<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 2000
REGISTRATION NO. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ADAPTEC, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 3576 94-2748530
(State or other (Primary Standard (I.R.S. employer
jurisdiction of incorporation Industrial Classification identification no.)
or organization) Code Number)
----------------------
691 S. MILPITAS BLVD.
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 S. MILPITAS BLVD.
MILPITAS, CALIFORNIA 95035
(408) 945-8600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
COPIES TO:
DENNIS R. DEBROECK, ESQ.
DAVID A. BELL, ESQ.
DANIEL P. HARVATH, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
----------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, please 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(d) 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. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------- ---------------- ---------------------------- ------------------------- ------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PRICE PER SHARE(2) PRICE(2) REGISTRATION FEE
- --------------------------------------- ---------------- ---------------------------- ------------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 290,000 shares $36.6875 $10,639,375 $2,809
- --------------------------------------- ---------------- ---------------------------- ------------------------- ------------------
</TABLE>
(1) The shares of Common Stock set forth in the Calculation of Registration Fee
Table, and which may be offered pursuant to this Registration Statement,
include, pursuant to rule 416 of the Securities Act of 1933, as amended,
such additional number of shares of the Registrant's Common Stock that may
become issuable as a result of any stock split, stock dividend or similar
event.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based
on the average of the high and low prices of the common stock on the Nasdaq
National Market on March 2, 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.
================================================================================
<PAGE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS IN ANY
JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER, SOLICITATION OF AN OFFER OR PROXY SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES
PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH OR
INCORPORATED HEREIN BY REFERENCE OR IN OUR AFFAIRS SINCE THE DATE OF THIS
PROSPECTUS.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 8, 2000
PROSPECTUS
The information in this Prospectus is not complete and may be changed. We 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.
290,000 SHARES
ADAPTEC, INC.
COMMON STOCK
($0.001 PAR VALUE)
-------------------
The Common Stock of Adaptec, Inc., or "Adaptec," trades on the Nasdaq
National Market.
Last reported sale price on March 7, 2000: $38 7/8 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.
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TABLE OF CONTENTS
The Offering..................................... 1
Risk Factors..................................... 2
Use of Proceeds.................................. 11
Selling Stockholder.............................. 12
Plan of Distribution............................. 12
Legal Matters.................................... 14
Experts.......................................... 14
Incorporation of Certain Information by
Reference........................................ 14
Where You Can Find More Information.............. 14
Information not Required in Prospectus........... II-1
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THE OFFERING
Under this Prospectus, the selling stockholder named under the section entitled
"Selling Stockholder" of this Prospectus may offer and sell shares of our Common
Stock that it acquired upon its exercise of two Warrants to Purchase Stock it
received in connection with the cross-license agreement between Adaptec and such
selling stockholder.
The selling stockholder may sell its 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."
Except for payment of the exercise price of the Warrants, Adaptec will not
receive any of the proceeds from the sale of shares by the selling
stockholder.
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RISK FACTORS
THIS OFFERING IS RISKY. ANYONE WHO MAY RECEIVE COMMON STOCK UNDER THIS
PROSPECTUS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO
THE OTHER INFORMATION PRESENTED IN OR INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT.
YOU SHOULD NOT RELY UPON THE FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS.
We make many statements in this Prospectus that are forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act of 1934, as amended, or the Exchange Act. These
statements relate to our future plans, objectives, expectations and intentions.
We may identify these statements by the use of words such as "believe,"
"expect," "anticipate," "intend" and "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,
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- gain on the exchange of a warrant to purchase JNI common stock,
and
- the gain on the sale of land.
Additionally, our operating results were affected by the recent acquisition
of CeQuadrat GmbH beginning in the second quarter of fiscal 2000 and the
acquisition of Distributed Processing Technology, Corp., beginning in the
fourth quarter of fiscal 2000, including increased goodwill and other
intangibles amortization expense. In the future, our operating results will be
affected by the cross-license agreement between Adaptec and Agilent
Technologies, Inc., or Agilent, 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.
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
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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,
- product costs,
- timely completion and introduction of new product designs,
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- 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 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. There can be no assurance that we will have sufficient
resources to accomplish the following:
- meet growing product demand,
- to make timely introduction of new leading-edge solutions in
response to competitive threats,
- to compete successfully in the future against existing or
potential competitors, or
- to 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, and in December 1999, we acquired
Distributed Processing Technology Corp. Both acquisitions were accounted for
using the purchase method of accounting. In January 2000, we entered into an
agreement with Agilent 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 to 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,
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- 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 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 MAY ENCOUNTER YEAR 2000 COMPLIANCE ISSUES, WHICH COULD NEGATIVELY AFFECT
OUR OPERATIONS.
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
2-digit year is commonly referred to as the Year 2000 Compliance issue. As a
result of this issue, some systems may be unable to accurately process
certain date-based information. During fiscal 1998, we completed
implementation of Enterprise Resource Planning ("ERP") software to replace
our existing core business applications. Additionally, we have analyzed the
remainder of our business not addressed by the ERP software and have, through
our standard product-development cycle, ensured our products are Year 2000
Compliant through procedures, tests and methodologies that have been in
effect since fiscal 1997. Although we have encountered no significant
problems with our internal systems as of the date of this Prospectus, if
internal systems do not properly recognize and process date information for
years into and beyond the turn of the century, there could be a material
adverse impact on other Company's operations. A significant disruption of our
financial or business systems would materially adversely impact our ability
to process orders, manage production and issue and pay invoices. Our
inability to perform these functions for a long period of time could result
in a material adverse impact on our result of operations and financial
condition. Failure of these systems could disrupt the manufacturing process
and could result in a delay in completion and shipment of our products. We
have communicated with others with whom we do significant business, including
major distributors, suppliers, customers, vendors and financial service
organizations, to assess their Year 2000 Compliance readiness with respect to
both their operations and the products and services they supply. The analysis
will continue into our fiscal year 2000, and we are taking and will continue
to take corrective action commensurate with our needs related to any affected
products and services. Although, we have not encountered any significant
problems with others with whom we do significant business as of the date of
this Prospectus, if companies with whom we do significant business fail
because of a Year 2000 malfunction for years into and beyond the turn of the
century, there could be a material adverse impact on our operating results.
We believe our customers' redirection of corporate management information
system budgets towards resolving Year 2000 Compliance issues has affected our
sales. The continuation of this trend could lower the demand for our products
if corporate buyers defer purchases of high-end business PCs. As of the date
of this Prospectus, we have not encountered any significant problems with our
applications and systems or our internal and external sources. However, we
have developed a contingency plan for some of our applications and systems to
address any of the consequences of internal or external failures to be Year
2000 Compliant. We also have created a contingency plan for internal and
external sources, including key suppliers. The potential ramifications of a
Year 2000 type failure are potentially far-reaching and largely unknown. In
spite of prudent planning we cannot assure that a contingency plan in effect
at the time of a system failure will adequately address the immediate or
long-term effects of a failure, or that such a failure would not have a
material adverse impact on our operations or financial 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,
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- 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.
While we have been satisfied with the quality, yield, and timeliness of
wafer deliveries to date we cannot assure 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 it 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 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. There can be no assurance 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. There can be no assurance 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.
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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.
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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 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 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 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 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.
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:
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- 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 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
10
<PAGE>
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 high 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. An adverse change in the
price of JNI common stock and limitations on the sale of that stock could
adversely materially affect on our financial results if we were to sell our
investment at a loss, which could materially adversely impact our financial
position.
WE ENGAGE IN TRANSACTIONS INVOLVING DERIVATIVES WHICH COULD AFFECT OUR FINANCIAL
POSITION AND OUR STOCK PRICE.
In the second quarter of fiscal 2000, we sold put warrants that could
have obligated us to buy back shares of our Common Stock at prices greater than
market value in exchange for up front premiums. In the third quarter of fiscal
2000, the put warrants expired unexercised. In the future, we may sell
additional derivative instruments, which could materially adversely affect our
financial position and the price of our Common Stock.
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 busisness 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.
For more information about financial market risks related to changes in
interest rates and foreign currency exchange rates, we refer you to Part II,
Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the
Registrant's Annual Report on Form 10-K for the year ended March 31, 1999. In
the second quarter of fiscal 2000, we sold put warrants that could have
obligated us to buy back up to 1.0 million shares of our Common Stock at prices
ranging from $37 to $39 in exchange for up-front premiums of $3.7 million. In
the third quarter of fiscal 2000, the put warrants expired unexercised. We are
exposed to equity price risk relating to our available-for-sale securities. We
have not attempted to reduce or eliminate our market exposure on the 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. There can
be no assurance if and when the unrealized gains will be realized. For each 10%
decline in market value of our available-for-sale equity securities from
December 31, 1999, our marketable securities would decline in value by $7.5
million.
11
<PAGE>
USE OF PROCEEDS
Except for payment of the exercise price of the Warrants described
below, Adaptec will not receive any of the proceeds from the sale of shares
by the selling stockholder. We intend to use the payment of the exercise of
the Warrants for general corporate purposes, including working capital
requirements.
SELLING STOCKHOLDER
The following table sets forth certain information known to us with
respect to the beneficial ownership of the Common Stock as of the close of
less business day on March 6, 2000 by the selling stockholder. The table
assumes that the selling stockholder has exercised 100% of its Warrants
described below and sells all of the shares offered by it in this offering.
However, we are unable to determine the exact number of shares that the
selling stockholder will sell or when or if such sales will occur. We also
assume, in the table below, that the selling stockholder does not acquire any
other shares of our Common Stock pending the offering.
The selling stockholder has advised us that it is the beneficial owner
of the shares being offered.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Before Offering Owned After Offering
--------------------- Shares Being --------------------
Name Number Percent Offered Number Percent
- ---- ------ ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Agilent Technologies, Inc. 1,160,000 1.1% 290,000 870,000 *
</TABLE>
- --------------
* Less that 1%
[The address of the selling stockholder is 3000 Hanover Street, Palo Alto,
California 94304.]
PLAN OF DISTRIBUTION
The selling stockholder will acquire the shares upon exercise of two
Warrants to Purchase Stock, the "Warrants," that it received in connection with
a cross-license agreement with us. The selling stockholder is bound by the terms
of the Warrants, which have a four-year term and entitle the selling stockholder
to purchase a total of 1,160,000 shares of our Common Stock at an exercise price
of $62.25 per share. The Warrants provide that we will register 25% of the
shares (290,000 shares) received by the selling stockholder and that the selling
stockholder may not sell or transfer such 290,000 shares until we have
registered them and until 90 days have elapsed from the issue date of the
Warrants (January 17, 2000).
To our knowledge, the selling stockholder has 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 stockholder may offer and sell shares of our Common Stock
from time to time. In addition, the selling stockholder's donees, pledgees,
transferees and other successors in interest may sell shares received from the
named selling stockholder after the date of this Prospectus. The selling
stockholder will act independently of us in making decisions with respect to the
timing, manner and size of each sale. Sales may be made over the Nasdaq National
Market or otherwise, at then prevailing market prices, at prices related to
prevailing market prices or at negotiated prices. The shares may be sold by one
or more of the following methods:
- a block trade in which the broker-dealer engaged by a selling
stockholder will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to
facilitate the transaction;
- purchases by the broker-dealer as principal and resale by the
broker or dealer for its account pursuant to this Prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
- privately negotiated transactions.
The selling stockholder has advised us that it has not, as of the date
of this Prospectus, entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers for the sale of shares, nor is there an
underwriter or coordinating broker acting in connection with the proposed sale
of shares by the selling stockholder.
