<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------
COMPUTER LEARNING CENTERS, INC.
(Exact name of registrant as specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 36-3501869
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
------------------------
11350 RANDOM HILLS ROAD
SUITE 240
FAIRFAX, VIRGINIA 22030
(Address of Principal Executive Offices)
------------------------------
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
------------------------------
CHARLES L. COSGROVE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
COMPUTER LEARNING CENTERS, INC.
11350 RANDOM HILLS ROAD, SUITE 240
FAIRFAX, VIRGINIA 22030
(Name and Address of Agent For Service)
(703) 359-9333
(Telephone Number, Including Area Code, of Agent for Service)
------------------------------
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 PER SHARE OFFERING PRICE REGISTERED FEE
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value........................... 200,000 shares(1) 54.625 $10,925,000(2) $3,222.88(2)
</TABLE>
(1) Represents shares of the Registrant's Common Stock, par value $.01 per share
(the "Common Stock"), to be issued by the Registrant in connection with the
Registrant's 1997 Employee Stock Purchase Plan (the "Plan"). This
Registration Statement also covers such indeterminate number of additional
shares as may become issuable to prevent dilution in the event of stock
splits, stock dividends or similar transactions pursuant to the terms of the
Plan.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and Rule 457(h) under the Securities Act of
1933, based on the average of the high and low prices of the Registrant's
Common Stock as reported by the Nasdaq National Market on December 26, 1997.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I.
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information required by Part I of Form S-8 is included in documents sent
or given to participants in the 1997 Employee Stock Purchase Plan of Computer
Learning Centers, Inc. (the "Registrant") pursuant to Rule 428(b)(1) of the
Securities Act of 1933, as amended (the "Securities Act").
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant is subject to the informational and reporting requirements of
Sections 13(a), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). The following documents, which are filed with the
Commission, are incorporated in this Registration Statement by reference:
(a) The Registrant's latest annual report filed pursuant to Section 13(a) or
15(d) of the Exchange Act or the latest prospectus filed pursuant to Rule
424(b) under the Securities Act that contains audited financial
statements for the latest fiscal year for which such statements have been
filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the document
referred to in (a) above.
(c) The description of the Registrant's Common Stock, par value $.01 per
share (the "Common Stock"), contained in a registration statement filed
under the Exchange Act including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be part hereof from the
date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 ("Section 145") of the Delaware General Corporation Law, as
amended, provides a detailed statutory framework covering indemnification of
officers and directors against liabilities and expenses arising out of legal
proceedings brought against them by reason of their being or having been
directors or officers. Section 145 generally provides that a director or officer
of a corporation (i) shall be indemnified by the corporation for all expenses of
such legal proceedings when he is successful on the merits, (ii) may be
indemnified by the corporation for expenses, judgments, fines and amounts paid
in settlement of such proceedings (other than a derivative suit), even if he is
not successful on the merits, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
2
<PAGE>
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, and (iii) may be
indemnified by the corporation for theexpenses of a derivative suit (a suit by a
stockholder alleging a breach by a director or officer of a duty owed to the
corporation), even if he is not successful on the merits, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. No indemnification may be made under clause (iii)
above, however, if the director or officer is adjudged liable for negligence or
misconduct in the performance of his duties to the corporation, unless a
corporation determines that, despite such adjudication, but in view of all the
circumstances, he is entitled to indemnification. The indemnification described
in clauses (ii) and (iii) above may be made only upon a determination that
indemnification is proper because the applicable standard of conduct has been
met. Such a determination may be made by a majority of a quorum of disinterested
directors, independent legal counsel, the stockholders or a court of competent
jurisdiction.
The indemnification of directors and officers is provided for by Article
SEVENTH of the Registrant's Second Amended and Restated Certificate of
Incorporation which provides in substance that, to the fullest extent permitted
by Delaware law as it now exists or as amended, each director and officer shall
be indemnified against reasonable costs and expenses, including attorney's fees,
and any liabilities which he may incur in connection with any action to which he
may be made a party by reason of his being or having been a director or officer
of the Registrant. The indemnification provided by the Registrant's Second
Amended and Restated Certificate of Incorporation is not deemed exclusive of or
intended in any way to limit any other rights to which any person seeking
indemnification may be entitled.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to provide in its Certificate of Incorporation that a
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit.
