LINKABIT WIRELESS, INC
EMPLOYEE STOCK PURCHASE PLAN
ADOPTED DECEMBER 2, 1997
1. PURPOSE.
(a) The purpose of this Employee Stock Purchase Plan (the "Plan") is to provide
a means by which employees of Linkabit Wireless, Inc., a Delaware corporation
(the "Company"), and its Affiliates, as defined in subparagraph 1(b), which are
designated as provided in subparagraph 2(b), may be given an opportunity to
purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent corporation or
subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
(the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of its
employees, to secure and retain the services of new employees, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company.
(d) The Company intends that the rights to purchase stock of the Company
granted under the Plan be considered options issued under an "employee stock
purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the "Board") of
the Company unless and until the Board delegates administration to a Committee,
as provided in subparagraph 2(c). Whether or not the Board has delegated
administration, the Board shall have the final power to determine all questions
of policy and expediency that may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the limitations of,
the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the
Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
(ii) To designate from time to time which Affiliates of the Company
shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan, in a manner and to the extent it shall deem necessary
or expedient to make the Plan fully effective.
1.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company and its Affiliates.
(c) The Board may delegate administration of the Plan to a Committee composed
of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 12 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to rights granted under
the Plan shall not exceed in the aggregate one million six hundred sixty-six
thousand six hundred sixty-seven (1,666,667) shares of the Company's Class A
Common Stock (the "Class A Common Stock"). If any right granted under the Plan
shall for any reason terminate without having been exercised, the Class A Common
Stock not purchased under such right shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired shares,
bought on the market or otherwise.
4. GRANT OF RIGHTS; OFFERING.
(a) The Board or the Committee may from time to time grant or provide for the
grant of rights to purchase Class A Common Stock of the Company under the Plan
to eligible employees (an "Offering") on a date or dates (the "Offering
Date(s)") selected by the Board or the Committee. Each Offering shall be in
such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate, which shall comply with the requirements of
Section 423(b)(5) of the Code that all employees granted rights to purchase
stock under the Plan shall have the same rights and privileges. The provisions
of separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
Offering or otherwise) the period during which the Offering shall be effective,
which period shall not exceed twenty-seven (27) months beginning with the
Offering Date, and the substance of the provisions contained in paragraphs 5
through 8, inclusive.
(b) If an employee has more than one right outstanding under the Plan, unless
he or she otherwise indicates in agreements or notices delivered hereunder:
(1) each agreement or notice delivered by that employee will be deemed to apply
to all of his or her rights under the Plan, and (2) a right with a lower
exercise price (or an earlier-granted right, if two rights have identical
exercise prices), will be exercised to the fullest possible extent before a
right with a higher exercise price (or a later-granted right, if two rights have
identical exercise prices) will be exercised.
2.
5. ELIGIBILITY.
(a) Rights may be granted only to employees of the Company or, as the Board or
the Committee may designate as provided in subparagraph 2(b), to employees of
any Affiliate of the Company. An employee of the Company or any Affiliate shall
not be eligible to be granted rights under the Plan, unless, on the Offering
Date, such employee is in the employ of the Company or any designated Affiliate
and has been in the employ of the Company or any designated Affiliate for such
continuous period preceding such grant as the Board or the Committee may
require, but in no event shall the required period of continuous employment be
greater than two (2) years. In addition, unless otherwise determined by the
Board or the Committee and set forth in the terms of the applicable Offering, no
employee of the Company or any Affiliate shall be eligible to be granted rights
under the Plan, unless, on the Offering Date, such employee's customary
employment with the Company or such Affiliate is for at least twenty (20) hours
per week and at least five (5) months per calendar year.
(b) Each person who, during the course of an Offering, first becomes an
eligible employee of the Company or designated Affiliate shall not be eligible
to be granted rights under such Offering.
(c) No employee shall be eligible for the grant of any rights under the Plan
if, immediately after any such rights are granted, such employee owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Affiliate. For purposes of
this subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such employee
may purchase under all outstanding rights and options shall be treated as stock
owned by such employee.
