IRWIN FINANCIAL CORPORATION
EMPLOYEES’ STOCK PURCHASE PLAN III
WHEREAS, Irwin
Financial Corporation (“Corporation”) desires to
provide eligible employees of the Corporation and certain
affiliated companies with an opportunity to acquire a proprietary
interest in the Corporation through the purchase of Common Shares
of the Corporation; and
WHEREAS, the
Corporation desires to offer further inducement to eligible
employees to remain as employees by providing a form of additional
compensation, for services which the employees have rendered or
will hereafter render, through the purchase of Common Shares at a
discounted rate.
NOW, THEREFORE,
the Corporation hereby establishes this employee stock purchase
plan pursuant to the provisions of section 423 of the Internal
Revenue Code of 1986, as amended, as follows:
The 1999 Irwin
Financial Corporation Employees’ Stock Purchase Plan (the
“Plan”) is hereby established effective as of the date
the registration of the Common Shares to be issued hereunder is
declared effective by the Securities and Exchange Commission,
provided however, that this Plan shall not become effective unless
it has received the approval of the holders of a majority of the
issued and outstanding Common Shares of the Corporation who are
either present or represented and are entitled to vote at a meeting
of shareholders of the Corporation duly held within twelve
(12) months before or after the date the Plan is adopted by
the Board of Directors.
DEFINITIONS AND
CONSTRUCTION
Section 2.01 . Definitions . When the initial letter
of a word or phrase is capitalized, the meaning of such word or
phrase shall be as follows:
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a)
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“Account” means the
record of a Participant’s interest in the Plan, as maintained
by the Committee or its designee pursuant to Section 7.01(c),
consisting of the sum of the Participant’s payroll deductions
under the Plan, the deduction of the amounts expended on behalf of
the Participant to exercise his or her options under
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the Plan, the
credit of the number of Common Shares (including fractional shares)
purchased under the Plan for the Participant and held by the
Custodian and the amounts, if any, carried forward on behalf of the
Participant from one Date of Exercise to the next Date of
Exercise.
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b)
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“Affiliate” means a
corporation which is a parent or subsidiary of the Corporation, or
a corporation or a parent or subsidiary corporation of such
corporation issuing or assuming an option in a transaction to which
Code Section 425(a) applies.
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c)
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“Board of Directors”
means the board of directors of the Corporation as it shall exist
from time to time.
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d)
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“Code” means the
Internal Revenue Code of 1986, as amended from time to
time.
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e)
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“Committee” means the
committee appointed by the Board of Directors under
Section 7.01 to administer the Plan.
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f)
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“Common Shares” means
the Common Shares of the Corporation.
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g)
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“Corporation” means
Irwin Financial Corporation, an Indiana corporation, and its
successors and assigns.
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h)
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“Custodian” means any
party designated by the Board of Directors pursuant to
Section 7.02 to act as custodian under the Plan.
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i)
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“Date of Exercise” means
the first business day following a Payday and/or such other date or
dates as may be established by the Committee as a date upon which
options granted under the Plan are to be exercised.
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j)
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“Effective Date” means
the effective date of this Plan, which is the date the registration
under the Securities Act of 1933, as amended, of Common Shares to
be issued hereunder is declared effective by the Securities and
Exchange Commission.
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k)
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“Eligible Employee”
means any person employed by the Corporation as a common law
employee or any of its Affiliates except for:
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1)
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employees who have been employed
less than six months (other than former Participants re-employed by
the Company);
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2)
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employees who customary employment
is less than twenty (20) hours per week; and
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3)
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employees whose customary employment
is for not more than five (5)months in any calendar
year.
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l)
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“Option Price” means the
price to be paid by Participants upon the exercise of options
granted under this Plan, determined as provided in Section
5.02.
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m)
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“Participant” means an
Eligible Employee who (i) authorizes the Corporation or an
Affiliate to make payroll deductions from Plan Compensation for the
purpose of purchasing Common Shares pursuant to the Plan,
(ii) has commenced participation in the Plan pursuant to
Section 3.01, and (iii) has not incurred a voluntary or
involuntary withdrawal, pursuant to Article VI or
Section 7.04 since his or her most recent commencement of
participation pursuant to Section 3.01.
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n)
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“Payday” means the date
on which an Eligible Employee receives any Plan
Compensation.
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o)
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“Plan” means the 1999
Irwin Financial Corporation Employees’ Stock Purchase Plan,
as amended from time to time.
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p)
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“Plan Compensation”
means all cash payments made by the Corporation or any Affiliate to
an Employee through its payroll system for services as an employee
including, without limitation, wages, salary, incentive
compensation, bonuses and profit sharing payments.
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q)
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“Section,” when not
preceded by the word “Code,” means a section of this
Plan.
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Section 2.02 . Construction and Governing
Law
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a)
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This Plan shall be construed,
enforced and administered and the validity thereof determined in
accordance with the Code and the regulations thereunder, and in
accordance with the laws of the State of Indiana when such laws are
not inconsistent with the Code.
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b)
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This Plan is intended to qualify as
an employee stock purchase plan under Code Section 423 and the
regulations thereunder. The provisions of the Plan shall be
construed so as to fulfill this intention.
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Section 3.01 . Participation.
