<PAGE>
As filed with the Securities and Exchange Commission on April 7, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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ADAPTEC, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<TABLE>
<S> <C> <C>
DELAWARE 3576 94-2748530
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) No.)
</TABLE>
691 MILPITAS BOULEVARD
MILPITAS, CALIFORNIA 95035
(408) 945-8600
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
------------------------------
ANDREW J. BROWN
VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER
ADAPTEC, INC.
691 MILPITAS BOULEVARD
MILPITAS, CALIFORNIA 95035
(408) 945-8600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
KATHARINE A. MARTIN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(650) 493-9300
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value.... 391,997 $35.0313 $13,732,145 $3,625
Total........................... 391,997 $35.0313 $13,732,145 $3,625
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933, as amended, based
on the average of the high and low prices of the common stock on the Nasdaq
National Market on April 4, 2000.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 7, 2000
PROSPECTUS
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
391,997 SHARES
ADAPTEC, INC.
COMMON STOCK
($0.001 PAR VALUE)
------------------------
This is an offering of common stock of Adaptec, Inc. All of the shares are
being offered by certain of our stockholders. We will not receive any of the
proceeds from the sale of shares by the selling stockholders.
The common stock of Adaptec, Inc., or "Adaptec," trades on the Nasdaq
National Market.
Last reported sale price on April 6, 2000: $34.0625 per share.
Trading Symbol: ADPT
------------------------
INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, NOR ANY STATE SECURITIES
COMMISSION, HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 2000.
<PAGE>
TABLE OF CONTENTS
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PAGE
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The Offering................................................ 1
Risk Factors................................................ 2
Use of Proceeds............................................. 10
Selling Stockholders........................................ 11
Plan of Distribution........................................ 11
Legal Matters............................................... 13
Experts..................................................... 13
Incorporation of Certain Information by Reference........... 13
Where You Can Find More Information......................... 13
</TABLE>
------------------------
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THIS OFFERING. YOU SHOULD NOT RELY ON SUCH INFORMATION OR REPRESENTATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE PURSUANT TO THIS
PROSPECTUS SHALL CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE COMMON STOCK COVERED BY THIS PROSPECTUS.
<PAGE>
THE OFFERING
Under this prospectus, the selling stockholders named under the section
entitled "Selling Stockholders" of this Prospectus may offer and sell shares of
our common stock that they acquired in exchange for the shares of Wild
File, Inc. common stock they held prior to our acquisition of all of the
outstanding capital stock of Wild File, Inc.
The selling stockholders may sell their shares of common stock in the open
market at prevailing market prices, or in private transactions at negotiated
prices. They may sell the shares directly, or may sell them through
underwriters, brokers or dealers. Underwriters, brokers or dealers may receive
discounts, concessions or commissions from the selling stockholder or from the
purchaser, and this compensation might be in excess of the compensation
customary in the type of transaction involved. See "Plan of Distribution."
Adaptec will not receive any proceeds from the sale of shares by the selling
stockholders.
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RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE PURCHASING OUR COMMON STOCK. IF
ANY OF THESE RISKS OCCURS, OUR BUSINESS, FINANCIAL CONDITION AND OPERATING
RESULTS COULD BE MATERIALLY ADVERSELY AFFECTED. IN THAT CASE, THE TRADING PRICE
OF OUR COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART OF YOUR
INVESTMENT.
YOU SHOULD NOT RELY UPON THE FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS.
We make many statements in this prospectus that are forward-looking
statements. These statements relate to our future plans, objectives,
expectations and intentions. We may identify these statements by the use of
words such as "expect," "anticipate," "intend," "plan" and similar expressions.
These forward-looking statements involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of various factors, including those we discuss in "Risk
Factors" and elsewhere in this prospectus. These forward-looking statements
speak only as of the date of this prospectus, and you should not rely on these
statements without also considering the risks and uncertainties associated with
these statements and our business.
OUR FUTURE OPERATING RESULTS ARE SUBJECT TO FLUCTUATION, WHICH COULD REDUCE OUR
STOCK PRICE.
In the first half of fiscal 1999, our operating results were adversely
affected by the following:
- shifts in corporate and retail buying patterns;
- increased competition;
- emerging technologies;
- economic instability in Asia; and
- turbulence in the computer disk drive industry.
In addition, fiscal 1999 operating results were significantly impacted by
unusual charges and credits, including the following:
- write-offs of acquired in-process technology;
- costs related to the termination of the Symbios, Inc. acquisition;
- restructuring charges;
- impairment of assets;
- terminations of senior executives;
- the gain on the sale of Peripheral Technology Solutions or PTS; and
- the gain on the sale of land.
Our operating results for the nine-month period ended December 31, 1999 were
significantly impacted by unusual charges and credits including the following:
- write-offs of acquired in-process technology;
- write-offs of estimated license fees attributable to the proposed
cross-license agreement;
- gain on the exchange of a warrant to purchase JNI common stock; and
- the gain on the sale of land.
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Additionally, our operating results were affected by the acquisition of
CeQuadrat GmbH beginning in the second quarter of fiscal 2000 and the
acquisition of Distributed Processing Technology, Corp. beginning in the third
quarter of fiscal 2000, including increased goodwill and other intangibles
amortization expense. Beginning in the fourth quarter of fiscal 2000, our
operating results will be affected by the cross-license agreement between
Adaptec and Agilent Technologies, Inc., or Agilent and the acquisition of Wild
File, Inc. including increased intangible amortization expense. In the future,
our operating results may fluctuate as a result of the factors described above
and as a result of a wide variety of other factors, including, but not limited
to, the following:
- cancellations or postponements of orders;
- shifts in the mix of our products and sales channels;
- changes in pricing policies by our suppliers;
- interruption in the supply of custom integrated circuits;
- the market acceptance of new and enhanced versions of our products;
- product obsolescence;
- general worldwide economic and computer industry fluctuations;
- future accounting pronouncements;
- changes in accounting policies; and
- the timing of acquisitions of other business products and technologies and
any associated charges or earnings.
The volume and timing of orders received during a quarter are difficult to
forecast. Our customers from time to time encounter uncertain and changing
demand for their products. Customers generally order based on their forecasts.
If demand falls below such forecasts or if customers do not control inventories
effectively, they may cancel or reschedule shipments previously ordered from us.
We have historically operated with a relatively small backlog, especially
relating to orders of our Host I/O products and have set our operating budget
based in part on expectations of future revenues. Because much of our operating
budget is relatively fixed in the short-term, if revenues do not meet our
expectations, then our operating income and net income may be disproportionately
affected. Operating results in any particular quarter, which do not meet the
expectations of securities analysts, are likely to cause volatility in the price
of our common stock.
IF THE DEMAND FOR HIGH-PERFORMANCE COMPUTER SYSTEMS, SERVERS OR WORKSTATIONS
DECLINES, OUR REVENUES MAY DECLINE.
Our Host I/O products are used primarily in high performance computer
systems and include host bus adapters, or HBA's, boards and chips that allow
computers to transfer information to and from peripherals, such as hard-disk
drives, scanners, CD-ROMs, CD-Rs, CD-RWs, DVD-ROMs, and Zip and Jaz drives among
many other devices. Historically, our growth has been supported by increasing
demand for systems that support:
- client/server and Internet/intranet applications;
- computer-aided engineering;
- desktop publishing;
- multimedia; and
- video.
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Beginning in the second half of fiscal 1998, the demand for such systems
slowed as more businesses chose to use relatively inexpensive PC's for desktop
applications and information technology managers shifted resources toward
resolving Year 2000 problems and investing in network infrastructure. If demand
for such systems continues to slow, our business or operating results could be
materially adversely affected by a resulting decline in demand for our products.
