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EXHIBIT 10.5
THE HOME DEPOT, INC.
RESTATED AND AMENDED EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of The Home Depot, Inc. Employee Stock Purchase
Plan (the "Plan") is to encourage and enable eligible employees of The
Home Depot, Inc. (the "Company") to acquire proprietary interests in
the Company through the ownership of Common Stock of the Company. The
Company believes that employees who participate in the Plan will have a
closer identification with the Company by virtue of their ability as
stockholders to participate in the Company's growth and earnings. 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"). Accordingly, the provisions of the Plan
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. Definitions. The following words or terms have the following meanings:
(a) "Plan" shall mean this The Home Depot, Inc. Employee Stock
Purchase Plan.
(b) "Company" shall mean The Home Depot, Inc.
(c) "Board of Directors" shall mean Board of Directors of the
Company or the Executive Committee of such Board.
(d) "Shares", "Stock" or "Common Stock" shall mean shares of the
$.05 par value Common Stock of the Company.
(e) "Committee" shall mean the committee of the Board of Directors
of the Company appointed to administer the Plan.
(f) "Subsidiary" shall mean any corporation if, at the time of the
granting of an option to purchase Common Stock under the Plan,
the Company owns or controls directly or indirectly more than
50 percent of the total voting power represented by all
classes of stock issued by such corporation.
(g) "Eligible Employee" shall mean a person regularly employed by
the Company or a Subsidiary on the effective date of any
offering of stock pursuant to the Plan; provided, however,
that no person shall be considered an Eligible Employee unless
he or she is customarily employed by the Company or a
Subsidiary for more than twenty hours per week and more than
five months in a
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calendar year; and provided further, that the Board of
Directors may exclude the employees of any specified
Subsidiaries from any offering under the Plan.
(h) "Annual Pay" shall mean an amount equal to the sum of (i) the
annual basic rate of pay of an Eligible Employee as determined
from the payroll records of the Company or a Subsidiary on the
effective date of an offer of Stock made pursuant to the Plan,
and (ii) the amount paid to the Eligible Employee by the
Company or a Subsidiary under any incentive compensation or
bonus plan during the twelve-month period immediately
preceding the effective date of an offer of Stock made
pursuant to the Plan.
(i) "Market Price" shall mean the closing price of the Company's
Common Stock on the New York Stock Exchange.
(j) "Options" shall mean the right or rights granted to Eligible
Employees to purchase the Company's Common Stock under an
Offering made under the Plan and pursuant to such Eligible
Employees' elections to purchase.
(k) "Purchase Period" shall mean the number of calendar months
during which installment payments for stock purchased under
the Plan shall be made.
(l) "Subscription Period" shall mean that period of time
prescribed in any offer of Stock under the Plan beginning on
the first day employees may elect to purchase Shares and
ending on the last day such elections to purchase are
authorized to be received and accepted.
3. Shares Reserved for Plan. The Shares of the Company's Common Stock to
be sold to Eligible Employees under the Plan may, at the election of
the Company, be either treasury shares or shares originally issued for
such purpose. The maximum number of Shares which shall be reserved and
made available for sale under the Plan shall be 129,618,750. The Shares
reserved may be issued and sold pursuant to one or more offerings under
the Plan. With respect to each offering, the Board of Directors, or the
Committee will specify the number of Shares to be made available, the
length of the Subscription Period, the length of the Purchase Period
and such other terms and conditions not inconsistent with the Plan as
may be necessary or appropriate. In no event shall the Subscription
Period and the Purchase Period together exceed 27 months for any
offering.
In the event of a subdivision or combination of the Company's
Shares, the maximum number of Shares which may thereafter be issued and
sold under the
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Plan and the number of Shares under elections to purchase at the time
of such subdivision or combination will be proportionately increased or
decreased, the terms relating to the price at which Shares under the
elections to purchase will be sold will be appropriately adjusted, and
such other action will be taken as in the opinion of the Board of
Directors deems appropriate under the circumstances. In case of a
reclassification or other change in the Company's Shares, the Board of
Directors also will make appropriate adjustments.
