EXHIBIT 10.2
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ST. JUDE MEDICAL, INC.
2007 EMPLOYEE STOCK PURCHASE PLAN
As Amended Effective August 1, 2013 |
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4824-0811-7011
TABLE OF CONTENTS
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| SECTION 1. | INTRODUCTION | 1 |
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| SECTION 2. | DEFINITIONS | 1 |
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| SECTION 3. | ELIGIBILITY | 3 |
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| SECTION 4. | CONTRIBUTION PERIODS | 3 |
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| SECTION 5. | PARTICIPATION | 3 |
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| SECTION 6. | METHOD OF PAYMENT OF CONTRIBUTIONS | 4 |
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| SECTION 7. | GRANT OF OPTION | 5 |
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| SECTION 8. | EXERCISE OF OPTION; REFUND | 5 |
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| SECTION 9. | DELIVERY | 5 |
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| SECTION 10. | WITHDRAWAL; TERMINATION OF EMPLOYMENT | 5 |
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| SECTION 11. | INTEREST | 6 |
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| SECTION 12. | SHARES | 7 |
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| SECTION 13. | ADMINISTRATION | 7 |
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| SECTION 14. | DEATH OF PARTICIPANT | 7 |
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| SECTION 15. | TRANSFERABILITY | 7 |
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| SECTION 16. | USE OF FUNDS | 8 |
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| SECTION 17. | REPORTS | 8 |
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| SECTION 18. | ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS | 8 |
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| SECTION 19. | AMENDMENT OR TERMINATION | 9 |
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| SECTION 20. | NOTICES | 9 |
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| SECTION 21. | CONDITIONS UPON ISSUANCE OF SHARES | 9 |
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| SECTION 22. | TERM OF PLAN; EFFECTIVE DATE | 10 |
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| SECTION 23. | ADDITIONAL RESTRICTIONS OF RULE 16B-3 | 10 |
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| SECTION 24. | GOVERNING LAW | 10 |
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| SECTION 25. | SEVERABILITY | 10 |
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| SECTION 26. | NO RIGHTS AS AN EMPLOYEE | 10 |
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| SECTION 27. | INTERNATIONAL PARTICIPANTS | 11 |
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| SECTION 28. | TAXES | 11 |
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| SECTION 29. | ACCEPTANCE OF TERMS | 12 |
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ST. JUDE MEDICAL, INC.
2007 EMPLOYEE STOCK PURCHASE PLAN
As Amended Effective August 1, 2013
The following constitute the provisions of the 2007 Employee Stock Purchase Plan of St. Jude Medical, Inc.
(a)Purpose. The purpose of the Plan is to enable the Company to obtain and retain the services of employees. In addition, the Plan provides a convenient, meaningful opportunity for employees to purchase St. Jude Medical, Inc. stock, thereby increasing participating employees' personal interest in the Company's success.
(b)Portion of Plan to Comply with Section 423. The Company intends to have a portion of the Plan qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code; and intends that such portion of the Plan be treated as a separate plan. Such portion of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner that is consistent with Section 423 of the Code.
(c)Portions of Plan Not Complying with Section 423. Section 27 of this Plan, and any additional provisions adopted by the Committee pursuant thereto, are intended by the Company to allow creation of separate portions of the Plan providing for the offering of Common Stock other than through the portion of the Plan governed by Section 423 of the Code, for purchase by individuals who are either (i) generally not subject to income taxation by the United States or (ii) are employed by Subsidiaries other than Designated Subsidiaries.
Section 2.Definitions.
(a)“Account” means the funds accumulated with respect to a Participant as a result of deduction from such Participant's paycheck for the purpose of purchasing Shares under the Plan. The funds allocated to a Participant's Account shall remain the property of the Participant at all times but may be commingled with the general funds of the Company, except to the extent such commingling may be prohibited by the laws of any applicable jurisdiction.
(b)“Board” means the Board of Directors of the Company.
(c)“Business Day” means any day (other than a Saturday or Sunday) on which the New York Stock Exchange is permitted to be open for trading.
(d)“Code” means the Internal Revenue Code of 1986, as amended.
(e)“Commencement Date” means the first calendar day of each Contribution Period of the Plan.
(f)“Common Stock” means the Common Stock, par value $.10 per share, of the Company.
(g)“Committee” means the committee described in Section 13(a) of the Plan.
