1987 Employee Stock Purchase Plan – Storage Technology Corp.
STORAGE TECHNOLOGY CORPORATION
AMENDED AND RESTATED
1987 EMPLOYEE STOCK PURCHASE PLAN
Amended as of May 24, 2001
1. Recitals. On February 2, 1982, Storage Technology Corporation, a
Delaware corporation (together with its Subsidiary Corporations,
hereinafter referred to, unless the context otherwise requires, as the
"Company"), established the Storage Technology Corporation 1982
Employee Stock Purchase Plan. Such plan was subsequently amended and
restated by the Board of Directors (the "Board") on June 15, 1987 and
renamed the Storage Technology Corporation 1987 Employee Stock Purchase
Plan. Under the provisions of Paragraph 19, the Company reserved the
power, through its Board of Directors, to amend the plan from time to
time, subject in certain instances to approval of the Company's
stockholders. Pursuant to that power, the plan was amended and restated
in its entirety on December 14, 1995 and was approved by the
stockholders of the Company on May 30, 1996. The plan was further
amended on September 23, 1997 and December 19, 1997, and these
amendments were approved by the stockholders of the Company on May 21,
1998. The plan was further amended on September 16, 1999. Stockholder
approval was not required for the September 16, 1999 amendments. The
plan was further amended on March 8, 2001, effective on May 24, 2001,
the date the stockholders approved the amendment. The Storage
Technology Corporation 1987 Employee Stock Purchase Plan, as amended
and restated through May 24, 2001, is referred to as the "1987 Plan" or
the "Plan".
2. Purposes. The 1987 Plan is intended to provide a method whereby
employees of the Company will have an opportunity to acquire a
proprietary interest in the Company through the purchase of shares of
the $.10 par value voting Common Stockof the Company (the "Common
Stock"). It is the intention of the Company to have the Plan qualify as
an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"). The
provisions of the Plan shall, accordingly, be construed so as to extend
and limit participation in a manner consistent with the requirements of
that section of the Code.
3. Definitions.
a. "Account" means an Employee's interest in the Segregated Account
based on the contributions made thereto and the interest earned
thereon.
b. "Base Pay" means, at the Employee's election, either: (i) an
Employee's rate of base salary (before deduction for contributions
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to plans maintained pursuant to Sections 401(k) and 125 of the Code)
in effect during the Offering Period, but EXCLUDING payments for
overtime, shift premium, incentive compensation, bonuses, and other
similar payments; or (ii) Employee's rate of base salary (before
deduction for contributions to plans maintained pursuant to Sections
401(k) and 125 of the Code) in effect during the Offering Period,
EXCLUDING payments for overtime, shift premium, incentive
compensation, bonuses, and other similar payments, but INCLUDING all
payments for bonuses, incentive compensation and various forms of
commissions. Base Pay shall also include payments for short-term
disability.
c. "Committee" means the Compensation Committee of the Company's Board
of Directors or such other committee as is designated by the Board
of Directors to administer the Plan.
d. "Employee" means any person who is a Regular Employee (per
CP-3-3-14) customarily employed for more than 20 hours per week and
more than five months in a calendar year by Storage Technology
Corporation or any Subsidiary Corporation.
e. "Offering Commencement Date" shall mean January 1, 1991 and each
following November 1 and May 1 thereafter, unless otherwise
specified by the Committee.
f. "Offering Periods" shall mean the period commencing January 1, 1991
and ending October 31, 1991 and thereafter the periods commencing
each November 1 and May 1 and ending on the next following April 30
and October 31, respectively. The duration of Offering Periods may
be changed pursuant to Paragraphs 5 and 21 of this Plan.
g. "Offering Termination Date" shall mean October 31, 1991 and each
following April 30 and October 31 thereafter, unless otherwise
specified by the Committee.
h. "Segregated Accounts" shall mean the depository accounts established
by the Company and by Subsidiary Corporations for collection of
Employee contributions to the Plan.
i. "Subsidiary Corporation" shall mean any present or future
corporation which (i) would be a subsidiary corporation with respect
to the Company as that term is defined in Section 425 of the Code,
and (ii) is designated as a participant in the Plan by the Committee
described in Paragraph 14.
