EXHIBIT 10(w)
DATA GENERAL CORPORATION
EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
1. Purpose
This Employee Qualified Stock Purchase Plan (the "Plan") is intended as an
incentive and to encourage stock ownership by all eligible employees of Data
General Corporation (the "Company") and all participating subsidiaries so that
they may share in the fortunes of the Company by acquiring or increasing their
proprietary interest in the Company. The Plan is designed to encourage eligible
employees to remain in the employ of the Company. It is intended that options
issued pursuant to this Plan shall constitute options issued pursuant to an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986 (the "Code").
2. Eligible Employees
All employees of the Company or any of its participating subsidiaries who
have completed ninety days' employment with the Company or any of its
subsidiaries shall be eligible to receive options under this Plan to purchase
the Company's Common Stock (except employees in countries whose laws make
participation impractical). Persons who have been so employed for ninety days or
more on the February 1 next following the date this Plan is approved by the
stockholders of the Company shall receive their options as of such February 1.
Persons who attain the status of employment for ninety days or more after the
date on which the initial options are granted under this Plan shall be granted
options on the next date on which options are granted to all participating
employees. In no event may an employee be granted an option if such employee,
immediately after the option is granted, owns stock possessing 5 percent or more
of the total combined voting power or value of all classes of stock of the
Company or of its parent corporation or subsidiary corporation, as the terms
"parent corporation" and "subsidiary corporation" are defined in Section 425(e)
and (f) of the Code. For purposes of determining stock ownership under this
paragraph, the rules of Section 425(d) of the Code shall apply and stock which
the employee may purchase under outstanding options shall be treated as stock
owned by the employee.
For purposes of this Article 2, the term employee shall not include an
employee whose customary employment is 20 hours or less per week or is for not
more than 5 months in any calendar year.
3. Stock Subject to the Plan
The stock subject to the options shall be shares of the Company's
authorized but unissued shares of Common Stock of the Company or shares of
Common Stock reacquired by the Company, including shares purchased in the open
market. The aggregate number of shares which may be issued pursuant to this Plan
is 11,100,000, subject to increase or decrease by reason of stock split-ups,
reclassifications, stock dividends, changes in par value and the like.
4. Payment Periods and Stock Options
The six-month periods, August 1 to January 31 and February 1 to July 31,
are Payment Periods during which payroll deductions will be accumulated under
the Plan. Each Payment Period includes only regular pay days falling within it.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period at the Option
Price hereinafter provided for such number of shares of the Common Stock of the
Company reserved for the purpose of the Plan as his or her accumulated payroll
deductions on the last day of such Payment Period will pay for at such Option
Price; provided and on condition that such employee remains eligible to
participate in the Plan throughout such Payment Period. The Option Price for
each Payment Period shall be the lesser of (i) 85% of the average market price
of the Company's Common Stock on the first business day of the Payment Period;
or (ii) 85% of the average market price of the Company's Common Stock on the
last business day of the Payment Period. In the event of an increase or decrease
in the number of outstanding shares of Common Stock of the Company through stock
split-ups, reclassifications, stock dividends, changes in par value and the
like, an appropriate adjustment shall be made in the number of shares and Option
Price per share provided for under the Plan, either by a proportionate increase
in the number of shares and a proportionate decrease in the Option Price per
share, or by a proportionate decrease in the number of shares and a
proportionate increase in the Option Price per share, as may be required to
enable an eligible employee who is then a participant in the plan as to whom an
option is exercised on the last day of any then current Payment Period to
acquire such number of full shares as his accumulated payroll deductions on such
date will pay for at the adjusted Option Price.
For purposes of this Plan the term "average market price" means, if the
Common Stock is listed on the New York Stock Exchange, the average of the high
and low prices of the Common Stock of the Company on such exchange or such other
national securities exchange as designated by the Board of Directors or, if the
Common Stock is traded over-the-counter securities market, the mean between the
bid and asked prices of the Common Stock.
