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EXHIBIT 10.8
ADVANTAGE LEARNING SYSTEMS, INC.
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
(EFFECTIVE OCTOBER 24, 2000)
1. Purpose. The purpose of this Plan is to provide employees of
Advantage Learning Systems, Inc. (the "Company") and of its Subsidiaries (as
defined in Paragraph 12 hereof) with an opportunity to purchase Company common
stock through annual offerings to be made commencing on the 1st day of January,
and thus develop a stronger incentive to work for the continued success of the
Company. The aggregate number of shares of common stock of the Company (the
"Stock") authorized to be sold pursuant to options granted under this Plan is
500,000 shares, subject to adjustment as provided in Paragraph 17 hereof. In
computing the number of shares available for grant, any shares relating to
options which are granted, but which subsequently lapse, are canceled or are
otherwise not exercised by the final date for exercise, shall be deemed
available for future grants of options. 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") and, therefore, the
provisions of the Plan shall be construed so as to govern participation in a
manner consistent with the requirements of Section 423(b) of the Code.
2. Administration. Subject to the general control of the Company's
Board of Directors (the "Board"), the Plan shall be administered by a committee
appointed by the Board (the "Committee"). The Committee shall consist of one or
more members and who need not be members of the Board. The Board may at any time
replace a member of such Committee. Any expenses of the Committee shall be paid
by the Company. The Committee may adopt regulations not inconsistent with the
provisions of this Plan for the administration thereof, and its interpretation
and construction of the Plan and the regulations shall be final and conclusive.
Any action to be taken by the Committee shall be on a vote of a majority of the
Committee either at a meeting or in writing.
3. Eligibility.
(a) All employees of the Company or of any Subsidiary
designated from time to time by the Committee will be eligible to
participate in the Plan provided they have a minimum period of
continuous service with the Company or a Subsidiary, such period to be
determined by the Committee from time to time, but in all events not to
exceed two years, subject to the additional limitations imposed herein
(each such employee is referred to as an "Eligible Employee").
(b) Any provision of this Plan to the contrary
notwithstanding, no employee shall be granted an option:
(i) if, immediately after the grant, such employee
would own, and/or hold outstanding options to purchase stock
possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company or of any parent
or subsidiary of the Company within the meaning of Section 423
of the Code; or
(ii) which permits the employee's rights to purchase
Stock under all employee stock purchase plans, as defined in
Section 423 of the Code, of the Company and its
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subsidiaries to accrue at a rate which exceeds $25,000 of Fair
Market Value of the Stock (determined at the time such option
is granted) for each calendar year in which such stock option
is outstanding at any time; or
(iii) if the employee's customary employment does not
meet certain requirements for length of employment determined
by the Committee from time to time; provided, however, that
any such requirement for length of employment shall comply
with Section 423 of the Code.
4. Offerings. The Committee may make one or more annual offerings to
Eligible Employees to purchase Stock under this Plan (each an "Offering"). The
term of any Offering shall be for a period of 12 months' duration. No Eligible
Employee shall be granted an option to purchase a number of shares of the
Company in excess of $25,000 divided by 100% of the Fair Market Value of a share
of Stock on the date immediately preceding the Effective Date of the Offering
(as defined in Paragraph 12 hereof).
5. Participation. An Eligible Employee on the Effective Date of the
Offering may participate in such Offering by completing and forwarding a payroll
deduction authorization form to the appropriate payroll location before August
1st of the offering period. An Eligible Employee who submits such authorization
is referred to as a "Participant." The form will authorize a regular payroll
deduction from the Participant's pay.
6. Deductions. The Company will maintain payroll deduction accounts for
all Participants. A Participant may purchase shares of Stock under this Plan
solely by means of payroll deduction. Payroll deductions, as designated by the
Participant pursuant to Paragraph 5, shall be a whole percentage of the
Participant's Compensation (as defined in Paragraph 12 hereof) but not less than
one percent (1%) nor more than ten percent (10%).
7. Deduction Changes. A Participant may increase or decrease the
applicable payroll deduction by filing a new payroll deduction authorization
form before August 1st of the offering period. The change may not become
effective sooner than the next pay period after receipt of the form. A payroll
deduction may be increased or decreased only once during the term of any
offering period.
8. Withdrawal From Participation in an Offering. A Participant may, at
any time and for any reason, withdraw from participation in an Offering under
this Plan, upon advance written notice to the Committee. As soon as reasonably
practicable thereafter, payroll deductions shall cease and the entire amount
credited to the Participant's payroll deduction account under this Plan shall be
refunded to the Participant in cash (partial refunds are not permitted), unless
the Participant instructs the Committee in writing, when he withdraws from
participation in an Offering, that he will purchase Stock at the end of such
offering period with the total payroll deductions credited to his payroll
deduction account through the date of his withdrawal; provided, however, that a
Participant may purchase Stock in any Offering only if he is an Eligible
Employee on any date within the last 3 months of the applicable offering period.
Any Participant who withdraws from an Offering under this Plan may not resume
participation in such Offering.
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9. Purchase of Shares.
(a) Each Participant will be entitled to purchase as many
whole shares of Stock as can be purchased with the total payroll
deductions credited to the Participant's account during the specified
offering periods in the manner and on the terms herein provided.
(b) The purchase price for a share of Stock under any Offering
will be the lower of either:
(i) the Offering Price of 85% of the Fair Market
Value of a share of Stock on the Effective Date of the
Offering; or
(ii) the Alternative Offering Price of 85% of the
Fair Market Value of a share of Stock on the day one year from
the Effective Date of the Offering.
