<PAGE>
As filed with the Securities and Exchange Commission on April 7, 1997
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
ENCAD, INC.
(Exact name of issuer as specified in its charter)
CALIFORNIA 95-3672088
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
6059 CORNERSTONE COURT WEST, SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices) (Zip Code)
------------------------
ENCAD, INC.
1993 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
-----------------------
DAVID A. PURCELL
Chief Executive Officer
ENCAD, INC.
6059 CORNERSTONE COURT WEST, SAN DIEGO, CALIFORNIA 92121
(Name and address of agent for service)
(619) 452-0882
(Telephone number, including area code, of agent for service)
------------------------
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered
securities will begin as soon as reasonably practicable after such effective
date.
-------------------------
<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(1) per Share(2) Price(2) Fee
---------- ------------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Common Stock (under 1993 200,000 $ 29.625 $ 5,925,000 $ 1,795.45
Employee Stock Purchase Plan) ---------- ---------- -------------
- -----------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1993 Employee Stock Purchase
Plan by reason of any stock dividend, stock split, recapitalization or
other similar transaction effected without the receipt of consideration
which results in an increase in the number of the Registrant's outstanding
shares of Common Stock.
2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low selling prices per share of Common Stock of ENCAD, Inc. on April 7,
1997 as reported by the Nasdaq National Market.
<PAGE>
INCORPORATION OF DOCUMENTS BY REFERENCE
The contents of the Registration Statement on Form S-8 filed by ENCAD,
Inc. (the "Registrant") on December 15, 1993 with the Securities and Exchange
Commission as Registration No. 33-72978 (the "1993 Registration Statement") are
incorporated herein by reference into this Registration Statement.
1993 EMPLOYEE STOCK PURCHASE PLAN
The Company initially registered 100,000 shares of Common Stock issuable
pursuant to its 1993 Employee Stock Purchase Plan (the "Plan") by means of the
1993 Registration Statement, together with any additional shares of Common Stock
which would become issuable under the Plan by reason of any stock dividend,
stock split, recapitalization or other similar transaction effected without the
receipt of consideration and which results in an increase in the number of the
Registrant's outstanding shares of Common Stock. On June 30, 1996, the Company
effected a 2 for 1 stock split which resulted in the shares issuable under the
Plan and registered pursuant to the 1993 Registration Statement to be 200,000
shares.
This Registration Statement shall register an additional 200,000 shares of
Common Stock issuable pursuant to the Plan, as authorized by the Company's
shareholders at the Company's Annual Shareholders' Meeting held on June 18,
1996.
EXHIBITS
EXHIBIT NUMBER EXHIBITS
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Independent Auditors' Consent - Deloitte & Touche LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-2 of this
Registration Statement.
99.1 ENCAD, Inc. 1993 Employee Stock Purchase Plan, as amended.
II-1
<PAGE>
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 San Diego, State of California, on this 7th day of
April, 1997.
ENCAD, INC.
By /s/
-----------------------------------------
David A. Purcell
(Chairman, Director and Chief Executive Officer)
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of ENCAD, INC., a
California corporation, do hereby constitute and appoint David A. Purcell and
Richard A. Plante, or either of them, the lawful attorneys and agents, with full
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determine may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments, both
pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms all that said
attorneys and agents, or any of them, shall do or cause to be done by virtue
hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Chairman of the Board, Director April 7, 1997
- ------------------- and Chief Executive Officer
(David A. Purcell) (Principal Executive Officer)
/s/ Director and President April 7, 1997
- ------------------- (Principal Operating Officer)
(Richard A. Plante)
/s/ Vice President and Chief Financial Officer April 7, 1997
- ------------------- (Principal Financial Officer)
(Todd Schmidt)
/s/ Director April 7, 1997
- -------------------
(Robert V. Adams)
/s/ Director April 7, 1997
- -------------------
(Ronald J. Hall)
/s/ Director April 7, 1997
- -------------------
(Howard L. Jenkins)
/s/ Director April 7, 1997
- -------------------
(Craig S. Andrews)
II-2
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
ENCAD, INC.
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NUMBER EXHIBITS
- -------------- --------
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Independent Auditors' Consent - Deloitte & Touche LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-2 of this
Registration Statement.
