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EXHIBIT 10.17
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INSIGNIA/ESG HOLDINGS, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
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Table of Contents
Page
1. Purpose.......................................................................................1
2. Definitions...................................................................................1
3. Eligibility...................................................................................4
4. Grant of Option; Participation................................................................4
5. Payroll Deductions............................................................................5
6. Exercise of Option............................................................................6
7. Delivery of Common Stock......................................................................6
8. Withdrawals; Termination of Employment; Disability or Leave of Absence Prior to
Termination of Employment.....................................................................7
9. Dividends and Interest........................................................................8
10. Stock.........................................................................................8
11. Administration................................................................................9
12. Designation of Beneficiary...................................................................10
13. Transferability..............................................................................10
14. Use of Funds.................................................................................11
15. Reports......................................................................................11
16. Effect of Certain Changes....................................................................11
17. Amendment or Termination.....................................................................12
18. Notices......................................................................................12
19. Regulations and Other Approvals; Governing Law...............................................12
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20. Withholding of Taxes.........................................................................13
21. No Employment Rights.........................................................................13
22. Severability of Provisions...................................................................13
23. Construction.................................................................................14
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INSIGNIA/ESG HOLDINGS, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries and Designated Parent with an opportunity to
purchase Common Stock of the Company through accumulated payroll deductions. It
is the intention of the Company that the Plan qualify as an "employee stock
purchase plan" within the meaning of Section 423 of the Code and the provisions
of the Plan shall be construed in a manner consistent with the requirements of
such section of the Code. The Plan is effective as of the Distribution Date.
2. DEFINITIONS.
(a) "Agent" shall mean the agent appointed by the
Committee pursuant to Section 11(b) hereof.
(b) "Board" shall mean the Board of Directors of the
Company.
(c) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(d) "Committee" shall mean the Compensation Committee
of the Board or such other committee or subcommittee appointed from time to time
by the Board. To the extent that no Committee exists which has the authority to
administer the Plan, the functions of the Committee shall be exercised by the
Board.
(e) "Common Stock" shall mean shares of the Company's
common stock, par value $.01 per share.
(f) "Company" shall mean Insignia/ESG Holdings, Inc.,
a Delaware corporation.
(g) "Compensation" shall mean the total cash
compensation paid during an Offering Period by the Company, any Designated
Subsidiary or Designated Parent or any affiliate of the Company to an Employee,
including overtime and bonuses, as reported by the Company, any Designated
Subsidiary or Designated Parent or any affiliate of the Company for federal
income tax purposes, and including an Employee's portion of salary deferral
contributions pursuant to Section 401(k) of the Code and any amount excludable
pursuant to Section 125 of the Code. Compensation shall not include any
contributions by the
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Company or any of its affiliates to, or benefits paid under, this Plan or under
any other pension, profit-sharing, fringe benefit, group insurance or other
employee welfare plan heretofore or hereafter adopted or any deferred
compensation arrangement. For purposes of this Section, affiliate shall mean any
entity required to be aggregated with the Company under Section 414 (b), (c),
(m) or (o) of the Code.
(h) "Designated Parent" shall mean the Parent
Corporation of the Company if so specifically designated as eligible to
participate in the Plan by the Board in its sole discretion.
(i) "Designated Subsidiaries" shall mean each
Subsidiary Corporation of the Company on the effective date of the Plan and
future Subsidiary Corporations which are not specifically excluded from
participation by the Board from time to time in its sole discretion.
Notwithstanding the foregoing, the term "Designated Subsidiaries" shall not
include Subsidiary Corporations located in Foreign Jurisdictions, unless the
Board specifically designates such Subsidiary Corporation as a Designated
Subsidiary.
(j) "Disability" or "Disabled" shall mean a permanent
and total disability as defined under Section 22(e)(3) of the Code.
(k) "Distribution Date" shall mean the date of
distribution of Common Stock by Insignia Financial Group, Inc. to holders of
Class A Common Stock, par value $.01 per share, of Insignia Financial Group,
Inc.
