<PAGE>
As filed with the Securities and Exchange Commission on December 11, 1996.
Registration No.333- ____________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
First USA Paymentech, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2634185
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1601 ELM STREET, SUITE 800
DALLAS, TEXAS 75201
(Address of principal executive offices) (Zip Code)
--------------------
EMPLOYEE STOCK PURCHASE PLAN
OF
FIRST USA PAYMENTECH, INC.
(Full title of the plan)
DAVID W. TRUETZEL WITH A COPY TO:
CHIEF FINANCIAL OFFICER CHARLES D. MAGUIRE, JR.
FIRST USA PAYMENTECH, INC. JACKSON & WALKER, L.L.P.
1601 ELM STREET, 8TH FLOOR 901 MAIN STREET,
DALLAS, TEXAS 75201 SUITE 6000
(214) 849-2000 DALLAS, TEXAS 75202
(Name, address, including zip code, and (214) 953-5850
telephone number, including area code,
of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------
Title of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered (2) Share(1) Price (1) Registration Fee
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value 150,000 shares $35.88 $5,382,000 $1,630.91
$.01 per share
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rules 457(c) and 457(h), the offering price and registration fee
are computed on the basis of the average of the high and low prices of the
Common Stock, as reported by the New York Stock Exchange on December 6,
1996.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein;
and covers such additional number of shares of Common Stock as may be
issuable pursuant to the antidilution provisions of the Employee Stock
Purchase Plan of First USA Paymentech, Inc.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Commission by the
Company, are incorporated herein by reference and made a part hereof:
(i) The Company's Form 10-K for the fiscal year ended June 30, 1996 filed
with the Commission (the "Annual Report");
(ii) All other reports filed with the Commission pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by the documents referred
to in the Annual Report; and
(iii) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on February
23, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all of the Common Stock offered hereunder has been sold or which
deregisters all of such Common Stock then remaining unsold, shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a corporation
to indemnify its directors and officers or former directors and officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers. Such law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under a corporation's
certificate of incorporation, bylaws, any agreement or otherwise.
Article IX of the Company's Bylaws provides for indemnification of officers
and directors except as to certain circumstances and except as provided by
applicable law.
II-1
<PAGE>
Additionally, Article IX (the "Article IX") of the Company's Certificate of
Incorporation, as amended, limits the personal liability of directors of the
Company to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, notwithstanding any provision of law imposing such
liability; provided, however, that to the extent required from time to time by
applicable law, Article IX shall not eliminate or limit the liability of a
director, to the extent such liability is provided by applicable law, (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-8, including those incorporated herein by
reference.
Exhibit No. Description of Exhibit
- ----------- ----------------------
4 None
5 Opinion of Philip E. Taken.*
15 None.
23.1 Consent of Ernst & Young LLP*
23.2 Consent of Philip E. Taken (included in its opinion filed as
Exhibit 5 to this Registration Statement).*
24 Power of Attorney (appearing on page II-5 of this Registration
Statement).*
28 None.
99.1 Employee Stock Purchase Plan of First USA Paymentech, Inc.*
- ------------------------
* Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act 1933, as amended (the "Securities Act");
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume in securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) (Section 230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas on the 11th day of December,
1996.
First USA Paymentech, Inc.
By: /s/ Pamela H. Patsley
--------------------------------------
Pamela H. Patsley
Chief Executive Officer and President
(Principal Executive Officer)
POWER OF ATTORNEY
Each person whose signature appears below authorizes Pamela H. Patsley,
David W. Truetzel and Philip E. Taken, and each of them, each of whom may act
without joinder of the other, to execute in the name of each such person who is
then an officer or director of the Registrant and to file any amendments to this
Registration Statement necessary or advisable to enable the Registrant to comply
with the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in respect thereof, in
connection with the registration of the securities which are the subject of this
Registration Statement, which amendments may make such changes in the
Registration Statement as such attorney may deem appropriate.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on December 11, 1996.
