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Exhibit 10.1
ILX LIGHTWAVE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I. INTRODUCTION
Section 1.01 Purpose. The purpose of the Plan is to provide employees
of the Company and certain related corporations with an opportunity to share in
the ownership of the Company by providing them with a convenient means for
regular and systematic purchases of Common Stock and, thus, to develop a
stronger incentive to work for the continued success of the Company.
Section 1.02 Rules of Interpretation. It is intended that the Plan be
an "employee stock purchase plan" as defined in Section 423(b) of the Code and
Treasury Regulations promulgated thereunder. Accordingly, the Plan shall be
interpreted and administered in a manner consistent therewith if so approved.
All Participants in the Plan will have the same rights and privileges consistent
with the provisions of the Plan.
Section 1.03 Definitions. For purposes of the Plan, the following terms
will have the meanings set forth below:
(a) "Acceleration Date" means the earlier of the date of shareholder
approval or approval by the Company's Board of Directors of (i) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Company
Common Stock would be converted into cash, securities or other property, other
than a merger of the Company in which shareholders of the Company immediately
prior to the merger have substantially the same proportionate ownership of stock
in the surviving corporation immediately after the merger; (ii) any sale,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; or (iii)
any plan of liquidation or dissolution of the Company.
(b) "Affiliate" means any subsidiary corporation of the Company, as
defined in Section 424(f) of the Code, whether now or hereafter acquired or
established.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee described in Section 10.01 of the
Plan.
(e) "Common Stock" means the Company's Common Stock, $.01 par value per
share, as such stock may be adjusted for changes in the stock or the Company as
contemplated by Article XI of the Plan.
(f) "Company" means ILX Lightwave Corporation, a Minnesota corporation,
and its successors by merger or consolidation as contemplated by Section 11.02
of the Plan.
(g) "Current Compensation" means all regular wage (including overtime),
salary and commission payments paid by the Company to a Participant in
accordance with the terms of his or
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her employment, but excluding annual bonus payments, quarterly incentive
payments and all other forms of special compensation.
(h) "Fair Market Value" as of a given date means the fair market value
of the Common Stock determined by such methods or procedures as shall be
established from time to time by the Committee, but shall not be less than, if
the Common Stock is then quoted on the NASDAQ National Market System, the
average of the high and low sales price as reported on the NASDAQ National
Market System on such date or, if the NASDAQ National Market System is not open
for trading on such date, on the most recent preceding date when it is open for
trading. If on a given date the Common Stock is not traded on an established
securities market, the Committee shall make a good faith attempt to satisfy the
requirements of this Section 1.03(h) and in connection therewith shall take such
action as it deems necessary or advisable.
(i) "Participant" means a Regular Employee who is eligible to
participate in the Plan under Section 2.01 of the Plan and who has elected to
participate in the Plan.
(j) "Participating Affiliate" means an Affiliate that has been
designated by the Committee in advance of the Purchase Period in question as a
corporation whose eligible Regular Employees may participate in the Plan.
(k) "Plan" means the ILX Lightwave Corporation Employee Stock Purchase
Plan, as it may be amended, the provisions of which are set forth herein.
(l) "Purchase Period" means the period beginning on September 1, 2000,
and ending on the last business day in August, 2001 and thereafter each
approximate six-month period beginning on September 1st and March 1st of each
year and ending on the last business day in February and August of each year;
provided, however, that the then current Purchase Period will end upon the
occurrence of an Acceleration Date.
(m) "Regular Employee" means an employee of the Company or a
Participating Affiliate as of the first day of a Purchase Period, including an
officer or director who is also an employee.
(n) "Stock Purchase Account" means the account maintained on the books
and records of the Company recording the amount received from each Participant
through payroll deductions made under the Plan.
ARTICLE II. ELIGIBILITY AND PARTICIPATION
Section 2.01 Eligible Employees. All Regular Employees shall be
eligible to participate in the Plan beginning on the first day of the first
Purchase Period to commence after such person becomes a Regular Employee.
Subject to the provisions of Article VI of the Plan, each such employee will
continue to be eligible to participate in the Plan so long as he or she remains
a Regular Employee.
