<PAGE> 1
Registration No. 333-_______
- -------------------------------------------------------------------------------
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 28, 1997.
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
ONEOK Inc. Employee Stock Purchase Plan
------------------
ONEOK, INC.
100 West Fifth Street, Tulsa, Oklahoma 74103
(Name of the issuer of the equity securities being offered pursuant
to the Plan and the address of its principal office)
OKLAHOMA 73-1520922
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
J.D. NEAL DONALD A. KIHLE
Vice President, Chief Financial Gable Gotwals Mock Schwabe Kihle Gaberino
Officer and Treasurer 100 West Fifth Street
ONEOK, Inc. Suite 1000
100 West Fifth Street Tulsa, Oklahoma 74103
Tulsa, Oklahoma 74103 (918) 585-8141
(918) 588-7000
(Name, addresses, and telephone numbers of agents for service)
------------------
Appropriate date of commencement of proposed sale pursuant to the Plan: from
time to time after the effective date hereof
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Offering Registration
to be Registered (1) Registered(2) Per Unit (3) Price (4) Fee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock with
$0.01 par value 242,252 $ 36.656 $ 8,879,989 $3,062
</TABLE>
- -------------------------------------------------------------------------------
Exhibits Index on Page 5.
<PAGE> 2
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests in the Plan to be offered or sold pursuant to the employee
benefit plan described herein.
(2) Represents the estimated maximum amount of common stock of ONEOK, Inc.
(hereinafter referred to as "Common Stock") which could be contributed
or acquired under the Employee Stock Purchase Plan (hereinafter
referred to as the "Plan") from ONEOK, Inc. (hereinafter referred to as
the "Company"), during the years of operation of the Plan.
(3) Based on price of $36.656 per share of the Common Stock, the average
sales price of the Common Stock published in the Wall Street Journal
reports of the New York Stock Exchange Composite Transaction for
November 25, 1997.
(4) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee.
2
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 will
be sent or given to employees as specified in Rule 428(b)(1). These documents
(and the documents incorporated by reference pursuant to Item 3 of Part II of
this Registration Statement) taken together, constitute the prospectus for
purpose of Section 10(a) of the Securities Act of 1933, as amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company and the Plan hereby incorporate by reference in this Registration
Statement the following documents of the Company (SEC File No. 1-2572)
heretofore filed with the Securities and Exchange Commission:
(1) Annual Report on Form 10-K of ONEOK Inc. (Predecessor by
merger to the Company herein after referred to as "Old ONEOK"
for the year ended August 31, 1997.
(2) Form 8-K reporting the consummation of the merger of ONEOK Inc.
with and into WAI filed November 26, 1997.
(3) Old ONEOK's Proxy Statement dated August 6, 1997 in connection
with its Special Meeting of Shareholders held September 25,
1997.
(4) In addition, there is incorporated herein by reference all
documents filed subsequent to the date hereof, by the Company
and the Plan pursuant to Sections 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that
all securities have been sold or which deregisters all
securities then remaining unsold. Such documents are deemed to
be a part hereof from the date of filing of such documents.
ITEM 4
DESCRIPTION OF SECURITIES
The following is a description of the securities offered.
Holders of ONEOK, Inc. Common Stock are entitled to (1) vote for each share held
of record. The holders of Common Stock are entitled to receive any dividends
that may be declared by the Corporation's Board of Directors from funds legally
available therefor and to share pro rata in the net assets of the Corporation
upon liquidation. Holders of Common Stock have no preemptive rights and no
rights to convert their Common Stock into any other securities of the
Corporation. All outstanding shares of Common Stock are fully paid and are not
subject to calls or assessments. Each share of Common stock includes an
associated right, each right ("Right") entitling the holder to purchase one
one-hundreth of a share of Series C Participating Preferred Stock, par value
$0.01 per share of the Company pursuant to a Rights Agreement between the
Company and a designated rights agent (the "Rights Agreement"). The designation
of Rights (Exhibit 4(c) hereto) is incorporated herein by reference.
3
<PAGE> 4
ITEM 5
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the securities which may be purchased under the Plan has been
passed upon by the firm of Gable Gotwals Mock Schwabe Kihle Gaberino, 100 West
Fifth Street, Suite 1000, Tulsa, Oklahoma 74103, counsel for the Company. The
firm of Gable Gotwals Mock Schwabe Kihle Gaberino, has reviewed the statements
made as to matters of law and legal conclusions under "Securities to be Offered"
and such statements are set forth in the documents which form a part of the
prospectus in reliance upon its authority as an expert.
