EXHIBIT 10.7
GENTIVA HEALTH SERVICES, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The purpose of this Plan is to provide eligible employees the opportunity to
purchase Gentiva Health Services, Inc. Common Stock on a basis that qualifies
for the tax treatment prescribed by Section 423 of the Code.
2. DEFINITIONS.
The following terms, when used in the Plan, shall have the following
meanings:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to a particular section of the Code include any successor
provisions.
(c) "Committee" means the committee appointed by the Board of Directors to
administer the Plan pursuant to the provisions of Section 3(a) below.
(d) "Common Stock" means common stock, par value $.10 per share, of the
Company.
(e) "Company" means Gentiva Health Services, Inc., a Delaware corporation.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
(g) "Fair Market Value" on a particular date means the mean between the
highest and lowest sales prices of a share of Common Stock on the principal
stock exchange or stock market on which the Common Stock may be listed or
admitted to trading. If there were no sales on such date, the respective prices
on the most recent prior day on which sales were reported shall be used. If the
foregoing method of determining fair market value should be inconsistent with
Section 423 of the Code, "Fair Market Value" shall be determined by the
Committee in a manner consistent with Section 423 of the Code and shall mean the
value as so determined.
(h) "Offering" means a period, designated by the Committee in accordance
with the provisions of Section 6 of the Plan, on the first day of which options
will be granted to eligible employees pursuant to Section 8(a) of the Plan and
on the last day of which such options will be deemed exercised or will expire,
as applicable, in accordance with Section 8(b) of the Plan.
(i) "Participant" or "Participating Employee" means an employee of the
Company or a Participating Subsidiary who is eligible to participate in an
Offering under the Plan pursuant to Section 5 below and who elects to
participate in such Offering in accordance with Section 6 below.
(j) "Participating Subsidiary" means, with respect to an Offering under the
Plan, a Subsidiary the employees of which are authorized by the Committee as
provided in Section 5 below to participate in such Offering.
(k) "Plan" means the Gentiva Health Services, Inc. Employee Stock Purchase
Plan set forth herein, as amended from time to time.
(l) "Parent" means a parent corporation as defined in Section 424(e) of the
Code, including a corporation which becomes such a parent in the future.
(m) "Subsidiary" means a subsidiary corporation as defined in
Section 424(f) of the Code, including a corporation which becomes such a
subsidiary in the future.
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(n) "Total Compensation" means, with respect to any Offering, all
remuneration, as defined in Section 3401(a) of the Code (for purposes of income
tax withholding at the source), but determined without regard to any rules that
limit remuneration included in wages based on the nature and location of
employment or the services performed, for services paid to an employee during,
or coincident with the end of, such Offering; PROVIDED, HOWEVER, that "Total
Compensation" shall not include the following items (even if includable in gross
income): (1) reimbursement or other expense allowances; (2) fringe benefits
(cash and noncash); (3) moving expenses and gross up for taxes; (4) welfare
benefits (including disability income from insurance policies); (5) payments on
account of severance of the employee from employment; (6) payments on account of
early retirement of the employee; (7) income arising from the grant or exercise
of stock options; (8) restricted stock awards; and (9) distributions under this
Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by a committee of the Board consisting of
two or more directors appointed from time to time by the Board.
(b) Subject to the provisions of the Plan, the powers of the Committee shall
include having the authority, in its discretion, to:
(i) define, prescribe, amend and rescind rules, regulations, procedures,
terms and conditions relating to the Plan; and
(ii) interpret, administer and construe the Plan and make all other
determinations necessary or advisable for the administration of the Plan,
including but not limited to correcting defects, reconciling inconsistencies
and resolving ambiguities.
(c) The interpretation by the Committee of the terms and conditions of the
Plan, and its administration of the Plan, and all action taken by the Committee,
shall be final, binding and conclusive on the Company, its stockholders,
Subsidiaries, all Participants and employees, and upon their respective
successors and assigns, and upon all other persons claiming under or through any
of them.
(d) Members of the Board, members of the Committee and persons to whom
authority is delegated under Section 3(e) below acting under this Plan shall be
fully protected in relying in good faith upon the advice of counsel and shall
incur no liability except for gross or willful misconduct in the performance of
their duties.
