<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 4, 1996.
REGISTRATION NO. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DIGITAL MICROWAVE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 77-0016028
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
170 ROSE ORCHARD WAY, SAN JOSE, CA 95134
(Address of Principal Executive Offices) (Zip Code)
DIGITAL MICROWAVE CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
CHARLES D. KISSNER
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
DIGITAL MICROWAVE CORPORATION
170 ROSE ORCHARD WAY
SAN JOSE, CA 95134
(Name and Address of Agent For Service)
408/943-0777
(Telephone Number, Including Area Code,
of Agent For Service)
With a copy to:
Bruce Alan Mann, Esq.
Morrison & Foerster LLP
345 California Street
San Francisco, CA 94104
- --------------------------------------------------------------------------------
<PAGE> 2
Calculation of Registration Fee
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities to Number of shares Offering Price Per Aggregate Offering Amount of
be Registered to be Registered Share Price Registration Fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par 300,000 $16.28* $4,884,000 $1,684.14
value per share
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933 on the basis of the average of the high and low price per
share of Digital Microwave Corporation's Common Stock on the Nasdaq National
Market on August 27, 1996.
<PAGE> 3
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Digital Microwave Corporation (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC").
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1996 filed with the SEC on June 28, 1996.
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1996 filed with the SEC on August 14,
1996.
(c) The Registrant's Registration Statement No. 0-15895 on Form
8-A filed with the SEC on May 22, 1987, in which there is
described the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 (the "1934 Act") after the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTOR AND OFFICERS
The Registrant's Restated Certificate of Incorporation provides that no
director of the Registrant will be personally liable to the Registrant or any of
its stockholders for monetary damages arising from the director's breach of his
II-1
<PAGE> 4
fiduciary duties. However, such exemption from liability does not apply with
respect to any action in which the director would be liable under Section 174 of
Title 8 of the Delaware General Corporation Law ("Delaware Law"), nor does it
apply with respect to any liability in which the director (i) breached his duty
of loyalty to the Registrant; (ii) did not act in good faith or, in failing to
act, did not act in good faith; (iii) acted in a manner involving intentional
misconduct or knowing violation of law or, in failing to act, acted in a manner
involving intentional misconduct or knowing violation of law; or (iv) derived an
improper personal benefit.
Pursuant to the provisions of Section 145 of Delaware Law, the
Registrant as a Delaware corporation has the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding (other than an action by or in the right
of the Registrant) by reason of the fact that he is or was a director, officer,
employee or agent of the Registrant or of any corporation, partnership, joint
venture, trust or other enterprise for which he is or was serving in such
capacity at the request of the Registrant, against any and all expenses,
judgments, fines and amounts paid in settlement which were reasonably incurred
by him in connection with such action, suit or proceeding. The power to
indemnify applies only if such person acted in good faith and in a manner he
reasonably believed to be in the best interests, or not opposed to the best
interests, of the Registrant and, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe his conduct was unlawful.
The power to indemnify also applies to actions brought by or in
the right of the Registrant, but only to the extent of defense and settlement
expenses and not to the satisfaction of a judgment or settlement of the claim
itself. In such actions, however, no indemnification will be made if there is
any adjudication of negligence or misconduct, unless the court, in its
discretion, finds that in the light of all the circumstances indemnification
should apply.
To the extent any such person is successful in the defense of the
actions referred to above, such person is entitled pursuant to Section 145 of
Delaware Law to indemnification as described above. Section 145 also grants the
power to advance litigation expenses upon receipt of an undertaking to reply
such advances in the event no right to indemnification is subsequently shown. A
corporation may also obtain insurance at its expense to protect anyone who might
be indemnified, or has a right to insist on indemnification, under the statute.
The Registrant has entered into indemnification agreements with
its directors and certain officers which provide for indemnification to the
fullest extent permitted by Delaware Law, including Section 145 thereof. The
Registrant may also enter into similar agreements from time to time with future
directors and/or present or future officers of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
II-2
<PAGE> 5
ITEM 8. EXHIBITS
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Morrison & Foerster LLP as to the legality of the
securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Public
Accountants.
