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Exhibit 10.6
CONNECTED CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
The Connected Corporation 2000 Employee Stock Purchase Plan (the
"Plan") is intended to provide a method whereby employees of Connected
Corporation (the "Company") will have an opportunity to acquire a proprietary
interest in the Company through the purchase of shares of the Company's $.001
par value common stock (the "Common Stock"). It is the intention of the Company
to have the Plan qualify as an "employee stock purchase plan" under Section 423
of the Internal Revenue Code of 1986, as amended (the "Code"). The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that Section of
the Code.
2. Eligible Employees.
(a) All employees of the Company (including employees who are directors
of the Company) or any of its participating subsidiaries shall be eligible to
receive options under this Plan to purchase the Company's Common Stock. In no
event may an employee be granted an option if such employee, immediately after
the option is granted, owns stock possessing five (5%) percent or more of the
total combined voting power or value of all classes of stock of the Company or
of its parent corporation or subsidiary corporation as the terms "parent
corporation" and "subsidiary corporation" are defined in Section 424(e) and (f)
of the Code. For purposes of determining stock ownership under this paragraph,
the rules of Section 424(d) of the Code shall apply and stock which the employee
may purchase under outstanding options shall be treated as stock owned by the
employee.
(b) For the purpose of this Plan, the term employee shall not include
an employee whose customary employment is for not more than twenty (20) hours
per week or is for not more than five (5) months in any calendar year.
3. Stock Subject to the Plan.
The stock subject to the options granted hereunder shall be shares of
the Company's authorized but unissued Common Stock or shares of Common Stock
reacquired by the Company, including shares purchased in the open market. The
aggregate number of shares which may be issued pursuant to the Plan is 500,000,
subject to increase or decrease by reason of stock split-ups, reclassifications,
stock dividends, changes in par value and the like. If the number of shares of
Common Stock reserved and available for any Offering Period (as defined
hereafter) is insufficient to satisfy all purchase requirements for that
Offering Period, the reserved and available shares for that Offering Period
shall be apportioned among participating employees in proportion to their
options.
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4. Offering Periods and Stock Options.
(a) Six month periods during which payroll deductions will be
accumulated under the Plan ("Offering Periods") will commence on October 1 and
April 1 of each year and end on March 31 or September 30 next following the
commencement date; provided, however, the first Offering Period shall commence
on the date on which the Company's Common Stock commences public trading
following the time when the Company's Registration Statement on Form S-1
relating to the Company's initial public offering is declared effective by the
Securities and Exchange Commission and will end on September 30, 2000.
Thereafter the Offering Periods will commence on October 1 and April 1. Each
Offering Period includes only regular pay days falling within it. The Offering
Commencement Date is the first day of each Offering Period. The Offering
Termination Date is the applicable date on which an Offering Period ends under
this Section.
(b) On each Offering Commencement Date, the Company will grant to each
eligible employee who is then a participant in the Plan an option to purchase on
the Offering Termination Date at the Option Exercise Price, as provided in this
paragraph (b), that number of full shares of Common Stock reserved for the
purpose under the Plan as his or her accumulated payroll deductions on the
Offering Termination Date (including any amount carried forward pursuant to
Article 8 hereof) will pay for at the Option Exercise Price; provided that such
employee remains eligible to participate in the Plan throughout such Offering
Period. The Option Exercise Price for each Offering Period shall be the lesser
of (i) eighty-five percent (85%) of the fair market value of the Common Stock on
the Offering Commencement Date, or (ii) eighty-five percent (85%) of the fair
market value of the Common Stock on the Offering Termination Date, in either
case rounded up to avoid fractions other than multiples of 1/8. In the event of
an increase or decrease in the number of outstanding shares of Common Stock
through stock split-ups, reclassifications, stock dividends, changes in par
value and the like, an appropriate adjustment shall be made in the number of
shares and Option Exercise Price per share provided for under the Plan, either
by a proportionate increase in the number of shares and proportionate decrease
in the Option Exercise Price per share, or by a proportionate decrease in the
number of shares and a proportionate increase in the Option Exercise Price per
share, as may be required to enable an eligible employee who is then a
participant in the Plan to acquire on the Offering Termination Date that number
of full shares of Common Stock as his accumulated payroll deductions on such
date will pay for at the Option Exercise Price, as so adjusted.
