_____________________________________________________________________________
As filed with the Securities and Exchange Commission on November 26, 1997
Registration No. 333-_________
_____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
PUGET SOUND ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Washington
(State or Other Jurisdiction of Incorporation or Organization)
91-0374630
(I.R.S. Employer Identification No.)
411 - 108th Avenue N.E.
Bellevue, Washington 98004-5515
(Address of Principal Executive Offices) (Zip Code)
PUGET SOUND ENERGY, INC. EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
WILLIAM S. WEAVER
President and Chairman of Unregulated Subsidiaries
Puget Sound Energy, Inc.
411 - 108th Avenue N.E.
Bellevue, Washington 98004-5515
(206) 454-6363
(Name, Address and Telephone Number,
Including Area Code, of Agent For Service)
___________________
Copy to:
J. Sue Morgan
Perkins Coie
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
<PAGE>
____________________________________________________________________________
CALCULATION OF REGISTRATION FEE
_____________________________________________________________________________
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Per Offering Registration
Registered Registered Share(1) Price(1) Fee
________________________________________________________________________
Common Stock
(without par 500,000(3) $26.969 $13,484,500 $4,087
value)
_____________________________________________________________________________
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The price
per share is estimated to be $26.969, based on the average of the high sales
price ($27.125) and the low sales price ($26.813) for the Registrant's Common
Stock as reported on the New York Stock Exchange on November 19, 1997.
(2) Includes associated Preference Stock Purchase Rights. Prior to the
occurrence of certain events, the Preference Stock Purchase Rights will not
be evidenced or traded separately from the Common Stock.
(3) Includes an indeterminate number of additional shares that 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.
<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 year ended
December 31, 1996 (File No. 1-4393);
(b) The Registrant's Current Report on Form 8-K filed with the
Securities and Exchange Commission (the "Commission") under Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") on
October 24, 1997, which contains certified financial statements for the most
recent fiscal year for which such statements have been filed;
(c) 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
Current Report on Form 8-K referred to in (b) above; and
(d) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission under Section
12(b) of the Exchange Act, including any amendments or reports filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Section 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 the 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.
Article VIII of the Registrant's Bylaws provides for the indemnification of
the Registrant's directors, officers, employees and agents to the maximum
extent permitted by Washington law.
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, or a knowing
violation of law, approval of distribution in violation of Section 23B.06.400
of the Washington Business Corporation Act, or any transaction from which the
director will personally receive a benefit in money, property or services to
which the director is not legally entitled. Article X 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.
II-1
<PAGE>
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 Coopers & Lybrand L.L.P. (see page II-6)
23.2 Consent of Arthur Andersen LLP (see page II-7)
23.3 Consent of Perkins Coie (included in its Opinion filed as Exhibit
5.1)
24.1 Power of Attorney (see Signature Page)
99.1 Puget Sound Energy, Inc. Employee 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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(b) 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
(c) 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)(a) and (1)(b) 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 that 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
II-2
<PAGE>
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits 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.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Commission, such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question of 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, 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 Bellevue, State of Washington, on
the 8th day of July, 1997.
PUGET SOUND ENERGY, INC.
By R.R. Sonstelie
___________________________
R.R. Sonstelie
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes R.R. Sonstelie,
William S. Weaver and James P. Torgerson, and each of them, as attorneys-in-
fact, with full power of substitution, to execute in the name and on behalf
of such person, individually and in each capacity stated below, and to file,
any or all amendments (including pre-effective and post-effective amendments)
to this registration statement, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons on the
8th day of July, 1997, in the capacities indicated.