23.2 Consent of Morrison & Foerster LLP (contained in the opinion
of counsel filed as Exhibit 5.1 to this Registration
Statement).
24.1 Power of Attorney (set forth on the signature page of this
Registration Statement).
99.1 Digital Microwave Corporation 1996 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 (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, as amended (the "1933 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 clauses (1)(i) and (1)(ii) shall not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the 1934 Act that are incorporated by reference into this
Registration Statement; (2) that for the purpose of determining any liability
under the 1933 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; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold upon the termination of the Registrant's 1996 Employee Stock Purchase
Plan.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into 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.
II-3
<PAGE> 6
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the indemnity provisions summarized in Item 6 above
or otherwise, the Registrant has been informed that in the opinion of the SEC
such indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on September 4,
1996.
DIGITAL MICROWAVE CORPORATION
By: /s/ CHARLES D. KISSNER
--------------------------------
Charles D. Kissner
Chairman of the Board, President and Chief
Executive Officer
II-4
<PAGE> 7
POWER OF ATTORNEY AND ADDITIONAL SIGNATURES
Each person whose signature appears below constitutes and appoints
Charles D. Kissner and Carl A. Thomsen, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement,
including post-effective amendments, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitutes, may lawfully do or
cause to be done by virtue thereof.
Further, pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------------------------------- --------------------------------------------- -------------------------
<S> <C> <C>
/s/ CHARLES D. KISSNER Chairman of the Board, President and Chief
- --------------------------------- Executive Officer
Charles D. Kissner September 4, 1996
/s/ RICHARD C. ALBERDING Director
- ---------------------------------
Richard C. Alberding September 4, 1996
/s/ CLIFFORD H. HIGGERSON Director
- ---------------------------------
Clifford H. Higgerson September 4, 1996
/s/ JAMES D. MEINDL Director
- ---------------------------------
James D. Meindl September 4, 1996
/s/ BILLY B. OLIVER Director
- ---------------------------------
Billy B. Oliver September 4, 1996
</TABLE>
II-5
<PAGE> 8
<TABLE>
<CAPTION>
Signature Title Date
- --------------------------------- --------------------------------------------- -------------------------
<S> <C> <C>
/s/ CARL A. THOMSEN Vice President, Chief Financial Officer and September 4, 1996
- --------------------------------- Secretary (Principal Financial and
Carl A. Thomsen Accounting Officer)
</TABLE>
<PAGE> 9
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
5.1 Opinion of Morrison & Foerster LLP as to the legality of the
securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Public
Accountants.
23.2 Consent of Morrison & Foerster LLP (contained in the opinion
of counsel filed as Exhibit 5.1 to this Registration
Statement).
24.1 Power of Attorney (set forth on the signature page of this
Registration Statement).
99.1 Digital Microwave Corporation 1996 Employee Stock Purchase
Plan.
<PAGE> 1
EXHIBIT 5.1
OPINION OF MORRISON & FOERSTER LLP
September 3, 1996
Digital Microwave Corporation
170 Rose Orchard Way
San Jose, California 95134
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-8 to be filed by Digital Microwave Corporation, a Delaware corporation (the
"Company"), with the Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as amended, of 300,000
shares of the Company's Common Stock, $0.01 par value (the "Common Stock").
As counsel to the Company, we have examined the proceedings taken by
the Company in connection with the issuance of 300,000 shares of the Common
Stock to be reserved for issuance under the Company's 1996 Employee Stock
Purchase Plan.
It is our opinion that the 300,000 shares of Common Stock which may be
issued and sold by the Company, when issued and sold in the manner referred to
in the Registration Statement, will be legally and validly issued, fully paid
and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to us in the
Registration Statement and any further amendments thereto.
Very truly yours,
/s/ MORRISON & FOERSTER LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated April 22, 1996
included or incorporated by reference in Digital Microwave Corporation's Form
10-K for the year ended March 31, 1996.
/s/ ARTHUR ANDERSEN LLP
San Jose, California
September 3, 1996
<PAGE> 1
EXHIBIT 99.1
DIGITAL MICROWAVE CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1996 Employee
Stock Purchase Plan of Digital Microwave Corporation.