(l) "Employee" shall mean any person, including an
officer, who is regularly and continuously employed by the Company or a
Designated Subsidiary or a Designated Parent.
(m) "Employer" shall mean, with respect to any
Employee, the Company or Designated Subsidiary or Designated Parent by which the
Employee is employed.
(n) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(o) "Exercise Date" shall mean the last business day
of each Offering Period in which payroll deductions are made under the Plan.
(p) "Fair Market Value" for purposes of this Plan,
unless otherwise required by any applicable provision of the Code or any
regulations issued thereunder, shall mean, as of any date, the last sales price
reported for the Common Stock on the applicable date (i) as reported by the
principal national securities exchange in the United States on which it is then
traded, or (ii) if not traded on any such national securities exchange, as
quoted on an automated quotation system sponsored by the National Association of
Securities Dealers. If the Common Stock is not readily tradable on a national
securities exchange or any system
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sponsored by the National Association of Securities Dealers, its Fair Market
Value shall be set in good faith by the Committee on the advice of a registered
investment adviser (as defined under the Investment Advisers Act of 1940).
(q) "Foreign Jurisdiction" shall mean any
jurisdiction outside of the United States including, without limitation,
countries, states, provinces and localities.
(r) "Leave of Absence" shall mean a leave of absence
determined in accordance with the personnel policies of a Participant's
Employer.
(s) "Offering Date" shall mean the first day of each
calendar quarter or such other dates designated by the Committee in its sole
discretion.
(t) "Offering Period" shall mean each calendar
quarter during the effectiveness of the Plan, commencing on each Offering Date,
provided that the Committee shall have the power to change the duration of
Offering Periods.
(u) "Option" shall mean an option to purchase shares
of Common Stock of the Company.
(v) "Parent Corporation" shall mean any corporation
(other than the Company) in an unbroken chain of corporations ending with the
Company if, at the time of granting an Option, each of the corporations other
than the employer corporation 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.
(w) "Participant" shall mean an Employee who
participates in the Plan.
(x) "Plan" shall mean this Insignia/ESG Holdings,
Inc. 1998 Employee Stock Purchase Plan, as amended from time to time.
(y) "Rule 16b-3" shall mean Rule 16b-3 under Section
16(b) of the Exchange Act as then in effect or any successor provisions.
(z) "Subsidiary Corporation" shall mean any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company at the time of granting an Option, 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.
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3. ELIGIBILITY.
(a) Subject to the requirements of Section 4(b)
hereof, any person who is (i) an Employee as of an Offering Date and (ii) who
customarily works more than twenty (20) hours per week for an Employer and more
than five (5) months per year for an Employer shall be eligible to participate
in the Plan and be granted an Option for the Offering Period commencing on such
Offering Date.
(b) Notwithstanding any provisions of the Plan to the
contrary, no Employee shall be granted an Option under the Plan:
(i) if, immediately after the grant, such Employee
(or any other person whose stock would be attributed to such
Employee pursuant to Section 424(d) of the Code) would own
stock and/or hold outstanding Options to purchase stock
possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company
or of any Subsidiary Corporation or Parent Corporation; or
(ii) which permits such Employee's right to purchase
stock under all employee stock purchase plans (as described in
Section 423 of the Code) of the Company and any Subsidiary
Corporation or Parent Corporation to accrue at a rate which
exceeds twenty-five thousand dollars ($25,000) of fair market
value of such stock (determined at the time such option is
granted) for any calendar year in which such option is
outstanding at any time.
(c) Notwithstanding anything herein to the contrary,
unless otherwise permitted pursuant to the Code, "qualified real estate agents"
(as defined in Section 3508 of the Code) shall not be eligible to participate in
the Plan.
4. GRANT OF OPTION; PARTICIPATION.
(a) On each Offering Date, the Company shall commence
an offer by granting each eligible Employee an Option to purchase shares of
Common Stock, subject to the limitations set forth in Sections 3(b) and 10
hereof. The Committee shall specify the terms and conditions for each such
offer, including the number of shares of Common Stock that may be purchased
thereunder.