Section 2.02 Election to Participate. An eligible Regular Employee may
elect to participate in the Plan for a given Purchase Period by filing with the
Company, in advance of that Purchase Period and in accordance with such terms
and conditions as the Committee in its sole discretion may
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impose, a form provided by the Company for such purpose (which authorizes
regular payroll deductions from Current Compensation beginning with the first
payday in that Purchase Period and continuing until the employee withdraws from
the Plan or ceases to be eligible to participate in the Plan).
Section 2.03 Limits on Stock Purchase. No employee shall be granted any
right to purchase Common Stock hereunder if such employee, immediately after
such a right to purchase is granted, would own, directly or indirectly, within
the meaning of Section 423(b)(3) and Section 424(d) of the Code, Common Stock
possessing 5% or more of the total combined voting power or value of all the
classes of the capital stock of the Company or of all Affiliates.
Section 2.04 Voluntary Participation. Participation in the Plan on the
part of a Participant is voluntary and such participation is not a condition of
employment nor does participation in the Plan entitle a Participant to be
retained as an employee.
ARTICLE III. PAYROLL DEDUCTIONS AND STOCK PURCHASE ACCOUNT
Section 3.01 Deduction from Pay. The form described in Section 2.02 of
the Plan will permit a Participant to elect payroll deductions of not less than
1% nor more than 10% of such Participant's Current Compensation for each pay
period during such Purchase Period, but in no event more than $2,500 per
Purchase Period, and subject to such other limitations as the Committee in its
sole discretion may impose. A Participant may cease making payroll deductions at
any time, subject to such limitations as the Committee in its sole discretion
may impose. In the event that during a Purchase Period the entire credit balance
in a Participant's Stock Purchase Account exceeds the product of (a) 85% of the
Fair Market Value of the Common Stock on the first business day of that Purchase
Period and (b) 300, then payroll deductions for such Participant shall
automatically cease, and shall resume on the first pay period of the next
Purchase Period.
Section 3.02 Credit to Account. Payroll deductions will be credited to
the Participant's Stock Purchase Account on each payday.
Section 3.03 Interest. No interest will be paid on payroll deductions
or on any other amount credited to, or on deposit in, a Participant's Stock
Purchase Account; provided that if the Plan is discontinued as provided in
Section 9.03 the Company will return all payroll deductions then credited to the
Participant's Stock Purchase Account plus simple interest at the rate of 3.5%
per year.
Section 3.04 Nature of Account. The Stock Purchase Account is
established solely for accounting purposes, and all amounts credited to the
Stock Purchase Account will remain part of the general assets of the Company or
the Participating Affiliate (as the case may be).
Section 3.05 No Additional Contributions. A Participant may not make
any payment into the Stock Purchase Account other than the payroll deductions
made pursuant to the Plan.
ARTICLE IV. RIGHT TO PURCHASE SHARES
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Section 4.01 Number of Shares. Each Participant will have the right to
purchase on the last business day of the Purchase Period all, but not less than
all, of the number of whole and fractional shares, computed to four decimal
places, of Common Stock that can be purchased at the price specified in Section
4.02 of the Plan with the entire credit balance in the Participant's Stock
Purchase Account, subject to the limitations that (a) no more than 300 shares of
Common Stock may be purchased under the Plan by any one Participant for a given
Purchase Period, and (b) in accordance with Section 423(b)(8) of the Code, no
more than $25,000 in Fair Market Value (determined at the beginning of each
Purchase Period) of Common Stock and other stock may be purchased under the Plan
and all other employee stock purchase plans (if any) of the Company and the
Affiliates by any one Participant for any calendar year. If the purchases for
all Participants for any Purchase Period would otherwise cause the aggregate
number of shares of Common Stock to be sold under the Plan to exceed the number
specified in Section 10.04 of the Plan, each Participant shall be allocated a
pro rata portion of the Common Stock to be sold for such Purchase Period.
Section 4.02 Purchase Price. The purchase price for any Purchase Period
shall be that price as announced by the Committee prior to the first business
day of that Purchase Period, which price may, in the discretion of the
Committee, be a price which is not fixed or determinable as of the first
business day of that Purchase Period; provided, however, that in no event shall
the purchase price for any Purchase Period be less than the lesser of (a) 85% of
the Fair Market Value of the Common Stock on the first business day of that
Purchase Period or (b) 85% of the Fair Market Value of the Common Stock on the
last business day of that Purchase Period, in each case rounded up to the next
higher full cent.