99.1 ENCAD, Inc. 1993 Employee Stock Purchase Plan, as amended.
<PAGE>
EXHIBIT 5
Opinion and Consent of Brobeck, Phleger & Harrison LLP
<PAGE>
April 7, 1997
ENCAD, Inc.
6059 Cornerstone Court West
San Diego, California 92121
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by ENCAD, Inc. (the "Registrant") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") for an aggregate additional 200,000
shares of common stock (and options to purchase common stock) of the Registrant
reserved for issuance under the Registrant's 1993 Employee Stock Purchase Plan,
as amended (the "Registered Shares").
In connection with this opinion, we have examined, issued and relied upon
the Registration Statement and related prospectus, the Registrant's Registration
Statement on Form S-8 filed on December 15, 1993 with the Commission as
Registration No. 33-72978, the Registrant's Articles of Incorporation and
Bylaws, as amended, and the originals or copies certified to our satisfaction,
of such records, documents, certificates, memoranda, and other instruments as in
our judgment are necessary or appropriate to enable us to render the opinion
expressed below.
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that the Registered Shares, when sold and issued pursuant to the
Registrant's 1993 Employee Stock Purchase Plan in accordance with the
Registration Statement and related prospectus, will be validly issued, fully
paid and nonassessable.
We consent to the reference to our firm under Item 5, "Interests of Named
Experts and Counsel," in Part II of the Registration Statement, and the filing
of this opinion as an exhibit to the Registration Statement.
Yours very truly,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
Independent Auditors' Consent - Deloitte & Touche LLP
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-72978 and in this Registration Statement of ENCAD, Inc. on Form S-8 of our
report dated February 4, 1997, appearing in and incorporated by reference in
the Annual Report on Form 10-K of ENCAD, Inc. for the year ended December 31,
1996.
San Diego, California
April 7, 1997
<PAGE>
EXHIBIT 23.2
Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5
<PAGE>
EXHIBIT 24
Power of Attorney. Reference is made to page II-2 of this Registration
Statement
<PAGE>
EXHIBIT 99.1
ENCAD, Inc. 1993 Employee Stock Purchase Plan
(As Amended Through February 11, 1997)
<PAGE>
ENCAD, INC.
AMENDED
1993 EMPLOYEE STOCK PURCHASE PLAN
EFFECTIVE FEBRUARY 11, 1997
I. PURPOSE
This ENCAD, Inc. 1993 Employee Stock Purchase Plan (the "Plan") is intended
to provide Qualifying Employees with the opportunity to acquire a proprietary
interest in the Company by accumulating amounts for the Employee's Account
through payroll deductions and the periodic application of such amounts to the
purchase of shares of the Company's Common Stock.
II. DEFINITIONS
For the purposes of plan administration, the following terms shall have the
meanings indicated:
ACT shall mean the Securities Act of 1933 (as amended).
ACCOUNT means the amount held for the benefit of a Participant hereunder
which Account shall be increased by any payroll deductions from the Participant
and will be decreased by amounts applied to the purchase of shares or refunded
to or for the benefit of the Participant hereunder.
BASE SALARY means the basic earnings paid to a Participant by Participating
Companies plus any pre-tax contributions made by the Participant to any Code
Section 401(k) salary deferral plan or any Code Section 125 Cafeteria benefit
program (now existing or hereafter established). Base Salary shall not include
(I) overtime payments, bonuses, commissions, profit-sharing distributions and
other incentive-type payments or (II) contributions (other than Code Section
401(k) or Code Section 125 contributions) made on the Participant's behalf under
any employee benefit or welfare plan (now existing or hereafter established).
BOARD means the Company's Board of Directors.
CODE means the Internal Revenue Code of 1986, as amended from time to time.
COMPANY means ENCAD, Inc., a California corporation, and any corporate
successor to all or substantially all of the assets or voting stock of ENCAD,
Inc. which adopts the Plan.
COMMON STOCK means shares of the Company's Common Stock.
1.
<PAGE>
CORPORATE AFFILIATE means any company which is a parent or subsidiary
corporation of the Company (as determined in accordance with Code Section 424),
including any parent or subsidiary corporation which becomes such after the
Effective Date.