(b) Each eligible Employee may elect to become a
Participant in the Plan with respect to an Offering Period, only by filing an
agreement with the Employer authorizing payroll deductions (as set forth in
Section 5 hereof).
(c) The Option price per share of the Common Stock
subject to an offering shall be determined by the Board, in its sole discretion,
and shall remain in effect
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unless modified at least thirty (30) days prior to the applicable Offering
Date, but in no event shall be less than the lesser of: (i) eighty-five percent
(85%) of the Fair Market Value of a share of Common Stock on the first business
day of the Offering Period or (ii) eighty-five (85%) of the Fair Market Value of
a share of Common Stock on the Exercise Date. Effective as of the Distribution
Date until modified by the Board, the price per share of the Common Stock
subject to an offering shall be the lesser of: (i) eighty-five percent (85%) of
the Fair Market Value of a share of Common Stock on the first business day of
the Offering Period or (ii) eighty-five (85%) of the Fair Market Value of a
share of Common Stock on the Exercise Date.
5. PAYROLL DEDUCTIONS.
(a) At least fourteen (14) days (or such shorter
period designated by the Committee) prior to each Offering Date, a Participant
may, in the manner prescribed by forms approved by the Committee, and subject to
the restriction set forth in Section 3(b)(ii) above, authorize payroll
deductions in any whole percentage up to ten percent (10%) of his or her
Compensation during the Offering Period. A Participant may increase or decrease
such payroll deductions prior to the beginning of any subsequent Offering
Period, upon fourteen (14) days' (or such shorter period designated by the
Committee) prior written notice to the Committee. A Participant may terminate a
payroll deduction authorization at any time, upon fourteen (14) days' (or such
shorter period designated by the Committee) prior written notice to the
Committee. An authorization shall remain in effect until modified or terminated
by the Participant or until the percentage used to determine the Option price
(as set forth in Section 4(c) above) is effectively increased.
(b) All payroll deductions made by a Participant
shall be credited to such Participant's account under the Plan. A Participant
may not make any additional payments into such account.
(c) In the event a Participant makes a hardship
withdrawal of employee deferral (401(k)) contributions under a 401(k) profit
sharing plan of the Company, a Designated Subsidiary, or a Designated Parent or
an affiliate or any other plan qualified under Section 401(a) of the Code that
contains a Code Section 401(k) feature, such Participant's payroll deductions
and the purchase of shares of Common Stock under the Plan shall be suspended
until the first payroll period following the Offering Date commencing after the
twelve (12) month period after such hardship withdrawal. If a Participant who
elects a hardship withdrawal under such a 401(k) profit sharing plan or such
other plan has a cash balance accumulated in his or her account at the time of
withdrawal that has not already been applied to purchase shares of Common Stock,
such cash balance shall be returned to the Participant as soon as
administratively practicable.
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6. EXERCISE OF OPTION.
(a) Unless a Participant withdraws from the Plan as
provided in Section 8 hereof, such Participant's election to purchase shares of
Common Stock shall be exercised automatically on the Exercise Date, and the
maximum number of whole and/or fractional shares of Common Stock subject to such
Option shall be purchased for such Participant at the applicable Option price
with the accumulated payroll deductions in such Participant's account. If all or
any portion of the shares cannot reasonably be purchased on the Exercise Date in
the sole discretion of the Committee because of unavailability or any other
reason, such purchase shall be made as soon thereafter as feasible. In no event
shall certificates for any fractional shares be issued under the Plan.
(b) The shares of Common Stock purchased upon
exercise of an Option hereunder shall be credited to the Participant's account
under the Plan and shall be deemed to be transferred to the Participant on the
Exercise Date and, except as otherwise provided herein, the Participant shall
have all rights of a stockholder with respect to such shares, including, without
limitation, the right to receive dividends on the shares and the right to vote
or tender such shares.
