As filed with the Securities and Exchange Commission on May 9, 1996
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
SHURGARD STORAGE CENTERS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 91-1603837
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1201 Third Avenue, Suite 2200
Seattle, Washington 98101
(Address of Principal Executive Offices)(Zip Code)
SHURGARD STORAGE CENTERS, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plans)
CHARLES K. BARBO
Chairman of the Board, President and Chief Executive Officer
SHURGARD STORAGE CENTERS, INC.
1201 Third Avenue, Suite 2200
Seattle, Washington 98101
(206) 624-8100
(Name, address and telephone number of agent for service)
______________________
Copy to:
Linda A. Schoemaker
PERKINS COIE
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
(206) 583-8888
______________________
CALCULATION OF REGISTRATION FEE
Title of Number Proposed Proposed Amount of
Securities to Be Maximum Maximum Registration
to Be Registered Offering Aggregate on Fee
Registered Price Per Offering
Share(1) Price(1)
- -------------- --------- --------- ---------- ----------
Class A Common 300,000(3) $25.4375 $7,631,250 $2,632
Stock, par value
$.001 per share (2)
(1) Estimated pursuant to Rule 457(h) solely for the purpose of
calculating the amount of the registration fee. The price per
share is estimated to be $25.4375 based on the average of the
high ($25.50) and low ($25.375) sales prices for the Common Stock
as traded on the New York Stock Exchange on May 6, 1996.
(2) Including the associated Preferred Share Purchase Rights.
(3) Together with an indeterminate number of additional shares
(including the associated Preferred Share Purchase Rights) which
may be necessary to adjust the number of shares reserved for
issuance pursuant to the 1996 Employee Stock Purchase Plan as the
result of any future stock split, stock dividend or similar
adjustment of the outstanding Class A Common Stock of the
Company.
/page
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in
this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1995 filed with the Securities and
Exchange Commission (the "Commission") on March 20,
1996 which contains certified financial statements for
the most recent fiscal year for which such statements
have been filed;
(b) All other reports by the Company filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), since the end
of the fiscal year covered by the Annual Report on
Form 10-K referred to in (a) above; and
(c) The description of the Class A Common Stock contained
in the Registrant's Registration Statement on Form 8-A
dated April 19, 1995, as amended by Amendment No. 1 on
Form 8-A/A dated April 26, 1995 and the description of
the Preferred Share Purchase Rights contained in the
Registrant's Registration Statement on Form 8-A dated
April 19, 1995, as amended by Amendment No. 1 on
Form 8-A/A dated April 26, 1995, under Section 12(g) of
the Exchange Act (Commission file no. 1-11455),
including any amendments or reports filed for the
purpose of updating such descriptions.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and
prior to the filing of a post-effective amendment, which indicates
that the securities offered hereby have been sold or which deregisters
the securities covered hereby then remaining unsold, shall also be
deemed to be incorporated by reference into this Registration
Statement and to be a part hereof commencing on the respective dates
on which such documents are filed.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 13 of the Registrant's Certificate of Incorporation
provides that directors of the Registrant shall not be liable to the
Registrant or its stockholders for monetary damages for their conduct
as directors to the full extent permitted by the Delaware General
Corporation Law ("Delaware Law") as it existed at the time the
Certificate of Incorporation was adopted, and as it may thereafter be
amended. Any amendment to or repeal of Article 13 shall apply only to
acts or omissions of directors occurring after such amendment or
repeal.
The Registrant's By-Laws provide that the Registrant shall
indemnify and hold harmless its directors and officers to the fullest
extent permitted under Delaware Law or by any other applicable law
against all litigation expenses, judgments, fines and settlement
amounts incurred in connection with their service or status as
directors and officers. Such indemnification also extends to
liabilities arising from actions taken by directors or officers when
serving at the request of the Registrant as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise.