(e) The Committee may delegate its authority to administer the Plan to any
individuals as the Committee may determine and such individuals shall serve
solely at the pleasure of the Committee. Any individuals who are authorized by
the Committee to administer the Plan shall have the full power to act on behalf
of the Committee, but shall at all times be subordinate to the Committee and the
Committee shall retain ultimate authority for the administration of the Plan.
4. STOCK SUBJECT TO THE PLAN.
(a) Subject to paragraph (c) below, the aggregate number of shares of Common
Stock which may be sold under the Plan is 1,200,000 shares of Common Stock.
(b) If the number of shares of Common Stock that Participating Employees
become entitled to purchase is greater than the number of shares of Common Stock
that are offered in a particular Offering or that remain available under the
Plan, the available shares of Common Stock shall be allocated by the Committee
among such Participating Employees in such manner as it deems fair and
equitable.
(c) In the event of any change in the Common Stock, through
recapitalization, merger, consolidation, stock dividend or split, combination or
exchange of shares, spinoff or otherwise, the
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Committee may make such equitable adjustments in the Plan and the then
outstanding Offerings as it deems necessary and appropriate including, but not
limited to, changing the number of shares of Common Stock reserved under the
Plan, and the purchase price of shares in the current Offering; provided that
any such adjustments shall be consistent with Sections 423 and 424 of the Code.
(d) Shares of Common Stock which are to be delivered under the Plan may be
obtained by the Company from its treasury, by purchasing such shares on the open
market or from private sources, or by issuing authorized but unissued shares of
its Common Stock. Shares of authorized but unissued Common Stock may not be
delivered under the Plan if the purchase price thereof is less than the par
value (if any) of the Common Stock at the time. The Committee may (but need not)
provide at any time or from time to time (including without limitation upon or
in contemplation of a change in control) for a number of shares of Common Stock
equal in number to the number of shares then subject to options under this Plan
to be issued or transferred to, or acquired by, a trust (including but not
limited to a grantor trust) for the purpose of satisfying the Company's
obligations under such options, and, unless prohibited by applicable law, such
shares held in trust shall be considered authorized and issued shares with full
dividend and voting rights, notwithstanding that the options to which such
shares relate might not be exercisable at the time.
5. ELIGIBILITY.
All employees of the Company and any Subsidiaries designated by the
Committee from time to time will be eligible to participate in the Plan, in
accordance with and subject to such rules and regulations as the Committee may
prescribe; provided, however, that (a) such rules shall comply with the
requirements of the Code (including but not limited to Section 423(b)(3),
(4) and (8) thereof), (b) no employee shall be eligible to participate in the
Plan if his or her customary employment is 20 hours or less per week or for not
more than 5 months in any calendar year, unless the Committee determines
otherwise on a uniform and non-discriminatory basis, (c) the Committee may (but
need not) in its discretion exclude employees who have been employed by the
Company or a Participating Subsidiary less than two years and/or highly
compensated employees within the meaning of Section 414(q) of the Code from
being eligible to participate in the Plan or any Offering, but unless and until
otherwise determined by the Committee, only employees who have been employed
less than eight months will be excluded, (d) no employee may be granted an
option under the Plan if such employee, immediately after the option is granted,
owns stock possessing 5% or more of the total combined voting power or value of
all classes of stock of his employer corporation or any Parent or Subsidiary
(with the rules of Section 424(d) of the Code applicable in determining the
stock ownership of an employee, and stock which the employee may purchase under
outstanding options, whether or not such options qualify for the special tax
treatment afforded by Section 421 (a) of the Code, shall be treated as stock
owned by the employee), and (e) all Participating Employees shall have the same
rights and privileges except as otherwise permitted by Section 423(b)(5) of the
Code.
