<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 11, 1997
REGISTRATION STATEMENT NO. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
DIGITAL LIGHTWAVE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4313013
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
601 CLEVELAND STREET, FIFTH FLOOR
CLEARWATER, FLORIDA 34615
(813) 442-6677
(Address and telephone number, including area code, of principal executive
offices)
---------------------
1996 STOCK OPTION PLAN
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plans)
---------------------
SETH P. JOSEPH
SENIOR EXECUTIVE VICE PRESIDENT
DIGITAL LIGHTWAVE, INC.
601 CLEVELAND STREET, FIFTH FLOOR
CLEARWATER, FLORIDA 34615
(813) 442-6677
(Name, address and telephone number, including area code, of agent for service)
---------------------
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IMMEDIATELY UPON
FILING WITH THE SECURITIES AND EXCHANGE COMMISSION.
---------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED (1) PER UNIT (2) PRICE (1)(2) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.0001 par value
per share . . . . . . . . . . . . . 5,300,000 $11.64 $61,676,071 $18,690
=========================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
Registrant's outstanding shares of Common Stock.
(2) Estimated solely for the purposes of calculating the registration fee in
accordance with Rule 457(h). The proposed maximum aggregate offering price
is based on (i) the aggregate price of $10,728,373.25 at which the
1,860,493 options currently outstanding may be exercised and (ii) an
assumed offering price of approximately $14.81 per share for the remaining
3,439,507 shares of Common Stock covered by this Registration Statement.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Digital Lightwave, Inc. (the "Registrant") hereby incorporates
by reference into this Registration Statement the following documents
previously filed with the Securities and Exchange Commission (the
"Commission"):
(i) The Registrant's Registration Statement on Form S-1,
filed with the Commission on August 2, 1996, as
amended, Registration Statement No. 333-09457 (the
"S-1 Registration Statement"), under the Securities
Act of 1933, as amended (the "Securities Act").
(ii) The Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996, filed with the
Commission on March 31, 1997.
(iii) The description of the Common Stock contained in the
Registrant's Form 8-A, dated November 1, 1996 and
filed with the Commission on November 2, 1996,
pursuant to Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), for
registration of the Common Stock, including any
amendment or report filed for the purpose of updating
such description.
(iv) The Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997, filed with the
Commission on May 14, 1997.
(v) The Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997, filed with the
Commission on August 14, 1997.
All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
II-1
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under the Delaware General
Corporation Law to indemnify all directors and officers to the extent provided
in such law. The Registrant's Certificate of Incorporation and Bylaws provide
that the Registrant shall indemnify its directors and officers to the fullest
extent permitted by such law. The Registrant has also entered into an
agreement with each of its directors and certain of its officers wherein it has
agreed to indemnify each of them to the fullest extent permitted by law.
At present, there is no pending litigation or proceeding
involving a director or officer of the Registrant as to which indemnification
is being sought, nor is the Registrant aware of any threatened litigation that
may result in claims for indemnification by any officer or director.
Pursuant to the Underwriting Agreement filed as Exhibit 1.01
to the S-1 Registration Statement, the Underwriters have agreed to indemnify
the directors, officers and controlling persons of the Registrant against
certain civil liabilities that may be incurred in connection with the
Registrant's initial public offering, including certain liabilities under the
Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.01* -- Registrant's Certificate of Incorporation.
4.02* -- Registrant's Amendment to Certificate of Incorporation
dated January 8, 1997.
4.03* -- Registrant's Amended and Restated Bylaws.
4.04* -- Specimen Certificate for the Common Stock.
5.01 -- Opinion of Baker & McKenzie.
23.01 -- Consent of Baker & McKenzie (included in Exhibit 5.01).
23.02 -- Consent of Coopers & Lybrand L.L.P.
24.01 -- Power of Attorney -- Reference is made to page II-4 of
this Registration Statement.
99.01* -- Registrant's 1996 Stock Option Plan.
99.02 -- Registrant's 1997 Employee Stock Purchase Plan.
- -----------------
* Incorporated by reference from the Registrant's S-1 Registration
Statement.
