<PAGE> 1
As filed with the Securities and Exchange Commission on July 2, 1999
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PROCOM TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
-------------------
California 33-0268063
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2181 Dupont Drive, Irvine, California 92715
(949) 794-4257
(Address and telephone number of principal executive offices)
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PROCOM TECHNOLOGY, INC. 1999 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
-------------------
Frederick Judd
Vice President - Finance, and General Counsel
Procom Technology, Inc.
2181 Dupont Drive, Irvine, California 92715
(Name and address of agent for service)
-------------------
Telephone number, including area code, of agent for service: (949) 794-4257
-------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 250,000(1) 7.8125 (2) $1,953,125 (2) $543 (2)
par value $0.01
per share
--------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement covers, in addition to the number of
shares of Common Stock stated above, options and other rights to
purchase or acquire the shares of Common Stock covered by the
Prospectus and, pursuant to Rule 416(c) under the Securities Act of
1933, as amended (the "Securities Act"), an additional
indeterminate number of shares, options and rights which by reason
of certain events specified in the Procom Technology, Inc. 1999
Employee Stock Purchase Plan (the "Plan") may become subject to the
Plan.
(2) Pursuant to Rule 457(h), the maximum offering price, per share and
in the aggregate, and the registration fee were calculated based
upon the average of the high and low prices of the Common Stock on
June 29, 1999, as reported on the Nasdaq National Market System and
published in The Western Edition of The Wall Street Journal.
The Exhibit Index for this Registration Statement is at page 9.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8
(plan information and registrant information) will be sent or given to employees
as specified by Securities Act Rule 428(b)(1). Such documents need not be filed
with the Securities and Exchange Commission (the "Commission") either as part of
this Registration Statement or as prospectuses or prospectus supplements
pursuant to Securities Act Rule 424. These documents, which include the
statement of availability required by Item 2 of Form S-8, and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of
Form S-8 (Part II hereof), taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Securities Act.
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<PAGE> 3
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of Procom Technology, Inc. (the "Company") filed
with the Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K for the Company's fiscal year ended
July 31, 1998;
(b) Quarterly Reports on Forms 10-Q for the Company's quarterly
periods ended October 31, 1998, January 31, 1999 and April 30,
1999;
(c) Current Report on Form 8-K filed with the Commission on June 7,
1999; and
(d) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed on October 30, 1996, and
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 or 15(d) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents. Any statement contained herein or in a document,
all or a portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or amended, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Company's Common Stock, par value $0.01 per share (the "Common
Stock"), is registered pursuant to Section 12 of the Exchange Act, and,
therefore, the description of securities is omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the original issuance of Common Stock registered hereby
is passed on for the Company by Frederick L. Judd. Mr. Judd is the Vice
President - Finance and General Counsel of the Company, is compensated by the
Company as an employee, is the holder of options to acquire shares of Common
Stock, and is eligible to participate in the Plan.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The California General Corporation Law (the "Law") provides that
California corporations may include provisions in their articles of
incorporation relieving directors of monetary liability for breach of their
fiduciary duties as directors, except for the liability of a
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<PAGE> 4
director resulting from (1) any transaction from which the director derives an
improper personal benefit, (2) acts or omissions involving intentional
misconduct or a knowing and culpable violation of law, (3) acts or omissions
that a director believes to be contrary to the best interests of the Company or
its shareholders or that involve the absence of good faith on the part of the
director, (4) acts or omissions constituting an unexcused pattern of inattention
that amounts to an abdication of the director's duty to the Company or its
shareholders, (5) acts or omissions showing a reckless disregard for the
director's duty to the Company or its shareholders in circumstances in which the
director was aware or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to the Company or
its shareholders, (6) any improper transaction between a director and the
Company in which the director has a material financial interest (Section 310 of
the Law), or (7) the making of an illegal distribution to shareholders or an
illegal loan or guaranty (Section 316 of the Law). The Company's Articles of
Incorporation provide that the Company's directors are not liable to the Company
or its shareholders for monetary damages for breach of their fiduciary duties to
the fullest extent permitted by California law. Such limitation of liability
does not affect the availability of equitable remedies such as injunctive relief
or rescission. The Bylaws of the Company (the "Bylaws") provide that the Company
will indemnify its directors and officers to the fullest extent permitted by
California law, including circumstances in which indemnification is otherwise
discretionary under California law, subject to certain limitations for actions
initiated by the director or officer, settlements not approved by the Company,
losses covered by the directors' and officers' liability insurance policy
maintained by the Company and judgments for an accounting of profits pursuant to
Section 16(b) of the Exchange Act and similar laws. In addition, the Company may
not indemnify directors and officers in circumstances in which indemnification
is expressly prohibited by Section 317 of the Law.
