TREND-LINES EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
PURPOSE
The Trend-Lines Employee Stock Purchase Plan, effective
October 1, 1997, is intended to provide a method whereby
Employees of Trend-Lines, Inc. (the "Company") and its
subsidiaries will have an opportunity to acquire a proprietary
interest in the Company through the purchase of Shares of the
common stock of the Company. Once an Employee enrolls as a
Participant in the Plan, payroll deductions will be used to
purchase stock under the terms of the Plan. The Company will pay
brokerage commissions or other charges for purchases under the
Plan. The Plan is not designed to conform to the provisions of
Section 423 of the Internal Revenue Code of the 1986, as amended
or the Employee Retirement Income Security Act of 1974, as
amended.
ARTICLE II
DEFINITIONS
2.1 "Account" means the account established under Section
5.2 to record a Participant's payroll deductions and Shares
purchased with payroll deductions.
2.2 "Base Pay" means an Employee's base compensation,
excluding amounts deferred under any nonqualified deferred
compensation plan, bonuses and other special payments.
2.3 "Committee" means the individuals described in Article
X.
2.4 "Company" means Trend-Lines, Inc., a Massachusetts
corporation.
2.5 "Employee" means an employee who regularly works 30 or
more hours per week for the Company or a Subsidiary.
2.6 "Offering" means monthly offerings to Employees of
Shares under Article IV.
2.7 "Participant" means an Employee who has elected to
participate in the Plan.
2.8 "Plan" means the Trend-Lines Employee Stock Purchase
Plan.
2.9 "Purchase Date" means the first business day of each
month.
2.10 "Shares" means shares of Class A Common Stock ($.01 par
value) of the Company, either treasury shares or shares purchased
on the open market, at the option of the Company.
2.11 "Subsidiary" means any entity owned 80% or more by the
Company which the Company designates to participate in this Plan.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Initial Eligibility.
Each Employee shall be eligible to participate in Offerings
under the Plan on the first day of the month after completing 12
full months as an Employee.
3.2 Commencement of Participation.
An Employee who is eligible to participate in the Plan under
Section 3.1 may participate by completing an authorization for
payroll deduction and filing it with the Committee on or before
the date set therefor by the Committee, which date shall be prior
to the Purchase Date for the Offering.
ARTICLE IV
OFFERINGS
4.1 Monthly Offerings.
The Plan will be implemented by Offerings on the first
business day of each month. There shall be available for
Offerings _______Shares under the Plan.
ARTICLE V
PAYROLL DEDUCTIONS
5.1 Amount of Deduction.
At the time a Participant files an authorization for payroll
deduction, the Participant shall elect to have deductions made
from his/her Base Pay as a whole percentage of Base Pay or fixed
dollar amount, not exceeding 10% of Base Pay. Notwithstanding
the foregoing, Participants who are employed by the Company in a
position of Vice President or a more senior position may elect a
maximum deduction of the greater of 20% of Base Pay or $50,000
annually.
5.2 Participant's Account.
All payroll deductions made from a Participant's Base Pay
shall be credited to his/her Account, which is deposited with the
Company's general funds. A Participant may not make any separate
cash payment into his/her Account. A Participant's Account may
be titled in the name of the Participant or in the name of the
Participant and his/her spouse.
On each Purchase Date, or as soon as practicable thereafter,
as many whole or fractional Shares shall be purchased with the
payroll deductions accumulated in each Participant's Account and
such Shares shall be credited to each Participant's Account. A
Participant's Account shall be held and maintained by the
financial institution that administers the Plan. A Participant's
Account shall not be credited with any interest on contributions
accumulated in his/her Account.
5.3 Changes in Payroll Deductions.
A Participant may change the amount of his/her payroll
deductions as of the first day of any calendar quarter, effective
for subsequent Offerings, by filing an appropriate form with the
Committee at such reasonable time as shall be required by the
Committee prior to the effective date of such change.
A Participant may discontinue participation in the Plan as
provided in Article VII.
5.4 Leave of Absence.
If a Participant goes on a leave of absence, such
Participant shall have the right to elect: (a) to withdraw the
balance in his or her Account pursuant to Section 7.1, or (b) to
remain a Participant in the Plan during the first 90 days of such
leave of absence, authorizing deductions to be made from any Base
Pay paid to the Participant during such period.