(h)“Company” means St. Jude Medical, Inc., a Minnesota corporation. Effective as of the date any Subsidiary becomes a Designated Subsidiary, references herein to the “Company” shall be interpreted to include such Designated Subsidiary, as appropriate.
(i)“Compensation” means regular straight time earnings, commissions and commission‑based sales bonuses annualized at the time of enrollment prior to the Commencement Date, excluding payments, if any, for overtime, incentive compensation, incentive payments, premiums, bonuses (including bonuses paid under the Company's Management Incentive Compensation Plan) and any other special remuneration.
(j)“Continuous Status as an Employee” means the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of (i) medical leave; (ii) leave allowed under the Family and Medical Leave Act; (iii) personal leave; (iv) military leave; (v) jury duty; (vi) any other leave of absence approved by the Committee; provided that any such leave referred to in (i) through (vi) does not exceed three months, unless re‑employment upon the expiration of such leave is guaranteed by contract or statute; or (vii) transfers between locations of the Company or between the Company and its Subsidiaries. In the case of an approved leave that exceeds 3 months and the Employee's right to reemployment is not provided either by contract or by statute, the Employee is deemed to incur a termination of his or her Continuous Status as an Employee (for purposes of this Plan) on the first day immediately following such three-month period.
(k)“Contribution Period” means a 1‑year period; provided, however, that the Board shall have the power to change the duration and/or frequency of Contribution Periods with respect to future purchases without shareholder approval if such change is announced at least 5 Business Days prior to the scheduled beginning of the first Contribution Period to be affected; provided further, however, that no Contribution Period shall exceed 27 months.
(l)“Contributions” means all amounts credited to the Account of a Participant pursuant to the Plan.
(m)“Corporate Transaction” means (i) a sale of all or substantially all of the Company's assets or (ii) a merger, consolidation or other capital reorganization of the Company with or into another corporation or any other transaction or series of related transactions in which the Company's shareholders immediately prior thereto own less than 50% of the voting stock of the Company (or its successor or parent) immediately thereafter.
(n)“Designated Subsidiaries” means the Subsidiaries that have been designated by the Board from time to time in its sole discretion as eligible to participate in the portion of the Plan subject to Section 423 of the Code.
(o)“Employee��� means any person, including an Officer or director who is also an employee, but excluding any person whose customary employment is (i) less than 20 hours per week or (ii) for not more than 5 months in any calendar year.
(p)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(q)“Fair Market Value” means, with respect to the Common Stock on a given date, the closing price for the Common Stock for such date, or if such date is not a Business Day, the last reported sale price for the Common Stock for the last Business Day preceding such date, as quoted on the New York Stock Exchange or another exchange; provided, however, that if the Common Stock ceases to be listed for trading on the New York Stock Exchange or another exchange, “Fair Market Value” of the Common Stock for a given date shall mean the value determined in good faith by the Board.
(r)“New Purchase Date” shall have the meaning set forth in Section 18(b) hereof.
(s)“Officer” means a person who has been designated by the Board as a reporting officer for purposes of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(t)“Participant” means any Employee who is eligible and has elected to participate in the Plan accordance with Sections 3 and 5 hereof and who has not withdrawn from the Plan or whose participation in the Plan is not otherwise terminated.
(u)“Plan” means this 2007 Employee Stock Purchase Plan, as may be amended from time to time.
(v)“Purchase Date” means the last calendar day of each Contribution Period of the Plan.
(w)“Purchase Price” means with respect to a Contribution Period that price as announced by the Committee prior to the first Business Day of that Contribution Period, which price may, in the discretion of the Committee, be a price which is not fixed or determinable as of the first Business Day of that Contribution Period; provided, however, that in no event shall the Purchase Price for any Contribution Period be less than the lesser of 85% of the Fair Market Value of a Share on the Commencement Date or
on the Purchase Date, in each case rounded up to the next higher full cent. If the Commencement Date or the Purchase Date is not a Business Day, then the Purchase Price for any Contribution Period shall not be less than the lesser of 85% of the Fair Market Value of a Share on the Business Day immediately preceding the Commencement Date or the Purchase Date.
(x)“Share” means a share of Common Stock, as adjusted in accordance with Section 18 hereof.
