THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT
TO RULE 901(d) OF REGULATION S-T
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 0-2287
SYMMETRICOM, INC.
(Exact name of registrant as specified in its charter)
California No. 95-1906306
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
85 West Tasman Drive, San Jose, California 95134-1703
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 943-9403
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
Applicable Only to Issuers Involved in Bankruptcy Proceedings
During the Preceding Five Years:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes
No
Applicable Only to Corporate Issuers:
Indicate number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
CLASS OUTSTANDING AS OF January 10, 1997
Common Stock 15,700,274
SYMMETRICOM, INC.
FORM 10-Q
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets
December 31, 1996 and June 30, 1996 3
Consolidated Statements of Operations
Three and six months ended December 31, 1996 and 1995 4
Consolidated Statements of Cash Flows
Six months ended December 31, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 11
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SYMMETRICOM, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
1996 1996
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 33,926 $ 31,327
Short-term investments 3,974 2,943
Cash and investments 37,900 34,270
Accounts receivable 18,480 14,544
Inventories 18,318 17,847
Other current assets 3,773 3,647
_________ _________
Total current assets 78,471 70,308
Property, plant and equipment, net 24,047 21,547
Other assets, net 1,153 1,676
_________ _________
$ 103,671 $ 93,531
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,487 $ 5,544
Accrued liabilities 11,557 9,185
Current maturities of long-term debt 59 57
_________ _________
Total current liabilities 18,103 14,786
Long-term debt, less current maturities 5,680 5,709
Deferred income taxes 2,581 2,633
Shareholders' equity:
Preferred stock, no par value:
Authorized 500 shares
Issued none
Common stock, no par value:
Authorized 32,000 shares
Issued and outstanding 15,696
and 15,570 shares 23,246 21,862
Retained earnings 54,061 48,541
_________ _________
Total shareholders' equity 77,307 70,403
_________ _________
$ 103,671 $ 93,531
The accompanying notes are an integral part of these consolidated
financial statements.
SYMMETRICOM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
December 31, December 31,
1996 1995 1996 1995
Net sales $ 35,447 $ 28,426 $ 67,470 $ 56,104
Cost of sales 19,337 14,837 37,703 29,449
________ ________ ________ ________
Gross profit 16,110 13,589 29,767 26,655
Operating expenses:
Research and development 4,425 3,522 8,379 7,148
Selling, general and
administrative 7,789 5,921 14,892 11,861
________ ________ ________ ________
Operating income 3,896 4,146 6,496 7,646
Interest income 454 481 912 947
Interest expense (147) (148) (295) (297)
________ ________ ________ ________
Earnings before income taxes 4,203 4,479 7,113 8,296
Income taxes 941 1,142 1,593 2,188
________ ________ ________ ________
Net earnings $ 3,262 $ 3,337 $ 5,520 $ 6,108
Net earnings per common and
common equivalent share $ .20 $ .21 $ .34 $ .38
Weighted average common and common
equivalent shares outstanding 16,367 16,045 16,242 16,124
The accompanying notes are an integral part of these consolidated
financial statements.
SYMMETRICOM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six months ended
December 31,
1996 1995
Cash flows from operating activities:
Cash received from customers $ 63,624 $ 51,789
Cash paid to suppliers and employees (55,886) (46,340)
Interest received 887 884
Interest paid (295) (297)
Income taxes paid (662) (208)
_________ _________
Net cash provided by operating activities 7,668 5,828
_________ _________
Cash flows from investing activities:
Purchases of short-term investments (10,531) (16,619)
Maturities of short-term investments 9,500 17,500
Capital expenditures, net (5,221) (4,720)
Other assets 126 21
_________ _________
Net cash used for investing activities (6,126) (3,818)
_________ _________
Cash flows from financing activities:
Repayment of long-term debt (27) (25)
Proceeds from issuance of common stock 1,084 1,073
_________ _________
Net cash provided by financing activities 1,057 1,048
_________ _________
Net increase in cash and cash equivalents 2,599 3,058
Cash and cash equivalents at beginning of
period 31,327 19,354
_________ _________
Cash and cash equivalents at end of period $ 33,926 $ 22,412
Reconciliation of net earnings to net cash provided
by operating activities:
Net earnings $ 5,520 $ 6,108
Adjustments:
Depreciation and amortization 3,118 2,581
Net deferred income taxes 354 623
Changes in assets and liabilities:
Accounts receivable (3,936) (3,532)
Inventories (471) 77
Other current assets (532) (439)
Accounts payable 943 145
Accrued liabilities 2,672 265
_________ _________
Net cash provided by operating activities $ 7,668 $ 5,828
The accompanying notes are an integral part of these consolidated
financial statements.
SYMMETRICOM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation. The consolidated financial statements included
herein have been prepared by SymmetriCom, Inc., (the "Company"), without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures,
normally included in financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or omitted
pursuant to such rules and regulations. Although the Company believes
that the disclosures which are made are adequate to make the information
presented not misleading, it is suggested that these consolidated
financial statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's
Annual Report on Form 10-K for the year ended June 30, 1996.
In the opinion of the management, these unaudited statements contain
all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position of the Company at
December 31, 1996, the results of operations for the three and six month
periods then ended and cash flows for the six month period then ended.
The results of operations for the periods presented are not necessarily
indicative of those that may be expected for the full year.
