1
THORN APPLE VALLEY, INC. EXHIBIT 4.1
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The Thorn Apple Valley, Inc. Employee Stock Purchase Plan (the "Plan") is
intended to encourage employee stock ownership by offering employees of Thorn
Apple Valley, Inc, and its subsidiaries Purchase Rights (as such term is
defined in Section 2 hereof) to purchase shares of Common Stock. The Plan is
intended to be an "employee stock purchase plan" as defined in 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 the
participation in a manner consistent with the requirements of Section 423 of
the Code.
2. CERTAIN DEFINITIONS
"Base Pay" means regular straight-time and overtime earnings received from
the Company, excluding payments for incentive compensation, bonuses and other
special payments.
"Board" means the Board of Directors of the Company.
"Committee" means the Compensation Committee of the Board.
"Common Stock" means the Common Stock, par value $.10 per share, of the
Company.
"Company" means Thorn Apple Valley, Inc. and each of its majority owned
subsidiaries.
"Custodian" means such person as the Committee shall designate from time
to time.
"Exercise Date" means the last day of the Purchase Period (as such term is
defined in Section 4(b) hereof), on which date all Participants' outstanding
Purchase Rights will automatically be exercised.
"Fair Market Value" means the closing sale price of a share of Common
Stock reported in the table entitled "NASDAQ National Market Issues" or any
successor table in The Wall Street Journal for such date or, if no shares of
Common Stock were traded on that date, on the next preceding day on which there
was such a trade.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"Participant" means an employee of the Company who has enrolled in the
Plan by filing a Participation Form (as such term is defined in Section 5
hereof) with the Plan Administrator.
1
2
"Plan Administrator" means the Vice President - Human Resources of the
Company, or any such other person so designated by the Committee.
"Purchase Right" means a Participant's option to purchase shares of Common
Stock that is deemed to be outstanding during a Purchase Period. A Purchase
Right represents an "option" as such term is used under Section 423 of the
Code.
"Section 16(b) Insider" means those persons subject to the requirement of
Section 16(b) of the Securities Exchange Act of 1934, as amended.
"Trading Day" refers to a day during which the NASDAQ National Market
System is available for trading shares of Common Stock
3. ELIGIBILITY
(a) Participation in the Plan is voluntary. All employees of the Company,
including officers and directors who are full-time employees, who are at least
eighteen years old, and who are not covered by a collective bargaining
agreement entered into by the Company unless the agreement by specific
reference to the Plan provides for coverage under the Plan, are eligible to
participate in the Plan.
(b) Notwithstanding any provision of the Plan to the contrary, no
employee may participate in the Plan:
(i) if following a grant of Purchase Rights under the Plan, the
employee would own, directly or by attribution, stock, Purchase Rights or
other stock options to purchase stock representing 5% or more of the total
combined voting power or value of all classes of the Company's stock; or
(ii) to the extent a grant of Purchase Rights under the Plan would
permit the employee's rights to purchase stock under all the Company's
Code Section 423 employee stock purchase plans to accrue at a rate
exceeding $25,000, based on the Fair Market Value of the stock (at the
time of grant), for each calendar year in which such Purchase Right is
outstanding.
4. SECURITIES SUBJECT TO THE PLAN AND PURCHASE PERIODS
(a) The Plan covers an aggregate of 400,000 shares of Common Stock
(subject to adjustments as provided in Section 15 hereof), which may be
authorized but unissued shares, reacquired shares or shares bought on the open
market. If any Purchase Right that shall have been granted shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares of Common Stock shall again become available for purposes of the Plan,
unless the Plan shall have been terminated.
2
3
(b) Except as discussed below for the first year the Plan is in effect,
there will be four purchase periods (each a "Purchase Period") each calendar
year. There will be only one Purchase Period in calendar 1994, which will begin
on October 1, 1994 and end on December 31, 1994. Thereafter, in each year that
the Plan is in effect, the first Purchase Period will begin on January 1 and
end on March 31 of each year that the Plan is in effect. The second Purchase
Period will begin on April 1 and end on June 30 of each year that the Plan is
in effect. The third Purchase Period will begin on July 1 and end on September
30 of each year that the Plan is in effect. The fourth Purchase Period will
begin on October 1 and end on December 31 of each year that the Plan is in
effect.