4. Administration of the Plan. The Plan shall be administered by a
Committee consisting of not less than two directors of the Company who
shall be appointed by the Board of Directors. The Committee shall be
vested with full authority to make, administer and interpret such
equitable rules and regulations regarding the Plan or to make
amendments to the Plan itself as it may deem advisable; provided,
however, that no such amendment shall increase the maximum number of
shares available for sale under the Plan, otherwise than as required to
reflect a subdivision or a combination as provided in Article 3 hereof,
nor shall any such amendment act to expand the persons eligible to
participate in the Plan beyond the employees of the Company and
Subsidiaries. Any determination, decision, or action of the Committee
in connection with the construction, interpretation, administration, or
application of the Plan shall be final, conclusive and binding upon all
Eligible Employees and any and all persons claiming under or through an
Eligible Employee.
The Committee may act by a majority vote at a regular or
special meeting of the Committee or by decision reduced to writing and
signed by a majority of the 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
the Board of Directors.
5. Participation in the Plan. Options to purchase the Company's Common
Stock under the Plan shall be granted only to Eligible Employees.
Options to purchase Shares shall be granted to all Eligible Employees
of the Company or Subsidiaries whose Eligible Employees are granted
such rights; provided, however, that the Board of Directors may
determine that any offering of Common Stock under the Plan will not be
extended to highly compensated employees as defined in Section 414(q)
of the Code, and provided further that in no event may an employee be
granted an option under this Plan if such employee, immediately after
the option is granted, owns Stock possessing five percent or more of
the total combined voting power or value of all classes of capital
stock of the Company or Subsidiaries.
For the purposes of determining stock ownership and the
limitations to purchase under this section, the rules of Section 424(d)
of the Code shall apply and Stock which the employee may purchase under
all outstanding options shall be treated as Stock owned by the
employee.
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6. Purchase Price. The purchase price for Shares purchased pursuant to the
Plan (except as otherwise provided herein) shall be the lower of (a) 85
percent of the Market Price on the first day of the Purchase Period; or
(b) 85 percent of the Market Price on the last day of the Purchase
Period; or if no Shares were traded on such day, on the last day prior
thereto on which Shares were traded.
7. Method of Payment. Except as provided in Sections 15 and 16, all
payments for Shares purchased pursuant to the Plan shall be made in
installments through payroll deductions, with no right of prepayment.
Each Eligible Employee electing to purchase Shares will authorize the
Company to withhold a designated amount from his regular weekly,
bi-weekly, semimonthly or monthly pay for each payroll period during
the Purchase Period. All such payroll deductions made for an Eligible
Employee shall be credited to his account under the Plan. At the end of
the Purchase Period, each Eligible Employee shall receive in cash the
balance remaining in his account, if any, after the purchase of the
number of Shares covered by his option to purchase Shares.
8. Employee's Election To Purchase - Grants of Options. In order to
participate in the Plan, an Eligible Employee must sign an election to
purchase Shares on a form provided by the Company stating the Eligible
Employee's desire to purchase Shares under the Plan and showing the
amount which the Eligible Employee elects to have withheld from his pay
for such payroll period during the Purchase Period. The election to
purchase Shares must be delivered on or before the last day of the
Subscription Period to the person or office designated to receive and
accept such elections. Subject to the limitations set forth in
Paragraph 9, each participating Eligible Employee shall be granted an
option to purchase a fixed maximum number of Shares determined by the
following procedure:
Step 1 - Determine the aggregate amount which will be
withheld from the Eligible Employee's pay
during the Purchase Period;
Step 2 - Determine the figure which represents the
lower of (a) 85 percent of the Market Price
on the first day of the Purchase Period; or
(b) 85 percent of the Market Price on the
last day of the Purchase Period; or if no
Shares were traded on such day, on the last
day prior thereto on which Shares were
traded.
Step 3 - Divide the figure determined in Step 1 by
the figure determined in Step 2. This final
figure shall be the fixed maximum number of
Shares for which the Eligible Employee may
be granted an option to purchase.
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In the event the total maximum number of Shares resulting from
all elections to purchase under any offering of Shares under the Plan
exceeds the number of Shares offered, the Company reserves the right to
reduce the maximum number of Shares which Eligible Employees may
purchase pursuant to their elections to purchase, to allot the Shares
available in such manner as it shall determine, but generally prorata
to subscriptions received and to grant options to purchase only for
such reduced number of Shares.
All Shares included in any offering under the Plan in excess
of the total number of Shares which all Eligible Employees elect to
purchase and all Shares with respect to which elections to purchase are
canceled as provided in Paragraph 12 shall continue to be reserved for
the Plan and shall be available for inclusion in any subsequent
offering under the Plan.
