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EXHIBIT 10.1
ASSOCIATED MATERIALS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the
interests of Associated Materials Incorporated by providing eligible employees
with the opportunity to acquire a proprietary interest in the Company through
participation in a payroll-deduction based employee stock purchase plan designed
to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
A. The Plan Administrator shall administer the Plan and
shall have full authority and discretion to interpret and construe any provision
of the Plan and to adopt such rules and regulations for administering the Plan
as it may deem necessary, and to take any action it may deem necessary in order
to comply with the requirements of Section 423 of the Code. Decisions of the
Plan Administrator and the Board shall be final and binding on all parties
having an interest in the Plan. The Plan Administrator shall have full authority
and discretion to retain and engage such third party firms (including, without
limitation, brokerage and record keeping firms) as it shall from time to time
deem advisable or appropriate.
B. The Board shall have the full authority and discretion
to designate Corporate Affiliates as Participating Companies from time to time
and to terminate any such designation; to decide any questions relating to the
administration of the Plan that are referred to the Board by the Plan
Administrator; and to amend the Plan as provided in Section X.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares
of authorized but unissued Common Stock or shares of Common Stock held in the
Company's treasury. The maximum number of shares of Common Stock which may be
issued over the term of the Plan shall not exceed 250,000 shares.
B. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Company's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities
issuable under the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date and (iii) the number and
class of securities and the price per share in effect under each outstanding
purchase right in order to prevent the dilution or enlargement of benefits
thereunder.
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IV. PURCHASE PERIODS
Shares of Common Stock shall be offered for purchase under the
Plan through a series of successive Purchase Periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the
Effective Date shall be eligible to participate in the Plan on the first day of
any Purchase Period under the Plan, provided such individual remains an Eligible
Employee on such day. Eligibility to participate in the Plan shall be limited to
Eligible Employees employed by the Company or by a Corporate Affiliate that is a
U.S. subsidiary of the Company.
B. Each individual who becomes an Eligible Employee after
the Effective Date shall be eligible to participate in the Plan on the first day
of any Purchase Period commencing thereafter, provided such individual remains
an Eligible Employee on such day.
C. To participate in the Plan for a particular Purchase
Period, an Eligible Employee must complete the enrollment forms prescribed by
the Plan Administrator and file such forms with the Plan Administrator (or its
designee) before the first day of such Purchase Period. An Eligible Employee's
enrollment in the Plan for a Purchase Period will remain in effect for all
subsequent Purchase Periods until modified or terminated by the Eligible
Employee or until he or she no longer qualifies as an Eligible Employee.
VI. PAYROLL DEDUCTIONS; SHORTFALL CONTRIBUTIONS
A. The payroll deduction authorized by the Participant for
purposes of acquiring shares of Common Stock under the Plan may be (i) any whole
multiple of one percent (1%) of the Eligible Compensation paid to the
Participant during each Purchase Period or (ii) any whole dollar amount of the
Eligible Compensation paid to the Participant during each Purchase Period,
provided that the Participant's payroll deduction for any Purchase Period shall
not exceed a maximum of twenty-five percent (25%) of such Eligible Compensation.
The deduction rate so authorized shall continue in effect for the entire
Purchase Period. The Participant may not increase his or her rate of payroll
deduction during a Purchase Period. However, the Participant may, at any time
prior to the tenth (10th) Business Day immediately preceding the Purchase Date
for the Purchase Period, reduce his or her rate of payroll deduction to any
whole percentage or whole dollar amount or to zero, such reduction to become
effective prospectively as soon as administratively feasible after filing the
appropriate form with the Plan Administrator. The Participant may not, however,
effect more than one (1) such reduction per Purchase Period. If a Participant
reduces his or her payroll deductions to zero, the Participant's previous
payroll deductions for the Purchase Period will still be applied to the purchase
of shares of Common Stock on the Purchase Date, unless the Participant elects to
terminate his or her purchase rights for the Purchase Period in accordance with
Section VII.E.