5. PARTICIPATION
Eligible employees become Participants in the Plan by authorizing payroll
deductions for that purpose through a form (the "Participation Form") filed
with the Plan Administrator no later than fifteen (15) days prior to the start
date of a Purchase Period.
6. PAYROLL DEDUCTIONS
(a) In order to purchase Common Stock an employee must indicate on the
Participation Form the contribution percentage he or she wishes to authorize
the Company to deduct at regular payroll intervals, in integral percentage
amounts ranging from 1% to 25%, of such Participant's Base Pay for the
applicable payroll period, with a minimum deduction of $10.00 per payday,
during each Purchase Period. The Participation Form will include authorization
for the Company to make payroll deductions from the Participant's Base Pay.
(b) In order to comply with the Federal tax laws, a Participant may not
be granted Purchase Rights under the Plan or any other Code Section 423
employee stock purchase plan of the Company with respect to more than $25,000
worth of Common Stock for any calendar year such Purchase Rights to purchase
Common Stock are outstanding pursuant to the terms of the Plan. The $25,000
limit is determined according to the Fair Market Value of the Common Stock on
the first day (grant date) of the Purchase Period. Participants will be
notified if these limitations become applicable to them.
(c) The amounts deducted shall be credited to the Participant's account
under the Plan, but no actual separate account will be established by the
Company to hold such amounts. There shall be no interest paid on the balance
outstanding in a Participant's account. The deducted amounts may be commingled
with the general assets of the Company and may be used for its general
corporate purposes.
(d) Payroll deductions begin on the first payday of each Purchase Period,
and end on the last payday of each Purchase Period. Eligible employees may
participate in the Plan and purchase shares only by means of payroll
deductions, except as set forth in the following sentence. A Participant may
not make any separate cash payment into his or her account, except that
employees on an approved leave of absence may continue participating in the
Plan, at the
3
4
sole discretion of the Plan Administrator, by making cash payments to the
Company on a normal payday equal to the amount of the normal payroll deduction
had a leave of absence not occurred. The right of a Participant on an approved
leave of absence to continue participating in the Plan shall terminate if such
leave of absence exceeds 90 days, unless and so long as the Participant's right
to reemployment by the Company after a longer leave is guaranteed by statute or
contract.
(e) So long as a Participant remains an employee of the Company, payroll
deductions will continue in effect from Purchase Period to Purchase Period,
unless at least fifteen (15) days prior to the first day of the next succeeding
Purchase Period the Participant:
(i) elects a different rate by filing a new Participation Form with
the Plan Administrator; or
(ii) withdraws from the Plan in accordance with Section 9
hereof.
(f) Unless a Participant files with the Plan Administrator a new
Participation Form electing to withdraw prior to 15 days before the beginning
of the next Purchase Period as permitted under the Plan, such Participant's
payroll deductions will continue throughout the next Purchase Period and his or
her Purchase Right to purchase Common Stock will be deemed to be fully and
automatically exercised on the last day of such Purchase Period with respect to
payroll deductions made during that period.
7. PURCHASE PRICE
(a) On the first day of each Purchase Period, a Participant is deemed to
have been granted a Purchase Right to purchase on the last day of the Purchase
Period as many full shares of Common Stock as such Participant will be able to
purchase with the payroll deductions credited to such Participant's account
during such period.
(b) The price at which each Purchase Right to purchase Common Stock may
be exercised is the average of:
(i) 85% of the Fair Market Value of the Common Stock on the first
Trading Day of a Purchase Period; and
(ii) 85% of the Fair Market Value of the Common Stock the last
Trading Day of such Purchase Period.
(c) The number of shares purchasable by each Participant per Purchase
Period will be the number of shares, including any fractional shares up to
three decimal points, obtained by dividing the amount credited to the
Participant (through payroll deductions or through payments by employees on
approved leaves of absence during that Purchase Period) by the purchase price
in effect for that Purchase Period.
