EXHIBIT 4.3
WATSCO, INC.
AMENDED AND RESTATED 1996 QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
TABLE OF CONTENTS
1. Effective Date and Purpose of the Plan
2. Definitions
3. Eligibility
4. Participation
5. Common Stock Available Under the Plan
6. Purchases of Common Stock
7. Investing in the Plan
8. Limitation on Purchases
9. Changing Payroll Deductions
10. Rights as a Shareholder
11. Accounts
12. Delivery of Share Certificates; Restriction on Transfer
13. No Transfer Rights
14. Administration
15. Designation of Beneficiary
16. Selling Stock
17. Shareholder Approval
18. Amendments
19. Termination of Plan
20. Laws and Regulations; Governing Law
21. Employment Termination; Participant Retirement; Death
22. Employment
23. Use of Funds; No Interest Paid
24. Additional Restrictions of Rule 16b-3
25. Adjustments Upon Changes in Capitalization
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WATSCO, INC.
AMENDED AND RESTATED 1996 QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
1. EFFECTIVE DATE AND PURPOSE OF THE PLAN
The effective date of the Watsco, Inc. 1996 Qualified Employee Stock Purchase
Plan (the "Plan") is July 1, 1996. The purpose of the Plan is to encourage
ownership of Watsco, Inc. Common Stock by eligible employees of the Company,
thereby enhancing employee interest in the success and progress of Watsco. The
Plan provides the opportunity to invest in such stock at a discounted price
through payroll deductions or lump-sum cash contributions. The Plan is intended
to comply with Section 423 of the Code.
2. DEFINITIONS
For purposes of the Plan, the following terms used in this document have the
meanings defined below:
"Account" - a separate account maintained by the Custodian for each Participant
which reflects the number of share of Common Stock purchased under the Plan by
each Participant.
"Agent, Custodian and Recordkeeper" - First Union National Bank.
"Business Day" - a day on which there is trading on the New York Stock Exchange.
"Code" - the Internal Revenue Code of 1986, including any amendments.
"Committee" - the Compensation Committee of the Board of Directors of Watsco.
"Common Stock" - Watsco's $.50 par value, Common Stock, presently traded on the
NYSE.
"Company" - Watsco and any of its subsidiaries (within the meaning of Section
424(f) of the Code) whose employees are designated by the Committee as being
Eligible Employees.
"Compensation" - the amount of a Participant's base wages, overtime, commissions
and cash bonuses, before giving effect to any reductions made in connection
with any plans described in Section 401(k) or Section 125 of the Code.
"Eligible Employees" - an employee of the Company who is eligible to participate
in the Plan in accordance with Section 3.
"Entry Date" - the first Business Day of each Purchase Period.
"Exchange Act" - The Securities Exchange Act of 1934, as amended.
"Fair Market Value" - the value of a share of Common Stock on any Business Day
shall be the closing price of the Common Stock as published in the NYSE listing
for such day; in the event such prices are not published, the Fair Market Value
shall be the most recent published price available.
"NYSE" - the New York Stock Exchange.
"Participant" - each Eligible Employee who has elected to have amounts deducted
from his or her Compensation to participate in this Employee Stock Purchase
Plan.
"Purchase Date" - the first Business Day after the month end of each Purchase
Period on which it is administratively possible to execute the purchase, but no
more than five business days after the end of each Purchase Period.
"Purchase Period" - each of the three month periods ending on the last day of
March, June, September and December. The initial Purchase Period of the Plan
shall begin on July 1, 1996 and end on September 30, 1996.
"Purchase Price" - the lesser of: the Fair Market Value of a share of Common
Stock on the Entry Date, less 15%; or the Fair Market Value of a share of
Common Stock on the Purchase Date, less 15%.
"Watsco" - Watsco, Inc., a Florida corporation.
3. ELIGIBILITY
Employees are eligible to participate in the Plan if, at the beginning of the
Purchase Period, the employee has completed 90 days of continuous employment and
is regularly scheduled to work at least 20 hours per week and more than 5 months
per year. No employee shall be eligible to participate in the Plan if,
immediately after the Entry Date, the employee (or any other person whose stock
would be attributed to the employee pursuant to Section 424(d) of the Code)
would own stock and/or options to purchase stock possessing 5% or more of the
total combined voting power or value of all classes of stock of Watsco or any
parent company or subsidiaries thereof.
