AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 2000
REGISTRATION NO. 333-84683
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TUMBLEWEED COMMUNICATIONS CORP.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 94-3336053
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization
700 SAGINAW DRIVE
REDWOOD CITY, CALIFORNIA 94063
(Address, Including Zip Code, of Principal Executive Offices)
------------------------
WORLDTALK COMMUNICATIONS CORPORATION 1996 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plans)
BERNARD J. CASSIDY, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
TUMBLEWEED COMMUNICATIONS CORP.
700 SAGINAW DRIVE
REDWOOD CITY, CALIFORNIA 94063
(Name and Address of Agent for Service)
(650) 216-2000
(Telephone Number, Including Area Code, of Agent for Service)
------------------------
Copy to:
GREGORY C. SMITH, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
525 UNIVERSITY DRIVE, SUITE 220
PALO ALTO, CALIFORNIA 94301
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE AGGREGATE OFFERING PRREGISTRATION FEE
PER SHARE PRICE PER SHARE
<S> <C> <C> <C> <C>
To be issued under 75,000 N/A $608,577.86(1) $160.66
Worldtalk Communications
Corporation 1996 Employee
Stock Purchase Plan
Common Stock, par value
$0.001 per share
- --------------------------- -------------- ------------------- ------------------ ---------------
(1) Computed in accordance with Rule 457(h) under the Securities Act solely for the purpose of calculating the registration fee.
The computation of the maximum aggregate offering price is based on the quotient of the fair market value of Worldtalk
Communication Corporation's ("Worldtalk") common stock, multiplied by 85%, which is the percentage of the fair
market value applicable to purchases under the Plan, divided by 0.26, which is the exchange ratio provided under
the Agreement and Plan of Merger between the Registrant, Keyhole Acquisition Corp. and Worldtalk.
</TABLE>
The Registration Statement shall become effective upon filing in
accordance with Rule 462(a) under the Securities Act.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1 PLAN INFORMATION. *
ITEM 2 REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION. *
*The document(s) containing the information specified in Part I of Form S-8
have been or will be sent or given to employees as specified by Rule
428(b)(1) under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3INCORPORATION OF DOCUMENTS BY REFERENCE.
Tumbleweed Communications Corp. (the "Company" or the "Registrant")
hereby incorporates by reference the following documents:
(a) The Registrant's Annual Report on Form 10-K filed on March 30,
2000 pursuant to Section 13(a) or 15(d) of the Exchange Act, which contains
audited consolidated financial statements for the Registrant's latest
fiscal year for which such statements have been filed.
(b) 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 Registrant
document referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in
Amendment No. 1 to the Registrant's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission under Section 12 of the
Exchange Act on August 2, 1999, 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 after filing of the
Registration Statement and, prior to the filing of a post-effective
amendment to the Registration Statement that indicates that all securities
offered have been sold or that deregisters all securities then remaining
unsold, will be deemed to be incorporated by reference in the Registration
Statement and to be a 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 will be deemed to be modified
or superseded for purposes of the Registration Statement to the extent that
a statement contained herein or in any other subsequently filed document
that is or is deemed to be incorporated by reference herein modifies or
supersedes such previous statement. Any such statement so modified or
superseded will not be deemed to constitute a part of the Registration
Statement, except as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Skadden, Arps, Slate, Meagher & Flom LLP will issue an opinion about
the validity of the shares of the Company's Common Stock offered hereby.
Two attorneys at Skadden, Arps beneficially own a total of approximately
40,244 shares of the Company's Common Stock, of which approximately 39,146
shares are owned by Gregory C. Smith, brother of Jeffrey C. Smith, the
President and Chief Executive Officer of the Company and Chairman of its
board of directors.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law, or the DGCL, as
amended, allows a corporation to eliminate the personal liability of
directors of a corporation to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director, except where
the director breached his duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or knowingly violated a law, authorized
the payment of a dividend or approved a stock repurchase in violation of
Delaware corporate law or obtained an improper personal benefit.
