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EXHIBIT 10.29
EMPLOYEE STOCK PURCHASE PLAN
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EXHIBIT 10.29
SOFAMOR DANEK GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF PLAN
The purpose of this Employee Stock Purchase Plan is to provide employees the
opportunity to purchase Shares of Sofamor Danek Group, Inc. (the "Company")
common stock through periodic offerings to be made during the term of the
Plan. Ownership by the employees strengthens the sense of identity between
the Company and its employees and furthers the recognition of the essential
unity of purpose among the Company, its employees, and its Shareholders and
allows it employees to share in the success of the Company. This Employee
Stock Purchase Plan is designed to facilitate the equity ownership by the
employees of the Company and to provide a convenient and economical means
through which such employees of the Company may own Shares of the Company
and a method by which the Company may assist in achieving this objective. An
aggregate of 60,000 of the Company's Shares have been reserved for inclusion
in this Plan.
2. DEFINITIONS
The following definitions apply to this Plan:
a. "Account" shall mean the payroll deduction account for each Plan
Participant, which is maintained as required by this Plan.
b. "Committee" shall mean the Committee appointed by the Board of
Directors of the Company in accordance with Section 4 of this Plan.
c. "Company" shall mean Sofamor Danek Group, Inc. and its Subsidiaries as
of the effective date of the Plan, and any future subsidiaries the
employees of which the Committee approves for participation in the
Plan.
d. "Custodian" shall mean a regulated bank, trust company, or brokerage
firm domiciled in the United States of America as may be designated by
the Company from time to time to receive contributions, purchase
Shares, and maintain Participant Accounts all for the benefit of the
Participants.
e. "Enrollment Dates" shall mean the dates on which any eligible Company
employee can become a Participant in the Plan as set forth in Section
6 hereof.
f. "Effective Date" shall mean November 1, 1991.
g. "Gross Earnings" shall mean the annual basic salary plus any overtime
wages of a Participant before payroll deductions for all usual and
normal employment withholding taxes or other purposes and shall not
include the value of any other direct or indirect benefits or
compensation.
h. "Offering Period" shall mean any three (3) month calendar quarter,
which begins on January 1, April 1, July 1 or October 1, the two month
period beginning November 1, 1991 and ending December 31, 1991, and the
thirty-one day period beginning October 1, 2006 and ending October 31,
2006.
i. "Option Price" shall mean the price paid by a Plan Participant for
each whole Share.
j. "Participant" shall mean an employee who satisfies the eligibility
criteria of this Plan and has elected in writing to participate in the
Plan.
k. "Plan" shall mean this Employee Stock Purchase Plan and all of its
amendments.
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l. "Share," "Shares" or "Stock" shall mean the common stock of Sofamor
Danek Group, Inc.
m. "Shareholder Approval" shall have the same meaning as set forth in
Section 423 of the United States Internal Revenue Code.
n. "Subsidiaries" or "Subsidiary" shall mean Sofamor Danek Group, Inc.,
Danek Medical, Inc., Warsaw Orthopedic, Inc. and Sofamor SNC
subsidiaries.
3. TERM OF PLAN
The operations of the Plan shall commence on the first day of November,
1991, and shall continue through October 31, 2006 unless terminated prior to
that date in accordance with Section 22 hereof.
4. ADMINISTRATION OF THE PLAN
The Plan will be administered by a Committee appointed by the Board of
Directors of the Company. At least two (2) members of the Committee shall be
members of the Board of Directors of the Company. Members of the Committee
shall not be eligible to participate in the Plan. The Committee will have
the sole authority to make rules and regulations for the administration of
the Plan, the sole discretion to administer and interpret the Plan, and the
interpretations and decisions of the Committee with regard to the Plan shall
be final and conclusive.
5. ELIGIBILITY TO PARTICIPATE IN THE PLAN
All employees of the Company will be eligible to participate in the Plan,
except for those employees who have been employed less than six months,
those employees whose customary employment is twenty hours or less per week,
and those employees whose customary employment is for not more than five
months in any calendar year.
