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EXHIBIT 4(a)
GENOME THERAPEUTICS CORP. EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE OF PLAN
The Genome Therapeutics Corp. Employee Stock Purchase Plan (the "Plan")
is intended to provide a method by which eligible employees of Genome
Therapeutics Corp. (the "Company") may use voluntary, systematic payroll
deductions to purchase shares of Common Stock, $.10 par value of the Company
(such Common Stock being hereafter referred to as "Stock") and thereby acquire
an interest in the future of the Company. The purpose of the Plan is to assist
the Company in retaining high quality employees and to expand employee stock
ownership. The Plan is intended to qualify under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), and shall be construed
accordingly.
SECTION 2. OPTIONS TO PURCHASE STOCK
Under the Plan, there is available an aggregate of not more than
250,000 shares of Stock (subject to adjustment as provided in Section 15) for
sale pursuant to the exercise of options ("Options") granted under the Plan to
employees of the Company ("Employees") who meet the eligibility requirements set
forth in Section 3 hereof ("Eligible Employees"). The Stock to be delivered upon
exercise of Options under the Plan may be either shares of authorized but
unissued Stock or shares of reacquired Stock, as the Board of Directors of the
Company (the "Board of Directors") may determine.
SECTION 3. ELIGIBLE EMPLOYEES
Except as otherwise provided below, each Employee who, on the first day
of an Option Period (as defined below) following his or her employment by the
Company, is scheduled to work at least 20 hours per week and is expected to be
employed by Company for at least five months per year will be eligible to
participate in the Plan
(a) Any Employee who immediately after the grant of an Option would own
(or pursuant to Section 423(b)(3) of the Code would be deemed to own) stock
possessing 5% or more of the total combined voting power or value of all classes
of stock of the Company, as defined in Section 424 of the Code, will not be
eligible to receive an Option to purchase Stock pursuant to the Plan.
(b) No Employee will be granted an Option under the Plan that would
permit his or her rights to purchase shares of stock under all employee stock
purchase plans of the Company to accrue at a rate which exceeds $25,000 in fair
market value of such stock (determined at the time the Option is granted) for
each calendar year during which any such Option granted to such Employee is
outstanding at any time, as provided in Section 423 of the Code.
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SECTION 4. METHOD OF PARTICIPATION
The first stock option period (the "Initial Option Period") for which
Options may be granted hereunder shall commence on March 1, 2000 and end on June
30, 2000. After the Initial Option Period, the periods for which Options may be
granted hereunder shall be from January 1 to June 30 and from July 1 to December
31 of each year. Such periods, together with the Initial Option Period, shall be
referred to as the "Option Periods." Each person who will be an Eligible
Employee on the first day of any Option Period may elect to participate in the
Plan by executing and delivering, at least 15 days prior to such day, a payroll
deduction authorization in accordance with Section 5. Such Employee will thereby
become a participant ("Participant") on the first day of such Option Period and
will remain a Participant until his or her participation is terminated as
provided in the Plan.
SECTION 5. PAYROLL DEDUCTION
The payroll deduction authorization will request withholding at a rate
(in whole percentages) of not less than 1% nor more than 15% from the
Participant's Compensation by means of substantially equal payroll deductions
over the Option Period from payroll periods ending in the Option Period. For
purposes of the Plan, "Compensation" means all compensation paid to the
Participant by the Company and currently includable in his or her income,
including bonuses, commissions and other amounts includible in the definition of
compensation provided in the Treasury Regulations promulgated under Section 415
of the Code, plus any amount that would be so included but for the fact that it
was contributed to a qualified plan pursuant to an elective deferral under
Section 401(k) of the Code, but not including payments under stock option plans
and other employee benefit plans or any other amounts excluded from the
definition of compensation provided in the Treasury Regulations under Section
415 of the Code. Once per quarter, a Participant may increase or decrease the
withholding rate of his or her payroll deduction authorization by written notice
delivered to the Company at least 15 days prior to the first day of the Option
Period as to which the change is to be effective. All amounts withheld in
accordance with a Participant's payroll deduction authorization will be credited
to a withholding account for such Participant.
