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EXHIBIT 10.12
BILLING CONCEPTS CORP.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The Billing Concepts Corp. Employee Stock Purchase Plan (the "Plan") is
designed to encourage employees of Billing Concepts Corp. ("Billing")
and its participating Subsidiaries (collectively, the "Company"), where
permitted by applicable laws and regulations, to acquire an equity
interest in Billing through the purchase of shares of the common stock,
par value $0.01 per share, of Billing ("Common Stock"). These purchases
are intended to establish a closer identification of employee, Company
and stockholder interests and to provide employees with a direct means
of participating in the Company's growth and earnings. It is
anticipated that Plan participation will motivate employees to remain
in the employ of the Company and give greater efforts on behalf of the
Company. This Plan is intended to constitute an "employee stock
purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. DEFINITIONS
The following words or terms, when used herein, shall have the
following respective meanings:
"Closing Market Price" refers to the reported closing sales price for
shares of the Common Stock as so reported in The Wall Street Journal
for that day.
"Committee" shall refer to the committee appointed by the Billing Board
of Directors to administer this Plan.
"Designated Broker" refers to the securities brokerage company that
will assist Billing in administering the Plan and which may be
designated from time to time by the Committee. Initially the Designated
Broker is Merrill Lynch & Co.
"Effective Date" means August 1, 1996, the first Enrollment Date under
the Plan.
"Employee" refers to all full-time and part-time employees, employed by
Billing or a Subsidiary on a continuous basis.
"Employee Contribution Amounts" refers to the amounts contributed by
employees via payroll deduction.
"Enrollment Date" refers to August 1, 1996, the first Enrollment Date
under the Plan, the first day of the initial six-month Participation
Period ending January 31, 1997, and after that latter date, refers to
February 1 and August 1, the first day of the succeeding six-month
Participation Periods which continue thereafter.
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"Enrollment Period" refers to the designated period that precedes each
Enrollment Date during which employees eligible to participate are
provided the opportunity to enroll in the Plan. The Enrollment Period
is approximately two weeks in duration and, generally, will expire
approximately 10 to 14 days prior to the Enrollment Date. The exact
dates for each Enrollment Period will be communicated to all eligible
employees prior to the Enrollment Period.
"Exercise Date" refers to the last stock trading day in a Participation
Period.
"Fair Market Value" refers to the Closing Market Price on either the
first or last stock trading day in the Participation Period as
determined in accordance with Section 9.
"Participant" refers to any employee meeting the eligibility
requirements specified in Section 5 who has enrolled in the Plan.
"Participation Period" refers to the six-month period from the
Effective Date through January 31, 1997, and after that latter date
refers to periods of February 1 through July 31 and August 1 through
January 31, during which periods payroll deductions will be made to
purchase stock under the Plan, or such other period as the Committee
may at any time prescribe.
"Plan" shall refer to this Billing Concepts Corp. Employee Stock
Purchase Plan.
"Prior Plan" refers to the U.S. Long Distance Corp. Stock Purchase
Plan, the stock purchase plan of Billing's former parent.
"Subsidiary" refers to any present or future corporation that is a
"subsidiary corporation" of the Company within the meaning of Section
424 of the Code.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Employee Stock Purchase Plan
Committee (the "Committee") appointed by the Board of Directors of
Billing (the "Board"), which Committee shall consist of at least three
(3) persons, who need not be members of the Board. The members of the
Committee shall supervise the administration and enforcement of the
Plan according to its terms and provisions and shall have all powers
necessary to accomplish these purposes and discharge its duties
hereunder including, but not limited to, the power to interpret the
Plan, to make factual determinations and resolve issues of eligibility,
stock price determination, or any other issues arising under the Plan
or as a result of participation of Participants in the Plan.
The Committee may act by majority decision of its members at a regular
or special meeting of the Committee or by decision reduced to writing
and signed by all members of the Committee without holding a formal
meeting. Vacancies in the membership of the Committee arising from
death, resignation or other inability to serve shall be filled by
appointment by the Board as soon as possible. All decisions by the
Committee shall be
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final and conclusive and binding upon all Participants and the Company.