Article NINTH of the Registrant's Second Amended and Restated Certificate of
Incorporation provides for the elimination of personal liability of a director
for breach of fiduciary duty, as permitted by Section 102(b)(7) of the Delaware
General Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibit Index immediately preceding the exhibits and the exhibits listed
thereon are incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
1. The Registrant undertakes:
(a) 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;
3
<PAGE>
(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;
(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 (i) and (ii) do not
apply if the Registration Statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the Registration Statement.
(b) 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.
(c) 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.
2. The 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 in the initial bona fide offering thereof.
3. 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 Securities and Exchange 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.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Fairfax, Virginia, on the 31st day of December, 1997.
<TABLE>
<S> <C> <C>
COMPUTER LEARNING CENTERS, INC.
BY: /S/ REID R. BECHTLE
-----------------------------------------
Reid R. Bechtle
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
</TABLE>
POWER OF ATTORNEY
We, the undersigned officers and directors of Computer Learning Centers,
Inc., hereby severally constitute Reid R. Bechtle, Charles L. Cosgrove and David
Sylvester, and any of them singly, our true and lawful attorneys with full power
to them, and each of them singly, to sign for us and in our names in the
capacities indicated below, the Registration Statement on Form S-8 filed
herewith and any and all subsequent amendments to said Registration Statement,
and generally to do all such things in our names and behalf in our capacities as
officers and directors to enable Computer Learning Centers, Inc. to comply with
all requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by said attorneys, or any of
them, to said Registration Statement and any and all amendments thereto.
WITNESS our hands and common seal on the date set forth below.
5
<PAGE>
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>
NAME TITLE DATE
- ------------------------------ ------------------------------ -------------------
<C> <S> <C>
President, Chief Executive
/s/ REID R. BECHTLE Officer and Director
- ------------------------------ (Principal Executive December 31, 1997
Reid R. Bechtle Officer)
Vice President and Chief
/s/ CHARLES L. COSGROVE Financial Officer
- ------------------------------ (Principal Financial December 31, 1997
Charles L. Cosgrove Officer)
/s/ MARK M. NASSER
- ------------------------------ Controller (Principal December 31, 1997
Mark M. Nasser Accounting Officer)
/s/ HARRY H. GAINES Director
- ------------------------------
Harry H. Gaines December 31, 1997
/s/ IRA D. COHEN
- ------------------------------ Director December 31, 1997
Ira D. Cohen
/s/ STEPHEN P. REYNOLDS
- ------------------------------ Director December 31, 1997
Stephen P. Reynolds
/s/ RALPH W. CLARK
- ------------------------------ Director December 31, 1997
Ralph W. Clark
/s/ JOHN L. CORSE
- ------------------------------ Director December 31, 1997
John L. Corse
</TABLE>
6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION PAGE
- ----------------- ------------------------------------------------------------------------------------------ -----
<C> <S> <C>
4.1 Second Amended and Restated Certificate of Incorporation, as amended (incorporated herein *
by reference to Exhibit 3.1 to the Registrant's Form 10-Q filed September 9, 1997).
4.2 Amended and Restated By-Laws of the Registrant (incorporated herein by reference to *
Exhibit 3.4 to the Registrant's Registration Statement on Form S-1, as amended (File No.
33-90716)(the "Form S-1"))
4.3 Specimen Certificate of Common Stock of the Registrant (incorporated herein by reference *
to Exhibit 4.1 to the Form S-1)
5 Opinion of Hale and Dorr LLP 8
23.1 Consent of Hale and Dorr LLP (included in Exhibit 5) 8
23.2 Consent of Price Waterhouse LLP 9
24.1 Power of Attorney (included in the signature pages of this Registration Statement) 5
99.1 Employee Stock Purchase Plan 10
</TABLE>
- ------------------------
* Incorporated herein by reference
7
<PAGE>
EXHIBIT 5
December 31, 1997
Computer Learning Centers, Inc.
11350 Random Hills Road
Suite 240
Fairfax, Virginia 22030
Re: 1997 Employee Stock Purchase Plan
Gentlemen:
We have assisted in the preparation of a Registration Statement on Form S-8
to be filed on December 31, 1997 with the Securities and Exchange Commission
relating to an aggregate of 200,000 shares of the Common Stock, $.01 par value
per share ("Common Stock"), of Computer Learning Centers, Inc., a Delaware
corporation (the "Company"), issuable under the Company's 1997 Employee Stock
Purchase Plan (the "Plan").
