Exhibit 10 (b)
ALPHA INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
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The Alpha Industries, Inc. Employee Stock Purchase Plan (hereinafter the
"Plan") is intended to provide a method whereby employees of Alpha Industries,
Inc. (the "Company") and participating subsidiaries will have an opportunity to
acquire a proprietary interest in the Company through the purchase of shares of
the Company's Common Stock. It is the intention of the Company to have the Plan
qualify as 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, accordingly, be construed so as to extend and limit participation in a
manner consistent with the requirements of that Section of the Code.
2. Eligible Employees.
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All employees of the Company or any of its participating subsidiaries who
have completed six months of employment with the Company or any of its
subsidiaries on or before the first day of the applicable Offering Period (as
defined below) shall be eligible to receive options under this Plan to purchase
the Company's Common Stock. In no event may an employee be granted an option if
such employee, immediately after the option is granted, owns stock possessing
five (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 the purpose of this Plan, the term employee shall not include an
employee whose customary employment is less than twenty (20) hours per week or
is for not more than five (5) months in any calendar year.
3. Stock Subject to the Plan.
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The stock subject to the options granted hereunder shall be shares of the
Company's authorized but unissued Common Stock 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 the Plan with
respect to each Offering Period is 100,000, and an aggregate of 300,000 for all
fifteen Offering Periods, subject to increase or decrease by reason of stock
split-ups, reclassifications, stock dividends, changes in par value and the
like. If less than 100,000 shares of Common Stock are purchased during any of
the first through fourteenth Offering Periods, the amount not purchased shall
be carried forward to and made available for purchase in the
subsequent Offering Period. If the number of shares of Common Stock reserved
and available for any Offering Period is insufficient to satisfy all purchase
requirements for that Offering Period, the reserved and available shares for
that Offering Period shall be apportioned among participating employees in
proportion to their options.
4. Offering Periods and Stock Options.
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There shall be fifteen Offering Periods during which payroll deductions
will be accumulated under the Plan. Each Offering Period includes only regular
pay days falling within it. The first Offering Period shall commence on
February 1, 1990 and end on December 31, 1990. The second Offering Period
shall commence on January 1, 1991 and end on December 31, 1991, and the third
Offering Period shall commence on January 1, 1992 and end on December 31, 1992.
Thereafter, the fourth through fifteenth Offering Periods shall commence and
end as follows:
Offering Offering Commencement Offering Termination
Period Date Date
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Fourth January 1, 1993 June 30, 1993
Fifth July 1, 1993 December 31, 1993
Sixth January 1, 1994 June 30, 1994
Seventh July 1, 1994 December 31, 1994
Eighth January 1, 1995 June 30, 1995
Ninth July 1, 1995 December 31, 1995
Tenth January 1, 1996 June 30, 1996
Eleventh July 1, 1996 December 31, 1996
Twelfth January 1, 1997 June 30, 1997
Thirteenth July 1, 1997 December 31, 1997
Fourteenth January 1, 1998 June 30, 1998
Fifteenth July 1, 1998 December 31, 1998
The Offering Commencement Date is the first day of each Offering Period.
The Offering Termination Date is the applicable date on which an Offering Period
ends under this Article 4.
On each Offering Commencement Date, the Company will grant to each eligible
employee who is then a participant in the Plan an option to purchase on the
Offering Termination Date at the Option Exercise Price, as hereinafter provided,
that number of full shares of Common Stock reserved for the purpose of the Plan
as his or her accumulated payroll deductions on the Offering Termination Date
will pay for at a price equal to eighty-five percent (85%) of the fair market
value of the Company's Common Stock on the Offering Commencement Date; provided
that such employee remains eligible to participate in the Plan throughout such
Offering Period. The Option Exercise Price for each Offering Period shall be
the lesser of (i) eighty-five percent (85%) of the fair market value of the
Common Stock on the Offering Commencement Date, or (ii) eighty-five percent
(85%) of the fair market value of the Common Stock on the Offering Termination
Date, in either case rounded up to avoid fractions other than multiples of 1/8.
In the event of an increase or decrease in the number of outstanding shares of
Common Stock 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 Exercise Price per share provided for under the Plan, either by a
proportionate increase in the number of shares and proportionate decrease in
the Option Exercise Price per share, or by a proportionate decrease in the
number of shares and a proportionate increase in the Option Exercise Price per
share, as may be required to enable an eligible employee who is then a
participant in the Plan to acquire on the Offering Termination Date that number
of full shares of Common Stock as his accumulated payroll deductions on such
date will pay for at a price equal to eighty-five percent (85%) of the fair
market value of the Common Stock on the Offering Commencement Date, as so
adjusted.