Section 145 of Delaware Law, as currently in effect, sets forth
the indemnification rights of directors and officers of Delaware
corporations. Under such provision, a director or officer of a
corporation (i) shall be indemnified by the corporation for all
expenses of litigation or other legal proceedings when he or she is
successful on the merits or otherwise, (ii) may be indemnified by the
corporation for the expenses, judgments, fines and amounts paid in
settlement of such litigation (other than a derivative suit), even if
he or she is not successful on the merits, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation (and, in the case of
a criminal proceeding, had no reason to believe his or her conduct was
unlawful), and (iii) may be indemnified by the corporation for the
expenses of a derivative suit (a suit by a stockholder alleging a
breach by a director or an officer of a duty owed to the corporation),
even if he or she is not successful on the merits, if he or she acted
in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation, provided that
no such indemnification may be made in accordance with this
clause (iii) if the director or officer is adjudged liable to the
corporation, unless a court determines that, despite such adjudication
but in view of all the circumstances, he or she is fairly and
reasonably entitled to indemnification of such expenses. The
indemnification described in clauses (ii) and (iii) above shall be
made only upon a determination by (A) a majority of a quorum of
disinterested directors, (B) independent legal counsel in a written
opinion, or (C) the stockholders, that indemnification is proper
because the applicable standard of conduct has been met.
The effect of the indemnification provisions contained in the
Registrant's By-Laws is to require the Registrant to indemnify its
directors and officers under circumstances where such indemnification
would otherwise be discretionary and to extend to the Registrant's
directors and officers the benefits of Delaware Law dealing with
director and officer indemnification, as well as any future changes
that might occur under Delaware Law in this area.
The Registrant's By-Laws state that the indemnification rights
granted thereunder are not exclusive of any other indemnification
rights to which the director or officer may otherwise be entitled. As
permitted by Section 145(g) of Delaware Law, the By-Laws also
authorize the Registrant to purchase directors and officers insurance
for the benefit of its directors and officers, irrespective of whether
the Registrant has the power to indemnify such persons under Delaware
Law. The Registrant currently maintains such insurance as allowed by
these provisions.
Item 8. EXHIBITS
Exhibit
Number Description
5.1 Opinion of Perkins Coie regarding legality
of the Class A Common Stock being
registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Perkins Coie (included in
opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1996 Employee Stock Purchase Plan
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;
(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; 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 paragraphs (1)(i) and (1)(ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this 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
benefits plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in 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
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.
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
Seattle, State of Washington, on the 8th day of May, 1996.
SHURGARD STORAGE CENTERS, INC.
By /s/ CHARLES K. BARBO
Charles K. Barbo,
Chairman of the Board, President
and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby
authorizes and appoints Charles K. Barbo and Harrell L. Beck, and each
of them, with full power of substitution and full power to act without
the other, as his true and lawful attorney-in-fact and agent to act in
his name, place and stead and to execute in the name and on behalf of
each person, individually and in each capacity stated below, and to
file, any and all amendments to this Registration Statement, including
any and all post-effective amendments with the Securities and Exchange
Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities indicated below on the 8th day of May, 1996.
Signature Title
Chairman of the Board, President and
/s/ Charles K. Barbo Chief Executive Officer
CHARLES K. BARBO (Principal Executive Officer)
Senior Vice President, Chief
/s/ Harrell L. Beck Financial Officer, Treasurer and
HARRELL L. BECK Director
(Principal Financial and Accounting
Officer)
/s/ Donald W. Lusk Director
DONALD W. LUSK
/s/ Wendell J. Smith Director
WENDELL J. SMITH
/s/ Dan Kourkoumelis Director
DAN KOURKOUMELIS
/page
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Shurgard Storage Centers, Inc. on Form S-8 of our report
dated February 2, 1996 appearing in the Annual Report on Form 10-K of
Shurgard Storage Centers, Inc. for the year ended December 31, 1995.
DELOITTE & TOUCHE LLP
Seattle, Washington
May 8, 1996
/page
INDEX TO EXHIBITS
Exhibit
Number Description
5.1 Opinion of Perkins Coie regarding legality
of the Class A Common Stock
being registered
23.1 Consent of Deloitte & Touche LLP (included
on page II-5)
23.2 Consent of Perkins Coie (included in
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page)
99.1 1996 Employee Stock Purchase Plan
May 6, 1996
Shurgard Storage Centers, Inc.
