As filed with the Securities and Exchange Commission on September 6, 1996.
Registration No. 333-_____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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ZYTEC CORPORATION
(Exact name of issuer as specified in its charter)
Minnesota 41-1465891
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7575 Market Place Drive, Eden Prairie, Minnesota 55344
(Address of principal executive offices, including Zip Code)
ZYTEC CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
Copy to:
Ronald D. Schmidt Eric O. Madson
President and Chief Executive Officer Winthrop & Weinstine, P.A.
Zytec Corporation 3000 Dain Bosworth Plaza
7575 Market Place Drive 60 South Sixth Street
Eden Prairie, Minnesota 55344 Minneapolis, Minnesota 55402
(Name and address of agent for service) (612) 347-0700
(612) 941-1100
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share (1) Price (1) Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 600,000 shares $10.0625 $6,037,500 $2,082
no par value
- -------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) based
upon the quotation for the Common Stock on September 4, 1996, as reported
on the Nasdaq National Market.
===================================================================================================================
</TABLE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Documents containing the information specified in this Part I will be sent
or given to persons who hold or receive options as specified by Rule 428(b)(1).
Such documents need not be filed with the Securities and Exchange Commission
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. Such documents and the documents incorporated
by reference in this Registration Statement pursuant to Item 3 of Part II, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933.
ITEM 1. PLAN INFORMATION.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated herein by reference:
a. The Annual Report on Form 10-K of Zytec Corporation (the "Company") for
the fiscal year ended December 31, 1995.
b. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996.
c. All other reports filed by the Company with the Securities and Exchange
Commission since December 31, 1995, pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act").
d. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1 (Registration No. 33-68822), as
amended, and incorporated by reference into the Company's Registration Statement
on Form 8-A (File No. 0-22428), filed with the Securities and Exchange
Commission.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to 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 such
securities then remaining to be sold shall be deemed to be incorporated herein
by reference and to be a part hereof from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The Common Stock, no par value (the "Common Stock"), of the Company
offered pursuant to this Registration Statement is registered under Section
12(g) of the Exchange Act. The description of the Company's Common Stock is
incorporated by reference pursuant to Item 3.d. of Part II, above.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Sherman Winthrop, a director and shareholder of the Company, is a
principal of Winthrop & Weinstine, P.A., which receives compensation from the
Company for rendering legal services.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 302A.521 of the Minnesota Statutes provides that unless prohibited
or limited by a corporation's articles of incorporation or bylaws, the Company
must indemnify its current and former officers, directors, employees and agents
against expenses (including attorneys' fees), judgments, penalties, fines and
amounts paid in settlement and which were incurred in connection with actions,
suits, or proceedings in which such persons are parties by reason of the fact
that they are or were an officer, director, employee or agent of the
corporation, if they (i) have not been indemnified by another organization, (ii)
acted in good faith, (iii) received no improper personal benefit, (iv) in the
case of a criminal proceeding, had no reasonable cause to believe the conduct
was unlawful, and (v) reasonably believed that the conduct was in the best
interests of the corporation. Section 302A.521 also permits a corporation to
purchase and maintain insurance on behalf of its officers, directors, employees
and agents against any liability which may be asserted against, or incurred by,
such persons in their capacities as officers, directors, employees and agents of
the corporation, whether or not the corporation would have been required to
indemnify the person against the liability under the provisions of such section.
Article VI of the Bylaws of the Company provides that the directors,
officers, committee members, of the Company and other persons shall have the
rights to indemnification provided by Section 302A.521 of the Minnesota
Statutes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed with this Registration Statement on
Form S-8:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
<S> <C>
5.1 Opinion of Winthrop & Weinstine, P.A. .................................................
23.1 Consent of Coopers & Lybrand L.L.P.....................................................
23.2 Consent of Winthrop & Weinstine, P.A. [included in its opinion filed as Exhibit 5.1].
24.1 Powers of Attorney [included as part of signature page].
99.1 Zytec Corporation 1996 Employee Stock Purchase Plan....................................
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) RULE 415 OFFERING.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 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
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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include
any financial statements required by Section 210.3-19 of this
chapter at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Securities Act need not be
furnished, provided that the registrant includes in the prospectus,
by means of a post-effective amendment, financial statements
required pursuant to this paragraph (a)(4) and other information
necessary to ensure that all other information in the prospectus is
at least as current as the date of those financial statements.
Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed
to include financial statements and information required by Section
10(a)(3) of the Securities Act or Section 210.3-19 of this chapter
if such financial statements and information are contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the Form F-3.
(b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(h) STATEMENT REQUIRED IN CONNECTION WITH FILING OF REGISTRATION STATEMENT ON
FORM S-8.
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, 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 Eden Prairie, State of Minnesota on August 23, 1996.
ZYTEC CORPORATION
By /s/ Ronald D. Schmidt
-------------------------------------
Ronald D. Schmidt
President and Chief Executive Officer
(The remainder of this page was intentionally left blank.)
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ronald D. Schmidt and John B. Rogers, or either of them, such person's true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution for such person and in such person's name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits hereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Ronald D. Schmidt Chairman of the Board, President, August 23, 1996
- ------------------------- and Chief Executive Officer
Ronald D. Schmidt (Principal Executive Officer)
/s/ John M. Steel Vice President, Marketing and Sales August 23, 1996
- ------------------------- and Director
John M. Steel
/s/ Sherman Winthrop Secretary and Director August 23, 1996
- -------------------------
Sherman Winthrop
/s/ Josef J. Matz Managing Director of Zytec GmbH August 23, 1996
- ------------------------- and Director
Josef J. Matz
/s/ John B. Rogers Chief Financial Officer August 23, 1996
- ------------------------- (Principal Financial and Principal
John B. Rogers Accounting Officer)
/s/ Lawrence J. Matthews Director August 23, 1996
- -------------------------
Lawrence J. Matthews
/s/ Gary C. Flack Director August 23, 1996
- -------------------------
Gary C. Flack
/s/ Dr. Fred C. Lee Director August 23, 1996
- -------------------------
Dr. Fred C. Lee
/s/ John V. Titsworth Director August 23, 1996
- -------------------------
John V. Titsworth
/s/ James S. Womack Director August 23, 1996
- -------------------------
James S. Womack
</TABLE>
WINTHROP & WEINSTINE, P.A.
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402
(612) 347-0700
September 6, 1996
EXHIBIT 5.1
Zytec Corporation
7575 Market Place Drive
Eden Prairie, Minnesota 55344
Re: Registration Statement on Form S-8
1996 Employee Stock Purchase Plan
600,000 Shares
Gentlemen:
We have acted as legal counsel for Zytec Corporation (the "Company") in
connection with the preparation of a Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission, and the Prospectus to be used in conjunction with the Registration
Statement (the "Prospectus"), relating to the registration under the Securities
Act of 1933, as amended, of the sale of up to 600,000 shares (the "Shares") of
common stock, no par value (the "Common Stock"), to be issued under the Zytec
Corporation 1996 Employee Stock Purchase Plan, in the manner set forth in the
Registration Statement and the Prospectus.
In connection therewith, we have examined (a) the Articles of Incorporation and
Bylaws of the Company, both as amended to date; (b) the corporate proceedings
of the Company relative to its organization and to the authorization and
issuance of the Shares; and (c) the Registration Statement and the Prospectus.
In addition to such examination, we have reviewed such other proceedings,
documents and records and have ascertained or verified such additional facts as
we deem necessary or appropriate for purposes of this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company has been legally incorporated and is validly existing under
the laws of the State of Minnesota.
2. All necessary corporate action has been taken by the Company to authorize
the issuance of the Shares.
3. The Shares are validly authorized by the Company's Articles of
Incorporation, as amended, and when issued and paid for as contemplated in
the Registration Statement and Prospectus, will be validly issued, fully
paid, and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus.
Very truly yours,
WINTHROP & WEINSTINE, P.A.
By /s/ Eric O. Madson
Eric O. Madson
Exhibit 23.1
Consent of Coopers & Lybrand L.L.P.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Zytec Corporation on Form S-8 of our reports dated February 21, 1996, on our
audits of the consolidated financial statements and financial statement schedule
of Zytec Corporation as of December 31, 1995 and 1994, and for the years ended
December 31, 1995, 1994 and 1993, which reports are included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995.
Coopers & Lybrand L.L.P.