ARTICLE V. EXERCISE OF RIGHT
Section 5.01 Purchase of Stock. On the last business day of a Purchase
Period, the entire credit balance in each Participant's Stock Purchase Account
will be used to purchase the number of whole shares and fractional shares,
computed to four decimal places, of Common Stock purchasable with such amount
(subject to the limitations of Section 4.01 of the Plan), unless the Participant
has filed with the Company, in advance of that date and subject to such terms
and conditions as the Committee in its sole discretion may impose, a form
provided by the Company which requests the distribution of the entire credit
balance in cash.
Section 5.02 Notice of Acceleration Date. The Company shall use its
best efforts to notify each Participant in writing at least ten days prior to
any Acceleration Date that the then current Purchase Period will end on such
Acceleration Date.
ARTICLE VI. WITHDRAWAL FROM PLAN; SALE OF STOCK
Section 6.01 Voluntary Withdrawal. A Participant may, in accordance
with such terms and conditions as the Committee in its sole discretion may
impose, withdraw from the Plan and cease making payroll deductions by filing
with the Company a form provided for this purpose. In such event, the entire
credit balance in the Participant's Stock Purchase Account will be paid to the
Participant in cash within 30 days. A Participant who withdraws from the Plan
will not be eligible to reenter the Plan until the beginning of the next
Purchase Period following the date of such withdrawal.
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Section 6.02 Death. Subject to such terms and conditions as the
Committee in its sole discretion may impose, upon the death of a Participant, no
further amounts shall be credited to the Participant's Stock Purchase Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's death occurred and in accordance with Section 5.01 of the Plan,
the entire credit balance in such Participant's Stock Purchase Account will be
used to purchase Common Stock, unless such Participant's estate has filed with
the Company, in advance of that day and subject to such terms and conditions as
the Committee in its sole discretion may impose, a form provided by the Company
which elects to have the entire credit balance in such Participant's Stock
Account distributed in cash within 30 days after the end of that Purchase Period
or at such earlier time as the Committee in its sole discretion may decide. Each
Participant, however, may designate one or more beneficiaries who, upon death,
are to receive the Common Stock or the amount that otherwise would have been
distributed or paid to the Participant's estate and may change or revoke any
such designation from time to time. No such designation, change or revocation
will be effective unless made by the Participant in writing and filed with the
Company during the Participant's lifetime. Unless the Participant has otherwise
specified the beneficiary designation, the beneficiary or beneficiaries so
designated will become fixed as of the date of the death of the Participant so
that, if a beneficiary survives the Participant but dies before the receipt of
the payment due such beneficiary, the payment will be made to such beneficiary's
estate.
Section 6.03 Termination of Employment. Subject to such terms and
conditions as the Committee in its sole discretion may impose, upon a
Participant's normal or early retirement with the consent of the Company under
any pension or retirement plan of the Company or Participating Affiliate, no
further amounts shall be credited to the Participant's Stock Purchase Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's approved retirement occurred and in accordance with Section 5.01
of the Plan, the entire credit balance in such Participant's Stock Purchase
Account will be used to purchase Common Stock, unless such Participant has filed
with the Company, in advance of that day and subject to such terms and
conditions as the Committee in its sole discretion may impose, a form provided
by the Company which elects to receive the entire credit balance in such
Participant's Stock Purchase Account in cash within 30 days after the end of
that Purchase Period, provided that such Participant shall have no right to
purchase Common Stock in the event that the last day of such a Purchase Period
occurs more than three months following the termination of such Participant's
employment with the Company by reason of such an approved retirement. In the
event of any other termination of employment (other than death) with the Company
or a Participating Affiliate, participation in the Plan will cease on the date
the Participant ceases to be a Regular Employee for any reason. In such event,
the entire credit balance in such Participant's Stock Purchase Account will be
paid to the Participant in cash within 30 days. For purposes of this Section
6.03, a transfer of employment to any Affiliate, or a leave of absence that has
been approved by the Committee, will not be deemed a termination of employment
as a Regular Employee.
