Amended and Restated Dominos Pizza, Inc. Employee Stock Payroll Deduction Plan DOMINOS PIZZA, INC. EMPLOYEE STOCK PAYROLL DEDUCTION PLAN
EXHIBIT 10.18
Amended and Restated Domino’s Pizza, Inc. Employee Stock Payroll Deduction Plan
DOMINO’S PIZZA, INC.
EMPLOYEE STOCK PAYROLL DEDUCTION PLAN
SECTION 1. PURPOSE OF PLAN
The Domino’s Pizza, Inc. Employee Stock Payroll Deduction Plan (the “Plan”) is intended to provide a method by which eligible employees of Domino’s Pizza, Inc. (“Domino’s”) and such of its Subsidiaries and affiliates as the Board of Directors of Domino’s (the “Board”) may from time to time designate (Domino’s and such Subsidiaries and affiliates being hereinafter referred to as the “Company”) may use voluntary, systematic payroll deductions to purchase shares of common stock, $.01 par value of Domino’s (such common stock being hereafter referred to as “Stock”) and thereby acquire an interest in the future of Domino’s. For purposes of the Plan, a “Subsidiary” is any corporation that would be treated as a subsidiary of Domino’s under Section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”). The Plan is intended to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of the Code and the Regulations thereunder and shall be construed accordingly, although Domino’s makes no undertaking or representation to maintain such qualification and in no event shall the Company be liable to any person by reason of any failure of the Plan or of any option granted under the Plan to qualify for the tax treatment available to qualifying employee stock purchase plans under Section 423 of the Code and options granted thereunder. Separate offerings (which may be consecutive or overlapping) may be made hereunder with terms that need not be identical; provided, that the provisions of each such offering shall be consistent with the terms of the Plan.
SECTION 2. OPTIONS TO PURCHASE STOCK
(a) Under the Plan, there is available an aggregate of not more than 1,000,000 shares of Stock (subject to adjustment as provided in Section 18) for sale pursuant to the exercise of options (“Options”).
(b) Options may be granted under the Plan to employees of the Company (“Employees”) who meet the eligibility requirements set forth in Section 3 hereof (“Eligible Employees”). The Stock to be delivered upon exercise of Options under the Plan may be either shares of authorized but unissued Stock or shares of reacquired Stock, as the Board may determine.
SECTION 3. ELIGIBLE EMPLOYEES
Subject to the exceptions and limitations set forth below and such additional restrictions, not inconsistent with Section 423(b)(4) of the Code, as may be imposed by the Board with respect to any offering, all Employees whose customary employment for the Company is more than twenty (20) hours per week are eligible to participate in the Plan (except those Employees in such category the exclusion of whom is not permitted under applicable law).
(a) Any Employee who immediately after the grant of an Option would own (or pursuant to Sections 423(b)(3) and 424(d) of the Code would be deemed to own) stock possessing 5% or more of the total combined voting power or value of all classes of stock of the employer corporation or of its parent or subsidiary corporations, as defined in Section 424 of the Code, will not be eligible to receive an Option to purchase Stock pursuant to the Plan.
(b) No Employee will be granted an Option under the Plan that would permit his or her rights to purchase shares of stock under all employee stock purchase plans of the employer corporation and parent and subsidiary corporations to accrue at a rate which exceeds $25,000 in fair market value of such stock (determined at the time the Option is granted) for each calendar year during which any such Option granted to such Employee is outstanding at any time, as provided in Section 423 of the Code.
SECTION 4. METHOD OF PARTICIPATION
The periods January 1 to June 30 and July 1 to December 31 of each year will be termed “Option Periods.” Each person who will be an Eligible Employee on the first day of an Option Period may elect to participate in the Plan by executing and delivering, by such deadline prior thereto as the Board may specify, such enrollment forms or materials, including a payroll deduction authorization in accordance with Section 5, as the Board may determine.
An Eligible Employee who elects to participate in the Plan for an Option Period in accordance with the foregoing will thereby become a participant (“Participant”) on the first day of the Option Period and will remain a Participant until his or her participation is terminated as provided in the Plan.
