Exhibit 4.2
PHOENIX HEALTHCARE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Phoenix Healthcare Corporation
Employee Stock Purchase Plan (the "Plan") is to provide a convenient means for
Employees of the Company and of any Subsidiary that elects to participate in the
Plan (with the consent of the Company) to acquire an ownership interest in the
Company. The Plan is intended to qualify as an Employee Stock Purchase Plan
under Section 423 of the Code.
2. DEFINITIONS. The following terms as used in this Plan shall
have the meaning specified below, unless the context clearly indicates
otherwise.
(a) "ACCOUNT" means the bookkeeping account established for
an Employee to which the funds deducted or paid from the Employee's Compensation
pursuant to the terms of the Plan to purchase Shares shall be credited. The
funds allocated to a Participant's Account shall at all times remain the
property of the Participant, but such funds may be commingled with the general
assets of the Company.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as
amended, and any regulations thereunder.
(d) "COMPANY" means Phoenix Healthcare Corporation and any
successor to such corporation, whether by merger, consolidation, liquidation or
otherwise.
(e) "COMPENSATION" means a Participant's total compensation
from the Company or any participating Subsidiary payable during the applicable
Semi-Annual Period.
(f) "EMPLOYEE" means any officer or other common law
employee of the Company, or any Subsidiary of the Company which participates in
the Plan with the consent of the Company.
(g) "ESPP BROKER" means a qualified stock brokerage or other
financial services firm that has been designated by the Board.
(h) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended (and any rules and regulations thereunder then in effect).
(i) "FAIR MARKET VALUE" of a Share means, as of any given
date, (i) the price of the last trade of a Share as reported on NASDAQ or the
OTC bulletin board, as applicable, for
that date (or if Shares were not traded on such date, for the closest preceding
date on which a trade occurred), or (ii) if the Shares are not publicly traded,
the fair market value of a Share as determined by the Board in good faith, using
such criteria as the Board may, in its sole discretion, deem appropriate.
(j) "HOLDING PERIOD" means the holding period that is set
forth in Section 423(a) of the Code, which, as of the date that the Company
adopted this Plan, is (i) the two (2) year period that begins on the first day
of the applicable Semi-Annual Period or (ii) the one (1) year period that begins
on the date the applicable Shares are transferred to the Participant under the
Plan, whichever end later.
(k) "PARTICIPANT" means each (i) Employee who is eligible
to, and elects to, participate in the Plan in accordance with the terms of the
Plan, and (ii) any Employee or former Employee who has an Account under the
Plan.
(l) "PLAN" means the Phoenix Healthcare Corporation Employee
Stock Purchase Plan, as amended from time to time.
(m) "SEMI-ANNUAL PERIOD" means the six (6) month period
ending on the last day of June and December of each year, with the first
Semi-Annual Period to begin on such date as may be established by the Board.
(n) "SHARES" means the shares of the Common Stock of the
Company, subject to adjustment pursuant to Section 14 of the Plan.
(o) "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing at least fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
3. SHARES SUBJECT TO THE PLAN. Subject to adjustment pursuant
to Section 14 of the Plan, the aggregate number of Shares which may be purchased
under the Plan is one million (1,000,000). The Shares may be authorized but
unissued shares, reacquired shares, or any combination thereof.
4. ELIGIBILITY. Any Employee of the Company or a participating
Subsidiary is eligible to become a Participant on the first day of the
Semi-Annual Period following the Employee's date of hire.
5. JOINING THE PLAN.
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(a) An eligible Employee's participation in the Plan shall
be effective as of the first day of the Semi-Annual Period following the date on
which the Employee completes, signs and returns to the Board such forms as may
be required to enroll in the Plan (or at such other time as may be permitted by
the Board in its sole discretion).
(b) Participation by any eligible Employee in the Plan is
entirely voluntary.
6. RESTRICTIONS ON PARTICIPATION. Notwithstanding anything
herein to the contrary:
(a) No Participant shall be permitted to contribute towards
the purchase of any Shares under the Plan if such Participant, immediately after
such contribution, would own Shares (including all Shares that may be purchased
under outstanding subscriptions under the Plan) that account for five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company or its Subsidiaries (as determined under the rules of Section
424(d)of the Code).
