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EXHIBIT 10.11
RESOURCES CONNECTION, INC.
EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the Resources Connection, Inc.
Employee Stock Purchase Plan (the "Plan").
1. PURPOSE
The purpose of this Plan is to assist Eligible Employees in acquiring a
stock ownership interest in the Corporation, at a favorable price and upon
favorable terms, pursuant to a plan which is intended to qualify as an
"employee stock purchase plan" under Section 423 of the Code. This Plan is
also intended to encourage Eligible Employees to remain in the employ of
the Corporation (or a Subsidiary which may be designated by the Committee
as "Participating Subsidiary") and to provide them with an additional
incentive to advance the best interests of the Corporation.
2. DEFINITIONS
Capitalized terms used herein which are not otherwise defined shall have
the following meanings.
"Account" means the bookkeeping account maintained by the Corporation,
or by a recordkeeper on behalf of the Corporation, for a Participant
pursuant to Section 7(a).
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the committee appointed by the Board to administer
this Plan pursuant to Section 12.
"Common Stock" means the Common Stock, par value $.01 per share, of
the Corporation, and such other securities or property as may become
the subject of Options pursuant to an adjustment made under Section
17.
"Company" means, collectively, the Corporation, its Parent and its
Subsidiaries (if any).
"Compensation" means an Eligible Employee's regular gross pay.
Compensation includes any amounts contributed as salary reduction
contributions to a plan qualifying under Section 401(k), 125 or 129 of
the Code. Any other form of remuneration is excluded from
Compensation, including (but not limited to) the following: overtime
payments, commissions, prizes, awards, relocation or housing
allowances, stock option exercises, stock appreciation rights,
restricted stock exercises, performance awards, auto allowances,
tuition reimbursement and other forms of imputed income, bonuses,
incentive compensation, special
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payments, fees and allowances. Notwithstanding the foregoing,
Compensation shall not include any amounts deferred under or paid from
any nonqualified deferred compensation plan maintained by the Company.
"Contributions" means all bookkeeping amounts credited to the Account
of a Participant pursuant to Section 7(a).
"Corporation" means Resources Connection, Inc., a Delaware
corporation, and its successors.
"Effective Date" means October 17, 2000, the date this Plan was
adopted by the Board.
"Eligible Employee" means any employee of the Corporation, or of any
Subsidiary which has been designated in writing by the Committee as a
"Participating Subsidiary" (including any Subsidiaries which have
become such after the date that this Plan is approved by the
stockholders of the Corporation). Notwithstanding the foregoing,
"Eligible Employee" shall not include any employee:
(a) who has been employed by the Corporation or a Subsidiary for less
than 90 days;
(b) whose customary employment is for 10 hours or less per week; or
(c) whose customary employment is for not more than five months in a
calendar year.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Exercise Date" means, with respect to an Offering Period, the last
day of that Offering Period.
"Fair Market Value" on any date means:
(a) if the Common Stock is listed or admitted to trade on a national
securities exchange, the closing price of a Share on the
Composite Tape, as published in the Western Edition of The Wall
Street Journal, of the principal national securities exchange on
which such stock is so listed or admitted to trade, on such date,
or, if there is no trading of the Common Stock on such date, then
the closing price of a Share as quoted on such Composite Tape on
the next preceding date on which there was trading in the Shares;
(b) if the Common Stock is not listed or admitted to trade on a
national securities exchange, the last/closing price for a Share
on such date, as furnished by the National Association of
Securities Dealers, Inc.
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("NASD") through the NASDAQ National Market Reporting System or a
similar organization if the NASD is no longer reporting such
information;
(c) if the Common Stock is not listed or admitted to trade on a
national securities exchange and is not reported on the National
Market Reporting System, the mean between the bid and asked price
for a Share on such date, as furnished by the NASD or a similar
organization; or
(d) if the Common Stock is not listed or admitted to trade on a
national securities exchange, is not reported on the National
Market Reporting System and if bid and asked prices for the
Common Stock are not furnished by the NASD or a similar
organization, the value as established by the Committee at such
time for purposes of this Plan.
"Grant Date" means the first day of each Offering Period, as
determined by the Committee and announced to potential Eligible
Employees.