II-2
<PAGE> 4
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or
sales are being made, a post-effective amendment to this Registration
Statement: (i) to include any prospectus required by Section 10(a)(3) of the
Securities Act, (ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, (x) that clauses (1)(i) and (1)(ii)
shall not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference into this
Registration Statement;
(2) that, for the purpose of determining any
liability under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold upon the termination of the Registrant's 1996 Stock Option Plan.
B. The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 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 this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
II-3
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all 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 Clearwater, State of Florida, on this 11th day
of September, 1997.
DIGITAL LIGHTWAVE, INC.
By: /s/ BRYAN J. ZWAN
-----------------------------------
Bryan J. Zwan
Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Bryan J. Zwan and Seth P. Joseph,
and each of them acting individually, as his or her attorney-in-fact, each with
full power of substitution, for him or her in any and all capacities, to sign
any and all amendments to this Registration Statement, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming his or her
signature as it may be signed by said attorney-in-fact to any and all
amendments to this Registration Statement.
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities indicated on September 11, 1997.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ BRYAN J. ZWAN Chairman of the Board, Chief Executive Officer,
----------------------------------------------- President and Director (Principal Executive Officer)
Bryan J. Zwan
/s/ MICHAEL TINSLEY Controller (Principal Financial and Accounting Officer)
-----------------------------------------------
Michael Tinsley
/s/ WILLIAM SEIFERT Director
-----------------------------------------------
William Seifert
/s/ SETH P. JOSEPH Senior Executive Vice President and Director
-----------------------------------------------
Seth P. Joseph
/s/ WILLIAM F. HAMILTON Director
-----------------------------------------------
William F. Hamilton
/s/ WILLIAM JEFFERSON MARSHALL Director
-----------------------------------------------
William Jefferson Marshall
</TABLE>
II-4
<PAGE> 6
EXHIBIT INDEX
4.01* -- Registrant's Certificate of Incorporation.
4.02* -- Registrant's Amendment to Certificate of Incorporation
dated January 8, 1997.
4.03* -- Registrant's Amended and Restated Bylaws.
4.04* -- Specimen Certificate for the Common Stock.
5.01 -- Opinion of Baker & McKenzie.
23.01 -- Consent of Baker & McKenzie (included in Exhibit 5.01).
23.02 -- Consent of Coopers & Lybrand L.L.P.
24.01 -- Power of Attorney -- Reference is made to page II-4 of
this Registration Statement.
99.01* -- Registrant's 1996 Stock Option Plan.
99.02 -- Registrant's 1997 Employee Stock Purchase Plan.
* Incorporated by reference from the Registrant's S-1 Registration
Statement.
II-4
<PAGE> 1
EXHIBIT 5.1
September 2, 1997
Digital Lightwave, Inc.
601 Cleveland Street, Fifth Floor
Clearwater, Florida 34615
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you with
the Securities and Exchange Commission on or about September 11, 1997, in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 5,300,000 shares of Common Stock, $0.0001 par value per
share (the "Shares"), of Digital Lightwave, Inc., a Delaware corporation (the
"Company"), reserved for issuance under the Company's 1996 Stock Option Plan
(the "1996 Plan") and 1997 Employee Stock Purchase Plan (the "1997 Plan") and
(ii) pursuant to options granted under the 1996 Plan and the 1997 Plan
(hereinafter referred to collectively as, the "Digital Lightwave Plans").
As your legal counsel, we have examined the Company's Certificate of
Incorporation and all amendments thereto, the Company's Bylaws, the written
Digital Lightwave Plans, records of corporate proceedings with respect to the
Digital Lightwave Plans and such documents as we have deemed necessary in
connection with the issuance of the Shares.
Based upon the foregoing examinations and upon applicable laws, we are of the
opinion that upon the receipt by the Company of full payment for the Shares in
accordance with the terms and conditions of the Digital Lightwave Plans, the
Shares, when offered and sold in the manner provided for in the Registration
Statement, will be legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to said Registration
Statement and further consent to the use of our name wherever appearing in said
Registration Statement and amendments thereto.
