<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 24, 1997.
REGISTRATION NO. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_____________________________________
ARIS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
WASHINGTON 91-1497147
(State or other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification Number)
_______________________________________________
Fort Dent One, Suite 250
6720 FORT DENT WAY
SEATTLE, WASHINGTON 98188-2555
(206) 433-2081
(Address and Telephone Number of Registrant's Principal Executive Offices)
_______________________________________________
ARIS Corporation
1998 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
_______________________________________________
Norbert W. Sugayan, Jr.
FORT DENT ONE, SUITE 250
6720 FORT DENT WAY
SEATTLE, WASHINGTON 98188-2555
(206) 433-2081
(Name, Address and Telephone Number of Agent for Service)
_______________________________________________
COPIES TO:
BRADLEY B. FURBER, ESQ.
DAREN H. NITZ, ESQ.
VAN VALKENBERG FURBER LAW GROUP P.L.L.C.
1325 FOURTH AVENUE, SUITE 1200
SEATTLE, WASHINGTON 98101-2509
TELEPHONE: (206) 464-0460
FACSIMILE: (206) 464-2857
_______________________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT TO BE MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED(1) OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED PER SHARE(2) OFFERING PRICE FEE(2)
====================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, without par value 300,000 $26.00 $7,800,000 $2,364
====================================================================================================================================
</TABLE>
(1) Includes an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance
pursuant to the ARIS Corporation 1998 Employee Stock Purchase Plan
(the "Plan") as the result of any future stock split, stock dividend
or similar adjustment of the Registrant's outstanding Common Stock.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rules 457(c) and 457(h) under the Securities Act of 1933,
as amended. The price per share and aggregate offering price are
based upon an estimated price per share of $26.00 based on the average
of the high ($26.625) and low ($25.375) sales prices for the
Registrant's Common Stock on November 19, 1997, as reported by the
Nasdaq National Market.
_______________________________________________
<PAGE>
PART I
INFORMATION REQUIRED IN THE 10(a) PROSPECTUS
The information required by Part I is included in documents sent or given
to participants in the Plan pursuant to Rule 428(b)(1) of the Securities Act of
1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by ARIS Corporation, a Washington corporation
(the "Company" or the "Registrant") with the Securities and Exchange Commission
(the "Commission") are incorporated by reference into this Registration
Statement:
(a) The Company's Registration Statement on Form S-1 (No. 333-25409) and
the prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act, that contain audited financial statements for the Company's
latest fiscal year for which such statements have been filed;
(b) A description of the Company's Common Stock, which is contained in the
Form 8-A Registration Statement filed by the Company with the Commission on June
3, 1997;
(c) The Company's Quarterly Report on Form 10-Q, filed August 14, 1997
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act");
(d) The Company's Current Report on Form 8-K, filed September 26, 1997
pursuant to the Exchange Act; and
(e) The Company's Quarterly Report on Form 10-Q, filed November 14, 1997
pursuant to the Exchange Act.
In addition, all reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
prior to the filing of a post effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part of this Registration Statement from the date of the filing of such
reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
The validity of the issuance of the Common Stock offered pursuant to
the Plan will be passed upon for the Company by its counsel, Van Valkenberg
Furber Law Group P.L.L.C. Van Valkenberg Furber Law Group P.L.L.C. holds a
warrant to purchase 4,000 shares of Common Stock at an exercise price of $10.00
per share.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act. Article 9 of the Registrant's
Amended and Restated Bylaws provides for indemnification of the Registrant's
directors, officers, employees and agents to an extent not inconsistent with
Washington law. The Registrant has entered into indemnification agreements with
each of its officers
<PAGE>
and directors. Directors of the Registrant may also be indemnified pursuant to
a liability insurance policy maintained by the Registrant for such purpose.
