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EXHIBIT 10.12
OPTEL INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
(APPROVED BY THE BOARD ON JUNE 4, 1998)
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.1 PURPOSE
The purpose of the OpTel Inc. 1998 Employee Stock Purchase
Plan is to assist employees of OpTel Inc. and its subsidiaries in acquiring a
stock ownership interest in the Company pursuant to a plan which is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended.
1.2 DEFINITIONS
Whenever the following terms are used in this Plan, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The singular pronoun shall include the plural where the context so
indicates.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the Stock Purchase Plan Committee of
the Company, which Committee shall administer the Plan as provided in Section
1.3 hereof.
"Common Stock" shall mean the $.01 par value Class A Common
Stock of the Company.
"Company" shall mean OpTel Inc., a Delaware corporation.
"Compensation" shall mean the base salary, overtime, and
commissions paid to an Employee by the Company or a Subsidiary in accordance
with established payroll procedures.
"Eligible Employee" shall mean with respect to an Option
Period an Employee who, at the time of the Offering Date on which such Option
Period commences, (a) is scheduled to work at least 20 hours per week, (b) whose
customary employment is more than five (5) months in a calendar year, and (c)
has been employed with the Company or a Subsidiary for at least six months;
provided, however, with respect to the first Option Period only, the
requirements of clause (c) above shall be waived.
"Employee" shall mean any employee of the Company or a
Subsidiary.
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"Exercise Date" shall mean (i) if the Option Date is January 1
of any given year, June 30 of that same year, and (ii) if the Option Date is
July 1 of any given year, December 31 of that same year; provided, however, the
first Exercise Date shall mean December 31, 1998.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fair Market Value" means the closing price for the Common
Stock as officially reported on the relevant date (or if there were no sales on
such date, on the next preceding date on which such closing price was recorded)
by the principal national securities exchange on which the Common Stock is
listed or admitted to trading, or if the Common Stock is not listed or admitted
to trading on any such national securities exchanges, the closing price as
furnished by the National Association of Securities Dealers through Nasdaq or a
similar organization if Nasdaq is no longer reporting such information, or, if
the Common Stock is not quoted on Nasdaq, as determined in good faith by
resolution of the Board (whose determination shall be conclusive), based on the
best information available to it; notwithstanding the foregoing, the Fair Market
Value of Common Stock on the IPO Date shall be the initial offering price to the
public pursuant to an effective registration statement under the Securities Act
of 1933, as amended.
"IPO Date" shall mean the date on which the Company's Common
Stock is first offered to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended.
"Offering Date" shall mean January 1, or July 1, of each year
until termination of the Plan; provided, however, the first Offering Date shall
mean the IPO Date.
"Option Period" shall mean the period beginning on an Offering
Date and ending on the next succeeding Exercise Date.
"Option Price" shall mean the purchase price of a share of
Common Stock hereunder as provided in Section 3.1 hereof.
"Participant" shall mean any Eligible Employee who elects to
participate.
"Plan" shall mean this OpTel Inc. 1998 Employee Stock Purchase
Plan, as the same may be amended from time to time.
"Plan Account" shall mean a bookkeeping account established
and maintained by the Company in the name of a Participant.
"Subsidiary" shall mean any present or future corporation
which (i) is a corporation in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
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corporations in such chain and (ii) is designated as a participating subsidiary
in the Plan by the Board or the Committee.
1.3 ADMINISTRATION OF PLAN
The Plan shall be administered by the Committee which shall be
composed of not less than three officers of the Company. Each member of the
Committee shall serve for a term commencing on a date specified by the Board and
continuing until he or she dies or resigns or is removed from office by the
Board. The Committee shall have the power to make, amend and repeal rules and
regulations for the interpretation and administration of the Plan consistent
with the qualifications of the plan under Section 423 of the Code, and the
Committee also is authorized to change the Option Periods, Offering Dates and
Exercise Dates under the Plan by providing written notice to all Employees at
least 15 days prior to the Exercise Date following which such changes will take
effect. The Committee may delegate administrative tasks under the Plan to one or
more agents. The Committee's interpretation and decisions in respect to the Plan
shall be final and conclusive.