2. Inventories. Inventories are stated at the lower of cost (first-in,
first-out) or market. Inventories consist of:
December 31, June 30,
1996 1996
(In thousands)
Raw materials $ 5,987 $ 6,704
Work-in-process 7,988 6,868
Finished goods 4,343 4,275
_______ _______
$18,318 $17,847
======= =======
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Business Outlook and Risk Factors
Certain trend analysis and other information contained in
Management's Discussion and Analysis of Financial Condition and Results
of Operations consist of "forward looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, and are subject to
the safe harbor provisions of those Sections. The Company's actual
results could differ materially from those discussed in the forward
looking statements due to a number of factors, including the factors
listed below.
Fluctuations in Quarterly Operating Results. The Company's quarterly results
have fluctuated in the past, and are expected to
fluctuate in the future, due to a number of factors, including the
timing, cancellation or delay of customer orders; changes in the product
or customer sales mix; the timing of new product introductions by the
Company or its competitors; customer delays in qualification of
products; delays in new product development and new product production;
manufacturing inefficiencies; increasing competition; market acceptance
of the Company's and its competitors' products; the long sales cycles
and short product life cycles associated with some of the Company's
products; other competitive factors; and the overall demand for
semiconductors, particularly semiconductors used in personal computers.
Any significant decline in sales could have a material adverse effect on
the Company's business, operating results and financial condition due to
the high level of fixed costs.
Order Timing. A substantial portion of each quarter's shipments is
often dependent upon orders received during that quarter, of which a
significant portion may be received in the last month, and even the last
few days, of that quarter. Furthermore, most orders in backlog can be
rescheduled or cancelled without significant penalty. Such reschedules
and cancellations have happened in the past, most recently in the second
and third quarters of fiscal 1996. The sales cycle for the Company's
Telecom Solutions products can be long and dependent upon uncertainties
and changes in customer funding of capital equipment programs.
Cancellations or delays in the timing or funding of such programs by one
or more customers, which have happened in the past, could have a material
adverse impact on the Company's business, operating results and financial
condition. Therefore, operating results may fluctuate significantly from
the Company's expectations quarter to quarter due to uncertainty in the
timing and the receipt of orders, delays in product shipment and
rescheduling or cancellation of orders. Although sales and the gross
margin percentage increased in the second quarter of fiscal 1997 compared
to the first quarter of fiscal 1997, the Company's long-term challenge
remains to further increase earnings through sales growth and improved
gross margins. There can be no assurance that the Company will achieve
sales growth or improve gross margins.
Product Development. The Company is affected by changing
technologies and frequent product introductions. The Company's success
will depend on its ability to respond to changing technologies and
customer requirements. Delays in product development or production
startup inefficiencies could have a material adverse effect on the
Company's business, operating results and financial condition. Delays in
product development and production startup inefficiencies have happened
in the past, most recently in the first and second quarters of fiscal
1997. There can be no assurance that the Company will successfully
develop and introduce new or enhanced products, or that such new or
enhanced products will achieve market acceptance.
Product Performance and Reliability. The Company's customers demand
exacting product performance and reliability. In addition, the Company's
products are complex and use state of the art components, processes and
techniques. Therefore, there can be no assurance that the Company's
products do not contain errors or design flaws. Such engineering issues
have happened in the past, most recently in the third quarter of fiscal
1996. Any such unforeseen problems could have a material adverse effect
on the Company's business, operating results and financial condition.
Market Change. Future Company results are due in large part to
growth in the markets for the Company's products. The growth in each of
these markets depends on, among other things, changes in general economic
conditions, specific conditions in the markets in which the Company
competes, regulatory and legislative environment, export rules and
conditions, and interest rates.
Competition. Markets for the Company's products are highly
competitive and some of the Company's competitors or potential
competitors are much larger than the Company, with substantially greater
financial, manufacturing, technical and marketing resources. Operating
results are subject to fluctuation based on actions taken by competitors,
the entry of new competitors and the introduction of new or enhanced
competing products. Competition for some of the Company's products
continues to increase in existing markets. In addition, the Company has
entered into new, highly competitive markets. Results will depend on the
Company's ability to provide competitive performance, quality, price and
service.
Semiconductor Manufacturing Capacity. Linfinity Microelectronics
Inc. (Linfinity) is nearing full utilization of its wafer fabrication
facility and anticipates increasing its capacity by improving yields and
productivity, adding capital equipment and personnel, and utilizing
outside foundries. However, there can be no assurance that the Company
will successfully improve yields or productivity. Wafers manufactured by
outside foundries may result in lower gross margin percentages. While
the Company believes that foundry capacity is currently available, there
can be no assurance that the Company will be able to obtain such capacity
or that such capacity will be available in the future.
Effective Tax Rate. The Company's future net earnings will be
affected by changes in its effective tax rate due to the extent there are
shifts in the earnings mix between Puerto Rico and the United States. In
addition, certain provisions of the Omnibus Budget Reconciliation Act of
1993 and the Small Business Job Protection Bill of 1996 may result in
less favorable tax treatment for future income earned in Puerto Rico,
prior to the statutory termination of this favorable tax treatment in
fiscal 2006.
The Company's stock price has been and may continue to be subject to
significant volatility. Many factors, including any shortfall in sales
or earnings from levels expected by the Company, securities analysts and
investors could have an immediate and significant adverse effect on the
trading price of the Company's common stock.
