<PAGE> 1
As filed with the Securities and Exchange Commission on
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
MOLECULAR DYNAMICS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-3050031
(State of incorporation) (I.R.S. Employer
Identification No.)
928 EAST ARQUES AVE.,
SUNNYVALE, CA 94086
(Address of principal executive offices)
-----------------------
1993 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plan)
-----------------------
JAY FLATLEY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MOLECULAR DYNAMICS, INC.
928 EAST ARQUES AVE.,
SUNNYVALE, CA 94086
(408) 733-1222
(Name, address and telephone number, including area code, of agent for service)
-----------------------
Copy to:
Jeffrey Y. Suto
Venture Law Group
2800 Sand Hill Road
Menlo Park, California 94025
(415) 854-4488
Page 1 of 9 Pages
Exhibit Index on Page 7
(Calculation of Registration Fee on following page)
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum Maximum Amount of
Amount to Offering Aggregate Registration
Title of Securities to be be Price Per Offering Fee
Registered Registered(1) Share Price
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 0.01 par
value, reserved for issuance 500,000 Shares $ 13.75(2) $6,875,000 $2,370.69
pursuant to the 1993
Employee Stock Purchase Plan
TOTAL 500,000 Shares $ 13.75 $6,875,000 $2,370.69
---------
</TABLE>
- -----------------------
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under any of the Plans being registered
pursuant to this Registration Statement by reason of any stock dividend,
stock split, recapitalization or any 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) Computed in accordance with Rule 457(h) under the Securities Act of 1933
(the "Securities Act") solely for the purpose of calculating the
registration fee. Computation based on the weighted average high and low
sale prices of the Common Stock as reported on the Nasdaq National Market
on February 12, 1997.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are hereby incorporated by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 filed with the Commission on April 1, 1996 pursuant to Section
13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which contains audited financial statements for the Registrant's latest fiscal
year for which such statements have been filed and as amended by Amendment No. 1
filed on April 5, 1996 and Amendment No. 2 filed on January 14, 1997.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual Report
referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the Commission under
Section 12 of the Exchange Act on January 11, 1993 including any amendment or
report filed for the purpose of updating such description.
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
part hereof from the date of filing 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's Certificate of Incorporation reduces the liability of a
director to the corporation or its shareholders for monetary damages for
breaches of his or her fiduciary duty of care to the fullest extent permissible
under Delaware law. The Bylaws of the Registrant further provide for
indemnification of corporate agents to the maximum extent permitted by the
Delaware General Corporation Law. In addition, the Registrant has entered into
Indemnification Agreements with its officers and directors.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
Item 8. EXHIBITS.
Exhibit
Number
5.1 Opinion of Venture Law Group, a Professional
Corporation.
23.1 Consent of Venture Law Group, a Professional
Corporation (included in Exhibit 5.1).
23.2 Accountants' Consent
24.1 Powers of Attorney
99.1 1993 Employee Stock Purchase Plan
3
<PAGE> 4
Item 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) that, for purposes 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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.
Insofar as the 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 a successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the question has already been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of 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.
[Signature Pages Follow]
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, MOLECULAR DYNAMICS, INC., a corporation organized and existing under
the laws of the State of Delaware, 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 Sunnyvale, State of
California, on this 18th day of February, 1997.
MOLECULAR DYNAMICS, INC.
By: /s/ Jay Flatley
--------------------------------
Jay Flatley
President, Chief Executive
Officer, Acting Chief
Financial Officer and Director
5
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jay Flatley and Lynne Wagoner, jointly
and severally, his or her attorneys-in-fact and agents, each with the power of
substitution and resubstitution, for him or her and in his or her name, place or
stead, in any and all capacities, to sign any amendments to this Registration
Statement on Form S-8, and to file such amendments, together with exhibits and
other documents in connection therewith, with the Securities and Exchange
Commission, granting to each attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully as he or she might or could do in
person, and ratifying and confirming all that the attorneys-in-fact and agents,
or his or her substitute or substitutes, may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jay Flatley President and Chief February 18, 1997
- ------------------------ Executive Officer, Acting
Jay Flatley Chief Financial Officer,
and Director (Principal
Executive and Financial
Officer)
/s/ Lynne Wagoner Director of Finance February 18, 1997
- ------------------------ (Principal Accounting
Lynne Wagoner Officer)
/s/ James Schlater Chairman of the Board of February 18, 1997
- ------------------------ Directors
James Schlater
/s/ Robert Keeley Director February 18, 1997
- ------------------------
Robert Keeley
/s/ Janice M. LeCocq Director February 18, 1997
- ------------------------
Janice M. LeCocq
/s/ Jack Lloyd Director February 18, 1997
- ------------------------
Jack Lloyd
/s/ C. Woodrow Rea, Jr. Director February 18, 1997
- ------------------------
C. Woodrow Rea, Jr.
</TABLE>
6
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
Number No.