4. Eligibility
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a. Participation in the Plan is completely voluntary. An Employee will
be eligible to become a participant in each Offering Period if
employed by the Company on or before 15 days prior to the applicable
Offering Commencement Date.
b. Any provision of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan:
i. if, immediately after the grant, such Employee would own stock,
and/or hold outstanding options to purchase stock, possessing
5% or more of the total combined voting power or value of all
classes of stock of the Company or of any Subsidiary
Corporation (for purposes of this Paragraph the rules of
Section 425(d) of the Code shall apply in determining stock
ownership of any Employee); or
ii. if such option would permit his or her rights to purchase stock
under all employee stock purchase plans of the Company and its
Subsidiary Corporations to accrue at a rate that exceeds
$25,000 of the fair market value of the stock (determined at
the time each option is granted) for each calendar year in
which such option is outstanding; or
iii. for shares in excess of 25,000 in respect of any Offering
Period, provided that this limitation is subject to increase or
decrease by the Committee prior to the commencement of any
Offering Period in respect of such Offering Period.
5. Plan Offerings.
a. The Plan is authorized to issue a total of 15,200,000 shares of
Common Stock.
b. The Plan will be implemented by consecutive Offering Periods, with a
new Offering Period commencing on each Offering Commencement Date
and ending on the next Offering Termination Date, or on such other
dates as the Committee shall determine prior to the commencement of
the relevant Offering Period, and continuing until terminated in
accordance with Paragraph 19 hereof. The Committee shall have the
power to change the duration of Offering Periods (including the
commencement and termination dates thereof) with respect to future
offerings without stockholder approval if such change is announced
at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected.
c. The Committee may determine in its sole discretion from time to time
to fix a maximum number of shares of Common Stock of the Company,
including any unsold balances from earlier Offering Periods (subject
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to adjustment upon changes in the capitalization of the Company in
accordance with Paragraph 18 hereof) that shall be issued during any
one Offering Period. If the Committee fixes a maximum number of
shares per Offering Period, the maximum number of shares to be
issued in respect of any Offering Period may from time to time be
increased or decreased by the Committee prior to the commencement of
the affected Offering Period within the limits of the total shares
then available under the Plan.
d. Participation in any Offering Period under the Plan shall neither
limit, nor require, participation in any other Offering Period
(except as set forth in paragraphs 4(b)(i) and 4(b)(ii) hereof).
6. Participation.
a. An eligible Employee may become a participant by enrolling and
authorizing payroll deductions on an Interactive Voice Response
system ("IVR") in such manner as is prescribed by the Company or, if
such Employee does not have access to IVR, by completing an
authorization for payroll deduction on the form provided by the
Company and filing it with the department designated by the Company
or the designated country coordinator by the deadline established by
the Company, which must precede the first day of the Offering Period
for which the participant enrolls.
b. Payroll deductions for a participant shall commence on the
applicable Offering Commencement Date when an authorization for a
payroll deduction becomes effective and shall end on the Offering
Termination Date of the Offering Period to which such authorization
is applicable unless sooner terminated by the participant as
provided in Paragraph 11.