4. PARTICIPATION
Participation in the Plan is voluntary. An eligible employee may elect to
participate by completing an enrollment form and returning it to the payroll
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department of each subsidiary. The payroll deductions will start at the
beginning of the next Purchase Period. The completed enrollment form must be
received by the payroll department no later than 15 days prior to the beginning
of a Purchase Period.
Purchase Periods begin on January 1, April 1, July 1 and October 1 of each year.
The Committee shall have the power to change the duration of the Purchase Period
with respect to any future Purchase Period without shareholder approval if such
change is announced at least fifteen (15) days prior to the scheduled beginning
of the first Purchase Period to be affected. So long as the Plan remains in
effect, once an employee enrolls, he/she will automatically continue
participation in subsequent Purchase Periods on the same basis, unless he/she
elects to change deduction amounts, withdraws or becomes ineligible.
5. COMMON STOCK AVAILABLE UNDER THE PLAN
The maximum number of shares of Common Stock which may be purchased under the
Plan is 800,000, subject to adjustment in the event of any capital change by
reason of any stock dividend or split, recapitalization, merger in which Watsco
is the surviving entity, combination or exchange of shares or similar corporate
change. In such an event, the number and type of shares of Watsco which
Participants may purchase under the Plan, and the maximum number of shares which
may be purchased under the Plan, will be adjusted, as appropriate, by the Board
of Directors described in Section 25.
6. PURCHASES OF COMMON STOCK
On the Purchase Date for each Purchase Period, whole and fractional shares will
be purchased for each Participant with the accumulated Participant payroll
deductions and/or with any additional lump-sum amounts contributed by the
Eligible Employee. The Purchase Price is equal to the lesser of 85% of the Fair
Market Value of a share of Common Stock on the Entry Date, or 85% of the Fair
Market Value of a share of Common Stock on the Purchase Date of the Purchase
Period. Additionally, commission charges relating to the purchase of Common
Stock under the Plan will be paid by the Company.
7. INVESTING IN THE PLAN
Plan elections for payroll deductions or lump-sum cash contributions must be
made in whole dollar amounts. The minimum dollar amount is $10.00 per payroll
period for employees that are paid weekly and $20.00 per pay period for
employees that are paid either bi-weekly or semi-monthly. If an employee elects
to make a lump-sum contribution, the minimum cash payment is $100 per Purchase
Period.
8. LIMITATION ON PURCHASES
The Fair Market Value of Common Stock that a Participant has the right to
Purchase under the Plan cannot exceed $25,000 in one calendar year. This
limitation is based on calculating the Fair Market Value at the beginning of
each Purchase Period.
9. CHANGING PAYROLL DEDUCTIONS
A Participant's elected payroll deduction may be increased or decreased
effective with the next Purchase Period. The form must be received by the
payroll department no later than 15 days prior to the next Purchase Period.
Changes will not become effective during a Purchase Period. Participants may,
however, cease deductions during a Purchase Period. If a Participant ceases
deductions during a Purchase Period, the deductions already taken will be
refunded to the Participant as soon as practicable. The Participant would not be
eligible to participate again until the Purchase Period after the one in which
he/she withdrew. In order to rejoin the Plan, a new enrollment form must be
submitted.
10. RIGHTS AS A SHAREHOLDER
From the initial Purchase Date of shares of Common Stock and thereafter (unless
and until the Participant sells the Common Stock), the Participant shall have
all the rights and privileges of a stockholder of Watsco with respect to the
shares of Common Stock purchased by the Participant. Proxy information will be
provided for each stockholders' meeting, so that each Participant may have
his/her full and fractional shares voted in accordance with their instructions.
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11. ACCOUNTS
First Union National Bank has been appointed Custodian for the Plan. The
Custodian will maintain an Account for each Participant. A statement or
confirmation will be issued following the purchase of shares of Common Stock,
which will include the number of full or fractional shares (rounded to three
decimal places) purchased for the Participant at the end of each Purchase
Period, the total number of shares owned by the Participant under the Plan and
the cost per share.
12. DELIVERY OF SHARE CERTIFICATES; RESTRICTION ON TRANSFER
As soon as practicable after each Purchase Date, the Custodian shall issue a
certificate representing the total number of whole shares of Common Stock for
aggregate exercised options of all of the Participants hereunder and shall hold
and maintain such certificate in safekeeping for the benefit of each
Participant. Any remaining amount, representing a fractional share that may not
be certificated shall be carried forward to the next date of exercise for
certification as a part of a whole share.