- ------ -----
<S> <C> <C>
5.1 Opinion of Venture Law Group, a Professional Corporation 8
23.1 Consent of Venture Law Group, a Professional Corporation 8
(included in Exhibit 5.1).
23.2 Accountants' Consent 9
24.1 Powers of Attorney 6
99.1 1993 Employee Stock Purchase Plan 10
</TABLE>
7
<PAGE> 1
EXHIBIT 5.1
February 18, 1997
Molecular Dynamics, Inc.
928 East Arques Ave.
Sunnyvale, CA 94086
Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about February 18, 1997 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 500,000 shares of your Common
Stock (the "Shares") reserved for issuance under the 1993 Employee Stock
Purchase Plan (the "Plan"). As your legal counsel, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
you in connection with the sale and issuance of the Shares under the Plan.
It is our opinion that, when issued and sold in the manner referred to in
the Plan and pursuant to the respective agreement which accompanies each grant
under the Plan, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever it appears in the
Registration Statement and any amendments to it.
Sincerely,
VENTURE LAW GROUP
/s/ Venture Law Group
8
<PAGE> 1
EXHIBIT 23.2
ACCOUNTANTS' CONSENT
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Molecular Dynamics, Inc. of our reports dated January 29, 1996, relating
to the consolidated balance sheets of Molecular Dynamics, Inc., and subsidiaries
as of December 31, 1995 and 1994, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995, and related schedule, which reports
appear in the December 31, 1995 Annual Report on Form 10-K of Molecular
Dynamics, Inc.
/s/ KPMG Peat Marwick LLP
San Francisco, California
February 18, 1997
<PAGE> 1
EXHIBIT 99.1
MOLECULAR DYNAMICS, INC.
1993 EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE
The Molecular Dynamics 1993 Employee Stock Purchase Plan (the "Plan")
is intended to provide eligible employees of the Company and one or more of its
Corporate Affiliates with the opportunity to acquire a proprietary interest in
the Company through participation in a plan designed to qualify as an employee
stock purchase plan under Section 423 of the Internal Revenue Code (the "Code").
II. DEFINITIONS
For purposes of administration of the Plan, the following terms shall
have the meanings indicated:
BOARD means the Board of Directors of the Company.
COMPANY means Molecular Dynamics, Inc., a Delaware corporation, and any
corporate successor to all or substantially all of the assets or voting stock of
Molecular Dynamics, Inc. which shall by appropriate action adopt the Plan.
COMPENSATION means the regular base earnings paid to an Eligible
Employee by one or more Participating Companies during such individual's period
of participation in the Plan, plus (i) any salary deferral contributions made by
such individual to the Company's 401(k) Plan during such period and (ii) all
overtime payments, bonuses, commissions, and other incentive-type payments, but
excluding all contributions (other than Code Section 125 or Section 401(k)
contributions) made by the Company or its Corporate Affiliates for such
individual's benefit under any employee benefit or welfare plan now or hereafter
established.
CORPORATE AFFILIATE means any company which is either the parent
corporation or a subsidiary corporation of the Company (as determined in
accordance with Section 424 of the Code), including any parent or subsidiary
corporation which becomes such after the Effective Date.
EFFECTIVE DATE means the first day of the initial purchase period
scheduled to commence upon the later of (i) January 25, 1993 or (ii) the
effective date of the S-8 Registration Statement covering the shares of Stock
issuable under the Plan. However, any Corporate Affiliate which becomes a
Participating Company in the Plan after the Effective Date shall designate a
subsequent Effective Date with respect to its employee-Participants.
ELIGIBLE EMPLOYEE means any person who is regularly engaged, for a
period of more than twenty (20) hours per week and more than five (5) months per
calendar year, in the rendition of personal services to the Company or any other
Participating Company for earnings considered wages under Section 3121 (a) of
the Code.