For purposes of this Plan, the term "fair market value" means, if the Common
Stock is listed on a national securities exchange or is on the National Market
List of the National Association of Securities Dealers Automated Quotation
("NASDAQ") system, the average of the high and low sales prices of the Common
Stock on such exchange or as reported on NASDAQ or, if the Common Stock is
traded in the over-the-counter securities market, but not on the National Market
List of NASDAQ, the average of the high and low bid quotations for the Common
Stock, each as published in the Wall Street Journal. If no shares of Common
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Stock are traded on the Offering Commencement Date or Offering Termination Date,
the fair market value will be determined on the next regular business day on
which shares of Common Stock are traded.
For purposes of this Plan the term "business day" as used herein means a day
on which there is trading on the American Stock Exchange or such other national
securities exchange on which the Common Stock is listed.
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 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 and shall be
construed in accordance with Section 423(b)(8) of the Code.
5. Exercise of Option.
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Each eligible employee who continues to be a participant in the Plan on the
Offering Termination Date shall be deemed to have exercised his or her 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 or her
accumulated payroll deductions on such date will pay for at the Option Exercise
Price, but in no event may an employee purchase shares of Common Stock in excess
of the number of full shares as his accumulated payroll deductions on the
Offering Termination Date will pay for at a price equal to 85% of the fair
market value of the Common Stock on the Offering Commencement Date. If a
participant is not an employee on the Offering Termination Date and throughout
an Offering Period, he or she shall not be entitled to exercise his or her
option.
6. Authorization for Entering Plan.
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An eligible employee may enter the Plan by filling out, signing and
delivering to the Treasurer of the Company an Authorization:
(a) stating the amount to be deducted regularly from his or her pay;
(b) authorizing the purchase of stock for him or her in each Offering Period
in accordance with the terms of the Plan;
(c) specifying the exact name in which Common Stock purchased for him or her
is to be issued in accordance with Article 11 hereof; and
(d) at the discretion of the employee in accordance with Article 14,
designating a beneficiary who is to receive any Common Stock and/or cash
in the event of his or her death.
Such Authorization must be received by the Treasurer of the Company at least
ten (10) business days before the Offering Commencement Date.
The Company will accumulate and hold for the employee's account the amounts
deducted from his or her pay. No interest will be paid thereon. Participating
employees may not make any separate cash payments into their account.
Unless an employee files a new Authorization or withdraws from the Plan, his
or her 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. An employee
may increase or decrease the amount of his or her payroll deductions as of the
next Offering Commencement Date by filling out, signing and delivering to the
Treasurer of the Company a new Authorization. Such new Authorization must be
received by the Treasurer of the Company at least ten (10) business days before
the date of such next Offering Commencement Date.
7. Maximum Amount of Payroll Deductions.
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An employee may authorize payroll deductions in any even dollar amount up to
but not more than ten percent (10%) of his or her base pay; provided, however,
that the minimum deduction in respect of any payroll period shall be five
dollars ($5). Base pay means regular straight-time earnings excluding payments
for overtime, incentive compensation, bonuses, and other special payments.
8. Unused Payroll Deductions.
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Only full shares of Common Stock may be purchased. Any balance remaining in
an employee's account after a purchase will be reported to the employee and will
be carried forward to the next Offering Period. However, in no event will the
amount of the unused payroll deductions
carried forward from a payroll period exceed the Option Exercise Price per
share for that Offering Period. If for any Offering Period the amount of
unused payroll deductions should exceed the Option Exercise Price per share,
the amount of the excess for any participant shall be refunded to such
participant, without interest.
9. Change in Payroll Deductions.
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Deductions may not be increased or decreased during an Offering Period.
10. Withdrawal from the Plan.
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An employee may withdraw from the Plan and withdraw all but not less than all
of the payroll deductions credited to his or her account under the Plan at any
time prior to the Offering Termination Date by delivering a Withdrawal Notice to
the Treasurer of the Company in which event the Company will promptly refund
without interest the entire balance of such employee's deductions not
theretofore used to purchase Common Stock under the Plan.
An employee who withdraws from the Plan is like an employee who has never
entered the Plan; the employee's rights under the Plan will be terminated and no
further payroll deductions will be made. To reenter, such an employee must file
a new Authorization at least ten (10) business days before the next Offering
Commencement Date which cannot, however, become effective before the beginning
of the next Offering Period following his withdrawal. Notwithstanding the
foregoing, employees who are subject to Section 16 of the Securities Exchange
Act of 1934, as amended, who withdraw from the Plan may not reenter the Plan
until the next Offering Commencement Date which is at least six months following
the date of such withdrawal.
