1995 Employee Stock Purchase Plan - Interland Inc.
INTERLAND, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
The following constitutes the provisions of the 1995 Employee Stock
Purchase Plan of Interland, Inc. as amended:
1. Purpose. The purpose of the ESP Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the ESP Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the ESP 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.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b)"Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d)"Company" shall mean Interland, Inc., a Minnesota corporation,
and subject to Section 21 below, its successors and assigns and any of its
Designated Subsidiaries.
(e)"Compensation" with respect to any Employee means such
Employee's wages, salaries, fees for professional services and other amounts
received for personal services actually rendered in the course of employment
with the Company or its Designated Subsidiaries to the extent that the amounts
are includible in gross income (including, but not limited to, commissions paid
to salesmen, compensation for services on the basis of a percentage of profits,
tips, and bonuses).
Compensation shall exclude (a)(1) contributions made by the
employer to a plan of deferred compensation to the extent that, the
contributions are not includible in the gross income of the Employee for the
taxable year in which contributed, (2) employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from the Employee's gross
income, (3) any distributions from a plan of deferred compensation; (b) amounts
realized from the exercise of a non-statutory stock option, or when restricted
stock (or property) held by an Employee either becomes freely transferable or is
no longer subject to substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified
stock option; (d) other amounts which receive special tax benefits, such as
premiums for group-term life insurance (but only to the extent that the premiums
are not includible in the gross income of the employee), or contributions made
by the employer (whether or not under a salary reduction agreement) towards the
purchase of any annuity contract described in Code Section 403(b) (whether or
not the contributions are actually excludable from the Employee's gross income);
(e) reimbursements or other expense allowances; (f) fringe benefits (cash and
noncash); (g) moving expenses; and (h) welfare benefits.
(f) "Continuous Status as an Employee" shall mean the absence of
any interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Company, provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
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(g) "Designated Subsidiaries" shall mean the Subsidiaries which
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the ESP Plan.
(h) "Employee" shall mean any person, including an officer, whose
customary employment on a continuous basis is more than twenty (20) hours per
week and more than five (5) months in a calendar year by the Company.
(i) "Enrollment Date" shall mean the first day of each Offering
Period.
(j) "Exercise Date" shall mean the last day of each Offering
Period.
(k) "Offering Period" shall mean a period of six (6) months, or a
shorter or longer duration as set by the Board.
(l) "ESP Plan" shall mean this Employee Stock Purchase Plan.
(m) "Subsidiary" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any Employee as defined in Section 2 who has been
continuously employed by the Company or any subsidiary of the Company for at
least one (1) consecutive month and who shall be employed by the Company on a
given Enrollment Date shall be eligible to participate in the ESP Plan.
(b) Any provisions of the ESP Plan to the contrary
notwithstanding, no Employee shall be granted an option under the ESP Plan (i)
if, immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 425(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any subsidiary of the Company, or (ii)
which permits his rights to purchase stock under all employee stock purchase
plans (described in Section 423 of the Code) of the Company and its subsidiaries
to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of fair
market value of such stock (determined at the time such option is granted) for a
calendar year in which such option is outstanding at any time.
4. Offering Periods. The ESP Plan shall be implemented by consecutive
Offering Periods with the first Offering Period commencing on or about July 1,
1995, and ending on December 31, 1995. Thereafter, Offering Periods shall
commence on January 1 and July 1 of each year, and continue thereafter until
terminated in accordance with Section 20 hereof. Subject to the shareholder
approval requirements of Section 20, the Board of Directors of the Company shall
have the power to change the duration of offering periods with respect to future
offerings if such change is announced. Notwithstanding the foregoing, a new
offering period shall commence on September 1, 2001 and end on December 31,
2001.
5. Participation.
(a) An eligible Employee may become a participant in the ESP Plan
by completing an ESP Plan Agreement authorizing payroll deductions and filing it
with the Company's Stock Administration office at least ten (10) business days
prior to the applicable Enrollment Date, unless a different time for filing the
ESP Plan Agreement is set by the Board for all eligible Employees with respect
to a given Offering Period.
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(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 11.
6. Payroll Deductions.
(a) At the time a participant files his or her ESP Plan
Agreement, he or she shall elect to have payroll deductions made on each payday
during the Offering Period at a rate that is not less than one percent (1%) and
not greater than twenty percent (20%) of the Compensation, and the aggregate of
such payroll deductions during the Offering Period shall not exceed twenty
percent (20%) of his or her aggregate Compensation during said Offering Period.
(b) All payroll deductions made by a participant shall be
credited to his or her account under the ESP Plan. A participant may not make
any additional payments into such account.