Suite 2200
1201 Third Avenue
Seattle, WA 98010
Re: Registration on Form S-8 of Shares of Class A
Common Stock, par value $.001 per share, of
Shurgard Storage Centers, Inc. (the "Company")
Ladies and Gentlemen:
We have acted as counsel to you in connection with the
preparation of a Registration Statement on Form S-8 (the
"Registration Statement") pursuant to the Securities Act of
1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission with respect to 300,000
shares of Class A Common Stock, par value $.001 per share, of
the Company (the "Common Stock") issuable under the Shurgard
Storage Centers, Inc. 1996 Employee Stock Purchase Plan (the
"Stock Purchase Plan"). The shares of Common Stock issuable
under or pursuant to the Stock Purchase Plan are hereinafter
collectively referred to as the "Shares."
We have examined the Registration Statement and such
documents and records of the Company and other documents as we
have deemed necessary for the purpose of this opinion. In
giving this opinion, we are assuming the authenticity of all
instruments presented to us as originals, the conformity with
originals of all instruments presented to us as copies and the
genuineness of all signatures.
Based upon and subject to the foregoing, we are of the
opinion that, upon the due execution by the Company and the
registration by its registrar of such Shares and the issuance
and sale thereof by the Company in accordance with the terms
of the Stock Purchase Plan, and the receipt of consideration
therefor in accordance with the terms of the Stock Purchase
Plan, such Shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement. In giving such
consent, we do not admit that we are in the category of
persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Perkins Coie
Shurgard Storage Centers, Inc. 1996 Employee Stock Purchase Plan
SHURGARD STORAGE CENTERS, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purposes of the Shurgard Storage Centers, Inc. 1996
Employee Stock Purchase Plan (the "Plan") are to (a) assist
employees of Shurgard Storage Centers, Inc., a Delaware
corporation (the "Company"), and its parent and subsidiary
corporations in acquiring a stock ownership interest in the
Company pursuant to a plan that is intended to qualify as an
"employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), and
(b) help employees provide for their future security and to
encourage them to remain in the employment of the Company and
its subsidiary corporations.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be
defined as set forth below.
2.1 Board
"Board" means the Board of Directors of the Company.
2.2 Change Notice Date
"Change Notice Date" has the meaning set forth in Section
9.2.
2.3 Code
"Code" means the Internal Revenue Code of 1986, as
amended.
2.4 Company
"Company" means Shurgard Storage Centers, Inc., a
Delaware corporation.
2.5 Designated Corporation
"Designated Corporation" has the meaning set forth in
Section 2.7.
2.6 Eligible Compensation
"Eligible Compensation" means all regular cash
compensation, including overtime, cash bonuses and
commissions. Regular cash compensation does not include
severance pay, hiring and relocation bonuses, pay in lieu of
vacations, sick leave or any other special payments.
2.7 Eligible Employee
"Eligible Employee" means any employee of the Company (or
any Parent Corporation or Subsidiary Corporation designated by
the Plan Administrator (a "Designated Corporation")) who is in
the employ of the Company (or any such Designated Corporation)
on one or more Offering Dates and who meets the following
criteria:
(a) the employee does not, immediately after the
Option is granted, own stock (as defined by
Code Sections 423(b)(3) and 424(d)) possessing
5% or more of the total combined voting power
or value of all classes of stock of the Company
or of a Parent Corporation or Subsidiary
Corporation of the Company;
(b) the employee's customary employment is for more
than 20 hours per week;
(c) the employee's customary employment is for more
than five months in any calendar year; and
(d) the employee has been employed for at least six
months.
If the Company permits any employee of a Designated
Corporation to participate in the Plan, then all employees of
that Designated Corporation who meet the requirements of this
paragraph shall also be considered Eligible Employees.
2.8 ESPP Broker
"ESPP Broker" has the meaning set forth in Section 10.
2.9 Exchange Act
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
2.10 Offering
"Offering" has the meaning set forth in Section 5.1.
2.11 Offering Date
"Offering Date" means the first day of an Offering.
2.12 Offering Period
"Offering Period" means the term of an Offering as
determined by the Plan Administrator.
2.13 Option
"Option" means an option granted under the Plan to an
Eligible Employee to purchase shares of Stock.
