EDEN BIOSCIENCE CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purposes of the Eden Bioscience Corporation 2000 Employee Stock
Purchase Plan (the "Plan") are (a) to assist employees of Eden Bioscience
Corporation, a Washington corporation (the "Company"), and its designated
subsidiaries in acquiring a stock ownership interest in the Company pursuant to
a plan that is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended, and (b) to
encourage employees to remain in the employ of the Company and its subsidiaries.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
"ADDITIONAL SHARES" has the meaning set forth in Section 6.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITTEE" means the Company's Compensation Committee or any other
Board committee appointed by the Board to administer the Plan.
"COMMON STOCK" means the common stock, par value $0.0025 per share, of
the Company.
"COMPANY" means Eden Bioscience Corporation, a Washington corporation.
"CORPORATE TRANSACTION" means either of the following events:
(a) Consummation of any merger or consolidation of the Company with or
into another corporation or
(b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all the
Company's outstanding securities or all or substantially all the Company's
assets;
provided, however, that a Corporate Transaction shall not include (i) a merger
of the Company in which the holders of shares of Common Stock immediately prior
to the merger hold at least a majority of the shares of Common Stock in a
surviving corporation, a successor corporation or its parent corporation, as
applicable, immediately after the merger; (ii) a mere reincorporation of the
Company; (iii) a transaction undertaken for the sole purpose
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of creating a holding company; or (iv) a transfer of the Company's assets to a
majority-owned subsidiary corporation of the Company.
"DESIGNATED SUBSIDIARY" has the meaning set forth under the definition
of "Eligible Employee" in this Section 2.
"ELIGIBLE COMPENSATION" means all base straight time gross earnings and
does not include overtime, cash bonuses, commissions, severance pay, hiring and
relocation bonuses, pay in lieu of vacations, sick leave, gain from stock option
exercises or any other special payments.
"ELIGIBLE EMPLOYEE" means any employee of the Company or a domestic
Subsidiary Corporation or any other Subsidiary Corporation designated by the
Board or the Committee (each, a "Designated Subsidiary"), who is in the employ
of the Company (or any Designated Subsidiary) on one or more Offering Dates and
who meets the following criteria:
(a) the employee does not, immediately after the Option is granted, own
stock (as defined by the Code) possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or of a Parent
Corporation or Subsidiary Corporation of the Company;
(b) the employee's customary employment is for 20 hours or more per
week; provided, however, that the Plan Administrator may decrease this minimum
hours requirement for a future Offering;
(c) if specified by the Plan Administrator for a future Offering, the
employee customarily works a minimum of five months per year or any lesser
number of months established by the Plan Administrator; and
(d) if specified by the Plan Administrator for a future Offering, the
employee has been employed for a certain minimum period of time as of an
Offering Date; provided, however, that any such minimum employment period may
not exceed two years.
If the Company permits any employee of a Designated Subsidiary to participate in
the Plan, then all employees of that Designated Subsidiary who meet the
requirements of this paragraph shall also be considered Eligible Employees.
"ENROLLMENT PERIOD" has the meaning set forth in Section 7.1.
"ESPP BROKER" has the meaning set forth in Section 10.1.
"FAIR MARKET VALUE" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing sales price for the Common Stock as reported by the Nasdaq
National Market on the Offering Date or the Purchase Date, as applicable, unless
the Plan Administrator determines otherwise for a future Offering or (b) if the
Common Stock is listed on the New York Stock Exchange or the
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American Stock Exchange, the closing sales price for the Common Stock as such
price is officially quoted in the composite tape of transactions on such
exchange on the Offering Date or the Purchase Date, as applicable, unless the
Plan Administrator determines otherwise for a future Offering; provided,
however, that for the first Offering Date under the Plan that occurs on the IPO
Date, Fair Market Value shall be equal to the Common Stock's initial public
offering price as set forth in Section 6(a). If there is no such reported price
for the Common Stock for the date in question, then such price on the last
preceding date for which such price exists shall be determinative of Fair Market
Value.
"IPO DATE" means the day on which shares of Common Stock are first
offered to the public in an underwritten initial public offering of the Common
Stock pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission (such day being the first trading day for
the Common Stock on the Nasdaq National Market, the New York Stock Exchange or
other applicable trading market).