ARTICLE VI
PURCHASE OF SHARES
6.1 Purchase Price.
The purchase price of Shares purchased with a Participant's
payroll deductions shall be the closing market price of the
Shares on the day immediately preceding the Purchase Date or the
nearest prior business day on which trading occurred on the
NASDAQ National Market System.
6.2 Number of Shares Purchased.
On each Purchase Date, all accumulated payroll deductions
will be used to purchase Shares for the Accounts of Participants.
The maximum number of whole and fractional Shares shall be
purchased. Each Participant's Account shall be credited with
his/her pro rata share of the Shares purchased and any additional
payroll deductions which have accumulated.
6.3 Voting of Shares.
The Participants will vote any Shares held in such
Participants' Accounts.
6.4 Delivery of Stock.
If a Participant requests a stock certificate, it shall be
delivered to the Participant by the financial institution that
administers the Plan as soon as practicable after the Offering
Termination Date. Any fractional Shares will be paid in cash.
6.5 Fees and Expenses.
The Company will be responsible for any brokerage
commissions or service charges for purchases made under the Plan.
ARTICLE VII
WITHDRAWAL
7.1 In General.
A Participant may withdraw from the Plan at any time. To
withdraw from the Plan, a Participant must give written notice to
the Committee. All of the Participant's payroll deductions
credited to his/her Account will be paid to the Participant
promptly after receipt of notice of withdrawal, and no further
payroll deductions will be made from the Participant's Base Pay
until the Participant again elects to have payroll deductions
made from his/her Base Pay as provided in Section 5.3.
7.2 Termination of Eligibility.
If a Participant ceases to be an Employee for any reason,
except death, the payroll deductions credited to his/her Account
will be returned to him/her if the Participant ceases to be an
Employee prior to the last working day before the 15th day of the
month prior to the Purchase Date. If the Participant ceases to
be an Employee after such date, his/her participation will cease
after the Offering immediately following his/her termination of
employment.
7.3 Rehired Employees.
If a Participant who has ceased to be an Employee again
becomes an Employee, he or she will again become a Participant
effective as of the Purchase Date following the date of such
Employee's rehire, provided that the Employee completes an
authorization for payroll deduction as required under Section
3.2.
7.4 Termination of Employment Due to Death.
Upon a Participant's death, his/her beneficiary (as set
forth in Section 11.1) shall have the right to elect, by written
notice given to the Committee prior to the Purchase Date:
(a) to withdraw all of the payroll deductions credited
to the Participant's Account, or
(b) to purchase Shares on the Purchase Date next
following the date of the Participant's death for the purchase of
the number of full Shares which the accumulated payroll
deductions in the Participant's Account at the date of the
Participant's death will purchase, and any excess in such Account
will be returned to said beneficiary, without interest.
In the event that no such written notice of election shall
be duly received by the Committee, the beneficiary shall
automatically be deemed to have elected to purchase the Shares.
7.5 Leave of Absence.
In the event that a Participant is on a leave of absence,
participation in the Plan will be suspended until such
Participant has resumed active employment with the Company.
Notwithstanding the foregoing, if a Participant has elected under
Section 5.4 to remain a Participant in the Plan during the first
90 days of such leave of absence, such Participant's
participation in the Plan will be suspended at the end of such 90
day period until such Participant has resumed active employment
with the Company.
ARTICLE VIII
INTEREST
8.1 Payment of Interest.
No interest will be paid or allowed on any money paid into
the Plan or credited to the Account of any Participant.
ARTICLE IX
STOCK
9.1 Registration of Stock.
Shares to be delivered to a Participant under the Plan will
be registered in the name of the Participant. A Participant
shall, subject to such restrictions as shall be applicable under
the securities laws, be able to sell Shares held in the name of
the Participant at any time.
9.2 Participant's Interest.
A Participant shall have no interest in Shares until such
Shares are purchased for his or her Account.
ARTICLE X
ADMINISTRATION
10.1 Appointment of Committee.
The Compensation and Stock Option Committee of the Board of
Directors of the Company shall be responsible for the
administration of the Plan. It may delegate its administrative
authority to an officer or officers of the Company.