In connection with distributions of the shares or otherwise, the
selling stockholder may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with these transactions,
broker-dealers or financial institutions may engage in short sales of the shares
in the course of hedging the positions they assume with the selling stockholder.
The selling stockholder may also sell shares short and redeliver the shares to
close out these short positions. The selling stockholder may also enter into
option or other transactions with broker-dealers or other financial institutions
that require the delivery to the broker-dealer or financial institution of the
shares, which the broker-dealer or financial institution may resell or otherwise
transfer under this Prospectus. The selling stockholder may also loan or pledge
the shares to a broker-dealer or other financial institution and the
broker-dealer or financial institution may sell the shares so loaned or, upon a
default, the broker-dealer may sell the pledged shares under this Prospectus. In
addition, any securities
12
<PAGE>
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.
Transactions under this Prospectus may or may not involve brokers or
dealers. The selling stockholder 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 stockholder 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 stockholder may be deemed to be underwriters within the meaning of
the Securities Act, the selling stockholder will be subject to the prospectus
delivery requirements of the Securities Act.
We have informed the selling stockholder that the anti-manipulation
rules under the Exchange Act apply to sales of shares in the market and to
the activities of the selling stockholder and their affiliates. The selling
stockholder have advised us that during the time they may be engaged in the
attempt to sell registered shares, they will:
- not bid for or purchase any of our securities or any rights to
acquire our securities, or attempt to induce any person to
purchase any of our securities or rights to acquire our
securities, other than, in each case, as permitted under the
Exchange Act;
- not sell or distribute the shares until after the Prospectus has
been appropriately amended or supplemented, if required, to set
forth the terms of sale or distribution; and
This offering will terminate on the earlier of:
- January 17, 2001;
- the date on which all shares held by all selling stockholder 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 stockholder.
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
stockholder 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 stockholder have agreed to indemnify each other
and other related parties against specified liabilities, including liabilities
arising under the Securities Act. The selling stockholder 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 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,
13
<PAGE>
- if the selling stockholder sells to a broker-dealer acting in the
capacity as an underwriter, such broker-dealer will be identified
in the Prospectus
- 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; and
- if the selling stockholder notifies us that a donee or pledgee
intends to sell more than 500 shares.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon by Fenwick & West LLP, 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 so
incorporated in reliance on the report of Arthur Andersen LLP, independent
certified public accountants, given on the authority of said firm as experts in
auditing and accounting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The 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 ending
June 30, 1999 and December 31, 1999, and our Quarterly Report on
Form 10-Q, as amended, relating to the quarter ending
September 30, 1999.
- Our Current Report on Form 8-K filed January 6, 2000, as
amended on our Current Report 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).
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:
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
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 Website is http://www.sec.gov.
We have filed a registration statement under the Securities Act with
the Securities and Exchange Commission with respect to the shares to be sold by
the selling stockholder. 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 aggregate estimated expenses to be paid by the Registrant in
connection with this offering are as follows:
Securities and Exchange Commission registration fee.............. $ 2,809
Nasdaq National Market filing fee................................ $ 2,900
Accounting fees and expenses*.................................... $ 7,000
Legal fees and expenses*......................................... $ 15,000
Miscellaneous*................................................... $ 5,000
--------
Total....................................................... $ 32,709
========
- ----------------
* Estimate
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our 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 breach of their fiduciary duties as directors, except for liability (i) for
any breach of their duty of loyalty to us or our 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.
Our Bylaws provide that we shall indemnify our directors and
officers and may indemnify our employees and other agents to the fullest
extent permitted by law. Our Bylaws also permit us 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 we
would have the power to indemnify him or her against such liability under the
General Corporation Law of Delaware. We currently have secured such insurance
on behalf of our officers and directors.
We have entered into agreements to indemnify our directors and
officers, in addition to indemnification provided for in our Bylaws. Subject to
certain conditions, these agreements, among other things, indemnify our
directors and officers for certain expenses (including attorney's 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 Adaptec,
arising out of such person's services as a director or officer of Adaptec, any
subsidiary of Adaptec or any other company or enterprise to which the person
provides services at our request.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference herein:
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
4.01 Warrant to Purchase Stock delivered by Adaptec to the
selling shareholder, issued on January 17, 2000, as amended
on February 14, 2000, providing for the purchase of 696,000
shares of the Common Stock of Adaptec at an exercise price of
$62.25 per share.
4.02 Warrant to Purchase Stock delivered by Adaptec to the selling
shareholder, issued on January 17, 2000, as amended on
February 14, 2000, providing for the purchase of 464,000
shares of the Common Stock of Adaptec at an exercise price of
$62.25 per share.
II-1
<PAGE>
4.03* Certificate of Incorporation of Registrant filed with
Delaware Secretary of State on November 19, 1997.
4.04* Second Amended and Restated Rights Agreement dated
December 5, 1996 between Registrant and Chase Mellon
Shareholder Services, Inc., as Rights Agents, as amended
March 12, 1998.
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.03 Consent of Arthur Andersen LLP, Independent Certified
Public Accountants.
- --------------
* Already filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made pursuant to this Registration Statement, 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 (the "SECURITIES ACT");
(ii) to reflect in the Prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement (notwithstanding the foregoing, any increase or
decrease in volume or 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; PROVIDED, HOWEVER,
that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective
amendment by paragraphs (1)(i) or (1)(ii) is contained in any
periodic report filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 (the
"EXCHANGE ACT") that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each post-effective amendment shall be deemed 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.
II-2
<PAGE>
(4) That, for purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act;
and, where interim financial information required to be presented by Article
3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause
to be delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
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 provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 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-3
<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
March 8, 2000.
ADAPTEC, INC.
By: /s/ Andrew J. Brown
------------------------------------
Andrew J. Brown
Vice President, Finance and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints Robert N. Stephens and Andrew J.
Brown, and each of them, his or her attorneys-in-fact and agents, each with
the power of substitution, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to sign any
registration statement for the same offering covered by this registration
statement that is to be effective upon filing pursuant to Rule 462(b)
promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or his or their substitute or substitutes, may lawfully 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 dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ---- ----- ----
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ Robert N. Stephens President and Chief Executive Officer March 8, 2000
- -------------------------------------------
Robert N. Stephens
PRINCIPAL FINANCIAL OFFICER:
/s/ Andrew J. Brown Vice President, Finance and Chief Financial March 8, 2000
- ------------------------------------------- Officer
Andrew J. Brown
PRINCIPAL ACCOUNTING OFFICER:
/s/ Kenneth B. Arola Vice President and Corporate Controller March 8, 2000
- -------------------------------------------
Kenneth B. Arola
ADDITIONAL DIRECTORS:
/s/ John G. Adler Director March 8, 2000
- -------------------------------------------
John G. Adler
/s/ Laurence B. Boucher Chairman of the Board and Director March 8, 2000
- -------------------------------------------
Laurence B. Boucher
/s/ Carl J. Conti Director March 8, 2000
- -------------------------------------------
Carl J. Conti
/s/ John East Director March 8, 2000
- -------------------------------------------
John East
/s/ Ilene H. Lang Director March 8, 2000
- -------------------------------------------
Ilene H. Lang
/s/ Robert J. Loarie Director March 8, 2000
- -------------------------------------------
Robert J. Loarie
/s/ B.J. Moore Director March 8, 2000
- -------------------------------------------
B.J. Moore
/s/ W. Ferrell Sanders Director March 8, 2000
- -------------------------------------------
W. Ferrell Sanders
/s/ Phillip E. White Director March 8, 2000
- -------------------------------------------
Phillip E. White
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
4.01 Warrant to Purchase Stock delivered by Adaptec to the
selling shareholder, issued on January 17, 2000, as amended
February 14, 2000, providing for the purchase of 696,000
shares of the Common Stock of Adaptec at an exercise price of
$62.25 per share.
4.02 Warrant to Purchase Stock delivered by Adaptec to the selling
shareholder, issued on January 17, 2000, as amended
February 14, 2000, providing for the purchase of 464,000
shares of the Common Stock of Adaptec at an exercise price of
$62.25 per share.
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.03 Consent of Arthur Andersen LLP, Independent Certified Public
Accountants.
24.01 Power of Attorney (see Page II-4 of this Registration
Statement).
<PAGE>
Exhibit 4.01
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER, INCLUDING BUT
NOT LIMITED TO A RIGHT OF FIRST OFFER ON BEHALF OF THE COMPANY, AS SET FORTH
IN AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE COMPANY.
WARRANT TO PURCHASE STOCK
Corporation: Adaptec, Inc.
Number of Shares: 696,000
Class of Stock: Common Stock
Initial Exercise Price: $62.25 per share
Issue Date: January 17, 2000
Expiration Date: January 16, 2004
This Warrant certifies that, for good and valuable consideration,
Agilent Technologies, Inc., a Delaware corporation ("HOLDER") is entitled to
purchase from the corporation named above (the "COMPANY"), until 5:00 p.m.
Pacific standard time, on the Expiration Date set forth above, the number of
fully paid and nonassessable shares of the Common Stock (the "SHARES") of the
Company at the initial exercise price per Share (the "WARRANT PRICE"), all as
set forth above and as adjusted pursuant to Section 2 of this Warrant,
subject to the provisions and upon the terms and conditions set forth in this
Warrant.
1. EXERCISE.
1.1 VESTING; EXERCISE. As of the Issue Date, this Warrant
shall be exercisable in full by Holder, and Holder may exercise this Warrant,
in whole or in part, by delivering a duly executed Notice of Exercise in
substantially the form attached as EXHIBIT A to the principal office of the
Company. Unless Holder is exercising the conversion right set forth in
Section 1.6, Holder shall also, concurrently with delivery of the Notice of
Exercise, deliver to the Company a check or wire transfer in United States
dollars for the aggregate Warrant Price for the Shares being purchased.
1.2 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after
Holder exercises this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, this Warrant shall automatically
be reduced by the number of Shares as to which the Warrant has been exercised
and remain exercisable for such remaining Shares as to which this Warrant has
not been exercised, and all other terms of the Warrant shall otherwise remain
in full force and effect as so adjusted. Upon final exercise of this Warrant
for any such remaining number of Shares, this Warrant shall be surrendered by
the Holder to the Company for cancellation.
1.3 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, or surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.
1.4 SALE, MERGER, OR CONSOLIDATION OF THE COMPANY.
1.4.1. "ACQUISITION". For the purpose of this Warrant,
"ACQUISITION" means any sale of the Company's stock by the Company's
stockholders in one transaction or series of related transactions or any
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reorganization, consolidation or merger of the Company, in any case where,
after the transaction, the holders of the Company's securities before the
transaction beneficially own less than fifty percent (50%) of the outstanding
voting securities of the surviving entity or of its parent corporation if the
surviving entity is a wholly owned subsidiary of such parent corporation.
1.4.2 ASSUMPTION OF WARRANT. Upon the closing of any
Acquisition where the consideration for the Acquisition to be received by the
Company's stockholders consists solely of stock or securities of the acquirer
or an entity affiliated with the acquirer, the successor entity shall assume
the obligations of this Warrant, and this Warrant shall be exercisable for
the same securities as would be payable for the Shares issuable upon exercise
of the unexercised portion of this Warrant as if such Shares were outstanding
on the record date for the Acquisition and subsequent closing thereof. The
Warrant Price shall be adjusted accordingly.
