2001 Employee Stock Purchase Plan - Transgenomic Inc.
TRANSGENOMIC, INC.
AMENDED AND RESTATED
2001 EMPLOYEE STOCK PURCHASE PLAN
Section 1. PURPOSE. The purpose of the Transgenomic, Inc. 2001 Employee
Stock Purchase Plan (the "Plan") is to provide an opportunity to current
employees of Transgenomic, Inc. (the "Company") or any Participating Subsidiary
of the Company to purchase its Common Stock. By encouraging such stock
ownership, the Company seeks to attract, retain and motivate such employees to
devote their best efforts to the financial success of the Company. It is
intended that the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). In
addition, the Plan authorizes the grant of Options and issuance of Common Stock
which do not qualify under Section 423 of the Code pursuant to sub-plans adopted
by the Committee designed to achieve desired tax or other objectives in
particular locations outside the United States.
Section 2. DEFINITIONS. For purposes of the Plan, the following terms used
herein shall have the following meanings, unless a different meaning is clearly
required by the context.
2.01. "BASE PAY" shall mean the monthly pay rate of a salaried Employee or
the hourly pay rate of an hourly Employee. Base Pay shall not include payments
for overtime, allowances, bonuses and other special payments, commissions and
other marketing incentive payments.
2.02. "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
2.03. "COMMITTEE" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.04. "COMMON STOCK" shall mean the Class A Common Stock of the Company.
2.05. "EMPLOYEE" shall mean any person, including any officer or
employee-director of the Company or any Participating Subsidiary of the Company,
who is actively and customarily employed for 20 hours or more per week by the
Company or a Participating Subsidiary of the Company.
2.06. "FAIR MARKET VALUE" shall mean the closing last trade on the date in
question, as such price is reported by the National Association of Securities
Dealers on the NASDAQ National Market or any successor system for a share of
Common Stock.
2.07. "OFFERING" shall have the meaning described in Section 4.01.
2.08. "OPTION" shall mean any option to purchase Common Stock granted to an
Employee pursuant to this Plan.
2.09. "PARTICIPANT" shall mean any Employee that is eligible to participate
in the Plan in accordance with Section 3 and who elects to participate in the
Plan.
2.10 "PARTICIPATING SUBSIDIARY OF THE COMPANY" means any Subsidiary of the
Company that has been designated by the Board of Directors as eligible to
participate in the Plan with respect to its Employees.
2.11. "PARTICIPATION PERIOD" shall mean the period beginning on December 1,
2001 and ending on February 28, 2002 and each three-month period thereafter
during the term of the Plan. The Plan shall be in effect from December 1, 2001,
to November 30, 2006. There shall be twenty Participation Periods during the
term of the Plan.
2.12. "SUBSIDIARY OF THE COMPANY" means any foreign or U.S. domestic
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
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Section 3. ELIGIBILITY AND PARTICIPATION. The following provisions shall
govern the eligibility of Employees to participate in the Plan.
3.01. ELIGIBILITY. Any Employee who shall have completed three months of
employment with the Company or any Participating Subsidiary of the Company shall
be eligible to participate in the Offering as of the first day of the next
Participation Period; PROVIDED, HOWEVER, that any Employee who has terminated
his or her participation in the Offering pursuant to Section 9.01 hereof will
not be eligible to again participate in the Offering until the first day of the
second Participation Period to begin after the date of such termination. The
Committee may also determine that a designated group of highly compensated
Employees are ineligible to participate in the Plan so long as the excluded
category fits within the definition of "highly compensated employee" in Code
Section 414(q). The Committee may impose restrictions on eligibility and
participation of Employees who are officers or directors to facilitate
compliance with federal or state securities laws or foreign laws.
