<PAGE> 1
EXHIBIT 10.4
FORM OF
2000 EMPLOYEE STOCK PURCHASE PLAN
OMNISKY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of OmniSky Corporation, a Delaware corporation, 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 Section 423 of the Code. 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 in the aggregate under the Plan shall not exceed 750,000 shares,
plus an annual increase to be added on January 1 of each year beginning in 2001
equal to the lesser of (i) 350,000 shares, (ii) 1% of the outstanding shares on
such date or (iii) an amount determined by the Board.
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, (i) appropriate adjustments shall be
made to the maximum number and class of securities issuable in the aggregate
under the Plan, (ii) the maximum number and class of securities purchasable per
Participant and in the aggregate on any one Purchase Date, (iii) the number of
shares which may be added to the Plan on an annual basis and (iv) 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.
<PAGE> 2
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive, overlapping offering 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.
B. Each offering period shall consist of periods of approximately
twenty-four (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after May 1 and November
1 of each year and terminating on the first Trading Day on or after the May 1
and November 1 offering period commencement date approximately twenty-four (24)
months later; provided, however, that the first offering period under the Plan
shall commence with the first Trading Day on or after the Effective Time and
ending on the first Trading Day on or after November 1, 2002. The Plan
Administrator shall have the power to change the duration of offering periods
(including the commencement dates thereof) with respect to future offerings
without shareholder approval if such change is announced prior to the scheduled
beginning of the first offering period to be affected thereafter.
C. Purchase Intervals shall run from the first Trading Day on or after
May 1 of each year to the first Trading Day on or after November 1 of the same
year and from the first Trading Day on or after November 1 of each year to the
first Trading Day on or after May 1 of the following year. However, the first
Purchase Interval in effect under the initial offering period shall commence at
the Effective Time and terminate on the first Trading Day on or after May 1,
2001.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair Market Value per
share of Common Stock on the start date of that offering period, then all
Participants in that offering period shall automatically be withdrawn from that
offering period immediately after the purchase of shares of Common Stock on such
Purchase Date, and automatically re-enrolled in the immediately following
offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of an
offering period under the Plan may enter that offering period on such start
date.
B. Each individual who first becomes an Eligible Employee after the
start date of an offering period may enter the immediately following offering
period on or prior to the start date of such subsequent offering period.
C. The date an individual enters an offering period shall be designated
his or her Entry Date for purposes of that offering period.
D. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its designee)
on or before his or her scheduled Entry Date.
-2-
<PAGE> 3
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock during an offering period may be up to 15% of
the Base Salary paid to the Participant during each Purchase Interval within
that offering period. The deduction rate so authorized shall continue in effect
throughout the offering period, except to the extent such rate is changed in
accordance with the following guidelines:
1. The Participant may, at any time during the offering 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 Interval.
2. The Participant may, prior to the commencement of any new
Purchase Interval within the offering period, increase the rate of his or her
payroll deduction by filing the appropriate form with the Plan Administrator.
The new rate (which may not exceed the fifteen percent (15%) maximum) shall
become effective on the start date of the first Purchase Interval following the
filing of such form.
B. Payroll deductions shall begin on the first pay day administratively
feasible following the Participant's Entry Date into the offering period and
shall (unless sooner terminated by the Participant) continue through the pay day
ending with or immediately prior to the last day of that offering 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 required to be held in any segregated account or trust fund and may be
commingled with the general assets of the Corporation and may be 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, whether within the same or a
different offering period.
VII. PURCHASE RIGHTS
A. Grant of Purchase Right. A Participant shall be granted a separate
purchase right for each offering period in which he or she participates. The
purchase right shall be granted on the Participant's Entry Date into the
offering period and shall provide the Participant with the right to purchase
shares of Common Stock, in a series of successive installments over the
remainder of such offering period, 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,
-3-
<PAGE> 4
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 in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant (other than Participants whose payroll deductions
have previously been refunded pursuant to the Termination of Purchase Right
provisions below) on each such Purchase Date. The purchase shall be effected by
applying the Participant's payroll deductions for the Purchase Interval ending
on such Purchase Date to the purchase of whole shares of Common Stock at the
purchase price in effect for the Participant for that Purchase Date.
C. Purchase Price. The purchase price per share at which Common Stock
will be purchased on the Participant's behalf on each Purchase Date within the
offering period shall be equal to eighty-five percent (85%) of the lower of (i)
the Fair Market Value per share of Common Stock on the Participant's Entry Date
into that offering 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 during the offering period
shall be the number of whole shares obtained by dividing the amount collected
from the Participant through payroll deductions during the Purchase Interval
ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed 5,000 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 on the Purchase Date
shall be promptly refunded.
F. Termination of Purchase Right. The following provisions shall govern
the termination of outstanding purchase rights:
1. A Participant may, at any time prior to the next scheduled
Purchase Date in the offering period, terminate his or her outstanding purchase
right by filing the appropriate form with the Plan Administrator (or its
designee), 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 Interval in which such termination
occurs shall, at the Participant's election, be immediately 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.
-4-
<PAGE> 5
2. The termination of such purchase right shall be irrevocable,
and the Participant may not subsequently rejoin the offering period for which
the terminated purchase right was granted. In order to resume participation in
any subsequent offering period, such individual must re-enroll in the Plan (by
making a timely filing of the prescribed enrollment forms) on or before his or
her scheduled Entry Date into that offering period.
