SCI SYSTEMS, INC.
EMPLOYEE STOCK PURCHASE PLAN
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SCI SYSTEMS, INC.
EMPLOYEE STOCK PURCHASE PLAN
TABLE OF CONTENTS
1. Purpose..................................................................1
2. Definitions..............................................................1
3. Eligibility and Participation............................................2
4. Payroll Deductions.......................................................3
5. Cash Withdrawals and Distributions upon Termination of Participation.....3
6. Grant of Option and Option Exercise Price................................4
7. Exercise of Option.......................................................5
8. Stock Subject to ESPP....................................................5
9. Administration...........................................................6
10. Administrative Fees......................................................6
11. Transferability..........................................................6
12. Adjustments Upon Changes in Capitalization...............................6
13. Amendment or Termination.................................................7
14. Notices..................................................................7
15. No Contract..............................................................7
16. Headings and Construction................................................7
17. Approval of Stockholders.................................................7
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SCI SYSTEMS, INC.
EMPLOYEE STOCK PURCHASE PLAN
1........Purpose. The purpose of the SCI Systems, Inc. Employee Stock
Purchase Plan (the "ESPP") is to provide employees of SCI Systems, Inc., a
Delaware corporation (the "Company"), with an opportunity to be compensated
through the benefits of stock ownership and to acquire an interest in the
Company through the purchase of Common Stock of the Company ("Common Stock").
The Company intends the ESPP to qualify as an employee stock purchase plan under
Section 423 of the Internal Revenue Code. Accordingly, the provisions of the
ESPP shall be construed so as to extend and limit participation in a manner
consistent with the requirements of Section 423. The ESPP was adopted by the
Board of Directors on _____________ . Under the ESPP employees can elect to
purchase shares of Common Stock through payroll deduction at a price equal to
85% of the lesser of the Fair Market Value of the Common Stock at the beginning
of each three-month purchase period or the Fair Market Value of the Common Stock
at the end of each three-month purchase period.
2........Definitions.
(a) "Base Salary" means base salary and wages paid to an
Eligible Employee by the Company, excluding commissions, income
attributable to the exercise of stock options, bonuses, and awards.
(b) Board of Directors" means the board of directors of the
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Company.
(c)"Code" means the Internal Revenue Code of 1986, as amended.
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(d)"Common Stock" means Common Stock, $0.10 par value, of the
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Company.
(e)"Eligible Employee" means any Employee of the Company or
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a Subsidiary for purposes of the Federal Insurance Contributions Act,
excluding:
(1) any Employee who customarily is employed for
twenty (20) hours per week or less;
(2) any Employee who would own (immediately after the
grant of an option under the ESPP and applying the rules of
Code Section 424(d) in determining stock ownership) shares,
and/or hold outstanding options to purchase shares, possessing
five percent (5%) or more of the total combined voting power
or value of all classes of shares of the Company or of any
Parent or Subsidiary; and
(3) any Employee who customarily is employed for five
(5) months or less.
(f) "Employee" means any person who is employed by
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the Company or a Subsidiary.
(g) "Entry Date" means the first day of each Offering
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Period.
(h) "Offering Period" means each three-month period
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beginning February 1, May 1, August 1 and November 1.
(i) "Parent" means a corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if, at the
time of the granting of the option hereunder, each of the corporations
other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
(j) "Participant" means an Employee who participates in the
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ESPP pursuant to Paragraph 3.
(k) "Subsidiary" means a corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at
the time of the granting of the option hereunder, each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations
in such chain.
3........Eligibility and Participation.
(a) Any person who is an Eligible Employee and has been
employed for at least six months on or prior to an Entry Date shall be
eligible to become a Participant in the ESPP beginning on that Entry
Date and shall become a Participant as of that Entry Date by completing
an authorization form provided by the Company, in the form and
containing the terms and conditions as the Company from time to time
may determine, and filing it with the Company by the date required by
the Company.
(b) Any Eligible Employee who first completes six months of
employment during an Offering Period shall be eligible to become a
Participant in the ESPP as of the first day of the Offering Period
beginning after the date upon which that person became an Eligible
Employee and shall become a Participant as of such date by completing
an authorization form provided by the Company, in the form and
containing the terms and conditions as the Company from time to time
may determine, and filing it with the Company by the date required by
the Company.
(c) A person shall cease to be a Participant upon the earliest
to occur of:
(1) the date of a termination of employment from the
Company and all Subsidiaries, for any reason, before the last
day of the Offering Period;
(2) the first day of the Offering Period following a
cessation of payroll deductions for the Participant under the
ESPP or
(3) the date of a withdrawal by the Participant under
Paragraph 5.