Our RAID products are used primarily in workstations and enterprise servers.
The use of RAID technology in this market is an industry standard, however,
another technology may replace RAID in the disk array controller marketplace. In
addition, widespread acceptance of, or growth of the use of, RAID products in
general, or our RAID controllers in particular, may not continue. If demand for
such systems slows or if our products are not widely accepted, our business or
operating results could be materially adversely affected by a resulting decline
in demand for our products.
Our software products are used primarily in high performance computer
systems to enable the control of SCSI peripherals or enable CD-R and CD-RW
capabilities. We sell our software products primarily to major OEM's and
distributors. As a result, our business depends on general economic and business
conditions and the growth of the CD-R and high-performance computer markets. If
demand for our products slows or the CD-R market does not develop as quickly as
we expect, our business or operating results may decline materially due to the
resulting decline in demand for our products.
OUR RELIANCE ON INDUSTRY STANDARDS, TECHNOLOGICAL CHANGE IN THE MARKETPLACE AND
OUR DEPENDENCE ON NEW PRODUCTS MAY CAUSE OUR REVENUES TO FLUCTUATE OR DECLINE.
Various standards and protocols that evolve with time characterize the
computer industry. We have designed our current products to conform to certain
industry standards and protocols such as the following:
- SCSI;
- UltraSCSI;
- Ultra2 SCSI;
- Ultra160 SCSI;
- PCI, RAID; and
- Fast Ethernet.
In particular, a majority of our revenues are currently derived from
products based on the SCSI standard. If consumer acceptance of these standards
declines, or if new standards emerge, and if we did not anticipate these changes
and develop new products, these changes could materially adversely affect our
business or operating results. For example, we believe that changes in
consumers' perceptions of the relative merits of SCSI based products and
products incorporating a competing standard, Ultra-DMA, have materially
adversely affected the sales of our products and may materially adversely affect
our future sales. The markets for our products involve the following:
- rapidly changing technology;
- frequent new product introductions; and
- declining average selling prices over product life cycles.
Our future success is highly dependent upon our completing and introducing
new products at competitive price/performance levels in a timely manner. The
success of new product introductions depends on several factors, including the
following:
- proper new product definition;
4
<PAGE>
- product costs;
- timely completion and introduction of new product designs;
- quality of new products;
- differentiation of new products from those of our competitors; and
- market acceptance of our and our competitors' products.
As a result, we believe that continued significant expenditures for research
and development will be required in the future. We cannot assure that we will
successfully identify new product opportunities and develop and bring new
products to market in a timely manner. Also we cannot assure you that products
or technologies developed by others will not render our products or technologies
obsolete or noncompetitive, or that our targeted customers will select our
products for their design or integration into the products. The failure of any
of our new product development efforts could have a material adverse effect on
our business or operating results. In addition, our revenues and operating
results could be materially adversely impacted if our customers significantly
shifted their demand away from board-based I/O solutions to application-specific
integrated circuits.
IF WE ARE UNABLE TO COMPETE EFFECTIVELY OUR REVENUES AND OUR STOCK PRICE MAY
DECLINE.
The markets for all of our products are intensely competitive and are
characterized by the following:
- rapid technological advances;
- frequent new product introductions;
- evolving industry standards; and
- price erosion.
In the host adapter market, we compete with a number of host adapter
manufacturers, including LSI Logic Corporation and other small host adapter
manufacturers. Our principal competitors for RAID solutions in the server market
are American Megatrends, Inc., Mylex Corporation (a wholly-owned subsidiary of
IBM), and captive suppliers. Our principal competitors in the Software segment
range from small operations to large consumer software companies. As we have
continued to broaden our bandwidth management product offerings into the
desktop, server, and networking environments, we have experienced, and expect to
experience in the future, significantly increased competition both from existing
competitors and from additional companies that may enter our markets. Some of
these companies have greater technical, marketing, manufacturing, and financial
resources than we do. We cannot assure you that we will have sufficient
resources to accomplish any of the following:
- meet growing product demand;
- make timely introduction of new leading-edge solutions in response to
competitive threats;
- compete successfully in the future against existing or potential
competitors; or
- avoid the possibility that price competition will not materially adversely
affect our business or operating results.
IF WE ARE UNABLE TO INTEGRATE ACQUIRED COMPANIES AND TECHNOLOGIES AND THE COSTS
RELATED WITH THESE ACQUISITIONS, OUR FINANCIAL CONDITION OR OPERATING RESULTS
MAY DECLINE.
In July 1999, we acquired CeQuadrat, in December 1999, we acquired
Distributed Processing Technology Corp., and in March 2000, we acquired Wild
File, Inc. Each of the acquisitions were accounted for using the purchase method
of accounting. In January 2000, we entered into an agreement with Agilent
5
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to co-develop, market and sell fibre channel host bus adapters. As part of our
overall strategy, we may continue to acquire or invest in complementary
companies, products, or technologies and enter into joint ventures and strategic
alliances with other companies. Risks commonly encountered in such transactions
include the following:
- the difficulty of assimilating the operations and personnel of the
combined companies;
- the potential disruption of our ongoing business;
- the inability to retain key technical and managerial personnel;
- the inability of management to maximize the financial and strategic
position of Adaptec through the successful integration of acquired
businesses;
- incurring additional expenses associated with amortization of acquired
intangible assets;
- dilution of existing equity holders;
- the maintenance of uniform standards, controls, procedures, and policies;
and
- the impairment of relationships with employees and customers as a result
of any integration of new personnel.
We cannot assure you that we will be successful in overcoming these risks or
any other problems encountered in connection with this or other business
combinations, investments, or joint ventures, or that such transactions will not
materially adversely affect our business, financial condition or operating
results.
WE DEPEND ON WAFER SUPPLIERS AND OTHER SUBCONTRACTORS WHOSE FAILURE TO MEET OUR
MANUFACTURING NEEDS COULD NEGATIVELY AFFECT OUR OPERATIONS.
Independent foundries currently manufacture to our specifications all of the
finished silicon wafers used for our products. We currently purchase most of our
wafers through a supply agreement with TSMC. The manufacture of semiconductor
devices is sensitive to a wide variety of factors, including the following:
- the availability of raw materials;
- the availability of manufacturing capacity;
- the level of contaminants in the manufacturing environment;
- impurities in the materials used; and
- the performance of personnel and equipment.
6
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While we have been satisfied with the quality, yield, and timeliness of
wafer deliveries to date we cannot assure you that manufacturing yield problems
will not occur in the future. In addition, although we have various supply
agreements with our supplier, a shortage of raw materials or production capacity
could lead our wafer supplier to allocate available capacity to other customers,
or to the supplier's internal uses. Any prolonged inability to obtain wafers
with competitive performance and cost attributes, adequate yields, or timely
deliveries from its foundries would delay our production and our product
shipments and could have a material adverse impact on our business or operating
results. We expect that our current supplier will, in the future, seek to
convert its fabrication process arrangements to smaller wafer geometries and to
more advanced process technologies. Such conversions entail inherent
technological risks that can affect yields and delivery times. If for any reason
our current supplier is unable or unwilling to satisfy our wafer needs, we will
be required to identify and qualify additional foundries. We cannot assure you
that any additional wafer foundries would become available, that such foundries
would be successfully qualified, or that such foundries would be able to satisfy
our requirements on a timely basis. In order to secure wafer capacity, from time
to time we have entered into "take or pay" contracts that have committed us to
purchase specified wafer quantities over extended periods, and we have made
prepayments to foundries. In the future, we may enter into similar transactions
or other transactions, including, without limitation, the following:
- non-refundable deposits;
- loans;
- equity investments;
- joint ventures; and
- other partnership relationships.