"Offering Period" means the six-consecutive month period commencing on
each Grant Date; provided, however, that the Committee may declare, as
it deems appropriate and in advance of the applicable Offering Period,
a shorter (not to be less than three months) Offering Period or a
longer (not to exceed 27 months) Offering Period; provided further
that the Grant Date for an Offering Period may not occur on or before
the Exercise Date for the immediately preceding Offering Period.
"Option" means the stock option to acquire Shares granted to a
Participant pursuant to Section 8.
"Option Price" means the per share exercise price of an Option as
determined in accordance with Section 8(b).
"Parent" means any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation in which
each corporation (other than the Corporation) owns stock possessing
50% or more of the total combined voting power of all classes of stock
in one or more of the other corporations in the chain.
"Participant" means an Eligible Employee who has elected to
participate in this Plan and who has filed a valid and effective
Subscription Agreement to make Contributions pursuant to Section 6.
"Plan" means this Resources Connection, Inc. Employee Stock Purchase
Plan, as amended from time to time.
"Rule 16b-3" means Rule 16b-3 as promulgated by the Commission under
Section 16, as amended from time to time.
"Share" means a share of Common Stock.
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"Subscription Agreement" means the written agreement filed by an
Eligible Employee with the Corporation pursuant to Section 6 to
participate in this Plan.
"Subsidiary" means any corporation (other than the Corporation) in an
unbroken chain of corporations (beginning with the Corporation) in
which each corporation (other than the last corporation) owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one or more of the other corporations in the
chain.
3. ELIGIBILITY
Any person employed as an Eligible Employee as of a Grant Date shall be
eligible to participate in this Plan during the Offering Period in which
such Grant Date occurs, subject to the Eligible Employee satisfying the
requirements of Section 6.
4. STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS
(a) Subject to the provisions of Section 17, the capital stock that may be
delivered under this Plan will be shares of the Corporation's
authorized but unissued Common Stock and any of its shares of Common
Stock held as treasury shares. The maximum number of Shares that may
be delivered pursuant to Options granted under this Plan is 1,200,000
Shares, subject to adjustments pursuant to Section 17.
In the event that all of the Shares made available under this Plan are
subscribed prior to the expiration of this Plan, this Plan shall
terminate at the end of that Offering Period and the Shares available
shall be allocated for purchase by Participants in that Offering
Period on a pro-rata basis determined with respect to Participants'
Account balances.
(b) The maximum number of Shares that any one individual may acquire upon
exercise of his or her Option with respect to any one Offering Period
is 3,000, subject to adjustments pursuant to Section 17 (the
"Individual Limit"); provided, however, that the Committee may amend
such Individual Limit, effective no earlier than the first Offering
Period commencing after the adoption of such amendment, without
stockholder approval. The Individual Limit shall be proportionately
adjusted for any Offering Period of less than twelve months, and may,
at the discretion of the Committee, be proportionately increased for
any Offering Period of greater than twelve months.
5. OFFERING PERIODS
During the term of this Plan, the Corporation will offer Options to
purchase Shares in each Offering Period to all Participants in that
Offering Period. Unless otherwise specified by the Committee in advance of
the Offering Period, an Offering Period that commences on or about July 1
will end the following December 31 and an Offering Period that commences on
or about January 1 will end the following June 30. Each Option shall
become effective on the Grant Date. The term of each Option shall be the
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duration of the related Offering Period and shall end on the Exercise Date.
The first Offering Period shall commence no earlier than the Effective
Date. Offering Periods shall continue until this Plan is terminated in
accordance with Section 18 or 19, or, if earlier, until no Shares remain
available for Options pursuant to Section 4.
6. PARTICIPATION
(a) An Eligible Employee may become a participant in this Plan by
completing a Subscription Agreement on a form approved by and in a
manner prescribed by the Committee (or its delegate). To become
effective, a Subscription Agreement must be signed by the Eligible
Person and filed with the Corporation at the time specified by the
Committee, but in all cases prior to the start of the Offering Period
with respect to which it is to become effective, and must set forth a
whole percentage (or, if the Committee so provides, a stated amount)
of the Eligible Employee's Compensation to be credited to the
Participant's Account as Contributions each pay period.