1.4.3 TERMINATION OF WARRANT. In the case of (a) an
Acquisition where the consideration for the Acquisition to be received by the
Company's stockholders in return for their capital stock of the Company
consists of cash or a combination of cash and other property or (b) the
proposed liquidation and dissolution of the Company, the Company shall give
Holder at least fifteen (15) days advance written notice of such event (the
"COMPANY NOTICE"), which notice shall include the Company's best estimate of
the value of the Shares receivable upon exercise or conversion of this
Warrant and the proposed date upon which such event is expected to occur.
During such notice period, Holder may exercise or convert this Warrant in
accordance with its terms, whether or not exercise or conversion is
contingent upon the happening of such event. Subject to prior exercise or
conversion as provided in the preceding sentence, this Warrant will terminate
at 5:00 p.m. Pacific time on the day prior to the date such event is expected
to occur as set forth in the Company Notice; PROVIDED THAT the event actually
occurs within sixty (60) days after the date it is expected to occur, as such
date was specified in the Company Notice.
1.5 RESTRICTIONS ON EXERCISE. This Warrant may not be
exercised if the issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities laws or other laws or
regulations. As a condition to the exercise of this Warrant, by the Holder's
execution of the Notice of Exercise attached hereto as EXHIBIT A, the Holder
shall confirm, acknowledge and agree to the representations, warranties and
agreements of the Holder set forth in Section 4 hereof.
1.6 NET EXERCISE ELECTION. The Holder may elect to convert all
or a portion of this Warrant, without the payment by the Holder of any
additional consideration, by the surrender of this Warrant or such portion of
this Warrant to the Company, with the net exercise election selected in the
Notice of Exercise attached hereto as EXHIBIT A duly executed by the Holder,
into up to the number of Shares that is obtained under the following formula:
X = Y (A-B)
-------
A
where X = the number of Shares to be issued to the Holder
pursuant to this Section 1.5.
Y = the number of Shares as to which this Warrant is
being exercised.
A = the fair market value of one Share, as determined
in good faith by the Company's Board of Directors,
as at the time the net exercise election is made
pursuant to this Section 1.5.
B = the Warrant Price.
The Company will promptly respond in writing to an inquiry by the
Holder as to the then current fair market value of one Share.
For purposes of the above calculation, fair market value of one
Share shall be determined by the Company's Board of Directors in good faith;
provided, however, that where there exists a public market for the Company's
Common Stock at the time of such exercise, the fair market value per share
shall be the average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary or the last reported sale price
of the Common Stock or the closing price quoted on the Nasdaq National Market
or on any exchange on which the Common Stock is listed, whichever is
applicable, as published in the Western Edition of THE WALL STREET JOURNAL
for the three (3) trading days prior to the date of determination of fair
market value.
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2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK SPLITS, RECAPITALIZATIONS, ETC. If the Company (i)
pays a dividend in, or makes a distribution of, shares of capital stock or
other securities on its outstanding Common Stock, (ii) subdivides its
outstanding shares of Common Stock in a transaction that increases the amount
of its outstanding shares of Common Stock, or (iii) combines its outstanding
shares of Common Stock in a transaction that decreases the amount of its
outstanding shares of Common Stock, then upon exercise or conversion of this
Warrant, for each Share acquired, Holder shall receive, without cost to
Holder, the total number and kind of securities to which Holder would have
been entitled had Holder owned the Shares of record as of the date such
dividend, distribution, subdivision or combination occurred.
2.2 CERTAIN CORPORATE TRANSACTIONS. Upon any reclassification,
exchange, substitution, Acquisition of the Company or other similar event
that results in a change of the number and/or class of the securities
issuable upon exercise or conversion of this Warrant other than as provided
in Section 2.1 (a "REORGANIZATION"), Holder shall be entitled to receive,
upon exercise or conversion of this Warrant, the number and kind of
securities and property that Holder would have received for the Shares if
this Warrant had been exercised immediately before such Reorganization. The
Company or its successor shall promptly issue to Holder a new Warrant for
such new securities or other property. The new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 2 including, without limitation,
appropriate adjustments to the Warrant Price and to the number of securities
or property issuable upon exercise or conversion of the new Warrant.
2.3 ADJUSTMENTS OF WARRANT PRICE. If the outstanding Shares
are combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased. If
the outstanding Shares are divided by reclassification or otherwise, into a
greater number of shares, the Warrant Price shall be proportionately
decreased.
2.4 ADJUSTMENT IS CUMULATIVE. The provisions of this Section 2
shall similarly apply to successive, stock dividends, stock splits or
combinations, reclassifications, exchanges, substitutions, or other events.
2.5 NO IMPAIRMENT. The Company shall not, by amendment of its
Certificate of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed under this Warrant by the Company,
but shall at all times carry out of all the provisions of this Section 2.
2.6 FRACTIONAL SHARES. No fractional Shares shall be issuable
upon exercise or conversion of the Warrant and the number of Shares to be
issued shall be rounded down to the nearest whole Share. If a fractional
share interest arises upon any exercise or conversion of the Warrant, the
Company shall eliminate such fractional Share interest by paying Holder an
amount by check computed by multiplying the fractional interest by the fair
market value of a full Share.
2.7 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting
forth such adjustment and the facts upon which such adjustment is based. The
Company shall, upon written request, furnish Holder a certificate setting
forth the Warrant Price in effect upon the date thereof and the series of
adjustments leading to such Warrant Price.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants to the Holder that all Shares which may be issued
upon the exercise of the purchase right represented by this Warrant, and all
securities, if any, issuable upon conversion of the Shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable,
and free of any liens and encumbrances except for restrictions on transfer
provided for herein or under applicable federal and state securities laws.
3.2 RESERVATION OF THE SHARES. If at any time the number of
shares of Common Stock or other securities issuable upon exercise of this
Warrant shall not be sufficient to effect the exercise of this Warrant, the
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Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock or other securities issuable upon exercise of this Warrant as
shall be sufficient for such purpose.
3.3 NO RIGHTS OR LIABILITIES AS STOCKHOLDER. This Warrant does
not by itself entitle the Holder to any voting rights, cash dividends or
other rights, nor subject Holder to any liabilities, as a stockholder of the
Company. In the absence of affirmative action by the Holder to purchase
Shares by exercise of this Warrant, no provisions of this Warrant, and no
enumeration herein of the rights or privileges of the Holder, shall cause the
Holder to be a stockholder of the company for any purpose.
4. REPRESENTATIONS OF HOLDER; TRANSFER.
4.1 REPRESENTATIONS. Holder hereby represents and warrants to
the Company as follows: Holder is a sophisticated investor having such
knowledge and experience in business and investment matters that Holder is
capable of protecting Holder's own interests in connection with the
acquisition, exercise or disposition of this Warrant. Holder is an
"accredited investor" within the meaning of Regulation D promulgated under
the Securities Act of 1933, as amended (the "ACT"). Holder is aware that this
Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) (hereinafter, collectively, the
"RESTRICTED SECURITIES") are being, or will be, issued to Holder in reliance
upon Holder's representation in this Section 4 and that such securities are
restricted securities that cannot be publicly sold except in certain
prescribed situations. Holder is aware of the provisions of Rule 144
promulgated under the Act and of the conditions under which sales may be made
thereunder. Holder has received such information about the Company as Holder
deems reasonable, has had the opportunity to ask questions and receive
answers from the Company with respect to its business, assets, prospects and
financial condition and has verified any answers Holder has received from the
Company with independent third parties to the extent Holder deems necessary.
The Holder, by acceptance hereof, acknowledges that the Restricted Securities
are being acquired solely for the Holder's own account and not as a nominee
for any other party, and for investment, and that the Holder will not offer,
sell or otherwise dispose of this Warrant or any Shares to be issued upon
exercise hereof or conversion thereof except under circumstances that will
not result in a violation of the Act or any state securities laws.
4.2 LEGENDS. The Restricted Securities shall be imprinted with
legends in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR LAW OR PURSUANT TO RULE 144 AND ANY STATE
EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER,
INCLUDING BUT NOT LIMITED TO A RIGHT OF FIRST OFFER ON BEHALF OF THE
COMPANY, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
4.3 RESTRICTIONS ON TRANSFER.
4.3.1 RIGHT OF FIRST REFUSAL. Except as provided
herein, the Holder hereby understands, acknowledges and agrees that the
Warrant may not be sold or otherwise transferred without the Company's prior
written consent. Before the Warrant may be sold or otherwise transferred
(including without limitation a transfer by gift or operation of law) (the
"OFFERED SECURITIES"), the Company and/or its assignee(s) will have a right
of first refusal to purchase the Warrant to be sold or transferred on the
terms and conditions set forth in this Section 4.3.1 (the "RIGHT OF FIRST
REFUSAL").
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4.3.1.1 NOTICE OF PROPOSED TRANSFER. The
Holder of the Offered Securities will deliver to the Company a written notice
(the "TRANSFER NOTICE") stating: (i) the Holder's bona fide intention to sell
or otherwise transfer the Offered Securities; (ii) the name and address of
each proposed purchaser or other transferee (the "PROPOSED TRANSFEREE");
(iii) the number or portion of such Offered Securities to be transferred to
each Proposed Transferee; (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Offered
Securities (the "OFFERED PRICE"); and (v) that the Holder acknowledges this
Transfer Notice is an offer to sell the Offered Securities to the Company
pursuant to the Company's Right of First Refusal at the Offered Price as
provided for in this Warrant.
4.3.1.2 EXERCISE OF RIGHT OF FIRST REFUSAL. At
any time within thirty (30) days after the date of the Transfer Notice, the
Company may, by giving written notice to the Holder, elect to purchase all
(or, with the consent of the Holder, less than all) the Offered Securities
proposed to be transferred to any one or more of the Proposed Transferees
named in the Transfer Notice, at the purchase price determined in accordance
with Subsection 4.3.1.3 below.
4.3.1.3 PURCHASE PRICE. The purchase price for
the Offered Securities purchased under this Section will be the Offered
Price, provided that if the Offered Price consists of no legal consideration
(as, for example, in the case of a transfer by gift), the purchase price will
be the fair market value of the Offered Securities as determined in
accordance with Section 1.6 hereof. If the Offered Price includes
consideration other than cash, then the value of the non-cash consideration,
as determined in good faith by the Company's Board of Directors, will
conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
4.3.1.4 PAYMENT. Payment of the purchase price
for the Offered Securities will be payable, at the option of the Company, as
applicable, by check, by wire transfer or by cancellation of all or a portion
of any outstanding indebtedness owed by the Holder to the Company (or to such
assignee, in the case of a purchase of Offered Securities by such assignee)
or by any combination thereof. The purchase price will be paid without
interest within three (3) business days after the Company's election to
exercise its Right of First Refusal.
4.3.1.5 HOLDER'S RIGHT TO TRANSFER. If the
Company has not elected to exercise its Rights of First Refusal as provided
in Section 4.3.1.2 or Holder has not consented to the purchase of less than
all of the Offered Securities proposed in the Transfer Notice to be
transferred to a given Proposed Transferee by the Company as provided in this
Section, then the Holder may sell or otherwise transfer all such Offered
Securities to each Proposed Transferee at the Offered Price or at a higher
price (and if Holder consented to the purchase of less than all the Offered
Securities proposed in the Transfer Notice to be transferred to a given
Proposed Transferee by the Company as provided in this Section, then the
Holder may sell or otherwise transfer any remaining Offered Securities to
each Proposed Transferee at the Offered Price or at a higher price), provided
that (i) such sale or other transfer is consummated within one hundred twenty
(120) days after the date of the Transfer Notice and (ii) any such sale or
other transfer is effected in compliance with all applicable securities laws.
