<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 21, 1997
REGISTRATION NO. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ADVANCED DIGITAL INFORMATION CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1618616
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
10201 WILLOWS ROAD
REDMOND, WASHINGTON 98052
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP CODE))
ADVANCED DIGITAL INFORMATION CORPORATION
1997 STOCK PURCHASE PLAN
(FULL TITLE OF THE PLAN)
--------------------------
PETER H. VAN OPPEN
CHIEF EXECUTIVE OFFICER
ADVANCED DIGITAL INFORMATION CORPORATION
10201 WILLOWS ROAD
REDMOND, WASHINGTON 98052
(206) 881-8004
(NAME, ADDRESS AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
LINDA A. SCHOEMAKER
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
(206) 583-8888
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE(3) AGGREGATE OFFERING PRICE(3) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par 500,000
value(1) shares (2) $17.1875 $8,593,750 $2,604
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes associated Preferred Stock Purchase Rights.
(2) Includes an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
such employee benefit plan as the result of any future stock split, stock
dividend or similar adjustment of the Registrant's outstanding Common
Stock.
(3) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
amount of the registration fee. The price per share is estimated to be
$17.1875 based on the average of the high ($17.375) and low ($17.00) sales
prices for the Registrant's Common Stock on August 21, 1997, as reported by
the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended October 31, 1996, filed with the Securities and Exchange Commission
(the "Commission") on January 16, 1997 pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which contains certified financial
statements for the most recent year for which such statements have been filed;
(b) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year
covered by the Annual Report referred to above; and
(c) The description of the Registrant's Common Stock contained
in the Registrant's Registration Statement on Form 10 on July 30, 1996 pursuant
to Section 12(q) of the Exchange Act, including any amendments or reports filed
for the purpose of updating such description.
In addition, all reports and documents filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
after the date hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters the securities covered hereby then remaining unsold shall also be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof commencing on the respective dates on which such documents are
filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 10 of the Registrant's Restated Bylaws provides for
indemnification of the Registrant's directors and officers against all expense,
liability and loss (including counsel fees, judgments, fines, ERISA excise taxes
or penalties and amounts to be paid in settlement) actually and reasonably
incurred in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal, in which the director or officer is, was or becomes involved
by reason of the fact that the director or officer is or was a director or
officer of the Registrant, or that being or having been such a director or
officer of the Registrant, such director or officer is or was serving at the
request of the Registrant as a director, officer, trustee, employee or agent of
another corporation or of a partnership, joint venture, trust, employee benefit
plan or other enterprise, whether the basis of such proceeding is alleged action
by the director or officer in an official capacity as such a director, officer,
partner, trustee, employee or agent or in any other capacity while serving as
such a director, officer, partner, trustee, employee or agent. The director or
officer is not indemnified for any action, suit, claim or proceeding instituted
by or at the direction of the director or officer unless such action, suit,
claim or proceeding is or was authorized by the Registrant's Board of Directors
or unless the action is to enforce the rights of indemnification. No indemnity
may be provided by the Registrant for acts or omissions of the indemnitee
finally adjudged to be intentional misconduct or a knowing violation of law, for
conduct of the indemnitee finally adjudged to be in violation of
Section 23B.08.310 of the Washington Business Corporation Act, for any
transaction with respect to which it was finally adjudged that such indemnitee
personally received a benefit in money, property or services to which the
indemnitee was not legally entitled or if the corporation is otherwise
prohibited by applicable law from paying such indemnification. The Registrant
has entered into an Indemnification Agreement with each of its directors and
executive officers which provides similar rights of indemnification.
Section 23B.08.320 of the Washington Business Corporation Act
authorizes a corporation to limit a director's liability to the corporation or
its shareholders for monetary damages for acts or omissions as a director,
except in certain circumstances involving intentional misconduct, self-dealing
or illegal corporate loans or distributions, or any transaction from which the
director personally receives a benefit in money, property or services to which
the director is not legally
II-1
<PAGE>
entitled. Article 11 of the Registrant's Restated Articles of Incorporation
contains provisions implementing, to the fullest extent permitted by Washington
law, such limitations on a director's liability to the Registrant and its
shareholders.
