As filed with the Securities and Exchange Commission on August 21, 1996
Registration No.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
SAWTEK INC.
(Exact name of registrant as specified in its charter)
Florida 1818 South Highway 441 59-1864440
(State of incorporation) Apopka, Florida 32703 (I.R.S. Employer
(Address of Principal Identification No.)
Executive offices)
SAWTEK INC.
AMENDED AND RESTATED 1983 INCENTIVE STOCK OPTION PLAN
(Full title of the plan)
Steven P. Miller
SAWTEK INC.
1818 South Highway 441
Apopka, Florida 32703
(Name and address of agent for service)
(407) 886-8860
(Telephone number, including area code, of agent for service)
------------------------------
Copies to:
William A. Grimm, Esq.
Akerman, Senterfitt & Eidson, P.A.
255 S. Orange Avenue, P.O. Box 231
Orlando, Florida 32802-0231
(407) 843-7860
-------------------------------
Approximate date of commencement of proposed
sale to the public: From time to time after this
Resigtration Statement becomes effective.
-------------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to be Offering Price Aggregate Offering Registration
be Registered Registered Per Share Price Fee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Common Stock,
$0.0005 par
value 1,807,045 $10.9896 $19,858,701.73 $6,847.83
- -------------------------------------------------------------------------------
(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
calculated by adding together (a) the product that results from multiplying
1,060,460 shares, which is the number of shares of Common Stock registered as a
part of this Registration Statement as to which options have been granted but
not exercised under the Sawtek Inc. Amended and Restated 1983 Incentive Stock
Option Plan (the "Plan"), by $0.59796 per share, which is the weighted average
exercise price of such options, and (b) the product that results from
multiplying 746,585 shares, which is the number of shares of Common Stock
registered as a part of this Registration Statement as to which options have
been exercised under the Plan, by $25.75 per share, which is the average of the
bid and asked prices of the Company's shares of Common Stock on the NASDAQ
National Market System on August 15, 1996.
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to subsection C of the General Instructions for Form S-8, this
Registration Statement contains a Prospectus which meets the requirements of
Part I of Form S-3 and relates to reoffers and resales of the shares of Common
Stock, par value $0.0005 per share, of Sawtek Inc. acquired by certain persons
pursuant to the Sawtek Inc. Amended and Restated 1983 Incentive Stock Option
Plan (the "Plan").
The information required by Part I of Form S-8 is included in documents
sent or given to participants in the Plan pursuant to Rule 428(b)(1) under the
Securities Act of 1933, as amended (the "Securities Act").
<PAGE>
SAWTEK INC.
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
Showing Location in Prospectus of Information
Required by Items of Part I of Form S-3
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Registration Statement
Item Number and Caption Caption or Location in Prospectus
Forepart of the Registration Statement
and Outside Front Cover Page of Prospectus.........Outside Front Cover Page
Inside Front and Outside Back Cover Pages
of Prospectus......................................Inside Front Cover Page;
Outside Back Cover Page
Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges.................The Company; Risk Factors
Use of Proceeds....................................Use of Proceeds
Determination of Offering Price....................Not Applicable
Dilution...........................................Not Applicable
Selling Security Holders...........................Selling Shareholders
Plan of Distribution...............................Plan of Distribution
Description of Securities to Be Registered.........Not Applicable
Interests of Named Experts and Counsel.............Legal Matters; Experts
Material Changes...................................Not Applicable
Incorporation of Certain Information by
Reference..........................................Incorporation of Documents
by Reference
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities........................................Not Applicable
- -------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
SAWTEK INC.
746,585 Shares of Common Stock
$0.0005 par value
This Prospectus relates to the contemplated resale, from time to time,
of up to 746,585 shares (the "Shares") of Common Stock, $0.0005 par value
("Common Stock"), of Sawtek Inc., a Florida corporation ("Sawtek" or the
"Company"), which have been acquired by certain employees, former employees and
officers (the "Selling Shareholders") pursuant to the Company's Amended and
Restated 1983 Incentive Stock Option Plan (the "Plan"). See "Selling
Shareholders." It is anticipated that the Selling Shareholders will offer the
Shares for sale from time to time at prices based upon prevailing market prices.
The Company will not receive any of the proceeds from the sale of the Shares by
the Selling Shareholders.
The Company will pay all the expenses of this registration. The Selling
Shareholders, however, will bear the cost of all brokerage commissions and
discounts incurred in connection with the sale of their Shares of Common Stock
and their respective legal expenses. The Shares may be sold by Selling
Shareholders directly or through underwriters, dealers or agents in market
transactions or in privately-negotiated transactions. See "Plan of
Distribution."
The Company's Common Stock is listed on the NASDAQ National Market
System under the symbol "SAWS." On August 15, 1996, the average of the bid and
asked price of the Common Stock was $25.75 per share.
------------
THE SHARES OFFERED HEREBY INVOLVED A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
ON PAGE 10.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN AS CONTAINED HEREIN IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICIATION MAY NOT BE LAWFULLY MADE.
The date of this Prospectus is August 21, 1996.
<PAGE>
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION .......................................... 8
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ................ 9
THE COMPANY .................................................... 10
RISK FACTORS ................................................... 11
USE OF PROCEEDS ................................................ 16
SELLING SHAREHOLDERS ........................................... 17
PLAN OF DISTRIBUTION ........................................... 19
LEGAL MATTERS .................................................. 20
EXPERTS......................................................... 21
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy and information statements
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at its following regional offices: Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661-2511; and Suite 1300, 7 World Trade Center, New
York, New York 10048. Copies of such material can also be obtained at prescribed
rates from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on
Form S-8 under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the securities being offered by this Prospectus. This Prospectus
does not contain all of the information set forth in the Registration Statement
and the exhibits thereto. For further information about the Company and the
securities offered hereby, reference is made to the Registration Statement and
to the exhibits filed as a part thereof. The statements contained in this
Prospectus as to the contents of any contract or other document identified as
exhibits in this Prospectus are not necessarily complete and, in each instance,
reference is made to a copy of such contract or document filed as an exhibit to
the Registration Statement, each statement being qualified in any and all
respects by such reference. The Registration Statement, including exhibits, may
be inspected without charge at the principal reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of
all or any part thereof may be obtained upon payment of fees prescribed by the
Commission from the Public Reference Section of the Commission at its principal
office in Washington, D.C. set forth above. In addition, the Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission (http://www.sec.gov).
The Company's Common Stock is listed on the NASDAQ National Market
System under the symbol "SAWS." All of the reports required to be filed by the
Company with the NASDAQ National Market System and other information concerning
the Company can be inspected at 1735 K Street, N.W., Washington, D.C.
20006-1500.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are hereby
incorporated by reference in this Prospectus:
(1) the Company's Prospectus on Form S-1, effective as of April 29,
1996;
(2) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996; and
(3) the Company's description of the Common Stock contained in a
registration statement filed on Form 8-A under the Exchange Act on April 23,
1996 and made effective on April 29, 1996.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act, subsequent to the date of this Prospectus but
prior to the termination of this offering to which this Prospectus relates,
shall be deemed to be incorporated by reference in this Prospectus and made a
part of this Prospectus from the date any such document is filed. 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
Prospectus 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 Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents described above, other than exhibits to such
documents (unless such exhibits have been specifically incorporated by reference
therein). Requests for such copies should be directed to the Company's Chief
Financial Officer, at the principal executive offices of the Company at 1818
South Highway 441, Apopka, Florida 32703, telephone (407) 886-8860.
<PAGE>
THE COMPANY
Sawtek Inc. ("Sawtek" or the "Company") designs, develops, manufactures
and markets a broad range of electronic signal processing components based on
surface acoustic wave ("SAW") technology. The Company's primary product focus is
custom designed, high performance bandpass filters, resonators, delay lines,
oscillators and SAW-based subsystems. These products are used in a wide array of
microwave and radio frequency ("RF") systems, such as Global System for Mobile
communications ("GSM") and Code Division Multiple Access ("CDMA") based digital
telephone systems, digital microwave radios, wireless local area networks
("WLAN") cable television equipment and a variety of defense and satellite
systems. Sawtek's products offer key advantages over products based on
alternative technologies and address rapidly growing needs in
telecommunications, data communications, video transmission, military and space
systems and other markets. Sawtek's commercial customer base, which currently
accounts for more than 80% of net sales, includes leading telecommunications
equipment producers, such as Alcatel, Ericsson, LGIC (Lucky GoldStar), Lucent
Technologies (formerly AT&T), Motorola, Nokia, Omnipoint and Qualcomm.
The wireless communications industry is experiencing significant
worldwide growth. Improvements in wireless communications products such as
cellular, personal communications services/networks ("PCS/PCN"), global
satellite telephones and wireless data systems are contributing to this growth.
Wireless communications systems can offer the functional advantages of wired
communication systems without the costly and time consuming development of an
extensive wired infrastructure. In addition, new digital telecommunications
standards and technology are rapidly emerging to provide the performance
improvements necessary to address overcrowding of existing cellular systems. SAW
technology is an enabling solution which meets the more demanding performance,
size and reliability requirements of these numerous and developing wireless
voice, data and video applications.
As a leading worldwide supplier of SAW-based components, Sawtek has
designed and manufactured more than 1,500 different SAW products that operate
from 10 MHz to nearly 3 GHz for both commercial and military applications. The
Company's products, comprising one of the broadest SAW product lines in the
industry, are used by diverse original equipment manufacturers in numerous
applications ranging from basestation and handheld telecommunications
applications in digital telephone systems to state-of-the-art, high performance
SAW-based subsystems. The Company's proprietary computer aided design ("CAD")
and analysis software tools support rapid and accurate SAW device design and
simulation, enabling Sawtek and its customers to achieve timely new product
development.
Sawtek intends to leverage its advanced design and manufacturing
technology and strong customer relationships to become a leading worldwide
provider of SAW components for high volume, wireless communications systems
applications. Furthermore, the Company expects to continue to build its
leadership position in the development and production of both custom and
standard SAW devices for industrial and "high end" commercial market
applications and to remain the dominant supplier of custom designed SAW
components and SAW-based subsystems to the military and space industry. The
markets and applications served by the Company demand a diverse mixture of SAW
products requiring a flexible manufacturing approach, and the Company intends to
further expand its high volume, automated manufacturing capacity as customer
needs dictate.
The Company was incorporated in Florida in 1979. Unless the context
otherwise requires, all references in this Prospectus to the Company refer to
Sawtek Inc. and its wholly owned subsidiaries. The Company's principal executive
offices are located at 1818 South Highway 441, Apopka, Florida 32703, and its
telephone number is (407) 886-8860.