(b) Notwithstanding the foregoing, a Participant's Contribution election
shall be subject to the following limitations:
(i) the $25,000 annual limitation set forth in Section 8(c);
(ii) a Participant may not elect to contribute more than fifteen
percent (15%) of his or her Compensation each pay period as Plan
Contributions; and
(iii) such other limits, rules, or procedures as the Committee may
prescribe.
(c) Subscription Agreements shall contain the Eligible Employee's
authorization and consent to the Corporation's withholding from his or
her Compensation the amount of his or her Contributions. An Eligible
Employee's Subscription Agreement, and his or her participation
election and withholding consent thereon, shall remain valid for all
Offering Periods until (i) the Eligible Employee's participation
terminates pursuant to the terms hereof, (ii) the Eligible Employee
files a new Subscription Agreement that becomes effective, or (iii)
the Committee requires that a new Subscription Agreement be executed
and filed with the Corporation.
7. METHOD OF PAYMENT OF CONTRIBUTIONS
(a) The Corporation shall maintain on its books, or cause to be maintained
by a recordkeeper, an Account in the name of each Participant. The
percentage of Compensation elected to be applied as Contributions by a
Participant shall be deducted from such Participant's Compensation on
each payday during the period for payroll deductions set forth below
and such payroll deductions shall be credited to that Participant's
Account as soon as administratively practicable after such date. A
Participant may not make any additional payments to his or her
Account. A Participant's Account shall be reduced by any amounts used
to pay
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the Option Price of Shares acquired, or by any other amounts
distributed pursuant to the terms hereof.
(b) Payroll deductions with respect to an Offering Period shall commence
as of the first day of the payroll period which coincides with or
immediately follows the applicable Grant Date and shall end on the
last day of the payroll period which coincides with or immediately
precedes the applicable Exercise Date, unless sooner terminated by the
Participant as provided in this Section 7 or until his or her Plan
participation terminates pursuant to Section 11.
(c) A Participant may terminate his or her Contributions during an
Offering Period (and receive a distribution of the balance of his or
her Account in accordance with Section 11) by completing and filing
with the Corporation, in such form and on such terms as the Committee
(or its delegate) may prescribe, a written withdrawal form which shall
be signed by the Participant. Such termination shall be effective as
soon as administratively practicable after its receipt by the
Corporation. A withdrawal election pursuant to this Section 7(c) with
respect to an Offering Period shall only be effective, however, if it
is received by the Corporation prior to the Exercise Date of that
Offering Period. Partial withdrawals of Accounts, and other
modifications or suspensions of Subscription Agreements, except as
provided in Section 7(e) or 7(f), are not permitted.
(d) During leaves of absence approved by the Corporation and meeting the
requirements of Regulation Section 1.421-7(h)(2) under the Code, a
Participant may continue participation in this Plan by cash payments
to the Corporation on his normal paydays equal to the reduction in his
Plan Contributions caused by his leave.
(e) A Participant may discontinue, increase, or decrease the level of his
or her Contributions (within Plan limits) by completing and filing
with the Corporation, on such terms as the Committee (or its delegate)
may prescribe, a new Subscription Agreement which indicates such
election. Subject to any additional timing requirements that the
Committee may impose, an election pursuant to this Section 7(e) shall
be effective with the first Offering Period that commences after the
Corporation's receipt of such election.
(f) A Participant may discontinue (but not increase or otherwise decrease)
the level of his or her Contributions, by filing with the Corporation,
on such terms as the Committee (or its delegate) may prescribe, a new
Subscription Agreement which indicates such election. An election
pursuant to this Section 7(f) shall be effective no earlier than the
first payroll period that starts after the Corporation's receipt of
such election.
8. GRANT OF OPTION
(a) On each Grant Date, each Eligible Employee who is a participant during
that Offering Period shall be granted an Option to purchase a number
of Shares. The
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Option shall be exercised on the Exercise Date. The number of Shares
subject to the Option shall be determined by dividing the
Participant's Account balance as of the applicable Exercise Date by
the Option Price.
(b) The Option Price per Share of the Shares subject to an Option for an
Offering Period shall be the lesser of: (i) 85% of the Fair Market
Value of a Share on the applicable Grant Date; or (ii) 85% of the Fair
Market Value of a Share on the applicable Exercise Date.