1. Purpose. The purpose of the Plan is to provide employees of
the Company and its Designated Parents or Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll deductions. It
is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Accrual Period" means a period, following the first
Accrual Period, of approximately six months, commencing on March 1 and September
1 of each year and terminating on the next following February 28 (or 29) or
August 31, respectively; provided, however, that the first Accrual Period shall
commence and end on the dates specified by the Plan Administrator.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Common Stock" means the common stock of the Company.
(e) "Company" means Digital Microwave Corporation, a Delaware
corporation.
(f) "Compensation" means an Employee's base salary from the
Company or one or more Designated Parents or Subsidiaries, including such
amounts of base salary as are deferred by the Employee (i) under a qualified
cash or deferred arrangement described in Section 401(k) of the Code, or (ii) to
a plan qualified under Section 125 of the Code. Compensation does not include
overtime, bonuses, annual awards, other incentive payments, reimbursements or
other expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, contributions (other than contributions described in the
first sentence) made on the Employee's behalf by the Company or one or more
Designated Parents or Subsidiaries under any employee benefit or welfare plan
now or hereafter established, and any other payments not specifically referenced
in the first sentence.
(g) "Corporate Transaction" means any of the following
stockholder-approved transactions to which the Company is a party:
1
<PAGE> 2
(1) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the
Company is incorporated;
(2) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the
capital stock of the Company's subsidiary corporations) in
connection with complete liquidation or dissolution of the
Company; or
(3) any reverse merger in which the Company is the
surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to a person
or persons different from those who held such securities
immediately prior to such merger.
(h) "Designated Parents or Subsidiaries" means the Parents or
Subsidiaries which have been designated by the Plan Administrator from time to
time as eligible to participate in the Plan.
(i) "Effective Date" means August 8, 1996. However, should any
Designated Parent or Subsidiary become a participating company in the Plan after
such date, then such entity shall designate a separate Effective Date with
respect to its employee-participants.
(j) "Employee" means any individual who is engaged in the
rendition of personal services to the Company or a Designated Parent or
Subsidiary for Compensation. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the individual's employer.
Where the period of leave exceeds ninety (90) days and the individual's right to
reemployment is not guaranteed either by statute or by contact, the employment
relationship will be deemed to have terminated on the ninety-first (91st) day of
such leave.
(k) "Enrollment Date" means the first day of each Purchase
Period.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Exercise Date" means the last day of each Accrual Period.
(n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(1) Where there exists a public market for the Common
Stock, the Fair Market Value shall be (A) the closing sales
price for a share of Common Stock for the last market trading
day prior to the time of the determination (or, if no sales
were reported on that date, on the last trading date on which
sales were reported) on the stock exchange determined by the
Plan Administrator to be the primary market for the Common
Stock or the Nasdaq National Market, whichever is
2
<PAGE> 3
applicable or (B) if the Common Stock is not traded on any
such exchange or national market system, the average of the
closing bid and asked prices of a share of Common Stock on the
Nasdaq Small Cap Market, in each case, as reported in The Wall
Street Journal or such other source as the Plan Administrator
deems reliable; or
(2) In the absence of an established market of the
type described in (1), above, for the Common Stock, the Fair
Market Value thereof shall be determined by the Plan
Administrator in good faith.
(o) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(p) "Participant" means an Employee of the Company or
Designated Parent or Subsidiary who is actively participating in the Plan.
(q) "Plan" means this Employee Stock Purchase Plan.
(r) "Plan Administrator" means either the Board or a committee
of the Board that is responsible for the administration of the Plan.
(s) "Purchase Period" means a purchase period established
pursuant to Section 4 hereof.
(t) "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(u) "Reserves" means the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
(v) "Rule 16b-3" means Rule 16b-3 promulgated under the
Exchange Act or any successor thereto.
(w) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Eligibility.
(a) General. Any individual who is an Employee on a given
Enrollment Date shall be eligible to participate in the Plan for the Purchase
Period commencing with such Enrollment Date.