EFFECTIVE DATE means the first day of the term of this Plan as set forth in
Article XI.A which is scheduled to commence upon the effective date of the S-8
Registration Statement covering the shares of Common Stock issuable under the
Plan. However, for any Corporate Affiliate which becomes a Participating
Company in the Plan after the first day of the initial option period, a
subsequent Effective Date shall be designated with respect to participation by
its Qualifying Employees.
ENTRY DATE means the date on which a Participant first joins the option
period in effect under the Plan.
PARTICIPANT means any Eligible Employee of a Participating Company who has
enrolled and is actively participating in the Plan.
PARTICIPATING COMPANY means the Company and any Corporate Affiliate
designated from time to time by the Board.
QUALIFYING EMPLOYEE means any person who is engaged, on a
regularly-scheduled basis of at least twenty (20) hours per week, in the
rendition of personal services to the Company, or any Participating company in
exchange for amounts which constitute wages under Section 3121(a) of the Code,
provided that no person who owns (within the meaning of Code Section 424(d)) or
holds outstanding options or other rights to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or any of its Corporate affiliates shall be a Qualifying
Employee.
QUARTER means a calendar quarter and (except for the first Quarter of the
initial option period or as otherwise designated by the Plan Administrator),
each Quarter shall begin on the first business day of the Quarter and shall end
on the last business day of such Quarter. The first Quarter of the initial
option period under this Plan shall commence on the Effective Date and shall end
on March 31, 1994.
SERVICE means the period during which an individual remains a Qualifying
Employee and all periods of Service shall be measured from such individual's
most recent date of hire by the Company or such Corporate Affiliate.
III. ADMINISTRATION
The Plan shall be administered by the Board or by a committee comprised of
two (2) or more Board members appointed from time to time by the Board (the
"Plan Administrator"). The Plan Administrator shall have full authority to
administer the Plan, including authority to interpret and construe any provision
of the Plan. Decisions of the Plan Administrator shall be final and binding on
all parties who have an interest in the Plan.
2.
<PAGE>
IV. OPTION PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive option periods during the term of the Plan until
the maximum number of shares of Common Stock available for issuance under the
Plan shall have been issued.
B. The initial option period will begin on the Effective Date and will
end on the last business day in December, 1994. Subsequent option periods shall
coincide with calendar years.
C. Each Participant will have purchase rights as set forth in Article VII
for each option period, the purchase price for which shall be collected through
payroll deductions and which purchase rights shall be exercised in successive
installments each Quarter within the option period.
D. the acquisition of Common Stock through participation in the Plan for
any option period shall neither limit nor require the acquisition of Common
Stock by the Participant in any subsequent option period.
V. ELIGIBILITY AND PARTICIPATION
A. Each Qualifying Employee shall be eligible to participate in an option
period under the Plan in accordance with the following provisions:
- All Qualifying Employees on the Effective Date may enter the
initial option period on the Effective Date by enrolling in accordance with
Section V.C. below.
- A Qualifying Employee who was not previously eligible to enter an
option period may enter that option period on the first day of any of the
Quarters following the date such Qualifying Employee becomes eligible by
enrolling in accordance with Section V.C. below.
B. A Qualifying Employee who does not enroll for an option period on the
first date such Qualifying Employee is permitted to enroll hereunder may
subsequently enroll in the next or any following option period.
C. To enroll in the Plan, a Qualifying Employee must complete the
enrollment forms prescribed by the Plan Administrator and file such forms with
the Plan Administrator (or its designate) on or before the date such Qualifying
Employee is first permitted to enter the Option Period.
D. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock under the Plan may be any multiple of one
percent (1%) of the Base Salary paid to the Participant during each Quarter of
the option period, up to a maximum of ten percent (10%) of Base Salary. The
deduction rate so authorized shall continue
3.
<PAGE>
in effect for the remainder of the option period, except to the extent such
rate is changed in accordance with the following guidelines:
- The Participant may, at any time during a Quarter, reduce the
rate of payroll deduction. Such reduction shall become effective as soon
as possible after filing of the requisite reduction form with the Plan
Administrator (or its designate), but the Participant may not effect more
than one such reduction during the same Quarter.