(y)“Subsidiary” means a corporation, domestic or foreign, of which not less than 50% of the total combined voting power of all classes of stock is held by the Company or any such subsidiary of the Company, whether or not such corporation now exists or is hereafter organized or acquired by the Company or another such subsidiary of the Company. “Subsidiary” also means an unincorporated business entity, such as a limited liability company or partnership, in which the Company holds directly or indirectly not less than 50% of the total combined voting power with respect to all classes of equity ownership of such entity, whether or not such unincorporated business entity now exists or is hereafter organized or acquired by the Company or another Subsidiary of the Company, but only if such entity either (i) has duly elected under applicable treasury regulations to be an association treated as a corporation for federal income tax purposes, and such election continues in effect; or (ii) is disregarded as a separate entity for federal income tax purposes, has not made an election described in clause (i) of this sentence and, pursuant to applicable treasury regulations, its assets are considered to be owned by another Subsidiary that is a corporation or is treated as one under clause (i) of this sentence.
Section 3.Eligibility.
(a)Any person who is an Employee and has completed 30 days of continuous employment service for the Company or one or more of its Designated Subsidiaries shall become eligible to participate in the Plan on the first day of the month coincident with or following completion of such period of service, subject to the requirements of Section 5(a) hereof and the limitations imposed by Section 423(b) of the Code.
(b)Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such Employee (together with any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to purchase stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary of the Company, or (ii) if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its Subsidiaries to accrue at a rate that exceeds $25,000 of the Fair Market Value of such stock (determined at the time such option is granted), or that exceeds 2,000 Shares, for each calendar year in which such option is outstanding at any time.
Section 4.Contribution Periods.
The Plan shall be implemented by a series of consecutive Contribution Periods. The first Contribution Period shall commence on August 1, 2007 and shall end on July 31, 2008. The Plan shall continue until terminated in accordance with Sections 19 and 22 hereof.
(a)An eligible Employee may become a Participant by following the established enrollment procedure as directed by the Committee, or other entity designated by the Committee, prior to the Commencement Date of the applicable Contribution Period, unless an earlier or later time for completing
the enrollment procedure is set by the Committee for all eligible Employees with respect to a given Contribution Period. The eligible Employee shall determine the amount of the Participant's Compensation (subject to Section 6(a) hereof) to be paid as Contributions pursuant to the Plan.
(b)Payroll deductions shall commence on the first payroll paid on or following the Commencement Date and shall end on the last payroll paid on or prior to the Purchase Date of the Contribution Period, unless sooner terminated as provided in Section 10 hereof. A Participant who has elected to participate in a Contribution Period shall automatically participate in the next Contribution Period until such time as such Participant withdraws from the Plan or terminates employment as provided in Section 10 hereof.
Section 6.Method of Payment of Contributions.
(a)Contribution Amounts. A Participant shall elect to have payroll deductions made on each payroll paid during the Contribution Period in full dollar amounts not less than $5 and not more than 10% of the Participant's rate of Compensation in effect at the time of enrollment (or such other maximum percentage as the Board may establish from time to time before any Commencement Date). All payroll deductions made by a Participant shall be credited to his or her Account under the Plan. A Participant may not make any additional payments into his or her Account. No assets in a Participant's Account shall be subject to the debts, contracts, liabilities, engagements or torts of the Participant.
(b)Contribution Changes by a Participant.
(i)A Participant may discontinue his or her participation in the Plan as provided in Section 10 hereof.
(ii)Unless otherwise provided by the Committee, a Participant may decrease the amount of his or her Contributions once during a Contribution Period by following the established administrative procedures as directed by the Committee to authorize a decrease in the payroll deduction amount. The decrease in amount shall be effective as soon as administratively feasible following the date of receipt by the Company, or other entity designated by the Committee. However, any decrease in amount must be made at least 30 days prior to the end of the Contribution Period to ensure such decrease shall be effective within the current Contribution Period.
(iii)Unless otherwise provided by the Committee, a Participant may not increase the amount of his or her Contributions during a Contribution Period. A Participant may only increase the amount of his or her Contributions with respect to a future Contribution Period by following the established administrative procedures as directed by the Committee to authorize an increase in the payroll deduction amount. The increase in amount shall be effective as of the Commencement Date of the next Contribution Period following the date of receipt by the Company, or other entity designated by the Committee.
(c)Contribution Changes by the Company.
(i)Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a Participant's payroll deductions may be adjusted during any Contribution Period, subject to the discretion of the Committee. Payroll deductions shall re‑commence at the amount provided in such Participant's most recently submitted enrollment materials at the beginning of the first Contribution Period that is scheduled to end in the next succeeding calendar year, unless terminated by the Participant as provided in Section 10 hereof.