4. NATURE AND NUMBER OF SHARES
The Common Stock subject to issuance under the terms of the Plan shall
be shares of Billing's authorized but unissued shares. The aggregate
number of shares that may be issued under the Plan shall not exceed two
million (2,000,000) shares of Common Stock. If the total number of
shares that Employees elect to purchase under the Plan exceeds the
shares available, the Committee will allot shares among Employees.
In the event of any reorganization, recapitalization, stock split,
reverse stock split, stock dividend, spin-off, combination of shares,
merger, consolidation, offering of rights or other similar change in
the capital structure of Billing, the Committee may make such
adjustment, if any, as it deems appropriate in the number, kind and
purchase price of the shares available for purchase under the Plan, in
the maximum number of shares that may be issued under the Plan and in
the Participation Periods, subject to the approval of the Board and in
accordance with Section 20 of the Plan.
If Billing is acquired in a transaction whereby it is not the surviving
entity or all or substantially all of Billing's assets are acquired,
the Committee shall determine a Plan termination date. This date shall
precede the expected effective date of such acquisition by not more
than sixty (60) days. Employee Contribution Amounts accumulated during
the period between the most recent Enrollment Date and Plan termination
date shall be used to purchase shares for Participants in the manner
provided in Section 9 utilizing the Plan termination date as the
Exercise Date for determining the purchase price for shares of Common
Stock. In the event the Plan is terminated and the acquisition
transaction is not consummated, the Plan may be reactivated on a date
determined by the Committee.
5. ELIGIBILITY REQUIREMENTS
Each Employee, except as described in the next following paragraph,
shall become eligible to participate in the Plan in accordance with
this Section 5 on the first Enrollment Date following employment by the
Company. Participation in the Plan is voluntary.
The following Employees are not eligible to Participate in the Plan:
i) Employees who have not completed at least six (6) months of
continuous service with the Company as of the Enrollment Date;
and
ii) Employees who would, immediately upon enrollment in the Plan,
own directly or indirectly, or hold options or rights to
acquire, an aggregate of five percent (5%) or more of the
total combined voting power or value of all outstanding shares
of all classes of Billing or any Subsidiary.
Employees of any corporation that may become a Subsidiary after the
Effective Date shall automatically be deemed to be eligible for
participation under this Plan effective as of the Enrollment Date
following the date (1) the corporation became a Subsidiary and (2) the
Employees satisfied the continuous service requirements described
above.
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All service with the former parent corporation of Billing or a
subsidiary of such former parent will be taken into account as
continuous service for purposes of this Section 5.
6. ENROLLMENT
Each eligible Employee of the Company as of the Effective Date will
become an eligible Employee in the Plan on the Effective Date if
immediately prior to the Effective Date he or she was eligible to
participate in the Prior Plan. Each other Employee of the Company who
thereafter becomes eligible to participate may enroll in the Plan on
the February 1 and August 1 Enrollment Dates following the date he or
she first meets the eligibility requirements of Section 5 of the Plan.
Any eligible Employee not enrolling in the Plan when first eligible may
enroll in the Plan on the next succeeding February 1 or August 1
Enrollment Date. In order to enroll, an eligible Employee must
complete, sign and submit the appropriate forms during the Enrollment
Period to Billing's Human Resources Department. Continued enrollment in
subsequent periods shall be automatic and no additional documentation
is required, unless a Participant desires to revise the Employee
Contribution Amount for the subsequent Participation Period. Employee
Contribution Amounts shall remain constant if not changed at the
Employee's request during an Enrollment Period. In order to terminate
Plan participation, at any time, or change Employee Contribution
Amounts during an Enrollment Period, the participant must complete,
sign and submit the appropriate forms to Billing's Human Resources
Department.
7. GRANT OF RIGHT TO PURCHASE SHARES ON ENROLLMENT
Enrollment in the Plan by an Employee on an Enrollment Date will
constitute the grant by Billing to the Participant of the right to
purchase shares of Common Stock under the Plan. Re-enrollment or
continued enrollment by a Participant in the Plan will constitute a
grant, on the Enrollment Date on which such re-enrollment or continued
enrollment occurs, by Billing to the Participant of a new right to
purchase shares of Common Stock. A Participant who has not terminated
employment shall have shares of Common Stock automatically purchased
for him or her on the applicable Exercise Date. The participant shall
automatically be re-enrolled in the Plan for subsequent Participation
Periods at the same Employee Contribution Amount, unless the
Participant notifies Billing's Human Resources Department on the
appropriate forms that he or she elects not to re-enroll or desires to
change his or her Employee Contribution Amount. A Participant who has
suspended payroll deductions during any Participation Period must
re-enroll on the appropriate forms to participate in the Plan in any
future Participation Periods.