SECTION 5. PAYROLL DEDUCTION
Each payroll deduction authorization will request withholding at a rate (in whole percentages) of not less than 1% nor more than 15% of Compensation per payroll period to be accomplished by means of payroll deductions over each Exercise Period (as defined in Section 8 below) with respect to payroll dates within the Exercise Period. For purposes of the Plan, “Compensation” shall include and be limited to the same items of compensation (determined without regard to the limitations imposed under Section 401(a)(17) of the Code) as are included in the measure of compensation used to determine the amount of salary reduction contributions under the Company’s 401(k) plan; provided, that if the Company maintains more than one 401(k) plan, “Compensation” shall be determined by reference to the 401(k) plan specified by the Board; and further provided, that if the Company maintains no 401(k) plan, “Compensation” shall mean base pay plus cash bonuses, commissions, overtime and other cash remuneration. A Participant may not change the withholding rate of his or her payroll deduction authorization during an Option Period, except that the Participant may withdraw from the Plan pursuant to Section 9 by notice to the Company at the time and in the manner as described therein. The payroll deduction authorization in effect on the last day of an Option Period shall continue apply to the next succeeding Option Period, unless the Participant elects, in accordance with procedures established by the Company, to change or revoke his or her payroll deduction authorization with respect to such Period. All amounts withheld in accordance with a Participant’s payroll deduction authorization will be credited to a withholding account maintained in the Participant’s name on the books of the Company. Amounts credited to the withholding account shall not be required to be set aside in trust or otherwise segregated from the Company’s general assets, and shall not bear interest.
SECTION 6. GRANT OF OPTIONS
Each person who is a Participant on the first day of an Option Period will be granted, as of such day and for such Option Period, an Option entitling the Participant to purchase shares of Stock equal in number to the lesser of:
(a) the whole number (disregarding any fractional share amount) determined by dividing $12,500 by the fair market value of one share of Stock on the first day of the Option Period; and
(b) the whole number (disregarding any fractional share amount) determined by dividing (i) the balance credited to the Participant’s withholding account on the last day of the Option Period, by (ii) the purchase price per share of the Stock determined under Section 7.
In the event the number of shares of Stock reserved for issuance under the Plan is insufficient, the Board shall adjust downward on a substantially proportionate basis the maximum number of shares of Stock available for purchase under each Option. Option grants under this Section 6 shall be automatic and need not be separately documented.
SECTION 7. PURCHASE PRICE
The purchase price of Stock issued pursuant to the exercise of an Option will be 85% of the fair market value of the Stock on the date on which the Option is deemed exercised under Section 8(a). Fair market value for any day will mean the Closing Price of the Stock for such day; provided, that if such day is not a trading day, fair market value shall mean the Closing Price of the Stock for the immediately preceding day which is a trading day. The “Closing Price” of the Stock on any trading day will be the last sale price, regular way, with respect to such Stock, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, with respect to such Stock, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange; or, if such Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such Stock is listed or admitted to trading; or, if such Stock is not listed or admitted to trading, the last quoted price with respect to such Stock, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market with respect to such Stock, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or such other similar system then in use; or, if on any such date such Stock is not quoted by any such organization, the average of the closing bid and asked prices with respect to such Stock, as furnished by a professional market maker making a market in such Stock selected by the Board in good faith; or, if no such market maker is available, the fair market value of such Stock as of such day as determined in good faith by the Board.
SECTION 8. EXERCISE OF OPTIONS
(a) Each Option Period shall consist of six (6) consecutive Exercise Periods of one-month duration. Each Exercise Period, unless abbreviated pursuant to Section 19 below, shall begin on the first day of a calendar month and shall end on the last day of such calendar month. On the last day of an Exercise Period, the Participant will be deemed to have exercised each Option previously awarded and then outstanding for the Option Period then in effect for the lesser of (i) the maximum number of whole shares of Stock available to be purchased under such Option determined under Section 6, reduced by the aggregate number of shares of Stock purchased in respect of prior Exercise Periods in such Option Period, and (ii) the whole number of shares of Stock determined by dividing the balance credited to the Participant’s withholding account on the last day of the Exercise Period and allocable to such Option by the Option purchase price per share of the Stock determined under Section 7. Following the last day of an Option Period, Domino’s will return to the Participant the balance, if any, of his or her withholding account in excess of the total purchase price of the shares so issued during such Option Period; provided, that if the balance left in the withholding account consists solely of an amount equal to the value of a fractional share it will be retained in the withholding account and carried over to the next Option Period.
