<PAGE> 1
As filed with the Securities and Exchange Commission on October 1, 1999
Registration No.333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
SAFESKIN CORPORATION
(Exact name of company as specified in its charter)
FLORIDA 59-2617525
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
12671 HIGH BLUFF DRIVE
SAN DIEGO, CALIFORNIA 92130
(Address of principal executive offices) (Zip Code)
SAFESKIN CORPORATION
STOCK PURCHASE PLAN
(Full title of the plan)
BRUCE P. GARREN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
SAFESKIN CORPORATION, 12671 HIGH BLUFF DRIVE
SAN DIEGO, CALIFORNIA 92130
(Name and address of agent for service)
(619) 794-8111
(Telephone number, including area code, of agent for service)
----------------------
Copy of all communications to:
HOWARD L. SHECTER, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103-2921
(215) 963-5000
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered (1) per share (2) offering price (2) registration fee (2)
---------------- -------------- ------------- ------------------ --------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 1,000,000 $8.1875 $8,187,500 $2,277
par value
</TABLE>
================================================================================
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Stock Purchase Plan by
reason of any stock dividend, stock split, recapitalization or other
similar transaction.
(2) Calculated solely for the purpose of this offering under Rule 457(h) and
(c) of the Securities Act of 1933 on the basis of the average of the
high and low selling prices per share of Common Stock of Safeskin
Corporation on September , 1999, as reported by the Nasdaq National
Market.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required to be included in Part
I of this Registration Statement will be given or sent to all persons who
participate in the Safeskin Corporation Stock Purchase Plan (the "Plan"), as
specified by Rule 428.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the U.S. Securities and Exchange
Commission (the "Commission") by Safeskin Corporation (the "Company") are
incorporated by reference in this Form S-8 Registration Statement (the
"Registration Statement") and made a part hereof:
1. The Annual Report on Form 10-K, as amended on Form 10-K/A filed on
April 30, 1999, for the fiscal year ended December 31, 1998.
2. The Quarterly Reports on Form 10-Q for the periods ended March 31,
1999 and June 30, 1999.
3. The description of the Company's Common Stock which is contained in
the Company's Registration Statement on Form 8-A filed under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") on November 2, 1993, as
amended by the Company's Form 8-A/A filed under the Exchange Act on January 2,
1997.
All documents and reports filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange 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
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents or reports. 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 other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified shall not be deemed to
constitute a part of the Registration Statement except as so modified and any
statement so superseded shall not be deemed 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
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<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 607.0850 of the Florida Business Corporation Act, as amended
from time to time ("FBCA"), permits a corporation, under specified
circumstances, to indemnify any person who was or is a party to any proceeding
brought by third parties by reason of the fact that they were or are directors,
officers, employees or agents of the Company against liability and expenses
actually and reasonably incurred in connection with such proceeding, including
any appeal thereof, if such person acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reason to believe their conduct was unlawful.
Section 607.0831 of the FBCA provides that the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director is limited to any breach or failure to perform
the director's duties which constitutes (i) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (ii)
unlawful payments of distributions to shareholders as provided in Section
607.0834 of the FBCA; (iii) any transaction from which the director derived an
improper personal benefit; (iv) conscious disregard for the best interest of the
corporation, or willful misconduct, in a proceeding by or in the right of the
corporation to procure a judgment in its favor or by or in the right of a
shareholder; or (v) recklessness, bad faith, malicious purpose or with wanton
and willful disregard of human rights, safety or property in a proceeding by or
in the right of someone other than the corporation or a shareholder.
The Company's Amended and Restated Articles of Incorporation provide
that the Company shall, to the full extent permitted by Section 607.0850 of the
FBCA indemnify all persons whom it may indemnify pursuant thereto. In addition,
the Company's Articles of Incorporation limit the personal liability of its
directors to the full extent permitted by Section 607.0831 of the FBCA, as
amended from time to time.
