<PAGE>
As filed with the Securities and Exchange Commission on October 20, 1999
Registration No. 333-__________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
CYGNUS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2978092
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
400 PENOBSCOT DRIVE, REDWOOD CITY, CA 94063
(Address of principal executive offices) (Zip Code)
------------------
CYGNUS, INC. AMENDED 1991 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plan)
------------------
BARBARA G. MCCLUNG, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
CYGNUS, INC.
400 PENOBSCOT DRIVE, REDWOOD CITY, CA 94063
(Name and address of agent for service)
(650) 369-4300
(Telephone number, including area code, of agent for service)
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TO BE TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PER SHARE PRICE REGISTRATION FEE
------------------- ----------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 350,000 (1) $9.781 (2) $3,423,438 (2) $951.72
(Amended 1991 Employee Stock
Purchase Plan)
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Cygnus, Inc. Amended 1991
Employee Stock Purchase Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without
the Registrant's receipt of consideration which results in an increase
in the number of the Registrant's outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended (the "1933 Act"), on the basis
of the average of the high and low selling prices per share of the
Registrant's Common Stock on October 15, 1999, as reported by the
NASDAQ National Market System.
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
will begin as soon as reasonably practicable after such effective date.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Cygnus, Inc. (all references to "we", "us", "our", "the Company" or
the "Registrant" in this Registration Statement mean Cygnus, Inc.) files this
Registration Statement with the Securities and Exchange Commission (the
"Commission") on Form S-8 to register 350,000 shares authorized for issuance
under the Registrant's Amended 1991 Employee Stock Purchase Plan.
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
We hereby incorporate by reference into this Registration Statement the
following documents previously filed with the Commission:
a. The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 filed with the Commission on
March 30, 1999;
b. The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1999 and June 30, 1999 filed with the
Commission on April 27, 1999 (with amendments filed on May 3,
1999 and May 4, 1999) and August 16, 1999, respectively;
c. The Registrant's Current Reports on Form 8-K filed with the
Commission (i) on February 5, 1999 (Film No. 99522291),
(ii) on February 5, 1999 (Film No. 99522321), (iii) on
June 7, 1999 (Film No. 99641354); (iv) on July 2, 1999
(Film No. 99659094); (v) on July 20, 1999 (Film No. 99667122);
(vi) on July 28, 1999 (Film No. 99671340), and (vii) on
October 7, 1999 (Film No. 99724796);
d. The Registrant's Registration Statement on Form 8-A filed
with the Commission on December 21, 1990, which provides
a description of the Registrant's Common Stock, including any
amendments or reports filed for the purpose of updating such
description; and
e. The Registrant's Registration Statement on Form 8-A
filed with the Commission on October 29, 1993, which provides
a description of the Registrant's Preferred Share Purchase
Rights, including any amendments or reports filed for the
purpose of updating such description.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 (the "1934 Act") after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which de-registers all securities
then remaining unsold shall be deemed to be incorporated by reference into
this Registration Statement and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that
a statement contained herein or in any subsequently filed document which also
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified
II-1
<PAGE>
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
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 145 of the General Corporation Law of the State of Delaware
(the "Delaware Law") provides for the indemnification of directors, officers,
employees and other agents under certain circumstances. Our Bylaws (the
"Bylaws") require us to indemnify each of our officers and directors to the
fullest extent permitted by the Delaware Law against certain expenses,
judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding arising by reason of the fact that
such person is or was an agent of Cygnus. In addition, the Bylaws grant us the
power to indemnify our employees and agents under certain circumstances to the
fullest extent permitted by Delaware Law against certain expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with any proceeding arising by reason of the fact that such person is
or was an agent of Cygnus.
Article IX of our Certificate of Incorporation provides that, to the
fullest extent permitted by Delaware Law, our directors shall not be personally
liable to Cygnus or our stockholders for monetary damages for breach of
fiduciary duty as a director.