(c) For purposes of this Plan, the term "fair market value" on any date
means, if the Common Stock is listed on a national securities exchange or on the
NASDAQ National Market, the average of the high and low sales prices of the
Common Stock on such date on such exchange or as reported on the NASDAQ National
Market or, if the Common Stock is traded in the over-the-counter securities
market, but not on the NASDAQ National Market, the average of the high and low
bid quotations for the Common Stock on such date, each as published in the Wall
Street Journal. If no shares of Common Stock are traded on the Offering
Commencement Date or Offering Termination Date, the fair market value will be
determined by taking the
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average of the fair market values on the immediately preceding and the next
following business days on which shares of Common Stock are traded.
(d) For purposes of this Plan the term "business day" as used herein
means a day on which there is trading on a national securities exchange or the
NASDAQ National Market on which the Common Stock is listed.
(e) No employee shall be granted an option which permits his or her
rights to purchase Common Stock under the Plan and any similar plans of the
Company or any parent or participating subsidiary corporations to accrue at a
rate which exceeds $25,000 of fair market value of such stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding at any time. The purpose of the limitation in the preceding sentence
is to comply with and shall be construed in accordance with Section 423(b)(8) of
the Code.
5. Exercise of Option.
Each eligible employee who continues to be a participant in the Plan on
the Offering Termination Date shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose under the Plan as
his or her accumulated payroll deductions on such date, plus any amount carried
forward pursuant to Article 8 hereof, will pay for at the Option Exercise Price,
but in no event may an employee purchase shares of Common Stock in excess of
2,000 shares of Common Stock on any Offering Termination Date. If a participant
is not an employee on the Offering Termination Date and throughout an Offering
Period, he or she shall not be entitled to exercise his or her option. All
options issued under the Plan shall, unless exercised as set forth herein,
expire at the end of the Offering Termination Date with respect to the Offering
Period during which such options were issued.
6. Authorization for Entering Plan.
(a) An eligible employee may enter the Plan by filling out, signing and
delivering to the Chief Financial Officer of the Company or his or her designee
an authorization ("Authorization"):
(i) stating the amount to be deducted regularly from his or her pay;
(ii) authorizing the purchase of Common Stock for him or her in each
Offering Period in accordance with the terms of the Plan;
(iii) specifying the exact name in which Common Stock purchased for
him or her is to be issued in accordance with Article 11 hereof;
and
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(iv) at the discretion of the employee in accordance with Article 14,
designating a beneficiary who is to receive any Common Stock
and/or cash in the event of his or her death.
Such Authorization must be received by the Chief Financial Officer of the
Company or his designee at least ten (10) business days before an Offering
Commencement Date.
(b) The Company will accumulate and hold for the employee's account the
amounts deducted from his or her pay. No interest will be paid thereon.
Participating employees may not make any separate cash payments into their
account.
(c) Unless an employee files a new Authorization or withdraws from the
Plan, his or her deductions and purchases under the Authorization he or she has
on file under the Plan will continue as long as the Plan remains in effect. An
employee may increase or decrease the amount of his or her payroll deductions as
of the next Offering Commencement Date by filling out, signing and delivering to
the Chief Financial Officer of the Company or his or her designee a new
Authorization. Such new Authorization must be received by the Chief Financial
Officer of the Company or his or her designee at least ten (10) business days
before the date of such next Offering Commencement Date.