(c) As of the date one year from the Effective Date of the
Offering, the account of each Participant shall be totaled and the
Alternative Offering Price determined. If a Participant shall have
sufficient funds in the Participant's account to purchase one or more
full shares at the lower of either the Offering Price or the
Alternative Offering Price as of that date, the Participant shall be
deemed to have exercised the Participant's option to purchase such
share or shares at such lower price, the Participant's account shall be
charged for the amount of the purchase, and a stock certificate shall
be issued to the Participant as of such day. The balance of any payroll
deductions credited to his account during the Offering shall be
refunded to the Participant in cash.
10. Interest. Interest will not accrue on any employee payroll
deduction accounts.
11. Registration of Certificates. Certificates will be registered only
in the name of the Participant. If a Participant makes written request to the
Committee, the Committee may cause the certificates to be issued in the
Participant's name jointly with a member of his family with right of
survivorship.
12. Definitions.
(a) "Compensation" means the total compensation paid in cash
to a Participant including salaries, wages, overtime pay or commission,
but excluding bonuses, moving or relocation allowances, car allowances,
imputed income attributable to cars, life insurance or other benefits,
or other items as determined by the Committee.
(b) "Effective Date of the Offering" shall be the date
established by the Committee in making any Offering under this Plan.
(c) "Fair Market Value" shall be the closing price of the
common stock of the Company as quoted on the Nasdaq Stock Market as
reported in the Midwest Edition of The Wall Street Journal on the
applicable valuation date hereunder, or if no sale of common stock of
the Company is quoted on the Nasdaq Stock Market on any such date, then
the closing price of the common stock of the Company on the next
preceding day on which a sale was made.
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(d) "Subsidiary" means any corporation of which the Company or
a Subsidiary owns 50% or more of the combined voting power of all
classes of stock unless the Board determines that such corporation
shall not be a "Subsidiary" for purposes hereof. Only subsidiaries that
satisfy the requirements of Section 424(f) of the Code shall be
entitled to participate in the Plan.
13. Rights as a Shareholder. None of the rights or privileges of a
shareholder of the Company shall exist with respect to shares purchased under
this Plan unless and until such full shares shall have been duly issued.
14. Rights on Retirement, Death or Termination of Employment. In the
event of a Participant's retirement, death, or termination of employment, no
payroll deduction shall be taken from any pay due and owing to such Participant
at such time and the balance in such Participant's account shall be paid to such
Participant or, in the event of such Participant's death, to such Participant's
estate; provided, however, that in the event of a Participant's retirement,
death or termination of employment, a Participant (or the Participant's estate,
as the case may be) may purchase Stock with the total payroll deductions
credited to his payroll deduction account pursuant to the terms and conditions
of Paragraph 8. Transfer of a Participant from the Company to a Subsidiary or
vice versa shall not constitute termination of employment.
15. Rights Not Transferable. Rights under this Plan are not
transferable by a Participant, other than by will or the laws of descent and
distribution, and are exercisable, during the Participant's lifetime, only by
the Participant.
16. Application of Funds. All funds received or held by the Company
under this Plan may be used for any corporate purpose and need not be
segregated.
17. Adjustment in Case of Changes Affecting the Common Stock of the
Company. In the event of any stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, or the like, as a result of
which shares of any class shall be issued in respect of the outstanding Stock,
or the Stock shall be changed into the same or a different number of the same or
another class of stock, or into securities of another person, cash or other
property (not including a cash dividend), the total number of shares authorized
to be offered in accordance with Paragraph 1, the number of shares subject to
each outstanding option, the option price applicable to each such option, and/or
the consideration to be received upon exercise of each such option shall be
adjusted in a fair and reasonable manner by the Committee. In addition, the
Committee shall, in its sole discretion, have authority to provide, in
appropriate cases, for (i) acceleration of the exercise date of outstanding
options or (ii) the conversion of outstanding options into cash or other
property to be received in certain of the transactions specified in the
preceding sentence upon effectiveness of such transactions.
18. Amendment of the Plan. The Board or the Committee may at any time,
or from time to time, amend this Plan in any respect; provided, however, that no
amendment shall be made without the approval of the shareholders of the Company
if shareholder approval is required for such amendment under applicable tax,
securities or other law. Any action taken by the Board, or the Committee
pursuant hereto that is otherwise inconsistent with the terms and conditions
hereof shall be given effect and be deemed to be an amendment hereof as related
to such action, to the extent allowed by this Paragraph 18, so as to make such
terms and conditions consistent with such action.
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19. Termination of the Plan.
(a) This Plan and all rights of Participants under any
offering hereunder shall terminate:
(i) on the day that Participants become entitled to
purchase a number of shares equal to or greater than the
number of shares remaining available for purchase. If the
number of shares so purchasable is greater than the shares
remaining available, the available shares shall be allocated
by the Committee among such Participants in such manner as it
deems fair and consistent with Section 423 of the Code; or
(ii) at any time, at the discretion of the Board or
the Committee.
(b) Upon termination of this Plan, all amounts in the accounts
of Participants shall be promptly refunded.
20. Governmental Regulations. The obligation to sell and deliver shares
of the 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.
21. Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding, that such
Committee member is liable for gross negligence or willful misconduct in the
performance of his duties; provided that within 60 days after the institution of
any such action, suit or proceeding, a Committee member shall in writing offer
the Company the opportunity, at its own expense, to handle and defend the same.
22. Approval of the Plan. The Plan has been adopted by the Board and approved by
the shareholders of the Company.
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