<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 3, 1999.
REGISTRATION NO. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DOCUMENT SCIENCES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0485994
-------------- ----------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
6339 PASEO DEL LAGO
CARLSBAD, CA 92009
(ADDRESS, INCLUDING ZIP CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
1997 EMPLOYEE STOCK PURCHASE PLAN
(FULL TITLE OF THE PLAN)
BARTON L. FABER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DOCUMENT SCIENCES CORPORATION
6339 PASEO DEL LAGO
CARLSBAD, CA 92009
(760) 602-1400
NAME, ADDRESS, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
MARK A. BERTELSEN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(415) 493-9300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE FEE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value,
reserved for issuance under the
1997 Employee Stock Purchase Plan
(the "Plan") 211,639 $ 1.646875 $348,542.98 $ 97.00
TOTAL ............... 211,639 $348,542.98 $ 97.00
======= =========== =======
=======================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Plan being registered pursuant
to this Registration Statement by reason of any stock dividend, stock
split, recapitalization or any 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 in accordance with Rule 457(h) under the Securities Act of 1933
(the "Securities Act") solely for the purpose of calculating the
registration fee. The computation is based upon the average of the high and
low sale prices of the Common Stock as reported on The Nasdaq National
Market on August 27, 1999, multiplied by 85%, which is the percentage of
the trading purchase price applicable to purchases under the referenced
Plan.
================================================================================
<PAGE> 2
DOCUMENT SCIENCES CORPORATION
REGISTRATION STATEMENT ON FORM S-8
PART I
INFORMATION REQUIRED IN THIS PROSPECTUS
Omitted pursuant to the instructions and provisions of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in this Registration Statement
the following documents and information heretofore filed with the Securities and
Exchange Commission (the "Commission") by Document Sciences Corporation (the
"Registrant"):
(1) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 filed with the Commission on March 31, 1999
pursuant to Section 13(a) the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(2) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999 filed with the Commission on May 14, 1999 pursuant to
Section 13(a) of the Exchange Act.
(3) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999 filed with the Commission on August 13, 1999 pursuant
to Section 13(a) of the Exchange Act.
(4) The Registrant's Definitive Proxy Statement on Schedule 14A filed
with the Commission on April 30, 1999 pursuant to Section 14(a) of
the Exchange Act.
(5) The description of Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the
Commission on July 10, 1996 pursuant to Section 12(g) of the
Exchange Act, as amended on August 9, 1996, including any amendment
or report filed for the purpose of updating such description.
In addition, all documents subsequently filed with the Commission by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
on or after the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold under
this Registration Statement, shall be deemed to be incorporated by reference in
this Registration Statement and to be part hereof from the date of filing of
such documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the
<PAGE> 3
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 earlier statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933.
The Registrant's Bylaws provide for mandatory indemnification of its directors
and officers and permissible indemnification of employees and other agents to
the fullest extent permitted by the Delaware General Corporation Law. In
addition, the Registrant's Amended and Restated Certificate of Incorporation
provides that, to the fullest extent permitted by the Delaware General
Corporation Law, its directors shall not be personally liable for monetary
damages for breach of the directors' fiduciary duties as directors to the
Registrant and its stockholders. This provision in the Amended and Restated
Certificate of Incorporation does not eliminate the directors' fiduciary duty,
and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain under Delaware law. Further, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to the Registrant, for acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law, for acts or
omissions that the director believes to be contrary to the best interests of the
Registrant or its stockholders, for any transaction from which the director
derived an improper personal benefit, for acts or omissions involving a reckless
disregard for the director's duty to the Registrant or its stockholders when the
director was aware or should have been aware of a risk of serious injury to the
Registrant or its stockholders, for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the Registrant or its stockholders, for improper transactions between
the director and the Registrant and for improper distributions to stockholders
and loans to directors and officers. This provision also does not affect a
director's responsibilities under any other laws, such as the federal securities
laws or state or federal environmental laws. In addition, the Registrant has
entered into contractual agreements with each of its directors and certain
officers of the Registrant designated by the Board to indemnify such individuals
to the fullest extent permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
II-2
<PAGE> 4
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- ------------------------------------------------------------
<S> <C>
4.1 1997 Employee Stock Purchase Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C., with
respect to the securities being registered.
23.1 Consent of Independent Auditors.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
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 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 of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 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 Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carlsbad, State of California, on this 31st day
of August 1999.