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B. Payroll deductions shall begin on the first pay day of
each Purchase Period and shall (unless sooner terminated) continue through the
pay day ending on or immediately prior to the last day of the Purchase Period.
The amounts so collected shall be credited to the Participant's Account under
the Plan. Payroll deduction amounts need not be held in any segregated account
or trust fund and may be commingled with the general assets of the Company and
used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the
termination of the Participant's purchase right in accordance with the
provisions of the Plan.
D. A Participant whose net pay after all deductions
therefrom on any given pay day is not sufficient to fund the payroll deduction
authorized by the Participant for a Purchase Period shall be permitted to fund
any such shortfall by contributing the amount thereof to the Plan in cash, by
personal check or in any other form permitted from time to time by the Plan
Administrator ("Shortfall Contributions"). Shortfall Contributions must be
contributed to the Plan before the tenth (10th) Business Day immediately
preceding the Purchase Date for the Purchase Period. All references in this Plan
to payroll deductions also shall be deemed to refer to and include Shortfall
Contributions, except where the context clearly requires otherwise.
E. No interest shall accrue on the payroll deductions of
a Participant in the Plan.
VII. PURCHASE RIGHTS
A. A Participant shall be granted a separate purchase
right on the first day of each Purchase Period in which he or she participates.
The purchase right shall provide the Participant with the right to purchase
shares of Common Stock on the Purchase Date upon the terms set forth below.
Under no circumstances shall purchase rights be granted under the Plan to any
Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Section 424(d) of the Code) or hold outstanding options
or other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
any Corporate Affiliate.
B. Each purchase right shall be automatically exercised
on the Purchase Date, and shares of Common Stock shall accordingly be purchased
on such date on behalf of each Participant participating in the related Purchase
Period (other than any Participant whose payroll deductions have previously been
refunded in accordance with paragraph E below). The purchase shall be effected
by applying the Participant's Account balance as of the last day of the Purchase
Period to the purchase of shares of Common Stock (subject to the limitation on
the maximum number of shares purchasable per Participant) at the Purchase Price
in effect for that Purchase Period.
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C. The number of shares of Common Stock purchasable by a
Participant on each Purchase Date shall be the number of whole and fractional
shares obtained by dividing the Participant's Account balance on the last day of
the Purchase Period by the Purchase Price in effect for that Purchase Date.
However, the maximum number of shares of Common Stock purchasable per
Participant on any one Purchase Date shall not exceed 3,000 shares.
D. Any portion of the Participant's Account balance that
is not applied to the purchase of Common Stock by reason of the limitation on
the maximum number of shares purchasable by the Participant on the Purchase Date
shall be refunded as soon as administratively feasible.
E. The following provisions shall govern the termination
of outstanding purchase rights:
(i) A Participant may, at any time prior to the tenth
(10th) Business Day immediately preceding the Purchase Date for the
Purchase Period, terminate his or her outstanding purchase right by
filing the appropriate form with the Plan Administrator (or its
designee), and no further payroll deductions shall be collected from or
made by the Participant with respect to such terminated purchase right.
The Participant's entire Account balance as of the effective date of
such termination shall be refunded as soon as administratively
feasible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the
Purchase Period for which the terminated purchase right was granted. In
order to resume participation in any subsequent Purchase Period, such
individual must re-enroll in the Plan (by making a timely filing of the
prescribed enrollment forms) before the first day of the new Purchase
Period.
