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ALPHA MICROSYSTEMS
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. This Alpha Microsystems Employee Stock
Purchase Plan (the "Plan") is intended to encourage and assist Employees (as
defined below) of Alpha Microsystems, a California corporation (the
"Corporation"), and the Employees of any present or future Parent (as defined
below) or Subsidiary (as defined below) of the Corporation in acquiring a stock
ownership interest in the Corporation (or such Parent or Subsidiary). The Plan
is intended to be an Employee Stock Purchase Plan under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the
Plan shall be construed so as to extend and limit participation in a manner
consistent with the requirements of Section 423 of the Code.
2. Definitions. Where the following terms are used in
this Plan they shall have the meaning specified below, unless the context
clearly indicates otherwise.
(a) "Board" means the Board of Directors of the
Corporation.
(b) "Code" means the Internal Revenue Code of
1986, as amended. References to any provision of the Code include regulations
thereunder and successor provisions and regulations thereto.
(c) "Committee" means the committee of the Board
appointed by the Board to administer the Plan. Unless otherwise determined by
the Board, the Committee shall be the Compensation Committee of the Board.
(d) "Common Stock" means the Common Stock of the
Corporation, no par value per share.
(e) "Corporation" means Alpha Microsystems, a
California corporation, or any successor thereto.
(f) "Employee" means any officer or other regular
full-time or part-time employee of the Corporation, or of any corporation which
is a Parent or Subsidiary of the Corporation.
(g) "Exchange Act" means the Securities Exchange
Act of 1934, as amended. References to any provision of the Exchange Act
include the rules and regulations thereunder and successor provisions and rules
and regulations thereto.
(h) "Fair Market Value" of a share of the Common
Stock means, as of any given date, (i) the closing sale price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, or if the Common Stock is not traded on an exchange, as reported on
the National Association of Securities Dealers, Inc. Automated Quotation
("Nasdaq") National Market on such date, or if shares were not traded on such
date,
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then on the closest preceding date on which a trade occurred, or (ii) if the
Common Stock is not traded on an exchange or on the Nasdaq National Market, the
mean between the closing representative bid and asked prices for the Common
Stock on such date as reported on the over- the-counter market by Nasdaq or, if
Nasdaq is not then in existence, by a successor quotation system; or (iii) if
the Common Stock is not publicly traded, the fair market value of a share of
Common Stock as established by the Committee acting in good faith and
considering all relevant and available information and data.
(i) "Parent" means a parent corporation as that
term is defined in Section 424(e) of the Code.
(j) "Participant" means each Employee who is
eligible to, and elects to, participate in the Plan in accordance with the
terms of the Plan.
(k) "Plan" means this Alpha Microsystems Employee
Stock Purchase Plan.
(l) "Rule 16b-3" means Rule 16b-3 promulgated
under the Exchange Act, as such Rule may be amended or superseded from time to
time.
(m) "Semi-Annual Period" means the six (6) month
period ending on the last day of June and December of each year, with the first
Semi-Annual Period to commence on July 1, 1996.
(n) "Shares" means shares of Common Stock of the
Corporation reserved for sale under the Plan.
(o) "Subsidiary" means any corporation, as
defined in Section 424(f) of the Code, in an unbroken chain of corporations
beginning with the Corporation if each of the corporations other than the last
corporation in the unbroken chain then 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. Stock Subject to the Plan. Subject to adjustment
pursuant to Section 12 of the Plan, the aggregate number of Shares of the
Corporation which may be sold under the Plan is 350,000. The Shares may be
authorized but unissued shares, treasury shares, or shares acquired in the
market, or any combination thereof. During the term of the Plan, the
Corporation shall at all times reserve and keep available such number of shares
of its Common Stock as shall be sufficient to satisfy the requirements of the
Plan.
4. Eligibility. Anyone who becomes an Employee of the
Corporation or any Parent or Subsidiary of the Corporation (except (a) any
Employee who directly or by attribution owns stock, and/or holds 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 Corporation or any Parent
or Subsidiary of the Corporation either at the start of any Semi-Annual Period
or immediately after such participation in the Plan (for purposes of the
foregoing, the rules of Section 424(d) of the
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Code shall apply in determining stock ownership of any Employee), (b) those
Employees whose customary employment is twenty (20) hours or less per week, and
(c) those Employees whose customary employment is for not more than five (5)
months in any calendar year) is eligible to become a member of the Plan on the
first day of the Semi-Annual Period following the second anniversary of the
Employee's commencement of employment with the Corporation. Notwithstanding
the foregoing, no Employee shall be entitled to purchase Shares under the Plan
and all other purchase plans of the Corporation and any Parent or Subsidiary of
the Corporation with an aggregate fair market value (determined at date of
grant) exceeding $25,000 per year for each calendar year in which such purchase
option is outstanding at any time.