The Company's Bylaws (the "Bylaws") provide a right to indemnification
to the full extent permitted by law for expenses, attorney's fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred by any of
the Company's directors, officers, employees or agents, who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was the Company's director, officer, employee
or agent, or was serving at the Company's request as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise. The Company's Bylaws also provide that the Company may pay the
expenses, including attorney's fees, incurred by any person entitled to be
indemnified by the Company in defending a civil or criminal action, suit or
proceeding in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking, by or on behalf of such person, to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized by law.
Pursuant to Florida law, the Company may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the applicable provisions of the Bylaws of the Company or
applicable law. The Company maintains such an insurance policy.
II-2
<PAGE> 4
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBERS EXHIBIT
--------------- -------
<S> <C>
5 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of PricewaterhouseCoopers LLP
23.3 Consent of Morgan, Lewis & Bockius LLP (included as part of
Exhibit 5.1)
24 Power of Attorney (included as part of the signature page)
99 Safeskin Corporation Stock Purchase Plan
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement; and
(iii)To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that subparagraphs (a)(1)(i) and
(a)(1)(ii) of this section do not apply if the information
required to be included in a post-effective amendment by those
subparagraphs is contained in periodic reports filed with or
furnished to the Commission by the Company pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
II-3
<PAGE> 5
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 that 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 Company's
annual report pursuant to Section 13(a) or 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 Company pursuant to the foregoing provisions, or otherwise, the Company
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 Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company 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.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 San Diego, California on this 30th day of September, 1999.
SAFESKIN CORPORATION
By: /s/ RICHARD JAFFE
------------------------------------
Richard Jaffe,
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by or on behalf of the following persons in the
capacities and on the dates indicated.
Each person, in so signing, also makes, constitutes and appoints Richard
Jaffe and David L. Morash, and each such officer acting singly, his true and
lawful attorney-in-fact, in his name, place and stead to execute and cause to be
filed with the Securities and Exchange Commission any or all amendments to this
Registration Statement, with all exhibits and any and all documents required to
be filed with respect thereto, and to do and perform each and every act and
thing necessary to effectuate the same.
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ RICHARD JAFFE
- --------------------------------- Chairman, President and Chief September 30, 1999
Richard Jaffe Executive Officer and Director
/s/ DAVID L. MORASH
- --------------------------------- Executive Vice President and September 30, 1999
David L. Morash Chief Financial Officer
/s/ SETH S. GOLDMAN
- --------------------------------- Vice President - Finance, September 30, 1999
Seth S. Goldman Controller and Secretary
/s/ NEIL K. BRAVERMAN
- --------------------------------- Director September 30, 1999
Neil K. Braverman
/s/ IRVING JAFFE
- --------------------------------- Chairman Emeritus and Director September 30, 1999
Irving Jaffe
/s/ HOWARD L. SHECTER
- --------------------------------- Director September 30, 1999
Howard L. Shecter
/s/ CAM L. GARNER
- --------------------------------- Director September 30, 1999
Cam L. Garner
/s/ JEFFEREY STIEFLER
- --------------------------------- Director September 30, 1999
Jeffrey Stiefler
/s/ JOSEPH STEMLER
- --------------------------------- Director September 30, 1999
Joseph Stemler
</TABLE>
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<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBERS EXHIBIT
--------------- -------
<S> <C>
5 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of PricewaterhouseCoopers LLP
23.3 Consent of Morgan, Lewis & Bockius LLP (included as part of
Exhibit 5.1)
24 Power of Attorney (included as part of the signature page)
99 Safeskin Corporation Stock Purchase Plan
</TABLE>
<PAGE> 1
EXHIBIT 5
October 1, 1999
Safeskin Corporation
12671 High Bluff Drive
Building B
San Diego, California 92130
Re: Offering of Shares Pursuant to
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel to Safeskin Corporation, a Florida corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
of a registration statement on Form S-8 (the "Registration Statement") relating
to the registration by the Company of 1,000,000 shares of the Company's Common
Stock, $.01 (the "Shares"), issued or to be issued pursuant to awards under the
Safeskin Corporation Stock Purchase Plan (the "Plan").