(b) No Participant shall be granted a right to contribute
towards the purchase of any Shares under the Plan that permits such
Participant's rights to purchase Shares under all "employee stock purchase
plans" of the Company and its Subsidiaries to accrue at a rate that exceeds
$25,000 worth of such Shares (determined using the Fair Market Value of a Share
at the time such right to contribute is granted) for each calendar year in which
such right to contribute is outstanding at any time.
7. EMPLOYEE CONTRIBUTIONS.
(a) Each Employee may elect (on such forms as may be
required by the Board in its sole discretion) to contribute by payroll deduction
of up to 10% of his or her Compensation payable during a Semi-Annual Period (or
such other amount or percentage as may be permitted by the Board in its sole
discretion).
(b) Subject to the limits set forth in (a) above, an
Employee may elect at any time (on such forms as may be required by the Board in
its sole discretion) to increase or decrease his or her rate of contribution.
Except as otherwise provided in the Plan, any such change shall become effective
as the first day of the Semi-Annual Period following receipt of such election by
the Board (or at such other time as may be permitted by the Board in its sole
discretion).
(c) Any contributions made by an Employee under the Plan
shall be credited to the Employee's Account. No interest shall be paid on funds
credited to a Participant's Account.
8. ISSUANCE OF SHARES.
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(a) On the last trading day of each Semi-Annual Period, the
contributions credited to a Participant's Account as of that date shall be
applied to the purchase of Shares; provided that no such purchase shall be made
on the Participant's behalf if so required by an event described in Section 9
below. Except as otherwise provided by the Board, only whole Shares may be
purchased under the Plan.
(b) The per share cost for the Shares purchased pursuant to
the Plan shall be 85% of the lower of (i) the Fair Market Value of a Share on
the first trading day of the Semi-Annual Period (the "date of the grant"), or
(ii) the Fair Market Value of a Share on the last trading day of the Semi-Annual
Period (the "date of exercise").
(c) Any funds remaining in a Participant's Account after the
purchase of Shares at the conclusion of a Semi-Annual Period shall, unless
otherwise requested by the Participant, be carried over and applied in the next
Semi-Annual Period.
(d) If the aggregate number of Shares that all Participants
in the Plan desire to purchase in any Semi-Annual Period exceeds the number of
Shares then available under the Plan, the Shares available shall be allocated
among such Participants in proportion to their contributions during the
Semi-Annual.
(e) Notwithstanding any other provision herein to the
contrary, the obligation to purchase, issue or deliver Shares under the Plan
shall (to the extent deemed necessary or appropriate by the Company or Board) be
subject to (i) the effectiveness of a registration statement under the
Securities Act of 1933, as amended, with respect to such Shares, and (ii) any
other applicable law, regulation, rule or order.
(f) Unless otherwise provided by the Board, any Shares
purchased by a Participant shall be deposited into an account that is
established in the Participant's name with the ESPP Broker and shall be subject
to the following:
(i) A Participant may direct, by written
notice to the Company prior to the conclusion of a Semi-Annual
Period, that the ESPP Broker account be established in the name of
the Participant and one such other person as may be designated by
the Participant as joint tenants with right of survivorship,
tenants in common, or community property, to the extent and in the
manner permitted by applicable law.
(ii) A Participant shall be free to
undertake a disposition, as that term is defined in Section 424(c)
of the Code (which generally includes any sale, exchange, gift or
transfer of legal title), of Shares in the Participant's ESPP
Broker account at any time, whether by sale, exchange, gift or
other transfer of title. Subject to subparagraph (iii) below, in
the absence of such a disposition of the Shares, all Shares must
remain in the Participant's account at the ESPP Broker until the
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applicable Holding Period for the Shares has been satisfied. For
Shares for which the Holding Period has been satisfied, a
Participant may move such Shares to an account at another
brokerage firm of the Participant's choosing or request that a
certificate representing the Shares be issued and delivered to the
Participant.