9. Limitations Of Number Of Shares Which May Be Purchased. The following
limitations shall apply with respect to the number of Shares which may
be purchased by each Eligible Employee who elects to participate in an
offering under the Plan;
(a) No Eligible Employee may purchase Shares during any one
offering pursuant to the Plan for an aggregate purchase price
(which shall be computed on an annual basis in the event the
Purchase Period is more or less than 12 months) in excess of
20 percent of his Annual Pay; and
(b) No Eligible Employee shall be granted an option to purchase
Shares under the Plan if such Eligible Employee immediately
after such option is granted, owns stock or holds options to
purchase stock possessing five percent or more of the total
combined voting power or value of the capital stock of the
Company or of any Subsidiary; and
(c) No Eligible Employee may be granted an option to purchase
Shares which permits his right to purchase Stock under the
Plan and all other stock option plans of the Company and of
any Subsidiary pursuant to Section 423 of the Code to accrue
at a rate which exceeds in any one calendar year $25,000 of
the fair market value of such Stock (determined on the date
the option to purchase is granted).
An Eligible Employee may elect to purchase less than the
number of Shares which he is entitled to elect to purchase.
10. Stockholder Rights. Only upon the issuance of Shares to an Eligible
Employee or his agent (and only in respect to such Shares purchased)
shall an Eligible Employee obtain the rights of stockholders,
including, without limitation, the right to vote the shares or receive
dividends or other distributions thereon. The
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Shares purchased will be issued as soon as practicable after the last
day of the Purchase Period.
11. Rights To Purchase Shares Not Transferable. An Eligible Employee's
rights under his election to purchase Shares may not be sold, pledged,
assigned or transferred in any manner otherwise than by will or the
laws of descent and distribution. If this provision is violated the
right of the Eligible Employee to purchase Shares shall terminate and
the only right remaining under such Eligible Employee's election to
purchase will be to have paid over to the person entitled thereto the
amount then credited to the Eligible Employee's account.
12. Cancellation of Election to Purchase. An Eligible Employee who has
elected to purchase Shares may cancel his election in its entirety or
may partially cancel his election by reducing the amount which he has
authorized the Company to withhold from his pay for each payroll period
during the Purchase Period. Any such full or partial cancellation shall
be effective upon the delivery by the Eligible Employee of written
notice of cancellation to the office or person designated to receive
elections. Such notice of cancellation must be so delivered before the
close of business on the last business day of the Purchase Period. If
an Eligible Employee partially cancels his original election by
reducing the amount authorized to be withheld from his pay, he shall
continue to make installment payments at the reduced rate for the
remainder of the Purchase Period. Only one partial cancellation may be
made during a Purchase Period.
An Eligible Employee's rights upon the full or partial
cancellation of his election to purchase Shares shall be limited to the
following:
(a) He may receive in cash, as soon as practicable after
delivery of the notice of cancellation, the amount
then credited to his account, except, in the case of
a partial cancellation, he must retain in his account
the cumulative installment payments made through the
date of cancellation until the end of the Purchase
Period, or
(b) He may have the amount credited to his account at the
time the cancellation becomes effective applied to
the purchase of the number of shares such amount will
then purchase at the end of the Purchase Period.
13. Leave Of Absence Or Layoff. An Eligible Employee purchasing Stock under
the Plan who is granted a leave of absence (including a military leave)
or is laid off during the Purchase Period may at that time (on a form
provided by the Company) elect one of the following:
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(a) He may suspend payments during the leave of absence, or, in
the case of a layoff, he may suspend payments for not more
than 90 days, but not in either case beyond the last month of
the Purchase Period, or
(b) He may cancel his election in accordance with Paragraph 12.
If Option (a) is elected, the Eligible Employee at the end of
the suspension period must make up the deficiency in his account either
by immediate lump sum payment or with installment payments so that,
assuming the maximum purchase price per share, payment for the maximum
number of Shares covered by his option will be completed in the last
month of the Purchase Period. If the Eligible Employee elects to make
increased installment payments, he may, nevertheless, at any time make
up his remaining deficiency by a lump sum payment.
If an Eligible Employee does not return to active service upon
the expiration of his leave of absence or within 90 days from the date
of his layoff, his election to purchase shall be deemed to have been
canceled at the time of the leave of absence or layoff.