Very truly yours,
BAKER & MCKENZIE
/s/ BAKER & McKENZIE
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Digital Lightwave, Inc. on Form S-8 of our report dated January 15, 1997,
except for the information in Notes 6 and 12, for which the date is February 28
and 5, 1997, respectively, on our audits of the financial statements of Digital
Lightwave, Inc. as of December 31, 1995 and 1996 and for each of the three
years in the period ended December 31, 1996, which report is included in
Digital Lightwave, Inc.'s 1996 Annual Report on Form 10-K and our report dated
October 21, 1996, except as to certain information in Note 10 for which the
date is December 5, 1996, on our audits of the financial statements of Digital
Lightwave, Inc. as of December 31, 1994 and 1995, and September 30, 1996 and
for the years ended December 31, 1993, 1994, and 1995 and for the nine months
ended September 30, 1996, which report is included in Digital Lightwave, Inc.'s
Registration Statement on Form S-1 (No. 333-09457). We also consent to the
reference to our firm under the captions "Experts" and "Selected Financial
Data" in Digital Lightwave, Inc.'s Registration Statement on Form S-1 (No.
333-09457).
COOPERS & LYBRAND L.L.P.
Tampa, Florida
September 5, 1997
<PAGE> 1
EXHIBIT 99.2
DIGITAL LIGHTWAVE, INC.
EMPLOYEE STOCK PURCHASE PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
1. PURPOSE 1
2. DEFINITIONS 1
3. ELIGIBILITY 3
4. PARTICIPATION 3
5. OFFERING 4
6. PURCHASE OF STOCK 6
7. PAYMENT AND DELIVERY 6
8. RECAPITALIZATION 6
9. MERGER, LIQUIDATION, OTHER CORPORATION TRANSACTIONS 7
10. TRANSFERABILITY 7
11. AMENDMENT OR TERMINATION OF THE PLAN 7
12. ADMINISTRATION 8
13. COMMITTEE RULES FOR FOREIGN JURISDICTIONS 8
14. SECURITIES LAWS REQUIREMENTS 9
15. GOVERNMENT REGULATIONS 9
16. NO ENLARGEMENT OF EMPLOYEE RIGHTS 9
17. GOVERNING LAW 9
18. EFFECTIVE DATE 9
</TABLE>
<PAGE> 3
DIGITAL LIGHTWAVE, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The purpose of this Plan is to provide an opportunity for
Employees of Digital Lightwave, Inc. (the "Corporation") and its Designated
Subsidiaries, to purchase Common Stock of the Corporation and thereby to have
an additional incentive to contribute to the prosperity of the Corporation. It
is the intention of the Corporation that the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended, although the Corporation makes no undertaking nor representation to
maintain such qualification.
2. DEFINITIONS.
(a) "BOARD" shall mean the Board of Directors of the Corporation.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "COMMITTEE" shall mean the committee appointed by the Board in
accordance with Section 12 of the Plan.
(d) "COMMON STOCK" shall mean the Common Stock of the Corporation,
or any stock into which such Common Stock may be converted.
(e) "COMPENSATION" shall mean an Employee's wages or salary and
other amounts payable to an Employee on account of personal services rendered
by the Employee to the Corporation or a Designated Subsidiary and which are
reportable as wages or other compensation on the Employee's Form W-2, plus
pre-tax contributions of the Employee under a cash or deferred arrangement
(401(k) plan) or cafeteria plan maintained by the Corporation or a Designated
Subsidiary, but excluding, however, (1) non-cash fringe benefits, (2) special
payments as determined by the Committee (e.g., moving expenses, unused
vacation, severance pay), (3) income from the exercise of stock options or
other stock purchases and (4) any other items of Compensation as determined by
the Committee.
(f) "CORPORATION" shall mean Digital Lightwave, Inc., a Delaware
corporation.
(g) "DESIGNATED SUBSIDIARY" shall mean a Subsidiary which has been
designated by the Board as eligible to participate in the Plan.
(h) "EMPLOYEE" shall mean an individual classified as an employee
(within the meaning of Code Section 3401(c) and the regulations thereunder) by
the
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<PAGE> 4
Corporation or a Designated Subsidiary on the Corporation payroll records
during the relevant participation period.
(i) "ENTRY DATE" shall mean the first day of each Option Period.