"OFFERING" has the meaning set forth in Section 5.1.
"OFFERING DATE" means the first day of an Offering.
"OPTION" means an option granted under the Plan to an Eligible Employee
to purchase shares of Common Stock.
"PARENT CORPORATION" means any corporation, other than the Company, in
an unbroken chain of corporations ending with the Company, if, at the time of
the granting of the Option, each of the corporations, other than the Company,
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means any Eligible Employee who has elected to participate
in an Offering in accordance with the procedures set forth in Section 7.1 and
who has not withdrawn from the Plan or whose participation in the Plan is not
otherwise terminated.
"PLAN" means the Eden Bioscience Corporation 2000 Employee Stock
Purchase Plan.
"PLAN ADMINISTRATOR" has the meaning set forth in Section 3.1.
"PURCHASE DATE" means the last day of each Purchase Period.
"PURCHASE PERIOD" has the meaning set forth in Section 5.2.
"PURCHASE PRICE" has the meaning set forth in Section 6.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSCRIPTION" has the meaning set forth in Section 7.1.
"SUBSIDIARY CORPORATION" means any corporation, other than the Company,
in an unbroken chain of corporations beginning with the Company, if, at the time
of the granting of
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the Option, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board and/or the Committee or, if
and to the extent the Board or the Committee designates an executive officer of
the Company to administer the Plan, by such executive officer (each, the "Plan
Administrator"). Any decisions made by the Plan Administrator shall be
applicable equally to all Eligible Employees.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Subject to the provisions of the Plan, the Plan Administrator shall have
the authority, in its sole discretion, to determine all matters relating to
Options granted under the Plan, including all terms, conditions, restrictions
and limitations of Options; provided, however, that all Participants granted
Options pursuant to the Plan shall have the same rights and privileges within
the meaning of Code Section 423. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, unless reserved to the Board or the
Committee, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's other officers or employees as the Plan Administrator so determines.
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in Section 20.1, the
maximum number of shares of Common Stock that shall be available for issuance
under the Plan shall be:
(a) 500,000 shares, plus
(b) an annual increase to be added as of the first day of the Company's
fiscal year beginning in 2002 equal to the least of (i) 250,000 shares and (ii)
1% of the outstanding shares of Common Stock of the Company as of the end of the
Company's immediately preceding fiscal year on a fully diluted basis (assuming
exercise of all outstanding options and warrants and conversion of all
outstanding convertible preferred stock) and (iii) a lesser amount determined by
the Board; provided, however, that any shares from any increases in previous
years that are not actually issued shall be added to the aggregate number of
shares available for issuance under the Plan.
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Shares issued under the Plan shall be drawn from authorized and unissued
shares or shares subsequently acquired by the Company.
SECTION 5. OFFERING DATES
5.1 OFFERINGS
(a) Except as otherwise set forth below, the Plan shall be implemented
by a series of Offerings that each last twenty-four months (each, an
"Offering"). Offerings shall commence on May 1st and November 1st of each year
and end on the second April 30th and October 31st, respectively, occurring
thereafter; provided, however, that the first Offering shall begin on the IPO
Date and shall end on October 31, 2002.
(b) Notwithstanding the foregoing, the Plan Administrator may establish
(i) a different term for one or more future Offerings and (ii) different
commencing and ending dates for such future Offerings; provided, however, that
an Offering may not exceed five years; and provided, further, that if the
Purchase Price may be less than 85% of the Fair Market Value of the Common Stock
on the Purchase Date, the Offering may not exceed 27 months.
(c) In the event the first or the last day of an Offering is not a
regular business day, then the first day of the Offering shall be deemed to be
the next regular business day and the last day of the Offering shall be deemed
to be the last preceding regular business day.
5.2 PURCHASE PERIODS
(a) Each Offering shall consist of four consecutive purchase periods of
six months' duration (each, a "Purchase Period"). The last day of each Purchase
Period shall be the Purchase Date for such Purchase Period. Except as otherwise
set forth below, a Purchase Period shall commence on May 1st and November 1st of
each year and end on the next October 31st and April 30th, respectively,
occurring thereafter; provided, however, that the Purchase Period for the first
Offering shall commence on the IPO Date and shall end on April 30th, 2001.