Any such transaction could require us to seek additional equity or debt
financing to fund such activities. We cannot assure you that we will be able to
obtain any required financing on terms acceptable to us. Additionally, we rely
on subcontractors for the assembly and packaging of the integrated circuits
included in our products. We have no long-term agreements with our assembly and
packaging subcontractors. We also use board subcontractors to better balance
production runs and capacity. We cannot assure you that such subcontractors will
continue to be able and willing to meet our requirements for such components or
services. Any significant disruption in supplies from, or degradation in the
quality of components or services supplied by, such subcontractors could delay
shipments and result in the loss of customers or revenues or otherwise have a
material adverse impact on our business or operating results.
WE DEPEND ON DISTRIBUTORS WHOSE FAILURE TO MEET OUR DISTRIBUTION NEEDS COULD
NEGATIVELY AFFECT OUR OPERATIONS.
Our distributors generally offer a diverse array of products from several
different manufacturers. Accordingly, we are at a risk that these distributors
may give higher priority to selling products from other suppliers, thus reducing
their efforts to sell our products. A reduction in sales efforts by our current
distributors could materially adversely impact our business or operating
results. Our distributors may on occasion build inventories in anticipation of
substantial growth in sales, and if such growth does not occur as rapidly as we
anticipate, distributors may decrease the amount of product ordered from us in
subsequent quarters. In addition, if we decrease our price protection or
distributor-incentive programs, our distributors may temporarily decrease the
amounts of inventory purchased from us. This could result in a change in
distributor business habits, and distributors may decide to decrease the amount
of product held and reduce their inventory levels. This could reduce our
revenues in any given quarter and could negatively impact our operating results.
In addition, we may from time to time take actions to reduce our inventory
levels at distributors. These actions could reduce our revenues in any given
quarter and could negatively impact our operating results or revenues.
7
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OUR OPERATIONS DEPEND ON KEY PERSONNEL, THE LOSS OF WHOM COULD AFFECT OUR
BUSINESS AND REDUCE OUR FUTURE REVENUES.
Our future success depends in large part on the continued service of our key
technical, marketing, and management personnel, and on our ability to continue
to attract and retain qualified employees, particularly those highly skilled
design, process, and test engineers who are involved in the design enhancements
and manufacture of existing products and the development of new products and
processes. The competition for such personnel is intense, and the loss of key
employees could materially adversely affect our business, operating results or
revenues.
CERTAIN OF OUR INTERNATIONAL OPERATIONS ARE RISKY, AND MAY NEGATIVELY AFFECT OUR
OPERATIONS OR REVENUES.
Our manufacturing facility and various subcontractors it utilizes from time
to time are primarily located in Asia. Additionally, we have various sales
offices and customers throughout Europe, Japan, and other countries. Our
international operations and sales are subject to political and economic risks,
including political instability, currency controls, exchange rate fluctuations,
and changes in import/export regulations, tariffs, and freight rates. We may use
forward exchange contracts to manage any exposure associated with certain
foreign currency-denominated-commitments. In addition, because our wafer
supplier, TSMC, is located in Taiwan, we may be subject to certain risks
resulting from the political instability in Taiwan, including conflicts between
Taiwan and the People's Republic of China.
WE MAY NOT ALWAYS BE ABLE TO ADEQUATELY PROTECT OR MAINTAIN OUR INTELLECTUAL
PROPERTY RIGHTS.
We have reached a tentative agreement with a third party concerning a
potential cross-license agreement. Under the proposed agreement, each party will
be granted a license for specified patents of the other party covering the
period from January 1, 1990 through June 30, 2004. The license fee to be paid by
the Company under the proposed cross-license agreement will range from
$11 million to $25 million, depending on the outcome of an evaluation of certain
patents by an independent party. The Company's best estimate of the total
license fee that will be payable under the proposed cross-license agreement is
$18.0 million. We cannot assure you that a cross-license agreement will be
finalized or that the final license fee would not be in excess of our estimate.
Additionally, we cannot assure you that costly litigation would not result if
such agreement was not finalized or that we would prevail in such litigation or
ultimately license such valid patents from the third party on commercially
reasonable terms.
Historically, we have devoted significant resources to research and
development, and we believe that the intellectual property derived from such
research and development is a valuable asset that is important to the success of
our business. Although we actively maintain and defend our intellectual property
rights, we cannot assure you that the steps taken by us will be adequate to
protect our proprietary rights. In addition, the laws of certain territories in
which our products are or may be developed, manufactured, or sold, including
Asia and Europe, may not protect our products and intellectual property rights
to the same extent as the laws of the United States. We have from time to time
discovered counterfeit copies of our products being manufactured or sold by
others. Although we maintain an active program to detect and deter the
counterfeiting of our products, if counterfeit products become available in the
market to any significant degree, it could materially adversely impact our
business or operating results. From time to time, third parties may assert
exclusive patent, copyright, and other intellectual property rights to our key
technologies. We cannot assure you that third parties will not assert
infringement claims against us in the future, that assertions by third parties
will not result in costly litigation or that we would prevail in such litigation
or be able to license any valid and infringed patents from third parties on
commercially reasonable terms. Litigation, regardless of the outcome, could
result in substantial cost to us and diversion of our resources. Any
infringement claim or other litigation against or by us could materially
adversely impact our business, operating results or revenues.
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IF OUR PRODUCTS DO NOT INTEROPERATE EFFECTIVELY, THIS COULD NEGATIVELY IMPACT
OUR REVENUES AND REDUCE THE PRICE OF OUR STOCK.
We must design our products to interoperate effectively with a variety of
hardware and software products supplied by other manufacturers, including the
following:
- microprocessors;
- peripherals; and
- operating system software.
We depend on significant cooperation with these manufacturers to achieve our
design objectives and produce products that interoperate successfully. We
believe that generally we have good relationships with leading system,
peripheral, and microprocessor suppliers; however, we cannot assure you that
these suppliers will not from time to time make it more difficult for us to
design our products for successful interoperability. These suppliers also may
decide to compete with us.
WE MAY ENCOUNTER NATURAL DISASTERS, WHICH MAY NEGATIVELY AFFECT OUR OPERATIONS
AND OUR FINANCIAL CONDITION.
Our corporate headquarters in California are located near major earthquake
faults. Any damage to our information systems caused as a result of an
earthquake, fire or any other natural disasters could have a material impact on
our business, financial condition and results of operations. Additionally, our
primary wafer supplier is located in Taiwan, which has recently experienced
significant earthquakes. Although our supplier experienced no major damage to
its facilities or equipment, additional earthquakes could interrupt our
manufacturing process and could materially adversely impact our business,
financial condition or results of operations.
WE MAY EXPERIENCE VOLATILE FLUCTUATIONS IN OUR STOCK PRICE.
The stock market in general, and the market for shares of technology
companies in particular, has from time to time experienced extreme price
fluctuations. Often, these changes have been unrelated to the operating
performance of the affected companies. In addition, factors such as
technological innovations or new product introductions by us, by our
competitors, or by our customers may have a significant impact positively or
negatively, on the market price of our common stock. Furthermore,
quarter-to-quarter fluctuations in our results of operations caused by changes
in customer demand, changes in the microcomputer and peripherals markets, or
other factors, may have a significant impact on the market price of our common
stock. In addition, general market conditions and international macroeconomic
factors unrelated to our performance may affect our stock price. These
conditions and other conditions and factors that generally affect the market for
stocks of technology companies could cause the price of our common stock to
fluctuate substantially over short periods.
WE ARE EXPOSED TO CERTAIN EQUITY PRICE RISKS OR INVESTMENT RISKS WHICH COULD
AFFECT OUR QUARTERLY OR ANNUAL PROFITS AND OUR STOCK PRICE.