Minneapolis, Minnesota
September 3, 1996
Exhibit 99.1
ZYTEC CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
1. ESTABLISHMENT OF PLAN.
The Zytec Corporation 1996 Employee Stock Purchase Plan (the "Plan") is
intended to provide the employees of Zytec Corporation (the "Company") and its
Subsidiaries the opportunity to purchase common stock, no par value (the "Common
Stock"), of the Company, and thus to develop a stronger incentive to work for
the continued success of the Company. The Company intends that the Plan shall
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). Therefore, the Plan shall be
construed in a manner consistent with the requirements of Section 423 of the
Code and the regulations thereunder.
2. PURPOSE.
The Plan is intended to encourage stock ownership by employees of the
Company, and thus provide an incentive to them to remain employed with the
Company, improve operations, increase profits, and contribute more significantly
to the Company's continued success.
3. DEFINITIONS.
(a) "Committee" shall mean the group of individuals described in Section
6 of the Plan.
(b) "Employee" shall mean any employee, including an officer, of the
Company or its Subsidiaries who as of the day immediately preceding
the Enrollment Date for that Employee is customarily employed by the
Company for at least twenty (20) hours per week.
(c) "Parent" shall mean any corporation defined as a parent of the
Company in Section 424(e) of the Code.
(d) "Phase" shall mean one of the phases of time occurring during the
term of this Plan, with the first phase ("Phase 1") commencing on
October 1, 1996, and ending at 5:00 o'clock p.m., Minneapolis,
Minnesota, time, on December 31, 1996, and each succeeding phase
commencing immediately on the first day of the calendar quarter
after the termination of the first Phase and each preceding Phase
thereafter and ending at 5:00 o'clock p.m., Minneapolis, Minnesota,
time, on the last day of that calendar quarter. Each Phase shall
commence immediately after the termination of the preceding Phase.
(e) "Subsidiary" shall mean any corporation defined as a subsidiary of
the Company in Section 424(f) of the Code.
4. ELIGIBILITY.
All Employees, as defined in Section 3 hereof, who are employed by the
Company or its Subsidiaries for a period of at least twelve (12) continuous
months prior to an Enrollment Date shall be eligible to participate in the Plan.
5. PARTICIPATION.
(a) ENROLLMENT. Participation in the Plan is voluntary. An Employee may
elect to participate in the Plan, and thereby become a "Participant"
in the Plan, by completing the Plan payroll deduction form provided
to him or her by the Company and delivering it to the Company or its
designated representative not less than thirty (30) calendar days
prior to January 1, April 1, July 1, and October 1 of each year
during the term of the Plan (collectively, the "Enrollment Dates"
and each an "Enrollment Date"). Such enrollment shall be effective
on the first Enrollment Date occurring after the date of the receipt
by the Company of a payroll deduction form from an Employee. Payroll
deductions for a Participant in the Plan shall commence on the first
payday on or after an Enrollment Date. Payroll deductions for each
Phase shall terminate on the last payday immediately prior to or
coinciding with the ending date of such Phase unless sooner
terminated by the Participant as provided in Section 10 hereof.
After a Participant enrolls in the Plan, the Participant shall
continue to participate in the Plan until such participation is
terminated by the Participant as provided in Section 10 hereof or is
otherwise terminated pursuant to the terms of this Plan.
(b) LEAVE OF ABSENCE. For purposes of participation in the Plan, a
person on leave of absence shall be deemed to be an Employee unless
or until such person's leave of absence is classified as a long-term
disability leave. Such Employee's participation shall be deemed to
have terminated on the first day during such leave of absence on
which such Employee is classified as being on a long-term disability
leave. Termination by the Company of any Employee's leave of
absence, other than termination of such leave of absence on return
to full-time or part-time employment, shall terminate an Employee's
employment for all purposes of the Plan and shall terminate such
Employee's participation in the Plan.