We have examined the Certificate of Incorporation of the Company and all
amendments thereto, and originals, or copies certified to our satisfaction, of
all pertinent records of the meetings of the directors and stockholders of the
Company, the aforementioned Registration Statement and such other documents
relating to this Company as we deemed material for the purposes of this opinion.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such latter documents.
Based upon the foregoing, we are of the opinion that the Company has duly
authorized for issuance the shares of its Common Stock covered by the
Registration Statement to be issued under the Plan, as described in the
Registration Statement, and such shares, when issued and paid for in accordance
with the terms of the Plan and at a price per share in excess of the par value
per share for such shares, will be legally issued, fully-paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the aforementioned Registration
Statement.
Very truly yours,
HALE AND DORR LLP
8
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 14, 1997, except for Note 2
which was as of March 24, 1997, which appears on page 28 of the 1997 Annual
Report to Shareholders of Computer Learning Centers, Inc., which is incorporated
by reference in Computer Learning Centers, Inc.'s Annual Report on Form 10-K for
the year ended January 31, 1997. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules, which appears on
page F-2 of such Annual Report on Form 10-K.
/s/ PRICE WATERHOUSE LLP
New York, New York
December 31, 1997
9
<PAGE>
EXHIBIT 99.1
COMPUTER LEARNING CENTERS, INC.
EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide eligible employees of Computer
Learning Centers, Inc. (the "Company") and certain of its subsidiaries with
opportunities to purchase shares of the Company's common stock, $.01 par value
(the "Common Stock"), commencing on August 1, 1997. Two hundred thousand
(200,000) shares of Common Stock in the aggregate have been approved for this
purpose.
1. ADMINISTRATION. The Plan will be administered by the Company's Board of
Directors (the "Board") or by a Committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
2. ELIGIBILITY. Participation in the Plan will neither be permitted nor
denied contrary to the requirements of Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code"), and regulations promulgated thereunder. All
employees of the Company, including Directors who are employees, and all
employees of any subsidiary of the Company (as defined in Section 424(f) of the
Code) designated by the Board or the Committee from time to time (a "Designated
Subsidiary"), are eligible to participate in any one or more of the offerings of
Options (as defined in Section 9) to purchase Common Stock under the Plan
provided that:
(a) they are regularly employed by the Company or a Designated
Subsidiary for more than 20 hours a week and for more than five months in a
calendar year; and
(b) they have been employed by the Company or a Designated Subsidiary
for at least 12 months prior to enrolling in the Plan; and
(c) they are employees of the Company or a Designated Subsidiary on the
first day of the applicable Plan Period (as defined below).
No employee may be granted an option hereunder if such employee, immediately
after the option is granted, owns 5% or more of the total combined voting power
or value of the stock of the Company or the subsidiary. For purposes of the
preceding sentence, the attribution rules of Section 424 (d) of the Code shall
apply in determining the stock ownership of an employee, and all stock which the
employee has a contractual right to purchase shall be treated as stock owned by
the employee.
3. OFFERINGS. The Company will make one or more offerings ("Offerings") to
employees to purchase stock under this Plan. Offerings will begin each February
1, or the first business day thereafter (the "Offering Commencement Dates").
Each Offering Commencement Date will begin a 12 month period (a "Plan Period")
during which payroll deductions will be made and held for the purchase of Common
Stock at the end of the Plan Period. The Board or the Committee may, at its
discretion, choose a different Plan Period of twelve (12) months or less for
subsequent offerings.
The Board has approved the initial offering period, subject to the Plan
being approved by stockholders, of August 1, 1997 through January 31, 1998.
Thereafter, the offering period unless changed by the Board or Committee will be
a twelve month period beginning February 1, and ending January 31.
4. PARTICIPATION. An employee eligible on the Offering Commencement Date of
any Offering may participate in such Offering by completing and forwarding a
payroll deduction authorization form to the Corporate Human Resources Department
at least 30 days prior to the applicable Offering Commencement Date. The form
will authorize a regular payroll deduction from the Compensation received by the
employee during the Plan Period. Unless an employee files a new form or
withdraws from the Plan, his deductions and purchases will continue at the same
rate for future Offerings under the Plan as long as the Plan remains in effect.