(b) Limitations on Grant and Accrual. Any provisions of the
Plan to the contrary notwithstanding, no Employee shall be granted an option
under the Plan (i) if, immediately after the grant, such Employee (taking
3
<PAGE> 4
into account stock owned by any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any Parent or Subsidiary, or (ii) which permits his/her rights to
purchase stock under all employee stock purchase plans of the Company and its
Parents or Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the Fair Market Value of the
shares at the time such option is granted) for each calendar year in which such
option is outstanding at any time. The determination of the accrual of the right
to purchase stock shall be made in accordance with Section 423(b)(8) of the Code
and the regulations thereunder.
(c) Other Limits on Eligibility. Notwithstanding Subsection
(a), above, the following Employees shall not be eligible to participate in the
Plan for any relevant Purchase Period: (i) Employees whose customary employment
is twenty (20) hours or less per week; (ii) Employees whose customary employment
is for not more than five (5) months in any calendar year; (iii) Employees who
have been employed for fewer than three (3) months; (iv) Employees and officers
who are "highly compensated employees" within the meaning of Sections
414(q)(1)(B) or (D) of the Code; and (v) Employees who are subject to rules or
laws of a foreign jurisdiction that prohibit or make impractical the
participation of such Employees in the Plan.
4. Purchase Periods.
(a) The Plan shall be implemented through overlapping or
consecutive Purchase Periods until such time as (i) the maximum number of shares
of Common Stock available for issuance under the Plan shall have been purchased
or (ii) the Plan shall have been sooner terminated in accordance with Section 19
hereof. The maximum duration of a Purchase Period shall be twenty-seven (27)
months. Initially, the Plan shall be implemented through overlapping Purchase
Periods of twenty-four (24) months' duration commencing each March 1 and
September 1 following the initial Purchase Period. The initial Purchase Period
shall commence and end on the dates specified by the Plan Administrator. The
Plan Administrator shall have the authority to change the length of any Purchase
Period and the length of Accrual Periods within any such Purchase Period
subsequent to the initial Purchase Period by announcement at least thirty (30)
days prior to the commencement of the Purchase Period and to determine whether
subsequent Purchase Periods shall be consecutive or overlapping.
(b) A Participant shall be granted a separate option for each
Purchase Period in which he/she participates. The option shall be granted on the
Enrollment Date and shall be automatically exercised in successive installments
on the Exercise Dates ending within the Purchase Period.
(c) An Employee may participate in only one Purchase Period at
a time. Accordingly, except as provided in Section 4(d), an Employee who wishes
to join a new Purchase Period must withdraw from the current Purchase Period in
which he/she is participating and must also enroll in the new Purchase Period
prior to the Enrollment Date for that Purchase Period.
4
<PAGE> 5
(d) If on the first day of any Accrual Period in a Purchase
Period in which a Participant is participating, the Fair Market Value of the
Common Stock is less than the Fair Market Value of the Common Stock on the
Enrollment Date of the Purchase Period (after taking into account any adjustment
during the Purchase Period pursuant to Section 18(a)), the Purchase Period shall
be terminated automatically and the Participant shall be enrolled automatically
in the new Purchase Period which has its first Accrual Period commencing on that
date, provided the Participant is eligible to participate in the Plan on that
date and has not elected to terminate participation in the Plan.
(e) Except as specifically provided herein, the acquisition of
Common Stock through participation in the Plan for any Purchase Period shall
neither limit nor require the acquisition of Common Stock by a Participant in
any subsequent Purchase Period.
5. Participation.
(a) An eligible Employee may become a Participant in the Plan
by completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the Company's payroll office
at least fifteen (15) business days prior to the Enrollment Date for the
Purchase Period in which such participation will commence, unless a later time
for filing the subscription agreement is set by the Plan Administrator for all
eligible Employees with respect to a given Purchase Period.
(b) Payroll deductions for a Participant shall commence with
the first payroll period following the Enrollment Date and shall end on the last
complete payroll period during the Purchase Period, unless sooner terminated by
the Participant as provided in Section 10.