4........Payroll Deductions. A Participant may contribute to the ESPP
through payroll deductions as follows:
(a) A Participant shall on his authorization form elect to
have payroll deductions made from his Base Salary at a rate which,
expressed as a whole percentage, shall be at least one percent (1%) and
not exceed ten percent (10%) of his Base Salary.
(b) Payroll deductions for a Participant shall commence for
Base Salary paid during the Offering Period for which the authorization
form is effective and shall continue until the effective date of an
Employee's authorization to change the rate of his payroll deductions
or stop payroll deductions.
(c) A Participant may change the rate of his payroll
deductions effective on the first day of any Offering Period, provided
the Employee files with the Company his authorization form by the date
required by the Company. However, a Participant may elect to stop
payroll deductions effective as of the first day of the payroll period
coinciding with or immediately following the Company's processing the
Participant's request.
(d) All payroll deductions made for a Participant shall be
credited to his account under the ESPP. All payroll deductions made
from Participants' Base Salary under the ESPP shall be commingled with
the general assets of the Company and no separate fund shall be
established. Participants' accounts are solely for bookkeeping purposes
and the Company shall not be obligated to pay Participants interest on
account balances.
5........Cash Withdrawals, Distributions upon Termination of
Participation and Suspension for Early Dispositions.
(a) A Participant may elect to withdraw the balance of the
cash credited to his account under the ESPP by giving written notice to
the Company prior to the date specified by the Company before the end
of the current Offering Period.
(b) The Company shall pay the cash balance of a Participant's
account to the Participant as soon as administratively feasible
following the date of processing of the withdrawal request or the date
a person ceases to be a Participant pursuant to Paragraph 3(c), as
applicable.
(c) On the date of the Company's receipt and processing of a
Participant's withdrawal request or the date a person ceases to be a
Participant pursuant to Paragraph 3(c), the Participant's outstanding
options under the ESPP shall immediately terminate. A Participant who
receives a withdrawal of the cash balance of his or her account under
the ESPP shall not be entitled to participate in the ESPP until the
third succeeding Entry Date following the date of the withdrawal.
(d) If a Participant withdraws the cash balance of his
account, no further payroll deductions will be made from the
Participant's Compensation during that Offering Period.
(e) In the event that a Participant sells any of the shares
of Common Stock, or any interest therein, that were acquired by the
Participant under the Plan prior to two years from the date of
acquisition, such Participant shall be suspended from participation in
the Plan from the date of such sale until the third succeeding Entry
Date following the date of such sale. Notwithstanding the foregoing,
any amounts contributed by such Participant during the Offering Period
in which the sale occurs shall remain in the Participant's account and
be used to purchase shares as of the end of the then current Offering
Period, unless the Participant has made an election for a cash
withdrawal pursuant to Paragraph 5(a) hereof.
6........Grant of Option and Option Exercise Price.
(a) As of the beginning of each Offering Period, a Participant
is granted an option to purchase a whole number of shares at
eighty-five percent (85%) of the lesser of the fair market value as of
the first day of each Offering Period or the last day of each Offering
Period up to an amount which does not exceed the Participant's payroll
deduction for that Offering Period. The option price of each share of
Common Stock to be purchased with a Participant's account during a
Offering Period shall be equal to eighty-five percent (85%) of the
lesser of the fair market value of one share of Common Stock on the
first day of the Offering Period or the fair market value of one share
of Common Stock on the last day of the Offering Period.
(b) Notwithstanding the preceding subparagraph or any other
provisions of the ESPP no Participant shall be granted an option which
permits his rights to purchase shares under all employee stock purchase
plans of the Company and its Parent and Subsidiaries to accrue at a
rate which exceeds $25,000 of the fair market value of the shares
(determined at the time the option is granted) for each calendar year
in which such stock option is outstanding at any time.
(c) For purposes of the preceding subparagraphs, the fair
market value of a share of Common Stock on the first and last day of
each Offering Period shall be determined as of each such date, or the
most immediately preceding business day with respect to which the
information required in the following clauses is available, as follows:
(1)if the Common Stock is traded on a national
securities exchange, the closing sale price on that date;
(2)if the Common Stock is not traded on any such
exchange, the closing sale price as reported by the NASDAQ
Stock Market;
(3)if no such closing sale price information is
available, the average of the closing bid and asked prices as
reported by the NASDAQ Stock Market; or
(4) if there are no such closing bid and asked
prices, the average of the closing bid and asked prices as
reported by any other commercial service.
(d) All options granted during an Offering Period shall
expire on the last day of that Offering Period.
7........Exercise of Option. A Participant's option for the purchase of
shares during an Offering Period will be automatically exercised for him on the
last day of each Offering Period for the purchase of the maximum number of
shares, whole and fractional, which the Participant's account on that day can
purchase at the option exercise price. Any funds remaining after the exercise of
a Participant's option shall be held and will be available for purchases of
shares on the last day of the next succeeding Offering Period.