7. DELIVERY OF COMMON STOCK.
(a) Certificates for whole shares of Common Stock
shall not be issued to Participants unless and until requested or as otherwise
provided pursuant to Section 8. Such certificates shall be issued as soon as
administratively feasible following the Participant's request for issuance. If a
Participant requests certificates for whole shares of Common Stock, any
fractional shares of Common Stock shall remain in the Participant's account
during his or her employment, unless he or she requests cash in lieu of the
fractional shares. A fee fixed by the Plan's Agent or transfer agent, as the
case may be, may be charged to the Participant for the issuance of certificates
of shares of Common Stock and for the replacement of lost certificates.
Certificates for a fractional share of Common Stock shall not be issued under
any circumstance.
(b) A Participant may request the Agent to sell all
or a portion of shares of Common Stock for which certificates have not been
issued and receive cash for such shares, subject to any brokerage fees or
commissions.
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8. WITHDRAWALS; TERMINATION OF EMPLOYMENT; DISABILITY OR LEAVE OF ABSENCE
PRIOR TO TERMINATION OF EMPLOYMENT.
(a) A Participant may withdraw all, but not less than
all, the payroll deductions credited to such Participant's account (that have
not been used to purchase shares of Common Stock) under the Plan at any time
prior to the Exercise Date by giving fourteen (14) days' (or such shorter period
designated by the Committee) prior written notice to the Committee. All such
payroll deductions credited to such Participant's account shall be paid to such
Participant (without interest) promptly after receipt of such Participant's
written notice of withdrawal and such Participant's Option for the Offering
Period in which the withdrawal occurs shall be automatically terminated. No
further payroll deductions for the purchase of shares of Common Stock shall be
made for such Participant during such Offering Period. A Participant's
withdrawal from an offering shall not have any effect upon such Participant's
eligibility to participate in a subsequent offering or in any similar plan which
may hereafter be adopted by the Company.
(b) If a Participant retires or terminates his or her
employment with the Company, any Subsidiary Corporation and any Parent
Corporation for any reason other than death, the payroll deductions credited to
such Participant's account (that have not been used to purchase shares of Common
Stock) shall be returned or distributed to the Participant (without interest) as
soon as practicable following the Participant's retirement or other termination
of employment. The Participant shall elect, within the sixty (60) day period
following the Participant's retirement or other termination of employment with
the Company, any Subsidiary Corporation and any Parent Corporation (i) to
receive certificates for all of the whole shares of Common Stock and cash in
lieu of any fractional shares of Common Stock credited to the Participant's
account under the Plan, (ii) to have certificates for all shares of Common Stock
(including fractional shares) credited to the Participant's account under the
Plan transferred to an individual brokerage account established by the Agent for
the benefit of the Participant or for the benefit of the Participant and his or
her spouse as joint tenants with rights of survivorship, or (iii) a combination
of (i) and (ii). A fee fixed by the Plan's Agent may be charged to the
Participant for the issuance of certificates of shares of Common Stock.
(c) In the event of the Participant's death, the
Participant's Option shall be exercised in accordance with the terms of the Plan
such that the payroll deductions credited to such Participant's account after
the Offering Date (whether before or immediately following the Participant's
death) shall be used to purchase shares of Common Stock in accordance with the
terms of the Plan. The Participant's beneficiary shall elect, within the sixty
(60) day period following the Exercise Date following the Participant's death,
(i) to receive certificates for all of the whole shares of Common Stock and cash
in lieu of any fractional shares of Common Stock credited to the Participant's
account under the Plan, (ii) to have certificates for all shares of Common Stock
(including fractional shares) credited to the Participant's account under the
Plan transferred to an individual brokerage account established by the Agent for
the benefit of the Participant's beneficiary, or (iii) a combination of (i) and
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(ii). A fee fixed by the Plan's Agent may be charged to the Participant's
beneficiary for the issuance of certificates of shares of Common Stock.
