Converse Inc. Employee Stock Purchase Plan

EXHIBIT 10.1


CONVERSE INC.
EMPLOYEE STOCK PURCHASE PLAN


CONVERSE INC.
EMPLOYEE STOCK PURCHASE PLAN
----------------------------


ARTICLE I. Introduction.


1.01 Statement of Purpose. The purpose of the Converse Inc.
-------------------- Employee Stock Purchase Plan is to provide eligible employees of Converse Inc. (the "Company") and its Subsidiaries, who wish to become shareholders, an opportunity to purchase common stock of the Company. The Board of Directors of the Company believes that employee participation in stock ownership will be to the mutual benefit of both the employees and the Company.


1.02 Internal Revenue Code Considerations. The Plan is intended to
------------------------------------ constitute an "employee stock purchase plan" within the meaning of section 423 of the Internal Revenue Code of 1986, as amended.


1.03 ERISA Considerations. The Plan is not intended and shall not
-------------------- be construed as constituting an "employee benefit plan," within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.


ARTICLE II. Definitions.


2.01 "Board of Directors" means the board of directors of the Company or a committee of the board of directors authorized to act on its behalf.


2.02 "Code" means the Internal Revenue Code of 1986, as amended.


2.03 "Committee" means the Company's Executive Compensation and Stock Option Committee.


2.04 "Company" means Converse Inc., a Delaware corporation.


2.05 "Effective Date" shall mean September 1, 1998.


2.06 "Election Date" means September 1 and March 1 within a Plan Year or such other dates as the Committee shall specify.


2.07 "Eligible Employee" means each Employee who (a) is classified by the Company as an employee (and not as an independent contractor no matter how characterized by a court or administrative agency), (b) is regularly scheduled to work more than 20 hours per week for the Employer, (c) has been an Employee for at least a 12-consecutive month period; and (d) is not deemed, for purposes of section 423(b)(3) of the Code, to own stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary. The term "Employee" shall not include any person employed by an Employer on a


temporary basis nor shall it include any member of the Board who is not also employed by the Employer.


2.08 "Employee" means each person employed by an Employer.


2.09 "Employer" means the Company and each Subsidiary.


2.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended, and as the same may hereafter be amended.


2.11 "Market Value" means the closing price of the Stock as reported in the Wall Street Journal as composite transactions for the relevant date (or the latest date for which such price was reported if such date is not a business day), or if not available, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported.


2.12 "Participant" means each Eligible Employee who elects to participate in the Plan.


2.13 "Plan" means the Converse Inc. Employee Stock Purchase Plan, as amended from time to time.


2.14 "Plan Year" means each 12-month period beginning each September 1 and ending on the next following August 31 during which the Plan is in effect.


2.15 "Purchase Agreement" means the instrument prescribed by the Committee pursuant to which an Eligible Employee may enroll as a Participant and subscribe for the purchase of shares of Stock on the terms and conditions offered by the Company. The Purchase Agreement is intended to evidence the Company's offer of an option to the Eligible Employee to purchase Stock on the terms and conditions set forth therein and herein.


2.16 "Purchase Date" means the last day of each Purchase Period.


2.17 "Purchase Period" means each period that begins on each Election Date coinciding with or following the Effective Date and ending on the day before the next Election Date or other period specified by the Committee during which the Participant's Stock purchase is funded through payroll deduction accumulations.


2.18 "Purchase Price" means the purchase price for shares of Stock purchased under the Plan, determined as set forth in Section 4.03.


2.19 "Stock" means the common stock of the Company.


2.20 "Subsidiary" means any present or future corporation (a) which constitutes a "subsidiary corporation" of the Company as that term is defined in section 424 of the Code, and (b) is designated as a participating entity in the Plan by the Committee.


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ARTICLE III. Admission to Participation.


3.01 Initial Participation. An Eligible Employee may elect to
--------------------- participate in the Plan and may become a Participant effective as of any Election Date, by executing and filing with the Committee a Purchase Agreement at such time in advance of such Election Date as the Committee shall prescribe. The Purchase Agreement shall remain in effect until modified or canceled in accordance with the terms of this Plan.


3.02 Discontinuance of Participation. A Participant may
------------------------------- voluntarily cease his or her participation in the Plan and stop payroll deductions at any time by filing a notice of cessation of participation on such form and at such time in advance of the effective date as the Committee shall prescribe. Notwithstanding anything in the Plan to the contrary, if a Participant ceases to be an Eligible Employee, his or her participation automatically shall cease and no further purchase of Stock shall be made for the Participant. Any amounts withheld from a Participant's compensation that were not applied to the purchase of Stock prior to such cessation shall be returned to the Participant as soon as possible, without interest.


3.03 Readmission to Participation. Any Eligible Employee who has
---------------------------- previously been a Participant, who has discontinued participation (whether by cessation of eligibility or otherwise), and who wishes to be reinstated as a Participant may again become a Participant by executing and filing with the Committee a new Purchase Agreement. Reinstatement to Participant status shall be effective as of any Election Date, provided the Participant files a new Purchase Agreement with the Committee at such time in advance of the Election Date as the Committee shall prescribe.


ARTICLE IV. Stock Purchase and Resale.


4.01 Reservation of Shares. There shall be 500,000 shares of Stock
--------------------- reserved for issuance or transfer under the Plan, subject to adjustment in accordance with the antidilution provisions hereinafter set forth. Except as provided in Section 5.02, the aggregate number of shares of Stock that may be purchased under the Plan shall not exceed the number of shares of Stock reserved under the Plan.


4.02 Limitation on Shares Available. Stock must be purchased in
------------------------------ whole shares only and the maximum number of shares of Stock that may be purchased for each Participant on a Purchase Date is the lesser of (a) the number of shares of Stock that can be purchased by applying the full balance of the Participant's withheld funds to the purchase of shares of Stock at the Purchase Price, or (b) the Participant's proportionate part of the maximum number of shares of Stock available under the Plan, as stated in Section 4.01. Notwithstanding the foregoing, if any person entitled to purchase shares pursuant to any offering under the Plan would be deemed for purposes of section 423(b)(3) of the Code to own stock (including any number of shares of Stock that such person would be entitled to purchase under the Plan) possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of Company, the maximum number of shares of Stock


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that such person shall be entitled to purchase pursuant to the Plan shall be reduced to that number which, when added to the number of shares of stock that such person is deemed to own (excluding any number of shares of Stock that such person would be entitled to purchase under the Plan), is one less than such five percent (5%). Any amounts withheld from a Participant's compensation that cannot be applied to the purchase of Stock by reason of the foregoing limitation shall be returned to the Participant as soon as practicable, without interest. Notwithstanding the foregoing, however, any amounts withheld from a Participant's compensation that cannot be applied to the purchase of Stock solely by reason of the requirement that Stock be purchased in whole shares shall remain in the Plan and applied to the Participant's purchase of Stock during the subsequent Purchase Period, unless otherwise distributable under the terms of the Plan.


4.03 Purchase Price of Shares. Before the first day of each
------------------------ Purchase Period the Committee shall set the Purchase Price for such Purchase Period; provided, however, that in no event shall the Purchase Price ...