<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 1999.
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
1999 NON-OFFICER EMPLOYEE RESTRICTED STOCK PURCHASE PLAN
(Full Title of the Plan)
CHARLES D. KISSNER
CHAIRMAN OF THE BOARD 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
425 Market Street
San Francisco, CA 94105
- --------------------------------------------------------------------------------
<PAGE>
Calculation of Registration Fee
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Proposed Proposed
Title of Number of Maximum Maximum Amount of
Securities to shares to be Offering Price Aggregate Registration
be Registered Registered Per Share Offering Price Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 160,643 $7.59* $1,219,280.37 $338.96
- --------------------------------------------------------------------------------
</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 April 8, 1999.
<PAGE>
Part I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I of
Form S-8 (plan information and registrant information and employee plan annual
information) will be sent or given to employees as specified by Rule 428(b)(1)
of the Securities Act of 1933, as amended (the "Securities Act"). Such document
need not be filed with the Securities and Exchange Commission either as part of
this Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424 of the Securities Act. These documents and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of
Form S-8 (Part II hereof), taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Securities Act.
I-1
<PAGE>
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 latest prospectus filed with the SEC on September 9,
1998, pursuant to Rule 424(b) under the Securities Act of 1933, as
amended (the "Securities Act").
(b) The Registrant's latest Annual Report on Form 10-K and on Form 10-K/A
for the fiscal year ended March 31, 1998 filed with the SEC on June
29, 1998 and July 20, 1998, respectively, pursuant to Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1998 filed with the SEC on August 14, 1998, pursuant to
Section 13(a) of the Exchange Act.
(d) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1998 filed with the SEC on November 16, 1998,
pursuant to Section 13(a) of the Exchange Act.
(e) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1998 filed with the SEC on February 16, 1999,
pursuant to Section 13(a) of the Exchange Act.
(f) The Registrant's Current Reports on Form 8-K dated April 3, 1998, July
29, 1998 and October 20, 1998, each filed pursuant to Section 13(a) of
the Exchange Act.
(g) 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 Exchange 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
II-1
<PAGE>
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 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 or she 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 or she 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 or her 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 or
she 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 or she had no reasonable cause to believe his or her 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.
II-2
<PAGE>
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.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ------------ -----------
<S> <C>
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 1999 Non-Officer Employee
Restricted Stock Purchase Plan.
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act, (ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement, provided, however, that 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
II-3
<PAGE>
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference into 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; 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 1999 Non-Officer Employee
Restricted Stock Purchase Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange 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.
C. Insofar as indemnification for liabilities arising under the
Securities 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 Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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 April 14, 1999.
DIGITAL MICROWAVE CORPORATION
By: /s/ CHARLES D. KISSNER
------------------------------------------
Charles D. Kissner
Chairman of the Board and
Chief Executive Officer
II-4
<PAGE>
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.
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
- ---------------------------
Charles D. Kissner Chairman of the Board and April 14, 1999
Chief Executive Officer
/s/ RICHARD C. ALBERDING
- ---------------------------
Richard C. Alberding Director April 14, 1999
/s/ PAUL S. BACHOW
- ---------------------------
Paul S. Bachow Director April 14, 1999
/s/ JOHN W. COMBS
- ---------------------------
John W. Combs Director April 14, 1999
/s/ CLIFFORD H. HIGGERSON
- ---------------------------
Clifford H. Higgerson Director April 14, 1999
/s/ JAMES D. MEINDL
- ---------------------------
James D. Meindl Director April 14, 1999
/s/ V. FRANK MENDICINO
- ---------------------------
V. Frank Mendicino Director April 14, 1999
II-5
<PAGE>
<CAPTION>
Signature Title Date
- --------------------------- -------------------------- --------------
<S> <C> <C>
/s/ BILLY B. OLIVER
- ---------------------------
Billy B. Oliver Director April 14, 1999
/s/ HOWARD ORINGER
- ---------------------------
Howard Oringer Director April 14, 1999
/s/ CARL A. THOMSEN
- ---------------------------
Carl A. Thomsen Vice President, Chief April 14, 1999
Financial Officer and
Secretary (Principal
Financial and Accounting
Officer)
</TABLE>
II-6
<PAGE>
EXHIBIT 5.1
April 13, 1999
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 160,643 shares of
the Company's common stock, $0.01 par value per share (the "Common Stock").