Section 145 of the DGCL provides, among other things, that the
Company may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding (other than an action by or in the right of the Company) by
reason of the fact that the person is or was a director, officer, agent or
employee of the Company or is or was serving at the Company's request as a
director, officer, agent, or employee of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, including
attorneys' ties, judgment, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with the action, suit
or proceeding. The power to indemnify applies (a) if the person is
successful on the merits or otherwise in defense of any action, suit or
proceeding, or (b) if the person acted in good faith and in a manner he
reasonably believed to be in the best interest, or not opposed to the best
interest, of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of the
Company as well, but only to the extent of defense expenses (including
attorneys' fees but excluding amounts paid in settlement) actually and
reasonably incurred and not to any satisfaction of judgment or settlement
of the claim itself, and with the further limitation that in these actions
no indemnification shall be made in the event of any adjudication of
negligence or misconduct in the performance of his duties to the Company,
unless the court believes that in light of all the circumstances
indemnification should apply.
Section 174 of the DGCL provides, among other things, that a director
who willfully or negligently approves of an unlawful payment of dividends
or an unlawful stock purchase or redemption may be held liable for these
actions. A director who was either absent when the unlawful actions were
approved or dissented at the time may avoid liability by causing his or her
dissent to these actions to be entered in the books containing the minutes
of the meetings of the board of directors at the time the action occurred
or immediately after the absent director receives notice of the unlawful
acts.
The Company's Amended and Restated Certificate of Incorporation
includes a provision that eliminates the personal liability of its
directors for monetary damages for breach of fiduciary duty as a director,
except for liability:
o for any breach of the director's duty of loyalty to the Company or
its stockholders;
o for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
o under Section 174 of the DGCL regarding unlawful dividends and
stock purchases; or
o for any transaction from which the director derived an improper
personal benefit.
These provisions are permitted under Delaware law.
The Company's Amended and Restated Bylaws provide that the Company must:
o indemnify its directors and officers to the fullest extent
permitted by Delaware law;
o indemnify its other employees and agents to the same extent that
it indemnified its officers and directors, unless otherwise
determined by the Company's board of directors; and
o advance expenses, as incurred, to its directors and executive
officers in connection with a legal proceeding to the fullest
extent permitted by Delaware Law.
The indemnification provisions contained in the Company's Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws are
not exclusive of any other rights to which a person may be entitled by law,
agreement, vote of stockholders or disinterested directors or otherwise. In
addition, the Company maintains insurance on behalf of its directors and
executive officers insuring them against any liability asserted against
them in their capacities as directors or officers or arising out of this
status.
The Company has entered or intends to enter into agreements to
indemnify its directors and executive officers, in addition to
indemnification provided for in the Company's bylaws. These agreements,
among other things, will provide for indemnification of the Company's
directors and executive officers for expenses, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding
arising out of the person's services as a director or executive officer or
at the Company's request. The Company believes that these provisions and
agreements are necessary to attract and retain qualified persons as
directors and executive officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index.
ITEM 9 UNDERTAKINGS.
1. The undersigned Registrant hereby undertakes:
(a) 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 of 1933, as amended, or 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 to this Registration Statement) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and 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 Securities
and Exchange Commission, or the Commission, by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended, or the Exchange Act, that are incorporated by reference in the
Registration Statement.
(b) 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.
(c) 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.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (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.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Post-Effective Amendment No. 2 to Form S-8 Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Redwood City, State of California, on this 28th day of April,
2000.
TUMBLEWEED COMMUNICATIONS CORP.
By: /s/ Bernard J. Cassidy
----------------------------
Bernard J. Cassidy
Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities indicated on April 28, 2000.
* Chairman of the Board, President and Chief
- ------------------------ Executive Officer (Principal Executive Officer)
Jeffrey C. Smith
/s/ Joseph C. Consul Vice President - Finance and Chief Financial
- ------------------------ Officer (Principal Financial Officer and
Joseph C. Consul Principal Accounting Officer)
* Director
- ------------------------
David F. Marquardt
* Director
- -------------------------
Timothy C. Draper
* Director
- ------------------------
Eric J. Hautemont
*By: /s/ Joseph C. Consul
------------------------
Joseph C. Consul
Attorney-in-Fact
EXHIBIT INDEX
Exhibit No. Description of Exhibit
4.1* Specimen Common Stock Certificate
4.2* Investors' Rights Agreement, dated as of February 26, 1999,
among the Registrant, the Founders, and the holders of the
Registrant's preferred stock
4.3* Warrant to Purchase Stock, dated November 30, 1998, issued
to Silicon Valley Bank
4.4* Amended and Restated Certificate of Incorporation of the Company
4.5* Amended and Restated By-laws of the Company
4.6* Amended and Restated Investors' Rights Agreement, dated as of
February 26, 1999, among the Registrant, the Founders, and
the holders of the Registrant's preferred stock
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding
the legality of the securities being registered
23.1 Consent of KPMG LLP
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1)
24.1* Power of Attorney
99.1* 1993 Stock Option Plan, as amended, and form of agreements
thereunder
99.2* 1999 Omnibus Stock Incentive Plan and form of stock option
thereunder
99.3* 1999 Employee Stock Purchase Plan
99.4* Worldtalk Communications Corporation 1996 Equity Incentive Plan
99.5* Worldtalk Communications Corporation 1996 Directors Stock
Option Plan
99.6* Worldtalk Communications Corporation 1992 Stock Option Plan
99.7* Agreement and Plan of Merger, dated as of November 18, 1999,
among Tumbleweed Communications Corp., Keyhole Acquisition
Corp. and Worldtalk Communications Corporation (incorporated
by reference to Exhibit 2.1 to Registrant's Registration
Statement on Form S-4 filed on December 7, 1999)
99.8 Worldtalk Communications Corporation 1996 Employee Stock
Purchase Plan
* Previously filed.