(iii) Should the Participant cease to remain an
Eligible Employee for any reason (including death, disability or change
in employment status) while his or her purchase right remains
outstanding, then that purchase right shall immediately terminate, and
the Participant's entire Account balance shall be refunded as soon as
administratively feasible. However, should the Participant cease to
remain in active service by reason of an approved unpaid leave of
absence, then the Participant shall have the right, exercisable up
until the tenth (10th) Business Day immediately preceding the Purchase
Date for the Purchase Period in which such leave commences, to withdraw
his or her entire Account balance. If a Participant on such an unpaid
leave does not exercise this right, such Participant's Account balance
shall be held for the purchase of shares at the next Purchase Date. In
no event, however, shall any further payroll deductions be collected on
the Participant's behalf during any such unpaid leave. Upon the return
to active service of any Participant previously on unpaid leave, his or
her payroll deductions under the Plan shall automatically resume at the
rate in effect at the time the leave began, unless the Participant
elected to withdraw his or her Account balance for the Purchase Period
in which the leave commenced.
(iv) Notwithstanding any other provision of the Plan
to the contrary, a Participant's purchase rights with respect to a
Purchase Period shall
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terminate, and his or her Account balance shall be refunded as soon as
administratively feasible, if the Participant's employment with the
Participating Companies terminates for any reason on or before the
Purchase Date for such Purchase Period.
F. Each outstanding purchase right shall automatically be
exercised, immediately prior to the date any Corporate Transaction is
consummated, by applying the Participant's Account balance to the purchase of
whole and fractional shares of Common Stock at a purchase price per share equal
to eighty-five percent (85%) of the lower of (i) the Fair Market Value per share
of Common Stock on the first day of the Purchase Period in which such Corporate
Transaction occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the date such Corporate Transaction is consummated.
However, the applicable limitation on the number of shares of Common Stock
purchasable per Participant shall continue to apply to any such purchase. The
Company shall use reasonable efforts to provide prior written notice of the
occurrence of any Corporate Transaction, and Participants shall, following the
receipt of such notice, have the right to terminate their outstanding purchase
rights prior to the effective date of the Corporate Transaction.
G. Should the total number of shares of Common Stock which
are to be purchased pursuant to outstanding purchase rights on any particular
date exceed the number of shares then available for issuance under the Plan, the
Plan Administrator shall make a pro-rata allocation of the available shares on a
uniform and nondiscriminatory basis, and the Account balance of each
Participant, to the extent in excess of the aggregate Purchase Price payable for
the Common Stock pro-rated to such individual, shall be refunded as soon as
administratively feasible.
H. The purchase right shall be exercisable only by the
Participant and shall not be assignable or transferable by the Participant.
I. A Participant shall have no stockholder rights with
respect to the shares subject to his or her outstanding purchase right until the
shares are purchased on the Participant's behalf in accordance with the
provisions of the Plan and the Participant has become the owner of the purchased
shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to
acquire Common Stock pursuant to any purchase right outstanding under this Plan
if and to the extent such rights, when aggregated with (i) rights to purchase
Common Stock accrued under any other purchase right granted under this Plan and
(ii) similar rights accrued under other employee stock purchase plans (within
the meaning of Section 423 of the Code) of the Company or any Corporate
Affiliate, would otherwise permit such Participant to purchase more than
Twenty-Five Thousand Dollars ($25,000) worth of stock of the Company and of any
Corporate Affiliate (determined on the basis of the Fair Market Value of such
stock on the date or dates such rights are granted) for each calendar year such
rights are at any time outstanding, subject to the following:
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(i) The right to acquire Common Stock under each
outstanding purchase right shall accrue on the Purchase Date in effect
for the Purchase Period for which such right is granted.
(ii) No right to acquire Common Stock under any
outstanding purchase right shall accrue to the extent the Participant
has already accrued in the same calendar year the right to acquire
Common Stock under one (1) or more other purchase rights at a rate
equal to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock
(determined on the basis of the Fair Market Value per share on the date
or dates of grant) for each calendar year such rights were at any time
outstanding.
B. If by reason of such accrual limitations, any purchase
right of a Participant does not accrue for a particular Purchase Period, then
the Participant's Account balance with respect to such purchase right shall be
refunded as soon as administratively feasible.