7. Payroll Deductions.
a. At the time a participant enrolls and authorizes payroll deductions,
the participant shall elect to have deductions made from his or her
Base Pay and deposited in a Segregated Account during the time the
Employee is a participant in an Offering Period. Deductions can be
made at the rate of 1, 2, 3, 4, 5, 6, 7, 8, 9, or 10% of Base Pay.
b. All payroll deductions made for a participant shall be transferred
to a Segregated Account as soon as practicable. For administrative
convenience, the Company may offset amounts advanced by the Company
to pay participant withdrawals pursuant to Paragraph 11 against
amounts of payroll deductions otherwise payable into the Segregated
Account. A participant may not make any separate cash payments into
the Segregated Account. The Company shall maintain appropriate
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accounting records to reflect at all times the interest and total
deductions of all participants in the Segregated Account.
c. A participant may discontinue participation in the Plan as provided
in Paragraph 11, but no other change can be made during an Offering
Period and, specifically, a participant may not alter the rate of
payroll deductions for that Offering Period.
8. Terms and Conditions of Options.
a. On the applicable Offering Commencement Date, when a participant's
authorization for a payroll deduction becomes effective, the
participant shall be deemed to have been granted an option to
purchase a maximum number of shares of Common Stock, subject to the
limitations pursuant to Paragraph 4(b) above, equal to the lesser
of: (a) the Option Price (as defined below) divided into the
Employee's total deductions under the Plan in respect of the
Offering Period or (b) the Employee's pro-rata share of all shares
available for issuance under the Plan for that Offering Period,
determined pursuant to Paragraph 13, below.
b. The option price per share (hereinafter "Option Price") of Common
Stock purchased with payroll deductions made during each Offering
Period shall be the lesser of:
i. 85% of the closing price per share of the Common Stock as quoted
in The Wall Street Journal for the applicable Offering
Commencement Date (or on the next business date on which shares
of the Common Stock shall be traded on the New York Stock
Exchange in the event that no shares of the Common Stock shall
have been traded on the Offering Commencement Date); or
ii. 85% of the closing price per share of the Common Stock as quoted
in The Wall Street Journal for the applicable Offering
Termination Date (or for the next preceding business date on
which shares of the Common Stock shall be traded on the New York
Stock Exchange in the event that no shares of the Common Stock
shall have been traded on the Offering Termination Date).
c. The Committee may determine in its sole discretion from time to time
to issue fractional shares under the Plan. If the Committee
determines not to issue fractional shares, any accumulated payroll
deductions that would have been used to purchase fractional shares
shall be (i) automatically credited to each participant's Account
and applied towards his or her option to purchase shares in the next
successive Offering Period, or (ii) returned to each participant
promptly following the termination of the Offering Period, as may be
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determined by the Committee. Any accumulated payroll deductions that
are in excess of the limitations of Paragraph 8(a), together with
any net income of the Segregated Account allocable to each
participant, and the amount referenced in item (ii) above, shall be
returned to each participant promptly following the termination of
an Offering Period.
9. Exercise of Option. Unless a participant withdraws in accordance with
Paragraph 11, his or her option to purchase Common Stock with payroll
deductions made during any Offering Period will be deemed to have been
exercised automatically on the applicable Offering Termination Date,
for the purchase of the number of full shares of Common Stock that the
accumulated payroll deductions will purchase at the applicable Option
Price (but not in excess of the number of shares for which options have
been granted to the participant pursuant to Paragraph 8(a)), and any
excess in his or her Account at that time will be returned to the
participant, together with any net income of the Segregated Account
allocable to his or her Account, as provided in Paragraph 13.
10. Delivery. As promptly as practicable after the Offering Termination
Date of each Offering Period, the Company will deliver to a broker
designated by the Committee to hold shares for the benefit of the
participants the shares of Common Stock purchased upon the exercise of
the participant's option. As may be determined by the Committee in its
sole discretion from time to time, such shares shall be delivered by
physical certificates or by means of a book entry system. A participant
may instruct any such designated broker to sell shares purchased upon
exercise of the participant's option at any time, subject to applicable
securities laws; provided, that the Committee (i) may restrict a
participant's right to transfer shares to another brokerage,
institution, or any other person (including the participant) during the
initial 24 months following the Offering Commencement Date in which the
shares were purchased, and (ii) may determine that, for purposes of
Section 423(b)(8)(B) of the Internal Revenue Code, the shares were sold
if a participant transfers shares to another brokerage or financial
institution, or any other person (including the participant) during the
initial 24 months following the Offering Commencement Date in which
shares were purchased.