SECTION 6. GRANT OF OPTIONS
Each person who is a Participant on the first day of an Option Period
will as of such day be granted an Option for such Period. Such Option will be
for the number of whole shares of Stock to be determined by dividing (i) the
balance in the Participant's withholding account on the last day of the Option
Period, by (ii) the purchase price per share of the Stock determined under
Section 7; PROVIDED, that the maximum number of shares that may be purchased by
any Participant for the Initial Option Period shall be that number of shares
which had a fair market value of $8,333.33 on the first day of the Initial
Option Period; PROVIDED, FURTHER, that the maximum number of shares that may be
purchased by any Participant for any subsequent Option Period shall be that
number of shares which had a fair market value of $12,500 on the first day of
the Option Period. The Company will reduce, on a substantially proportionate
basis, the number of shares of Stock purchasable by each Participant upon
exercise of his or her Option for an Option Period in the event that the number
of shares then available under the Plan is insufficient.
SECTION 7. PURCHASE PRICE
The purchase price of Stock issued pursuant to the exercise of an
Option will be 85% of the fair market value of the Stock at (a) the time of
grant of the Option or (b) the time at which the Option is deemed exercised,
whichever is less. Fair market value will mean the Closing Price of the Stock.
The "Closing Price" of the Stock on any business
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day will be the last sale price, regular way, with respect to such Stock, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, with respect to such Stock, in either case as
reported on the NASDAQ Stock Market ("NASDAQ"); or, if such Stock is not listed
or admitted to trading on NASDAQ, as reported on such other principal national
securities exchange on which such Stock is listed or admitted to trading.
SECTION 8. EXERCISE OF OPTIONS
If any Employee is a Participant in the Plan on the last business day
of an Option Period, he or she will be deemed to have exercised the Option
granted to him or her for that period. Upon such exercise, the Company will
apply the balance of the Participant's withholding account to the purchase of
the number of whole shares of Stock determined under Section 6 and as soon as
practicable thereafter will issue and deliver certificates for said shares to
the Participant and will return to him or her the balance, if any, of his or her
withholding account in excess of the total purchase price of the shares so
issued; PROVIDED, that if the balance left in the account consists solely of an
amount equal to the value of a fractional share it will be retained in the
Account and carried over to the next Period. No fractional shares will be issued
hereunder.
Notwithstanding anything herein to the contrary, the Company's
obligation to issue and deliver shares of Stock under the Plan will be subject
to the approval required of any governmental authority in connection with the
authorization, issuance, sale or transfer of said shares, to any requirements of
any national securities exchange applicable thereto, and to compliance by the
Company with other applicable legal requirements in effect from time to time.
SECTION 9. INTEREST
No interest will be payable on withholding accounts.
SECTION 10. CANCELLATION AND WITHDRAWAL
A Participant who holds an Option under the Plan may at any time prior
to exercise thereof under Section 8 cancel all or any part of his or her Options
by written notice delivered to the Company. Upon such cancellation, the balance
in the Participant's withholding account will be returned to the Participant.
A Participant may terminate his or her payroll deduction authorization
as of any date by written notice delivered to the Company and will thereby cease
to be a Participant as of such date. Any Participant who voluntarily terminates
his or her payroll deduction authorization prior to the last business day of an
option period will be deemed to have canceled his or her Option.
SECTION 11. TERMINATION OF EMPLOYMENT
Upon the termination of a Participant's service with the Company by
reason of retirement or disability (permanent or temporary) or upon a
Participant's leave of absence with the Company, such Participant, by written
notice to the Company, may request that the balance of his or her withholding
account be applied to the exercise of his or her Option as of the last day of
the Option Period pursuant to Section 8 of the Plan.
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In the absence of such a written notice to the Company, subject to
Section 12, upon the termination of a Participant's service with the Company for
any reason, he or she will cease to be a Participant, and any Option held by him
or her under the Plan will be deemed canceled, the balance of his or her
withholding account will be returned, and he or she will have no further rights
under the Plan.