4
5
(d) A Participant may not purchase more than 1,000 shares of Common Stock
for any particular Purchase Period. The Committee has the power, exercisable at
any time prior to the start of a Purchase Period, to increase or decrease the
1,000-share maximum for that Purchase Period. The maximum, as thus adjusted,
will continue in effect from Purchase Period to Purchase Period until the
Committee once again exercises its power to adjust the maximum.
8. EXERCISE OF PURCHASE RIGHT
(a) Each outstanding Purchase Right will be exercised automatically on
the Exercise Date. The exercise of the Purchase Right is to be effected by
applying the amount credited to each Participant's account as of the Exercise
Date to the purchase on the Exercise Date of whole shares of Common Stock
(subject to the 1,000-share maximum) at the purchase price in effect for the
Purchase Period.
(b) Certificates will not be issued for fractional shares. Fractional
shares will be credited to a Participant's account and the Participant will be
credited with as many whole and fractional shares as the funds forwarded by the
Company for the Participant's account will allow.
(c) If a Participant purchases the 1,000-share maximum, any amount not
applied to the purchase of Common Stock for that Purchase Period will be
refunded after the close of the Purchase Period.
(d) If the number of shares for which Purchase Rights are exercised
exceeds the number of shares available in any Purchase Period under the Plan,
the shares available for sale will be allocated by the Plan Administrator pro
rata among the Participants in such Purchase Period in proportion to the
relative amounts in their accounts. Any amounts not thereby applied to the
purchase of Common Stock under the Plan will be refunded to the Participants
after the end of the Purchase Period.
9. WITHDRAWAL AND TERMINATION OF PURCHASE RIGHTS
(a) A Participant may withdraw from the Plan by providing written notice
to the Plan Administrator at any time prior to 15 days before the end of the
current Purchase Period. Such notice shall be on a form (the "Withdrawal Form")
provided by the Plan Administrator for that purpose. The Withdrawal Form will
permit such a Participant to make the following election:
(i) The Participant may elect to immediately terminate his or her
outstanding Purchase Rights, and such withdrawal will become effective by
the tenth day following the Plan Administrator's receipt of the
Participant's Withdrawal Form, at which time all outstanding Purchase
Rights will be terminated and all accumulated payroll deductions will be
refunded without penalty or interest; or
(ii) The Participant may elect to continue his or her participation
in the Plan through the end of the current Purchase Period, and thus
exercise such Participant's
5
6
outstanding Purchase Rights on the following Exercise Date, but terminate
his or her participation in the Plan for subsequent Purchase Periods.
Payroll deductions for such a Participant will continue until the end of
the current Purchase Period. After the Exercise Date, no further Purchase
Rights will be granted to the Participant, and no further payroll
deductions will be made.
(b) Any Participant who withdraws from the Plan pursuant to Section 9(a)
will not be eligible to rejoin the Plan for the Purchase Period under way at
the time of withdrawal and will have to re-enroll in the Plan by completing and
filing a new Participation Form should such individual wish to resume
participation in a subsequent Purchase Period; provided, however, that such
Participant may not re-enroll in the Plan earlier than 90 days from the
effective date of such withdrawal.
(c) In the event a Section 16(b) Insider Participant ceases participation
in the Plan, whether as a result of withdrawal during a Purchase Period or of
such Participant's decision to discontinue his or her enrollment for subsequent
Purchase Periods, such insider may not re-enroll in the Plan earlier than six
(6) months after the decision to cease participation.
(d) If a Participant ceases to be an employee of the Company for any
reason during a Purchase Period, his or her outstanding Purchase Right will
immediately terminate, and all sums previously collected from such Participant
during such Purchase Period under the terminated Purchase Right will be
refunded without penalty or interest.
(e) The Committee may, at its option, treat any attempt to borrow by an
employee on the security of his or her accumulated payroll deductions as an
election under Section 9(a) (i) hereof to withdraw such deductions.
10. RIGHTS AS SHAREHOLDER
(a) A Participant is not a shareholder until the Participant exercises
his or her Purchase Right. Thus, a Participant will not have a right to any
dividend or distribution made prior to the Exercise Date.
