EXHIBIT 10.28
MORGAN STANLEY DEAN WITTER & CO.
EMPLOYEE STOCK PURCHASE PLAN
Amended December 18, 1998, Effective January 1, 1999
SECTION 1 - PURPOSE
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The purpose of the Plan is to secure for the Company and its stockholders the
benefits of the incentive inherent in the ownership of Common Stock by current
and future Eligible Employees. The Plan is intended to comply with the
provisions of Code Section 423 and shall be administered, interpreted and
construed in accordance with such provisions.
SECTION 2 - DEFINITIONS
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When used herein, the following terms shall have the following meanings:
2.1 "Board of Directors" means the Board of Directors of the Company, or any
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committee of such Board of Directors, as the Board of Directors may
determine from time to time.
2.2 "Code" means the Internal Revenue Code of 1986, as amended from time to
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time, or any successor statute thereto.
2.3 "Committee" means the committee appointed by the Board of Directors to
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administer the Plan pursuant to Section 12.
2.4 "Common Stock" means common stock, par value $0.01 per share, of the
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Company.
2.5 "Common Stock Account" means the account established with, and maintained
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by, the Custodian for the purpose of holding Common Stock purchased
pursuant to this Plan.
2.6 "Company" means Morgan Stanley Dean Witter & Co., a Delaware corporation,
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and its successors and assigns.
2.7 "Custodian" means the agent selected by the Company to hold Common Stock
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purchased under the Plan.
2.8 "Disability" means disability as defined under any qualified, defined
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benefit plan sponsored by the Company or any Subsidiary in which an
Eligible Employee is a participant on the date such Eligible Employee
terminates employment with the Company or any Subsidiary.
2.9 "Eligible Compensation" means the sum of the types and amounts of
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compensation determined from time to time by the Committee in its sole
discretion to be eligible to be taken into account under the Plan, provided
that no such determination shall include or exclude any type or amount of
compensation contrary to the requirements of Section 423 of the Code and
any regulations promulgated thereunder.
2.10 "Eligible Employee" means all employees of the Company and its
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Subsidiaries that have been designated as eligible to participate in the
Plan pursuant to and in accordance with rules prescribed by the Committee
from time to time, which rules, however, shall neither permit nor deny
participation in the Plan contrary to the requirements of the Code
(including, but not limited to, Section 423(b)(3), (4), (5), and (8)
thereof) and the regulations promulgated thereunder.
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2.11 "Fair Market Value" means the average of the high and low sales prices of
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a share of Common Stock as reported on the New York Stock Exchange
Composite Tape on the date in question or, if the Common Stock shall not
have been traded on such date, the average of the high and low sales prices
on the first day prior thereto on which the Common Stock was so traded or,
if the Common Stock was not so traded, such other amount as may be
determined by the Committee in its sole discretion.
2.12 "Investment Date" means for each Eligible Employee, each date on which he
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receives his Eligible Compensation in each Plan Year, or such other dates
as may be determined by the Committee in its sole discretion.
2.13 "Participant" means an Eligible Employee who has met the requirements of
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Section 3 and has elected to participate in the Plan pursuant to Section
4.1.
2.14 "Payroll Deduction Account" means the bookkeeping entry established by the
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Company for each Participant pursuant to Section 4.3.
2.15 "Plan" means the Morgan Stanley Dean Witter & Co. Employee Stock Purchase
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Plan as set forth herein and as amended from time to time.
2.16 "Plan Year" means a calendar year.
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2.17 "Retirement" means retirement as defined by any qualified or non-qualified
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defined benefit plan sponsored by the Company or a Subsidiary in which an
Eligible Employee is a participant on the date such Eligible Employee
terminates employment with the Company or any Subsidiary.
2.18 "Subsidiary" means any corporation designated by the Committee which
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constitutes a "subsidiary" of the Company, within the meaning of Code
Section 424(f).
SECTION 3 - ELIGIBILITY
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3.1 General Rule. Subject to Section 3.3, each Eligible Employee shall be
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eligible to participate in the Plan beginning on the later of (i) the
Eligible Employee's date of hire by the Company or any Subsidiary and (ii)
the date such employee becomes an Eligible Employee.