(b) Notwithstanding the foregoing, the Plan Administrator may establish
for a future Offering (i) a different term for one or more future Purchase
Periods and (ii) different commencing and ending dates for any such Purchase
Period.
(c) In the event the first or last day of a Purchase Period is not a
regular business day, then the first day of the Purchase Period shall be deemed
to be the next regular business day and the last day of the Purchase Period
shall be deemed to be the last preceding regular business day.
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5.3 GOVERNMENTAL APPROVAL; SHAREHOLDER APPROVAL
Notwithstanding any other provision of the Plan to the contrary, an
Option granted pursuant to the Plan shall be subject to (a) obtaining all
necessary governmental approvals and qualifications for the Plan and (b)
obtaining shareholder approval of the Plan.
SECTION 6. PURCHASE PRICE
(a) The purchase price (the "Purchase Price") at which Common Stock may
be acquired in an Offering pursuant to the exercise of all or any portion of an
Option shall be 85% of the lesser of (i) the Fair Market Value of the Common
Stock on the Offering Date of such Offering and (ii) the Fair Market Value of
the Common Stock on the Purchase Date; provided, however, that the Purchase
Price for the first Offering that begins on the IPO Date shall be the lesser of
(A) 100% of the initial public offering price per share of Common Stock, before
underwriters' discounts or concessions, set forth in that certain underwriting
agreement between the Company and the representatives of the underwriters and
executed in connection with the Company's initial public offering of the Common
Stock and (B) 85% of the Fair Market Value of the Common Stock on the Purchase
Date.
(b) Notwithstanding the foregoing, if an increase in the number of
shares authorized for issuance under the Plan (other than an annual increase
pursuant to Section 4) is approved and all or a portion of such additional
shares are to be issued during one or more Offerings that are underway at the
time of shareholder approval of such increase (the "Additional Shares"), then,
if as of the date of such shareholder approval, the Fair Market Value of a share
of Common Stock is higher than the Fair Market Value on the Offering Date for
any such Offering, the Purchase Price for the Additional Shares shall be 85% of
the lesser of (i) the Common Stock's Fair Market Value on the date of such
shareholder approval and (ii) the Fair Market Value of the Common Stock on the
Purchase Date.
SECTION 7. PARTICIPATION IN THE PLAN
7.1 INITIAL PARTICIPATION
An Eligible Employee shall become a Participant on the first Offering
Date after satisfying the eligibility requirements and delivering to the Plan
Administrator during the enrollment period established by the Plan Administrator
(the "Enrollment Period") a subscription (the "Subscription"):
(a) indicating the Eligible Employee's election to participate in the
Plan;
(b) authorizing payroll deductions and stating the amount to be deducted
regularly from the Participant's pay; and
(c) authorizing the purchase of Common Stock for the Participant in each
Purchase Period.
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An Eligible Employee who does not deliver a Subscription as provided
above during the Enrollment Period shall not participate in the Plan for that
Offering or for any subsequent Offering unless such Eligible Employee
subsequently enrolls in the Plan by filing a Subscription with the Company
during the Enrollment Period for such subsequent Offering. The Company may, from
time to time, change the Enrollment Period for a future Offering as deemed
advisable by the Plan Administrator, in its sole discretion, for the proper
administration of the Plan.
An employee who becomes eligible to participate in the Plan after an
Offering has commenced shall not be eligible to participate in such Offering but
may participate in any subsequent Offering, provided that such employee is still
an Eligible Employee as of the commencement of any such subsequent Offering.
Eligible Employees may not participate in more than one Offering at a time.
7.2 CONTINUED PARTICIPATION
A Participant shall automatically participate in the next Offering until
such time as such Participant withdraws from the Plan pursuant to Section 11.3
or terminates employment as provided in Section 13.
