COMPUTER PRODUCTS, INC.
EMPLOYEE STOCK PURCHASE PLAN
1.PURPOSE OF PLAN
The purpose of this plan (the "Plan") is to provide eligible employees who
wish to become stockholders of Computer Products, Inc. (the "Company") or
wish to increase their stock holdings in the Company with a method of doing
so which is both convenient and on a basis more favorable than would
otherwise be available. With the expiration of the Computer Products, Inc.
Qualified Stock Purchase Plan that expired on December 31, 1995, the Company
hereby continues to provide a plan whereby employees may acquire shares of
the Company's Common Stock, par value $0.01 per share ("Common Stock"),
directly from the Company on a payroll deduction basis, thus making it easier
for them to acquire such shares and relieving them of the details of a
transaction unfamiliar to most of them. It is felt that employee
participation in ownership of the Company on this basis will thus be to the
mutual benefit of both the employees and the Company. It is intended that
the Plan shall constitute an "employee stock purchase plan" within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").
2.EMPLOYEES ELIGIBLE TO PARTICIPATE
An employee, except an employee who (a) has been employed less than three
months, (b) whose customary employment is not more than five months per
calendar year, or (c) whose customary employment is 20 hours or less per
week, of the Company or any subsidiary of the Company which adopts the Plan
with the consent of the Company, who is in the employ of the Company or any
participating subsidiary (the "Employing Corporation") is eligible to
participate in the Plan. The term "employee" shall include an officer but
not a non-employee member of the board of directors of the Employing
Corporation.
3.OFFERS
The Compensation and Stock Option Committee (the "Committee") of the
Company's board of directors shall determine the date or dates upon which one
or more offers ("Offer"/"Offers") shall be made under the Plan, and shall
notify each eligible employee at least ten (10) days prior to the effective
date thereof. In order to participate in an Offer, an eligible employee must
sign and forward to the Company, prior to the effective date of the Offer, a
payroll deduction authorization form authorizing regular payroll deductions,
which must be 2% or more of the employee's base salary per pay period but may
not exceed 6% of the employee's base salary per pay period, to be applied
toward the purchase of Common Stock pursuant to the Offer.
4.OPTIONS
On the effective date of an Offer, each eligible employee who has elected to
participate will be granted an option to purchase, through payroll
deductions, as many whole shares of Common Stock, subject to the limitations
hereinafter set forth, as may be purchased, at the option price set forth in
Section 6 hereof, with the compensation deferred by such employee pursuant to
Section 3 hereof during the period commencing on the effective date of the
Offer and expiring on the date which is three (3) months thereafter. Each
option granted pursuant to an Offer shall be automatically exercised on the
date (the "Exercise Date") of the tenth trading day following the date which
is three (3) months from the effective date of the Offer. No interest shall
be paid on any amounts deferred by any employee.
5.PARTICIPATION LIMITATIONS
Notwithstanding anything herein to the contrary, no employee shall be
permitted to purchase any shares under the Plan if the employee, immediately
after the purchase, owns or would own shares (including all shares which may
be purchased under outstanding options under the Plan) possessing 5% or more
of the total combined voting power or value of all classes of shares of
capital stock of the Employing Corporation or of its parent or subsidiary
corporations. For purposes of the foregoing limitation, the rules of Section
424(d) (relating to attribution of stock ownership) of the Code shall apply
in determining share ownership, and stock which the employee may purchase
under outstanding options shall be treated as stock owned by such employee.
Further, if pursuant to the terms of the Plan, an employee would be granted
an option that violates Section 424(b)(8) of the Code, such option shall not
be granted.
6.OPTION PRICE
The option price (the "Option Price") at which shares of Common Stock may be
purchased under the Plan shall be 85% of the fair market value of a share of
Common Stock on the Exercise Date. As used herein, the term "fair market
value" shall mean: (A) if the Common Stock is listed on a national securities
exchange or quoted on The NASDAQ National Market, the closing price of the
Common Stock on the relevant date; (B) if the Common Stock is not listed on a
national securities exchange or quoted on The NASDAQ National Market, but is
traded in the over-the-counter market, the last sales price or, if not
available, the average of the bid and asked prices for the Common Stock on
the relevant date, or the most recent preceding day for which such quotations
are reported by The NASDAQ Stock Market; and (C) if the fair market value of
the Common Stock cannot be determined pursuant to clause (A) or (B) above,
such price as the Committee shall in good faith determine.
