<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
LANDMARK SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
---------------------------
Virginia 54-1221302
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
8000 Towers Crescent Drive, Vienna, Virginia 22180
(Address of Principal Executive Offices)
---------------------------
LANDMARK SYSTEMS CORPORATION 1998 EMPLOYEE STOCK PURCHASE PLAN
( Full Title of the Plan)
---------------------------
Ralph E. Alexander
President
Landmark Systems Corporation
8000 Towers Crescent Drive
Vienna, Virginia 22180
(Name and Address of Agent for Service)
(703) 902-8000
(Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Ellen A. Fredel, Esq.
Shaw, Pittman, Potts & Trowbridge
2300 N Street, N.W.
Washington, D.C. 20037
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered (1) Per Share (2) Price (2) Registration Fee
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value per
share 1,000,000 shares $ 9.625 $ 9,625,000.00 $ 2,840.00
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Plans by reason of any stock
dividend, stock split, recapitalization or other similar transaction effected
without the receipt of consideration which results in an increase in the number
of the Registrant's outstanding shares of Common Stock.
(2) Estimated solely for the purpose of computing the registration fee.
Pursuant to Rule 457(h), the calculation of the registration fee is based on
the average of the high and low sales prices of the Registrant's Common Stock
on August 6, 1998, as reported by the Nasdaq Stock Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which are on file with the Securities and
Exchange Commission, are incorporated herein by reference and made a part
hereof:
(a) The Registration Statement on Form S-1 of Landmark Systems
Corporation (the "Registrant"), as filed with the Securities and Exchange
Commission (the "Commission") on September 15, 1997, together with all
amendments thereto (Registration Statement No. 333-35629);
(b) The description of the Registrant's Common Stock contained in
its Registration Statement on Form 8-A, as filed with the Commission on
November 13, 1997, including any amendment or report filed for the purpose of
updating such description;
(c) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997;
(d) The Proxy Statement in connection with the Registrant's 1998
Annual Meeting; and
(e) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
In addition, all documents subsequently filed 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 hereby 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.
Section 13.1-697 of the Virginia Stock Corporation Act ("VSCA"), as
amended, authorizes a corporation to indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred in the
proceeding if such individual has conducted himself in good faith and if, in
the course of conduct in his official capacity, he believed that his conduct
was in the best interest of the corporation, and in all other cases, he
believed that his conduct was at least not opposed to the corporation's best
interest. A corporation is also authorized to indemnify a director in the case
of any criminal proceeding if the director had no reasonable cause to believe
his conduct was unlawful. The termination of the proceeding by judgment,
order, settlement or conviction is not, of itself, determinative that the
director did not meet the prescribed standard of conduct. A corporation may
not indemnify a director in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation or
in connection with any other proceeding charging the director whether or not
involving action in his official capacity in which the director was adjudged
liable on the basis that personal benefit was improperly received by him.
Section 13.1-698 and 13.1-702 of the VSCA provide that unless limited
by its articles of incorporation, a corporation shall indemnify each director,
officer, employee or agent who entirely prevails in the defense of any
proceeding to which he was a party because he is or was a director, officer,
employee or agent of the corporation against reasonable expenses incurred by
him in connection with the proceeding.
<PAGE> 3
Section 13.1-704(B) of the VSCA provides that any corporation shall
have the power to make any further indemnity, including indemnity with respect
to a proceeding by or in the right of the corporation, and to make additional
provisions for advances and reimbursement of expenses to any director, officer,
employee or resolution adopted, before by the articles of incorporation or by
any bylaw made by the shareholders or any resolution adopted, before or after
the event, by the shareholders except an indemnity against willful misconduct
or a knowing violation of criminal law.
Article Ninth of the Registrant's Articles of Incorporation provides
for indemnification of officers and directors in the situations authorized by
the VSCA.
The Registrant has obtained a policy of directors' and officers'
liability insurance that insures the Registrant's directors and officers
against the cost of defense, settlement or payment of a judgment under certain
circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
None.
ITEM 8. EXHIBITS.
Item Number as per Item 601 of Regulation S-K.
4.1 Articles of Incorporation (incorporated by reference to
Exhibit 3.1 forming a part of the Company's registration statement on
Form S-1 (File No. 333-35629) filed with Securities and Exchange
Commission under the Securities Act of 1933, as amended).