(j) "EXERCISE DATE" shall mean the last business day of each
Exercise Period.
(k) "EXERCISE PERIOD" shall mean a three-month, six-month or other
period as determined by the Board. The first Exercise Period during an Option
Period shall commence on the first day of such Option Period. Subsequent
Exercise Periods, if any, shall run consecutively after the termination of the
preceding Exercise Period. The last Exercise Period in an Option Period shall
terminate on the last day of such Option Period.
(l) "FAIR MARKET VALUE" shall mean the value of one (1) share
of Common Stock on the relevant date, determined as follows:
(1) If the shares are traded on an exchange, the
reported "closing price" on the next preceding trading day;
(2) If the shares are traded over-the-counter on the
NASDAQ System or on the NASDAQ National Market System, the mean between the
highest bid and the highest asked prices on said System on the next preceding
trading day; and
(3) If neither (1) nor (2) applies, the fair market
value as determined by the Committee in good faith. Such determination shall
be conclusive and binding on all persons.
(m) "OPTION PERIOD" shall mean a period of up to twenty-seven
(27) months as determined by the Committee. The Board may determine that the
Option Period and the Exercise Period are the same.
(n) "PARTICIPANT" shall mean a participant in the Plan as
described in Section 4 of the Plan.
(o) "PLAN" shall mean this employee stock purchase plan.
(p) "SHAREHOLDER" shall mean a record holder of shares
entitled to vote shares of Common Stock under the Corporation's by-laws.
(q) "SUBSIDIARY" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, as described in Code Section 424(f).
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<PAGE> 5
3. ELIGIBILITY.
Any Employee regularly employed on a full-time basis by the
Corporation or by any Designated Subsidiary on an Entry Date shall be eligible
to participate in the Plan with respect to the Option Period commencing on such
Entry Date, provided that the Committee may establish administrative rules
requiring that employment commence some minimum period (e.g., one pay period)
prior to an Entry Date to be eligible to participate with respect to that Entry
Date and provided further that (1) the Board may extend eligibility to
part-time Employees pursuant to criteria and procedures established by the
Committee and (2) the Board may impose an eligibility period on participation
of up to two years with respect to participation on any prospective Entry Date.
The Board may also determine that a designated group of highly compensated
Employees (e.g., Employees subject to Section 16(b) of the Securities Exchange
Act of 1934) are ineligible to participate in the Plan. An Employee shall be
considered employed on a full-time basis unless his or her customary employment
is less than 20 hours per week or five months per year. No Employee may
participate in the Plan if immediately after an option is granted the Employee
owns or is considered to own (within the meaning of Code Section 424(d)),
shares of stock, including stock which the Employee may purchase by conversion
of convertible securities or under outstanding options granted by the
Corporation, possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Corporation or of any of its
Subsidiaries. All Employees who participate in the Plan shall have the same
rights and privileges under the Plan except for differences which may be
mandated by local law and which are consistent with Code Section 423(b)(5).
The Board may impose restrictions on eligibility and participation of Employees
who are officers and directors to facilitate compliance with federal or state
securities laws or foreign laws.
4. PARTICIPATION.
4.1 An Employee who is eligible to participate in the Plan in
accordance with Section 3 may become a Participant by filing, on a date
prescribed by the Committee prior to an applicable Entry Date, a completed
payroll deduction authorization and Plan enrollment form provided by the
Corporation. An eligible Employee may authorize payroll deductions at the rate
of any whole percentage of the Employee's Compensation, not to exceed fifteen
percent (15%) of the Employee's Compensation, or such lesser percentage as
specified by the Committee as applied to an Entry Date or Option Period. All
payroll deductions may be held by the Corporation and commingled with its other
corporate funds. No interest shall be paid or credited to the Participant with
respect to such payroll deductions except where required by local law as
determined by the Committee. A separate bookkeeping account for each
Participant shall be maintained by the Corporation under the Plan and the
amount of each Participant's payroll deductions shall be credited to such
account. A Participant may not make any additional payments into such account.
