2000 Employee Stock Purchase Plan - Birch Telecom Inc.
BIRCH TELECOM, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I.
PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN
1.1 PURPOSE AND SCOPE. The purpose of the Birch Telecom, Inc. 2000
Employee Stock Purchase Plan is to assist employees of Birch Telecom, Inc. and
its subsidiaries in acquiring a stock ownership interest in the Company pursuant
to a plan which is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code of 1986, as amended.
1.2 ADMINISTRATION OF PLAN. The Plan shall be administered by the
Committee. The Committee shall have the power to make, amend and repeal rules
and regulations for the interpretation and administration of the Plan consistent
with the qualification of the Plan under Section 423 of the Code, and the
Committee also is authorized to change the Option Periods, Offering Dates and
Exercise Dates under the Plan by providing written notice to all Employees at
least 15 days prior to the date following which such changes will take effect.
The Committee may delegate administrative tasks under the Plan to one or more
Officers of the Company. The Committee's interpretation and decisions in respect
to the Plan shall be final and conclusive.
ARTICLE II.
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The singular pronoun shall include the plural where the context so indicates.
2.1 "BOARD" shall mean the Board of Directors of the Company.
2.2 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.3 "COMMITTEE" shall mean the Compensation Committee of the Board,
which Committee shall administer the Plan as provided in Section 1.2 above.
2.4 "COMMON STOCK" shall mean shares of common stock of the Company.
2.5 "COMPANY" shall mean Birch Telecom, Inc., a Delaware corporation.
2.6 "COMPENSATION" shall mean the base salary, bonuses, overtime and
commissions paid to an Employee by the Company or a Subsidiary in accordance
with established payroll procedures.
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2.7 "ELIGIBLE EMPLOYEE" shall mean an Employee who (a) is customarily
scheduled to work at least 20 hours per week, and (b) whose customary employment
is more than five (5) months in a calendar year.
2.8 "EMPLOYEE" shall mean any employee of the Company or a Subsidiary.
2.9 "EXERCISE DATE" shall mean each (a) with respect to Option
Periods beginning on January 1 or the IPO Date, the next following December
31, and (b) with respect to Option Periods beginning on July 1, the next
following June 30.
2.10 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
2.11 "FAIR MARKET VALUE" of a share of Common Stock as of a given date
shall mean (i) the closing price of the sale of Common Stock on the Nasdaq
National Market System ("Nasdaq") as of 4:00 P.M., New York time on such date or
on the immediately preceding trading date, or (ii) if Common Stock is not quoted
on Nasdaq, the fair market value of a share of Common Stock as established by
the Committee acting in good faith.
2.12 "IPO DATE" shall mean the effective date of the initial public
offering of Common Stock pursuant to a registration statement filed with the
Securities and Exchange Commission.
2.13 "OFFERING DATE" shall mean each January 1 and July 1; provided,
however, that the first Offering Date under the Plan shall be the IPO Date.
2.14 "OFFICER" shall mean an employee of the Company who is either an
executive officer or member of the management of the Company. 2.15 "OPTION
PERIOD" shall mean the period beginning on an Offering Date and ending on the
second next succeeding Exercise Date. 2.16 "OPTION PRICE" shall mean the
purchase price of a share of Common Stock hereunder as provided in Section 4.1
below. 2.17 "PARTICIPANT" shall mean any Eligible Employee who elects to
participate.
2.18 "PLAN" shall mean this Birch Telecom, Inc. 2000 Employee Stock
Purchase Plan, as it may be amended from time to time.
2.19 "PLAN ACCOUNT" shall mean a bookkeeping account established and
maintained by the Company in the name of each Participant.
2.20 "SUBSIDIARY" shall mean any corporation of which the Company or a
Subsidiary owns stock possessing 50% or more of the total combined voting power
of all classes of stock in the corporation.
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ARTICLE III.