The Registrant also maintains an insurance policy insuring its
directors and officers against liability for certain acts or omissions while
acting in their official capacities.
ITEM 8. EXHIBITS
Exhibit Number Description
- ------------------ ----------------------------------------------------------
5.1 Opinion of Perkins Coie regarding legality of the Common
Stock being registered
23.1 Consent of Price Waterhouse LLP (see page II-5)
23.3 Consent of Perkins Coie (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1997 Stock Purchase Plan
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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 therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE>
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer of 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redmond, State of Washington, on the 20th day of
August, 1997.
ADVANCED DIGITAL INFORMATION CORPORATION
By: /s/ Peter H. van Oppen
------------------------------------
Peter H. van Oppen
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints Peter H. van Oppen and Charles H. Stonecipher, and each of them, with
full power of substitution and full power to act without the other, as his true
and lawful attorney-in-fact and agent to act in his name, place and stead and to
execute in the name and on behalf of each person, individually and in each
capacity stated below, and to file, any and all amendments to this Registration
Statement, including any and all post-effective amendments with the Securities
and Exchange Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 20th day of August, 1997.
SIGNATURE TITLE
/s/ Peter H. van Oppen Chairman, President and Chief Executive
- -------------------------------- Officer
Peter H. van Oppen (Principal Executive Officer)
/s/ Leslie S. Rock Treasurer, Chief Accounting Officer
- -------------------------------- (Principal Financial and
Leslie S. Rock Accounting Officer)
/s/ Christopher T. Bayley
- -------------------------------- Director
Christopher T. Bayley
/s/ Walter P. Kistler
- -------------------------------- Director
Walter P. Kistler
/s/ Russell F. McNeill
- -------------------------------- Director
Russell F. McNeill
/s/ John W. Stanton
- -------------------------------- Director
John W. Stanton
/s/ Walter F. Walker
- -------------------------------- Director
Walter F. Walker
II-4
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated November 27, 1996 included in Advanced
Digital Information Corporation's Annual Report on Form 10-K for the year ended
October 31, 1996. We also consent to the application of such report to the
Financial Statement Schedule for the three years ended October 31, 1996 when
such schedule is read in conjunction with the financial statements referred to
in our report. The audits referred to in such report also include the Financial
Statement Schedule.
PRICE WATERHOUSE LLP
Seattle, Washington
August 20, 1997
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
- ------------------ ---------------------------------------------------------
5.1 Opinion of Perkins Coie regarding legality of the Common
Stock being registered
23.1 Consent of Price Waterhouse LLP (see page II-5)
23.3 Consent of Perkins Coie (included in opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1997 Stock Purchase Plan
<PAGE>
EXHIBIT 5.1
PERKINS COIE
1201 Third Avenue, 40th Floor, Seattle, Washington 98101-3099
TELEPHONE: 206 583-8888 FACSIMILE: 206 583-8500
August 20, 1997
Advanced Digital Information Corporation
10201 Willows Road
Redmond, WA 98052
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen and Ladies:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission with respect to 500,000 shares of Common
Stock, no par value per share (the "Shares"), which may be issued under the
Advanced Digital Information Corporation 1997 Stock Purchase Plan (the "Plan").
We have examined the Registration Statement and such documents and records of
the Company and other documents as we have deemed necessary for the purpose of
this opinion.
Based upon and subject to the foregoing, we are of the opinion that the
Shares that may be issued upon the exercise of stock options granted or to be
granted pursuant to the Plan have been duly authorized and that, upon the due
execution by the Company and the registration by its registrars of the Shares
and the sale thereof by the Company in accordance with the terms of the Plan,
and the receipt of the consideration therefor in accordance with the terms of
the Plan, the Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ PERKINS COIE
jsm:syh
<PAGE>
EXHIBIT 99.1
ADVANCED DIGITAL INFORMATION CORPORATION
1997 STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purposes of the Advanced Digital Information Corporation 1997 Stock
Purchase Plan (the "Plan") are to (a) assist team members of Advanced Digital
Information Corporation, a Washington corporation (the "Company"), and its
subsidiary corporations in acquiring a stock ownership interest in the Company
pursuant to a plan that is intended to qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"), and (b) help team members provide for their future security and
encourage them to remain in the employ of the Company and its subsidiary
corporations. Stock purchased under the Plan may be paid for by regular payroll
deductions. Only employees of the Company and its designated subsidiary
corporations are eligible to participate in the Plan, and participation is
voluntary.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set forth
below.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Company's Compensation and Stock Option Committee or
another committee appointed by the Board and given authority by the Board to
administer the Plan.