Signature Title
R. R. Sonstelie
___________________________ Chairman and Chief Executive Officer
(R. R. Sonstelie) (Principal Executive Officer)
William S. Weaver
___________________________ President, Chairman of Unregulated
(William S. Weaver) Subsidiaries and Director
James P. Torgerson
___________________________ Vice President and Chief Financial Officer
(James P. Torgerson) (Principal Financial Officer)
James W. Eldredge
___________________________ Corporate Secretary, Controller and
(James W. Eldredge) Chief Accounting Officer
Douglas P. Beighle
___________________________ Director
(Douglas P. Beighle)
Charles W. Bingham
___________________________ Director
(Charles W. Bingham)
II-4
<PAGE>
Signatures, continued
___________________________ Director
(Phyllis J. Campbell)
Donald J. Covey
___________________________ Director
(Donald J. Covey)
Robert L. Dryden
___________________________ Director
(Robert L. Dryden)
John D. Durbin
___________________________ Director
(John D. Durbin)
John W. Ellis
___________________________ Director
(John W. Ellis)
Daniel J. Evans
___________________________ Director
(Daniel J. Evans)
Tomio Moriguchi
___________________________ Director
(Tomio Moriguchi)
Sally G. Narodick
___________________________ Director
(Sally G. Narodick)
R. Kirk Wilson
___________________________ Director
(R. Kirk Wilson)
II-5
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
____________________________________________________________
We consent to the incorporation by reference in the registration statement of
Puget Sound Energy, Inc. on Form S-8 of our reports dated February 12, 1997,
on our audits of the consolidated financial statements and financial
statement schedule of Puget Sound Energy, Inc. (formerly Puget Sound Power &
Light Company) as of December 31, 1996 and 1995 and for the years ended
December 31, 1996, 1995, and 1994, which reports are included in the
Company's Current Report on Form 8-K, dated October 23, 1997 and in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
Coopers & Lybrand L.L.P.
Seattle, Washington
November 24, 1997
II-6
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
____________________________________________________________
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement, as it relates to Washington Energy
Company and Washington Natural Gas Company (the Companies), of our reports
dated October 31, 1996 included in Puget Sound Energy, Inc.'s Form 8-K dated
October 24, 1997 and to all references to our Firm included in this
registration statement. It should be noted that we have not audited any
financial statements of the Companies subsequent to September 30, 1996 or
performed any audit procedures subsequent to the date of our report.
Arthur Andersen LLP
Seattle, Washington
November 24, 1997
II-7
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
_______ _________________________________________________________________
5.1 Opinion of Perkins Coie regarding legality of Common Stock being
registered
23.1 Consent of Coopers & Lybrand L.L.P. (see Page II-6)
23.2 Consent of Arthur Andersen LLP (see Page II-7)
23.3 Consent of Perkins Coie (included in its Opinion filed as Exhibit
5.1)
24.1 Power of Attorney (see Signature Page)
99.1 Puget Sound Energy, Inc. Employee Stock Purchase Plan
<PAGE>
EXHIBIT 5.1
(PERKINS COIE LETTERHEAD)
November 24, 1997
Puget Sound Energy, Inc.
411 - 108th Avenue N.E.
Bellevue, WA 98004-5515
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
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, without par value (the "Shares"), which may be issued pursuant to the
Puget Sound Energy, Inc. Employee Stock Purchase Plan (the "Plan"). We have
examined the Registration Statement and such documents and records of the
Company and other documents as we have deemed necessary for the purpose of
this opinion.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plan have been
duly authorized and that, upon the due execution by the Company and the
registration by its registrar of such Shares and the sale thereof by the
Company in accordance with the terms of the Plan, and the receipt of
consideration therefor in accordance with the terms of the Plan, such 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,
Perkins Coie
<PAGE>
EXHIBIT 99.1
EMPLOYEE STOCK PURCHASE PLAN
(Amended and Restated as of July 1, 1997)
SECTION 1. PURPOSE
The purpose of the Puget Sound Energy, Inc. Employee Stock Purchase
Plan (the "Plan") are to (a) assist employees of Puget Sound Energy, Inc., 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
employees provide for their future security and encourage them to remain in
the employ of the Company and its subsidiary corporations. Stock purchased
under the Plan may be paid for either in cash or 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 Retirement Committee
or another committee appointed by the Board and given authority by the Board
to administer the Plan.
"Company" means Puget Sound Energy, Inc., a Washington corporation.
"Eligible Compensation" means all regular cash compensation, including
overtime; provided that in the case of commissions and cash bonuses, cash
compensation will also include an amount equal to the average of a
Participant's commissions and cash bonuses in the Participant's payroll
period during the six months preceding the current Offering Period. Regular
cash compensation does not include severance pay, hiring and relocation
bonuses, pay in lieu of vacations, sick leave or any other special payments.
"Eligible Employee" means any employee of the Company or any Subsidiary
Corporation designated by the Board or the Committee (a "Designated
Subsidiary") who is in the employ of the Company (or any Designated
Subsidiary) on one or more Offering Dates and who meets the following
criteria:
(a) the employee does not, immediately after the Option is granted,
own stock (as defined by the Code) possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or of a
Designated Subsidiary of the Company;
(b) the employee's customary employment is for more than 20 hours per
week; and
(c) the employee'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 Employees.