(d) An eligible employee may be granted rights under the Plan only if such
rights, together with any other rights granted under "employee stock purchase
plans" of the Company and any Affiliates, as specified by Section 423(b)(8) of
the Code, do not permit such employee's rights to purchase stock of the Company
or any Affiliate to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of fair market value of such stock (determined at the time such rights
are granted) for each calendar year in which such rights are outstanding at any
time.
(e) Officers of the Company and any designated Affiliate shall be eligible to
participate in Offerings under the Plan, provided, however, that the Board may
provide in an Offering that certain employees who are highly compensated
employees within the meaning of Section 423(b)(4)(D) of the Code shall not be
eligible to participate.
6. RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each eligible employee, pursuant to an Offering made
under the Plan, shall be granted the right to purchase up to the number of
shares of Class A Common Stock of the Company purchasable with a percentage
designated by the Board or the Committee not exceeding fifteen percent (15%) of
such employee's Earnings (as defined in subparagraph 7(a)) during the period
which begins on the Offering Date (or such later date as the Board or the
3.
Committee determines for a particular Offering) and ends on the date stated in
the Offering, which date shall be no later than the end of the Offering. The
Board or the Committee shall establish one or more dates during an Offering (the
"Purchase Date(s)") on which rights granted under the Plan shall be exercised
and purchases of Class A Common Stock effected in accordance with such Offering.
(b) In connection with each Offering made under this Plan, the Board or the
Committee shall specify a maximum number of shares which may be purchased by any
employee as well as a maximum aggregate number of shares which may be purchased
by all eligible employees pursuant to such Offering. In addition, in connection
with each Offering which contains more than one Purchase Date, the Board or the
Committee may specify a maximum aggregate number of shares which may be
purchased by all eligible employees on any given Purchase Date under the
Offering. If the aggregate purchase of shares upon exercise of rights granted
under the Offering would exceed any such maximum aggregate number, the Board or
the Committee shall make a pro rata allocation of the shares available in as
nearly a uniform manner as shall be practicable and as it shall deem to be
equitable.
(c) The purchase price of stock acquired pursuant to rights granted under the
Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair market
value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the fair market
value of the stock on the Purchase Date.
(d) As used in this Plan, "fair market value" means, as of any date, the value
of the Class A Common Stock of the Company determined as follows:
(i) If the Class A Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market, the fair market value of a share of Class A Common Stock shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Class A Common Stock) on the last market trading
day prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable;
(ii) If the Class A Common Stock is quoted on Nasdaq (but not on the
National Market thereof) or is regularly quoted by a recognized securities
dealer but selling prices are not reported, the fair market value of a share of
Class A Common Stock shall be the mean between the bid and asked prices for the
Class A Common Stock on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Board deems reliable;
(iii) In the absence of an established market for the Class A Common
Stock, the fair market value shall be determined in good faith by the Board.
4.
7. PARTICIPATION; WITHDRAWAL; TERMINATION; TRANSFERABILITY.
(a) An eligible employee may become a participant in the Plan pursuant to an
Offering by delivering a participation agreement to the Company within the time
specified in the Offering, in such form as the Company provides; provided,
however, that an eligible employee shall not be entitled to participate in more
than one (1) Offering at any time. Each such agreement shall authorize payroll
deductions of up to the maximum percentage specified by the Board or the
Committee of such employee's Earnings during the Offering. "Earnings" is
defined as an employee's regular salary or wages (including amounts thereof
elected to be deferred by the employee, that would otherwise have been paid,
under any cash or deferred arrangement established by the Company), which shall
include bonuses and overtime pay, but shall exclude commissions, incentive pay,
profit sharing, other remuneration paid directly to the employee, the cost of
employee benefits paid for by the Company or an Affiliate, education or tuition
reimbursements, imputed income arising under any group insurance or benefit
program, traveling expenses, business and moving expense reimbursements, income
received in connection with stock options, contributions made by the Company or
an Affiliate under any employee benefit plan, and similar items of compensation.
