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EXHIBIT 10.10
SOFTWARE SPECTRUM, INC.
EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED*
ARTICLE I
NAME AND PURPOSE
1.1 Name. The name of this Plan is the "Software Spectrum, Inc.
Employee Stock Purchase Plan."
1.2 Purpose and Construction. The Company has established this Plan
to encourage and facilitate the purchase of its Common Stock by Eligible
Employees, as an incentive to Eligible Employees, so that they may share in the
growth of the Company by acquiring or increasing their proprietary interest in
the Company. This Plan is intended to qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Code. Consequently, the provisions of this Plan
shall be construed in a manner consistent with the requirements of Section 423
of the Code. Any term or provision of this Plan which is inconsistent with the
requirements of Section 423 of the Code shall be inapplicable.
ARTICLE II
DEFINITIONS OF TERMS
2.1 General Definitions. The following words and phrases, when used in
the Plan, unless otherwise specifically defined or unless the context clearly
otherwise requires, shall have the following respective meanings:
(a) Board. The Board of Directors of the Company.
(b) Code. The Internal Revenue Code of 1986, as amended.
Any reference to the Code includes the regulations promulgated
pursuant to the Code.
(c) Company. Software Spectrum, Inc.
(d) Common Stock. The Company's $0.01 par value common
stock.
* Amended as of June 1, 1997 1
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(e) Compensation. The total gross compensation, including
salary, bonuses and commissions, of an Employee, but excluding any
amounts realized from the exercise of a stock option, or from the
sale, exchange or other disposition of Shares acquired under this
Plan or any other stock purchase plan.
(f) Effective Date. September 1, 1992. However, in order to
remain effective, the Plan must be approved by the shareholders of
the Company within one year before or after approval by the Board.
Any Offerings made prior to the approval by the shareholders of the
Company shall be void if such approval is not obtained.
(g) Employee. A salaried or hourly employee as determined
based on the payroll records of the Company or a Subsidiary;
provided, however, that the following shall not be considered
"Employees" for purposes of the Plan: (i) any employee who is a
leased employee within the meaning of Code Section 414(n); (ii) any
employee whose terms and conditions of employment are governed by a
collective bargaining agreement and with respect to whom inclusion in
the Plan has not been specifically provided for in such collective
bargaining agreement; and (iii) any individual who is an independent
contractor (including any individual who is recharacterized by the
Internal Revenue Service as a common law employee, for periods during
which such individual was treated as an independent contractor by the
Company or a Subsidiary).
(h) Employer. With respect to each Offering, the Company
and those of its Parents and Subsidiaries designated from time to
time whose Employees will be eligible to be granted Options to
purchase Common Stock in such Offering.
(i) Entry Date. Entry Dates shall be each January 1, April
1, July 1 and October 1.
(j) Exercise Date. The 15th day of each month (or the first
business day following the 15th of the month if such date falls on a
non- business day).
(k) Fair Market Value. The closing price of Shares on the
NASDAQ National Market System on the Exercise Date; provided,
however, if there is no quoted closing price on such date, the
closing price shall be determined as of the most recent date
preceding the Exercise Date on which there is a quoted closing price
on the NASDAQ National Market System.
* Amended as of June 1, 1997 2
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(l) Offering. An offering consisting of grants of Options
to purchase Shares under the Plan. The initial Offering under the
Plan shall commence on September 1, 1992, and shall terminate on
October 15, 1992. Each subsequent Offering under the Plan shall
commence on the first business day following the preceding Offering's
Exercise Date, and shall terminate as of the next Exercise Date.
(m) Officer. Any Employee who is an officer of the Employer
as that term is defined under Rule 16(a)-1(f) of the rules
promulgated under the Securities Exchange Act of 1934, as amended.
(n) Option. An option granted under the Plan to purchase
Shares.
(o) Parent. Any corporation (other than the Company or a
Subsidiary) is an unbroken chain of corporations ending with the
Company, if, at the time of the grant of an Option, each of the
corporations (other than the Company or a Subsidiary) owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporation in such chain.
(p) Participant. An eligible Employee who has elected to
participate in the Plan.
(q) Plan. The Software Spectrum, Inc. Employee Stock
Purchase Plan and all amendments and supplements to it.
(r) Share. A share of Common Stock.
(s) Subsidiary. Any corporation or entity organized under
the laws of the United States or any state, other than the Company,
in an unbroken chain of corporations beginning with the Company if,
at the time of grant of an Option, each of the corporations, other
than the last corporation in the unbroken chain, owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
2.2 Other Definitions. In addition to the above definitions, certain
words and phrases used in the Plan and in any Offering may be defined in other
portions of the Plan or in such Offering.