In so acting, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of (a) the Articles of Incorporation
of the Company, (b) the Bylaws of the Company, (c) the Plan and (d) such other
documents, records, certificates and other instruments of the Company as in our
judgment are necessary or appropriate for purposes of this opinion.
Based on the foregoing, we are of the following opinion:
1. The Company is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Florida.
2. The Shares have been duly authorized by the Company and, when issued and
paid for as contemplated by the Registration Statement, will be duly and
validly issued and will be fully paid and non-assessable.
We render the foregoing opinions as members of the Bar of the State of
Florida and express no opinion as to laws other than the laws of the State of
Florida.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this registration statement of
Safeskin Corporation (the "Company") on Form S-8 (relating to 1,000,000 shares
of common stock for the Safeskin Corporation Stock Purchase Plan) of our report
dated April 5, 1999 appearing in the Annual Report on Form 10-K of the Company
for the year ended December 31, 1998.
/s/ DELOITTE & TOUCHE LLP
San Diego, California
September 30, 1999
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this registration statement for
Safeskin Corporation on Form S-8 for 1,000,000 shares of common stock for the
Safeskin Corporation Stock Purchase Plan of our report dated February 17, 1997,
appearing in the Annual Report on Form 10-K of Safeskin Corporation for the year
ended December 31, 1998.
/s/ PRICEWATERHOUSECOOPERS LLP
San Diego, California
September 30, 1999
<PAGE> 1
EXHIBIT 99
SAFESKIN CORPORATION
STOCK PURCHASE PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I Introduction...............................................................1
Sec. 1.01 Statement of Purpose..........................................................1
Sec. 1.02 Internal Revenue Code Considerations..........................................1
Sec. 1.03 ERISA Considerations..........................................................1
ARTICLE II Definitions................................................................1
Sec. 2.01 Board of Directors............................................................1
Sec. 2.02 Code..........................................................................1
Sec. 2.03 Committee.....................................................................1
Sec. 2.04 Company.......................................................................1
Sec. 2.05 Compensation..................................................................1
Sec. 2.06 Effective Date................................................................1
Sec. 2.07 Election Date.................................................................1
Sec. 2.08 Eligible Employee.............................................................2
Sec. 2.09 Employer......................................................................2
Sec. 2.10 Exchange Act..................................................................2
Sec. 2.11 Market Value..................................................................2
Sec. 2.12 Participant...................................................................2
Sec. 2.13 Plan..........................................................................3
Sec. 2.14 Plan Year.....................................................................3
Sec. 2.15 Purchase Agreement............................................................3
Sec. 2.16 Purchase Date.................................................................3
Sec. 2.17 Purchase Period...............................................................3
Sec. 2.18 Purchase Price................................................................3
Sec. 2.19 Stock.........................................................................3
Sec. 2.20 Subsidiary....................................................................3
ARTICLE III Admission to Participation.................................................3
Sec. 3.01 Initial Participation.........................................................3
Sec. 3.02 Discontinuance of Participation...............................................3
Sec. 3.03 Readmission to Participation..................................................4
ARTICLE IV Stock Purchase and Resale..................................................4
Sec. 4.01 Reservation of Shares.........................................................4
Sec. 4.02 Limitation on Shares Available................................................4
Sec. 4.03 Purchase Price of Shares......................................................4
Sec. 4.04 Exercise of Purchase Privilege................................................5
Sec. 4.05 Payroll Deductions............................................................5
Sec. 4.06 Payment for Stock.............................................................5
Sec. 4.07 Share Ownership; Issuance of Certificates.....................................5
Sec. 4.08 Distribution of Shares or Resale of Stock.....................................6
ARTICLE V Special Adjustments........................................................7
Sec. 5.01 Shares Unavailable............................................................7
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
Sec. 5.02 Anti-Dilution Provisions......................................................7
Sec. 5.03 Effect of Certain Transactions................................................7
ARTICLE VI Miscellaneous..............................................................8
Sec. 6.01 Non-Alienation................................................................8
Sec. 6.02 Administrative Costs..........................................................8
Sec. 6.03 The Committee.................................................................8
Sec. 6.04 Withholding of Taxes..........................................................8
Sec. 6.05 Amendment of the Plan.........................................................9
Sec. 6.06 Expiration and Termination of the Plan........................................9
Sec. 6.07 Repurchase of Stock...........................................................9
Sec. 6.08 Notice........................................................................9
Sec. 6.09 Government Regulation.........................................................9
Sec. 6.10 Headings, Captions, Gender....................................................9
Sec. 6.11 Severability of Provisions, Prevailing Law....................................9
</TABLE>
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<PAGE> 4
ARTICLE I
Introduction
Sec. 1.01 Statement of Purpose. The purpose of the Safeskin
Corporation Employee Stock Purchase Plan is to provide eligible employees of the
Company and its subsidiaries an opportunity to purchase common stock of the
Company. The Board of Directors of the Company believes that employee
participation in stock ownership will be to the mutual benefit of the employees
and the Company. The Plan must be approved by the shareholders of the Company
within 12 months after the date on which the Plan is adopted.