2.14 Parent Corporation
"Parent Corporation" means any corporation, other than
the Company, in an unbroken chain of corporations ending with
the Company if, at the time of the granting of the Option,
each of the corporations, other than the Company, owns stock
possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain.
2.15 Participant
"Participant" means any Eligible Employee who has elected
to participate in an Offering in accordance with the
procedures set forth in Section 6.1 and who has not withdrawn
from the Offering or whose participation in the Offering is
not terminated.
2.16 Plan
"Plan" means the Shurgard Storage Centers, Inc. 1996
Employee Stock Purchase Plan.
2.17 Plan Administrator
"Plan Administrator" means any committee of the Board
designated to administer the Plan under Section 3.1 of the
Plan.
2.18 Purchase Date
"Purchase Date" means the last day of each Purchase
Period.
2.19 Purchase Period
"Purchase Period" has the meaning set forth in
Section 5.2.
2.20 Purchase Price
"Purchase Price" has the meaning set forth in Section 8.
2.21 Stock
"Stock" means the Class A Common Stock, par value $.001
per share, of the Company.
2.22 Subscription Date
"Subscription Date" has the meaning set forth in
Section 6.1.
2.23 Subsidiary Corporation
"Subsidiary Corporation" means any corporation, other
than the Company, in an unbroken chain of corporations
beginning with the Company, if, at the time of the granting of
the Option, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50%
or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
SECTION 3. ADMINISTRATION
3.1 Plan Administrator
The Plan shall be administered by the Compensation
Committee of the Board, except to the extent that the Board
appoints another committee or committees (which term includes
subcommittees) consisting of one or more members of the Board
to administer the Plan. The administration of the Plan with
respect to officers and directors of the Company who are
subject to Section 16 of the Exchange Act with respect to
securities of the Company shall comply with the requirements
of Rule 16b-3 under Section 16(b) of the Exchange Act as then
in effect.
3.2 Administration and Interpretation By the Plan
Administrator
Subject to the provisions of the Plan, the Plan
Administrator shall have exclusive authority, in its
discretion, to determine all matters relating to Options
granted under the Plan, including all terms, conditions,
restrictions and limitations of Options; provided, however,
that all Participants granted Options pursuant to the Plan
shall have the same rights and privileges within the meaning
of Code Section 423(b)(5). The Plan Administrator shall also
have exclusive authority to interpret the Plan and may from
time to time adopt, and change, rules and regulations of
general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and
regulations, and all actions taken and determinations made by
the Plan Administrator pursuant to the Plan, shall be
conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to
such of the Company's officers or employees as it so
determines.
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in
Section 21, a maximum of 300,000 shares of Stock shall be
available for issuance under the Plan. Shares issued under
the Plan shall be drawn from authorized and unissued shares or
shares now held or subsequently acquired by the Company as
treasury shares. Any shares of Stock that have been made
subject to an Option that cease to be subject to the Option
(other than by reason of exercise of the Option), including,
without limitation, in connection with the cancellation or
termination of an Option, shall again be available for
issuance in connection with future grants of Options under the
Plan.
SECTION 5. OFFERING DATES
5.1 Offering Periods
Except as otherwise set forth below, the Plan shall be
implemented by a series of Offerings (each, an "Offering").
The Plan Administrator shall determine the number and length
of each Offering Period. Notwithstanding the foregoing, an
Offering Period may not exceed five years; provided, however,
that if the Purchase Price may be less than 85% of the fair
market value of the Stock on the Purchase Date, the Offering
Period may not exceed twenty-seven months. An employee who
becomes eligible to participate in the Plan after an Offering
Period has commenced shall not be eligible to participate in
such Offering but may participate in any subsequent Offering,
provided that such employee is still an Eligible Employee as
of the commencement of any such subsequent Offering. Eligible
Employees may not participate in more than one Offering at a
time. In the event the first or the last day of an Offering
Period is not a regular business day, then the first day of
the Offering Period shall be deemed to be the next regular
business day and the last day of the Offering Period shall be
deemed to be the last preceding regular business day.
5.2 Purchase Periods
The Plan Administrator shall determine the number and
length of consecutive Purchase Periods in each Offering Period
(each, a "Purchase Period"). The last day of each Purchase
Period shall be the Purchase Date for such Purchase Period.