6. PARTICIPATION IN THE PLAN
Eligible employees may enroll in the Plan within the thirty (30) days after
the Effective Date. Thereafter, eligible employees may enroll in the Plan on
each January 1, April 1, July 1 and October 1 while the Plan is in effect,
except that eligible employees may also enroll at any time within the thirty
(30) days after Shareholder Approval. On or before December 1, March 1, June
1 and September 1 of each year or such other dates as may be prescribed by
the Committee, those employees determined by the Committee to be eligible to
participate in the Plan shall be notified of their right to enroll in the
Plan. Each employee who is eligible to participate in the Plan may elect to
become a Participant by delivering to the Company an Employee Stock Purchase
Plan Enrollment Form ("Enrollment Form") on or before the date prescribed by
the Committee. Upon acceptance by the Company, the employee will become a
Participant as of the next enrollment date. The delivery of a completed
Enrollment Form by the employee to the Company shall constitute:
A. written notice of the employee's election to participate in the Plan;
B. authorization to the Company to make payroll deductions in accordance
with the terms of the Plan and pursuant to the Enrollment Form; and
C. direction to the Custodian to establish and operate an Account under
the terms of the Plan in the name of and for the benefit of the
employee.
The percentage rate of contribution contained in the Enrollment Form elected
by an employee shall remain in effect until changed by the employee pursuant
to Section 8 of this Plan. The Company shall designate a location at the
Company and at each Subsidiary where employees may receive a copy of the
Plan and all applicable forms, and may submit completed forms.
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7. PAYROLL DEDUCTIONS
The Company will maintain an Account for each Participant. With respect to
any offering made under this Plan, an employee may authorize a payroll
deduction in terms of whole number percentages up to a maximum of 5% (or
such other maximum percentage amount as determined by the Committee) of the
Gross Earnings an employee receives during an Offering Period or during such
portion of an Offering Period during which an employee participates in the
Plan. Payroll deductions will begin as soon as practical, but not later than
the first payroll period commencing after receipt and acceptance of a
Participant's enrollment form.
8. CONTRIBUTIONS AND PURCHASE OF SHARES
Each Participant, in any offering under this Plan, will be granted an
option, on the effective date of such offering, for as many whole number
Shares of Company stock as may be purchased on the Purchase Date, as
hereinafter defined, with the following amounts:
A. one percent (1%), two percent (2%), three percent (3%), four percent
(4%), or five percent (5%) of Gross Earnings received during the
Offering Period or that portion of the Offering Period during which an
employee participates in the Plan, which purchase will be paid by
payroll deductions during such Offering Period; and
B. the balance (if any) carried forward from the Participant's Account
for the preceding Offering Period pursuant to the third to the last
paragraph of this Section 8.
No employee may be granted an option to purchase Shares under this Plan, if
(a) the grant of that option permits an employee to purchase Shares under
this Plan and any other stock purchase plan of the Company to exceed
Twenty-Five Thousand ($25,000.00) of the fair market value of such Stock
during any calendar year, or (b) an employee owns five percent (5%) or more
of the Stock of the Company immediately after the option is granted. For
purposes of subpart (b) in the immediately preceding sentence of this
Section 8, the rules of Section 424(d) of the United States Internal Revenue
Code shall apply to determine the stock ownership of an individual and stock
which the employee may purchase under any option granted pursuant to this
Plan shall be treated as stock owned by that employee.
The Option Price, paid from each Participant's Account for each Share
purchased under this Plan, shall not be less that eighty-five percent (85%)
of the fair market value of the Stock as of the last business day of an
Offering Period (the "Purchase Date"), the actual percentage to be
determined by the Committee. As of the Purchase Date, the Account of each
Participant shall be totaled. If such Participant Account contains
sufficient funds to purchase one or more full Shares as of that date then
the Participant shall be deemed to have purchased such full Share or Shares
at the Option Price based on the funds in the Participant's Account. The
Participant's Account shall be charged for the amount of the Option Price,
the Shares so purchased shall be promptly distributed to the Account of such
Participant, and the ownership of such Share or Shares by such Participant,
shall be appropriately evidenced on the books of the Company. Subsequent
Shares will be purchased in the same manner as of the last day of an
Offering Period whenever sufficient funds have again accrued in the
Participant's Account. Until Shareholder Approval for this Plan is obtained,
any purchase of Shares made pursuant to this Plan shall be deemed a
conditional purchase of those Shares. No Participant shall have any rights
in any Shares until Shares are purchased on behalf of a Participant.
