As filed with the Securities and Exchange Commission on March 25, 1997
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
READ-RITE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-2770690
(State of Incorporation) (I.R.S. Employer
Identification No.)
345 Los Coches Street
Milpitas, California 95035
(Address of Principal Executive Offices, including Zip Code)
________________________________________
Employee Stock Purchase Plan
(Full title of the plan)
_________________________________________
Cyril J. Yansouni
Chief Executive Officer
READ-RITE CORPORATION
345 Los Coches Street
Milpitas, California 95035
(408) 262-6700
(Name, address and telephone number of agent for service)
____________________
Copies to:
Francis S. Currie, Esq.
WILSON SONSINI GOODRICH & ROSATI, P.C.
650 Page Mill Road
Palo Alto, California 94304-1050
CALCULATION OF REGISTRATION FEE
Proposed
Maximum Proposed
Offering Maximum
Amount to Price Aggregate Amount of
Title of Securities be Per Share Offering Registration
to be Registered Registered (1) Price (1) Fee
Shares of Common Stock 500,000 $24.8125 $12,406,250.00 $3,759.47
to be issued under
Employee Stock Purchase
Plan
(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended (the "Securities Act"), whereby the per share price was determined
by reference to the average between the high and low price reported in the
Nasdaq National Market on March 19, 1997.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents and information previously filed with the
Securities and Exchange Commission (the "Commission") by Read-Rite
Corporation (the "Company") are hereby incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1996, filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1996, filed pursuant to Section 13(a) or 15(d)
of the Exchange Act.
(c) The description of the Company's common stock which is contained
in the Company's Registration Statement on Form 8-A filed with the
Commission on September 6, 1991 pursuant to Section 12 of the Exchange Act,
including any amendment or report filed for the purpose of updating any
such description.
(d) The description of the Company's Series A participating preferred
stock ("Series A Preferred Stock") which is contained in the Company's
Registration Statement on Form 8-A filed with the Commission on March 6,
1997 pursuant to Section 12 of the Exchange Act, including any amendment
or report filed for the purpose of updating any such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities
registered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing of
such documents.
Item 4. Description of Securities - Securities to be Purchased.
In March 1997 the Board of Directors approved a Preferred Shares
Rights Agreement and declared a dividend distribution of one Preferred
Share Purchase Right (the "Rights") for each share of its Common Stock
outstanding on March 17, 1997 and each share of its Common Stock issued
thereafter (subject to certain limitations). Currently, the Rights trade
with shares of Common Stock and, when the Rights become exercisable, each
Right will entitle the stockholder to buy 1/1000th of a share of the
Company's Series A Preferred Stock at an exercise price of $150.00. Each
such 1/1000th of a share of Series A Preferred Stock has rights and
preferences substantially identical to those of 1 share of the Company's
Common Stock. The Rights will become
exercisable and will trade separately from the Common Stock (unless
postponed by action of the disinterested directors) on the earlier of (i)
ten days following a public announcement that a person or group has
acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding Common Stock or (ii) ten business days following
the commencement or announcement of a tender offer or exchange offer which,
if consummated, would result in the beneficial ownership by a person or
group of 20% or more of the Company's outstanding Common Stock. If any
person or a group acquires 20% or more of the Company's Common Stock
without approval of the Company's Board of Directors, each Right not held
by the acquiring person would entitle its holder to purchase $300.00 worth
of the Company's Common Stock for $150.00. If, after any person or group
acquires 20% or more of the Company's Common Stock without the approval of
the Board of Directors, the Company is acquired in a merger or other
business combination transaction, each Right not held by the acquiring
person would entitle its holder to purchase $300.00 worth of the common
stock of the acquiring company for $150.00. Under certain conditions, the
Company may elect to redeem the Rights for $0.001 per Right or to cause the
exchange of each Right not held by the acquiring person for one share of
the Company's Common Stock. Additionally, the exercise price, number of
Rights, and number of shares of Common Stock that may be acquired for that
price are subject to adjustment from time to time to prevent dilution. The
Rights expire on March 17, 2007 unless previously exchanged or redeemed as
described above, or terminated in connection with the acquisition of the
Company by consolidation or merger approved by the Board of Directors and
satisfying certain conditions.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation limits, to the maximum
extent permitted by Delaware law, the personal liability of directors for
monetary damages for their conduct as a director. The Company's Bylaws
provide that the Company shall indemnify its officers and directors and may
indemnify its employees and other agents to the fullest extent permitted by
law. The Bylaws authorize the use of indemnification agreements and the
Company has entered into such agreements with each of its directors and
executive officers.