5. Joining the Plan. Any eligible Employee's
participation in the Plan shall be effective as of the first day of the
Semi-Annual Period following the day on which the Employee completes, signs and
returns to the Corporation, or one of its present or future Parent or
Subsidiary corporations, a Stock Purchase Plan Application and Payroll
Deduction Authorization Form indicating his or her acceptance and agreement to
the Plan. Participation by any Employee in the Plan is entirely voluntary.
Except as provided in Section 4, all Employees who elect to participate in the
Plan shall have the same rights and privileges. Nothing in this Plan shall
confer upon any Employee any right to continue as an employee of the
Corporation or any Parent or Subsidiary of the Corporation, or shall interfere
with or restrict in any way the rights of the Corporation or any Parent or
Subsidiary of the Corporation, which are hereby expressly reserved, to
discharge the Employee at any time for any reason whatsoever, with or without
cause.
6. Participant's Contributions.
(a) Each Participant shall elect to make
contributions by payroll deduction of not less than one percent (1%) nor more
than ten percent (10%) of his or her gross compensation. All such payroll
deductions must be in increments of one percent (1%) of gross compensation.
(b) Subject to the maximum described above, a
Participant may, from time to time, elect in writing to increase or decrease
his or her rate of contribution; such change will become effective the first
day of the Semi-Annual Period following receipt by the Corporation of such
written election.
(c) The amount of each Participant's contribution
shall be held by the Corporation in an account maintained by the Corporation
and such contribution shall be credited, without interest, to such
Participant's individual account as of the last business day of the month
during which the compensation from which the contribution was deducted was
earned. A Participant may not make any separate cash payment into such
Participant's account. No interest will be paid on any money paid into the
Plan or credited to the account of any Participant. All payroll deductions
received or held by the Corporation under the Plan may be used by the
Corporation for any corporate purpose and the Corporation shall not be
obligated to segregate such payroll deductions.
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(d) No Employee will be permitted to make
contributions for any period during which he or she is not receiving salary or
other compensation from the Corporation or one of its present or future Parent
or Subsidiary corporations.
7. Issuance of Shares.
(a) On the last trading of each Semi-Annul Period
during the term of the Plan, and provided the Participant has not before that
date advised the Corporation that he or she does not wish Shares purchased for
his or her account on that date, the Corporation shall apply the funds in the
Participant's account as of that date to the purchase of Shares of its Common
Stock in units of one (1) full Share or multiples thereof. No fractional
shares shall be purchased or issued.
(b) The per share cost to each Participant for
the Shares so purchased shall be eighty-five percent (85%) of the lower of (i)
the Fair Market Value of a share of the Common Stock on the first trading day
of the Semi-Annual Period (the "date of grant") or (ii) the Fair Market Value
of a share of the Common Stock on the last trading day of the Semi-Annual
Period (the "date of exercise").
(c) Any moneys remaining in such Participant's
account equaling less than the sum required to purchase one full Share, or
moneys remaining in such Participant's account by reason of application of the
provisions of Section 7(d) hereof, shall, unless otherwise requested by the
Participant, be held in the Participant's account for use during the next
Semi-Annual Period. Any moneys remaining in such Participant's account by
reason of his or her prior election not to purchase Shares in a given
Semi-Annual Period shall be disbursed to the Participant within thirty (30)
days of the end of such Semi-Annual Period. The Corporation shall as
expeditiously as possible after the last day of each Semi-Annual Period issue
to the Participant entitled thereto the certificate evidencing the Shares
issuable to him or her as provided herein.
(d) Notwithstanding anything above to the
contrary, (i) if the aggregate number of Shares that all Participants in the
Plan desire to purchase at the end of any Semi-Annual Period exceeds the number
of Shares then available under the Plan, the Shares available shall be
allocated among such Participants in proportion to their contributions during
the Semi-Annual Period (but no fractional Shares shall be purchased or issued)
and (ii) no funds in a Participant's account shall be applied to the purchase
of Shares and no Shares shall be issued hereunder, unless the issuance and sale
of such Shares are covered by an effective registration statement under the
Securities Act of 1933, as amended, or is exempt from such registration
requirements.