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<PAGE> 6
4.2 Under procedures established by the Committee, a
Participant may suspend or discontinue participation in the Plan at any time
during an Exercise Period by completing and filing a new payroll deduction
authorization and Plan enrollment form with the Corporation. A Participant may
increase or decrease his or her rate of payroll deductions only effective on an
Entry Date by filing a new payroll deduction authorization and Plan enrollment
form. If a new payroll deduction authorization and Plan enrollment form is not
filed with the Corporation, the rate of payroll deductions shall continue at
the originally elected rate throughout the Option Period unless the Board
determines to change the permissible rate.
If a Participant suspends participation during an Exercise Period,
his or her accumulated payroll deductions will remain in the Plan for purchase
of shares as specified in Section 6 on the following Exercise Date, but the
Participant will not again participate until he or she completes a new payroll
deduction authorization and Plan enrollment form. The Committee may establish
rules limiting the frequency with which Participants may suspend and resume
payroll deductions under the Plan and may impose a waiting period on
Participants wishing to resume suspended payroll deductions. If a Participant
discontinues participation in the Plan, the amount credited to the
Participant's individual account shall be paid to the Participant without
interest (except where required by local law). In the event any Participant
terminates employment with the Corporation or any Subsidiary for any reason
(including death) prior to the expiration of an Option Period, the
Participant's participation in the Plan shall terminate and all amounts
credited to the Participant's account shall be paid to the Participant or the
Participant's estate without interest (except where required by local law).
Whether a termination of employment has occurred shall be determined by the
Committee. The Committee may also establish rules regarding when leaves of
absence or change of employment status (e.g., from full-time to part-time) will
be considered to be a termination of employment, and the Committee may
establish termination of employment procedures for this Plan which are
independent of similar rules established under other benefit plans of the
Corporation and its Subsidiaries.
In the event of a Participant's death, any accumulated payroll
deductions will be paid, without interest, to the estate of the Participant.
5. OFFERING.
5.1 The maximum number of shares of Common Stock which may be
issued pursuant to the Plan shall be 300,000 shares. The Board may designate
any amount of available shares for offering for any Option Period determined
pursuant to Section 5.2.
5.2 Each Option Period, Entry Date and Exercise Period shall
be determined by the Board. The Board shall have the power to change the
duration of future Option Periods or future Exercise Periods, and to determine
whether or not to have overlapping Option Periods, with respect to any
prospective offering,
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<PAGE> 7
without shareholder approval, and without regard to the expectations of any
Participants.
5.3 With respect to each Option Period, each eligible Employee
who has elected to participate as provided in Section 4.1 shall be granted an
option to purchase that number of shares of Common Stock which may be purchased
with the payroll deductions accumulated on behalf of such Employee (assuming
payroll deductions at a rate of 15% of Compensation) during each Exercise
Period within such Option Period at the purchase price specified in Section 5.4
below; provided, however, (1) in no event shall the Employee be entitled to
accrue rights to purchase shares under the Plan (and all other employee stock
purchase plans, as defined in Code Section 423, of the Corporation and its
subsidiaries) at a rate which exceeds $25,000 of the Fair Market Value of such
stock (determined at the time the option is granted) for any calendar year in
which such option is outstanding at any time, and (2) the maximum shares
subject to any option shall in no event exceed 1,500.
5.4 The option price under each option shall be the lower of:
(i) a percentage (not less than eighty-five percent (85%)) established by the
Board ("Designated Percentage") of the Fair Market Value of the Common Stock on
the Entry Date on which an option is granted, or (ii) the Designated Percentage
of the Fair Market Value on the Exercise Date on which the Common Stock is
purchased. The Board may change the Designated Percentage with respect to any
future Option Period, but not below eighty-five percent (85%).
5.5 If the total number of shares of Common Stock for which
options granted under the Plan are exercisable exceeds the maximum number of
shares offered on any Entry Date, the number of shares which may be purchased
under options granted on the Entry Date shall be reduced on a pro rata basis in
as nearly a uniform manner as shall be practicable and equitable. In this
event, payroll deductions shall also be reduced or refunded accordingly. If an
Employee's payroll deductions during any Exercise Period exceeds the purchase
price for the maximum number of shares permitted to be purchased under Section
5.3, the excess shall be refunded to the Participant without interest (except
where otherwise required by local law).