3.02. RESTRICTIONS ON PARTICIPATION. Notwithstanding any provisions of the
Plan to the contrary, no Employee shall be granted an Option under the Plan:
(a) if, immediately after such grant, such Employee would own stock
possessing five percent or more of the total combined voting power or value of
all classes of stock of the Company or any Subsidiary of the Company, such
ownership to be determined by applying the rules of Section 424(d) of the Code
and treating stock which the employee may purchase under outstanding options as
stock owned by the Employee; or
(b) which would permit his or her rights to purchase stock under the Plan
(and under any other plans of the Company or any Subsidiary of the Company
qualifying under Section 423 of the Code) to accrue at a rate which exceeds the
lesser of (i) $25,000 or (ii) 10% of the Employee's Base Pay of fair market
value of the stock (determined on the basis of the fair market value of the
stock at the time such Option is granted) for each calendar year in which such
Option is outstanding.
3.03. COMMENCEMENT OF PARTICIPATION. A Participant may elect to participate
in the Offering by executing the enrollment form prescribed for such purpose by
the Committee which enrollment form may include an application for an account
with the Company's designated broker. A Participant will begin participation in
the Offering on the first day of the next Participation Period to begin after
submission of the Participant's enrollment form as long as such enrollment form
is submitted to the Committee at least 15 days prior to the first day of such
Participation Period. Participants that submit their enrollment form after such
date will begin participation in the Offering on the first day of the following
Participation Period (provided that their enrollment forms are submitted at
least 15 days prior to the first day of such following Participation Period).
The Participant shall designate on the enrollment form the percentage of his or
her Base Pay which he or she elects to have withheld for the purchase of Common
Stock, which may be any whole percentage from 1% to 10%. Once enrolled, a
Participant will continue to participate in the Plan for each succeeding
Participation Period until he or she terminates participation or ceases to
qualify as an Employee.
Section 4. COMMON STOCK SUBJECT TO THE PLAN.
4.01. NUMBER OF SHARES. The total number of shares of Common Stock for
which Options may be granted under this Plan shall not exceed in the aggregate
500,000 shares of Common Stock. The Plan will be implemented by an Offering of
shares of Common Stock (the "Offering"). The Offering shall begin on December 1,
2001 and shall terminate on November 30, 2006.
4.02. REISSUANCE. The shares of Common Stock that may be subject to Options
granted under this Plan may be either authorized and unissued shares of Common
Stock or shares of Common Stock reacquired at any time and now or hereafter held
as treasury stock of the Company as the Committee may determine. In the event
that any outstanding Option expires or is terminated for any reason, the shares
allocable to the unexercised portion of such Option may again be subject to an
Option granted under this Plan. If any shares of Common Stock acquired pursuant
to the exercise of an Option shall have been repurchased by the Company, then
such shares shall again become available for issuance pursuant to the Plan.
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Section 5. ADMINISTRATION OF THE PLAN.
5.01. COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board of Directors, or such other committee established by the
Board of Directors (the "Committee") consisting of no less than two persons. The
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors.
5.02. INTERPRETATION. The Committee shall be authorized (i) to interpret
the Plan and decide any matters arising thereunder, and (ii) to adopt such
rules, regulations and procedures, not inconsistent with the provisions of the
Plan, as it may deem advisable to carry out the purpose of this Plan.
5.03. FINALITY. The interpretation and construction by the Committee of any
provision of the Plan, any Option granted hereunder or any agreement evidencing
any such Option shall be final, conclusive and binding upon all parties.
5.04. VOTING BY COMMITTEE MEMBERS. Only members of the Committee shall vote
on any matter affecting the administration of the Plan or the granting of
Options under the Plan.
5.05. EXPENSES. All expenses and liabilities incurred by the Committee in
the administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration of the Plan. The Company, and its officers and directors,
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. No member of the Board of Directors or the Committee shall be liable
for any action, determination or interpretation taken or made in good faith with
respect to the Plan or any Option granted hereunder.
5.06 NON-U.S. PARTICIPATION. The Committee may adopt rules or procedures
relating to the operation and administration of the Plan to accommodate the
specific requirements of local laws and procedures. Without limiting the
generality of the foregoing, the Committee is specifically authorized to adopt
rules and procedures regarding handling of payroll deductions, payment of
interest, conversion of local currency, payroll tax and withholding procedures
which vary with local requirements. With respect to any Participating Subsidiary
which employs Participants who reside outside of the United States, and
notwithstanding anything herein to the contrary, the Committee may in its sole
discretion amend or vary the terms of the Plan in order to conform such terms
with the requirements of local law or to meet the objectives and purpose of the
Plan, and the Committee may, where appropriate, establish one or more sub-plans
to reflect such amended or varied provisions which sub-plans may be designed to
be outside the scope of Code Section 423. The provisions of such sub-plans may
take precedence over other provisions of the Plan, with the exception of Section
4.01, but unless otherwise superseded by the terms of such sub-plan, the
provisions of the Plan shall govern the operation of such sub-plan.