- The Participant may, prior to the commencement of any new Quarter
within the option period, increase or decrease the rate of payroll
deduction for the new Quarter by filing the appropriate form with the Plan
Administrator (or its designate). The new rate shall become effective as
of the first day of the next Quarter.
Payroll deductions will automatically cease upon the termination of
the Participant's purchase right in accordance with the applicable provisions of
Section VII below.
VI. STOCK SUBJECT TO PLAN
A. The maximum number of shares of Common Stock which may be issued under
the Plan shall be 400,000 shares of Common Stock (subject to adjustment under
Section VI.B below).
B. In the event any change is made to the Company's outstanding Common
Stock by reason of any stock dividend, stock split, combination of shares or
other change affecting such outstanding Common Stock as a class without receipt
of consideration, then appropriate adjustments shall be made by the Plan
Administrator to (i) the class and maximum number of shares issuable over the
term of the Plan, (ii) the class and maximum number of shares purchasable per
Participant during any one option period, and (iii) the class and number of
shares and the price per share in effect under each purchase right at the time
outstanding under the Plan. Such adjustments shall be designed to preclude the
dilution or enlargement of rights and benefits under the Plan.
VII. PURCHASE RIGHTS
Each Participant in a particular option period shall have the right to
purchase shares of Common Stock in a series of successive quarterly installments
during such option period on the terms and conditions set forth below (the
"Purchase Rights"). Each Participant shall execute a purchase agreement
embodying such terms and conditions and such other provisions (not inconsistent
with the Plan) as the Plan Administrator may require.
PURCHASE PRICE. The Purchase Rights shall be exercised at the end of each
Quarter at a purchase price equal to eighty-five percent (85%) of the LOWER of
(i) the fair market value per share of the Common Stock on the Participant's
Entry Date or (ii) the fair market value per share of the Common Stock on the
last business day of the Quarter. However, for each Participant whose Entry
Date is other than the first day of the option period, the amount determined
under clause (I) shall not be less than the fair market value of the Common
Stock on the first day of such option period.
4.
<PAGE>
VALUATION. For purposes of determining the fair market value per share of
Common Stock on any relevant date, the following procedures shall be in effect:
- If fair market value is to be determined on or after the date of
the Common Stock is first registered under Section 12(g) of the Securities
Exchange Act of 1934, then the fair market value shall be the closing
selling price on that date, as officially quoted on the NASDAQ National
Market System, or if there is no quoted selling price for such date, then
the closing selling price on the next preceding day for which there does
exist such a quotation.
- If fair market value is to be determined prior to such Section
12(g) registration of the Common Stock, then the fair market value of the
Common Stock on such date shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator deems
appropriate.
NUMBER OF PURCHASABLE SHARES. The number of shares purchasable by a
Participant each Quarter shall be the number of whole shares obtained by
dividing the amount in Participant's Account at the end of such Quarter by the
purchase price in effect for the Quarter. However, no Participant may, during
any one option period, purchase more than 2,000 shares of Common Stock (subject
to adjustment under Section VI.B).
Notwithstanding the above, no participant shall have the right to purchase
shares of Common Stock to the extent that, immediately after the grant, such
Participant would own (within the meaning of Code Section 424(d)) or hold
outstanding options or other rights to purchase, stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company or any of its Corporate Affiliates.
PAYMENT. Payment for the Common Stock purchased under the Plan shall be
effected by means of the Participant's authorized payroll deductions. Such
deductions shall begin on the first pay day coincident with or immediately
following the Participant's Entry Date into the option period and shall (unless
sooner terminated by the Participant) continue through the pay day ending with
or immediately prior to the last day of the option period. The amounts so
collected shall be credited to the Participant's Account under the Plan, but no
interest shall be paid on the balance from time to time outstanding in such
Account. The amounts collected from a Participant may be comingled with the
general assets of the Company and may be used for general corporate purposes.