7. Allowable Payroll Deductions.
An employee may authorize payroll deductions in any even dollar amount
up to but not more than ten percent (10%) of his or her base pay; provided,
however, that the minimum deduction in respect of any payroll period shall be
one percent (1%) of his or her base pay but in no event less than five dollars
($5); and provided further that the maximum percentage shall be reduced to meet
the requirements of Section 4(e) hereof. Base pay means regular straight-time
earnings and, if applicable, commissions, but excluding payments for overtime,
bonuses, and other special payments.
8. Unused Payroll Deductions.
Only full shares of Common Stock may be purchased. Any balance remaining
in an employee's account after a purchase will be reported to the employee and
will be carried forward to the next Offering Period. However, in no event will
the amount of the unused payroll deductions carried forward from a payroll
period exceed the Option Exercise Price per share for the immediately preceding
Offering Period. If for any Offering Period the amount of unused payroll
deductions should exceed the Option Exercise Price per share, the amount of the
excess for any participant shall be refunded to such participant, without
interest.
9. Change in Payroll Deductions.
Deductions may not be increased or decreased during an Offering Period.
10. Withdrawal from the Plan.
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(a) An employee may withdraw from the Plan and withdraw all but not less
than all of the payroll deductions credited to his or her account under the Plan
at any time prior to the Offering Termination Date by delivering a notice to the
Chief Financial Officer of the Company or his or her designee (a "Withdrawal
Notice") in which event the Company will promptly refund without interest the
entire balance of such employee's deductions not theretofore used to purchase
Common Stock under the Plan.
(b) If an employee withdraws from the Plan, the employee's rights under
the Plan will be terminated and no further payroll deductions will be made. To
reenter, such an employee must file a new Authorization at least ten (10)
business days before the next Offering Commencement Date. Such Authorization
will become effective for the Offering Period that commences on such Offering
Commencement Date.
11. Issuance of Stock.
Upon written request, certificates for Common Stock will be issued and
delivered to participants as soon as practicable after each Offering Period.
Common Stock purchased under the Plan will be issued only in the name of the
employee, or in the case of employees who are not subject to Section 16 of the
Securities Exchange Act of 1934, as amended, if the employee's Authorization so
specifies, in the name of the employee and another person of legal age as joint
tenants with rights of survivorship.
12. No Transfer or Assignment of Employee's Rights.
An employee's rights under the Plan are his or hers alone and may not be
transferred or assigned to, or availed of by, any other person. Any option
granted to an employee may be exercised only by him or her, except as provided
in Article 13 in the event of an employee's death.
13. Termination of Employee's Rights.
(a) Except as set forth in the last paragraph of this Article 13, an
employee's rights under the Plan will terminate when he or she ceases to be an
employee because of retirement, resignation, lay-off, discharge, death, change
of status, failure to remain in the customary employ of the Company for greater
than twenty (20) hours per week or more than five (5) months in any calendar
year, or for any other reason. A Withdrawal Notice will be considered as having
been received from the employee on the day his or her employment ceases, and all
payroll deductions not used to purchase Common Stock will be refunded.
(b) If an employee's payroll deductions are interrupted by any legal
process, a Withdrawal Notice will be considered as having been received from him
or her on the day the interruption occurs.
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(c) Upon termination of the participating employee's employment because
of death, the employee's beneficiary (as defined in Article 14) shall have the
right to elect, by written notice given to the Chief Financial Officer of the
Company or his or her designee prior to the expiration of the thirty (30) day
period commencing with the date of the death of the employee, either (i) to
withdraw, without interest, all of the payroll deductions credited to the
employee's account under the Plan, or (ii) to exercise the employee's option for
the purchase of shares of Common Stock on the next Offering Termination Date
following the date of the employee's death for the purchase of that number of
full shares of Common Stock reserved for the purpose of the Plan which the
accumulated payroll deductions in the employee's account at the date of the
employee's death will purchase at the applicable Option Exercise Price (subject
to the maximum number set forth in Article 5), and any excess in such account
will be returned to said beneficiary. In the event that no such written notice
of election shall be duly received by the Chief Financial Officer of the Company
or his or her designee, the beneficiary shall automatically be deemed to have
elected to withdraw the payroll deductions credited to the employee's account at
the date of the employee's death and the same will be paid promptly to said
beneficiary, without interest.