ITEM 6
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Article VIII of the bylaws of ONEOK, Inc. upon authorization and
determination either (1) by the board of directors by a majority of a quorum is
not consisting of directors who were not parties to the action, suit, or
proceeding involved; (2) if such a quorum is not obtainable, or even if
obtainable and a quorum of disinterested directors so directs, by independent
counsel in a written opinion; or (3) by the stockholders, the Company is
obligated to indemnify any person who incurs liability by reason of the fact
that he is or was a director, officer, employee, or agent of the Company, or is
or was serving at its request as a director , officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
as a member of any committee or similar body, if he acted in good faith and in a
manner he reasonably believed to be in 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. However, in an action by
or in the right of the Company, no indemnification will be made if such person
shall be adjudged to be liable to the Company, unless such indemnification is
allowed by a court of competent jurisdiction.
Under insurance obtained by the Company, coverage of Company officers and
directors against liability for neglect, errors, omission, or breaches of duty
in their capacities as such is provided for both the Company, to the extent that
it is obligated to indemnify such officers and directors, and the officers and
directors themselves. Such coverage is provided in the amount of $75,000,000
with a retained limit by the Company of $250,000. The insurance companies are
obligated to pay covered losses in excess of the $250,000 retained limit, up to
the policies' limits of $75,000,000. Among the policies' exclusions are those
which exclude coverage for accounting for profits made within the meaning of
Section 16(b) of the Securities Act of 1934, claims based upon or attributable
to directors and officers gaining any personal profit or advantage to which such
individuals are not legally entitled, and for any claims brought about or
attributable to the dishonesty of an officer or director.
The registrant has been advised that, in the opinion of the Securities and
Exchange Commission, provisions providing for the indemnification by the
corporation of its officers, directors, and controlling persons against
liabilities imposed by the Securities Act of 1933 are against public policy as
expressed in said Act and are therefore unenforceable. It is recognized that the
above-summarized provisions of the registrant's bylaws and the applicable
Oklahoma General Corporation Law may be sufficiently broad to indemnify
officers, directors, and controlling persons of the registrant against
liabilities arising under said Act. Therefore, in the event that a claim of
indemnification against liability under said Act (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) shall be asserted by an officer, director, or controlling person
under said provisions, the registrant will, unless in the opinion of its counsel
the question has already been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question of whether or not such
indemnification by it is against public policy as expressed in said Act and will
be governed by the final adjudication of such issue.
4
<PAGE> 5
ITEM 8
EXHIBITS
The following exhibits are attached hereto or incorporated by reference herein:
<TABLE>
<CAPTION>
Page Number or
Incorporation by
Reference to
----------------
<S> <C>
(4)(a) Certificate of Incorporation
ONEOK, Inc. Exhibit (3.1) to Form
S-4 Registration
Statement No.
333-27467
(4)(b) Bylaws of ONEOK, Inc., as Amended Exhibit (3.2) to Form
S-4 Registration
Statement No.
333-27467
(4)(c) Certificate of Description, Exhibit A to Exhibit (3.4)
Preference of Rights of Series C To Form S-4 Registration
Participating Preferred Stock of Statement No. 333-27467
the Corporation
(5) Opinion of Gable Gotwals Mock Schwabe
Kihle Gaberino
(23)(a) Consent of Gable Gotwals Mock Schwabe
Kihle Gaberino (See Item 5)
(23)(b) Independent Auditors' Consent
(23)(c) Independent Auditors' Consent
(24) Powers of Attorney (Included on pages 8,
9, and 10)
(99) ONEOK, Inc. Employee Stock Purchase Plan 12 - 20
</TABLE>
5
<PAGE> 6
ITEM 9
UNDERTAKINGS
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(a) To include any prospectus required by Section 10
(a)(3) of the Securities Act of 1933;
(b) 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;
(c) To include any material information with respect to
the Plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each 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 the time of shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of 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 purpose of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
c. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus to each employee to whom the prospectus
is sent or given, the latest Annual Report to Shareholders unless such
employee otherwise has received a copy of such report, in which case
the registrant shall state in the prospectus that it will promptly
furnish, without charge, a copy of such report on written request of
the employee. If the last fiscal year of the registrant has ended
within 120 days prior to the use of the prospectus, the Annual Report
of the registrant of the preceding fiscal year may be delivered, but
within such 120-day period the Annual Report for the last fiscal year
will be furnished to each such employee.