Liquidity and Capital Resources
Working capital increased to $60.4 million at December 31, 1996 from
$55.5 million at June 30, 1996 and the current ratio decreased to 4.3 to
1.0 from 4.8 to 1.0 during the same period. Cash, cash equivalents and
short-term investments increased to $37.9 million at December 31, 1996
from $34.3 million at June 30, 1996 principally due to $7.7 million in
cash provided by operating activities and $1.1 million in proceeds from
the issuance of common stock, partially offset by $5.2 million used for
capital expenditures. At December 31, 1996, the Company had $7.0 million
of unused credit available under its bank line of credit.
The Company believes that cash, cash equivalents, short-term
investments, funds generated from operations and funds available under
its bank line of credit will be sufficient to satisfy working capital and
capital equipment requirements over the near term. The Company has both
the intent and ability to refinance the existing $5.7 million note,
payable in November 1997, on a long-term basis. At December 31, 1996,
the Company had outstanding capital spending commitments of $7.1 million
for tenant improvements at the new San Jose facility and other equipment
purchases.
Results of Operations
Net sales for the three and six month periods ended December 31, 1996
and 1995 were as follows:
Three Months Six Months
Ended Ended
December 31, December 31,
1996 1995 Change 1996 1995 Change
(In millions)
Net sales data*:
Telecom Solutions $ 21.6 $ 18.4 17% $ 41.6 $ 35.6 17%
Linfinity
Microelectronics Inc. 13.9 10.1 38% 25.9 20.5 26%
_______ _______ _______ ______
$ 35.4 $ 28.4 25% $ 67.5 $ 56.1 20%
* May not add due to rounding.
Telecom Solutions net sales increased by 17% in both the second
quarter and first half of fiscal 1997, compared to the corresponding
periods of fiscal 1996 primarily due to higher domestic sales of
synchronization products. Linfinity net sales increased by 38% and 26%
in the second quarter and first half of fiscal 1997, respectively,
compared to the corresponding periods of fiscal 1996 principally due to
higher unit volume and a shift in sales to higher priced products.
The Company's gross margin percentage decreased to 45% and 44% in the
second quarter and first half of fiscal 1997, respectively, compared to
48% in the corresponding periods of fiscal 1996 principally due to lower
manufacturing efficiencies at Linfinity. Future gross margins will
largely depend on product mix, manufacturing efficiencies and selling
prices.
Research and development expense was $4.4 million (or 12% of net
sales) and $8.4 million (or 12% of net sales) in the second quarter and
first half of fiscal 1997, respectively, compared to $3.5 million (or 12%
of net sales) and $7.1 million (or 13% of net sales) in the corresponding
periods of fiscal 1996 as the Company continued to invest in new product
development and the enhancement of existing products.
Selling, general and administrative expense increased to $7.8 million
(or 22% of net sales) and $14.9 million (or 22% of net sales) in the
second quarter and first half of fiscal 1997, respectively, compared to
$5.9 million (or 21% of net sales) and $11.9 million (or 21% of net
sales) in the corresponding periods of fiscal 1996. The increases were
essentially due to higher marketing and sales expense related to expanded
sales support, new product promotion and higher selling expense
associated with higher sales.
Interest income was $.5 million and $.9 million in the second quarter
and first half of fiscal 1997, respectively, and the same in the
corresponding periods of fiscal 1996.
The Company's effective tax rate was 22% in both the second quarter
and first half of fiscal 1997, compared to 25% and 26% in the
corresponding periods of fiscal 1996 and 21% for all of fiscal 1996. The
effective tax rate for fiscal 1997 is expected to be lower than the
combined federal and state tax rate essentially due to the benefit of
lower income tax rates on income earned in Puerto Rico and state tax
credits. The Company's future net earnings will be affected by changes
in its effective tax rate due to the extent there are shifts in the
earnings mix between Puerto Rico and the United States. In addition,
certain provisions of the Omnibus Budget Reconciliation Act of 1993 and
the Small Business Job Protection Bill of 1996 may result in less
favorable tax treatment for future Puerto Rico earnings, prior to the
statutory termination of the current favorable tax treatment in fiscal
2006.
As a result of the factors discussed above, net earnings in the
second quarter of fiscal 1997 were $3.3 million, or $.20 per share,
compared to $3.3 million, or $.21 per share, in the second quarter of
fiscal 1996. Net earnings in the first half of fiscal 1997 decreased to
$5.5 million, or $.34 per share, from $6.1 million, or $.38 per share, in
the first half of fiscal 1996.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's Annual Meeting of Shareholders was held on October
24, 1996.
(b) All director candidates, William D. Rasdal, Roger A. Strauch
and Robert M. Wolfe, were duly elected.
(c) (i) The votes for the director candidates were as follows:
Nominee Votes For Votes Withheld
William D. Rasdal 14,297,094 100,949
Roger A. Strauch 14,348,644 49,399
Robert M. Wolfe 14,348,074 49,969
There were no abstentions or broker non-votes with respect to
election of directors.
(c)(ii) The shareholders ratified the appointment of Deloitte & Touche
LLP as the Company's independent auditors for the current fiscal
year. The vote was 14,344,910 for, 21,215 against and 31,918
abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.28 1990 Employee Stock Plan (as amended through December 1,
1996).