8........Stock Subject to ESPP.
(a) The shares of Common Stock to be sold to Participants
under the ESPP may, at the election of the Company, be either treasury
shares, shares originally issued for such purpose or shares acquired on
the open market. The maximum number of shares made available for sale
under the ESPP shall be five hundred thousand 500,000) shares, subject
to adjustment upon changes in capitalization of the Company as provided
in Paragraph 12. If the total number of shares for which options are to
be exercised in accordance with Paragraph 7 exceeds the number of
shares then available under the ESPP, the Company shall make a pro rata
allocation of the shares available in as nearly a uniform manner as
shall be practicable and as it shall determine to be equitable.
(b) A Participant will have no interest in shares covered by
his option until such option has been exercised.
(c)Shares to be delivered to a Participant under the ESPP will
initially be registered in book entry form with the registrar for the
Company or held in street name by a brokerage firm designated by the
Company. Any individual who has acquired shares of Common Stock
pursuant to the Plan may request a certificate for whole shares of
Common Stock once the shares have been owned by the individual for
twenty-four months.
9........Administration. The ESPP shall be administered by the
Committee, which shall be comprised of at least two members of the Board of
Directors who are "non-employee directors," as defined in Rule 16b-3 as
promulgated under the Securities Exchange Act of 1934. Subject to the provisions
of the ESPP, the Committee shall have full and conclusive authority to interpret
the ESPP; to prescribe, amend and rescind rules and regulations relating to the
ESPP; and to make all other determinations necessary or advisable for the proper
administration of the ESPP. The Committee's decisions shall be final and
binding. The Committee may delegate the duty to perform administrative
functions.
10.......Administrative Fees. The Committee may charge Participants'
accounts for reasonable administrative fees to defray the administrative costs
of the Plan, which shall in no event exceed the actual administrative costs of
the Plan.
11.......Transferability. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of an option or
to receive shares under the ESPP may be assigned, transferred, pledged, or
otherwise disposed of in any way by the Participant with the exception of by
will or the laws of descent and distribution. Any attempted assignment,
transfer, pledge, or other disposition other than by will or by the laws of
descent or distribution shall be without effect.
12.......Adjustments Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Common Stock
of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company by reason of a recapitalization, reclassification, stock
split, combination of shares, or dividend payable in shares of Common
Stock, an appropriate adjustment shall be made by the Committee to the
number and kind of shares available for the granting of options, or as
to which outstanding options shall be exercisable, and to the option
price. No fractional shares shall be issued or optioned in making any
such adjustments. All adjustments made by the Committee under this
paragraph shall be conclusive.
(b) In the event of or in anticipation of a merger,
consolidation or other reorganization of the Company or tender offer
for shares of Common Stock, the Committee may make such adjustments
with respect to options and take such other action as it deems
necessary or appropriate to reflect such merger, consolidation,
reorganization or tender offer, including, without limitation, the
substitution of new options, the termination of outstanding options for
cash, the adjustment of outstanding options, or the acceleration of
options.
(c) The grant of an option pursuant to the ESPP shall not
affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
13.......Amendment or Termination. The Board of Directors at any time
may amend or terminate the Plan without shareholder approval; provided, however,
that the Board of Directors may condition any amendment on the approval of the
shareholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws to which the Company, this
Plan, or Employees are subject. No amendment or termination of the Plan shall
adversely affect the rights of an Employee without his consent with respect to
Common Stock previously acquired under the Plan.
14.......Notices. All notices or other communications by a Participant
to the Company under or in connection with the ESPP shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company.
15.......No Contract. The ESPP shall not be deemed to constitute a
contract between the Company or any Subsidiary and any Employee or to be a
consideration or an inducement for the employment of any Employee. Nothing
contained in the ESPP shall be deemed to give any Employee the right to be
retained in the service of the Company or any Subsidiary or to interfere with
the right of the Company or any Subsidiary to discharge any Employee at any
time, regardless of the effect which such discharge shall have upon him or her
as a Participant.
16.......Headings and Construction. The headings to Paragraphs in the
ESPP have been included for convenience of reference only. The ESPP shall be
interpreted and construed in accordance with the laws of the State of Delaware.
17.......Approval of Stockholders. The ESPP shall be submitted to the
stockholders of the Company for their approval within twelve (12) months after
the adoption of the ESPP by the Board of Directors. The ESPP is conditioned upon
the approval of the stockholders of the Company, and failure to receive their
approval shall render the ESPP and all outstanding options issued thereunder
void and of no effect.
IN WITNESS WHEREOF, the Company has caused this ESPP to be executed as
of this ____ day of _________, 2000.
SCI SYSTEMS, INC.
By:
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Title:
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ATTEST:
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Title:
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[CORPORATE SEAL]