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SECTION 8. LIMITATIONS ON RIGHT TO PURCHASE SHARES
8.1 NUMBER OF SHARES PURCHASED
(a) No Participant shall be entitled to purchase Common Stock under the
Plan (or any other employee stock purchase plan that is intended to meet the
requirements of Code Section 423 sponsored by the Company, a Parent Corporation
or a Subsidiary Corporation) with a Fair Market Value exceeding $25,000 (such
value determined as of the Offering Date for each Offering or such other limit
as may be imposed by the Code) in any calendar year in which a Participant
participates in the Plan (or any other employee stock purchase plan described in
this Section 8.1).
(b) No Participant shall be entitled to purchase more than 1,000 shares
of Common Stock (or such other number as the Board or the Committee shall
specify for a future Offering) under the Plan in any single Purchase Period. In
addition, no more than an aggregate of 125,000 shares of Common Stock (or such
other number as the Board or the Committee shall specify for a future Offering)
may be purchased by all the Participants under the Plan in any single Purchase
Period.
(c) For a future Offering, the Board or the Committee may specify a
maximum number of shares that may be purchased by any Participant, as well as a
maximum aggregate number of shares that may be purchased by all Participants,
pursuant to such Offering.
8.2 PRO RATA ALLOCATION
In the event the number of shares of Common Stock that might be
purchased by all Participants exceeds the number of shares of Common Stock
available in the Plan, in a Purchase Period or in an Offering, the Plan
Administrator shall make a pro rata allocation of the remaining shares of Common
Stock in as uniform a manner as shall be practicable and as the Plan
Administrator shall determine to be equitable. Fractional shares may not be
issued under the Plan unless the Plan Administrator determines otherwise for a
future Offering.
SECTION 9. PAYMENT OF PURCHASE PRICE
9.1 GENERAL RULES
Subject to Section 9.11, Common Stock that is acquired pursuant to the
exercise of all or any portion of an Option may be paid for only by means of
payroll deductions from the Participant's Eligible Compensation. Except as set
forth in this Section 9, the amount of compensation to be withheld from a
Participant's Eligible Compensation during each pay period shall be determined
by the Participant's Subscription.
9.2 PERCENT WITHHELD
The amount of payroll withholding for each Participant for purchases
pursuant to the Plan during any pay period shall be at least 1% but shall not
exceed 15% of the Participant's
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Eligible Compensation for such pay period (or such other higher percentage as
the Plan Administrator may establish from time to time for a future Offering).
Amounts shall be withheld in whole percentages only.
9.3 PAYROLL DEDUCTIONS
Payroll deductions shall commence on the first payday following the
Offering Date and shall continue through the last payday of the Offering unless
sooner altered or terminated as provided in the Plan.
9.4 MEMORANDUM ACCOUNTS
Individual accounts shall be maintained for each Participant for
memorandum purposes only. All payroll deductions from a Participant's
compensation shall be credited to such account but shall be deposited with the
general funds of the Company. All payroll deductions received or held by the
Company may be used by the Company for any corporate purpose.
9.5 NO INTEREST
No interest shall be paid on payroll deductions received or held by the
Company.
9.6 ACQUISITION OF COMMON STOCK
On each Purchase Date of an Offering, each Participant shall
automatically acquire, pursuant to the exercise of the Participant's Option, the
number of shares of Common Stock arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Purchase Period by the
Purchase Price; provided, however, that the number of shares of Common Stock
purchased by the Participant shall not exceed the number of whole shares of
Common Stock so determined, unless the Plan Administrator has determined for a
future Offering that fractional shares may be issued under the Plan; and
provided, further, that the number of shares of Common Stock purchased by the
Participant shall not exceed the number of shares for which Options have been
granted to the Participant pursuant to Section 8.1.
9.7 REFUND OF EXCESS AMOUNTS
Any cash balance remaining in the Participant's account at the
termination of a Purchase Period that is not sufficient to purchase a whole
share of Common Stock shall be applied to the purchase of Common Stock in the
new Purchase Period, provided the Participant participates in the next Purchase
Period and the purchase complies with Section 8.1. All other amounts remaining
in a Participant's account after a Purchase Date shall be refunded to the
Participant as soon as practical after the Purchase Date without the payment of
any interest.