The undersigned registrant hereby undertakes to transmit or cause to be
transmitted to all employees participating in the Plan who do not
otherwise receive such material as stockholders or the registrant, at
the time and in the manner such material is sent to its stockholders,
copies of all reports, proxy statements, and other communications
distributed to its stockholders generally.
d. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In
6
<PAGE> 7
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
7
<PAGE> 8
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, 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 Tulsa and the State of Oklahoma, on the 26th day of
November, 1997.
ONEOK, Inc.
By: LARRY BRUMMETT
--------------------------------
Larry Brummett, Chairman of the
Board and Chief Executive
Officer
8
<PAGE> 9
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes Larry
Brummett and J. D. Neal, or either of them, as attorney-in-fact with full power
of substitution, 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 and all instruments necessary or incidental in connection therewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
certify that to the best of their knowledge and belief, the registrant meets all
the requirements for filing on Form S-8. This registration statement has been
signed below by the following persons in the capacities indicated in the City of
Tulsa and the State of Oklahoma, on this 26th day of November, 1997.
LARRY BRUMMETT J. D. NEAL
- ---------------------- ----------------------------
Larry Brummett J. D. Neal
Chairman of the Board, Vice President,
Chief Executive Chief Financial Officer, and
Officer, and Director Treasurer
E. G. ANDERSON STEVEN L. KITCHEN
- ---------------------- ----------------------------
E. G. Anderson Steven L. Kitchen
Director Director
W. M. BELL D. L. KYLE
- ---------------------- ----------------------------
W. M. Bell D. L. Kyle
Director Director
D. R. CUMMINGS B. H. MACKIE
- ---------------------- ----------------------------
D. R. Cummings B. H. Mackie
Director Director
W. L. FORD D. A. NEWSOM
- ---------------------- ----------------------------
W. L. Ford D. A. Newsom
Director Director
HOWARD R. FRICKE G. D. PARKER
- ---------------------- ----------------------------
Director Director
J. M. GRAVES J. D. SCOTT
- ---------------------- ----------------------------
J. M. Graves J. D. Scott
Director Director
S. J. JATRAS S. L. YOUNG
- ---------------------- ----------------------------
S. J. Jatras S. L. Young
Director Director
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Plan has caused
this registration statement to be signed on its behalf by the undersigned in
their capacity as members of the registrant's Executive Compensation Committee,
thereto duly authorized, in the City of Tulsa and the State of Oklahoma, on this
26th day of November, 1997.
ONEOK, INC.
EMPLOYEE STOCK PURCHASE PLAN
WILLIAM L. FORD
- ---------------------------
William L. Ford, Chairman
DOUGLAS R. CUMMINGS
- ---------------------------
Douglas R. Cummings, Vice Chairman
J. M. GRAVES
- ---------------------------
J. M. Graves, Member
STEPHEN J. JATRAS
- ---------------------------
Stephen J. Jatras, Member
GARY D. PARKER
- ---------------------------
Gary D. Parker, Member
STANTON L. YOUNG
- ---------------------------
Stanton L. Young, Member
This Plan does not have any officers or directors or persons performing similar
functions other than the committee members whose signatures appear above.
10
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER OF
INCORPORATION BY
EXHIBIT NO. DESCRIPTION REFERENCE TO
- ----------- ----------- ----------------
<S> <C> <C>
(4)(a) Certificate of Incorporation ONEOK, Inc. Exhibit (3.1) to Form
S-4 Registration
Statement No.
333-27467
(4)(b) Bylaws of ONEOK, Inc., as Amended Exhibit (3.2) to Form
S-4 Registration
Statement No.
333-27467
(4)(c) Certificate of Description, Preference of Rights of Exhibit A to Exhibit (3.4)
Series C Participating Preferred Stock of the To Form S-4 Registration
Corporation Statement No. 333-27467
(5) Opinion of Gable Gotwals Mock Schwabe Kihle Gaberino
(23)(a) Consent of Gable Gotwals Mock Schwabe Kihle Gaberino
(See Item 5)
(23)(b Independent Auditors' Consent
(23)(c) Independent Auditors' Consent
(24) Powers of Attorney (Included on pages 8, 9, and 10)
(99) ONEOK, Inc. Employee Stock Purchase Plan 12 - 20
</TABLE>
<PAGE> 1
EXHIBIT 5
[GABLE GOTWALS MOCK SCHWABE KIHLE GABERINO LETTERHEAD]
November 26, 1997
ONEOK, Inc.