PARTICIPATION
3.1 ELIGIBILITY. An Eligible Employee may participate in the Plan if
immediately after the applicable Offering Date, that Employee would not be
deemed for purposes of Section 423(b)(3) of the Code to possess 5% or more of
the total combined voting power or value of all classes of stock of the Company
or any Subsidiary.
3.2 ELECTION TO PARTICIPATE; PAYROLL DEDUCTIONS
(a) An Eligible Employee may participate in the Plan only by
means of payroll deduction. An Eligible Employee may elect to participate in the
Plan during an Option Period by delivering to the Company in the calendar month
preceding the Offering Date on which such Option Period commences a written
payroll deduction authorization on a form prescribed by the Company; provided,
however, that for the Option Period commencing on the IPO Date, an Eligible
Employee may elect to participate in the Plan at any time on or prior to the IPO
Date.
(b) Payroll deductions (i) shall be equal to at least 1%, but
not more than 15%, of the Participant's Compensation as of the Offering Date;
(ii) must equal at least five dollars ($5.00) per pay period; and (iii) may be
expressed either as (A) a whole number percentage, or (B) a fixed dollar amount,
subject to the provisions of Sections 4.2 and 4.3 below. Amounts deducted from a
Participant's Compensation pursuant to this Section 3.2 shall be credited to the
Participant's Plan Account. 3.3 LEAVE OF ABSENCE. During leaves of absence
approved by the Company meeting the requirements of Regulation Section
1.421-7(h)(2) under the Code, a Participant may continue participation in the
Plan by making cash payments to the Company bon his or her normal payday equal
to his or her authorized payroll deduction.
ARTICLE IV.
PURCHASE OF SHARES
4.1 OPTION PRICE. The Option Price per share of the Common Stock sold
to Participants hereunder shall be 85% of the Fair Market Value of such share on
either the Offering Date or the Exercise Date of the Option Period, whichever is
lower, but in no event shall the Option Price per share be less than the par
value per share ($0.001) of the Common Stock.
4.2 PURCHASE OF SHARES
(a) On each Exercise Date on which he or she is employed, each
Participant will automatically and without any action on his or her part be
deemed to have exercised his or her option to purchase at the Option Price the
largest number of whole shares of Common Stock which can be purchased with the
amount in the Participant's Plan Account. The
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balance, if any, remaining in the Participant's Plan Account (after exercise of
his or her option) as of an Exercise Date shall be carried forward to the next
Option Period, unless the Participant has elected to withdraw from the Plan
pursuant to Section 6.1 below.
(b) As soon as practicable following each Exercise Date, the
number of shares purchased by such Participant pursuant to subsection (a) above
will be delivered, in the Company's sole discretion, to either (i) the
Participant, or (ii) an account established in the Participant's name at a stock
brokerage or other financial services firm designated by the Company. In the
event the Company is required to obtain from any commission or agency authority
to issue any such shares of Common Stock, the Company will seek to obtain such
authority. Inability of the Company to obtain from any such commission or agency
authority which counsel for the Company deems necessary for the lawful issuance
of any such shares shall relieve the Company from liability to any Participant
except to refund to him or her the amount withheld.
4.3 LIMITATIONS ON PURCHASE. No Employee shall be granted an option
under the Plan which permits his or her rights to purchase Common Stock under
the Plan or any other employee stock purchase plan of the Company or any of its
Subsidiaries to accrue at a rate which exceeds $25,000 (as measured by the Fair
Market Value of such Common Stock at the time the option is granted) for each
calendar year such option is outstanding. For purposes of this Section 4.3, the
right to purchase Common Stock under an option accrues when the option (or any
portion thereof) becomes exercisable, and the right to purchase Common Stock
which has accrued under one option under the Plan may not be carried over to any
other option.
4.4 TRANSFERABILITY OF RIGHTS. An option granted under the Plan shall
not be transferable and is exercisable only by the Participant. No option or
interest or right to the option shall be available to pay off any debts,
contracts or engagements of the Participant or his or her successors in interest
or shall be subject to disposition by pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation
of law by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempt at disposition of
the option shall have no effect.