In the event the first or last day of a Purchase Period is not
a regular business day, then the first day of the Purchase
Period shall be deemed to be the next regular business day and
the last day of the Purchase Period shall be deemed to be the
last preceding regular business day.
SECTION 6. PARTICIPATION IN THE PLAN
6.1 Initial Participation
An Eligible Employee shall become a Participant on the
first Offering Date after satisfying the eligibility
requirements and delivering to the Company's Stock Option
Administrator not later than the last business day before such
Offering Date (the "Subscription Date") a subscription
agreement indicating the Eligible Employee's election to
participate in the Plan and authorizing payroll deductions.
An Eligible Employee who does not deliver a subscription
agreement to the Company's Stock Option Administrator on or
before the Subscription Date shall not participate in the Plan
for that Offering Period or for any subsequent Offering
Period, unless such Eligible Employee subsequently enrolls in
the Plan by filing a subscription agreement with the Company
by the Subscription Date for such subsequent Offering Period.
The Plan Administrator may, from time to time, change the
Subscription Date as deemed advisable by the Plan
Administrator in its sole discretion for the proper
administration of the Plan.
6.2 Continued Participation
A Participant shall automatically participate in the next
Offering Period until such time as such Participant withdraws
from the Plan pursuant to Section 11.1 or 11.2 or terminates
employment as provided in Section 13. If a Participant is
automatically withdrawn from an Offering at the end of a
Purchase Period pursuant to Section 12, then the Participant
shall automatically participate in the Offering Period
commencing on the next regular business day.
SECTION 7. LIMITATIONS ON RIGHT TO PURCHASE SHARES
7.1 $25,000 Limitation
No Participant shall be entitled to purchase Stock under
the Plan (or any other employee stock purchase plan that is
intended to meet the requirements of Code Section 423
sponsored by the Company, a Parent Corporation or a Subsidiary
Corporation) at a rate that exceeds $25,000 in fair market
value, determined as of the Offering Date for each Offering
Period (or such other limit as may be imposed by the Code),
for each calendar year in which a Participant participates in
the Plan (or any other employee stock purchase plan described
in this Section 7.1).
7.2 Pro Rata Allocation
In the event the number of shares of Stock that might be
purchased by all Participants in the Plan exceeds the number
of shares of Stock available in the Plan, the Plan
Administrator shall make a pro rata allocation of the
remaining whole shares of Stock in as uniform a manner as
shall be practicable and as the Plan Administrator shall
determine to be equitable. In no event shall fractional
shares be issued.
SECTION 8. PURCHASE PRICE
The purchase price at which Stock may be acquired in an
Offering pursuant to the exercise of all or any portion of an
Option granted under the Plan shall be set by the Plan
Administrator (the "Purchase Price"); provided, however, that
the Purchase Price shall be not less than 85% of the lesser of
(a) the fair market value of the Stock on the Offering Date of
such Offering and (b) the fair market value of the Stock on
the Purchase Date. The fair market value of the Stock on the
Offering Date or on the Purchase Date shall be the closing
price of the Stock as reported in The Wall Street Journal for
the New York Stock Exchange -- Composite Transactions (or
similar successor consolidated transactions reports) for a
single trading day. If no sales of the Stock were made on the
New York Stock Exchange on the transaction date, Fair Market
Value shall mean the closing price of a share of the Stock as
reported for the next preceding day on which sales of the
Stock were made on the New York Stock Exchange.
SECTION 9. PAYMENT OF PURCHASE PRICE
9.1 General Rules
Stock that is acquired pursuant to the exercise of all or
any portion of an Option may be paid for only by means of
payroll deductions from the Participant's Eligible
Compensation. Except as set forth in this Section 9, the
amount of compensation to be withheld from a Participant's
Eligible Compensation during each pay period shall be
determined by the Participant's subscription agreement.
9.2 Change Notices
During an Offering Period, a Participant may elect to
decrease the amount withheld from his or her compensation by
filing an amended subscription agreement with the Company's
Stock Option Administrator on or before the seventh day prior
to the end of the first pay period for which such election is
to be effective (the "Change Notice Date"); however, the Plan
Administrator may change such Change Notice Date from time to
time.