The term "Compensation" means the amount of money reportable on the employee's
Federal Income Tax Withholding Statement, excluding (overtime, shift premium,
incentive or
10
<PAGE>
bonus awards, allowances for travel expenses, income or gains on the exercise of
Company stock options or stock appreciation rights, and similar items, whether
or not shown on the employee's Federal Income Tax Withholding Statement, but
including, in the case of salespersons, sales commissions to the extent
determined by the Board of the Committee).
5. DEDUCTIONS. The Company will maintain payroll deduction accounts for all
participating employees. With respect to any Offering made under this Plan, an
employee may authorize a payroll deduction in any whole percentage from 1% to
10% of the Compensation he or she receives during the Plan Period or such
shorter period during which deductions from payroll are made. The deduction
percentages will be converted to fixed dollar amounts and rounded down to the
nearest whole dollar.
No employee may be granted an Option (as defined in Section 9) which permits
his rights to purchase Common Stock under this Plan and any other purchase plan
of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000
of the fair market value of such Common Stock (determined at the Offering
Commencement Date of the Plan Period) for each calendar year in which the Option
is outstanding at any time.
6. DEDUCTION CHANGES. An employee may discontinue his payroll deduction
during any Plan Period, by filing a new payroll deduction authorization form. An
employee may not increase his payroll deduction during a Plan Period. If an
employee elects to discontinue his payroll deductions during a Plan Period, but
does not elect to withdraw his funds pursuant to Section 8 hereof, funds
deducted prior to his election to discontinue will be applied to the purchase of
Common Stock on the Exercise Date (as defined below).
7. INTEREST. Interest will not be paid on any employee accounts, except to
the extent that the Board or the Committee, in its sole discretion, may elect in
the future to credit employee accounts with interest at such per annum rate as
it may from time to time determine.
8. WITHDRAWAL OF FUNDS. An employee may at any time prior to the close of
business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee's account and
thereby withdraw from participation in an Offering. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee,
except that employees who are also directors or officers of the Company within
the meaning of Section 16 of the Securities Exchange Act of 1934 (the "Exchange
Act") and the rules promulgated there under may not participate again for a
period of at least six months as provided in Rule 16b-3 (d) (2) (i) or any
successor provision.
9. PURCHASE OF SHARES. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan. In no event may an employee purchase in any one Offering
Period, a number of shares which is more than 15% of the employee's annualized
base pay divided by 85% of the market value of a share of Common Stock on the
Commencement date of the offering period.
The purchase price for each share purchased will be 85% of the closing price
of the Common Stock on (i) the first business day of such Plan Period or (ii)
the Exercise Date, whichever closing price shall be less. Such closing price
shall be (a) the closing price on any national securities exchange on which the
Common Stock is listed, (b) the closing price of the Common Stock on the Nasdaq
National Market or (c) the average of the closing bid and asked prices in the
over-the-counter-market, whichever is applicable, as published in THE WALL
STREET JOURNAL. If no sales of Common Stock were made on such a day, the price
of the Common Stock for purposes of clauses (a) and (b) above shall be the
reported price for the next preceding day on which sales were made.
Each employee who continues to be a participant in the Plan on the Exercise
Date shall be deemed to have exercised his Option at the Option Price on such
date and shall be deemed to have purchased from the Company the number of full
shares of Common Stock reserved for the purpose of the Plan that his
11
<PAGE>
accumulated payroll deductions on such date will pay for pursuant to the formula
set forth above (but not in excess of the maximum number determined in the
manner set forth above).
Any balance remaining in an employee's payroll deduction account at the end
of a Plan Period which is less than the purchase price of one share of Common
Stock will be carried forward into the employee's payroll deduction account for
the following Offering, unless the employee elects not to participate in the
following Offering under the Plan, in which case the balance in the employee's
account shall be refunded.
10. ISSUANCE OF CERTIFICATES. Certificates representing shares of Common
Stock purchased under the Plan may be issued only in the name of the employee,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship, or (in the Company's sole discretion) in the street
name of a brokerage firm, bank or other nominee holder designated by the
employee.
11. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In the event
of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, (a) to a
beneficiary previously designated in a revocable notice signed by the employee
(with any spousal consent required under state law) or (b) in the absence of
such a designated beneficiary, to the executor or administrator of the
employee's estate or (c) if no such executor or administrator has been appointed
to the knowledge of the Company, to such other person(s) as the Company may, in
its discretion, designate. If, prior to the last business day of the Plan
Period, the Designated Subsidiary by which an employee is employed shall cease
to be a subsidiary of the Company, or if the employee is transferred to a
subsidiary of the Company that is not a Designated Subsidiary, the employee
shall be deemed to have terminated employment for the purpose of this Plan.