7.EXERCISE OF OPTIONS
On the Exercise Date, each participant will be deemed to have exercised his
option to purchase, at the then applicable Option Price, that number of full
shares of Common Stock determined pursuant to Section 4 hereof and the
Company will remit to a custodian designated by the Company all employee
payroll deductions made by the Company during the corresponding payroll
deduction period. Upon receipt of such funds from the Company, the custodian
will purchase from the Company, at the Option Price, as many full shares of
Common Stock as may be purchased with the funds received from each Plan
participant. Any funds not expended in the purchase of whole shares on any
particular Exercise Date will, for each participant, be carried forward and
applied to the purchase of shares on the next subsequent Exercise Date or
refunded to the employee if requested in writing. The custodian for the Plan
shall hold all shares purchased under the Plan and shall maintain a separate
account for each participant, in which Common Stock purchased by such
participant under the Plan shall be held and dividends received will be
reinvested. The custodian shall vote all shares purchased by each
participant under the Plan in the manner designated by the participant, and,
upon the written request of any participant, all or any specified portion of
any shares held by the custodian on behalf of such participant, may be
withdrawn by such participant. Each participant shall receive a statement as
soon as practicable after each Exercise Date reflecting purchases and other
transactions in his account under the Plan through such Exercise Date.
8.NUMBER OF SHARES TO BE OFFERED
Except as provided in Section 13 hereof, the maximum number of shares that
may be offered under the Plan is 200,000.
9.ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee, which shall consist of not
less than three directors and shall be appointed from time to time by the
Company's board of directors. The Committee may prescribe rules and regulations
from time to time for the administration of the Plan and may decide questions
which may arise with respect to its interpretation or application. The
Committee may, subject to Section 14 hereof, amend or modify the Plan and may
determine the terms and conditions of Offers under the Plan. The Committee may
not, however, make any alterations which would materially and adversely affect
an option previously granted without the consent of the optionee. Furthermore,
the Committee may not reduce the applicable option price per share or make any
change or addition which does not meet the requirements of Section 423(b) of the
Code.
10.WITHDRAWAL FROM PARTICIPATION
A participant may, at any time and for any reason, by giving written notice
of his desire in this regard to the Committee or its designee, elect to withdraw
from any further participation in an Offer, but may not otherwise amend his
payroll deduction authorization form during the period of any Offer. A
withdrawing participant will, on the next succeeding Exercise Date, have his
account credited with the number of full shares of Common Stock which may be
acquired at the Exercise Price with any cash in such participant's account on
such Date. In addition, the amount of any excess cash remaining in the account
of any participant who withdraws from participation in any Offer or who does not
participate in any succeeding Offer shall be distributed to such participant as
promptly as practicable. Except as provided in Section 18 hereof, a withdrawing
participant may recommence participation on the effective date of the next
Offer.
11.RIGHTS NOT TRANSFERABLE
Except for transfers by will or under the laws of descent and distribution,
or unless otherwise permitted by law (including, without limitation, the Code),
no employee shall have the right to sell, assign, transfer, pledge or otherwise
dispose of or encumber either his right to participate in the Plan or his
interest in any options hereunder, and such right and interest shall not be
liable for or subject to the debts, contracts or liabilities of the employee.
Any attempted transfers in violation of this Section 11 shall be void and the
attempted transferor shall, except as may otherwise be required by law, be
deemed to have irrevocably withdrawn from the Plan as of the date thereof.
12.TERMINATION OF EMPLOYMENT
In the event of a participant's retirement, death or other termination of
employment, a certificate representing the number of full shares of Common Stock
then credited to the participant's account, and any amount of excess deferred
funds as of that date, will be issued to the employee or his representative as
promptly as practicable.