We maintain directors' and officers' liability insurance policies
insuring our directors and officers against certain liabilities and expenses
incurred by them in their capacities as such, and insuring Cygnus under certain
circumstances, in the event that indemnification payments are made by us to such
directors and officers.
We have entered into indemnification agreements with our officers and
directors, pursuant to which we are obligated to indemnify each officer and
director against certain claims and expenses for which the officer or director
might be held liable.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
II-2
<PAGE>
EXHIBIT NUMBER EXHIBIT
- -------------- -------
4 Instruments Defining the Rights of Stockholders. Reference is
made to Registrant's Registration Statements on Form 8-A,
together with the exhibits thereto, which are incorporated
herein by reference pursuant to Items 3(d) and 3(e),
respectively.
5 Opinion and Consent of Barbara G. McClung.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Barbara G. McClung is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-7 of this
Registration Statement.
99.1 Cygnus, Inc. Amended 1991 Employee Stock Purchase Plan (As
Amended and Restated as of October 1, 1999).
II-3
<PAGE>
Item 9. UNDERTAKINGS
A. We hereby undertake:
(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 1933
Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this 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 this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that clauses (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed by Cygnus pursuant to Section
13 or Section 15(d) of the 1934 Act that are incorporated by reference into
this Registration Statement.
(2) that for the purpose of determining any liability under the 1933 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. We hereby undertake that, for purposes of determining any
liability under the 1933 Act, each filing of our annual report pursuant to
Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by
reference into this 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 1933
Act may be permitted to directors, officers or controlling persons of Cygnus
pursuant to the indemnification provisions summarized in Item 6 or otherwise, we
have been advised that, in the opinion of the Commission, such indemnification
is against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Cygnus of expenses incurred or paid by a
director, officer, or controlling person of Cygnus 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, we will,
unless in the opinion of our counsel the matter has been
II-4
<PAGE>
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 1933 Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Redwood City, State of
California on this 20th day of October 1999.
CYGNUS, INC.
By: /s/ John C. Hodgman
-----------------------------------------------
John C. Hodgman
President, Chief Executive Officer and Chairman
II-6
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Cygnus, Inc., a
Delaware corporation, do hereby constitute and appoint John C. Hodgman the
lawful attorney-in-fact and agent with full power and authority to do any and
all acts and things and to execute any and all instruments which said attorney
and agent determines may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorney and agent shall do or cause to be done by virtue hereof.
This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ John C. Hodgman President, Chief Executive Officer October 20, 1999
- -------------------------------------- (Principal Executive Officer), Chairman of the
John C. Hodgman Board of Directors and Director
/s/ Craig W. Carlson Senior Vice President, Finance and Chief October 20, 1999
- -------------------------------------- Financial Officer (Principal Financial Officer
Craig W. Carlson and Accounting Officer)
/s/ Gary W. Cleary Chairman Emeritus of the Board of October 20, 1999
- -------------------------------------- Directors
Gary W. Cleary
/s/ Andre F. Marion Vice Chairman of the Board of Directors October 20, 1999
- --------------------------------------
Andre F. Marion
/s/ Frank T. Cary Director October 20, 1999
- --------------------------------------
Frank T. Cary
/s/ Richard G. Rogers Director October 20, 1999
- --------------------------------------
Richard G. Rogers
/s/ Walter B. Wriston Director October 20, 1999
- --------------------------------------
Walter B. Wriston
</TABLE>
II-7
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER THE
SECURITIES ACT OF 1933
CYGNUS, INC.
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
4 Instruments Defining the Rights of Stockholders. Reference is
made to Registrant's Registration Statements on Form 8-A,
together with the exhibits thereto, which are incorporated
herein by reference pursuant to Items 3(d) and 3(e),
respectively.
5 Opinion and Consent of Barbara G. McClung.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Barbara G. McClung is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-7 of this
Registration Statement.
99.1 Cygnus, Inc. Amended 1991 Employee Stock Purchase Plan (As
Amended and Restated as of October 1, 1999).