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY
An Eligible Employee may participate in an Option Period if
immediately after the applicable Offering Date, such Employee would not be
deemed for the purposes of Section 423(b)(3) of the Code to possess 5% or more
of the total combined voting power or value of all classes of stock of the
Company or any Subsidiary.
2.2 ELECTION TO PARTICIPATE; PAYROLL DEDUCTIONS
An Eligible Employee may participate in the Plan only by means
of payroll deduction. An Eligible Employee may elect to participate in the Plan
during an Option Period by delivering to the Company in the calendar month
preceding the Offering Date on which such Option Period commences a written
payroll deduction authorization on a form prescribed by the Company; provided,
however, that for the Option Period commencing on the IPO Date, an Eligible
Employee may elect to participate in the Plan at any time designated by the
Company on or prior to the IPO Date. Payroll deductions (a) shall be equal to at
least 1%, but not more than 10%, of the Participant's Compensation during the
Option Period; (b) must equal at least five dollars ($5.00) per pay period; and
(c) must be expressed as a whole number percentage, subject to the provisions of
Section 3.2 and 3.3 hereof. Amounts deducted from a Participant's Compensation
pursuant to this Section 2.2 shall be credited to the Participant's Plan
Account.
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2.3 CONTINUED EFFECTIVENESS OF ELECTING TO PARTICIPATE
An election to participate pursuant to Section 2.2, once made,
shall remain in force for subsequent Option Periods until revoked or modified.
Any revocation or modification must be made on a form prescribed by the Company
and submitted to the Company at least eight business days prior to the
subsequent Option Period.
2.4 LEAVE OF ABSENCE
During leaves of absence approved by the Company and meeting
the requirements of Regulation Section 1.421-7(h)(2) under the Code, a
Participant may continue participation in the Plan by making cash payments to
the Company on his or her normal payday equal to his or her authorized payroll
deduction.
ARTICLE III
PURCHASE OF SHARES
3.1 OPTION GRANT; OPTION PRICE
On each Offering Date of an Option Period with respect to
which a Participant elects to participate, subject to Section 3.3, the
Participant will automatically and without any action on his or her part be
granted an option to purchase at the Option Price the number of shares (or part
thereof) of Common Stock which can be purchased with the amount that shall be in
the Participant's Plan Account on the Exercise Date. The Option Price per share
of the Common Stock sold to Participants hereunder shall be 85% of the Fair
Market Value of such share on either the Offering Date or the Exercise Date of
the Option Period, whichever is lower, but in no event shall the Option Price
per share be less than the par value per share of the Common Stock.
3.2 PURCHASE OF SHARES
(a) On each Exercise Date on which he or she is employed, each
Participant will automatically and without any action on his or her part
exercise his or her option to purchase at the Option Price the number of shares
(or part thereof) of Common Stock which can be purchased with the amount in the
Participant's Plan Account; provided, however, that no Participant shall be
permitted to purchase more than 4,000 shares of Common Stock (as adjusted
pursuant to Section 4.2 hereof) pursuant to this Plan during an Option Period.
The balance, if any, remaining in the Participant's Plan Account (after exercise
of his or her option) as of an Exercise Date shall be carried forward to the
next Option Period, unless the Participant has elected to withdraw from the Plan
pursuant to Section 5.1 hereof or to revoke an election to participate pursuant
to Section 2.3 hereto.
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(b) As soon as practicable following each Exercise Date, shares of
Common Stock acquired by each Participant shall be credited to an account in the
Participant's name with a brokerage firm selected by the Committee to hold the
shares in street name.
(c) The balance, if any, remaining in the Participant's Plan Account
after exercise of his or her option on the last Exercise Date under this Plan
shall be refunded to him or her within 21 days after such Exercise Date.