[Skadden, Arps, Slate, Meagher & Flom LLP Letterhead]
April 28, 2000
Tumbleweed Communications Corp.
700 Saginaw Drive
Redwood City, California 94063
Re: Tumbleweed Communications Corp.
Post-Effective Amendment No. 2
to Form S-8 Registration Statement
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Tumbleweed
Communications Corp., a Delaware corporation (the "Company"), in connection
with the registration of 75,000 shares (the "Shares") of the Company's
common stock, par value $0.001 per share (the "Common Stock"), issuable
pursuant to the Agreement and Plan of Merger, dated as of November 18, 1999
(the "Merger Agreement"), by and among the Company, Keyhole Acquisition
Corp., a Delaware corporation, and Worldtalk Communications Corporation, a
Delaware corporation ("Worldtalk"), under Worldtalk's 1996 Employee Stock
Purchase Plan (the "Plan").
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act
of 1933, as amended (the "Act").
In connection with this opinion, we have examined originals
or copies, certified or otherwise identified to our satisfaction, of (i)
the Company's Registration Statement on Form S-8 as filed with the
Securities and Exchange Commission (the "Commission") on August 6, 1999
under the Act; (ii) the Company's Post-Effective Amendment No. 1 to Form
S-8 as filed with the Commission on February 23, 2000; (iii) the Company's
Registration Statement on Form S-4 as filed with the Commission on December
7, 1999 under the Act; (iv) the Company's Post-Effective Amendment No. 2 to
Form S-8 Registration Statement as proposed to be filed with the Commission
under the Act (the "Amendment to Form S-8"); (v) a specimen certificate
representing the Common Stock; (vi) the Amended and Restated Certificate of
Incorporation of the Company, as presently in effect; (vii) the Amended and
Restated Bylaws of the Company, as presently in effect; (viii) the Merger
Agreement; (ix) the Plan; and (x) certain resolutions of the Board of
Directors of the Company relating to the issuance and sale of the Shares
and related matters. We have also examined originals or copies, certified
or otherwise identified to our satisfaction, of such records of the Company
and such agreements, certificates of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter
documents. In making our examination of documents executed or to be
executed by parties other than the Company, we have assumed that such
parties had or will have the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution
and delivery by such parties of such documents and the validity and binding
effect thereof. As to any facts material to the opinions expressed herein
that we have not independently established or verified, we have relied upon
statements and representations of officers and other representatives of the
Company and others. In rendering the opinion set forth below, we have
assumed that the certificates representing the Shares will be manually
signed by one of the authorized officers of the transfer agent and
registrar for the Common Stock and registered by such transfer agent and
registrar and will conform to the specimen thereof examined by us.
We have also assumed that each award agreement setting forth
the terms of each grant of options or other awards under the Plan is
consistent with the Plan and has been duly authorized and validly executed
and delivered by the parties thereto, and that the consideration received
by the Company for the Shares delivered pursuant to the Plan will be in an
amount at least equal to the par value of such Shares.
Members of our firm are admitted to the bar in the State of
California, and we do not express any opinion with respect to the law of
any jurisdiction other than Delaware corporate law.