4.2 Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 forming a part of the Company'' registration statement on
Form S-1 (File No. 333-35629) filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended).
4.3 Specimen certificate of Common Stock (incorporated by
reference to Exhibit 4.2 forming a part of the Company's registration
statement on Form S-1 (File No. 333-35629) filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended).
5 Opinion of Shaw, Pittman, Potts & Trowbridge with respect to
legality of the Common Stock registered hereunder (filed herewith).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.2 Consent of Shaw, Pittman, Potts & Trowbridge (included in its
opinion filed as Exhibit 5 to this Registration Statement).
99 Landmark Systems Corporation 1998 Employee Stock Purchase Plan
(filed herewith).
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 (the "Securities Act");
(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
<PAGE> 4
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
(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) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vienna, and the Commonwealth of Virginia, on this
11th day of August, 1998.
LANDMARK SYSTEMS CORPORATION
a Virginia corporation
(Registrant)
By: /s/ Ralph E. Alexander
-------------------------
Ralph E. Alexander
President
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Patrick H. McGettigan
--------------------------
Patrick H. McGettigan Chairman of the Board of Directors August 11, 1998
/s/ Katherine K. Clark Chief Executive Officer and Director August 11, 1998
------------------------ (Principal Executive Officer)
Katherine K. Clark
President, Chief Operating Officer,
/s/ Ralph E. Alexander Chief Financial Officer, Treasurer, August 11, 1998
------------------------- Secretary and Director
Ralph E. Alexander (Principal Financial Officer)
/s/ Leslie J. Collins Vice President, Finance
----------------------- (Principal Accounting Officer) August 11, 1998
Leslie J. Collins
/s/ Henry D. Barratt, Jr. Director August 11, 1998
----------------------------
Henry D. Barratt, Jr.
/s/ Jeffrey H. Bergman Director August 11, 1998
------------------------
Jeffrey H. Bergman
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
/s/ T. Eugene Blanchard Director August 11, 1998
-------------------------
T. Eugene Blanchard
/s/ Patrick W. Gross Director August 11, 1998
-------------------------
Patrick W. Gross
</TABLE>
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Descrption
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<S> <C>
4.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 forming a part of the Company's
registration statement on Form S-1 (File No. 333-35629) filed with Securities and Exchange Commission
under the Securities Act of 1933, as amended).
4.2 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 forming a part of the Company's
registration statement on Form S-1 (File No. 333-35629) filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended).
4.3 Specimen certificate of Common Stock (incorporated by reference to Exhibit 4.2 forming a part of the
Company's registration statement on Form S-1 (File No. 333-35629) filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended).
5 Opinion of Shaw, Pittman, Potts & Trowbridge with respect to legality of the Common Stock registered
hereunder (filed herewith).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.2 Consent of Shaw, Pittman, Potts & Trowbridge (included in its opinion filed as Exhibit 5 to this
Registration Statement).
99 Landmark Systems Corporation 1998 Employee Stock Purchase Plan (filed herewith).
</TABLE>
<PAGE> 1
Exhibit 5
SHAW, PITTMAN, POTTS & TROWBRIDGE
2300 N Street, N.W.
Washington, D.C. 20037
August 11, 1998
Landmark Systems Corporation
8000 Towers Crescent Drive
Vienna, Virginia 22180
Re: Landmark Systems Corporation
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Landmark Systems Corporation, a Virginia
corporation (the "Company"), in connection with the registration of 1,000,000
shares (the "Shares") of the Common Stock, $0.01 par value, of the Company
pursuant to a Registration Statement on Form S-8 under the Securities Act of
1933 (the "Registration Statement"), relating to the Landmark Systems
Corporation 1998 Employee Stock Purchase Plan (the "Plan").