Section 6. PAYROLL DEDUCTIONS.
6.01. AMOUNT OF DEDUCTION. At the time a Participant files his or her
enrollment form authorizing payroll deductions pursuant to Section 3.03, he or
she shall elect to have deductions made from his or her Base Pay on each payday
during the time he or she is a Participant in the Offering.
6.02. PARTICIPANT'S ACCOUNT; NO INTEREST. All payroll deductions made for a
Participant shall be credited to his or her account under the Plan. A
Participant may not make any separate cash payment into such account. No
interest shall accrue on amounts credited to a Participant's account under the
Plan, regardless of whether or not the funds in such account are ultimately used
to acquire shares of Common Stock, unless required under local law.
6.03. CHANGES IN PAYROLL DEDUCTIONS. A Participant may change the rate of
payroll deductions, effective for the next Participation Period, by filing a new
enrollment form with the Committee at any time prior to the first day of the
Participation Period for which such change is to be effective. A Participant may
also discontinue his or her participation in the Plan by notifying the Committee
in accordance with the procedures established by the Committee for such purpose.
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6.04. USE OF FUNDS. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions unless
required under local law.
Section 7. GRANT OF OPTION.
7.01. TERMS AND CONDITIONS. A description of the terms and conditions of
the Plan shall be made available to Participants in such form and manner as the
Committee shall approve.
7.02. NUMBER OF OPTION SHARES. On the first business day of each
Participation Period during the term of the Plan, each Participant shall be
deemed to have been granted an Option, subject to the limitations of Section
3.02, to purchase a maximum number of shares of Common Stock during the
Participation Period equal to the number obtained by multiplying (i) the
percentage of the Employee's Base Pay for that Participation Period which he or
she has elected to have withheld pursuant to Section 6.01 by (ii) the Employee's
Base Pay for that Participation Period and dividing the resulting product by
(iii) 85% of the Fair Market Value of one share of Common Stock of the Company
on the first business day or on the last business day of that Participation
Period, whichever is lower, provided, however, that in no event shall the total
number of shares of Common Stock for which Options are granted exceed the number
of shares set forth in Section 4.01. If the total number of shares of Common
Stock for which Options would have been granted to Participants pursuant to the
preceding sentence would have exceeded the number of shares set forth in Section
4.01 (absent the proviso in the preceding sentence), the Committee shall make a
pro rata allocation of the shares of Common Stock available for grant to
Participants' Options in such manner as it shall determine, in its sole
discretion, to be reasonably practicable, uniform and equitable.
7.03. OPTION PRICE. The Option price per share of the Common Stock subject
to an Option shall be 85% of the Fair Market Value of one share of Common Stock
on the first business day or on the last business day of the applicable
Participation Period, whichever is lower.
7.04. INTEREST IN OPTION STOCK. A Participant shall have no interest in
shares of Common Stock covered by his or her Option until such Option has been
exercised.
7.05. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's account nor Options granted to a Participant shall be transferable
other than by will or the laws of descent and distribution and, during a
Participant's lifetime, an Option shall be exercisable only by the Participant.
7.06 TAX WITHHOLDING. In the event that the Company or any Subsidiary of
the Company is required to withhold any Federal, state, local or foreign taxes
in respect of any compensation income realized by the Participant as a result of
any "disqualifying disposition" of any shares of Common Stock acquired upon
exercise of an Option granted hereunder, the Company or such Subsidiary of the
Company shall deduct from any payments of any kind otherwise due to such
Participant the aggregate amount of such Federal, state, local or foreign taxes
required to be so withheld or, if such payments are insufficient to satisfy such
Federal, state, local or foreign taxes, such Participant will be required to pay
to the Company or such Subsidiary of the Company, or make other arrangements
satisfactory to the Company or such Subsidiary of the Company regarding payment
to the Company or such Subsidiary of the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the Committee
in its sole discretion. Subject to approval by the Committee, a Participant may
elect to have such tax withholding obligation satisfied, in whole or in part, by
(i) authorizing the Company to withhold from shares of Common Stock to be
acquired upon exercise of an Option, a number of shares of Common Stock with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Common Stock owned by the Participant with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due.