Section 23B.08.320 of the Washington Business Corporation Act authorizes a
corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except in
certain circumstances involving intentional misconduct, knowing violations of
law or illegal corporate loans or distributions, or any transaction from which
the director personally receives a benefit in money, property or services to
which the director is not legally entitled. Article 6 of the Registrant's
Amended and Restated Articles of Incorporation contains provisions implementing,
to the fullest extent permitted by Washington law, such limitations on a
director's liability to the Registrant and its shareholders.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein:
<TABLE>
<CAPTION>
EXHIBIT NO. Description
------------- -----------------------------------------------------
<S> <C>
4.1* Amended and Restated Articles of Incorporation.
4.2* Amended and Restated Bylaws.
4.3* Form of Common Stock Certificate.
5.1 Opinion of Van Valkenberg Furber Law Group P.L.L.C.
as to legality of shares to be issued.
23.1 Consent of Van Valkenberg Furber Law Group P.L.L.C.
(Included in Exhibit 5.1).
23.2 Consent of Price Waterhouse L.L.P., independent
certified public accountants for the Company.
24.1 Power of Attorney (Included in the signature page to
this Registration Statement).
99.1 ARIS Corporation 1998 Employee Stock Purchase Plan.
</TABLE>
__________________
(*) Filed as an exhibit to the Form S-1 Registration Statement (No.333-
25409), as amended through the date hereof and incorporated herein by
reference.
ITEM 9. UNDERTAKINGS
A. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sells are being
made, a post-effective amendment to this Registration Statement to:
(i) include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) 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 together, represent a
fundamental change in the information in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent
<PAGE>
no more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement; and
(iii) 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 (1)(i) and (1)(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 Commission 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 of the securities offered herein, 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 this Registration Statement shall be deemed to be a
new registration statement relating to the securities being offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Seattle, State of Washington, on the 20th day of
November 1997.
ARIS CORPORATION
By: /s/ Paul Y. Song
----------------
Paul Y. Song
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints Paul Y. Song and Thomas W. Averill, or either of them, with full power
of substitution and full power to act without the other, as his true and lawful
attorney-in-fact and agent to act in his name, place and stead and to execute in
the name and on behalf of each person, individually and in each capacity stated
below, and to file, any and all amendments to this Registration Statement,
including any and all post-effective amendments with the Securities and Exchange
Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 20th day of November, 1997.
SIGNATURE TITLE
--------- -----
/s/ Paul Y. Song Chairman, President and Chief Executive Officer
- ---------------------------- (Principal Executive Officer)
Paul Y. Song
/s/ Thomas W. Averill Vice President, Finance and Chief Financial
- ---------------------------- Officer (Principal Financial and Accounting
Thomas W. Averill Officer)
/s/ Kendall W. Kunz Senior Vice President of Western Operations and
- ---------------------------- Director
Kendall W. Kunz
/s/ Bruce R. Kennedy Director
- ----------------------------
Bruce R. Kennedy
/s/ Kenneth A. Williams Director
- ----------------------------
Kenneth A. Williams
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. Description
-------------- ------------------------------------------------
<S> <C>
4.1* Amended and Restated Articles of Incorporation.
4.2* Amended and Restated Bylaws.
4.3* Form of Common Stock Certificate.
5.1 Opinion of Van Valkenberg Furber Law Group P.L.L.C. as to
legality of shares to be issued.
23.1 Consent of Van Valkenberg Furber Law Group P.L.L.C.
(Included in Exhibit 5.1).
23.2 Consent of Price Waterhouse L.L.P., independent certified
public accountants for the Company.
24.1 Power of Attorney (Included in the signature page to this
Registration Statement).
99.1 ARIS Corporation 1998 Employee Stock Purchase Plan.
</TABLE>
__________________
(*) Filed as an exhibit to the Form S-1 Registration Statement (No.333-
25409), as amended through the date hereof and incorporated herein by
reference.