6. ADMINISTRATION.
Decisions made under the Plan with respect to the Company's executive
officers and directors (as the terms "executive officers" and "directors" are
used in Section 16(a) of the Securities Exchange Act of 1934) shall be made by
the Compensation Committee of the Company's Board of Directors (the "Committee")
consisting of not fewer than two directors of the Company who are not Employees,
as designated by the Board of Directors of the Company (the "Board of
Directors"). No member of the Committee shall be eligible to purchase Common
Stock under the Plan. The Board of Directors shall fill all vacancies in the
Committee and may remove any member of the Committee at any time, with or
without cause. The Committee shall select its own chairman and hold its meetings
at such times and places as it may determine. All determinations of the
Committee shall be made by a majority of its members. Any decision which is made
in writing and signed by a majority of the members of the Committee shall be
effective as fully as though made by a majority vote at a meeting of the members
of the Committee duly called and held. The determinations of the Committee shall
be made in accordance with its judgment as to the best interests of the Company,
its employees and its stockholders and in accordance with the purposes of the
Plan; provided, however, that the provisions of the Plan shall be construed in a
manner consistent with the requirements of Section 423 of the Code. Such
determinations shall be binding upon the Company and the participants in the
Plan unless otherwise determined by the Board of Directors. The Company shall
pay all expenses of administering the Plan; however, each Participant shall pay
all expenses and commissions associated with his or her individual transactions.
The Company's Board of Directors may retain an agent to record and effect the
grants and exercises of options under the Plan and the enrollment and
termination of enrollment of Participants in the Plan, and to perform such any
other ministerial functions as the Board shall deem appropriate. No member of
the Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.
7. DURATION AND PHASES OF THE PLAN.
(a) TERM OF THE PLAN. The Plan will commence on October 1, 1996, and
will terminate at 5:00 o'clock p.m., Minneapolis, Minnesota, on
September 30, 2006, unless earlier terminated by the Committee.
Notwithstanding the foregoing, this Plan shall be considered of no
force and effect, and any options granted hereunder shall be
considered null and void, unless the holders of the issued and
outstanding shares of the Common Stock of the Company duly approve
the Plan within twelve (12) months after the date of its adoption by
the Board of Directors.
(b) CANCELLATION OF PHASES. If all of the shares of Common Stock
reserved for the grant of options hereunder are issued pursuant to
the terms hereof prior to the commencement of one or more Phases, or
if the number of shares remaining is so small, in the opinion of the
Committee, as to render administration of any succeeding Phase
impracticable, such Phase or Phases may be canceled by the Committee
in its discretion.
(c) ACCELERATION OF PHASES. The Board of Directors may elect (but is not
obligated to elect) to accelerate the ending date of any Phase
effective on the date specified by the Board of Directors in the
event of a Control Transaction (as the term "Control Transaction" is
hereinafter defined in Section 14(b) hereof). In addition, the Board
of Directors, in its sole discretion, may (but is not required to)
choose not to accelerate the ending date of any Phase if, in the
opinion of the certified public accountants of the Company or the
"successor" entity where the Company's business is transferred to
another entity pursuant to a "Control Transaction" (as the term
"Control Transaction" is hereinafter defined in Section 14(b)
hereof), acceleration of the ending date of any Phase would preclude
a "pooling of interests" treatment for a Control Transaction under
generally accepted accounting principles. If the ending date of a
Phase is not accelerated by the Board of Directors, the Phase shall
continue according to the provisions of the Plan, and the options
granted under the Plan shall continue to be subject to the
termination, restrictions on transferability, and other provisions
of the Plan.
8. PAYROLL DEDUCTIONS.
(a) AMOUNT OF PAYROLL DEDUCTIONS. Upon enrollment, a Participant shall
elect to make contributions to the Plan by payroll deductions (in
full dollar amounts), in the aggregate amount of not less than
$10.00 and not in excess of $500.00 for each complete payroll period
which is paid during each Phase. For the purpose of determining the
number of shares covered by each option granted pursuant to Section
9(a) and to be issued pursuant to Section 9(b), the total
accumulated payroll deduction for any Phase shall be determined on
the last payday falling within the Phase. Deductions will not be
prorated for partial payroll periods.
(b) EFFECT OF CHANGE IN COMPENSATION. If there is a change in the pay
period of any Participant, such as from biweekly to monthly, an
appropriate adjustment shall be made by the Company to the deduction
on each payday so as to assure as closely as possible the deduction
of the proper amount authorized by the Participant.
(c) PARTICIPANTS' ACCOUNTS. All payroll deductions made for Participants
shall be credited to their accounts under the Plan. A Participant
may not make any separate cash payments into such account.