<PAGE>
RISK FACTORS
The shares offered hereby involve a high degree of risk. The following
risk factors should be considered carefully in addition to the other information
in this Prospectus before purchasing the shares of Common Stock offered hereby.
Except for the historical information contained herein, the discussion in this
Prospectus contains certain forward-looking statements that involve risks and
uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Prospectus
should be read as being applicable to all related forward-looking statements
wherever they appear in this Prospectus. The Company's actual results could
differ materially from those discussed here. Factors that could cause or
contribute to such differences include those discussed below, as well as those
discussed elsewhere herein.
Fluctuations in Quarterly Results; Backlog. The Company's quarterly
operating results have fluctuated in the past and are expected to fluctuate in
the future as a result of a variety of factors. Historically, the first quarter
of each fiscal year for the Company has been lower in net sales and net income
than the previous quarter (the fourth quarter of the previous fiscal year).
There are a number of operating factors that can cause fluctuations in quarterly
results, the most significant of which is product mix, which is determined by
different customer requirements. In the event of a change in the product mix,
the average selling price and gross margin may be lower. Other factors that can
affect quarterly results are delays in production caused by the installation of
new equipment, the level of orders that are received and can be shipped in any
quarter, price competition, fluctuations in manufacturing yields, availability
of manufacturing capacity, market acceptance of product, increased direct labor
and overhead, delays in receiving equipment from suppliers, customer
over-ordering followed by order cancellations, and cancellation or rescheduling
of orders for any reason.
The Company's purchase orders may be terminated by the Company's
customers with prior notice, typically 60 to 90 days. Such orders are often
large and intended to satisfy customers' long-term needs. Accordingly, the
Company's backlog is not necessarily indicative of future product sales, and the
Company may be materially adversely affected by a delay or cancellation of a
small number of purchase orders. In addition, the Company's expense levels are
based in significant part on the Company's expectations of future product sales
and therefore are relatively fixed in the short term. If net sales are below
expectations, operating results would be materially adversely affected.
Consequently, the Company's results of operations for any quarter are not
necessarily indicative of results for any future period. Furthermore, the
Company's results of operations may be subject to economic downturns in the
electronics industry. Due to the foregoing factors, it is likely that in some
future quarter the Company's operating results will be below the expectations of
public market analysts and investors. In such event, the price of the Common
Stock would likely be materially adversely affected.
Capacity Limitations; Manufacturing Risks. The Company is limited in
its capacity to produce and deliver SAW devices, primarily for
telecommunications applications. As a result of a rapid influx of orders over
the past 12 months, the Company has been unable to meet the requested delivery
times of its customers. Because of the long delivery times, several of the
Company's largest customers have expressed the need to find other sources of
supply for SAW devices. A continuation of this condition may cause existing or
new customers to develop other sources of supply or develop an internal
capability to produce SAW devices to meet their requirements. If customers
develop other sources of supply, external or internal, and the Company is unable
to identify new customers in a timely manner, the Company's business, financial
condition and results of operations would be materially adversely affected. To
meet the demand for its products, the Company is working to increase its
manufacturing capabilities by hiring new personnel, completing the construction
of new facilities, purchasing new equipment and custom building new equipment.
Any delays in hiring and training new personnel, completing such construction,
or purchasing or building new equipment could result in a continuation of
lengthy delivery times and further encourage customers to find alternate sources
of supply. The Company's manufacture of SAW devices involves processes that may
have yield problems from time to time, the causes of which are often difficult
to determine. While yield problems have not been a significant factor in
limiting production capacity in the past, a material and continuing reduction in
yields at any stage of the manufacturing process would have a material adverse
effect on the Company's ability to meet its quoted delivery times, which would
exaggerate the capacity limitation risk described above and would have a
material adverse effect on the operations of the Company.
Limited Sources of Supply. The Company has a limited number of
suppliers for certain critical raw materials, components and equipment used by
the Company in manufacturing SAW devices. While historically the Company has not
experienced difficulty in obtaining needed supplies and equipment, synthetic
crystal material and wafer fabrication equipment could potentially be difficult
to obtain. The synthetic quartz material used by the Company, and purchased from
third parties, may require up to six months to grow. Currently, few wafer
producers have the expertise and capacity necessary to satisfy the Company's
wafer requirements. A failure of the Company to anticipate its needs for high
quality quartz could result in a shortage of quartz material available to the
Company. The Company purchases used semiconductor fabrication equipment, which
it modifies and refurbishes for its needs. If the Company is unable to satisfy
its requirements for quartz or other raw materials or to obtain and maintain
appropriate fabrication equipment, the Company's business, financial condition
and results of operations would be materially adversely affected. There can be
no assurance that the Company will be able to secure adequate supplies of
materials.
Dependence on Continuing Demand for Wireless Communications Services
and CDMA Technology. Approximately 56% of the Company's net sales for the last
fiscal quarter were derived from sales of SAW devices for application for
wireless communications systems. Any economic, technological or other force that
causes a reduction in demand for telecommunications services will cause a
reduction in the need for performance upgrades to existing basestations and in
the installation of new basestations, which could have a material adverse effect
on the Company's business, financial condition and results of operations. As
basestations are installed and upgraded, domestically and internationally, the
market for SAW devices installed in such basestations may ultimately become
saturated. The life of SAW devices is typically in excess of 20 years, and a
market for replacement devices for basestations may not develop.
Although the Company's SAW devices are being used in GSM basestations,
a significant portion of the Company's SAW devices for cellular basestations is
being installed in CDMA-based systems. CDMA technology has not yet been
implemented on a commercial scale in fully operational cellular, PCS/PCN or
wireless local loop ("WLL") systems. There can be no assurance that unforeseen
complications will not arise in the scale-up and operation of CDMA-based systems
that could materially delay or limit the commercial use of CDMA technology. Such
delay or limitation would have a material adverse effect on the Company's
business, operating results and financial condition.
Dependence on a Limited Number of Customers. A relatively limited
number of customers have historically accounted for a significant portion of the
Company's net sales. In fiscal 1995 and for the nine months ended June 30, 1996,
net sales to the Company's top 10 customers accounted for approximately 60% and
73% respectively, of total net sales. In the nine months ended June 30, 1996,
the Company's top three customers accounted for approximately 31%, 11% and 8% of
total net sales. The Company expects that sales of its products to a limited
number of customers will continue to account for a high percentage of its net
sales in the foreseeable future. In addition, a substantial portion of the
Company's products are designed to address the needs of individual customers.
Accordingly, the Company's future success depends in significant part upon the
decision of the Company's current customers to continue to purchase products
from the Company, as well as the decision of prospective customers to develop
and market systems that incorporate the Company's products. There can be no
assurance that the Company's current customers will continue to place orders
with the Company or that the Company will be able to obtain orders from new
customers. If the Company were to lose one or more of its most significant
customers, or if orders by such customers were otherwise decreased or delayed,
the Company's business, financial condition and results of operations could be
materially adversely affected. See "-Fluctuations in Quarterly Results;
Backlog."
Dependence on New Products; Technological Change. Future growth of the
Company's business is dependent on the Company's ability to develop new or
improved SAW devices on a timely basis. The Company's product development
resources are limited, requiring the Company to allocate such resources among a
limited number of product development projects. Failure by the Company to
allocate its product development resources to products that meet market needs
could have a material adverse effect on the Company's future growth. The success
of new products may also depend on timely completion of new product designs,
quality of new products and market acceptance of customer products.
The markets for products offered by the Company are characterized by
rapidly changing technology and evolving industry standards. If technology
supported by the Company's products becomes obsolete or fails to gain widespread
commercial acceptance, the Company's business may be materially adversely
affected. Accordingly, the Company believes that continued significant
expenditures for research and development will be required. In the past, the
Company has depended on customer funded non-recurring engineering charges for a
significant portion of its product development expenditures. There can be no
assurance that such customer funding will continue in the future, which may
require the Company either to reduce the scope of its product development or
allocate increased internal resources for such purposes. If the Company is
unable to design, develop and introduce competitive products on a timely basis,
its future financial condition and operating results could be materially
adversely affected. Competing technologies, including digital filtering
technology, could develop which could replace or reduce the use of SAW
technology for certain applications. Any development of a cost effective, new
technology that replaces SAW filtering technology could have a material adverse
effect on the Company's business, financial condition and results of operations.
Competition. The markets for the Company's products are intensely
competitive and are characterized by price competition, rapid technological
change, product obsolescence and heightened domestic and international
competition. In each of the markets for the Company's products, the Company
competes with large international companies that have substantially greater
financial, technical, sales, marketing, distribution and other resources than
the Company. In addition, the Company may face competition from companies that
currently manufacture SAW devices for their own internal requirements, as well
as from a number of the Company's customers that have the potential to develop
an internal supply capability for SAW devices. The Company expects competition
to increase from both established and emerging competitors as well as from
internal capabilities developed by certain customers. The Company also believes
that a significant source of competition may come from alternative technological
approaches. See "-Dependence on New Products; Technological Change." The
Company's ability to compete effectively in its target markets depends on a
variety of factors both within and outside of the Company's control, including
timing and success of new product introductions by the Company and its
competitors, availability of manufacturing capacity, the rate at which customers
incorporate the Company's components into their products, the Company's ability
to respond to price decreases by reducing cost of sales, availability of
technical personnel, sufficient supplies of raw materials, the quality,
reliability and price of products and general economic conditions. There can be
no assurance that the Company will be able to compete successfully in the
future.
Risks Associated with International Operations. The Company's
international sales have increased over the past three years, accounting for
approximately 30%, 40% and 49% of net sales for fiscal years 1993, 1994 and
1995, respectively, and 58% of net sales for the nine months ended June 30,
1996. The Company's largest customer, accounting for approximately 23% of net
sales in fiscal 1995 and 31% of sales for the nine-month period ended June 30,
1996, is Ericsson, a European company. The sale of products in foreign countries
involves risks associated with currency exchange rate fluctuations and
restrictions, export-import regulations, customs matters, longer payment cycles,
foreign collection problems and political and transportation risks. The
Company's international sales are generally denominated in U.S. dollars.