100 West Fifth Street
Tulsa, OK 74103
Re: Form S-8, Registration Statement
Under the Securities Act of 1933,
relating to Shares of the Common
Stock of ONEOK, Inc. in Relation
to Employee Stock Purchase Plan
Gentlemen:
We are retained as regular counsel for ONEOK, Inc., an Oklahoma corporation
(hereinafter called the "Company") which has filed with the Securities and
Exchange Commission ("Commission") under the Securities Act of 1933, as amended,
a Registration Statement on Form S-8 relating to the registration of shares of
the Company's Common Stock, $0.01 par value, (the "Shares") for sale under the
ONEOK, Inc. Employee Stock Purchase Plan (the "Plan").
We have examined (a) the above-mentioned Registration Statement which is
being filed with the Securities and Exchange Commission; (b) the Certificate of
Incorporation, and the By-laws, as amended, of the Company; (c) the Plan; (d)
the corporate actions taken by the Board of Directors of the Company in
connection with the issuance of the Shares; and (e) such other corporate
records, certificates of public officials and officers of the Company, and
other documents as we have considered relevant to the matters covered by this
opinion.
In connection with the foregoing, we wish to advise you as follows:
1. The Company is a corporation validly organized and existing under the
laws of the State of Oklahoma.
2. The filing of the above-mentioned Registration Statement has been
duly authorized by the proper corporate action on the part of the Company.
<PAGE> 2
ONEOK, Inc.
November 26, 1997
Page 2
3. Assuming the Shares are being issued in compliance with the terms and
conditions of the Plan, when the certificates for the Shares have been executed
by the proper officer of the Company, countersigned by the Transfer Agent and
registered by the Registrar thereof, the certificates for such Shares will
represent, and the Shares will constitute, duly authorized, legally issued,
fully paid, non-assessable, valid and legal shares of the Common Stock of the
Company.
We hereby consent to:
1. Being named in the above-mentioned Form S-8 Registration Statement
and the documents constituting a Prospectus under Rule 428(a)(1) of the
Commission, and in any amendments thereto, under the caption "Experts" and
"Legality," as counsel for the Company, passing upon legal matters in
connection with the Shares and having reviewed the matters of law and legal
conclusions under "Description of Securities" contained in said Registration
Statement and documents which are included therein under our authority as
experts.
2. The filing of this opinion as an exhibit to the above-mentioned Form
S-8 Registration Statement.
Very truly yours,
GABLE GOTWALS MOCK SCHWABE KIHLE
GABERINO
By /s/ DONALD A. KIHLE
--------------------------------
Donald A. Kihle
DAK:bb
<PAGE> 1
EXHIBIT (23)(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
ONEOK, Inc.
We consent to the incorporation by reference herein of our report on
the Consolidated Financial Statements of ONEOK, Inc. as of August 31, 1997 and
1996, and for each of the years in the three-year period ended August 31, 1997,
which report appears in the August 31, 1997, Annual Report on Form 10-K of
ONEOK, Inc. Our report refers to the adoption of Financial Accounting Standards
No. 121, Accounting for the Impairment of Long-lived Assets and Long-lived
Assets to be Disposed Of in 1996.
KPMG PEAT MARWICK LLP
Tulsa, Oklahoma
November 26, 1997
11
<PAGE> 1
EXHIBIT (23)(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form 8-K of our report for the Gas Business,
a business unit of Western Resources, Inc. dated February 4, 1997 included in
Registration Statement File No. 333-27467. It should be noted that we have not
audited any financial statements of the Gas Business subsequent to August 31,
1996 or performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Kansas City, Missouri
November 26, 1997
11 b
<PAGE> 1
EXHIBIT (99)
ONEOK INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The purpose of this Plan is to provide eligible employees the
opportunity to purchase Common Stock at a discount on a basis that qualifies for
the tax treatment prescribed by Section 423 of the Code.