* Amended as of June 1, 1997 3
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ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Initial Eligibility. An Employee who has completed six (6) months
employment shall be eligible to participate on and after the first Entry Date
following his completion of his initial six (6) months of employment. For
purposes of determining eligibility, employment for an entity which is acquired
by an Employer or whose assets are acquired by an Employer shall not be treated
as employment by the Employer unless the Board shall make a determination
otherwise.
3.2 Restrictions on Participation. Notwithstanding any provision of
the Plan to the contrary, no Employee shall participate in the Plan if:
(a) immediately after the grant, he would own (within the
meaning of Section 423(b)(3) of the Code) stock possessing five
percent (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;
or
(b) he is a part-time employee whose customary employment
is twenty (20) hours or less per week; or
(c) he is an employee whose customary employment is for not
more than five (5) months in any calendar year.
3.3 Eligibility for Rehired Employees. If an Employee who had
previously satisfied the initial eligibility requirements of Section 3.1 hereof
is subsequently rehired, such Employee shall be eligible to participate in
Offerings under the Plan on the first Entry Date following his rehire date. If
an Employee is rehired who had not previously saitsfied the initial eligibility
requirements, the Employee must satisfy the employment requirements of section
3.1, considering only his employment service following his rehire date.
ARTICLE IV
SHARES TO BE OFFERED
4.1 Number of Shares. The number of Shares for which Options may be
granted under the Plan shall be 165,000. Such Shares may be authorized but
unissued Shares, Shared held in the treasury, or both.
4.2 Reusage. If an Option expires or is terminated, surrendered, or
cancelled without having been fully exercised, the shares covered by such
Option which were not purchased shall again be available for issuance under the
Plan.
* Amended as of June 1, 1997 4
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4.3 Adjustments. If there is any change in the Common Stock of the
Company by reason of any stock dividend, spin-off, split-up, spin-out,
recapitalization, merger, consolidation, reorganization, combination or
exchange of shares, or otherwise, the number and class of shares available for
Options, the maximum number of Shares that may be purchased in the current
Offering Period, and the price per Share, as applicable, shall be appropriately
adjusted by the Committee.
ARTICLE V
GRANTS, PARTICIPATION AND WITHDRAWAL
5.1 Grant of Options. On his initial Entry Date following his
becoming eligible to participate in the Plan, each eligible Employee may
execute and deliver to the Company or its designee an agreement in the form
approved by the Company ("Participation Agreement") in accordance with the
provisions of the Offering, in order to be granted an Option to purchase Shares
under the Plan.
5.2 Nontransferability. No payroll deductions credited to a
Participant's stock purchase account nor any rights with regard to the exercise
of an Option or to receive Shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way by a Participant other than by will
or the laws of descent and distribution. Options under the Plan shall be
exercisable during a Participant's lifetime only by him, his guardian or legal
representative. Shares may be sold or otherwise transferred by a Participant
without restriction. Each Participant shall agree in the Participation
Agreement to notify the Company or its designee of any transfer of the Shares
within two years of the Exercise Date on which such Shares were purchased.
5.3 Election to Participate. An eligible Employee who wishes to
participate in the Plan must deliver his executed Participation Agreement to
the Company or its designee no later than required by the Company or its
designee. In such Participation Agreement, each eligible Employee may elect to
have deductions from his Compensation at the rate of a dollar amount per
payroll period or any whole percentage of his Compensation, but not in any
event to exceed ten percent (10%) of his Compensation. The minimum payroll
deduction amount per payroll period shall be $10 (U.S.). Each Participant's
Participation Agreement shall remain in effect for each Offering subsequent
thereto until the Participant either (a) ceases future contributions to his
stock purchase account in accordance with Section 5.5 of the Plan; or (b)
increases or decreases his payroll deduction contributions to the Plan, by
completing a new Participation
* Amended as of June 1, 1997 5
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Agreement. Any change shall be permitted only as of the end of the next payroll
period following each Entry Date if submitted to the Company or its designee no
later than ten (10) business days prior to the end of such payroll period. The
Board may permit any Participant to make an irrevocable election and to specify
the term of such election.
5.4 Method of Payment and Stock Purchase Accounts. Payment for Shares
will be made through payroll deductions from the Participant's Compensation,
such deductions to be authorized by a Participant in the Participation
Agreement. A stock purchase account shall be set up on the books of the Company
or its designee in the name of each Participant. The amount of all payroll
deductions shall be credited to the respective stock purchase accounts of the
Participants on such books. The funds deducted and withheld by the Company
through payroll deductions may be used by the Company for any corporate
purposes as the Board shall determine, and the Company shall not be obligated
to segregate said funds in any way.