"Company" means Advanced Digital Information Corporation, a Washington
corporation.
"Designated Subsidiary" has the meaning set forth under the definition of
"Eligible Team Member" in this Section 2.
"Eligible Compensation" means all regular cash compensation, including
overtime, cash bonuses and commissions. Regular cash compensation does not
include severance pay, hiring and relocation bonuses, pay in lieu of vacation or
sick leave, or any other special payments, or any gain from stock option
exercises.
"Eligible Team Member" means any employee (a "Team Member") of the Company,
or any Subsidiary Corporation designated by the Board or the Committee (a
"Designated Subsidiary"), who is in the employ of the Company (or any Designated
Subsidiary) on one or more Offering Dates and who meets the following criteria:
<PAGE>
(a) the Team Member does not, immediately after the Option is granted, own
stock (as defined by the Code) possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or of a Designated
Subsidiary;
(b) the Team Member has been employed for at least one month;
(c) the Team Member's customary employment is for more than 20 hours per
week; and
(d) the Team Member's customary employment is for more than five months in
any calendar year.
If the Company permits any employee of a Designated Subsidiary to
participate in the Plan, then all employees of that Designated Subsidiary who
meet the requirements of this paragraph shall also be considered Eligible Team
Members.
"Enrollment Period" has the meaning set forth in Section 6.1.
"SPP Broker" has the meaning set forth in Section 10.
"Offering" has the meaning set forth in Section 5.1.
"Offering Date" means the first day of an Offering.
"Offering Period" has the meaning set forth in Section 5.1.
"Option" means an option granted under the Plan to an Eligible Employee to
purchase shares of Stock.
"Parent Corporation" means any corporation, other than the Company, in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of the corporations, other than the Company, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
"Participant" means any Eligible Team Member who has elected to participate
in an Offering in accordance with the procedures set forth in Section 6.1 and
who has not withdrawn from the Plan or whose participation in the Plan is not
terminated.
"Plan" means the Advanced Digital Information Corporation 1997 Stock
Purchase Plan.
"Plan Administrator" has the meaning set forth in Section 3.1.
"Purchase Date" means the last day of each Purchase Period.
"Purchase Period" has the meaning set forth in Section 5.2.
"Purchase Price" has the meaning set forth in Section 8.
"Stock" means the Common Stock, no par value, of the Company.
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<PAGE>
"Subscription" has the meaning set forth in Section 6.1.
"Subsidiary Corporation" means any corporation, other than the Company, in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or the Committee or, if and to
the extent the Board or the Committee designates an executive officer of the
Company to administer the Plan, by such executive officer.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Subject to the provisions of the Plan, the Plan Administrator shall have
the authority, in its sole discretion, to determine all matters relating to
Options granted under the Plan, including all terms, conditions, restrictions
and limitations of Options; provided, however, that all Participants granted
Options pursuant to the Plan shall have the same rights and privileges within
the meaning of Code Section 423. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, unless revised by the Board or the
Committee, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's other officers or employees as the Plan Administrator so determines.
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in Section 19, a
maximum of 500,000 shares of Stock may be sold under the Plan. Shares sold
under the Plan shall be drawn from authorized and unissued shares or shall be
shares acquired by the Company. Any shares of Stock subject to an Option that
cease to be subject to the Option (other than by reason of exercise of the
Option), including, without limitation, in connection with the cancellation or
termination of the Option, shall again be available for sale in connection with
future grants of Options under the Plan.
SECTION 5. OFFERING DATES
5.1 OFFERING PERIODS
The Plan shall be implemented by a series of offerings (each, an
"Offering"). Except as otherwise set forth below, Offerings shall commence on
September 1 and March 1 of each year and end on the next February 28 (or
February 29 when applicable) and August 31, respectively, occurring thereafter.