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
December 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SYMMETRICOM, INC.
(Registrant)
DATE: February 3, 1997 By:
/s/ J. Scott Kamsler
J. Scott Kamsler
Vice President, Finance
and Chief Financial Officer
(for Registrant and as
Principal
Financial and Accounting
Officer)
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<PERIOD-END> DEC-31-1996
<CASH> 33926
<SECURITIES> 3974
<RECEIVABLES> 18928
<ALLOWANCES> 448
<INVENTORY> 18318
<CURRENT-ASSETS> 78471
<PP&E> 55762
<DEPRECIATION> 31715
<TOTAL-ASSETS> 103671
<CURRENT-LIABILITIES> 18103
<BONDS> 0
0
0
<COMMON> 23246
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 103671
<SALES> 67470
<TOTAL-REVENUES> 67470
<CGS> 37703
<TOTAL-COSTS> 37703
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 295
<INCOME-PRETAX> 7113
<INCOME-TAX> 1593
<INCOME-CONTINUING> 5520
<DISCONTINUED> 0
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SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
(As Amended Through December 1, 1996)
The following constitute the provisions of the Employee Stock
Purchase Plan of SymmetriCom, Inc.
1. Purpose. The purpose of the Plan is to provide employees of
the Company and its Designated Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll
deductions. It is the intention of the company to have the Plan qualify
as an "Employee Stock Purchase Plan" under Section 423 of the Internal
Revenue Code of 1986, as amended. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of the
Code.
2. Definitions.
(a) "Applicable Laws" shall mean the requirements relating
to the administration of stock option plans under the corporate,
securities, tax and other applicable laws of any country or jurisdiction
to which the Plan is extended, as well as the rules of any stock
exchange
or quotation system on which the Common Stock is listed or quoted.
(b) "Board" shall mean the Board of Directors of the
company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Common Stock" shall mean the Common Stock of the
Company.
(e) "Company" shall mean SymmetriCom, Inc. and any
Designated Subsidiary of the Company.
(f) "Compensation" shall mean all base straight time gross
earnings and sales commissions, including all payments for overtime,
shift premium, incentive compensation, incentive payments, profit
sharing, bonuses and other compensation, except for holiday bonuses and
annual excess sick payouts.
(g) "Designated Subsidiaries" shall mean the Subsidiaries
which have been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.
(h) "Employee" shall mean any individual who is an Employee
of the Company for tax purposes. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual's
right to reemployment is not guaranteed either by statute or by
contract,
the employment relationship will be deemed to have terminated on the
91st
day of such leave.
(i) "Enrollment Date" shall mean the first day of each
Offering Period.
(j) "Exercise Date" shall mean the last day of each
Offering Period.
(k) "Fair Market Value" shall mean, as of any date, the
value of Common Stock determined as follows:
(1) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation
the Nasdaq National Market of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, its Fair Market
Value shall be the closing sale price for the Common Stock (or the mean
of the closing bid and asked prices, if no sales were reported), as
quoted on such exchange (or the exchange with the greatest volume of
trading in Common Stock) or system on the date of such determination, as
reported in The Wall Street Journal or such other source as the Board
deems reliable, or;
(2) If the Common Stock is quoted on the NASDAQ
System (but not on the Nasdaq National Market thereof) or is regularly
quoted by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean of the closing bid and
asked prices for the Common Stock on the date of such determination, as
reported in The Wall Street Journal or such other source as the Board
deems reliable, or;
(3) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
(l) "Offering Period" shall mean a period of approximately
six (6) months, commencing on the first Trading Day on or after
February 1 and terminating on the last Trading Day in the period ending
the following July 31, or commencing on the first Trading Day on or
after
August 1 and terminating on the last Trading Day in the period ending
the
following January 31, during which an option granted pursuant to the
Plan
may be exercised, provided that the first Offering Period under this
Plan
shall be the period of approximately four (4) months, commencing with
the
first Trading Day on or after October 17, 1994 and terminating on the
last Trading Day in the period ending the following January 31, 1995.
The duration of Offering Periods may be changed pursuant to Section 4 of
this Plan.
(m) "Plan" shall mean this Employee Stock Purchase Plan.
(n) "Purchase Price" shall mean an amount equal to 85% of
the Fair Market Value of a share of Common Stock on the Enrollment Date
or on the Exercise Date, whichever is lower.
(o) "Reserves" shall mean the number of shares of Common
Stock covered by each option under the Plan which have not yet been
exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but not yet placed under option.
(p) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the
Company or a Subsidiary, whether or not such corporation now exists or
is
hereafter organized or acquired by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which national stock
exchanges and the NASDAQ System are open for trading.
3. Eligibility.
(a) Any Employee (as defined in Section 2(g)), who shall be
employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan.