Section 145 of the Delaware General Corporation Law ("Delaware Law")
provides that a corporation may indemnify a director, officer, employee or
agent made a party to an action by reason of the fact that he was a
director, officer, employee or agent of the corporation or was serving at
the request of the corporation against expenses actually and reasonably
incurred by him in connection with such action if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the corporation and with respect to any criminal action,
had no reasonable cause to believe his conduct was unlawful. The Company
also maintains a policy of director and officer liability insurance which
covers certain matters, including matters arising under the Securities Act.
Delaware Law does not permit a corporation to eliminate a director's
duty of care, and the provisions of the Company's Certificate of
Incorporation have no effect on the availability of equitable remedies such
as injunction or rescission, based upon a director's breach of the duty of
care. Insofar as indemnification for liabilities arising under the
Exchange Act may be permitted to foregoing provisions and agreements, the
Company has been informed that in the opinion of the staff of the
Commission such indemnification is against public policy as expressed in
the Exchange Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
4.1 Employee Stock Purchase Plan, as amended
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (see Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
Item 9. Undertakings.
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 to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) 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 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission, such indemnification is against public policy as expressed in
the Exchange 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 Exchange 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 Milpitas, State of California, on
this 25th day of March 1997.
READ-RITE CORPORATION
By:/s/ Cyril J. Yansouni
Cyril J. Yansouni
Chairman of the Board of Directors
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Cyril J. Yansouni and John
Kurtzweil, and each of them acting individually, as his or her
attorney-in-fact, each with full power of substitution, for him or her in
any and all capacities, to sign any and all amendments to this Registration
Statement on Form S-8, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorneys-
in-fact, or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/ Cyril J. Yansouni Chief Executive Officer March 25, 1997
Cyril J. Yansouni (Principal Executive
Officer) and
Chairman of the Board
of Directors
/s/ Frederic Schwettmann President, Chief March 25, 1997
Frederic Schwettmann Operating
Officer and Director
/s/ John T. Kurtzweil Vice President, Finance March 25, 1997
John T. Kurtzweil and
Chief Financial Officer
(Principal
Financial and
Accounting Officer)
/s/ John G. Linvill Director March 25, 1997
John G. Linvill
/s/ William J. Almon Director March 25, 1997
William J. Almon
/s/ Michael L. Hackworth Director March 25, 1997
Michael L. Hackworth
/s/ Matthew. J. O'Rourke Director March 25, 1997
Matthew J. O'Rourke
READ-RITE CORPORATION
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description Page
4.1 Employee Stock Purchase Plan, as amended
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (see Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
March 21, 1997
Read-Rite Corporation
345 Los Coches Street
Milpitas, California 95035
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about March 24, 1997
(the "Registration Statement") in connection with the registration under
the Securities Act of 1933, as amended, of 500,000 shares (the "Shares") of
your Common Stock under your Employee Stock Purchase Plan (the "Plan"). As
your counsel in connection with this transaction, we have examined the
proceedings taken and are familiar with the proceedings proposed to be
taken by you in connection with the issuance and sale of the Shares
pursuant to the Plan.
It is our opinion that, upon completion of the actions being taken, or
contemplated by us as your counsel to be taken by you prior to the issuance
of the Shares pursuant to the Registration Statement and the Plan, and upon
completion of the actions being taken in order to permit such transactions
to be carried out in accordance with the securities laws of the various
states where required, the Shares will be legally and validly issued, fully-
paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement, and further consent to the use of our name wherever
appearing in the Registration Statement and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI, P.C.