<PAGE> 2
PARTICIPANT means any Eligible Employee of a Participating Company who
is actively participating in the Plan.
PARTICIPATING COMPANY means the Company and such Corporate Affiliate or
Affiliates as may be authorized from time to time by the Board to extend the
benefits of the Plan to their Eligible Employees. The Participating Companies in
the Plan, as of the Effective Date, are listed in attached Schedule A.
PLAN ADMINISTRATOR shall have the meaning given such term in
Article III.
STOCK means shares of the common stock of the Company.
III. ADMINISTRATION
The Plan shall be administered by a committee (the "Plan
Administrator") comprised of two or more non-employee Board members appointed
from time to time by the Board. The Plan Administrator shall have full authority
to administer the Plan, including authority to interpret and construe any
provision of the Plan and to adopt such rules and regulations for administering
the Plan as it may deem necessary in order to comply with the requirements of
Section 423 of the Code. Decisions of the Plan Administrator shall be final and
binding on all parties who have an interest in the Plan.
IV. PURCHASE PERIODS
A. Stock shall be offered for purchase under the Plan through a series
of successive purchase periods until such time as (i) the maximum number of
shares of Stock available for issuance under the Plan shall have been issued
pursuant to purchase rights granted under the Plan or (ii) the Plan shall have
been sooner terminated in accordance with Article VII.J.
B. Each purchase period shall have a duration of six (6) months, except
that the initial purchase period shall have a duration of less than six (6)
months and the next subsequent purchase period shall have a duration in excess
of six (6) months. The initial purchase period shall begin upon the later of (i)
January 25, 1993 or (ii) the effective date of the S-8 Registration Statement
covering the shares of Stock issuable under the Plan and shall end on July 31,
1993. The next subsequent purchase period shall begin on August 1, 1993 and
shall end on February 15, 1994. Subsequent purchase periods shall begin on
February 16 or August 16 and shall end on August 15 or February 15 each year,
respectively.
C. The Participant shall be granted a separate purchase right for each
purchase period in which he/she participates. The purchase right shall be
granted on the first business day of the purchase period and shall be
automatically exercised on the last business day of the purchase period.
D. Under no circumstances shall any purchase rights granted under the
Plan be exercised, nor shall any shares of Stock be issued hereunder, until such
time as (i) the Plan shall have been approved by the Company's stockholders and
(ii) the Company shall have complied with all applicable requirements of the
Securities Act of 1933 (as amended), all applicable listing
-2-
<PAGE> 3
requirements of any securities exchange on which the Stock is listed and all
other applicable requirements established by law or regulation.
E. The acquisition of Stock through participation in the Plan for any
purchase period shall neither limit nor require the acquisition of Stock by the
Participant in any subsequent purchase period.
V. ELIGIBILITY AND PARTICIPATION
A. Each Eligible Employee of a Participating Company may begin
participation in the Plan on the first day of any purchase period following
his/her commencement of service with the Company or any Corporate Affiliate.
B. In order to participate in the Plan, an Eligible Employee must
complete the enrollment forms prescribed by the Plan Administrator (including a
purchase agreement and a payroll deduction authorization) and file such forms
with the Plan Administrator (or its designate) during the specified enrollment
period for the purchase period.
C. The payroll deduction authorized by a Participant for purposes of
acquiring Stock under the Plan may be any whole percentage not in excess of
fifteen percent (15%) of the Compensation paid to the Participant during the
purchase period. The deduction rate so authorized shall continue in effect for
the entire purchase period and for each successive period, unless the
Participant shall change the rate by filing the appropriate form with the Plan
Administrator (or its designate). The new rate shall become effective as soon as
practicable following the filing of such form. A participant may not increase
the deduction rate more than once per purchase period, but may reduce the
deduction rate an unlimited number of times. Payroll deductions, however, shall
automatically cease upon the termination of the Participant's purchase right in
accordance with Section VII.D or E below.
VI. STOCK SUBJECT TO PLAN
A. The Stock purchasable by Participants under the Plan shall, solely
in the Board's discretion, be made available from either authorized but unissued
Stock or from reacquired Stock, including shares of Stock purchased on the open
market. The total number of shares which may be issued under the Plan shall not
exceed 200,000 shares (subject to adjustment under subparagraph B below).