The Company has entered into indemnification agreements with certain of
its directors and officers that require the Company to indemnify such directors
and officers to the fullest extent permitted by applicable provisions of law,
provided that any settlement of a third party action against a director or
officer is approved by the Company, and subject to limitations for actions
initiated by the director or officer, penalties paid by insurance, and
violations of Section 16(b) of the Exchange Act and similar laws. The agreements
contain provisions that are broader in some respects than the specific
indemnification provisions contained in the California Corporations Code. The
indemnification agreements may require the Company, among other things, to
indemnify its officers and directors against certain liabilities that may arise
by reason of their status or service as directors or executive officers (other
than liabilities arising from willful misconduct of a culpable nature), to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified and to obtain directors' and officers'
insurance, if available on reasonable terms. The Company also maintains director
and officers' liability insurance policies insuring directors and officers of
the Company for covered losses as defined in the policies.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See the attached Exhibit Index at page 8.
ITEM 9. UNDERTAKINGS
4
<PAGE> 5
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, executive officers and controlling
persons of the registrant pursuant to the provisions described in Item 6 above,
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
5
<PAGE> 6
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.
6
<PAGE> 7
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on the 28th day of June,
1999.
By: /s/ Alex Razmjoo
------------------------------------
Alex Razmjoo
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alex Razmjoo Chairman of the Board, June 28, 1999
- -------------------------- President and Chief Executive
Alex Razmjoo Officer (Principal Executive
Officer)
/s/ Frank Alaghband Executive Vice President - June 28, 1999
- -------------------------- Operations, and Director
Frank Alaghband
</TABLE>
7
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ Alex Aydin Executive Vice President - June 30, 1999
- -------------------------- Finance and Administration,
Alex Aydin and Director (Principal
Financial Officer)
/s/ Nick Shahrestany Executive Vice President - June 28, 1999
- -------------------------- Marketing and Information
Nick Shahrestany Technology, and Director
Director
- --------------------------
Dom Genovese
Director
- --------------------------
David Blake
/s/ Frederick L. Judd Vice President - Finance and June 30, 1999
- -------------------------- General Counsel (Principal
Frederick L. Judd Accounting Officer)
</TABLE>
8
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<S> <C>
4. Procom Technology, Inc. 1999 Employee Stock Purchase Plan.
5. Opinion of Frederick L. Judd (Opinion re: legality).
23.1 Consent of Arthur Andersen LLP (Consent of Independent Auditor).
23.2 Consent of O'Melveny & Myers LLP (included in Exhibit 5).
24. Power of Attorney (included in this Registration Statement under
"Signatures").
</TABLE>
9
<PAGE> 1
EXHIBIT 4
PROCOM TECHNOLOGY, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
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 Procom Technology, Inc.
(e) "Compensation" shall mean base straight time gross earnings,
commissions, overtime and shift premium, exclusive of payments for incentive
compensation, incentive payments, bonuses, and other compensation; provided
that, for individuals who are subject to Section 16 of the Securities Exchange
Act of 1934, as amended, Compensation shall not include commissions."
(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 individual who is an employee of the Company
for purposes of tax withholding under the Code whose customary employment with
the Company or any Designated Subsidiary 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.
(j) "Fair Market Value" shall mean, as of any date, the value of Common
Stock determined as follows:
(i) 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 SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing
sale price for the Common Stock (or the mean of the closing bid
and asked prices, if no sales were reported), as quoted on such
exchange (or the exchange with the greatest volume of trading in
Common Stock) or system on the date of such determination, as
reported in The Wall Street Journal or such other source as the
Board deems reliable;
(ii) 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
<PAGE> 2
Board deems reliable; or
(iii) 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 the first Trading Day on or after January 1 and terminating on the
last Trading Day in the period ending the following June 30, or commencing on
the first Trading Day on or after July 1 and terminating on the last Trading Day
in the period ending the following December 31. The duration, commencement and
termination of Offering Periods may be changed pursuant to Section 4 of this
Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Purchase Price" shall mean an amount equal to 85% of the Fair Market
Value of a share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower.