11. Issuance of Stock.
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Certificates for Common Stock issued to participants will be delivered as
soon as practicable after each Offering Period.
Common Stock purchased under the Plan will be issued only in the name of the
employee, or, if the employee's 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.
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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 him or her, except as provided
in Article 13 in the event of an employee's death.
13. Termination of Employee's Rights.
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Except as set forth in the last paragraph of this Article 13, an employee's
rights under the Plan will terminate when he or she ceases to be an employee
because of retirement, resignation, lay- off, discharge, death, change of
status, failure to remain in the customary employ of the Company for twenty (20)
hours or more per week, 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 Common 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.
Upon termination of the participating employee's employment because of death,
the employee's beneficiary (as defined in Article 14) shall have the right to
elect, by written notice given to the Treasurer of the Company prior to the
expiration of the thirty (30) day period commencing with the date of the death
of the employee, either (i) to withdraw, without interest, all of the payroll
deductions credited to the employee's account under the Plan, or (ii) to
exercise the employee's option for the purchase of shares of Common Stock on the
next Offering Termination Date following the date of the employee's death for
the purchase of that number of full shares of Common Stock reserved for the
purpose of the Plan which the accumulated payroll deductions in the employee's
account at the date of the employee's death will purchase at the applicable
Option Exercise Price (subject to the maximum number set forth in Article 5),
and any excess in such account (in lieu of fractional shares) will be returned
to said beneficiary. In the event that no such written notice of election shall
be duly received by the Treasurer of the Company, the beneficiary shall
automatically be deemed to have elected to withdraw the payroll deductions
credited to the employee's account at the date of the employee's death and the
same will be paid promptly to said beneficiary, without interest.
14. Designation of Beneficiary.
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A participating employee may file a written designation of a beneficiary who
is to receive any Common Stock and/or cash in case of his or her death. Such
designation of beneficiary may be changed by the employee at any time by written
notice. Upon the death of a participating employee and upon receipt by the
Company of proof of the identity and existence at the employee's death of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such Common Stock and/or cash to such beneficiary. In the event of the death of
a participating employee and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such employee's death, the Company
shall deliver such Common Stock and/or cash to the executor or administrator of
the estate of the employee, or if, to the knowledge of the Company, no such
executor or administrator has been appointed, the Company, in the discretion of
the Committee, may deliver such Common Stock and/or cash to the spouse or to any
one or more dependents of the employee as the Committee may designate. No
beneficiary shall, prior to the death of the employee by whom he or she has been
designated, acquire any interest in the Common Stock or cash credited to the
employee under the Plan.
15. Termination and Amendments to Plan.
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The Plan may be terminated at any time by the Company's Board of Directors.
It will terminate in any case after the end of the fifteenth Offering Period,
or if sooner, when all of the shares of Common Stock reserved for the purposes
of the Plan have been purchased. Upon such termination or any other
termination of the Plan, all payroll deductions not used to purchase Common
Stock will be refunded without interest.
The Board of Directors reserves the right to amend the Plan from time to time
in any respect; provided, however, that no amendment shall be effective without
stockholder approval within twelve (12) months before or after the Board of
Directors adopts the amendment if the amendment would (a) except as provided in
Articles 3, 4, 24 and 25, increase the aggregate number of shares of Common
Stock to be offered under the Plan, or (b) change the class of employees
eligible to receive options under the Plan; provided, further, that so long as
there is a requirement under Rule 16b-3 under the Securities Exchange Act of
1934, as amended, for stockholder approval of the Plan and certain amendments
thereto, any such amendment which (a) materially increases the number of shares
of Common Stock which may be offered under the Plan, (b) materially increases
the benefits accruing to participants in the Plan or (c) materially modifies the
requirement for eligibility to participate in the Plan, shall be subject to
stockholder approval.
16. Limitations of Sale of Stock Purchased Under the Plan.
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The Plan is intended to provide eligible employees an opportunity to acquire
the Company's Common Stock for investment. Common Stock purchased under the
Plan may not be sold for six (6) months after purchase on the Offering
Termination Date, except in the case of death or disability of an employee who
is not subject to Section 16 of the Securities Exchange Act of 1934, as
amended, or unless otherwise permitted under Rule 16b-3 thereunder.
Thereafter, an employee may sell Common Stock purchased under the Plan at any
time; 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 Common Stock disposed of within two years after the Offering
Commencement Date on which the Common 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 Common Stock. Certificates representing
shares of Common Stock purchased under the Plan will bear a legend reflecting
the restrictions on transfer set forth herein.