We are exposed to equity price risk with our investment in JNI common stock
included in "Marketable securities" and our investment in a warrant to purchase
JNI common stock included in "Other long-term assets" in our Condensed
Consolidated Balance Sheet as of December 31, 1999. During the fourth quarter of
fiscal 2000, we exercised our warrant to purchase JNI common stock. An adverse
change in the price of JNI common stock and limitations on the sale of that
stock could materially adversely affect our financial results if we were to sell
our investment at a loss, which could materially adversely impact our financial
position.
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WE ENGAGE IN TRANSACTIONS INVOLVING DERIVATIVES WHICH COULD ADVERSELY AFFECT OUR
FINANCIAL POSITION.
We engage in transactions involving derivative securities to execute
repurchases of our common stock under stock repurchase programs authorized by
our board of directors. Some of these transactions may obligate us to buy back
shares of our common stock at prices greater than fair market value at the time
of purchase. Our obligation could be in excess of the amounts recognized in our
financial statements and could materially adversely affect our financial
position.
WE MAY BE ENGAGED IN LEGAL PROCEEDINGS THAT COULD NEGATIVELY AFFECT OUR
FINANCIAL CONDITION OR BUSINESS OPERATIONS.
From time to time we are subject to litigation or claims that could
negatively affect our financial condition or business operations. For instance,
a class-action lawsuit is pending in the United States District Court for the
Northern District of California against us and certain of our officers and
directors. This lawsuit alleges that we made false and misleading statements at
various times during the period between April 1997 and January 1998 and that
these statements violated federal securities laws. The complaint does not
specify damages. We believe this lawsuit is without merit and we intend to
defend ourselves vigorously. However, any dispute, including this lawsuit, could
cause us to incur unforeseen expenses, could occupy an inordinate amount of our
management's time and attention and could negatively affect our financial
condition or business operations.
WE ARE EXPOSED TO MARKET RISK, WHICH COULD AFFECT OUR FINANCIAL POSITION AND OUR
STOCK PRICE.
Our investment portfolio consists of fixed income securities that are
subject to interest rate risks that will decline in value if market interest
rates increase. From time to time, we also engage in forward exchange contracts
to hedge firm commitments denominated in foreign currencies, principally
Singapore dollars. Fluctuations in foreign exchange rates could negatively
impact our financial position. We are also exposed to equity price risk relating
to our available-for-sale securities. We have not attempted to reduce or
eliminate our market exposure on these equity securities. The realization of the
unrealized gains on our equity securities is dependent on the market value of
the securities, which is subject to fluctuation, and our ability to sell the
securities under our current limitations. We cannot assure you that any
unrealized gains will be realized.
USE OF PROCEEDS
Adaptec will not receive any proceeds from the sale of shares by the selling
stockholders.
10
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the names of each of the selling
stockholders, the number of shares owned by each of the selling stockholders
immediately prior to the date of this prospectus and the number of shares being
offered by the selling stockholder in this prospectus. None of the selling
stockholders has had a material relationship with Adaptec within the past three
years and none of the selling stockholders will own any shares of Adaptec after
completion of this offering, assuming that all of the shares of Adaptec common
stock being offered are sold and assuming that no shares of Adaptec common stock
are purchased by any of the selling stockholders prior to the sale of Adaptec
common stock being offered.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF NUMBER OF SHARES OF
ADAPTEC COMMON STOCK ADAPTEC COMMON
NAME OF SELLING STOCKHOLDER OWNED PRIOR TO THE OFFERING STOCK BEING OFFERED
- --------------------------- --------------------------- -------------------
<S> <C> <C>
Eric D. Schneider.................................... 130,480 130,480
E. Robert Kinney..................................... 69,282 69,282
Michael J. Gustafson................................. 61,100 61,100
James H. Binger...................................... 48,782 48,782
Edward W. Bruggeman.................................. 34,272 34,272
Margaret V. Kinney................................... 7,128 7,128
John D. French....................................... 7,128 7,128
Erika Binger......................................... 6,907 6,907
Meghan Brown......................................... 6,907 6,907
Benjamen Binger...................................... 6,907 6,907
Noa Staryk........................................... 6,907 6,907
Marcy Shilling....................................... 6,197 6,197
</TABLE>
PLAN OF DISTRIBUTION
To our knowledge, the selling stockholders have not entered into any
agreement, arrangement or understanding with any particular broker or market
maker with respect to the sale of the shares covered by this prospectus.
The selling stockholders may offer and sell shares of our common stock from
time to time directly or, alternatively, through underwriters, broker-dealers or
agents. These shares may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve crosses or block transactions):
- on any national securities exchange or U.S. inter-dealer quotation system
of a registered national securities association on which the common stock
may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing of options.
In connection with sales of our common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers, which may
in turn engage in short sales in the course of hedging positions they assume.
The selling stockholders may also sell shares of our common stock short and
deliver shares of our common stock being registered to close out short
positions, or loan or pledge the common stock being registered to broker-dealers
that in turn may sell such securities. In addition, any securities covered by
this prospectus that qualify for sale under Rule 144 of the Securities Act may
be sold under Rule 144 rather than under this prospectus.
11
<PAGE>
Transactions under this prospectus may or may not involve brokers or
dealers. The selling stockholders may sell shares directly to purchasers or to
or through broker-dealers, who may act as agents or principals. Broker-dealers
engaged by the selling stockholder may arrange for other broker-dealers to
participate in selling shares. Broker-dealers or agents may receive compensation
in the form of commissions, discounts or concessions from the selling
stockholder in amounts to be negotiated in connection with the sale.
Broker-dealers or agents may also receive compensation in the form of discounts,
concessions or commissions from the purchasers of shares for whom the
broker-dealers may act as agents or to whom they sell as principal, or both.
This compensation as to a particular broker-dealer might exceed customary
commissions.
The selling stockholders and any participating broker-dealers may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
sales of shares covered by this prospectus. Any commission, discount or
concession received by a broker-dealer and any profit on the resale of shares
sold by them while acting as principals might be deemed to be underwriting
discounts or commissions under the Securities Act. Because selling stockholders
may be deemed to be underwriters within the meaning of the Securities Act, the
selling stockholders will be subject to the prospectus delivery requirements of
the Securities Act.
This offering will terminate on the earlier of:
- the date on which all shares held by all selling stockholders can be sold
in a three-month period under Rule 144; or
- the date on which all shares offered have been sold by the selling
stockholders.
We have agreed to pay the expenses of registering the shares under the
Securities Act, including registration and filing fees, printing expenses,
administrative expenses and certain legal and accounting fees. The selling
stockholders will bear all discounts, commissions or other amounts payable to
underwriters, dealers or agents as well as fees and disbursements for legal
counsel retained by any selling stockholder.
Adaptec and the selling stockholders have agreed to indemnify each other and
other related parties against specified liabilities, including liabilities
arising under the Securities Act. The selling stockholders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of shares against liabilities, including liabilities arising
under the Securities Act.
Upon the occurrence of any of the following events, a supplement or
post-effective amendment to this prospectus will be filed, if required, under
Rule 424(b) under the Securities Act to include additional disclosure before
offers and sales of the securities in question are made:
- to the extent the securities are sold at a fixed price or at a price other
than the prevailing market price, such price would be set forth in the
prospectus;
- if the securities are sold in block transactions and the purchaser acting
in the capacity of an underwriter wishes to resell, such arrangements
would be described in the prospectus;
- if a selling stockholder sells to a broker-dealer acting in the capacity
as an underwriter, such broker-dealer will be identified in the
prospectus; and
- if the compensation paid to broker-dealers is other than usual and
customary discounts, concessions or commissions, disclosure of the terms
of the transaction would be included in the prospectus.