The payroll deductions made for each participant shall be credited to an account
for such participant under the Plan and shall be deposited with the general
funds of the Company or an Affiliate. A participant may reduce (including to
zero) or increase such payroll deductions after the beginning of any Offering
only as provided for in the Offering. A participant may make additional
payments into his or her account only if specifically provided for in the
Offering and only if and to the extent the participant has not had the maximum
amount withheld during the Offering.
(b) At any time during an Offering, a participant may terminate his or her
payroll deductions under the Plan and withdraw from the Offering by delivering
to the Company a notice of withdrawal in such form as the Company provides.
Such withdrawal may be elected at any time prior to the end of the Offering
except as provided by the Board or the Committee in the Offering. Upon such
withdrawal from the Offering by a participant, the Company shall distribute to
such participant all of his or her accumulated payroll deductions (reduced to
the extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest, and such participant's
interest in that Offering shall be automatically terminated. A participant's
withdrawal from an Offering will have no effect upon such participant's
eligibility to participate in any other Offerings under the Plan but such
participant will be required to deliver a new participation agreement in order
to participate in subsequent Offerings under the Plan. A reduction of payroll
deductions to zero shall not, by itself, constitute a withdrawal from an
Offering.
(c) Rights granted pursuant to any Offering under the Plan shall terminate
immediately upon cessation of any participating employee's employment with the
Company and any designated Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee), under the Offering, without
interest.
5.
(d) Rights granted under the Plan shall not be transferable, and, except as
provided in paragraph 14, shall be exercisable only by the person to whom such
rights are granted.
(e) Shares of Class A Common Stock purchased under the Plan may not be
assigned, transferred, pledged or otherwise disposed of until after completion
of six full calendar months following the Purchase Date (defined in paragraph 8
below) on which such shares of Class A Common Stock are acquired.
8. EXERCISE.
(a) On each date specified therefor in the relevant Offering ("Purchase Date"),
each participant's accumulated payroll deductions and other additional payments
specifically provided for in the Offering (without any increase for interest)
will be applied to the purchase of whole shares of stock of the Company, up to
the maximum number of shares permitted pursuant to the terms of the Plan and the
applicable Offering, at the purchase price specified in the Offering. No
fractional shares shall be issued upon the exercise of rights granted under the
Plan. The amount, if any, of accumulated payroll deductions remaining in each
participant's account after the purchase of shares which is less than the amount
required to purchase one share of stock on the final Purchase Date of an
Offering shall be held in each such participant's account for the purchase of
shares under the next Offering under the Plan, unless such participant does not
elect to participate in such next Offering, or withdraws from such next Offering
as provided in subparagraph 7(b), or is no longer eligible to be granted rights
under the Plan as provided in paragraph 5, in which case such amount shall be
distributed to the participant after such final Purchase Date, without interest.
The amount, if any, of accumulated payroll deductions remaining in any
participant's account after the purchase of shares which is equal to the amount
required to purchase whole shares of stock on the final Purchase Date of an
Offering shall be distributed in full to the participant after such Purchase
Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent unless the
Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended (the
"Securities Act") and the Plan is in material compliance with all applicable
state, foreign and other securities and other laws applicable to the Plan. If
on a Purchase Date in any Offering hereunder the Plan is not so registered, no
rights granted under the Plan or any Offering shall be exercised on such
Purchase Date, and the Purchase Date shall be delayed until the Plan is subject
to such an effective registration statement and in such compliance, except that
the Purchase Date shall not be delayed more than twelve (12) months and the
Purchase Date shall in no event be more than twenty-seven (27) months from the
Offering Date. If on the Purchase Date of any Offering hereunder, as delayed to
the maximum extent permissible, the Plan is not registered and in such
compliance, no rights granted under the Plan or any Offering shall be exercised
and all payroll deductions accumulated during the Offering (reduced to the
extent, if any, such deductions have been used to acquire stock) shall be
distributed to the participants, without interest.
6.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the rights granted under the Plan, the Company shall
keep available at all times the number of shares of stock required to satisfy
such rights.