(d) In the event of a Participant's Disability or
Leave of Absence, payroll deductions shall only be taken from Compensation that
is due and owing to the Participant. To the extent that any cash balance has
accumulated in the Participant's account, such balance shall be used to purchase
shares of Common Stock on the Exercise Date. With respect to a Participant who
becomes ineligible to participate due to a Disability or Leave of Absence,
shares of Common Stock held in such Participant's account shall continue to be
held in the Participant's account unless he or she elects otherwise under
Section 7(a). In the event that such individual's Disability or Leave of Absence
ends and such individual returns to work as an Employee and satisfies the
eligibility conditions under Section 3, payroll deductions shall resume
automatically in accordance with his or her most recent payroll deduction
authorization form in effect prior to the Disability or Leave of Absence, unless
he or she elects otherwise. Section 8(b) shall apply to any termination of
employment with the Company, any Subsidiary Corporation and any Parent
Corporation following a Participant's Disability or Leave of Absence.
9. DIVIDENDS AND INTEREST.
(a) Cash dividends, if any, on shares of Common Stock
acquired through the Plan will be automatically paid by check directly to the
Participant by the Company, or if applicable, the transfer agent. Dividends paid
in property other than cash or Common Stock shall be distributed to Participants
as soon as practicable.
(b) No interest shall accrue on or be payable with
respect to the payroll deductions of a Participant in the Plan.
10. STOCK.
(a) The maximum number of shares of Common Stock
which shall be reserved for sale under the Plan shall be 1,500,000 subject to
adjustment as provided in Section 16 hereof. If the total number of shares which
would otherwise be subject to Options granted pursuant to Section 4(a) hereof on
an Offering Date exceeds the number of shares then available under the Plan
(after deduction of all shares for which Options have been exercised or are then
outstanding), the Committee shall make a pro rata allocation of the shares
remaining available for Option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Committee shall give written notice to each Participant of such reduction of the
number of Option shares affected thereby and shall similarly reduce the rate of
payroll deductions, if necessary. Purchases of Common Stock under the Plan shall
be made by the Agent on the open market, or in the sole discretion of the
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Committee, may be made by the Company's delivery of treasury shares or
newly-issued and authorized shares to the Plan, upon such terms as the Committee
may approve.
(b) Shares of Common Stock to be delivered to a
Participant under the Plan shall be registered solely in the name of the
Participant or, at the election of the Participant, in the name of the
Participant and his or her spouse as joint tenants with rights of survivorship.
11. ADMINISTRATION.
(a) The Plan shall be administered by the Committee,
and the Committee may select an administrator to whom its duties and
responsibilities hereunder may be delegated. The Committee shall have full power
and authority, subject to the provisions of the Plan, to promulgate such rules
and regulations as it deems necessary for the proper administration of the Plan,
to interpret the provisions and supervise the administration of the Plan, and to
take all action in connection therewith or in relation thereto as it deems
necessary or advisable. The Committee may adopt special guidelines and
provisions for persons who are residing in, or subject to the laws of, Foreign
Jurisdictions to comply with applicable tax and securities laws. All
interpretations and determinations of the Committee shall be made in its sole
and absolute discretion based on the Plan document and shall be final,
conclusive and binding on all parties.
(b) The Committee may employ such legal counsel,
consultants, brokers and agents as it may deem desirable for the administration
of the Plan and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant, broker or
agent. The Committee may, in its sole discretion, designate an Agent to
administer the Plan, purchase and sell shares of Common Stock in accordance with
the Plan, keep records, send statements of account to employees and to perform
other duties relating to the Plan, as the Committee may request from time to
time. The Agent shall serve as custodian for purposes of the Plan and, unless
otherwise requested by the Participant, Common Stock purchased under the Plan
shall be held by and in the name of, or in the name of a nominee of, the
custodian for the benefit of each Participant, who shall thereafter be a
beneficial stockholder of the Company. The Committee may adopt, amend or repeal
any guidelines or requirements necessary for the custody and delivery of the
Common Stock, including, without limitation, guidelines regarding the imposition
of reasonable fees in certain circumstances.