C. In the event there is any conflict between the
provisions of this Article and one or more provisions of the Plan or any
instrument issued thereunder, the provisions of this Article shall be
controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on August 26, 1998
and shall become effective on the Effective Date, provided no purchase rights
granted under the Plan shall be exercised, and no shares of Common Stock shall
be issued hereunder, until the Company shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange on which the Common Stock is listed for trading and all other
applicable requirements established by law or regulation other than approval of
the Plan by the Company's stockholders. In the event stockholder approval of the
Plan by majority vote of the shares represented in person or by proxy at a
meeting of the stockholders of the Company at which a quorum is present is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect, and the Participants' Account balances shall be
distributed as soon as administratively feasible.
B. Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest to occur of (i) the last Business Day in December
2008, (ii) the date on which all shares available for issuance under the Plan
shall have been sold to Participants pursuant to purchase rights exercised under
the Plan or (iii) the date on which all purchase rights are exercised in
connection with a Corporate Transaction. Following such termination, no further
purchase rights shall be granted or exercised, and no further payroll deductions
shall be collected under the Plan.
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X. AMENDMENT OF THE PLAN
A. The Plan may be amended from time to time by the Board
or any duly authorized committee thereof, and all purchase rights outstanding at
the effective date of any such amendment will be subject to such amendment. In
the event any law, or any rule or regulation issued or promulgated by the
Internal Revenue Service, the Securities and Exchange Commission, the National
Association of Securities Dealers, Inc., any stock exchange upon which the
Common Stock is listed for trading, or any other governmental or
quasi-governmental agency having jurisdiction over the Company, the Common Stock
or the Plan, requires the Plan to be amended, or in the event any of the rules
under Section 16 of the 1934 Act are amended or supplemented (e.g., by addition
of alternative rules), in either event to require or permit the Company to add,
remove or lessen any restrictions on or with respect to purchase rights under
the Plan, the Board reserves the right to amend the Plan to the extent of any
such requirement, amendment or supplement, and all purchase rights then
outstanding will be subject to such amendment.
B. The Plan may be terminated at any time by action of the
Board; provided, however, that the termination of the Plan shall not adversely
affect the terms of any outstanding purchase rights.
C. Notwithstanding the foregoing, the Board may not,
without the approval of the Company's stockholders, increase the number of
shares of Common Stock issuable under the Plan, except to the extent permitted
under Section III.B.
D. With respect to any Participating Corporation which
employs Eligible Employees who reside outside of the United States, and
notwithstanding anything herein to the contrary, the Board may in its sole
discretion amend the terms of the Plan, or any purchase right granted under the
Plan, in order to comply with the requirements of local law, and may, where
appropriate, establish one or more sub-plans to reflect such amended provisions
applicable to such Eligible Employees.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration
of the Plan shall be paid by the Company.
B. Nothing in the Plan shall confer upon any Participant
any right to continue in the employ of the Company or any Corporate Affiliate
for any period of specific duration, or interfere with or otherwise restrict in
any way the rights of the Company (or any Corporate Affiliate employing such
person) or of the Participant, which rights are hereby expressly reserved by
each, to terminate such Participant's employment at any time for any reason,
with or without cause.
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APPENDIX
The following definitions shall be in effect under the Plan:
A. Account shall mean the account established by the Plan
Administrator to record a Participant's payroll deductions as of any given date.
B. Board shall mean the Company's Board of Directors.
C. Business Day shall mean a day on which the New York
Stock Exchange is open for trading.
D. Code shall mean the Internal Revenue Code of 1986, as
amended.
E. Common Stock shall mean the Company's common stock, par
value $.0025 per share.
F. Company shall mean Associated Materials Incorporated, a
Delaware corporation, and any corporate successor to all or substantially all of
the assets or voting stock of Associated Materials Incorporated which shall by
appropriate action adopt the Plan.