3.3 LIMITATIONS ON PURCHASE
No Employee shall be granted an option under the Plan which
permits his or her rights to purchase Common Stock under the Plan or any other
employee stock purchase plan of the Company or any of its Subsidiaries to accrue
at a rate which exceeds $25,000 (as measured by the Fair Market Value of such
Common Stock at the time the option is granted) for each calendar year such
option is outstanding. For purposes of this Section 3.3, the right to purchase
Common Stock under an option accrues when the option (or any portion thereof)
becomes exercisable, and the right to purchase Common Stock which has accrued
under one option under the Plan may not be carried over to any other option.
3.4 TRANSFERABILITY OF RIGHTS
An option granted under the Plan shall not be transferable and
is exercisable only by the Participant. No option or interest or right therein
or part thereof shall be liable for the debts, contracts or engagements of the
Participant or his or her successors in interest or shall be subject to
disposition by alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation
of law by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy) and any attempt at disposition
thereof shall be null and void and of no effect.
ARTICLE IV
PROVISIONS RELATING TO COMMON STOCK
4.1 COMMON STOCK AVAILABLE FOR ISSUANCE
There shall be available for issuance under this Plan that
number of shares of Common Stock that equals 1% of the Common Stock outstanding,
on the IPO Date, on a fully diluted basis, issued or issuable under derivative
securities, subject to adjustment in accordance with Section 4.2 hereof. The
Company shall take all appropriate actions to reserve such available shares for
issuance under this Plan.
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4.2 ADJUSTMENT FOR CHANGES IN COMMON STOCK
In the event that adjustments are made in the number of
outstanding shares of Common Stock or the shares are exchanged for a different
class of stock of the Company by reason of stock dividend, stock split or other
subdivision, the Committee shall make appropriate adjustments in (a) the number
and class of shares or other securities that may be reserved for purchase
hereunder and (b) the Option Price.
4.3 MERGER, ACQUISITION OR LIQUIDATION
In the event of the merger or consolidation of the Company
into another corporation, the acquisition by another corporation of all or
substantially all of the Company's assets or 80% or more of the Company's then
outstanding voting stock or the liquidation or dissolution of the Company, the
date of exercise with respect to outstanding options shall be the business day
immediately preceding the effective date of such merger, consolidation,
acquisition, liquidation or dissolution unless the Committee administering the
Plan shall, in its sole discretion, provide for the assumption or substitution
of such options in a manner complying with Section 424(a) of the Code.
4.4 INSUFFICIENT SHARES
If the aggregate funds available for the purchase of Common
Stock on any Exercise Date would cause an issuance of shares in excess of the
number provided for in Section 4.1 hereof, (a) the Committee shall
proportionately reduce the number of shares that would otherwise be purchased by
each Participant in order to eliminate such excess, and (b) the Plan shall
automatically terminate immediately after such Exercise Date.
4.5 RIGHTS AS STOCKHOLDERS
With respect to shares of Common Stock subject to an option, a
Participant shall not be deemed to be a stockholder and shall not have any of
the rights or privileges of a stockholder. A Participant shall have the rights
and privileges of a stockholder when, but not until, the account in the
Participant's name with the brokerage firm selected by the Committee has been
credited following the exercise of his or her option.
ARTICLE V
TERMINATION OF PARTICIPATION
5.1 CESSATION OF CONTRIBUTIONS; VOLUNTARY WITHDRAWAL
(a) A Participant may cease payroll deductions during an Option Period
by delivering written notice of such cessation to the Company. Upon any such
cessation, such Participant may
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elect either to withdraw from the Plan pursuant to subsection (b) below or to
have amounts credited to his or her Plan Account held in the Plan for the
purchase of Common Stock pursuant to Section 3.2. A Participant who ceases
contributions to the Plan during any Option Period shall not be permitted to
resume contributions to the Plan during such Option Period.
(b) A Participant may withdraw from the Plan at any time by written
notice to the Company at least eight business days prior to the close of
business on an Exercise Date. Within 21 days after the notice of withdrawal is
delivered, the Company shall refund the entire amount, if any, in a
Participant's Plan Account to him or her, and thereupon, the Participant's
payroll deduction authorization, his or her interest in the Plan and his or her
option under the Plan shall terminate. Any Eligible Employee who withdraws from
the Plan may again become a Participant in accordance with Section 2.2 hereof.