SECTION 12. DEATH OF PARTICIPANT
A Participant may file a written designation of beneficiary specifying
who is to receive any stock and/or cash credited to the Participant under the
Plan in the event of the Participant's death, which designation will also
provide for the election by the Participant of either (i) cancellation of the
Participant's Option upon his or her death, as provided in Section 10 or (ii)
application as of the last day of the Option Period of the balance of the
deceased Participant's withholding account at the time of death to the exercise
of his or her Option, pursuant to Section 8 of the Plan. In the absence of a
valid election otherwise, the death of a Participant will be deemed to effect a
cancellation of his or her Option. A designation of beneficiary and election may
be changed by the Participant at any time, by written notice. In the event of
the death of a Participant and receipt by the Company of proof of the identity
and existence at the Participant's death of a beneficiary validly designated by
him or her under the Plan, the Company will deliver such stock and/or cash to
which the beneficiary is entitled under the Plan to such beneficiary. In the
event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Participant's death,
the Company will deliver such stock and/or cash to the executor or administrator
of the estate of the Participant, if the Company is able to identify such
executor or administrator. If the Company is unable to identify such
administrator or executor, the Company in its discretion may deliver such stock
and/or cash to the spouse or to any one or more dependents of a Participant as
the Company may determine. No beneficiary will, prior to the death of the
Participant by whom he or she has been designated, acquire any interest in the
stock or cash credited to the Participant under the Plan.
SECTION 13. EQUAL RIGHTS; PARTICIPANT'S RIGHTS NOT TRANSFERABLE
All Participants granted Options under the Plan will have the same
rights and privileges, and each Participant's rights and privileges under any
Option granted under the Plan will be exercisable during his or her lifetime
only by him or her, and will not be sold, pledged, assigned, or transferred in
any manner. In the event any Participant violates the terms of this Section, any
Options held by him or her may be terminated by the Company and upon return to
the Participant of the balance of his or her withholding account, all his or her
rights under the Plan will terminate.
SECTION 14. EMPLOYMENT RIGHTS
Nothing contained in the provisions of the Plan will be construed to
give to any Employee the right to be retained in the employ of the Company or to
interfere with the right of the Company to discharge any Employee at any time.
SECTION 15. CHANGE IN CAPITALIZATION
In the event of any change in the outstanding Stock of the Company by
reason of a stock dividend, split-up, recapitalization, merger, consolidation,
reorganization, or other capital change, the aggregate number of shares
available under the Plan, the number of shares under Options granted but not
exercised, the maximum number of shares purchasable under an Option, and the
Option price will be appropriately adjusted.
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SECTION 16. ADMINISTRATION OF PLAN
The Plan will be administered by the Board of Directors, which will
have the right to determine any questions which may arise regarding the
interpretation and application of the provisions of the Plan and to make,
administer, and interpret such rules and regulations as it will deem necessary
or advisable.
SECTION 17. AMENDMENT AND TERMINATION OF PLAN
The Company reserves the right at any time or times to amend the Plan
to any extent and in any manner it may deem advisable by vote of the Board of
Directors; provided, however, that any amendment relating to the aggregate
number of shares which may be issued under the Plan (other than an adjustment
provided for in Section 15) will have no force or effect unless it will have
been approved by the shareholders within twelve months before or after its
adoption.
The Plan may be suspended or terminated at any time by the Board of
Directors, but no such suspension or termination will adversely affect the
rights and privileges of holders of the outstanding Options. The Plan will
terminate in any case when all or substantially all of the Stock reserved for
the purposes of the Plan has been purchased.
SECTION 18. APPROVAL OF SHAREHOLDERS
The Plan will be subject to the approval of the shareholders of the
Company secured within twelve months before or after the date the Plan is
adopted by the Board of Directors.
SECTION 19. EFFECTIVE DATE
The effective date of the Plan shall be March 1, 2000.