Each right to purchase shares of Common Stock under the Plan during any
participation Period shall have the following terms:
i) the right to purchase shares of Common Stock during any
Participation Period shall expire on the earlier of (A) the
completion of the purchase of shares on the Exercise
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Date or (B) the date on which the Participant terminates
employment;
ii) in no event shall the right to purchase shares of Common Stock
during any Participation Period extend beyond twenty-seven
(27) months from the Enrollment Date;
iii) payment for shares purchased shall be made only with amounts
contributed through payroll deductions;
iv) purchase of shares shall be accomplished only in accordance
with Section 9;
v) the price per share shall be determined as provided in Section
9;
vi) the right to purchase shares of Common Stock (taken together
with all other such rights then outstanding under this Plan
and under all other similar stock purchase plans of Billing or
any Subsidiary) will in no event give the Participant the
right to purchase a number of shares of Common Stock during a
Participation Period in excess of the number of shares of
Common Stock derived by dividing $12,500.00 by the Fair Market
Value of the Common Stock on the applicable Grant Date, as
defined in Section 9, determined in accordance with Section 9;
and
vii) the right to purchase shares of Common Stock shall in all
respects be subject to the terms and conditions of the Plan,
as interpreted by the Committee from time to time.
8. METHOD OF PAYMENT
Payment of shares of Common Stock shall be made as of the applicable
Exercise Date with amounts contributed through payroll deductions
collected over the Plan's designated Participation Period, with the
first such deduction commencing with the payroll period ending after
the Enrollment Date. Each Participant will authorize such deductions
from his or her pay for each month during the Participation Period. No
changes in monthly deduction amounts are permitted subsequent to the
Enrollment Period other than ceasing ongoing payroll deductions for the
remainder of the Participation Period. Payroll deductions will be made
in equal installments on each of the first two payrolls of each month
during the Participation Period. No lump sum or prepayments are
permitted. Employees may select any monthly Employee Contribution
Amount as long as the following requirements are met:
i) at least $10.00 is deducted each month;
ii) amount selected is a multiple of $5.00;
iii) total amount deducted does not exceed Employee's net pay of
their base salary; and
iv) the aggregate of monthly deduction amounts does not exceed
$10,625.00 in any Participation Period (under this Plan and
under all other similar stock purchase plans
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of Billing or any Subsidiary). If for any reason a
Participant's contributions to the Plan exceed $10,625.00
during any Participation Period, such excess amounts shall be
refunded to the Participant as soon as practicable after such
excess has been determined to exist.
A Participant may suspend payroll deductions at any time during a
Participation Period by given written notice to Billing's Human
Resources Department on the appropriate forms, which will be processed
effective for the first payroll period that is administratively
feasible. In such case, the Participant's account balance shall still
be used to purchase Common Stock at the end of the Participation
Period. Any Participant who suspends payroll deductions during any
Participation Period cannot resume payroll deductions during such
period and must re-enroll in the Plan during a subsequent Enrollment
Period in order to participate in any future Participation Periods.
Except in the case of termination of employment, the amount in a
Participant's account at the end of any Participation Period shall be
applied to the purchase of shares, as provided in Section 9.
9. PURCHASE OF SHARES
The right to purchase shares of Common Stock granted by the Company
under the Plan is for the term of a Participation Period. The price to
be paid for the Common Stock to be purchased at the expiration of such
Participation Period shall be determined as the lower of: (a) 85% of
the Closing Market Price on the first trading day of the Participation
Period (Grant Date) or (b) 85% of the Closing Market Price on the last
trading day in the Participation Period (Exercise Date). These dates
constitute the date of grant and the date of exercise for valuation
purposes under Section 423 of the Code.