DOCUMENT SCIENCES CORPORATION
By: /s/ Barton L. Faber
----------------------------------
Barton L. Faber, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Barton L. Faber and John H. Wilson,
jointly and severally, his or her attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8 and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------------------------- --------------------------------------- ---------------
<S> <C> <C>
/s/ Barton L. Faber President, Chief Executive Officer and August 31, 1999
- --------------------------- Director (Principal Executive Officer)
Barton L. Faber
/s/ John H. Wilson Vice President, Finance August 31, 1999
- --------------------------- (Principal Financial and Accounting
John H. Wilson Officer)
/s/ Thomas L. Ringer Chairman of the Board of Directors August 31, 1999
- ---------------------------
Thomas L. Ringer
/s/ Charles P. Holt Director August 31, 1999
- ---------------------------
Charles P. Holt
/s/ Colin J. O'Brien Director August 31, 1999
- ---------------------------
Colin J. O'Brien
/s/ Brian E. Stern Director August 31, 1999
- ---------------------------
Brian E. Stern
</TABLE>
II-4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- ------------------------------------------------------------
<S> <C>
4.1 1997 Employee Stock Purchase Plan.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C., with
respect to the securities being registered.
23.1 Consent of Independent Auditors.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
DOCUMENT SCIENCES CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1997 Employee Stock
Purchase Plan of Document Sciences Corporation.
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the common stock of the Company.
(d) "Company" shall mean Document Sciences Corporation, a Delaware
corporation, and any Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross earnings
and sales commissions, overtime pay and cash bonuses.
(f) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "Employee" shall mean any Employee of the Company for tax
purposes whose customary employment with the Company is at least twenty (20)
hours per week and more than five (5) months in any calendar year. For purposes
of the Plan, the employment relationship shall be treated as continuing intact
while the individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the employment
relationship will be deemed to have terminated on the 91st day of such leave.
(h) "Enrollment Date" shall mean the first day of each Offering
Period.
(i) "Exercise Date" shall mean the last day of each Offering Period.
<PAGE> 2
(j) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation The Nasdaq
National Market or the Nasdaq Small Cap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable, or;
(2) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of such determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable, or;
(3) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.
(k) "Offering Period" shall mean a period of approximately six (6)
months, commencing on an Enrollment Date and terminating on an Exercise Date.
The first Offering Period shall commence on the first Trading Day following June
1, 1997 and shall terminate on the last Trading Day of the sixth month following
the commencement of the Offering Period. Thereafter, Offering Periods shall
commence on the first Trading Day following termination of the prior Offering
Period and shall terminate on the last Trading Day of the sixth month following
commencement of such Offering Period.
(l) "Parent" shall mean any corporation, domestic or foreign, in an
unbroken chain of corporations ending with the Company if each corporation in
the chain (other than the Company) owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
(m) "Plan" shall mean this 1997 Employee Stock Purchase Plan.
(n) "Purchase Price" shall mean an amount equal to not less than 85%
of the Fair Market Value of a share of Common Stock on the Enrollment Date or on
the Exercise Date, whichever is lower. If the Enrollment Date shall fall on a
Saturday, Sunday, or other legal holiday, the Fair Market Value shall be
determined as of the trading day immediately preceding the Enrollment Date.
(o) "Reserves" shall mean the number of Treasury Shares covered by
each option under the Plan which have not yet been exercised and the number of
Treasury Shares which have been authorized for issuance under the Plan but not
yet placed under option.
(p) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
2
<PAGE> 3
(q) "Trading Day" shall mean a day on which national stock exchanges
and The Nasdaq Stock Market are open for trading.
(r) "Treasury Shares" shall mean shares of Common Stock that have
been previously issued to stockholders and reacquired by the Company.
3. Eligibility.
(a) Any Employee (as defined in Section 2(g)), who shall be employed
by the Company on a given Enrollment Date shall be eligible to participate in
the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i)to the extent, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own
capital stock and/or hold outstanding options to purchase such stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Parent, Subsidiary, or
(ii) to the extent his or her rights to purchase stock under all employee stock
purchase plans (as defined in Section 423(b) of the Code) of the Company and any
Parent or its subsidiaries will not accrue at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) worth of stock (determined at the fair market value
of the shares at the time such option is granted) for each calendar year in
which such option is outstanding at any time. The accrual of rights to purchase
stock shall be determined in accordance with Section 423(b)(8) of the Code.
4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods. The first Offering Period shall commence on the first Trading
Day following June 1, 1997 and shall terminate on the last Trading Day of the
sixth month following the commencement of the Offering Period. Thereafter,
Offering Periods shall commence on the first Trading Day following Exercise Date
of the prior Offering Period and shall terminate on the last Trading Day of the
sixth month following commencement of such Offering Period. The Board shall have
the power to change the duration of Offering Periods (including the commencement
dates thereof) with respect to future offerings without shareholder approval if
such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period to be affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a enrollment agreement authorizing payroll deductions in the form of
Exhibit A to this Plan and filing it with the Company's Human Resources office
not later than one day prior to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which
3
<PAGE> 4
such authorization is applicable, unless sooner terminated by the participant as
provided in Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her enrollment agreement,
he or she shall elect to have payroll deductions made on each pay day during an
Offering Period in an amount not exceeding ten percent (10%) of the Compensation
which he or she receives on each pay day during the Offering Period.
