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EXHIBIT 99.1
AS AMENDED THROUGH JANUARY 1, 1997
INTERSTATE HOTELS COMPANY
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. This Employee Stock Purchase Plan (the "Plan") is intended to
advance the interests of Interstate Hotels Company (the "Company") and its
shareholders by strengthening the Company's ability to attract and retain
employees who have the training, experience and ability to enhance the
profitability of the Company and to reward employees of the Company and its
subsidiaries upon whose judgment, initiative and effort the successful conduct
and development of their business largely depend. It is further intended that
stock purchase rights issued pursuant to this Plan will constitute options
issued pursuant to an "employee stock purchase plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code").
2. ADMINISTRATION. The Plan will be administered by the Compensation
Committee of the Board of Directors or such other committee of not less than
two members of the Board of Directors appointed by the Board of Directors (the
"Committee"). The majority of the Committee will constitute a quorum, and the
action of a majority of the members of the Committee present at any meeting at
which a quorum is present, or acts unanimously approved in writing, will be the
acts of the Committee.
The interpretation and construction by the Committee of any provision of
the Plan or of any stock purchase right granted under it will be final. The
Committee may establish any policies or procedures which in the discretion of
the Committee are relevant to the operation and administration of the Plan and
may adopt rules for the administration of the Plan. No member of the Committee
will be liable for any action or determination made in good faith with respect
to the Plan or any stock purchase right granted under it.
3. ELIGIBILITY. All employees (as defined below) of the Company or of any
subsidiary (as defined below) of the Company who have completed at least 12
consecutive months of employment on the date of any grant of stock purchase
rights pursuant to the Plan will be offered stock purchase rights under the
Plan to purchase the Company's common stock ("Common Stock"), except that no
employee will be granted a stock purchase right under the Plan if, immediately
after the stock purchase right was granted, such employee would own stock
possessing 5% or more of the total combined voting power or value of all
classes of stock of the Company or of any subsidiary of the Company. For
purposes of this paragraph, stock ownership of an individual will be determined
under the rules of Section 424(d) of the Code, and stock which the employee may
purchase under outstanding stock purchase rights will be treated as owned by
the employee.
For purposes of the Plan, the term "employee" will exclude any employee
whose customary employment is not for more than 20 hours per week or more than
five months per calendar year, and the term "subsidiary" will mean any
corporation that the
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Company controls, through one or more intermediaries, by ownership of 50% or
more of such corporation's outstanding voting securities.
4. STOCK. The stock subject to the stock purchase rights granted under the
Plan will be shares of authorized but unissued or reacquired Common Stock. The
aggregate number of shares which may be purchased under the Plan may not exceed
500,000 shares of Common Stock. In the event that the number of shares subject
to stock purchase rights to be granted pursuant to any offering under the Plan
exceeds the number of shares available to be purchased under the Plan, the
shares available to be purchased will be allocated on a pro rata basis among
the stock purchase rights to be granted.
5. TERMS AND CONDITIONS OF STOCK PURCHASE RIGHTS. Stock purchase rights
granted pursuant to the Plan will be evidenced by agreements in such form as
the Committee will from time to time approve, provided that all employees
granted such stock purchase rights will have the same rights and privileges
(except as otherwise provided in subparagraphs (a) and (e) below), and provided
further that such stock purchase rights will comply with and be subject to the
following terms and conditions:
(a) Number of Shares. Each stock purchase right granted hereunder will
state the number of shares of Common Stock covered thereby. Such number will be
determined, prior to the date of granting of such stock purchase right, with
respect to the employee to whom the stock purchase right is offered, in
accordance with uniform policies and procedures established by the Committee;
provided, however, that the maximum number of shares covered by a stock
purchase right may not be greater than the number of shares determined by
dividing 8% of the employee's compensation (as defined below) during the term
of the stock purchase right by 85% of the fair market value of one share on the
date of grant.
For purposes of the Plan, the term "compensation" will mean an
employee's base pay (including vacation and sick pay), overtime, commissions
and service charges paid to an hourly or salaried employee, including any
adjustments which occur during a calendar year. Compensation will also include
any contributions made on behalf of an employee by the Company or any
subsidiary pursuant to a deferral election under any cash or deferred
arrangement that satisfies the requirements of Section 401(k) of the Code or
any cafeteria plan that satisfies the requirements of Section 125 of the Code.
