As filed with the Securities and Exchange Commission on March 11, 1997
Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
DAKA INTERNATIONAL, INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware 04-3024178
(State of Incorporation) (I.R.S. Employer Identification #)
One Corporate Place
55 Ferncroft Road
Danvers, MA 01923-4001
(508) 774-9115
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
DAKA INTERNATIONAL, INC. EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
------------------------------------
William H. Baumhauer
Chairman and Chief Executive Officer
DAKA International, Inc.
One Corporate Place
55 Ferncroft Road
Danvers, Massachusetts 01923-4001
(508) 774-9115
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------------
With copies to:
Charles W. Redepenning, Jr.
DAKA International, Inc.
One Corporate Place
55 Ferncroft Road
Danvers, Massachusetts 01903-4001
(617) 570-1000
------------------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
Title of Securities Being Amount to be Proposed Maximum
Registered Registered (1) Offering Price Per Share
Common Stock, par value $.01 400,000 $7.36(2)
per share
Proposed Maximum Amount of
Aggregate Offering Price Registration Fee
$2,945,200.00 $883.56
================================================================================
(1) Plus such additional number of shares as may be required in the event of a
stock dividend, reverse stock split, split-up, recapitalization, forfeiture
of stock under the Plan or other similar event.
(2) This estimate is made pursuant to Rule 457(c) and (h) under the Securities
Act of 1933, as amended (the "Securities Act"), solely for the purposes of
determining the amount of the registration fee. The registration fee is
based upon the average of the high and low prices for the Registrant's
Common Stock, $.01 par value per share as reported on the Nasdaq National
Market on March 7, 1997.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
DAKA International, Inc. (the "Registrant") hereby incorporates by
reference the documents listed in (a) through (c) below, which have previously
been filed with the Securities and Exchange Commission:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended June
29, 1996;
(b) (1) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 28, 1996.
(2) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
December 28, 1996.
(3) The Registrant's Registration Statement on Form S-3 (No. 333-14841).
(c) The description of the Company's Common Stock contained in Registration
Statement on Form 8-A dated October 11, 1988, including any amendment or
report filed for the purpose of amending such description.
In addition, all documents subsequently filed with the Securities and
Exchange Commission by the Registrant 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 offered hereunder 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 a part hereof
from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant is a Delaware corporation. Reference is made to Section
145(a) and section 145(b) of the Delaware General Corporation Law, which enables
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
or she is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action, suit or proceeding if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
<PAGE>
A corporation may also indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorney's fees)
actually and reasonably incurred by him or her connection with the defense or
settlement of such action or suit if he or she 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 except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 145 further provides: that a Delaware corporation is required to
indemnify a director, officer, employee or agent against expenses (including
attorney's fees) actually and reasonably incurred by him in connection with any
action, suit or proceeding or in defense of any claim, issue or matter therein
as to which such person has been successful on the merits or otherwise; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that
indemnification provided for by Section 145 shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of such
person's heirs, executors and administrators. A Delaware corporation may provide
indemnification only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct. Such
determination is to be made (i) by the board of directors by vote of directors
who were not party to such action, suit or proceeding, or (ii) if such a quorum
is not obtainable, or even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion or (iii) by the
stockholders.
The Certificate of Incorporation and By-laws of the Registrant provide
for indemnification of directors and officers of the Registrant to the fullest
extent permitted by law, as now in effect or later amended. The By-laws also
provide that expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the Registrant in advance of
final deposition upon receipt of any undertaking by or on behalf of such person
to repay such amount if it ultimately is determined that he is not entitled to
be indemnified by the Registrant. The By-laws further provide that such
indemnification provisions are not exclusive.
Additionally, the Registrant's Certificate eliminates the personal
liability of the Registrant's directors to the Registrant or the stockholders of
the Registrant to the fullest extent permitted by the provisions of Section 102
of the Delaware General Corporation Law, as the same may be amended and
supplemented.
Item 7. Exemption from Registration Claimed.
Not Applicable.
<PAGE>
Item 8. Exhibits.
(a) The following is a complete list of exhibits filed or incorporated
by reference as part of this Registration Statement.
Exhibit
4.1 Certificate of Incorporation*
4.3 By-laws*
5.1 Opinion of Goodwin, Procter & Hoar LLP, as to the legality of
the securities being registered.
10.1 DAKA International, Inc. Employee Stock Purchase Plan.
23.1 Consent of Independent Auditors, Deloitte & Touche LLP.
23.2 Consent of Counsel, Goodwin, Procter & Hoar LLP (included in
Exhibit 5.1 hereto).