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9.8 WITHHOLDING OBLIGATIONS
At the time the Option is exercised, in whole or in part, or at the time
some or all the Common Stock is disposed of, the Participant shall make adequate
provision for local, state, federal and foreign withholding obligations of the
Company, if any, that arise upon exercise of the Option or upon disposition of
the Common Stock. The Company may withhold from the Participant's compensation
the amount necessary to meet such withholding obligations.
9.9 TERMINATION OF PARTICIPATION
No Common Stock shall be purchased on behalf of a Participant on a
Purchase Date if his or her participation in the Offering or the Plan has
terminated on or before such Purchase Date.
9.10 PROCEDURAL MATTERS
The Company may, from time to time, establish (a) limitations on the
frequency and/or number of any permitted changes in the amount withheld during
an Offering, as set forth in Section 11.1, (b) an exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, (c) payroll withholding
in excess of the amount designated by a Participant in order to adjust for
delays or mistakes in the Company's processing of properly completed withholding
elections, and (d) such other limitations or procedures as deemed advisable by
the Company in the Company's sole discretion that are consistent with the Plan
and in accordance with the requirements of Code Section 423.
9.11 LEAVES OF ABSENCE
During leaves of absence approved by the Company and meeting the
requirements of the applicable treasury regulations promulgated under the Code,
a Participant may elect to continue participation in the Plan by delivering cash
payments to the Company on the Participant's normal paydays equal to the amount
of his or her payroll deduction under the Plan had the Participant not taken a
leave of absence. Currently, the treasury regulations provide that a Participant
may continue participation in the Plan only during the first 90 days of a leave
of absence unless the Participant's reemployment rights are guaranteed by
statute or contract.
SECTION 10. COMMON STOCK PURCHASED UNDER THE PLAN
10.1 ESPP BROKER
If the Plan Administrator designates or approves a stock brokerage or
other financial services firm (the "ESPP Broker") to hold shares purchased under
the Plan for the accounts of Participants, the following procedures shall apply.
Promptly following each Purchase Date, the number of shares of Common Stock
purchased by each Participant shall be deposited into an account established in
the Participant's name with the ESPP Broker. Each Participant shall be the
beneficial owner of the Common Stock purchased under the Plan and shall have
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all rights of beneficial ownership in such Common Stock. A Participant shall be
free to undertake a disposition of the shares of Common Stock in his or her
account at any time, but, in the absence of such a disposition, the shares of
Common Stock must remain in the Participant's account at the ESPP Broker until
the holding period set forth in Code Section 423 has been satisfied. With
respect to shares of Common Stock for which the holding period set forth above
has been satisfied, the Participant may move those shares of Common Stock to
another brokerage account of the Participant's choosing or request that a stock
certificate be issued and delivered to him or her. Dividends paid in the form of
shares of Common Stock with respect to Common Stock in a Participant's account
shall be credited to such account. A Participant who is not subject to payment
of U.S. income taxes may move his or her shares of Common Stock to another
brokerage account of his or her choosing or request that a stock certificate be
delivered to him or her at any time, without regard to the Code Section 423
holding period.
10.2 NOTICE OF DISPOSITION
By entering the Plan, each Participant agrees to promptly give the
Company notice of any Common Stock disposed of within the later of one year from
the Purchase Date and two years from the Offering Date for such Common Stock,
showing the number of such shares disposed of and the Purchase Date and Offering
Date for such Common Stock. This notice shall not be required if and so long as
the Company has a designated ESPP Broker.
SECTION 11. CHANGES IN WITHHOLDING AMOUNTS AND
VOLUNTARY WITHDRAWAL
11.1 CHANGES IN WITHHOLDING AMOUNTS
(a) Unless the Plan Administrator determines otherwise for a future
Offering, a Participant may elect to increase or decrease the amount to be
withheld from his or her compensation for future Purchase Periods by filing with
the Plan Administrator an amended Subscription; provided, however, that notice
of such election must be delivered to the Plan Administrator at least ten days
prior to such Purchase Period in such form and in accordance with such terms as
the Plan Administrator may establish for an Offering. An amended
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Subscription shall remain in effect until the Participant changes such
Subscription in accordance with the terms of the Plan.