14. Designation of Beneficiary.
A participating employee may file a written designation of a beneficiary
who is to receive any Common Stock and/or cash in case of his or her death. Such
designation of beneficiary may be changed by the employee at any time by written
notice. Upon the death of a participating employee and upon receipt by the
Company of proof of the identity and existence at the employee's death of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such Common Stock and/or cash to such beneficiary. In the event of the death of
a participating employee and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such employee's death, the Company
shall deliver such Common Stock and/or cash to the executor or administrator of
the estate of the employee, or if, to the knowledge of the Company, no such
executor or administrator has been appointed, the Company, in the discretion of
the Committee, may deliver such Common Stock and/or cash to the spouse or to any
one or more dependents of the employee as the Committee (as defined in Section
19) may designate. No beneficiary shall, prior to the death of the employee by
whom he or she has been designated, acquire any interest in the Common Stock or
cash credited to the employee under the Plan.
15. Termination and Amendments to Plan.
(a) The Plan may be terminated at any time by the Company's Board of
Directors, effective on the next following Offering Termination Date.
Notwithstanding the foregoing, it will terminate when all of the shares of
Common Stock reserved for the purposes of the Plan have been purchased. Upon
such termination or any other termination of the Plan, all payroll deductions
not used to purchase Common Stock will be refunded without interest.
(b) The Board of Directors reserves the right to amend the Plan from
time to time in any respect; provided, however, that no amendment shall be
effective without stockholder approval if the amendment would (a) except as
provided in Articles 3, 4, 24 and 25, increase the
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aggregate number of shares of Common Stock to be offered under the Plan, or (b)
change the class of employees eligible to receive options under the Plan.
16. Limitations of Sale of Stock Purchased Under the Plan.
Common Stock purchased under the Plan by employees who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended, may not be sold
for six (6) months after the Offering Termination Date on which such shares were
purchased, unless such transaction shall be exempt from Rule 16b-3 under the
Securities Exchange Act of 1934, as amended. Thereafter, such employees may sell
Common Stock purchased under the Plan at any time. Notwithstanding the
foregoing, because of certain Federal tax requirements, all employees will agree
by entering the Plan, promptly to give the Company notice of any such Common
Stock disposed of within two (2) years after the Offering Commencement Date on
which the related option was granted showing the number of such shares disposed
of. The employee assumes the risk of any market fluctuations in the price of
such Common Stock. Certificates representing shares of Common Stock purchased
under the Plan will bear a legend reflecting the restrictions on transfer set
forth herein.
17. Company's Payment of Expenses Related to Plan.
The Company will bear all costs of administering and carrying out the
Plan.
18. Participating Subsidiaries.
The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Committee (as defined in Article 19) to
participate in the Plan. The Committee shall have the power to make such
designation before or after the Plan is approved by the stockholders.
19. Administration of the Plan.
(a) The Plan shall be administered by a committee of "Non-Employee
Directors" as that term is defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, appointed by the Board of Directors of the Company,
which shall be the Company's Compensation Committee (the "Committee"). The
Committee shall consist of not less than two members of the Company's Board of
Directors. The Board of Directors may from time to time remove members from, or
add members to, the Committee. Vacancies on the Committee, howsoever caused,
shall be filled by the Board of Directors. No member of the Committee shall be
eligible to participate in the Plan while serving as a member of the Committee.
(b) The Committee shall select one of its members as chairman, and shall
hold meetings at such times and places as it may determine. Acts by a majority
of the Committee, or acts reduced to or approved in writing by all of the
members of the Committee, shall be the valid acts of the Committee.