Name Title
- ---- -----
/s/ John C. Tolleson Chairman of the Board
- ---------------------------------------
John C. Tolleson
/s/ Pamela H. Patsley Chief Executive Officer, President and
- --------------------------------------- Director (Principal Executive Officer)
Pamela H. Patsley
/s/ David W. Truetzel Chief Financial Officer and Secretary
- --------------------------------------- (Principal Financial and Accounting
David W. Truetzel Officer)
/s/ Richard W. Vague Director
- ---------------------------------------
Richard W. Vague
/s/ Gene H. Bishop Director
- ---------------------------------------
Gene H. Bishop
/s/ Rupinder S. Sidhu Director
- ---------------------------------------
Rupinder S. Sidhu
II-5
<PAGE>
EMPLOYEE STOCK PURCHASE PLAN OF FIRST USA PAYMENTECH, INC.
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Plan has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Dallas, State of
Texas, on December 11, 1996.
Employee Stock Purchase Plan of
First USA Paymentech, Inc.
By: Advisory Committee
By: /s/ Mary Baker
----------------------------
Mary Baker, Committee Member
II-6
<PAGE>
EXHIBIT LIST
Exhibit No. Description of Exhibit
- ----------- ----------------------
5 Opinion of Philip E. Taken.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Philip E. Taken (included in its opinion filed as
Exhibit 5 to this Registration Statement).
24 Power of Attorney (appearing on page II-5 of this Registration
Statement).
99.1 Employee Stock Purchase Plan of First USA Paymentech, Inc.
II-7
<PAGE>
EXHIBIT 5
[First USA Paymentech, Inc. Letterhead]
December 11, 1996
First USA Paymentech, Inc.
1601 Elm Street, Suite 800
Dallas, Texas 75201
Re: Registration Statement on Form S-8 of First USA Paymentech, Inc.
Ladies and Gentlemen:
I am acting as counsel for First USA Paymentech, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of the offering and sale of up
to 150,000 shares of the Company's Common Stock, par value $0.01 per share (the
"Shares") issuable under the Company's Employee Stock Purchase Plan (the
"Plan"). A Registration Statement on Form S-8 covering the offering and sale of
the Shares (the "Registration Statement") is expected to be filed with the
Securities and Exchange Commission (the "Commission") on or about the date
hereof.
In reaching the conclusions expressed in this opinion, I have examined and
relied upon the originals or certified copies of all documents, certificates and
instruments as we have deemed necessary to the opinions expressed herein,
including the Registration Statement, Certificate of Incorporation, as amended,
and the Bylaws of the Company and copies of the Plan.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such latter documents. I have also assumed
that the certificates representing the Common Stock have been or will be signed
by facsimile or otherwise by authorized officers of the Company and of the
transfer agent for the Common Stock and registered by the registrar
for the Common Stock and will conform to the specimens thereof examined by me.
In making my examination of documents executed by parties other than the
Company, I have assumed that such parties had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization and delivery by such parties of such documents and the validity
and binding effect thereof. As to any facts material to the opinions expressed
herein that were not independently established or verified, I have relied upon
oral or written statements and representations of other officers and other
representatives of the Company, and others.
Based solely upon the foregoing, subject to the comments hereinafter
stated, and limited in all respects to the laws of the State of Texas, the
General Corporation Law of the State of Delaware and the federal laws of the
United States of America, it is my opinion that the Shares, when sold in
accordance with the terms of the Plan, will be validly issued, fully paid and
nonassessable.
<PAGE>
First USA Paymentech, Inc.
December 11, 1996
Page 2
You should be aware that I am not admitted to the practice of law in the
State of Delaware. Accordingly, any opinion herein as to the laws of the State
of Delaware is based solely upon the latest generally available compilation of
the statutes and case law of such state.
I hereby consent to the use of this opinion as an Exhibit to the
Registration Statement. In giving this consent, I do not admit that I come
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ PHILIP E. TAKEN
------------------------------
Philip E. Taken
Senior Vice President and
General Counsel
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 to be filed on or about December 10, 1996 for the registration of
150,000 shares of common stock) pertaining to the Employee Stock Purchase Plan
of First USA Paymentech, Inc. of our report dated July 16, 1996, with respect to
the consolidated financial statements of First USA Paymentech, Inc. included and
incorporated by reference in its Annual Report (Form 10-K) for the year ended
June 30, 1996, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Dallas, Texas
December 9, 1996
<PAGE>
EXHIBIT 99.1
EMPLOYEE STOCK PURCHASE PLAN OF
FIRST USA PAYMENTECH, INC.