24.1 Powers of Attorney.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the rgistration
statement; and
(iii)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.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
undersigned registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registation by means of a post-effective amendment
any of the securities being registered whcih remain unsold at the
terination of the offering.
- ----------------------------
* Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 29, 1996.
<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Act and will
be governed by the final adjudication of such issue.
<PAGE>
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 Town of Danvers, the Commonwealth of Massachusetts, on this
10th day of March, 1997.
DAKA INTERNATIONAL, INC.
By:/s/William H. Baumhauer
--------------------------
William H. Baumhauer, Chairman and
Chief Executive Officer
Signature Capacity Date
/s/William H. Baumhauer Chairman, Chief Executive March 10, 1997
- ----------------------- Officer and Director
William H. Baumhauer (Principal Executive Officer)
* President and Chief Operating March 10, 1997
- ----------------------- Officer and Director
Allen R. Maxwell
/s/Donald C. Moore Senior Vice President and Chief March 10, 1997
- ------------------ Financial Officer (Principal
Donald C. Moore Financial and Accounting Officer)
* Director March 10, 1997
- -----------------------
Erline Belton
* Director March 10, 1997
- -----------------------
Joseph W. O "Donnell
* Director March 10, 1997
- -----------------------
Dean P. Vlahos
*By:/s/Charles W. Redepenning, Jr.
- ----------------------------------
Charles W. Redepenning, Jr.
Senior Vice President and
General Counsel,
as attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 Certificate of Incorporation*
4.3 By-Laws*
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the
legality of the securities being registered.
10.1 DAKA International, Inc. Employee Stock Purchase Plan.
23.1 Consent of Independent Auditors, Deloitte & Touche LLP.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in
Exhibit 5.1 hereto).
24.1 Powers of Attorney.
- ----------------------------
* Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 29, 1996.
EXHIBIT 5.1
March 10, 1997
DAKA International, Inc.
One Corporate Place
55 Ferncroft Road
Danvers, Massachusetts 01923-4001
Re: DAKA International, Inc. Registration on Form S-8
Ladies and Gentlemen:
This opinion is furnished in connection with the registration pursuant
to the Securities Act of 1933, as amended (the "Act"), of 400,000 shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), of
DAKA International, Inc. (the "Company") which may be issued pursuant to the
DAKA International, Inc. Employee Stock Purchase Plan.
We have acted as counsel to the Company in connection with the
registration of the Shares under the Act. We have examined the Plan; the
Certificate of Incorporation and the By-laws of the Company, each as amended to
date; such records of the corporate proceedings of the Company as we deemed
material; and such other certificates, receipts, records and documents as we
considered necessary for the purposes of this opinion.
We are attorneys admitted to practice in the Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdictions
other than the laws of the United States of America and the Commonwealth of
Massachusetts and the general corporation laws of the State of Delaware.
Based upon the foregoing, we are of the opinion that upon the issuance
and delivery of the Shares in accordance with the terms of the Registration
Statement and the Plan, the Shares will be legally issued, fully paid and
non-assessable shares of the Company's Common Stock.
The foregoing assumes that all requisite steps will be taken to comply
with the requirements of the Act and applicable requirements of state laws
regulating the offer and sale of securities.
We hereby consent to the filing of this opinion as part of the
above-referenced Registration Statement and to the use of our name therein.
Very truly yours,
/s/Goodwin, Procter & Hoar LLP
- ------------------------------
GOODWIN, PROCTER & HOAR LLP
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
DAKA International, Inc. on Form S-8 of our report dated September 6, 1996
(except for Note 5 as to which the date is October 15, 1996), appearing in the
Annual Report on Form 10-K of DAKA International, Inc. For the year ended June
29, 1996.
/s/Deloitte & Touche LLP
Boston, Massachusetts
March 10, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints each of William H. Baumhauer,
Donald C. Moore and Charles W. Redepenning, Jr. acting together or singularly,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him in his name, place and stead, in any and all
capacities, (i) to sign a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
shares issuable pursuant to the DAKA International, Inc. Employee Stock Purchase
Plan and (ii) to sign any and all amendments (including post-effective
amendments) to such Registration Statement, and (iii) to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission under the Securities Act. The undersigned
hereby ratifies and confirms all that such attorney-in-fact or his substitute
may lawfully do or cause to be done by virtue hereof.