(b) Notwithstanding the foregoing, to the extent necessary to comply
with Code Section 423 and Section 8.1, a Participant's payroll deductions may be
decreased to 0% during any Purchase Period if the aggregate of all payroll
deductions accumulated with respect to one or more Purchase Periods ending
within the same calendar year exceeds $25,000 of Fair Market Value of the Common
Stock determined as of the first day of an Offering ($21,250 to the extent the
Purchase Price may be 85% of the Fair Market Value of the Common Stock on the
Offering Date of the Offering). Payroll deductions shall re-commence at the rate
provided in such Participant's Subscription at the beginning of the first
Purchase Period that is scheduled to end in the following calendar year, unless
the Participant terminates participation in an Offering or the Plan as provided
in Section 11.2 or Section 11.3 or indicates otherwise in an amended
Subscription. Also notwithstanding the foregoing, a Participant's payroll
deductions may be decreased to 0% at such time that the aggregate of all payroll
deductions accumulated with respect to a Purchase Period exceeds the amount
necessary to purchase (i) 1,000 shares of Common Stock in such Purchase Period
(or such other number as the Board or Committee shall specify for a future
offering) or (ii) the aggregate number of shares of Common Stock available for
purchase by all Participants in any single Purchase Period or Offering as set
forth in Section 8.1. Payroll deductions shall re-commence at the rate provided
in such Participant's Subscription at the beginning of the next Purchase Period,
provided the Participant continues to participate in the Plan and such
participation complies with Section 8.1.
11.2 WITHDRAWAL FROM AN OFFERING
A Participant may withdraw from an Offering by completing and delivering
to the Plan Administrator a written notice of withdrawal on a form provided by
the Company for such purpose. Such notice must be delivered prior to the end of
the Purchase Period for which such withdrawal is to be effective. Unless
otherwise indicated by a Participant, withdrawal from an Offering shall not
result in a withdrawal from the Plan or any succeeding Offering therein. A
Participant may not resume participation in the same Offering at any time upon
withdrawal from such Offering.
11.3 WITHDRAWAL FROM THE PLAN
A Participant may withdraw from the Plan by completing and delivering to
the Plan Administrator a written notice of withdrawal on a form provided by the
Plan Administrator for such purpose. Such notice must be delivered prior to the
end of the Purchase Period for which such withdrawal is to be effective, or by
any other date specified by the Plan Administrator for a future Offering.
11.4 NOTICE OF WITHDRAWAL; EFFECT OF WITHDRAWAL ON PRIOR PURCHASE PERIODS;
RE-ENROLLMENT IN THE PLAN
(a) The Company may, from time to time, impose a requirement that any
notice of withdrawal be on file with the Company for a reasonable period prior
to the effectiveness of the Participant's withdrawal.
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(b) If a Participant withdraws from an Offering or the Plan after the
Purchase Date for a Purchase Period, the withdrawal shall not affect Common
Stock acquired by the Participant in any earlier Purchase Periods.
(c) In the event a Participant voluntarily elects to withdraw from an
Offering or from the Plan, the Participant may not resume participation in the
Plan during the same Offering, but may participate in any subsequent Offering
under the Plan by again satisfying the definition of Eligible Employee. In the
event a Participant voluntarily elects to withdraw from the Plan, the
Participant may participate in any subsequent Offerings under the Plan by again
satisfying the definition of Eligible Employee and re-enrolling in the Plan in
accordance with Section 7.
11.5 RETURN OF PAYROLL DEDUCTIONS
Upon withdrawal from an Offering pursuant to Section 11.2 or from the
Plan pursuant to Section 11.3, the withdrawing Participant's accumulated payroll
deductions that have not been applied to the purchase of Common Stock shall be
returned as soon as practical after the withdrawal, without the payment of any
interest, to the Participant and the Participant's interest in the Offering
shall terminate. Such accumulated payroll deductions may not be applied to any
other Offering under the Plan.
SECTION 12. AUTOMATIC WITHDRAWAL
If the Fair Market Value of the Common Stock on any Purchase Date of an
Offering is less than the Fair Market Value of the Common Stock on the Offering
Date for such Offering, then every Participant shall automatically (a) be
withdrawn from such Offering at the close of such Purchase Date and after the
acquisition of the shares of Common Stock for such Purchase Period and (b) be
enrolled in the Offering commencing on the first business date subsequent to
such Purchase Period, provided the Participant is eligible to participate in the
Plan and has not elected to terminate participation in the Plan.