As counsel to the Company, we have examined the proceedings taken by the
Company in connection with the reservation of the 160,643 additional shares of
the Common Stock to be reserved for issuance under the Company's 1999
Non-Officer Employee Restricted Stock Purchase Plan.
It is our opinion that the 160,643 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>
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 21, 1998 included in or incorporated by reference in Digital Microwave
Corporation's Form 10-K for the year ended March 31, 1998.
/s/ ARTHUR ANDERSEN LLP
San Jose, California
April 12, 1999
<PAGE>
EXHIBIT 99.1
DIGITAL MICROWAVE CORPORATION
1999 NON-OFFICER EMPLOYEE RESTRICTED STOCK PURCHASE PLAN
The following constitutes the provisions of the 1999 Non-Officer
Employee Restricted Stock Purchase Plan of Digital Microwave Corporation.
1. PURPOSE. The purpose of the Plan is to provide Employees (excluding
Officers) of the Company with the opportunity to use their ESPP Account Balance
to purchase Restricted Shares.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "APPLICABLE LAWS" means the legal requirements relating to the
administration of the Plan, if any, under applicable provisions of federal
securities laws, state corporate and securities laws, the Code, the rules of any
applicable stock exchange or national market system, and the rules of any
foreign jurisdiction applicable to participation in the Plan by residents
therein.
(b) "BOARD" means the board of directors of the Company.
(c) "CHANGE IN CONTROL" means a change in ownership or control of the
Company effected through the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMON STOCK" means the common stock of the Company.
(f) "COMPANY" means Digital Microwave Corporation, a Delaware
corporation.
(g) "CONSULTANT" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.
(h) "CONTINUOUS SERVICE" means the provision of services to the
Company or a Related Entity in any capacity by an Employee that is not
interrupted or terminated. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entity, or any successor, in any capacity of
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<PAGE>
Employee, Director or Consultant or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director or Consultant.
(i) "CORPORATE TRANSACTION" means any of the following transactions:
(i) 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;
(ii) 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;
(iii) 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; or
(iv) an acquisition by any person or related group of persons
(other than the Company or by a Company-sponsored employee benefit plan) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities (whether or not in a transaction
also constituting a Change in Control), but excluding any such transaction that
the Plan Administrator determines shall not be a Corporate Transaction.
(j) "DIRECTOR" means a member of the Board or the board of directors
of any Related Entity.
(k) "EMPLOYEE" means any individual (excluding Officers) who performs
services while in the employ of the Company or a Related Entity, subject to the
control and direction of the employer entity not only as to the work to be
performed but also as to the manner and method of performance.
(l) "ESPP ACCOUNT BALANCE" means the amount of contributions withheld
from a Participant's compensation under the Company's 1996 Employee Stock
Purchase Plan for the period beginning on September 1, 1998 and ending on
February 28, 1999, that was not refunded to the Participant or used to purchase
Common Stock under the Company's 1996 Employee Stock Purchase Plan.
(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(n) "OFFICER" means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
2
<PAGE>
(o) "PARENT" means a corporation that owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in the Company.
(p) "PARTICIPANT" means an Employee of the Company or a Related
Entity who selects "Alternative 2 - Restricted Stock Plan" on the DMC ESPP
Participation Statement and returns such Statement to the Company's San Jose
Personnel Office by noon Pacific Standard Time on March 8, 1999.
(q) "PARTICIPANT ELECTION DATE" means the date on which an Employee
of the Company or a Related Entity becomes a Participant.
(r) "PLAN" means this 1999 Non-Officer Employee Restricted Stock
Purchase Plan.
(s) "PLAN ADMINISTRATOR" means either the Board or a committee of the
Board that is responsible for the administration of the Plan as is designated
from time to time by resolution of the Board.
(t) "PURCHASE PRICE" means an amount equal to a Participant's
purchase price for a share of Common Stock under the Company's 1996 Employee
Stock Purchase Plan for the period beginning on September 1, 1998, and ending on
February 28, 1999.
(u) "RELATED ENTITY" means any Parent, Subsidiary and any business,
corporation, partnership, limited liability company or other entity in which the
Company, a Parent or a Subsidiary holds a substantial ownership interest,
directly or indirectly
(v) "RESTRICTED SHARES" means the Shares sold to a Participant under
this Plan that have not vested in accordance with Section 5.
(w) "SHARES" means shares of Common Stock sold under this Plan.
(x) "SUBSIDIARY" means each corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, provided each such
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in any other corporation in
such chain.