Signature Capacity Date
/s/William H. Baumhauer Chairman, Chief Executive Officer March 10, 1997
- ----------------------- and Director (Principal Executive
William H. Baumhauer Officer)
/s/Allen R. Maxwell President and Chief Operating March 10, 1997
- ------------------- Officer and Director
Allen R. Maxwell
/s/Donald C. Moore Senior Vice President and March 10, 1997
- ------------------ Chief Financial Officer (Principal
Donald C. Moore Financial and Accounting Officer)
/s/Erline Belton Director March 10, 1997
Erline Belton
/s/Joseph W. O'Donnell Director March 10, 1997
Joseph W. O'Donnell
/s/Dean P. Vlahos Director March 10, 1997
Dean P. Vlahos
Exhibit 10.1
DAKA STOCK PURCHASE PLAN
The purpose of the DAKA Stock Purchase Plan ("the Plan") is to provide
eligible associates of DAKA International, Inc. (the "Company") and certain of
its subsidiaries with opportunities to purchase shares of the Company's common
stock, par value $0.01 per share (the "Common Stock"). Four hundred thousand
(400,000) shares of Common Stock in the aggregate have been approved and
reserved for this purpose. The Plan is intended to constitute an "employee stock
purchase plan" within the meaning of Section 423(b) of the Internal Revenue Code
of 1986, as amended (the "Code"), and shall be interpreted in accordance with
that intent.
1. Administration. The Plan will be administered by the person or persons
(the "Administrator") appointed by the Company's Board of Directors (the
"Board") for such purpose. The Administrator has authority to make rules and
regulations for the administration of the Plan, and its interpretations and
decisions with regard thereto shall be final and conclusive. No member of the
Board or individual exercising administrative authority with respect to the Plan
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted hereunder.
2. Offerings. The Company will make one or more offerings to eligible
associates to purchase Common Stock under the Plan ("Offerings"). Unless
otherwise determined by the Administrator, the initial Offering will begin on
January 2, 1997 and will end on March 31, 1997. Thereafter, unless otherwise
determined by the Administrator, an Offering will begin on the first business
day occurring on or after each April 1, July 1, October 1 and January 1
<PAGE>
and will end on the last business day occurring on or before the following June
30, September 30, December 31 and March 31, respectively. The Administrator may,
in its discretion, designate a different period for any Offering, provided that
no Offering shall exceed one year in duration or overlap any other Offering.
3. Eligibility. All associates (i.e., employees) of the Company (including
associates who are also directors of the Company) and all associates of each
Designated Subsidiary (as defined in Section 11) are eligible to participate in
any one or more of the Offerings under the Plan, provided that as of both the
first day of the applicable Offering (the "Offering Date") and such earlier
date, not more than fifteen (15) business days prior to the Offering Date, as
shall be established for the Offering, they are customarily employed by the
Company or a Designated Subsidiary for more than twenty (20) hours a week.
Notwithstanding the foregoing, participation in the Plan will neither be
permitted nor be denied contrary to the requirements of the Code.
4. Participation. An associate eligible for any Offering may participate in
such Offering by submitting an enrollment form to his appropriate payroll
location at least fifteen (15) business days before the Offering Date (or by
such other deadline as shall be established for the Offering). The form will (a)
state an amount to be deducted from his Compensation (as defined in Section 11)
per pay period, (b) authorize the purchase of Common Stock for him in each
Offering in accordance with the terms of the Plan and (c) specify the exact name
or names in which shares of Common Stock purchased for him are to be issued
pursuant to Section 10. An associate who does not enroll in accordance with
these procedures will be deemed to have waived his right to participate. Unless
an associate files a new enrollment form or withdraws from the Plan, his
deductions and purchases will continue at the same
<PAGE>
amount of Compensation for future Offerings, provided he remains eligible.
Notwithstanding the foregoing, participation in the Plan will neither be
permitted nor be denied contrary to the requirements of the Code.
5. Associate Contributions. Each eligible associate may authorize payroll
deductions at a minimum of ten dollars ($10.00) per week up to a maximum of
fifty percent (50%) of his Compensation for each pay period. The Company will
maintain book accounts showing the amount of payroll deductions made by each
participating associate for each Offering. No interest will accrue or be paid on
payroll deductions.
6. Deduction Changes. Except as may be determined by the Administrator in
advance of an Offering, an associate may not increase or decrease his payroll
deduction during any Offering, but may increase or decrease his payroll
deduction with respect to the next Offering (subject to the limitations of
Section 5) by filing a new enrollment form at least fifteen (15) business days
before the next Offering Date (or by such other deadline as shall be established
for the Offering). The Administrator may, in advance of any Offering, establish
rules permitting an associate to increase, decrease or terminate his payroll
deduction during an Offering.
