number of option shares,
A is the dollar amount of the approved reduction in
the Optionee's base salary for the calendar year,
and
B is the Fair Market Value per share of Common Stock
on the option grant date.
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3. EXERCISE AND TERM OF OPTIONS. The option shall become
exercisable in a series of twelve (12) successive
equal monthly installments upon the Optionee's
completion of each calendar month of Service in the
calendar year for which the salary reduction is in
effect. Each option shall have a maximum term of ten
(10) years measured from the option grant date.
4. EFFECT OF TERMINATION OF SERVICE. Should the Optionee
cease Service for any reason while holding one or more
options under this Article Three, then each such
option shall remain exercisable, for any or all of the
shares for which the option is exercisable at the time
of such cessation of Service, until the earlier of (i)
the expiration of the ten (10)-year option term or
(ii) the expiration of the three (3)-year period
measured from the date of such cessation of Service.
Should the Optionee die while holding one or more
options under this Article Three, then each such
option may be exercised, for any or all of the shares
for which the option is exercisable at the time of the
Optionee's cessation of Service (less any shares
subsequently purchased by Optionee prior to death), by
the personal representative of the Optionee's estate
or by the person or persons to whom the option is
transferred pursuant to the Optionee's will or in
accordance with the laws of descent and distribution.
Such right of exercise shall lapse, and the option
shall terminate, upon the earlier of (i) the
expiration of the ten (10)-year option term or (ii)
the three (3)-year period measured from the date of
the Optionee's cessation of Service. However, the
option shall, immediately upon the Optionee's
cessation of Service for any reason, terminate and
cease to remain outstanding with respect to any and
all shares of Common Stock for which the option is not
otherwise at that time exercisable.
C. CORPORATE TRANSACTION/CHANGE IN CONTROL
1. In the event of any Corporate Transaction while the
Optionee remains in Service, each outstanding option
held by such Optionee under this Salary Investment
Option Grant Program shall automatically accelerate so
that each such option shall, immediately prior to the
effective date of the Corporate Transaction, become
fully exercisable with respect to the total number of
shares of Common Stock at the time subject to such
option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. Each
such outstanding option shall be assumed by the
successor corporation (or parent thereof) in the
Corporate Transaction and shall remain exercisable for
the fully-vested shares until the earlier of (i) the
expiration of the ten (10)-year option term or (ii)
the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Service.
2. In the event of a Change in Control while the Optionee
remains in Service, each outstanding option held by
such Optionee under this Salary Investment Option
Grant Program shall automatically accelerate so that
each such option shall immediately become fully
exercisable with respect to the total number of shares
of Common Stock at the time subject to such option and
may be exercised for any or all of those shares as
fully-vested shares of Common Stock. The option shall
remain so exercisable until the earlier or (i) the
expiration of the ten (10)-year option term or (ii)
the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Service.
3. Upon the occurrence of a Hostile Take-Over, the Optionee
shall have a thirty (30)-day period in which to
surrender to the Corporation each of his or her
outstanding option grants. The Optionee shall in
return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i)
the Take-Over Price of the shares of Common Stock at
the time subject to each surrendered option (whether
or not the Optionee is otherwise at the time vested in
those shares) over (ii) the aggregate exercise price
payable for such shares. Such cash distribution shall
be paid within five (5) days following the surrender
of the option to the Corporation. No approval or
consent of the Board or any Plan Administrator shall
be required in connection with such option surrender
and cash distribution.
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4. The grant of options under the Salary Investment Option
Grant Program shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
D. REMAINING TERMS
The remaining terms of each option granted under the Salary
Investment Option Grant Program shall be the same as the terms in effect for
option grants made under the Discretionary Option Grant Program.
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IV.
STOCK ISSUANCE PROGRAM
A. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.
1. PURCHASE PRICE.
a. The purchase price per share shall be fixed by the Plan
Administrator, but shall not be less than one hundred
percent (100%) of the Fair Market Value per share of
Common Stock on the issuance date.
b. Subject to the provisions of Section I of Article
Seven, shares of Common Stock may be issued under the
Stock Issuance Program for any of the following items
of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
2. VESTING PROVISIONS.
a. Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan
Administrator, be fully and immediately vested upon
issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment
of specified performance objectives.
b. Any new, substituted or additional securities or other
property (including money paid other than as a regular
cash dividend) which the Participant may have the right
to receive with respect to the Participant's unvested
shares of Common Stock by reason of any stock dividend,
stock split, recapitalization, combination of shares,
exchange of shares or other change affecting the
outstanding Common Stock as a class without the
Corporation's receipt of consideration shall be issued
subject to (i) the same vesting requirements applicable
to the Participant's unvested shares of Common Stock
and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.
c. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the
Participant under the Stock Issuance Program, whether
or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the
right to vote such shares and to receive any regular
cash dividends paid on such shares.
d. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock
issued under the Stock Issuance Program or should the
performance objectives not be attained with respect to
one or more such unvested shares of Common Stock, then
those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall
have no further stockholder rights with respect to
those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration
paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the
Corporation shall repay to the Participant the cash
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consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding
purchase-money note of the Participant attributable to
the surrendered shares.
e. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested
shares of Common Stock which would otherwise occur upon
the cessation of the Participant's Service or the
non-attainment of the performance objectives applicable
to those shares. Such waiver shall result in the
immediate vesting of the Participant's interest in the
shares as to which the waiver applies. Such waiver may
be effected at any time, whether before or after the
Participant's cessation of Service or the attainment or
non-attainment of the applicable performance
objectives.
B. CORPORATE TRANSACTION/CHANGE IN CONTROL
1. All of the Corporation's outstanding repurchase rights
under the Stock Issuance Program shall terminate
automatically, and all the shares of Common Stock
subject to those terminated rights shall immediately
vest in full, in the event of any Corporate
Transaction.
2. All of the Corporation's outstanding repurchase under the
Stock Issuance Program shall automatically terminate,
and the shares of Common Stock subject to those
terminated rights shall immediately vest, upon a Change
in Control.
C. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion,
be held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.
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V.