Based upon our examination of the originals or copies of such
documents, corporate records, certificates of officers of the Company and other
instruments as we have deemed necessary and upon the laws as presently in
effect, we are of the opinion that the Shares have been duly authorized for
issuance by the Company, and that upon issuance and delivery in accordance with
the Plans referred to in the Registration Statement, the Shares will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ SHAW, PITTMAN, POTTS & TROWBRIDGE
SHAW, PITTMAN, POTTS & TROWBRIDGE
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 13, 1998, appearing on page
F-2 of Landmark Systems Corporation's Annual Report on Form 10-K for the year
ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
Falls Church, Virginia
August 11, 1998
<PAGE> 1
Exhibit 99
LANDMARK SYSTEMS CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF PLAN
The purpose of the Landmark Systems Corporation 1998 Employee Stock Purchase
Plan is to provide a method for employees of Landmark Systems Corporation and
its subsidiaries to acquire a proprietary interest in Landmark Systems
Corporation through the purchase of common stock of Landmark Systems
Corporation. The Landmark Systems Corporation 1998 Employee Stock Purchase Plan
is intended to comply with the terms of Section 423 of the Internal Revenue
Code of 1986, as amended.
2. DEFINITIONS
Unless the context clearly indicates otherwise, the following terms shall have
the following meanings:
2.1 "Board" means the Board of Directors of the Corporation.
2.2 "Cash Compensation" means the amounts paid to an Eligible
Employee in cash for the performance of services, including cash
payments of overtime, commissions, incentive compensation, and
bonuses, before deduction of salary reduction contributions from
the Eligible Employee's cash compensation pursuant to elections
under a plan subject to Section 125 or 401(k) of the Code.
2.3 "Code" means the Internal Revenue Code of 1986, as amended, or
any successor law. A reference to a particular section of the
Code shall include a reference to any regulations issued under
the section and to the corresponding section of any successor
law.
2.4 "Commission" means the Securities and Exchange Commission or any
successor agency.
2.5 "Committee" means, if applicable, the committee established by
the Board pursuant to Section 3 to be responsible for the
general administration of the Plan.
2.6 "Common Stock" means shares of the voting common stock, par
value $0.01 per share, of the Corporation.
2.7 "Corporation" means Landmark Systems Corporation, a Virginia
corporation, or any successor thereto.
2.8 "Eligible Employee" means any U.S. employee of the Corporation
or of any Subsidiary who meets the eligibility requirements of
Section 4. Foreign employees of the Corporation or of any
Subsidiary are not eligible to participate.
2.9 "Enrollment Form" means the form filed with the Corporation
authorizing payroll deductions pursuant to Section 6.
2.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE> 2
2.11 "Fair Market Value" means the lesser of (a) the closing price of
the Common Stock reported on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") in the
national market on the business day before the Offering
Commencement Date, or (b) the closing price of the Common Stock
reported on NASDAQ in the national market on the business day
before the Offering Termination Date, provided that if there
should be no sales of Common Stock reported on any such date,
the Fair Market Value shall be deemed equal to the closing price
as reported by NASDAQ for the last preceding date on which sales
of Common Stock were reported. In the event that the Common
Stock is listed upon an established stock exchange or exchanges,
"Fair Market Value" means the closing price of Common Stock on
the exchange that trades the largest volume of Common Stock on
such date.
2.12 "Investment Date" means the date on which shares of Common Stock
are acquired. If the Common Stock is acquired from the
Corporation, the "Investment Date" shall be the last business
day of each Purchase Period during which shares of Common Stock
are traded. If the Common Stock is purchased in the
over-the-counter market or in a private transaction, the
"Investment Date" shall be the date on which Common Stock is
purchased.
2.13 "Offering Commencement Date" means the first day of each
calendar quarter.
2.14 "Offering Termination Date" means the last day of each calendar
quarter.
2.15 "Participating Employee" means each Eligible Employee who elects
to participate in the Plan by filing an Enrollment Form pursuant
to Section 6.
2.16 "Payroll Deduction Account" means the account established for a
Participating Employee to hold payroll deductions pursuant to
Section 6.
2.17 "Plan" means the Landmark Systems Corporation 1998 Employee
Stock Purchase Plan, as it may be amended and restated from time
to time.
2.18 "Purchase Period" means a calendar quarter.
2.19 "Purchase Price" means the price for each share of Common Stock,
which shall be 90 percent of the Fair Market Value of such
Common Stock.