Professional Corporation
/s/ WILSON, SONSINI, GOODRICH & ROSATI
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Employee Stock Purchase Plan of Read-Rite
Corporation, of our report dated October 21, 1996, except for Note 11, for
which the date is December 11, 1996, with respect to the consolidated
financial statements and schedule of Read-Rite Corporation included in its
Annual Report (Form 10-K) for the year ended September 30, 1996, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
San Jose, California
March 21, 1997
EXHIBIT 4.1
READ-RITE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(As amended effective October 22, 1996)
1. Establishment of Plan. Read-Rite Corporation proposes to grant
the opportunity to purchase the Company's Common Stock to employees of the
Company and Subsidiaries (as hereinafter defined) pursuant to the Plan
herein set forth. For purposes of this Plan, "Parent Corporation" and
"Subsidiary" (collectively, "Subsidiaries") shall have the same meanings
as, respectively, "parent corporation" and "subsidiary corporation" in
Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). The Company intends that the Plan shall qualify as an
"employee stock purchase plan" under Section 423 of the Code (including any
amendments or replacements of such section), and the Plan shall be so
construed. Any term not expressly defined in the Plan but defined for
purposes of such Section 423 shall have the same definition herein.
2. Purposes and Share Reserve. The purpose of the Plan is to
provide employees of the Company and Subsidiaries with a convenient means
to acquire an equity interest in the Company, to enhance such employees'
sense of participation in the affairs of the Company and Subsidiaries, to
provide an incentive for continued employment and to help such employees
provide for their future financial security. The maximum number of shares
of Common Stock which may be issued under the Plan shall be 1,500,000
shares of the Company's authorized but unissued Common Stock or Common
Stock which are treasury shares. In the event that any purchase
opportunity for any reason expires or is canceled or terminated, the shares
of Common Stock allocable to the unexercised portion of such purchase
opportunity may again be subjected to a purchase opportunity.
3. Administration and Shareholder Approval. The Plan is
administered by the Compensation Committee appointed by the Board of
Directors of the Company. Subject to the provisions of the Plan and to the
limitations of Section 423 of the Code or any successor provision in the
Code, all questions of interpretation or application of the Plan shall be
determined by the Compensation Committee, and its decisions shall be final
and binding upon all participants. Members of the Compensation Committee
shall be "disinterested persons", as defined in Rule 16b-3 or successor
rule adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"). Members of the
Compensation Committee shall receive no compensation for their services in
connection with the administration of the Plan, other than standard fees as
established from time to time by the Board of Directors of the Company for
services rendered by Board members serving on Board committees. All
expenses incurred in connection with the administration of the Plan shall
be paid by the Company.
The Company shall indemnify and hold harmless any member of the
Compensation Committee or any employee to whom any responsibility with
respect to the Plan is allocated or delegated, from and against any and all
liabilities, costs and expenses, including attorney's fees, incurred by
such persons as a result of any act, or omission to act, in connection with
the performance of their duties, responsibilities and obligations under the
Plan, other than such liabilities, costs and expenses as may result from
the bad faith, criminal acts, or willful misconduct of such persons or to
the extent such indemnification is prohibited by law. The Company shall
have the obligation to conduct the defense of such persons in any
proceeding to which this provision applies. If any person covered by this
indemnification clause determines that the defense of the Company is
inadequate, that person shall be entitled to retain separate legal counsel
for his/her defense and the Company shall be obligated to pay for all
reasonable legal fees and other court costs incurred in the course of such
defense unless a court of competent jurisdiction finds such person acted in
bad faith or engaged in criminal acts or willful misconduct. The Company
may satisfy this obligation in whole or in part through the purchase of a
policy or policies of insurance, but no insurer shall have any rights
against the Company arising out of this provision.
Notwithstanding any other provision of the Plan to the contrary, any
purchase opportunity granted pursuant to the Plan shall be subject to
(i) obtaining all necessary governmental approvals and/or qualifications of
the sale and/or issuance of the purchase opportunities and/or the shares of
Common Stock and (ii) for a purchase opportunity granted after the date the
Board of Directors of the Company has initially adopted or amended the
Plan, obtaining any necessary shareholder approval of the Plan with respect
to such initial adoption or amendment for such purchase opportunity to be
treated as an option described in section 423 of the Code or the grant or
exercise of such purchase opportunity to not be treated as a non-exempt
"purchase" under Section 16(b) of the Securities Exchange Act of 1934, as
amended.