(b) All payroll deductions made for a participant shall be credited
to his or her account under the Plan and will be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, but may not otherwise increase or
decrease the rate of his or her payroll deductions during the Offering Period. A
participant's enrollment agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year (the "Current
Offering Period") that the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in a prior Offering Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Offering Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such participant's enrollment agreement
at the beginning of the first Offering Period which is scheduled to end in the
following calendar year, unless terminated by the participant as provided in
Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but will not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the participant's account as of the
Exercise Date by the applicable Purchase Price. During a six month Offering
Period no
4
<PAGE> 5
Employee shall be permitted to purchase more than 5,000 shares (or such lesser
number determined by the Administrator; provided, however, that such limit shall
be adjusted proportionately in the event of an Offering Period longer than six
months. All such purchases shall also be subject to the limitations set forth in
Sections 3(b) and 12 hereof. Exercise of the option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof, and shall expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be carried over in the participant's account into the next
Offering Period. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the shares shall be credited to an account in
the participant's name with a brokerage firm selected by the Plan Committee to
hold the shares in it's street name.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time up to two weeks prior to any Exercise Date
by giving written notice to the Company in the form of Exhibit B to this Plan.
All of the participant's payroll deductions credited to his or her account will
be paid to such participant promptly after receipt of notice of withdrawal, such
participant's option for the Offering Period will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made during
the Offering Period. If a participant withdraws from an Offering Period, payroll
deductions will not resume at the beginning of the succeeding Offering Period
unless the participant delivers to the Company a new enrollment agreement.
(b) Upon a participant's ceasing to be an Employee (as defined in
Section 2(g) hereof) for any reason, he or she will be deemed to have elected to
withdraw from the Plan and the payroll deductions credited to such participant's
account during the Offering Period but not yet used to exercise the option will
be returned to such participant or, in the case of his or her death, to the
person or persons entitled thereto under Section 14 hereof, and such
participant's option will be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.
(c) A participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted
5
<PAGE> 6
by the Company or in succeeding Offering Periods which commence after the
termination of the Offering Period from which the participant withdraws.
11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be three hundred fifty
thousand (350,000) shares, subject to adjustment upon changes in capitalization
of the Company as provided in Section 18 hereof. Shares issuable under the Plan
shall be Treasury Shares. If on a given Exercise Date the number of shares with
respect to which options are to be exercised exceeds the number of shares then
available under the Plan, the Company shall make a pro rata allocation of the
shares remaining available for purchase in as uniform a manner as shall be
practicable and as it shall determine to be equitable.
(b) The participant will have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
13. Administration.
(a) Administrative Body. The Plan shall be administered by the Board
or a committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
(b) Rule 16b-3 Limitations. Notwithstanding the provisions of
Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any successor provision ("Rule 16b-3") provides specific requirements for the
administrators of plans of this type, the Plan shall be administered only by
such a body and in such a manner as shall comply with the applicable
requirements of Rule 16b-3.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account
6
<PAGE> 7
under the Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof. The Company
shall have the right to place a legend on all stock certificates delivered
pursuant to this Plan setting forth the restriction on transferability of such
shares.
16. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each participant
in the Plan. Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
18. Adjustments Upon Changes in Capitalization; Dissolution;
Liquidation; Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the Reserves as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration". Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
7
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issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period shall terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Offering Period then in progress shall be
shortened by setting a new Exercise Date (the "New Exercise Date"). The New
Exercise Date shall be before the date of the Company's proposed sale or merger.
The Board shall notify each participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date, unless prior to
such date the participant has withdrawn from the Offering Period as provided in
Section 10 hereof.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and for
any reason amend or terminate the Plan. Except as provided in Section 18 hereof,
no such termination can affect options previously granted. Except as provided in
Section 18 hereof, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent
necessary to comply with Rule 16b-3 or under Section 423 of the Code (or any
successor rule or provision or any other applicable law or regulation), the
Company shall obtain shareholder approval in such a manner and to such a degree
as required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods
(provided no Offering Period may be more than seven months), limit the frequency
and/or number of changes in the amount withheld during an Offering Period,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated
by a participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant's
Compensation, and establish such other limitations or procedures as the Board
(or its committee) determines in its sole discretion advisable which are
consistent with the Plan.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
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<PAGE> 9
21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
22. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.