(b) The Participant will be entitled to receive, as soon as practicable
after the Exercise Date, a stock certificate for the number of purchased shares
upon a written request made to the Custodian. The Custodian may impose upon, or
pass through to, the Participant a reasonable fee for withdrawal of shares of
Common Stock in the form of stock certificates. It is the responsibility of
each Participant to keep his or her address current with the Company through
the Plan Administrator and with the Custodian.
11. SALE OF COMMON STOCK ACQUIRED UNDER THE PLAN
(a) Participants may sell the shares, or request certificates for the
shares, of Common Stock they acquire under the Plan at any time after one (1)
year from the date following the last
6
7
day of the Purchase Period in which the Participant exercised his/her Purchase
Right with respect to such shares. Such sales shall be without restriction,
other than this one (1) year holding period, provided the Participant is not a
Section 16(b) Insider. Section 16(b) Insiders will be subject to certain other
restrictions in connection with their transactions under the Plan. If a
Participant dies or leaves the Company, the Participant, or his/her personal
representative, may either request stock certificates, or sell the shares of
Common Stock without regard to the one (1) year holding period.
(b) A Participant shall immediately provide information to the Plan
Administrator if the Participant transfers any shares purchased through the
Plan within one (1) year from the date of grant of the related Purchase Right.
Such transfer shall include disposition by sale, gift or other manner. The
Participant may be requested to disclose the manner of the transfer, the date
of the transfer, the number of shares involved and the transfer price.
(c) The Company is authorized to withhold from any payment to be made to
a Participant, including any payroll and other payments not related to the
Plan, amounts of withholding and other taxes due in connection with any
transaction under the Plan, and a Participant's enrollment in the Plan will be
deemed to constitute his or her consent to such withholding.
12. PLAN ADMINISTRATION
(a) The Plan shall be administered by the Committee. No member of the
Board will be eligible to participate in the Plan during his or her period of
Committee service.
(b) The Committee shall have the plenary power, subject to and within the
limits of the express provisions of the Plan:
(i) to determine the commencement and termination date of the
offering of Common Stock under the Plan; and
(ii) to interpret the terms of the Plan, establish and revoke rules
for the administration of the Plan and correct or reconcile any defect or
inconsistency in the Plan.
(c) The Committee may delegate all or part of its authority to administer
the Plan to the Plan Administrator, who may in turn delegate the day-to-day
operations of the Plan to the Custodian. The Custodian will establish and
maintain, as agent for the Participants, accounts for the purpose of holding
shares of Common Stock and/or cash contributions as may be necessary or
desirable for the administration of the Plan.
(d) The Board may waive or modify any requirement that a notice or
election be made or filed under the Plan by a specified period in advance in an
individual case or by adoption of a rule or regulation under the Plan, without
the necessity of a amendment to the Plan.
7
8
13. TRANSFERABILITY
(a) Any account maintained by the Custodian for the benefit of a
Participant with respect to shares acquired pursuant to the Plan may only be in
the name of the Participant; provided, however, that the Participant may elect
to maintain such account with right of joint ownership with such Participant's
spouse. Such election may only be made on a form provided by the Company.
(b) Neither payroll deductions credited to a Participant's account nor
any Purchase Rights or other rights to acquire Common Stock under the Plan may
be assigned, transferred, pledged or otherwise disposed of by Participants
other than by will or the laws of descent and distribution and, during the
lifetime of a Participant, Purchase Rights may be exercised only by the
Participant.
14. MERGER OR LIQUIDATION OF THE COMPANY
In the event the Company merges with another corporation and the Company
is not the surviving entity, or in the event all or substantially all of the
stock or assets of the Company is acquired by another company, or in the event
of certain other similar transactions, the Committee may, in connection with
such transaction, cancel each outstanding Purchase Right and refund all sums
previously collected from Participants under the canceled Purchase Rights, or,
in its discretion, cause each Participant with outstanding Purchase Rights to
have his or her outstanding Purchase Right exercised immediately prior to such
transaction and thereby have the balance of his or her account applied to the
purchase of whole shares of Common Stock (subject to the 1,000-share maximum)
at the purchase price in effect for the Purchase Period, which would be treated
as ending with the effective date of such transaction. The balance of the
account not so applied will be refunded to the Participant. In the event of a
merger in which the Company is the surviving entity, each Participant is
entitled to receive, for each share as to which such Participant's Purchase
Rights are exercised, the securities or property that a holder of one share of
Common Stock was entitled to receive upon the merger.