2.20 "Subsidiary" means any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the
Corporation if, as of an Investment Date, each of the
corporations other than the last corporation in the unbroken
chain owns stock possessing 50 percent or more of the total
combined voting power of all classes of stock in one of the
other corporations in such chain. The Board shall determine
whether a Subsidiary may adopt the Plan for the benefit of its
employees.
3. ADMINISTRATION OF THE PLAN
3.1 Administration of Plan. The Plan shall be administered by the
Board or by a committee appointed by the Board, which shall be
composed of at least three (3) individuals.
3.2 Authority of Board or Committee. The Board or, if applicable,
the Committee shall have full power and authority to:
(i) determine whether Common Stock shall be purchased from
the Corporation or by purchases in the open market or in
private transactions;
(ii) interpret and construe the Plan and adopt such rules and
regulations it shall deem necessary and advisable to
implement and administer the Plan; and
<PAGE> 3
(iii) designate persons to carry out its responsibilities,
subject to such limitations, restrictions and conditions
as it may prescribe, provided that the Board or Committee
may not delegate its authority if such delegation would
cause the Plan not to comply with the requirements of
Rule 16b-3 under the Exchange Act or any successor rule
of the Commission.
The foregoing determinations shall be made in accordance with the
Board's or Committee's best business judgment as to the best interests
of the Corporation and its stockholders and in accordance with the
purposes of the Plan.
3.3 Determinations of Committee. A majority of the Committee shall
constitute a quorum at any meeting of the Committee, and all
determinations of the Committee shall be made by a majority of
its members. Any action which the Committee shall take through a
written instrument signed by all of its members shall be as
effective as though it had been taken at a meeting duly called
and held. The Committee shall report all actions taken by it to
the Board.
3.4 Delegation. The Board or Committee may delegate such
non-discretionary administrative duties under the Plan to one or
more agents as it shall deem necessary and advisable.
3.5 Effect of Board or Committee Determination. No member of the
Board or Committee shall be personally liable for any action or
determination made in good faith with respect to the Plan or to
any settlement of any dispute between a Participating Employee
and the Corporation. Any decision made or action taken by the
Committee or the Board with respect to the administration or
interpretation of the Plan shall be conclusive and binding upon
all persons.
4. ELIGIBILITY
All U.S. employees of the Corporation and its Subsidiaries are eligible to
participate in the Plan, except employees whose customary employment is twenty
hours or less per week or who are employed for not more than five months in a
calendar year. Each Eligible Employee may become a participant as of the first
day of any calendar quarter by authorizing payroll deductions as provided in
Section 6.
No director of the Corporation or of any Subsidiary who is not an employee
shall be eligible to participate in the Plan. Independent contractors of the
Corporation or any Subsidiary are not eligible to participate in the Plan.
5. SHARES SUBJECT TO PLAN
Subject to adjustment as provided in Section 14, the aggregate number of shares
of Common Stock which may be issued and purchased under the Plan shall not
exceed 1,000,000 shares of Common Stock. Shares needed to satisfy the needs of
the Plan may be acquired from the Corporation or by purchase at the expense of
the Corporation on the open market or in private transactions.
6. ELECTION TO PARTICIPATE
Each Eligible Employee may become a Participating Employee effective on the
first day of any calendar quarter coincident with or following the date such
individual becomes an Eligible Employee by filing with the Board or Committee
an Enrollment Form authorizing specified regular payroll deductions from such
Eligible Employee's Cash Compensation. Such regular payroll deductions shall be
subject to a minimum deduction of $25 per payroll period and a maximum
deduction of 10 percent of Cash Compensation. All regular payroll deductions
shall be credited to the Payroll Deduction Account that the Corporation has
established in the name of the Participating Employee.
<PAGE> 4
A Participating Employee may at any time withdraw from the Plan and cease to be
a Participating Employee. An employee who has ceased to be a Participating
Employee may not again become a Participating Employee until the first day of
the next calendar quarter. A Participating Employee may, effective as of the
first day of the following calendar quarter, increase or decrease the amount of
such Participating Employee's payroll deductions by filing a new Enrollment
Form.