(c) Notwithstanding anything else contained herein, a person who is
otherwise an Eligible Employee shall not be granted any Option (or any
Option granted shall be subject to compliance with the following
limitations) or other right to purchase Shares under this Plan to the
extent:
(i) it would, if exercised, cause the person to own "stock" (as such
term is defined for purposes of Section 423(b)(3) of the Code)
possessing 5% or more of the total combined voting power or value
of all classes of stock of the Corporation, or of any Parent, or
of any Subsidiary; or
(ii) such Option causes such individual to have rights to purchase
stock under this Plan and any other plan of the Corporation, any
Parent, or any Subsidiary which is qualified under Section 423 of
the Code which accrue at a rate which exceeds $25,000 of the fair
market value of the stock of the Corporation, of any Parent, or
of any Subsidiary (determined at the time the right to purchase
such Stock is granted, before giving effect to any discounted
purchase price under any such plan) for each calendar year in
which such right is outstanding at any time.
For purposes of the foregoing, a right to purchase stock accrues when
it first become exercisable during the calendar year. In determining
whether the stock ownership of an Eligible Employee equals or exceeds
the 5% limit set forth above, the rules of Section 424(d) of the Code
(relating to attribution of stock ownership) shall apply, and stock
which the Eligible Employee may purchase under outstanding options
shall be treated as stock owned by the Eligible Employee.
9. EXERCISE OF OPTION
Unless a Participant's Plan participation is terminated as provided in
Section 11, his or her Option for the purchase of Shares shall be exercised
automatically on the Exercise Date for that Offering Period, without any
further action on the Participant's part, and the maximum number of whole
Shares subject to such Option (subject to the Individual Limit set forth in
Section 4(b) and the limitations contained in Section 8(c)) shall be
purchased at the Option Price with the balance of such Participant's
Account.
If any amount which is not sufficient to purchase a whole Share remains in
a Participant's Account after the exercise of his or her Option on the
Exercise Date: (i) such amount shall be credited to such Participant's
Account for the next Offering Period, if he or she is
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then a Participant; or (ii) if such Participant is not a Participant in the
next Offering Period, or if the Committee so elects, such amount shall be
refunded to such Participant as soon as administratively practicable after
such date.
If the Share limit of Section 4(a) is reached, any amount that remains in a
Participant's Account after the exercise of his or her Option on the
Exercise Date to purchase the number of Shares that he or she is allocated
shall be refunded to the Participant as soon as administratively
practicable after such date.
If any amount which exceeds the Individual Limit set forth in Section 4(b)
or one of the limitations set forth in Section 8(c) remains in a
Participant's Account after the exercise of his or her Option on the
Exercise Date, such amount shall be refunded to the Participant as soon as
administratively practicable after such date.
10. DELIVERY
As soon as administratively practicable after the Exercise Date, the
Corporation shall deliver to each Participant a certificate representing
the Shares purchased upon exercise of his or her Option. The Corporation
may make available an alternative arrangement for delivery of Shares to a
recordkeeping service. The Committee (or its delegate), in its discretion,
may either require or permit Participants to elect that such certificates
representing the Shares purchased or to be purchased under the Plan be
delivered to such recordkeeping service. In the event the Corporation is
required to obtain from any commission or agency authority to issue any
such certificate, the Corporation will seek to obtain such authority. If
the Corporation is unable to obtain from any such commission or agency
authority which counsel for the Corporation deems necessary for the lawful
issuance of any such certificate, or if for any other reason the
Corporation can not issue or deliver Shares and satisfy Section 21, the
Corporation shall be relieved from liability to any Participant except that
the Corporation shall return to each Participant the amount of the balance
credited to his or her Account.
11. TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS
(a) Except as provided in the next paragraph, if a Participant ceases to
be an Eligible Employee for any reason, or if the Participant elects
to terminate Contributions pursuant to Section 7(c), at any time prior
to the last day of an Offering Period in which he or she participates,
such Participant's Account shall be paid to him or her or in cash (or,
in the event of the Participant's death, to the person or persons
entitled thereto under Section 13 in cash), and such Participant's
Option and participation in the Plan shall be automatically
terminated.
