DYNASIL CORPORATION OF AMERICA
EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED JULY 25, 2000
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of Dynasil Corporation of America by providing eligible employees with the
opportunity to acquire a proprietary interest in the Corporation through
participation in an 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 as set forth in the text.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations
for administering the Plan as it may deem necessary in order to comply with
the requirements of Code Section 423. Decisions of the Plan Administrator
shall be final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares of Common Stock
purchased on the open market. The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed One Hundred
Fifty Thousand (150,000) shares (as adjusted for splits and dividends).
B. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as
a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities
issuable under the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date and (iii) the number and
class of securities and the price per share in effect under each outstanding
purchase right in order to prevent the dilution or enlargement of benefits
thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive 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 be twelve (12) months. All offering
periods shall commence on January 1 and end on December 31 of each year.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee during any offering
period may purchase shares during that offering period, provided he or she
remains an Eligible Employee.
B. To participate in the Plan for a particular offering period, the
Eligible Employee must complete forms prescribed by the Plan Administrator.
VI. PURCHASE RIGHTS
A. Grant of Purchase Right. A Participant shall be granted a separate
purchase right for each offering period. The purchase right 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, 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. The purchase right shall be
exercised within the offering period by a Participant exercising the
appropriate purchase request and paying the purchase price. Shares of Common
Stock shall accordingly be purchased on behalf of each Participant. Upon the
expiration of the offering period, any unexercised rights shall terminate as
to that offering period.
C. Purchase Price. The purchase price per share at which Common Stock
will be purchased on the Participant's behalf shall be equal to eighty-five
percent (85%) of the Fair Market Value per share of Common Stock on the date
that the Purchase Price is paid; provided, however, that the Purchase Price
may be adjusted by the Board pursuant to Section IX.
D. Number of Purchasable Shares. During any twelve (12) month period,
an Employee shall be prohibited from purchasing pursuant to the Employee
Stock Purchase Plan, more than that number of shares for which the total
purchase price is $5,000. This means, for example, if the purchase price is
$5.00 per share, then an employee may purchase no more than 1,000 shares
during any twelve (12) month offering period.
Should the Participant cease to remain an Eligible Employee for any
reason (including death, disability or change in status), then his or her
purchase right shall immediately terminate.
E. 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.
F. Assignability. The purchase right shall be exercisable only by the
Participant and shall not be assignable or transferable by the Participant.
G. 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 by the Participant in accordance with the
provisions of the Plan and the Participant has become a holder of record of
the purchased shares.
VII. 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 on the first day of the offering period.
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. 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.
VIII. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board and the shareholders on January
26, 1999, and became effective on that date.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest of (i) January 25, 2009, or (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. No further purchase rights shall
be granted or exercised under the Plan following its termination.
IX. AMENDMENT OF THE PLAN
The Board may alter, amend, suspend or discontinue the Plan at any time.
However, the Board may not, without the approval of the Corporation's
stockholders, (i) materially increase the number of shares of Common Stock
issuable under the Plan or the maximum number of shares purchasable per
Participant during any offering period, 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) materially
increase the benefits accruing to Participants under the Plan or materially
modify the requirements for eligibility to participate in the Plan.
Notwithstanding the above, in the event the Board determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary
or desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to (i) altering the purchase price for
any offering period including an offering period underway at the time of the
change in purchase price, (ii) shortening any offering period, including an
offering period underway at the time of the Board action; and (iii)
allocating shares. Such modifications or amendments shall not require
stockholder approval or the consent of any Plan Participants.
X. 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 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.
C. The provisions of the Plan shall be governed by the laws of the
State of New Jersey without resort to that State's conflict-of-laws rules.
APPENDIX
The following definitions shall be in effect under the Plan:
A. Board shall mean the Corporation's Board of Directors.
B. Code shall mean the Internal Revenue Code of 1986, as amended.
C. Common Stock shall mean the Corporation's common stock.
D. 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.
E. Corporation shall mean Dynasil Corporation of America, a New Jersey
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Dynasil Corporation of America which shall by
appropriate action adopt the Plan.
F. Eligible Employee shall mean any person who is employed by the
Corporation on a basis under which he or she is regularly expected to render
more than twenty (20) hours of service per week, and has been employed for
more than three (3) months for earnings considered wages under Code Section
3401(a).
G. Entry Date shall mean the date an Eligible Employee first commences
participation in the offering period in effect under the Plan.
H. 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 quoted on the OTC Bulletin
Board, then the Fair Market Value shall be the average bid price per share on
the date in question, as such price is quoted on the OTC Bulletin Board.
If there is no average bid price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing bid price on the
last preceding date for which such quotation exists.
ii. If the Common Stock is at the time traded on the Nasdaq
SmallCap Market or 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 such Nasdaq 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.
iii. 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.
I. 1933 Act shall mean the Securities Act of 1933, as amended.
J. Participant shall mean any Eligible Employee of the Corporation.
K. 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.
L. Plan shall mean the Corporation's Employee Stock Purchase Plan, as
set forth in this document.
M. Plan Administrator shall mean a committee appointed by the Board to
administer the Plan.
N. Stock Exchange shall mean either the American Stock Exchange or the
New York Stock Exchange.