If the Offered Securities described in the Transfer Notice are not
transferred to each Proposed Transferee within such one hundred twenty (120)
day period, then a new Transfer Notice must be given to the Company, pursuant
to which the Company will again be offered the Right of First Refusal before
the Warrant may be sold or otherwise transferred.
4.3.1.6 EXEMPT TRANSFERS. Notwithstanding
anything to the contrary in this Section, the following transfers of the
Warrant will be exempt from the Right of First Refusal: (i) any transfer of
the Warrant made pursuant to a statutory merger or statutory consolidation of
the Company with or into another corporation or corporations (except that the
Right of First Refusal will continue to apply thereafter to the Warrant, in
which case the surviving corporation of such merger or consolidation shall
succeed to the rights of the Company under this Section unless the agreement
of merger or consolidation expressly otherwise provides); (ii) any transfer
of the Warrant pursuant to the winding up and dissolution of the Company; or
(iii) any transfer of the Warrant to any wholly owned subsidiary of Holder.
4.3.1.7 TERMINATION OF RIGHT OF FIRST REFUSAL.
The Right of First Refusal will terminate as to the Warrant on the first to
occur of the following: (i) the Expiration Date of this Warrant, or (ii) the
effective date of the registration of the Shares by the Company under the Act
and applicable state securities law, or (iii) the date of expiration of any
statutory holding period applicable to the Shares as required by Rule 144 and
any applicable state exemption from registration.
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4.3.1.8 ENCUMBRANCES ON THE WARRANT. Holder
may grant a lien or security interest in, or pledge, hypothecate or encumber
the Warrant only if each party to whom such lien or security interest is
granted, or to whom such pledge, hypothecation or other encumbrance is made,
agrees in a writing satisfactory to the Company that: (i) such lien, security
interest, pledge, hypothecation or encumbrance will not apply to the Warrant
after they are acquired by the Company and/or its assignees under this
Section; and (ii) the provisions of this Section will continue to apply to
the Warrant in the hands of such party and any transferee of such party.
Purchaser may not grant a lien or security interest in, or pledge,
hypothecate or encumber any part of this Warrant.
4.3.2 SECURITIES LAWS. This Warrant and the Shares
issuable upon exercise of this Warrant may not be transferred or assigned in
whole or in part without compliance with applicable federal and state
securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal
opinions reasonably satisfactory to the Company, as reasonably requested by
the Company). If, subject to the provisions of this Section 4.3, the Holder
is allowed to transfer this Warrant or the Shares issuable upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any), the Company shall not require Holder to
provide an opinion of counsel if there is no material question as to the
availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144(d) and (e) in reasonable
detail, the selling broker represents that it has complied with Rule 144(f),
and the Company is provided with a copy of Holder's notice of proposed sale
and/or transfer.
4.4 REGISTRATION.
4.4.1 REGISTRATION STATEMENT ON FORM S-3. For use in
the sale of up to 25 percent (25%) of the Shares (the "UNRESTRICTED SHARES"),
within 30 days of the Issue Date, the Company will prepare and file with the
Securities and Exchange Commission ("SEC") a registration statement on Form
S-3 (or such other form that the Company may be eligible to use) relating to
the sale of the Unrestricted Shares by Holder from time to time (the
"REGISTRATION STATEMENT"), and use its reasonable best efforts, subject to
receipt of necessary information from Holder, to cause such Registration
Statement to be declared effective by the SEC as soon as is practicable after
the SEC has completed its review process. The Company agrees to use its
reasonable best efforts to keep such Registration Statement effective until
twelve 12 months after the issue date. The Company shall file all reports
required to be filed by the Company with the SEC in a timely manner and take
all other necessary action so as to maintain such eligibility for the use of
Form S-3 (or its successor or equivalent). Notwithstanding the foregoing,
following the effectiveness of the Registration Statement, the Company may,
at any time, suspend the effectiveness of the Registration Statement (a
"SUSPENSION PERIOD"), by giving written notice to Holder, if the Company
shall have determined that the Company may be required to disclose, update,
correct or provide any material corporate development or information. Holder
agrees that, upon receipt of any notice from the Company of a Suspension
Period, Holder will not sell any Unrestricted Shares pursuant to the
Registration Statement until (i) Holder is advised in writing by the Company
that the use of the applicable prospectus may be resumed, (ii) Holder has
received copies of any additional or supplemental or amended prospectus, if
applicable, and (iii) Holder has received copies of any additional or
supplemental filings which are incorporated or deemed to be incorporated by
reference in such prospectus. The Company will use its reasonable best
efforts to ensure that the use of the Registration Statement may be resumed
as soon as reasonably practicable.
4.4.1.1 PUT RIGHT. The first time the Holder
wishes to sell any or all of the Unrestricted Shares pursuant to the
Registration Statement, it shall notify the Company in writing (the "SALE
NOTICE"). The Sale Notice may not be given by the Holder any sooner than 90
days after the Issue Date. If upon receipt of the Sale Notice, the
Registration Statement for the Unrestricted Shares has not been declared
effective for any reason other than for the Holder's failure to provide
necessary information for such Registration Statement, then the Company shall
immediately notify the Holder that such Registration Statement has not been
declared effective (the "COMPANY REGISTRATION NOTICE") and the Holder will
have the right to require the Company to purchase all such Unrestricted
Shares subject to the terms and conditions hereof (the "PUT RIGHT"). Upon
receipt of the Company Registration Notice, the Holder must notify the
Company within three (3) business days as to whether it wishes to exercise
the Put Right (the "PUT EXERCISE NOTICE"). Upon receipt of the Put Exercise
Notice, the Company shall purchase and the Holder shall sell to the Company,
free and clear of any encumbrances, all such Unrestricted Shares by the
Company's paying for each and every share of the Unrestricted Shares subject
to the Put Right an amount equal to the closing price of a share of the
Company's Common Stock as quoted on Nasdaq or any other exchange on which the
Common Stock of the Company is listed as of the date of the receipt of the
Sale Notice by the Company. The closing of the Put Right exercise shall occur
within three (3) business days of Company's receipt of the Put Exercise
Notice. The Put Right shall expire on the date the Registration Statement
first becomes effective.
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4.4.2 DELIVERY OF PROSPECTUS. The Company shall
furnish to Holder promptly after the Registration Statement is prepared and
publicly distributed, filed with the SEC, or received by the Company, one
copy of the Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or supplement
thereto. The Company shall furnish to Holder such number of copies of
prospectuses and preliminary prospectuses in conformity with the requirements
of the Securities Act, in order to facilitate the public sale or other
disposition of all or any of the Unrestricted Shares by Holder; provided,
however, that the obligation of the Company to deliver copies of prospectuses
or preliminary prospectuses to the Holder shall be subject to the receipt by
the Company of reasonable assurances from Holder that Holder will comply with
the applicable provisions of the Securities Act and of such other securities
or blue sky laws as may be applicable in connection with any use of such
prospectuses or preliminary prospectuses. The Company shall bear all expenses
incurred by the Company in connection with the registration of the
Unrestricted Shares pursuant to the Registration Statement (but excluding
underwriters' and brokers' discounts and commissions), and the reasonable
fees and disbursements (not to exceed $10,000 in the aggregate) of a single
special counsel for Holder.
4.4.3 INFORMATION. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to Section
4.4.1 that Holder shall provide such information regarding itself, the
Unrestricted Shares held by them, the intended method of disposition of the
Unrestricted Shares and such other information as the Company may reasonably
request to timely effect the registration of the Unrestricted Shares.
4.4.4 INDEMNIFICATION. For the purpose of this Section
4.4.4, the term "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 4.4.1.
(a) The Company agrees to indemnify and hold
harmless Holder, each of its directors and officers, any underwriters (as
defined in the Securities Act) for Holder and each person, if any, who
controls Holder within the meaning of the Securities Act, against any losses,
claims, damages, liabilities or expenses to which Holder or such officer or
director, underwriter or controlling person may become subject, under the
Securities Act, the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), or any other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company), insofar
as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, including the prospectus, financial statements
and schedules, and all other documents filed as a part thereof or
incorporated by reference therein, as amended at the time of effectiveness of
the Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule
430A,or pursuant to Rule 434, of the Rules and Regulations, or the
prospectus, in the form first filed with the SEC pursuant to Rule 424(b) of
the Regulations, or filed as part of the Registration Statement at the time
of effectiveness if no Rule 424(b) filing is required (the "PROSPECTUS"), or
any amendment or supplement thereto, (ii) the omission or alleged omission to
state in any of them a material fact required to be stated therein or
necessary to make the statements in any of them not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act or any federal or state securities law in connection with the
offering covered by such registration statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "VIOLATIONS"), and will
reimburse Holder and each such officer or director, underwriter or
controlling person for any legal and other expenses as such expenses are
reasonably incurred by Holder or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, the indemnity
agreement contained in this Section 4.4.4(a) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability, expense or action
if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld or delayed) and provided, further,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Prospectus or any amendment
or supplement thereto in reliance upon and in conformity with (i) written
information furnished to the Company by or on behalf of Holder expressly for
use therein or (ii) the failure of Holder to comply with the covenants and
agreements contained in this Warrant respecting the sale of the Unrestricted
Shares, the inaccuracy of any representations made by Holder herein or any
statement or omission in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to Holder prior to the pertinent sale or sales
by Holder.
(b) Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses to which the Company,
7
<PAGE>
each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of Holder) insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon any Violation,
in each case to the extent, but only to the extent, that such Violation
occurs in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Holder expressly for use therein, and
will reimburse the Company, each of its directors, each of its officers who
signed the Registration Statement or controlling person for any legal and
other expense reasonably incurred by the Company, each of its directors, each
of its officers who signed the Registration Statement or controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided,
however, the indemnity agreement contained in this Section 4.4.4(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability, expense or action if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably withheld or
delayed). Notwithstanding the foregoing, in no event shall any indemnity
under this Section 4.4.4(b) exceed the proceeds from the offering of Shares
made under the Registration Statement.
(c) Promptly after receipt by an indemnified
party under this Section 4.4.4 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 4.4.4, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party for contribution or otherwise than
under the indemnity agreement contained in this Section 4.4.4 or to the
extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory
to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a
conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel
reasonably acceptable to the indemnifying party to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 4.4.4 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel, approved by
such indemnifying party in the case of paragraph (a), representing the
indemnified parties who are parties to such action) or (ii) the indemnified
party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) The foregoing indemnity agreements of the
Company and Holder are subject to the condition that, insofar as they relate
to the bases for any losses, claims, damages, liabilities or expenses
contemplated in Section 4.4.4(a) arising out of the preparation and filing of
the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the registration statement in
question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity
agreement shall not inure to the benefit of any person if a copy of the Final
Prospectus was furnished to the indemnified party and 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.
4.5 TRANSFER PROCEDURE. If, subject to the provisions of
Section 4.3, Holder is allowed to transfer all or part of this Warrant,
Holder shall give the Company a written notice of the portion of the Warrant
being transferred, such notice setting forth the name, address and taxpayer
identification number of the transferee, and, together with such notice,
Holder shall surrender this Warrant to the Company for reissuance to the
transferee (and to the new Warrant Holder for any remaining Shares, if
applicable). As a condition to sale, transfer or assignment (other than
pursuant to the Registration Statement under Section 4.4) of this Warrant and
the Shares issuable upon exercise of this Warrant, the Holder shall confirm,
acknowledge and agree to the representations, warranties and agreements
8
<PAGE>
forth in Section 4 hereof.