4. Eligibility. Any employee of the Company and Subsidiaries is
eligible to participate in the Plan except the following:
(a) employees who are not employed by the Company or
Subsidiaries on the 15th day of the month before the beginning of a
Purchase Period, with respect to that Purchase Period;
(b) employees who are customarily employed for less than 20
hours a week;
(c) employees who are customarily employed for less than 5
months in a calendar year; and
(d) employees who own or hold options to purchase or who, as a
result of participation in this plan, would own or hold options to
purchase, 5% or more of the Company's Common Stock within the meaning of
section 423(b)(3) of the Code.
5. Offering Dates. The Plan is implemented by sequential offerings
of six months duration (the "Purchase Period"); however, the first Purchase
Period shall have a twelve month duration commencing on April 1, 1992 and
ending on March 31, 1993. Subsequent Purchase Periods shall commence April
1 and October 1 of each year and end on September 30 and March 31,
respectively, thereafter. The first day of each Purchase Period shall be
the "Offering Date" and the last day of each Purchase Period shall be the
"Purchase Date".
Notwithstanding the foregoing, the Compensation Committee may
establish a different term for one or more Purchase Periods and/or
different commencing and/or ending dates for such Purchase Periods. In the
event the first and/or last day of a Purchase Period is not a business day,
the Company shall specify the business day that will be deemed the first or
last day, as the case may be, of the Purchase Period.
6. Participation in the Plan. Eligible employees become
participants in the Plan on the first Offering Date after satisfying the
eligibility requirements by delivering to the Company's or Subsidiary's
(whichever employs such employee) payroll office (the "payroll office") not
later than the 15th day of the month before such Offering Date a
subscription agreement authorizing payroll deductions. An eligible
employee who does not deliver a subscription agreement to the payroll
office by such date after becoming eligible to participate in the Plan
shall not participate in the Plan for that Purchase Period or for any
subsequent Purchase Period unless such employee subsequently enrolls in the
Plan by filing the subscription agreement with the payroll office not later
than the 15th day of the month preceding a subsequent Offering Date. Once
an employee becomes a participant in the Plan, such employee will
automatically participate in each successive offering until such time as
such employee withdraws, or is withdrawn, from the Plan as set forth below,
and is not required to file any additional subscription agreements for
subsequent Purchase Periods in order to continue participation in the Plan.
7. Grant of Purchase Opportunity on Enrollment. Enrollment by an
eligible employee in the Plan with respect to a Purchase Period will
constitute the grant (as of the Offering Date) by the Company to such
employee an opportunity to purchase shares of Common Stock from the Company
under the Plan. All participants granted a purchase opportunity under the
Plan shall have the same rights and privileges within the meaning of
Section 423(b)(5) of the Code. Re-enrollment by a participant in the Plan
(but not merely an increase or decrease in the level of payroll
withholding) will constitute the grant by the Company to the participant of
a purchase opportunity on the first day of the Offering Period with respect
to which such re-enrollment occurs. Any participant whose opportunity to
purchase expires and who has not withdrawn from the Plan will automatically
be reenrolled in the Plan and granted a new purchase opportunity on the
first date of the next Offering Period.
8. Purchase Price. The purchase price per share at which a share of
Common Stock will be sold in any Purchase Period shall be eighty-five
percent (85%) of the lesser of:
(a) The fair market value on the Offering Date; or
(b) The fair market value of the Common Stock on the Purchase Date.
For purposes of the Plan, the term "fair market value" shall mean for
the applicable date the closing price of a share of the Common Stock as
reported on the NASDAQ National Market System or, if not so reported, as
reported on such other stock exchange or market system on which the Common
Stock is traded as determined by the Compensation Committee, or as
otherwise determined by the Compensation Committee if shares of Common
Stock are not so reported.
9. Payment of Purchase Price; Changes in Payroll Deductions;
Issuance of Shares.
(a) Payment for the purchase price of the shares of Common Stock is
accumulated by regular payroll deductions made during each Purchase Period.