11. Withdrawal and Termination.
a. Prior to the 15th day of the month before the applicable Offering
Termination Date, any participant may withdraw payroll deductions
and net earnings thereon credited to the participant by following
the procedures specified by the Company for effecting a withdrawal
on the IVR system or, if the participant does not have access to
IVR, by giving written notice of withdrawal to the department
designated by the Company or the designated country coordinator. As
promptly as practical after the participant's withdrawal, the
payment to the participant of all the participant's payroll
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deductions credited to his or her account, together with any net
earnings of the Segregated Account allocable to the participant's
Account shall be made. No further payroll deductions for such
participant will be made during such Offering Period. The Company
may, for administrative convenience, elect to pay to participants
(or beneficiaries) the amount of any withdrawals and earnings
thereon and may then offset the amount of any such payments against
payroll deductions otherwise payable to the Segregated Account. The
Company may, at its option, treat any attempt to borrow by a
participant on the security of the accumulated payroll deductions
allocated to the participant's Account as an election under this
Paragraph 11(a) to withdraw such amounts from the Segregated
Account.
b. A participant's withdrawal from any Offering Period will not have
any effect upon eligibility to participate in any subsequent
Offering Period or in any similar plan that may hereafter be adopted
by the Company.
c. Upon termination of the participant's employment with the Company
for any reason (including retirement but excluding death or, in
certain cases, disability while in the employ of the Company) on or
prior to the last day of the last full payroll period immediately
preceding an Offering Termination Date, the payroll deductions
credited to the participant, together with any net earnings of the
Segregated Account allocable to his or her Account, will be returned
to the participant, or, in the case of a participant's death
subsequent to the termination of employment, to the person or
persons entitled thereto under Paragraph 15. For purposes of the
Plan, a participant shall be considered disabled if the Company
determines that the participant is unable to perform the usual and
customary requirements of his or her job with the Company and will
be unable to do so for at least six months; provided, however, that
such determination is subject to review by the Committee at its
discretion.
d. Upon termination of the participant's employment because of death or
disability prior to the Offering Termination Date, the participant
or the participant's beneficiary (as defined in Paragraph 15) shall
have the right to elect, by written notice given to the Company's
General Counsel prior to the expiration of the period of 90 days
commencing on the date of death or disability of the participant,
and prior to the Offering Termination Date, either
i. to withdraw all of the payroll deductions credited to the
participant, together with any net earnings of the Segregated
Account allocable to his or her Account, or
ii. to exercise the participant's option to purchase of Common Stock
for the then current Offering Period on the Offering Termination
Date for the purchase of the number of full shares of Common
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Stock that the amount allocated to the participant's Account at
the date of the participant's death or disability will purchase
at the applicable Option Price, and any excess credited to such
Account will be returned to said participant or his or her
beneficiary. In the event that no such written notice of
election shall be duly received by the office of the Company's
General Counsel within the required time period, the participant
or beneficiary shall automatically be deemed to have elected to
withdraw the payroll deductions credited to the participant,
together with the net earnings of the Segregated Account
allocable to his or her Account at the date of the participant's
death or disability, and the same will be paid promptly to said
participant or beneficiary. Notwithstanding the foregoing, if a
participant's employment with the Company and any Subsidiary
Corporation terminates because of disability more than three
months prior to the Offering Termination Date, the provisions
of this Paragraph 11(d) shall not apply and the provisions of
Paragraph 11(c) shall apply to such participant.
12. Income and Accounting.
a. Separate accounts shall not be established by the Company for
Employees who participate in the Plan. The Employee's payroll
deductions shall be transferred to the Segregated Account as soon
as practical after each pay period and credited to the participant.
b. Each participant shall share proportionately in the income and
expense of the Segregated Account and any net income shall be
taxable to the participant, who shall be responsible for paying any
income or other taxes applicable thereto.