Based upon and subject to the foregoing, we are of the
opinion that the Shares have been duly authorized for issuance by the
Company and, when issued and paid for in accordance with the terms and
conditions of the Plan and the Merger Agreement, the Shares will be validly
issued and, subject to any restrictions imposed by the Plan, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Amendment to Form S-8. In giving this
consent, we do not thereby admit that we are included in the category of
persons whose consent is required under Section 7 of the Act or the rules
and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit 23.1
Consent of KPMG LLP
The Board of Directors
Tumbleweed Communications Corp.:
We consent to incorporation by reference in this registration statement
(Post-Effective Amendment No. 2 to Form S-8 (No. 333-84683)) of Tumbleweed
Communications Corp. of our report dated January 17, 2000 except as to Note
10, which is as of January 31, 2000, relating to the consolidated balance
sheets of Tumbleweed Communications Corp. and subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1999, which report appears in the December 31,
1999 annual report on Form 10-K of Tumbleweed Communications Corp.
/s/ KPMG LLP
San Francisco, California
April 28, 2000
WORLDTALK CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
As Adopted on February 7, 1996
and Amended March 23, 1996
and Amended August 22, 1996
1. ESTABLISHMENT OF PLAN. Worldtalk Communications Corporation, a
Delaware corporation dba Worldtalk Corporation (the "COMPANY"), proposes to
grant options for purchase of the Company's Common Stock to eligible
employees of the Company and its Subsidiaries (as hereinafter defined)
pursuant to this Employee Stock Purchase Plan (this "PLAN"). For purposes
of this Plan, "PARENT CORPORATION" and "SUBSIDIARY" (collectively,
"SUBSIDIARIES") shall have the same meanings as "parent corporation" and
"subsidiary corporation" in Sections 424(e) and 424(f), respectively, of
the Internal Revenue Code of 1986, as amended (the "CODE"). The Company
intends this Plan to qualify as an "employee stock purchase plan" under
Section 423 of the Code (including any amendments to or replacements of
such Section), and this Plan shall be so construed. Any term not expressly
defined in this Plan but defined for purposes of Section 423 of the Code
shall have the same definition herein. A total of 1,000,000 shares of the
Company's Common Stock (post 1-for-2 1996 reverse stock split) is reserved
for issuance under this Plan. Such number shall be subject to adjustments
effected in accordance with Section 14 of this Plan.
2. PURPOSE. The purpose of this Plan is to provide employees of
the Company and Subsidiaries designated by the Board of Directors of the
Company (the "BOARD") as eligible to participate in this Plan with a
convenient means of acquiring an equity interest in the Company through
payroll deductions, to enhance such employees' sense of participation in
the affairs of the Company and Subsidiaries, and to provide an incentive
for continued employment.
3. ADMINISTRATION. This Plan shall be administered by a committee
appointed by the Board (the "Committee") consisting of at least two (2)
members of the Board, each of whom is a Disinterested Person as defined in
Rule 16b-3(d) of the Securities Exchange Act of 1934 (the "EXCHANGE ACT").
As used in this Plan, references to the "Committee" shall mean either such
committee or the Board if no committee has been established. After
registration of the Company under the Exchange Act, Board members who are
not Disinterested Persons may not vote on any matters affecting the
administration of this Plan, but any such member may be counted for
determining the existence of a quorum at any meeting of the Board. Subject
to the provisions of this Plan and the limitations of Section 423 of the
Code or any successor provision in the Code, all questions of
interpretation or application of this Plan shall be determined by the Board
and its decisions shall be final and binding upon all participants. Members
of the Board shall receive no compensation for their services in connection
with the administration of this Plan, other than standard fees as
established from time to time by the Board for services rendered by Board
members serving on Board committees. All expenses incurred in connection
with the administration of this Plan shall be paid by the Company.
4. ELIGIBILITY. Any employee of the Company or the Subsidiaries is
eligible to participate in an Offering Period (as hereinafter defined)
under this Plan except the following:
(a) employees who are not employed by the Company or
Subsidiaries on the day before the first business day of an Offering
Period;
(b) employees who are customarily employed for less than
twenty (20) hours per week;
(c) employees who are customarily employed for less than five
(5) months in a calendar year;
(d) employees who, together with any other person whose stock
would be attributed to such employee pursuant to Section 424(d) of the
Code, own stock or hold options to purchase stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of
stock of the Company or any of its Subsidiaries or who, as a result of
being granted an option under this Plan with respect to such Offering
Period, would own stock or hold options to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or any of its Subsidiaries.