10.2 Authority of Committee.
Subject to the express provisions of the Plan, the Committee
shall have plenary authority in its discretion to interpret and
construe any and all provisions of the Plan, to adopt rules and
regulations for administering the Plan, and to make all other
determinations deemed necessary or advisable for administering
the Plan. The Committee's determination on the foregoing matters
shall be conclusive.
All determinations of the Committee shall be made by a
majority of its members. The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan, in the
manner and to the extent it shall deem desirable. Any decision
or determination reduced to writing and signed by a majority of
the members of the Committee shall be as fully effective as if it
had been made by a majority vote at a meeting duly called and
held.
10.3 Expenses.
The Company shall pay all expenses related to the
administration of the Plan, except sales charges and commissions,
and such other expenses designated by the Committee.
ARTICLE XI
MISCELLANEOUS
11.1 Designation of Beneficiary.
In the event of the death of a Participant, the financial
institution that administers the Plan shall deliver such stock
and/or cash to the executor or administrator of the estate of the
Participant who shall be the Participant's beneficiary. If no
such executor or administrator has been appointed (to the
knowledge of the administrator of the Plan), the administrator,
in its discretion, may deliver such stock and/or cash to the
spouse or to any one or more dependents of the Participant as the
Committee may designate as beneficiary. No beneficiary shall,
prior to the death of the Participant by whom he or she has been
designated, acquire any interest in the Shares or cash credited
to the Participant's Account.
11.2 Use of Funds.
All payroll deductions 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 payroll
deductions.
11.3 Adjustment Upon Changes in Capitalization.
(a) If, while any options are outstanding, the
outstanding Shares have increased, decreased, changed into, or
been exchanged for a different number or kind of shares or
securities of the Company through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock
split or similar transaction, appropriate and proportionate
adjustments may be made by the Committee in the number and/or
kind of shares which are subject to purchase under outstanding
options and on the option exercise price or prices applicable to
such outstanding options. In addition, in any such event, the
number and/or kind of shares of stock which may be offered in the
Offerings described in Article IV hereof shall also be
proportionately adjusted. For the purposes of this Paragraph,
any distribution of Shares to shareholders in an amount
aggregating 20% or more of the outstanding Shares shall be deemed
a stock split and any distributions of Shares aggregating less
than 20% of the outstanding Shares shall be deemed a stock
dividend.
(b) Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the
Company is not the surviving corporation, or upon a sale of
substantially all of the property or stock of the Company to
another corporation, the holder of each option then outstanding
under the Plan will thereafter be entitled to receive at the next
Offering upon the exercise of such option for each Share as to
which such option shall be exercised, as nearly as reasonably may
be determined, the cash, securities and/or property which a
holder of one Share was entitled to receive upon and at the time
of such transaction. The Board of Directors of the Company shall
take such steps in connection with such transactions as the Board
shall deem necessary to assure that the provisions of this
Section shall thereafter be applicable, as nearly as reasonably
may be determined, in relation to the said cash, securities
and/or property as to which such holder of such option might
thereafter be entitled to receive.
11.4 Amendment and Termination.
The Board of Directors of the Company shall have complete
power and authority to terminate or amend the Plan. No
termination, modification, or amendment of the Plan may, without
the consent of an Employee then having an option under the Plan
to purchase Shares, adversely affect the rights of such Employee
under such option.
11.5 Effective Date.
The Plan shall become effective as of October 1, 1997.
11.6 No Employment Rights.
The Plan does not, directly or indirectly, create any right
for the benefit of any Employee or class of Employees to purchase
any Shares under the Plan, or create in any Employee or class of
Employees any right with respect to continuation of employment by
the Company, and it shall not be deemed to interfere in any way
with the Company's right to terminate, or otherwise modify, an
Employee's employment at any time.
11.7 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.
11.8 Governing Law.
The law of the Commonwealth of Massachusetts will govern all
matters relating to this Plan except to the extent it is
superseded by the laws of the United States.
TREND-LINES, INC.
By /s/ Stanley D. Black
Stanley D. Black
Its Chairman