In no event shall an Eligible Employee be permitted to
complete payment for any Shares after 27 months from the date of the
commencement of the Subscription Period.
14. Effect of Failure To Make Payments When Due. If in any payroll period,
for any reason not set forth in Paragraph 13, an Eligible Employee who
has filed an election to purchase Shares under the Plan has no pay or
his pay is insufficient (after other authorized deductions) to permit
deduction of his installment payment, such payment may be made in cash
at the time. If not so made, the Eligible Employee, when his pay is
again sufficient to permit the resumption of installment payments, must
pay in cash the amount of the deficiency in his account or arrange for
uniformly increased installment payments so that, assuming the maximum
purchase price per share, payment for the maximum number of Shares
covered by his option will be completed in the last month of the
Purchase Period. If the Eligible Employee elects to make increased
installment payments, he may, nevertheless, at any time make up the
remaining deficiency by a lump sum payment.
Subject to the above and other provisions of the Plan
permitting postponement, the Company may treat the failure by an
Eligible Employee to make any payment as a cancellation of his election
to purchase shares. Such cancellation will be affected by mailing
notice to him at his last known business or home address. Upon such
mailing, his only right will be to receive in cash the amount credited
to his account.
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15. Retirement and Disability. If an Eligible Employee who has elected to
purchase Shares retires or becomes disabled within 3 months prior to
the end of a Purchase Period, he may, by delivering written notice to
the office or person designated to receive elections no later than the
end of the Purchase Period, elect to:
(a) Have the amount credited to his account at the time of his
retirement or disability applied to the purchase of the number
of Shares such amount will purchase at the end of the Purchase
Period; or
(b) Make a lump sum payment in the amount of any deficiency for
the remaining portion of the Purchase Period; or
(c) Cancel his election to purchase Shares in accordance with the
provisions of Paragraph 12.
If no such notice is given within such period, the election
will be deemed canceled as of the date of retirement or disability and
the only right of the Eligible Employee will be to receive in cash the
amount credited to his account. For purposes of the Plan, an Eligible
Employee shall be considered to have retired if he terminates
employment with the Company or a Subsidiary after having completed at
least 10 years of continuous employment and attained age 55. An
Eligible Employee shall be considered disabled if he becomes eligible
for permanent and total disability benefits under the Company's
long-term disability plan.
16. Death. If an Eligible Employee, including a retired or disabled
Eligible Employee described in Section 15, dies and has an election to
purchase Shares in effect at the time of his death, the legal
representative of the deceased Eligible Employee may, by delivering
written notice to the office or person designated to receive elections
no later than the end of the Purchase Period, elect to:
(a) Have the amount credited to the Participant's account at the
time of his death applied to the purchase of the number of
Shares such amount will purchase at the end of the Purchase
Period; or
(b) Make a lump sum payment in the amount of any deficiency for
the remaining portion of the Purchase Period; or
(c) Cancel the election to purchase Shares in accordance with the
provisions of Paragraph 12.
If no such notice is given within such period, the election
will be deemed canceled as of the date of death, and the only right of
such legal representative will be to receive in cash the amount
credited to the deceased Eligible Employee's account.
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17. Termination of Employment Other Than For Retirement, Disability Or
Death. If an Eligible Employee's employment with the Company and all
Subsidiaries and other affiliates of the Company is terminated for any
reason other than retirement or disability within 3 months prior to the
end of a Purchase Period or death prior to the end of the Purchase
Period, his election to purchase shall thereupon be deemed canceled as
of the date on which his employment ended. In such an event, no further
payments under such election will be permitted, and the Eligible
Employee's only right will be to receive in cash the amount credited to
his account.
18. Application of Funds. All funds received by the Company in payment for
Shares purchased under the Plan and held by the Company at any time may
be used for any valid corporate purpose.
19. Governmental Approvals or Consents. The Plan shall not be effective
unless it is approved by the stockholders of the Company within 12
months after the Plan is adopted by the Board of Directors of the
Company. The Plan and any offerings and sales to Eligible Employees
under it are subject to any governmental approvals or consents that may
be or become applicable in connection therewith. The Board of Directors
of the Company may make such changes in the Plan and include such terms
in any offering under the Plan as may be necessary or desirable, in the
opinion of counsel, so that the Plan will comply with the rules and
regulations of any governmental authority and so that Eligible
Employees participating in the Plan will be eligible for tax benefits
under the United States Internal Revenue Code or the laws of any state.