6. Payroll Deductions.
(a) At the time a Participant files his/her subscription
agreement, he/she shall elect to have payroll deductions made during the
Purchase Period in an amount not exceeding ten percent (10%) of the Compensation
which he/she receives during the Purchase Period.
(b) All payroll deductions made for a Participant shall be
credited to his/her account under the Plan and will be withheld in whole
percentages only. A Participant may not make any additional payments into such
account.
(c) A Participant may discontinue his/her participation in the
Plan as provided in Section 10, or may decrease the rate of his/her payroll
deductions during the Purchase Period by completing and filing with the Company
a new subscription agreement authorizing a decrease in the payroll deduction
rate. The decrease in rate shall be effective with the first full payroll period
commencing ten (10) business days after the Company's receipt of the new
subscription agreement unless the Company elects to process a given change in
participation more quickly. A Participant may increase the rate of his/her
payroll deductions for a future Purchase Period by filing with the Company a
5
<PAGE> 6
new subscription agreement authorizing an increase in the payroll deduction rate
within ten (10) business days (unless the Company elects to process a given
change in participation more quickly) before the commencement of the upcoming
Purchase Period. A Participant's subscription agreement shall remain in effect
for successive Purchase Periods unless terminated as provided in Section 10. The
Plan Administrator shall be authorized to limit the number of payroll deduction
rate changes during any Purchase Period.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
Participant's payroll deductions may be decreased to 0% at such time during any
Accrual Period which is scheduled to end during the current calendar year (the
"Current Accrual Period") that the aggregate of all payroll deductions which
were previously used to purchase stock under the Plan in a prior Accrual Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Accrual Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such Participant's subscription
agreement at the beginning of the first Accrual Period which is scheduled to end
in the following calendar year, unless terminated by the Participant as provided
in Section 10.
7. Grant of Option. On the Enrollment Date, each Participant
in such Purchase Period shall be granted an option to purchase on each Exercise
Date of such Purchase Period (at the applicable Purchase Price) up to a number
of shares of the Common Stock determined by dividing such Participant's payroll
deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the applicable Purchase Price;
provided (i) that such purchase shall be subject to the limitations set forth in
Sections 3(b) and 12 hereof, and (ii) the maximum number of shares of Common
Stock a Participant shall be permitted to purchase in any Accrual Period shall
be five thousand (5,000) shares, subject to adjustment as provided in Section 18
hereof. Exercise of the option shall occur as provided in Section 8, unless the
Participant has withdrawn pursuant to Section 10, and the option, to the extent
not exercised, shall expire on the last day of the Purchase Period.
8. Exercise of Option. Unless a Participant withdraws from the
Plan as provided in Section 10, below, his/her option for the purchase of shares
will be exercised automatically on each Exercise Date, and the maximum number of
full shares subject to the option shall be purchased for such Participant at the
applicable Purchase Price with the accumulated payroll deductions in his/her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a Participant's account which are not sufficient to purchase a
full share shall be carried over to the next Purchase Period or returned to the
Participant, if the Participant withdraws from the Plan. Any amount remaining in
a Participant's account following the purchase of shares on the Exercise Date
which exceeds the cost of one full share of Common Stock on the Exercise Date
shall be returned to the Participant and shall not be carried over to the next
Purchase Period. During a Participant's lifetime, a Participant's option to
purchase shares hereunder is exercisable only by him/her.
9. Delivery. Upon receipt of a request from a Participant
after each Exercise Date on which a purchase of shares occurs, the Company shall
arrange the delivery to such Participant, as appropriate, of a certificate
representing the shares purchased upon exercise of his/her option.
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<PAGE> 7
10. Withdrawal; Termination of Employment.
(a) A Participant may withdraw all but not less than all the
payroll deductions credited to his/her account and not yet used to exercise
his/her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the Participant's payroll
deductions credited to his/her account will be paid to such Participant promptly
after receipt of notice of withdrawal, such Participant's option for the
Purchase Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Purchase Period.
If a Participant withdraws from a Purchase Period, payroll deductions will not
resume at the beginning of the succeeding Purchase Period unless the Participant
delivers to the Company a new subscription agreement.