AUTOMATIC OPTION GRANT PROGRAM
A. OPTION TERMS
1. OPTION GRANTS. Each individual who is first elected or
appointed as a non-employee Board member at any time on
or after the Underwriting Date shall automatically be
granted, on the date of such initial election or
appointment, a Non-Statutory Option to purchase 15,000
shares of Common Stock, provided that individual has
not previously been in the employ of the Corporation or
any Parent or Subsidiary.
2. EXERCISE PRICE.
a. The exercise price per share shall be equal to one
hundred percent (100%) of the Fair Market Value per
share of Common Stock on the option grant date.
b. The exercise price shall be payable in one or more of
the alternative forms authorized under the
Discretionary Option Grant Program. Except to the
extent the sale and remittance procedure specified
thereunder is utilized, payment of the exercise price
for the purchased shares must be made on the Exercise
Date.
3. OPTION TERM. Each option shall have a term of ten (10)
years measured from the option grant date.
4. EXERCISE AND VESTING OF OPTIONS. Each option shall be
exercisable for those option shares which have vested.
During the period of service as a member of the Board,
each 15,000-share grant shall vest to the extent of one
third of the number of shares granted thereby (5,000
shares), on the first anniversary of the date of grant,
and cumulatively to the extent of an additional
one-third, on each of the next two succeeding
anniversaries, so that on the third anniversary of the
date of grant (provided service as a Board member has
continued throughout the period), the options granted
to any eligible Director shall be fully vested.
5. TERMINATION OF BOARD SERVICE. The following provisions
shall govern the exercise of any options held by the
Optionee at the time the Optionee ceases to serve as a
Board member:
(i) The Optionee (or, in the event of Optionee's death,
the personal representative of the Optionee's estate
or the person or persons to whom the option is
transferred pursuant to the Optionee's will or in
accordance with the laws of descent and
distribution) shall have a twelve (12)-month period
following the date of such cessation of Board
service in which to exercise each such option.
(ii) During the twelve (12)-month exercise period, the
option may not be exercised in the aggregate for
more than the number of vested shares of Common
Stock for which the option is exercisable at the
time of the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board
member by reason of death or Permanent Disability,
then all shares at the time subject to the option
shall immediately vest so that such option may,
during the twelve (12)-month exercise period
following such cessation of Board service, be
exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
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(iv) In no event shall the option remain exercisable
after the expiration of the option term. Upon the
expiration of the twelve (12)-month exercise period
or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be
outstanding for any vested shares for which the
option has not been exercised. However, the option
shall, immediately upon the Optionee's cessation of
Board service for any reason other than death or
Permanent Disability, terminate and cease to be
outstanding to the extent the option is not
otherwise at that time exercisable for vested
shares.
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B. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
1. In the event of any Corporate Transaction, the shares of
Common Stock at the time subject to each outstanding
option but not otherwise vested shall automatically
vest in full so that each such option shall,
immediately prior to the effective date of the
Corporate Transaction, become fully exercisable for
all of the shares of Common Stock at the time subject
to such option and may be exercised for all or any
portion of those shares as fully-vested shares of
Common Stock. Immediately following the consummation
of the Corporate Transaction, each automatic option
grant shall terminate and cease to be outstanding.
2. In connection with any Change in Control, the shares of
Common Stock at the time subject to each outstanding
option but not otherwise vested shall automatically
vest in full so that each such option shall,
immediately prior to the effective date of the Change
in Control, become fully exercisable for all of the
shares of Common Stock at the time subject to such
option and may be exercised for all or any portion of
those shares as fully-vested shares of Common Stock.
Each such option shall remain exercisable for such
fully-vested option shares until the expiration or
sooner termination of the option term or the
surrender of the option in connection with a Hostile
Take-Over.
3. Upon the occurrence of a Hostile Take-Over, the Optionee
shall have a thirty (30)-day period in which to
surrender to the Corporation each of his or her
outstanding automatic option grants. The Optionee
shall in return be entitled to a cash distribution
from the Corporation in an amount equal to the excess
of (i) the Take-Over Price of the shares of Common
Stock at the time subject to each surrendered option
(whether or not the Optionee is otherwise at the time
vested in those shares) over (ii) the aggregate
exercise price payable for such shares. Such cash
distribution shall be paid within five (5) days
following the surrender of the option to the
Corporation. No approval or consent of the Board or
any Plan Administrator shall be required in
connection with such option surrender and cash
distribution.
4. Each option which is assumed in connection with a
Corporate Transaction shall be appropriately
adjusted, immediately after such Corporate
Transaction, to apply to the number and class of
securities which would have been issuable to the
Optionee in consummation of such Corporate
Transaction had the option been exercised immediately
prior to such Corporate Transaction. Appropriate
adjustments shall also be made to the exercise price
payable per share under each outstanding option,
provided the aggregate exercise price payable for
such securities shall remain the same.
5. The grant of options under the Automatic Option Grant
Program shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
C. REMAINING TERMS
The remaining terms of each option granted under the
Automatic Option Grant Program shall be the same as the terms in effect for
option grants made under the Discretionary Option Grant Program.
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VI.
DIRECTOR FEE OPTION GRANT PROGRAM
A. OPTION GRANTS
Each non-employee Board member may elect to apply all or any
portion of the annual retainer fee otherwise payable in cash for his or her
service on the Board to the acquisition of a special option grant under this
Director Fee Option Grant Program. Such election must be filed with the
Corporation's Chief Financial Officer prior to the first day of the calendar
year for which the annual retainer fee which is the subject of that election is
otherwise payable. Each non-employee Board member who files such a timely
election shall automatically be granted an option under this Director Fee
Option Grant Program on the first trading day in January in the calendar year
for which the annual retainer fee which is the subject of that election would
otherwise be payable.
B. OPTION TERMS
Each option shall be a Non-Statutory Option governed by the
terms and conditions specified below.
1. EXERCISE PRICE.
a. The exercise price per share shall be thirty-three and
one-third percent (33-1/3%) of the Fair Market Value
per share of Common Stock on the option grant date.
b. The exercise price shall become immediately due upon
exercise of the option and shall be payable in one or
more of the alternative forms authorized under the
Discretionary Option Grant Program. Except to the
extent the sale and remittance procedure specified
thereunder is utilized, payment of the exercise price
for the purchased shares must be made on the Exercise
Date.