<PAGE>
Exhibit 5.1
-----------
[Van Valkenberg Furber Law Group P.L.L.C. Letterhead]
November 24, 1997
ARIS Corporation
Fort Dent One, Suite 250
6720 Fort Dent Way
Seattle, Washington 98188-2555
Ladies and Gentlemen:
We have acted as counsel to ARIS Corporation, a Washington corporation
(the "Company"), in connection with the preparation and filing of a registration
statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), being filed by the Company with the
Securities and Exchange Commission with respect to the issuance by the Company
of up to 300,000 shares (the "Shares") of the Company's common stock, without
par value per share, that may be issuable under the ARIS Corporation 1998
Employee Stock Purchase Plan (the "Plan").
We have examined the Registration Statement and such documents and
records of the Company and other documents as we have deemed necessary for the
purpose of this opinion. In our examination of the foregoing documents, we have
assumed the genuineness of all signatures and the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as copies and the authenticity of the originals of
such latter documents. Based upon and subject to the foregoing, we are of the
opinion that upon the happening of the following events:
(a) the filing and effectiveness of the Registration Statement and
any amendments thereto;
(b) the approval of the Plan by the shareholders of the Company;
(c) registration by the Company's registrar of the Shares;
(d) the issuance and sale of the Shares in accordance with the terms
of the Plan; and
(e) receipt by the Company of the consideration required for the
Shares in accordance with the terms of the Plan;
the Shares will be duly authorized, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the Registration
Statement under the heading "Interest of Named Experts and Counsel." In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act.
This opinion is based upon currently existing statutes, rules,
regulations and judicial decisions, and we disclaim any obligation to advise you
of any change in any of these sources of law or subsequent legal or factual
developments which might affect any matters or opinions set forth herein.
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
Very truly yours,
/s/ Van Valkenberg Furber Law Group P.L.L.C.
<PAGE>
Exhibit 23.2
------------
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement of our reports dated March 21, 1997, with respect to ARIS Corporation
for the year ended December 31, 1996, and March 14, 1997, with respect to
SofTeach Corporation for the nine months ended September 30, 1996, included in
ARIS Corporation's Registration Statement on Form S-1 (No. 333-25409) filed with
the Securities and Exchange Commission.
/s/ Price Waterhouse LLP
Seattle, Washington
November 20, 1997
<PAGE>
Exhibit 99.1
------------
ARIS CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purposes of the ARIS Corporation 1998 Employee Stock Purchase Plan (the
"Plan") are to (a) assist employees of ARIS Corporation, a Washington
corporation (the "Company"), and its designated subsidiary corporations in
acquiring a stock ownership interest in the Company pursuant to a plan that is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Internal Revenue Code of 1986, as amended (the "Code"), and (b) help
employees provide for their future security and encourage them to remain in the
employ of the Company and its subsidiary corporations. Stock purchased under
the Plan may be paid for by regular payroll deductions. Only employees of the
Company and its designated subsidiary corporations are eligible to participate
in the Plan, and participation is voluntary.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set forth
below.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Company's Compensation Committee or another committee
appointed by the Board and given authority by the Board to administer the Plan.
"Company" means ARIS Corporation, a Washington corporation.
"Designated Subsidiary" has the meaning set forth under the definition of
"Eligible Employee" in this Section 2.
"Eligible Compensation" means all regular cash compensation, including
overtime, cash bonuses and commissions. Regular cash compensation does not
include severance pay, hiring and relocation bonuses, pay in lieu of vacation or
sick leave, or any other special payments, or any gain from stock option
exercises.
"Eligible Employee" means any employee of the Company, or any Subsidiary
Corporation designated by the Board or the Committee (a "Designated
Subsidiary"), who is in the employ of the Company (or any Designated Subsidiary)
on one or more Offering Dates and who meets the following criteria:
<PAGE>
(a) the employee does not, immediately after the Option is granted, own
stock (as defined by the Code) possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or of a Designated
Subsidiary;
(b) the employee has been employed for at least ninety (90) consecutive
days;
(c) the employee's customary employment is for more than 20 hours per week;
provided, however, that the Plan Administrator, in its sole discretion, may
reduce this minimum hourly requirement for future Offering Periods; and
(d) the employee's customary employment is for more than five (5) months in
a calendar year; provided, however, that the Plan Administrator, in its sole
discretion, may reduce this minimum requirement for future Offering Periods.