ARTICLE V.
PROVISIONS RELATING TO COMMON STOCK
5.1 COMMON STOCK RESERVED. Subject to adjustment as provided in Section
5.2, the maximum number of shares of Common Stock that shall be made available
for sale under this Plan shall be 1,000,000 plus an annual increase on the first
day of each of the Company's fiscal years beginning in 2001 and ending in 2010,
equal to the lesser of (a) 1,000,000 shares, (b) 1.2% of the shares outstanding
on the last day of the immediately preceding fiscal year, or (c) such lesser
number of shares as is determined by the Board. Shares of Common Stock made
available for sale under this Plan may be authorized but unissued or reacquired
shares reserved for issuance under this Plan.
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5.2 ADJUSTMENT FOR CHANGES IN COMMON STOCK. In the event that
adjustments are made in the number of outstanding shares of Common Stock or the
shares are exchanged for a different class of stock of the Company by reason of
stock dividend, stock split or other subdivision, the Committee shall make
appropriate adjustments in (a) the number and class of shares or other
securities that may be reserved for purchase hereunder, and (b) the Option Price
of outstanding options.
5.3 MERGER, ACQUISITION OR LIQUIDATION. In the event of the merger or
consolidation of the Company into another corporation, the acquisition by
another corporation of all or substantially all of the Company's assets or 80%
or more of the Company's then outstanding voting stock or the liquidation or
dissolution of the Company, the date of exercise with respect to outstanding
options shall be the business day immediately preceding the effective date of
such merger, consolidation, acquisition, liquidation or dissolution unless the
Committee shall, in its sole discretion, provide for the assumption or
substitution of such options in a manner complying with Section 424(a) of the
Code.
5.4 INSUFFICIENT SHARES. If the aggregate funds available for the
purchase of Common Stock on any Exercise Date would cause an issuance of shares
in excess of the number provided for in Section 5.1 above, (a) the Committee
shall proportionately reduce the number of shares that would otherwise be
purchased by each Participant in order to eliminate such excess, and (b) the
Plan shall automatically terminate immediately after such Exercise Date.
5.5 RIGHTS AS STOCKHOLDERS. With respect to shares of Common Stock
subject to an option, a Participant shall not be deemed to be a stockholder and
shall not have any of the rights or privileges of a stockholder. A Participant
shall have the rights and privileges of a stockholder when, but not until, a
certificate has been issued to him or her following exercise of his or her
option.
ARTICLE VI.
TERMINATION OF PARTICIPATION
6.1 CESSATION OF CONTRIBUTIONS; VOLUNTARY WITHDRAWAL
(a) A Participant may cease payroll deductions during an
Option Period by delivering written notice of such cessation to the Company.
Upon any such cessation, the Participant may elect either to withdraw from the
Plan pursuant to subsection (b) below or to have amounts credited to his or her
Plan Account held in the Plan for the purchase of Common Stock pursuant to
Section 4.2. A Participant who ceases contributions to the Plan during any
Option Period shall not be permitted to resume contributions to the Plan during
that Option Period.
(b) A Participant may withdraw from the Plan at any time by
written notice to the Secretary of the Company prior to the close of business on
an Exercise Date. Within 21 days after the notice of withdrawal is delivered,
the Company shall refund the entire
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amount, if any, in a Participant's Plan Account to him or her, at which time the
Participant's payroll deduction authorization, his or her interest in the Plan
and his or her option under the Plan shall terminate. Any Eligible Employee who
withdraws from the Plan may again become a Participant in accordance with
Section 3.2 above.
6.2 TERMINATION OF ELIGIBILITY
(a) If a Participant ceases to be eligible under Section 3.1
above for any reason, the amount in such Participant's Plan Account will be
refunded to the Participant or his or her designated beneficiary or estate
within 21 days of his or her termination of employment or other cessation of
eligibility.