Sec. 1.02 Internal Revenue Code Considerations. The Plan is
intended to constitute an "employee stock purchase plan" within the meaning of
section 423 of the Internal Revenue Code of 1986, as amended.
Sec. 1.03 ERISA Considerations. The Plan is not intended and
shall not be construed as constituting an "employee benefit plan," within the
meaning of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended.
ARTICLE II
Definitions
Sec. 2.01 "Board of Directors" means the Board of Directors of
the Company.
Sec. 2.02 "Code" means the Internal Revenue Code of 1986, as
amended. References to specific sections of the Code shall be taken to be
references to corresponding sections of any successor statute.
Sec. 2.03 "Committee" means the committee appointed by the Board
of Directors to administer the Plan, as provided in Section 6.03.
Sec. 2.04 "Company" means Safeskin Corporation and any successor
by merger or otherwise.
Sec. 2.05 "Compensation" shall mean a Participant's base wages,
overtime pay, commissions, cash bonuses, premium pay and shift differential,
before giving effect to any compensation reductions made in connection with
plans described in section 401(k) or 125 of the Code.
Sec. 2.06 "Effective Date" shall mean October 1, 1999 or such
other date as is designated by the Board of Directors as the effective date of
the Plan.
Sec. 2.07 "Election Date" means each January 1, April 1, July 1
and October 1, or such other dates as the Committee shall specify. The first
Election Date for the Plan shall be the Effective Date.
Sec. 2.08 "Eligible Employee" means each employee of the
Employer:
<PAGE> 5
(i) Who is employed by the Employer as an employee (and not as
an independent contractor),
(ii) Whose customary employment is for more than 20 hours per
week and for more than five months per year,
(iii)Who is not deemed for purposes of section 423(b)(3) of the
Code to own stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company or any
subsidiary, and
(iv) Who has completed at least one year of service with the
Employer, including any period of service with any predecessor business
unit acquired by the Employer (whether by asset purchase, stock
purchase, merger or otherwise).
Notwithstanding the foregoing, the term "Eligible Employee" shall not include an
employee who is a member of a collective bargaining unit if the collective
bargaining agent has determined that employees in such collective bargaining
unit will not participate in the Plan, during any period in which such election
not to participate is in effect. A collective bargaining agent's election not to
authorize participation in the Plan shall remain in effect until the collective
bargaining agent affirmatively elects to authorize such participation, by giving
proper written notice to the Company. A collective bargaining agent's election
to authorize participation in the Plan shall be made prospectively and with
sufficient notice to permit appropriate implementation by the Company.
Sec. 2.09 "Employer" means the Company and each Subsidiary.
Sec. 2.10 "Exchange Act" means the Securities Exchange Act of
1934, as amended, and as the same may hereafter be amended.
Sec. 2.11 "Market Value" means the last price for the Stock as
reported on the principal market on which the Stock is traded for the date of
reference. If there was no such price reported for the date of reference,
"Market Value" means the last reported price for the Stock on the day next
preceding the date of reference for which such price was reported.
Sec. 2.12 "Participant" means each Eligible Employee who elects
to participate in the Plan.