5. GENERAL PROVISIONS.
5.1 NOTICES. Any and all notices and Transfer Notices required
or permitted to be given to a party pursuant to the provisions of this
Warrant will be in writing and will be effective and deemed to provide such
party sufficient notice under this Warrant on the earliest of the following:
(i) at the time of personal delivery, if delivery is in person; (ii) at the
time of transmission by facsimile, addressed to the other party at its
facsimile number specified herein (or hereafter modified by subsequent notice
to the parties hereto), with confirmation of receipt made by both telephone
and printed confirmation sheet verifying successful transmission of the
facsimile; (iii) one (1) business day after deposit with an express overnight
courier for United States deliveries, or two (2) business days after such
deposit for deliveries outside of the United States, with proof of delivery
from the courier requested; or (iv) three (3) business days after deposit in
the United States mail by certified mail (return receipt requested) for
United States deliveries.
All notices for delivery outside the United States will be
sent by facsimile or by express courier. All notices not delivered personally
or by facsimile will be sent with postage and/or other charges prepaid and
properly addressed to the party to be notified at the address or facsimile
number set forth below the signature lines to this Warrant, or at such other
address or facsimile number as such other party may designate by one of the
indicated means of notice herein to the other parties hereto. Notices to the
Company will be marked "Attention: President". Notices by facsimile shall be
machine verified as received.
5.2 GOVERNING LAW. This Warrant will be governed by and
construed in accordance with the laws of the State of California, without
giving effect to that body of laws pertaining to conflict of laws.
5.3 FURTHER ASSURANCES. The parties agree to execute such
further documents and instruments and to take such further actions as may be
reasonably necessary to carry out the purposes and intent of this Warrant.
5.4 TITLES AND HEADINGS. The titles, captions and headings of
this Warrant are included for ease of reference only and will be disregarded
in interpreting or construing this Warrant. Unless otherwise specifically
stated, all references herein to "sections" and "exhibits" will mean
"sections" and "exhibits" to this Warrant.
5.5 COUNTERPARTS. This Warrant may be executed in any number
of counterparts, each of which when so executed and delivered will be deemed
an original, and all of which together shall constitute one and the same
agreement.
5.6 SEVERABILITY. If any provision of this Warrant is
determined by any court or arbitrator of competent jurisdiction to be
invalid, illegal or unenforceable in any respect, such provision will be
enforced to the maximum extent possible given the intent of the parties
hereto. If such clause or provision cannot be so enforced, such provision
shall be stricken from this Warrant and the remainder of this Warrant shall
be enforced as if such invalid, illegal or unenforceable clause or provision
had (to the extent not enforceable) never been contained in this Warrant.
Notwithstanding the forgoing, if the value of this Warrant based upon the
substantial benefit of the bargain for any party is materially impaired,
which determination as made by the presiding court or arbitrator of competent
jurisdiction shall be binding, then both parties agree to substitute such
provision(s) through good faith negotiations.
5.7 FACSIMILE SIGNATURES. This Warrant may be executed and
delivered by facsimile and upon such delivery the facsimile signature will be
deemed to have the same effect as if the original signature had been
delivered to the other party. The original signature copy shall be delivered
to the other party by express overnight delivery. The failure to deliver the
original signature copy and/or the nonreceipt of the original signature copy
shall have no effect upon the binding and enforceable nature of this Warrant.
5.8 AMENDMENT AND WAIVERS. This Warrant may be amended only by
a written agreement executed by each of the parties hereto. No amendment of
or waiver of, or modification of any obligation under this Warrant will be
enforceable unless set forth in a writing signed by the party against which
enforcement is sought. Any amendment effected in accordance with this Section
5.8 will be binding upon all parties hereto and each of their respective
successors and assigns. No delay or failure to require performance of any
provision of this Warrant shall constitute a waiver of that provision as to
that or any other instance. No waiver granted under this Warrant as to any
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<PAGE>
one provision herein shall constitute a subsequent waiver of such provision
or of any other provision herein, nor shall it constitute the waiver of any
performance other than the actual performance specifically waived.
5.9 ENTIRE AGREEMENT. This Warrant and the documents referred
to herein, including but not limited to the Development and Marketing
Agreement between Company and Holder dated of even date herewith, constitute
the entire agreement and understanding of the parties with respect to the
subject matter of this Warrant, and supersede all prior understandings and
agreements, whether oral or written, between or among the parties hereto with
respect to the specific subject matter hereof.
WARRANT HOLDER: COMPANY:
/s/ William J. Brown /s/ Robert L. Schultz, Jr.
- -------------------------------- -------------------------------
AGILENT TECHNOLOGIES, INC. ADAPTEC, INC.
Name: William J. Brown Name: Robert L. Schultz, Jr.
--------------------------- --------------------------
Title: Senior Vice President and Title: Chief Operating Officer
General Manager -------------------------
--------------------------
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<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
1. PLEASE MARK ONE OF THE FOLLOWING:
[ ] 1.1 CASH EXERCISE ELECTION. The undersigned hereby elects to purchase
___________ shares of the Common Stock of ADAPTEC, INC., a Delaware
corporation, pursuant to the terms of the attached Warrant to Purchase Stock
with an Issue Date of January 17, 2000 (the "WARRANT"), and the Undersigned
tenders herewith payment of the total purchase price of such shares in full,
pursuant to a check or wire transfer, in the amount of $__________.
OR
[ ] 1.2 NET EXERCISE ELECTION. The undersigned Holder elects to convert all
or part of the Warrant into shares of stock by net exercise election pursuant
to Section 1.6 of the Warrant. This conversion is exercised with respect to
__________ shares of Common Stock of ADAPTEC, INC. covered by the Warrant.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned. The undersigned represents that it is
acquiring the shares solely for its own account and not as a nominee for any
other party and not with a view toward the resale or distribution thereof
except in compliance with applicable securities laws and hereby confirms and
agrees to the representations, warranties and agreements that are set forth
in Section 4 of the attached Warrant.
------------------------------------
(Name)
------------------------------------
------------------------------------
------------------------------------
Address
------------------------------------
(Signature of Holder)
1
<PAGE>
AMENDMENT
OF
WARRANT TO PURCHASE STOCK
OF
ADAPTEC, INC.
This Amendment is made effective as of February 14, 2000 between
Adaptec, Inc. (the "COMPANY") and Agilent Technologies, Inc., the "HOLDER"
(as defined in the Warrant) of that certain Warrant to Purchase Stock, Issue
Date of January 17, 2000, providing for the purchase of 696,000 shares of the
Common Stock of the Company at an Initial Exercise Price of $62.25 per share
(the "WARRANT"). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Warrant.
RECITAL
WHEREAS, the Company and the undersigned Holder desire to amend the
Warrant to adequately reflect their current understanding of their rights and
obligations under the Warrant.
AGREEMENT
NOW THEREFORE, pursuant to Section 5.8 of the Warrant, the Company and the
Holder hereby agree as follows:
1. To amend the Warrant so that the portion of Section 4.4.1 of
the Warrant which reads "within 30 days of the Issue Date" is deleted and is
replaced by "as soon as reasonably possible but in no event later than 51
days of the Issue Date"; and
2. That all other provisions of the Warrant shall remain in full
force and effect.
This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original and enforceable against the parties
actually executing such counterpart, and all of which together shall
constitute one instrument.
<PAGE>
This Amendment is executed and is effective as of the date first set
forth above.
COMPANY:
ADAPTEC, INC.
By: /s/ Andrew J. Brown
----------------------------------
Name: Andrew J. Brown
--------------------------------
Title: Vice President, Finance and Chief Financial Officer
-----------------------------------------------------
HOLDER:
AGILENT TECHNOLOGIES, INC.
By: /s/ William P. Sullivan
----------------------------------
Name: William P. Sullivan
--------------------------------
Title: Senior Vice President and General Manager
-----------------------------------------------------
1002706
[SIGNATURE PAGE TO THE AMENDMENT OF WARRANT TO PURCHASE STOCK OF ADAPTEC, INC.]
<PAGE>
Exhibit 4.02
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER, INCLUDING BUT
NOT LIMITED TO A RIGHT OF FIRST OFFER ON BEHALF OF THE COMPANY, AS SET FORTH IN
AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.
WARRANT TO PURCHASE STOCK
Corporation: Adaptec, Inc.
Number of Shares: 464,000
Class of Stock: Common Stock
Initial Exercise Price: $62.25 per share
Issue Date: January 17, 2000
Expiration Date: January 16, 2004
This Warrant certifies that, for good and valuable consideration,
Agilent Technologies, Inc., a Delaware corporation ("HOLDER") is entitled to
purchase from the corporation named above (the "COMPANY"), until 5:00 p.m.
Pacific standard time, on the Expiration Date set forth above, the number of
fully paid and nonassessable shares of the Common Stock (the "SHARES") of the
Company at the initial exercise price per Share (the "WARRANT PRICE"), all as
set forth above and as adjusted pursuant to Section 2 of this Warrant, subject
to the provisions and upon the terms and conditions set forth in this Warrant.
1. EXERCISE.
1.1 VESTING; EXERCISE. As of the Issue Date, this Warrant shall be
exercisable in full by Holder, and Holder may exercise this Warrant, in whole or
in part, by delivering a duly executed Notice of Exercise in substantially the
form attached as EXHIBIT A to the principal office of the Company. Unless Holder
is exercising the conversion right set forth in Section 1.6, Holder shall also,
concurrently with delivery of the Notice of Exercise, deliver to the Company a
check or wire transfer in United States dollars for the aggregate Warrant Price
for the Shares being purchased.
1.2 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises this Warrant, the Company shall deliver to Holder certificates for the
Shares acquired and, if this Warrant has not been fully exercised or converted
and has not expired, this Warrant shall automatically be reduced by the number
of Shares as to which the Warrant has been exercised and remain exercisable for
such remaining Shares as to which this Warrant has not been exercised, and all
other terms of the Warrant shall otherwise remain in full force and effect as so
adjusted. Upon final exercise of this Warrant for any such remaining number of
Shares, this Warrant shall be surrendered by the Holder to the Company for
cancellation.
1.3 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.4 SALE, MERGER, OR CONSOLIDATION OF THE COMPANY.
1.4.1. "ACQUISITION". For the purpose of this Warrant,
"ACQUISITION" means any sale of the Company's stock by the Company's
stockholders in one transaction or series of related transactions or any
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<PAGE>
reorganization, consolidation or merger of the Company, in any case where,
after the transaction, the holders of the Company's securities before the
transaction beneficially own less than fifty percent (50%) of the outstanding
voting securities of the surviving entity or of its parent corporation if the
surviving entity is a wholly owned subsidiary of such parent corporation.
1.4.2 ASSUMPTION OF WARRANT. Upon the closing of any
Acquisition where the consideration for the Acquisition to be received by the
Company's stockholders consists solely of stock or securities of the acquirer or
an entity affiliated with the acquirer, the successor entity shall assume the
obligations of this Warrant, and this Warrant shall be exercisable for the same
securities as would be payable for the Shares issuable upon exercise of the
unexercised portion of this Warrant as if such Shares were outstanding on the
record date for the Acquisition and subsequent closing thereof. The Warrant
Price shall be adjusted accordingly.