--------------------------
1. Purpose. The purpose of the Plan is to provide employees of the
-------
Company and its Designated Affiliates with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company that the Plan qualify as an "Employee Stock Purchase
Plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as
amended, and the provisions of the Plan shall be construed in a manner
consistent with the requirements of such Section of the Code.
2. Definitions.
-----------
(a) "Affiliate" shall mean with respect to any person, any person that
is a Parent corporation or a Subsidiary corporation within the meaning of
Section 424(e) or (f) of the Code.
(b) "Agent" shall have the meaning set forth in paragraph 11 hereof.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" shall mean the Common Stock, $.01 par value, of the
Company.
(f) "Company" shall mean First USA Paymentech, Inc., a Delaware
corporation.
(g) "Committee" shall have the meaning set forth in paragraph 11
hereof.
(h) "Compensation" shall mean the total compensation received from the
Company for personal services rendered by an Employee in respect of a particular
Offering Period, including an Employee's portion of the salary deferral
contributions pursuant to Section 401(k) of the Code, bonus, commissions,
incentive pay (other than long-term incentive payments), overtime pay and any
amount excludable pursuant to Section 125 of the Code, but excluding any long-
term incentive payments, imputed income, severance pay, expenses or other
special emolument or any credit or benefit under any employee plan maintained by
the Company.
(i) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company (including, but not limited to, a military
or sick leave), provided that such leave is for a period of not more than 90
days or if reemployment upon the expiration of such leave is guaranteed by
contract or statute.
1
<PAGE>
(j) "Designated Affiliates" shall mean the Affiliates which have been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
(k) "Employee" shall mean any person, including an officer, who is
regularly employed by the Company or one of its Designated Affiliates.
(l) "Exercise Date" shall mean the last business day of each Offering
Period under the Plan.
(m) "Fair Market Value" per share as of a particular date shall mean
(i) the closing sales price per share of Common Stock on the national securities
exchange on which the Common Stock is principally traded, for the last preceding
date on which there was a sale of Common Stock on such exchange, or (ii) if the
shares of Common Stock are then traded in an over-the-counter market, the
average of the closing bid and asked prices for the shares of Common Stock in
such over-the-counter market for the last preceding date on which there was a
sale of such Common Stock in such market, or (iii) if the shares of Common Stock
are not then listed on a national securities exchange or traded in an over-the-
counter market, such value (as defined in Section 3 hereof) as the Committee, in
its sole discretion, shall determine.
(n) "Initial Valuation Date" shall mean December 1, March 1, June 1
and September 1 of each Plan Year or such dates as the Committee shall
determine.
(o) "Offering Period" shall mean each calendar quarter during the
effectiveness of the Plan, commencing on each January 1, April 1, July 1 and
October 1 following an Initial Valuation Date, provided that the Committee shall
have the power to change the duration of Offering Periods.
(p) "Parent" shall mean a parent corporation as defined in Section
424(e) of the Code.
(q) "Plan" shall mean this Employee Stock Purchase Plan as amended
from time to time.
(r) "Plan Year" shall mean the calendar year.
(s) "Reserves" shall have the meaning set forth in paragraph 16
hereof.
(t) "Subsidiary" shall mean a subsidiary corporation as defined in
Section 424(f) of the Code.
2
<PAGE>
3. Eligibility.
-----------
(a) Subject to the requirements of paragraph 4(b) hereof, any person
who is an Employee as of the commencement of an Offering Period shall be
eligible to participate in the Plan for such Offering Period, provided that he
or she continues to be an Employee through the last payroll deduction date in
such Offering Period.
(b) Notwithstanding any provisions of the Plan to the contrary, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or together with any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own
stock and/or hold outstanding options to purchase stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company or of its Parent or any Subsidiary, or (ii) which permits his or
her right to purchase stock under all employee stock purchase plans (described
in Section 423 of the Code) of the Company and its Parent or any Subsidiaries to
accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of Fair
Market Value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time.
4. Grant of Option; Participation.
------------------------------
(a) On each Initial Valuation Date the Company shall commence an offer
by granting each eligible Employee an option to purchase such number of shares
of Common Stock as may be purchased with the amount elected by such Employee
under paragraph 4(b), subject to the limitations set forth in paragraph 10
hereof.