Section 8. EXERCISE OF OPTIONS.
8.01. AUTOMATIC EXERCISE. Unless a Participant gives written notice to the
Company of withdrawal pursuant to Section 9.01, his or her Option to acquire
Common Stock with payroll deductions credited to his or her account for
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any Participation Period will be deemed to have been exercised automatically on
the last business day of the applicable Participation Period for the purchase of
the number of full shares of Common Stock which the accumulated payroll
deductions credited to his or her account at that time will purchase at the
applicable Option price (but not in excess of the number of shares of Common
Stock for which Options have been granted to the Employee pursuant to Section
7.02), and any excess credited to his or her account at that time will be
carried forward to the next Participation Period.
8.02. FRACTIONAL SHARES. Fractional shares will not be issued under the
Plan and any accumulated payroll deductions which would have been used to
purchase fractional shares will be carried over to the next following
Participation Period.
8.03. DELIVERY OF STOCK. As soon as reasonably practicable after each
Participation Period, the Company will deliver to the Participant's account with
the Company's designated broker, in such Participant's name, the shares of
Common Stock purchased upon exercise of such Participant's Option. It is a
condition of participation in the Plan that each Participant maintain an account
with the broker designated by the Company. The Company reserves the right to
change its designated broker from time to time in its sole discretion.
Section 9. WITHDRAWAL.
9.01. IN GENERAL. A Participant may withdraw payroll deductions credited to
his or her account for a Participation Period under the Plan at any time prior
to the last business day of such Participation Period by giving written notice
to the Committee. As soon as reasonably practicable after receipt by the
Committee of his or her notice of withdrawal, the payroll deductions credited to
the Participant's account for such Participation Period will be paid to him or
her without interest (except to the extent required by local law), and no
further payroll deductions will be made from his or her Base Pay for such
Participation Period.
9.02. CESSATION OF EMPLOYEE STATUS. In the event a Participant shall cease
to be an Employee during a Participation Period for any reason, other than as a
result of his or her death, the payroll deductions credited to his or her
account for such Participation Period will be returned to him or her without
interest (except to the extent required by local law) as soon as reasonably
practicable thereafter.
9.03. TERMINATION DUE TO DEATH. In the event a Participant shall cease to
be an Employee during a Participation Period by reason of his or her death, his
or her legal representative shall have the right to elect, by written notice to
the Committee prior to the last business day of the Participation Period:
(a) to withdraw all of the payroll deductions credited to the
Participant's account under the Plan for such Participation Period without
interest (except to the extent required by local law), or
(b) to exercise the Participant's Option for such Participation Period
with any excess in the Participant's account after exercise of the Option to be
returned to the Participant's legal representative.
In the event that no such written notice of election is duly and timely
received by the Committee, the Participant's legal representative shall
automatically be deemed to have elected, pursuant to clause (b) above, to
exercise the Participant's Option.
Section 10. ADJUSTMENTS.
10.01. CHANGES IN CAPITALIZATION. In the event that the outstanding shares
of the Company's Common Stock shall be increased or decreased or changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation, effected without the receipt of
consideration by the Company, through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, reverse stock split, split-up,
combination or exchange of shares or declaration of any dividends payable in
Common Stock, the Board of Directors shall appropriately adjust, subject to any
required action by the stockholders of the Company, (i)the number of shares of
Common Stock (and the Option price per share) subject to the unexercised portion
of any outstanding Option (to the nearest possible full share), provided,
however, that the limitations of Section 424 of the
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Code shall apply with respect to such adjustments and (ii) the number of shares
of Common Stock for which Options may be granted under the Plan, as set forth in
Section 4.01 hereof, and such adjustments shall be final, conclusive and binding
for all purposes of the Plan. Except as expressly provided herein, no issuance
by the Company of 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.