(ii)If a Participant goes on an approved paid leave of absence during a Contribution Period, the Participant's payroll deductions shall continue in effect during such leave unless the Participant is deemed to incur a termination of his or her Continuous Status as an Employee prior to the Purchase Date of the Contribution Period (i.e., because the leave exceeds three months and re‑employment upon the expiration of such leave is not guaranteed by contract or statute).
(iii)If a Participant goes on an approved unpaid leave of absence during a Contribution Period, the Participant's payroll deductions shall be suspended during such leave. Except as otherwise provided by the Committee, if such Participant returns from leave (without incurring a termination of his or her Continuous Status as an Employee), payroll deductions shall resume at an adjusted amount to account for payroll deductions in arrears, unless the Participant elects to decrease the amount of his or her Contributions as set forth in Section 6(b) above).
Section 7.Grant of Option.
On the Commencement Date of each Contribution Period, each eligible Employee participating in such Contribution Period shall be granted an option to purchase on the Purchase Date a number of Shares determined by dividing such Employee's Contributions accumulated prior to such Purchase Date and retained in the Participant's Account as of the Purchase Date by the applicable Purchase Price, subject to the limitations set forth in Sections 3(b) and 12 hereof.
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| Section 8. | Exercise of Option; Refund. |
(a) Unless a Participant ceases to be an eligible Employee as provided in Section 3, withdraws from the Plan as provided in Section 10 hereof, or affirmatively elects not to exercise all or a portion of his or her option for the purchase of Shares at the end of the Contribution Period (as described below), the option for the purchase of Shares will be exercised automatically on each Purchase Date of each Contribution Period, and the maximum number of Shares (rounded down to the nearest whole Share) subject to the option will be purchased at the applicable Purchase Price with the accumulated Contributions in his or her Account. Unused Contributions representing the amount of any fractional Share shall be returned to the Participant. The Shares purchased upon exercise of an option hereunder shall be deemed to be transferred to the Participant on the Purchase Date. During his or her lifetime, a Participant's option to purchase Shares hereunder is exercisable only by him or her.
(b) During the enrollment period that occurs near the end of a Contribution Period and prior to the next Commencement Date, a Participant may elect to have none or only a portion of the accumulated Contributions in his or her Account used to purchase Shares as of the Purchase Date for the then-current Contribution Period (and have the unused balance in the Account refunded). Such election must be made by completing a stock purchase form in the manner prescribed by the Committee, which should specify how much, if any, of the Contributions are to be used to purchase Shares. The unused balance of the Account will be refunded to the Participant.
Section 9.Delivery.
As promptly as practicable after each Purchase Date of each Contribution Period, the number of Shares purchased by each Participant upon exercise of his or her option shall be delivered in accordance with procedures established from time to time by the Committee, and a transfer agent for the Common Stock may be utilized or a brokerage or nominee account may be established for this purpose. The terms of such transfer agency or brokerage or nominee account shall be at the sole discretion of the Company, and participation in the Plan is expressly conditioned on the acceptance of such terms.
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| Section 10. | Withdrawal; Termination of Employment. |
(a)Voluntary Withdrawal.
(i)A Participant may withdraw from the Plan by following the established administrative procedures as directed by the Committee, or other entity designated by the Committee.
The withdrawal request will be effective as soon as administratively feasible. However, any withdrawal request must be made at least 30 days prior to the end of a Contribution Period to ensure such withdrawal request shall be effective within such Contribution Period. Once the withdrawal request is effective, all of the Participant's Contributions credited to his or her Account will be paid to him or her, his or her option will be automatically terminated, and no further Contributions for the purchase of Shares will be made absent re‑enrollment. Upon withdrawal from the Plan, a Participant may not re‑enroll in the Plan until the next Contribution Period. In order to re‑enroll, a Participant must follow the provisions set forth under Section 5(a) hereof.
(ii)Notwithstanding the foregoing, an Officer shall not have the right to withdraw Contributions credited to his or her account under the Plan except in accordance with Section 10(b) hereof.
(b)Termination of Continuous Status as an Employee.