ARTICLE VII. NONTRANSFERABILITY
Section 7.01 Nontransferable Right to Purchase. The right to purchase
Common Stock hereunder may not be assigned, transferred, pledged or hypothecated
(whether by operation of law or otherwise), except as provided in Section 6.02
of the Plan, and will not be subject to execution,
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attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition or levy of attachment or similar process upon
the right to purchase will be null and void and without effect.
Section 7.02 Nontransferable Account. Except as provided in Section
6.02 of the Plan, the amounts credited to a Stock Purchase Account may not be
assigned, transferred, pledged or hypothecated in any way, and any attempted
assignment, transfer, pledge, hypothecation or other disposition of such amounts
will be null and void and without effect.
Section 7.03 Nontransferable Shares. Except as the Committee shall
otherwise permit, prior to the second anniversary of the beginning of any
Purchase Period, the Common Stock purchased at the end of such Purchase Period
by a Participant pursuant to Section 5.01 of the Plan together with any
additional Common Stock acquired pursuant to Section 8.04 of the Plan upon the
reinvestment of dividends may not be assigned, transferred, pledged,
hypothecated or otherwise disposed of in any way other than by will or by the
laws of descent and distribution, and any other attempted assignment, transfer,
pledge, hypothecation or other disposition of such share or shares will be null
and void and without effect.
ARTICLE VIII. COMMON STOCK ISSUANCE AND DIVIDEND REINVESTMENT
Section 8.01 Issuance of Purchased Shares. Promptly after the last day
of each Purchase Period and subject to such terms and conditions as the
Committee in its sole discretion may impose, the Company will cause the Common
Stock then purchased pursuant to Section 5.01 of the Plan to be issued for the
benefit of the Participant and held in the Plan pursuant to Section 8.03 of the
Plan.
Section 8.02 Completion of Issuance. A Participant shall have no
interest in the Common Stock purchased pursuant to Section 5.01 of the Plan
until such Common Stock is issued for the benefit of the Participant pursuant to
Section 8.03 of the Plan.
Section 8.03 Form of Ownership. The Common Stock issued under Section
8.01 of the Plan will be held in the Plan in the name of the Participant or
jointly in the name of the Participant and another person, as the Participant
may direct on a form provided by the Company, until such time as certificates
for such shares of Common Stock are delivered to or for the benefit of the
Participant pursuant to Section 8.05 of the Plan.
Section 8.04 Automatic Dividend Reinvestment. Prior to the delivery of
certificates to or for the benefit of the Participant under Section 8.05 of the
Plan, any and all cash dividends paid on full and fractional shares of Common
Stock issued under either Section 8.01 of the Plan or this Section 8.04 shall be
reinvested to acquire either new issue Common Stock or shares of Common Stock
purchased on the open market, as determined by the Committee in its sole
discretion. Purchases of Common Stock under this Section 8.04 will be (a) with
respect to shares newly issued by the Company, invested on the dividend payment
date, or, if that date is not a trading day, the immediately preceding trading
day, or (b) with respect to shares purchased on the open market, normally
purchased on the open market within ten business days of the dividend payment
date, depending upon market conditions. The price per share of the Common Stock
issued under this Section 8.04 shall be (x) with respect to shares newly issued
by the Company, the Fair Market Value of the
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Common Stock on the applicable investment date, or (y) with respect to shares
purchased on the open market, the weighted average price per share at which the
Common Stock is actually purchased on the open market for the relevant period on
behalf of all participants in the Plan. All shares of Common Stock acquired
under this Section 8.04 will be held in the Plan in the same name as the Common
Stock upon which the cash dividends were paid.
Section 8.05 Delivery. At any time following the conclusion of the
nontransferability period set forth in Section 7.03 of the Plan and subject to
such terms and conditions as the Committee in its sole discretion may impose, by
filing with the Company a form provided by the Company for such purpose, the
Participant may elect to have the Company cause to be delivered to or for the
benefit of the Participant a certificate for the number of whole shares and cash
for the number of fractional shares representing the Common Stock purchased
pursuant to Section 5.01 of the Plan together with any additional Common Stock
acquired pursuant to Section 8.04 of the Plan upon the reinvestment of
dividends. The election notice will be processed as soon as practicable after
receipt. A certificate for whole shares normally will be mailed to the
Participant within sixty business days after receipt of the election notice;
provided, however, that if the notice is received between a dividend record date
and a dividend payment date, a certificate will generally not be sent out until
the declared dividends have been reinvested pursuant to Section 8.04 of the
Plan. Any fractional shares normally will be sold on the first trading day of
each month and a check for the fractional shares sent to the Participant
promptly thereafter.