(b) Upon payment by the Company to the Participant or his or
her beneficiary or estate of the remaining balance, if any, in Participant's
Plan Account, the Participant's interest in the Plan and the Participant's
option under the Plan shall terminate.
ARTICLE VII.
GENERAL PROVISIONS
7.1 CONDITION OF EMPLOYMENT. Neither the creation of the Plan nor an
Employee's participation therein shall be deemed to create a contract of
employment, any right of continued employment or in any way affect the right of
the Company or a Subsidiary to terminate an Employee at any time with or without
cause.
7.2 AMENDMENT OF THE PLAN
(a) The Board may amend, suspend or terminate the Plan at any
time and from time to time; provided, however, that without approval of the
Company's stockholders given within 12 months before or after action by the
Board, the Plan may not be amended to increase the maximum number of shares
subject to the Plan or change the designation or class of Eligible Employees.
(b) Upon termination of the Plan, the balance in each
Participant's Plan Account shall be refunded within 21 days of such termination.
7.3 USE OF FUNDS; NO INTEREST PAID. All funds received by the Company
by reason of purchase of Common Stock under this Plan will be included in the
general funds of the Company free of any trust or other restriction and may be
used for any corporate purpose. No interest will be paid to any Participant or
credited under the Plan.
7.4 TERM; APPROVAL BY STOCKHOLDERS. The Plan shall terminate on the
tenth anniversary of the date of its initial approval by the stockholders of the
Company, unless earlier terminated by action of the Board. No option may be
granted during any period of suspension of the Plan nor after termination of the
Plan. The Plan will be submitted for the approval of the
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Company's stockholders within 12 months after the date of the Board's initial
adoption of the Plan. Options may be granted prior to such stockholder approval;
provided, however, that such options shall not be exercisable prior to the time
when the Plan is approved by the stockholders; provided further that if such
approval has not been obtained by the end of said 12-month period, all options
previously granted under the Plan shall thereupon be canceled and become null
and void.
7.5 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
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company or any Subsidiary (a) to establish any other forms of incentives or
compensation for employees of the Company or any Subsidiary, or (b) to grant or
assume options otherwise than under this 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.
7.6 CONFORMITY TO SECURITIES LAWS. Notwithstanding any other provision
of this Plan, this Plan and the participation in this Plan by any individual who
is then subject to Section 16 of the Exchange Act shall be subject to any
additional limitations set forth in any applicable exemptive rule under Section
16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange
Act) that are requirements for the application of such exemptive rule. To the
extent permitted by applicable law, the Plan shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.
7.7 NOTICE OF DISPOSITION OF SHARES. The Company may require any
Participant to give the Company prompt notice of any disposition of shares of
Common Stock, acquired pursuant to the Plan, within two years after the
applicable Offering Date or within one year after the applicable Exercise Date
with respect to such shares. The Company may direct that the certificates
evidencing shares acquired pursuant to the Plan refer to such requirement.
7.8 TAX WITHHOLDING. The Company shall be entitled to require payment
in cash or deduction from other compensation payable to each Participant of any
sums required by federal, state or local tax law to be withheld with respect to
any purchase of shares of Common Stock under the Plan or any sale of such
shares.
7.9 GOVERNING LAW. The Plan and all rights and obligations thereunder
shall be construed and enforced in accordance with the laws of the State of
Delaware.
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I hereby certify that the foregoing Birch Telecom, Inc. 2000 Employee
Stock Purchase Plan was duly approved by the Compensation Committee of the Board
of Directors of Birch Telecom, Inc. on March 30, 2000.
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I hereby certify that the foregoing Birch Telecom, Inc. 2000 Employee
Stock Purchase Plan was duly approved by the stockholders of Birch Telecom, Inc.
on March 30, 2000.
Executed on this 30th day of March, 2000.
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Secretary
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