<PAGE>
EXHIBIT 5
October 20, 1999
Cygnus, Inc.
400 Penobscot Drive
Redwood City, CA 94063
RE: Cygnus, Inc.
Registration Statement for Offering of
350,000 Shares of Common Stock
Ladies and Gentlemen:
In connection with your registration of 350,000 shares of the Common Stock of
Cygnus, Inc. (the "Company") on Form S-8 under the Securities Act of 1933, as
amended, I advise you that, in my opinion, when such shares have been issued and
sold pursuant to the provisions of the Company's Amended 1991 Employee Stock
Purchase Plan and in accordance with the Registration Statement, such shares
will be duly authorized, validly issued, fully paid and non-assessable shares of
the Company's Common Stock.
I hereby consent to filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Barbara G. McClung
Barbara G. McClung
Senior Vice President and General Counsel
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the registration of 350,000 shares of
Cygnus, Inc. under the amended 1991 Employee Stock Purchase Plan of our
report dated January 19, 1999, except for the Note 14, as to which the date
is February 23, 1999, with respect to the consolidated financial statements
and schedules of Cygnus, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1998, filed with the Securities and Exchanges
Commission.
Palo Alto, California
October 13, 1999
<PAGE>
EXHIBIT 99.1
CYGNUS, INC.
AMENDED 1991 EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED OCTOBER 1, 1999)
The following constitutes the provisions of the Amended 1991 Employee
Stock Purchase Plan of Cygnus, Inc., as last amended and restated on October
1, 1999.
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) "BOARD" shall mean the Board of Directors of the Company or a
Committee appointed by the Board pursuant to Section 13.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "COMMON STOCK" shall mean the common stock of the Company.
(d) "COMPANY" shall mean Cygnus, Inc.
(e) "COMPENSATION" shall mean all base straight time gross earnings,
including bonuses, but excluding payments for overtime, shift premiums and
commissions, awards, and other compensation.
(f) "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.
(g) "EMPLOYEE" shall mean any individual who is a regular employee of
the Company or a Designated Subsidiary for purposes of tax-withholding under the
Code. 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.
(h) "ENROLLMENT DATE" shall mean the first Trading Day of each
Offering Period.
1.
<PAGE>
EXHIBIT 99.1
(i) "ENROLLMENT DATE PRICE" shall mean the Fair Market Value of a
share of Common Stock on the last Trading Day prior to the Enrollment Date.
(j) "EXERCISE DATE" shall mean the last Trading Day of each Purchase
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 National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, 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 day 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 National Market System thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and low asked prices for the Common Stock on
the day 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, subject to the discretion of the
Board pursuant to Section 4, a period of approximately twenty-four (24) months,
commencing on the first Trading Day on or after October 1 and terminating on the
last Trading Day in the September twenty-four (24) months later, or commencing
on the first Trading Day on or after April 1 and terminating on the last Trading
Day in the March twenty-four (24) months later.
(m) "PLAN" shall mean this Amended 1991 Employee Stock Purchase Plan.
(n) "PARTICIPANT" shall mean an Employee who is participating in the
Plan.
(o) "PURCHASE PERIOD" shall mean the approximately six-month period
commencing after one Exercise Date and ending with the next following Exercise
Date, except that the first Purchase Period of any Offering Period shall
commence on the Enrollment Date and end with the next following Exercise Date.
(p) "PURCHASE PRICE" shall mean an amount equal to a designated
percentage of the Enrollment Date Price or a designated percentage of the Fair
Market Value on the Exercise Date, whichever is lower. Each designated
percentage shall be 85% unless determined otherwise by the Board with respect to
any Offering Period, but shall in no event be less than 85%.
2.
<PAGE>
EXHIBIT 99.1
(q) "RESERVES" shall mean the number of shares of Common Stock
covered by each purchase right 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 purchase right.
(r) "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.
(s) "TRADING DAY" shall mean a day on which national stock exchanges
and the National Association of Securities Dealers Automated Quotation (NASDAQ)
System are open for trading.