TERMINATION OF PURCHASE RIGHT. The following provisions shall govern the
termination of outstanding purchase rights:
(i) A participant may, at any time prior to the last five (5)
business days of the Quarter, terminate his/her outstanding purchase right
under the Plan by filing the prescribed notification form with the Plan
Administrator (or its designate). Nor further payroll deductions shall be
collected from the Participant with respect to the terminated purchase
right, and any payroll deductions collected for the current Quarter shall,
at the Participant's election, be immediately refunded or held for the
5.
<PAGE>
purchase of shares on the end of the Quarter. If no such election is made,
then such funds shall be refunded as soon as possible after the close of
such Quarter.
(ii) After the termination of purchase rights for an option
period, the Participant may not subsequently rejoin that option period. In
order to resume participation in any subsequent option period, such
individual must re-enroll in the Plan for that option period.
(iii) If a Participant ceases to be a Qualifying Employee during
an option period then all payroll deductions shall terminate and the
Participant (or the personal representative of the estate of a deceased
Participant) shall have the following election, exercisable up until the
end of the Quarter in which the Participant ceases to be a Qualifying
Employee:
- to withdraw in cash all of the Participant's payroll
deductions for such Quarter, or
- to have such funds held for the purchase of shares at the
end of the Quarter.
If no such election is made, then all funds in the Participant's
account shall be refunded at the close of such Quarter.
STOCK PURCHASE. Subject to the limitations set forth herein, funds held
in a Participant's Account at the end of a Quarter (and which are not required
to be refunded hereunder) shall be applied to the purchase of whole shares of
Common Stock for the Participant on the last business day of the Quarter at the
purchase price in effect for such Quarter. Any payroll deductions not applied
to such purchase because they are not sufficient to purchase a whole share shall
be held for the purchase of Common Stock in the next Quarter. Any payroll
deductions not applied to the purchase of Common Stock for any other reason
shall be promptly refunded to the Participant.
PRORATION OF PURCHASE RIGHTS. If the total number of shares of Common
Stock which would otherwise be purchased hereunder on any date exceed the number
of shares then available for issuance under the Plan, the Plan Administrator
shall make a pro-rata allocation of the available shares to Participants on a
uniform and nondiscriminatory basis.
RIGHTS AS STOCKHOLDER. A Participant shall have no stockholder rights with
respect to the shares subject to his/her outstanding purchase right until the
shares are actually purchased on the Participant's behalf in accordance with the
applicable provisions of the Plan. No adjustments shall be made for dividends,
distributions or other rights for which the record date is prior to the date of
such purchase.
A Participant shall not be entitled to receive a stock certificate for the
number of shares purchased, or sell any shares purchased, within a period of
less than six (6) months from the time of purchase. Such certificate may, upon
the Participant's request, be issued in the names of the Participant and his/her
spouse as community property or as joint tenants with right of survivorship.
6.
<PAGE>
ASSIGNABILITY. No purchase right granted under the Plan shall be
assignable or transferable by the Participant other than by will or by the laws
of descent and distribution following the Participant's death, and during the
Participant's lifetime the purchase right shall be exercisable only the
Participant.
CHANGE IN OWNERSHIP. Should the Company or its stockholders enter into an
agreement to dispose of all or substantially all of the assets or outstanding
capital stock of the Company by means of:
(i) a sale, merger or other reorganization in which the Company will
not be the surviving corporation (other than a reorganization effected
primarily to change the State in which the Company is incorporated), or
(ii) a reverse merger in which the Company is the surviving
corporation but in which more than 50% of the Company's outstanding voting
stock is transferred to holders different from those who held the stock
immediately prior to the reverse merger,
then all outstanding purchase rights under the Plan shall automatically be
exercised immediately prior to the consummation of such sale, merger,
reorganization or reverse merger by applying the amounts in each Participant's
Account to the purchase of whole shares of Common Stock at eighty-five percent
(85%) of the LOWER of (i) the fair market value of the Common Stock on the
Participant's Entry Date into the option period in which such transaction occurs
or (ii) the fair market value of the Common Stock immediately prior to the
consummation of such transaction. However, the applicable share limitations of
Articles VII and VIII shall continue to apply to any such purchase, and the
clause (i) amount above shall not, for any Participant whose Entry Date for the
option period is other than the start date of such option period, be less than
the fair market value of the Common Stock on such start date.