The number of shares of Common Stock, including fractional shares,
purchased on behalf of a Participant shall be recorded in the
Designated Broker stock trading account established for each
Participant as soon as administratively feasible, but no later than
five (5) business days following the last business day of the preceding
Participation Period. The number of shares purchased shall be computed
by dividing the aggregate Employee Contribution Amount by the price for
the Common Stock determined in the manner described in the preceding
paragraph. Participants shall be treated as the record owners of the
shares, with all rights of a stockholder, effective as of the date the
shares are posted to the Participant's stock trading account. Any fees
associated with maintaining these stock trading accounts shall be the
obligation of the Company.
10. WITHDRAWAL OF SHARES
The record of shares of Common Stock purchased shall be maintained in
an individual stock trading account established at the Designated
Broker on behalf of the Participant until the shares are either
withdrawn or sold. A Participant may elect to withdraw all shares held
in his or her account at any time (without withdrawing from the Plan)
by giving notice to the Designated Broker. Upon receipt of such notice,
the Designated Broker will arrange for
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either (a) the issuance and delivery of all shares held in the
Participant's account as soon as administratively feasible or (b) the
sale of the shares, as described by the Participant.
Certificates shall be issued only in the following situations:
i) if the Participant requests a certificate; or
ii) if the Participant terminates employment with the
Company and requests a certificate.
In both of these cases, the Participant will be required to notify the
Designated Broker and pay an issuance fee. The share certificate will
be issued to the Participant as soon as administratively feasible after
the receipt by the Designated Broker of the required form and payment
of the issuance fee.
Fractional shares shall be handled as follows: For share withdrawals,
only whole shares will be certified and issued to Participants. A
payment will be made to the Participant for any fractional shares owned
by the Participant. This payment shall be computed using the Closing
Market Price of a share of Common Stock on the date the withdrawal is
processed by the Designated Broker. For shares sold, Participants shall
receive credit for all whole and fractional shares at the actual price
for which the shares were sold.
11. INCOME TAX OBLIGATIONS
Participants shall be responsible for all personal income tax
obligations associated with selling shares of Common Stock purchased
through this Plan. The Committee recommends that each Participant seek
competent, professional tax advice prior to enrolling in the Plan to
ensure he or she fully understands the tax consequences resulting from
stock sales.
12. TERMINATION OF PARTICIPATION
The right to participate in the Plan terminates immediately when a
Participant ceases to be employed by Billing or any Subsidiary.
Employee Contribution Amounts collected prior to the date of
termination of employment shall be paid in cash. The cash shall be
delivered to the Participant as soon as administratively feasible
following the end of the Participation Period in which the
Participant's employment terminates. Employee Contribution Amounts for
Participants who are on a Leave of Absence will be used to purchase
Common Stock at the conclusion of the Participation Period in
accordance with Section 9.
13. DEATH OF A PARTICIPANT
As soon as administratively feasible after receiving notification of
the death of a Participant, Employee Contribution Amounts collected
prior to the date of termination of employment shall be paid in cash to
the Participant's estate. No additional shares of Common Stock may be
purchased on behalf of a Participant after notification of death is
received. All assets in a Participant's stock trading account will
remain in the Participant's account until the person
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whom the Participant has elected a joint tenant, with or without right
of survivorship, or the representative of the Participant's estate
requests delivery thereof from the Designated Broker and submits such
documentation as the Designated Broker may require to show proof of
entitlement thereto.
14. ASSIGNMENT
The rights of a Participant under the Plan shall not be assignable or
otherwise transferable by the Participant except by will or the laws of
descent and distribution or pursuant to a qualified domestic relations
order . No purported assignment or transfer of any rights of a
Participant under the Plan, whether voluntary or involuntary, by
operation of law or otherwise, shall vest in the purported assignee or
transferee any interest or right therein whatsoever, but immediately
upon such assignment or transfer, or any attempt to make the same, such
rights shall terminate and become of no further effect. If the
foregoing provisions of this Section 14 are violated, the Participant's
election to purchase Common Stock shall terminate and the only
obligation of the Company remaining under the Plan shall be to pay the
person entitled thereto the Employee Contribution Amount then credited
to the Participant's account. No Participant may create a lien on any
funds, securities, rights or other property held for the account of the
Participant under the Plan, except to the extent permitted by will or
the laws of descent and distribution if beneficiaries have not been
designated. A Participant's right to purchase shares of Common Stock
under the Plan shall be exercisable only during the Participant's
lifetime and only by him or her.