13. Stock.
a. If the Committee, in its sole discretion, fixes a maximum number of
shares that shall be made available for sale under the Plan during
any Offering Period, such number of shares may be adjusted if less
than the number of shares that may be specified by the Committee
with respect to any Offering Period are purchased during any
Offering Period. In such event, the number of shares not purchased
in the Offering Period may be carried over and made available for
sale under the Plan during any subsequent Offering Period. If the
total number of shares subject to options that would otherwise be
exercised on any Offering Termination Date in accordance with
Paragraph 9 exceeds the maximum number of shares available for sale,
subject to adjustment as aforesaid, the Company shall make a pro
rata allocation of the shares available for delivery and
distribution in as nearly a uniform manner as shall be practicable
and as it shall determine to be equitable, and the balance of
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payroll deductions credited to each participant, together with the
net earnings of the Segregated Account allocable thereto, shall be
returned to him or her as promptly as possible.
b. A participant will have no interest in Common Stock covered by
the participant's option until such option has been exercised.
Participants in the Plan shall have no rights as stockholders with
respect to any shares covered by the Plan until the date of issue of
a stock certificate to him or her for such shares. Except as
otherwise expressly provided in the Plan or in the corporate action
relating to such event, no adjustment shall be made for dividends or
other rights for which the record date is prior to the date such
stock certificate is issued.
c. Common Stock to be delivered to a participant under the Plan will be
registered in the name of the participant.
d. The Board of Directors may, in its discretion, require as conditions
to the exercise of any option that the shares of Common Stock
reserved for issuance upon the exercise of the option shall have
been duly listed, upon official notice of issuance, upon the New
York Stock Exchange, and that either
i. Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall have become
effective, or
ii. the participant shall have represented in form and substance
satisfactory to the Company that it is the participant's
intention to purchase for investment the shares being purchased
under such option.
14. Administration. The Plan shall be administered by the Committee. The
interpretation and construction of any provision of the Plan or any
Segregated Account agreement and the adoption of rules and regulations
for administering the Plan shall be made by the Committee, subject,
however, at all times to the final concurrence of the Board of
Directors of the Company. Determinations made by the Committee and
approved by the Board of Directors with respect to any matter or
provision contained in the Plan shall be final, conclusive and binding
upon the Company and upon all participants, their heirs or legal
representatives. Any rules, regulations or interpretations adopted by
the Committee shall remain in full force and effect unless and until
altered, amended, or repealed by the Committee or the Board of
Directors.
15. Designation of Beneficiary. A participant may file with the Company,
pursuant to rules adopted by the Committee, a written designation of a
beneficiary who is to receive any Common Stock and/or cash pursuant to
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the provisions of the Plan in the event of the participant's death.
Such designation of beneficiary may be changed by the participant at
any time by written notice. Upon the death of a participant and upon
receipt by the Company of proof of the identity and existence at the
participant's death of a beneficiary validly designated by him under
the Plan, the Company shall deliver such Common Stock to such
beneficiary and/or pay any cash in the participant's Account in the
Segregated Account to the beneficiary, as may be required under the
provisions of Paragraph 11(d). 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 cause such cash to be paid to the person or persons
or the entity duly designated by the participant, as shown on the
Company's records, as his or her beneficiary for the proceeds of
Company paid life insurance. In the absence of such a beneficiary who
is living at the time of the participant's death, the Company shall
cause such cash to be paid to the executor or administrator of the
estate of the participant, or if no such executor or administrator of
the estate has been appointed (to the knowledge of the Company), the
Company, in its discretion, may cause such cash to be paid to the
spouse or to any one or more dependents of the participant as the
Company may designate. No beneficiary shall, prior to the death of the
participant by whom he or she has been designated, acquire any interest
in the Common Stock or in amounts credited to the participant's
Account.