7. Withdrawal. An associate may withdraw from participation in the Plan by
delivering a written notice of withdrawal to his appropriate payroll location.
If received at least fifteen (15) business days before the last day of an
Offering (or by such other deadline as shall be established in advance of the
Offering), the associate's withdrawal will be effective as of the next business
day; if received after such deadline, the associate's withdrawal will be
effective on the first day of the next Offering. Following an associate's
withdrawal, the
<PAGE>
Company will promptly refund to him his entire account balance under the Plan
(after payment for any Common Stock purchased before the effective date of
withdrawal). Partial withdrawals are not permitted. The associate may not begin
participation again during the remainder of the Offering, but may enroll in a
subsequent Offering in accordance with Section 4.
8. Grant of Options. On each Offering Date, the Company will grant to each
eligible associate who has not previously waived his right to participate in
such Offering an option ("Option") to purchase on the last day of such Offering
(the "Exercise Date"), at the Option Price hereinafter provided for, a maximum
of six hundred (600) shares of Common Stock reserved for the purposes of the
Plan, or such other maximum number of shares as shall have been established by
the Administrator in advance of the Offering. The purchase price for each share
purchased under such Option (the "Option Price") will be a certain percentage of
the Fair Market Value of the Common Stock on the Offering Date or the Exercise
Date, whichever is less. Such percentage will be determined by the Board in
advance of such Offering Date and will be between 85% and 100% of the Fair
Market Value of the Common Stock, inclusive. Notwithstanding the foregoing, no
associate may be granted an option hereunder if such associate, immediately
after the option was granted, would be treated as owning stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or any Parent or Subsidiary (as defined in Section 11).
For purposes of the preceding sentence, the attribution rules of Section 424(d)
of the Code shall apply in determining the stock ownership of an associate, and
all stock which the associate has
<PAGE>
a contractual right to purchase shall be treated as stock owned by the
associate. In addition, no associate may be granted an Option which permits his
rights to purchase stock under the Plan, and any other employee stock purchase
plan of the Company and its Parents and Subsidiaries, to accrue at a rate which
exceeds $25,000 of the fair market value of such stock (determined on the option
grant date or dates) for each calendar year in which the Option is outstanding
at any time. The purpose of the limitation in the preceding sentence is to
comply with Section 423(b)(8) of the Code.
9. Exercise of Option and Purchase of Shares. Each associate continues to
be a participant in the Plan on the Exercise Date shall be deemed to have
exercised his Option on such date and shall acquire from the Company such number
of whole shares of Common Stock reserved for the purpose of the Plan as his
accumulated payroll deductions on such date will purchase at the Option Price,
subject to any other limitations contained in the Plan. Except as otherwise
determined by the Administrator in advance of an Offering, any amount remaining
in an associate's account at the end of an Offering solely by reason of the
inability to purchase a fractional share will be carried forward to the next
Offering; any other balance remaining in an associate's account at the end of an
Offering will be refunded to the associate promptly.
10. Issuance of Certificates. Certificates representing shares of Common
Stock purchased under the Plan may be issued only in the name of the associate,
in the name of the associate and another person of legal age as joint tenants
with rights of survivorship, or in the name of a broker authorized by the
associate to be his, or their, nominee for such purpose.
<PAGE>
11. Definitions.
The term "Compensation" means the amount of base pay, prior to salary
reduction pursuant to either Section 125 or 401(k) of the Code, but excluding
overtime, commissions, incentive or bonus awards, allowances and reimbursements
for expenses such as relocation allowances or travel expenses, income or gains
on the exercise of Company stock options, and similar items.
The term "Designated Subsidiary" means any present or future Subsidiary (as
defined below) that has been designated by the Board to participate in the Plan.
The Board may so designate any Subsidiary, or revoke any such designation, at
any time and from time to time, either before or after the Plan is approved by
the stockholders.
The term "Fair Market Value of the Common Stock" means (i) if the Common
Stock is admitted to trading on a national securities exchange or the Nasdaq
National Market, the closing price reported for the Common Stock on such
exchange or system for such date or, if no sales were reported for such date,
for the next preceding date for which a sale was reported, or (ii) if clause (i)
does not apply but the Common Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), the
average of the highest bid and lowest asked prices reported for the Common Stock
on NASDAQ for such date or, if no bid and asked prices were reported for such
date, for the next preceding date for which such prices were reported.
The term "Parent" means a "parent corporation" with respect to the Company,
as defined in Section 424(e) of the Code.
