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Interliant - Employee Stock Purchase Plan
Exhibit 10.40
INTERLIANT, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
PURPOSE AND COMMENCEMENT
1.01 Purpose. The purpose of the Plan is to provide the employees of Interliant, Inc., a Delaware corporation (the "Company") and its Subsidiaries with added incentive to continue in their employment and to encourage increased efforts to promote the best interests of the Company by permitting eligible employees to purchase shares of Common Stock of the Company at prices less than the current market price thereof. The Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Code and shall be interpreted and construed in accordance with such purpose.
1.02 Commencement . The Plan shall become effective on such date as may be specified by the Board of Directors, which, absent a resolution of the Board of Directors to the contrary, shall be as set forth in Section 2.01(q) hereof; provided, however, that, in no event, shall the Plan become effective unless -------- ------- within twelve months of the date of its adoption by the Board of Directors it has been approved by the affirmative vote of a majority of the issued and outstanding shares of the Company's securities entitled to vote on such matters at a duly called meeting of the shareholders of the Company.
ARTICLE II
DEFINITIONS
2.01 Definitions. As used in the Plan, the following terms and phrases shall have the following meanings:
(a) "Board of Directors" shall mean the Board of Directors of the Company.
(b) "Closing Market Price" with respect to any day shall mean (i) the sales price of the Common Stock as reported on the Nasdaq National Market as of 4:00 P.M. New York Time, on such day, or (ii) if the foregoing provision is inapplicable, the Closing Market Price shall be determined by the Committee in good faith on such basis as it deems appropriate.
(c) "Code" shall mean the Internal Revenue Code as of 1986, as amended.
(d) "Commencement Date" shall mean the first day of a Purchase Period.
(e) "Committee" shall mean the Compensation Committee of the Board of Directors, or such other committee of the Board of Directors designated by it for purposes of administering the Plan.
(f) "Common Stock" means the common stock of the Company, par value $.01 per share.
(g) "Company" shall mean Interliant, Inc., a Delaware corporation.
(h) "Contribution Account" shall mean the account established on behalf of a Participant pursuant to Article III hereof to which shall be credited his or her Participant Contributions.
(i) "Contribution Rate" shall be a percentage of a Participant's Covered Compensation during each payroll period designated by each Participant to be contributed by regular payroll deductions to his or her Contribution Account as set forth in Section 3.03 hereof.
(j) "Covered Compensation" shall mean the total cash compensation received by an Employee from a Sponsoring Employer, before tax withholdings and other deductions, including base compensation, overtime, shift or other compensatory premiums, payments in substitution of base compensation such as vacation, holiday and sick pay, and including all cash bonus compensation, but not including short or long-term disability payments.
(k) "Employee" shall mean each employee of a Sponsoring Employer whose customary employment is at least twenty (20) hours a week and more than five months in a calendar year; provided, however, that an employee of a Sponsoring
-------- ------- Employer who is employed in a foreign jurisdiction shall not be deemed an Employee if participation by such employee in the Plan is prohibited pursuant to the laws of such jurisdiction. For purposes of the Plan, "employment" shall be determined in accordance with the provisions of Section 1.421-7(h) of the Treasury Regulations (or any successor regulations).
(l) "Participant" shall mean any Employee of a Sponsoring Employer who has met the conditions and provisions for becoming a Participant set forth in Article III hereof.
(m) "Participant Contributions" shall be the aggregate dollars actually contributed by each Participant to his or her Contribution Account.
(n) "Permanent Disability" shall mean an illness, injury or other physical or mental condition continuing for at least 180 consecutive days which results in
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an Employee's inability to provide in all material respects the duties theretofore performed in his or her capacity as an Employee of a Sponsoring Employer.
(o) "Plan" shall mean the Interliant, Inc. Employee Stock Purchase Plan as set forth herein, as it may be amended from time to time.
(p) "Purchase Date" shall mean the last business day of a Purchase Period on which the Common Stock publicly trades.
(q) "Purchase Period" shall mean each of the six-month periods commencing January 1 and July 1 of each calendar year during which the Plan is in effect. The first Purchase Period shall commence on July 1, 2000.
(r) "Purchase Price" shall mean the purchase price for a share of Common Stock to be paid by a Participant on a Purchase Date, as determined under Section 4.02 hereof.
(s) "Request for Participation" shall mean such form as shall be approved by the Committee for distribution to Employees in connection with participation in the Plan.
(t) "Sponsoring Employers" shall mean the Company and each Subsidiary that has been designated by the Committee as a Sponsoring Employer under the Plan.
(u) "Subsidiary" shall mean a subsidiary of the Company which is treated as a subsidiary corporation under Section 424(f) of the Code.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.01 Eligibility. Each Employee who shall be employed by a Sponsoring Employer on a given Commencement Date of a Purchase Period shall be eligible to participate in the Plan for such Purchase Period, subject to the satisfaction of any election requirements described in Section 3.03(a) herein.