Sec. 2.13 "Plan" means the Safeskin Corporation Stock Purchase
Plan, as set forth herein and as hereafter amended.
Sec. 2.14 "Plan Year" means each calendar year during which the
Plan is in effect.
Sec. 2.15 "Purchase Agreement" means the instrument prescribed
by the Committee pursuant to which an Eligible Employee may enroll as a
Participant and subscribe for the purchase of shares of Stock on the terms and
conditions offered by the Company. The
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<PAGE> 6
Purchase Agreement is intended to evidence the Company's offer of an option to
the Eligible Employee to purchase Stock on the terms and conditions set forth
therein and herein.
Sec. 2.16 "Purchase Date" means the last day of each Purchase
Period.
Sec. 2.17 "Purchase Period" means each three-month period or
other period specified by the Committee, beginning on or after the Effective
Date, during which the Participant's Stock purchase is funded through payroll
deduction accumulations.
Sec. 2.18 "Purchase Price" means the purchase price for shares
of Stock purchased under the Plan, determined as set forth in Section 4.03.
Sec. 2.19 "Stock" means the common stock of the Company.
Sec. 2.20 "Subsidiary" means any present or future corporation
which (i) constitutes a "subsidiary corporation" of the Company as that term is
defined in section 424 of the Code and (ii) is designated as a participating
entity in the Plan by the Committee.
ARTICLE III
Admission to Participation
Sec. 3.01 Initial Participation. An Eligible Employee may elect
to participate in the Plan and may become a Participant effective as of any
Election Date, by executing and filing with the Committee a Purchase Agreement
at such time in advance of the Election Date as the Committee shall prescribe.
The Purchase Agreement shall remain in effect until it is modified through
discontinuance of participation under Section 3.02 or a change under Section
4.05.
Sec. 3.02 Discontinuance of Participation. A Participant may
voluntarily cease his or her participation in the Plan and stop payroll
deductions at any time by filing a notice of cessation of participation on such
form and at such time in advance of the effective date as the Committee shall
prescribe. Notwithstanding anything in the Plan to the contrary, if a
Participant ceases to be an Eligible Employee, his or her participation
automatically shall cease, no further purchase of Stock shall be made for the
Participant and the Participant may request payment of any funds held in his or
her account under the Plan.
Sec. 3.03 Readmission to Participation. Any Eligible Employee
who has previously been a Participant, who has discontinued participation
(whether by cessation of eligibility or otherwise), and who wishes to be
reinstated as a Participant may again become a Participant by executing and
filing with the Committee a new Purchase Agreement. Reinstatement to Participant
status shall be effective as of any Election Date, provided the Participant
files a new Purchase Agreement with the Committee at such time in advance of the
Election Date as the Committee shall prescribe.
ARTICLE IV
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<PAGE> 7
Stock Purchase and Resale
Sec. 4.01 Reservation of Shares. There shall be 1,000,000 shares
of Stock reserved for issuance or transfer under the Plan, subject to adjustment
in accordance with Section 5.02. Except as provided in Section 5.02, the
aggregate number of shares of Stock that may be purchased under the Plan shall
not exceed the number of shares of Stock reserved under the Plan.
Sec. 4.02 Limitation on Shares Available.
(a) The maximum number of shares of Stock that may be purchased for each
Participant on a Purchase Date is the lesser of (a) the number of whole shares
of Stock that can be purchased by applying the full balance of the Participant's
withheld funds to the purchase of shares of Stock at the Purchase Price, or (b)
the Participant's proportionate part of the maximum number of shares of Stock
available under the Plan, as stated in Section 4.01.
(b) Notwithstanding the foregoing, if any person entitled to purchase
shares pursuant to any offering under the Plan would be deemed for purposes of
section 423(b)(3) of the Code to own stock (including any number of shares of
Stock that such person would be entitled to purchase under the Plan) possessing
five percent or more of the total combined voting power or value of all classes
of stock of Company, the maximum number of shares of Stock that such person
shall be entitled to purchase pursuant to the Plan shall be reduced to that
number which, when added to the number of shares of stock that such person is
deemed to own (excluding any number of shares of Stock that such person would be
entitled to purchase under the Plan), is one less than such five percent. Any
amounts withheld from a Participant's compensation that cannot be applied to the
purchase of Stock by reason of the foregoing limitation shall be returned to the
Participant as soon as practicable.