9.3 Percent Withheld
The amount of payroll withholding with respect to the
Plan for any Participant during any pay period shall be at
least 1% of the Participant's Eligible Compensation for such
pay period or $10, but shall not exceed 10% of the
Participant's Eligible Compensation for such pay period.
Amounts shall be withheld in only whole percentages or
increments of $10.
9.4 Payroll Deductions
Payroll deductions shall commence on the first payday
following the Offering Date and shall continue to the end of
the Offering Period unless sooner altered or terminated as
provided in the Plan.
9.5 Memorandum Accounts
Individual accounts shall be maintained for each
Participant for memorandum purposes only. All payroll
deductions from a Participant's compensation shall be credited
to such account, but shall be deposited with the general funds
of the Company. All payroll deductions received or held by
the Company may be used by the Company for any corporate
purpose.
9.6 No Interest
Interest shall not be paid on sums withheld from a
Participant's compensation.
9.7 Acquisition of Stock
On each Purchase Date of an Offering Period, each
Participant shall automatically acquire, pursuant to the
exercise of the Participant's Option, the number of whole
shares of Stock arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Purchase
Period by the Purchase Price; provided, however, that in no
event shall the number of shares of Stock purchased by the
Participant exceed the number of shares of Stock subject to
the Participant's Option. In no event shall fractional shares
be issued.
9.8 Refund of Excess Amounts
Any cash balance remaining in the Participant's account
shall be refunded to the Participant as soon as practical
after the Purchase Date. In the event the cash to be returned
to a Participant pursuant to the preceding sentence is in an
amount less than the amount necessary to purchase a whole
share of Stock, the Company may establish procedures whereby
such cash is maintained in the Participant's account and
applied to the purchase of Stock in the subsequent Purchase
Period or Offering Period.
9.9 Withholding Obligations
At the time the Option is exercised, in whole or in part,
or at the time some or all of the Stock is disposed of, the
Participant shall make adequate provision for federal and
state withholding obligations of the Company, if any, that
arise upon exercise of the Option or upon disposition of the
Stock. The Company may, but shall not be obligated to,
withhold from the Participant's compensation the amount
necessary to meet such withholding obligations.
9.10 Termination of Participation
No Stock shall be purchased on behalf of a Participant on
a Purchase Date whose participation in the Offering or the
Plan has terminated on or before such Purchase Date.
9.11 Procedural Matters
The Plan Administrator may, from time to time, establish
(a) limitations on the frequency and/or number of changes in
the amount withheld during an Offering, (b) an exchange ratio
applicable to amounts withheld in a currency other than U.S.
dollars, (c) 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, and (d) such other limitations or
procedures as deemed advisable by the Plan Administrator in
the Plan Administrator's sole discretion that are consistent
with the Plan and in accordance with the requirements of Code
Section 423.
9.12 Leaves of Absence
During leaves of absence approved by the Company and
meeting the requirements of Treasury Regulations
Section 1.421-7(h)(2), a Participant may continue
participation in the Plan by delivering cash payments to the
Company's Stock Option Administrator on the Participant's
normal paydays equal to the amount of his or her payroll
deduction under the Plan had the Participant not taken a leave
of absence.
SECTION 10. EVIDENCE OF STOCK OWNERSHIP
Promptly following each Purchase Date, the number of
shares of Stock purchased by each Participant shall be
deposited into an account established in the Participant's
name at a stock brokerage or other financial services firm
designated or approved by the Plan Administrator (the "ESPP
Broker"). A Participant shall be free to undertake a
disposition of the shares of Stock in his or her account at
any time, but, in the absence of such a disposition, the
shares of Stock must remain in the Participant's account at
the ESPP Broker until the holding period set forth in Code
Section 423(a) has been satisfied. With respect to shares of
Stock for which the Code Section 423(a) holding periods have
been satisfied, the Participant may move those shares of Stock
to another brokerage account of the Participant's choosing or
request that a stock certificate be issued and delivered to
him or her. A Participant who is not subject to payment of
U.S. income taxes may move his or her shares of Stock to
another brokerage account of his or her choosing or request
that a stock certificate be delivered to him or her at any
time, without regard to the Code Section 423(a) holding
period.