5.2 TERMINATION OF ELIGIBILITY
(a) A Participant whose employment with the Company or a Subsidiary
terminates due to disability or retirement may elect by written notice to the
Company either to
(i) withdraw the entire amount, if any, in his or her Plan
Account, in which event such amount shall be refunded to the Participant by the
Company within 21 days of the notice, or
(ii) have the amount used to purchase shares of Common Stock
pursuant to Section 3.2 hereof on the next succeeding Exercise Date.
(b) If a Participant's employment with the Company or a Subsidiary
terminates for any reason other than retirement or disability, the amount in
such Participant's Plan Account will be refunded to the Participant or his or
her designated beneficiary or estate within 21 days of his or her termination of
employment.
(c) Upon payment by the Company to the Participant or his or her
beneficiary or estate or the remaining balance, if any, in Participant's Plan
Account, the Participant's interest in the Plan and the Participant's option
under the Plan shall terminate.
ARTICLE VI
GENERAL PROVISIONS
6.1 CONDITION OF EMPLOYMENT
Neither the creation of the Plan nor an Employee's
participation therein shall be deemed to create any right of continued
employment or in any way affect the right of the Company or a Subsidiary to
terminate an Employee at any time with or without cause.
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6.2 AMENDMENT OF THE PLAN
The Board may amend, suspend or terminate the Plan at any time
and from time to time; provided, however, that without approval of the Company's
stockholders given within 12 months before or after action by the Board, the
Board may not amend the Plan to increase the maximum number of shares subject to
the Plan or change the designation or class of Eligible Employees; provided,
further, however, that no amendment to the Plan may modify any option granted
prior to the time of the amendment which modification might reasonably be
expected to adversely affect the rights of any Participant, without the prior
written consent of such Participant.
Upon termination of the Plan, the balance in each
Participant's Plan Account shall be refunded within 21 days of such termination.
6.3 USE OF FUNDS; NO INTEREST PAID
All funds withheld or received by the Company for purchase of
Common Stock hereunder will be included in the general funds of the Company free
of any trust or other restriction and may be used for any corporate purpose. No
interest will be paid to any Participant or credited under the Plan.
6.4 CONDITION; TERM; APPROVAL BY STOCKHOLDERS
The effectiveness of the Plan is entirely conditioned upon the
occurrence of the IPO Date. No option may be granted during any period of
suspension of the Plan nor after termination of the Plan. If the Plan shall not
have received written stockholder approval prior to the first meeting following
the adoption of the Plan by the Board, the Plan will be submitted for the
approval of the Company's stockholders at such first meeting. Options may be
granted prior to such stockholder approval; provided, however, that such options
shall not be exercisable prior to the time when the Plan is approved by the
stockholders; provided further that if such approval has not been obtained by
December 31, 1998, all options previously granted under the Plan shall thereupon
be canceled and become null and void.
6.5 EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other
compensation or incentive plans in effect for the Company or any Subsidiary.
Nothing in this Plan shall be construed to limit the right of the Company or any
Subsidiary (a) to establish any other forms of incentives or compensation for
employees of the Company or any Subsidiary or (b) to grant or assume options
otherwise than under this Plan in connection with any proper corporate purpose,
including, but not by way of limitation, the grant or assumption of options in
connection with the acquisition, by
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purchase, lease, merger, consolidation or otherwise, of the business, stock or
assets of any corporation, firm or association.
6.6 CONFORMITY TO SECURITIES LAWS
Notwithstanding any other provision of this Plan, this Plan
and the participation in this Plan by any individual who is then subject to
Section 16 of the Exchange Act shall be subject to any additional limitations
set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent permitted
by applicable law, the Plan shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.
6.7 GOVERNING LAW
The Plan and all rights and obligations thereunder shall be
construed and enforced in accordance with the laws of the State of Texas.
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