(d) DISCONTINUANCE OF, AND CHANGE IN, PARTICIPATION IN PLAN. A
Participant may discontinue his or her participation in the Plan at
any time as provided in Section 10. Subject to the limitations of
Section 8(a), and upon thirty (30) days written notice to the
Company, a Participant may increase or decrease the amount of his or
her payroll deduction under the Plan, with such change to take
effect on the first payday during the next Phase.
(e) LEAVE OF ABSENCE. If a Participant goes on a leave of absence as
provided in Section 5(b), such Participant shall have the right to
elect: (i) to withdraw the balance in his or her account pursuant to
Section 10(a) or (ii) to remain a Participant in the Plan during
such leave of absence, authorizing deductions to be made from
regular payroll payments, if any, made by the Company to the
Participant during such leave of absence.
9. OPTIONS.
(a) GRANT OF OPTION.
(i) A Participant who is an Employee of the Company as of the
first day of a Phase as provided in Section 3(d) hereof, and
who has properly elected to participate in the Plan prior to
such day, shall be granted an option as of such day to
purchase a number of shares, including fractional shares, of
Common Stock to be determined by dividing the total amount to
be credited to that Participant's account under Section 8
hereof by the option price set forth in Section 9(a)(ii)(A)
hereof.
(ii) The option price for such shares of Common Stock shall be the
lower of:
A. Eighty-five percent (85%) of the fair market value of
the shares of Common Stock on the first day of each
Phase; or
B. Eighty-five percent (85%) of the fair market value of
such shares of Common Stock on the ending day of the
Phase as provided in Section 3(d) hereof.
(iii) If the Common Stock of the Company is traded publicly, the
fair market value of a share of Common Stock, on each
valuation date, shall be the officially quoted closing sales
price of the Common Stock on The Nasdaq National Market or a
national stock exchange, if the Common Stock is quoted on The
Nasdaq National Market or traded on such an exchange; or if
the Common Stock is traded on the Nasdaq SmallCap Market, the
average of the representative closing bid and asked prices as
quoted by the National Association of Securities Dealers, Inc.
as of the valuation date. If the Common Stock is not traded
publicly, the fair market value of a share of Common Stock on
the valuation date shall be determined in good faith by the
Committee in a manner acceptable under Section 423 of the
Code.
(iv) Anything herein to the contrary notwithstanding, no Employee
shall be granted an option hereunder:
A. Which permits his or her rights to purchase Common Stock
under all employee stock purchase plans of the Company,
or a Subsidiary or a Parent of the Company, if any, to
accrue at a rate which exceeds Twenty-Five Thousand and
00/100 Dollars ($25,000.00) of the fair market value of
such Common Stock (determined at the time such option is
granted) for each calendar year in which such option is
outstanding at any time;
B. If immediately after the grant, such Employee would own
shares of Common Stock, and/or hold outstanding options
to purchase Common Stock, possessing five percent (5%)
or more of the total combined voting power or value of
all classes of stock of the Company, its Parent, if any,
or a Subsidiary (for purposes of determining stock
ownership under this Paragraph, the rules of Section
424(d) of the Code shall apply); or
C. Which can be exercised after the expiration of 27 months
from the date the option is granted.
(b) EXERCISE OF OPTION.
(i) Unless a Participant gives written notice to the Company
pursuant to Section 10 prior to the ending day of a Phase, his
or her option for the purchase of shares of Common Stock
granted at the first day of such Phase as determined pursuant
to Section 3(d) will be exercised automatically for him or her
as of the ending day of that Phase (the "Stock Purchase Date")
for the purchase of the number of shares, including fractional
shares, of the Company's Common Stock which the accumulated
payroll deductions in his or her account at the Stock Purchase
Date will purchase at the applicable option price, subject to
the limitations set forth in Section 11 hereof.
(ii) Stock certificates for the Common Stock purchased by
Participants under the Plan shall be caused by the Company to
be prepared and delivered to Participants only upon the
written request of Participants given to the Company or upon
termination of the Participant's participation in the Plan.