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ARTICLE IX. EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN
Section 9.01 Effective Date. The Plan was approved by the Board of
Directors on May 5, 2000, and shall be approved by the shareholders of the
Company within twelve (12) months thereof.
Section 9.02 Plan Commencement. The initial Purchase Period under the
Plan will commence September 1, 2000. Thereafter, each succeeding Purchase
Period will commence and terminate in accordance with Section 1.03(l) of the
Plan.
Section 9.03 Powers of Board. The Board of Directors may amend or
discontinue the Plan at any time, including immediately before the end of any
Purchase Period and before any rights to purchase Common Stock for that Purchase
Period accrue. No amendment or discontinuation of the Plan, however, shall be
made without shareholder approval if shareholder approval is required under any
rules or regulations of the NASDAQ National Market System or any securities
exchange that are applicable to the Company.
ARTICLE X. ADMINISTRATION
Section 10.01 The Committee. The Plan shall be administered by a
committee (the "Committee") established by the Board of Directors. The members
of the Committee need not be directors of the Company and shall be appointed by
and serve at the pleasure of the Board of Directors.
Section 10.02 Powers of Committee. Subject to the provisions of the
Plan, the Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan, to establish
deadlines by which the various administrative forms must be received in order to
be effective, and to adopt such other rules and regulations for administering
the Plan as it may deem appropriate. The Committee shall have full and complete
authority to determine whether all or any part of the Common Stock acquired
pursuant to the Plan shall be subject to restrictions on the transferability
thereof or any other restrictions affecting in any manner a Participant's rights
with respect thereto but any such restrictions shall be contained in the form by
which a Participant elects to participate in the Plan pursuant to Section 2.02
of the Plan. Decisions of the Committee will be final and binding on all parties
who have an interest in the Plan.
Section 10.03 Power and Authority of the Board of Directors. The Board
of Directors may, at any time and from time to time, notwithstanding anything to
the contrary contained herein, and without any further action of the Committee,
exercises the powers and duties of the Committee under the Plan.
Section 10.04 Stock to be Sold. The Common Stock to be issued and sold
under the Plan may be authorized but unissued shares or shares acquired in the
open market or otherwise. Except as provided in Section 11.01 of the Plan, the
aggregate number of shares of Common Stock to be sold under the Plan will not
exceed 150,000 shares.
Section 10.05 Notices. Notices to the Committee should be addressed as
follows:
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ILX Lightwave Corporation
31950 East Frontage Road
Bozeman MT 59715
Attn: ESPP
ARTICLE XI. ADJUSTMENT FOR CHANGES IN STOCK OR COMPANY
Section 11.01 Stock Dividend or Reclassification. If the outstanding
shares of Common Stock are increased, decreased, changed into or exchanged for a
different number or kind of securities of the Company, or shares of a different
par value or without par value, through reorganization, recapitalization,
reclassification, stock dividend, stock split, amendment to the Company's
Certificate of Incorporation, reverse stock split or otherwise, an appropriate
adjustment shall be made in the maximum numbers and kind of securities to be
purchased under the Plan with a corresponding adjustment in the purchase price
to be paid therefor.
Section 11.02 Merger or Consolidation. If the Company is merged into or
consolidated with one or more corporations during the term of the Plan,
appropriate adjustments will be made to give effect thereto on an equitable
basis in terms of issuance of shares of the corporation surviving the merger or
of the consolidated corporation, as the case may be.
ARTICLE XII. APPLICABLE LAW
Rights to purchase Common Stock granted under the Plan shall be
construed and shall take effect in accordance with the laws of the State of
Montana.
ILX LIGHTWAVE CORPORATION
31950 E. Frontage Road
Bozeman, Montana 59715
(406) 586-1244