(i)Upon termination of the Participant's Continuous Status as an Employee prior to the Purchase Date of a Contribution Period for any reason, including death or retirement, the Contributions credited to his or her Account will be returned to him or her or, in the case of his or her death, to the person or persons entitled thereto under Section 14 hereof, and his or her option will be automatically terminated. Whether the Participant's Continuous Status as an Employee has been terminated shall be determined by the Committee in its sole discretion. In the event that any Designated Subsidiary ceases to be a Designated Subsidiary of the Company, the employees of such Designated Subsidiary shall no longer be Employees for purposes of Section 3(a) hereof as of the date such Designated Subsidiary ceases to be a Designated Subsidiary.
(ii)Notwithstanding the foregoing, if any Participant on an approved leave of absence is deemed to incur a termination of the Participant's Continuous Status as an Employee (i.e., because the leave exceeds three months and re‑employment upon the expiration of such leave is not guaranteed by contract or statute) within three months preceding the Purchase Date of a Contribution Period, his or her option will not be terminated, and any Contributions previously credited to the Participant's Account will remain in the Account and be applied toward the purchase of Shares.
(c)Hardship Withdrawal. If, during a Contribution Period, the Participant receives a hardship withdrawal under the Company's tax‑qualified cash or deferral arrangement under Section 401(k) of the Code or the Company's non-qualified deferred compensation plan (to the extent required by that plan), the Participant's participation in the Plan shall be discontinued. Once the hardship withdrawal request is effective, all of the Participant's Contributions credited to his or her Account will be paid to him or her, his or her option will be automatically terminated, and no further Contributions for the purchase of Shares will be made absent re‑enrollment. Upon withdrawal from the Plan, a Participant may not re‑enroll in the Plan until the next Contribution Period that begins at least six months after receipt of the hardship distribution. In order to re‑enroll, a Participant must follow the provisions set forth under Section 5(a) hereof.
(d)A Participant's withdrawal from the Plan shall not have any effect upon his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or any Subsidiary.
Section 11.Interest.
No interest shall accrue on the Contributions or the Account balance of a Participant in the Plan, unless otherwise determined necessary by the Committee for the Accounts of Participants in the portion of the Plan that is not intended to qualify under Section 423 of the Code.
(a)The maximum number of Shares originally authorized for issuance under the Plan was 5,000,000 Shares (subject to adjustment as provided in Section 18 hereof). Effective for Purchase Dates occurring on or after August 1, 2012, the number of Shares available for issuance under the Plan is increased by 6,000,000 Shares to a total of 11,000,000 Shares (subject to adjustment as provided in Section 18 hereof). If on a given Purchase Date, the number of Shares with respect to which options are to be exercised exceeds the number of Shares available for sale under the Plan on such Purchase Date, the Committee shall make a pro rata allocation of the Shares available for purchase on such Purchase Date among all Participants, and the balances in the Accounts shall be refunded to the respective Participants.
(b)The Participant shall have no interest or voting right in Shares covered by his or her option until such option has been exercised.
Section 13.Administration.
(a)The Committee. The Plan shall be administered by a committee (the “Committee”) established by the Board. The members of the Committee need not be directors of the Company and shall be appointed by and serve at the pleasure of the Board.
(b)Powers of Committee. The Committee shall supervise and administer the Plan and shall have full power to adopt, amend and rescind any rules deemed desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe and interpret the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. Decisions of the Committee will be final and binding on all parties who have an interest in the Plan. The Committee may delegate ministerial duties to such of the Company's employees, outside entities and outside professionals as the Committee so determines.
(c)Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan.
Section 14.Death of Participant.
In the event of the death of a Participant, the Company shall deliver any Shares and cash in the Participant's Account to a beneficiary previously designated by the Participant or, if there is no surviving beneficiary duly designated, to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
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| Section 15. | Transferability. |
Neither Contributions 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 any way (other than as provided in Section 14 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 10 hereof.
All Contributions 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 Contributions. The Plan is unfunded and shall not create nor be construed to create a trust or separate fund of any kind or a fiduciary relationship among the Company, the Board, the Committee and the Participant. To the extent a Participant acquires a right to receive payment from the Company pursuant to the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.
Accounts will be maintained for each Participant in the Plan. Account statements will be made available to participating Employees by the Company and will set forth the amounts of Contributions, the Purchase Price per Share, the number of Shares purchased and the remaining cash balance, if any.