5.5 Withdrawal from the Plan. A Participant may cease future
contributions to his stock purchase account, effective for the next payroll
period, by submitting a notice to the Company or its designee no later than ten
(10) business days prior to the end of such payroll period. Notwithstanding the
foregoing, any Officer who withdraws from the Plan may not thereafter
participate for a period of six (6) months following the effective date of
withdrawal. Notwithstanding a Participant's notice that future contributions
will cease, the balance in the Participant's stock purchase account will
nevertheless be used to purchase Shares at the next Exercise Date.
ARTICLE VI
OFFERINGS
6.1 Offerings. There shall be a series of Offerings under the Plan
which shall occur on a monthly basis. Each Participant having funds in his
stock purchase account on an Exercise Date shall be deemed, without any further
action, to have purchased with the funds in his account the number of whole
Shares which he has the right to purchase at the purchase price on that
Exercise Date.
6.2 Terms of Offering. At least annually, the Board will determine
all of the terms and conditions of the Offerings for the next twelve (12)
months, which terms and conditions shall include, but not be limited to, the
following:
(a) The number of Shares to be offered, which in no event
shall exceed the maximum number of Shares then available under the
provisions of ARTICLE IV.
* Amended as of June 1, 1997 6
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(b) The Offering period. In no event shall an Option be
exercisable after the expiration of five (5) years from the date each
Option is granted.
(c) The price per Share for which Common Stock will be sold
to Participants who exercise Options, which price shall not be less
than 85% of the Fair Market Value on the Exercise Date upon which the
Option is exercised. Notwithstanding the foregoing, in no event shall
the price per Share be less than the par value.
(d) All eligible Employees on an Entry Date shall be
eligible with respect to the Options in an Offering that is
continuing on and after such Entry Date. However, no Employee shall
be granted an Option which permits his rights to purchase stock under
all employee stock purchase plans (as defined in Section 423(b) of
the Code) of the Company and its Parents and Subsidiaries to accrue
at a rate which exceeds $15,000 of fair market value of such stock,
determined as of the Exercise Date, for each calendar year in which
such Option is outstanding at anytime.
ARTICLE VII
PURCHASE OF STOCK
7.1 Exercise of Option. Each Participant's Option to purchase Shares
will be automatically exercised for him on each Exercise Date for the number of
full Shares which the accumulated payroll deductions as of the Exercise Date
will purchase at the applicable Option price, subject to the limitations set
forth in the Plan and the Offering and subject to allotment in accordance with
Section 7.2. Any balance remaining in a Participant's stock purchase account
after the exercise of an Option will remain in such account unless the Plan is
terminated, in which event it will be refunded to such Participant.
7.2 Allotment of Shares. In the event that, on any Exercise Date, the
aggregate funds and Shares available for the purchase of Shares, pursuant to
the provisions of Section 7.1, would purchase a greater number of Shares than
the number of Shares then available for purchase under the Plan on such
Exercise Date, the Company shall issue to each Participant, on a pro rata
basis, such number of Shares as, when taken together with the Shares issued to
all other Participants, will result in the issuance of Shares totaling no more
than the number of Shares then remaining available for issuance under the Plan
on such Exercise Date. If, after such allotment, all of the Shares under an
Offering have been purchased, any balance remaining in a Participant's stock
purchase account shall be refunded to such Participant.
* Amended as of June 1, 1997 7
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7.3 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 Compensation due and owing to him at
such time and the amount in the Participant's stock purchase account shall be
paid within thirty (30) days following request therefor, to the former Employee
or, in the event of his death, the person or persons to whom his rights pass by
will or the laws of descent and distribution including his estate during the
period of administration. An Employee of a Subsidiary or a Parent which ceases
to be a Subsidiary or a Parent shall be deemed to have terminated his
employment for purposes of this Section 7.3 as of the date such corporation
ceases to be a Subsidiary or a Parent, as the case may be, unless, as of such
date, the Employee shall become an Employee of the Company or any Subsidiary or
Parent.
7.4 Rights to Share Certificates. At least annually, each Participant
will receive a statement from the Company reflecting the number of Shares
purchased for his account and may at any time request delivery of certificates
for Shares reflected on his account. A Participant may be required to pay the
administrative fees associated with issuance of the certificates. Certificates
for Shares will be issued and delivered upon request as soon as practicable, in
the name of the Participant. The Company may designate any person to maintain
the accounts and records required under the Plan.