12
<PAGE>
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to our Annual Report on Form 10-K for the year ended March 31, 1999,
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting. The audited historical financial statements of
Distributed Processing Technology, Corp. incorporated by reference to our
Current Report on Form 8-K/A filed March 3, 2000, have been audited by Arthur
Andersen LLP, independent certified public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in auditing and accounting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission, or SEC, allows us to "incorporate by
reference" in this prospectus the information that we file with the SEC. This
means that we can disclose important information by referring the reader to
those SEC filings. The information incorporated by reference is considered to be
part of this prospectus, and later information we file with the SEC will update
and supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Section 13(a), 13(c), 14,
or 15(d) of the Securities Exchange Act until termination of the offering:
- Our Annual Report on Form 10-K for our fiscal year ended March 31, 1999.
- Our Quarterly Reports on Form 10-Q relating to the quarters ended
June 30, 1999 and December 31, 1999, and our Quarterly Report on
Form 10-Q, as amended, relating to the quarter ended September 30, 1999.
- Our Current Report on Form 8-K filed January 6, 2000, as amended by our
Current Report on Form 8-K/A filed March 3, 2000.
This prospectus may contain information that updates, modifies or is
contrary to information in one or more of the documents incorporated by
reference in this prospectus. Reports we file with the SEC after the date of
this prospectus may also contain information that updates, modifies or is
contrary to information in this prospectus or in documents incorporated by
reference in this prospectus. Investors should review these reports as they may
disclose a change in our business, prospects, financial condition or other
affairs after the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
The documents incorporated by reference into this prospectus are available
from us upon request. We will provide a copy of any and all of the information
that is incorporated by reference in this prospectus, not including exhibits to
the information unless those exhibits are specifically incorporated by reference
into this proxy statement prospectus, to any person, without charge, upon
written or oral request.
Requests for documents should be directed to Investor Relations,
Adaptec, Inc., 691 S. Milpitas Blvd, Milpitas, California 95035, telephone
number (408) 945-8600.
13
<PAGE>
We file reports, proxy statements and other information with the Securities
and Exchange Commission. Copies of our reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the SEC:
<TABLE>
<S> <C> <C>
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 5000 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
</TABLE>
Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. The SEC
maintains a Website that contains our reports, proxy statements and other
information. The address of the SEC Web site is http://www.sec.gov.
We have filed a registration statement under the Securities Act with the SEC
with respect to the shares to be sold by the selling stockholders. This
prospectus has been filed as part of the registration statement. This prospectus
does not contain all of the information set forth in the registration statement
because certain parts of the registration statement are omitted in accordance
with the rules and regulations of the SEC. The registration statement is
available for inspection and copying as set forth above.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of common stock being registered. All
amounts are estimates except the Securities and Exchange Commission registration
fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 3,625
Nasdaq National Market additional listing fee............... $ 7,900
Accounting fees and expenses................................ $ 7,000
Legal fees and expenses..................................... $10,000
Miscellaneous............................................... $ 5,000
-------
Total..................................................... $33,525
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for a breach of their fiduciary duties as directors, except for
liability (i) for any breach of their duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
The Registrant's Bylaws provide that the Registrant shall indemnify its
directors and officers and may indemnify its employees and other agents to the
fullest extent permitted by law. The Registrant's Bylaws also permit the
Registrant to secure insurance on behalf of any officer, director, employee or
other agent for any liability arising out of his or her actions in such
capacity, regardless of whether the Registrant would have the power to indemnify
him or her against such liability under the General Corporation Law of the State
of Delaware. The Registrant currently has secured such insurance on behalf of
its officers and directors.
The Registrant has entered into agreements to indemnify its directors and
officers, in addition to indemnification provided for in the Registrant's
Bylaws. Subject to certain conditions, these agreements, among other things,
indemnify the Registrant's directors and officers for certain expenses
(including attorneys' fees), judgments, fines and settlement amounts incurred by
any such person in any action or proceeding, including any action by or in the
right of the Registrant, arising out of such person's services as a director or
officer of the Registrant, any subsidiary of the Registrant or any other company
or enterprise to which the person provides services at the request of the
Registrant.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- ------------------------------------------------------------
<C> <S>
4.1 Registration Rights Agreement dated as of March 10, 2000
5.1 Opinion of Wilson Sonsini Goodrich & Rosati
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.2 Consent of Arthur Andersen LLP, Independent Certified Public
Accountants
23.3 Consent of Wilson Sonsini Goodrich & Rosati (contained in
Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually, or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. 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 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) 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,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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.
II-2
<PAGE>
SIGNATURES
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-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milpitas, State of California, on April 7, 2000.
<TABLE>
<S> <C> <C>
ADAPTEC, INC.
By: /s/ ROBERT N. STEPHENS
-----------------------------------------
Robert N. Stephens
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
POWER OF ATTORNEY
KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert N. Stephens and Andrew J. Brown,
jointly and severally, as his or her attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Registration Statement on Form S-3, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his or her substitute or substitutes, may do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
President, Chief Executive
/s/ ROBERT N. STEPHENS Officer and Director
- ------------------------------------------- (principal executive April 7, 2000
Robert N. Stephens officer)
Vice President, Finance and
/s/ ANDREW J. BROWN Chief Financial Officer
- ------------------------------------------- (principal financial April 7, 2000
Andrew J. Brown officer)
Vice President and
/s/ KENNETH B. AROLA Corporate Controller
- ------------------------------------------- (principal accounting April 7, 2000
Kenneth B. Arola officer)
/s/ LAURENCE B. BOUCHER
- ------------------------------------------- Chairman of the Board and April 7, 2000
Laurence B. Boucher Director
/s/ JOHN G. ADLER
- ------------------------------------------- Director April 7, 2000
John G. Adler
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
- ------------------------------------------- Director
Carl J. Conti
- ------------------------------------------- Director
John East
/s/ ILENE H. LANG
- ------------------------------------------- Director April 7, 2000
Ilene H. Lang
/s/ ROBERT J. LOARIE
- ------------------------------------------- Director April 7, 2000
Robert J. Loarie
/s/ B.J. MOORE
- ------------------------------------------- Director April 7, 2000
B.J. Moore
/s/ W. FERRELL SANDERS
- ------------------------------------------- Director April 7, 2000
W. Ferrell Sanders
/s/ PHILLIP E. WHITE
- ------------------------------------------- Director April 7, 2000
Phillip E. White
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<C> <S>
4.1 Registration Rights Agreement dated as of March 10, 2000
5.1 Opinion of Wilson Sonsini Goodrich & Rosati
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.2 Consent of Arthur Andersen LLP, Independent Certified Public
Accountants
23.3 Consent of Wilson Sonsini Goodrich & Rosati (contained in
Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
</TABLE>
II-5
<PAGE>
Exhibit 4.1
ADAPTEC, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made
effective as of March 10, 2000 (the "EFFECTIVE DATE"), by and among Adaptec,
Inc., a Delaware corporation (the "PARENT"), Wild File, Inc., a Delaware
corporation (the "COMPANY"), and those persons whose signatures appear on the
signature page hereto (each a "STOCKHOLDER" and collectively, the
"STOCKHOLDERS").
RECITALS
A. The Company, Parent, Snowfall Acquisition Corporation, a
Delaware corporation ("SUB"), and certain others, are parties to the
Agreement and Plan of Reorganization dated March 3, 2000 (together with the
exhibits and schedules thereto, the "MERGER AGREEMENT"), pursuant to which
the Company shall be merged with and into Sub, the separate corporate
existence of the Company shall cease and Sub shall continue as the surviving
corporation and as a wholly-owned subsidiary of Parent.