Compensation will not include any bonuses or other forms of special or
extraordinary compensation, nor will it include deferred compensation, stock,
stock options, stock appreciation rights or other distributions which receive
special tax benefits. Notwithstanding the foregoing, the Committee, in its
discretion, will have the authority to modify, with respect to all employees,
the forms of compensation taken into account under the Plan, provided that such
modification complies with Section 423(b)(5) of the Code. In addition, the
Committee, in its discretion, may set a maximum aggregate number of shares
(subject to Section 4 of the Plan) which may be purchased under stock purchase
rights granted pursuant to an offering. If participating employees elect to
withhold funds from their compensation and/or to reinvest dividends sufficient
to purchase shares in excess of such maximum number, the number of shares
purchased by employees under each such stock purchase right will be reduced on
a pro rata basis.
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(b) Purchase Price. Each stock purchase right will state the stock
purchase right purchase price. For 1996, the purchase price will be the initial
public offering price per share of the Common Stock. Thereafter, the purchase
price will be the determined by the Committee twice per calendar year and will
be expressed as a percentage of the closing sales prices of shares of Common
Stock quoted on the Composite Transactions tape of the New York Stock Exchange.
Notwithstanding the foregoing, the purchase price may not be less than the
lesser of 85% of the fair market value per share of the Common Stock on the
date of the granting of the stock purchase right or 85% of the fair market
value per share on the exercise date (as defined in Section 5(d) of the Plan).
Subject to the foregoing, the Committee will have full authority and discretion
in fixing the purchase price.
(c) Medium and Time of Payment. The purchase price will be payable in
full in United States dollars, pursuant to uniform policies and procedures
established by the Committee, not later than the exercise date (as defined in
Section 5(d) of the Plan) of such stock purchase right. The funds required for
such payment will be derived from regular withholding from an employee's
compensation in approximately equal installments over the term of the stock
purchase right or such other period as may be approved by the Committee. No
interest will accrue on the employee funds held by the Company. An employee
will have the right at any time to cancel his stock purchase right (in whole,
but not in part) and to obtain a refund of amounts withheld from his
compensation by the Company by submitting a written request to the Company,
provided that such request is received by the Company prior to the applicable
exercise date. Such withheld amounts will thereafter be paid to the employee
within a reasonable period of time. No interest will accrue on such amounts.
(d) Term of Stock Purchase Right. The date on which the Common Stock
covered by a stock purchase right is to be purchased by the employee (the
"exercise date") will be the last day of the term of the stock purchase right.
The Committee, in its discretion, may establish the term of each stock purchase
right granted hereunder, provided that in no event may any term be in excess of
one year or be less than one month from the date of grant, and provided further
that all stock purchase rights granted to employees pursuant to any offering
under the Plan must be for the same term. Except to the extent a stock purchase
right has been cancelled by an employee prior to the exercise date, it will be
deemed automatically exercised on the exercise date to the extent of all
payments received from the employee.
(e) Accrual Limitation. No stock purchase right may permit the rights
of an employee to purchase stock under all "employee stock purchase plans" (as
defined in the Code) of the Company to accrue at a rate which exceeds $25,000
of fair market value of such stock (determined at the time the stock purchase
right is granted) for each calendar year in which the stock purchase right is
outstanding at any time. For purposes of this Section 5(e), (i) the right to
purchase stock under a stock purchase right accrues when the stock purchase
right (or any portion thereof) first becomes exercisable during the calendar
year, (ii) the right to purchase stock under a stock purchase right accrues at
the rate provided in the stock purchase right, but in no case may such rate
exceed $25,000 of fair market value of such stock (determined at the time such
stock purchase right is granted) for any one calendar year and (iii) a right to
purchase stock which has accrued under a stock
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purchase right granted pursuant to the Plan may not be carried over to any
other stock purchase right.
(f) Termination of Employment. If a participating employee ceases to
be employed by the Company or any subsidiary of the Company for any reason
(including death) before the exercise date, such employee's right to have his
stock purchase right exercised will be terminated. Any dividends to be used for
payment or amounts withheld from the employee's compensation for purposes of
the Plan which remain in an employee's account will be refunded. No interest
will accrue on such amount.