If a Participant (i) ceases to be an Eligible Employee during an
Offering Period but remains an employee of the Company through the
Exercise Date, or (ii) during an Offering Period commences a sick
leave, military leave, or other leave of absence approved by the
Company, and the leave meets the requirements of Treasury Regulation
Section 1.421-7(h)(2) and the Participant is an employee of the
Company or on such leave as of the applicable Exercise Date, such
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Participant's Contributions shall cease (subject to Section 7(d)), and
the Contributions previously credited to the Participant's Account for
that Offering Period shall be used to exercise the Participant's
Option as of the applicable Exercise Date in accordance with Section 9
(unless the Participant makes a timely election to terminate
Contributions in accordance with Section 7(c), in which case such
Participant's Account shall be paid to him or her in cash in
accordance with the foregoing paragraph).
(b) A Participant's termination from Plan participation precludes the
Participant from again participating in this Plan during that Offering
Period. However, such termination shall not have any effect upon his
or her ability to participate in any succeeding Offering Period,
provided that the applicable eligibility and participation
requirements are again then met. A Participant's termination from Plan
participation shall be deemed to be a revocation of that Participant's
Subscription Agreement and such Participant must file a new
Subscription Agreement to resume Plan participation in any succeeding
Offering Period.
(c) For purposes of this Plan, if a Participating Subsidiary ceases to be
a Subsidiary, each person employed by that Subsidiary will be deemed
to have terminated employment for purposes of this Plan and will no
longer be an Eligible Employee, unless the person continues as an
Eligible Employee in respect of another Company entity.
12. ADMINISTRATION
(a) The Board shall appoint the Committee, which shall be composed of not
less than two members of the Board. Each member of the Committee, in
respect of any transaction at a time when an affected Participant may
be subject to Section 16 of the Exchange Act, shall be a "non-employee
director" within the meaning of Rule 16b-3. The Board may, at any
time, increase or decrease the number of members of the Committee, may
remove from membership on the Committee all or any portion of its
members, and may appoint such person or persons as it desires to fill
any vacancy existing on the Committee, whether caused by removal,
resignation, or otherwise. The Board may also, at any time, assume or
change the administration of this Plan.
(b) The Committee shall supervise and administer this Plan and shall have
full power and discretion to adopt, amend and rescind any rules deemed
desirable and appropriate for the administration of this Plan and not
inconsistent with the terms of this Plan, and to make all other
determinations necessary or advisable for the administration of this
Plan. The Committee shall act by majority vote or by unanimous written
consent. No member of the Committee shall be entitled to act on or
decide any matter relating solely to himself or herself or solely to
any of his or her rights or benefits under this Plan. The Committee
shall have full power and discretionary authority to construe and
interpret the terms and conditions of this Plan, which construction or
interpretation shall be final and binding on all parties including the
Company, Participants and beneficiaries. The Committee may
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delegate ministerial non-discretionary functions to third parties,
including individuals who are officers or employees of the
Corporation.
(c) Subject only to compliance with the express provisions hereof, the
Board and Committee may act in their absolute discretion in matters
within their authority related to this Plan. Any action taken by, or
inaction of, the Corporation, any Participating Subsidiary, the Board
or the Committee relating or pursuant to this Plan shall be within the
absolute discretion of that entity or body and will be conclusive and
binding upon all persons. In making any determination or in taking or
not taking any action under this Plan, the Board or Committee, as the
case may be, may obtain and may rely on the advice of experts,
including professional advisors to the Corporation. No member of the
Board or Committee, or officer or agent of the Company, will be liable
for any action, omission or decision under the Plan taken, made or
omitted in good faith.
13. DESIGNATION OF BENEFICIARY
(a) A Participant may file, on a form and in a manner prescribed by the
Committee (or its delegate), a written designation of a beneficiary
who is to receive any Shares or cash from such Participant's Account
under this Plan in the event of such Participant's death. If a
Participant's death occurs subsequent to the end of an Offering Period
but prior to the delivery to him or her of any Shares deliverable
under the terms of this Plan, such Shares and any remaining balance of
such Participant's Account shall be paid to such beneficiary (or such
other person as set forth in Section 13(b)) as soon as
administratively practicable after the Corporation receives notice of
such Participant's death and any outstanding unexercised Option shall
terminate. If a Participant's death occurs at any other time, the
balance of such Participant's Account shall be paid to such
beneficiary (or such other person as set forth in Section 13(b)) in
cash as soon as administratively practicable after the Corporation
receives notice of such Participant's death and such Participant's
Option shall terminate. If a Participant is married and the designated
beneficiary is not his or her spouse, spousal consent shall be
required for such designation to be effective unless it is established
(to the satisfaction of the Committee or its delegate) that there is
no spouse or that the spouse cannot be located. The Committee may rely
on the last designation of a beneficiary filed by a Participant in
accordance with this Plan.