6. OFFERINGS; PARTICIPATION.
The Company may make Offerings of up to 27 months' duration each, to
eligible employees to purchase shares of Common Stock under the Plan, until all
shares authorized to be delivered under the Plan have been exhausted or until
the Plan is sooner terminated by the Board. Subject to the preceding sentence,
the number, commencement date and duration of any Offerings shall be determined
by the Committee in its sole discretion; provided that, unless the Committee
determines otherwise, (a) the first Offering shall commence on February 1, 2000
and shall terminate on June 30, 2000, and (b) a new six-month Offering shall
commence immediately after the end of the previous Offering. The duration of any
Offering need not be the same as the duration of any other Offering, and more
than one Offering may commence or terminate on the same date if the Committee so
provides. Subject to such rules and procedures as the Committee may prescribe,
an eligible employee may elect to participate in an
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Offering at such time(s) as the Committee may permit by authorizing a payroll
deduction for such purpose in one percent increments of up to a maximum of ten
percent of his or her Total Compensation with respect to such Offering or such
lesser amount as the Committee may prescribe. Participant elections may be made
in any manner deemed appropriate by the Committee from time to time, including
by voice response or through the internet. The Committee may (but need not)
permit employee contributions to be made by means other than payroll deductions,
provided that in no event shall an employee's contributions (excluding interest,
if any, credited pursuant to Section 7(a) below) from all sources in any
Offering exceed ten percent of his or her Total Compensation with respect to
such Offering or such lesser amount as the Committee may prescribe. The
Committee may at any time suspend or accelerate the completion of an Offering if
required by law or deemed by the Committee to be in the best interests of the
Company, including in the event of a change in ownership or control of the
Company or any Subsidiary.
7. PAYROLL DEDUCTIONS.
(a) The Company will maintain payroll deduction accounts on its books for
all Participating Employees, and may (but need not) credit such accounts with
interest if (and only if) the Committee so directs at such rate (if any) as the
Committee may prescribe. All employee contributions and any interest thereon
which the Committee may authorize in accordance with the preceding sentence
shall be credited to such accounts. Employee contributions and any interest
credited to the payroll deduction accounts of Participating Employees need not
be segregated from other corporate funds and may be used for any corporate
purpose.
(b) At such times as the Committee may permit and subject to such rules and
procedures as the Committee may prescribe, a Participating Employee may suspend
his or her payroll deduction during an Offering, or may withdraw the balance of
his or her payroll deduction account and thereby withdraw from participation in
an Offering.
(c) Any balance remaining in an employee's payroll deduction account after
shares have been purchased in an Offering pursuant to Section 8(b) below will be
refunded to the Participating Employee. Upon termination of the Plan, all
amounts in the accounts of Participating Employees shall be carried forward into
their payroll deduction accounts under a successor plan, if any, or refunded to
them, as the Committee may decide.
(d) In the event of the termination of a Participating Employee's employment
for any reason, his or her participation in any Offering under the Plan shall
cease, no further amounts shall be deducted pursuant to the Plan and the balance
in the employee's account shall be paid as soon as practicable following such
termination of employment to the employee, or, in the event of the employee's
death, to the employee's beneficiary designated under this Plan or, in the
absence of such a beneficiary designation, to the employee's estate.
8. PURCHASE; LIMITATIONS.
(a) Subject to Section 5 above and within the limitations of Section 8(d)
below, each person who is an eligible employee of the Company or a Participating
Subsidiary on the first day of an Offering under the Plan is hereby granted an
option, on the first day of such Offering, to purchase a number of whole and/or
partial shares of Common Stock at the end of such Offering determined by
dividing ten percent (or such lesser percentage as may be specified by the
Committee as the maximum employee contribution percentage in such Offering) of
such employee's Total Compensation with respect to such Offering, plus such
interest (if any) as the Committee may authorize to be credited during such
Offering in accordance with Section 7(a) above, by 85 percent of the Fair Market
Value of a share of Common Stock on the first date of such Offering or on the
last date of such Offering, whichever is lower, provided that in no event shall
the number of shares of Common Stock that may be purchased
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under any such option exceed 5,000 shares or such higher or lower number of
whole or partial shares as the Committee may have specified in advance of such
Offering as the maximum amount of stock which may be purchased by an employee in
such Offering. The purchase price of such shares under such options shall be
determined in accordance with Section 8(c) below. The Company's obligation to
sell and deliver Common Stock in any Offering or pursuant to any such option
shall be subject to the approval of any governmental authority whose approval
the Committee determines it is necessary or advisable to obtain in connection
with the authorization, issuance, offer or sale of such Common Stock.