(g) Transfer of Stock Purchase Right. No stock purchase right may be
transferred or assigned by a participating employee.
(h) Adjustments. The Committee may make or provide for such
adjustments in the purchase price and in the number or kind of shares of the
Common Stock or other securities covered by outstanding stock purchase rights
as the Committee, in its sole discretion, may determine is equitably required
to prevent dilution or enlargement of the rights of participating employees
that would otherwise result from (i) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital
structure of the Company, (ii) any merger, consolidation, spin-off, split-off,
spin-out, split-up, separation, reorganization, partial or complete
liquidation, or other distribution of assets, issuance of rights or warrants to
purchase stock, or (iii) any other corporate transaction or event having an
effect similar to any of the foregoing. Moreover, in the event of any such
transaction or event, the Committee, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration as it may determine to be equitable in the circumstances and may
require in connection therewith the surrender of all awards so replaced, except
that in no event may the Committee substitute such alternative consideration
that would disqualify this Plan as an "employee stock purchase plan" within the
meaning of Section 423 of the Code. The Committee may also make or provide for
such adjustments in the number or kind of shares of the Common Stock or other
securities which may be sold under the Plan as the Committee, in its sole
discretion, may determine is appropriate to reflect any transaction or event
described in clause (i) of the preceding sentence.
The grant of a stock purchase right pursuant to the Plan will not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell or
transfer all or any part of its business or assets.
(i) Rights as a Stockholder. A participating employee will have no
rights as a shareholder with respect to any Common Stock covered by a stock
purchase right hereunder until the exercise date following payment in full. No
adjustment will be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date of such exercise, except as provided in
Section 5(h) of the Plan.
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(j) Nondistribution Purpose. Unless the shares of Common Stock subject
to stock purchase rights under the Plan are registered under the Securities Act
of 1933, as amended (the "Securities Act"), each stock purchase right under the
Plan will be granted on the condition that the purchases of shares thereunder
may not be made with a view to resale or distribution or any participation
therein. Resales of such shares without registration under the Securities Act
may not be made unless, in the opinion of counsel for the Company, such resale
is permissible under the Securities Act and any other applicable law,
regulation or rule of any governmental agency.
(k) Fractional Shares. An employee's stock purchase right may be
exercised to purchase fractional shares of Common Stock under the Plan. The
Company, however, will have the right to pay cash in lieu of any fractional
shares of Common Stock to be distributed from an employee's account under the
Plan.
(l) Other Provisions. The stock purchase right agreements authorized
under the Plan will contain such other provisions as the Committee may deem
advisable, provided that no such provisions may in any way be in conflict with
the terms of the Plan.
6. TERM OF PLAN. Stock purchase rights granted pursuant to the Plan will
be granted within a period of 10 years from the date the Plan is adopted by the
Board of Directors.
7. AMENDMENT OR TERMINATION OF THE PLAN. The Plan may be amended from time
to time by the Board of Directors of the Company, but without further approval
of the Company's stockholders, no such amendment may increase the aggregate
number of shares of Common Stock that may be issued and sold under the Plan
(except that adjustments authorized by the last sentence of the first paragraph
of Section 5(h) of the Plan will not be limited by this provision) or change
the designation of Section 3 of the class of employees eligible to receive
stock purchase rights. Furthermore, the Plan may not, without further approval
of the stockholders, be amended in any manner that would cause stock purchase
rights issued under it to fail to meet the requirements applicable to "employee
stock purchase plans" as defined in Section 423 of the Code. The Plan may be
terminated at any time by the Board of Directors of the Company, subject to the
outstanding stock purchase rights of participating employees.
8. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Common Stock pursuant to stock purchase rights granted under the Plan
will be used for general corporate purposes.
9. APPROVAL OF STOCKHOLDERS. The Plan will not take effect until adopted
by the unanimous written consent of the holders of all of the shares of Common
Stock, or the affirmative vote of the holders of a majority of the shares of
Common Stock actually voting on the Plan in person or by proxy at a meeting at
which a quorum representing a majority of the outstanding Common Stock is
present in person or by proxy, which approval must occur within the period of
12 months before and 12 months after the date the Plan is adopted by the Board
of Directors.
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