2. NUMBER OF OPTION SHARES. The number of shares of Common
Stock subject to the option shall be determined
pursuant to the following formula (rounded down to the
nearest whole number):
X = A/(B x 66-2/3%), where
X is the number of option shares,
A is the portion of the annual retainer fee subject
to the non-employee Board member's election, and
B is the Fair Market Value per share of Common Stock on
the option grant date.
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3. EXERCISE AND TERM OF OPTIONS. The option shall become
exercisable for fifty percent (50%) of the option
shares upon the Optionee's completion of six (6) months
of Board service in the calendar year for which his or
her election under this Director Fee Option Grant
Program is in effect, and the balance of the option
shares shall become exercisable in a series of six (6)
successive equal monthly installments upon the
Optionee's completion of each additional month of Board
service during that calendar year. Each option shall
have a maximum term of ten (10) years measured from the
option grant date.
4. TERMINATION OF BOARD SERVICE. Should the Optionee cease
Board service for any reason (other than death or
Permanent Disability) while holding one or more options
under this Director Fee Option Grant Program, then each
such option shall remain exercisable, for any or all of
the shares for which the option is exercisable at the
time of such cessation of Board service, until the
earlier of (i) the expiration of the ten (10)-year
option term or (ii) the expiration of the three
(3)-year period measured from the date of such
cessation of Board service. However, each option held
by the Optionee under this Director Fee Option Grant
Program at the time of his or her cessation of Board
service shall immediately terminate and cease to remain
outstanding with respect to any and all shares of
Common Stock for which the option is not otherwise at
that time exercisable.
5. DEATH OR PERMANENT DISABILITY. Should the Optionee's
service as a Board member cease by reason of death or
Permanent Disability, then each option held by such
Optionee under this Director Fee Option Grant Program
shall immediately become exercisable for all the shares
of Common Stock at the time subject to that option, and
the option may be exercised for any or all of those
shares as fully-vested shares until the earlier of (i)
the expiration of the ten (10)-year option term or (ii)
the expiration of the three (3)-year period measured
from the date of such cessation of Board service.
Should the Optionee die after cessation of Board service but
while holding one or more options under this Director Fee Option Grant Program,
then each such option may be exercised, for any or all of the shares for which
the option is exercisable at the time of the Optionee's cessation of Board
service (less any shares subsequently purchased by Optionee prior to death), by
the personal representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the Optionee's will or in
accordance with the laws of descent and distribution. Such right of exercise
shall lapse, and the option shall terminate, upon the earlier of (i) the
expiration of the ten (10)-year option term or (ii) the three (3)-year period
measured from the date of the Optionee's cessation of Board service.
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<PAGE>
C. CORPORATE TRANSACTION/CHANGE IN CONTROL
1. In the event of any Corporate Transaction while the
Optionee remains a Board member, each outstanding
option held by such Optionee under this Director Fee
Option Grant Program shall automatically accelerate so
that each such option shall, immediately prior to the
effective date of the Corporate Transaction, become
fully exercisable with respect to the total number of
shares of Common Stock at the time subject to such
option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. Each
such outstanding option shall be assumed by the
successor corporation (or parent thereof) in the
Corporate Transaction and shall remain exercisable for
the fully-vested shares until the earlier of (i) the
expiration of the ten (10)-year option term or (ii) the
expiration of the three (3)-year period measured from
the date of the Optionee's cessation of Board service.
2. In the event of a Change in Control while the Optionee
remains in Service, each outstanding option held by
such Optionee under this Director Fee Option Grant
Program shall automatically accelerate so that each
such option shall immediately become fully exercisable
with respect to the total number of shares of Common
Stock at the time subject to such option and may be
exercised for any or all of those shares as
fully-vested shares of Common Stock. The option shall
remain so exercisable until the earlier or (i) the
expiration of the ten (10)-year option term or (ii) the
expiration of the three (3)-year period measured from
the date of the Optionee's cessation of Service.
3. Upon the occurrence of a Hostile Take-Over, the Optionee
shall have a thirty (30)-day period in which to
surrender to the Corporation each of his or her
outstanding option grants. The Optionee shall in return
be entitled to a cash distribution from the Corporation
in an amount equal to the excess of (i) the Take-Over
Price of the shares of Common Stock at the time subject
to each surrendered option (whether or not the Optionee
is otherwise at the time vested in those shares) over
(ii) the aggregate exercise price payable for such
shares. Such cash distribution shall be paid within
five (5) days following the surrender of the option to
the Corporation. No approval or consent of the Board or
any Plan Administrator shall be required in connection
with such option surrender and cash distribution.
4. The grant of options under the Director Fee Option Grant
Program shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
D. REMAINING TERMS
The remaining terms of each option granted under this
Director Fee Option Grant Program shall be the same as the terms in effect for
option grants made under the Discretionary Option Grant Program.
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<PAGE>
VII.
MISCELLANEOUS
A. FINANCING
The Plan Administrator may permit any Optionee or Participant
to pay the option exercise price under the Discretionary Option Grant Program
or the purchase price of shares issued under the Stock Issuance Program by
delivering a full-recourse, interest bearing promissory note payable in one or
more installments. The terms of any such promissory note (including the
interest rate and the terms of repayment) shall be established by the Plan
Administrator in its sole discretion. In no event may the maximum credit
available to the Optionee or Participant exceed the sum of (i) the aggregate
option exercise price or purchase price payable for the purchased shares plus
(ii) any Federal, state and local income and employment tax liability incurred
by the Optionee or the Participant in connection with the option exercise or
share purchase.
B. TAX WITHHOLDING
1. The Corporation's obligation to deliver shares of Common
Stock upon the exercise of options or the issuance or
vesting of such shares under the Plan shall be subject
to the satisfaction of all applicable Federal, state
and local income and employment tax withholding
requirements.
2. The Plan Administrator may, in its discretion, provide any
or all holders of Non-Statutory Options or unvested
shares of Common Stock under the Plan (other than the
options granted or the shares issued under the
Automatic Option Grant or Director Fee Option Grant
Program) with the right to use shares of Common Stock
in satisfaction of all or part of the Taxes incurred by
such holders in connection with the exercise of their
options or the vesting of their shares. Such right may
be provided to any such holder in either or both of the
following formats:
Stock Withholding: The election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated by the holder.