10. WITHDRAWAL OR TERMINATION OF PARTICIPATION.
(a) GENERAL. A Participant may, at any time prior to a Stock Purchase
Date, withdraw all (but not less than all) payroll deductions then
credited to his or her account by giving twenty-one (21) days
written notice of such withdrawal to the Company. Within twenty-one
(21) days of receipt of such notice of withdrawal, all (but not less
than all) payroll deductions credited to the Participant's account
during a Phase which have not been used for the purchase of shares,
will be paid to him or her, such withdrawal shall serve as the
Participant's withdrawal from the Plan, and no further payroll
deductions will be made during the Plan unless the Employee later
enrolls in the Plan as permitted herein. In the event of such
withdrawal of a Participant's payroll deductions, the option granted
to the Participant for that Phase of the Plan shall lapse
immediately. Partial withdrawals of payroll deductions hereunder may
not be made.
(b) EFFECT OF SUBSEQUENT PARTICIPATION. A Participant's withdrawal from
participation in the Plan at any time will not have any effect upon
his or her eligibility to participate in the Plan during any
subsequent Phase or in any similar employee stock purchase plan
which may hereafter be adopted by the Company.
(c) DEATH OF PARTICIPANT. In the event of the death of a Participant,
the accumulated payroll deductions in the account of such deceased
Participant will be distributed to the person or persons specified
in Section 15 in full in cash.
(d) TERMINATION OF PARTICIPANT'S EMPLOYMENT. Upon termination of a
Participant's employment with the Company for any reason, including
retirement and the death of the Participant while in the employ of
the Company, the payroll deductions credited to that Participant's
account during a Phase which have not been used for the purchase of
shares, shall be returned to him or her without interest or, in the
case of a Participant's death, to the person or persons entitled
thereto under Section 15 hereof, and the Participant's option under
the Plan shall be terminated. Upon termination or withdrawal from
the Plan, the Participant or, in the case of the death of the
Participant the person designated by the Participant pursuant to
Section 15 hereof, shall elect to receive either (i) a certificate
for the number of whole shares credited to the Participant's share
account plus the cash value of any fractional share, or (ii) to have
such shares sold and to receive a cash payment for such sale less
brokerage commissions and fees.
(e) LEAVE OF ABSENCE. A Participant on leave of absence shall, subject
to the election made by such Participant pursuant to Section 8(e),
continue to be a Participant in the Plan so long as such Participant
is on a continuous leave of absence. Such Participant's
participation in the Plan shall terminate on the first day during
such leave of absence on which such Employee is classified as being
on a long-term disability leave. If the Participant's participation
in the Plan is terminated pursuant to this Section 10(e), the
Company shall return, within twenty-one (21) days of such
termination, all payroll deductions credited to such Participant's
account which have not been used for the purchase of shares. Any
unexercised option granted to such Participant under the Plan shall
lapse immediately upon the termination of such Participant's
participation under the Plan.
11. STOCK RESERVED FOR OPTIONS.
(a) MAXIMUM SHARES. The maximum number of shares of Common Stock which
shall be issued under the Plan, subject to adjustment upon changes
in capitalization of the Company as provided in Section 13 hereof,
shall be 600,000 shares of Common Stock (which reflects the
two-for-one stock split effective on June 3, 1996). Such shares
shall be authorized and unissued shares of the Company's Common
Stock. Shares of Common Stock subject to the unexercised portion of
any lapsed or expired option may again be subject to options granted
under the Plan.
(b) ADJUSTMENT IN NUMBER OF SHARES. If the total number of shares of the
Common Stock for which options are to be granted for a given Phase
as specified in Section 9 exceeds the number of shares then
remaining available under the Plan (after deduction of all shares
for which options have been exercised or are then outstanding), and
if the Committee does not elect to cancel such Phase pursuant to
Section 7, the Committee shall make a pro rata allocation to
Participants of the shares remaining available in as uniform and
equitable a manner as it shall consider practicable. In such event,
the options to be granted and the payroll deductions to be made
pursuant to the Plan which would otherwise be effected may, in the
discretion of the Committee, be reduced accordingly, and the balance
of payroll deductions credited to the account of each Participant
under the Plan shall be returned to each Participant as promptly as
possible. The Committee shall give written notice of such reduction
to each Participant affected.