5.6 In the event that the Fair Market Value of the
Corporation's Common Stock is lower on the first day of an Exercise Period
within an Option Period (subsequent "Reassessment Date") than it was on the
Entry Date for such Option Period, all Employees participating in the Plan on
the Reassessment Date shall be deemed to have relinquished the unexercised
portion of the option granted on the Entry Date and to have enrolled in and
received a new option commencing on such Reassessment Date, unless the Board
has determined not to permit overlapping Option Periods or to restrict such
transfers to lower price Option Periods.
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<PAGE> 8
6. PURCHASE OF STOCK.
Upon the expiration of each Exercise Period, a Participant's
option shall be exercised automatically for the purchase of that number of full
shares of Common Stock which the accumulated payroll deductions credited to
the Participant's account at that time shall purchase at the applicable price
specified in Section 5.4.
7. PAYMENT AND DELIVERY.
Upon the exercise of an option, the Corporation shall deliver to
the Participant the Common Stock purchased and the balance of any amount of
payroll deductions credited to the Participant's account not used for the
purchase. The Board may permit or require that shares be deposited directly
with a broker designated by the Participant (or a broker selected by the
Committee) or to a designated agent of the Company, and the Committee may
utilize electronic or automated methods of share transfer. The Board may
require that shares be retained with such broker or agent for a designated
period of time (and may restrict dispositions during that period) and/or may
establish other procedures to permit tracking of disqualifying dispositions of
such shares or to restrict transfer of such shares. To the extent the unused
cash balance represents a fractional share, the unused cash balance credited to
the Participant's account shall be carried over to the next Exercise Period, if
the Participant is also a Participant in the Plan at that time or refunded to
the Participant, as determined by the Committee. The Corporation shall retain
the amount of payroll deductions used to purchase Common Stock as full payment
for the Common Stock and the Common Stock shall then be fully paid and
non-assessable. No Participant shall have any voting, dividend, or other
stockholder rights with respect to shares subject to any option granted under
the Plan until the option has been exercised and shares issued.
8. RECAPITALIZATION.
If after the grant of an option, but prior to the purchase of
Common Stock under the option, there is any increase or decrease in the number
of outstanding shares of Common Stock because of a stock split, stock dividend,
combination or recapitalization of shares subject to options, the number of
shares to be purchased pursuant to an option, the share limit of Section 5.3
and the maximum number of shares specified in Section 5.1 shall be
proportionately increased or decreased, the terms relating to the purchase
price with respect to the option shall be appropriately adjusted by the Board,
and the Board shall take any further actions which, in the exercise of its
discretion, may be necessary or appropriate under the circumstances.
The Board, if it so determines in the exercise of its sole
discretion, also may adjust the number of shares specified in Section 5.1, as
well as the price per share of Common Stock covered by each outstanding option
and the maximum number of shares subject to any individual option, in the event
the Corporation
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effects one or more reorganizations, recapitalizations, spin-offs, split-ups,
rights offerings or reductions of shares of its outstanding Common Stock.
The Board's determinations under this Section 8 shall be
conclusive and binding on all parties.
9. MERGER, LIQUIDATION, OTHER CORPORATION TRANSACTIONS.
In the event of the proposed liquidation or dissolution of the
Corporation, the Option Period will terminate immediately prior to the
consummation of such proposed transaction, unless otherwise provided by the
Board in its sole discretion, and all outstanding options shall automatically
terminate and the amounts of all payroll deductions will be refunded without
interest to the Participants.
In the event of a proposed sale of all or substantially all of the
assets of the Corporation, or the merger or consolidation of the Corporation
with or into another corporation, then in the sole discretion of the Board, (1)
each option shall be assumed or an equivalent option shall be substituted by
the successor corporation or parent or subsidiary of such successor
corporation, (2) a date established by the Board on or before the date of
consummation of such merger, consolidation or sale shall be treated as an
Exercise Date, and all outstanding options shall be deemed exercisable on such
date or (3) all outstanding options shall terminate and the accumulated payroll
deductions shall be returned to the Participants.