If the Company permits any employee of a Designated Subsidiary to
participate in the Plan, then all employees of that Designated Subsidiary who
meet the requirements of this paragraph shall also be considered Eligible
Employees.
"Enrollment Period" has the meaning set forth in Section 6.1.
"SPP Broker" has the meaning set forth in Section 10.
"Offering" has the meaning set forth in Section 5.1.
"Offering Date" means the first day of an Offering.
"Offering Period" has the meaning set forth in Section 5.1.
"Option" means an option granted under the Plan to an Eligible Employee to
purchase shares of Stock.
"Parent Corporation" means any corporation, other than the Company, in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of the corporations, other than the Company, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
"Participant" means any Eligible Employee who has elected to participate in
an Offering in accordance with the procedures set forth in Section 6.1 and who
has not withdrawn from the Plan or whose participation in the Plan is not
terminated.
"Plan" means the ARIS Corporation 1998 Stock Purchase Plan.
"Plan Administrator" has the meaning set forth in Section 3.1.
"Purchase Date" means the last day of each Purchase Period.
"Purchase Period" has the meaning set forth in Section 5.2.
"Purchase Price" has the meaning set forth in Section 8.
<PAGE>
"Stock" means the Common Stock, no par value, of the Company.
"Subscription" has the meaning set forth in Section 6.1.
"Subsidiary Corporation" means any corporation, other than the Company, in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or the Committee or, if and to
the extent the Board or the Committee designates an executive officer of the
Company to administer the Plan, by such executive officer.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Subject to the provisions of the Plan, the Plan Administrator shall have
the authority, in its sole discretion, to determine all matters relating to
Options granted under the Plan, including all terms, conditions, restrictions
and limitations of Options; provided, however, that all Participants granted
Options pursuant to the Plan shall have the same rights and privileges within
the meaning of Code Section 423. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, unless revised by the Board or the
Committee, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's other officers or employees as the Plan Administrator so determines.
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in Section 19, a
maximum of 300,000 shares of Stock may be sold under the Plan. Shares sold
under the Plan shall be drawn from authorized and unissued shares or shall be
shares acquired by the Company. Any shares of Stock subject to an Option that
cease to be subject to the Option (other than by reason of exercise of the
Option), including, without limitation, in connection with the cancellation or
termination of the Option, shall again be available for sale in connection with
future grants of Options under the Plan.
<PAGE>
SECTION 5. OFFERING DATES
5.1 OFFERING PERIODS
The Plan shall be implemented by a series of offerings (each, an
"Offering"). Except as otherwise set forth below, Offerings shall commence on
January 1 and July 1 of each year and end on the next June 30 and December 31,
respectively, occurring thereafter. The first Offering Period shall begin
January 1, 1998 and end on June 30, 1998. Notwithstanding the foregoing, the
Board or the Committee may establish (a) a different term for one or more future
Offerings and (b) different commencing and ending dates for such Offerings;
provided, however, that an offering period (the "Offering Period") may not
exceed five years; and provided, further, that if the Purchase Price may be less
than 85% of the fair market value of the Stock on the Purchase Date, the
Offering Period may not exceed 27 months. In the event the first or the last
day of an Offering Period is not a regular business day, then the first day of
the Offering Period shall be deemed to be the next regular business day and the
last day of the Offering Period shall be deemed to be the last preceding regular
business day. An employee who becomes eligible to participate in the Plan after
an Offering Period has commenced shall not be eligible to participate in such
Offering but may participate in any subsequent Offering, provided that such
Employee is still an Eligible Employee as of the commencement of any such
subsequent Offering. Eligible Employees may not participate in more than one
Offering at a time.