SECTION 11. VOLUNTARY WITHDRAWAL
11.1 Withdrawal From an Offering
A Participant may withdraw from an Offering by signing
and delivering to the Company's Stock Option Administrator a
written notice of withdrawal on a form provided by the Plan
Administrator for such purpose. Such withdrawal may be
elected at any time prior to the end of an Offering Period;
provided, however, that if a Participant withdraws after the
Purchase Date for a Purchase Period of an Offering, the
withdrawal shall not affect Stock acquired by the Participant
in the earlier Purchase Periods. Unless otherwise indicated,
withdrawal from an Offering shall not result in a withdrawal
from the Plan or any succeeding Offering therein. A
Participant is prohibited from again participating in the same
Offering at any time upon withdrawal from such Offering. The
Company may, from time to time, impose a requirement that the
notice of withdrawal be on file with the Stock Option
Administrator for a reasonable period prior to the
effectiveness of the Participant's withdrawal.
11.2 Withdrawal From the Plan
A Participant may withdraw from the Plan by signing a
written notice of withdrawal on a form provided by the Plan
Administrator for such purpose and delivering such notice to
the Company's Stock Option Administrator. In the event a
Participant voluntarily elects to withdraw from the Plan, the
withdrawing Participant may not resume participation in the
Plan during the same Offering Period, but may participate in
any subsequent Offering under the Plan by again satisfying the
definition of Participant. The Company may impose, from time
to time, a requirement that the notice of withdrawal be on
file with the Company's Stock Option Administrator for a
reasonable period prior to the effectiveness of the
Participant's withdrawal.
11.3 Return of Payroll Deductions
Upon withdrawal from an Offering pursuant to Section 11.1
or 11.2, the withdrawing Participant's accumulated payroll
deductions that have not been applied to the purchase of Stock
shall be returned as soon as practical after the withdrawal,
without the payment of any interest, to the Participant and
the Participant's interest in the Offering shall terminate.
Such accumulated payroll deductions may not be applied to any
other Offering under the Plan.
SECTION 12. AUTOMATIC WITHDRAWAL FROM AN OFFERING
If the fair market value of the Stock on a Purchase Date
of an Offering (other than the final Purchase Date of such
Offering) is less than the fair market value of the shares on
the Offering Date for such Offering and the Plan Administrator
has established that the Purchase Price for the Offering may
be the lesser of the fair market value (or a percentage
thereof) of the Stock on the Offering Date and the fair market
value of the Stock on the Purchase Date, then every
Participant shall automatically (a) be withdrawn from such
Offering at the close of such Purchase Date and (b) after the
acquisition of Stock for such Purchase Period, be enrolled in
the Offering commencing on the first business day subsequent
to such Purchase Period.
SECTION 13. TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the
Company for any reason, including retirement, death or the
failure of a Participant to remain an Eligible Employee, shall
terminate the Participant's participation in the Plan
immediately. In such event, the payroll deductions credited
to the Participant's account since the last Purchase Date
shall, as soon as practical, be returned to the Participant
or, in the case of a Participant's death, to the Participant's
legal representative, and all the Participant's rights under
the Plan shall terminate. Interest shall not be paid on sums
returned to a Participant pursuant to this Section 13.
SECTION 14. RESTRICTIONS UPON ASSIGNMENT
An Option granted under the Plan shall not be
transferable otherwise than by will or the laws of descent and
distribution, and is exercisable during the Participant's
lifetime only by the Participant. The Plan Administrator will
not recognize, and shall be under no duty to recognize, any
assignment or purported assignment by a Participant, other
than by will or the laws of descent and distribution, of the
Participant's interest in the Plan, of his or her Option or of
any rights under his or her Option.
SECTION 15. EXCHANGE ACT HOLDING PERIOD
Disposition of the shares of Stock obtained upon exercise
of the Option by persons required to file Forms 3, 4 and 5
pursuant to Section 16 of the Exchange Act, within six months
of the Purchase Date, could result in short-swing liability
under Section 16(b) of the Exchange Act.