Enrollment Forms must be filed with the Corporation not less than fourteen days
before the beginning of a calendar quarter to be effective for that calendar
quarter unless a shorter period of time is prescribed by the Board or
Committee. An Enrollment Form not filed within the prescribed filing period
shall be effective the first day of the calendar quarter following the calendar
quarter when it would otherwise become effective. An Enrollment Form, once
filed, shall remain in effect for all subsequent payroll periods, unless the
Participating Employee withdraws from the Plan or amends his or her Enrollment
Form to increase or decrease the Employee's payroll deductions.
7. PURCHASE FROM PAYROLL DEDUCTION ACCOUNT
Each Participating Employee having eligible funds in such Participating
Employee's Payroll Deduction Account on an Investment Date shall be deemed,
without any further action, to have purchased the number of whole shares which
the eligible funds in such Participating Employee's Payroll Deduction Account
could purchase at the Purchase Price. Any portion of the Participating
Employee's Payroll Deduction Account that is not applied to the purchase of
shares of Common Stock shall be held for the purchase of shares on the next
Investment Date, unless the Participant has withdrawn from the Plan. In such
event, any funds credited to the Participating Employee's Payroll Deduction
Account shall be returned, without interest.
8. STOCK PURCHASES
Shares of Common Stock shall be acquired for Participating Employees as of each
Investment Date either from the Corporation or, if directed by the Board or
Committee, by purchases on the open market or in private transactions using the
payroll deduction amounts held by the Corporation for Participating Employees.
If shares are purchased in one or more transactions on the open market or in
private transactions at the direction of the Board or Committee, the
Corporation will pay the difference between the Purchase Price and the price at
which such shares are purchased for Participating Employees. As soon as
practicable following each Investment Date, the Corporation shall direct the
Corporation's transfer agent to credit on the books of the Corporation or
deliver to each Participating Employee a stock certificate, the whole shares of
stock acquired on such Investment Date by the Participating Employee.
9. LIMITATION ON PURCHASES
No Participating Employee may purchase any Common Stock under this Plan and any
other plan of the Corporation, and its Subsidiary corporations intended to
qualify under Section 423 of the Code if the Fair Market Value of the purchase
plus the Fair Market Value of all prior purchases by the Participating Employee
under such plans (determined by reference to the Fair Market Value on each date
of purchase) during any calendar year exceeds $25,000.
A Participating Employee's Payroll Deduction Account may not be used to
purchase Common Stock on any Investment Date to the extent that after such
purchase the Participating Employee would own (or be considered as owning
within the meaning of Section 424(d) of the Code) stock possessing 5 percent or
more of the total combined voting power or value of all classes of stock of the
Corporation or any Subsidiary. For this purpose, stock which the Participating
Employee may purchase under any outstanding option shall be treated as owned by
such Participating Employee. As of the first Investment Date on which this
Section 9 limits a Participating Employee's ability to purchase Common Stock,
the employee shall cease to be a Participating Employee.
<PAGE> 5
10. TITLE TO SHARES
The Corporation shall direct the Corporation's stock transfer agent to credit
each Participating Employee with the whole shares acquired on each Investment
Date. The Participating Employee may designate on his or her Enrollment Form
whether shares shall be credited in the name of the Participating Employee or
in the name of such Participating Employee jointly with a member of such
Participating Employee's family, with right of survivorship. A Participating
Employee who is a resident of a jurisdiction which does not recognize such a
joint tenancy may direct that shares be credited in the Participating
Employee's name as tenant in common with a member of the Participating
Employee's family, without right of survivorship.
11. RIGHTS AS A SHAREHOLDER
A Participating Employee shall have the right at any time to obtain a
certificate for the whole shares of Common Stock credited to such Participating
Employee or to direct that such shares be transferred to a broker designated by
the Participating Employee to be held in street name.
Subject to the provisions of Section 6, a Participating Employee shall have the
right at any time to direct that any shares held in such Participating
Employee's name be sold through a broker selected by the Participating
Employee, and that the proceeds, less expenses of sale, be remitted to the
Participating Employee.
If a Participating Employee ceases to be such, the Participating Employee may
elect to have the shares credited to such Participating Employee's name sold by
a broker designated by the Participating Employee and the proceeds, after
selling expenses, remitted, or the Participating Employee may elect to have a
certificate for the whole shares of Common Stock credited to such Participating
Employee's name forwarded to the Participating Employee.