3. ELIGIBILITY.
(a) Any Employee, as defined in Section 2(g), who shall be employed
by the Company or a Designated Subsidiary on a given Enrollment Date shall be
eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted a purchase right under the Plan (i) if, 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
stock and/or hold outstanding purchase rights to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or of any Subsidiary of the Company, or (ii) which
permits 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 purchase right is granted) for each
calendar year in which such purchase right is outstanding at any time.
4. OFFERING PERIODS. The Plan shall be implemented by consecutive and
overlapping Offering Periods. The Board shall have the power to change the
duration of Offering Periods 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.
Absent action by the Board, each Offering Period shall be for a period of
approximately twenty-four months (24) and new Offering Periods shall commence on
the first Trading Day of April and October of each year. No Offering Period
shall exceed twenty-four (24) months in length.
5. PARTICIPATION.
(a) An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
provided by the Company and filing it with the Company's payroll office prior to
the applicable Enrollment Date.
3.
<PAGE>
EXHIBIT 99.1
(b) Payroll deductions for a Participant shall commence on the first
payroll period following the Enrollment Date and shall end on the last payroll
period in the Offering Period, unless sooner terminated by the Participant as
provided in Section 10.
6. PAYROLL DEDUCTIONS.
(a) At the time a Participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding fifteen percent (15%) of
the Compensation which he or she receives on each pay day during the Offering
Period, and the aggregate of such payroll deductions during the Offering Period
shall not exceed fifteen percent (15%) of the Participant's Compensation during
said 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, or may increase or decrease the rate of his or
her payroll deductions during the current Purchase Period by filing with the
Company a new subscription agreement authorizing such a change in the payroll
deduction rate. A reduction to a 0% rate of contribution shall be treated as a
withdrawal from the Plan effective with the following Purchase Period unless
such rate is increased prior to the following Purchase Period. The change in
rate shall be effective with the first full payroll period following such
advance notice period as the Company shall specify. A Participant's
subscription agreement shall remain in effect for successive Purchase Periods
and Offering Periods unless terminated as provided in Section 10. The Board
shall be authorized to limit the number of participation rate changes during any
Offering Period. A Participant may at any time elect to have his or her
participation agreement become irrevocable for such period of time as he or she
may designate.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a Participant's
payroll deductions may be decreased to 0% at such time during any Purchase
Period which is scheduled to end during the current calendar year (the "Current
Purchase Period") that the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Purchase Period equal $21,250. The Company may
provide either (i) that payroll deductions shall recommence at the rate provided
in such Participant's subscription agreement at the beginning of the first
Purchase Period which is scheduled to end in the following calendar year, unless
terminated by the Participant as provided in Section 10, or (ii) that
participation shall recommence only upon filing a new enrollment form following
such waiting period as the Company shall specify.
(e) At the time the purchase right 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
4.
<PAGE>
EXHIBIT 99.1
obligations, if any, which arise upon the exercise of the purchase right 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 benefit attributable to sale or early disposition of Common
Stock by the Employee.
7. GRANT OF PURCHASE RIGHT. On the Enrollment Date of each Offering
Period, each eligible Employee participating in such Offering Period shall be
granted a purchase right to purchase on each Exercise Date during 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
such purchase shall be subject to the limitations set forth in Section 3(b) and
12 hereof. Exercise of the purchase right shall occur as provided in Section 8,
unless the Participant has withdrawn pursuant to Section 10, and the purchase
right shall expire on the last day of the Offering Period.