SECTION 16. NO RIGHTS OF STOCKHOLDER UNTIL
CERTIFICATE ISSUED
With respect to shares of Stock subject to an Option, a
Participant shall not be deemed to be a stockholder of the
Company, and he or she shall not have any of the rights or
privileges of a stockholder. A Participant shall have the
rights and privileges of a stockholder of the Company when,
but not until, the shares have been issued following exercise
of the Participant's Option.
SECTION 17. AMENDMENT OF THE PLAN
The Plan may be amended by the stockholders of the
Company. The Board may also amend the Plan in such respects
as it shall deem advisable; however, to the extent required
for compliance with Rule 16b-3 under the Exchange Act,
Section 423 of the Code or any applicable law or regulation,
stockholder approval will be required for any amendment that
will (a) increase the total number of shares as to which
Options may be granted under the Plan, (b) materially modify
the class of persons eligible to receive Options,
(c) materially increase the benefits accruing to Participants
under the Plan, (d) decrease the Purchase Price below a price
computed in the manner stated in Section 8, or (e) otherwise
require stockholder approval under any applicable law or
regulation.
SECTION 18. TERMINATION OF THE PLAN
The Company's stockholders or the Board may suspend or
terminate the Plan at any time. Unless the Plan shall
theretofore have been terminated by the Company's stockholders
or the Board, the Plan shall terminate on, and no Options
shall be made after May 14, 2006 except that such termination
shall have no effect on Options made prior thereto. No
Options shall be granted during any period of suspension of
the Plan.
SECTION 19. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person
(including any Eligible Employee or Participant) the right to
remain in the employ of the Company or a Parent Corporation or
Subsidiary Corporation of the Company or to affect the right
of the Company and the Parent Corporations and Subsidiary
Corporations of the Company to terminate the employment of any
person (including any Eligible Employee or Participant) at any
time with or without cause.
SECTION 20. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other
compensation or incentive plans in effect for the Company or
any Parent Corporation or Subsidiary Corporation of the
Company. Nothing in the Plan shall be construed to limit the
right of the Company, any Parent Corporation or any Subsidiary
Corporation to (a) establish any other forms of incentives or
compensation for employees of the Company, Parent Corporation
or Subsidiary Corporation or (b) grant or assume options
otherwise than under the Plan in connection with any proper
corporate purpose, including, but not by way of limitation,
the grant or assumption of options in connection with the
acquisition, by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any
corporation, firm or association.
SECTION 21. ADJUSTMENTS
21.1 Adjustment of Shares
In the event that at any time or from time to time a
stock dividend, stock split, spin-off, combination or exchange
of shares, recapitalization, merger, consolidation,
distribution to stockholders other than a normal cash
dividend, or other change in the Company's corporate or
capital structure results in (a) the outstanding shares, or
any securities exchanged therefor or received in their place,
being exchanged for a different number or class of securities
of the Company or of any other corporation or (b) new,
different or additional securities of the Company or of any
other corporation being received by the holders of shares of
Stock, then the Plan Administrator, in its sole discretion,
shall make such equitable adjustments as it shall deem
appropriate in the circumstances in the maximum number of
shares of Stock subject to the Plan as set forth in Section 4.
The determination by the Committee as to the terms of any of
the foregoing adjustments shall be conclusive and binding.
21.2 Limitations
The grant of Options will in no way affect the Company's
right to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its
business or assets.
SECTION 22. GENERAL
22.1 Registration; Certificates for Shares
The Company shall be under no obligation to any
Participant to register for offering or resale under the
Securities Act of 1933, as amended, or register or qualify
under state securities laws, any shares of Stock. The Company
may issue certificates for shares with such legends and
subject to such restrictions on transfer and stop-transfer
instructions as counsel for the Company deems necessary or
desirable for compliance by the Company with federal and state
securities laws.
22.2 Compliance With Rule 16b-3
It is the Company's intention that, so long as any of the
Company's equity securities are registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, the Plan shall
comply in all respects with Rule 16b-3 under the Exchange Act
and, if any Plan provision is later found not to be in
compliance with such Rule, the provision shall be deemed null
and void, and in all events the Plan shall be construed in
favor of its meeting the requirements of Rule 16b-3.
SECTION 23. EFFECTIVE DATE
The Plan's effective date is the date on which it is
approved by the Company's stockholders.