1.4.3 TERMINATION OF WARRANT. In the case of (a) an
Acquisition where the consideration for the Acquisition to be received by the
Company's stockholders in return for their capital stock of the Company consists
of cash or a combination of cash and other property or (b) the proposed
liquidation and dissolution of the Company, the Company shall give Holder at
least fifteen (15) days advance written notice of such event (the "COMPANY
NOTICE"), which notice shall include the Company's best estimate of the value of
the Shares receivable upon exercise or conversion of this Warrant and the
proposed date upon which such event is expected to occur. During such notice
period, Holder may exercise or convert this Warrant in accordance with its
terms, whether or not exercise or conversion is contingent upon the happening of
such event. Subject to prior exercise or conversion as provided in the preceding
sentence, this Warrant will terminate at 5:00 p.m. Pacific time on the day prior
to the date such event is expected to occur as set forth in the Company Notice;
PROVIDED THAT the event actually occurs within sixty (60) days after the date it
is expected to occur, as such date was specified in the Company Notice.
1.5 RESTRICTIONS ON EXERCISE. This Warrant may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of this Warrant, by the Holder's execution of the
Notice of Exercise attached hereto as EXHIBIT A, the Holder shall confirm,
acknowledge and agree to the representations, warranties and agreements of the
Holder set forth in Section 4 hereof.
1.6 NET EXERCISE ELECTION. The Holder may elect to convert all or a
portion of this Warrant, without the payment by the Holder of any additional
consideration, by the surrender of this Warrant or such portion of this Warrant
to the Company, with the net exercise election selected in the Notice of
Exercise attached hereto as EXHIBIT A duly executed by the Holder, into up to
the number of Shares that is obtained under the following formula:
X = Y (A-B)
-------
A
where X = the number of Shares to be issued to the Holder
pursuant to this Section 1.5.
Y = the number of Shares as to which this Warrant is
being exercised.
A = the fair market value of one Share, as determined in
good faith by the Company's Board of Directors, as at
the time the net exercise election is made pursuant
to this Section 1.5.
B = the Warrant Price.
The Company will promptly respond in writing to an inquiry by the
Holder as to the then current fair market value of one Share.
For purposes of the above calculation, fair market value of one Share
shall be determined by the Company's Board of Directors in good faith; provided,
however, that where there exists a public market for the Company's Common Stock
at the time of such exercise, the fair market value per share shall be the
average of the closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter Market Summary or the last reported sale price of the Common
Stock or the closing price quoted on the Nasdaq National Market or on any
exchange on which the Common Stock is listed, whichever is applicable, as
published in the Western Edition of THE WALL STREET JOURNAL for the three (3)
trading days prior to the date of determination of fair market value.
2
<PAGE>
2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK SPLITS, RECAPITALIZATIONS, ETC. If the Company (i) pays a
dividend in, or makes a distribution of, shares of capital stock or other
securities on its outstanding Common Stock, (ii) subdivides its outstanding
shares of Common Stock in a transaction that increases the amount of its
outstanding shares of Common Stock, or (iii) combines its outstanding shares of
Common Stock in a transaction that decreases the amount of its outstanding
shares of Common Stock, then upon exercise or conversion of this Warrant, for
each Share acquired, Holder shall receive, without cost to Holder, the total
number and kind of securities to which Holder would have been entitled had
Holder owned the Shares of record as of the date such dividend, distribution,
subdivision or combination occurred.
2.2 CERTAIN CORPORATE TRANSACTIONS. Upon any reclassification,
exchange, substitution, Acquisition of the Company or other similar event that
results in a change of the number and/or class of the securities issuable upon
exercise or conversion of this Warrant other than as provided in Section 2.1 (a
"REORGANIZATION"), Holder shall be entitled to receive, upon exercise or
conversion of this Warrant, the number and kind of securities and property that
Holder would have received for the Shares if this Warrant had been exercised
immediately before such Reorganization. The Company or its successor shall
promptly issue to Holder a new Warrant for such new securities or other
property. The new Warrant shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
2 including, without limitation, appropriate adjustments to the Warrant Price
and to the number of securities or property issuable upon exercise or conversion
of the new Warrant.
2.3 ADJUSTMENTS OF WARRANT PRICE. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased. If the
outstanding Shares are divided by reclassification or otherwise, into a greater
number of shares, the Warrant Price shall be proportionately decreased.
2.4 ADJUSTMENT IS CUMULATIVE. The provisions of this Section 2 shall
similarly apply to successive, stock dividends, stock splits or combinations,
reclassifications, exchanges, substitutions, or other events.
2.5 NO IMPAIRMENT. The Company shall not, by amendment of its
Certificate of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times carry out of all the provisions of this Section 2.
2.6 FRACTIONAL SHARES. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional Share interest by paying Holder an amount by check
computed by multiplying the fractional interest by the fair market value of a
full Share.
2.7 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the Warrant
Price, the Company at its expense shall compute such adjustment, and furnish
Holder with a certificate of its Chief Financial Officer setting forth such
adjustment and the facts upon which such adjustment is based. The Company shall,
upon written request, furnish Holder a certificate setting forth the Warrant
Price in effect upon the date thereof and the series of adjustments leading to
such Warrant Price.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Holder that all Shares which may be issued upon the exercise of
the purchase right represented by this Warrant, and all securities, if any,
issuable upon conversion of the Shares, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.
3.2 RESERVATION OF THE SHARES. If at any time the number of shares of
Common Stock or other securities issuable upon exercise of this Warrant shall
not be sufficient to effect the exercise of this Warrant, the
3
<PAGE>
Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock or other securities issuable upon exercise of this Warrant as
shall be sufficient for such purpose.
3.3 NO RIGHTS OR LIABILITIES AS STOCKHOLDER. This Warrant does not by
itself entitle the Holder to any voting rights, cash dividends or other rights,
nor subject Holder to any liabilities, as a stockholder of the Company. In the
absence of affirmative action by the Holder to purchase Shares by exercise of
this Warrant, no provisions of this Warrant, and no enumeration herein of the
rights or privileges of the Holder, shall cause the Holder to be a stockholder
of the company for any purpose.
4. REPRESENTATIONS OF HOLDER; TRANSFER.
4.1 REPRESENTATIONS. Holder hereby represents and warrants to the
Company as follows: Holder is a sophisticated investor having such knowledge and
experience in business and investment matters that Holder is capable of
protecting Holder's own interests in connection with the acquisition, exercise
or disposition of this Warrant. Holder is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act of 1933, as amended
(the "ACT"). Holder is aware that this Warrant and the Shares (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if
any) (hereinafter, collectively, the "RESTRICTED SECURITIES") are being, or will
be, issued to Holder in reliance upon Holder's representation in this Section 4
and that such securities are restricted securities that cannot be publicly sold
except in certain prescribed situations. Holder is aware of the provisions of
Rule 144 promulgated under the Act and of the conditions under which sales may
be made thereunder. Holder has received such information about the Company as
Holder deems reasonable, has had the opportunity to ask questions and receive
answers from the Company with respect to its business, assets, prospects and
financial condition and has verified any answers Holder has received from the
Company with independent third parties to the extent Holder deems necessary. The
Holder, by acceptance hereof, acknowledges that the Restricted Securities are
being acquired solely for the Holder's own account and not as a nominee for any
other party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any Shares to be issued upon exercise
hereof or conversion thereof except under circumstances that will not result in
a violation of the Act or any state securities laws.
4.2 LEGENDS. The Restricted Securities shall be imprinted with legends
in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR LAW OR PURSUANT TO RULE 144 AND ANY STATE EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER,
INCLUDING BUT NOT LIMITED TO A RIGHT OF FIRST OFFER ON BEHALF OF THE
COMPANY, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.
4.3 RESTRICTIONS ON TRANSFER.
4.3.1 RIGHT OF FIRST REFUSAL. Except as provided herein, the
Holder hereby understands, acknowledges and agrees that the Warrant may not be
sold or otherwise transferred without the Company's prior written consent.
Before the Warrant may be sold or otherwise transferred (including without
limitation a transfer by gift or operation of law) (the "OFFERED SECURITIES"),
the Company and/or its assignee(s) will have a right of first refusal to
purchase the Warrant to be sold or transferred on the terms and conditions set
forth in this Section 4.3.1 (the "RIGHT OF FIRST REFUSAL").
4
<PAGE>
4.3.1.1 NOTICE OF PROPOSED TRANSFER. The Holder of
the Offered Securities will deliver to the Company a written notice (the
"TRANSFER NOTICE") stating: (i) the Holder's bona fide intention to sell or
otherwise transfer the Offered Securities; (ii) the name and address of each
proposed purchaser or other transferee (the "PROPOSED TRANSFEREE"); (iii) the
number or portion of such Offered Securities to be transferred to each Proposed
Transferee; (iv) the bona fide cash price or other consideration for which the
Holder proposes to transfer the Offered Securities (the "OFFERED PRICE"); and
(v) that the Holder acknowledges this Transfer Notice is an offer to sell the
Offered Securities to the Company pursuant to the Company's Right of First
Refusal at the Offered Price as provided for in this Warrant.
4.3.1.2 EXERCISE OF RIGHT OF FIRST REFUSAL. At any
time within thirty (30) days after the date of the Transfer Notice, the Company
may, by giving written notice to the Holder, elect to purchase all (or, with the
consent of the Holder, less than all) the Offered Securities proposed to be
transferred to any one or more of the Proposed Transferees named in the Transfer
Notice, at the purchase price determined in accordance with Subsection 4.3.1.3
below.
4.3.1.3 PURCHASE PRICE. The purchase price for the
Offered Securities purchased under this Section will be the Offered Price,
provided that if the Offered Price consists of no legal consideration (as, for
example, in the case of a transfer by gift), the purchase price will be the fair
market value of the Offered Securities as determined in accordance with Section
1.6 hereof. If the Offered Price includes consideration other than cash, then
the value of the non-cash consideration, as determined in good faith by the
Company's Board of Directors, will conclusively be deemed to be the cash
equivalent value of such non-cash consideration.
4.3.1.4 PAYMENT. Payment of the purchase price for
the Offered Securities will be payable, at the option of the Company, as
applicable, by check, by wire transfer or by cancellation of all or a portion of
any outstanding indebtedness owed by the Holder to the Company (or to such
assignee, in the case of a purchase of Offered Securities by such assignee) or
by any combination thereof. The purchase price will be paid without interest
within three (3) business days after the Company's election to exercise its
Right of First Refusal.
4.3.1.5 HOLDER'S RIGHT TO TRANSFER. If the Company
has not elected to exercise its Rights of First Refusal as provided in Section
4.3.1.2 or Holder has not consented to the purchase of less than all of the
Offered Securities proposed in the Transfer Notice to be transferred to a given
Proposed Transferee by the Company as provided in this Section, then the Holder
may sell or otherwise transfer all such Offered Securities to each Proposed
Transferee at the Offered Price or at a higher price (and if Holder consented to
the purchase of less than all the Offered Securities proposed in the Transfer
Notice to be transferred to a given Proposed Transferee by the Company as
provided in this Section, then the Holder may sell or otherwise transfer any
remaining Offered Securities to each Proposed Transferee at the Offered Price or
at a higher price), provided that (i) such sale or other transfer is consummated
within one hundred twenty (120) days after the date of the Transfer Notice and
(ii) any such sale or other transfer is effected in compliance with all
applicable securities laws. If the Offered Securities described in the Transfer
Notice are not transferred to each Proposed Transferee within such one hundred
twenty (120) day period, then a new Transfer Notice must be given to the
Company, pursuant to which the Company will again be offered the Right of First
Refusal before the Warrant may be sold or otherwise transferred.