3.2 Leave of Absence. Unless the Committee otherwise determines, a Participant
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on a paid leave of absence shall continue to be a Participant in the Plan
so long as such Participant is on such paid leave of absence. Unless
otherwise determined by the Committee, a Participant on an unpaid leave of
absence shall not be entitled to participate in any offering commencing
after such unpaid leave has begun but shall not be deemed to have
terminated employment for purposes of the Plan. A Participant who, upon
failing to return to work following a leave of absence, is deemed not to be
an employee, shall not be entitled to participate in any offering
commencing after such termination of employment, and such Participant's
Payroll Deduction Account shall be paid out in accordance with Section 6.1.
3.3 Common Stock Account. As a condition to participation in this Plan, each
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Eligible Employee shall be required to hold shares purchased hereunder in a
Common Stock Account and such employee's decision to participate in the
Plan shall constitute the appointment of the Custodian as custodial agent
for the purpose of holding such shares. Such Common Stock Account will be
governed by, and subject to, the terms and conditions of a written
agreement between the Company and the Custodian.
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SECTION 4 - PARTICIPATION AND PAYROLL DEDUCTIONS
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4.1 Enrollment. Each Eligible Employee may elect to participate in the Plan
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for a Plan Year by completing a Company-specified enrollment process. Upon
completing the enrollment process, an Eligible Employee shall commence
participation in the Plan on the next practicable Investment Date. Each
Eligible Employee shall be advised of the purchase price (expressed as a
percentage of Fair Market Value) determined under Section 5.2(b) before
enrolling in the Plan.
4.2 Amount of Deduction. When enrolling, the Eligible Employee shall specify a
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payroll deduction amount of a percentage (in whole numbers) of Eligible
Compensation which shall be withheld from such Eligible Employee's regular
paychecks, including bonus paychecks, for the Plan Year, provided, however,
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that the Committee may determine and specify, from time to time, (i) the
range of permissible percentages of Eligible Compensation an Eligible
Employee may specify to be withheld and (ii) the maximum amount, if any, of
Eligible Compensation that may be deducted for an Eligible Employee in any
Plan Year, and provided further, that no such determination shall be
contrary to the requirements of Code Section 423 and the regulations
promulgated thereunder.. The Committee, in its sole discretion, may
authorize payment in respect of any option exercised hereunder by personal
check.
4.3 Payroll Deduction Accounts. Each Participant's payroll deduction shall be
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credited, as soon as practicable following the relevant pay date, to a
Payroll Deduction Account, pending the purchase of Common Stock in
accordance with the provisions of the Plan. All such amounts shall be
assets of the Company and may be used by the Company for any corporate
purpose. No interest shall accrue or be paid on amounts credited to a
Payroll Deduction Account.
4.4 Subsequent Plan Years. Unless otherwise specified prior to the beginning
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of any Plan Year by completing a Company-specified process, a Participant
shall be deemed to have elected to participate in each subsequent Plan Year
for which the Participant is eligible to the same extent and in the same
manner as at the end of the prior Plan Year.
4.5 Changes in Participation.
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(a) At any time during a Plan Year, a Participant may cease participation
in the Plan by completing a Company-specified process. Such cessation will
become effective as soon as practicable following completion of such
process, whereupon no further payroll deductions will be made and the
Company shall pay to such Participant an amount equal to the balance in the
Participant's Payroll Deduction Account as soon as practicable thereafter.
To the extent then an Eligible Employee, any Participant who ceased to
participate may elect to participate again as of any subsequent Investment
Date in any calendar quarter after the quarter in which such Participant
ceased to participate.
(b) At any time during a Plan Year (but not more than once in any calendar
quarter), a Participant may increase or decrease the percentage of Eligible
Compensation subject to payroll deduction within the limits approved by the
Committee pursuant to Section 4.2 by completing a Company-specified
process. Such increase or decrease shall become effective with the first
pay period following the completion of such process to which it may be
practically applied. Notwithstanding any increase in the percentage of
Eligible Compensation subject to pay deduction pursuant to this Section
4.5(b), in no event may the amount of Eligible Compensation deducted for an
Eligible Employee for any Plan Year exceed the maximum amount authorized to
be deducted pursuant to Section 4.2.