7.5 Purchases and Sales by Officers. With respect to purchases of
Shares by Officers, such Officers shall hold such Shares for a period of not
less than six (6) months following the applicable Exercise Date unless such
Officer irrevocably elects to participate in the Plan not less than six (6)
months prior to the applicable Exercise Date.
ARTICLE VIII
ADMINISTRATION
8.1 Board of Directors. The Plan shall be administered by the Board.
8.2 Authority. Subject to the terms of the Plan, the Board shall have
complete authority to:
(a) determine the terms and conditions of, and the eligible
Employees under, each Offering, as described in ARTICLE VI;
(b) interpret and construe the Plan;
(c) prescribe, amend and rescind rules and regulations
relating to the Plan;
* Amended as of June 1, 1997 8
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(d) maintain accounts, records and ledgers relating to
Options;
(e) maintain records concerning its decisions and
proceedings;
(f) employ agents, attorneys, accountants or other persons
for such purposes as the Board considers necessary or desirable; and
(g) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and to carry out the
purposes of the Plan.
8.3 Determinations; Action in Good Faith. All determinations of the
Board shall be final. No member of the Board and no designee of the Board shall
be liable for any action taken in good faith in its administration of the Plan.
8.4 Delegation. The Board may delegate all or any part of its
authority under the Plan to any Employee, Employees or committee, and may
retain such third parties as it deems appropriate to administer the Plan and
the purchase of Shares pursuant to the Plan.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Power of Board. Except as hereinafter provided, the Board shall
have the sole right and power to amend the Plan at any time and from time to
time.
9.2 Limitation. The Board may not amend the Plan, without approval of
the shareholders of the Company:
(a) in a manner which would cause the Plan to fail to meet
the requirements of Sections 423 of the Code;
(b) in a manner which materially increases the total number
of shares which may be issued pursuant to options granted under the
Plan;
(c) in a manner which materially modifies the requirements
as to eligibility for participation in the Plan; or
(d) in a manner which materially increases the benefits
accruing to Participants under the Plan.
* Amended as of June 1, 1997 9
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9.3 Term. The Plan shall commence as of the Effective Date and,
subject to the terms of the Plan including those requiring approval by the
shareholders of the Company, shall continue to full force and effect until
terminated.
9.4 Termination. The Plan may be terminated at any time by the Board.
Subject to the Board's right to amend the Plan, with shareholder approval, to
increase the number of Shares available for purchase have been sold. Upon
termination of the Plan, and the exercise or lapse of all outstanding Options,
any balances remaining in each Participant's stock purchase account shall be
refunded to him.
9.5 Effect. The amendment or termination of the Plan shall not
adversely effect any Options granted prior to such amendment or termination.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Underscored References. The underscored references contained in
the Plan are included only for convenience, and they shall not be construed as
a part of the Plan or in any respect affecting or modifying its provisions.
10.2 Number and Gender. The masculine and neuter, wherever used in
the Plan, shall refer to either the masculine, neuter or feminine; and, unless
the context otherwise requires, the singular shall include the plural and the
plural the singular.
10.3 Governing Law. This Plan shall be construed and administered in
accordance with the laws of the State of Texas.
10.4 Purchase for Investment. The Plan is intended to provide Common
Stock for investment and not for resale. The Company does not, however, intend
to restrict or influence any Employee in the conduct of his or her own affairs.
An Employee may therefore sell Shares purchased under the Plan at any time the
Employee chooses, subject to compliance with any applicable federal or state
securities laws. Provided, however, that because of certain federal tax
requirements, each Employee agrees by entering the Plan promptly to give the
Company notice of any Shares disposed of within two years after the Exercise
Date of the applicable Option showing the number of such Shares disposed of.
All certificates for Shares delivered under the Plan shall be subject to such
stock transfer orders and other restrictions at the Company may deem advisable
under all applicable laws, rules, and regulations, and the Company may cause a
legend or legends to be put on any such certificates to make
* Amended as of June 1, 1997 10
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appropriate references to such restrictions. THE EMPLOYEE ASSUMES THE RISK OF
ANY MARKET FLUCTUATIONS IN THE PRICE OF THE SHARES.
10.5 No Employment Contract. The adoption of the Plan shall not
confer upon any Employee any right to continued employment nor shall it
interfere in any way with the right of the Company, a Parent or a Subsidiary to
terminate the employment of any of its employees at any time.
10.6 Offset. In the event that any Participant wrongfully
appropriates funds or other property of an Employer and thereby becomes
indebted to such Employer, any funds or Shares in his stock purchase account
may be applied against and used to satisfy such indebtedness.
10.7 Obligation and Deliver Shares. 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 shares.
* Amended as of June 1, 1997 11