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(c) The interpretation and construction by the Committee of any
provisions of the Plan or of any option granted under it shall be final. The
Committee may from time to time adopt such rules and regulations for carrying
out the Plan as it may deem best. With respect to persons subject to Section 16
of the Securities and Exchange Act of 1934, as amended, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under said Act. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by that Committee.
(d) Promptly after the end of each Offering Period, the Committee shall
prepare and distribute to each participating employee in the Plan a report
containing the amount of the participating employee's accumulated payroll
deductions as of the Offering Termination Date, the Option Exercise Price for
such Offering Period, the number of shares of Common Stock purchased by the
participating employee with the participating employee's accumulated payroll
deductions, and the amount of any unused payroll deductions either to be carried
forward to the next Offering Period, or returned to the participating employee
without interest.
(e) No member of the Board of Directors or the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted under it. The Company shall indemnify each member of the
Board of Directors and the Committee to the fullest extent permitted by law with
respect to any claim, loss, damage or expense (including counsel fees) arising
in connection with their responsibilities under this Plan.
20. Optionees Not Stockholders.
Neither the granting of an option to an employee nor the deductions from
his or her pay shall constitute such employee a stockholder of the Company with
respect to the shares covered by such option until such shares have been
purchased by and issued to him or her.
21. Application of Funds.
The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan may be used for any corporate
purposes, and the Company shall not be obligated to segregate participating
employees' payroll deductions.
22. Governmental Regulation.
(a) 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 stock.
(b) In this regard, the Board of Directors may, in its discretion,
require as a condition to the exercise of any option that a Registration
Statement under the Securities Act of 1933, as amended, with respect to the
shares of Common Stock reserved for issuance upon exercise of the option, be
effective.
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23. Transferability.
Neither payroll deductions credited to an employee's account nor any
rights with regard to the exercise of an option or to receive Common Stock under
the Plan may be assigned, transferred, pledged, or otherwise disposed of in any
way by the employee. Any such attempted assignment, transfer, pledge, or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with Article 10.
24. Effect of Changes of Common Stock.
If the Company should subdivide or reclassify the Common Stock which has
been or may be optioned under the Plan, or should declare thereon any dividend
payable in shares of such Common Stock, or should take any other action of a
similar nature affecting such Common Stock, then the number and class of shares
of Common Stock which may thereafter be optioned (in the aggregate and to any
individual participating employee) shall be adjusted accordingly.
25. Merger or Consolidation.
If the Company should at any time merge into or consolidate with another
corporation, the Board of Directors may, at its election, either (i) terminate
the Plan and refund without interest the entire balance of each participating
employee's payroll deductions, or (ii) entitle each participating employee to
receive on the Offering Termination Date upon the exercise of such option for
each share of Common Stock as to which such option shall be exercised the
securities or property to which a holder of one share of the Common Stock was
entitled upon and at the time of such merger or consolidation, and the Board of
Directors shall take such steps in connection with such merger or consolidation
as the Board of Directors shall deem necessary to assure that the provisions of
this Article 25 shall thereafter be applicable, as nearly as reasonably
possible. A sale of all or substantially all of the assets of the Company shall
be deemed a merger or consolidation for the foregoing purposes.
26. Withholding of Additional Federal Income Tax.
The Company will undertake such withholding in connection with the Plan
as it determines is appropriate, in its sole discretion.
27. Approval of Stockholders.
The Plan shall not take effect until approved by the holders of a
majority of the outstanding shares of Common Stock of the Company pursuant to
written consent, or by the holders of a majority of the shares of Common Stock
of the Company present and entitled to vote at a duly held meeting of
stockholders, which approval must occur no later than the end of the first
Offering Period after the date the Plan is adopted by the Board of Directors.
Options may be granted under the Plan prior and subject to such stockholder
approval. If the Plan is not so
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approved by the stockholders, all payroll deductions from participating
employees shall be returned without interest and all options so granted shall
terminate.
Date of Approval by the Board of Directors: March __, 2000
Date of Approval by the Stockholders:
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