(b) As of the last day of the Offering, the payroll deduction account of
each Participating Employee shall be totalled. Subject to the provisions of
Section 7(b) above and 8(d) below, if such account contains sufficient funds as
of that date to purchase one or more whole or partial shares of Common Stock at
the price determined under Section 8(c) below, the Participating Employee shall
be conclusively deemed to have exercised the option granted pursuant to
Section 8(a) above for as many whole or partial shares of Common Stock as the
amount of his or her payroll deduction account (including any contributions made
by means other than payroll deductions and including any interest credited to
the account) at the end of the Offering can purchase (but in no event for more
than the total number of shares that are subject to the option); such employee's
account will be charged for the amount of the purchase and for all purposes
under the Plan the employee will be deemed to have acquired the shares on that
date; and either a stock certificate representing such shares will be issued to
him or her, or the Company's record keeper will make an entry on its books and
records evidencing that such shares have been duly issued or transferred as of
that date, as the Committee may direct. Notwithstanding any provision of the
Plan to the contrary, unless otherwise determined by the Committee, fractional
shares may be purchased under the Plan. Any option granted pursuant to
Section 8(a) above which is not deemed exercised as of the last day of the
Offering in accordance with the foregoing provisions of this Section 8(b) shall
expire on that date.
(c) Unless the Committee determines before the first day of an Offering that
a higher price that complies with Section 423 of the Code shall apply, the price
at which shares of Common Stock may be purchased under each option granted
pursuant to Section 8(a) above shall be the lesser of (i) an amount equal to
85 percent of the Fair Market Value of the Common Stock at the time such option
is granted, or (ii) an amount equal to 85 percent of the Fair Market Value of
the Common Stock at the time such option is exercised.
(d) In addition to any other limitations set forth in the Plan, no employee
may be granted an option under the Plan which permits his or her rights to
purchase stock under the Plan, and any other stock purchase plan of his or her
employer corporation and its Parent and Subsidiary that is qualified under
Section 423 of the Code, 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 the option is outstanding at any time. The Committee
may further limit the amount of Common Stock which may be purchased by any
employee during an Offering in accordance with Section 423(b)(5) of the Code.
9. NO TRANSFER.
(a) No option, right or benefit under the Plan may be transferred by any
employee, whether by will, the laws of descent and distribution, or otherwise,
and all options, rights and benefits under the Plan may be exercised during an
employee's lifetime only by such employee.
(b) Book entry accounts and certificates for shares of Common Stock
purchased under the Plan may be maintained or registered, as the case may be,
only in the name of the Participating Employee or, if such employee so indicates
on his or her payroll deduction authorization form, in his or her name jointly
with a member of his or her family, with right of survivorship.
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10. EFFECTIVE DATE AND DURATION OF PLAN.
The Plan shall become effective when adopted by the Board, provided that the
stockholders of the Company approve it within 12 months thereafter. If not so
approved by shareholders, the Plan shall be null, void and of no force or
effect. If so approved, the Plan shall remain in effect until all shares
authorized to be issued or transferred hereunder have been exhausted or until
the Plan is sooner terminated by the Board of Directors, and may continue in
effect thereafter with respect to any options outstanding at the time of such
termination if the Board of Directors so provides.
11. AMENDMENT AND TERMINATION OF THE PLAN.
The Plan may be amended by the Board of Directors, without shareholder
approval, at any time and in any respect, unless shareholder approval of the
amendment in question is required under Section 423 of the Code. The Plan may
also be terminated at any time by the Board of Directors.
12. GENERAL PROVISIONS.
(a) Nothing contained in this Plan shall be deemed to confer upon any person
any right to continue as an employee of or to be associated in any other way
with the Company for any period of time or at any particular rate of
compensation.
(b) No person shall have any rights as a stockholder of the Company with
respect to any shares optioned under the Plan until such shares are issued or
transferred to him or her.
(c) All expenses of adopting and administering the Plan shall be borne by
the Company, and none of such expenses shall be charged to any employee.
(d) The Plan shall be governed by and construed under the laws of the State
of New York, without giving effect to the principles of conflicts of laws of
that State.
(e) The Plan and each Offering under the Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the Code.
Transactions under the Plan by or with respect to persons subject to
Section 16(b) of the Exchange Act with respect to transactions involving equity
securities of the Company are also intended to qualify for exemption under SEC
Rule 16b-3, unless the Committee specifically determines otherwise. Every
provision of the Plan shall be administered, interpreted and construed to carry
out those intentions.
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