B. Pursuant to the Merger Agreement, among other things, the
Stockholders shall have the right to receive the shares of common stock of
Parent (the "SHARES") in exchange for outstanding shares of Company capital
stock.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, all parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"BLACK-OUT PERIOD" means any period during which executive officers
and directors of Parent are generally prohibited from engaging in trades in
Parent's securities pursuant to Parent's Insider Trading Policy.
"COMMISSION" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar Federal rule or statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
"HOLDER" means any of the Stockholders, for so long as such person
holds any Registrable Securities, or any person holding Registrable
Securities to whom the rights under this Agreement have been transferred in
accordance with Section 11 hereof.
<PAGE>
"INSIDER TRADING POLICY" means the policy adopted by Parent's Board
of Directors, as such may be amended from time to time, relating to
transactions in Parent's securities by Parent's executive officers and
directors.
"PERMITTED WINDOW" means the period during which a Holder entitled
to sell Registrable Securities pursuant to a registration statement under
Section 5(a) of this Agreement shall be permitted to sell Registrable
Securities pursuant to such a registration. Except as otherwise set forth in
this Agreement, a Permitted Window shall (i) commence immediately after the
end of a Black-Out Period, and shall (ii) terminate upon the commencement of
a Black-Out Period, unless Holder receives notice from Parent to the contrary
in accordance with Section 5(b)(iii).
"REGISTRABLE SECURITIES" means the Shares and any Common Stock of
Parent issued to the Stockholders in the Merger, other than shares held in
escrow pursuant to ARTICLE VII of the Merger Agreement, or issuable in
respect thereof upon any conversion, stock split, stock dividend,
recapitalization, merger or other reorganization; PROVIDED, HOWEVER, that
securities shall only be treated as Registrable Securities if and so long as
they have not been registered or sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction.
"REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act, and the declaration or ordering of the effectiveness of
such registration statement.
"REGISTRATION EXPENSES" means all expenses, except Selling Expenses,
incurred by Parent in complying with Section 5 hereof, including without
limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for Parent, blue sky
fees and expenses, the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees
of Parent which shall be paid in any event by Parent).
"RESTRICTED SECURITIES" means the securities of Parent required to
bear a legend as described in Section 3 hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar Federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" means all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders and all fees and disbursements of counsel for any Holder.
2. RESTRICTIONS ON TRANSFERABILITY. The Restricted Securities and
any other securities issued in respect of such securities upon any stock
split, stock dividend, recapitalization, merger or other reorganization,
shall not be sold, assigned, transferred or pledged except upon the
conditions specified in this Agreement, which conditions are intended to
ensure compliance with the provisions of the Securities Act. Each Holder or
transferee will cause any proposed purchaser, assignee,
-2-
<PAGE>
transferee, or pledgee of any such securities held by the Holder or
transferee to agree to take and hold such securities subject to the
restrictions and upon the conditions specified in this Agreement, including
without limitation the restrictions set forth in Section 4.
3. RESTRICTIVE LEGEND. Each certificate representing the Shares or
any other securities issued in respect of such securities upon any stock
split, stock dividend, recapitalization, merger or other reorganization shall
be stamped or otherwise imprinted with the following legends:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE TRANSFERRED
UNLESS A REGISTRATION STATEMENT UNDER SAID ACT IS IN EFFECT AS
TO SUCH TRANSFER OR, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER, SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER SAID ACT
Each Holder consents to Parent making a notation on its records and giving
instructions to any transfer agent of its capital stock in order to implement
the restrictions on transfer established in this Agreement and the Purchase
Agreement.
4. NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in
all respects with the provisions of this Section 4. Without in any way
limiting the immediately preceding sentence or the provisions of Section 2,
no sale, assignment, transfer or pledge (other than (i) a sale made pursuant
to a registration statement filed under the Securities Act and declared
effective by the Commission or (ii) a sale made in accordance with the
applicable provisions of Rule 144) of Restricted Securities shall be made by
any holder thereof to any person unless such person shall first agree in
writing to be bound by the restrictions of this Agreement, including without
limitation this Section 4. Prior to any proposed sale, assignment, transfer
or pledge of any Restricted Securities, unless there is in effect a
registration statement under the Securities Act covering the proposed
transfer, the holder thereof shall give written notice to Parent of such
holder's intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and, if requested
by Parent, the holder shall also provide, at such holder's expense, a written
opinion of legal counsel (who shall be, and whose legal opinion shall be,
reasonably satisfactory to Parent) addressed to Parent, to the effect that
the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act and under applicable state securities
laws and regulations. Upon delivery to Parent of such notice and, if
required, such opinion, the holder of such Restricted Securities shall be
entitled to transfer such Restricted Securities in accordance with the terms
of such notice. Parent agrees that it shall not request such an opinion of
counsel with respect to (i) a transfer not involving a change in beneficial
ownership, (ii) a transaction involving the transfer without consideration of
Restricted Securities by an individual holder during such holder's lifetime
by way of gift or on death by will or the laws of descent and distribution.
Each certificate evidencing the Restricted Securities transferred
-3-
<PAGE>
as above provided shall bear, except if such transfer is made pursuant to
Rule 144, the appropriate restrictive legend set forth in Section 3 above,
except that such certificate shall not bear such restrictive legend if, in
the opinion of counsel for such holder and counsel for Parent, such legend is
not required in order to establish or ensure compliance with any provision of
the Securities Act.
5. REGISTRATION ON FORM S-3.
(a) REGISTRATION. Parent shall use its commercially reasonable
efforts to cause a registration statement on Form S-3 (or any successor form,
a "FORM S-3") covering all Registrable Securities to be filed no later than
May 15, 2000, and declared effective as soon as practicable thereafter
provided that such date does not occur within any Black-Out Period and
provided further that the financial statements contained in Parent's most
recent quarterly or annual report on Form 10-Q and Form 10-K, respectively,
are not of a date 135 days or more on or prior to the 90th day following the
Closing Date, in which case, Parent shall use its commercially reasonable
efforts to cause such registration statement to be filed within ten (10) days
after Parent's next quarterly or annual report on Form 10-Q or Form 10-K, as
the case may be, is filed and declared effective as soon as practicable
thereafter. Parent shall use its commercially reasonable efforts to keep such
registration statement effective until the first anniversary of the date of
this Agreement, or such earlier date upon which no Holder holds any
Registrable Securities. Upon receipt of a notice from any Holder that such
Holder intends to sell Registrable Securities during a Permitted Window,
Parent shall, prior to the commencement of the Permitted Window, inform the
other Holders of the commencement of the Permitted Window. Parent shall
notify each of the Holders of the termination of a Permitted Window no later
than the time Parent notifies its executive officers and directors of the
corresponding Black-Out Period; PROVIDED, HOWEVER, that Parent need not
notify the Holders of regularly scheduled Black-Out Periods relating to the
closing of Parent's fiscal quarters, which periods commence on the fifteenth
day prior to the end of the last month of each fiscal quarter and terminate
twenty-four hours after Parent publicly announces its results for such
quarters.
(b) LIMITATIONS ON REGISTRATION AND SALE OF REGISTRABLE
SECURITIES. Notwithstanding anything in this Agreement to the contrary,
Parent's obligations and the Holders' rights under this Section 5 are subject
to the limitations and qualifications set forth below, which may be waived in
writing by Parent.
(i) Parent shall have no obligation to keep effective a
registration statement hereunder following such time as each Holder is
eligible to sell all of its Registrable Securities in a three month period
under the applicable provisions of Rule 144.
(ii) The Holders will sell Registrable Securities pursuant
to a registration effected hereunder only during a Permitted Window.