Notwithstanding the foregoing, the first Offering Period shall commence on
September 5, 1997 and end on February 28, 1998. Also, notwithstanding the
foregoing, the Board or the Committee
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may establish (a) a different term for one or more future Offerings and
(b) different commencing and ending dates for such Offerings; provided, however,
that an offering period (the "Offering Period") may not exceed five years; and
provided, further, that if the Purchase Price may be LESS THAN 85% of the fair
market value of the Stock on the Purchase Date, the Offering Period may not
exceed 27 months. In the event the first or the last day of an Offering Period
is not a regular business day, then the first day of the Offering Period shall
be deemed to be the next regular business day and the last day of the Offering
Period shall be deemed to be the last preceding regular business day. A Team
Member who becomes eligible to participate in the Plan after an Offering Period
has commenced shall not be eligible to participate in such Offering but may
participate in any subsequent Offering, provided that such Team Member is still
an Eligible Team Member as of the commencement of any such subsequent Offering.
Eligible Team Members may not participate in more than one Offering at a time.
5.2 PURCHASE PERIODS
Each Offering Period shall consist of one or more consecutive purchase
periods (each, a "Purchase Period"). Except as otherwise set forth below,
Purchase Periods shall commence on September 1 and March 1 of each year and end
on the next February 28 (or February 29 when applicable) and August 31,
respectively, occurring thereafter. Notwithstanding the foregoing, the first
Offering Period shall commence on September 5, 1997 and end on February 28,
1998. Also, notwithstanding the foregoing, the Board or the Committee may
establish for any future Offering (a) different terms for one or more Purchase
Periods within the Offering Period and (b) different commencing dates and
Purchase Dates for any such Purchase Periods. The last day of each Purchase
Period shall be the Purchase Date for such Purchase Period. In the event the
first or last day of a Purchase Period is not a regular business day, then the
first day of the Purchase Period shall be deemed to be the next regular business
day and the last day of the Purchase Period shall be deemed to be the last
preceding regular business day.
SECTION 6. PARTICIPATION IN THE PLAN
6.1 INITIAL PARTICIPATION
An Eligible Team Member shall become a Participant on the first Offering
Date after satisfying the eligibility requirements and delivering to the Plan
Administrator during the enrollment period established by the Plan Administrator
(the "Enrollment Period") a subscription (the "Subscription"):
(a) indicating the Eligible Team Member's election to participate in the
Plan;
(b) authorizing payroll deductions and stating the amount to be deducted
regularly from the Participant's pay; and
(c) authorizing the purchase of Stock for the Participant in each Purchase
Period.
An Eligible Team Member who does not deliver a Subscription to the Plan
Administrator during the Enrollment Period shall not participate in the Plan for
that Offering Period or any subsequent Offering Period unless such Eligible Team
Member subsequently enrolls in the Plan by delivering a Subscription to the Plan
Administrator during the Enrollment Period for such subsequent Offering Period.
The Plan Administrator may, from time to time, change the Enrollment Period for
any
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future Offering as deemed advisable by the Plan Administrator in its, his or her
sole discretion for the proper administration of the Plan.
6.2 CONTINUED PARTICIPATION
Unless the Plan Administrator determines otherwise for any future Offering,
a Participant shall automatically participate in the next Offering Period until
such time as the Participant withdraws from the Plan pursuant to Section 11.1 or
terminates employment as provided in Section 12.
SECTION 7. LIMITATIONS ON RIGHT TO PURCHASE SHARES
7.1 $25,000 LIMITATION
No Participant shall be entitled to purchase Stock under the Plan (or any
other employee stock purchase plan that is intended to meet the requirements of
Code Section 423 sponsored by the Company, any Parent Corporation or any
Subsidiary Corporation) at a rate that exceeds $25,000 in fair market value,
determined as of the Offering Date for each Offering Period (or such other limit
as may be imposed by the Code), for each calendar year in which a Participant
participates in the Plan (or any other employee stock purchase plan described in
this Section 7.1).