(c) A participant may discontinue his or her participation in the
ESP Plan as provided in Section 11, or may decrease, but not increase, the rate
of payroll deductions during the Offering Period (within the limits of Section
6(a)) by completing or filing with the Company's a new ESP Plan Agreement
authorizing a change in payroll deduction rate. The change in rate shall be
effective with the first full payroll period following ten (10) business days
after the Company's receipt of the new ESP Plan Agreement. A participant's ESP
Plan Agreement shall remain in effect for successive Offering Periods unless
revised as provided herein or terminated as provided in Section 11.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
participant's payroll deductions may be decreased to 0% at such time during any
Offering Period which is scheduled to end during the current calendar year that
the aggregate of all payroll deductions accumulated with respect to such
Offering Period and any other Offering Period ending within the same calendar
year equal $21,250. Payroll deductions shall recommence at the rate provided in
such participant's ESP Plan Agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 11.
(e) A participant in this ESP Plan, who is also a participant in
the Retirement at Micron Section 401(k) Plan (or any successor Plans thereto)
(collectively, the "401k Plans") and who requests and receives a hardship
distribution from any 401(k) Plan, is prohibited from making, and must suspend,
for a period of twelve (12) months thereafter, his or her elective contributions
and employee contributions including, without limitation to the foregoing, any
payroll deduction made pursuant to the terms of this ESP Plan from the date of
receipt by that employee of the hardship distribution from any 401(k) Plan.
7. Grant of Option.
(a) On the Enrollment Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period up to a number of
shares of the Company's Common Stock determined by dividing such Employee's
payroll deductions accumulated prior to such Exercise Date and retained in the
participant's account as of the Exercise Date by the lower of (i) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Enrollment Date or (ii) eighty-five percent (85%) of the fair market
value of a share of the Company's Common Stock on the Exercise Date; provided
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 13 hereof. Exercise of the option shall occur as provided in Section 8,
unless the participant has withdrawn pursuant to Section 11, and shall expire on
the last day of the Offering Period. Fair market value or a share of the
Company's Common Stock shall be determined as provided in Section 7(b) herein.
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Notwithstanding anything to the contrary set forth herein, the maximum number of
shares which any Employee may purchase on any Exercise Date shall not exceed
5,000 shares.
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Enrollment Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion; provided, however, that
effective for Offering Periods beginning on and after July 1, 1999, where there
is a public market for the Common Stock the fair market value per share shall be
the closing sales price on the Nasdaq National Market on the last market trading
day preceding such date, as reported in The Wall Street Journal.
8. Exercise of Option. Unless a participant withdraws from the ESP Plan
as provided in Section 11, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date of the Offering Period, and the
maximum number of full shares subject to option will be purchased for him or her
at the applicable option price with the accumulated payroll deductions in his
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the participant on the Exercise Date. During his or
her lifetime, a participant's option to purchase shares hereunder is exercisable
only by such participant.
9. Restrictions on Transfer of Shares. Shares purchased upon exercise of
a participant's option may not be transferred by the participant for a period of
one (1) year from the Exercise Date. This transfer restriction shall be earlier
terminated in the event of a participant's permanent disability or death, or
upon the involuntary transfer of the shares due to divorce, judicial declaration
of insolvency or bankruptcy or other form of involuntary transfer.
10. Delivery. Immediately following the Exercise Date of each Offering
Period, unless a participant requests the issuance of a certificate representing
the participant's shares, the Company shall promptly record the participant's
full shares in book entry form. Upon request from a participant, or upon the
involuntary transfer of a participant's shares, the Company shall arrange for
the delivery to the participant of a certificate representing the full shares
purchased. Certificates issued which are subject to the transfer restriction
shall bear a legend in a conspicuous place referencing the restriction. Any cash
remaining to the credit of a participant's account under the ESP Plan after a
purchase by the participant of shares at the termination of each Offering
Period, which is insufficient to purchase a full share of Common Stock, shall be
returned to said participant or retained in the participant's account for the
subsequent Offering Period, as determined by the Company as to all participants
for a given Offering Period.
11. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the
payroll deductions credited to such participant's account under the ESP Plan at
any time prior to the Exercise Date of the Offering Period by completing an ESP
Plan Agreement indicating the participant's desire to withdraw from the ESP Plan
and delivering it to the Company's Stock Administration Office. All of the
participant's payroll deductions credited to his or her account will be paid to
him or her promptly after receipt of the ESP Plan Agreement and the
participant's option for the current Offering Period will be automatically
terminated, and no further payroll deductions for the purchase of shares will be
made during the Offering Period. If a participant withdraws from an Offering
Period, payroll deductions will not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the Company a new ESP Plan
Agreement as described in Section 5(a).
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date of the Offering Period for any reason,
including retirement or death, the payroll
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deductions credited to such participant's account will be returned to him or her
or, in the case of his or her death, to the person or persons entitled thereto
under Section 15, and such participant's option will be automatically
terminated.
(c) In the event an Employee fails to remain in Continuous Status
as an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the Employee is a participant, he or she will be deemed
to have elected to withdraw from the ESP Plan and the payroll deductions
credited to his or her account will be returned to him or her and the option
terminated.