5. OFFERING DATES. The offering periods of this Plan (each, an
"OFFERING PERIOD") shall be of twenty-four (24) months duration commencing
on November 1 and May 1 of each year and ending on April 30 and October 31
of each year; provided, however, that notwithstanding the foregoing, (a)
the first such Offering Period shall commence on the first business day
after the date on which the registration statement filed by the Company
with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "SECURITIES ACT") registering the
initial public offering of the Company's Common Stock is declared effective
by the SEC (the "FIRST OFFERING Date") and shall end on April 30, 1998, and
(b) the second such Offering Period shall commence on November 1, 1996 and
shall end on October 31, 1998. Except for the first Purchase Period in the
first Offering Period (which shall terminate on October 31, 1996), each
Offering Period shall consist of four (4) six-month purchase periods
(individually, a "PURCHASE PERIOD") during which payroll deductions of the
participants are accumulated under this Plan. The first business day of
each Offering Period is referred to as the "OFFERING DATE." The last
business day of each Purchase Period is referred to as the "PURCHASE DATE."
The Board shall have the power to change the duration of Offering Periods
or Purchase Periods with respect to future offerings without stockholder
approval if such change is announced at least fifteen (15) days prior to
the scheduled beginning of the first Offering Period or Purchase Period to
be affected.
6. PARTICIPATION IN THIS PLAN. Eligible employees may become
participants in an Offering Period under this Plan on the first Offering
Date after satisfying the eligibility requirements by delivering a
subscription agreement to the Company's accounting department (the
"TREASURY DEPARTMENT") not later than the last business day of the month
before such Offering Date unless a later time for filing the subscription
agreement authorizing payroll deductions is set by the Board for all
eligible employees with respect to a given Offering Period. An eligible
employee who does not deliver a subscription agreement to the Treasury
Department by such date after becoming eligible to participate in such
Offering Period shall not participate in that Offering Period or any
subsequent Offering Period unless such employee enrolls in this Plan by
filing a subscription agreement with the Treasury Department not later than
the last business day of the month preceding a subsequent Offering Date.
Once an employee becomes a participant in an Offering Period, such employee
will automatically participate in the Offering Period commencing
immediately following the last day of the prior Offering Period unless the
employee withdraws or is deemed to withdraw from this Plan or terminates
further participation in the Offering Period as set forth in Section 11
below. Such participant is not required to file any additional subscription
agreement in order to continue participation in this Plan.
7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible
employee in this Plan with respect to an Offering Period will constitute
the grant (as of the Offering Date) by the Company to such employee of an
option to purchase on the Purchase Date up to that number of shares of
Common Stock of the Company determined by dividing (a) the amount
accumulated in such employee's payroll deduction account during such
Purchase Period by (b) the lower of (i) eighty-five percent (85%) of the
fair market value of a share of the Company's Common Stock on the Offering
Date (but in no event less than the par value of a share of the Company's
Common Stock), or (ii) eighty-five percent (85%) of the fair market value
of a share of the Company's Common Stock on the Purchase Date (but in no
event less than the par value of a share of the Company's Common Stock);
provided, however, that the number of shares of the Company's Common Stock
subject to any option granted pursuant to this Plan shall not exceed the
lesser of (a) the maximum number of shares set by the Board pursuant to
Section 10(c) below with respect to the applicable Offering Period, or (b)
the maximum number of shares which may be purchased pursuant to Section
10(b) below with respect to the applicable Offering Period. The fair market
value of a share of the Company's Common Stock shall be determined as
provided in Section 8 hereof.
8. PURCHASE PRICE. The purchase price per share at which a share
of Common Stock will be sold in any Offering Period shall be eighty-five
percent (85%) of the lesser of:
(a) The fair market value on the Offering Date; or
(b) The fair market value on the Purchase Date;
provided, however, that in no event may the purchase price per share of the
Company's Common Stock be below the par value per share of the Company's
Common Stock.
For purposes of this Plan, the term "FAIR MARKET VALUE" on
a given date shall mean the fair market value of the Company's Common Stock
as determined by the Board in its sole discretion, exercised in good faith;
provided, however, that where there is a public market for the Common
Stock, the fair market value per share shall be the average of the last
reported bid and asked prices of the Common Stock on the last trading day
prior to the date of determination (or the average closing price over the
number of consecutive trading days preceding the date of determination as
the Board shall deem appropriate), or, in the event the Common Stock is
listed on a stock exchange or on the Nasdaq National Market, the fair
market value per share shall be the closing price on such exchange or
quotation system on the date of determination or the last trading date
prior to the date of determination if there are no trades in the Company's
Common Stock on the date of determination (or the average closing price
over the number of consecutive trading days preceding the date of
determination as the Board shall deem appropriate); and provided further,
that notwithstanding the foregoing, the fair market value of the Company's
Common Stock on the First Offering Date (which is the first business day of
the first Offering Period under this Plan) shall be deemed to be the price
per share at which shares of the Company's Common Stock are initially
offered for sale to the public in the Company's initial public offering of
its Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act
9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS;
ISSUANCE OF SHARES.