2. DEFINITIONS.
The following terms, when used in the Plan, shall have the following
meanings:
(a) "Base Compensation" means, with respect to any offering period: (i)
in the case of an employee normally paid an hourly rate, the employee's hourly
rate at the inception of the offering period multiplied by 2,080, (ii) in the
case of an employee normally paid at a weekly rate, the employee's weekly rate
at the inception of the offering period multiplied by 52, (iii) in the case of
an employee normally paid at a bi-weekly rate, the employee's bi-weekly rate at
the inception of the offering period multiplied by 26, (iv) in the case of an
employee normally paid at a monthly rate, the employee's monthly rate at the
inception of the offering period multiplied by 12; and (v) in the case of an
employee normally paid at an annual rate, the employee's annual rate at the
inception of the offering period. Base compensation shall be determined by
reference to the applicable rate before any deductions pursuant to a salary
reduction agreement under any plan qualified under Section 401(k) of the Code or
any cafeteria plan under Code Section 125 and shall exclude any bonuses,
commissions, overtime pay, fringe benefits, stock options and other special
compensation payable to an employee.
(b) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to the Code or to a particular section of the Code
shall include references to any related Treasury Regulations and rulings and to
successor provisions.
(d) "Committee" means the committee appointed by the Board of Directors
to administer the Plan pursuant to the provisions of Section 3(a) below.
(e) "Common Stock" means common stock, without par value, of the
Company.
12
<PAGE> 2
(f) "Company" means ONEOK Inc., a Delaware corporation, its successors
and assigns.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(h) "Fair Market Value" on a particular date means the average of the
high and low sale prices of the Common Stock in consolidated trading on the date
in question as reported by The Wall Street Journal or another reputable source
designated by the Committee; provided that if there were no sales on such date
reported as provided above, the respective prices on the most recent prior day
for which a sale was so reported. If the foregoing method of determining fair
market value should be inconsistent with Section 423 of the Code, "Fair Market
Value" shall be determined by the Committee in a manner consistent with such
section of the Code and shall mean the value as so determined.
(i) "General Counsel" means the General Counsel of the Company serving
from time to time.
(j) "Plan" means the ONEOK Inc. Employee Stock Purchase Plan set forth
in these pages, as amended from time to time.
(k) "SEC Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
Commission promulgated under the Exchange Act, as such rule or any successor
rule may be in effect from time to time.
(l) "Section 16 Person" means a person subject to Section 16(b) of the
Exchange Act with respect to transactions involving equity securities of the
Company.
(m) "Subsidiary" means a subsidiary as defined in Section 424(f) of the
Code, including a corporation which becomes such a subsidiary in the future.
3. ADMINISTRATION.
(a) The Plan shall be administered by a committee of the Board
consisting of two or more directors appointed from time to time by the Board. No
person shall be appointed to or shall serve as a member of such committee unless
at the time of such appointment and service he or she shall be a "Non-Employee
Director", as defined in SEC Rule 16b-3.
(b) Subject to the provisions of the Plan, the powers of the Committee
shall include having the authority, in its discretion, to:
(i) define, prescribe, amend and rescind rules, regulations,
13
<PAGE> 3
procedures, terms and conditions relating to the Plan; and
(ii) make all other determinations necessary or advisable for
the administration of the Plan, including but not limited to interpreting the
Plan, correcting defects, reconciling inconsistencies and resolving ambiguities.
(iii) approve any transaction involving a grant, award or
other transaction from the Company to a Section 16 Person (other than a
Discretionary Transaction, as defined in SEC Rule 16b-3), so as to exempt such
transaction under SEC Rule 16b-3; provided, that any transaction under the Plan
involving a Section 16 Person also may be approved by the Board of Directors, or
may be approved or ratified by the stockholders of the Company, in the manner
that exempts such transaction under SEC Rule 16b-3.
(c) The interpretation by the Committee of the terms and provisions of
the Plan, and its administration of the Plan, and all action taken by the
Committee, shall be final, binding and conclusive on the Company, its
stockholders, Subsidiaries, all participants and employees, and upon their
respective successors and assigns, and upon all other persons claiming under or
through any of them.
(d) Members of the Board and members of the Committee acting under this
Plan shall be fully protected in relying in good faith upon the advice of
counsel and shall incur no liability except for gross or willful misconduct in
the performance of their duties.