(iii) A Participant who is not subject to
United States taxation may, at any time and without regard to the
applicable Holding Period, move his or her Shares to an account at
another brokerage firm of the Participant's choosing or request
that a certificate that represents the Shares be issued and
delivered to the Participant.
9. TERMINATION OF CONTRIBUTIONS.
(a) The contributions of an Employee under the Plan shall
terminate (and no further contributions shall be made on his or her behalf) as
of the date on which the Employee (i) elects to revoke his or her payroll
deduction contribution for a Semi-Annual Period, (ii) ceases to be an Employee,
(iii) dies, (iv) ceases to receive Compensation for the remainder of a
Semi-Annual Period, or (v) to the extent required by law or regulation, receives
a hardship distribution under tax-qualified section 401(k) plan sponsored by the
Company or any affiliate. Upon ceasing contributions under the Plan, an Employee
shall (if applicable) be entitled to recommence contributions in accordance with
the terms of Section 5; provided that in the case of a termination under (a)(v),
the terminated Participant may not do so for a period of 12 months following the
date of the hardship withdrawal (or other period specified under the section
401(k) plan).
(b) Other than for the cessation of contributions under
Section 9(a) (ii) and (iii), Shares shall (except as provided in Section 9(c))
be purchased for the Participant for the Semi-Annual Period based upon the
balance in the Participant's Account as of that date, and payment of any funds
remaining in the Account (after the purchase of Shares) shall be made to the
Participant as soon as administratively feasible.
(c) In the case of a revocation of a payroll deduction
election under Section 9(a)(i), the Participant also may elect at any time prior
to the last trading day of the Semi-Annual Period (under such procedures as may
be established by the Board) to have any funds remaining in his or her Account
paid to him or her. Such payment shall be made as soon as administratively
feasible after such an election is submitted in accordance with any applicable
procedures.
(d) In the case of a cessation of contributions under
Section 9(a)(iii), any funds remaining in the Participant's Account shall be
applied in accordance with Section 10(a).
(e) In the case of a cessation of contributions under
Section 9(a)(ii), any funds remaining in the Participant's Account shall be
returned to the Participant as soon as
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administratively feasible after the date on which the Participant terminates
employment.
10. DEATH OF A PARTICIPANT.
(a) Upon the death of a Participant, the contributions
credited to a Participant's Account shall be retained and applied in accordance
with Section 8 and the Participant's beneficiary (see Section 10(b)) shall
thereafter be entitled to the Shares (and cash, if any) credited to the
Participant's Account. Any distribution to a beneficiary hereunder shall be in
full satisfaction of the obligations owing to the deceased participant under the
Plan. If more than one beneficiary is designated, each beneficiary shall be
entitled to the portion of the Participant's Account designated by the
Participant, or if no such designation is made, each beneficiary shall receive
an equal portion of the Shares and proceeds.
(b) Each Participant may designate (on such forms as may be
required by the Board) a beneficiary under the Plan. A previous designation may
be changed by a Participant at any time by the submission of a new designation
form to the Board prior to the Participant's death. If a Participant has not
designated a beneficiary or the designated beneficiary is not living on the
Participant's date of death, the Participant's beneficiary shall be his or her
estate.
11. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Board. The Board
shall have the full discretion to interpret and administer the Plan and to adopt
such rules, regulations and procedures as it deems necessary or advisable from
time to time. The Board may delegate any or all of its powers and duties
hereunder to one or more (i) committees consisting of such members of the Board
as it may designate, or (ii) Employees. The interpretation of, and all actions
taken under, the Plan by the Board or its delegate shall be final, binding, and
conclusive on all interested parties, including the Company, its shareholders,
and all former, present, and future Employees. The Board may, as to questions of
accounting, rely conclusively upon any determinations made by independent public
accountants of the Company.
(b) A majority of the Board shall constitute a quorum, and
the acts of a majority of the members of the Board present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
members of the Board, shall be deemed the acts of the Board.
(c) Unless otherwise directed by the Board, all costs and
expenses of administering the Plan shall be paid by the Company and the other
participating employers (as determined by the Board in its sole discretion).