8. Termination of Participation. A Participant's
participation in the Plan will be terminated when the Participant (a)
voluntarily elects to withdraw his or her entire account, (b) resigns or is
discharged, with or without cause, from the Corporation or one of its present
or future Parent or Subsidiary corporations, (c) dies, or (d) does not receive
salary or other compensation from the Corporation or one of its present or
future Parent or Subsidiary corporations for twelve (12) consecutive months,
unless this period is due to illness, injury or for
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other reasons approved by the Committee. Upon termination of participation,
the terminated Participant shall not be entitled to rejoin the Plan until the
first day of the Semi-Annual Period immediately following the Semi-Annual
Period in which the termination occurs. Except in the case of a voluntary
termination under Sections 7(c) and 8(a) hereof, if a termination of
participation occurs prior to the last trading of a Semi-Annual Period, (i)
Shares will be issued for the Semi-Annual Period in which the termination
occurred in accordance with the Plan based upon the balance in such
Participant's account on the date of termination of participation, (ii) no
further payroll deductions or contributions shall be permitted, and (iii) the
Participant shall be entitled to payment of the balance of the amount of his or
her individual account within thirty (30) days after the end of such
Semi-Annual Period.
9. Beneficiary.
(a) Each Participant may file a written
designation of a beneficiary who is to receive any Shares credited to such
Participant's account under the Plan in the event of the death of such
Participant prior to the last trading day of a Semi-Annual Period and/or prior
to delivery to such Participant of the certificates for such Shares. Such
designation may be changed by the Participant at any time by written notice
received by the Corporation.
(b) Upon the death of a Participant, promptly
following the end of the Semi-Annual Period during which the death occurred,
all Shares and amounts remaining in his or her account after the final purchase
of Shares in accordance with Section 7 hereof shall be paid or distributed to
the beneficiary or beneficiaries designated by such Participant, or in the
absence of such designation, to the executor or administrator of his or her
estate, and in either event the Corporation shall not be under any further
liability. If more than one (1) beneficiary is designated, then each
beneficiary shall receive the portion designated to be received by such
beneficiary by the Participant, or if no such designation is made, each
beneficiary shall receive an equal portion of the Shares and proceeds in the
account, provided that the Corporation may, in its sole discretion, make
adjustments in such distributions to avoid the issuance of fractional shares.
10. Administration of the Plan. The Plan will be
administered by the Committee. The Committee shall have the full power,
discretion, and authority to interpret and administer the Plan consistent with
the Plan provisions and to delegate to employees of the Corporation or any
Parent or Subsidiary the authority to perform administrative functions under
the Plan. The Committee shall serve at the pleasure of the Board of Directors.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members of the Committee present at any meeting at which a
quorum is present, or acts approved in writing by a majority of the members of
the Committee, shall be deemed the acts of the Committee. All costs and
expenses incurred in administering the Plan shall be paid by the Corporation.
Any taxes applicable to a Participant's account shall be charged or credited to
the Participant's account by the Corporation.
11. Modification and Termination. Although the
Corporation expects to continue the Plan until such time as all of the Shares
reserved for issuance under the Plan have been sold, the Board and/or the
Committee reserve the right to amend, alter, suspend, discontinue
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or terminate the Plan in its or their discretion; provided, however, that the
Board, shall not, without the approval of the shareholders of the Corporation
(i) increase the maximum number of Shares which may issued under the Plan
(except pursuant to Section 12 hereof) or (ii) amend the requirements as to the
class of employees eligible to purchase Shares under the Plan. The Board may,
in its discretion, submit any proposed amendment to the Plan to the
shareholders of the Corporation for approval and shall submit proposed
amendments to the Plan to the shareholders of the Corporation for approval if
such approval is required in order for the Plan to comply with Rule 16b-3 of
the Exchange Act (or any successor rule). In the event shareholder approval of
the Plan is not obtained prior to the date that is twelve (12) months after the
date this Plan is adopted by the Board, the Plan shall terminate. Upon such
termination, each Participant shall be entitled to payment of the amount of his
or her individual account within thirty (30) days after the date of termination
of the Plan and no Shares shall be issued to any Employee hereunder.
12. Adjustments Upon Changes in Capitalization.
Appropriate and proportionate adjustments shall be made in the number and class
of shares of stock subject to this Plan in the event of a stock dividend, stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, acquisition, separation or like change in the capital structure
of the Corporation.
13. Transferability of Rights. No rights of any Employee
under this Plan shall be transferable by such Employee, by operation of law or
otherwise, except (a) to the extent that a Participant is permitted to
designate a beneficiary or beneficiaries as hereinabove provided, (b) to the
extent permitted by will or the laws of descent and distribution if no such
beneficiary has been designated and (c) pursuant to a qualified domestic
relations order as defined in Section 414(p) of the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended. Except as set
forth above, purchase options granted under this Plan are exercisable, during
an Employee's lifetime, only by the Employee.
14. Participation in Other Plans. Nothing herein
contained shall affect an Employee's right to participate in and receive
benefits under and in accordance with the then current provisions of any
pension, insurance or other employee welfare plan or program of the
Corporation.