7.2 PRO RATA ALLOCATION
In the event the number of shares of Stock that might be purchased by all
Participants in the Plan exceeds the number of shares of Stock available in the
Plan, the Plan Administrator shall make a pro rata allocation of the remaining
shares of Stock in as uniform a manner as shall be practicable and as the Plan
Administrator shall determine to be equitable. Fractional shares may be issued
under the Plan unless the Board or the Committee determines otherwise.
SECTION 8. PURCHASE PRICE
The purchase price (the "Purchase Price") at which Stock may be acquired in
an Offering pursuant to the exercise of all or any portion of an Option granted
under the Plan shall be 85% of the lesser of (a) the fair market value of the
Stock on the Offering Date of such Offering and (b) the fair market value of the
Stock on the Purchase Date. Notwithstanding the foregoing, the Board or the
Committee may establish a different Purchase Price for any future Offering,
which shall not be less than 85% of the lesser of (a) the fair market value of
the Stock on the Offering Date of such Offering and (b) the fair market value of
the Stock on the Purchase Date. The fair market value of the Stock on the
Offering Date or on the Purchase Date shall be the average of the high and low
per share trading prices for the Stock as reported for such day by the Nasdaq
National Market. If no sales of the Stock were made on the Nasdaq National
Market on the transaction date, fair market value shall mean the average of the
high and low per share trading prices for the Stock as reported for the next
preceding day on which sales of the Stock were made on the Nasdaq National
Market.
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<PAGE>
SECTION 9. PAYMENT OF PURCHASE PRICE
9.1 GENERAL RULES
Stock that is acquired pursuant to the exercise of all or any portion of an
Option may be paid for only by means of payroll deductions from the
Participant's Eligible Compensation. Except as set forth in this Section 9, the
amount of compensation to be withheld from a Participant's Eligible Compensation
during each pay period shall be determined by the Participant's Subscription.
9.2 CHANGE NOTICES
Unless otherwise determined by the Plan Administrator for any future
Offering, a Participant may not elect during an Offering Period to increase or
decrease the amount withheld from his or her compensation in future pay periods.
9.3 PERCENT WITHHELD
The amount of payroll withholding with respect to the Plan for any
Participant during any pay period shall be at least $10, but shall not exceed
10% of the Participant's Eligible Compensation for such pay period. Amounts
shall be withheld only in whole percentages or increments of $10.
9.4 PAYROLL DEDUCTIONS
Payroll deductions shall commence on the first payday following the
Offering Date and shall continue through the last payday of the Offering Period
unless sooner altered or terminated as provided in the Plan.
9.5 MEMORANDUM ACCOUNTS
Individual accounts shall be maintained for each Participant for memorandum
purposes only. All payroll deductions from a Participant's compensation shall
be credited to such account but shall be deposited with the general funds of the
Company. All payroll deductions received or held by the Company may be used by
the Company for any corporate purpose.
9.6 NO INTEREST
No interest shall be paid on payroll deductions received or held by the
Company.
9.7 ACQUISITION OF STOCK
On each Purchase Date of an Offering Period, each Participant shall
automatically acquire, pursuant to the exercise of the Participant's Option, the
number of shares of Stock arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Purchase Period by the
Purchase Price; provided, however, that the number of shares of Stock purchased
by the Participant shall not exceed the number of whole shares of Stock so
determined, if the Board or the Committee has determined for any future Offering
that fractional shares may not be issued under the Plan.
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<PAGE>
9.8 CARRYOVER OF ACCOUNT
Any cash balance remaining in the Participant's account at the termination
of each Offering shall be refunded to the Participant as soon as practical after
the Purchase Date without the payment of any interest; provided, however, that
if the Participant reenrolls in the next Offering, any cash balance remaining in
the Participant's account shall be applied to the purchase of Stock in the new
Offering.
9.9 WITHHOLDING OBLIGATIONS
At the time the Option is exercised, in whole or in part, or at the time
some or all of the Stock is disposed of, the Participant shall make adequate
provision for federal and state withholding obligations of the Company, if any,
that arise upon exercise of the Option or upon disposition of the Stock. The
Company may, but shall not be obligated to, withhold from the Participant's
compensation the amount necessary to meet such withholding obligations.
9.10 TERMINATION OF PARTICIPATION
No Stock shall be purchased on behalf of a Participant on a Purchase Date
if his or her participation in the Plan has terminated prior to such Purchase
Date.