<PAGE>
The term "Subsidiary" means a "subsidiary corporation" with respect to the
Company, as defined in Section 424(f) of the Code.
12. Rights on Termination of Employment. If a participant's employment
terminates for any reason before the Exercise Date for any Offering, no payroll
deduction will be taken from any pay due and owing to the participant and the
balance in his account will be paid to him as if he had withdrawn from the Plan
under Section 7. An associate will be deemed to have terminated employment, for
this purpose, if the corporation that employs him, having been a Designated
Subsidiary, ceases to be a Subsidiary, or if the associate is transferred to any
corporation other than the Company or a Designated Subsidiary.
13. Special Rules. Notwithstanding anything herein to the contrary, the
Administrator may adopt special rules applicable to the associates of a
particular Designated Subsidiary, whenever the Administrator determines that
such rules are necessary or appropriate for the implementation of the Plan in a
jurisdiction where such Designated Subsidiary has associates; provided that such
rules are consistent with the requirements of Section 423(b) of the Code. Such
special rules may include (by way of example, but not by way of limitation) the
establishment of a method for associates of a given Designated Subsidiary to
fund the purchase of shares other than by payroll deduction, if the payroll
deduction method is prohibited by local law or is otherwise impracticable. Any
special rules established pursuant to this Section 13 shall, to the extent
possible, result in the associates subject to such rules having substantially
the same rights as other participants in the Plan.
14. Optionees Not Stockholders. Neither the granting of an Option to an
associate nor the deductions from his pay shall constitute such associate a
holder of the shares of
<PAGE>
Common Stock covered by an Option under the Plan until such shares have been
purchased by and issued to him.
15. Rights Not Transferable. Rights under the Plan are not transferable by
a participant other than by will or the laws of descent and distribution, and
are exercisable during the associate's lifetime only by the associate.
16. Application of Funds. All funds received or held by or on behalf of the
Company under the Plan may be combined with other corporate funds and may be
used for any corporate purpose.
17. Adjustment in Case of Changes Affecting Common Stock. In the event of a
subdivision of outstanding shares of Common Stock, or the payment of a dividend
in Common Stock, the number of shares approved for the Plan, and the share
limitation set forth in Section 8, shall be increased proportionately, and such
other adjustment shall be made as may be deemed equitable by the Administrator.
In the event of any other change affecting the Common Stock, such adjustment
shall be made as may be deemed equitable by the Administrator to give proper
effect to such event.
18. Amendment of the Plan. The Board may at any time, and from time to
time, amend the Plan in any respect, except that without the approval, within
twelve (12) months of such Board action, by the holders of a majority of the
shares of stock of the Company present or represented and entitled to vote at a
meeting of stockholders, no amendment shall be made increasing the number of
shares approved for the Plan or making any other change that would require
stockholder approval in order for the Plan, as amended, to qualify as an
"employee stock purchase plan" under Section 423(b) of the Code.
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19. Insufficient Shares. If the total number of shares of Common Stock that
would otherwise be purchased on any Exercise Date plus the number of shares
purchased under previous Offerings under the Plan exceeds the maximum number of
shares issuable under the Plan, the shares then available shall be apportioned
among participants in proportion to the amount of payroll deductions accumulated
on behalf of each participant that would otherwise be used to purchase Common
Stock on such Exercise Date.
20. Termination of the Plan. The Plan may be terminated at any time by the
Board. Upon termination of the Plan, all amounts in the accounts of participants
shall be promptly refunded.
21. Governmental Regulations. The Company's obligation to sell and deliver
Common Stock under the Plan is subject to obtaining all governmental approvals
required in connection with the authorization, issuance, or sale of such stock.
The Plan shall be governed by the law of the Commonwealth of Massachusetts
except to the extent that such law is preempted by federal law.
22. Issuance of Shares. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.
23. Tax Withholding. Participation in the Plan is subject to any required
tax withholding on income of the participant in connection with the Plan. Each
associate agrees, by entering the Plan, that the Company and its Subsidiaries
shall have the right to deduct any such taxes from any payment of any kind
otherwise due to the associate, including shares issuable under the Plan.
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24. Notification Upon Sale of Shares. Each associate agrees, by entering
the Plan, to give the Company prompt notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.
25. Effective Date and Approval of Shareholders. The Plan shall take effect
on the later of the date it is adopted by the Board or the date it is approved
by the holders of a majority of the shares of stock of the Company present or
represented and entitled to vote at a meeting of stockholders, which approval
must occur within twelve (12) months of the adoption of the Plan by the Board.