(c) Notwithstanding anything herein to the contrary, in the event the
Committee determines under Section 5.2(b) to change the purchase price of a
share of Common Stock, each Participant shall be advised in advance of the
effective date of such change and afforded
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the opportunity to make a change in participation under Section 4.5(a) or
4.5(b) before such change in the purchase price takes effect.
SECTION 5 - OFFERINGS
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5.1 Maximum Number of Shares. The Plan will be implemented by making offerings
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of Common Stock on each Investment Date until the maximum number of shares
of Common Stock available under the Plan have been issued pursuant to the
exercise of options.
5.2 Grant and Exercise of Options
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(a) Subject to Section 5.3, on each Investment Date, each Participant
shall be deemed, subject to Section 5.4, to have been granted an option to
purchase, and shall be deemed, without any further action, to have
exercised such option and purchased the number of shares of Common Stock
determined by dividing the amount credited to the Participant's Payroll
Deduction Account on such date by the purchase price (as determined in
paragraph (b) below). All such shares shall be credited to the
Participant's Common Stock Account.
(b) The purchase price for each share of Common Stock shall be expressed
as a percentage of Fair Market Value on the Investment Date and shall be
determined from time to time by the Committee, but in no event shall such
purchase price be less than 85 percent of the Fair Market Value of such
share on the Investment Date.
5.3 Oversubscription of Shares. If the total number of shares for which
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options are exercised on any Investment Date exceeds the maximum number of
shares available for the applicable offering, the Company shall make an
allocation of the shares available for delivery and distribution among the
Participants in as nearly a uniform manner as shall be practicable, and the
balance of all amounts credited to the Payroll Deduction Accounts shall be
applied to the next offering.
5.4 Limitations on Grant and Exercise of Options
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(a) No option granted under this Plan shall permit a Participant to
purchase stock under all employee stock purchase plans (as defined by Code
Section 423(b)) of the Company and any Subsidiary in an amount which, in
the aggregate, would exceed $25,000 based on the Fair Market Value of such
stock (determined at the time the option is granted) for each calendar year
in which the option is outstanding at any time.
(b) No employee who would own, immediately after the option is granted,
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 (a
"5% Owner") shall be granted an option. For purposes of determining whether
an employee is a 5% Owner, the rules of Code Section 424(d) shall apply in
determining the stock ownership of an individual and stock which the
employee may purchase under outstanding options shall be treated as stock
owned by the employee.
SECTION 6 - DISTRIBUTIONS OF COMMON STOCK ACCOUNT
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6.1 Termination of Employment. If a Participant's employment with the Company
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and its Subsidiaries terminates for any reason during a Plan Year, all
shares credited to the Participant's Common Stock Account shall be
distributed to the Participant, and any amount credited to the
Participant's Payroll Deduction Account shall be refunded to the
Participant or, in the event of the Participant's death, to the
Participant's estate, as soon as practicable.
6.2 During Employment. Prior to the Participant's termination of employment
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with the Company and its Subsidiaries, a Participant may withdraw some or
all of the whole shares credited to the
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Participant's Common Stock Account, subject to the provisions of Section
10.3, provided, however, that a Participant may not withdraw shares from
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the Participant's Common Stock Account (other than shares acquired upon the
automatic reinvestment of dividends pursuant to Section 7) for a period of
12 months immediately following the Investment Date on which they were
purchased.
SECTION 7 - DIVIDENDS ON SHARES
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All cash dividends paid with respect to shares of Common Stock held in a
participant's Common Stock Account shall be invested automatically in shares of
Common Stock purchased at 100 percent of Fair Market Value on the date such
dividend is paid. All non-cash distributions paid on Common Stock held in a
Participant's Common Stock Account shall be paid to the Participant as soon as
practicable.
SECTION 8 - RIGHTS AS A STOCKHOLDER
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When a Participant purchases Common Stock pursuant to the Plan or when Common
Stock is credited to a Participant's Common Stock Account, subject to the
restrictions set forth in Sections 6.2 and 10.3, the Participant shall have all
of the rights and privileges of a stockholder of the Company with respect to the
shares so purchased or credited, whether or not certificates representing shares
shall have been issued.