Except as hereinafter provided, for a period of 12 months after each Entry Date
in which the Participant purchases stock (the "Restriction Period"), the shares
of Common Stock issued may not be sold, transferred or disposed of by the
Participant other than upon death by will or the laws of descent and
distribution or to immediate family members or trusts established for their
benefit.
Such restriction shall not apply to the transfer of such shares pursuant to a
plan of reorganization of the Company, but the stock, securities or other
property received in exchange therefore shall also become subject to the same
transfer restrictions applicable to the original shares of Common Stock, and
shall be held by the Custodian pursuant to the provisions hereof.
Upon expiration of the Restriction Period, the transfer restrictions shall cease
to apply and the Participant may direct the sale of some or all of the whole
shares of Common Stock in his/her Account that are not then subject to transfer
restrictions.
13. NO TRANSFER RIGHTS
The rights granted under this Plan may not be assigned or transferred under any
circumstances other than by will or the laws of descent and distribution, and
are exercisable during a Participant's lifetime only by the Participant.
14. ADMINISTRATION
The Plan is administered by the Committee. The members of the Committee are not
eligible to participate in the Plan. The Committee has the authority to
interpret the Plan and to establish rules and regulations for its
administration, and the decisions and interpretations by the Committee shall be
final, conclusive and binding upon all Participants. The Committee has the
authority to delegate the day-to-day administration of the Plan.
15. DESIGNATION OF BENEFICIARY
A Participant may file a written designation of a beneficiary who is to receive
any shares and cash in the Participant's Account, as well as any uninvested
cash, if any, in the event of such Participant's death. A Participant's
beneficiary designation may be changed by the Participant at any time by written
notice. In the event of the death of a Participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
Participant's death, the Company shall deliver such shares and/or cash to the
executor of the Participant's estate, or if no such executor or administrator
has been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or
more dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.
16. SELLING STOCK
The Plan is intended to provide Participants with an ownership interest in
Watsco as an investment. However, once the Restriction Period described in
Section 12 has elapsed, Participants may sell shares of Common Stock purchased
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under the Plan by completing and submitting the appropriate form to the payroll
department. Participants will be responsible for payment of a commission equal
to 5 cents per share of Common Stock sold.
Restrictions may apply to the sale of shares of Common Stock by certain officers
of the Company and those having similar responsibilities, who are subject to the
SEC insider reporting and short-swing profit rules.
17. SHAREHOLDER APPROVAL
The Plan shall become effective on July 1, 1996, subject to approval by the
shareholders of Watsco in accordance with applicable law and the requirements of
Section 423 of the Code. Participation in the Plan may commence on the effective
date, prior to receipt of shareholder approval, provided that, if shareholder
approval is not received, no shares of Common Stock shall be purchased under the
Plan until Participants are advised of SEC rules regarding the purchase of
shares. Participants would have the option to remain in the Plan or have
deducted amounts returned. In addition, to the extent necessary to comply with
Rule 16b-3 of the Exchange Act or under Section 423 of the Code or other
applicable law, the Committee shall obtain approval of the shareholders of
Watsco of any Plan or any Plan amendment in such a manner and to such a degree
as required.
18. AMENDMENTS
The Committee may at any time, or from time to time, amend the Plan in any
respect, except that, without approval of the shareholders of Watsco, no
amendment may be made (a) increasing the number of shares which may be purchased
under the Plan (other than provided in Section 5 herein), (b) materially
increasing the benefits accruing to Participants, or (c) materially modifying
the requirements as to eligibility for participation in the Plan.
19. TERMINATION OF THE PLAN
The Plan and all rights hereunder shall terminate on the earliest of:
- the date on which the maximum number of shares of Common Stock
available for purchase under the Plan has been purchased;
- the termination of the Plan by the Committee;
- the effective date of any consolidation or merger in which Watsco is
not the surviving entity, any exchange or conversion of outstanding
shares of Watsco for or into securities of another entity or other
consideration, or any complete liquidation of Watsco.
Upon termination of the Plan, any full shares in the Participant's account
together with a cash amount for any fractional shares shall be delivered by the
Custodian to the Participant or his/her legal representative as soon as
practicable following such termination.
20. LAWS AND REGULATIONS; GOVERNING LAW
Notwithstanding any other provision of the Plan, the rights of Participants to
purchase Common Stock hereunder shall be subject to all applicable Federal,
state, and foreign laws, rules and regulations and the rules of each stock
exchange upon which the Common Stock is from time to time listed.
As a condition to issuing any shares, the Company may require the Participant to
represent and warrant at the time of any such issuance that the shares are being
purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned applicable provisions of
law.