17. Company's Offering of Expenses Related to Plan.
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The Company will bear all costs of administering and carrying out the Plan.
18. Participating Subsidiaries.
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The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Committee to participate in the Plan. The
Committee shall have the power to make such designation before or after the Plan
is approved by the stockholders.
19. Administration of the Plan.
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The Plan shall be administered by a committee of "disinterested" directors as
that term is defined in Rule 16b-3 under the Securities Exchange Act of 1934,
as amended, appointed by the Board of Directors of the Company (the
"Committee"). The Committee shall consist of not less than two 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. No
member of the Committee shall be eligible to participate in the Plan while
serving as a member of the Committee.
The Committee shall select 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 or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee.
The interpretation and construction by the Committee of any provisions of the
Plan or of any option granted under it shall be final. The Committee may from
time to time adopt such rules and regulations for carrying out the Plan as it
may deem best. With respect to persons subject to Section 16 of the Securities
and Exchange Act of 1934, as amended, transactions under the Plan are intended
to comply with all applicable conditions of Rule 16b-3 or its successors under
said Act. To the extent any provision of the Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by that Committee.
Promptly after the end of each Offering Period, the Committee shall prepare
and distribute to each participating employee in the Plan a report containing
the amount of the participating employee's accumulated payroll deductions as of
the Offering Termination Date, the Option Exercise Price for such Offering
Period, the number of shares of Common Stock purchased by the participating
employee with the participating's accumulated payroll deductions, and the amount
of any unused payroll deductions either to be carried forward to the next
Offering Period, or returned to the participating employee without interest.
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. The Company shall indemnify each member of the Board
of Directors and the Committee to the fullest extent permitted by law with
respect to any claim, loss, damage or expense (including counsel fees) arising
in connection with their responsibilities under this Plan.
20. Optionees Not Stockholders.
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Neither the granting of an option to an employee nor the deductions from his
or her pay shall constitute such employee a stockholder of the Company with
respect to the shares covered by such option until such shares have been
purchased by and issued to him.
21. Application of Funds.
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The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan may be used for any corporate purposes, and
the Company shall not be obligated to segregate participating employees' payroll
deductions.
22. Governmental Regulation.
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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.
In this regard, the Board of Directors may, in its discretion, require as a
condition to the exercise of any option that a Registration Statement under the
Securities Act of 1933, as amended, with respect to the shares of Common Stock
reserved for issuance upon exercise of the option shall be effective.
23. Transferability.
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Neither payroll deductions credited to an employee's account nor any rights
with regard to the exercise of an option or to receive stock under the Plan may
be assigned, transferred, pledged, or otherwise disposed of in any way by the
employee. Any such attempted 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 Article 10.
24. Effect of Changes of Common Stock.
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If the Company should subdivide or reclassify the Common Stock which has been
or may be optioned under the Plan, or should declare thereon any dividend
payable in shares of such Common Stock, or should take any other action of a
similar nature affecting such Common Stock, then the number and class of shares
of Common Stock which may thereafter be optioned (in the aggregate and to any
individual participating employee) shall be adjusted accordingly.
25. Merger or Consolidation.
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If the Company should at any time merge into or consolidate with another
corporation, the Board of Directors may, at its election, either (i) terminate
the Plan and refund without interest the entire balance of each participating
employee's payroll deductions, or (ii) entitle each participating employee to
receive on the Offering Termination Date upon the exercise of such option
for each share of Common Stock as to which such option shall be exercised the
securities or property to which a holder of one share of the Common Stock was
entitled upon and at the time of such merger or consolidation, and the Board of
Directors shall take such steps in connection with such merger or consolidation
as the Board of Directors shall deem necessary to assure that the provisions of
this Article 25 shall thereafter be applicable, as nearly as reasonably
possible. A sale of all or substantially all of the assets of the Company
shall be deemed a merger or consolidation for the foregoing purposes.
26. Withholding of Additional Federal Income Tax.
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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 includable in the employee's gross income.
27. Approval of Stockholders.
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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 (12) months before and ending twelve (12)
months after the date the Plan is adopted by the Board of Directors. Options
may be granted under the Plan prior and subject to such stockholder approval.
If the Plan is not so approved by the stockholders, all payroll deductions from
participating employees shall be returned without interest and all options so
granted shall terminate.
The Plan was adopted by the Board of Directors on December 21, 1989.
The Plan was amended by the Board of Directors on _____________________.
The Plan was further amended by the Board of Directors on __________________.