4.3.1.6 EXEMPT TRANSFERS. Notwithstanding anything to
the contrary in this Section, the following transfers of the Warrant will be
exempt from the Right of First Refusal: (i) any transfer of the Warrant made
pursuant to a statutory merger or statutory consolidation of the Company with or
into another corporation or corporations (except that the Right of First Refusal
will continue to apply thereafter to the Warrant, in which case the surviving
corporation of such merger or consolidation shall succeed to the rights of the
Company under this Section unless the agreement of merger or consolidation
expressly otherwise provides); (ii) any transfer of the Warrant pursuant to the
winding up and dissolution of the Company; or (iii) any transfer of the Warrant
to any wholly owned subsidiary of Holder.
4.3.1.7 TERMINATION OF RIGHT OF FIRST REFUSAL. The
Right of First Refusal will terminate as to the Warrant on the first to occur of
the following: (i) the Expiration Date of this Warrant, or (ii) the effective
date of the registration of the Shares by the Company under the Act and
applicable state securities law, or (iii) the date of expiration of any
statutory holding period applicable to the Shares as required by Rule 144 and
any applicable state exemption from registration.
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4.3.1.8 ENCUMBRANCES ON THE WARRANT. Holder may grant
a lien or security interest in, or pledge, hypothecate or encumber the Warrant
only if each party to whom such lien or security interest is granted, or to whom
such pledge, hypothecation or other encumbrance is made, agrees in a writing
satisfactory to the Company that: (i) such lien, security interest, pledge,
hypothecation or encumbrance will not apply to the Warrant after they are
acquired by the Company and/or its assignees under this Section; and (ii) the
provisions of this Section will continue to apply to the Warrant in the hands of
such party and any transferee of such party. Purchaser may not grant a lien or
security interest in, or pledge, hypothecate or encumber any part of this
Warrant.
4.3.2 SECURITIES LAWS. This Warrant and the Shares issuable
upon exercise of this Warrant may not be transferred or assigned in whole or in
part without compliance with applicable federal and state securities laws by the
transferor and the transferee (including, without limitation, the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, as reasonably requested by the Company). If, subject to the
provisions of this Section 4.3, the Holder is allowed to transfer this Warrant
or the Shares issuable upon exercise of this Warrant (or the securities
issuable, directly or indirectly, upon conversion of the Shares, if any), the
Company shall not require Holder to provide an opinion of counsel if there is no
material question as to the availability of current information as referenced in
Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in
reasonable detail, the selling broker represents that it has complied with Rule
144(f), and the Company is provided with a copy of Holder's notice of proposed
sale and/or transfer.
4.4 REGISTRATION.
4.4.1 REGISTRATION STATEMENT ON FORM S-3. For use in the sale
of up to 25 percent (25%) of the Shares (the "UNRESTRICTED SHARES"), within 30
days of the Issue Date, the Company will prepare and file with the Securities
and Exchange Commission ("SEC") a registration statement on Form S-3 (or such
other form that the Company may be eligible to use) relating to the sale of the
Unrestricted Shares by Holder from time to time (the "REGISTRATION STATEMENT"),
and use its reasonable best efforts, subject to receipt of necessary information
from Holder, to cause such Registration Statement to be declared effective by
the SEC as soon as is practicable after the SEC has completed its review
process. The Company agrees to use its reasonable best efforts to keep such
Registration Statement effective until twelve 12 months after the issue date.
The Company shall file all reports required to be filed by the Company with the
SEC in a timely manner and take all other necessary action so as to maintain
such eligibility for the use of Form S-3 (or its successor or equivalent).
Notwithstanding the foregoing, following the effectiveness of the Registration
Statement, the Company may, at any time, suspend the effectiveness of the
Registration Statement (a "SUSPENSION PERIOD"), by giving written notice to
Holder, if the Company shall have determined that the Company may be required to
disclose, update, correct or provide any material corporate development or
information. Holder agrees that, upon receipt of any notice from the Company of
a Suspension Period, Holder will not sell any Unrestricted Shares pursuant to
the Registration Statement until (i) Holder is advised in writing by the Company
that the use of the applicable prospectus may be resumed, (ii) Holder has
received copies of any additional or supplemental or amended prospectus, if
applicable, and (iii) Holder has received copies of any additional or
supplemental filings which are incorporated or deemed to be incorporated by
reference in such prospectus. The Company will use its reasonable best efforts
to ensure that the use of the Registration Statement may be resumed as soon as
reasonably practicable.
4.4.1.1 PUT RIGHT. The first time the Holder wishes
to sell any or all of the Unrestricted Shares pursuant to the Registration
Statement, it shall notify the Company in writing (the "SALE NOTICE"). The Sale
Notice may not be given by the Holder any sooner than 90 days after the Issue
Date. If upon receipt of the Sale Notice, the Registration Statement for the
Unrestricted Shares has not been declared effective for any reason other than
for the Holder's failure to provide necessary information for such Registration
Statement, then the Company shall immediately notify the Holder that such
Registration Statement has not been declared effective (the "COMPANY
REGISTRATION NOTICE") and the Holder will have the right to require the Company
to purchase all such Unrestricted Shares subject to the terms and conditions
hereof (the "PUT RIGHT"). Upon receipt of the Company Registration Notice, the
Holder must notify the Company within three (3) business days as to whether it
wishes to exercise the Put Right (the "PUT EXERCISE NOTICE"). Upon receipt of
the Put Exercise Notice, the Company shall purchase and the Holder shall sell to
the Company, free and clear of any encumbrances, all such Unrestricted Shares by
the Company's paying for each and every share of the Unrestricted Shares subject
to the Put Right an amount equal to the closing price of a share of the
Company's Common Stock as quoted on Nasdaq or any other exchange on which the
Common Stock of the Company is listed as of the date of the receipt of the Sale
Notice by the Company. The closing of the Put Right exercise shall occur within
three (3) business days of Company's receipt of the Put Exercise Notice. The Put
Right shall expire on the date the Registration Statement first becomes
effective.
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4.4.2 DELIVERY OF PROSPECTUS. The Company shall furnish to
Holder promptly after the Registration Statement is prepared and publicly
distributed, filed with the SEC, or received by the Company, one copy of the
Registration Statement and any amendment thereto, each preliminary prospectus
and prospectus and each amendment or supplement thereto. The Company shall
furnish to Holder such number of copies of prospectuses and preliminary
prospectuses in conformity with the requirements of the Securities Act, in order
to facilitate the public sale or other disposition of all or any of the
Unrestricted Shares by Holder; provided, however, that the obligation of the
Company to deliver copies of prospectuses or preliminary prospectuses to the
Holder shall be subject to the receipt by the Company of reasonable assurances
from Holder that Holder will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses or preliminary
prospectuses. The Company shall bear all expenses incurred by the Company in
connection with the registration of the Unrestricted Shares pursuant to the
Registration Statement (but excluding underwriters' and brokers' discounts and
commissions), and the reasonable fees and disbursements (not to exceed $10,000
in the aggregate) of a single special counsel for Holder.
4.4.3 INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 4.4.1 that
Holder shall provide such information regarding itself, the Unrestricted Shares
held by them, the intended method of disposition of the Unrestricted Shares and
such other information as the Company may reasonably request to timely effect
the registration of the Unrestricted Shares.
4.4.4 INDEMNIFICATION. For the purpose of this Section 4.4.4,
the term "Registration Statement" shall include any final prospectus, exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section 4.4.1.
(a) The Company agrees to indemnify and hold harmless
Holder, each of its directors and officers, any underwriters (as defined in the
Securities Act) for Holder and each person, if any, who controls Holder within
the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses to which Holder or such officer or director, underwriter
or controlling person may become subject, under the Securities Act, the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or any other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement,
including the prospectus, financial statements and schedules, and all other
documents filed as a part thereof or incorporated by reference therein, as
amended at the time of effectiveness of the Registration Statement, including
any information deemed to be a part thereof as of the time of effectiveness
pursuant to paragraph (b) of Rule 430A,or pursuant to Rule 434, of the Rules and
Regulations, or the prospectus, in the form first filed with the SEC pursuant to
Rule 424(b) of the Regulations, or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) filing is required (the
"PROSPECTUS"), or any amendment or supplement thereto, (ii) the omission or
alleged omission to state in any of them a material fact required to be stated
therein or necessary to make the statements in any of them not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act or any federal or state securities law in connection with the
offering covered by such registration statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "VIOLATIONS"), and will reimburse
Holder and each such officer or director, underwriter or controlling person for
any legal and other expenses as such expenses are reasonably incurred by Holder
or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, the indemnity agreement contained in this
Section 4.4.4(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, expense or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld or delayed) and provided, further, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with (i) written information furnished to the Company by or on behalf
of Holder expressly for use therein or (ii) the failure of Holder to comply with
the covenants and agreements contained in this Warrant respecting the sale of
the Unrestricted Shares, the inaccuracy of any representations made by Holder
herein or any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to Holder prior to the pertinent sale
or sales by Holder.
(b) Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act, against any losses, claims, damages, liabilities or
expenses to which the Company,
7
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each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of Holder) insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon any Violation,
in each case to the extent, but only to the extent, that such Violation
occurs in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Holder expressly for use therein, and
will reimburse the Company, each of its directors, each of its officers who
signed the Registration Statement or controlling person for any legal and
other expense reasonably incurred by the Company, each of its directors, each
of its officers who signed the Registration Statement or controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided,
however, the indemnity agreement contained in this Section 4.4.4(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability, expense or action if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably withheld or
delayed). Notwithstanding the foregoing, in no event shall any indemnity
under this Section 4.4.4(b) exceed the proceeds from the offering of Shares
made under the Registration Statement.
(c) Promptly after receipt by an indemnified party
under this Section 4.4.4 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 4.4.4, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 4.4.4 or to the extent it is not prejudiced
as a proximate result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be a conflict between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel reasonably acceptable to the indemnifying party to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 4.4.4 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by such
indemnifying party in the case of paragraph (a), representing the indemnified
parties who are parties to such action) or (ii) the indemnified party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.
(d) The foregoing indemnity agreements of the Company
and Holder are subject to the condition that, insofar as they relate to the
bases for any losses, claims, damages, liabilities or expenses contemplated in
Section 4.4.4(a) arising out of the preparation and filing of the preliminary
prospectus but eliminated or remedied in the amended prospectus on file with the
SEC at the time the registration statement in question becomes effective or the
amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "FINAL
PROSPECTUS"), such indemnity agreement shall not inure to the benefit of any
person if a copy of the Final Prospectus was furnished to the indemnified party
and 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.
4.5 TRANSFER PROCEDURE. If, subject to the provisions of Section 4.3,
Holder is allowed to transfer all or part of this Warrant, Holder shall give the
Company a written notice of the portion of the Warrant being transferred, such
notice setting forth the name, address and taxpayer identification number of the
transferee, and, together with such notice, Holder shall surrender this Warrant
to the Company for reissuance to the transferee (and to the new Warrant Holder
for any remaining Shares, if applicable). As a condition to sale, transfer or
assignment (other than pursuant to the Registration Statement under Section 4.4)
of this Warrant and the Shares issuable upon exercise of this Warrant, the
Holder shall confirm, acknowledge and agree to the representations, warranties
and agreements
8
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forth in Section 4 hereof.