12. AMENDMENT.
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(a) The Board shall have the right to amend the Plan at any
time and from time to time; provided, that no such amendment of the Plan shall,
without stockholder approval, be effective if stockholder approval of the
amendment is required to comply with Section 423 of the Code or any other
applicable law, regulation, rule or order.
(b) No amendment may be made that would cause the purchase
of Shares under the Plan not to qualify for exemption under Section 16 of the
Exchange Act.
(c) Notwithstanding anything herein to the contrary, the
Board shall have the power to amend the Plan in any manner deemed necessary or
advisable for the purchase of Shares under the Plan to qualify for any exemption
provided under Section 16 of the Exchange Act and any such amendment shall, to
the extent deemed necessary or advisable by the Board, be applicable to any
existing Accounts.
13. TERMINATION. The Board shall have the right to terminate
the Plan at any time. Upon termination, each Participant shall be entitled to
payment of his or her Account balance as soon as administratively feasible after
the date the Plan is terminated and Participants shall have no further rights
hereunder. Unless terminated earlier by action of the Board, the Plan shall
remain in effect until such time as no Shares remain available for issuance
under the Plan and the Participants and their employers have no further rights
or obligations (as applicable) under the Plan.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Appropriate
and proportionate adjustments shall be made in the number and class of shares
subject to this Plan in the event of a share dividend, share split, reverse
share split, recapitalization, reorganization, merger, consolidation,
acquisition, separation or like change in the capital structure of the Company.
15. TRANSFERABILITY OF RIGHTS. No rights or interests of a
Participant under this Plan may be voluntarily or involuntarily transferred, by
operation of law or otherwise, other than by will or the laws of descent and
distributions, and such rights and interests shall not be subject to a
Participant's debts, contracts or liabilities.
16. PARTICIPATION IN OTHER BENEFIT PLANS. Nothing herein
contained shall affect an Employee's rights to participate in and receive
benefits under and in accordance with the then current provisions of any
pension, insurance or other employee benefit plan or program offered by his or
her employer.
17. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Plan
shall confer upon any Employee any right to continued employment with the
Company or any affiliate, or interfere with or restrict in any way the rights of
the Company or affiliate to discharge the
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Employee at any time for any reason whatsoever, with or without cause.
18. NO SHAREHOLDER RIGHTS CONFERRED. Nothing contained in the
Plan shall confer upon a Participant (or his or her beneficiary) any rights of a
holder of Shares unless and until Shares are issued to the Participant (or his
or her beneficiary).
19. GOVERNING LAW. To the extent not preempted by Federal law,
the Plan shall be construed in accordance with and governed by the internal laws
of the State of Delaware.
20. SEVERABILITY. In the event any provision of the Plan or
any action taken pursuant to the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included, and the illegal or invalid action shall be
deemed null and void.
21. WITHHOLDING TAXES. To the extent required by applicable
law or regulation, each Participant shall arrange with his or her employer for
the payment of any required federal, state or local income or other tax
withholding applicable to the receipt of Shares under the Plan prior to the
delivery of the Shares to the Employee.
22. NOTICES. Any notice or other communication required or
permitted to be given pursuant to the Plan must be in writing and may be given
by registered or certified mail, and if given by registered or certified mail,
shall be determined to have been given and received on the date three days after
a registered or certified letter containing such notice, properly addressed with
postage prepaid, is deposited in the United States mails; and if given other
than by registered or certified mail, it shall be deemed to have been given when
delivered to and received by the party to whom addressed. Notice shall be given
to Participants at their most recent addresses shown in the Company's records.
Notice to the Board shall be sent to the Board at the Company's principal
executive offices to the attention of the Chairman and Chief Executive Officer
of the Company. Notice to an employer shall be sent to the employer's principal
executive offices to the attention of its Chief Financial Officer.
23. CONSTRUCTION. Titles and headings of sections and articles
of this Plan are for convenience of reference only and shall not affect the
construction of any provision of this Plan. Unless the context clearly requires
otherwise, the singular shall include the plural.
24. EFFECTIVE DATE OF PLAN. The Plan shall become effective as
of the date established by the Board.
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