Sec. 4.03 Purchase Price of Shares. The Purchase Price per share
for the Stock to be sold to Participants for each Purchase Period shall be the
lower of (i) 85% of the Market Value of such share on the first day of the
Purchase Period or (ii) 85% of the Market Value of such share on the last day of
the Purchase Period (the "Purchase Date").
Sec. 4.04 Exercise of Purchase Privilege.
(a) As of the first day of each Purchase Period, each
Participant shall be granted an option to purchase shares of Stock at the
Purchase Price specified in Section 4.03. The option shall continue in effect
through the Purchase Date for the Purchase Period. The maximum number of shares
that a Participant may purchase during a Purchase Period is 2,500 shares
(subject to the limits of Section (c) below). Subject to the provisions of
Section 4.02 above and Section 4.04(c), on each Purchase Date, the Participant
shall automatically be deemed to have exercised his or her option to purchase
shares of Stock, unless the Participant notifies the Committee, in such manner
and at such time in advance of the Purchase Date as the Committee shall
prescribe, of his or her desire not to make such purchase.
(b) There shall be purchased for the Participant on each
Purchase Date, at the Purchase Price for the Purchase Period, the largest number
of whole shares of Stock as can be purchased with the amounts withheld from the
Participant's Compensation
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during the Purchase Period. Each such purchase shall be deemed to have occurred
on the Purchase Date occurring at the close of the Purchase Period for which the
purchase was made. Any amounts that are withheld from a Participant's
Compensation in a Purchase Period and that remain after the purchase of whole
shares of Stock on a Purchase Date will be held in the Participant's account and
applied on the Participant's behalf to purchase Stock on the next Purchase Date.
(c) A Participant may not purchase shares of Stock
having an aggregate Market Value of more than $25,000, determined at the
beginning of each Purchase Period, for any calendar year in which one or more
offerings under this Plan are outstanding at any time, and a Participant may not
purchase a share of Stock under any offering after the expiration of the
Purchase Period for the offering.
Sec. 4.05 Payroll Deductions. Each Participant shall authorize
payroll deductions from his or her Compensation for the purpose of funding the
purchase of Stock pursuant to his or her Purchase Agreement. In the Purchase
Agreement, each Participant shall authorize an after-tax payroll deduction from
each payment of a percentage of Compensation during a Purchase Period in an
amount not less than 1% and not more than 15% of the Participant's Compensation.
A Participant may change the deduction to any permissible level effective as of
any Election Date. A change shall be made by filing with the Committee a notice
in such form and at such time in advance of the Election Date on which the
change is to be effective as the Committee shall prescribe.
Sec. 4.06 Payment for Stock. The Purchase Price for all shares
of Stock purchased by a Participant under the Plan shall be paid out of the
Participant's authorized payroll deductions. All funds received or held by the
Company under the Plan may be used for any corporate purpose, and the Company
shall not be obligated to segregate such funds.
Sec. 4.07 Share Ownership; Issuance of Certificates.
(a) The shares of Stock purchased by a Participant on a
Purchase Date shall, for all purposes, be deemed to have been issued or sold at
the close of business on the Purchase Date. Prior to that time, none of the
rights or privileges of a shareholder of the Company shall inure to the
Participant with respect to such shares of Stock. All the shares of Stock
purchased under the Plan shall be delivered by the Company in a manner as
determined by the Committee.