Stock Delivery: The election to deliver to the
Corporation, at the time the Non-Statutory Option is exercised or the shares
vest, one or more shares of Common Stock previously acquired by such holder
(other than in connection with the option exercise or share vesting triggering
the Taxes) with an aggregate Fair Market Value equal to the percentage of the
Taxes (not to exceed one hundred percent (100%)) designated by the holder.
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C. EFFECTIVE DATE AND TERM OF THE PLAN
1. The Plan shall become effective immediately upon the Plan
Effective Date. However, the Salary Investment Option
Grant Program shall not be implemented until such time
as the Primary Committee may deem appropriate. Options
may be granted under the Discretionary Option Grant or
Automatic Option Grant Program at any time on or after
the Plan Effective Date. However, no options granted
under the Plan may be exercised, and no shares shall be
issued under the Plan, until the Plan is approved by
the Corporation's stockholders. If such stockholder
approval is not obtained within twelve (12) months
after the Plan Effective Date, then all options
previously granted under this Plan shall terminate and
cease to be outstanding, and no further options shall
be granted and no shares shall be issued under the
Plan.
2. The Plan shall serve as the successor to the Predecessor
Plans, and no further option grants or direct stock
issuances shall be made under the Predecessor Plans
after the Section 12 Registration Date. All options
outstanding under the Predecessor Plans on the Section
12 Registration Date shall be incorporated into the
Plan at that time and shall be treated as outstanding
options under the Plan. However, each outstanding
option so incorporated shall continue to be governed
solely by the terms of the documents evidencing such
option, and no provision of the Plan shall be deemed to
affect or otherwise modify the rights or obligations of
the holders of such incorporated options with respect
to their acquisition of shares of Common Stock.
3. One or more provisions of the Plan, including (without
limitation) the option/vesting acceleration provisions
of Article Two relating to Corporate Transactions and
Changes in Control, may, in the Plan Administrator's
discretion, be extended to one or more options
incorporated from the Predecessor Plans which do not
otherwise contain such provisions.
4. The Plan shall terminate upon the earliest of (i)
February 25, 2007, (ii) the date on which all shares
available for issuance under the Plan shall have been
issued as fully-vested shares or (iii) the termination
of all outstanding options in connection with a
Corporate Transaction. Upon such plan termination, all
outstanding option grants and unvested stock issuances
shall thereafter continue to have force and effect in
accordance with the provisions of the documents
evidencing such grants or issuances.
D. AMENDMENT OF THE PLAN
1. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all
respects. However, no such amendment or modification
shall adversely affect the rights and obligations with
respect to stock options or unvested stock issuances at
the time outstanding under the Plan unless the Optionee
or the Participant consents to such amendment or
modification. In addition, certain amendments may
require stockholder approval pursuant to applicable
laws or regulations in order to preserve the
deductibility or other tax treatment of options and
shares granted hereunder, or the exemption of
recipients of such shares or options from Section 16(b)
of the 1934 Act.
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<PAGE>
2. Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant and Salary
Investment Option Grant Programs and shares of Common
Stock may be issued under the Stock Issuance Program
that are in each instance in excess of the number of
shares then available for issuance under the Plan,
provided any excess shares actually issued under those
programs shall be held in escrow until there is
obtained stockholder approval of an amendment
sufficiently increasing the number of shares of Common
Stock available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12)
months after the date the first such excess issuances
are made, then (i) any unexercised options granted on
the basis of such excess shares shall terminate and
cease to be outstanding and (ii) the Corporation shall
promptly refund to the Optionees and the Participants
the exercise or purchase price paid for any excess
shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term
Federal Rate) for the period the shares were held in
escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding.
E. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale
of shares of Common Stock under the Plan shall be used for general corporate
purposes.
F. REGULATORY APPROVALS
1. The implementation of the Plan, the granting of any stock
option under the Plan and the issuance of any shares of
Common Stock (i) upon the exercise of any granted
option or (ii) under the Stock Issuance Program shall
be subject to the Corporation's procurement of all
approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the
stock options granted under it and the shares of Common
Stock issued pursuant to it.
2. No shares of Common Stock or other assets shall be issued
or delivered under the Plan unless and until there
shall have been compliance with all applicable
requirements of Federal and state securities laws,
including the filing and effectiveness of the Form S-8
registration statement for the shares of Common Stock
issuable under the Plan, and all applicable listing
requirements of any stock exchange (or the Nasdaq
National Market, if applicable) on which Common Stock
is then listed for trading.
G. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining such person) or
of the Optionee or the Participant, which rights are hereby expressly reserved
by each, to terminate such person's Service at any time for any reason, with or
without cause.
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APPENDIX
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The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic
option grant program in effect under the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change of control of the
Corporation of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item
on any similar schedule or form) promulgated under the 1934 Act whether or not
the Corporation is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if:
(i) any person or group (as such terms are used in connection
with Sections 13(d) and 14(d) of the 1934 Act) becomes the
"beneficial owner" (as defined in Rule 13d-3 and 13d-5 under
the 1934 Act), directly or indirectly, of securities of the
Corporation representing 35% or more of the combined voting
power of the Corporation's then outstanding securities;
(ii) the Corporation is a party to a merger, consolidation,
sale of assets or other reorganization, or a proxy contest,
as a consequence of which members of the Board in office
immediately prior to such transaction or event constitute
less than a majority of the Board thereafter; or
(iii) during any period of twenty-four consecutive months,
individuals who at the beginning of such period constituted
the Board (including for this purpose any new director whose
election or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute
at least a majority of the Board.
Notwithstanding the foregoing provisions of this Section C, a
"Change in Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Corporation (or any reporting requirement
under the 1934 Act relating thereto) by an employee benefit plan maintained by
the Corporation for its employees.
D. CODE shall mean the Internal Revenue Code of 1986, as
amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either a stockholder-
approved sale, transfer or other disposition of all or substantially all of the
Corporation's assets in complete liquidation or dissolution of the Corporation.
G. CORPORATION shall mean Globecomm Systems Inc., a Delaware
corporation, and its successors.