9.11 PROCEDURAL MATTERS
The Plan Administrator may, from time to time, establish (a) limitations on
the frequency and/or number of any permitted changes in the amount withheld
during an Offering, (b) an exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, (c) payroll withholding in excess of the
amount designated by a Participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, and
(d) such other limitations or procedures as deemed advisable by the Plan
Administrator, in its sole discretion, that are consistent with the Plan and in
accordance with the requirements of Code Section 423.
9.12 LEAVES OF ABSENCE
During leaves of absence approved by the Company and meeting the
requirements of the applicable Treasury Regulations promulgated under the Code,
a Participant may continue participation in the Plan by delivering cash payments
to the Plan Administrator on the Participant's normal paydays equal to the
amount of his or her payroll deduction under the Plan had the Participant not
taken a leave of absence.
SECTION 10. STOCK PURCHASED UNDER THE PLAN
10.1 SPP BROKER
If the Plan Administrator designates or approves a stock brokerage or other
financial services firm (the "SPP Broker") to hold shares purchased under the
Plan for the accounts of Participants, the following procedures shall apply.
Promptly following each Purchase Date, the number of shares of Stock purchased
by each Participant shall be deposited into an account established in the
Participant's name with the SPP Broker. A Participant shall be free to
undertake a disposition of the shares of Stock in his or her account at any
time, but, in the absence of such a disposition, the shares of Stock must
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remain in the Participant's account at the SPP Broker until the holding period
set forth in Code Section 423 has been satisfied. With respect to shares of
Stock for which the Code Section 423 holding periods have been satisfied, the
Participant may move those shares of Stock to another brokerage account of the
Participant's choosing or request that a stock certificate be issued and
delivered to him or her. A Participant who is not subject to payment of U.S.
income taxes may move his or her shares of Stock to another brokerage account of
his or her choosing or request that a stock certificate be delivered to him or
her at any time, without regard to the Code Section 423 holding period.
10.2 NOTICE OF DISPOSITION
By entering the Plan, each Participant agrees to promptly give the Company
notice of any Stock disposed of within the later of one year from the Purchase
Date and two years from the Offering Date for such Stock, showing the number of
such shares disposed of and the Purchase Date and Offering Date for such Stock.
This notice shall not be required if and so long as the Company has a designated
SPP Broker.
SECTION 11. VOLUNTARY WITHDRAWAL
11.1 WITHDRAWAL FROM THE PLAN
A Participant may withdraw from the Plan by delivering to the Plan
Administrator a notice of withdrawal in the form required by the Plan
Administrator for such purpose. Any withdrawal from an Offering shall
constitute a withdrawal from the Plan unless the Board or the Committee
determines for any future Offerings that withdrawal from an Offering shall not
result in a withdrawal from the Plan and any succeeding Offering. Such notice
must be delivered at least ten days prior to the end of the Purchase Period for
which such withdrawal is to be effective or by any other date specified by the
Plan Administrator for any future Offering. If a Participant withdraws after
the Purchase Date for a Purchase Period of an Offering, the withdrawal shall not
affect Stock acquired by the Participant in that Purchase Period and any earlier
Purchase Periods. In the event a Participant voluntarily elects to withdraw
from the Plan, the withdrawing Participant may not resume participation in the
Plan during the same Offering Period but may participate in any subsequent
Offering under the Plan by again satisfying the definition of a Participant.
11.2 RETURN OF PAYROLL DEDUCTIONS
Upon withdrawal from the Plan pursuant to Section 11.1, the withdrawing
Participant's accumulated payroll deductions that have not been applied to the
purchase of Stock shall be returned as soon as practical after the withdrawal,
without the payment of any interest, to the Participant, and the Participant's
interest in the Offering shall terminate. Such accumulated payroll deductions
may not be applied to any other Offering and the Plan under the Plan.
SECTION 12. TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the Company for any reason,
including retirement, disability or death, or the failure of a Participant to
remain an Eligible Team Member, shall immediately terminate the Participant's
participation in the Plan. The payroll deductions credited to the Participant's
account since the last Purchase Date shall, as soon as practical, be returned to
the
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Participant or, in the case of a Participant's death, to the Participant's legal
representative, and all the Participant's rights under the Plan shall terminate.