(b) Each eligible Employee may elect to participate in the Plan with
respect to an offer, only by filing a subscription agreement with the Company by
the fifteenth day of the month prior to the Offering Period, indicating the
amount of such Employee's Compensation (not to exceed 20% of such Compensation)
which such Employee elects to use to purchase shares of Common Stock and
authorizing payroll deductions (as set forth in paragraph 5 hereof) throughout
the Offering Period. Such subscription agreement shall remain in effect for
subsequent Offering Periods unless modified or terminated by the participant by
the fifteenth day of the month prior to any such subsequent Offering Period.
(c) The option price per share of the Common Stock subject to an
offering shall be the lesser of: (i) 85% of the Fair Market Value of a share of
Common Stock on the Initial Valuation Date immediately preceding the applicable
Offering Period; or (ii) 85% of the Fair Market Value of a share of Common Stock
on the Exercise Date.
5. Payroll Deductions.
------------------
(a) During an Offering Period, the Company shall withhold from the
Compensation of each Employee participating in the offer, the amount elected by
such Employee under paragraph 4(b) (the "Aggregate Purchase Price").
3
<PAGE>
(b) The Aggregate Purchase Price shall be withheld in approximately
equal installments from each paycheck during the Offering Period.
(c) All payroll deductions made by a participant shall be credited to
his or her account under the Plan. A participant may not make any additional
payments into such account.
6. Exercise of Option. Unless a participant withdraws from the Plan as
------------------
provided in paragraph 8, his or her election to purchase shares will be
exercised automatically on the Exercise Date, and the maximum number of whole
and/or fractional shares (up to four decimal places) subject to such option will
be purchased for him or her at the applicable option price with the accumulated
payroll deductions in his or her account. The shares purchased upon exercise of
an option hereunder shall be deemed to be transferred to the participant on the
Exercise Date. During his or her lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
7. Delivery. Certificates representing shares purchased upon exercise of
--------
a participant's option shall be held for the account of such participant, or
delivered as promptly as practicable to such participant following such
exercise, if requested by the participant. No shares shall be delivered until
full payment therefor has been made.
8. Withdrawal; Termination of Employment; Insiders.
-----------------------------------------------
(a) A participant may withdraw all, but not less than all, the payroll
deductions credited to his or her account under the Plan at any time prior to
the Exercise Date of an Offering Period by giving written notice to the Company.
All of the payroll deductions credited to such participant's account will be
paid to him or her promptly after receipt of his or her notice of withdrawal and
his or her option for the current period will be automatically terminated. No
further payroll deductions for the purchase of shares will be made for such
participant during such Offering Period.
(b) Upon termination of a participant's Continuous Status as an
Employee prior to the Exercise Date of the Offering Period on account of
retirement or disability, the payroll deductions credited to his or her account
will be used to purchase shares on the next succeeding Exercise Date unless the
participant (or his or her estate, as the case may be) elects to withdraw such
deductions in cash prior to such Exercise Date. Upon termination of a
participant's Continuous Status as an Employee for any other reason, such
deductions shall be refunded to such participant in cash. Thereafter, so long
as such participant's Continuous Status as an Employee shall continue to be
terminated, such participant's participation in the Plan shall cease.
9. Interest. No interest shall accrue on or be payable with respect to
--------
the payroll deductions of a participant in the Plan.
4
<PAGE>
10. Stock.
-----
(a) The maximum number of shares of Common Stock which shall be
reserved for sale under the Plan shall be 150,000, subject to adjustment upon
changes in capitalization of the Company as provided in paragraph 16. Shares of
Common Stock available for purchase pursuant to this Plan may be purchased on
the open market or directly from the Company. If the total number of shares
which would otherwise be subject to options granted pursuant to paragraph 4(a)
hereof on an Initial Valuation Date exceeds the number of shares then available
under the Plan (after deduction of all shares for which options have been
exercised or are then outstanding), the Committee may make a pro rata allocation
of the shares remaining available for option grant in as uniform a manner as
shall be practicable and as it shall determine to be equitable. In such event,
the Committee shall give written notice to each Employee of such reduction of
the number of option shares affected thereby and shall similarly reduce the rate
of payroll deductions, if necessary. The Company shall pay all brokerage
commissions or fees incurred in connection with the purchase of shares of Common
Stock hereunder.
(b) The participant will not have rights as a shareholder with respect
to shares covered by his or her option until such shares shall have been
purchased for his or her account in accordance with the provisions of the Plan.
(c) Shares of Common Stock to be delivered to a participant under the
Plan will be registered in the name of the participant.