13.REORGANIZATION
In the event of reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, offering of rights or
any other change in the structure of Common Stock, the Company's board of
directors may make such adjustments, if any, as it may deem appropriate in the
number, kind and price of shares available for purchase under the Plan, and in
the minimum and maximum number of shares which a participant is entitled to
purchase.
14.APPROVAL OF STOCKHOLDERS
The Plan was adopted by the board of directors of the Company on January 25,
1996, subject to approval by the Company's stockholders. No amendment of the
Plan which would (a) increase the number of shares reserved for issuance under
the Plan (except as provided in Section 13 hereof), (b) materially increase the
benefits to participants, (c) materially modify the requirements for
participation, or (d) cause the options to fail to meet the requirements of
Section 423 of the Code, shall be effective unless it is duly approved by the
Company's stockholders.
15.TERMINATION OF PLAN
The Plan and all rights of employees participating in an Offer will terminate
(a) on the day that participants have exercised options to purchase a number of
shares equal to or greater than the number of shares then subject to the Plan,
and in the latter event options will be exercisable by participants on a pro
rata basis, (b) at any time, at the discretion of the Committee, or (c) on June
30, 1996 if the Plan has not been approved by the Company's stockholders on or
prior to that date. Upon termination of the Plan, shares of the Common Stock
and all cash in the participants' accounts, will be returned to the
participants, without interest, as soon as is administratively feasible.
16.NO RIGHTS AS STOCKHOLDER
The holder of an option shall have no rights, as such, as a stockholder of
the Company prior to the Exercise Date thereof.
17.NO RIGHT TO EMPLOYMENT
Nothing in the Plan or any option shall be deemed to confer upon any employee
any right to continue in the employ of any Employing Corporation or in any way
interfere with the right of any such Employing Corporation to terminate the
employment of any employee at any time, with or without cause.
18.SPECIAL PROVISIONS FOR OFFICERS AND DIRECTORS
Notwithstanding any provisions contained herein to the contrary, any officer
or director, as such terms are defined under Section 16 of the Securities and
Exchange Act of 1934 (the "Exchange Act") and the rules promulgated thereunder,
who withdraws any shares of Common Stock from the Plan shall either (a) agree to
hold such shares for at least six months prior to disposition, or (b) cease any
further purchases of Common Stock under the Plan for a period of at least six
months. In addition, any such officer or director who withdraws from, or elects
not to participate in, any Offer, may not participate again for at least six
months. The provisions of this Section 18 are intended to comply with Rule 16b-
3(d) under the Exchange Act and shall be interpreted in such a manner as to
cause the Plan to comply with the provisions thereof.
19.COMPLIANCE WITH SECTION 423
All eligible employees shall have equal rights and privileges with respect to
the Plan, so that the Plan qualifies as an "employee stock purchase plan" within
the meaning of Section 423 or any successor provision of the Code and related
regulations. Any provision of the Plan which is inconsistent with Section 423
or any successor provision of the Code shall, without further act or amendment
by the Company, be reformed to comply with the requirements of Section 423.
This Section 19 shall take precedence over all other provisions of the Plan.
20.REQUIRED GOVERNMENTAL APPROVALS
The Plan, and all options granted under and other rights inherent in the
Plan, are subject to stockholder approval as provided in Section 14 above and to
receipt by the Company of all necessary approvals or consents of governmental
agencies having jurisdiction, and, notwithstanding any other provision of the
Plan, all options granted under the Plan and all other rights inherent in the
Plan are subject to termination and/or modification as may be required or
advisable in order to obtain any such necessary approval or consent or, as a
result of consequences attaching to any such required approval or consent, as
may be required or advisable in order to avoid, in the judgment of the Company's
board of directors, adverse impact on the Company's overall wage and salary
policy as applied to all employees of the Company.
21.GENDER
Pronouns shall be deemed to include the masculine and feminine gender and
words used in the singular shall be deemed to include both the singular and the
plural, unless the context indicates otherwise.