(d) A participant's withdrawal from an Offering Period will not
have any effect upon his or her eligibility to participate in a succeeding
Offering Period or in any similar ESP Plan which may hereafter be adopted by the
Company.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the ESP Plan.
13. Stock.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the ESP Plan shall be 2,500,000
shares, subject to adjustment upon changes in capitalization of the Company as
provided in Section 19. If the total number of shares which would otherwise be
subject to options granted pursuant to Section 7(a) hereof on the Enrollment
Date of an Offering Period exceeds the number of shares then available under the
ESP Plan (after deduction of all shares for which options have been exercised or
are then outstanding), the Company shall make a pro rata allocation of the
shares remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each participant affected thereby and shall similarly
reduce the rate of payroll deductions, if necessary.
(b) The participant will have no interest or voting right in
shares covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the ESP Plan
will be registered in the name of the participant or, if requested by the
participant, in the name of the participant and his or her spouse.
14. Administration. The ESP Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The administration,
interpretation or application of the ESP Plan by the Board or its committee
shall be final, conclusive and binding upon all participants. Members of the
Board who are eligible Employees are permitted to participate in the ESP Plan,
provided that:
(a) Members of the Board who are eligible to participate in the
ESP Plan may not vote on any matter affecting the administration of the ESP Plan
or the grant of any option pursuant to the ESP Plan.
(b) If a Committee is established to administer the ESP Plan, no
member of the Board who is eligible to participate in the ESP Plan may be a
member of the Committee.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the ESP Plan in the event of such participant's death subsequent to the
end of the Offering Period but prior to delivery to him of such
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shares and cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under the
ESP Plan in the event of such participant's death prior to the Exercise Date of
the Offering Period.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the ESP
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
16. Transferability of Rights. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the ESP Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at 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 Section 11.
17. Use of Funds. All payroll deductions received or held by the Company
under the ESP Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual statements of accounts will be maintained for
each participant in the ESP Plan. Statements of account will be given to
participating Employees; on no less than an annual basis, promptly following the
Exercise Date, which statements will set forth the amounts of payroll
deductions, the per share purchase price, the number of shares purchased and the
remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each option under the ESP Plan which has not yet been exercised and
the number of shares of Common Stock which have been authorized for issuance
under the ESP Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered by each
option under the ESP Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.
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20. Amendment or Termination. The Board of Directors of the Company may
at any time terminate or amend the ESP Plan. Except as provided in Section 19,
no such termination can affect options previously granted, nor may an amendment
make any change in any option theretofore granted which adversely affects the
rights of any participant, nor may an amendment be made without prior approval
of the shareholders of the Company (obtained in the manner described in Section
23) if such amendment would:
(a) Increase the number of shares that may be issued under the
ESP Plan;
(b) Change the designation of the employees (or class of
employees) eligible for participation in the ESP Plan; or
(c) Materially increase the benefits which may accrue to
participants under the ESP Plan.
21. Dissolution, Merger or Asset Sale. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. 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 ESP 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 Periods then in progress by setting a new Exercise Date
(the "New Exercise Date"). If the Board shortens the Offering Periods 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 Exercise Date, that the Exercise Date for his
option has been changed to the New Exercise Date and that his option will be
exercised automatically on the New Exercise Date, unless prior to such date he
has withdrawn from the Offering Period as provided in Section 11 hereof. For
purposes of this paragraph, an option granted under the ESP Plan shall be deemed
to be assumed if, following the sale of assets or merger, the option confers the
right to purchase, for each share of Common 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. Notices. All notices or other communications by a participant to the
Company under or in connection with the ESP Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof. Unless
changed by the Company, all such Notices or other communications shall be
directed to the Company's Stock Administration Department.
23. Shareholder Approval. Continuance of the ESP Plan shall be subject
to approval by the shareholders of the Company within twelve months before or
after the date the ESP Plan is adopted. If such shareholder approval is obtained
at a duly held shareholders' meeting, it may be obtained by the affirmative vote
of the holders of a majority of the shares of the Company present or represented
and entitled to vote thereon, which approval shall be (i) solicited
substantially in accordance with Section 14(a) of the Securities Act of 1934, as
amended (the "Act") and the rules and regulations promulgated
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thereunder, or (ii) solicited after the Company has furnished in writing to the
holders entitled to vote substantially the same information concerning the ESP
Plan as that which would be required by the rules and regulations in effect
under Section 14(a) of the Act at the time such information is furnished.
In the case of shareholder approval by written consent, it must
be obtained by the unanimous written consent of all shareholders of the Company,
or by written consent of a smaller percentage of shareholders but only if the
Board determines, on the basis of advice of the Company's legal counsel, that
the written consent of such a smaller percentage of shareholders will comply
with all applicable laws and will not adversely affect the qualifications of the
ESP Plan under Section 423 of the Code.
24. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, and the Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange or national
market system upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
25. Term of ESP Plan. The ESP Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the shareholders of the Company as described in Section 23. It shall continue in
effect for a term of ten (10) years unless sooner terminated under Section 20.
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