3. 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 Interval in which the purchase right so terminates shall be immediately
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 day before the Purchase Date of the Purchase
Interval in which such leave commences, to (a) withdraw all the payroll
deductions collected to date on his or her behalf for that Purchase Interval or
(b) have such funds held for the purchase of shares on his or her behalf on 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 shall be treated as a new Employee for purposes
of the Plan and must, in order to resume participation in the Plan, re-enroll in
the Plan (by making a timely filing of the prescribed enrollment forms) on or
before his or her scheduled Entry Date into the offering period.
G. Change in Control. In the event of a Change in Control, each
outstanding option shall be assumed or an equivalent option substituted by the
successor corporation or a parent or subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or substitute for the
option, each outstanding purchase right shall automatically be exercised,
immediately prior to the effective date of the Change in Control, by applying
the payroll deductions of each Participant for the Purchase Interval in which
such Change in Control occurs to the purchase of whole 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 Participant's Entry
Date into the offering period in which such Change in Control occurs or (ii) the
Fair Market Value per share of Common Stock immediately prior to the effective
date of such Change in Control. The Corporation shall use its best efforts to
provide at least ten (10)-days prior written notice of the occurrence of any
Change in Control, 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 Change in Control.
H. Proration of Purchase Rights. Should the total number of shares of
Common Stock 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
-5-
<PAGE> 6
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 of the Fair Market Value per share 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 to the purchase
rights granted under the Plan, the following provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue in a series of installments on each successive
Purchase Date during the offering period on which such right remains
outstanding.
(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 Interval, then the payroll
deductions which the Participant made during that Purchase Interval 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.
-6-
<PAGE> 7
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on July 28, 2000 and shall become
effective at the Effective Time, 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 offering period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate upon
the earliest of (i) the last business day in July 2010, (ii) the date on which
all shares available for issuance under the Plan shall have been sold pursuant
to purchase rights exercised 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 Interval.
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,
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. 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
-7-
<PAGE> 8
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.
B. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation; however, each Participant shall bear all costs
and expenses incurred by such individual in the sale or other disposition of any
shares purchased under the Plan.
C. The provisions of the Plan shall be governed by the laws of the State
of California without regard to that State's conflict-of-laws rules.
-8-
<PAGE> 9
SCHEDULE A
PARTICIPATING CORPORATIONS IN THE
2000 EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
1. OmniSky Corporation
<PAGE> 10
-----------
APPENDIX TO
2000 EMPLOYEE STOCK PURCHASE PLAN
-----------
The following definitions shall be in effect under the Plan:
A. "Board" shall mean the Corporation's Board of Directors.
B. "Base Salary" shall mean the regular base salary payable to a
Participant by one or more Participating Corporations during such individual's
period of participation in one or more offering periods under the Plan. Base
Salary does not include any overtime payments, bonuses, commissions, current
profit-sharing distributions, other incentive-type payments or any contributions
(other than Code Section 401(k) or Code Section 125 contributions) made on the
Participant's behalf by the Corporation or any Corporate Affiliate to any
employee benefit or welfare plan now or hereafter established. Base Salary shall
be calculated before deduction of (A) any income or employment tax withholdings
or (B) 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.
C. "Change in Control" shall mean a change in ownership of the
Corporation pursuant to any of the following transactions:
(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, or
(iii) the acquisition, directly or indirectly, by a 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.
D. "Code" shall mean the Internal Revenue Code of 1986, as amended.
E. "Common Stock" shall mean the Corporation's common stock.
A-2-
<PAGE> 11
F. "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.
G. "Corporation" shall mean OmniSky Corporation, a Delaware corporation,
and any corporate successor to all or substantially all of the assets or voting
stock of OmniSky Corporation which shall by appropriate action adopt the Plan.
H. "Effective Time" shall mean the time at which the Securities and
Exchange Commission declares the Corporation's Registration Statement for the
initial public offering of its equity securities effective. Any Corporate
Affiliate which becomes a Participating Corporation after such Effective Time
shall designate a subsequent Effective Time 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).
J. "Entry Date" shall mean the date an Eligible Employee first commences
participation in the offering period in effect under the Plan. The earliest
Entry Date under the Plan shall be the Effective Time.
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.
(iii) For purposes of the initial offering period which begins at
the Effective Time, the Fair Market Value shall be deemed to be equal to the
price per share at which the Common Stock is sold in the initial public offering
pursuant to the Registration Statement declared effective by the Securities and
Exchange Commission.
L. "1933 Act" shall mean the Securities Act of 1933, as amended.
A-3-
<PAGE> 12
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 at the Effective Time are listed on Schedule A to the
Plan.
O. "Plan" shall mean this 2000 Employee Stock Purchase Plan.
P. "Plan Administrator" shall mean the Board or a committee of the Board
charged with the administration of the Plan.
Q. "Purchase Date" shall mean the first Trading Day on or after of May 1
and November 1 of each year. The initial Purchase Date shall be the first
Trading Day on or after May 1, 2001.
R. "Purchase Interval" shall mean the approximate six (6) month period
commencing after one Purchase Date and ending with the next Purchase Date,
except the first Purchase Interval of any offering period shall commence on the
first day of any offering period and end with the next Purchase Date.
S. "Stock Exchange" shall mean either the American Stock Exchange or the
New York Stock Exchange.
T. "Trading Day" shall mean a day on which the Stock Exchanges and the
Nasdaq System are open for trading.
U. "Underwriting Agreement" shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
A-4-