However, the Company may be required in the future, due to competition, to
denominate sales in certain countries in foreign currencies. As a result,
fluctuations in currency exchange rates may in the future have a significant
effect on the Company's sales, even in the absence of an increase or decrease of
unit sales to foreign customers. A strong U.S. dollar could have a material
adverse effect on the Company's ability to compete internationally. The Company
has not, to date, engaged in hedging a portion of its foreign exchange risk. If,
however, any of the Company's future international sales are denominated in
foreign currencies, the Company may find it necessary to engage in rate hedging
activities with respect to certain exchange rate risks. There can be no
assurance that the Company will engage in such exchange rate hedging or that any
such activities will successfully protect against such risks. In addition,
foreign sales involve uncertainties arising from local business practices and
cultural considerations, and risks associated with international trade
transactions. For a portion of foreign sales, the Company depends upon
independent sales representatives who are not subject to the Company's control
and are generally free to terminate their relationships with the Company on 30
days notice.
The Company has leased a production facility, has purchased another
facility and has commenced operations in San Jose, Costa Rica. Operating a
production facility in a foreign country carries unknown risks of disruption
resulting from government intervention, wars, currency devaluations, labor
disputes and other events. Any such disruptions or delays in training personnel,
installing automated equipment, achieving acceptable quality levels or reaching
an acceptable production rate at this facility could have a material adverse
effect on the Company's business, results of operations and financial condition.
Management of Growth. In recent quarters, the Company has experienced
growth at a rate which it has not experienced previously. The Company's
management has limited experience in handling this rate and type of growth.
Because of this rapid growth, the Company must make strategic and tactical
decisions at a pace that could increase the likelihood of poor decisions. To
manage its growth effectively, the Company will be required to continue to
implement additional management and financial systems and controls, and to
expand, train and manage its employee base. Failure to manage this rapid growth
properly could cause increased expenses or a failure to increase the Company's
production capacity sufficiently to satisfy the demands of the Company's largest
customers.
Dependence on Key Managerial and Technical Personnel. The Company's
success depends to a significant extent on the performance of a number of key
management and technical personnel, the loss of one or more of whom could have a
material adverse effect on the Company. The Company's success will also depend
in part on its ability to attract and retain qualified professional, technical,
production, managerial and marketing personnel. Competition for such personnel
in the SAW industry is intense. There can be no assurance that the Company will
be successful in attracting and retaining the personnel it requires to increase
its manufacturing capacity, to develop new and enhanced products and to conduct
its operations successfully.
Intellectual Property and Proprietary Rights. Sawtek relies on a
combination of patents, copyrights and trade secrets in order to establish and
protect its proprietary rights. There can be no assurance that patents will
issue from any of its pending applications or that any claims allowed from
existing or pending patents will be sufficiently broad to protect the Company's
technology. In addition, there can be no assurance that any patents issued to
Sawtek will not be challenged, invalidated or circumvented, or that the rights
granted thereunder will provide proprietary protection to the Company.
Litigation may be necessary to enforce Sawtek's patents, trade secrets and other
intellectual property rights, to determine the validity and scope of the
proprietary rights of others or to defend against claims of infringement. Such
litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on the Company's business and results of
operations regardless of the final outcome of the litigation. The Company is not
currently engaged in any patent infringement suits nor has it threatened or been
threatened with any such suits in recent years. Despite Sawtek's efforts to
maintain and safeguard its proprietary rights, there can be no assurances that
the Company will be successful in doing so or that the Company's competitors
will not independently develop or patent technologies that are substantially
equivalent or superior to Sawtek's technologies.
The SAW industry is characterized by uncertain and conflicting
intellectual property claims. Sawtek has in the past and may in the future
become aware of the intellectual property rights of others that it may be
infringing, although it does not believe that it is infringing any third party
proprietary rights at this time. To the extent that it deemed necessary, Sawtek
has licensed the right to use certain technology patented by others in certain
of its products. There can be no assurance that Sawtek will not in the future be
notified that it is infringing other patent and/or intellectual property rights
of third parties. In the event of such infringement, there can be no assurance
that a license to the technology in question could be obtained on commercially
reasonable terms, if at all, that litigation will not occur or that the outcome
of such litigation will not be adverse to Sawtek. The failure to obtain
necessary licenses or other rights, the occurrence of litigation arising out of
such claims or an adverse outcome from such litigation could have a material
adverse effect on Sawtek's business. In any event, patent litigation is
expensive, and Sawtek's operating results could be materially adversely affected
by any such litigation, regardless of its outcome.
Environmental and Other Governmental Regulations. The Company is
subject to a variety of federal, state and local laws, rules and regulations
related to the discharge and disposal of toxic, volatile and other hazardous
chemicals used in its manufacturing processes. The failure to comply with
present or future regulations could result in fines being imposed on the
Company, suspension of production or a cessation of operations. Such regulations
could require the Company to acquire significant equipment or to incur
substantial expenses in order to comply with environmental regulations. Any past
or future failure by the Company to control the use of, or to restrict
adequately the discharge of, hazardous substances could subject the Company to
future liabilities and could have a material adverse effect on the Company's
business, results of operations and financial condition. In addition, the
increasing demand for wireless communications has exerted pressure on regulatory
bodies worldwide to adopt new standards for such products and services,
generally following extensive investigation of and deliberation over competing
technologies. The delays inherent in this governmental approval process have in
the past, and may in the future, cause the cancellation, postponement or
rescheduling of the installation of communications systems by the Company's
customers, which in turn may have a material adverse effect on the sale of
products by the Company to such customers.
Control by Existing Shareholders; Certain Anti-Takeover Provisions. The
Company's directors, officers and principal (5% or more) shareholders, as a
group, beneficially own in the aggregate approximately 67% of the outstanding
Common Stock, which includes approximately 50% of the outstanding Common Stock
that the Company's Employee Stock Ownership Plan and Trust ("ESOP") owns. As a
result of such ownership by the ESOP, the trustees of the ESOP may be able to
control certain matters that require approval by shareholders of the Company,
and the combination of the trustees and the participants with allocated shares
can control the election of directors. The trustees of the ESOP consist of two
executive officers and directors of the Company and two outside directors of the
Company. Certain anti-takeover provisions of the Florida Business Corporation
Act (the "Control Share Statute" and the "Affiliated Transactions Statute")
could have the effect of making it more difficult for a third party to acquire,
or of discouraging a third party from attempting to acquire, control of the
Company. Such provisions could limit or depress the price that certain investors
might be willing to pay in the future for shares of Common Stock. The Company is
also authorized to issue preferred stock with rights senior to the Common Stock,
without the necessity of shareholder approval and with such rights, preferences
and privileges as the Company's Board of Directors may determine. Although the
Company has no present plans to issue these shares of preferred stock, such
issuance, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company.
No Prior Public Market; Possible Volatility of Stock Price. Prior to
May 1, 1996, there was no public market for the Company's Common Stock, and
there can be no assurance that an active trading market will continue after this
date. The stock markets in general, and the market prices for high technology
companies in particular, have historically experienced volatility that at times
has been unrelated to the operating performance of such companies. The trading
price of the Common Stock could also be subject to significant fluctuations in
response to variations in quarterly results of operations, announcements of new
products or acquisitions by the Company or its competitors, governmental
regulatory action, other developments or disputes with respect to proprietary
rights, general trends in the industry and overall market conditions, and other
factors. The market price of the Common Stock may be significantly affected by
factors such as announcements of new products by the Company's competitors, as
well as by movements in prices of equity securities in general. These broad
market and industry fluctuations may materially adversely affect the market
price of the Common Stock regardless of the Company's operating performance.
Dilution. Investors purchasing shares pursuant to this offering will
incur immediate, substantial dilution in the net tangible book value of their
shares. Dilution to new investors will be $22.92 per share, based on the market
price of $25.75 per share on August 15, 1996. As of June 30, 1996, there were
outstanding options to purchase an aggregate of 1,543,140 shares of Common Stock
at a weighted average exercise price of $1.80 per share. To the extent any such
options are exercised, there will be further dilution to new investors.
Shares Eligible for Future Sale. Sales of substantial numbers of shares
of Common Stock in the public market could materially adversely affect the
market price for the Common Stock. Prior to the Company's initial public
offering, shareholders holding 16,284,320 shares of Common Stock executed
agreements (the "Lock-Up Agreements") under which they agreed not to sell their
shares until October 29, 1996. All but one of the Selling Shareholders executed
such Lock-Up Agreements. The Lock-Up Agreements provide that Hambrecht & Quist
LLC may, in its sole discretion and at any time without notice to the Company's
shareholders or the public market, release all or a portion of the shares
subject to the Lock-Up Agreements. Beginning on October 29, 1996, all shares
subject to the Lock-up Agreements will become eligible for sale in the public
market, subject in certain cases to compliance with Rule 144 or Rule 701 under
the Securities Act. As of June 30, 1996, an additional 1,543,120 shares were
issuable upon exercise of outstanding options. Of these shares, approximately
457,100 shares are vested and eligible for sale in the public market upon
expiration of the Lock-Up Agreements.
Absence of Dividends. The Company has historically not paid dividends
on its Common Stock. Because the Company believes it will require additional
capital in the future, the Company currently intends to retain its earnings and
does not anticipate paying cash dividends on its Common Stock in the foreseeable
future. The Company's $11.5 million line of credit agreement contains customary
restrictive covenants including restrictions on additional indebtedness and
financial covenants covering minimum current ratio, net worth and cash flow.
Although the line of credit does not impose restrictions on dividends, the
restrictive financial covenants could limit the Company's ability to pay
dividends. The Company was in compliance with the covenants as of September 30,
1995 and June 30, 1996.
Benefits of the Offering to Selling Shareholders. The Selling
Shareholders will significantly benefit from this offering through realization
of significant gains. The Selling Shareholders have a basis ranging from $0.13
per share to $1.34 per share in the stock they presently hold.
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Shares of Common Stock
offered herein will go directly to the Selling Shareholders. The Company
will not receive any proceeds from the sale of Common Stock by the Selling
Shareholders. See "Selling Shareholders."