SECTION 13. TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the Company for any
reason, including retirement, death or the failure of a Participant to remain an
Eligible Employee, shall immediately terminate the Participant's participation
in the Plan. The payroll deductions credited to the Participant's account since
the last Purchase Date shall, as soon as practical, be returned to the
Participant or, in the case of a Participant's death, to the Participant's legal
representative or designated beneficiary as provided in Section 14.2, and all
the Participant's rights under the Plan shall terminate. Interest shall not be
paid on sums returned to a Participant pursuant to this Section 13.
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SECTION 14. RESTRICTIONS ON ASSIGNMENT
14.1 TRANSFERABILITY
An Option granted under the Plan shall not be transferable and such
Option shall be exercisable during the Participant's lifetime only by the
Participant. The Company will not recognize, and shall be under no duty to
recognize, any assignment or purported assignment by a Participant of the
Participant's interest in the Plan, of his or her Option or of any rights under
his or her Option.
14.2 BENEFICIARY DESIGNATION
The Plan Administrator may permit a Participant to designate a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event the Participant dies after the
Purchase Date for an Offering but prior to delivery to such Participant of such
shares and cash. In addition, the Plan Administrator may permit a Participant to
designate a beneficiary who is to receive any cash from the Participant's
account under the Plan in the event that the Participant dies before the
Purchase Date for an Offering. Such designation may be changed by the
Participant at any time by written notice to the Plan Administrator.
SECTION 15. NO RIGHTS AS SHAREHOLDER UNTIL SHARES ISSUED
With respect to shares of Common Stock subject to an Option, a
Participant shall not be deemed to be a shareholder of the Company, and he or
she shall not have any of the rights or privileges of a shareholder. A
Participant shall have the rights and privileges of a shareholder of the Company
when, but not until, a certificate or its equivalent has been issued to the
Participant for the shares following exercise of the Participant's Option.
SECTION 16. LIMITATIONS ON SALE OF COMMON STOCK PURCHASED UNDER THE PLAN
The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
Participant in the conduct of his or her own affairs. A Participant, therefore,
may sell Common Stock purchased under the Plan at any time he or she chooses
subject to compliance with Company policies and any applicable federal and state
securities laws. A Participant assumes the risk of any market fluctuations in
the price of the Common Stock.
SECTION 17. AMENDMENT OR TERMINATION OF THE PLAN
(a) The Board may amend the Plan in such respects as it shall deem
advisable; provided, however, that, to the extent required for compliance with
Code Section 423 or any applicable law or regulation, shareholder approval will
be required for any amendment that will (i) increase the total number of shares
as to which Options may be granted under the
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Plan, (ii) modify the class of employees eligible to receive Options, or (iii)
otherwise require shareholder approval under any applicable law or regulation;
and provided further, that except as provided in this Section 17, no amendment
to the Plan shall make any change in any Option previously granted which
adversely affects the rights of any Participant.
(b) The Plan shall continue in effect for ten years after the date of
its adoption by the Board. Notwithstanding the foregoing, the Board may at any
time and for any reason terminate or suspend the Plan. During any period of
suspension or upon termination of the Plan, no Options shall be granted.
(c) Except as provided in Section 20, no such termination of the Plan
may affect Options previously granted, provided that the Plan or an Offering may
be terminated by the Board on a Purchase Date or by the Board's setting a new
Purchase Date with respect to an Offering and a Purchase Period then in progress
if the Board determines that termination of the Plan and/or the Offering is in
the best interests of the Company and the shareholders or if continuation of the
Plan and/or the Offering would cause the Company to incur adverse accounting
charges as a result of a change after the effective date of the Plan in the
generally accepted accounting rules applicable to the Plan.
SECTION 18. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person (including any
Eligible Employee or Participant) the right to remain in the employ of the
Company or a Parent Corporation or Subsidiary Corporation or to affect the right
of the Company or a Parent Corporation or Subsidiary Corporation to terminate
the employment of any person (including any Eligible Employee or Participant) at
any time with or without cause.