For purposes of this Plan the term "business day" as used herein means a
day on which there is trading on the New York Stock Exchange or such other
national securities exchange as shall be designated by the Board of Directors
pursuant to the preceding paragraph.
No employee shall be granted an option which permits his rights to purchase
Common Stock under the Plan and any similar plans of the Company or any parent
or subsidiary corporations to accrue at a rate which exceeds $25,000 of the fair
market value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time. The purpose
of the limitation in the preceding sentence is to comply with Section 423(b)(8)
of the Code.
5. Exercise of Option
Each eligible employee who continues to be a participant in the Plan on the
last business day of a Payment Period shall be deemed to have exercised his
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
his accumulated payroll deductions on such date will pay for at such Option
Price. If a participant is not an employee on the last business day of a Payment
Period, he shall not be entitled to exercise his option.
6. Unused Payroll Deductions
If the participant wishes to receive a certificate representing the shares
purchased pursuant to the option, only full shares of stock will be represented
by the stock certificate. Any balance remaining in an employee account after a
purchase will be reported to the employee and will be carried forward to the
next Payment Period.
7. Authorization for Entering Plan
An employee may enter the Plan by filling out, signing and delivering to
the Corporate Benefits Department an Authorization:
a) stating the percentage of either (i) the employee's regular base pay or
(ii) the employee's Total ESPP-Eligible Compensation to be deducted
regularly from the employee's pay and other compensation;
b) authorizing the purchase of stock for the employee in each Payment
Period in accordance with the terms of the Plan; and
c) specifying the exact name in which stock purchased for such employee
is to be issued as provided under Article 11 hereof.
Such Authorization for any Payment Period must be received by the Corporate
Benefits Department at least 10 days before the beginning date of the next
succeeding Payment Period. The amounts deducted from each employee's pay and
other compensation under the Plan during any Payment Period shall reflect any
adjustment(s) to regular base pay or Total ESPP-Eligible Compensation of such
employee paid during the Payment Period. For purposes of the foregoing, "Total
ESPP-Eligible Compensation" includes regular base pay together with those other
types of compensation designated by the Committee from time to time as included
in "Total ESPP-Eligible Compensation". No such designation shall be made which
would cause the Plan to cease to comply with the requirements of Section 423 of
the Internal Revenue Code, as amended.
Unless an employee files a new Authorization or withdraws from the Plan, an
employee's deductions and purchases under the Authorization he or she has on
file under the Plan will continue as long as the Plan remains in effect.
The Company will accumulate and hold for the employee's account the amounts
deducted from the employee's pay and compensation. No interest will be paid on
it.
8. Amount of Payroll Deductions
An employee may authorize payroll deductions by designating (1) a
percentage (stated as an even 0.5% percentage amount, not less than 0.5% and not
more than 10.0%), and (2) designating whether such percentage shall be applied
to (i) such employee's regular base pay or (ii) such employee's Total
ESPP-Eligible Compensation, provided, however, that the minimum deduction in
respect of any payroll period shall be $10.00 (or such lesser amount as the
Committee shall establish).
9. Change in Payroll Deductions
Each employee may decrease the percentage designated by such employee under
Section 8(1), above, not more than once in each Payment Period. Increases to
such percentage are not permitted during any Payment Period. Each employee may
increase or decrease the percentage designated by such employee under Section
8(1), above, or change such employee's election under Section 8(2), above, for
the next Payment Period by filing with the Company's Corporate Benefits
Department a new Authorization at least 10 days before the beginning of the next
Payment Period.
10. Withdrawal from the Plan
An employee may withdraw from the Plan, in whole but not in part, at any
time prior to the last business day of each Payment Period by delivering a
Withdrawal Notice to the Corporate Benefits Department, in which event the
Company will promptly refund the entire balance of his deductions not
theretofore used to purchase stock under the Plan.
An employee who withdraws from the Plan is like an employee who has never
entered the Plan. To re-enter, he or she must file a new Authorization at least
10 days before the beginning date of the next Payment Period which cannot,
however, become effective before the beginning of the next Payment Period
following his or her withdrawal.