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information concerning the Selling
Shareholders as of the date of this Prospectus:
Number of
Shares of Percentage of Shares of
Common Stock Number of Common Stock Owned
Beneficially Shares Offered Before After
NAME Owned(1) For Resale Offering(2) Offering(3)
- ---- ------------- --------------- ------------ -----------
Former Employees
of Sawtek Inc.:
- ----------------
Mark S. Cavin 6,860 6,860 * *
3250 Drawbridge Parkway
#118L
Greensborough, NC 27410
Clifford J. Gissell 4,620 4,620 * *
Route 4 - Box 1028
Vinemont, AL 35179
Brent H. Horine 16,556 16,250 * *
5849 Grove Lane Drive
Orlando, FL 32810
Sherman M. Houston 40,980 40,980 * *
1849 Wingfield Drive
Longwood, FL 32779
Gerald S. Sunkin 1,600 1,600 * *
2430 Island Drive
Longwood, FL 32779
Douglas M. Waldrop 2,010 2,010 * *
9477 Shortleaf Court
Apopka, FL 32703
Current Employees of
Sawtek Inc.(4):
Rodolfo C. Almar 13,820 13,820 * *
John K. Bitzer 28,120 9,500 * *
Herbert C. Blevins 15,966 15,966 * *
ammy E. Collins 4,740 4,740 * *
Jay E. Dodge 1,600 1,600 * *
William J. Erndl 53,240 53,240 * *
David F. Ferrarini 21,700 16,460 * *
Sunder G. Gopani 57,740 57,740 * *
John G. Gore 21,744 21,744 * *
Jacqueline H. Hines 17,868 16,860 * *
Dave Jordan 1,600 1,600 * *
Robert W. Kindell 4,820 4,820 * *
Scott M. Knapp 3,963 2,500 * *
Douglas C. Kranz, Sr. 26,140 26,140 * *
Arland M. McMullen 33,220 28,220 * *
John T. Miller 45,680 45,680 * *
Gary A. Monetti(5) 310,630 58,410 1.56% 1.27%
Roger Mouton 7,265 2,165 * *
Tim J. Murphy 14,000 14,000 * *
Joseph M. Phillips 13,420 13,420 * *
Terry W. Pyle 15,440 14,440 * *
Enoch C. Register III 9,640 9,640 * *
Rickey J. Russell 23,374 19,014 * *
continued....
<PAGE>
Number of
Shares of Percentage of Shares of
Common Stock Number of Common Stock Owned
Beneficially Shares Offered Before After
AME Owned(1) For Resale Offering(2) Offering(3)
- --- ------------ -------------- ------------ ----------
Anthony F. Sassano 14,326 14,326 * *
J. Louis Schlegel, IV 35,620 5,940 * *
Lisa Schwartz 28,651 22,500 * *
Thomas L. Shoquist(6)349,809 80,340 1.76% 1.36%
Kathy M. Sikes 11,820 11,820 * *
Leland P. Solie 7,500 7,500 * *
Ronald A. Stribling(7) 55,020 55,020 * *
Bruce D. Thomas 35,840 8,040 * *
Jon R. Vandendriessche 26,360 4,820 * *
Sherri M. Walls 5,900 5,000 * *
Raymond L. Yap 14,100 7,240 * *
--------- -------
1,403,302 746,585
========= =======
- -------------------------------------------
* Represents less than 1% of outstanding shares.
(1) For purposes of this table, a person is deemed to have "Beneficial
Ownership" of any shares as of a given date which such person has the
right to acquire within 60 days after such date. Excludes shares owned
by the Sawtek Inc. Employee Stock Ownership Plan and Trust and held on
behalf of current and former employees.
(2) "Before Offering" percentages are based on 19,854,102 shares outstand-
ing as of August 15, 1996.
(3) Calculation assumes all Shares are sold but does not constitute a
commitment to sell any or all of the stated number of shares of Common
Stock to be registered. The number of shares to be offered shall be
determined from time to time by each Selling Shareholder at his or her
sole discretion.
(4) The address for current employees of Sawtek Inc. is P.O. Box 609501,
Orlando, FL 32860-9501.
(5) Mr. Monetti is the Vice President and Chief Operating Officer of the
Company.
(6) Mr. Shoquist is the Vice President - Quality of the Company.
(7) Mr. Stribling is the Controller and Chief Accounting Officer of the
Company.
<PAGE>
PLAN OF DISTRIBUTION
The distribution of the Shares of Common Stock by the Selling
Shareholders may be effectuated from time to time in one or more transactions
(which may involve block transactions), on the NASDAQ National Market System, or
on any exchange on which the Shares may then be listed, in negotiated private
transactions, or a combination of such methods of sale, at market prices
prevailing at the time of sale, or at prices relating to such prevailing market
prices or at negotiated prices. The Selling Shareholders may effectuate such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or purchasers of
the Shares for whom they may act as agent (which compensation may be in excess
of customary commissions).
The Selling Shareholders and any broker-dealers that act in connection
with the sale of the Shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act and the commissions received by
them and any profit on the resale of such shares might be deemed to be
underwriting discounts or commissions under the Securities Act. Because the
Selling Shareholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, the Selling Shareholders will be subject to
prospectus delivery requirements under the Securities Act. Furthermore, in the
event of a "distribution" of the shares, such Selling Shareholder, any selling
broker or dealer and any "affiliated purchasers" may be subject to Rules 10b-6
under the Exchange Act , which Rule would prohibit, with certain exceptions, any
such person from bidding for or purchasing any security which is the subject of
such distribution until his participation in that distribution is completed. In
addition, Rule 10b-7 under the Exchange Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of Common Stock in connection with this offering. The Selling Shareholders
may agree to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the Shares against certain liabilities including
liabilities arising under the Securities Act.
All but one of the Selling Shareholders have entered into Lock-Up
Agreements under which they agreed not to sell any of the Shares until October
29, 1996. The Lock-Up Agreements provide that Hambrecht & Quist LLC may, in its
sole discretion and at any time without notice to the Company's shareholders or
the public market, release all or a portion of the Shares subject to the Lock-Up
Agreements.
Any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than pursuant to this Prospectus. There is no assurance that the Selling
Shareholders will sell any or all of the Shares of Common Stock offered hereby.
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the legality of the Shares of
Common Stock offered hereby have been passed upon for the Company by Akerman,
Senterfitt & Eidson, P.A., Orlando, Florida. William A. Grimm, a shareholder in
Akerman, Senterfitt & Eidson, P.A. and Secretary of the Company, is the
beneficial owner of 12,040 shares of Common Stock.
<PAGE>
EXPERTS
The consolidated balance sheets of Sawtek at September 30, 1995 and
1994, and the related consolidated statements of income (loss), non-redeemable
shareholders' equity and cash flows for each of the three years in the period
ended September 30, 1995, included in the Registration Statement on Form S-1
(File No. 333-1860), which was filed with the Securities and Exchange Commission
on April 29, 1996, and incorporated herein by reference in this Prospectus and
Registration Statement, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing. The report of Ernst & Young LLP on Sawtek's September 30, 1995
consolidated financial statements refers to a change in accounting for ESOP
shares.
<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
SAWTEK INC. (the "Company") is subject to the informational and
reporting requirements of Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The following documents,
which are filed with the Commission, are incorporated in this Registration
Statement by reference:
(1) The Company's latest annual report filed pursuant to Section 13(a)
or 15(d) of the Exchange Act, or the latest prospectus filed pursuant to Rule
424(b) under the Securities Act that contains audited financial statements for
the Company's latest fiscal year for which such statements have been filed.
(2) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the document
referred to in (1) above.
(3) The description of the Common Stock, par value $0.0005 per share
("Common Stock"), contained in a registration statement filed on Form 8-A under
the Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all shares of Common Stock offered
hereby have been sold or which deregisters all shares of Common Stock then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be part hereof from the date of the filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the issuance of the shares of Common Stock offered
hereby and certain other legal matters will be passed upon for the Company by
Akerman, Senterfitt & Eidson, P.A., Orlando, Florida. William A. Grimm, a
shareholder in Akerman, Senterfitt & Eidson, P.A. and Secretary of the Company,
is the beneficial owner of 12,040 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
The Company, a Florida corporation, is empowered by Section 607.0850 of
the Florida Business Corporation Act, subject to the procedures and limitations
stated therein, to indemnify any person who was or is a party to any proceeding
other than any action by, or in the right of, the corporation, by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against liability incurred in connection with
such proceeding, including any appeal thereof, if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.
Section 607.0850 also empowers a Florida corporation to indemnify any
person who was or is a party to any proceeding by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses and amounts paid in settlement not exceeding, in
the judgment of the board of directors, the estimated expense of litigating the
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including any appeal thereof, if
he acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable unless, and only to the extent
that, the court in which such proceeding was brought, or any other court of
competent jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such court shall deem proper. To the extent that a director, officer, employee
or agent of a corporation has been successful on the merits or otherwise in
defense of any proceeding referred to above, or in defense of any claim, issue
or matter therein, he shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith.
The Company's Articles of Incorporation (the "Articles") contain a
provision entitling Directors and executive officers to be indemnified by the
Company against claims which may arise out of their actions in such capacities
to the fullest extent permitted by law. The Company has also secured insurance
on behalf of its executive officers and Directors for certain liabilities which
may arise out of their actions in such capacities.
Item 7. Exemption from Registration Claimed.
The securities registered hereby, all of which were issued to employees
pursuant to a written employee stock option plan, were originally exempt from
registration pursuant to Section 4/2 of the Securities Act, Regulation D and
later Rule 701 of the Securities Act.
Item 8. Exhibits.
The exhibits filed as part of this Registration Statement are as
follows:
EXHIBIT
NUMBER DESCRIPTION
4.1 --Amended and Restated Articles of Incorporation of
Sawtek Inc.
5.1 --Opinion of Akerman, Senterfitt & Eidson, P.A.
15.1 --Letter of Consent from Ernst & Young LLP.
<PAGE>
23.1 --Consent of Akerman, Senterfitt & Eidson, P.A.
Reference is made to Exhibit 5.1.
24.1 --Power of Attorney. Reference is made to the
signature page hereto.
99.1 --Sawtek Inc. Amended and Restated 1983 Incentive
Stock Option Plan.
Item 9. Undertakings.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement 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.
(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 herein, 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.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and where
applicable, each filing of an employee benefit plan's annual report pursuant to
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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
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 Company of expenses incurred by a
director, officer or controlling person of the Company 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
Company 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 and as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
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 Apopka, State of Florida on the 21st day of August,
1996.
SAWTEK INC.
By:/s/Steven P. Miller
Steven P. Miller
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned, officers and directors of SAWTEK INC., hereby
severally constitute Steven P. Miller and Neal J. Tolar, and each of them
singly, our true and lawful attorneys with full power to any of them, and to
each of them singly, to sign for us and in our names in the capacities indicated
below the Registration Statement on Form S-8 filed herewith and any and all
amendments to said Registration Statement and generally to do all such things in
our name and behalf in our capacities as officers and directors to enable SAWTEK
INC. to comply with the provisions of the Securities Act and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their capacities and on
the date indicated.