B. In the event any change is made to the Stock purchasable under the
Plan by reason of any stock dividend, stock split, combination of shares,
recapitalization or other change affecting the outstanding Common Stock of the
Company as a class without the Company's receipt of consideration, appropriate
adjustments shall be made by the Plan Administrator to (i) the class and maximum
number of shares issuable over the term of the Plan, (ii) the class and maximum
number of shares purchasable per Participant under any one purchase right, and
(iii) the class and number of shares and the price per share of the Stock
subject to each purchase right at the time outstanding under the Plan.
-3-
<PAGE> 4
VII. PURCHASE RIGHTS
Each Eligible Employee who participates in the Plan for a particular
purchase period shall have the right to purchase Stock upon the terms and
conditions set forth below and shall execute a purchase agreement embodying such
terms and conditions and such other provisions (not inconsistent with the Plan)
as the Plan Administrator may deem advisable.
A. PURCHASE PRICE. The purchase price per share shall be the lesser of
(i) eighty-five percent (85%) of the fair market value of a share of Stock on
the date on which the purchase right is granted or (ii) eighty-five percent
(85%) of the fair market value of a share of Stock on the date the purchase
right is exercised. For purposes of determining such fair market value (and for
all other valuation purposes under the Plan), the fair market value of a share
of Stock on the start date of the initial purchase period shall be the price per
share at which the Stock was sold to the Company's underwriters in connection
with the firm commitment initial public offering of the Stock effected
concurrently on such start date and on any subsequent date shall be the closing
selling price per share of Stock on such date, as officially quoted on the
principal exchange on which the Stock is at the time traded or, if not traded on
any exchange, the closing selling price per share of the Stock on such date, as
reported on the NASDAQ National Market System. If there are no sales of Stock on
such day, then the closing selling price for the Stock on the next preceding day
for which such closing selling price is quoted shall be determinative of fair
market value.
B. NUMBER OF PURCHASABLE SHARES. The number of shares purchasable by a
Participant upon the exercise of an outstanding purchase right shall be the
number of whole shares obtained by dividing the amount collected from the
Participant through payroll deductions during the purchase period for which such
purchase right is outstanding, together with any amount carried over from the
preceding purchase period pursuant to the provisions of Section VII.F, by the
purchase price in effect for that purchase period. However, the maximum number
of shares purchasable by any Participant during any one purchase period shall
not exceed 1,500 shares (subject to adjustment under Section VI.B).
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)), or hold outstanding options or
other 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
any Corporate Affiliate.
C. PAYMENT. Payment for Stock purchased under the Plan shall be
effected by means of the Participant's authorized payroll deductions. Such
deductions shall begin with the first pay check received after the commencement
date of the relevant purchase period and shall terminate with the last pay check
received within the purchase period. The amounts so collected shall be credited
to the Participant's individual account under the Plan, but no interest shall be
paid on the balance from time to time outstanding in the account. The amounts
collected from a Participant may be commingled with the general assets of the
Company and may be used for general corporate purposes.
-4-
<PAGE> 5
D. TERMINATION OF PURCHASE RIGHTS.
(i) A Participant may, prior to the last business day of any
purchase period, terminate his/her outstanding purchase right under the Plan by
filing the prescribed notification form with the Plan Administrator (or its
designate). No further payroll deductions shall be collected from the
Participant with respect to the terminated purchase right, and the Participant
shall have the following election with respect to any payroll deductions for the
purchase period collected prior to the termination date: (a) have the Company
refund the payroll deductions which the Participant made in that purchase period
with respect to the terminated purchase right or (b) have such payroll
deductions held for the purchase of shares at the end of such purchase period.
If no such election is made, then such payroll deductions shall automatically be
refunded promptly after the close of such purchase period.
(ii) The termination of such purchase right shall be irrevocable,
and the Participant may not subsequently rejoin the purchase period for which
such terminated purchase right was granted. In order to resume participation in
any subsequent purchase period, such individual must re-enroll in the Plan (by
making a timely filing of a new purchase agreement and payroll deduction
authorization).