4. STOCK SUBJECT TO THE PLAN.
(a) Subject to paragraph (c) below, the aggregate number of shares of
Common Stock which may be sold under the Plan is 350,000.
(b) If the number of shares of Common Stock that participating
employees become entitled to purchase is greater than the number of shares of
Common Stock that are offered in a particular offering or that remain available
under the Plan, the available shares of Common Stock shall be allocated by the
Committee among such participating employees in such manner as it deems fair and
equitable.
(c) In the event of any change in the Common Stock, through
recapitalization, merger, consolidation, stock dividend or split, combination or
exchange of shares, spinoff or otherwise, the Committee may make such equitable
adjustments in the Plan and the then outstanding offerings as it deems necessary
and appropriate including, but not limited to, changing the number of shares of
Common Stock reserved under the Plan, and the price of the current offering;
provided that any such adjustments shall be consistent with Sections 423 and 424
of the Code.
14
<PAGE> 4
(d) Shares of Common Stock which are to be delivered under the Plan may
be obtained by the Company from its treasury, by purchases on the open market or
from private sources, or by issuing authorized but unissued shares of its Common
Stock. Shares of authorized but unissued Common Stock may not be delivered under
the Plan if the purchase price thereof is less than the par value (if any) of
the Common Stock at the time. The Committee may (but need not) provide at any
time or from time to time (including without limitation upon or in contemplation
of a change in control) for a number of shares of Common Stock equal in number
to the number of shares then subject to options under this Plan, or expected to
be subject to options under this Plan in the then pending offering(s), to be
issued or transferred to, or acquired by, a trust (including but not limited to
a grantor trust) for the purpose of satisfying the Company's obligations under
such options, and, unless prohibited by applicable law, such shares held in
trust shall be considered authorized and issued shares with full dividend and
voting rights, notwithstanding that the options to which such shares relate
might not be exercisable at the time. No fractional shares of Common Stock shall
be issued or sold under the Plan.
5. ELIGIBILITY.
All employees of the Company and any Subsidiaries designated by the
Committee from time to time will be eligible to participate in the Plan, in
accordance with and subject to such rules and regulations as the Committee may
prescribe; provided, however, that (a) such rules shall neither permit nor deny
participation in the Plan contrary to the requirements of the Code (including
but not limited to Section 423(b)(3), (4) and (8) thereof), (b) no employee
shall be eligible to participate in the Plan if his or her customary employment
is 20 hours or less per week or for not more than 5 months in any calendar year,
unless the Committee determines otherwise on a uniform and non-discriminatory
basis, (c) no employee may be granted an option under the Plan if such employee,
immediately after the option is granted, owns stock possessing 5% or more of the
total combined voting power or value of all classes of stock of his or her
employer corporation or any parent or Subsidiary corporation (within the meaning
of Section 423(b)(3) of the Code). For purposes of the preceding sentence, the
rules of Section 424(d) of the Code shall apply in determining the stock
ownership of an employee, and stock which the employee may purchase under
outstanding options (whether or not such options qualify for the special tax
treatment afforded by Code Section 421(a)) shall be treated as stock owned by
the employee; and (d) all participating employees shall have the same rights and
privileges except as otherwise permitted by Section 423(b)(5) of the Code.
6. OFFERINGS; PARTICIPATION.
The Company may make offerings of up to 27 months' duration each, to
eligible employees to purchase Common Stock under the Plan, until all shares
authorized to be
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delivered under the Plan have been exhausted or until the Plan is sooner
terminated by the Board. Subject to the preceding sentence, the duration and
commencement date of any offerings shall be determined by the Committee in its
sole discretion; provided that, unless the Committee determines otherwise, a new
offering shall commence on the first day of the Company's first payroll period
coinciding with or next following each January 1 after the effective date of
this Plan and shall extend through and include the payroll period immediately
preceding the payroll period in which the next offering commences. Subject to
such rules, procedures and forms as the Committee may prescribe, an eligible
employee may participate in an offering at such time(s) as the Committee may
permit by authorizing a payroll deduction for such purpose of up to a maximum of
ten percent of his or her Base Compensation or such lesser amount as the
Committee may prescribe. The Committee may (but need not) permit employee
contributions to be made by means other than payroll deductions, provided that
in no event shall an employee's contributions from all sources in any offering
exceed ten percent of his or her Base Compensation or such lesser amount as the
Committee may prescribe. The Committee may at any time suspend or accelerate the
completion of an offering if required by law or deemed by the Committee to be in
the best interests of the Company, including in the event of a change in
ownership or control of the Company or any Subsidiary. The Company's obligation
to sell and deliver Common Stock under this Plan shall be subject to the
approval of any governmental authority whose approval the General Counsel
determines is necessary or advisable to obtain in connection with the
authorization, issuance or sale of such Common Stock.