Signature Title Date
/s/Steven P. Miller Chairman, President and Chief
Steven P. Miller Executive Officer 8/21/96
/s/Neal J. Tolar Senior Vice President, Chief
Neal J. Tolar Technical Officer and Director 8/21/96
/s/Thomas L. Shoquist
Thomas L. Shoquist Vice President, Quality 8/21/96
/s/Gary A. Monetti Vice President, Operations and 8/21/96
Gary A. Monetti Chief Operating Officer
/s/Raymond A. Link Vice President, Finance and 8/21/96
Raymond A. Link Chief Financial Officer
Robert C. Strandberg Director
Bruce S. White Director
/s/Willis C. Young Director 8/21/96
Willis C. Young
<PAGE>
Exhibit 4.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
of
SAWTEK INC.
FIRST: The name of the corporation (hereinafter called the "Corpora-
tion") is SAWTEK INC.
SECOND: The duration of the Corporation shall be perpetual.
THIRD: The purposes for which the Corporation is initially organized,
which shall continue to be the purposes of the Corporation until and if the same
shall be amended pursuant to the provisions of the Florida General Corporation
Act, and which shall include the authority of the Corporation to transact any
lawful business for which corporations may be incorporated under the Florida
General Corporation Act, are as follows:
To carry on a general mercantile, industrial, investigating and trading
business in all its branches; to devise, invent, manufacture, fabricate,
assemble, install, service, maintain, alter, buy, sell, import, export, license
as licensor or licensee, lease as lessor or lessee, distribute, job, enter into,
negotiate, execute, acquire and assign contracts in respect of, acquire,
receive, grant, and assign licensing arrangements, options, franchises, and
other rights in respect of, and generally deal in and with, at wholesale and
retail, as principal, and as sales, business, special, or general agent,
representative, broker, factor, merchant, distributor, jobber, advisor, and in
any other lawful capacity, goods, wares, merchandise, commodities, and
unimproved, improved, finished, processed, and other real, personal, and mixed
property of any and all kinds, together with the components, resultants, and
by-products thereof; to acquire by purchase or otherwise own, hold, lease,
mortgage, sell, or otherwise dispose of, erect, construct, make, alter, enlarge,
improve, and to aid or subscribe toward the construction, acquisition or
improvement of any factories, shops, storehouses, buildings, and commercial and
retail establishments of every character, including all equipment, fixtures,
machinery, implements and supplies necessary, or incidental to, or connected
with, any of the purposes or business of the Corporation; and generally to
perform any and all acts connected therewith or arising therefrom or incidental
thereto, and all acts proper or necessary for the purpose of the business.
To engage generally in the real estate business as principal, agent,
broker, and in any lawful capacity, and generally to take, lease, purchase, or
otherwise acquire, and to own, use, hold, sell, convey, exchange, lease,
mortgage, work, clear, improve, develop, divide, and otherwise handle, manage,
operate, deal in and dispose of real estate, real property, lands,
multiple-dwelling structures, houses, buildings and other works and any interest
or right therein; to take, lease, purchase or otherwise acquire, and to own,
use, hold, sell, convey, exchange, hire, lease, pledge, mortgage, and otherwise
handle, and deal in and dispose of, as principal, agent, broker, and in any
lawful capacity, such personal property, chattels, chattels real, rights,
easements, privileges, choses in action, notes, bonds, mortgages, and securities
as may lawfully be acquired, held, or disposed of; and to acquire, purchase,
sell, assign, transfer, dispose of, and generally deal in and with, as
principal, agent, broker, and in any lawful capacity, mortgages and other
interests in real, personal, and mixed properties; to carry on a general
construction, contracting, building and realty management business as principal,
agent, representative, contractor, subcontractor, and in any other lawful
capacity.
To apply for, register, obtain, purchase, lease, take licenses in
respect of or otherwise acquire, and to hold, own, use, operate, develop, enjoy,
turn to account, grant licenses and immunities in respect of, manufacture under
and to introduce, sell, assign, mortgage, pledge, or otherwise dispose of, and,
in any manner deal with and contract with reference to:
<PAGE>
(a) inventions, devices, formulae, processes, and any improvements and
modifications thereof;
(b) letters patent, patent rights, patented processes, copyrights,
designs, and similar rights, trademarks, trade symbols and other indications of
origin and ownership granted by or recognized under the laws of the United
States of America or of any state or subdivision thereof, or of any foreign
country or subdivision thereof, and all rights connected therewith or
appertaining thereto;
(c) franchises, licenses, grants and concessions.
To have all of the powers conferred upon corporations organized under
the Florida General Corporation Act.
FOURTH: The aggregate number of shares which the Corporation shall have
authority to issue is Two Million (2,000,000), which are divided into Three
Hundred Thirty Thousand Eight Hundred Eighty-Two (330,882) shares of Series A
Convertible Preferred, par value $.01 per share (designated "Convertible
Preferred Stock"), One Hundred Fifty Thousand (150,000) shares of 6% Preferred
Stock, par value $2.00 per share (designated "6% Preferred Stock") and One
Million Five Hundred Nineteen Thousand One Hundred Eighteen (1,519,118) shares
of Common Stock, par value $.01 per share (designated "Common Stock").
The following is a description of each class of capital stock of the
Corporation and a statement of the preferences, qualifications, privileges,
limitations, restrictions, and other special or relative rights granted to or
imposed upon the shares of each class.
Common Stock.
Subject to the rights of the convertible Preferred Stock and the 6%
Preferred Stock, and except as otherwise provided by the laws of the State of
Florida, the holders of records of shares of Common Stock shall share ratably in
all dividends and other distributions, whether in respect of a liquidation or
dissolution (voluntary or involuntary) or otherwise, and shall be entitled to
one vote per share of Common Stock held with respect to all matters to be voted
on by the stockholders of the Corporation.
Convertible Preferred Stock.
(a) Voting. Each share of Convertible Preferred Stock shall entitle the
holder of record thereof to such number of votes per share as shall equal the
number (including any fraction to one decimal place) of shares of Common Stock
into which each share of Convertible Preferred Stock is then convertible. Except
as otherwise provided by the laws of the State of Florida, the holders of record
of shares of Convertible Preferred Stock shall vote with the holders of any
other class of stock entitled to vote, without regard to class, with respect to
all matters to be voted on by the stockholders of the Corporation.
As long as shares of Convertible Preferred Stock are outstanding, the
Corporation shall not create or authorize any class or series of shares of
capital stock ranking prior to or on a parity with the Convertible Preferred
Stock in respect of dividends or distribution of assets on liquidation,
dissolution or winding up of the Corporation, and the Corporation shall not
authorize, effect or validate any amendment or modification of these Articles of
Incorporation (including without limitation by merger or consolidation with
another corporation) or the By-Laws of the Corporation or otherwise alter or
change the powers, preferences or rights (including, but not limited to, any
liquidation, dividend, conversion, redemption or voting rights) of the holders
of Convertible Preferred Stock, or effect any reclassification or
recapitalization of the Common Stock, without, in any such case, the consent of
the holders of at least seventy percent (70%) of the number of then outstanding
shares of Convertible Preferred Stock voting together as single class at a
meeting called for that purpose, or by written consent signed by the holders of
such a percentage of then outstanding shares of Convertible Preferred Stock.
(b) Dividends. Except as provided in paragraph (e) and (f) below, the
Corporation shall not declare, pay or set apart any dividend on the Convertible
Preferred Stock or declare, make or set apart any distribution on the
Convertible Preferred Stock. As long as shares of Convertible Preferred Stock
are outstanding, the Corporation shall not declare, pay or set apart any
dividend on the Common Stock or declare, make or set apart any distribution on
the Common Stock, unless any such dividend or distribution on the Common Stock
is approved in writing by the holders of at least seventy percent (70%) of the
number of then outstanding shares of Convertible Preferred Stock, which approval
may be withheld for any reason or without assigning a reason therefor.
(c) Convertibility. Each share of Convertible Preferred Stock shall be
convertible into one share of fully paid and nonassessable Common Stock, subject
to adjustment as provided in paragraph (d) below.
A holder of shares of Convertible Preferred Stock, at his option, at
any time and from time to time, may exercise the conversion right as to any or
all of such shares held of record by him by delivering to the Corporation during
regular business hours, at the principal office of the Corporation or at such
other place as may be designated by the Corporation, the certificate or
certificates for the shares to be converted, duly endorsed or assigned in blank
or to the Corporation (if required by it), accompanied by written notice stating
that the holder elects to convert such shares and stating the name or names
(with address or addresses) in which the certificate or certificates for shares
of Common Stock are to be issued. All outstanding shares of Convertible
Preferred Stock shall be convertible, on a mandatory basis, simultaneously with
the closing under a firm commitment underwritten public offering of shares of
Common Stock by the Corporation, registered under the Securities Act of 1933, as
amended, in which at least $5,000,000.00 is raised by the Corporation; provided,
however, that the price to public of such offered shares shall be at least
$27.20 per share. Conversion shall be deemed to have been effected on the date,
in the case of an optional conversion, when such delivery of certificates for
the shares to be converted is made or, in the case of mandatory conversion, on
the date immediately prior to consummation of such public offering. As promptly
as practicable thereafter, the Corporation, at its expense, shall issue and
deliver to or upon the written order of such holder, at such office or other
place designated by the Corporation, a certificate or certificates for the
number of full shares of Common Stock to which such holder is entitled.
The person in whose name the certificate or certificates for shares of
Common Stock are to be issued shall be deemed to have become a stockholder of
record on the conversion date unless the transfer books of the Corporation are
closed on that date, in which event he shall be deemed to have become a
stockholder of record or the next succeeding date on which the transfer books
are opened.
(d) Dilution. If, whenever shares of Convertible Preferred Stock are
outstanding, the Corporation increases the number of shares of Common Stock
outstanding in connection with a dividend or other distribution payable in
Common Stock, or shall subdivide its Common Stock into a greater number of
shares of Common Stock, or shall combine its Common Stock into a smaller number
of shares of Common Stock, appropriate adjustment must be made in the conversion
rate so as to make each share of Convertible Preferred Stock convertible into
the same proportionate amount of Common Stock as it would have been convertible
into in the absence of such dividend, subdivision or combination.