H. DIRECTOR FEE OPTION GRANT PROGRAM shall mean the special
stock option grant in effect for non-employee Board members under Article Six
of the Plan.
I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the
discretionary option grant program in effect under the Plan.
<PAGE>
J. ELIGIBLE DIRECTOR shall mean a non-employee Board member
eligible to participate in the Automatic Option Grant Program in accordance
with the eligibility provisions of Article One.
K. EMPLOYEE shall mean an individual who is in the employ of
the Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.
L. EXERCISE DATE shall mean the date on which the Corporation
shall have received written notice of the option exercise.
M. FAIR MARKET VALUE per share of Common Stock on any
relevant date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be
deemed equal to the closing selling price per share of Common
Stock on the date in question, as such price is reported on
the Nasdaq National Market or any successor system. If there
is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be deemed equal to
the closing selling price per share of Common Stock on the
date in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(iii) For purposes of any option grants made on the
Underwriting Date, the Fair Market Value shall be deemed to
be equal to the price per share at which the Common Stock is
to be sold in the initial public offering pursuant to the
Underwriting Agreement.
(iv) For purposes of any option grants made prior to the
Underwriting Date, or after the Underwriting Date if the
Common Stock is not at the time traded on the Nasdaq National
Market or any Stock Exchange, the Fair Market Value shall be
determined by the Plan Administrator, after taking into
account such factors as it deems appropriate.
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation's stockholders which the Board does not
recommend such stockholders to accept.
O. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
P. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by such person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner.
<PAGE>
The foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of any Optionee, Participant or other
person in the Service of the Corporation (or any Parent or Subsidiary).
Q. 1934 ACT shall mean the Securities Exchange Act of 1934,
as amended.
R. NON-STATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.
S. OPTIONEE shall mean any person to whom an option is
granted under the Discretionary Option Grant, Salary Investment Option Grant,
Automatic Option Grant or Director Fee Option Grant Program.
T. PARENT shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
U. PARTICIPANT shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program.
V. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean
the inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of
twelve (12) months or more. However, solely for purposes of the Automatic
Option Grant and Director Fee Option Grant Programs, Permanent Disability or
Permanently Disabled shall mean the inability of the non-employee Board member
to perform his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
W. PLAN shall mean the Corporation's 1997 Stock Incentive
Plan, as set forth in this document.
X. PLAN ADMINISTRATOR shall mean the particular entity,
whether the Primary Committee, the Board or the Secondary Committee, which is
authorized to administer the Discretionary Option Grant, Salary Investment
Option Grant and Stock Issuance Programs with respect to one or more classes of
eligible persons, to the extent such entity is carrying out its administrative
functions under those programs with respect to the persons under its
jurisdiction.
Y. PLAN EFFECTIVE DATE shall mean February 26, 1997, the date
on which the Plan was adopted by the Board.
Z. PREDECESSOR PLANS shall mean the Corporation's
pre-existing Incentive Stock Option Plan and Director Stock Option Plan in
effect immediately prior to the Plan Effective Date hereunder.
AA. PRIMARY COMMITTEE shall mean the committee of two (2) or
more non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders and to administer the Salary Investment Option Grant Program with
respect to all eligible individuals.
BB. SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the
salary investment grant program in effect under the Plan.
CC. SECONDARY COMMITTEE shall mean a committee of one (1) or
more Board members appointed by the Board to administer the Discretionary
Option Grant and Stock Issuance Programs with respect to eligible persons other
than Section 16 Insiders.
<PAGE>
DD. SECTION 12 REGISTRATION DATE shall mean the date on
which the Common Stock is first registered under Section 12(g) of Section 16
of the 1934 Act.
EE. SECTION 16 INSIDER shall mean an officer or director of
the Corporation subject to the short-swing profit liabilities of Section 16 of
the 1934 Act.
FF. SERVICE shall mean the performance of services for the
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in
the documents evidencing the option grant or stock issuance.
GG. STOCK EXCHANGE shall mean either the American Stock
Exchange or the New York Stock Exchange.
HH. STOCK ISSUANCE AGREEMENT shall mean the agreement entered
into by the Corporation and the Participant at the time of issuance of shares
of Common Stock under the Stock Issuance Program.
II. STOCK ISSUANCE PROGRAM shall mean the stock issuance
program in effect under the Plan.
JJ. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
KK. TAKE-OVER PRICE shall mean the greater of (i) the Fair
Market Value per share of Common Stock on the date the option is surrendered to
the Corporation in connection with a Hostile Take-Over or (ii) the highest
reported price per share of Common Stock paid by the tender offeror in
effecting such Hostile Take-Over. However, if the surrendered option is an
Incentive Option, the Take-Over Price shall not exceed the clause (i) price per
share.
LL. TAXES shall mean the Federal, state and local income and
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those
options or the vesting of those shares.
MM. 10% STOCKHOLDER shall mean the owner of stock (as
determined under Code Section 424(d)) possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation (or any Parent or Subsidiary).
NN. UNDERWRITING AGREEMENT shall mean the agreement between
the Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
OO. UNDERWRITING DATE shall mean the date on which the
Underwriting Agreement is executed and priced in connection with an initial
public offering of the Common Stock.
<PAGE>
GLOBECOMM SYSTEMS INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE OF THE PLAN
This 1999 Employee Stock Purchase Plan is intended to promote the interests
of Globecomm Systems Inc. by providing eligible employees with the opportunity
to acquire a proprietary interest in the Corporation through participation in a
payroll-deduction based employee stock purchase plan designed to qualify under
Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such terms in
the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and construe
any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares of Common Stock purchased
on the open market. The maximum number of shares of Common Stock which may be
issued over the term of the Plan shall not exceed 400,000 shares.
B. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and class of securities issuable under the Plan,
(ii) the maximum number and class of securities purchasable per Participant on
any one Purchase Date and (iii) the number and class of securities and the price
per share in effect under each outstanding purchase right in order to prevent
the dilution or enlargement of benefits thereunder.
IV. PURCHASE PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive purchase periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
<PAGE>
B. Each purchase period shall have a duration of six (6) months. Purchase
periods shall run from the first business day in January to the last business
day in June each year and from the first business day in July each year to the
last business day in December each year. The first purchase period shall
commence on the Effective Date.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of any
purchase period shall be eligible to participate in the Plan for that purchase
period.