(b) Upon a Participant's ceasing to be an Employee for any
reason or upon termination of a Participant's employment relationship (as
described in Section 2(j)), the payroll deductions credited to such
Participant's account during the Purchase Period but not yet used to exercise
the option will be returned to such Participant or, in the case of his/her
death, to the person or persons entitled thereto under Section 14, and such
Participant's option will be automatically terminated.
11. Interest. No interest shall accrue on the payroll
deductions credited to a Participant's account under the Plan.
12. Stock.
(a) The maximum number of shares of Common Stock which shall
be made available for sale under the Plan shall be three hundred thousand
(300,000) shares, subject to adjustment upon changes in capitalization of the
Company as provided in Section 18. If on a given Exercise Date the number of
shares with respect to which options are to be exercised exceeds the number of
shares then available under the Plan, the Plan Administrator shall make a pro
rata allocation of the shares remaining available for purchase in as uniform a
manner as shall be practicable and as it shall determine to be equitable.
(b) A Participant will have no interest or voting right in
shares covered by his/her option until such shares are actually purchased on the
Participant's behalf in accordance with the applicable provisions of the Plan.
No adjustment shall be made for dividends, distributions or other rights for
which the record date is prior to the date of such purchase.
(c) Shares to be delivered to a Participant under the Plan
will be registered in the name of the Participant or in the name of the
Participant and his/her spouse.
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<PAGE> 8
13. Administration.
(a) Administrative Body. The Plan shall be administered by the
Board or a committee of members of the Board appointed by the Board. The Board
or its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee shall, to the full
extent permitted by law, be final and binding upon all persons. Members of the
Board who are eligible Employees are permitted to participate in the Plan except
to the extent limited by Subsection (b) of this Section 13.
(b) Rule 16b-3 Limitations. Notwithstanding the provisions of
Subsection (a), above, in the event that Rule 16b-3 provides specific
requirements for the administrators of plans of this type, the Plan shall be
administered only by such a body and in such a manner as shall comply with the
applicable requirements of Rule 16b-3.
14. Designation of Beneficiary.
(a) Each Participant will file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event of such Participant's death.
If a Participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
Participant (and his/her spouse, if any) at any time by written notice. In the
event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Participant's death,
the Company shall deliver such shares and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Plan Administrator),
the Plan Administrator, in its discretion, may deliver such shares and/or cash
to the spouse or to any one or more dependents or relatives of the Participant,
or if no spouse, dependent or relative is known to the Plan Administrator, then
to such other person as the Plan Administrator may designate.
15. Transferability. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Plan Administrator may treat such act as an election to
withdraw funds from a Purchase Period in accordance with Section 10.
16. Use of Funds. All payroll deductions received or held by
the Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.
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<PAGE> 9
17. Reports. Individual accounts will be maintained for each
Participant in the Plan. Statements of account will be given to Participants at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
18. Adjustments Upon Changes in Capitalization; Corporate
Transactions.
(a) Adjustments Upon Changes in Capitalization. Subject to any
required action by the stockholders of the Company, the Reserves, as well as the
Purchase Price, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other similar event resulting in an increase or decrease in
the number of issued shares of Common Stock. Such adjustment shall be made by
the Plan Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option. The Plan Administrator may, if it so determines in the exercise of
its sole discretion, make provision for adjusting the Reserves, as well as the
price per share of Common Stock covered by each outstanding option, in the event
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock.
(b) Corporate Transactions. In the event of a proposed
Corporate Transaction, each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Plan Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Purchase Period then in progress by
setting a new Exercise Date (the "New Exercise Date"). If the Plan Administrator
shortens the Purchase Period then in progress in lieu of assumption or
substitution in the event of a Corporate Transaction, the Plan Administrator
shall notify each Participant in writing, at least ten (10) days prior to the
New Exercise Date, that the Exercise Date for his/her option has been changed to
the New Exercise Date and that his/her option will be exercised automatically on
the New Exercise Date, unless prior to such date he/she has withdrawn from the
Purchase Period as provided in Section 10. For purposes of this Subsection, an
option granted under the Plan shall be deemed to be assumed if, following the
Corporate Transaction, the option confers the right to purchase, for each share
of Common Stock subject to the option immediately prior to the Corporate
Transaction, the consideration (whether stock, cash or other securities or
property) received in the Corporate Transaction by holders of Common Stock for
each share of Common stock held on the effective date of the Corporate
Transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if such consideration received
in the Corporate Transaction was not solely common stock of the successor
corporation or its Parent, the Plan Administrator may, with the consent of the
successor corporation and the Participant, provide for the consideration to be
received upon exercise of the option to be solely common stock of the successor
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<PAGE> 10
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Corporate Transaction.