(y) "TOTAL NUMBER OF RESTRICTED SHARES AWARDED" means the whole
number of Restricted Shares determined by dividing a Participant's ESPP Account
Balance by the Participant's Purchase Price disregarding any resulting
fractional Restricted Shares.
3. STOCK SUBJECT TO THE PLAN. The number of Shares reserved for sale
under the Plan shall be 160,643 Shares.
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<PAGE>
4. PURCHASE OF SHARES. The Company hereby sells to each Participant the
Total Number of Restricted Shares Awarded calculated for such Participant.
Payment for the Total Number of Restricted Shares Awarded shall be made
automatically to the Company from the Participant's ESPP Account Balance on the
Participant Election Date without further action by the Participant.
5. VESTING OF SHARES.
(a) Subject to the Participant's Continuous Service and other
limitations set forth in this Plan, the Participant's Restricted Shares will
"vest" in accordance with the following schedule: one-twelfth (1/12) of the
Total Number of Restricted Shares Awarded shall vest on April 21, 1999, and
one-twelfth (1/12) of the Total Number of Restricted Shares Awarded shall vest
on the third Wednesday of each month thereafter until the Restricted Shares are
fully vested.
(b) For purposes of this Plan, the term "vest" shall mean, with
respect to any Restricted Shares, that such Restricted Shares are no longer
subject to cancellation and shall be released to the Participant without
restrictions, subject to satisfaction of any withholding obligations provided in
Section 7. If the Participant would become vested in a fraction of a Restricted
Share, such fraction of a Restricted Share shall not vest until the Participant
becomes vested in the entire Restricted Share.
(c) The Participant shall have full stockholder rights with respect
to the Shares sold to the Participant pursuant to Section 4, whether or not they
are Restricted Shares. Accordingly, the Participant shall have the right to
vote such Restricted Shares and to receive any regular cash dividends paid on
such Restricted Shares, less any applicable withholding obligations. Any new,
additional or different shares of stock or other property (including money paid
other than as a regular cash dividend) which the Participant may have the right
to receive with respect to his or her Restricted Shares by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class shall
be subject to the same vesting requirements applicable to the Participant's
Restricted Shares.
(d) If a Participant's Continuous Service terminates for any reason,
with or without cause (including death or disability), any Restricted Shares
that have not vested as of the date the Participant's Continuous Service
terminates (the "Termination Date") shall be cancelled by the Company and the
Participant shall have no further stockholder rights or other interests or
rights with respect to those Restricted Shares. Upon such cancellation, the
Company shall become the legal and beneficial owner of the Restricted Shares and
all rights and interest therein and related thereto, and the Company shall have
the right to transfer to its own name such Restricted Shares, without any
further action by the Participant or his or her successor in interest. Within
thirty (30) days of the Termination Date, the Company shall repay to the
Participant or the Participant's estate an amount of cash equal to the number of
canceled Restricted Shares multiplied by the Purchase Price (disregarding any
resulting fractional cents), such amount to be paid without any interest.
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<PAGE>
(e) Notwithstanding the terms of Section 5(a), in the event of the
Participant's change in status from Employee to Director or Consultant, the
vesting of the Restricted Shares shall continue only to the extent determined by
the Plan Administrator as of such change in status.
6. TRANSFER RESTRICTIONS. The Restricted Shares sold to the Participant
hereunder may not be sold, transferred by gift, pledged, hypothecated, or
otherwise transferred or disposed of by the Participant prior to the date when
the Restricted Shares have fully vested pursuant to Section 5. Any attempt to
transfer Restricted Shares in violation of this Section 6 will be null and void
and will be disregarded.
7. SECTION 83(b) ELECTION AND WITHHOLDING OF TAXES. The Participant
shall provide the Plan Administrator with a copy of any timely election made
pursuant to Section 83(b) of the Code or similar provision of state law
(collectively, an "83(b) Election"), a form of which is attached hereto as
EXHIBIT A. If the Participant makes a timely 83(b) Election, the Participant
shall immediately pay the Company the amount necessary to satisfy any applicable
foreign, federal, state, and local income and employment tax withholding
obligations. If the Participant does not make a timely 83(b) Election, the
Participant shall, as Restricted Shares vest or at the time withholding is
otherwise required by any Applicable Law, pay the Company the amount necessary
to satisfy any applicable foreign, federal, state, and local income and
employment tax withholding obligations.