5. GENERAL PROVISIONS.
5.1 NOTICES. Any and all notices and Transfer Notices required or
permitted to be given to a party pursuant to the provisions of this Warrant will
be in writing and will be effective and deemed to provide such party sufficient
notice under this Warrant on the earliest of the following: (i) at the time of
personal delivery, if delivery is in person; (ii) at the time of transmission by
facsimile, addressed to the other party at its facsimile number specified herein
(or hereafter modified by subsequent notice to the parties hereto), with
confirmation of receipt made by both telephone and printed confirmation sheet
verifying successful transmission of the facsimile; (iii) one (1) business day
after deposit with an express overnight courier for United States deliveries, or
two (2) business days after such deposit for deliveries outside of the United
States, with proof of delivery from the courier requested; or (iv) three (3)
business days after deposit in the United States mail by certified mail (return
receipt requested) for United States deliveries.
All notices for delivery outside the United States will be
sent by facsimile or by express courier. All notices not delivered personally or
by facsimile will be sent with postage and/or other charges prepaid and properly
addressed to the party to be notified at the address or facsimile number set
forth below the signature lines to this Warrant, or at such other address or
facsimile number as such other party may designate by one of the indicated means
of notice herein to the other parties hereto. Notices to the Company will be
marked "Attention: President". Notices by facsimile shall be machine verified as
received.
5.2 GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the laws of the State of California, without giving effect to
that body of laws pertaining to conflict of laws.
5.3 FURTHER ASSURANCES. The parties agree to execute such further
documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intent of this Warrant.
5.4 TITLES AND HEADINGS. The titles, captions and headings of this
Warrant are included for ease of reference only and will be disregarded in
interpreting or construing this Warrant. Unless otherwise specifically stated,
all references herein to "sections" and "exhibits" will mean "sections" and
"exhibits" to this Warrant.
5.5 COUNTERPARTS. This Warrant may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same agreement.
5.6 SEVERABILITY. If any provision of this Warrant is determined by any
court or arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to the maximum
extent possible given the intent of the parties hereto. If such clause or
provision cannot be so enforced, such provision shall be stricken from this
Warrant and the remainder of this Warrant shall be enforced as if such invalid,
illegal or unenforceable clause or provision had (to the extent not enforceable)
never been contained in this Warrant. Notwithstanding the forgoing, if the value
of this Warrant based upon the substantial benefit of the bargain for any party
is materially impaired, which determination as made by the presiding court or
arbitrator of competent jurisdiction shall be binding, then both parties agree
to substitute such provision(s) through good faith negotiations.
5.7 FACSIMILE SIGNATURES. This Warrant may be executed and delivered by
facsimile and upon such delivery the facsimile signature will be deemed to have
the same effect as if the original signature had been delivered to the other
party. The original signature copy shall be delivered to the other party by
express overnight delivery. The failure to deliver the original signature copy
and/or the nonreceipt of the original signature copy shall have no effect upon
the binding and enforceable nature of this Warrant.
5.8 AMENDMENT AND WAIVERS. This Warrant may be amended only by a
written agreement executed by each of the parties hereto. No amendment of or
waiver of, or modification of any obligation under this Warrant will be
enforceable unless set forth in a writing signed by the party against which
enforcement is sought. Any amendment effected in accordance with this Section
5.8 will be binding upon all parties hereto and each of their respective
successors and assigns. No delay or failure to require performance of any
provision of this Warrant shall constitute a waiver of that provision as to that
or any other instance. No waiver granted under this Warrant as to any
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one provision herein shall constitute a subsequent waiver of such provision
or of any other provision herein, nor shall it constitute the waiver of any
performance other than the actual performance specifically waived.
5.9 ENTIRE AGREEMENT. This Warrant and the documents referred to
herein, including but not limited to the Development and Marketing Agreement
between Company and Holder dated of even date herewith, constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Warrant, and supersede all prior understandings and agreements, whether
oral or written, between or among the parties hereto with respect to the
specific subject matter hereof.
WARRANT HOLDER: COMPANY:
/s/ William P. Sullivan /s/ Robert L. Schultz, Jr.
- -------------------------------- -------------------------------
AGILENT TECHNOLOGIES, INC. ADAPTEC, INC.
Name: William P. Sullivan Name: Robert L. Schultz, Jr.
--------------------------- --------------------------
Title: Senior Vice President and Title: Chief Operating Officer
General Manager -------------------------
--------------------------
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EXHIBIT A
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
1. PLEASE MARK ONE OF THE FOLLOWING:
[ ] 1.1 CASH EXERCISE ELECTION. The undersigned hereby elects to purchase
___________ shares of the Common Stock of ADAPTEC, INC., a Delaware corporation,
pursuant to the terms of the attached Warrant to Purchase Stock with an Issue
Date of January 17, 2000 (the "WARRANT"), and the Undersigned tenders herewith
payment of the total purchase price of such shares in full, pursuant to a check
or wire transfer, in the amount of $__________.
OR
[ ] 1.2 NET EXERCISE ELECTION. The undersigned Holder elects to convert all or
part of the Warrant into shares of stock by net exercise election pursuant to
Section 1.6 of the Warrant. This conversion is exercised with respect to
__________ shares of Common Stock of ADAPTEC, INC. covered by the Warrant.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned. The undersigned represents that it is acquiring
the shares solely for its own account and not as a nominee for any other party
and not with a view toward the resale or distribution thereof except in
compliance with applicable securities laws and hereby confirms and agrees to the
representations, warranties and agreements that are set forth in Section 4 of
the attached Warrant.
____________________________________
(Name)
____________________________________
____________________________________
____________________________________
Address
____________________________________
(Signature of Holder)
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AMENDMENT
OF
WARRANT TO PURCHASE STOCK
OF
ADAPTEC, INC.
This Amendment is made effective as of February 14, 2000 between
Adaptec, Inc. (the "COMPANY") and Agilent Technologies, Inc., the "HOLDER"
(as defined in the Warrant) of that certain Warrant to Purchase Stock, Issue
Date of January 17, 2000, providing for the purchase of 464,000 shares of the
Common Stock of the Company at an Initial Exercise Price of $62.25 per share
(the "WARRANT"). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Warrant.
RECITAL
WHEREAS, the Company and the undersigned Holder desire to amend the
Warrant to adequately reflect their current understanding of their rights and
obligations under the Warrant.
AGREEMENT
NOW THEREFORE, pursuant to Section 5.8 of the Warrant, the Company and the
Holder hereby agree as follows:
1. To amend the Warrant so that the portion of Section 4.4.1 of the
Warrant which reads "within 30 days of the Issue Date" is deleted and is
replaced by "as soon as reasonably possible but in no event later than
51 days of the Issue Date"; and
2. That all other provisions of the Warrant shall remain in full force
and effect.
This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original and enforceable against the parties
actually executing such counterpart, and all of which together shall
constitute one instrument.
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This Amendment is executed and is effective as of the date first set
forth above.
COMPANY:
ADAPTEC, INC.
By: /s/ Andrew J. Brown
----------------------------------
Name: Andrew J. Brown
--------------------------------
Title: Vice President, Finance and Chief Financial Officer
-----------------------------------------------------
HOLDER:
AGILENT TECHNOLOGIES, INC.
By: /s/ William P. Sullivan
----------------------------------
Name: William P. Sullivan
--------------------------------
Title: Senior Vice President and General Manager
-----------------------------------------------------
1002629
[SIGNATURE PAGE TO THE AMENDMENT OF WARRANT TO PURCHASE STOCK OF ADAPTEC, INC.]
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EXHIBIT 5.01
March 8, 2000
Adaptec, Inc.
691 S. Milpitas Blvd.
Milpitas, California 95035
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form
S-3 (the "REGISTRATION STATEMENT") to be filed by you with the Securities and
Exchange Commission (the "COMMISSION") on or about March 8, 2000 in connection
with the registration under the Securities Act of 1933, as amended, of an
aggregate of 290,000 shares of the Common Stock, par value $0.001 per share (the
"STOCK"), of Adaptec, Inc., a Delaware corporation ("ADAPTEC"), issuable upon
the exercise of the Warrants to Purchase Stock (the "WARRANTS") included as
Exhibits 4.01 and 4.02 to the Registration Statement, all or part of which will
be sold by the selling stockholder, Agilent Technologies, Inc. (the "SELLING
STOCKHOLDER"). The Selling Stockholder will acquire the Stock upon the Selling
Stockholder's exercise of the Warrants that Selling Stockholder received from
Adaptec.
In rendering this opinion, we have examined the following:
(1) the Warrants to Purchase Stock delivered by Adaptec to Agilent
Technologies, Inc., issued on January 17, 2000, providing for
the purchase of 1,160,000 shares of the Stock of Adaptec at an
exercise price of $62.25 per share;
(2) the Registration Statement, together with the Exhibits
filed as a part thereof;
(3) the Prospectus prepared in connection with the Registration
Statement;
(4) the resolutions of the Board of Directors of Adaptec, dated as
of February 10, 2000, approving the Warrants, the Registration
Statement and the Stock; and
(5) correspondence dated March 6, 2000 from your transfer agent
stating the number of outstanding shares of your common stock
as of December 31, 1999, together with documentation received
from you regarding your reconciliation of such number to the
records of Adaptec as reported to the Commission on Form 10-Q,
as amended, for the quarter ended December 31, 1999.
By review of the records of the Commission appearing on the
Commission's Website, we have reviewed the filing by you of reports required to
be filed by you pursuant to Sections 13, 14 and 15 of the Securities Exchange
Act of 1934, as amended, and the rules promulgated thereunder.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted
to us as originals, the conformity to originals of all documents submitted to us
as copies, the legal capacity of all natural persons executing the same, the
lack of any undisclosed termination, modification, waiver or amendment to any
document reviewed by us and the due authorization, execution and delivery of all
documents where due authorization, execution and delivery are prerequisites to
the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information included in the documents
referred to above. We have made no independent investigation or other attempt to
verify the accuracy of
<PAGE>
any of such information or to determine the existence or non-existence of any
other factual matters; HOWEVER, we are not aware of any facts that would
cause us to believe that the opinion expressed herein is not accurate.
We are admitted to practice law in the State of California, and we
express no opinion herein with respect to the application or effect of the laws
of any jurisdiction other than the existing laws of the United States of America
and the State of California.
Based upon the foregoing, it is our opinion that the 290,000 shares of
Stock that may be issued and sold by you upon exercise of the Warrants, when
issued and sold in accordance with the applicable Warrant and sold by the
Selling Stockholder in the manner referred to in the Prospectus associated with
the Registration Statement, will be validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement, the Prospectus constituting a part thereof and any amendments
thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof. This
opinion is intended solely for your use as an exhibit to the Registration
Statement for the purpose of the above sale of the Stock and is not to be relied
upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
By /s/ Dennis R. DeBroeck
--------------------------
Dennis R. DeBroeck, a Partner
<PAGE>
EXHIBIT 23.02
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 LLP
- -------------------------------
PricewaterhouseCoopers LLP
San Jose, California
March 7, 2000
<PAGE>
EXHIBIT 23.03
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) relating
to the financial statements of Distributed Processing Technology, Corp. which is
included in Adaptec, Inc.'s current report on Form 8-K/A dated March 3, 2000 and
to all references to our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------
Arthur Andersen LLP
Orlando, Florida
March 7, 2000