The Company may make such provisions as it deems appropriate for withholding by
the Company pursuant to federal or state tax laws of such amounts as the Company
determines it is required to withhold in connection with the purchase or sale by
a Participant of any Common Stock acquired pursuant to the Plan. The Company may
require a Participant to satisfy any relevant tax requirements before
authorizing any issuance of Common Stock to such Participant.
The Plan and purchase of Common Stock hereunder shall be subject to additional
rules and regulations, not inconsistent with the Plan, that may be promulgated
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from time to time by the Committee regarding the purchases and sales of Common
Stock.
The validity, construction and effect of the Plan and any rules and regulations
relating to the Plan will be determined in accordance with the laws of the State
of Florida, without giving effect to principles of conflicts of laws, and
applicable Federal law.
21. EMPLOYMENT TERMINATION; PARTICIPANT RETIREMENT; DEATH
Disposition of Account Upon Termination of Employment Other Than Retirement or
Death- If the employment of a Participant terminates for any reason other than
retirement or death, his/her participation in the Plan terminates automatically
as of the date of the termination of employment. The Company shall promptly
refund the amount of any uninvested amounts held under the Plan. In addition,
upon termination of employment, for Participants with fewer than 100 restricted
shares in his/her account, the Custodian, as soon as is practicable following
notification, shall sell all whole shares of Common Stock in the Participant's
Account and any fractional shares shall also be converted into cash. Such
proceeds (less commissions and/or service charges) upon sale of the whole shares
together with the cash from the conversion of such fractional shares shall be
delivered to the Participant. For participants with 100 shares or greater in
his/her Account, the Participant may elect to request that the Custodian issue a
share certificate for some or all of such shares in the Account, or, for shares
that are not then subject to the Restriction Period set forth in Section 12, may
request that such shares be sold. Such disposition of shares shall not apply to
Participants that are subject to Rule 16b-3 requirements; such participants may
obtain certificates for any whole shares held in his/her Account upon
notification to the Custodian.
Disposition of Shares Upon Termination by Retirement - A Participant may, upon
attainment of age 65 and retirement from the Company, by written notice to the
Company, request a certificate for any whole shares held in the Account. Unless
such a request is received upon notification of retirement, the shares will be
subject to sale upon termination of employment as described above.
Disposition of Shares Upon Death- Upon the death of the Participant, shares will
be disposed of in accordance with Section 15.
22. EMPLOYMENT
The Plan shall not confer any rights of continued employment upon any employee
of the Company.
23. USE OF FUNDS; NO INTEREST PAID
All funds received by the Company under the Plan shall be included in the
general funds of the Company and may be used for any corporate purpose. No
interest shall be paid to any Participant or credited to his/her account under
the Plan.
24. ADDITIONAL RESTRICTIONS OF RULE 16B-3
Persons subject to Section 16 of the Exchange Act shall comply with the
applicable provisions of Rule 16b-3 of the Exchange Act or any successor
provision. This Plan shall be deemed to contain such additional conditions and
restrictions as may be required by Rule 16b-3 to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan transactions.
In the event that Rule 16b-3 provides specific requirements for the
administrators of plans of this type, the Plan shall only be administered by
such body and in such a manner as to comply with the applicable requirements of
Rule 16b-3. Unless permitted by Rule 16b-3, no discretion concerning decisions
regarding the Plan shall be afforded to any Committee or person that is not
"disinterested" as that term is used in Rule 16b-3.
25. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Subject to any required action by the stockholders of Watsco, the number of
shares of Common Stock issued pursuant to the Plan and the number of shares of
Common Stock which have been authorized but are unissued under the Plan
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(collectively, the "Reserves"), as well as the price per share of Common Stock
at which such shares may be purchased, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination, or
reclassification of the Common Stock, or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
Watsco; provided, however, that conversion of any convertible securities of
Watsco shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issue by Watsco of shares of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject the Plan.
In the event of the proposed dissolution or liquidation of Watsco, the Purchase
Period will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Committee. In the event of a proposed
sale of all or substantially all of the assets of Watsco, or the merger of
Watsco with or into another corporation, shares under the Plan shall be assumed
or an equivalent share shall be assumed or substituted by such successor
corporation or a parent or subsidiary of such successor corporation.
The Committee may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that Watsco
effects one or more reorganizations, recapitalization, rights offerings or other
increases or reductions of shares of its outstanding Common Stock, and in the
event of Watsco being consolidated with or merged into any other corporation.