(b) Any provisions of the Plan to the contrary notwith-
standing, no Employee shall be granted an option under the Plan (i) to
the extent, immediately after the grant, such Employee (or any other
person whose stock would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own capital stock of the Company
and/or
hold outstanding options to purchase such stock possessing five percent
(5%) or more of the total combined voting power or value of all classes
of the capital stock of the Company or of any Subsidiary, or (ii) to the
extent his or her rights to purchase stock under all employee stock
purchase plans of the Company and its subsidiaries to accrue at a rate
which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time such
option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods. The Plan shall be implemented by
consecutive Offering Periods with a new Offering Period commencing on
the
first Trading Day on or after February 1 and August 1 each year, or, in
the case of the first Offering Period under the Plan, on the first
Trading Day on or after October 17, 1994, or on such other date as the
Board shall determine, and continuing thereafter until terminated in
accordance with Section 19 hereof. The Board shall have the power to
change the duration of Offering Periods (including the commencement
dates
thereof) with respect to future offerings without shareholder approval
if
such change is announced at least fifteen (15) days prior to the
scheduled beginning of the first Offering Period to be affected
thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the
Plan by completing a Participation Agreement authorizing payroll
deductions in the form of Exhibit A, Exhibit A-1 or Exhibit A-2 to this
Plan, as applicable, and filing it with the Company's payroll office
prior to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on
the first payroll following the Enrollment Date and shall end on the
last
payroll in the Offering Period to which such authorization is
applicable,
unless sooner terminated by the participant as provided in Section 10
hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her
Participation Agreement, he or she shall elect to have payroll
deductions
made on each pay day during the Offering Period in an amount not
exceeding ten percent (10%) of the Compensation which he or she receives
on each pay day during the Offering Period.
(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and will be withheld in
whole percentages only. A participant may not make any additional
payments into such account.
(c) A participant may discontinue his or her participation
in the Plan as provided in Section 10 hereof, or may decrease the rate
of
his or her payroll deductions one time during the Offering Period by
completing or filing with the Company a new Participation Agreement
authorizing a change in payroll deduction rate. The Board may, in its
discretion, limit the number of or eliminate participation rate changes
during any Offering Period. The change in rate shall be effective with
the first full payroll period following five (5) business days after the
Company's receipt of the new Participation Agreement unless the Company
elects to process a given change in participation more quickly. A
participant's Participation Agreement shall remain in effect for
successive Offering Periods unless terminated as provided in Section 10
hereof.
(d) Notwithstanding the foregoing, to the extent necessary
or advisable to comply with the limitations on contributions and Share
purchases under this Plan, including but not limited to the limitations
imposed pursuant to Section 423(b)(8) of the Code and Section 3(b)
hereof, a participant's payroll deductions may be reduced by the
Company.
For purposes of complying with Section 423(b)(8) of the Code and
Section
3(b) hereof, payroll deductions shall be decreased to 0% at such time
during any Offering Period which is scheduled to end during the current
calendar year (the "Current Offering Period") that the aggregate of all
payroll deductions which were previously used to purchase stock under
the
Plan in a prior Offering Period which ended during that calendar year
plus all payroll deductions accumulated with respect to the Current
Offering Period equal $21,250. Payroll deductions shall recommence at
the rate provided in such participant's Participation Agreement at the
beginning of the first Offering Period which is scheduled to end in the
following calendar year, unless terminated by the participant as
provided
in Section 10 hereof.
(e) At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued
under the Plan is disposed of, the participant must make adequate
provision for the Company's federal, state, or other tax withholding
obligations, if any, which arise upon the exercise of the option or the
disposition of the Common Stock. At any time, the Company may, but will
not be obligated to, withhold from the participant's compensation the
amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the
Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering
Period, each eligible Employee participating in such Offering Period
shall be granted an option to purchase on the Exercise Date of such
Offering Period (at the applicable Purchase Price) up to a number of
shares of the Company's Common Stock determined by dividing such
Employee's payroll deductions accumulated prior to such Exercise Date
and
retained in the Participant's account as of the Exercise Date by the
applicable Purchase Price; provided that in no event shall an Employee
be
permitted to purchase during each Offering Period more than a number of
Shares determined by dividing $12,500 by the Fair Market Value of a
share
of the Company's Common Stock on the Enrollment Date, and provided
further that such purchase shall be subject to the limitations set forth
in Sections 3(b) and 12 hereof. Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn
pursuant to Section 10 hereof, and shall expire on the last day of the
Offering Period.
8. Exercise of Option. Unless a participant withdraws from the
Plan as provided in Section 10 hereof, notice of exercise of his or her
option shall be deemed to have been given by the participant and his or
her option for the purchase of shares shall be exercised automatically
on
the Exercise Date, and the maximum number of full shares subject to
option shall be purchased for such participant at the applicable
Purchase
Price with the accumulated payroll deductions in his or her account. No
fractional shares shall be purchased; any payroll deductions accumulated
in a participant's account which are not sufficient to purchase a full
share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as
provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise
Date on which a purchase of shares occurs, the Company shall arrange for
delivery to each participant of his or her shares. In the Company's
absolute discretion, delivery shall be by one of the following methods:
(i) the delivery to each participant, as appropriate, of a certificate
representing the shares purchased upon exercise of his or her option,
(ii) by crediting the shares purchased to an account in the
participant's name with a brokerage firm selected by the Board to hold
the shares in street name, or (iii) by arranging for such other method
of
delivery as the Board shall determine and as permitted by Applicable
Laws.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all
the payroll deductions credited to his or her account and not yet used
to
exercise his or her option under the Plan at any time up to four days
before the Exercise Date by giving written notice to the Company in the
form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account will be paid to such
participant promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period will be automatically
terminated, and no further payroll deductions for the purchase of shares
will be made during the Offering Period. If a participant withdraws
from
an Offering Period, payroll deductions will not resume at the beginning
of the succeeding Offering Period unless the participant delivers to the
Company a new Participation Agreement.