8. CORPORATE TRANSACTIONS AND CHANGE IN CONTROL.
(a) Upon the occurrence of any Corporate Transaction, all Restricted
Shares that are outstanding under this Plan shall immediately vest in full.
(b) The Plan Administrator shall have the discretionary authority,
exercisable at any time while Restricted Shares remain outstanding under the
Plan, to provide for the immediate and automatic vesting of those Restricted
Shares in whole or in part upon the occurrence of a Change in Control.
9. USE OF PROCEEDS. Cash proceeds received by the Company from the sale
of Shares under the Plan may be used for general corporate purposes.
10. ADMINISTRATION. The Plan shall be administered by the Plan
Administrator which shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan and to adjudicate all
disputed claims filed under the Plan. Every finding, decision and determination
made by the Plan Administrator shall, to the full extent permitted by Applicable
Law, be final and binding upon all persons.
11. AMENDMENT OR TERMINATION. The Plan Administrator may at any time
and for any reason terminate or amend the Plan. Except as provided in Section
8, no such termination can affect Restricted Shares previously granted and no
such amendment may make any change in any
5
<PAGE>
Restricted Shares theretofore granted which adversely affects the rights of any
Participant without the consent of affected Participants.
12. CONDITIONS UPON ISSUANCE OF SHARES. At the time of vesting pursuant
to Section 5(a), Shares shall not be issued with respect to Restricted Shares
that are vesting unless the vesting of such Restricted Shares and the issuance
and delivery of such Shares pursuant thereto shall comply with all Applicable
Laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance. As a condition to the issuance of Shares, the
Company may require the Participant to represent and warrant at the time of any
such issuance 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 Laws.
13. TERM OF PLAN. The Plan shall become effective upon its adoption by
the Board. It shall terminate on May 1, 2000 unless sooner terminated under
Section 11.
14. NO EMPLOYMENT RIGHTS. Neither the action of the Company in
establishing the Plan, nor any action taken by the Plan Administrator hereunder,
nor any provision of the Plan shall be construed so as to grant any individual
the right to remain in the Continuous Service of the Company (or a Related
Entity) for any period of specific duration, and the Company (or any Related
Entity retaining the services of such individual) may terminate such
individual's Continuous Service at any time and for any reason, with or without
cause.
15. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, participation in the Plan shall not be deemed compensation for
purposes of computing benefits or contributions under any retirement plan of the
Company or a Related Entity, and shall not affect any benefits under any other
benefit plan of any kind or any benefit plan subsequently instituted under which
the availability or amount of benefits is related to level of compensation. The
Plan is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement
Income Security Act of 1974, as amended.
16. GOVERNING LAW. The Plan is to be construed in accordance with and
governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code, or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties, except to the extent the
internal laws of the State of California are superseded by the laws of the
United States. Should any provision of the Plan be determined by a court of law
to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.
6
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EXHIBIT A
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the Internal
Revenue Code, to include in gross income for 1999 the amount of any compensation
taxable in connection with the taxpayer's receipt of the property described
below:
1. The name, address, taxpayer identification number and
taxable year of the undersigned are:
TAXPAYER'S NAME:
SPOUSE'S NAME:
TAXPAYER'S SOCIAL SECURITY NO.:
SPOUSE'S SOCIAL SECURITY NO.:
TAXABLE YEAR: Calendar Year 1999
ADDRESS:
2. The property which is the subject of this election is
__________ shares of common stock of Digital Microwave Corporation.
3. The property was transferred to the undersigned on March __,
1999.
4. The property is subject to repurchase at the original
purchase price if the taxpayer terminates employment prior to the vesting
of the transferred shares.
5. The fair market value of the property at the time of
transfer (determined without regard to any restriction other than a
restriction which by its terms will never lapse) is: $_______ per share
x ________ shares = $___________.
6. The undersigned paid $______ per share x _________ shares
for the property transferred or a total of $______________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The undersigned taxpayer is the person performing the
services in connection with the transfer of said property.
The undersigned will file this election with the Internal Revenue
Service office to which he files his annual income tax return not later than 30
days after the date of transfer of the property. A copy of the election also
will be furnished to the person for whom the services were performed.
Additionally, the undersigned will include a copy of the election with his
income tax
A-1
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return for the taxable year in which the property is transferred. The
undersigned understands that this election will also be effective as an election
under _____________ law.
Dated:
------------------------- -------------------------
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated:
------------------------- -------------------------
Spouse of Taxpayer
A-2