10. TRANSFERABILITY.
Options granted to Participants may not be voluntarily or
involuntarily assigned, transferred, pledged, or otherwise disposed of in any
way, and any attempted assignment, transfer, pledge, or other disposition shall
be null and void and without effect. If a Participant in any manner attempts
to transfer, assign or otherwise encumber his or her rights or interest under
the Plan, other than as permitted by the Code, such act shall be treated as an
election by the participant to discontinue participation in the Plan pursuant
to Section 4.2.
11. AMENDMENT OR TERMINATION OF THE PLAN.
11.1 The Plan shall continue until, June 30, 2007 unless
previously terminated in accordance with Section 11.2.
11.2 The Board may, in its sole discretion, insofar as
permitted by law, terminate or suspend the Plan, or revise or amend it in any
respect whatsoever, except that, without approval of the shareholders, no such
revision or amendment shall:
(a) materially increase the number of shares subject
to the Plan, other than an adjustment under Section 8 of the Plan;
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(b) materially modify the requirements as to
eligibility for participation in the Plan, except as otherwise specified in
this Plan;
(c) materially increase the benefits accruing to
Participants;
(d) reduce the purchase price specified in
Section 5.4, except as specified in Section 8;
(e) extend the term of the Plan beyond the date
specified in Section 11.1; or
(f) amend this Section 11.2 to defeat its purpose.
12. ADMINISTRATION.
The Board shall appoint a Committee consisting of at least two
members who will serve for such period of time as the Board may specify and who
may be removed by the Board at any time. The Committee will have the authority
and responsibility for the day-to-day administration of the Plan, the authority
and responsibility specifically provided in this Plan and any additional
duties, responsibility and authority delegated to the Committee by the Board,
which may include any of the functions assigned to the Board in this Plan. The
Committee shall have full power and authority to promulgate any rules and
regulations which it deems necessary for the proper administration of the Plan,
to interpret the provisions and supervise the administration of the Plan, and
to take all action in connection with administration of the Plan as it deems
necessary or advisable, consistent with the delegation from the Board.
Decisions of the Board and the Committee shall be final and binding upon all
participants. Any decision reduced to writing and signed by a majority of the
members of the Committee shall be fully effective as if it had been made at a
meeting of the Committee duly held. The Corporation shall pay all expenses
incurred in the administration of the Plan. No Board or Committee member shall
be liable for any action or determination made in good faith with respect to
the Plan or any option granted thereunder.
13. COMMITTEE RULES FOR FOREIGN JURISDICTIONS.
The Committee may adopt rules or procedures relating to the
operation and administration of the Plan in non-United States jurisdictions to
accommodate the specific requirements of local laws and procedures. Without
limiting the generality of the foregoing, the Committee is specifically
authorized to adopt rules and procedures regarding handling of payroll
deductions, payment of interest, conversion of local currency, withholding
procedures and handling of stock certificates which vary with local
requirements.
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14. SECURITIES LAWS REQUIREMENTS.
The Corporation shall not be under any obligation to issue Common
Stock upon the exercise of any option unless and until the Corporation has
determined that: (i) it and the Participant have taken all actions required to
register the Common Stock under the Securities Act of 1933, or to perfect an
exemption from the registration requirements thereof; (ii) any applicable
listing requirement of any stock exchange on which the Common Stock is listed
has been satisfied; and (iii) all other applicable provisions of state, federal
and applicable foreign law have been satisfied.
15. GOVERNMENTAL REGULATIONS.
This Plan and the Corporation's obligation to sell and deliver
shares of its stock under the Plan shall be subject to the approval of any
governmental authority required in connection with the Plan or the
authorization, issuance, sale, or delivery of stock hereunder.
16. NO ENLARGEMENT OF EMPLOYEE RIGHTS.
Nothing contained in this Plan shall be deemed to give any
Employee the right to be retained in the employ of the Corporation or any
Designated Subsidiary or to interfere with the right of the Corporation or
Designated Subsidiary to discharge any Employee at any time.
17. GOVERNING LAW.
This Plan shall be governed by Delaware law.
18. EFFECTIVE DATE.
This Plan shall be effective on September 1, 1997, subject to
approval of the shareholders of the Corporation within 12 months of its
adoption by the Board of Directors.
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