The deductions are made as a percentage of the employee's base pay in one
percent (1%) increments not to exceed 10%. Base pay (a) shall include all
salaries, commissions, and advances paid against future commissions, before
deduction for any contributions to any plan maintained by the Company and
described in Section 401(k) or Section 125 of the Code, and (b) shall not
include over-time, bonuses, annual awards, other incentive payments, shift
premiums, long-term disability, worker's compensation or any other payments
not specifically referenced in (a). Payroll deductions shall commence on
the first payday following the Offering Date and shall continue to the end
of the Purchase Period unless sooner altered or terminated as provided in
the Plan.
(b) A participant may lower (but not increase) the rate of payroll
deductions during a Purchase Period by filing with the payroll office a new
authorization for payroll deductions (which must be expressed as a whole
percentage of the employee's base pay in one percent (1%) increments,
including zero percent (0%)). A decrease in a participant's payroll
deductions to zero percent (0%) during a Purchase Period shall not
constitute the participant's withdrawal from such Purchase Period and the
Plan unless the participant expressly elects such a withdrawal in writing
in accordance with the requirements of Section 11 of the Plan. Such change
in the rate of payroll deductions may be made at any time during a Purchase
Period, but not more than one change may be made effective during any
Purchase Period. A participant may increase or lower the rate of payroll
deductions for any subsequent Purchase Period by filing with the payroll
office a new authorization for payroll deductions not later than the 15th
day of the month before the beginning of such Purchase Period.
(c) All payroll deductions made for a participant are credited to
his/her account under the Plan and are deposited with the general funds of
the Company; no interest accrues on the payroll deductions. All payroll
deductions received or held by the Company may be used by the Company for
any corporate purpose.
(d) On each Purchase Date, so long as the Plan remains in effect and
provided that the participant has not terminated prior to a given Purchase
Date, the Company shall apply the funds then in the participant's account
to the purchase of whole shares of Common Stock reserved to the extent
permitted by the Plan. The purchase price per share shall be as specified
in Section 8 of the Plan. Any amount remaining in such participant's
account representing any excess over the sum required to purchase whole
shares shall be held for purchases on the next Purchase Date unless the
remaining amount equals or exceeds the sum required to purchase one whole
share of Common Stock at the end of the relevant Purchase Period, or the
Plan has been oversubscribed, in which case such funds shall be returned to
the member. No Common Stock shall be purchased on behalf of any employee
whose participation in the Plan has terminated prior to the last day of a
Purchase Period.
(e) Subject to the provisions of this Plan, as promptly as practical
after the Purchase Date, the Company shall cause to be delivered to the
participant, or the participant's agent, certificates representing the
shares of Common Stock purchased by the participant. Delivery shall be
deemed effective for all purposes when the Company's stock transfer agent
deposits the stock certificates in the United States mail addressed to the
participant, or the participant's agent, at the address specified by the
participant. Prior to the date of issuance of a stock certificate for the
shares of Common Stock being purchased, a participant shall have no rights
as a shareholder of the Company by virtue of participation in the Plan.
(f) The Company may, from time to time, establish or change (i) a
minimum required withholding amount for participation in any Purchase
Period, (ii) limitations on the frequency and/or number of changes in the
amount withheld during a Purchase Period, (iii) an exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars,
(iv) payroll withholding in excess of or less than the amount designated by
a participant in order to adjust for delays or mistakes in the Company's
processing of subscription agreements, (v) the date(s) and manner by which
the fair market value of the Common Stock is determined for purposes of the
administration of the Plan, and/or (vi) such other limitations or
procedures as deemed advisable by the Company in the Company's sole
discretion which are consistent with the Plan, and Section 423 of the Code.
(g) Any portion of a participant's purchase opportunity remaining
unexercised after the end of the Purchase Period to which it relates shall
expire immediately upon the end of such Purchase Period.
10. Limitation on Shares to be Purchased. No employee shall be
entitled to purchase Common Stock under the Plan at a rate which exceeds
$25,000 in fair market value, determined as of the Offering Date (or such
other limit as may be imposed by the Code) for each calendar year in which
the employee participates in the Plan. If the number of shares to be
purchased by all employees participating in the Plan exceeds the number of
shares available in the Plan, the Company will make a pro rata allocation
of the remaining shares in as uniform a manner as shall be practical and as
the Compensation Committee shall determine to be equitable. Any payroll
deductions accumulated in a participant's account which are not used to
purchase stock due to the limitations in this paragraph shall be returned
to the participant at the end of the Purchase Period, unless insufficient
to purchase a whole share of Common Stock as provided in Section 9(d) of
the Plan, or at such other time as the Compensation Committee shall
determine.
