______________________________________________________________________________
SUPERIOR TELECOM INC.
EMPLOYEE STOCK PURCHASE PLAN
______________________________________________________________________________
October 1, 1996
SUPERIOR TELECOM INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries 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 shall become effective upon the date specified by the Board in
their resolutions adopting the Plan, subject to the approval of the Plan by a
majority of the stockholders of the Company who are present in person or
represented by proxy at a meeting of stockholders within a twelve (12) month
period before or after the Plan is adopted.
2. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Change in Capitalization" shall mean 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,
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Committee" shall mean a committee of the Board or such
other committee 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 common stock, par value
$.01 per share, of the Company.
(f) "Company" shall mean Superior TeleCom Inc., a Delaware
corporation.
(g) "Compensation" shall mean the total cash compensation paid
during an Offering Period by the Company, any Designated Subsidiary or any
affiliate of the
Company to an Employee, including overtime and bonuses, as reported by the
Company, any Designated Subsidiary 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 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 Subsidiaries" shall mean each Subsidiary
Corporation of the Company on the effective date of the Plan and future
Subsidiary Corporations which have been designated by the Board from time to
time in its sole discretion as eligible to participate in the Plan.
(i) "Employee" shall mean any person, including an officer, who
is regularly and continuously employed by the Company or one of its Designated
Subsidiaries.
(j) "Employer" shall mean, with respect to any Employee, the
Company or Designated Subsidiary by which the Employee is employed.
(k) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(l) "Exercise Date" shall mean the last business day of each
Offering Period in which payroll deductions are made under the Plan.
(m) "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 the Exercise 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 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).
(n) "Offering Date" shall mean the first day of each calendar
quarter.
(o) "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.
2
(p) "Option" shall mean an option to purchase shares of Common
Stock of the Company.
(q) "Parent Corporation" shall mean any corporation (other than
the Company) in an unbroken chain of corporations ending with the employer
corporation 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.
(r) "Participant" shall mean an Employee who participates in the
Plan.
(s) "Plan" shall mean the Superior TeleCom Inc. Employee Stock
Purchase Plan, as amended from time to time.
(t) "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of
the Exchange Act as then in effect or any successor provisions.
(u) "Subsidiary Corporation" shall mean any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
employer corporation if, 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.
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 at least five (5)
months per year 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
3
Company and any Subsidiary Corporation or Parent Corporation to accrue
at a rate which exceeds six thousand two hundred fifty dollars
($6,250) of Fair Market Value of such stock (determined at the time
such Option is granted) for any Offering Period in which such Option
is outstanding at any time.
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 Company 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 the lesser of: (i) eighty-five percent (85%) of the Fair
Market Value of a share of Common Stock on the date immediately prior to the
Offering Date or (ii) eighty-five (85%) of the Fair Market Value of a share of
Common Stock on the Exercise Date.
5. PAYROLL DEDUCTIONS.
(a) Prior to each Option Date, a Participant may, in accordance
with rules adopted by the Committee, authorize a payroll deduction of any whole
percentage from one percent (1%) to the maximum percentage, determined by the
Committee prior to the Offering Date, of his or her Compensation, provided, that
the maximum percentage shall not exceed twenty five percent (25%) of the
Participant's Compensation. Each authorization shall only be effective with
respect to the Offering Period for which the authorization is made.
(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.
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
full 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.
4
In no event shall any fractional shares be issued under the Plan. A
Participant's Option to purchase shares hereunder is exercisable only by such
Participant.
(b) Any cash balance remaining in a Participant's account after
the termination of an Offering Period shall be carried forward in the
Participant's account for the purchase of Common Stock during the next Offering
Period if the Participant has elected to continue to participate in the Plan.
Otherwise the Participant shall receive a cash payment equal to the balance of
his or her account, without any interest thereon as provided in Section 9(b).
(c) 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.
Delivery of the shares of Common Stock purchased upon the exercise of
each Option shall be made by the Company within sixty (60) days after the
Exercise Date, or such shorter period of time as the Committee, in its sole
discretion, may determine, provided, however, the Committee, in its sole
discretion, may also determine that the Company may retain stock certificates
issued to each employee until such time as the employee requests delivery of
such certificates.
8. TERMINATION OF EMPLOYMENT.
(a) If a Participant retires or terminates his or her employment
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.
(b) 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 Option 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.
5
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. 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 250,000, 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.
(b) Shares of Common Stock to be delivered to a Participant
under the Plan shall be registered in the name of the Participant or, at the
election of the Participant, in the name of the Participant and another person
as joint tenants with rights of survivorship.
11. ADMINISTRATION.
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.
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. 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)
6
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.
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.
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 12 hereof) by the Participant. Any such attempt at assignment,
transfer, pledge or other disposition shall be without effect.
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.
7
15. REPORTS.
Individual accounts shall be maintained for each Participant in the
Plan. Statements of account shall be given to participating Employees as soon
as practicable following each Offering Period, which 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.
17. AMENDMENT OR TERMINATION.
The Company, by action of the Board (or a duly authorized committee
thereof), may at any time terminate or amend 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
such Participant's account (that have not been used to purchase shares of Common
Stock).
8
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.
(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, within
such time of such disposition as prescribed by the Committee, 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
9
Company is required to withhold. Notwithstanding anything herein to the
contrary, the Committee may permit any such withholding obligation with regard
to any Participant to be satisfied by reducing the number of shares of Common
Stock otherwise deliverable or by delivering shares of Common Stock already
owned, provided such arrangement is approved to the extent necessary to satisfy
Rule 16b-3.
(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.
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.
10
Table of Contents
-----------------
Page
----
1. Purpose............................................................ 1
2. Definitions........................................................ 1
3. Eligibility........................................................ 3
4. Grant of Option; Participation..................................... 4
5. Payroll Deductions................................................. 4
6. Exercise of Option................................................. 4
7. Delivery of Common Stock........................................... 5
8. Termination of Employment.......................................... 5
9. Dividends and Interest............................................. 6
10. Stock.............................................................. 6
11. Administration..................................................... 6
12. Designation of Beneficiary......................................... 7
13. Transferability.................................................... 7
14. Use of Funds....................................................... 7
15. Reports............................................................ 8
16. Effect of Certain Changes.......................................... 8
17. Amendment or Termination........................................... 8
18. Notices............................................................ 9
19. Regulations and Other Approvals; Governing Law..................... 9
20. Withholding of Taxes............................................... 9
21. No Employment Rights.............................................. 10
22. Severability of Provisions........................................ 10
23. Construction...................................................... 10