"Enrollment Period" has the meaning set forth in Section 6.1.
"ESPP 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.
"Participant" means any Eligible Employee who has elected to
participate in an Offering in accordance with the procedures set forth in
Section 6.1 and who has not withdrawn from the Offering or whose
participation in the Offering is not terminated.
"Plan" means the Puget Sound Energy, Inc. Employee Stock Purchase Plan.
"Plan Administrator" has the meaning set forth in means the Company's
Treasurer or another Company officer designated by the Board or the Committee
to administer the Plan under 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.
"Subscription" has the meaning set forth in Section 6.1.
"Subscription Date" 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.
"Trust" and "Trustee" have the meanings set forth in Section 9.4.
SECTION 3. ADMINISTRATION
3.1 Plan Administrator
The Plan shall be administered by the Board or the Committee and, 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
exclusive authority, in its 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 the Code. 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 or the Trustee of the Trust. Any shares of
Stock that have been made 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 July 1 and January 1 of each year and end on the next December 31 and June
30, respectively, occurring thereafter. Notwithstanding the foregoing, the
Board or the Committee may establish (a) a different term for one or more
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. An employee who becomes eligible
to participate in the Plan after an Offering Period has commenced shall not
be eligible to participate in such Offering but may participate in any
subsequent Offering, provided that such employee is still an Eligible
Employee as of the commencement of any such subsequent Offering. Eligible
Employees may not participate in more than one Offering at a time. 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.
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 July 1 and January 1 of each year and end
on the next December 31 and June 30, respectively, occurring thereafter.
Notwithstanding the foregoing, the Board or the Committee may establish (a)
different terms for one or more Purchase Periods within an Offering Period
and (b) different commencing dates and Purchase Dates for any such Purchase
Period. The last day of each Purchase Period shall be the Purchase Date for
such Purchase Period. In the event the first or last day of a Purchase
Period is not a regular business day, then the first day of the Purchase
Period shall be deemed to be the next regular business day and the last day
of the Purchase Period shall be deemed to be the last preceding regular
business day.
SECTION 6. PARTICIPATION IN THE PLAN
6.1 Initial Participation
An Eligible Employee shall become a Participant on the first Offering
Date after satisfying the eligibility requirements and delivering to the Plan
Administrator during the enrollment period established by the Plan
Administrator (the "Enrollment Period") and not later than ten days before
such Offering Date or such other date as the Plan Administrator may specify
for an Offering(the "Subscription Date") a subscription (the "Subscription"):
(a) indicating the Eligible Employee's election to participate in
the Plan;
(b) authorizing payroll deductions and stating the amount to be
deducted regularly from the Participant's pay, or accompanied by a cash
payment or both; and
(c) authorizing the purchase of Stock for the Participant in each
Purchase Period.
An Eligible Employee who does not deliver a Subscription to the Plan
Administrator during the Enrollment Period and on or before the Subscription
Date shall not participate in the Plan for that Offering Period or for any
subsequent Offering Period, unless such Eligible Employee subsequently
enrolls in the Plan by delivering a Subscription to the Plan Administrator
during the Enrollment Period and on or before the Subscription Date for such
subsequent Offering Period. The Plan Administrator may, from time to time,
change the Subscription Date 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, a Participant shall
automatically participate in the next Offering Period until such time as
Participant withdraws from the Plan pursuant to Section 11.2 or
terminates employment as provided in Section 12. If a Participant withdraws
from an Offering pursuant to Section 11.1, the Participant is not required to
file any additional subscription agreements for the next subsequent Offering
in order to continue participation in the Plan.
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 a 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 only to the extent permitted by the Board or the
Committee.
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 90% 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 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 New York Stock Exchange in The Wall Street
Journal or in such other source as the Plan Administrator deems reliable. If
no sales of the Stock were made on the New York Stock Exchange 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 New York Stock Exchange.
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 a cash payment or payroll
deductions from the Participant's Eligible Compensation or both. 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 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 increments of $10.
9.3 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.