(e) Redemption. The Corporation is not obligated to purchase or redeem
the Convertible Preferred Stock, except for payments in liquidation pursuant to
paragraph (f) below and except that, in the event of a merger, consolidation of
the Corporation with another corporation or the sale of all or substantially all
the assets of the Corporation, the Corporation will give to each holder of the
Convertible Preferred Stock, by first class mail, postage prepaid, addressed to
such holder at its address as shown on the books of the Corporation (a) at least
thirty (30) days prior written notice of the date when the same shall take
place. In the event that any such holders, within twenty (20) days after receipt
of such notice shall so request, the Corporation will, prior to or
simultaneously with the consummation of such merger, consolidation or sale,
redeem all, or any portion specified in such notice, of the shares of
Convertible Preferred Stock held by such holder for cash at the price of $13.60
per share. In addition, the Corporation will not effect any such merger,
consolidation or sale unless, prior to the consummation thereof, the successor
corporation (if other than the Corporation) resulting from such consolidation or
merger of the corporation purchasing such assets shall assume by written
instrument (in form reasonably satisfactory to the holders of at least seventy
percent (70%) of the shares of Convertible Preferred Stock at the time
outstanding) issued and mailed or delivered to each holder of shares of
Convertible Preferred Stock at the last address of such holder appearing on the
books of the Corporation, the obligation to deliver to such holder, if such
holder shall have elected to have shares of Convertible Preferred Stock redeemed
as aforesaid, the redemption price therefor. Anything in this paragraph (e) to
the contrary notwithstanding, in the event that the consideration to be received
by the stockholders of the Corporation in any such merger or consolidation, or
by the Corporation in any such sale of assets, shall include (i) either no cash
or cash in any amount less than the amount required to be paid to requesting
holders of Convertible Preferred Stock as aforesaid, and (ii) "Salable
Securities," as hereinafter defined, then in lieu of paying cash to such
requesting holders in an amount greater than the cash (if any) included in such
consideration, the Corporation may deliver or cause to be delivered to such
requesting holders, pro rata based on the number of shares held by them as to
which such requests shall have been made, shares or other units or such Salable
Securities having a "Market Value," as hereinafter defined, equal to the cash
payment or additional cash payment, as the case may be, which would otherwise
have been so required. As used in this paragraph (3), the term "Salable
Securities" shall mean shares or other securities which (i) are listed on a
national securities exchange or quoted on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), and (ii) in the hands of the
holders of Convertible Preferred Stock are freely salable under the Securities
Act of 1933 (including, without limitation, Rule 144 thereunder or any successor
rule) without restriction as to volume (except for any restriction as to volume
imposed by reason of the fact that the holder is an affiliate of the issuer of
such securities). As used in this paragraph (e), the term "Market Value" of any
Salable Securities shall mean the value attributed in good faith to such Salable
Securities in the transaction or, if less, the average closing prices (in the
case of listed securities) or closing bid prices (in the case of NASDAQ quoted
securities) on the thirty trading days next preceding the date of consummation
of such transaction.
(f) Liquidation. Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, net assets available for
distribution to the Corporation's stockholders shall be distributed as follows:
(i) first, the holders of the Convertible Preferred Stock shall be entitled to
be paid an amount equal to $13.60 per share; (ii) next, the holders of the 6%
Preferred Stock shall be entitled to be paid as set forth below in the
description of the 6% Preferred Stock; (iii) next, the holders of the Common
Stock shall be entitled to be paid an amount equal to $13.60 per share; and (iv)
thereafter, the remaining net assets of the Corporation shall be distributed to
the holders of the Convertible Preferred Stock and the Common Stock based upon
the number of shares holder by each (determined as if the Convertible Preferred
Stock had been converted immediately prior thereto). If upon any dissolution,
liquidation or winding up of the Corporation, the net assets available for
distribution to the Corporation's stockholders shall be insufficient to permit
payment to the holders of Convertible Preferred Stock of the amount
distributable in clause (i) of the preceding sentence, the entire assets of the
Corporation to be so distributed shall be distributed ratably among the holders
of Convertible Preferred Stock. Written notice of such liquidation, dissolution
or winding up, setting a payment date, the amount of the payment to holders of
the Corporation's stock, and the place where said amount shall be payable shall
be given not less than thirty (30) days prior to the payment date stated
therein, to each holder of record of such stock. A consolidation, merger, sale
of assets or the reduction of capital stock of the Corporation shall not be
deemed to be a liquidation, dissolution or winding up of the Corporation within
the meaning of this paragraph. The liquidation preference provided for herein
with respect to the Convertible Preferred Stock shall be equitably adjusted to
reflect any stock divided, combination or subdivision with respect to the
Convertible Preferred Stock.
6% Preferred Stock.
(a) Dividends. Each issued and outstanding share of 6% Preferred Stock
shall entitle the holder of record thereof to receive out of funds legally
available therefore, when and as declared by the Board of Directors, dividends
in cash at the rate of six (6) per centum of the par value thereof per annum,
which shall be payable semi-annually on such dates in each calendar year as the
Board of Directors shall deem advisable, and which shall be declared and set
apart or paid before dividends of any kind may be declared upon the Common Stock
and before distributions of any kind may be made upon the issued and outstanding
Common Stock. Said semi-annual dividends upon the issued and outstanding 6%
Preferred Stock shall be cumulative and shall be deemed to accrue from and after
the date of issuance, whether earned, or whether there be funds legally
available therefor, or whether said dividends shall have been declared. Whenever
full dividends upon the issued and outstanding 6% Preferred Stock as aforesaid
for all past semi-annual dividend periods shall have been declared and either
paid or a sum sufficient for the payment thereof set aside in full, without
interest, then, subject to the rights of the holders of Convertible Preferred
Stock as hereinabove provided, the Board of Directors may declare, set aside, or
pay additional cash dividends, and/or may make share distributions of the
authorized but unissued Common Stock of the Corporation and/or its treasury
Common Stock, if any, and/or may make distributions of bonds or property of the
Corporation, including the shares or bonds of other corporations. The holders of
the record of the issued and outstanding Common Stock shall be entitled in
respect of said Common Stock exclusively to receive any such additional cash
dividends which may be declared and/or any such distributions which may be made,
each issued and outstanding Common Stock entitling the holder of record thereof
to receive an equal proportion of said dividends and/or distributions. Any
reference to "distribution" in this paragraph contained shall not be deemed to
include any distributions made in connection with any liquidation, dissolution,
or winding up of the Corporation, whether voluntary or involuntary; nor shall
any such reference to "distributions" in relation to issued and outstanding
shares be deemed to limit, curtail, or divest the authority of the Board of
Directors to make any proper distributions, including distributions of
authorized but unissued Common Stock, in relation to its treasury Common Stock,
if any.
(b) Liquidation. Subject to the liquidation rights of the holders of
Convertible Preferred Stock, in the event of any liquidation, dissolution, or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
each issued and outstanding share of 6% Preferred Stock shall entitle the holder
of record thereof to payment at the rate of Two Dollars ($2.00) plus an amount
equal to all unpaid dividends, without interest, whether or not earned or
declared, which have accrued thereon to the date of payment before any payment
or distribution of the net assets of the Corporation (whether stated capital or
surplus) shall be made to or set apart for the holders of record of the issued
and outstanding Common Stock in respect of said Common Stock. After setting
apart or paying in full the preferential amounts aforesaid to the holders of
record of the issued and outstanding 6% Preferred Stock, the remaining net
assets (whether stated capital or surplus), if any, shall be distributed
exclusively to the holders of record of the issued and outstanding Common Stock
and Convertible Preferred Stock as hereinabove provided. If the net assets of
the Corporation shall be insufficient to pay in full the preferential amounts
among the holders of the 6% Preferred Stock as aforesaid, then each issued and
outstanding share of 6% Preferred Stock shall entitle the holder of record
thereof to an equal proportion of said net assets, and the holders of the Common
Stock shall in no event be entitled to participate in the distribution of said
net assets in respect of their Common Stock. Without excluding any other
proceeding which does not in fact effect a liquidation, dissolution, or winding
up of the Corporation, a merger or consolidation of the Corporation into or with
any other Corporation, a merger of any other corporation into the Corporation,
or a sale, lease, mortgage, pledge, exchange, transfer, or other disposition by
the Corporation of all or substantially all of its assets shall not be deemed,
for the purpose of this paragraph, to be a liquidation, dissolution, or winding
up of the Corporation.
FIFTH: The address of the registered office of the Corporation in
the State of Florida is 1818 S. Highway 441, Apopka, Florida, 32703, and the
name of the registered agent of the Corporation at such address is Steven P.
Miller.
SIXTH: The number of directors constituting the Board of Directors
of the Corporation shall be no fewer than five and no more than ten.
SEVENTH: The Corporation shall indemnify its directors and
officers to the extent permitted by the Florida General Corporation Act.
<PAGE>
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION
OF
SAWTEK INC.
The undersigned, Steven P. Miller, President of Sawtek Inc., a Florida
corporation (the "Corporation") hereby executes the following Articles of
Amendment to the Articles of Incorporation of the Corporation:
ARTICLE I: Name. The name of the Corporation is Sawtek Inc.
ARTICLE II: Amendment. The Articles of Incorporation of the Corpora-
tion are hereby amended as follows:
Article Fourth, of the Articles of Incorporation is deleted in its
entirety and replaced by the following:
FOURTH: The maximum number of shares of its common stock that the
Corporation is authorized to have outstanding at any one time is 40,000,000
shares, $0.0005 per share par value (the "Common Stock"). The maximum number of
shares of its preferred stock that the Corporation is authorized to have
outstanding at any time is 1,000,000 shares, $0.01 per share par value (the
"Preferred Stock"). The consideration to be paid for each share shall be fixed
by the board and may be paid in whole or in part in cash or other property,
tangible or intangible, or in labor or services actually performed or to be
performed for the Corporation, with a value, in the judgment of the directors,
equivalent to or greater than the full value of the shares.
Common Stock. Subject to the rights of the Corporation's preferred
stock and except as otherwise provided by the laws of the state of Florida, the
holders of record of Common Stock shall share ratably in all dividends, payable
in cash, stock or otherwise, and other distributions, whether in respect of
liquidation or dissolution (voluntary or involuntary) or otherwise. The holders
of Common Stock shall be entitled to one vote per share of Common Stock held,
with respect to all matters to be voted on by the shareholders of the
Corporation.
Preferred Stock. The Board is authorized to determine and alter the
rights, preferences, privileges and restrictions granted to and imposed upon any
portion of Preferred Stock not designated as a specific Series and on any wholly
unissued series of Preferred Stock, and to fix the number of shares and
designation of any such shares of Preferred Stock. The Board, within the limits
and restrictions stated in any resolutions of the Board originally fixing the
number of shares constituting any shares of Preferred Stock, may increase or
decrease (but not below the number of shares of such series then outstanding)
the number of shares of any series subsequent to the issue of shares of that
series.