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EXHIBIT A
DOCUMENT SCIENCES CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
ENROLLMENT AGREEMENT
_____ Original Application Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. _____________________________________ hereby elects to participate in the
Document Sciences Corporation 1997 Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribes to purchase shares of the
Company' s Common Stock in accordance with this Enrollment Agreement and
the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of
____% of my Gross Compensation (not to exceed 10%) beginning on the first
payday after the Grant Date and on each payday thereafter until the
Exercise Date, as determined by the Board, in accordance with the Employee
Stock Purchase Plan. (Please note that no fractional percentages are
permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Company's Common Stock at the applicable Purchase
Price determined in accordance with the Section 9.3 of the Employee Stock
Purchase Plan. I understand that, prior to the Exercise Date, I shall be
permitted only once to (a) withdraw accumulated payroll deductions, (b)
discontinue payroll deductions, or (c) decrease, but not increase, the
percentage of Gross Compensation withheld. I further understand that I may
withdraw all but not less than all the payroll deductions credited to my
account and not yet used to exercise my option under the Plan at any time
up to two weeks prior to the Exercise Date by giving written notice to the
Company.
4. I have received a copy of the complete "Employee Stock Purchase Plan." I
understand that my participation in the Employee Stock Purchase Plan is in
all respects subject to the terms of the Plan. I understand that the grant
of the option by the Company under this Enrollment Agreement is subject to
obtaining shareholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse Only):
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6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares), I will be treated
for federal income tax purposes as having received ordinary income at the
time of such disposition in an amount equal to the excess of the fair
market value of the shares at the time such shares were purchased by me
over the price which I paid for the shares. I hereby agree to notify the
Company in writing within 30 days after the date of any disposition of
shares and I will make adequate provision for Federal, state or other tax
withholding obligations, if any, which arise upon the disposition of the
Common Stock. The Company may, but will not be obligated to, withhold from
my compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by me. If I dispose of such shares at any time
after the expiration of the 2-year holding period, I understand that I
will be treated for federal income tax purposes as having received income
only at the time of such disposition, and that such income will be taxed
as ordinary income only to the extent of an amount equal to the lesser of
(1) the excess of the fair market value of the shares at the time of such
disposition over the purchase price which I paid for the shares, or (2)
15% of the fair market value of the shares on the first day of the
Offering Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Enrollment Agreement is dependent upon my
eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)______________________________________________________
(First) (Middle) (Last)
________________________________________
Relationship
________________________________________
(Address)
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NAME: (Please print)______________________________________________________
(First) (Middle) (Last)
________________________________________
Relationship
________________________________________
(Address)
Employee's Social
Security Number: ________________________________________
Employee's Address: ________________________________________
________________________________________
________________________________________
I UNDERSTAND THAT THIS ENROLLMENT AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated: _______________________________________
Signature of Employee
________________________________________
Spouse's Signature
(If beneficiary other than spouse)
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EXHIBIT B
DOCUMENT SCIENCES CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Document Sciences Corporation 1997
Employee Stock Purchase Plan which began on ___________ 19____ (the "Grant
Date") hereby notifies the Company that he or she hereby withdraws from the
Plan. He or she hereby directs the Company to pay to the undersigned as promptly
as practicable all the payroll deductions credited to his or her account with
respect to the Plan. The undersigned understands and agrees that his or her
option for the Plan will be automatically terminated. The undersigned
understands further that no further payroll deductions will be made for the
purchase of shares in the Plan, and the undersigned shall be eligible to
participate in the Plan at the next Exercise Date only by delivering to the
Company a new Enrollment Agreement.
Name and Address of Participant:
________________________________________
________________________________________
________________________________________
Signature:
________________________________________
Date:___________________________________
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EXHIBIT 5.1
August 31, 1999
Document Sciences Corporation
6339 Paseo del Lago
Carlsbad, CA 92009
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by you with the Securities and Exchange Commission on or
about September 3, 1999, in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 211,639 shares of your
Common Stock, $0.001 par value (the "Shares"), reserved for issuance under your
1997 Employee Stock Purchase Plan (the "Plan"). As your legal counsel, we have
reviewed the actions taken by you in connection with the proposed sale and
issuance of the Shares by you under the Plan. We assume that the consideration
received by you in connection with each issuance of Shares will include an
amount in the form of cash or property that exceeds the greater of (i) the
aggregate par value of such Shares or (ii) the portion of such consideration
determined by the Company's Board of Directors to be "capital" for purposes of
the General Corporation Law of the State of Delaware.
It is our opinion that, upon completion of the proceedings being taken, or
contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares pursuant to the Registration Statement and the Plan, including the
proceedings being taken in order to permit such transaction to be carried out in
accordance with applicable state securities laws, the Shares, when issued and
sold in the manner described in the Registration Statement and in accordance
with the resolutions adopted by the Board of Directors, will be legally and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/S/ Wilson Sonsini Goodrich & Rosati, P.C.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the 1997 Employee Stock Purchase
Plan of Document Sciences Corporation and to the incorporation by reference
therein of our report dated January 25, 1999, with respect to the consolidated
financial statements and schedule of Document Sciences Corporation included in
its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Diego, California
August 31, 1999