SECTION 9 - OPTIONS NOT TRANSFERABLE
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Neither a Participant's Payroll Deduction Account nor any options granted under
the Plan to a Participant may be transferred, pledged or otherwise disposed of
in any way (other than by will or the laws of descent and distribution) by a
Participant and such options are exercisable during the Participant's lifetime
only by the Participant. Any attempt at such assignment, transfer, pledge or
other disposition shall be without effect.
SECTION 10 - COMMON STOCK
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10.1 Reserved Shares. There shall be reserved for issuance and purchase under
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the Plan an aggregate of 1,048,416 shares of Common Stock (as of November
30, 1998), subject to adjustment as provided in Section 11. Shares subject
to the Plan may be shares now or hereafter authorized but unissued,
treasury shares, or both.
10.2 Restrictions on Exercise. In its sole discretion, the Board of Directors
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may require as conditions to the exercise of any option that shares of
Common Stock reserved for issuance upon the exercise of an option shall
have been duly listed on any recognized national securities exchange, and
that either a registration statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or the Participant
shall have represented at the time of purchase, in form and substance
satisfactory to the Company, that it is the Participant's intention to
purchase the shares for investment only and not for resale or distribution.
10.3 Restriction on Sale. Shares of Common Stock purchased hereunder (other
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than shares of Common Stock acquired upon the automatic investment of
dividends pursuant to Section 7) shall not be transferable by a Participant
for a period of 12 months immediately following the Investment Date on
which such shares were purchased. In addition, upon the expiration of such
12-month period, shares of Common Stock purchased hereunder (other than
shares of Common Stock acquired upon the automatic investment of dividends
pursuant to Section 7) shall not be transferable by a Participant for an
additional succeeding 12-month period, without prior notice to the Company
in the manner approved by the Company.
SECTION 11 - ADJUSTMENT UPON CHANGES IN CAPITALIZATION
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In the event of a subdivision or consolidation of the outstanding shares of
Common Stock, or the payment of a stock dividend thereon, the number of shares
reserved or authorized to be reserved under this Plan shall be increased or
decreased, as the case may be, proportionately, and such other adjustments shall
be made as may be deemed necessary or equitable by the Board of Directors. In
the event of any other change affecting the Common Stock, such adjustments shall
be made as may be deemed equitable by the Board of Directors, in its sole
discretion, to give proper effect to such event, subject to the limitations of
Code Section 424.
SECTION 12 - ADMINISTRATION
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12.1 Appointment. The Plan shall be administered by the Committee. The
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Committee shall consist of two or more members who shall serve at the
pleasure of the Board of Directors. The Board of Directors may from time
to time appoint members of the Committee in substitution for, or in
addition to, members previously appointed and may fill vacancies, however
caused, in the Committee.
12.2 Authority. Subject to the express provisions of the Plan, the Committee
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shall have authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, and to make all other determinations
necessary or advisable in administering the Plan, all of which
determinations shall be final and binding upon all persons. If and to the
extent required by Securities and Exchange Commission Rule 16b-3 or any
successor exemption under which the Committee believes it is appropriate
for the Plan to qualify, the Committee may restrict a Participant's ability
to participate in the Plan or sell any Common Stock received under the Plan
for such period as the Committee deems appropriate or may impose such other
conditions in connection with participation or distributions under the Plan
as the Committee deems appropriate.
12.3 Duties of Committee. The Committee shall provide for the establishment
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and maintenance of records of the Plan and of each Payroll Deduction
Account and Common Stock Account established for any Participant hereunder.
12.4 Plan Expenses. The Company shall pay the fees and expenses of accounts
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and counsel to the Company or the Committee, agents and other personnel and
all other costs of administration of the Plan.