(b) Upon a participant's ceasing to be an Employee (as
defined in Section 2(g) hereof) for any reason, he or she will be deemed
to have elected to withdraw from the Plan and the payroll deductions
credited to such participant's account during the Offering Period but
not
yet used to exercise the option will be returned to such participant or,
in the case of his or her death, to the person or persons entitled
thereto under Section 14 hereof, and such participant's option will be
automatically terminated. The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of
employment shall be treated as continuing to be an Employee for the
participant's customary number of hours per week of employment during
the
period in which the participant is subject to such payment in lieu of
notice.
(c) A participant's withdrawal from an Offering Period will
not have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in
succeeding Offering Periods which commence after the termination of the
Offering Period from which the participant withdraws.
11. Interest. No interest shall accrue on the payroll deductions
of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common
Stock which shall be made available for sale under the Plan shall
450,000
shares, subject to adjustment upon changes in capitalization of the
Company as provided in Section 18 hereof. If on a given Exercise Date
the number of shares with respect to which options are to be exercised
exceeds the number of shares then available under the Plan, the Company
shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.
(b) The participant will have no interest or voting right
in shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan
will be registered in the name of the participant or in the name of the
participant and his or her spouse.
13. Administration.
(a) Administrative Body. The Plan shall be administered by
the Board or a committee of members of the Board appointed by the Board.
The Board or its committee shall have full and exclusive discretionary
authority to construe, interpret and apply the terms of the Plan, to
determine eligibility, to adjudicate all disputed claims filed under the
Plan and to prescribe, amend and rescind rules and regulations necessary
to conform the Plan to Applicable Laws. Every finding, decision and
determination made by the Board or its committee shall, to the full
extent permitted by law, be final and binding upon all parties.
(b) Rule 16b-3 Limitations. Notwithstanding the provisions
of Subsection (a) of this Section 13, in the event that Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor provision ("Rule 16b-3") provides
specific requirements for the administrators of plans of this type, the
Plan shall be administered only by such a body and in such a manner as
shall comply with the applicable requirements of Rule 16b-3.
14. Designation of Beneficiary.
(a) Subject to Applicable Laws, 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 is 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 the 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.
15. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an
option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the
laws
of descent and distribution or as provided in Section 14 hereof) by the
participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat
such act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.
16. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such
payroll
deductions.
17. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to
participating Employees at least annually, which statements will set
forth the amounts of payroll deductions, the Purchase Price, the number
of shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the Reserves as well as the
price per share of Common Stock covered by each option under the Plan
which has not yet been exercised shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be
deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall
affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Offering Period
will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board.
(c) Merger or Asset Sale. In the event of a proposed sale
of all or substantially all of the assets of the Company, or the merger
of the Company with or into another corporation, the Offering Period
during which such event occurs shall be cancelled and participants shall
receive a refund of all amounts contributed to the Plan during such
Offering Period, unless the Board determines, in the exercise of its
sole
discretion and in lieu of cancelling such Offering Period, to shorten
the
Offering Period then in progress by setting a new Exercise Date (the
"New
Exercise Date"). If the Board shortens the Offering Period then in
progress in lieu of cancelling the Offering Period, the Board shall
notify each participant in writing, at least ten (10) business days
prior
to the New Exercise Date, that the Exercise Date for his option has been
changed to the New Exercise Date and that his option will be exercised
automatically on the New Exercise Date, unless prior to such date he has
withdrawn from the Offering Period as provided in Section 10 hereof.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as
the price per share of Common Stock covered by each outstanding option,
in the event the Company effects one or more reorganizations,
recapitalization, rights offerings or other increases or reductions of
shares of its outstanding Common Stock, and in the event of the Company
being consolidated with or merged into any other corporation.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time
and for any reason terminate or amend the Plan. Except as provided in
Section 18 hereof, no such termination can affect options previously
granted, provided that an Offering Period may be terminated by the Board
of Directors on any Exercise Date if the Board determines that the
termination of the Plan is in the best interests of the Company and its
shareholders. Except as provided in Section 18 hereof, no amendment may
make any change in any option theretofore granted which adversely
affects
the rights of any participant. To the extent necessary to comply with
Rule 16b-3 or under Section 423 of the Code (or any successor rule or
provision or any other applicable law or regulation), the Company shall
obtain shareholder approval in such a manner and to such a degree as
required.
(b) Without shareholder consent and without regard to
whether any participant rights may be considered to have been "adversely
affected," the Board (or its committee) shall be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the
amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and
crediting
procedures to ensure that amounts applied toward the purchase of Common
Stock for each participant properly correspond with amounts withheld
from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole
discretion advisable which are consistent with the Plan.
20. Notices. All notices or other communications by a
participant to the Company under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by
the
Company at the location, or by the person, designated by the Company for
the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and
the issuance and delivery of such shares pursuant thereto shall comply
with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon
which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at
the
time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned applicable
provisions of law.
22. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its
approval by the shareholders of the Company. It shall continue in
effect
for a term of ten (10) years unless sooner terminated under Section 19
hereof.