5.2 PURCHASE PERIODS
Each Offering Period shall consist of one or more consecutive purchase
periods (each, a "Purchase Period"). Except as otherwise set forth below,
Purchase Periods shall commence on January 1 and July 1 of each year and end on
the next June 30 and December 31, respectively, occurring thereafter. The first
Purchase Period shall begin January 1, 1998 and end on June 30, 1998.
Notwithstanding the foregoing, the Board or the Committee may establish for any
future Offering (a) different terms for one or more Purchase Periods within the
Offering Period and (b) different commencing dates and Purchase Dates for any
such Purchase Periods. The last day of each Purchase Period shall be the
Purchase Date for such Purchase Period. In the event the first or last day of a
Purchase Period is not a regular business day, then the first day of the
Purchase Period shall be deemed to be the next regular business day and the last
day of the Purchase Period shall be deemed to be the last preceding regular
business day.
SECTION 6. PARTICIPATION IN THE PLAN
6.1 INITIAL PARTICIPATION
An Eligible Employee shall become a Participant on the first Offering Date
after satisfying the eligibility requirements and delivering to the Plan
Administrator during the enrollment period established by the Plan Administrator
(the "Enrollment Period") a subscription (the "Subscription"):
(a) indicating the Eligible Employee's election to participate in the Plan;
<PAGE>
(b) authorizing payroll deductions and stating the amount to be deducted
regularly from the Participant's pay; and
(c) authorizing the purchase of Stock for the Participant in each Purchase
Period.
An Eligible Employee who does not deliver a Subscription to the Plan
Administrator during the Enrollment Period shall not participate in the Plan for
that Offering Period or any subsequent Offering Period unless such Eligible
Employee subsequently enrolls in the Plan by delivering a Subscription to the
Plan Administrator during the Enrollment Period for such subsequent Offering
Period. The Plan Administrator may, from time to time, change the Enrollment
Period for any future Offering as deemed advisable by the Plan Administrator in
its, his or her sole discretion for the proper administration of the Plan.
6.2 CONTINUED PARTICIPATION
Unless the Plan Administrator determines otherwise for any future Offering,
a Participant shall automatically participate in the next Offering Period until
such time as the Participant withdraws from the Plan pursuant to Section 11.1 or
terminates employment as provided in Section 12.
SECTION 7. LIMITATIONS ON RIGHT TO PURCHASE SHARES
7.1 $25,000 LIMITATION
No Participant shall be entitled to purchase Stock under the Plan (or any
other employee stock purchase plan that is intended to meet the requirements of
Code Section 423 sponsored by the Company, any Parent Corporation or any
Subsidiary Corporation) at a rate that exceeds $25,000 in fair market value,
determined as of the Offering Date for each Offering Period (or such other limit
as may be imposed by the Code), for each calendar year in which a Participant
participates in the Plan (or any other employee stock purchase plan described in
this Section 7.1).
7.2 PRO RATA ALLOCATION
In the event the number of shares of Stock that might be purchased by all
Participants in the Plan exceeds the number of shares of Stock available in the
Plan, the Plan Administrator shall make a pro rata allocation of the remaining
shares of Stock in as uniform a manner as shall be practicable and as the Plan
Administrator shall determine to be equitable. Fractional shares may be issued
under the Plan unless the Board or the Committee determines otherwise.