(b) The Committee, in its sole discretion, may determine
that shares of Stock shall be delivered by (i) issuing and delivering to the
Participant a certificate for the number of shares of Stock purchased by the
Participant, (ii) issuing and delivering certificates for the number of shares
of Stock purchased to a firm which is a member of the National Association of
Securities Dealers, as selected by the Committee from time to time, which shares
shall be maintained by such firm in a separate brokerage account for each
Participant, or (iii) issuing and delivering certificates for the number of
shares of Stock purchased by Participants to a bank or trust company or
affiliate thereof, as selected by the Committee from time to time, which shares
may be held by such bank or trust company or affiliate in street name, but with
a separate account maintained by such entity for each Participant reflecting
such Participant's share interests in the Stock. Each certificate or account, as
the case may be,
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may be in the name of the Participant or, if he or she so designates on the
Participant's Purchase Agreement, in the Participant's name jointly with the
Participant's spouse, with right of survivorship, or in such other form as the
Committee may permit.
(c) The Committee, in its sole discretion, may impose
such restrictions or limitations as it shall determine on the resale of Stock,
the issuance of individual stock certificates or the withdrawal from any
shareholder accounts established for a Participant.
(d) If, under Section 4.07(b), certificates for Stock
are held for the benefit of the Participant, any dividends payable with respect
to shares of Stock credited to a shareholder account of a Participant will, at
the Participant's election, either (i) be reinvested in whole shares of Stock
and credited to the Participant's account (with fractional shares credited in
cash) or (ii) paid directly to the Participant. If dividends are reinvested in
shares of Stock, such reinvestment shall be made based on the Market Value of
the Stock at the date of the reinvestment, with no discount from Market Value.
Sec. 4.08 Distribution of Shares or Resale of Stock.
(a) A Participant may request a distribution of shares
of Stock purchased for the Participant under the Plan or order the sale of such
shares at any time by making a request in such form and at such time as the
Committee shall prescribe.
(b) If a Participant terminates his or her employment
with the Employer or otherwise ceases to be an Eligible Employee, the
Participant shall receive a distribution of his or her shares of Stock held in
any shareholder account established pursuant to Section 4.07(b), unless the
Participant elects to have the shares of Stock sold in accordance with such
procedures as the Committee shall prescribe.
(c) If a Participant is to receive a distribution of
shares of Stock, or if shares are to be sold, the distribution or sale shall be
made in whole shares of Stock, with fractional shares paid in cash. Any
brokerage commissions resulting from a sale of Stock shall be deducted from
amounts payable to the Participant.
ARTICLE V
Special Adjustments
Sec. 5.01 Shares Unavailable. If, on any Purchase Date, the
aggregate funds available for the purchase of Stock would purchase a number of
shares in excess of the number of shares of Stock then available for purchase
under the Plan, the following events shall occur:
(a) The number of shares of Stock that would otherwise
be purchased by each Participant shall be proportionately reduced on the
Purchase Date in order to eliminate such excess; and
(b) The Plan shall automatically terminate immediately
after the Purchase Date as of which the supply of available shares is exhausted.
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Sec. 5.02 Anti-Dilution Provisions. The aggregate number of
shares of Stock reserved for purchase under the Plan, as provided in Section
4.01, and the calculation of the Purchase Price per share may be appropriately
adjusted by the Committee to reflect any increase or decrease in the number of
issued shares of Stock resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend, or a stock
split, or other increase or decrease in such shares, if effected without receipt
of consideration by the Company.
Sec. 5.03 Effect of Certain Transactions. Subject to any
required action by the shareholders, if the Company shall be the surviving
corporation in any merger or consolidation, any offering hereunder shall pertain
to and apply to the shares of stock of the Company. However, in the event of a
dissolution or liquidation of the Company, or of a merger or consolidation in
which the Company is not the surviving corporation, the Plan and any offering
hereunder shall terminate upon the effective date of such dissolution,
liquidation, merger or consolidation, unless the Board determines otherwise, and
the balance of any amounts withheld from a Participant's compensation which have
not by such time been applied to the purchase of Stock shall be returned to the
Participant.
ARTICLE VI
Miscellaneous.
Sec. 6.01 Non-Alienation. Except as set forth below, the right
to purchase shares of Stock under the Plan is personal to the Participant, is
exercisable only by the Participant during the Participant's lifetime and may
not be assigned or otherwise transferred by the Participant. If a Participant
dies, unless the executor, administrator or other personal representative of the
deceased Participant directs otherwise, any amounts previously withheld from the
Participant's Compensation before the Participant's death during the Purchase
Period in which the Participant dies shall be used to purchase Stock on the
Purchase Date for the Purchase Period. After that Purchase Date, there shall be
delivered to the executor, administrator or other personal representative of the
deceased Participant all shares of Stock and such residual amounts as may remain
to the Participant's credit under the Plan.