15. Compliance with Governmental Regulations.
Notwithstanding any provision of the Plan or the terms of any agreement entered
into pursuant to the Plan, the Corporation shall not be required to issue any
shares hereunder prior to registration of the shares subject to the Plan under
the Securities Act of 1933, as amended, or the Exchange Act, if such
registration shall be necessary, or before compliance by the Corporation or any
Participant with any other provisions of either of those acts or of regulations
or rulings of the Securities and Exchange Commission thereunder, or before
compliance with other federal and state laws and regulations and rulings
thereunder, including the rules of the National Association of Securities
Dealers, Inc. The Corporation shall use its best efforts to effect such
registrations and to comply with such laws, regulations and rulings forthwith
upon advice by its counsel that any such registration or compliance is
necessary.
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16. Compliance with Rule 16b-3. It is the intent of the
Corporation that this Plan and all transactions under this Plan comply in all
respects with applicable provisions of Rule 16b-3 under the Exchange Act (or
any successor rule). Accordingly, if any provision of this Plan, any agreement
hereunder, or any transaction pursuant to the Plan does not comply with the
requirements of Rule 16b-3 as then applicable to a Participant, such provisions
will be construed or deemed amended to the extent necessary to conform to the
applicable requirements with respect to such Participant. To the extent that
any provision of the Plan, any agreement hereunder, or any action by the Board
or the Committee fails to so comply, it shall be deemed null and void to the
extent permitted by law and to the extent deemed advisable by the Board or the
Committee.
17. No Right to Continue as an Employee. Nothing
contained in the Plan or any agreement hereunder will confer upon any
Participant any right to continue to serve as an employee of the Corporation.
18. No Shareholder Rights Conferred. Nothing contained
in the Plan or any agreement hereunder will confer upon any Participant (or any
person or entity claiming rights by or through a Participant) any rights of a
shareholder of the Corporation unless and until shares of Common Stock are in
fact issued to such Participant (or person).
19. Governing Law. To the extent not preempted by
Federal law, the Plan and any agreement pursuant to the Plan shall be construed
in accordance with and governed by the internal laws of the State of
California.
20. Severability. In the event any provision of the Plan
or any action taken pursuant to the Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts
of the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included, and the illegal or invalid action
shall be deemed null and void.
21. Withholding Taxes. To the extent required by
applicable law or regulation, each Employee must arrange with the Corporation
for the payment of any federal, state or local income or other tax applicable
to the receipt of Common Stock under the Plan before the Corporation shall be
required to deliver to the Employee a certificate for Shares of Common Stock.
22. Availability of Plan. A copy of this Plan shall be
delivered to any Employee making reasonable inquiry concerning the Plan.
23. Notices. Any notice or other communication required
or permitted to be given pursuant to the Plan or under any agreement hereunder
must be in writing and may be given by registered or certified mail, and if
given by registered or certified mail, shall be determined to have been given
and received on the date three (3) days after a registered or certified letter
containing such notice, properly addressed with postage prepaid, is deposited
in the United States mails; and if given other than by registered or certified
mail, it shall be deemed to have been given when delivered to and received by
the party to whom addressed. Notice shall be given to
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Participants at their most recent addresses shown in the Corporation's records.
Notice to the Corporation shall be addressed to the Corporation at the address
of the Corporation's principal executive offices, to the attention of the
Secretary of the Corporation.
24. Titles and Headings. Titles and headings of sections
and articles of this Plan are for convenience of reference only and shall not
affect the construction of any provision of this Plan.
25. Effective Date of Plan; Shareholder Approval. The
Plan shall become effective on the date the Plan is adopted by the Board,
subject to approval by the affirmative votes of the holders of a majority of
the Common Stock present or represented at a duly held special or annual
meeting of the shareholders of the Corporation. The Plan shall be submitted to
the shareholders of the Corporation for their approval at the Annual Meeting of
Shareholders to be held in 1996. If the Plan is not approved at that meeting,
it shall not become effective, all amounts in each Participant's account shall
be promptly repaid to such Participant and no Shares shall be issued hereunder.
26. Plan Termination. Unless earlier terminated by
action of the Board or the Committee, the Plan will remain in effect until such
time as no Shares of Common Stock remain available for issuance under the Plan
and the Corporation and Participants have no further rights or obligations
under the Plan.
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of ALPHA MICROSYSTEMS on June 14, 1996 and by the shareholders of
ALPHA MICROSYSTEMS on August 13, 1996.
Executed on this 13th day of August, 1996.
/s/JOHN F. GLADE
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John F. Glade, Secretary
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