7. PAYROLL DEDUCTIONS.
(a) The Company will maintain payroll deduction accounts on its books
for all participating employees. All employee contributions shall be credited to
such accounts. Employee contributions credited to the payroll deduction accounts
of participating employees need not be segregated from other corporate funds and
may be used for any corporate purpose.
(b) At such times as the Committee may permit and subject to such
rules, procedures and forms as the Committee may prescribe, an employee may
increase, decrease or suspend his or her payroll deduction during an offering,
or may withdraw the balance of his or her payroll deduction account and thereby
withdraw from participation in an offering. However, an employee may at any time
waive in writing the right or privilege to decrease or suspend his or her
payroll deductions or withdraw from participation in a particular offering for a
period of at least six months. Any such waiver shall be irrevocable with respect
to the period ending six months after the employee files a superseding written
revocation of such waiver with the Company.
(c) No employee shall make any elective contribution or employee
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contribution to the Plan (within the meaning of Treasury Regulation Section
1.401(k)-1(d)(2)(iv)(B)(4)) during the balance of the calendar year after the
employee's receipt of a hardship distribution from a plan of the Company or a
related party within the provisions of Code Section 414(b), (c), (m) or (o)
containing a cash or deferred arrangement under Section 401(k) of the Code, or
during the following calendar year. The foregoing sentence shall not apply if
and to the extent the General Counsel determines it is not necessary to qualify
any such plan as a cash or deferred arrangement under Section 401(k) of the
Code.
(d) Any balance remaining in any employee's payroll deduction account
at the end of an offering period will be carried forward into the employee's
payroll deduction account for the following offering period. In no event will
the balance carried forward be equal to or greater than the purchase price of
one share of Common Stock as determined under Section 8(c) below. Any excess
shall be refunded to the participant. Upon termination of the Plan, all amounts
in the accounts of participating employees shall be carried forward into their
payroll deduction accounts under a successor plan, if any, or refunded to them,
as the Committee may decide.
(e) In the event of the termination of a participating employee's
employment for any reason, his or her participation in any offering under the
Plan shall cease, no further amounts shall be deducted pursuant to the Plan and
the balance in the employee's account shall be paid to the employee, or, in the
event of the employee's death, to the employee's beneficiary under the Company's
basic group life insurance program.
8. PURCHASE; LIMITATIONS.
(a) Within the limitations of Section 8(d) below, each employee
participating in any offering under the Plan will be granted an option, upon the
effective date of such offering, for as many full shares of Common Stock as the
amount of his or her payroll deduction account (including any contributions made
by means other than payroll deductions) at the end of the offering can purchase.
(b) As of the last day of the offering period, the payroll deduction
account of each participating employee shall be totalled. Subject to the
provisions of Section 7(b) above and 8(d) below, if such account contains
sufficient funds as of that date to purchase one or more full shares of Common
Stock at the price determined under Section 8(c) below, the employee shall be
deemed to have exercised an option to purchase the largest number of full shares
of Common Stock at the price determined under Section 8(c) below that his or her
payroll deduction account will permit; such employee's account will be charged
for the amount of the purchase and for all purposes under the Plan the employee
will be deemed to have acquired the shares on that date; and either a stock
certificate representing such shares will be issued to him or her, or
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the Company's registrar will make an entry on its books and records evidencing
that such shares have been duly issued or transferred as of that date, as the
Committee may direct. Notwithstanding any provision of the Plan to the contrary,
the Committee may but need not permit fractional shares to be purchased under
the Plan.
(c) Unless the Committee determines before the effective date of an
offering that a higher price that complies with Section 423 of the Code shall
apply, the purchase price of the shares of Common Stock which are to be sold
under the offering shall be the lesser of (i) an amount equal to 85 percent of
the Fair Market Value of the Common Stock at the time such option is granted, or
(ii) an amount equal to 85 percent of the Fair Market Value of the Common Stock
at the time such option is exercised.