E. TERMINATION OF EMPLOYMENT/CHANGE OF STATUS. Should a Participant
cease to remain in Service while his/her purchase right remains outstanding or
should there otherwise occur a change in such individual's employee status so
that he/she is no longer an Eligible Employee while holding such purchase right,
then such purchase right shall immediately terminate upon such termination of
Service or change in status and all sums previously collected from the
Participant during the purchase period in which the purchase right so terminates
shall be promptly refunded to the Participant. However, should the Participant
die or become permanently disabled while in Service or should the Participant
cease employment by reason of a leave of absence, then the Participant (or the
person or persons to whom the rights of the deceased Participant under the Plan
are transferred by will or the laws of inheritance) shall have the election,
exercisable up until the end of the purchase period in which the Participant
dies or becomes permanently disabled or in which the leave of absence commences,
to (i) withdraw all the funds credited to the Participant's account at the time
of his/her cessation of Service or at the commencement of such leave or (ii)
have such funds held for the purchase of shares at the end of such purchase
period. If no such election is made, then such funds shall automatically be held
for the purchase of shares at the end of such purchase period. In no event,
however, shall any further payroll deductions be added to the Participant's
account following his/her cessation of Service or the commencement of such
leave. Should the Participant return to active Service following a leave of
absence, then his/her payroll deductions under the Plan shall automatically
resume at the rate in effect at the time the leave began, provided such return
to Service occurs prior to the expiration date of the purchase period in which
such leave began.
For purposes of the Plan: (i) the Participant shall be considered to
remain in Service for so long as such Participant remains in the active employ
of the Company or one or more other Participating Companies and (ii) the
Participant shall be deemed to be permanently disabled if he/she is unable to
engage in any substantial gainful employment, by reason of any medically
-5-
<PAGE> 6
determinable physical or mental impairment expected to result in death or to be
of continuous duration of at least twelve (12) months.
F. STOCK PURCHASE. The Stock subject to the purchase right of each
Participant (other than Participants whose payroll deductions have been refunded
in connection with the termination of their purchase rights under Section VII.D
or E above) shall automatically be purchased on the Participant's behalf on the
last day of the purchase period. The purchase shall be effected by applying the
amount credited to each Participant's account on the last date of the purchase
period to the purchase of whole shares of Stock (subject to the Section VII.B
limitation on the maximum number of purchasable shares) at the purchase price in
effect for such purchase period. Any amount remaining in the Participant's
account after application shall be held for the purchase of Stock in the next
purchase period. However, any amount not applied to the purchase of Stock by
reason of the Section VII.B limitation shall be refunded promptly after the
close of the purchase period.
G. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of
Stock which are to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and any amounts
credited to the accounts of Participants shall, to the extent not applied to the
purchase of Stock, be refunded to the Participants.
H. RIGHTS AS STOCKHOLDER. A Participant shall have no rights as a
stockholder with respect to shares covered by his/her outstanding purchase right
under the Plan until the shares are actually purchased on the Participant's
behalf in accordance with Section VII.F. No adjustments shall be made for
dividends, distributions or other rights for which the record date is prior to
the date of such purchase.
A Participant shall be issued, as soon as practicable after the date of
each purchase, a stock certificate for the number of shares purchased on the
Participant's behalf. Such certificate may, upon the Participant's request, be
issued in the names of the Participant and his/her spouse as community property
or as joint tenants with right of survivorship. Title to the stock certificate
may not be subsequently transferred to any other person or entity, including the
Participant's stock broker, except in connection with (i) the actual sale of the
underlying shares or (ii) a transfer of title by will or inheritance following
the Participant's death.
In lieu of delivering a stock certificate to each Participant, the Plan
Administrator may, in its discretion, implement a designated broker program and
direct the Company to issue a single stock certificate to a broker designated by
the Plan Administrator. Such designated broker shall establish an account for
each Participant. If the participant so requests, such designated broker shall
arrange for the issuance to the participant of a stock certificate for the
shares, subject to the restrictions set forth in the preceding paragraph.
I. ASSIGNABILITY. No purchase right granted under the Plan shall be
assignable or transferable by the Participant other than by will or by the laws
of descent and distribution, and during the Participant's lifetime the purchase
right shall be exercisable only by the Participant.