The Company shall use its best efforts to provide at least ten (10) days
advance written notice of the occurrence of any such sale, merger, reorganiation
or reverse merger, an Participants shall, following the receipt of such notice,
have the right to terminate their outstanding purchase rights in accordance with
the applicable provisions of this Article VII.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right outstanding under this Plan and
(ii) similar rights accrued under other employee stock purchase plans (within
the meaning of Section 423 of the Code) of the Company or its Corporate
Affiliates, would otherwise permit such Participant to purchase more than
$25,000 worth of stock of the Company or any Corporate Affiliate (determined on
the basis of the fair market value of such stock on the date or dates such
rights are granted to the Participant) for each calendar year such rights are at
any time outstanding.
7.
<PAGE>
B. For purposes of applying such accrual limitations, the right to
acquire Common Stock pursuant to each purchase right outstanding under the Plan
shall accrue as follows:
(i) The right to acquire Common Stock under each such purchase right
shall accrue in a series of successive quarterly installments as and when
the purchase right first becomes exercisable for each quarterly installment
on the last business day of each Quarter for which the right remains
outstanding.
(ii) No right to acquire Common Stock under any outstanding purchase
right shall accrue to the extent the Participant has already accrued in the
same calendar year the right to acquire $25,000 worth of Common Stock
(determined on the basis of the fair market value on the date or dates of
grant) pursuant to one or more purchase rights held by the Participant
during such calendar year.
(iii) If, by reason of such accrual limitations, any purchase
right of a Participant does not accrue for a particular Quarter, then the
payroll deductions which the Participant made during that Quarter with
respect to such purchase right shall be promptly refunded.
C. In the event there is any conflict between the provisions of this
Article VIII and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article VIII shall be controlling.
IX. STATUS OF PLAN UNDER FEDERAL TAX LAWS
The Plan is designed to qualify as an employee stock purchase plan under
Code Section 423.
x. AMENDMENT AND TERMINATION
A. The Board may alter, amend, suspend or discontinue the Plan following
the close of any quarter. However, the Board may not, without the approval of
the Company's stockholders:
(i) materially increase the number of shares issuable under the
Plan or the maximum number of shares which may be purchased per Participant
during any one option period under the Plan, except that the Plan
Administrator shall have the authority, exercisable without such
stockholder approval, to effect adjustments to the extent necessary to
reflect changes in the Company's capital structure pursuant to Section
VI.B;
(ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares issuable under the Plan; or
(iii) materially increase the benefits accruing to Participants
under the Plan or materially modify the requirements for eligibility to
participate in the Plan.
8.
<PAGE>
B. The Company shall have the right, exercisable in the sole discretion
of the Plan Administrator, to terminate all outstanding purchase rights under
the Plan immediately following the close of any Quarter. Should the Company
elect to exercise such right, then the Plan shall terminate in its entirety. No
further purchase rights shall thereafter be granted or exercised, and no further
payroll deductions shall thereafter be collected, under the Plan.
XI. GENERAL PROVISIONS
A. The term of this Plan shall commence on the effective date of the S-8
Registration Statement covering the Common Stock issuable under the Plan,
PROVIDED that the term shall not commence, and no shares of the Common Stock
shall be issued hereunder, until (i) the Plan shall have been approved by the
stockholders; (ii) the Company shall have complied with all applicable
requirements, all applicable listing requirements of any securities exchange on
which shares of the Common Stock are listed and all other applicable
requirements established by law or regulation and the Plan Administrator shall
have determined to commence granting Purchase Rights hereunder. In the event
stockholder approval is not obtained, or Company compliance with the Act is not
effected, within twelve (12) months after the date on which the Plan is adopted
by the Board, the Plan shall terminate and have no further force or effect.
B. The Plan shall terminate on December 31, 2003.
C. All costs and expenses incurred in the administration of the Plan
shall be paid by the Company.
D. Neither the action of the Company in establishing the Plan, nor any
action taken under the Plan by the Board or the Plan Administrator, nor any
provision of the Plan itself shall be construed so as to grant any person the
right to remain in the employ of the Company or any Corporate Affiliate for any
period, and such person's employment may be terminated at any time, with or
without cause.
9.