11. Withdrawal. Each participant may withdraw from the Plan by
signing and delivering to the payroll office notice on a form provided for
such purpose. Such withdrawal may be elected at any time for a Purchase
Period prior to the Purchase Date for that Purchase Period.
Upon withdrawal from the Plan, the accumulated payroll deductions
shall be returned to the withdrawn employee and his/her interest in the
Plan shall terminate. In the event an employee voluntarily elects to
withdraw from the Plan, he/she may not resume his/her participation in the
Plan during the same Purchase Period, but he/she may participate in any
succeeding Purchase Period under the Plan by filing a new authorization for
payroll deductions in the same manner as set forth above for initial
participation in the Plan.
12. Termination of Employment. Termination of a participant's
employment for any reason, including retirement, disability or death or the
failure of a participant to remain an eligible employee, terminates his/her
participation in the Plan immediately. In such event, the payroll
deductions credited to the participant's account will be returned to
him/her or, in the case of his/her death, to his/her legal representative.
13. Repayment of Payroll Deductions Without Interest. In the event
an employee's interest in the Plan is terminated, or in the event the Plan
is terminated by the Board of Directors of the Company, the Company shall
promptly deliver to the employee the payroll deductions credited to his/her
account. No interest shall accrue on the payroll deductions of a
participant in the Plan.
14. Capital Changes. In the event of changes in the Common Stock of
the Company due to stock dividends, stock splits or other changes in
capitalization, or in the event of any merger, sale or any other
reorganization, appropriate adjustments will be made by the Company in the
Plan's share reserve, the shares subject to purchase under a participant's
purchase opportunity, and in the purchase price per share of Common Stock.
15. Nonassignability. No rights or accumulated payroll deductions of
an employee under the Plan may be pledged, assigned or transferred for any
reason and any such attempt may be treated by the Company as an election by
such employee to withdraw from the Plan.
16. Reports. Individual accounts will be maintained for each
participant in the Plan. Each participant shall receive promptly after the
end of each Purchase Period a report of his/her account setting forth the
total payroll deductions accumulated, the number of shares of Common Stock
purchased and the remaining cash balance, if any, carried forward to the
next Purchase Period or returned to the participant, as the case may be.
17. No Obligation. Neither this Plan nor the grant of any
opportunity to purchase hereunder shall confer any right on any employee to
remain in the employ of the Company or any Subsidiary or restrict the right
of the Company or any Subsidiary to terminate such employee's employment.
18. Headings. Headings have been provided for purposes of
identification and organization only and shall not be treated as operative
provisions of the Plan.
19. Transfer of Control. A "Transfer of Control" shall be deemed to
have occurred in the event any of the following occurs with respect to the
Company.
(a) the direct or indirect sale or exchange by the shareholders of
the Company of all or substantially all of the stock of the Company where
the shareholders of the Company before such sale or exchange do not retain,
directly or indirectly, at least a majority of the beneficial interest in
the voting stock of the Company;
(b) a merger in which the shareholders of the Company before such
merger do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the Company; or
(c) the sale, exchange, or transfer of all or substantially all of
the Company's assets (other than a sale, exchange, or transfer to one (1)
or more corporations where the shareholders of the Company before such
sale, exchange or transfer retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
corporation(s) to which the assets were transferred).
In the event of a Transfer of Control, the Board of Directors of the
Company in its sole discretion, shall either (i) provide that purchase
opportunities granted under the Plan shall be fully exercisable to the
extent of each participant's account balance for the Purchase Period as of
a date prior to the Transfer of Control, as the Board so determines or
(ii) arrange with the surviving, continuing, successor, or purchasing
corporation, as the case may be, that such corporation assume the Company's
rights and obligations under the Plan. All purchase opportunities shall
terminate effective as of the date of the Transfer of Control to the extent
that the purchase opportunity is neither exercised as of the date of the
Transfer of Control nor assumed by the surviving, continuing, successor, or
purchasing corporation, as the case may be.