A Participant may change his or her percentage rate of payroll deduction
contributions in the Plan subject to the percentage rates permitted herein
by filing an amended Enrollment Form with the Company, which amendment will
become effective as soon as practical but not later than 45 days after the
date such amended Enrollment Form is received by the Company. The amount of
the payroll deduction may changed only once during any Offering Period.
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Any balance remaining in Participant's Account at the end of any Offering
Period will be carried forward into the Participant's Account for the
following Offering Period. In no event will the balance carried forward be
equal to or greater than the Option Price of one Share on the last day of
any Offering Period. All options for Shares which have not been exercised at
the end of an Offering Period shall terminate on the last day of the
Offering Period. If, with respect to an offering of Shares, there is an
insufficient number of Shares available to satisfy all outstanding options,
then the available Shares shall be allocated to each Participant in the
proportion that the funds credited to the Account of each Participant bears
to the aggregate funds available in the accounts of all Participants.
For the purposes of this Section 8 the phrase "Fair Market Value" shall mean
the fair market value of Shares as determined by the Committee consistent
with those rules and regulations of the United States Internal Revenue Code
used to determine fair market value.
No option granted hereunder may be exercised after the expiration of five
(5) years from the date such option is granted.
9. VOTING AND DIVIDENDS
Each Participant shall have the right to vote or to direct the voting of any
Shares and to receive any dividends paid by the Company in connection with
any Shares purchased by the Custodian for his or her Account.
10. SHARE CERTIFICATES
Within sixty (60) days after the end of each December 31, within sixty (60)
days after the termination of this Plan, or sooner if requested in writing
by a Participant, the Custodian shall cause to be delivered to each
Participant at the address indicated on the Participant's Enrollment Form, a
Share certificate representing the whole Share or Shares purchased by the
Custodian for such Participant during the immediately preceding Offering
Period. No Share certificate shall be delivered until Shareholder Approval
is obtained.
11. INTEREST
No interest shall be credited to each Participant's Account unless
authorized by the Committee.
12. TRANSACTION COSTS OF SHARE PURCHASES
The Custodian shall be reimbursed by the Company in respect of any brokerage
costs it incurs in order to purchase Shares on behalf of Participants, and
no such costs shall be charged to the Account of any Participant.
13. TERMINATION OF PARTICIPATION
Participants may terminate their participation in the Plan at any time by
giving written notice to the Company on a form prescribed by the Company. A
Participant's participation and the Company's obligations hereunder shall
terminate immediately upon the Company's receipt of that form. The assets
held in the Participant's Account by the Custodian pursuant to this Plan
shall be distributed to the Participant promptly upon such termination, and
the Participant's Account with the Custodian shall be closed. Any funds
remaining in the Participant's Account shall be distributed to the
Participant. A Participant who has terminated his or her participation in
the Plan but otherwise remains eligible to participate in accordance with
Section 5 of this Plan, may re-enroll in the Plan in accordance with Section
6.
14. TERMINATION OF EMPLOYMENT, RETIREMENT, OR DEATH
When a Participant ceases to be an employee of the Company for any reason
other than death or legal incapacity, the Custodian shall distribute the
assets of the Participant's Account in accordance with Section 13 of this
Plan. Upon the death or legal incapacity of a Participant, no further Shares
shall be purchased for that
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Participant, and all assets held in that Participant's Account shall be
disbursed to the beneficiaries as directed by the Participant on his or her
Enrollment Form in accordance with Section 13 of this Plan.
15. FEES AND EXPENSES
All fees and expenses related to the administration of the Plan shall be the
responsibility of and paid solely by the Company.
16. PARTICIPANT'S STATEMENT OF ACCOUNT
Promptly following the end of each calendar quarter, the Custodian shall
forward a statement to each Participant setting out the activity of his or
her Account for such calendar quarter and the net asset position as of the
end of the preceding calendar quarter including the adjusted cost basis of
all Shares then held, the market value of the Shares then held, and any cash
balances.