SECTION 8. PURCHASE PRICE
The purchase price (the "Purchase Price") at which Stock may be acquired in
an Offering pursuant to the exercise of all or any portion of an Option granted
under the Plan shall be 85% of the lesser of (a) the fair market value of the
Stock on the Offering Date of such Offering and (b) the fair market value of the
Stock on the Purchase Date. Notwithstanding the foregoing, the Board or the
Committee may establish a different Purchase Price for any future Offering,
which shall not be less than 85% of the lesser of (a) the fair market value of
the Stock on the Offering
<PAGE>
Date of such Offering and (b) the fair market value of the Stock on the Purchase
Date. The fair market value of the Stock on the Offering Date or on the
Purchase Date shall be the average of the high and low per share trading prices
for the Stock as reported for such day by the Nasdaq National Market. If no
sales of the Stock were made on the Nasdaq National Market on the transaction
date, fair market value shall mean the average of the high and low per share
trading prices for the Stock as reported for the next preceding day on which
sales of the Stock were made on the Nasdaq National Market.
SECTION 9. PAYMENT OF PURCHASE PRICE
9.1 GENERAL RULES
Stock that is acquired pursuant to the exercise of all or any portion of an
Option may be paid for only by means of payroll deductions from the
Participant's Eligible Compensation. Except as set forth in this Section 9, the
amount of compensation to be withheld from a Participant's Eligible Compensation
during each pay period shall be determined by the Participant's Subscription.
9.2 CHANGE NOTICES
Unless otherwise determined by the Plan Administrator for any future
Offering, a Participant may not elect during an Offering Period to increase or
decrease the amount withheld from his or her compensation in future pay periods
during an Offering Period.
9.3 PERCENT WITHHELD
The amount of payroll withholding with respect to the Plan for any
Participant during any pay period shall not exceed 10% of the Participant's
Eligible Compensation for such pay period. Amounts shall be withheld only in
whole percentages.
9.4 PAYROLL DEDUCTIONS
Payroll deductions shall commence on the first payday following the
Offering Date and shall continue through the last payday of the Offering Period
unless sooner altered or terminated as provided in the Plan.
9.5 MEMORANDUM ACCOUNTS
Individual accounts shall be maintained for each Participant for memorandum
purposes only. All payroll deductions from a Participant's compensation shall
be credited to such account but shall be deposited with the general funds of the
Company. All payroll deductions received or held by the Company may be used by
the Company for any corporate purpose.
9.6 NO INTEREST
No interest shall be paid on payroll deductions received or held by the
Company.
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9.7 ACQUISITION OF STOCK
On each Purchase Date of an Offering Period, each Participant shall
automatically acquire, pursuant to the exercise of the Participant's Option, the
number of shares of Stock arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Purchase Period by the
Purchase Price; provided, however, that the number of shares of Stock purchased
by the Participant shall not exceed the number of whole shares of Stock so
determined, if the Board or the Committee has determined for any future Offering
that fractional shares may not be issued under the Plan.
9.8 EXCESS CASH BALANCES
Any cash balance remaining in the Participant's account under the Plan
after a purchase of Stock at the end of a Purchase Period which is an amount
less than the amount necessary to purchase a whole share of Stock (if the Board
or the Committee has determined that fractional shares may not be issued), shall
be maintained in the Participant's account and carried over to the next Purchase
Period or Offering Period if the Participant continues to participate in the
Plan. If the Participant does not continue to participate, such amounts shall
be refunded to the Participant as soon as practicable after the Purchase Date
without the payment of any interest.
9.9 WITHHOLDING OBLIGATIONS
At the time the Option is exercised, in whole or in part, or at the time
some or all of the Stock is disposed of, the Participant shall make adequate
provision for federal and state withholding obligations of the Company, if any,
that arise upon exercise of the Option or upon disposition of the Stock. The
Company may, but shall not be obligated to, withhold from the Participant's
compensation the amount necessary to meet such withholding obligations.
9.10 TERMINATION OF PARTICIPATION
No Stock shall be purchased on behalf of a Participant on a Purchase Date
if his or her participation in the Plan has terminated prior to such Purchase
Date.
9.11 PROCEDURAL MATTERS
The Plan Administrator may, from time to time, establish (a) limitations on
the frequency and/or number of any permitted changes in the amount withheld
during an Offering, (b) an exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, (c) 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, and (d)
such other limitations or procedures as deemed advisable by the Plan
Administrator, in its sole discretion, that are consistent with the Plan and in
accordance with the requirements of Code Section 423.