B. To participate in the Plan for a particular purchase period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization form) and file such forms with the Plan Administrator (or its
designate) on or before the start date of the purchase period.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock under the Plan may be any multiple of one
percent (1%) of the Base Salary paid to the Participant during each purchase
period, up to a maximum of ten percent (10%). The deduction rate so authorized
shall continue in effect for the entire purchase period. The Participant may not
increase his or her rate of payroll deduction during a purchase period. However,
the Participant may, at any time during the purchase period, reduce his or her
rate of payroll deduction to become effective as soon as possible after filing
the appropriate form with the Plan Administrator. The Participant may not,
however, effect more than one (1) such reduction per purchase period.
B. Payroll deductions shall begin on the first pay day following the start
date of the purchase period and shall (unless sooner terminated by the
Participant) continue through the pay day ending with or immediately prior to
the last day of the purchase period. The amounts so collected shall be credited
to the Participant's book account under the Plan, but no interest shall be paid
on the balance from time to time outstanding in such account. The amounts
collected from the Participant shall not be held in any segregated account or
trust fund and may be commingled with the general assets of the Corporation and
used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination of the
Participant's purchase right in accordance with the provisions of the Plan.
D. The Participant's acquisition of Common Stock under the Plan on any
Purchase Date shall neither limit nor require the Participant's acquisition of
Common Stock on any subsequent Purchase Date.
2
<PAGE>
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a separate
purchase right on the start date of each purchase period in which he or she
participates. The purchase right shall provide the Participant with the right to
purchase shares of Common Stock on the Purchase Date upon the terms set forth
below. The Participant shall execute a stock purchase agreement embodying such
terms and such other provisions (not inconsistent with the Plan) as the Plan
Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan to
any Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Code Section 424(d)) or hold outstanding options or other
rights to purchase, stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Corporation or any
Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
automatically exercised on the Purchase Date, and shares of Common Stock shall
accordingly be purchased on behalf of each Participant (other than any
Participant whose payroll deductions have previously been refunded in accordance
with the Termination of Purchase Right provisions below) on such date. The
purchase shall be effected by applying the Participant's payroll deductions for
the purchase period ending on such Purchase Date to the purchase of shares of
Common Stock (subject to the limitation on the maximum number of shares
purchasable per Participant on any one Purchase Date) at the purchase price in
effect for that purchase period.
C. PURCHASE PRICE. The purchase price per share at which Common Stock will
be purchased on the Participant's behalf on each Purchase Date shall be equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of
Common Stock on the start date of the purchase period or (ii) the Fair Market
Value per share of Common Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common Stock
purchasable by a Participant on each Purchase Date shall be the number of shares
obtained by dividing the amount collected from the Participant through payroll
deductions during the purchase period ending with that Purchase Date by the
purchase price in effect for that Purchase Date. However, the maximum number of
shares of Common Stock purchasable per Participant on any one Purchase Date
shall not exceed 750 shares, subject to periodic adjustments in the event of
certain changes in the Corporation's capitalization.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to the
purchase of shares of Common Stock on any Purchase Date because they are not
sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on the
Purchase Date shall be promptly refunded.
3
<PAGE>
F. TERMINATION OF PURCHASE RIGHT. The following provisions shall govern the
termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the last day of the
purchase period, terminate his or her outstanding purchase right by filing
the appropriate form with the Plan Administrator (or its designate), and no
further payroll deductions shall be collected from the Participant with
respect to the terminated purchase right. Any payroll deductions collected
during the purchase period in which such termination occurs shall, at the
Participant's election, be promptly refunded or held for the purchase of
shares on the next Purchase Date. If no such election is made at the time
such purchase right is terminated, then the payroll deductions collected
with respect to the terminated right shall be refunded as soon as possible.
(ii) The termination of such purchase right shall be irrevocable, and
the Participant may not subsequently rejoin the purchase period for which
the terminated purchase right was granted. In order to resume participation
in any subsequent purchase period, such individual must re-enroll in the
Plan (by making a timely filing of the prescribed enrollment forms) on or
before the start date of the new purchase period.
(iii) Should the Participant cease to remain an Eligible Employee for
any reason (including death, disability or change in status) while his or
her purchase right remains outstanding, then that purchase right shall
immediately terminate, and all of the Participant's payroll deductions for
the purchase period in which the purchase right so terminates shall be
promptly refunded. However, should the Participant cease to remain in
active service by reason of an approved unpaid leave of absence, then the
Participant shall have the right, exercisable up until the last business
day of the purchase period in which such leave commences, to (a) withdraw
the payroll deductions collected during such purchase period or (b) have
such funds held for the purchase of shares at the next scheduled Purchase
Date. In no event, however, shall any further payroll deductions be
collected on the Participant's behalf during such leave. Upon the
Participant's return to active service (i) within ninety (90) days
following the commencement of such leave or, (ii) prior to the expiration
of any longer period for which such Participant's right to reemployment
with the Corporation is guaranteed by either statute or contract, his or
her payroll deductions under the Plan shall automatically resume at the
rate in effect at the time the leave began. However, should the
Participant's leave of absence exceed ninety (90) days and his or her
re-employment rights not be guaranteed by either statute or contract, then
the Participant's status as an Eligible Employee will be deemed to
terminate on the ninety-first (91st) day of that leave, and such
Participant's purchase right for the purchase period in which that leave
began shall thereupon terminate. An individual who returns to active
employment following such a leave shall be treated as a new Employee for
purposes of the Plan and must, in order to resume
4
<PAGE>
participation in the Plan, re-enroll in the Plan (by making a timely
filing of the prescribed enrollment forms) on or before the start date of
any subsequent purchase period.
G. CORPORATE TRANSACTION. Each outstanding purchase right shall
automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the purchase period in which such Corporate Transaction occurs to the
purchase of shares of Common Stock at a purchase price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of
Common Stock on the start date of the purchase period in which such Corporate
Transaction occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Corporate Transaction. However,
the applicable limitation on the number of shares of Common Stock purchasable
per Participant shall continue to apply to any such purchase.