3.02 Limitations. Notwithstanding anything to the contrary contained in the Plan, no right to purchase Common Stock shall accrue under the Plan in favor of any person who is not an Employee eligible to participate in the Plan under Section 3.01 hereof, and no Employee shall acquire the right to purchase shares of Common Stock if (i) immediately after receiving such right to purchase Common Stock, such Employee would own 5% or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary, taking into account in determining stock ownership any stock attributable to such Employee under Section 424(d) of the Code, or (ii) which would permit such Employee's right to purchase stock under all employee
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stock purchase plans (to which Section 423 of the Code applies) of the Company and its Subsidiaries, as those plans are in effect from time to time, to accrue at a rate which exceeds $25,000 of fair market value of such stock (as determined as each Commencement Date) for each calendar year, all as specified in the manner provided by Section 423(b)(8) of the Code, or (iii) which would permit such Employee the right to purchase more than 1,250 shares (or such other number as may be determined in advance for any Purchase Period by the Committee) of Common Stock in any Purchase Period.
3.03 Participation
(a) Each Employee eligible to be a Participant and participate in the Plan shall be furnished a summary of the Plan and a Request for Participation by such Employee's Sponsoring Employer. If an Employee elects to participate hereunder, such Employee shall complete such form and file it with his or her Sponsoring Employer not later than 15 days prior to a Commencement Date of a Purchase Period. The completed Request for Participation shall indicate the Participant Contribution Rate authorized by the Participant. If any Employee does not elect to participate in the Plan during any given Purchase Period, such Employee may elect to participate on any future Commencement Date so long as he or she continues to be an eligible Employee.
(b) On his or her Request for Participation, an Employee must authorize his or her Sponsoring Employer to deduct through a payroll deduction the amount of such Employee's Participant Contribution. The payroll deduction specified in a Request for Participation for each payroll period shall be at a Participant Contribution Rate no less than 1% and no more than 15% of such Employee's Covered Compensation during such payroll period paid to him or her by his or her Sponsoring Employer. Such deductions shall begin as of the first pay period occurring after the Commencement Date of a Purchase Period. Participant Contributions will not be permitted to begin at any time other than on the first payroll date occurring immediately after the Commencement Date of a Purchase Period. No interest shall accrue to Participants on any amounts withheld under the Plan, unless and until the Committee shall approve such accrual of interest on terms that it shall specify and apply on a uniform basis as to all Participants.
(c) The Participant's Contribution Rate, once established, shall remain in effect for all Purchase Periods unless changed by the Participant in writing delivered to such Participant's Sponsoring Employer and filed with such Sponsoring Employer at least 15 days prior to the Commencement Date of the next Purchase Period. A Participant's Contribution Rate for a Purchase Period may not be increased, decreased or otherwise modified at any time during the 15-day period prior to the Commencement Date of such Purchase Period.
(d) A Participant may notify his or her Sponsoring Employer of such Participant's desire to discontinue his or her Participant Contributions by delivering to his or her Sponsoring Employer written notice on such forms as may be provided by the Company or such Participant's Sponsoring Employer at least 15 days prior to the
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Purchase Date of the relevant Purchase Period. Upon such request, there shall be promptly refunded to such Participant as soon as practicable the entire cash balance in his or her Contribution Account. If a Participant determines to discontinue his or her Participant Contributions pursuant to this Section 3.03(d), (i) such Participant shall be terminated from the Plan effective upon the date of receipt of such Participant's notice to his or her Sponsoring Employer and (ii) such Participant shall not be permitted to resume participation in the Plan at the beginning of the succeeding Purchase Period unless such Participant delivers to the Company a new Request for Participation in accordance with Section 3.03(a) hereof. In the event that a Participant's payroll deductions are prevented by legal process, the Participant will be deemed to have terminated from the Plan.
(e) By enrolling in the Plan, each Participant will be deemed to have authorized the establishment of a brokerage account in his or her name at a securities brokerage firm or other financial institution, if approved by the Committee in its discretion.
3.04 Termination of Employment. Any Participant (i) whose employment by a Sponsoring Employer is terminated for any reason (except death, retirement or Permanent Disability) or (ii) who shall cease to be an Employee under the Plan, in either case during a Purchase Period, shall cease being a Participant as of the date of such termination of employment. Upon such termination of employment, there shall be refunded to such Participant as soon as practicable the entire cash balance in such Participant's Contribution Account. Section 4.03(b) hereof shall apply to the issuance of certificates to a Participant following termination of employment.
3.05 Death, Retirement or Permanent Disability.
(a) If a Participant shall die during a Purchase Period, no further Participant Contributions on behalf of the deceased Participant shall be made. The executor or administrator of the deceased Participant's esta...
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