12.5 Indemnification. To the maximum extent permitted by law, no member of the
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Committee shall be personally liable by reason of any contract or other
instrument executed by such member or on such member's behalf in such
member's capacity as a member of the Committee or for any mistake of
judgment made in good faith, and the Company shall indemnify and hold
harmless, directly from its own assets (including the proceeds of any
insurance policy the premiums of which are paid from the Company's own
assets), each member of the Committee and each other officer, employee or
director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan or to the management or
control of the assets of the Plan may be delegated or allocated, against
any cost or expense (including fees, disbursements and other charges of
legal counsel) or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission
to act in connection with the Plan unless arising out of such person's own
fraud, willful misconduct or bad faith. The foregoing shall not be deemed
to limit the Company's obligation to indemnify any member of the Committee
under the Company's Certificate of Incorporation or By-laws, or any other
agreement between the Company and such member.
SECTION 13 - AMENDMENT AND TERMINATION
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13.1 Amendment. Subject to the provisions of Code Section 423, the Board of
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Directors may amend the Plan in any respect; provided, however, that the
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Plan may not be amended in any manner that will retroactively impair or
otherwise adversely affect the rights of any person to benefits under the
Plan which have accrued prior to the date of such action.
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13.2 Termination. The Plan will terminate on the Investment Date that
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Participants become entitled to purchase a number of shares greater than
the number of shares remaining available for purchase. In addition, the
Plan may be terminated at any prior time, at the sole discretion of the
Board of Directors.
SECTION 14 - GOVERNMENTAL AND OTHER REGULATIONS
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The Plan and the grant and exercise of options to purchase shares hereunder, and
the Company's obligation to sell and deliver shares upon the exercise of options
to purchase shares, shall be subject to all applicable Federal, state and
foreign laws, rules and regulations, and to such approvals by any regulatory or
governmental agency as, in the opinion of counsel to the Company, may be
required.
SECTION 15 - NO EMPLOYMENT RIGHTS
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The Plan does not create, directly or indirectly, any right for the benefit of
any employee or class of employees to purchase any shares from the Company
(other than as expressly provided in, and subject to the terms and conditions
of, the Plan), or create in any employee or class of employees any right with
respect to continuation of employment by the Company or any Subsidiary, and it
shall not be deemed to interfere in any way with the Company's or any
Subsidiary's right to terminate, or otherwise modify, an employee's employment
at any time.
SECTION 16 - WITHHOLDING
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As a condition to receiving shares hereunder, the Company may require the
Participant to make a cash payment to the Company of, or the Company may
withhold from any shares distributable under the Plan, an amount necessary to
satisfy all Federal, state, city or other taxes required to be withheld in
respect of such payments pursuant to any law or governmental regulation or
ruling.
SECTION 17 - OFFSETS
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To the extent permitted by law, the Company shall have the absolute right to
withhold any amounts payable to any Participant under the terms of the Plan to
the extent of any amount owed for any reason by such Participant to the Company
or any Subsidiary and to set off and apply the amounts so withheld to payment of
any such amount owed to the Company or any Subsidiary, whether or not such
amount shall then be immediately due and payable and in such order or priority
as among such amounts owed as the Committee, in its sole discretion, shall
determine.
SECTION 18 - NOTICES, ETC.
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All elections, designations, requests, notices, instructions and other
communications from a Participant to the Committee or the Company required or
permitted under the Plan shall be in Company-specified form, and if required to
be in writing shall be mailed by first-class mail or delivered to such Company-
specified location and shall be deemed to have been given and delivered only
upon actual receipt thereof at such location.
SECTION 19 - CAPTIONS, ETC.
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The captions of the sections and paragraphs of this Plan have been inserted
solely as a matter of convenience and in no way define or limit the scope or
intent of any provision of the Plan. References to sections herein are to the
specified sections of this Plan unless another reference is specifically stated.
Wherever used herein, a singular number shall be deemed to include the plural
unless a different meaning is required by the context.
SECTION 20 - EFFECT OF PLAN
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The provisions of the Plan shall be binding upon, and inure to the benefit of,
all successors of the Company and each Participant, including, without
limitation, such Participant's estate and the executors, administrators or
trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or
representative of creditors of such Participant.
SECTION 21 - GOVERNING LAW
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The internal laws of the State of New York shall govern all matters relating to
this Plan except to the extent superseded by the laws of the United States.
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