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| Section 18. | Adjustments Upon Changes in Capitalization; Corporate Transactions. |
(a)Adjustment. The number of Shares set forth in Section 12 hereof, the price per Share covered by each option under the Plan that has not yet been exercised and the maximum number of Shares that may be purchased by a Participant in a calendar year pursuant to Section 3(b) hereof, shall be proportionately adjusted for any increase or decrease in the number of outstanding Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock (including any such change in the number of Shares effected in connection with a change in domicile of the Company). Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares issuable hereunder or subject to an option hereunder.
(b)Corporate Transactions. In the event of a dissolution or liquidation of the Company, any Contribution Period then in progress will terminate immediately prior to the consummation of such action, unless otherwise provided by the Board in its sole discretion, and in such event, all outstanding options shall automatically terminate and the balance in the Accounts shall be refunded to the respective Participants. In the event of a Corporate Transaction, each option outstanding under the Plan shall be assumed or an equivalent option shall be substituted by the successor corporation or a parent or subsidiary of such successor corporation. In the event that the successor corporation refuses to assume or substitute for outstanding options, the Contribution Period then in progress shall be shortened and a new Purchase Date shall be set (the “New Purchase Date”), as of which date the Contribution Period then in progress will terminate. The New Purchase Date shall be on or before the date of consummation of the Corporate Transaction and the Board shall notify each Participant in writing, at least 10 days prior to the New Purchase Date, that the Purchase Date for his or her option has been changed to the New Purchase Date and that his or her option will be exercised automatically on the New Purchase Date, unless prior to such date he or she has withdrawn from the Plan as provided in Section 10 hereof. For purposes of this Section 18, an option granted under the Plan shall be deemed to be assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction, each holder of an option under the Plan would be entitled to receive upon exercise of the option the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the Corporate Transaction if the holder had been, immediately prior to the Corporate Transaction, the holder of the number of Shares covered by the option at such time (after giving effect to any adjustments in the number of Shares covered by the option as provided for in
this Section 18); provided however that if the consideration received in the transaction is not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Board may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in fair market value, as determined by the Committee, to the per Share consideration received by holders of Common Stock in the Corporate Transaction.
The Board may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the number of Shares set forth in Section 12 hereof, as well as the price per Share covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of its outstanding Common Stock, and in the event the Company is consolidated with or merged into any other corporation.
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| Section 19. | Amendment or Termination. |
(a)The Board may at any time and for any reason terminate or amend the Plan. Except as provided in Section 18 hereof, no such termination of the Plan may affect options previously granted, provided that the Plan or the Contribution Period may be terminated by the Board on a Purchase Date or by the Board's setting a new Purchase Date with respect to a Contribution Period then in progress if the Board determines that termination of the Plan and/or the Contribution Period is in the best interests of the Company and the shareholders or if continuation of the Plan and/or the Contribution Period would cause the Company to incur adverse accounting charges as a result of a change after the effective date of the Plan in the generally accepted accounting principles applicable to the Plan. Except as provided in Section 18 hereof and in this Section 19, no amendment to the Plan shall make any change in any option previously granted that adversely affects the rights of any Participant. In addition, to the extent necessary to comply with Rule 16b‑3 under the Exchange Act or Section 423 of the Code (or, in either case, any successor rule or provision or any applicable law or regulation) or the requirements of any stock exchange upon which the Shares may then be listed, the Company shall obtain shareholder approval in such a manner and to such a degree as so required.
(b)Without shareholder approval and without regard to whether any Participant rights may be considered to have been adversely affected, the Board shall be entitled to change the Contribution Periods and/or the Purchase Price as permitted under the Plan, limit the frequency and/or number of changes in the amount deducted during a Contribution Period, establish the exchange ratio applicable to amounts deducted in a currency other than U.S. dollars, permit payroll deductions in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company's processing of properly completed payroll deduction elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Shares for each Participant properly correspond with amounts deducted from the Participant's Compensation, and establish such other limitations or procedures as the Board determines in its sole discretion to be advisable and consistent with the Plan.
Section 20.Notices.
All notices or other communications by a Participant to the Company under or in connection with the Plan 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 for the receipt thereof.
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| Section 21. | Conditions Upon Issuance of Shares. |
Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, applicable state securities laws and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
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| Section 22. | Term of Plan; Effective Date. |
The Plan shall become effective upon approval by the Company's shareholders. It shall continue in effect until all of the Shares set forth in Section 12 hereof are exhausted or such earlier time as the Plan is terminated pursuant to Section 19 hereof.