(iii) If Parent furnishes to the Holders a certificate
signed by the President or Chief Financial Officer of Parent stating that, in
the good faith judgment of the Board of Directors of Parent, it would be
seriously detrimental to Parent for a Form S-3 registration to be effected,
or a Permitted Window to be in effect, due to (A) the existence of a material
development or potential material development involving Parent which Parent
would be obligated to disclose in the
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prospectus contained in the Form S-3 registration statement, which disclosure
would in the good faith judgment of the Board of Directors be premature or
otherwise inadvisable or (B) the existence of other facts or circumstances as
a result of which the prospectus contained or to be contained in the Form S-3
registration statement includes or would include an untrue statement of a
material fact or omits or would omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made or then existing,
Parent may defer the filing of the Form S-3 registration statement or delay
the commencement of a Permitted Window or may effect an early termination of
a Permitted Window that has commenced, as the case may be. Parent may elect
to so defer, delay or terminate under clause (A) above only to the extent
that the event described in clause (A) also gives rise to a Black-Out Period
applicable to all of Parent's executive officers and directors under Parent's
Insider Trading Policy. If Parent elects to so defer, delay or terminate
under clause (B) above, Parent shall use its commercially reasonable efforts
to amend the registration statement or take such other action as may be
necessary to eliminate the situation described in clause (B) as soon as
practicable. Any Holder receiving any notice from Parent with respect to the
matters covered by this Section 5(b)(iii) shall keep the fact and content of
such notice, and the event or circumstances giving rise to such notice,
confidential.
(iv) The obligations of Parent hereunder are conditioned
upon its being eligible to register its securities on Form S-3 at the time
any such registration is otherwise required hereunder; provided, however that
Parent shall use its reasonable best efforts to remain eligible for use of
Form S-3 for the one-year period following the Effective Date; and provided
further that if after registration is accomplished on Form S-3 and prior to
the time that is one year following the Effective Date Parent is no longer
eligible to use Form S-3, subject to the provisions of this Section 5(b),
Parent shall undertake to continue the registration of the Registrable
Securities on another eligible form.
(v) Notwithstanding anything to the contrary in this
Agreement, Parent shall have no obligation to effect a registration
hereunder, and no Permitted Window will exist, with respect to Registrable
Securities that are subject to the escrow provisions of the Merger Agreement
(including any agreement which is an exhibit thereto) during the time that
such Registrable Securities are subject to such provisions and no Holder
shall sell any such Registrable Securities pursuant to a registration
hereunder, or pursuant to Rule 144, during any such period.
(c) REGISTRATION PROCEDURES. In connection with any
registration required under this Agreement, Parent shall take the actions set
forth below.
(i) Prior to filing any registration statement,
prospectus, amendment or supplement with the Commission in connection with
any registration hereunder, Parent shall furnish to one counsel selected by
the Holders of a majority of the Registrable Securities copies of such
documents.
(ii) Parent shall notify each Holder of any stop order
issued or threatened by the Commission and will take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered.
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<PAGE>
(iii) Parent shall comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by a
registration statement filed pursuant to this Agreement with respect to the
disposition of all Registrable Securities covered by such registration
statement in accordance with the intended methods of disposition by the
Holders as set forth in such registration statement.
(iv) Parent shall furnish to each Holder and each
underwriter, if any, of Registrable Securities covered by a registration
statement filed pursuant to this Agreement such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the prospectus included in such
registration statement (including each preliminary prospectus), in conformity
with the requirements of the Securities Act, and such other documents as a
selling Holder may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such Holder. Such delivery of
documents shall be made by Parent within two (2) trading days of receipt of a
request therefor from a Holder.
(v) Parent shall use its best efforts to register or
qualify the Registrable Securities under the securities or "blue sky" laws of
each State of the United States of America as any of the Holders or
underwriters, if any, of the Registrable Securities covered by a registration
statement filed hereunder reasonably requests, and shall do any and all other
acts and things which may be reasonably necessary or advisable to enable each
selling Holder and each underwriter, if any, to consummate the disposition in
such States of the Registrable Securities owned by such selling Holders;
PROVIDED that Parent shall not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection (v), (B) subject itself to taxation in any
such jurisdiction or (C) consent to general service of process in any such
jurisdiction.
(vi) Parent shall immediately notify each Holder entitled
to sell Registrable Securities during a Permitted Window of the happening of
any event which comes to Parent's attention if, as a result of such event,
the prospectus included in the registration statement filed under this
Agreement contains any untrue statement of a material fact or omits to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and Parent shall
promptly prepare and furnish to each Holder and file with the Commission a
supplement or amendment to such prospectus so that such prospectus will no
longer contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(vii) Parent shall take all such other reasonable and
customary actions as each Holder or the underwriters, if any, may reasonably
request in order to expedite or facilitate the disposition of the Registrable
Securities in accordance with the terms of this Agreement.
(viii) Parent shall make available for inspection by the
Holders, any underwriter participating in any disposition pursuant to a
registration statement filed under this Agreement, and any attorney,
accountant or other agent retained by such Holders or underwriters, all
financial and other records, pertinent corporate documents and properties of
Parent and its subsidiaries, as such person may reasonably request for the
purpose of confirming that such
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<PAGE>
registration statement does not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided that Parent obtains reasonably satisfactory assurances
that such information will be used solely for such purpose and will be held
in confidence (except to the extent that it is included in the registration
statement). Parent shall cause the officers, directors and employees of
Parent and each of its subsidiaries to supply such information and respond to
such inquiries as any Holder or underwriter may reasonably request or make
for the purpose of confirming that such registration statement does not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, provided that Parent obtains
reasonably satisfactory assurances that such information will be used solely
for such purpose and will be held in confidence (except to the extent that it
is included in the registration statement).
6. OTHER REGISTRATION RIGHTS. The Holders acknowledge that certain
other stockholders of Parent may now or hereafter have registration rights,
and that such other stockholders may be entitled to sell their securities at
the same time, or pursuant to the same registration and underwriting, as the
Holders hereunder.
7. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with Parent's obligations hereunder shall be borne by Parent. All
Selling Expenses relating to securities proposed to be registered hereunder
and all other registration expenses shall be borne by the Holders of such
securities pro rata on the basis of the number of shares proposed to be sold
by each of them during the applicable Permitted Window; provided, however,
that Parent shall be obligated to pay up to an aggregate of $3,000 for the
legal fees relating to securities proposed to be registered hereunder and all
other registration expenses of the Holders of such securities pro rata on a
basis of the number of shares proposed to be sold by each of them.
8. INDEMNIFICATION.
(a) Parent will indemnify each Holder, each of its officers and
directors and partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which
registration has been effected pursuant to this Agreement, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or
any amendment or supplement thereto, incident to any such registration, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading and Parent
will reimburse each such Holder, each of its officers, directors and
partners, and each person controlling such Holder, for any legal and any
other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
PROVIDED that Parent will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based
on any untrue statement or omission or alleged untrue statement or omission,
made in reliance upon and
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<PAGE>
in conformity with written information furnished to Parent by an instrument
duly executed by such Holder or controlling person, and stated to be
specifically for use therein; and PROVIDED, FURTHER, that the foregoing
indemnity agreement is subject to the condition that, insofar as it relates
to any such untrue statement, alleged untrue statement, omission or alleged
omission made in a preliminary prospectus, such indemnity agreement shall not
inure to the benefit of any person, if a copy of the final prospectus or an
amended or supplemented prospectus, as applicable, was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act, and if the final prospectus or
the amended or supplemented prospectus, as applicable, would have cured the
defect giving rise to the loss, liability, claim or damage. In no event,
however, shall Parent have any indemnification obligation to the extent that
the expenses, claims, losses, damages or liabilities as to which
indemnification is sought are in connection with an offer or sale made by a
person other than Parent in violation of the terms of this Agreement (a
"VIOLATION").