(a) The purchase price of the shares is accumulated by regular
payroll deductions made during each Offering Period. The deductions are
made as a percentage of the participant's compensation in one percent (1%)
increments not less than two percent (2%), nor greater than ten percent
(10%) or such lower limit set by the Committee. Compensation shall mean all
W-2 compensation, including, but not limited to base salary, wages,
commissions, overtime, shift premiums and bonuses, plus draws against
commissions; provided, however, that for purposes of determining a
participant's compensation, any election by such participant to reduce his
or her regular cash remuneration under Sections 125 or 401(k) of the Code
shall be treated as if the participant did not make such election. Payroll
deductions shall commence on the first payday following the Offering Date
and shall continue to the end of the Offering Period unless sooner altered
or terminated as provided in this Plan.
(b) A participant may lower (but not increase) the rate of
payroll deductions during an Offering Period by filing with the Treasury
Department a new authorization for payroll deductions, in which case the
new rate shall become effective for the next payroll period commencing more
than fifteen (15) days after the Treasury Department's receipt of the
authorization and shall continue for the remainder of the Offering Period
unless changed as described below. Such change in the rate of payroll
deductions may be made at any time during an Offering Period, but not more
than one (1) change may be made effective during any Offering Period. A
participant may increase or decrease the rate of payroll deductions for any
subsequent Offering Period by filing with the Treasury Department a new
authorization for payroll deductions not later than the last business day
of the month before the beginning of such Offering Period.
(c) All payroll deductions made for a participant are credited
to his or her account under this Plan and are deposited with the general
funds of the Company. No interest accrues on the payroll deductions. All
payroll deductions received or held by the Company may be used by the
Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.
(d) On each Purchase Date, so long as this Plan remains in
effect and provided that the participant has not submitted a signed and
completed withdrawal form before that date which notifies the Company that
the participant wishes to withdraw from that Offering Period under this
Plan and have all payroll deductions accumulated in the account maintained
on behalf of the participant as of that date returned to the participant,
the Company shall apply the funds then in the participant's account to the
purchase of whole shares of Common Stock reserved under the option granted
to such participant with respect to the Offering Period to the extent that
such option is exercisable on the Purchase Date. The purchase price per
share shall be as specified in Section 8 of this Plan. Any cash remaining
in a participant's account after such purchase of shares shall be refunded
to such participant in cash, without interest. In the event that this Plan
has been oversubscribed, all funds not used to purchase shares on the
Purchase Date shall be returned to the participant, without interest. No
Common Stock shall be purchased on a Purchase Date on behalf of any
employee whose participation in this Plan has terminated prior to such
Purchase Date.
(e) As promptly as practicable after the Purchase Date, the
Company shall arrange the delivery to each participant of a certificate
representing the shares purchased upon exercise of his option.
(f) During a participant's lifetime, such participant's option
to purchase shares hereunder is exercisable only by him or her. The
participant will have no interest or voting right in shares covered by his
or her option until such option has been exercised. Shares to be delivered
to a participant under this Plan will be registered in the name of the
participant or in the name of the participant and his or her spouse.
10. LIMITATIONS ON SHARES TO BE PURCHASED.
(a) No employee shall be entitled to purchase stock under
this Plan at a rate which, when aggregated with his or her rights to
purchase stock under all other employee stock purchase plans of the Company
or any Subsidiary, exceeds $25,000 in fair market value, determined as of
the Offering Date (or such other limit as may be imposed by the Code) for
each calendar year in which the employee participates in this Plan.
(b) No more than two hundred percent (200%) of the number of
shares determined by using eighty-five percent (85%) of the fair market
value of a share of the Company's Common Stock on the Offering Date as the
denominator may be purchased by a participant on any single Purchase Date.