(c) RIGHTS AS STOCKHOLDER. The Participant shall have no rights as a
stockholder with respect to any shares of Common Stock subject to
the Participant's option until the date of the exercise of the
option to purchase shares of Common Stock as provided in Section
9(b). No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to
the date such option is exercised, except as otherwise provided in
Section 13 hereof.
(d) OWNERSHIP OF STOCK. The shares of the Common Stock to be delivered
to a Participant pursuant to the exercise of an option under the
Plan will be registered only in the name of the Participant.
(e) RESTRICTIONS ON EXERCISE. The Board of Directors may, in its
discretion, require as conditions to the issuance of any shares of
Common Stock under the Plan that such shares shall have been duly
listed, upon official notice of issuance, upon a stock market, and
that a Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall then be effective.
12. ACCOUNTING AND USE OF FUNDS.
Payroll deductions for each Participant shall be credited to an account
established for him or her under the Plan. A Participant may not make any
separate cash payments into such account. Such account shall be solely for
bookkeeping purposes, and no separate fund or trust shall be established
hereunder and the Company shall not be obligated to segregate such funds. All
funds from payroll deductions received or held by the Company under the Plan may
be used, without limitation, for any corporate purpose by the Company.
13. ADJUSTMENT PROVISIONS.
(a) RECAPITALIZATIONS. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock
covered by each outstanding option granted hereunder, and the
exercise price per share thereof, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of the
Common Stock resulting from a subdivision or consolidation of shares
or the payment of a share dividend (but only on such shares) or any
other increase or decrease in the number of such shares effected
without receipt of consideration by the Company.
(b) OTHER SHARES OF STOCK. In the event of a change in the shares of
Common Stock of the Company as presently constituted which is
limited to a change of all its authorized shares with par value into
the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to
be the shares within the meaning of this Plan.
14. NON-TRANSFERABILITY OF OPTIONS AND SHARES OF COMMON STOCK.
(a) OPTIONS. Options granted under the Plan shall not be transferable
except under the laws of descent and distribution and shall be
exercisable only by the Participant during his lifetime and after
his death only by his beneficiary or the representative of his
estate as provided in Section 10(c) hereof. Neither payroll
deductions credited to a Participant's account, nor any rights with
regard to the exercise of an option or to receive Common Stock under
the Plan, may be assigned, transferred, pledged, or otherwise
disposed of in any way by the Participant except under the laws of
descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be null and void and without
effect, except that the Company may, at its option, treat such act
as an election to withdraw funds in accordance with Section 10(a).
(b) OPTIONS AND SHARES. To be accorded the tax treatment under the Code
made available by compliance with the provisions of Section 423 of
the Code, shares acquired upon exercise of an option granted
hereunder may not be disposed of within two years after the date of
grant of that option or one year after the date of exercise of such
option, whichever is longer; provided, however, that transfers
during such periods are not prohibited hereunder. In the event of a
Public Offering of the Common Stock or in the event of a Control
Transaction (as the terms "Public Offering" and "Control
Transaction" are hereinafter defined), the Board of Directors may
require (but is not obligated to require) that a holder of an option
granted hereunder, a holder of shares of Common Stock acquired upon
the exercise of such an option, and/or (but only in the case of a
Control Transaction) a holder of equity securities received in
exchange for such shares of Common Stock, shall not sell, transfer,
gift, or otherwise dispose of all or any of such options, shares of
Common Stock, or equity securities (i) for a period of up to one
hundred eighty (180) days from the effective date of a Public
Offering, or (ii) such period of time after a Control Transaction as
shall be necessary or advisable, in the Company's judgment after
consultation with any experts as it shall deem advisable, to assure,
if and as necessary, that the Control Transaction is treated as a
"pooling of interests" under generally accepted accounting
principles, assuming such treatment is intended in connection with
the Control Transaction. As used herein, the term "Public Offering"
shall mean an underwritten public offering of the Common Stock of
the Company under the Securities Act of 1933, as amended, and the
term "Control Transaction" shall mean a transaction which involves
the liquidation or dissolution of the Company, the sale of all or
substantially all of the assets or Common Stock of the Company, the
merger of the Company into another entity where the Company is not
the survivor thereof, or any other similar reorganization of the
Company. Such restrictions may survive the Employee's term as a
Participant in the Plan or as an Employee of the Company.