As a condition of participation in the Plan, each Participating Employee agrees
to notify the Corporation in the event such individual sells or otherwise
disposes of any of the shares of Common Stock acquired under this Plan within
two years of the Investment Date on which such shares were purchased.
12. RETIREMENT, TERMINATION AND DEATH
In the event of a Participating Employee's retirement or termination of
employment, or if a Participating Employee ceases to be such, the amount in the
Participating Employee's Payroll Deduction Account shall be refunded to the
Participating Employee, and, unless otherwise elected, certificates will be
issued for whole shares held in such Participating Employee's name. If a
Participating Employee elects to have the shares sold, the Participating
Employee will receive the proceeds of the sale, less selling expenses. In the
event of death, the amount in the Participating Employee's Payroll Deduction
Account and all shares in the Participating Employee's name shall be delivered
to the beneficiary designated by the Participating Employee in a writing filed
with the Corporation. If no beneficiary has been designated, or if the
designated beneficiary does not survive the Participating Employee, such amount
and all shares shall be delivered to the estate of the Participating Employee.
13. RIGHTS NOT TRANSFERABLE
Rights under the Plan are not transferable by a Participating Employee except
pursuant to a qualified domestic relations order, by will or by the laws of
descent and distribution. All rights under the Plan are exercisable, during a
Participating Employee's lifetime, only by such Participating Employee.
<PAGE> 6
14. CHANGES IN CAPITALIZATION
Subject to any required action by the stockholders, the number of shares
covered by the Plan and the Purchase Price shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock of
the Corporation resulting from a subdivision or consolidation of shares or the
payment of a stock dividend (but only on the Common Stock) or any other
increase or decrease in the number of such shares effected without receipt of
consideration by the Corporation. In the event of a change of all of the
Corporation's authorized Common Stock with par value into the same number of
shares with a different par value or without par value, the Shares resulting
from any such change shall be deemed to be Common Stock within the meaning of
the Plan.
To the extent that the foregoing adjustments relate to stock or securities of
the Corporation, such adjustments shall be made by the Board or Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that the Board or Committee shall make no adjustment that would cause
the Plan to fail to continue to qualify as an employee stock purchase plan
under Section 423 of the Code.
Except as hereinbefore expressly provided in this Section 14, a Participating
Employee shall have no rights (i) by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class, or (ii) by
reason of any dissolution, liquidation, merger, or consolidation, spin-off of
assets or stock of another corporation, or any issue by the Corporation of
shares of stock of any class, nor shall any of these actions affect, or cause
an adjustment to be made with respect to, the number or Purchase Price of
shares subject to the Plan. The Plan shall not affect in any way the right or
power of the Corporation (i) to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, (ii) to merge
or consolidate, (iii) to dissolve, liquidate, or sell or transfer all or any
part of its business or assets or (iv) to issue any bonds, debentures,
preferred or other preference stock ahead of or affecting the Common Stock.
15. AMENDMENT OF THE PLAN
The Board of Directors may at any time, or from time to time, amend the Plan in
any respect; provided, however, that the shareholders of the Corporation must
approve any amendment that would materially (i) decrease the Purchase Price,
(ii) increase the number of shares of Common Stock that may be issued under the
Plan, or (iii) modify the requirements as to eligibility for participation in
the Plan.
16. TERMINATION OF THE PLAN
The Plan shall terminate on the earlier of:
(a) the Investment Date that Participating Employees become entitled to
purchase a number of shares greater than the number of reserved shares
remaining available for purchase; or
(b) April 1, 2008, or at any earlier date at the discretion of the Board of
Directors.
In the event that the Plan terminates under circumstances described in (a)
above, reserved shares remaining as of the termination date shall be issued to
Participating Employees on a pro rata basis. Upon termination of the Plan, all
amounts in an employee's Payroll Deduction Account that are not used to
purchase Common Stock will be refunded.
17. GOVERNING LAW
The Plan shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Virginia.
<PAGE> 7
18. EFFECTIVE DATE OF PLAN
The Plan shall become effective on the date and at the time of the
Corporation's 1998 annual meeting of shareholders, subject to the approval of
the Plan on or before such date by a majority of the voting shares of Common
Stock represented and entitled to vote.