(n) "Reserves" shall mean the number of shares of Common Stock covered by
each option under the Plan which have not yet been exercised and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.
(o) "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.
(p) "Trading Day" shall mean a day on which national stock exchanges and
the Nasdaq System are open for trading.
3. Eligibility.
(a) Any Employee 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 of the Company 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 Subsidiary, or (ii) to the extent his or her rights to
purchase stock under all employee stock purchase plans of the Company and its
subsidiaries 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.
4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after January 1 and July 1 each year, or on such other date as the Board
shall determine, and continuing thereafter until terminated in accordance with
Section 19 hereof, provided however that the first Offering Period shall
commence 30 days after approval by the Company's shareholders of this Plan. The
Board shall have the power to change the duration of Offering Periods (including
the commencement and/or termination dates thereof) with respect to future
offerings without shareholder approval if such change is announced at least five
(5) days prior to the schedule beginning of the first Offering Period to be
effected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the Plan
<PAGE> 3
by completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the Company's Human Resources
Department 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 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 subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the 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, and the aggregate of such payroll deductions during the Offering Period
shall not exceed ten percent (10%) of the participant's Compensation during said
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, or may increase or decrease the rate
of his or her payroll deductions during the Offering Period by completing or
filing with the Company a new subscription agreement authorizing a change in
payroll deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription 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 zero percent (0%) at any
time during an Offering Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription 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; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than a
number of Shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such purchase shall 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
<PAGE> 4
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 will
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 will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. Any other monies left over in a participant's account after
the Exercise Date shall be returned to the participant. 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 Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.
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 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 and 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 subscription agreement.
(b) Upon a participant's ceasing to be an Employee, for any
reason, including by virtue of him or her having failed to remain an Employee of
the Company for at least twenty (20) hours per week during an Offering Period in
which the Employee is a participant, 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.
(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 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 400,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 18 hereof. 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
<PAGE> 5
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. Members of the Board
who are eligible employees are permitted to participate in the ESPP but may not
vote on any matter affecting the administration thereof or the grant of any
option pursuant thereto. No director who is eligible to participate in the ESPP
may be a member of the committee appointed to administer it. 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. No charges for
administrative or other costs may be made against the payroll deductions of a
participant in the ESPP. Members of the Board receive no additional compensation
for their services in connection with the administration of the ESPP.
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 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.
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.
<PAGE> 6
18. Adjustments Upon Changes in Capitalization.
(a) Changes in Capitalization. Subject to any required action
by the shareholders 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 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 will 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 and that the
participant's option shall be exercised automatically on 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 terminate or amend the Plan. Except as provided in Section 18
hereof, no such termination can affect options previously granted, provided that
an Offering Period may be terminated by the Board of Directors on any Exercise
Date if the Board determines that the termination of the Plan is in the best
interests of the Company and its shareholders. 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 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, 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
<PAGE> 7
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. 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.
<PAGE> 1
EXHIBIT 5
June 30, 1999
Procom Technology, Inc.
2181 Dupont Drive
Irvine, California 92715
Re: Registration on Form S-8 of Procom
Technology, Inc. (the "Company")
Gentlemen:
At your request, I have examined the Registration Statement on Form S-8
to be filed with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of 250,000 shares of
Common Stock, par value $0.01 per share, of the Company (the "Common Stock"), to
be issued pursuant to the Procom Technology, Inc. 1999 Employee Stock Purchase
Plan (the "Plan"). I have examined the proceedings heretofore taken and to be
taken in connection with the authorization of the Plan and the Common Stock to
be issued pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact and law as I
have deemed relevant, I am of the opinion that the Common Stock has been duly
authorized by all necessary corporate action on the part of the Company and,
when issued in accordance with such authorization, the provisions of the Plan
and relevant agreements duly authorized by and in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted,
/s/ Frederick L. Judd
----------------------------------------
Frederick L. Judd
Vice President - Finance
and General Counsel
<PAGE> 1
EXHIBIT 23.1
ARTHUR ANDERSEN LLP LETTERHEAD
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 10-K into the Company's previously filed
Registration Statement on Form S-8 File Number 333-23905.
/s/ ARTHUR ANDERSEN LLP
------------------------------
ARTHUR ANDERSEN LLP
Orange County, California
June 28, 1999