SECTION 19. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Parent Corporation or
Subsidiary Corporation. Nothing in the Plan shall be construed to limit the
right of the Company, any Parent Corporation or Subsidiary Corporation to (a)
establish any other forms of incentives or compensation for employees of the
Company, a Parent Corporation or Subsidiary Corporation or (b) grant or assume
options otherwise than under the Plan in connection with any proper corporate
purpose, including, but not by way of limitation, the grant or assumption of
options in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
firm or association.
SECTION 20. ADJUSTMENTS
20.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the
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Company's corporate or capital structure results in (a) the outstanding shares,
or any securities exchanged therefor or received in their place, being exchanged
for a different number or kind of securities of the Company or of any other
corporation or (b) new, different or additional securities of the Company or of
any other corporation being received by the holders of shares of Common Stock,
then (subject to any required action by the Company's shareholders), the Board
or the Committee, in its sole discretion, shall make such equitable adjustments
as it shall deem appropriate in the circumstances in (i) the maximum number and
kind of shares of Common Stock subject to the Plan as set forth in Section 4,
(ii) the number and kind of securities that are subject to any outstanding
Option and the per share price of such securities and (iii) the maximum number
of shares of Common Stock that may be purchased by a Participant in a Purchase
Period. The determination by the Board or the Committee as to the terms of any
of the foregoing adjustments shall be conclusive and binding. Notwithstanding
the foregoing, a merger, asset sale, dissolution or liquidation of the Company
shall not be governed by this Section 20.1 but shall be governed by Sections
20.2 and 20.3, respectively.
20.2 DISSOLUTION OR LIQUIDATION OF THE COMPANY
In the event of the proposed dissolution or liquidation of the Company,
the Offering then in progress shall be shortened by setting a new Purchase Date
and shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The new
Purchase Date shall be a specified date before the date of the Company's
proposed dissolution or liquidation. The Board shall notify each Participant in
writing prior to the new Purchase Date that the Purchase Date for the
Participant's Option has been changed to the new Purchase Date and that the
Participant's Option shall be exercised automatically on the new Purchase Date,
unless prior to such date the Participant has withdrawn from an Offering then in
progress or the Plan as provided in Section 11.
20.3 CORPORATE TRANSACTION
In the event of a proposed Corporate Transaction, each outstanding
Option shall be assumed or an equivalent option substituted by the successor
corporation or parent thereof (the "Successor Corporation"). In the event that
the Successor Corporation refuses to assume or substitute for the Option, any
Offering then in progress shall be shortened by setting a new Purchase Date. The
new Purchase Date shall be a specified date before the date of the Corporate
Transaction. The Board shall notify each Participant in writing, prior to the
new Purchase Date, that the Purchase Date for the Participant's Option has been
changed to the new Purchase Date and that the Participant's Option shall be
exercised automatically on the new Purchase Date, unless prior to such date the
Participant has withdrawn from an Offering then in progress or the Plan as
provided in Section 11.
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20.4 LIMITATIONS
The grant of Options shall in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
SECTION 21. REGISTRATION; CERTIFICATES FOR SHARES
Notwithstanding any other provision of the Plan, the Company shall have
no obligation to issue or deliver any shares of Common Stock under the Plan or
make any other distribution of benefits under the Plan unless such issuance,
delivery or distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.
The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
To the extent that the Plan or any instrument evidencing shares of
Common Stock provides for issuance of stock certificates to reflect the issuance
of such shares, the issuance may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the applicable rules of any stock
exchange.
SECTION 22. EFFECTIVE DATE
The Plan will become effective on the IPO Date, so long as it is
approved by the Company's shareholders as of such date.
Adopted by the Board on July 6, 2000 and approved by the shareholders on
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PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY PAGE
SECTION/EFFECT OF DATE OF SHAREHOLDER
DATE OF BOARD ACTION ACTION AMENDMENT APPROVAL
July 6, 2000 Initial Plan Adoption _________, 200__
R-1
2000 Employee Stock Purchase Plan - Eden Bioscience Corp.
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