The Corporation shall use reasonable efforts to provide prior written
notice of the occurrence of any Corporate Transaction, and Participants shall,
following the receipt of such notice, have the right to terminate their
outstanding purchase rights prior to the effective date of the Corporate
Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of
Common Stock which are to be purchased pursuant to outstanding purchase rights
on any particular date exceed the number of shares then available for issuance
under the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
I. ASSIGNABILITY. The purchase right shall be exercisable only by the
Participant and shall not be assignable or transferable by the Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder rights with
respect to the shares subject to his or her outstanding purchase right until the
shares are purchased on the Participant's behalf in accordance with the
provisions of the Plan and the Participant has become a holder of record of the
purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (i) rights to purchase Common Stock
accrued under any other purchase right granted under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within the meaning of
Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise
permit such Participant to purchase more than Twenty-Five Thousand Dollars
($25,000) worth of stock of the Corporation or any Corporate Affiliate
(determined on the basis
5
<PAGE>
of the Fair Market Value of such stock on the date or dates such rights are
granted) for each calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations, the following
provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding purchase
right shall accrue on the Purchase Date in effect for the purchase period
for which such right is granted.
(ii) No right to acquire Common Stock under any outstanding purchase
right shall accrue to the extent the Participant has already accrued in the
same calendar year the right to acquire Common Stock under one (1) or more
other purchase rights at a rate equal to Twenty-Five Thousand Dollars
($25,000) worth of Common Stock (determined on the basis of the Fair Market
Value per share on the date or dates of grant) for each calendar year such
rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular purchase period, then the payroll
deductions which the Participant made during that purchase period with respect
to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on September 23, 1998 and shall become
effective on the Effective Date, provided no purchase rights granted under the
Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Corporation and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock is listed for trading and all other applicable requirements
established by law or regulation. In the event such stockholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect and all sums collected from Participants during
the initial purchase period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate upon the
earliest to occur of (i) the last business day in December 2008, (ii) the date
on which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised
6
<PAGE>
under the Plan or (iii) the date on which all purchase rights are exercised in
connection with a Corporate Transaction. No further purchase rights shall be
granted or exercised, and no further payroll deductions shall be collected,
under the Plan following such termination.
X. AMENDMENT/TERMINATION OF THE PLAN
A. The Board may alter, amend, suspend or terminate the Plan at any time to
become effective immediately following the close of any purchase period.
However, the Plan may be amended or terminated immediately upon Board action, if
and to the extent necessary to assure that the Corporation will not recognize,
for financial reporting purposes, any compensation expense in connection with
the shares of Common Stock offered for purchase under the Plan, should the
financial accounting rules applicable to the Plan at the Effective Time be
subsequently revised so as to require the recognition of compensation expense in
the absence of such amendment or termination.
B. In no event may the Board effect any of the following amendments or
revisions to the Plan without the approval of the Corporation's stockholders:
(i) increase the number of shares of Common Stock issuable under the Plan or the
maximum number of shares purchasable per Participant on any one Purchase Date,
except for permissible adjustments in the event of certain changes in the
Corporation's capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock purchasable
under the Plan or (iii) modify eligibility requirements for participation in the
Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan shall
be paid by the Corporation.
B. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
7
<PAGE>
SCHEDULE A
CORPORATIONS PARTICIPATING IN
1999 EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE DATE
GLOBECOMM SYSTEMS INC.
<PAGE>
APPENDIX
The following definitions shall be in effect under the Plan:
A. BASE SALARY shall mean the regular base salary paid to a Participant by
one or more Participating Companies during such individual's period of
participation in the Plan, plus any pre-tax contributions made by the
Participant to any Code Section 401(k) salary deferral plan or any Code Section
125 cafeteria benefit program now or hereafter established by the Corporation or
any Corporate Affiliate.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE AFFILIATE shall mean any parent or subsidiary corporation of
the Corporation (as determined in accordance with Code Section 424), whether now
existing or subsequently established.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Corporation in complete liquidation or dissolution
of the Corporation.
G. CORPORATION shall mean Globecomm Systems Inc., a Delaware corporation,
and any corporate successor to all or substantially all of the assets or voting
stock of Globecomm Systems Inc. by appropriate action adopt the Plan.
H. EFFECTIVE DATE shall mean January 4, 1999. Any Corporate Affiliate which
becomes a Participating Corporation after such Effective Date shall designate a
subsequent Effective Date with respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
A-1
<PAGE>
J. EMPLOYEE shall mean an individual who is in the employ of the
Corporation or any Corporate Affiliate subject to the control and direction of
the employer entity as to both the work to be performed and the manner and
method of performance.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such price is reported by
the National Association of Securities Dealers on the Nasdaq National
Market or any successor system. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock Exchange determined by
the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
M. PARTICIPANT shall mean any Eligible Employee of a Participating
Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such Corporate
Affiliate or Affiliates as may be authorized from time to time by the Board to
extend the benefits of the Plan to their Eligible Employees. The Participating
Corporations in the Plan as of the Effective Date are listed in attached
Schedule A.
O. PLAN shall mean the Corporation's 1999 Employee Stock Purchase Plan, as
set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or more Board
members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each purchase period.
R. SERVICE shall mean the performance of services to the Corporation or any
Corporate Affiliate by a person in the capacity of an Employee.
S. STOCK EXCHANGE shall mean either the American Stock Exchange or the New
York Stock Exchange.
A-2
<PAGE>
GLOBECOMM SYSTEMS, INC.
EMPLOYEE STOCK PURCHASE PLAN ("ESPP")
ENROLLMENT/CHANGE FORM
- ------------------
SECTION 1: Action Complete Sections:
- ------------------ ------------------------------- ------------------
ACTIONS [ ] New Enrollment 2, 3, 6, 7 and sign
attached Stock
Purchase Agreement
[ ] Payroll Deduction Change 2, 4, 7
[ ] Terminate Payroll Deductions 2, 5, 7
[ ] Beneficiary Change 2, 6, 7
===============================================================================
- ------------------
SECTION 2: Name
- ------------------ ----------------------------------------------------
Last First MI Dept.