9.4 Participant Accounts; Trust
Individual accounts shall be maintained for each Participant for
memorandum purposes only. All cash payments and payroll deductions from a
Participant's compensation shall be credited to such account, but shall be
deposited with the general funds of the Company. Such cash payments and
payroll deductions may also be paid by the Company to the Trustee (the
"Trustee") of the 1997 Employee Stock Purchase Plan Trust (the "Trust"), such
payments to be used by the Trustee to purchase shares of Stock pursuant to
the terms of the Trust. Shares of Stock acquired by the Trust shall be held
for the benefit of the Participants and shall be delivered to the
Participants or their beneficiaries by the Trustee at the direction of the
Plan Administrator in accordance with the terms and conditions of the Plan.
All cash payments and payroll deductions received or held by the Company may
be used by the Company for any corporate purpose. No interest shall be paid
on cash payments or payroll deductions received or held by the Company or the
Trust.
9.5 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 cash payment and accumulated payroll deductions for the
Purchase Period by the Purchase Price; provided, however, that in no event
shall the number of shares of Stock purchased by the Participant exceed the
number of whole shares of Stock so determined, except to the extent that the
Board or the Committee has determined that fractional shares may be issued
under the Plan.
9.6 Refund of Excess Amounts
Any cash balance remaining in the Participant's account shall be
refunded to the Participant as soon as practical after the Purchase Date. In
the event the cash to be returned to a Participant pursuant to the preceding
sentence is in an amount less than the amount necessary to purchase a whole
share of Stock, and the Committee has determined that fractional shares may
not be issued, the Plan Administrator may establish procedures whereby such
cash is maintained in the Participant's account and applied to the purchase
of Stock in the subsequent Purchase Period or Offering Period.
9.7 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.
9.8 Termination of Participation
No Stock shall be purchased on behalf of a Participant on a Purchase
Date if his or her participation in the Offering or the Plan has terminated
prior to such Purchase Date.
9.9 Procedural Matters
The Plan Administrator may, from time to time, establish (a) an
exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, (b) 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 (c) 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.
9.10 Leaves of Absence
During leaves of absence approved by the Company and meeting the
requirements of the applicable Treasury Regulations, 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 Restrictions on Transfer of Stock
(a) Shares of Stock purchased under the Plan may be registered
in the name of a nominee or held in such other manner as the Plan
Administrator determines to be appropriate. Each Participant will be the
beneficial owner of the Stock purchased under the Plan and will have all
rights of beneficial ownership in such Stock, except that the Participant may
not transfer or otherwise dispose of such Stock for a period of three months
following the Purchase Date for such Stock.
(b) The Company or a brokerage firm or other entity selected by
the Company will retain custody of the Stock purchased under the Plan for a
period of time ending no earlier than the expiration of the three-month
restriction set forth in subparagraph (a) above. A book entry stock account
will be established in each participant's name (a "Stock Account") for such
time period.
(c) Cash dividends paid on Stock in a Participant's Stock Account
due to the three-month restriction in Section 10.1(a) or because the
Participant has not made a request for delivery shall be used by the
custodian of such Stock to purchase additional shares of Stock, which shall
be credited to the Participant's Stock Account. Dividends paid in the form
of shares of Stock with respect to Stock in a Participant's Stock Account
shall be credited to such Stock Account. Stock credited to a Participant's
Stock Account due to cash or stock dividends with respect to Stock which is
subject to the three-month restriction set forth in Section 10.1(a) shall be
restricted for the same period as the Stock with respect to which the
dividend was paid.
(d) Upon termination of the Participant's employment because of
retirement, disability or death, the three-month restriction set forth in
subparagraph (a) above will be deemed to be satisfied as of the date of such
termination.
10.2 ESPP Broker
If the Plan Administrator designates or approves a stock brokerage or
other financial services firm to hold shares purchased under the Plan for the
accounts of Participants (the "ESPP Broker"), 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
with the ESPP Broker. A Participant shall be free
to undertake a disposition of the shares of Stock held for the Participant's
account in his or her account at any time after expiration of the three-month
restriction set forth in Section 10.1(a), but, in the absence of such a
disposition, the shares of Stock must remain in the Participant's account at
the ESPP Broker until the holding period set forth in Code Section 423(a) has
been satisfied. With respect to shares of Stock for which the Code
Section 423(a) 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. Subject to the three-month restriction set forth in Section 10(a),
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(a) holding period.