19. Amendment or Termination.
(a) The Plan Administrator may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 18, no such
termination can affect options previously granted, provided that a Purchase
Period may be terminated by the Plan Administrator on any Exercise Date if the
Plan Administrator determines that the termination of the Plan is in the best
interests of the Company and its stockholders. Except as provided in Section 18,
no amendment may make any change in any option theretofore granted which
adversely affects the rights of any Participant. To the extent necessary to
comply with Rule 16b-3 or Section 423 of the Code (or any successor rule or
provision or any other applicable law or regulation), the Company shall obtain
stockholder approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether
any Participant rights may be considered to have been "adversely affected," the
Plan Administrator shall be entitled to change the Purchase Periods, limit the
frequency and/or number of changes in the amount withheld during Purchase
Periods, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, establish additional terms, conditions, rules
or procedures to accommodate the rules or laws of applicable foreign
jurisdictions, permit 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, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
Participant properly correspond with amounts withheld from the Participant's
Compensation, and establish such other limitations or procedures as the Plan
Administrator determines in its sole discretion advisable and which are
consistent with the Plan.
20. Notices. All notices or other communications by a
Participant to the Company under or in connection with the Plan shall be deemed
to have been duly given when received in the form specified by the Plan
Administrator at the location, or by the person, designated by the Plan
Administrator for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an option, the Company may require the Participant
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned applicable provisions of
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<PAGE> 11
law. In addition, no options shall be exercised or shares issued hereunder
before the Plan shall have been approved by stockholders of the Company as
provided in Section 24.
22. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19.
23. Additional Restrictions of Rule 16b-3. The terms and
conditions of options granted hereunder to, and the purchase of shares by,
persons subject to Section 16 of the Exchange Act shall comply with the
applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, such
options shall contain, and the shares issued upon exercise thereof shall be
subject to, such additional conditions and restrictions as may be required by
Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
24. Stockholder Approval. Continuance of the Plan shall be
subject to approval by the stockholders of the Company within twelve (12) months
before or after the date the Plan is adopted. If such stockholder approval is
obtained at a duly held stockholders' meeting, the Plan must be approved by a
majority of the votes cast at such stockholders' meeting at which a quorum
representing a majority of all outstanding voting stock of the Company is,
either in person or by proxy, present and voting on the Plan. If such
stockholder approval is obtained by written consent, it must be obtained by the
written consent of the holders of a majority of all outstanding voting stock of
the Company. However, approval at a meeting or by written consent may be
obtained by a lesser degree of stockholder approval if the Plan Administrator
determines, in its discretion after consultation with the Company's legal
counsel, that such a lesser degree of stockholder approval will comply with all
applicable laws and will not adversely affect the qualification of the Plan
under Section 423 of the Code.
25. No Employment Rights. The Plan does not, directly or
indirectly, create any right for the benefit of any employee or class of
employees to purchase any shares under the Plan, or create in any employee or
class of employees any right with respect to continuation of employment by the
Company or a Designated Parent or Subsidiary, and it shall not be deemed to
interfere in any way with such employer's right to terminate, or otherwise
modify, an employee's employment at any time.
26. Effect of Plan. The provisions of the Plan shall, in
accordance with its terms, be binding upon, and inure to the benefit of, all
successors of each Participant, including, without limitation, such
Participant's estate and the executors, administrators or trustees thereof,
heirs and legatees, and any receiver, trustee in bankruptcy or representative of
creditors of such Participant.
27. Applicable Law. The laws of the State of California
(excluding that body of law pertaining to conflicts of law) will govern all
matters relating to this Plan except to the extent it is superseded by the laws
of the United States.
