<PAGE> 1
As filed with the Securities and Exchange Commission on March 18, 1999
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
================================================================================
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------- -------------- ------------------- ------------------ ------------
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Per Aggregate Registration
Share (1) Offering Price (1) Fee
- ---------------------------- -------------- ------------------- ------------------ ------------
<S> <C> <C> <C> <C>
Shares of Common Stock to be 2,000,000 $7.3313 $14,662,500 $4,076.18
issues under Employee Stock
Purchase Plan
- ---------------------------- -------------- ------------------- ------------------ ------------
</TABLE>
(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 85% of the average between the high and low price reported by the
Nasdaq National Market on March 16, 1999.
2
<PAGE> 3
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, 1998, 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, 1998, 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
3
<PAGE> 4
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 the 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.
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
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 6).
</TABLE>
4
<PAGE> 5
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.
5
<PAGE> 6
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 17th day of
March 1999.
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 on March 17, 1999 by the following
persons in the capacities indicated:
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Cyril J. Yansouni Chief Executive Officer and Chairman of the Board of
- ------------------------------- Director
Cyril J. Yansouni
/s/ John T. Kurtzweil Vice President, Finance and Chief Financial Officer
- -------------------------------
John T. Kurtzweil
/s/ John G. Linvill Director
- -------------------------------
John G. Linvill
/s/ William J. Almon Director
- -------------------------------
William J. Almon
/s/ Michael L. Hackworth Director
- -------------------------------
Michael L. Hackworth
/s/ Matthew J. O'Rourke Director
- -------------------------------
Matthew J. O'Rourke
</TABLE>
6
<PAGE> 7
READ-RITE CORPORATION
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
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 6).
</TABLE>
7
<PAGE> 1
Exhibit 4.1
READ-RITE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED EFFECTIVE OCTOBER 1, 1998)
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 3,500,000 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, 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 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
<PAGE> 2
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 Purchase Period beginning
October 1, 1998 shall end April 30, 1999. Thereafter, Purchase Periods shall
commence on or around May 1 and November 1 of each year and end on or around
October 31 and April 30, respectively. 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
<PAGE> 3
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 of 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.
(c) Notwithstanding anything in the Plan to the contrary, in the
event (i) the Company's stockholders approve an increase in the number of shares
of Common Stock available for issuance under the Plan, (ii) all or a portion of
such additional shares are to be issued with respect to a Purchase Period that
is under way at the time of such stockholder approval, and (iii) the per share
fair market value (determined in accordance with Section 8(b) above) of the
Common Stock on the date of such approval (the "Authorization Date FMV") is
higher than the fair market value on the Offering Date of such Purchase Period,
then for all purposes under the Plan, the Authorization Date FMV shall be used
instead of the fair market value on the Offering Date.
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%.
<PAGE> 4
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 12 of the Plan. Such change in the rate of payroll
deductions may be made at any time during a 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
<PAGE> 5
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. Designation of Beneficiary.
a. A participant may 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 subsequent to an Exercise Date
on which the option in exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option. 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
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 participant, or if
no such executor or administrator has been appointed (to the knowledge of the
Company), the Company, 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 company, then to such other
person as the Company may designate.
11. 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. The aggregate number of shares available for issuance under the
Plan for any Purchase Period shall be 250,000; provided, however, that the
maximum number of shares available for the Purchase Period beginning October 1,
1998 shall be 350,000. 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.
12. 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 for a Purchase Period at any time at least 30
days prior to the Purchase Date for that Purchase Period, or at such other time
as the Company may specify.
<PAGE> 6
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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. Headings. Headings have been provided for purposes of identification
and organization only and shall not be treated as operative provisions of the
Plan.
20. 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
<PAGE> 7
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 shall 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. All purchase
opportunities shall terminate effective as of the date of the Transfer of
Control to the extent that the purchase opportunity is not exercised as of the
date of the Transfer of Control.
21. 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
<PAGE> 8
Common Stock acquired under the Plan refer to such requirement to give prompt
notice of disposition.
22. 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 meetings on October 22, 1996, July 22, 1997 and October 20, 1998.
___/s/__________________________________
Andrew C. Holcomb
Associate General Counsel and Secretary
<PAGE> 1
Exhibit 5.1
March 15, 1999
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 12, 1999, in
connection with the registration under the Securities Act of 1933, as amended,
of 2,000,000 shares of Common Stock (the "Shares") to be issued under your
Employee Stock Purchase Plan (the "Plan").
As your legal counsel, we have examined the proceedings taken and are
familiar with the proceedings proposed to be taken by you in connection with the
sale and issuance of the Shares. It is our opinion that the Shares, when issued
and sold in the manner referred to in the Plan, and pursuant to the agreements
which accompany the Plan, will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to said Registration
Statement and further consent to the use of our name wherever appearing in said
Registration Statement and any amendments thereto.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI, P.C.
<PAGE> 1
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 15, 1998, 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, 1998, filed with the Securities and
Exchange Commission
/s/ Ernst & Young, LLP
San Jose, California
March 15, 1999