10.3 Notice of Disposition
Each Participant agrees by entering the Plan, promptly to give the
Company notice of any Stock disposed of within 18 months of the Purchase Date
for such Stock, showing the number of such shares disposed of and the
Purchase Date for such Stock. This notice shall not be required if and so
long as the Company has a designated ESPP Broker.
SECTION 11. VOLUNTARY WITHDRAWAL
11.1 Withdrawal From an Offering
A Participant may withdraw from an Offering by delivering to the Plan
Administrator a notice of withdrawal in the form required by the Plan
Administrator for such purpose. Such withdrawal must be elected at least
nine days prior to the end of the Purchase Period for which such withdrawal
is to be effective. 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. Unless the Plan Administrator establishes a different rule,
withdrawal from an Offering shall not result in a withdrawal from the Plan
or any succeeding Offering therein. A Participant is prohibited from
again participating in the same Offering at any time upon withdrawal from
such Offering.
11.2 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. Such notice must be delivered at least nine
days prior to the end of the Purchase Period for which such withdrawal is to
be effective. 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 Participant.
11.3 Return of Cash Payments and Payroll Deductions
Upon withdrawal from an Offering pursuant to Section 11.1 or from the
Plan pursuant to Section 11.2, the withdrawing Participant's cash payments
and 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 cash payments and accumulated
payroll deductions may not be applied to any other Offering under the Plan.
SECTION 12. TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the Company for any
reason, including retirement, disability or death, or the failure of a
Participant to remain an Eligible Employee, shall immediately terminate the
Participant's participation in the Plan. The cash payments and payroll
deductions credited to the Participant's account since the last Purchase Date
shall, as soon as practical, be returned to the Participant or, in the case
of a Participant's death, to the Participant's legal representative, and all
the Participant's rights under the Plan shall terminate. Interest shall not
be paid on sums returned to a Participant pursuant to this Section 12.
SECTION 13. RESTRICTIONS UPON ASSIGNMENT
An Option granted under the Plan shall not be transferable otherwise
than by will or by the applicable laws of descent and distribution, and shall
be exercisable during the Participant's lifetime only by the Participant.
The Plan Administrator will not recognize, and shall be under no duty to
recognize, any assignment or purported assignment by a Participant, other
than by will or by the applicable laws of descent and distribution, of the
Participant's interest in the Plan, of his or her Option or of any rights
under his or her Option.
SECTION 14. NO RIGHTS OF SHAREHOLDER UNTIL SHARES ISSUED
With respect to shares of Stock subject to an Option, a Participant
shall not be deemed to be a shareholder of the Company, and he or she shall
not have any of the rights or privileges of a shareholder. Subject to
Section 10.1(a), 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, May 19, 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 Employee or Participant) the right to remain in the employ of
the Company or a Subsidiary Corporation or to affect the right of the Company
and the Subsidiary Corporations to terminate the employment of any person
(including any Eligible Employee or Participant) at any time with or without
cause.
SECTION 18. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary Corporation.
Nothing in the Plan shall be construed to limit the right of the Company or
any Subsidiary Corporation to (a) establish any other forms of incentives or
compensation for employees of the Company or any Subsidiary Corporation or
(b) grant or assume options otherwise than under the Plan in connection with
any proper corporate purpose, including, but not by way of limitation, the
grant or assumption of options in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business, stock
or assets of any corporation, firm or association.
SECTION 19. ADJUSTMENTS
19.1 Adjustment of Shares
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor
or received in their place, being exchanged for a different number or class
of securities of the Company or of any other corporation or (b) new,
different or additional securities of the Company or of any other corporation
being received by the holders of shares of Stock, then (subject to any
required action by the Company's shareholders), the Board or the Committee,
in its sole discretion, shall make such equitable adjustments as it shall
deem appropriate in the circumstances (i) in 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, liquidation or dissolution unless the Board or the Committee
shall, in its sole discretion, provide for the assumption or substitution of
such Options in a manner complying with Code Section 424(a).
19.3 Limitations
The grant of Options will in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
SECTION 20. REGISTRATION
The Company shall be under no obligation to any Participant to register
for offering or resale under the Securities Act of 1933, as amended, or
register or qualify under state securities laws, any shares of Stock. The
Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for
the Company deems necessary or desirable for compliance by the Company with
federal and state securities laws.
SECTION 21. EFFECTIVE DATE
The Plan's effective date is the date on which it is approved by the
Company's shareholders.