(c) The Company shall, to the fullest extent
permitted by law and the Certificate of Incorporation and By-laws of the Company
and, to the extent not covered by insurance, indemnify each director, officer or
employee of the Employer (including the heirs, executors, administrators and
other personal representatives of such person) and each member of the Committee
against all expenses, costs, liabilities and losses (including attorneys' fees,
judgments, fines, excise taxes or penalties, and amounts paid or to be paid in
settlement)
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actually and reasonably incurred by such person in connection with any
threatened, pending or actual suit, action or proceeding (whether civil,
criminal, administrative or investigative in nature or otherwise) in which such
person may be involved by reason of the fact that he or she is or was serving
this Plan in any capacity at the request of the Employer, except in instances
where any such person engages in willful neglect or fraud. Such right of
indemnification shall include the right to be paid by the Company for expenses
incurred or reasonably anticipated to be incurred in defending any such suit,
action or proceeding in advance of its disposition; provided, however, that the
payment of expenses in advance of the settlement or final disposition of a suit,
action or proceeding, shall be made only upon delivery to the Company of an
undertaking by or on behalf of such person to repay all amounts so advanced if
it is ultimately determined that such person is not entitled to be indemnified
hereunder. Such indemnification shall be in addition to any rights of
indemnification the person may have as a director, officer or employee or under
the Certificate of Incorporation of the Company or the By-Laws of the Company.
Expenses incurred by the Committee or the Board in the engagement of any such
counsel, consultant or agent shall be paid by the Company.
(d) Employees shall be fully responsible for (i) any
brokerage fees and commissions charged for the sale of Common Stock, (ii) any
fees for certificates of shares of Common Stock and (iii) any taxes owed by them
as a result of participation in the Plan.
12. DESIGNATION OF BENEFICIARY.
A Participant may file, on forms supplied by and delivered to
the Company, a written designation of a beneficiary who is to receive any shares
of Common Stock and cash remaining in such Participant's account under the Plan
in the event of the Participant's death. Such designation of beneficiary may be
changed by the Participant at any time by written notice. If a Participant is
married on the date of his death and no beneficiary had been designated by the
Participant prior to his death, the Participant's spouse will be presumed to be
his beneficiary. If a Participant is not married on the date of his death and no
beneficiary had been designated by the Participant prior to his death, the
Participant's beneficiary shall be his estate.
13. TRANSFERABILITY.
(a) 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 Plan may be assigned, transferred, pledged or
otherwise disposed of in an way (other than by will, the laws of descent and
distribution or as provided in Section 10(b) or 12 hereof) by the Participant.
Any such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Section 8 hereof.
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(b) All rights of a Participant granted under this
Plan, including but not limited to, the grant of an Option, the right to
exercise an Option and the ability to authorize payroll deductions shall relate
solely to a Participant, except as otherwise provided in Section 8(c) hereof.
14. USE OF FUNDS.
All payroll deductions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such payroll deductions.
15. REPORTS.
Individual accounts shall be maintained for each Participant
in the Plan. Statements of account shall be given to participating Employees at
such times prescribed by the Committee; such statements shall set forth the
amounts of payroll deductions, the per share purchase price, the number of
shares of Common Stock purchased, the aggregate shares in the Participant's
account and the remaining cash balance, if any.
16. EFFECT OF CERTAIN CHANGES.
(a) In the event of any increase, reduction, or
change or exchange of shares of Common Stock for a different number or kind of
shares or other securities of the Company by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, stock dividend, stock
split or reverse stock split, combination or exchange of shares, repurchase of
shares, change in corporate structure or otherwise, or the distribution of an
extraordinary dividend, the Committee shall conclusively determine the
appropriate equitable adjustments, if any, to be made under the Plan, including
without limitation adjustments to the number of shares of Common Stock which
have been authorized for issuance under the Plan but have not yet been placed
under Option, as well as the price per share of Common Stock covered by each
Option under the Plan which has not yet been exercised.
(b) In the event of the complete liquidation of the
Company or of a reorganization, consolidation or merger in which the Company is
not the surviving Corporation, any Option granted under the Plan shall continue
in full force and effect unless either (i) the Board modifies such Option so
that it is fully exercisable with respect to all of the Common Stock subject
thereto prior to the effective date of such transaction or (ii) the surviving
corporation issues or assumes a stock option as contemplated under Section
424(a) of the Code.