15. DESIGNATION OF BENEFICIARY.
A Participant may file a written designation of a beneficiary who is to
receive any cash to the Participant's credit under any Phase of the Plan in the
event of such Participant's death prior to exercise of his option pursuant to
Section 9(b) hereof. The beneficiary designation may be changed by the
Participant at any time by written notice to the Company. Upon the death of a
Participant and upon receipt by the Company of proof deemed adequate by it of
the identity and existence at the Participant's death of a beneficiary validly
designated under the Plan, the Company shall deliver to such beneficiary the
accumulated payroll deductions in the account of the deceased Participant. If
there is no validly designated beneficiary under the Plan who is living at the
time of the Participant's death, the Company shall deliver the cash credited to
the account of the Participant to the executor or administrator of the estate of
the Participant, or, if no such executor or administrator has been appointed to
the knowledge of the Company, it may, in its discretion, deliver such cash to
the spouse or to any one or more dependents or relatives of the Participant, or
if no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate. The Company shall not be responsible for or
be required to give effect to the disposition of any cash or shares of Common
Stock or the exercise of any option in accordance with any will or other
testamentary disposition made by such Participant or in accordance with the
provision of any law concerning intestacy, or otherwise. No designated
beneficiary shall, prior to the death of a Participant by whom he has been
designated, acquire any interest in any shares of Common Stock or in any option
or in the cash credited to the Participant under the Plan.
16. AMENDMENT AND TERMINATION.
The Plan may be terminated at any time by the Board of Directors provided
that, except as permitted in Section 7(c) with respect to an acceleration of the
ending date of any Phase, no such termination will take effect with respect to
any options then outstanding. Also, the Board may, from time to time, amend the
Plan as it may deem proper and in the best interests of the Company or as may be
necessary to comply with Section 423 of the Code, or other applicable laws or
regulations; provided, however, that no such amendment shall, without prior
approval of the stockholders of the Company (i) increase the total number of
shares for which options may be granted under the Plan (except as provided in
Section 13 herein), or (ii) impair any outstanding option. Upon termination of
the Plan for any reason (including expiration of its term), any excess balance
in a Participant's account not used to acquire shares of Common Stock on such
date will be distributed to the Participant or, in the case of a Participant's
death subsequent to the termination of his or her employment with the Company,
to the person or persons entitled thereto under Section 15 hereof.
17. NOTICES.
All notices or other communications in connection with the Plan or any
Phase thereof shall be in the form specified by the Committee and shall be
deemed to have been duly given when received by the Participant or his
designated personal representative or beneficiary or by the Company or its
designated representative, as the case may be.
18. PARTICIPATION OF EMPLOYEES OF PARENTS AND SUBSIDIARIES.
The Employees of any Parent or Subsidiary of the Company shall be entitled
to participate in the Plan on the same basis as Employees of the Company, unless
the Board of Directors determines otherwise. Effective as of the date of
coverage of any Parent or Subsidiary, any references herein to the "Company"
shall be interpreted as referring to such Parent or Subsidiary as well as to
Zytec Corporation. If any Parent or Subsidiary which is covered under the Plan
ceases to be a Parent or Subsidiary of Zytec Corporation, the employees of such
Parent or Subsidiary shall be considered to have terminated their employment for
purposes of Section 10 hereof as of the date such Parent or Subsidiary ceases to
be such a Parent or Subsidiary.
19. BINDING EFFECT OF PLAN.
The provisions of the Plan shall, in accordance with its terms, be binding
upon, and inure to the benefit of, each Participant in the Plan, including,
without limitation, each such Participant's estate and the executors,
administrators or trustees thereof, heirs and legatees, and any receiver,
trustee in bankruptcy or representative of creditors of such Participant.
20. GOVERNING LAW.
The laws of the State of Minnesota will govern all matters relating to
this Plan except to the extent that they are superseded by the laws of the
United States.
21. WEEKENDS AND HOLIDAYS.
If any Enrollment Date, date of valuation, Stock Purchase Date, beginning
day of any Phase, ending date of a Phase, termination date of the Plan, or any
other date used in the Plan, falls on a weekend or a holiday on which stocks are
not traded on the New York Stock Exchange, or on any holiday declared by the
Company, the effective date of any such determination or event shall be the next
succeeding business day.