15. COSTS
Billing will pay all expenses incident to establishing and
administering the Plan. Expenses to be incurred by Participants shall
be limited to brokerage fees relating to sales of stock from the
Participant's account (as described herein), issuance fees (as
described in Section 10) and any personal income tax obligations.
16. REPORTS
At least annually, the Company shall provide or cause to be provided to
each Participant a report of their Employee Contribution Amounts and
the shares of Common Stock purchased with such Employee Contribution
Amounts by that Participant on each Exercise Date.
17. EQUAL RIGHTS AND PRIVILEGES
All eligible Employees shall have equal rights and privileges with
respect to the Plan so that the Plan qualifies as an "employee stock
purchase plan" within the meaning of Section 423 or any successor
provision of the Code and related regulations. Any provision of the
Plan that is inconsistent with Section 423 or any successor provision
of the Code shall without further act or amendment by the Company be
reformed to comply with the requirements of Section 423. This Section
17 shall take precedence over all other provisions in the Plan.
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18. RIGHTS AS A STOCKHOLDER
A Participant shall have no rights as a stockholder under his or her
rights to purchase Common Stock until he or she becomes a stockholder
as herein provided. A Participant will become a stockholder with
respect to shares for which payment has been completed as provided in
Section 9 effective as of the date the shares are posted to the
Participant's stock trading account.
19. MODIFICATION AND TERMINATION
The Board may amend or terminate the Plan at any time as permitted by
law, with the exception that the provisions of the Plan (including,
without limitation, the provisions of Sections 8 and 9) that constitute
a formula award for purposes of Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended ("Rule 16b-3"), may not be amended more than once
every six (6) months, other than to comply with changes in the Code, or
the rules thereunder. No amendment shall be effective unless within one
(1) year after the change is adopted by the Board it is approved by the
holders of a majority of the voting power of Billing's outstanding
shares:
i) if and to the extent such amendment is required to be
approved by stockholders to continue the exemption
provided for in Rule 16b-3 (or any successor
provision); or
ii) if such amendment would cause the rights granted
under the Plan to purchase shares of Common Stock to
fail to meet the requirements of Section 423 of the
Code (or any successor provision).
20. BOARD AND STOCKHOLDER APPROVAL; EFFECTIVE DATE
The Plan was approved by the Board and by the sole stockholder of
Billing on July 10, 1996. The Plan will become effective as of
August 1, 1996.
21. GOVERNMENTAL APPROVALS OR CONSENTS
The Plan and any offering or sale made to Employees under the Plan are
subject to any governmental approvals or consents that may be or become
applicable in connection therewith. Subject to the provisions of
Section 19, the Board may make such changes in the Plan and include
such terms in any offering under the Plan as may be desirable to comply
with the rules or regulations of any governmental authority.
22. USE OF FUNDS
All Employee Contribution Amounts received or held by the Company under
this Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such amounts.
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23. NO ADDITIONAL PURCHASE RIGHTS OR EMPLOYMENT RIGHTS
Other than for rights to purchase Common Stock under the Plan, the Plan
does not, directly or indirectly, create any right for the benefit of
any Employee or class of Employee to purchase any shares under the
Plan, or create in any Employee or class of Employee any right with
respect to continuance of employment with the Company, and it shall not
be deemed to interfere in any way with the Company's right to
terminate, or otherwise modify, any Employee's employment at any time.
24. EFFECT OF PLAN
The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each
Employee participating in the Plan, including, without limitation, such
Employee's estate and the executors, administrators or trustees
thereof, heirs and legatees, and any receiver, trustee in bankruptcy or
representative of creditors of such Employee.
25. GOVERNING LAW
The laws of the State of Delaware will govern all matters relating to
the Plan except to the extent superseded by the laws of the United
States or the property laws of any particular state.
26. NO PAYMENT OF INTEREST
No interest will be paid or allowed on any Employee Contribution
Amounts or amounts credited to the account of any Participant.
27. OTHER PROVISIONS
The agreement to purchase shares of Common Stock under the Plan shall
contain such other provisions as the Committee and the Board shall deem
advisable, provided that no such provision shall in any way conflict
with the terms of the Plan.
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