12. OPTIONEES NOT STOCKHOLDERS. Neither the granting of an Option to an
employee nor the deductions from his pay shall constitute such employee a
stockholder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him.
13. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not transferable by
a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
14. APPLICATION OF FUNDS. All funds received or held by the Company under
this Plan may be combined with other corporate funds and may be used for any
corporate purpose.
15. ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event of a
subdivision of outstanding shares of Common Stock, or the payment of dividend in
Common Stock, the number of shares approved for this Plan, and the share
limitation set forth in Section 9, shall be increased proportionately, and such
other adjustment shall be made as may be deemed equitable by the Board or the
Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
16. MERGER. If the Company shall at any time merge or consolidate with
another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of one share of the Common Stock was entitled to upon
and at the time of such merger, and the Committee shall take such steps in
connection with such merger as the Committee shall deem necessary to assure that
the provisions of Paragraph 15 shall thereafter be applicable, as nearly as
reasonably may be, in relation to the said securities or property as to which
such holder of such Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while
12
<PAGE>
unexercised Options remain outstanding under the Plan, (a) subject to the
provisions of clauses (b) and (c), after the effective date of such transaction,
each holder of an outstanding Option shall be entitled, upon exercise of such
Option, to receive in lieu of shares of Common Stock, shares of such Stock or
other securities as the holders of shares of Common Stock received pursuant to
the terms of such transactions; or (b) all outstanding Options may be cancelled
by the Board or the Committee as of a date prior to the effective date of any
such transaction and all payroll deductions shall be paid out to the
participating employees; or (c) all outstanding Options may be cancelled by the
Board or the Committee as of the effective date of any such transaction,
provided that notice of such cancellation shall be given to each holder of an
Option, and each holder of an Option shall have the right to exercise such
Option in full based on payroll deductions then credited to his account as of a
date determined by the Board or the Committee, which date shall not be less than
ten (10) days preceding the effective date of such transaction.
17. AMENDMENT OF THE PLAN. The Board may at any time, and from time to time,
amend this Plan in any respect, except that (a) if the approval of any such
amendment by the shareholders of the Company is required by Section 423 of the
Code or by Rule 16b-3 under the Exchange Act, such amendment shall not be
effected without such approval, and (b) in no event may any amendment be made
which would cause the Plan to fail to comply with Section 16 of the Exchange Act
and the rules promulgated thereunder, as in effect from time to time, or Section
423 of the Code.
18. INSUFFICIENT SHARES. In the event that the total number of shares of
Common Stock specified in elections to be purchased under any Offerings plus the
number of shares purchased under previous Offerings under this Plan exceeds the
maximum number of shares issuable under this Plan, the Board or the Committee
will allot the shares then available on a pro rata basis.
19. TERMINATION OF THE PLAN. This plan may be terminated at any time by the
Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded.
20. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
Common Stock under this Plan is subject to listing on a national stock exchange
or quotation on the Nasdaq National Market and the approval of all governmental
authorities required in connection with the authorization, issuance or sale of
such stock.
The Plan shall be governed by Delaware law except to the extent that such
law is preempted by federal law.
The Plan is intended to comply with the provisions of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934. Any provision inconsistent with such
Rule shall to that extent be inoperative and shall not affect the validity of
the Plan.
21. ISSUANCE OF SHARES. Shares may be issued upon exercise of an Option from
authorized but unissued Common Stock, from shares held in the treasury of the
Company, or from any other proper source.
22. NOTIFICATION UPON SALE OF SHARES. Each employee agrees, by entering the
Plan, to promptly give the Company notice of any disposition of shares purchased
under the Plan where such disposition occurs within two years after the date of
grant of the Option pursuant to which such shares were purchased.
23. EFFECTIVE DATE AND APPROVAL OF SHAREHOLDERS. The Plan shall take effect
on August 1, 1997 subject to approval by the shareholders of the Company as
required by Rule 16b-3 under the Exchange Act and by Section 423 of the Code,
which approval must occur within twelve months of the adoption of the Plan by
the Board.
Adopted by the Board of Directors
on March 13, 1997
Approved by the stockholders on
July 10, 1997
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