(d) In addition to any other limitations set forth in the Plan, (i) no
employee may purchase in any offering period more than the number of shares of
Common Stock determined by dividing the employee's annual Base Compensation as
of the first day of the offering period, or $25,000, whichever is less, by the
Fair Market Value of a share of Common Stock at such day, and (ii) no employee
may be granted an option under the Plan which permits his or her rights to
purchase stock under the Plan, and any other stock purchase plan of his or her
employer corporation and its parent and subsidiary corporations that is
qualified under Section 423 of the Code, to accrue at a rate which exceeds
$25,000 of the Fair Market Value of such stock (determined at the time such
option is granted) for each calendar year in which the option is outstanding at
any time. The Committee may further limit the amount of Common Stock which may
be purchased by any employee during an offering period in accordance with
Section 423(b)(5) of the Code.
9. NO TRANSFER.
(a) No option, right or benefit under the Plan (including any
derivative security within the meaning of paragraph (a)(2) of SEC Rule 16b-3)
may be transferred by a participating employee, whether by will, the laws of
descent and distribution, or otherwise, and all options, rights and benefits
under the Plan may be exercised during the participating employee's lifetime
only by such employee.
(b) Book entry accounts and certificates for shares of Common Stock
purchased under the Plan may be maintained or registered, as the case may be,
only in the name of the participating employee or, if such employee so indicates
on his or her payroll deduction authorization form, in his or her name jointly
with a member of his or her family, with right of survivorship. An employee who
is a resident of a jurisdiction which does not recognize such a joint tenancy
may have book entry accounts maintained and certificates registered in the
employee's name as tenant in common with a member of the employee's family,
without right of survivorship.
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10. EFFECTIVE DATE AND DURATION OF PLAN.
The Plan shall become effective when adopted by the Board, provided
that the stockholders of the Company approve it within 12 months thereafter at a
duly held stockholders' meeting. If not so approved by shareholders, the Plan
shall be null, void and of no force or effect. If so approved, the Plan shall
remain in effect until all shares authorized to be issued or transferred
hereunder have been exhausted or until the Plan is sooner terminated by the
Board of Directors, and may continue in effect thereafter with respect to any
options outstanding at the time of such termination if the Board of Directors so
provides.
11. AMENDMENT AND TERMINATION OF THE PLAN.
The Plan may be amended by the Board of Directors, without shareholder
approval, at any time and in any respect, unless shareholder approval of the
amendment in question is required under Delaware law, the Code (including
without limitation Code Section 423 and Treasury Regulation Section
1.423-2(c)(4) thereunder), any exemption from Section 16 of the Exchange Act
(including without limitation SEC Rule 16b-3) for which the Company intends
Section 16 Persons to qualify, any national securities exchange or system on
which the Stock is then listed or reported, by any regulatory body having
jurisdiction with respect to the Plan, or under any other applicable laws, rules
or regulations. The Plan provisions that determine the amount, price and timing
of option grants to Section 16 Persons may not be amended more than once every
six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act of 1974, or the rules thereunder, unless
the General Counsel determines that such restriction on amendments is not
necessary to secure or maintain any exemption from Section 16 of the Exchange
Act for which the Company intends Section 16 Persons to qualify. The Plan may
also be terminated at any time by the Board of Directors.
12. GENERAL PROVISIONS.
(a) Nothing contained in this Plan shall be deemed to confer upon any
person any right to continue as an employee of or to be associated in any other
way with the Company for any period of time or at any particular rate of
compensation.
(b) No person shall have any rights as a stockholder of the Company
with respect to any shares optioned under the Plan until such shares are issued
or transferred to him or her.
(c) All expenses of adopting and administering the Plan shall be borne
by the Company, and none of such expenses shall be charged to any participant.
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(d) The Plan shall be governed by and construed under the laws of the
State of Delaware, without giving effect to the principles of conflicts of laws
of that State.
(e) The Plan and each offering under the Plan is intended to qualify as
an "employee stock purchase plan" within the meaning of Section 423 of the Code.
Transactions under the Plan by or with respect to Section 16 Persons are also
intended to qualify for exemption under SEC Rule 16b-3, unless the Committee
specifically determines otherwise. Every provision of the Plan shall be
administered, interpreted and construed to carry out those intentions, and any
provision that cannot be so administered, interpreted and construed shall to
that extent be disregarded.
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