ARTICLE III: This amendment to the Articles of Incorporation was
adopted by the Corporation on February 28, 1996, pursuant to a recommendation by
the Board of Directors of the Corporation to the shareholders of the Corporation
and approval by the shareholders on February 28, 1996, by written consent of the
holders of the required majority of the shares entitled to vote thereon.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment to Articles of Incorporation, this 28th day of February, 1996.
By:/s/Steven P. Miller
Steven P. Miller, President
<PAGE>
Exhibit 5.1
August 21, 1996
Sawtek Inc.
1818 South Highway 441
Apopka, Florida 32703
RE: Sawtek Inc. Amended and Restated 1983 Incentive Stock Option
Plan Registration Statement on Form S-8 and Reoffer Prospectus
Ladies and Gentlemen:
We are counsel to Sawtek Inc., a Florida corporation (the "Company"), and
our opinion has been requested with respect to the inclusion of an aggregate
1,807,045 shares of the Company's Common Stock (the "Shares") in a Registration
Statement on Form S-8, of which 1,060,460 Shares are issuable upon exercise of
outstanding stock options. It is our opinion that the outstanding Shares
included in the Registration Statement on Form S-8 have been duly authorized and
are validly issued, and with respect to an aggregate 1,060,460 Shares issuable
upon exercise of outstanding stock options, such Shares have been duly
authorized and when issued upon payment therefor in accordance with the terms of
the outstanding options granted, will be validly issued, fully paid and
non-assessable. We hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement on Form S-8 relating to the Shares, as filed under
the Securities Act of 1933, as amended, with the Securities and Exchange
Commission.
Very truly yours,
AKERMAN, SENTERFITT & EIDSON, P.A.
By:/s/William A. Grimm
<PAGE>
Exhibit 15.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts"in the
Registration Statement (Form S-8 No. 33-00000) pertaining to the Sawtek Inc.
Amended and Restated 1983 Incentive Stock Option Plan and to the incorporation
by reference therein of our report dated October 30, 1995 (except for Note 13,
as to which the date is February 29, 1996, and Note 14, as to which the date is
April 27, 1996) with respect to the consolidated financial statements of Sawtek
Inc. for the year ended September 30, 1995 included in its Registration
Statement on Form S-1 (File No. 333-1860) filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Orlando, Florida
August 21, 1996
<PAGE>
Exhibit 99.1
SAWTEK INC.
AMENDED AND RESTATED 1983 INCENTIVE STOCK OPTION PLAN
1. Purpose. The purposes of the Incentive Stock Option Plan (the
"Plan") are as follows:
(a) To further the growth, success, and interest of Sawtek
Inc. (the "Company") and its shareholders by enabling key employees of the
Company, who have been or will be given responsibility for the administration of
the affairs of the Company, to acquire shares of its Common Stock under the
terms and conditions and in the manner contemplated by this Plan, thereby
increasing their personal involvement in the Company; and
(b) To enable the Company to obtain and retain the services of
key employees the Company desires to employ by providing such key employees with
an opportunity to become owners of Common Stock of the Company under the terms
and conditions and in the manner contemplated by this Plan; and
(c) To provide an Incentive Stock Option Plan which qualifies
for treatment under Section 422A of the Internal Revenue Code of 1986, as
amended from time to time, to transfers of stock made pursuant to it.
2. Administration of Plan. This Plan shall be administered by a
committee (the "Committee") consisting of three directors to be appointed by the
Board of Directors for the purposes of this Plan. This Committee shall interpret
the Plan in a manner consistent with its purposes; and, subject to the terms of
the Plan, will have discretion to determine who shall participate in the Plan
and how many shares shall be sold to each participant. All actions of the
Committee, including the awarding of options, shall be taken on behalf of the
Company.
3. Time of Grant. Any and all options granted pursuant to this
Plan must be granted within ten years from the earlier of the date the
Plan is initially adopted by the Board of Directors or the date the Plan is
initially approved by the shareholders of the Company. An option shall be
deemed to have been granted on the date on which the Committee awards the
option.
4. Eligible Employees. Key employees, including officers, of the
Company whom the Committee selects shall be eligible for participation under the
Plan. However, no member of the Board of Directors of the Company shall be
eligible to participate under the plan unless he is also an employee of the
Company. Non-employees shall not be eligible to participate. Further, no
employee who owns more than ten percent of the total combined voting power of
all classes of stock of the Company shall be eligible for participation under
the Plan except in compliance with paragraph 7 below.
5. Shares Subject to Plan. An aggregate of 155,000* shares of
the Common Stock, no par value, of the Company shall be subject to this Plan
either from authorized but previously unissued shares or from shares reacquired
by the Company, including shares purchased in the open market, and such number
and kind of shares shall be appropriately adjusted in the event of any one or
more stock splits, reverse stock splits, stock dividends paid or declared with
respect to such stock in the future, or merger of the Company. If prior to the
termination of the Plan, shares issued under it shall have been repurchased by
the Company in connection with the restrictions imposed on such shares
pursuant to this Plan, such repurchased shares shall again become available
for issuance under the Plan.
* The stock of the Company was split twenty for one in February 1996 which
changes this number to 3,100,000.
6. Terms and Conditions of Options. Options may be evidenced by
Stock Option Agreements in such form not inconsistent with this Plan as the
Committee shall from time to time determine; provided that the substance of the
following shall be included in any Stock Option Agreement or in the terms of
the grant of the options:
(a) Option Price. The option price shall not be less than one
hundred percent of the fair market value of the stock on the date the option is
granted. The fair market value of the stock shall be determined in good faith by
the Committee.
(b) Method of Exercise. Shares purchased under options shall
at the time of purchase be paid for in full. To the extent that the right to
purchase shares has accrued thereunder, options may be exercised from time to
time by written notice to the Company stating the number of shares with respect
to which the option is being exercised and the time of the delivery thereof,
which time shall be at least fifteen days after the giving of such notice unless
an earlier date shall have been mutually agreed upon. At the time specified in
such notice, the Company shall, without transfer or issue tax to the optionee (
or other person entitled to exercise the option), deliver to the optionee (or
other person entitled to exercise the option) at the main office of the Company,
or such other place as shall be mutually acceptable, a certificate or
certificates for such shares out of theretofore authorized but unissued or
reacquired Common Stock as the Company may elect. The shares shall be paid for
by certified or bank cashier's check or the equivalent thereof acceptable to the
Company or, in whole or in part, by shares of stock of the Company which have
been owned by the optionee (or other person entitled to exercise the option) for
at least one year. If the optionee (or other person entitled to exercise the
option) fails to accept delivery of and pay for all or any part of the number of
shares specified in such notice upon tender of delivery thereof, his right to
exercise the option with respect to such undelivered shares may be terminated.
(c) Option Term. No option will be exercisable after the expira-
tion of ten years from the date the option is granted.
(d) Exercise of Options. During the first year an option is
outstanding, it may not be exercised with respect to any of the shares covered
thereby; during the second year it may be exercised as to not more than
twenty-five percent of the total number of shares covered thereby; during the
third year it may be exercised as to not more than fifty percent of the total
number of shares covered thereby; during the fourth year it may be exercised as
to not more than seventy-five percent of the total number of shares covered
thereby; and during the fifth year it may be exercised as to one hundred percent
of the total number of shares covered thereby. For the purposes of the preceding
sentence, a year will not be deemed to have expired, thereby increasing the
number of options that may be exercised, until the employee that owns the
options has been employed by the Company for twelve months, not including any
bona fide leaves of absence, after the option has been granted, or after the
preceding "year" has expired (e.g., if an employee, during the first year his
options are outstanding, takes a bona fide leave of absence for two months, the
"second year" set forth in this subsection will not commence until the
expiration of fourteen months after the employee's options are outstanding).
Thereafter, the option may be exercised at any time and from time to time,
within its terms, in whole or in part, but it shall not be exercisable after the
expiration of ten years from the date on which it was granted or after the
earlier termination of the option as provided for in subparagraphs 6(f) or 6(m)
below. Notwithstanding the foregoing, the Committee may, in its discretion,
alter such exercise schedule in any particular option granted and such option
shall reflect the exercise schedule approved by the Committee.
(e) Nonassignability of Option Rights. No option shall be assignable
or transferable by the optionee except by will or by the laws of descent and
distribution. During the life of an optionee, the option shall be exercisable
only by him.
(f) Effect of Termination of Employment, Disability, or Death.
In the event an optionee during his life ceases to be an employee of the Company
or of any parent or subsidiary of the Company for any reason, including
retirement, other than total disability or temporary bona fide leaves of absence
of no longer than ninety days, any option or unexercised portion thereof granted
to him which is otherwise exercisable shall terminate thirty days from the date
on which he ceases to be an employee. In the event an optionee ceases to be an
employee of the Company or of any parent or subsidiary of the Company by reason
of his total disability as defined in Section 105(d) (4) of the Internal Revenue
Code of 1986, as amended, any option or unexercised portion thereof granted to
him which is otherwise exercisable shall terminate one year after the date on
which he ceases to be an employee. In the event of the death of the optionee
while he is an employee of the Company, any option or unexercised portion
thereof granted to him, if otherwise exercisable by the optionee at the date of
death, may be exercised by his personal representatives, heirs, or legatees at
any time prior to the expiration of one year from date of the death of the
optionee and, in any event, no later than ten years from the date the option is
granted or five years from the date the option is granted in the event of an
option granted pursuant to the terms of paragraph 7 below.
(g) Rights as Shareholder. The optionee shall have no rights
as a shareholder with respect to any shares covered by his option until the date
of issuance of a certificate to him for such shares. No adjustment shall be made
for dividends or other rights for which the record date is prior to the date
such certificate is issued.
(h) Amount of Options. An option may not be granted to any
employee if the grant of such option to such employee would otherwise cause the
aggregate fair market value (determined at the time the option is granted) of
the stock for which options are exercisable for the first time by such employee
under all incentive stock option plans of the Company (as defined in Section
422A of the Internal Revenue Code of 1986, as amended) during any calendar year
to exceed $100,000.
(i) Other Outstanding Options. No option granted under this
Plan prior to January 1, 1987 may be exercised while there is outstanding any
other incentive stock option to purchase stock in the Company which was granted
before the granting of such option and (1) which has not been exercised in full,
(2) which has not expired by reason of lapse of time, or (3) which has not been
terminated by the mutual consent of the Company and the optionee. As used in
this subparagraph 6(i), "Company" shall include its parent, subsidiaries, or
their predecessors, if any. Notwithstanding anything to the contrary contained
in this Plan, the foregoing restriction set forth in this paragraph 6(i) shall
apply only to options granted prior to January 1, 1987.