(b) Beneficiary designations may be changed by the Participant (and his or
her spouse, if required) at any time on forms provided and in the
manner prescribed by the Committee (or its delegate). If a Participant
dies with no validly designated beneficiary under this Plan who is
living at the time of such Participant's death, the Corporation shall
deliver all Shares and/or cash payable pursuant to the terms hereof to
the executor or administrator of the estate of the Participant, or if
no such executor or administrator has been appointed, the Corporation,
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,
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dependent or relative is known to the Corporation, then to such other
person as the Corporation may designate.
14. TRANSFERABILITY
Neither Contributions credited to a Participant's Account nor any Options
or rights with respect to the exercise of Options or right to receive
Shares under this Plan may be anticipated, alienated, encumbered, assigned,
transferred, pledged or otherwise disposed of in any way (other than by
will, the laws of descent and distribution, or as provided in Section 13)
by the Participant. Any such attempt at anticipation, alienation,
encumbrance, assignment, transfer, pledge or other disposition shall be
without effect and all amounts shall be paid and all Shares shall be
delivered in accordance with the provisions of this Plan. Amounts payable
or Shares deliverable pursuant to this Plan shall be paid or delivered only
to the Participant or, in the event of the Participant's death, to the
Participant's beneficiary pursuant to Section 13.
15. USE OF FUNDS; INTEREST
All Contributions received or held by the Corporation under this Plan will
be included in the general assets of the Corporation and may be used for
any corporate purpose. Notwithstanding anything else contained herein to
the contrary, no interest will be paid to any Participant or credited to
his or her Account under this Plan (in respect of Account balances, refunds
of Account balances, or otherwise).
16. REPORTS
Statements shall be provided to Participants as soon as administratively
practicable following each Exercise Date. Each Participant's statement
shall set forth, as of such Exercise Date, that Participant's Account
balance immediately prior to the exercise of his or her Option, the Option
Price, the number of whole Shares purchased and his or her remaining
Account balance, if any.
17. ADJUSTMENTS OF AND CHANGES IN THE STOCK
Upon or in contemplation of any reclassification, recapitalization, stock
split (including a stock split in the form of a stock dividend), or reverse
stock split; any merger, combination, consolidation, or other
reorganization; split-up, spin-off, or any similar extraordinary dividend
distribution in respect of the Common Stock (whether in the form of
securities or property); any exchange of Common Stock or other securities
of the Corporation, or any similar, unusual or extraordinary corporate
transaction in respect of the Common Stock; or a sale of substantially all
the assets of the Corporation as an entirety occurs; then the Committee
shall, in such manner, to such extent (if any) and at such time as it deems
appropriate and equitable in the circumstances:
(a) proportionately adjust any or all of (i) the number and type of Shares
or the number and type of other securities that thereafter may be made
the subject of Options (including the specific maxima and numbers of
Shares set forth elsewhere in this Plan), (ii) the number, amount and
type of Shares (or other securities or
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property) subject to any or all outstanding Options, (iii) the Option
Price of any or all outstanding Options, or (iv) the securities, cash
or other property deliverable upon exercise of any outstanding
Options; or
(b) make provision for a cash payment in settlement of, or for the
substitution or exchange of, any or all outstanding Options or the
cash, securities or property deliverable to the holder of any or all
outstanding Options based upon the distribution or consideration
payable to holders of the Common Stock upon or in respect of such
event.
The Committee may adopt such valuation methodologies for outstanding
Options as it deems reasonable in the event of a cash or property
settlement and, without limitation on other methodologies, may base such
settlement solely upon the excess (if any) of the amount payable upon or in
respect of such event over the exercise or strike price of the Option.
In any of such events, the Committee may take such action sufficiently
prior to such event to the extent that the Committee deems the action
necessary to permit the Participant to realize the benefits intended to be
conveyed with respect to the underlying shares in the same manner as is or
will be available to stockholders generally.
18. POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS
Upon a dissolution of the Corporation, or any other event described in
Section 17 that the Corporation does not survive, the Plan and, if prior to
the last day of an Offering Period, any outstanding Option granted with
respect to that Offering Period shall terminate, subject to any provision
that has been expressly made by the Board for the survival, substitution,
assumption, exchange or other settlement of the Plan and Options. In the
event a Participant's Option is terminated pursuant to this Section 18
without a provision having been made by the Board for a substitution,
exchange or other settlement of the Option, such Participant's Account
shall be paid to him or her in cash without interest.
19. TERM OF PLAN; AMENDMENT OR TERMINATION
(a) This Plan shall become effective as of the Effective Date. No new
Offering Periods shall commence on or after the day before the tenth
anniversary of the Effective Date and this Plan shall terminate as of
the Exercise Date on or immediately following such date unless sooner
terminated pursuant to Section 4, Section 18, or this Section 19.
(b) The Board may, at any time, terminate or, from time to time, amend,
modify or suspend this Plan, in whole or in part, without notice.
Stockholder approval for any amendment or modification shall not be
required, except to the extent required by Section 423 of the Code or
other applicable law, or deemed necessary or advisable by the Board.
No Options may be granted during any suspension of this Plan or after
the termination of this Plan, but the Committee will retain
jurisdiction as to Options then outstanding in accordance with the
terms of this Plan. No amendment, modification, or termination
pursuant to this Section 19(b)
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shall, without written consent of the Participant, affect in any
manner materially adverse to the Participant any rights or benefits
of such Participant or obligations of the Corporation under any
Option granted under this Plan prior to the effective date of such
change. Changes contemplated by Section 17 or Section 18 shall not be
deemed to constitute changes or amendments requiring Participant
consent. Notwithstanding the foregoing, the Committee shall have the
right to designate from time to time the Subsidiaries whose employees
may be eligible to participate in this Plan and such designation
shall not constitute any amendment to this Plan requiring stockholder
approval.
20. NOTICES
All notices or other communications by a Participant to the Corporation
contemplated by this Plan shall be deemed to have been duly given when
received in the form and manner specified by the Committee (or its
delegate) at the location, or by the person, designated by the Committee
(or its delegate) for that purpose.
21. CONDITIONS UPON ISSUANCE OF SHARES
This Plan, the granting of Options under this Plan and the offer, issuance
and delivery of Shares are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities laws) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for
the Corporation, be necessary or advisable in connection therewith. The
person acquiring any securities under this Plan will, if requested by the
Corporation and as a condition precedent to the exercise of his or her
Option, provide such assurances and representations to the Corporation as
the Committee may deem necessary or desirable to assure compliance with all
applicable legal and accounting requirements.
22. PLAN CONSTRUCTION
(a) It is the intent of the Corporation that transactions involving
Options under this Plan in the case of Participants who are or may be
subject to the prohibitions of Section 16 of the Exchange Act satisfy
the requirements for applicable exemptions under Rule 16 promulgated
by the Commission under Section 16 of the Exchange Act so that such
persons (unless they otherwise agree) will be entitled to the
exemptive relief of Rule 16b-3 or other exemptive rules under Section
16 of the Exchange Act in respect of those transactions and will not
be subject to avoidable liability thereunder.
(b) This Plan and Options are intended to qualify under Section 423 of the
Code.
(c) If any provision of this Plan or of any Option would otherwise
frustrate or conflict with the intents expressed above, that provision
to the extent possible shall be interpreted so as to avoid such
conflict. If the conflict remains irreconcilable, the Committee may
disregard the provision if it concludes that to do so furthers the
interest of the Corporation and is consistent with the purposes of
this Plan as to such persons in the circumstances.
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<PAGE>
23. EMPLOYEES' RIGHTS
(a) Nothing in this Plan (or in any other documents related to this Plan)
will confer upon any Eligible Employee or Participant any right to
continue in the employ or other service of the Company, constitute any
contract or agreement of employment or other service or effect an
employee's status as an employee at will, nor shall interfere in any
way with the right of the Company to change such person's compensation
or other benefits or to terminate his or her employment or other
service with or without cause. Nothing contained in this Section
23(a), however, is intended to adversely affect any express
independent right of any such person under a separate employment or
service contract other than a Subscription Agreement.