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17. AMENDMENT OR TERMINATION.
The Company, by action of the Board (or a duly authorized
committee thereof), may at any time terminate, amend or freeze the Plan. No such
termination shall adversely affect Options previously granted and no amendment
may make any change in any Option theretofore granted which adversely affects
the rights of any Participant. No amendment shall be effective unless approved
by the stockholders of the Company if stockholder approval of such amendment is
required to comply with Section 423 of the Code or to comply with any other
applicable law, regulation or stock exchange rule. Upon termination of the Plan,
the Company shall return or distribute the payroll deductions credited to a
Participant's account (that have not been used to purchase shares of Common
Stock) and shall distribute or credit shares of Common Stock credited to a
Participant's account in accordance with Section 8(b) hereof. Upon the freezing
of the Plan, any payroll deductions credited to a Participant's account (that
have not been used to purchase shares of Common Stock) shall be used to purchase
shares of Common Stock in accordance with Section 6, substituting the term
Exercise Date with the effective date of the freezing of the Plan.
18. NOTICES.
All notices or other communications by a Participant to the
Company or the Committee under or in connection with the Plan shall be deemed to
have been duly given when received in the form specified by the Company or
Committee at the location, or by the person, designated for the receipt thereof.
Each Participant shall be responsible for furnishing the Committee with the
current and proper address for the mailing of notices and the delivery of other
information. Any notices or communications by the Company to a Participant shall
be deemed given if directed to such address and mailed by regular United States
mail, first-class and prepaid. If any item mailed to such address is returned as
undeliverable to the addressee, mailing shall be suspended until the Participant
furnishes the proper address.
19. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.
(a) This Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of Delaware without giving effect to the choice of law principles thereof,
except to the extent that such law is preempted by federal law.
(b) The obligation of the Company to sell or deliver
shares of Common Stock with respect to Options granted under the Plan shall be
subject to all applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Committee.
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(c) To the extent required, the Plan is intended to
comply with Rule 16b-3 and the Committee shall interpret and administer the
provisions of the Plan in a manner consistent therewith. Any provisions
inconsistent with Rule 16b-3 shall be inoperative and shall not affect the
validity of the Plan. The Committee may establish and adopt written
administrative guidelines, designed to facilitate compliance with Section 16(b)
of the Exchange Act and Rule 16b-3, as it may deem necessary or proper for the
administration and operation of the Plan and the transaction of business
thereunder.
20. WITHHOLDING OF TAXES.
(a) If the Participant makes a disposition, within
the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any share or shares issued to such Participant pursuant to such
Participant's exercise of an Option, and such disposition occurs within the
two-year period commencing on the day after the Offering Date or within the
one-year period commencing on the day after the Exercise Date, such Participant
shall immediately, or as soon as practicable thereafter, notify the Company
thereof and thereafter immediately deliver to the Company any amount of federal,
state or local income taxes and other amounts which the Company informs the
Participant the Company is required to withhold.
(b) Notwithstanding anything herein to the contrary,
the Employer shall have the right to make such provisions as it deems necessary
to satisfy any obligations to withhold federal, state, or local income taxes or
other taxes incurred by reason of the issuance of Common Stock pursuant to the
Plan. Notwithstanding anything herein to the contrary, the Employer may require
a Participant to remit an amount equal to the required withholding amount and
may invalidate any election if the Participant does not remit applicable
withholding taxes.
21. NO EMPLOYMENT RIGHTS.
The establishment and operation of this Plan shall not confer
any legal rights upon any Participant or other person for a continuation of
employment, nor shall it interfere with the rights of an Employer to discharge
any Employee and to treat him without regard to the effect which that treatment
might have upon him as a Participant or potential Participant under the Plan.
22. SEVERABILITY OF PROVISIONS.
If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.
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23. CONSTRUCTION.
The use of a masculine pronoun shall include the feminine, and
the singular form shall include the plural form, unless the context clearly
indicates otherwise. The headings and captions herein are provided for reference
and convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.
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