Exhibit A
SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
PARTICIPATION AGREEMENT
Enrollment Date: __________
Check One: _____ Original Application _____ Change of
Beneficiary(ies)
_____ Change in Payroll Deduction Rate (Limited to one reduction per
offering period)
1. ________________________hereby elects to participate in the
SymmetriCom, Inc. Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan") and subscribes to purchase shares of the Company's
Common Stock in accordance with this Participation Agreement and
the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the
amount of ____% of my Compensation on each payday (not to exceed
10%) during the Offering Period in accordance with the Employee
Stock Purchase Plan. (Please note that no fractional percentages
are permitted.)
3. I understand that said payroll deductions shall be accumulated for
the purchase of shares of Common Stock at the applicable Purchase
Price determined in accordance with the Employee Stock Purchase
Plan. I understand that if I do not withdraw from an Offering
Period, any accumulated payroll deductions will be used to
automatically exercise my option.
4. I have received a copy of the complete "Employee Stock Purchase
Plan." I understand that my participation in the Employee Stock
Purchase Plan is in all respects subject to the terms of the Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan
should be issued in the name(s) of (Employee or Employee and Spouse
Only):
6. I understand that if I dispose of any shares received by me
pursuant to the Plan within 2 years after the Enrollment Date (the
first day of the Offering Period during which I purchased such
shares), I will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in
an amount equal to the excess of the fair market value of the
shares at the time such shares were purchased by me over the price
which I paid for the shares. I hereby agree to notify the Company
in writing within 30 days after the date of any disposition of
shares and I will make adequate provision for Federal, state or
other tax withholding obligations, if any, which arise upon the
disposition of the Common Stock. The Company may, but will not be
obligated to, withhold from my compensation the amount necessary to
meet any applicable withholding obligation including any
withholding necessary to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of
Common Stock by me. If I dispose of such shares at any time after
the expiration of the 2-year holding period, I understand that I
will be treated for federal income tax purposes as having received
income only at the time of such disposition, and that such income
will be taxed as ordinary income only to the extent of an amount
equal to the lesser of (1) the excess of the fair market value of
the shares at the time of such disposition over the purchase price
which I paid for the shares, or (2) 15% of the fair market value of
the shares on the first day of the Offering Period. The remainder
of the gain, if any, recognized on such disposition will be taxed
as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock
Purchase Plan. The effectiveness of this Participation Agreement
is dependent upon my eligibility to participate in the Employee
Stock Purchase Plan.
I UNDERSTAND THAT THIS PARTICIPATION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Under no circumstances shall the terms of employment of any participant
be modified or in any way affected by participation in this Plan. The
maintenance of the Plan shall not constitute a contract of employment.
Participating in the Plan will not give any participant a right to be
retained in the employ of the company.
By choosing to participate in the Plan, I understand and agree that
shares purchased for me under the Employee Stock Purchase Plan will be
issued and held, for my account, by Piper Jaffray, Inc., and that the
Company assumes no responsibility in connection with such shares or such
account or in connection with any subsequent disposition of such shares.
I understand that Piper Jaffray will charge a commission of 6 1/4 cents
per share sold. I understand that I must comply with Symmetricom's
Policy Statement Regarding Transactions in Company Securities and the
related statements specifying open and closed trading periods.
Dated:______________
Signature of Employee:___________________
Return completed form and direct any questions to Jane Williamson, Stock
Administrator, at Extension 7804, or fax to Extension 7896.
White - Payroll Blue - Stock Administration Green - Human
Resources Yellow - Employee
Exhibit A-1
SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
PARTICIPATION AGREEMENT - U.K. PARTICIPANTS
Enrollment Date: __________
Check One: _____ Original Application _____ Change of
Beneficiary(ies)
_____ Change in Payroll Deduction Rate (Limited to one reduction per
offering period)
1. _________________________ hereby elects to participate in the
SymmetriCom, Inc. Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan") and subscribes to purchase shares of the Company's
Common Stock in accordance with this Participation Agreement and
the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the
amount of ____% of my Compensation on each payday (not to exceed
10%) during the Offering Period in accordance with the Employee
Stock Purchase Plan. (Please note that no fractional percentages
are permitted.)
3. I understand that said payroll deductions shall be accumulated in
order to exercise the option(s) granted to me pursuant to the
Employee Stock Purchase Plan and to purchase shares of Common
Stock at the applicable Purchase Price determined in accordance
with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll
deductions will be used to automatically exercise my option.
4. I have received a copy of the complete "Employee Stock Purchase
Plan." I understand that my participation in the Employee Stock
Purchase Plan is in all respects subject to the terms of the
Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan
should be issued in the name(s) of (Employee or Employee and Spouse
Only):
6. I understand and acknowledge that notwithstanding any other
provision of this Participation Agreement or the Employee Stock
Purchase Plan:
(a) neither the Employee Stock Purchase Plan nor this
Participation Agreement shall form any part of any contract
of employment between myself and the Company or any
Designated Subsidiary, and it shall not confer on me any
legal or equitable rights (other than those constituting the
Options themselves) against the Company or any Designated
Subsidiary, directly or indirectly, or give rise to any cause
of action in law or in equity against the Company or any
Designated Subsidiary;
(b) no benefits under the Employee Stock Purchase Plan shall form
any part of my wages, pay or remuneration or count as wages,
pay or remuneration for pension fund or any other purpose;
(c) in no circumstances shall I, upon ceasing to be employed by
the Company or any Designated Subsidiary, be entitled to any
compensation for any loss of any right or benefit, or
prospective right or benefit under the Employee Stock
Purchase Plan which I might otherwise have enjoyed, whether
such compensation is claimed by way of damages for wrongful
dismissal, breach of contract, compensation for loss of
office or otherwise;
(d) that the Company expressly retains the right to terminate the
Plan at any time and that I will have no right to continued
participation or option grants under the Employee Stock
Purchase Plan in such event.