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EXHIBIT A
DIGITAL MICROWAVE CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
___ Original Application Enrollment Date:_____________
___ Change in Payroll Deduction Rate
___ Change of Beneficiary(ies)
1. I,________________________, hereby elect to participate in
the Digital Microwave Corporation 1996 Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribe to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement and the
Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in
the amount of ______% of my Compensation on each payday (not to exceed 10%)
during the Purchase Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)
3. I understand that the payroll deductions shall be
accumulated for the purchase of shares of Common Stock at the applicable
Purchase Price determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from a Purchase Period, any accumulated
payroll deductions will be used to automatically exercise my option.
4. I have received a copy of the complete "Digital Microwave
Corporation 1996 Employee Stock Purchase Plan." I understand that my
participation in the Employee Stock Purchase Plan is in all respects subject to
the terms of the Plan. I understand that the grant of the option by the Company
under this Subscription Agreement is subject to obtaining stockholder approval
of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase
Plan should be issued in the name(s) of:
_____________________
_____________________
6. I understand that if I dispose of any shares received by me
pursuant to the Employee Stock Purchase Plan within two (2) years after the
Enrollment Date (the first day of the Purchase Period during which I purchased
such shares) or within one (1) year after the Exercise Date (the date I
purchased such shares), I will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in an amount
equal to the excess of the fair market value of the shares at the time such
shares were delivered to me over the price which I paid for the shares. I
A-1
<PAGE> 13
hereby agree to notify the Company in writing within 30 days after the date of
any such disposition and I will make adequate provision for foreign, federal,
state or other tax withholding obligations, if any which arise upon the
disposition of the Common Stock . The Company may, but will not be obligated to,
withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by me. If I dispose of such shares at any time after
the expiration of the 2-year and 1-year holding periods described above, I
understand that I will be treated for federal income tax purposes as having
received income only at the time of such disposition, and that such income will
be taxed as ordinary income only to the extent of an amount equal to the lesser
of (1) the excess of the fair market value of the shares at the time of such
disposition over the purchase price which I paid for the shares, or (2) 15% of
the fair market value of the shares on the first day of the Purchase Period. The
remainder of the gain, if any, recognized on such disposition will be taxed as
capital gain. I also understand that the foregoing income tax consequences are
based on current federal income tax law and that the Company is not responsible
for advising me of any changes in the applicable tax rules.
7. I hereby agree to be bound by the terms of the Employee
Stock Purchase Plan. The effectiveness of this Subscription Agreement is
dependent upon my eligibility to participate in the Employee Stock Purchase
Plan.
8. In the event of my death, I hereby designate the following
as my beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan.
NAME: (Please print) ____________________________________________
(First) (Middle) (Last)
Relationship: ____________________________________________
Address: ____________________________________________
Employee's Social
Security Number: ____________________________________________
Employee's Address: ____________________________________________
____________________________________________
____________________________________________
A-2
<PAGE> 14
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE PURCHASE PERIODS UNLESS TERMINATED BY ME
Employee's Signature: ____________________________________________________
Dated: ____________________________________________________
Signature of spouse
if beneficiary is other
than spouse: ____________________________________________________
Dated: ____________________________________________________
A-3
<PAGE> 15
EXHIBIT B
DIGITAL MICROWAVE CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
NOTICE OF WITHDRAWAL
The undersigned participant in the Purchase Period of the
Digital Microwave Corporation 1996 Employee Stock Purchase Plan which began on
_________________, 19___, hereby notifies the Company that he or she hereby
withdraws from the Purchase Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his/her account with respect to such Purchase Period. The
undersigned understands and agrees that his/her option for such Purchase Period
will be automatically terminated. The undersigned understands further that no
further payroll deductions will be made for the purchase of shares in the
current Purchase Period and the undersigned shall be eligible to participate in
succeeding Purchase Periods only by delivering to the Company a new Subscription
Agreement.
Name and Address
of Participant: _______________________________________________________
_______________________________________________________
Signature: _______________________________________________________
Date: _______________________________________________________
B-1