11. Administration.
--------------
(a) The Plan shall be administered by a committee (the "Committee")
established by the Board. The Committee shall have full power and authority,
subject to the provisions of the Plan, to promulgate such rules and regulations
as it deems necessary for the proper administration of the Plan, to interpret
the provisions and supervise the administration of the Plan, and to take all
action in connection therewith or in relation to the Plan as it deems necessary
or advisable. Decisions of the Committee shall be made by a majority of its
members and shall be final. Any decision reduced to writing and signed by all
of the members of the Committee shall be fully effective as if it had been made
at a meeting duly held. The Company will pay all expenses incurred in the
administration of the Plan.
(b) An agent (the "Agent") may be appointed by the Board to perform
the functions and have the responsibilities assigned to the Agent in this
paragraph 11 with respect to the purchase of Common Stock. The Board shall have
the right to change the Agent at any time. Notwithstanding any other provision
to the contrary contained herein, to the extent that shares of Common Stock are
purchased on the open market the Agent shall have all authority to determine the
times of purchases of Common Stock, the prices as which such purchases are made,
the manner of such purchases and the selection of brokers or dealers (which may
include the Agent) to make such purchases. If Common Stock is purchased at
varying market prices, an average price will be allocated to the account of each
Employee.
5
<PAGE>
12. Designation of Beneficiary.
--------------------------
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash remaining in such participant's account under
the Plan in the event of the participant's death subsequent to the end of an
Offering Period but prior to delivery to him or her of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the Exercise Date of an Offering Period.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
13. Transferability. Neither payroll deductions credited to a
---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in paragraph 12 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with paragraph 8.
14. Use of Funds. All payroll deductions received or held by the Company
------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
15. Reports. Individual accounts will be maintained for each participant
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in the Plan. Statements of account will be given to participating Employees as
soon as practicable following each Exercise Date, which statements will set
forth the amounts of payroll deductions, the per share purchase price, the
number of shares purchased and the remaining cash balance, if any.
16. Effect of Certain Changes. Subject to any required action by the
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shareholders of the Company, the number of shares of Common Stock covered by
each option under the Plan which has not yet been exercised and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but have not yet been placed under option (collectively, the "Reserves"), as
well as the price per share of Common Stock covered by each option under the
Plan which has not yet been exercised, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock or similar capital adjustment, or any other
increase or decrease in the number of shares of Common Stock
6
<PAGE>
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Committee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.
In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, each option under the Plan shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or subsidiary of
such successor corporation, unless the Committee determines, in the exercise of
its sole discretion and in lieu of such assumption or substitution, that the
participant shall have the right to exercise the option as to all of the
optioned shares, including shares as to which the option would not otherwise be
exercisable. If the Committee makes an option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Committee shall notify the participant that the option shall be fully
exercisable for a period of thirty (30) days from the date of such notice, and
the option will terminate upon the expiration of such period.
The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.
17. Amendment or Termination. The Board may at any time terminate, suspend
------------------------
or amend the Plan and any provision thereof. Except as provided in paragraph
16, no such termination can affect options previously granted, nor may an
amendment make any change in any option heretofore granted which adversely
affects the rights of any participant, nor may an amendment be made without
prior approval of the shareholders of the Company (obtained in the manner
described in paragraph 19) if such amendment would:
(a) Materially increase the number of shares that may be issued under
the Plan;
(b) Change the designation or the class of employees eligible for
participation in the Plan; or
(c) Materially increase the benefits which may accrue to participants
under the Plan;
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<PAGE>
provided, however, that prior approval of the shareholders of the Company shall
- -------- -------
be required only to the extent required by any law, regulation or stock exchange
rule.
18. Notices. All notices or other communications by a participant to the
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Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company to the location, or by
the person, designated by the Company for the receipt thereof.
19. Shareholder Approval. The Plan shall be subject to approval by the
--------------------
shareholders of the Company within twelve (12) months before or after the date
the Plan is adopted.
20. Conditions Upon Issuance of Shares. Shares shall not be issued with
----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreignincluding, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment without
any present intention to sell or distribute shares if, in the opinion of counsel
for the Company, such a representation is required by any of the aforementioned
applicable provisions of law.
21. Effective Date. The Plan shall be effective as of the date determined
--------------
by Company subject to the approval of the Plan by the shareholders of the
Company.
8