(b) Each Holder will, severally and not jointly and severally,
if Registrable Securities held by such Holder are included in the securities
as to which a registration hereunder is effected, indemnify Parent, each of
its directors and officers, each person who controls Parent within the
meaning of Section 15 of the Securities Act, and each other such Holder, each
of its officers and directors and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on (i) a Violation by such Holder or (ii) any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or
any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse Parent, such Holders, such directors, officers
or control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, but, in the case of clause (ii) above, only to the
extent that such untrue statement (or alleged untrue statement) or omission
(or alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
information furnished to Parent by such Holder. Notwithstanding the
foregoing, the liability of each Holder under this subsection 8.7(b) shall be
limited in an amount equal to the initial public offering price of the shares
sold by such Holder, unless such liability arises out of or is based on a
Violation or willful misconduct by such Holder.
(c) Each party entitled to indemnification under this Section 8
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that (i) counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld), and the Indemnified Party may participate in
such defense at such party's expense, (ii) that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under Section 8 of this Agreement
unless the failure to give such notice is materially prejudicial to an
Indemnifying Party's
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<PAGE>
ability to defend such action, and then only to the extent that such
Indemnifying Party is materially prejudiced, and (iii) that the Indemnifying
Party shall not assume the defense for matters as to which there is a
conflict of interest or there are separate and different defenses. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party (whose consent shall not be
unreasonably withheld), consent to entry of any judgment or enter into any
settlement which (i) does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation or (ii) includes
admission of fault by the Indemnified Party. Notwithstanding the foregoing,
the liability of each Holder under this subsection 8.7(c) shall be limited in
an amount equal to the initial public offering price of the shares sold by
such Holder, unless such liability arises out of or is based on a Violation
or willful misconduct by such Holder.
9. INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration hereunder shall furnish to Parent
such information regarding such Holder or Holders, the Registrable Securities
held by them and the distribution proposed by such Holder or Holders as
Parent may request in writing and as shall be required in connection with any
registration referred to in this Agreement.
10. RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit
the sale of the Restricted Securities to the public without registration
Parent agrees to use all reasonable efforts, at any time after the first
anniversary of the Effective Date, to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of Parent under the Securities Act and the Exchange
Act.
11. TRANSFER OF REGISTRATION RIGHTS. The rights to cause Parent to
register securities granted to Holders under Section 5 may be assigned to a
transferee or assignee reasonably acceptable to Parent in connection with any
transfer or assignment of Registrable Securities by the Holder, provided that
(i) such transfer is otherwise effected in accordance with applicable
securities laws and the terms of this Agreement, (ii) such assignee or
transferee acquires at least 10,000 shares of Registrable Securities (as
adjusted for stock splits, stock dividends, stock combinations and the like),
(iii) written notice is promptly given to Parent and (iv) such transferee
agrees in writing to be bound by the provisions of this Agreement.
Notwithstanding the foregoing, the rights to cause Parent to register
securities may be assigned without compliance with item (ii) above to a
family member or trust for the benefit of a Holder who is an individual, or a
trust for the benefit of a family member of such a Holder. In addition, a
distribution of Shares issued in the Merger without additional consideration
to underlying beneficial owners in proportion to the beneficial ownership
interests (such as the general and limited partners, Stockholders and trust
beneficiaries of a Holder) shall not be deemed to be an "assignment" or
"transfer" for purposes of the Section 11 and such underlying beneficial
owners shall be entitled to the same rights and subject to the same
restrictions under this Agreement as the initial Holder from which the
Registrable Securities were received
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without any additional action on the part of any party to this Agreement
other than reasonable notice to Parent of such distribution.
12. AMENDMENT. Except as otherwise provided above, any provision of
this Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Parent and Holders of a
majority of the Registrable Securities remaining at the time such amendment
or waiver is made.
13. GOVERNING LAW. This Agreement shall be governed in all respects
by the laws of the State of California, without regard to conflict of laws
provisions.
14. ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and Agreement among the parties regarding the matters
set forth herein. Except as otherwise expressly provided herein, all other
agreements regarding the registration rights of the Company's Stockholders
shall hereby expire. The provisions hereof shall inure to the benefit of, and
be binding upon the successors, permitted assigns, heirs, executors and
administrators of the parties hereto.
15. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by facsimile
transmission, by hand or by messenger, addressed:
(a) if to a Holder, at such Holder's address as set forth below
such Holder's signature on this Agreement, or at such other address as such
Holder shall have furnished to Parent.
(b) if to Parent, to:
Adaptec, Inc.
691 Milpitas Boulevard
Milpitas, California 95035
Fax: (408) 957-7137
Attn: General Counsel
or at such other address as Parent shall have furnished to the
Holders, with a copy to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94304-1050
Attn: Katharine A. Martin, Esq.
Fax: (650) 493-6811
Each such notice or other communication shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally or by facsimile transmission, or, if sent by mail, at
the earlier of its receipt or 72 hours after the same has been
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<PAGE>
deposited in a regularly maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
"PARENT"
Adaptec, Inc.
a Delaware corporation
By: /s/ Tom Shea
------------------------------------
Name: Tom Shea
----------------------------------
Title: VP & GM
---------------------------------
"THE HOLDERS"
By: /s/ Eric D. Schneider
------------------------------------
Name: Eric D. Schneider
By: /s/ James H. Binger
------------------------------------
Name: James H. Binger
By: /s/ E.R. Kinney
------------------------------------
Name: E.R. Kinney
By: /s/ Margaret Velie Kinney
------------------------------------
Name: Margaret Velie Kinney
By: /s/ John D. French
------------------------------------
Name: John D. French
By: /s/ Mike Gustafson
------------------------------------
Name: Mike Gustafson
By: /s/ Marcy H. Shilling
------------------------------------
Name: Marcy H. Shilling
By: /s/ Erika Binger
------------------------------------
Name: Erika Binger
By: /s/ Meghan Brown
------------------------------------
Name: Meghan Brown
<PAGE>
By: /s/ Benjamin Binger
------------------------------------
Name: Benjamin Binger
By: /s/ Noa Staryk
------------------------------------
Name: Noa Staryk
By: /s/ Edward Bruggeman
------------------------------------
Name: Edward Bruggeman
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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Exhibit 5.1
April 7, 2000
Adaptec, Inc.
691 South Milpitas Boulevard
Milpitas, California 95035
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel to Adaptec, Inc., a Delaware corporation
(the "Company" or "you"), and have examined the Company's registration
statement on Form S-3 (the "Registration Statement") to be filed by the
Company with the Securities and Exchange Commission on or about April 7, 2000
in connection with the registration for resale under the Securities Act of
1933, as amended, of 391,997 shares of common stock, $0.001 par value per
share (the "Shares").
As your legal counsel, we have examined the proceedings taken with
respect to the issuance of the Shares. It is our opinion that the Shares have
been legally and validly issued and are fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement and any amendments thereto.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated April 28, 1999 relating to the
financial statements, which appears in Adaptec, Inc.'s Annual Report on
Form 10-K for the year ended March 31, 1999. We also consent to the reference to
us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers
- ------------------------------
PricewaterhouseCoopers
San Jose, California
April 6, 2000
<PAGE>
[ARTHUR ANDERSEN LETTERHEAD]
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 of our
report dated February 26, 1999 (except with respect to matters discussed in Note
12 as to which the dates are November 19, 1999, and December 22, 1999) related
to the financial statements of Distributed Processing Technology Corp., which
are included in Adaptec, Inc.'s current report on Form 8-K/A filed on March 3,
2000, and to all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Orlando, Florida,
April 6, 2000