(j) Restrictions. All shares sold pursuant to this Plan shall be
subject to the following restrictions:
(i) If an employee terminates his employment with the Compan
(not including bona fide leaves of absence for less than ninety days) within
five years after an option is granted to him under the Plan, and such termina-
tion is for any reason other then normal retirement, death, total disability,
or early retirement approved by the Company's Board of Directors or the
Committee, the Company shall have the option for a period of thirty days after
the employee's termination of employment to buy for cash all or any part
of the shares purchased by the terminating participant at the then fair
market value of said shares as determined by the Committee.
(ii) In the event a participant who has purchased shares under
this plan terminates his employment with the Company because of normal retire-
ment, death, total disability, or early retirement with the consent of the Board
of Directors or of the Committee, then the Company shall not have the right to
repurchase any of his shares purchased pursuant to this Plan.
(iii) The shares may not be sold, transferred, pledged, or
hypothecated without an opinion of counsel, satisfactory to counsel for
the Company that said sale, transfer, pledge or hypothecation may legally be
made without registration of said shares under federal or state law. This
restriction shall not apply to any shares which are registered under the
Securities Act of 1933, as amended, and appropriate state securities laws.
(iv) The Company shall have the right of first refusal to
purchase any shares purchased pursuant to this Plan which are offered for sale
upon the terms which the seller intends to accept from a third party. This
right of first refusal shall terminate upon the expiration of ten years after
the date the optionee is granted the option or upon the Company becoming
publicly held, whichever occurs first.
(k) Investment Intent. Each optionee shall agree that the
option and any shares purchased pursuant to the option shall be purchased for
investment purposes only, for his own account, and not with a view to
distribution involving a public offering. Each optionee shall also acknowledge
that the option and the shares pertaining to the option are not registered under
the Securities Act of 1933, as amended, the Florida Securities and Investor
Protection Act, or any other state securities law.
(l) Legend. In order to enforce the restrictions imposed upon
shares under this Plan, the Committee may cause a legend or legends to be placed
on any certificates representing shares issued pursuant to this Plan, which
legend or legends shall make appropriate reference to such restrictions.
(m) Change of Control. In the event of a "Change of Control"
(as defined below) of the Company, all options granted pursuant to this Plan
shall vest fully as to all unexercised portions of such options effective twenty
days before the occurrence of the Change of Control. "Change of Control" shall
be deemed to have occurred if:
(i) the transfer of beneficial ownership of more than fifty
percent of the outstanding voting securities of the Company occurs within a
three-month period; or
(ii) the Company merges or is consolidated with another
corporation and as a result of such merger or consolidation less than fifty
percent of the outstanding voting stock of the surviving or resulting corpora-
tion shall be owned in the aggregate by the former shareholders of the Company,
other than affiliates (within the meaning of the Securities Exchange Act of
1934) of any party to such merger or consolidation, as the same shall have
existed immediately prior to such merger or consolidation.
(iii) the Company sells or transfers for value sub-
stantially all of the assets of the Company to another corporation and less
than fifty percent of the outstanding stock of such acquiring corporation shall
be owned in the aggregate by the shareholders of the Company, other than
affiliates (within the meaning of the Securities Exchange Act of 1934) of
any party to such sale as the same shall have existed immediately prior
to such sale.
In the event options which would not otherwise vest, vest and are
exercised in contemplation of a Change in Control pursuant to (m)(ii) or
(m)(iii) above, and such Change in Control does not occur, then either the
Company or the optionee may elect to rescind the vesting and exercise of such
option, such election to be made within thirty days following the vote or
consent in writing of the shareholders of the Company defeating such proposed
Change in Control.
For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(l)(i) (as in effect on the date hereof) pursuant to the Securities
Exchange Act of 1934.
7. Greater than 10% Shareholder. A shareholder who owns more than
ten percent of the total combined voting power of all classes of stock
of the Company may be granted an option pursuant to this Plan if, in additio
to the other terms and restrictions of the Plan, the following
restrictions are complied with: (i) the option price is at least one hundred
ten percent of the fair market value of the stock subject to the option; and
(ii) such option is not exercisable after five years from the date the option is
granted.
8. Escrow. In order to enforce the restrictions imposed upon shares
under this Plan, the Committee may require any participant to enter into an
Escrow Agreement providing that the certificates representing shares issued
pursuant to this Plan shall remain in the physical custody of an escrow holder
until any or all of such restrictions have terminated.
9. Shareholder Approval. This Plan shall be approved by the share-
holders of the Company in any manner which is provided for in the Florida
General Corporation Act to constitute valid shareholder action.
10. Amendment of Plan. The Board of Directors may at any time amend the
Plan, provided that, without the approval of the shareholders, there shall be,
except by operation of the provisions of paragraph 5 above, no increase in the
total number of shares covered by the Plan, there shall be no change in the
class of employees eligible to receive options granted under this Plan, there
shall be no reduction in the option price, there shall be no extension of the
latest date upon which options may be exercised and, provided further, that no
amendment may affect any then outstanding options or any unexercised portions
thereof.
11. Use of Proceeds. The proceeds from the sale of shares pursuant
to options granted under this Plan shall constitute general funds of the
Company.
12. Termination. This Plan shall terminate and no further options shall
be granted hereunder ten years after its initial approval by the Shareholders of
the Company or its initial adoption by the Board of Directors, whichever is
earlier, or such earlier date as may be determined by the Committee. The
termination of this Plan, however, shall not affect any restrictions previously
imposed on shares issued pursuant to this Plan or rights of the Company granted
pursuant to this Plan. Any Option outstanding at the time the Plan is terminated
under this paragraph 12 shall remain in effect until the Option is exercised or
expires.
13. Registration Rights.
(a) Registration of Plan. If any time the Company first
registers any of its capital stock pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), in
connection with a public offering of such capital stock (the "Public Offering"),
the Company shall register the Plan under the Act as soon as practicable after
the Company first becomes eligible to register the Plan on Form S-8 under the
Act.
(b) Piggyback Registration. At least forty-five days prior to
the Public Offering, the Company shall give written notice to the holders (the
"Holders") of shares of common stock issued pursuant to exercise of options
granted under the Plan (the "Eligible Shares") of the Company's intention to do
so and upon written request of the Holders delivered to the Company within
twenty days after receipt of such written notice, the Company will use its best
efforts to register under the Act all Eligible Shares requested to be so
registered by such Holder for sale by the Holder. In the case a registration
affected by the Company in connection with the Public Offering involves an
underwritten public offering, the Company, if requested by any Holder, will
request the underwriters to include the Eligible Shares to be offered and sold
by such Holder among those to be distributed by the underwriters. The piggyback
registration rights granted with respect to shares issued pursuant to exercise
of options granted under the Plan are subordinate to any piggyback registration
rights granted prior to October 1, 1988 to other shareholders.
Any Eligible Shares which are being registered pursuant to this
paragraph 13(b) shall, if so requested by the managing underwriter, be offered
for sale through the underwriters on the same terms and conditions under which
the Company's securities are to be distributed; provided, however, that if the
managing underwriter elects to include less than all of the Eligible Shares to
be offered by selling Holders, the Eligible Shares of the common stock to be
included in the underwritten portion shall be determined on a pro rata basis
among the Holders based on the Eligible Shares which the Holders had requested
to be registered hereunder; provided, further, that those Eligible Shares which
are not being distributed by the underwriters in the Public Offering shall be
withheld from the market by the Holders for a period, not to exceed ninety days
after the underwriting, which the managing underwriter determines necessary in
order to affect the underwriting. In the event of an underwritten offering under
this paragraph 13(b), the Company shall have the right to select the
underwriters thereof.
Holders shall bear any additional registration and qualification fees
and expenses (including underwriter discounts and commissions), and any
additional costs and disbursements of counsel for the Company that result from
the inclusion of Eligible Shares held by the Holder in such registration, with
such additional expenses of the registration being borne by the Holders pro rata
on the basis of the amount of Eligible Shares so registered; provided, that if
any such costs or expenses attributable solely to a Holder do not constitute a
normal cost or expense of such registration, such costs or expenses shall be
allocated to that Holder. In addition, the Holder shall bear the fees and costs
of its own counsel. The Company shall bear all accounting expenses incident to
such registration.
In the case of a registration affected by the Company pursuant to this
paragraph 13(b), the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof. Each Holder
holding securities included in any registration shall furnish the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration referred to in this paragraph
13(b).
(c) Indemnification. The Company shall indemnify each Holder
joining in a registration, qualification or compliance under paragraph 13(b)
hereof and each underwriter who participated in the offering of such securities,
and each other person, if any, who controls such Holder or underwriter within
the meaning of the Act and the rules and regulations thereunder, against any
legal and any other expenses reasonably incurred in connection with
investigating and defending any losses, claims, expenses, damages or liabilities
(or action in respect thereof), joint or several, to which such Holder or
underwriter or controlling person may become subject or incur under the Act, or
otherwise, by reason of any omission or alleged omission from the registration
statement, prospectus, offering circular of the like, of any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or by reason of the fact that such registration statement,
prospectus, offering circular or the like, contains any untrue statement or
alleged untrue statement of a material fact, or by reason of any omission or
alleged omission from any preliminary prospectus or final prospectus contained
in such registration statement of any material fact necessary to be stated
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or by reason of the
fact that such prospectus contained any untrue statement or alleged untrue
statement of a material fact, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Holder or underwriter or controlling person and stated to be
specifically for use therein. Such Holder hereby agrees that it will, upon the
written request of the Company, indemnify the Company to the same extent as the
foregoing indemnity from the Company to it, but only with respect to information
furnished in writing by it, and stated to be specifically for use in such
registration statement or preliminary prospectus or final prospectus. All
references to "registration statement" in this paragraph 13(c) shall include
post-effective amendments and supplements thereto.
Each party entitled to indemnification (the "Indemnified Party") shall
give notice to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claims
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonable be withheld), and the
Indemnified Party may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this paragraph 13(c), unless such failure prejudices or impairs the
Indemnifying Party's response or defense to any such claim or proceeding. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation, and no
Indemnified Party shall consent to entry of any judgment of enter into any
settlement with respect to any such claim or litigation without the prior
written consent of the Indemnifying Party.
Initially adopted by the Board of Directors and Shareholders on May 24, 1983.