10.02. ACQUISITION, MERGER, SALE OF ASSETS, DISSOLUTION OR LIQUIDATION.
Notwithstanding the foregoing, in the event of (i) any offer or proposal to
holders of the Company's Common Stock relating to the acquisition of their
shares, including, without limitation, through purchase, merger or otherwise, or
(ii) any transaction generally relating to the acquisition of substantially all
of the assets or business of the Company, or (iii) the dissolution or
liquidation of the Company, the Board of Directors may make such adjustment as
it deems equitable in respect of outstanding Options (and in respect of the
shares of Common Stock for which Options may be granted under the Plan),
including, without limitation, the revision, cancellation, or termination of any
outstanding Options, or the change, conversion or exchange of the shares of the
Company's Common Stock under outstanding Options (and of the shares of the
Company's Common Stock for which Options may be granted under the Plan) into or
for securities or other property of another corporation. Any such adjustments by
the Board of Directors shall be final, conclusive and binding for all purposes
of the Plan.
Section 11. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP. Neither this
Plan nor any Option granted hereunder to a Participant shall be construed as
conferring upon such Participant any right to continue in the employ of the
Company or any Subsidiary of the Company as the case may be, or limit in any
respect the right of the Company or any Subsidiary of the Company to terminate
such Participant's employment with the Company or any Subsidiary of the Company,
as the case may be, at any time.
Section 12. AMENDMENT OF THE PLAN. The Board of Directors may amend the
Plan from time to time as it deems desirable in its sole discretion without
approval of the stockholders of the Company, except to the extent stockholder
approval is required by applicable NASDAQ National Market or stock exchange
rules, applicable provisions of the Code, or other applicable laws or
regulations.
Section 13. TERMINATION OF THE PLAN. The Board of Directors may terminate
the Plan at any time in its sole discretion. No Option may be granted hereunder
after termination of the Plan. The termination or amendment of the Plan shall
not alter or impair any rights or obligations under any Option theretofore
granted under the Plan in any material adverse way without the consent of the
affected Participant.
Section 14. GOVERNING LAW. The Plan and any and all Option agreements
executed in connection with the Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to conflict of
laws principles.
Section 15. NO STRICT CONSTRUCTION. No rule of strict construction shall be
applied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any Option agreement, any Option
granted under the Plan, or any rule, regulation or procedure established by the
Committee.
Section 16. SUCCESSORS. This Plan is binding on and will inure to the
benefit of any successor to the Company, whether by way of merger,
consolidation, purchase, or otherwise.
Section 17. SEVERABILITY. If any provision of the Plan or an Option
agreement shall be held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan or such
agreement, and the Plan and such agreement shall each be construed and enforced
as if the invalid provisions had never been set forth therein.
Section 18. PLAN PROVISIONS CONTROL. Except as otherwise provided in
Section 5.06, the terms of the Plan govern all Options granted under the Plan,
and in no event will any Option be granted under the Plan which is contrary to
any of the provisions of the Plan. In the event any provision of any Option
granted under the Plan shall conflict with any term in the Plan as constituted
on the grant date of such Option, the term in the Plan as constituted on the
grant date of such Option shall control except as otherwise provided in Section
5.06.
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Section 19. HEADINGS. The headings used in the Plan are for convenience
only, do not constitute a part of the Plan, and shall not be deemed to limit,
characterize, or affect in any way any provisions of the Plan, and all
provisions of the Plan shall be construed as if no captions had been used in the
Plan.
Section 20. EFFECTIVE DATE OF THE PLAN. The Plan shall be submitted to the
stockholders of the Company for approval and ratification at the next regular or
special meeting thereof to be held after January 1, 2001. Unless at such meeting
the Plan is approved and ratified by the stockholders of the Company, in the
manner provided by the Company's By-Laws, then and in such event, the Plan shall
become null and void and of no further force and effect. Subject to the
immediately preceding sentence, the Plan shall be effective as of December 1,
2001. The Plan shall continue in effect until November 30, 2006 unless sooner
terminated under Section 13.