(b) The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to issue and
sell shares of stock upon exercise of the rights granted under the Plan. If,
after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to rights granted under the Plan
shall constitute general funds of the Company.
11. RIGHTS AS A STOCKHOLDER.
A participant shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until the participant's stockholdings acquired upon
exercise of rights under the Plan are recorded in the books of the Company.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject to any
rights granted under the Plan (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or otherwise), the Plan and outstanding rights will be
appropriately adjusted in the class(es) and maximum number of shares subject to
the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding rights.
(b) In the event of: (1) a dissolution or liquidation of the Company; (2) a
merger or consolidation in which the Company is not the surviving corporation;
(3) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's Class A Common Stock outstanding immediately preceding
the merger are converted by virtue of the merger into other property, whether in
the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, as determined by the Board in its
sole discretion (i) any surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (ii) such rights may
continue in full force and effect, or (iii) participants' accumulated payroll
deductions may be used to purchase Class A Common Stock immediately prior to the
transaction described above and the participants' rights under the ongoing
Offering terminated.
7.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan. However,
except as provided in paragraph 12 relating to adjustments upon changes in
stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for rights under the
Plan;
(ii) Modify the provisions as to eligibility for participation in
the Plan (to the extent such modification requires stockholder approval in order
for the Plan to obtain employee stock purchase plan treatment under Section 423
of the Code or to comply with the requirements of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended ("Rule 16b-3")); or
(iii) Modify the Plan in any other way if such modification requires
stockholder approval in order for the Plan to obtain employee stock purchase
plan treatment under Section 423 of the Code or to comply with the requirements
of Rule 16b-3.
It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee stock purchase plans
and/or to bring the Plan and/or rights granted under it into compliance
therewith.
(b) Rights and obligations under any rights granted before amendment of the
Plan shall not be impaired by any amendment of the Plan, except with the consent
of the person to whom such rights were granted or except as necessary to comply
with any laws or governmental regulation.
14. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to the end of an
Offering but prior to delivery to him of such shares and cash. In addition, a
participant may file a written designation of a beneficiary who is to receive
any cash from the participant's account under the Plan in the event of such
participant's death during an Offering.
(b) Such designation of beneficiary may be changed by the participant at any
time by written notice. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such participant's death, the Company shall deliver such shares and/or
cash to the executor or administrator of the estate of the participant, or if no
such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares and/or cash to
the spouse or to any one or more dependents or relatives of the participant, or
if no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
8.
15. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. No rights may be
granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the Plan is in effect
shall not be impaired by suspension or termination of the Plan, except as
expressly provided in the Plan or with the consent of the person to whom such
rights were granted or except as necessary to comply with any laws or
governmental regulation.
16. EFFECTIVE DATE OF PLAN.
The Plan shall become effective upon the effectiveness of the Company's
initial public offering of shares of Class A Common Stock, but no rights granted
under the Plan shall be exercised unless and until the Plan has been approved by
the stockholders of the Company.
9.
LINKABIT WIRELESS, INC.
EMPLOYEE STOCK PURCHASE PLAN OFFERING
1. GRANT; OFFERING DATE.
(a) The Board of Directors of Linkabit Wireless, Inc. (the "Company"), pursuant
to the Company's Employee Stock Purchase Plan (the "Plan"), hereby authorizes
the grant of rights to purchase shares of the Class A Common Stock of the
Company ("Class A Common Stock") to all Eligible Employees (an "Offering"). The
first Offering shall begin simultaneously with the effective date of the initial
public offering of the Company's Class A Common Stock (the "Effective Date") and
end on January 31, 2000 (the "Initial Offering"). Thereafter, an Offering shall
begin on February 1st and August 1st, every year, beginning with August 1, 1997,
and shall end on the day prior to the second anniversary of its Offering Date.
The first day of an Offering is that Offering's "Offering Date." If an Offering
Date does not fall on a day during which the Company's Class A Common Stock is
actively traded, then the Offering Date shall be the next subsequent day during
which the Company's Class A Common Stock is actively traded. Capitalized terms
used but not otherwise defined herein shall have the meaning ascribed to them in
the Plan.