Interest shall not be paid on sums returned to a Participant pursuant to this
Section 12.
SECTION 13. RESTRICTIONS UPON ASSIGNMENT
An Option granted under the Plan shall not be transferable otherwise than
by will or by the applicable laws of descent and distribution and shall be
exercisable during the Participant's lifetime only by the Participant. The Plan
Administrator will not recognize, and shall be under no duty to recognize, any
assignment or purported assignment by a Participant, other than by will or by
the applicable laws of descent and distribution, of the Participant's interest
in the Plan, of his or her Option, or of any rights under his or her Option.
SECTION 14. NO RIGHTS OF SHAREHOLDER UNTIL SHARES ISSUED
With respect to shares of Stock subject to an Option, a Participant shall
not be deemed to be a shareholder of the Company, and he or she shall not have
any of the rights or privileges of a shareholder. A Participant shall have the
rights and privileges of a shareholder of the Company when, but not until, the
shares have been issued following exercise of the Participant's Option.
SECTION 15. AMENDMENT OF THE PLAN
The Board or the Committee may amend the Plan in such respects as it shall
deem advisable; provided, however, that, to the extent required for compliance
with Code Section 423 or any applicable law or regulation, shareholder approval
will be required for any amendment that will (a) increase the total number of
shares as to which Options may be granted under the Plan, (b) modify the class
of employees eligible to receive Options, or (c) otherwise require shareholder
approval under any applicable law or regulation.
SECTION 16. TERMINATION OF THE PLAN
The Board may suspend or terminate the Plan at any time. Unless the Plan
shall theretofore have been terminated by the Board, the Plan shall terminate
on, and no Options shall be granted after, August 20, 2007, except that such
termination shall have no effect on Options granted prior thereto. No Options
shall be granted during any period of suspension of the Plan.
SECTION 17. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person (including any
Eligible Team Member or Participant) the right to remain in the employ of the
Company or a Subsidiary Corporation or to affect the right of the Company and
the Subsidiary Corporations to terminate the employment of any person (including
any Eligible Team Member or Participant) at any time with or without cause.
SECTION 18. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary Corporation.
Nothing in the Plan shall be construed to limit the right of the Company or any
Subsidiary Corporation to (a) establish any other forms of incentives or
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compensation for employees of the Company or any Subsidiary Corporation or
(b) grant or assume options otherwise than under the Plan in connection with any
proper corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition, by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
SECTION 19. ADJUSTMENTS
19.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Stock, then (subject to any required action by the
Company's shareholders), the Board or the Committee, in its sole discretion,
shall make such equitable adjustments as it shall deem appropriate in the
circumstances in (i) the maximum number and kind of securities subject to the
Plan as set forth in Section 4 and (ii) the number and kind of securities that
are subject to any outstanding Option and the per share price of such
securities. The determination by the Board or the Committee as to the terms of
any of the foregoing adjustments shall be conclusive and binding.
19.2 MERGER, ACQUISITION OR LIQUIDATION OF THE COMPANY
In the event of the merger or consolidation of the Company into another
corporation, the acquisition by another corporation of all or substantially all
of the Company's assets, or the liquidation or dissolution of the Company, the
Purchase Date with respect to outstanding Options shall be the business day
immediately preceding the effective date of such merger, consolidation,
acquisition, liquidation or dissolution unless the Board or the Committee shall,
in its sole discretion, provide for the assumption or substitution of such
Options in a manner complying with Code Section 424(a).
19.3 LIMITATIONS
The grant of Options will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 20. REGISTRATION
The Company shall be under no obligation to any Participant to register for
offering or resale under the Securities Act of 1933, as amended, or register or
qualify under state securities laws, any shares of Stock. The Company may issue
certificates for shares with such legends and subject to such restrictions on
transfer and stop-transfer instructions as counsel for the Company deems
necessary or desirable for compliance by the Company with federal and state
securities laws.
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SECTION 21. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the Board,
so long as it is approved by the Company's shareholders at any time within
12 months of such adoption.