(b) It is a condition of participation in the Plan that a Participant agree that all Stock purchased pursuant to the Plan will be held in the Participant’s name in a brokerage account designated by the Company until the later of the date on which (1) the Participant sells the shares following the end of the twelve month holding period (as determined under Section 10) or (2) the Participant’s employment with the Company terminates.
(c) Notwithstanding anything herein to the contrary, Domino’s obligation to issue and deliver shares of Stock under the Plan will be subject to the approval required of any governmental authority in connection with the authorization, issuance, sale or transfer of said shares, to any requirements of any national securities exchange applicable thereto, and to compliance by Domino’s with other applicable legal requirements in effect from time to time.
SECTION 9. CANCELLATION AND WITHDRAWAL
A Participant who holds an Option under the Plan may at any time prior to exercise thereof cancel all (but not less than all) of his or her remaining Option or terminate his or her participation in the Plan in the form and manner specified by the Company and with such prior notice as the Company may require. Upon such cancellation or termination, the balance in the Participant’s withholding account will be retained in the Participant’s account and applied to the deemed exercise of the Option at the end of the Exercise Period.
A Participant who makes a hardship withdrawal from a Company savings plan qualifying under Section 401(k) of the Code (a “401(k) Plan”) will be deemed to have terminated his or her payroll deduction authorization as of the date of such hardship withdrawal, will cease to be a Participant as of such date, and will be deemed to have canceled his or her Option effective as of such date. No further amounts will be withheld from the Participant’s compensation under the Plan after such date. Amounts credited to the Participant’s account shall be retained under the Plan and applied to the deemed exercise of the Participant’s Option under the Plan at the end of the Exercise Period as provided in Section 8. An Employee who has made
a hardship withdrawal from a 401(k) Plan will thereby be deemed irrevocably to have elected not to participate in the Plan until the first Option Period that begins six (6) months after the date of his or her hardship withdrawal.
SECTION 10. RESTRICTION ON TRANSFER OF STOCK
Participants shall not be permitted to sell, assign, transfer, pledge, hypothecate, give or otherwise dispose of, by operation of law or otherwise (collectively “transfer”), Stock received pursuant to the exercise of an Option, or any interest therein, for a period specified by the Board. Unless otherwise specified by the Board, the period shall be one (1) year from the date of exercise of such Option, except transfers that occur by will or the laws of descent and distribution.
SECTION 11. LEGEND
Any certificates representing Stock received pursuant to the exercise of an Option shall bear a legend substantially in the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS UPON TRANSFER SET FORTH IN AN EMPLOYEE STOCK PAYROLL DEDUCTION PLAN. THE CORPORATION WILL FURNISH A COPY OF SUCH PLAN TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT CHARGE.
If Stock is held in book-entry form, the Company may take such steps as it deems necessary or appropriate to record and manifest the restrictions applicable to such Stock.
SECTION 12. EFFECT OF PROHIBITED TRANSFER
The Company shall not be required (a) to transfer on its books any Stock which has been sold or transferred in violation of any of the provisions set forth in this Plan, or (b) to treat as the owner of such Stock or to pay dividends to any transferee to whom any such Stock shall have been so sold or transferred.
SECTION 13. TAXES.
Payroll deductions are made on an after-tax basis. If the Company determines that the grant or exercise of an Option or the disposition of shares following the exercise of an Option could result in employment tax liability, the Company, as a condition of granting such shares, will make such provision as it deems necessary to provide for the remittance by the Participant of employment taxes required to be paid in connection with such grant, exercise or disposition of shares.
SECTION 14. TERMINATION OF EMPLOYMENT
Except as otherwise provided in Section 15, upon the termination of a Participant’s employment with the Company for any reason, he or she will cease to be a Participant, any Option held by him or her under the Plan will be deemed canceled, the balance
of his or her withholding account will be retained under the Plan and applied to the deemed exercise of the Participant’s Option at the end of the Exercise Period and the shares purchased thereby will be held as described in Section 8(b), and he or she will have no further rights under the Plan.