20. Restriction on Issuance or Transfer of Shares. The issuance of
shares of Common Stock under the Plan shall be subject to compliance with
all applicable requirements of federal or state law with respect to such
securities. A purchase opportunity may be not be exercised if the issuance
of shares of Common Stock upon such exercise would constitute a violation
of any applicable federal or state securities laws or other laws or
regulations. In addition, no purchase opportunity may be exercised unless
(i) a registration statement under the Securities Act of 1933, as amended,
shall at the time of exercise of the purchase opportunity be in effect with
respect to the shares of Common Stock issuable upon exercise of the
purchase opportunity, or (ii) in the opinion of legal counsel to the
Company, the shares issuable upon exercise of the purchase opportunity may
be issued in accordance with the terms of an applicable exemption from the
registration requirements of said Act. As a condition to the exercise of
the purchase opportunity, the Company may require the participant to
satisfy any qualifications that may be necessary or appropriate, to
evidence compliance with any applicable law or regulation, and to make any
representation or warranty with respect thereto as may be requested by the
Company.
The Company may at any time place legends or other identifying symbols
regarding any applicable federal and/or state securities restrictions or
any provision convenient in the administration of the Plan on some or all
of the certificates representing shares of Common Stock issued under the
Plan. The participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares of
Common Stock acquired under the Plan in the possession of the participant
in order to carry out these provisions.
The Company, in its absolute discretion may impose such restrictions
on the transferability of the shares of Common Stock purchased under the
Plan as it deems appropriate and any such restriction may be set forth in
the respective subscription agreement and may be referred to on the
certificates evidencing such shares. The Company may require the employee
to give the Company prompt notice of any disposition of shares of Common
Stock acquired by exercise of a purchase opportunity within two years from
the date of granting such opportunity or one year from the date of exercise
of such opportunity. The Company may direct that the certificates
evidencing shares of Common Stock acquired under the Plan refer to such
requirement to give prompt notice of disposition.
21. Amendment or Termination of the Plan. This Plan shall continue
until terminated by the Board of Directors of the Company or until all of
the shares of Common Stock reserved for issuance under the Plan have been
issued, whichever occurs first.
The Board of Directors of the Company may at any time terminate the
Plan, except that such termination cannot affect shares of Common Stock or
purchase opportunities previously granted under the Plan, except as
expressly permitted by the Plan. The Board of Directors or any officer as
may be authorized by the Board of Directors from time to time may at any
time amend the Plan, provided that no amendment makes any change in shares
of Common Stock or purchase opportunities previously granted which would
adversely affect the right of any participant, nor may any amendment be
made without approval of the shareholders of the Company within 12 months
of the adoption of such amendment if such amendment would authorize the
sale of more shares than are authorized for issuance under the Plan or
would change the designation of corporations whose employees may be offered
purchase opportunities under the Plan. In addition to the foregoing,
approval of the Company's shareholders shall be sought for any amendment to
the Plan for which the Board of Directors deems shareholder approval
necessary in order to comply with Rule 16b-3.
Notwithstanding any other provisions of the Plan to the contrary, in
the event of an amendment to the Plan which affects the rights or
privileges of purchase opportunities offered under the Plan, each
participant with an outstanding purchase opportunity shall have the right
to exercise such outstanding purchase opportunity on the effective date of
the amendment and to participate in the Plan for the remaining term of such
outstanding purchase opportunity pursuant to the terms and conditions of
the Plan, as amended. If in accordance with the preceding sentence, a
participant elects to exercise such outstanding purchase opportunity and to
commence participation in the Plan, as amended on the effective date of
such amendment, the participant shall be deemed to have received a new
purchase opportunity on such effective date, and such effective date shall
be deemed the Offering Date for such new purchase opportunity.
IN WITNESS WHEREOF, the undersigned Secretary of Read-Rite
Corporation, a Delaware corporation, hereby declares that the Read-Rite
Corporation Employee Stock Purchase Plan was adopted by the Board of
Directors of Read-Rite Corporation at its meeting on January 30, 1992,
readopted at its meeting on November 16, 1992, amended at its meeting on
December 19, 1994, and further amended at its meeting on October 22, 1996.
/s/ Rex S. Jackson
Rex S. Jackson
Vice President, General Counsel and Secretary