(c) No employee shall be entitled to purchase more than the
Maximum Share Amount (as defined below) on any single Purchase Date. Not
less than thirty (30) days prior to the commencement of any Offering
Period, the Board may, in its sole discretion, set a maximum number of
shares which may be purchased by any employee at any single Purchase Date
(hereinafter the "MAXIMUM SHARE AMOUNT"). In no event shall the Maximum
Share Amount exceed the amounts permitted under Section 10(b) above. If a
new Maximum Share Amount is set, then all participants must be notified of
such Maximum Share Amount not less than fifteen (15) days prior to the
commencement of the next Offering Period. Once the Maximum Share Amount is
set, it shall continue to apply with respect to all succeeding Purchase
Dates and Offering Periods unless revised by the Board as set forth above.
(d) If the number of shares to be purchased on a Purchase
Date by all employees participating in this Plan exceeds the number of
shares then available for issuance under this Plan, then the Company will
make a pro rata allocation of the remaining shares in as uniform a manner
as shall be reasonably practicable and as the Board shall determine to be
equitable. In such event, the Company shall give written notice of such
reduction of the number of shares to be purchased under a participant's
option to each participant affected thereby.
(e) Any payroll deductions accumulated in a participant's
account which are not used to purchase stock due to the limitations in this
Section 10 shall be returned to the participant as soon as practicable
after the end of the applicable Purchase Period, without interest.
11. WITHDRAWAL.
(a) Each participant may withdraw from an Offering Period
under this Plan by signing and delivering to the Treasury Department a
written notice to that effect on a form provided for such purpose. Such
withdrawal may be elected at any time at least fifteen (15) days prior to
the end of an Offering Period.
(b) Upon withdrawal from this Plan, the accumulated payroll
deductions shall be returned to the withdrawn participant, without
interest, and his or her interest in this Plan shall terminate. In the
event a participant voluntarily elects to withdraw from this Plan, he or
she may not resume his or her participation in this Plan during the same
Offering Period, but he or she may participate in any Offering Period under
this Plan which commences on a date subsequent to such withdrawal by filing
a new authorization for payroll deductions in the same manner as set forth
above for initial participation in this Plan.
(c) If the purchase price on the first day of any current
Offering Period in which a participant is enrolled is higher than the
purchase price on the first day of any subsequent Offering Period, the
Company will automatically enroll such participant in the subsequent
Offering Period. A participant does not need to file any forms with the
Company to automatically be enrolled in the subsequent Offering Period.
12. TERMINATION OF EMPLOYMENT. Termination of a participant's
employment for any reason, including retirement, death or the failure of a
participant to remain an eligible employee, immediately terminates his or
her participation in this Plan. In such event, the payroll deductions
credited to the participant's account will be returned to him or her or, in
the case of his or her death, to his or her legal representative, without
interest. For purposes of this Section 12, an employee will not be deemed
to have terminated employment or failed to remain in the continuous employ
of the Company in the case of sick leave, military leave, or any other
leave of absence approved by the Board; provided that such leave is for a
period of not more than ninety (90) days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
13. RETURN OF PAYROLL DEDUCTIONS. In the event a participant's
interest in this Plan is terminated by withdrawal, termination of
employment or otherwise, or in the event this Plan is terminated by the
Board, the Company shall promptly deliver to the participant all payroll
deductions credited to such participant's account. No interest shall accrue
on the payroll deductions of a participant in this Plan.
14. CAPITAL CHANGES. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each option under this Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance
under this Plan but have not yet been placed under option (collectively,
the "RESERVES"), as well as the price per share of Common Stock covered by
each option under this Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of
issued and outstanding shares of Common Stock of the Company resulting from
a stock split or the payment of a stock dividend (but only on the Common
Stock) or any other increase or decrease in the number of issued and
outstanding shares of Common Stock effected without receipt of any
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"; and provided further, that the
price per share of Common Stock shall not be reduced below its par value
per share. Such adjustment shall be made by the Board, whose determination
shall be final, binding and conclusive. Except as expressly provided
herein, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Board. The Board may, in the exercise of its sole discretion in such
instances, declare that the options under this Plan shall terminate as of a
date fixed by the Board and give each participant the right to exercise his
or her option as to all of the optioned stock, including shares which would
not otherwise be exercisable. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger or
consolidation of the Company with or into another corporation, each option
under this Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, that the
participant shall have the right to exercise the option as to all of the
optioned stock. If the Board makes an option exercisable in lieu of
assumption or substitution in the event of a merger, consolidation or sale
of assets, the Board shall notify the participant that the option shall be
fully exercisable for a period of twenty (20) days from the date of such
notice, and the option will terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
price per share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of
shares of its outstanding Common Stock, or in the event of the Company
being consolidated with or merged into any other corporation; provided,
that the price per share of Common Stock shall not be reduced below its par
value per share.