SECTION 15. DEATH OF PARTICIPANT
A Participant may elect that if death should occur during an Option Period the balance, if any, of the Participant’s withholding account at the time of death will be applied at the end of the Exercise Period in which the death occurs to the deemed exercise of the Participant’s Option and the shares thereby purchased under the Option (plus any balance remaining in the Participant’s withholding account) will be delivered to the Participant’s beneficiary or beneficiaries. For this purpose, a Participant’s beneficiary(ies) for purposes of the Plan shall be (i) such person or persons as are treated as the Participant’s beneficiary(ies) for purposes of the Company group life insurance plan applicable to the Participant, or (ii) in the absence of any beneficiary determined under clause (i), the Participant’s estate.
SECTION 16. EQUAL RIGHTS; PARTICIPANT’S RIGHTS NOT TRANSFERABLE
All Participants granted Options under the Plan with respect to any Option Period will have the same rights and privileges, except for differences that may be mandated by local law and that are consistent with Code Section 423(b)(5) and the Regulations thereunder. Each Participant’s rights and privileges under any Option granted under the Plan will be exercisable during the Participant’s lifetime only by him or her and except as provided at Section 15 above may not be sold, pledged, assigned, or transferred in any manner. In the event any Participant violates or attempts to violate the terms of this Section, any Options held by him or her may be terminated by the Company and, upon return to the Participant of the balance of his or her withholding account, all of the Participant’s rights under the Plan will terminate.
SECTION 17. EMPLOYMENT RIGHTS
Nothing contained in the provisions of the Plan will be construed as giving to any Employee any right of employment or as interfering with the right of the Company to discharge any Employee at any time.
SECTION 18. CHANGE IN CAPITALIZATION
In the event of any change in the outstanding Stock of Domino’s by reason of a stock dividend, split-up, recapitalization, merger, consolidation, reorganization, or other capital change, the aggregate number and type of shares available under the Plan, the number and type of shares under Options granted but not exercised, the maximum number and type of shares purchasable under an Option, and the Option price will be appropriately adjusted.
SECTION 19. ADMINISTRATION OF PLAN
The Plan will be administered by the Board, which will have the right to determine any matters which may arise regarding the interpretation and application of the provisions of the Plan and to make, administer, and interpret such rules and regulations as it
deems necessary or advisable. References in the Plan to the Board shall include the Board’s delegates to the extent of any delegation by the Board to such delegates of administrative responsibilities hereunder.
SECTION 20. AMENDMENT AND TERMINATION OF PLAN
Domino’s reserves the right at any time to amend the Plan in any manner it may deem advisable, by vote of the Board; provided, that any amendment that would be treated as the adoption of a new plan for purposes of Section 423 of the Code and the Regulations thereunder will have no effect unless approved by the shareholders of Domino’s within twelve (12) months before or after its adoption.
The Plan may be suspended or terminated at any time by the Board. In connection therewith, the Board may either cancel outstanding Options or continue them and provide that they will be exercisable either at the end of each remaining Exercise Period as determined under Section 8 above or on such earlier date as the Board may specify (in which case such earlier date shall be treated as the last day of the applicable Option Period and Exercise Period).
SECTION 21. APPROVAL OF SHAREHOLDERS
The Plan and the exercisability of Options granted hereunder will be subject to the approval of the shareholders of Domino’s obtained within twelve (12) months before or after the date the Plan is adopted by the Board.
SECTION 22. ADDITIONAL PROVISIONS
Domino’s is authorized to create programs, sub-plans and offerings, and grant options thereunder to acquire Stock, without regard to the requirements of Section 423 of the Code or the corresponding requirements of the Plan but subject in all events to Section 2(a) of the Plan. Options granted pursuant to the immediately preceding sentence shall be subject to the administrative provisions of the Plan (as determined by the Board), subject to such other rules and conditions, and subject to such exceptions, as the Board may determine. In no event shall the Board’s authority pursuant to this Section 22 be construed or be exercised in any manner that would render the provisions and benefits of Section 423 of the Code unavailable with respect to any Option granted under the Plan to which such provisions and benefits are intended to be applicable; provided, that in no event shall the Company be liable to any person by reason of any failure of the Plan or of any Option granted under the Plan to qualify for the tax treatment available to qualifying employee stock purchase plans under Section 423 of the Code and options granted thereunder.
Effective Date: December 31, 2013