PERSONNEL
DATA Home Address
-------------------------------------------
Street
-------------------------------------------
City State Zip Code
Social Security # - -
--- --- --- --- --- --- --- --- ---
===============================================================================
- ------------------
SECTION 3: Effective with the Purchase Payroll Deduction
- ------------------ Interval Beginning: Amount: ____% of base
salary
NEW [ ] January 1,
ENROLLMENT [ ] July 1, * Must be a multiple of
1% up to a maximum of
10% of base salary
===============================================================================
- ------------------
SECTION 4: Effective with the
- ------------------ Pay Period Beginning:
----------------------------------
PAYROLL DEDUCTION
CHANGE
I authorize the following new level of
payroll deduction: ____% of base salary*
* Must be a multiple of 1% up to a maximum of 10% of
base salary
NOTE: You may reduce your rate of payroll deductions
once per purchase period to become effective as
soon as possible following the filing of the
change form.
===============================================================================
- ------------------
SECTION 5:
- ------------------ Effective with the
Pay Period Beginning:
TERMINATE ---------------------------------
PAYROLL Month, Day and Year
DEDUCTIONS
Your election to terminate your payroll deductions for
the balance of the offering period cannot be changed, and
you may not rejoin the purchase period at a later date.
You will not be able to resume participation in the ESPP
prior to the commencement of the next offering period.
In connection with my voluntary termination of payroll
deductions (or an approved leave of absence), I elect the
following action regarding my ESPP payroll deductions to
date in the current purchase interval:
[ ] Purchase shares of Globecomm Systems Inc. on next
scheduled purchase date
OR
[ ] Refund ESPP payroll deductions collected
NOTE: If your employment terminates for any reason or
your eligibility status changes (less than
20 hrs/wk or less than 5 months/yr), you will
immediately cease to participate in the ESPP, and
your ESPP payroll deductions collected in that
purchase interval will automatically be refunded
to you.
===============================================================================
- ------------------
SECTION 6: In connection with my leave of absence, I elect the
- ------------------ following action with respect to my ESPP payroll
deductions to date:
LEAVE OF [ ] Purchase shares of Globecomm Systems Inc. on next
ABSENCE scheduled purchase date
OR
[ ] Refund ESPP payroll deductions collected
NOTE: If you take an unpaid leave of absence, your
payroll deductions will immediately cease. If you return
to active status within 90 days after the start of your
leave, your payroll deductions will at that time
automatically resume at the rate in effect for you when
your leave began.
===============================================================================
- ------------------
SECTION 7:
- ------------------
AUTHORIZATION I HEREBY AUTHORIZE THE SPECIFIC ACTION OR ACTIONS
INDICATED ABOVE.
- ---------------------------- ------------------------------------------
Date Signature of Employee
<PAGE>
GLOBECOMM SYSTEMS INC.
STOCK PURCHASE AGREEMENT
I hereby elect to participate in the Employee Stock Purchase Plan (the
"ESPP") for the purchase period specified below, and I hereby subscribe to
purchase shares of Common Stock of Globecomm Systems Inc. (the "Corporation")
in accordance with the provisions of this Agreement and the ESPP. I hereby
authorize payroll deductions from each of my paychecks during the purchase
period in the 1% multiple of my base salary (not to exceed a maximum of 10%)
specified in my attached Enrollment Form.
Purchase periods under the ESPP will run from the first business day
in January to the last business day in June and from the first business day in
July to the last business day in December of each year. My participation will
automatically remain in effect from one purchase period to the next in
accordance with this Agreement and my payroll deduction authorization, unless I
withdraw from the ESPP or change the rate of my payroll deduction or unless my
employment status changes. I may reduce the rate of my payroll deductions once
per purchase period, and I may increase the rate of my payroll deductions to
become effective at the start of any subsequent purchase period.
My payroll deductions will be accumulated for the purchase of shares
of the Corporation's Common Stock on the last business day of the purchase
period. The purchase price per share will be 85% of the lower of (i) the fair
market value per share of Common Stock on the start date of the purchase period
or (ii) the fair market value per share on the purchase date. I will also be
subject to ESPP restrictions (i) limiting the maximum number of shares which I
may purchase on any one purchase date to 750 shares and (ii) prohibiting me
from purchasing more than U.S.$25,000 worth of Common Stock for each calendar
year my purchase right remains outstanding.
I may withdraw from the ESPP at any time prior to the last business
day of the purchase period and elect either to have the Corporation refund all
my payroll deductions for that period or to have such payroll deductions
applied to the purchase of Common Stock at the end of such period. However, I
may not rejoin that particular purchase period at any later date. Upon the
termination of my employment for any reason, including death or disability, or
my loss of eligible employee status, my participation in the ESPP will
immediately cease and all my payroll deductions for the purchase period in
which my employment terminates or my loss of eligibility occurs will
automatically be refunded.
If I take an unpaid leave of absence, my payroll deductions will
immediately cease, and any payroll deductions for the purchase period in which
my leave begins will, at my election, either be refunded or applied to the
purchase of shares of Common Stock at the end of that purchase period. If my
re-employment is guaranteed by either law or contract or if I return to active
service within ninety (90) days, then upon my return, my payroll deductions
will automatically resume at the rate in effect when my leave began.
A stock certificate for the shares purchased on my behalf at the end
of each purchase period will automatically be deposited into a brokerage
account designated by the Corporation. I will notify the Corporation of any
disposition of shares purchased under the ESPP and I will satisfy all
applicable income and employment tax withholding requirements at the time of
such disposition.
The Corporation has the right, exercisable in its sole discretion, to
amend or terminate the ESPP at any time, with such amendment or termination to
become effective immediately following the exercise of outstanding purchase
rights at the end of any current purchase period. However, such purchase rights
may be amended or terminated effective immediately to the extent necessary to
avoid the Corporation's recognition of compensation expense for financial
reporting purposes, should the accounting principles applicable to the ESPP
change. Should the Corporation elect to terminate the ESPP, I will have no
further rights to purchase shares of Common Stock pursuant to this Agreement.
I have read this Agreement and hereby agree to be bound by the terms
of both this Agreement and the ESPP. The effectiveness of this Agreement is
dependent upon my eligibility to participate in the ESPP.
Date: ____________________ _____ ____________________________________
Signature of Employee
Printed Name: _____________________