(b) Prior to the commencement of any Offering, the Board of Directors (or the
Committee described in subparagraph 2(c) of the Plan, if any) may change any or
all terms of such Offering and any subsequent Offerings. The granting of rights
pursuant to each Offering hereunder shall occur on each respective Offering Date
unless, prior to such date (a) the Board of Directors (or such Committee)
determines that such Offering shall not occur, or (b) no shares remain available
for issuance under the Plan in connection with the Offering.
2. ELIGIBLE EMPLOYEES.
(a) All employees of the Company [and each of its Affiliates] (as defined in
the Plan) incorporated in the United States shall be granted rights to purchase
Class A Common Stock under each Offering on the Offering Date of such Offering
(an "Eligible Employee"); provided, however, that an Eligible Employee shall not
be entitled to participate in more than one (1) Offering at any time.
Notwithstanding the foregoing, no employee who is disqualified by subparagraph
5(c) or 5(d) of the Plan shall be an Eligible Employee or be granted rights
under an Offering. In addition, to be an Eligible Employee and be granted
rights under an Offering, an employee MUST (i) have been employed by the Company
or any designated Affiliate for no less than the ninety (90) day period
immediately preceding the Offering Date of such Offering and (ii) be customarily
employed by the Company or any designated Affiliate for at least twenty (20)
hours per week and at least five (5) months per calendar year.
(b) Each person who, with respect to any Offering, first becomes an Eligible
Employee subsequent to the Offering Date of such Offering shall not receive any
right under such Offering.
1
3. RIGHTS.
(a) Subject to the limitations contained herein and in the Plan, on each
Offering Date each Eligible Employee shall be granted the right to purchase the
number of shares of Class A Common Stock purchasable with up to ten percent
(10%) of such employee's Earnings (as defined in the Plan) paid during the
period of such Offering beginning after such Eligible Employee first commences
participation; provided, however, that no employee may purchase Class A Common
Stock in a particular year with more than ten percent (10%) of such employee's
Earnings (as defined in the Plan) in such year under all ongoing Offerings under
the Plan and all other plans of the Company or any Affiliate of the Company
which are intended to qualify as "employee stock purchase plans" under Section
423 of the Internal Revenue Code of 1986, as amended (the "Code"). The maximum
number of shares of Class A Common Stock an Eligible Employee may purchase on
any Purchase Date in an Offering shall be such number of shares as has a fair
market value (determined as of the Offering Date for such Offering) equal to (x)
$25,000 multiplied by the number of calendar years in which the right under such
Offering has been outstanding at any time, minus (y) the fair market value of
any other shares of stock (determined as of the relevant Offering Date with
respect to such shares) which, for purposes of the limitation of Section
423(b)(8) of the Code, are attributed to any of such number of calendar years in
which the right is outstanding. The amount in clause (y) of the previous
sentence shall be determined in accordance with regulations applicable under
Section 423(b)(8) of the Code based on (i) the number of shares previously
purchased with respect to such calendar years pursuant to such Offering or any
other Offering under the Plan, or pursuant to any other plans of the Company or
any Affiliate of the Company which are intended to qualify as "employee stock
purchase plans" under Section 423 of the Code, and (ii) the number of shares
subject to other rights outstanding on the Offering Date for such Offering
pursuant to the Plan or any other such plan of the Company or any Affiliate of
the Company.
(b) The maximum aggregate number of shares available to be purchased by all
Eligible Employees under an Offering on any Purchase Date shall be the number of
shares remaining available under the Plan on the applicable Purchase Date. If
the aggregate purchase of shares of Class A Common Stock upon exercise of rights
granted under the Offering would exceed the maximum aggregate number of shares
available, the Board shall make a pro rata allocation of the shares available in
a uniform and equitable manner.