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| Section 23. | Additional Restrictions of Rule 16b‑3. |
The terms and conditions of options granted hereunder to, and the purchase of Shares by, Officers shall comply with the applicable provisions of Rule 16b‑3. This Plan shall be deemed to contain, and such options shall be deemed to contain, and the Shares issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may be required by Rule 16b‑3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.
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| Section 24. | Governing Law. |
The internal law, and not the law of conflicts, of the State of Minnesota, shall govern all questions concerning the validity, construction and effect of the Plan, and any rules and regulations relating to the Plan.
If any provision of the Plan is or becomes invalid, illegal, or unenforceable in any jurisdiction or would disqualify the Plan under any law, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without materially altering the intent of the Plan, such provision shall be stricken as to such jurisdiction, and the remainder of the Plan shall remain in full force and effect.
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| Section 26. | No Rights as an Employee. |
This Plan shall not form part of any contract of employment between the Company or any of the Designated Subsidiaries or Subsidiaries not constituting Designated Subsidiaries nor shall this Plan amend, abrogate or affect any existing employment contract between the Company or any Designated Subsidiary or any Subsidiary not being a Designated Subsidiary and their respective employees. Nothing in the Plan shall be construed to give any person (including an Employee or Participant) the right to remain in the employ of the Company or a Subsidiary or to affect the right of the Company or a Subsidiary to terminate the employment of any person (including the Employee or Participant) at any time with or without cause. Nothing in this Plan shall confer on any person any legal or equitable right against the Company or any Subsidiary, or give rise to any cause of action at law or in equity against the
Company or any Subsidiary. Neither the Shares purchased hereunder nor any other benefits conferred hereby, including the right to purchase Common Stock at a discount, shall form any part of the wages or salary of any eligible Employee for purposes of severance pay or termination indemnities, irrespective of the reason for termination of employment. Under no circumstances shall any person ceasing to be an Employee be entitled to any compensation for any loss of any right or benefit under this Plan which such Employee might otherwise have enjoyed but for termination of employment, whether such compensation is claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise.
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| Section 27. | International Participants. |
The Committee shall have the power and authority to allow any of the Company's Subsidiaries other than Designated Subsidiaries to adopt and join in the portion of this Plan that is not intended to comply with Section 423 of the Code and to allow employees of such Subsidiaries who work or reside outside of the United States an opportunity to acquire Shares in accordance with such special terms and conditions as the Committee may establish from time to time, which terms and conditions may modify the terms and conditions of the Plan set forth elsewhere in this Plan. Without limiting the authority of the Committee, the special terms and conditions which may be established with respect to any foreign country, and which need not be the same for all foreign countries, include but are not limited to the right to participate, procedures for elections to participate, the payment of any interest with respect to amounts received from or credited to accounts held for the benefit of participants, the purchase price of any Shares to be acquired, the length of any Contribution Period, the maximum amount of contributions, credits or Shares which may be acquired by any participating employees, and a participating employee's rights in the event of his or her death, disability, withdrawal from participation in the purchase of Shares hereunder, or termination of employment. Any purchases made pursuant to the provisions of this Section 27 shall not be subject to the requirements of Section 423 of the Code.
Participants are responsible for the payment of all income taxes, employment, social insurance, welfare and other taxes under applicable law relating to any amounts deemed under the laws of the country of their residency or of the organization of the Subsidiary employing such Participant to constitute income arising out of the Plan, the purchase and sale of Shares pursuant to the Plan and the distribution of Shares or cash to the Participant in accordance with this Plan. Each Participant hereby authorizes the relevant Subsidiary to make appropriate withholding deductions from each Participant's compensation, which shall be in addition to any payroll deductions made pursuant to Section 6, and to pay such amounts to the appropriate tax authorities in the relevant country or countries in order to satisfy any of the above tax liabilities of the Participant under applicable law.
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| Section 29. | Acceptance of Terms. |
By participating in the Plan, each Participant shall be deemed to have accepted all the conditions of the Plan and the terms and conditions of any rules and regulations adopted by the Committee and shall be fully bound thereby.
Adopted by the Board on February 23, 2007 and approved by Shareholders on May 16, 2007.
Amended by the Board on February 24, 2012 and approved by Shareholders on May 3, 2012, but effective for Contribution Periods and Purchase Dates beginning on and after August 1, 2012.
Amended by the Board on May 1, 2013 and effective August 1, 2013.