8. EXERCISE OF PURCHASE RIGHT. Unless a Participant withdraws from the
Plan as provided in Section 10 below, his or her purchase right for the purchase
of shares of Common Stock will be exercised automatically on each Exercise Date,
and the maximum number of full shares subject to the purchase right shall be
purchased for such Participant at the applicable Purchase Price with the
accumulated payroll deductions in his or her account. No fractional shares will
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 Purchase Period, subject to earlier
withdrawal by the Participant as provided in Section 10. During a Participant's
lifetime, a Participant's purchase right 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 the delivery of
purchased shares to a directed brokerage account. Certificates representing the
shares that were purchased by each Participant will remain with the brokerage
account until such time as the Participant (or beneficiary) requests that their
shares be transferred out of the brokerage account.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A Participant may, subject to the terms of any irrevocable
participation agreement elected by the Participant, 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 purchase right under the Plan at any time by giving
written notice to the Company in the form provided by the Company. 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 purchase right 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
subscription agreement.
5.
<PAGE>
EXHIBIT 99.1
(b) Upon a Participant's ceasing to be an Employee for any reason or
upon termination of a Participant's employment relationship (as described in
Section 2(g)), the payroll deductions credited to such Participant's account
during the Offering Period but not yet used to exercise the purchase right 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, and such Participant's
purchase right will be automatically terminated. The Company may reduce the
amount returned to a Participant by the amount of any outstanding debts that the
Participant owes to either the Company or a Subsidiary.
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 be 1,275,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 18. If on a given Exercise Date the number of shares with respect to
which purchase rights 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 this purchase right until such purchase right 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. The Plan shall be administered by the Board of the
Company or a committee of one or more members of the Board as appointed by the
Board. Committee members serve for the period of time specified by the Board of
Directors and can be removed from the committee by the Board at any time. 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
and to adjudicate all disputed claims filed under the Plan. 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.
6.
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EXHIBIT 99.1
14. DESIGNATION OF BENEFICIARY.
(a) A Participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the Participant's account under
the Plan in the event of such Participant's death subsequent to an Exercise Date
on which the purchase right 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 purchase right. 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
(and his or her spouse, if any) 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 a purchase
right 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.
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, DISSOLUTION, MERGER OR
ASSET SALE.
(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 purchase right 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
7.
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EXHIBIT 99.1
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 issue 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 a purchase right.
The Board may, if it so determines in the exercise of its sole discretion,
make provision for adjusting the Reserves, as well as the price per share of
Common Stock covered by each outstanding purchase right, in the event the
Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding
Common Stock.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Periods 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, each purchase right under the Plan shall be
assumed or an equivalent purchase right shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Periods then in progress by
setting a new Exercise Date (the "New Exercise Date"). If the Board shortens
the Offering Periods then in progress in lieu of assumption or substitution in
the event of a merger or sale of assets, the Board shall notify each Participant
in writing, at least ten (10) days prior to the New Exercise Date, that the
Exercise Date for his purchase right has been changed to the New Exercise Date
and that his purchase right 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. For purposes of this Section, a purchase right granted
under the Plan shall be deemed to be assumed or substituted if accomplished in
accordance with Section 424 of the Code.
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, no such
termination can affect purchase rights 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, no amendment may make any change in any purchase right 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
8.
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EXHIBIT 99.1
entitled to change the Purchase Periods and/or Offering Periods (subject to
Section 4), limit the frequency and/or number of changes in the amount
withheld during Purchase Periods and/or Offering Periods, 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 a purchase right unless the exercise of such purchase right 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.
22. TERM OF PLAN. The Plan was originally effective on August 1, 1991.
The Plan shall continue in effect through July 31, 2011 unless sooner terminated
under Section 19.
23. AUTOMATIC TRANSFER TO LOW PRICE OFFERING PERIOD. If the Fair
Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Enrollment Date Price of such Offering Period, then all
Participants in such Offering Period shall be automatically withdrawn from
such Offering Period immediately after the exercise of their purchase rights
on such Exercise Date and automatically reenrolled in the immediately
following Offering Period as of the first day thereof.
24. EXECUTION. To record the adoption of this amended and restated
Plan by the Board, the Company has caused its duly authorized officer to sign
below.
NAME
By /s/ John C. Hodgman
----------------------------
Title Chairman, Pres & CEO
-------------------------
9.