Sec. 6.02 Administrative Costs. The Company shall pay the
administrative expenses associated with the operation of the Plan (other than
brokerage commissions resulting from sales of Stock directed by Participants).
Sec. 6.03 The Committee. The Board of Directors shall appoint a
Committee, which shall have the authority and power to administer the Plan and
to make, adopt, construe, and enforce rules and regulations not inconsistent
with the provisions of the Plan. The Committee shall adopt and prescribe the
contents of all forms required in connection with the administration of the
Plan, including, but not limited to, the Purchase Agreement, payroll withholding
authorizations, requests for distribution of shares, and all other notices
required hereunder. The Committee shall have the fullest discretion permissible
under law in the discharge of its duties. The Committee's interpretations and
decisions with respect to the Plan shall be final and conclusive.
Sec. 6.04 Withholding of Taxes. All acquisitions of Stock under
the Plan shall be subject to applicable federal (including FICA), state and
local tax withholding requirements
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if the Internal Revenue Service or other taxing authority requires such
withholding. The Company may require that Participants pay to the Company (or
make other arrangements satisfactory to the Company for the payment of) the
amount of any federal, state or local taxes that the Company is required to
withhold with respect to the purchase of Stock or the sale of Stock acquired
under the Plan, or the Company may deduct from the Participant's wages or other
compensation the amount of any withholding taxes dues with respect to the
purchase of Stock or the sale of Stock acquired under the Plan.
Sec. 6.05 Amendment of the Plan. The Board of Directors may, at
any time and from time to time, amend the Plan in any respect, except that any
amendment that is required to be approved by the shareholders under Section 423
of the Code shall be submitted to the shareholders of the Company for approval.
Sec. 6.06 Expiration and Termination of the Plan. The Plan shall
continue in effect for ten years from the Effective Date, unless terminated
prior to that date pursuant to the provisions of the Plan or pursuant to action
by the Board of Directors. The Board of Directors shall have the right to
terminate the Plan at any time without prior notice to any Participant and
without liability to any Participant. Upon the expiration or termination of the
Plan, the balance, if any, then standing to the credit of each Participant from
amounts withheld from the Participant's compensation which has not, by such
time, been applied to the purchase of Stock shall be refunded to the
Participant.
Sec. 6.07 Repurchase of Stock. The Company shall not be required
to purchase or repurchase from any Participant any of the shares of Stock that
the Participant acquires under the Plan.
Sec. 6.08 Notice. A Purchase Agreement and any notice that a
Participant files pursuant to the Plan shall be on the form prescribed by the
Committee and shall be effective only when received by the Committee. Delivery
of such forms may be made by hand or by certified mail, sent postage prepaid, to
the Company's corporate headquarters, or such other address as the Committee may
designate. Delivery by any other mechanism shall be deemed effective at the
option and discretion of the Committee.
Sec. 6.09 Government Regulation. The Company's obligation to
sell and to deliver the Stock under the Plan is at all times subject to all
approvals of any governmental authority required in connection with the
authorization, issuance, sale or delivery of such Stock.
Sec. 6.10 Headings, Captions, Gender. The headings and captions
herein are for convenience of reference only and shall not be considered as part
of the text. The masculine shall include the feminine, and vice versa.
Sec. 6.11 Severability of Provisions, Prevailing Law. The
provisions of the Plan shall be deemed severable. In the event any such
provision is determined to be unlawful or unenforceable by a court of competent
jurisdiction or by reason of a change in an applicable statute, the Plan shall
continue to exist as though such provision had never been included therein (or,
in the case of a change in an applicable statute, had been deleted as of the
date of
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such change). The Plan shall be governed by the laws of the State of California
to the extent such laws are not in conflict with, or superseded by, federal law.
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