9.12 LEAVES OF ABSENCE
During leaves of absence approved by the Company and meeting the
requirements of the applicable Treasury Regulations promulgated under the Code,
a Participant may continue
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participation in the Plan by delivering cash payments to the Plan Administrator
on the Participant's normal paydays equal to the amount of his or her payroll
deduction under the Plan had the Participant not taken a leave of absence.
SECTION 10. STOCK PURCHASED UNDER THE PLAN
10.1 SPP BROKER
If the Plan Administrator designates or approves a stock brokerage or other
financial services firm (the "SPP Broker") to hold shares purchased under the
Plan for the accounts of Participants, the following procedures shall apply.
Promptly following each Purchase Date, the number of shares of Stock purchased
by each Participant shall be deposited into an account established in the
Participant's name with the SPP Broker. A Participant shall be free to
undertake a disposition of the shares of Stock in his or her account at any
time, but, in the absence of such a disposition, the shares of Stock must remain
in the Participant's account at the SPP Broker until the holding period set
forth in Code Section 423 has been satisfied. With respect to shares of Stock
for which the Code Section 423 holding periods have been satisfied, the
Participant may move those shares of Stock to another brokerage account of the
Participant's choosing or request that a stock certificate be issued and
delivered to him or her. A Participant who is not subject to payment of U.S.
income taxes may move his or her shares of Stock to another brokerage account of
his or her choosing or request that a stock certificate be delivered to him or
her at any time, without regard to the Code Section 423 holding period.
10.2 NOTICE OF DISPOSITION
By entering the Plan, each Participant agrees to promptly give the Company
notice of any Stock disposed of within the later of one year from the Purchase
Date and two years from the Offering Date for such Stock, showing the number of
such shares disposed of and the Purchase Date and Offering Date for such Stock.
This notice shall not be required if and so long as the Company has a designated
SPP Broker.
SECTION 11. VOLUNTARY WITHDRAWAL
11.1 WITHDRAWAL FROM THE PLAN
A Participant may withdraw from the Plan by delivering to the Plan
Administrator a notice of withdrawal in the form required by the Plan
Administrator for such purpose. Any withdrawal from an Offering shall constitute
a withdrawal from the Plan unless the Board or the Committee determines for any
future Offerings that withdrawal from an Offering shall not result in a
withdrawal from the Plan and any succeeding Offering. Such notice must be
delivered at least ten days prior to the end of the Purchase Period for which
such withdrawal is to be effective or by any other date specified by the Plan
Administrator for any future Offering. If a Participant withdraws after the
Purchase Date for a Purchase Period of an Offering, the withdrawal shall not
affect Stock acquired by the Participant in that Purchase Period and any earlier
Purchase Periods. In the event a Participant voluntarily elects to withdraw from
the Plan, the withdrawing Participant may not resume participation in the Plan
during the same Offering Period but may
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participate in any subsequent Offering under the Plan by again satisfying the
definition of a Participant.
11.2 RETURN OF PAYROLL DEDUCTIONS
Upon withdrawal from the Plan pursuant to Section 11.1, the withdrawing
Participant's accumulated payroll deductions that have not been applied to the
purchase of Stock shall be returned as soon as practical after the withdrawal,
without the payment of any interest, to the Participant, and the Participant's
interest in the Offering shall terminate. Such accumulated payroll deductions
may not be applied to any other Offering under the Plan.
SECTION 12. TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the Company for any reason,
including retirement, disability or death, or the failure of a Participant to
remain an Eligible Employee, shall immediately terminate the Participant's
participation in the Plan. The payroll deductions credited to the Participant's
account since the last Purchase Date shall, as soon as practical, be returned to
the Participant or, in the case of a Participant's death, to the Participant's
legal representative, and all the Participant's rights under the Plan shall
terminate. Interest shall not be paid on sums returned to a Participant
pursuant to this Section 12.