4. PURCHASE PRICE.
The purchase price of the Class A Common Stock under the Offering shall be
the lesser of eighty-five percent (85%) of the fair market value of the Class A
Common Stock on the Offering Date or eighty-five percent (85%) of the fair
market value of the Class A Common Stock on the Purchase Date, in each case
rounded up to the nearest whole cent per share. For the Initial Offering, the
fair market value of the Class A Common Stock at the time when the Offering
commences shall be the price per share at which shares of Class A Common Stock
are first sold to the public in the Company's initial public offering as
specified in the final prospectus with respect to that offering.
2
5. PARTICIPATION.
(a) An Eligible Employee may elect to participate in an Offering only on the
Offering Date. An Eligible Employee shall become a participant in an Offering by
delivering an agreement authorizing payroll deductions. Such deductions may be
in whole percentages only, with a minimum percentage of one percent (1%), and a
maximum percentage of ten percent (10%). A participant may not make additional
payments into his or her account. The agreement shall be made on such
enrollment form as the Company provides, and must be delivered to the Company no
later than ten (10) days prior to the applicable Offering Date to be effective
for that Offering, unless a later time for filing the enrollment form is set by
the Board for all Eligible Employees with respect to a given Offering Date. As
to the Initial Offering, the time for filing an enrollment form and commencing
participation for individuals who are Eligible Employees on the Offering Date
for the Initial Offering shall be determined by the Company and communicated to
such Eligible Employees.
(b) A participant may increase his or her participation level during the course
of an Offering, but only effective as of the day immediately following the next
Purchase Date occurring after the requested increase (i.e., only on February 1
or August 1). A participant may reduce his or her participation level, to a
whole percentage not less than one percent (1%), only once during any six month
period ending on a Purchase Date by delivering a notice to the Company in such
form and at such time as the Company provides. A participant may withdraw from
an Offering and receive his or her accumulated payroll deductions from the
Offering (reduced to the extent, if any, such deductions have been used to
acquire Class A Common Stock for the participant on any prior Purchase Dates),
without interest, at any time prior to the end of the Offering by delivering a
withdrawal notice to the Company in such form as the Company provides; provided,
however, that such withdrawal notice must be delivered no later than three (3)
business days prior to the requested date of withdrawal.
6. PURCHASES.
Subject to the limitations contained herein, on each Purchase Date (defined
below), each participant's accumulated payroll deductions (without any increase
for interest) shall be applied to the purchase of whole shares of Class A Common
Stock, up to the maximum number of shares permitted under the Plan and the
Offering. "Purchase Date" shall be defined as each January 31 (excluding
January 31, 1998) and July 31. If a Purchase Date does not fall on a market
trading day, then the Purchase Date shall be the nearest prior day during which
the Company's Class A Common Stock is actively traded.
7. TERMINATION.
Rights granted under the Offering shall terminate immediately upon
cessation of any participating employee's employment with the Company and any
designated Affiliate, for any reason, and the Company shall distribute to such
terminated employee all of his or her accumulated payroll deductions (reduced to
the extent, if any, such deductions have been used to acquire stock for the
terminated employee), under the Offering, without interest.
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8. NOTICES AND AGREEMENTS.
Any notices or agreements provided for in an Offering or the Plan shall be
given in writing, in a form provided by the Company, and unless specifically
provided for in the Plan or this Offering shall be deemed effectively given upon
receipt or, in the case of notices and agreements delivered by the Company,
five (5) days after deposit in the United States mail, postage prepaid.
9. EXERCISE CONTINGENT ON STOCKHOLDER APPROVAL.
The rights granted under an Offering are subject to the approval of the
Plan by the stockholders as required for the Plan to obtain treatment as a
tax-qualified employee stock purchase plan under Section 423 of the Code and to
comply with the requirements of the exemption from potential liability under
Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), set forth in Rule 16b-3 promulgated under the Exchange Act.
10. OFFERING SUBJECT TO PLAN.
Each Offering is subject to all the provisions of the Plan, and its
provisions are hereby made a part of the Offering, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of an Offering and those of the Plan (including
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan), the provisions of the Plan
shall control.
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