17. PARTICIPANTS' INCOME TAX REPORTING REQUIREMENTS
Within thirty-one (31) days following the end of each calendar year, the
Custodian shall provide to each Participant the necessary reporting
statements as required by law with respect to interest (if any), dividends
(if any), and other investment income (if any) earned for the year in each
Participant's Account under this Plan. In the event of a disqualifying
disposition of Shares by a Participant, funds may be required to be withheld
in an amount sufficient to satisfy the rules and regulation of the United
States Internal Revenue Code.
18. SHAREHOLDER INFORMATION
The Company shall provide to the Custodian sufficient copies of all
information normally sent to Shareholders for distribution to each
Participant. The Custodian shall promptly distribute such information to
each Participant.
19. ADJUSTMENT IN CASE OF CHANGES AFFECTING SHARES
In the event of a subdivision of Shares, or the payment of a stock dividend,
the number of Shares approved for this Plan, and the Share limitation set
forth in Section 8, shall be increased proportionately, and such other
adjustment shall be made as may be deemed equitable by the Board of
Directors. In the event of any other change affecting the Shares, such
adjustment shall be made as may be deemed equitable by the Board of
Directors to give proper effect to such events.
20. AMENDMENT OF THE PLAN
The Board of Directors may at any time, or from time to time, amend this
Plan in any respect, except that, without the approval of the Shareholders
of the Company, no amendment shall be made (i) to increase or decrease the
number of Shares approved for this Plan (other than as provided in Section
19), (ii) to decrease the Option Price of each Share, (iii) to change the
class of employees eligible to participate in this Plan, or (iv) to
materially increase the benefits accruing to Participants under the Plan.
21. PLAN SHARE PURCHASES AND COMPANY FUNDING
Purchases of Shares may be made pursuant to and on behalf of this Plan, upon
such terms as the Company may approve, for delivery under this Plan. The
Company shall provide to the Custodian such funds as are necessary to
fulfill its obligations under Section 8 and Section 15.
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22. TERMINATION OF THE PLAN
This Plan and all rights of Participants under any offering hereunder shall
terminate:
A. on the day that Participants become entitled to purchase a number of
Shares equal to or greater than the number of Shares remaining
available for purchase. If the number of Shares to be purchased is
greater than the Shares remaining available, the available Shares shall
be allocated by the Committee among such Participants in such manner as
it deems appropriate; or
B. at any time, at the discretion of the Board of Directors of the
Company. No offering hereunder shall be made which shall be extended
beyond October 31, 2006. Upon the termination of this Plan, all amounts
in the Account of each Participant shall be carried forward into each
Participant's Account for disposition as determined by the Committee or
the Board of Directors of the Company.
C. This Plan initially received Shareholder Approval on April 29, 1992,
and received Shareholder Approval on May 9, 1996 to extend the term of
this Plan to October 31, 2006.
23. HEADINGS
Titles of Sections, headings and subheadings in this Plan are solely for
convenience and ease of reference and are not deemed to be or form a
substantive part or in any way modify or define the text or the meaning of
any provision of this Plan.
24. EMPLOYMENT
The Plan shall not be deemed to constitute a contract of employment or
inducement for employment between the Company or any Subsidiary and any
employee, and nothing contained in this Plan shall be deemed to give any
employee the right to be retained in the employ of the Company or any
Subsidiary or to interfere with the right of the Company or any Subsidiary
to reassign, discipline, demote or discharge any employee at any time,
regardless of the effect of such reassignment, discipline, demotion or
discharge on such employee as a Participant in the Plan.
25. RIGHTS NOT TRANSFERABLE
Rights under this Plan and the options granted under this Plan are not
transferable by a Participant other than by will or the laws of descent and
distribution, and are exerciseable during the employee's lifetime only by
the employee.
26. CHOICE OF LAW
This Plan and the rights and obligations contained herein shall be
interpreted and construed for all purposes solely in accordance with the
laws of the State of Tennessee, without regard to the laws of any other
state or jurisdiction.