(b) No Participant or other person will have any right, title or interest
in any fund or in any specific asset (including Shares) of the Company
by reason of any Option hereunder. Neither the provisions of this Plan
(or of any related documents), nor the creation or adoption of this
Plan, nor any action taken pursuant to the provisions of this Plan
will create, or be construed to create, a trust of any kind or a
fiduciary relationship between the Company and any Participant or
other person. To the extent that a Participant or other person
acquires a right to receive payment pursuant to this Plan, such right
will be no greater than the right of any unsecured general creditor of
the Corporation. No special or separate reserve, fund or deposit will
be made to assure any such payment.
(c) A Participant will not be entitled to any privilege of stock ownership
as to any Shares not actually delivered to and held of record by the
Participant. No adjustment will be made for dividends or other rights
as a stockholder for which a record date is prior to such date of
delivery.
24. MISCELLANEOUS
(a) This Plan, the Options, and related documents shall be governed by,
and construed in accordance with, the laws of the State of Delaware.
If any provision shall be held by a court of competent jurisdiction to
be invalid and unenforceable, the remaining provisions of this Plan
shall continue in effect.
(b) Captions and headings are given to the sections of this Plan solely as
a convenience to facilitate reference. Such captions and headings
shall not be deemed in any way material or relevant to the
construction of interpretation of this Plan or any provision hereof.
(c) The adoption of this Plan shall not affect any other Company
compensation or incentive plans in effect. Nothing in this Plan will
limit or be deemed to limit the authority of the Board or Committee
(i) to establish any other forms of incentives or compensation for
employees of the Company (with or without reference to the Common
Stock), or (ii) to grant or assume options (outside the scope of and
in
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<PAGE>
addition to those contemplated by this Plan) in connection with any
proper corporate purpose; to the extent consistent with any other plan
or authority.
(d) Benefits received by a Participant under an Option granted pursuant to
this Plan shall not be deemed a part of the Participant's compensation
for purposes of the determination of benefits under any other employee
welfare or benefit plans or arrangements, if any, provided by the
Company, except where the Committee or the Board expressly otherwise
provides or authorizes in writing.
25. EFFECTIVE DATE
Notwithstanding anything else contained herein to the contrary, the
effectiveness of this Plan is subject to the approval of this Plan by the
stockholders of the Corporation within twelve months after the Effective
Date. Notwithstanding anything else contained herein to the contrary, no
Shares shall be issued or delivered under this Plan until such stockholder
approval is obtained and, if such stockholder approval is not obtained
within such twelve-month period of time, all Contributions credited to a
Participant's Account hereunder shall be refunded to such Participant
(without interest) as soon as practicable after the end of such twelve-
month period.
26. TAX WITHHOLDING
Notwithstanding anything else contained in this Plan herein to the
contrary, the Company may deduct from a Participant's Account balance as of
an Exercise Date, before the exercise of the Participant's Option is given
effect on such date, the amount of any taxes which the Company reasonably
determines it may be required to withhold with respect to such exercise.
In such event, the maximum number of whole Shares subject to such Option
(subject to the other limits set forth in this Plan) shall be purchased at
the Option Price with the balance of the Participant's Account (after
reduction for the tax withholding amount).
Should the Company for any reason be unable, or elect not to, satisfy its
tax withholding obligations in the manner described in the preceding
paragraph with respect to a Participant's exercise of an Option, or should
the Company reasonably determine that it has a tax withholding obligation
with respect to a disposition of Shares acquired pursuant to the exercise
of an Option prior to satisfaction of the holding period requirements of
Section 423 of the Code, the Company shall have the right at its option to
(i) require the Participant to pay or provide for payment of the amount of
any taxes which the Company reasonably determines that it is required to
withhold with respect to such event or (ii) deduct from any amount
otherwise payable to or for the account of the Participant the amount of
any taxes which the Company reasonably determines that it is required to
withhold with respect to such event.
27. NOTICE OF SALE
Any person who has acquired Shares under this Plan shall give prompt
written notice to the Corporation of any sale or other transfer of the
Shares if such sale or transfer occurs (i) within the two-year period after
the Grant Date of the Offering Period with respect to which such Shares
were acquired, or (ii) within the twelve-month period after the Exercise
Date of the Offering Period with respect to which such Shares were
acquired.
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