G. Corporate Affiliate shall mean any parent or subsidiary
corporation of the Company (as determined in accordance with Section 424 of the
Code), whether now existing or subsequently established.
H. Corporate Transaction shall mean either of the
following stockholder-approved transactions to which the Company is a party:
(i) a merger, consolidation or reorganization of the
Company into or with another corporation or legal person as a result of
which securities possessing less than fifty percent (50%) of the total
combined voting power of the then-outstanding voting securities of such
corporation or person immediately after such transaction are held in
the aggregate by the holders of the voting securities of the Company
immediately prior to such transaction, or
(ii) a sale or other transfer of all or substantially
all of the assets of the Company to another corporation or other legal
person as a result of which securities possessing less than fifty
percent (50%) of the total combined voting power of the
then-outstanding voting securities of such corporation or person
immediately after such sale or transfer are held in the aggregate by
the holders of the voting securities of the Company immediately prior
to such sale or transfer.
I. Effective Date shall mean October 1, 1998.
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J. Eligible Compensation means the following items of
remuneration paid to a Participant by one or more Participating Companies during
each Purchase Period: base salary, overtime pay, commissions and cash incentive
compensation, computed before giving effect to the Participant's salary
reduction elections under Section 125 or Section 401(k) of the Code or the
Participant's deferral elections under any nonqualified deferred compensation
plan of the Company or any Corporate Affiliate.
K. Eligible Employee shall mean an Employee who is
employed by a Participating Company on a basis under which he or she is
regularly expected to render at least twenty (20) hours of service per week for
more than five (5) months per calendar year for earnings considered wages.
Notwithstanding the foregoing, a person who is an independent contractor
performing services for a Participating Company shall not be eligible to
participate in the Plan.
L. Employee shall mean an individual who is a common law
employee of the Company or any Corporate Affiliate.
M. Fair Market Value per share of Common Stock on any
relevant date shall be the closing selling price per share of Common Stock on
the date in question on the stock exchange determined by the Plan Administrator
to be the primary market for the Common Stock or the NASDAQ, as such price is
officially quoted in the composite tape of transactions on such exchange or
NASDAQ. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
N. 1933 Act shall mean the Securities Act of 1933, as
amended.
O. 1934 Act shall mean the Securities Exchange Act of
1934, as amended.
P. Participant shall mean any Eligible Employee of a
Participating Company who is actively participating in the Plan.
Q. Participating Company shall mean the Company, each
Corporate Affiliate that is a direct or indirect domestic subsidiary of the
Company and each other Corporate Affiliate that is authorized from time to time
by the Board to extend the benefits of the Plan to its Eligible Employees. For
purposes of the foregoing, the term "subsidiary" has the meaning set forth in
Section 424(f) of the Code.
R. Plan shall mean the Company's Employee Stock Purchase
Plan, as set forth in this document.
S. Plan Administrator shall mean the person or persons
appointed by the Board from time to time as the plan administrator of the Plan.
T. Purchase Date shall mean the last Business Day of each
Purchase Period or, with respect to a Corporate Transaction, the date specified
for the purchase in Section VII.F.
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U. Purchase Period shall mean a period of six (6) months
extending from January 1 to June 30 and from July 1 to December 31 of each year;
provided, however, that the first Purchase Period shall begin on October 1,
1998, and shall end on December 31, 1998.
V. Purchase Price shall mean the purchase price per share
at which Common Stock will be purchased on the Participant's behalf on each
Purchase Date and shall be equal to eighty-five percent (85%) of the lower of
(i) the Fair Market Value per share of Common Stock on the first day of the
Purchase Period in which the Purchase Date occurs or (ii) the Fair Market Value
per share of Common Stock on that Purchase Date.
W. Service shall mean the performance of services to the
Company or any Corporate Affiliate by a person in the capacity of an Employee.
X. Shortfall Contributions shall have the meaning ascribed
to such term in Section VI.D. of the Plan.
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