15. ADJUSTMENT FOR CHANGES IN CAPITALIZATION
To prevent dilution or enlargement of the rights of Participants under the
Plan, appropriate adjustments may be made in the event any change is made to
the Company's outstanding Common Stock by reason of any stock dividend, stock
split, combination of shares, exchange of shares or other change in the Common
Stock effected without the Company's receipt of consideration. Adjustments may
be made to the maximum number and class of securities issuable under the Plan,
the maximum number and class of securities purchasable per outstanding Purchase
Right and the number and class of securities and price per share in effect
under each outstanding Purchase Right. Any such adjustments will be made by the
Committee in its sole discretion.
8
9
16. AMENDMENT AND TERMINATION
The Committee may terminate or amend the Plan at any time; provided,
however, such termination or amendment may not affect or change Purchase Rights
previously granted under the Plan without the consent of the affected
Participant, and any amendment that materially increases the benefits or number
of shares under the Plan (except for certain allowable adjustments in the event
of changes to the Company's capital structure or for changes authorized by the
Plan to be made by the Committee or the Plan Administrator) or materially
modifies the eligibility requirements of the Plan shall be subject to
shareholder approval. If not sooner terminated by the Committee, the Plan shall
terminate at the time Purchase Rights have been exercised with respect to all
shares of Common Stock reserved for grant under the Plan.
17. SHAREHOLDER APPROVAL
The Plan is subject to the approval of shareholders of the Company holding
a majority of the shares of the Common Stock.
Purchase Rights may be grated under the Plan for the Purchase Period
beginning on October 1, 1994, but such rights may not be exercised (and
Participants' payroll deductions will be returned to them) if shareholder
approval of the Plan is not obtained prior to December 31, 1994.
18. NO EMPLOYMENT RIGHTS
Participation in the Plan will not impose any obligations upon the Company
to continue the employment of the Participant for any specific period and will
not affect the right of the Company to terminate such person's employment at
any time, with or without cause.
19. COSTS
Except as set forth in Section 10(b), costs and expenses incurred in the
administration of the Plan and the maintenance of accounts with the Custodian
will be paid by the Company, to the extent provided in this Section 19. Any
brokerage fees and commissions for the purchase of Common Stock under the Plan
(including shares of Common Stock purchased upon reinvestment of dividends and
distributions) will be paid by the Company, but any brokerage fees and
commissions for the sale of shares of Common Stock under the Plan by a
Participant will be borne by such Participant.
20. REPORTS
After the close of each Purchase Period, each Participant in the Plan will
receive a report from the Custodian indicating the amount of the Participant's
contributions to the Plan during the Purchase Period, the amount of the
contributions applied to the purchase of Common Stock for
9
10
the Purchase Period, the purchase price per share in effect for the Purchase
Period and the amount of the contributions (if any) carried over to the next
Purchase Period.
21. GOVERNING LAW
The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan will be determined in accordance with laws of
the State of Michigan, without giving effect to principles of conflicts of
laws, and applicable Federal law.
22. COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS
The Plan, the granting and exercising of Purchase Rights hereunder, and
the other obligations of the Company, the Plan Administrator and the Custodian
under the Plan will be subject to all applicable federal and state laws, rules,
and regulations, and to such approvals by any regulatory or governmental agency
as may be required. The Company may, in its discretion, postpone the issuance
or delivery of shares of Common Stock upon exercise of Purchase Rights until
completion of any registration or qualification of such shares of Common Stock
or other required action under any federal or state law, rule, or regulation,
listing or other required action with respect to any automated quotation system
or stock exchange upon which the shares of Common Stock or other Company
securities are designated or listed, or compliance with any other contractual
obligation of the Company, as the Company may consider appropriate, and may
require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of shares of Common Stock in compliance with applicable laws, rules,
and regulations, designation or listing requirements, or other contractual
obligations.
10