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a)
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Any
person who is an Eligible Employee on the Effective Date may become
a Participant in the Plan as of the first Payday after the
Effective Date, by completing and delivering to the Committee such
forms as the Committee shall
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require to
authorize payroll deductions and to request participation in the
Plan, within the time period established by the
Committee.
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b)
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After the Effective Date, an
Eligible Employee who is not a participant may become a Participant
in the Plan as of the first day of a calendar quarter, by
completing and returning to the Committee at least thirty
(30) days before such date such forms as the Committee shall
require to authorize payroll deductions and request participation
in the Plan.
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Section 3.02 . Payroll Deductions
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a)
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Payroll deductions for a Participant
shall commence on the first Payday after an Eligible Employee
becomes a Participant and shall continue until the earlier of
(i) the termination of the Plan or (ii) the date the
Participant suspends his or her payroll deductions or ceases
participation pursuant to subsection (b) of this
Section 3.02. Each Participant shall authorize his or her
employer to make deductions from his or her Plan Compensation on
each Payday during the time he or she is a Participant in the Plan
in a specified whole dollar amount; provided, however, the minimum
amount of the payroll deduction authorized by the Participant must
be at least $5.00 per Payday.
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b)
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A
Participant may suspend or change his or her payroll deduction in
the Plan effective as of any Payday by filing written notice with
the Committee at least ten (10) days prior to such Payday. A
Participant’s suspension of his or her payroll deductions
shall not automatically result in his or her withdrawal from
participation in the Plan.
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Section 3.03 . Participant’s Account . On each
Payday, the Corporation or its Affiliate, as the case may be, shall
deduct the authorized amount from each Participant’s Plan
Compensation and shall credit the Account of each Participant with
the amount of the Participant’s payroll deduction under the
Plan effective as of the Payday on which it was
deducted.
The shares
subject to options granted under this Plan shall be Common Shares.
The total number of Common Shares on which options may be granted
under this Plan shall not exceed in the aggregate Seven Hundred
Fifty Thousand (750,000) Common Shares, except as such number of
Common Shares shall be adjusted in accordance with
Section 8.01 of this Plan. Common Shares required to satisfy
purchases pursuant to the Plan may be provided out of the
Corporation’s treasury shares or its authorized and unissued
Common Shares.
GRANTING AND EXERCISE OF
OPTIONS
Section 5.01 . Grant of Options
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a)
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On
each Payday, there shall be granted automatically by the
Corporation to each Participant, except those identified in
subsection (b) of this Section 5.01, an option to purchase on
the next succeeding Date of Exercise at the Option Price such
number of the Common Shares, including fractional shares, reserved
for issuance pursuant to this Plan as the balance in such
Participant’s Account on such Date of Exercise enables him or
her to purchase.
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b)
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Notwithstanding any provision in
this Plan to the contrary, no Participant shall be granted an
option:
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1)
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if
the Participant, immediately after the option is granted, would own
shares possessing five percent (5%) or more of the total combined
voting power or value of all classes of shares of the Corporation
or its Affiliates, provided that (i) the rules of Code Section
425(d) shall apply in determining the share ownership of an
individual, and (ii) shares which the Participant may purchase
under outstanding options shall be deemed to be owned by the
Participant; or
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2)
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which permits his or her rights to
purchase shares under all employee stock purchase plans of the
Corporation and its Affiliates to accrue at a rate which exceeds
Twenty-five Thousand Dollars ($25,000) of fair market value of
Common Shares (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any
time.
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Section 5.02 . Option Price. The option price for
Common Shares purchased as of each Date of Exercise shall be
eighty-five percent (85%) of the closing price of the Common Shares
as reported by the National Association of Securities Dealers
Automated Quotation/National Market System
(“Nasdaq/NMS”) for the last trading day prior to such
Date of Exercise or, if not so reported, as reported by such other
source as the Committee shall designate.
Section 5.03 . Exercise of Option: Limitations. As of
each Date of Exercise, each Participant’s option to purchase
Common Shares shall be exercised automatically for his or her
Account. The Participant shall purchase the number of shares,
including fractional shares, which the amount of cash credited to
his or her Account on that Date of Exercise shall enable him or her
to purchase at the Option Price. As soon as administratively
reasonable after each Date of Exercise, the Corporation shall
notify the Custodian of the number of Common Shares purchased for
the Account of each Participant on such Date of
Exercise.
Section 5.04 . Interest in Shares. A Participant shall
have no interest in or rights as a shareholder with respect to
Common Shares subject to an option granted under this Plan until
such option has been exercised and the number of Common Shares
purchased has been credited to the Participant’s Account.
Upon written request directed to the Committee, a Participant shall
be entitled to receive a certificate representing the number of
whole Common Shares and/or cash in lieu of any fractional shares
credited to the Participant’s Account. Upon receipt of any
such request, the Committee shall promptly direct the Custodian to
distribute such certificates, if any, and the Corporation to pay
such cash, if any, to the Participant.
Section 5.05 . Fractional Shares. A Participant shall
be entitled to participate in any dividend or other distribution
with respect to any fractional share credited to the
Participant’s Account, but shall have no right to vote any
fractional share. No certificates will be issued representing
fractional shares purchased pursuant to the Plan. Upon a
Participant’s withdrawal from the Plan under Article VI
or Section 7.04 or upon the Committee
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