7. I understand that I may be subject to taxation upon grant or
exercise of any option granted under the Plan, as well as the
subsequent disposition of any shares purchased under the Plan.
8. I hereby agree to be bound by the terms of the Employee Stock
Purchase Plan. The effectiveness of this Participation Agreement
is dependent upon my eligibility to participate in the Employee
Stock Purchase Plan.
I UNDERSTAND THAT THIS PARTICIPATION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
By choosing to participate in the Plan, I understand and agree that
shares purchased for me under the Employee Stock Purchase Plan will be
issued and held, for my account, by Piper Jaffray, Inc., and that the
Company assumes no responsibility in connection with such shares or such
account or in connection with any subsequent disposition of such shares.
I understand that Piper Jaffray will charge a commission of 6 1/4 cents
per share sold, plus a $25.00 wire fee for each transaction, plus
conversion costs. I understand that I must comply with Symmetricom's
Policy Statement Regarding Transactions in Company Securities and the
related statements specifying open and closed trading periods.
Dated:
Signature of Employee
Dated:
Spouse's Signature
White - Payroll Blue - Stock Administration Green - Human
Resources Yellow - Employe
Exhibit A-2
SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
PARTICIPATION AGREEMENT--PUERTO RICAN PARTICIPANTS
Enrollment Date: __________
Check One: _____ Original Application _____ Change of
Beneficiary(ies)
_____ Change in Payroll Deduction Rate (Limited to one reduction per
offering period)
1. ______________________________ hereby elects to participate in the
SymmetriCom, Inc. Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan") and subscribes to purchase shares of the Company's
Common Stock in accordance with this Participation Agreement and
the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the
amount of ____% of my Compensation on each payday (not to exceed
10%) during the Offering Period in accordance with the Employee
Stock Purchase Plan. (Please note that no fractional percentages
are permitted.)
3. I understand that said payroll deductions shall be accumulated for
the purchase of shares of Common Stock at the applicable Purchase
Price determined in accordance with the Employee Stock Purchase
Plan. I understand that if I do not withdraw from an Offering
Period, any accumulated payroll deductions will be used to
automatically exercise my option.
4. I have received a copy of the complete "Employee Stock Purchase
Plan." I understand that my participation in the Employee Stock
Purchase Plan is in all respects subject to the terms of the Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan
should be issued in the name(s) of (Employee or Employee and Spouse
Only):
6. I understand that at the time shares are purchased for me pursuant
to the Plan, I will be treated for Puerto Rican tax purposes as
having received ordinary income equal to the excess of the fair
market value of the shares over the price I pay for the shares.
The Company may withhold from my compensation an amount necessary
to meet any applicable withholding obligations under Puerto Rican
law.
I also understand that if I sell the shares within 6 months of the
date of purchase , any gain will be taxed as short-term capital
gain. (Currently, short-term capital gain is taxed at the same
rates as ordinary income.) If I sell my shares after six months
from the date of purchase, any gain will be taxed as long-term
capital gain. Currently, the long-term capital gain rate is 20%.
7. I hereby agree to be bound by the terms of the Employee Stock
Purchase Plan. The effectiveness of this Participation Agreement
is dependent upon my eligibility to participate in the Employee
Stock Purchase Plan.
I UNDERSTAND THAT THIS PARTICIPATION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Under no circumstances shall the terms of employment of any participant
be modified or in any way affected by participation in this Plan. The
maintenance of the Plan shall not constitute a contract of employment.
Participating in the Plan will not give any participant a right to be
retained in the employ of the company.
By choosing to participate in the Plan, I understand and agree that
shares purchased for me under the Employee Stock Purchase Plan will be
issued and held, for my account, by Piper Jaffray, Inc., and that the
Company assumes no responsibility in connection with such shares or such
account or in connection with any subsequent disposition of such shares.
I understand that Piper Jaffray will charge a commission of 6 1/4 cents
per share sold. I understand that I must comply with Symmetricom's
Policy Statement Regarding Transactions in Company Securities and the
related statements specifying open and closed trading periods.
Dated:______________
Signature of Employee:___________________
Return completed form and direct any questions to Jane Williamson, Stock
Administrator, at Extension 7804, or fax to Extension 7896.
White - Payroll Blue - Stock Administration Green - Human
Resources Yellow - Employee
Exhibit B
SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the
SymmetriCom, Inc. Employee Stock Purchase Plan which began on
_______________, 19____ (the "Enrollment Date") hereby notifies the
Company that he or she hereby withdraws from the Offering Period. He or
she hereby directs the Company to pay to the undersigned as promptly as
practicable all the payroll deductions credited to his or her account
with respect to such Offering Period. The undersigned understands and
agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no
further payroll deductions will be made for the purchase of shares in
the
current Offering Period and the undersigned shall be eligible to
participate in succeeding Offering Periods only by delivering to the
Company a new Participation Agreement.
Name and Address of Participant:
Signature:
Date:
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