-6-
<PAGE> 7
J. MERGER OR LIQUIDATION OF COMPANY. In the event the Company or its
stockholders enter into an agreement to dispose of all or substantially all of
the assets or outstanding capital stock of the Company by means of:
(I) a sale, merger or other reorganization (other than a
reorganization effected primarily to change the State in which the Company is
incorporated),
(ii) a reverse merger in which the Company is the surviving
corporation but in which all or substantially all of the Company's outstanding
voting stock is transferred to the acquiring entity or its wholly-owned
subsidiary, or
(iii) a liquidation of the Company,
all outstanding purchase rights under the Plan shall automatically be exercised
immediately prior to the effective date of such sale, merger, reorganization,
reverse merger or liquidation by applying all sums previously collected from
Participants during the purchase period in which such transaction occurs to the
purchase of whole shares of Stock, subject, however, to the applicable
limitations of Section VII.B.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Stock
pursuant to any purchase right outstanding under this Plan if and to the extent
such accrual, when aggregated with (i) rights to purchase Stock accrued under
other purchase rights granted to the Participant under this Plan and (ii)
similar rights accrued by the Participant under other employee stock purchase
plans (within the meaning of Code Section 423) of the Company or its Corporate
Affiliates, would otherwise permit such Participant to purchase more than
$25,000 in value of stock of the Company or any Corporate Affiliate (determined
on the basis of the fair market value of such stock on the date or dates such
rights are granted to the Participant) for each calendar year such rights are at
any time outstanding.
B. For purposes of applying the accrual limitations of Section VIII.A,
the right to acquire Stock pursuant to each purchase right granted under the
Plan shall accrue as follows:
(i) The right to acquire Stock under each such purchase right
shall accrue as and when the purchase right first becomes exercisable on the
last day of the purchase period for which such right is granted.
(ii) No right to acquire Stock under any outstanding purchase right
shall accrue to the extent the Participant has already accrued in the same
calendar year the right to acquire $25,000 in value of Stock (determined on the
basis of the fair market value on the date or dates of grant) pursuant to one or
more other purchase rights granted to the Participant during such calendar year.
(iii) If by reason of the Section Vlll.A limitations, the
Participant's purchase right does not accrue on the last day of the particular
purchase period for which such right is
-7-
<PAGE> 8
granted, then the payroll deductions which the Participant made during that
purchase period with respect to such purchase right shall be promptly refunded.
C. In the event there is any conflict between the provisions of this
Article VIII and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article VIII shall be controlling.
IX. AMENDMENT AND TERMINATION
The Board may from time to time alter, amend, suspend or discontinue
the Plan; provided, however, that no such action shall adversely affect purchase
rights at the time outstanding under the Plan; and provided, further, that no
such action of the Board may, without the approval of the Company's
stockholders, increase the number of shares issuable under the Plan or the
maximum number of shares which any one Participant may purchase under the Plan
during a single purchase period (provided, however, the Plan Administrator shall
have the authority to effect adjustments pursuant to Sections VI.B and VII.B
without stockholder approval), alter the purchase price formula so as to reduce
the purchase price specified in the Plan, otherwise materially increase the
benefits accruing to Participants under the Plan, or materially modify the
requirements for eligibility to participate in the Plan.
X. GENERAL PROVISIONS
A. The Plan shall become effective on the Effective Date, provided that
no purchase rights granted under the Plan shall be exercised, and no shares of
Stock shall be issued hereunder, until (i) the Plan shall have been approved by
the Company's stockholders and (ii) the Company shall have complied with all
applicable requirements of the Securities Act of 1933 (as amended), all
applicable listing requirements of any securities exchange on which the Stock is
listed and all other applicable requirements established by law or regulation.
In the event such stockholder approval is not obtained, or such Company
compliance is not effected, within twelve (12) months after the date on which
the Plan is adopted by the Board, the Plan shall terminate and have no further
force or effect and all sums collected from Participants during the initial
purchase period hereunder shall be refunded.
B. The Plan shall terminate upon the earlier of (i) the last day of the
purchase period ending in February 2002 or (ii) the date on which all shares
available for issuance under the Plan shall have been sold pursuant to purchase
rights exercised under the Plan.
C. All costs and expenses incurred in the administration of the Plan
shall be paid by the Company.
D. Neither the action of the Company in establishing the Plan, nor any
action taken under the Plan by the Board or the Plan Administrator, nor any
provision of the Plan itself shall be construed so as to grant any person the
right to remain in the employ of the Company or any of its Corporate Affiliates
for any period of specific duration, and such person's employment may be
terminated at any time, with or without cause.
-8-
<PAGE> 9
E. The provisions of the Plan shall be governed by the laws of the
State of California without resort to that State's conflict of laws rules.
-9-