16. Transferability. Neither payroll deductions credited to a participant,
nor earnings thereon, nor any rights with regard to the exercise of an
option or to receive Common Stock under the Plan may be assigned,
transferred, pledged, or otherwise disposed of in any way by the
participant otherwise than by will or the laws of descent and
distribution. Any such attempted assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat
such act as an election to withdraw funds in accordance with Paragraph
11.
17. Ownership of ESPP Assets. All contributions paid into Segregated
Accounts shall be the property of the respective participants in the
Plan and the Company shall have no interest in such amounts while held
in the Segregated Account.
18. Effect of Changes in Capital Structure. If the outstanding shares of
Common Stock are changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of any
recapitalization, reclassification, stock split, stock dividend,
combination, or subdivision, or if the Company takes any other action
of a similar nature affecting such Common Stock (excluding, however,
any reorganization under the United States Bankruptcy Code), then the
number and class of shares of Common Stock that may thereafter be
optioned, or the rights assigned thereto (in the aggregate and to any
participant), shall be adjusted accordingly and, in the case of each
option outstanding at the time of any such action, the number and class
of shares that may thereafter be purchased pursuant to such option and
the Option Price shall be adjusted, in each case to such extent and in
such manner, if at all, as may be determined by the Board upon the
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recommendations of the Committee, with the approval of independent
public accountants and counsel, to be necessary to preserve unimpaired
the rights of the holder of such option.
19. Amendment or Termination. The Board of Directors of the Company may at
any time terminate or amend the Plan. No such termination can affect
options previously granted, nor may an amendment make any change in any
option theretofore granted without prior approval of the stockholders
of the Company if such approval is required under the laws or
regulations administered by the U.S. Treasury (including Section 423 of
the Code), the Securities and Exchange Commission (including Rule
16b-3), any other agency of the U.S. Government, or the New York Stock
Exchange, or any other exchange or system on which the Company's stock
is then registered or traded.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have
been duly given when received by the General Counsel of the Company.
21. Dissolution, Merger or Asset Sale.
a. Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Offering Period shall terminate
immediately prior to the consummation of such proposed action,
unless otherwise provided by the Board.
b. Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each option under the Plan
shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise
of its sole discretion and in lieu of such assumption or
substitution, to shorten the Offering Period then in progress by
setting a new Offering Termination Date (the "New Offering
Termination Date") or to cancel each outstanding right to purchase
and refund all sums collected from participants during the Offering
Period then in progress. If the Board shortens the Offering Period
then in progress in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board shall notify each
participant in writing, at least ten (10) business days prior to the
New Termination Date, that the Offering Termination Date for the
option held by the participant has been changed to the New Offering
Termination Date and that such option shall be exercised
automatically on the New Offering Termination Date, unless prior to
such date the participant has withdrawn from the Offering Period as
provided in Paragraph 10 hereof. For purposes of this paragraph, an
option granted under the Plan shall be deemed to be assumed if,
following the sale of assets or merger, the option confers the right
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to purchase, for each share of option stock subject to the option
immediately prior to the sale of assets or merger, the consideration
(whether stock, cash or other securities or property) received in
the sale of assets or merger by holders of Common Stock for each
share of Common Stock held on the effective date of the transaction
(and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the
outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not
solely common stock of the successor corporation or its parent (as
defined in Section 424(e) of the Code), the Board may, with the
consent of the successor corporation, provide for the consideration
to be received upon exercise of the option to be solely common stock
of the successor corporation or its parent equal in fair market
value to the per share consideration received by holders of Common
Stock and the sale of assets or merger.
22. Effective Date of Offering Periods. Offerings may commence under the
Plan prior to approval by the stockholders of any amendments or
restatements under Paragraph 19 above, but no Common Stock requiring
stockholder approval may be purchased hereunder unless and until the
requisite stockholder approval has been received.
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