SECTION 13. RESTRICTIONS UPON ASSIGNMENT
An Option granted under the Plan shall not be transferable otherwise than
by will or by the applicable laws of descent and distribution and shall be
exercisable during the Participant's lifetime only by the Participant. The Plan
Administrator will not recognize, and shall be under no duty to recognize, any
assignment or purported assignment by a Participant, other than by will or by
the applicable laws of descent and distribution, of the Participant's interest
in the Plan, of his or her Option, or of any rights under his or her Option.
SECTION 14. NO RIGHTS OF SHAREHOLDER UNTIL SHARES ISSUED
With respect to shares of Stock subject to an Option, a Participant shall
not be deemed to be a shareholder of the Company, and he or she shall not have
any of the rights or privileges of a shareholder. A Participant shall have the
rights and privileges of a shareholder of the Company when, but not until, the
shares have been issued following exercise of the Participant's Option.
SECTION 15. AMENDMENT OF THE PLAN
The Board or the Committee may amend the Plan in such respects as it shall
deem advisable; provided, however, that, to the extent required for compliance
with Code Section 423 or any applicable law or regulation, shareholder approval
will be required for any amendment that will (a) increase the total number of
shares as to which Options may be granted under the Plan, (b) modify the class
of employees eligible to receive Options, or (c) otherwise require shareholder
approval under any applicable law or regulation.
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SECTION 16. TERMINATION OF THE PLAN
The Board may suspend or terminate the Plan at any time. The Plan shall
have no fixed expiration date. No Options shall be granted during any period of
suspension of the Plan.
SECTION 17. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person (including any
Eligible Employee or Participant) the right to remain in the employ of the
Company or a Subsidiary Corporation or to affect the right of the Company and
the Subsidiary Corporations to terminate the employment of any person (including
any Eligible Employee or Participant) at any time with or without cause.
SECTION 18. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary Corporation.
Nothing in the Plan shall be construed to limit the right of the Company or any
Subsidiary Corporation to (a) establish any other forms of incentives or
compensation for employees of the Company or any Subsidiary Corporation or (b)
grant or assume options otherwise than under the Plan in connection with any
proper corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition, by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
SECTION 19. ADJUSTMENTS
19.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Stock, then (subject to any required action by the
Company's shareholders), the Board or the Committee, in its sole discretion,
shall make such equitable adjustments as it shall deem appropriate in the
circumstances in (i) the maximum number and kind of securities subject to the
Plan as set forth in Section 4 and (ii) the number and kind of securities that
are subject to any outstanding Option and the per share price of such
securities. The determination by the Board or the Committee as to the terms of
any of the foregoing adjustments shall be conclusive and binding.
19.2 MERGER, ACQUISITION OR LIQUIDATION OF THE COMPANY
In the event of the merger or consolidation of the Company into another
corporation, the acquisition by another corporation of all or substantially all
of the Company's assets, or the liquidation or dissolution of the Company, the
Purchase Date with respect to outstanding Options
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shall be the business day immediately preceding the effective date of such
merger, consolidation, acquisition, liquidation or dissolution unless the Board
or the Committee shall, in its sole discretion, provide for the assumption or
substitution of such Options in a manner complying with Code Section 424(a).
19.3 LIMITATIONS
The grant of Options will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 20. REGISTRATION
The Company shall be under no obligation to any Participant to register for
offering or resale under the Securities Act of 1933, as amended, or register or
qualify under state securities laws, any shares of Stock. The Company may issue
certificates for shares with such legends and subject to such restrictions on
transfer and stop-transfer instructions as counsel for the Company deems
necessary or desirable for compliance by the Company with federal and state
securities laws.
SECTION 21. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the Board,
so long as it is approved by the Company's shareholders at any time within 12
months of such adoption.