11. Issuance of Stock
Certificates for stock issued to participants will be delivered as soon as
practicable after each Payment Period.
Stock purchased under the Plan will be issued only in the name of the
employee, or if his or her Authorization so specifies, in the name of the
employee and another person of legal age as joint tenants with rights of
survivorship.
12. No Transfer or Assignment of Employee's Rights
An employee's rights under the Plan are his or hers alone and may not be
transferred or assigned to, or availed of by, any other person. Any option
granted to an employee may be exercised only by such employee.
13. Termination of Employee's Rights
An employee's rights under the Plan will terminate when he ceases to be an
employee because of retirement, resignation, lay-offs, discharge, death, change
of status, or for any other reason. A Withdrawal Notice will be considered as
having been received from the employee on the day his or her employment ceases,
and all payroll deductions not used to purchase stock will be refunded.
If an employee's payroll deductions are interrupted by any legal process, a
Withdrawal Notice will be considered as having been received from him or her on
the day the interruption occurs.
14. Termination and Amendments to Plan
The plan may be terminated at any time by the Company's Board of Directors.
It will terminate in any case when all or substantially all of the unissued
shares of stock reserved for the purposes of the Plan have been purchased. If at
any time shares of stock reserved for the purposes of the Plan remain available
for purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to their options and the Plan shall terminate. Upon such termination
or any other termination of the Plan, all payroll deductions not used to
purchase stock will be refunded.
The Board of Directors also reserves the right to amend the Plan from time
to time, in any respect provided, however, that no amendment shall be effective
without prior approval of the stockholders, which would (a) except as provided
in Article 3 and 4, increase the number of shares of Common Stock to be offered
above or (b) change the class of employees eligible to receive options under the
Plan.
15. Limitations on Sale of Stock Purchased Under the Plan
The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. An employee may, therefore,
sell stock purchased under the Plan at any time he or she chooses; provided,
however, that because of certain Federal tax requirements, each employee will
agree by entering the Plan, promptly to give the Company notice of any such
stock disposed of within two years after the date of the last day of the Payment
Period during which the stock was purchased showing the number of such shares
disposed of. The employee assumes the risk of any market fluctuations in the
price of such stock.
16. Company's Payment of Expenses Related to Plan
The Company will bear all costs of administering and carrying out the Plan.
17. Participating Subsidiaries
The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Board of Directors to participate in the
Plan. The Board of Directors shall have the power to make such designations
before or after the Plan is approved by the stockholders.
18. Administration of the Plan
The Plan shall be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than three members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee shall elect one of its members as Chairman,
and shall hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, or acts reduced to and approved in writing by a
majority of the members of the Committee, including written approvals by
electronic means, shall be valid acts of the Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any options granted under it shall be final unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best. No
member of the Board of Directors or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any option
granted under it. No member of the Committee shall be eligible to participate in
the Plan while serving as a member of the Committee.
19. Optionees Not Stockholders
Neither the granting of an option to an employee nor the deduction from his
or her pay shall constitute such employee a stockholder of the shares covered by
an option until such shares have been purchased by and issued to such employee.
20. Application of Funds
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.
21. Governmental Regulation
The Company's obligation to sell and deliver shares of the Company's Common
Stock under this Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance or sale of such stock.
22. Withholding of Additional Federal Income Tax
The Company, in accordance with Section 3402(a) of the Code and the
Regulations and Rulings promulgated thereunder, will withhold from the wages of
participating employees, in all payroll periods following and in the same
calendar year as the date on which compensation is deemed received by the
employee, additional income taxes in respect of the amount that is considered
compensation includible in the employee's gross income.
23. Approval of Stockholders
The Plan shall not take effect until approved by the holders of a majority
of the outstanding shares of Common Stock of the Company, which approval must
occur within the period beginning twelve months before and ending twelve months
after the date the Plan is adopted by the Board of Directors.