15. NONASSIGNABILITY. 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 this 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 22 hereof) by the
participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be void and without effect.
16. REPORTS. Individual accounts will be maintained for each
participant in this Plan. Each participant shall receive promptly after the
end of each Purchase Period a report of his or her account setting forth
the total payroll deductions accumulated, the number of shares purchased,
the per share price thereof and the remaining cash balance, if any, carried
forward to the next Purchase Period or Offering Period, as the case may be.
17. NOTICE OF DISPOSITION. Each participant shall notify the
Company if the participant disposes of any of the shares purchased in any
Offering Period pursuant to this Plan if such disposition occurs within two
(2) years from the Offering Date or within one (1) year from the Purchase
Date on which such shares were purchased (the "NOTICE PERIOD"). Unless such
participant is disposing of any of such shares during the Notice Period,
such participant shall keep the certificates representing such shares in
his or her name (and not in the name of a nominee) during the Notice
Period. The Company may, at any time during the Notice Period, place a
legend or legends on any certificate representing shares acquired pursuant
to this Plan requesting the Company's transfer agent to notify the Company
of any transfer of the shares. The obligation of the participant to provide
such notice shall continue notwithstanding the placement of any such legend
on the certificates.
18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the
grant of any option hereunder shall confer any right on any employee to
remain in the employ of the Company or any Subsidiary, or restrict the
right of the Company or any Subsidiary to terminate such employee's
employment.
19. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have
equal rights and privileges with respect to this Plan so that this Plan
qualifies as an "employee stock purchase plan" within the meaning of
Section 423 or any successor provision of the Code and the related
regulations. Any provision of this Plan which is inconsistent with Section
423 or any successor provision of the Code shall, without further act or
amendment by the Company or the Board, be reformed to comply with the
requirements of Section 423. This Section 19 shall take precedence over all
other provisions in this Plan.
20. NOTICES. All notices or other communications by a participant
to the Company under or in connection with this 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.
21. TERM; STOCKHOLDER APPROVAL. After this Plan is adopted by the
Board, this Plan will become effective on the date that is the First
Offering Date (as defined above); provided, however, that if the First
Offering Date does not occur on or before December 31, 1996, this Plan will
terminate as of December 31, 1996 having never become effective. This Plan
shall be approved by the stockholders of the Company, in any manner
permitted by applicable corporate law, within twelve (12) months before or
after the date this Plan is adopted by the Board. No purchase of shares
pursuant to this Plan shall occur prior to such stockholder approval.
Thereafter, no later than twelve (12) months after the Company becomes
subject to Section 16(b) of the Exchange Act, the Company will comply with
the requirements of Rule 16b-3 with respect to stockholder approval. This
Plan shall continue until the earlier to occur of (a) termination of this
Plan by the Board (which termination may be effected by the Board at any
time), (b) issuance of all of the shares of Common Stock reserved for
issuance under this Plan, or (c) ten (10) years from the adoption of this
Plan by the Board.
22. 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 this Plan in the event of such participant's
death subsequent to the end of an Purchase Period but prior to delivery to
him of such shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the
participant's account under this Plan in the event of such participant's
death prior to a Purchase Date.
(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
this Plan who is living at the time of such participant's death, the
Company shall deliver such shares 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 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.
23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE 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 Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or automated
quotation system 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.
24. APPLICABLE LAW. The Plan shall be governed by the substantive
laws (excluding the conflict of laws rules) of the State of California.
25. AMENDMENT OR TERMINATION OF THIS PLAN. The Board may at any
time amend, terminate or the extend the term of this Plan, except that any
such termination cannot affect options previously granted under this Plan,
nor may any amendment make any change in an option previously granted which
would adversely affect the right of any participant, nor may any amendment
be made without approval of the stockholders of the Company obtained in
accordance with Section 21 hereof within twelve (12) months of the adoption
of such amendment (or earlier if required by Section 21) if such amendment
would:
(a) increase the number of shares that may be issued under this
Plan;
(b) change the designation of the employees (or class of
employees) eligible for participation in this Plan; or
(c) constitute an amendment for which stockholder approval is
required in order to comply with Rule 16b-3 (or any successor
rule) of the Exchange Act.
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