-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gi948ma4m1brN6bz4vIlsp/4CQHLooaz3uK2ms7CoMoNbRRo9IowsZiUBF3LvswD 3FRDgQEpN11P9WMD8l6dLg== 0000912057-97-020589.txt : 19970618 0000912057-97-020589.hdr.sgml : 19970618 ACCESSION NUMBER: 0000912057-97-020589 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970617 EFFECTIVENESS DATE: 19970617 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICHAELS STORES INC CENTRAL INDEX KEY: 0000740670 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOBBY, TOY & GAME SHOPS [5945] IRS NUMBER: 751943604 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-29429 FILM NUMBER: 97625506 BUSINESS ADDRESS: STREET 1: 8000 BENT BRANCH DR STREET 2: PO BOX 619566 CITY: IRVING STATE: TX ZIP: 75063 BUSINESS PHONE: 2147147000 MAIL ADDRESS: STREET 1: PO BOX 619566 CITY: DFW STATE: TX ZIP: 75261 S-8 1 COVER, PAGES II-1 As filed with the Securities and Exchange Commission on June 17, 1997. Registration No. 333-_____ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- MICHAELS STORES, INC. (Exact name of registrant as specified in its charter) Delaware 75-1943604 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 8000 Bent Branch Drive Irving, Texas 75063 P.O. Box 619566 DFW, Texas 75261-9566 (972) 409-1300 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) MICHAELS STORES, INC. 1997 EMPLOYEES STOCK PURCHASE PLAN (Full title of the plan) R. Michael Rouleau Chief Executive Officer Michaels Stores, Inc. 8000 Bent Branch Drive Irving, Texas 75063 (972) 409-1300 (Name, address, including zip code, and telephone number, including area code, of agent for service) WITH COPIES TO: Mark V. Beasley, Esq. Robert L. Estep, Esq. Michaels Stores, Inc. Jones, Day, Reavis & Pogue 8000 Bent Branch Drive 2300 Trammell Crow Center Irving, Texas 75063 2001 Ross Avenue (972) 409-1300 Dallas, Texas 75201 (214) 220-3939 --------------- CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Proposed Proposed Maximum Maximum Title of Amount Offering Aggregate Amount of Securities to to be Price per Offering Registration be Registered Registered(1) Share(2) Price (2) Fee (2) - ------------------------------------------------------------------------------- Common Stock, par value $0.10 per share. . . . . 1,000,000 $20.75 $20,750,000 $6,288 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1. Represents shares issuable under the Michaels Stores, Inc. 1997 Employees Stock Purchase Plan (the "Plan"). Pursuant to Rule 416, there are also registered hereunder such indeterminate number of additional shares as may become subject to the Plan as a result of the antidilution provisions contained therein. 2. The registration fee with respect to these shares has been computed in accordance with paragraphs (c) and (h) of Rule 457, based upon the average of the reported high and low sale prices of shares of the Common Stock on the Nasdaq National Market System on June 13, 1997. EXPLANATORY NOTE The information called for by Part I of Form S-8 is included in the description of the Michaels Stores, Inc. 1997 Employees Stock Purchase Plan (the "Plan") to be delivered to persons eligible to purchase shares pursuant to the Plan. Pursuant to the Note to Part I of Form S-8, this information is not being filed with or included in this Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, which have been filed with the Securities and Exchange Commission (the "Commission") by Michaels Stores, Inc. (the "Company") are incorporated by reference, as of their respective dates, in this Registration Statement: (a) The Company's Annual Report on Form 10-K for the fiscal year ended February 1, 1997; (b) The Company's Quarterly Report on Form 10-Q for the period ended May 3, 1997; and (c) The description of the Company's common stock, par value $0.10 per share (the "Common Stock"), contained in the Company's Registration Statement on Form 8-A (Commission File No. 0-11822), filed August 30, 1991. In addition, all documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (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 in this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for all purposes of this Registration Statement to the extent that a statement contained herein or therein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Certain legal matters in connection with the validity of the Common Stock offered hereby have been passed upon for the Company by Jones, Day, Reavis & Pogue, Dallas, Texas. Michael C. French, a consultant to Jones, Day, Reavis & Pogue, is a director of the Company. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law empowers a corporation to indemnify its directors and officers or former directors or officers and to purchase insurance with respect to liability arising out of their capacity or status as directors and officers. Such law provides further that the indemnification permitted thereunder shall not be deemed exclusive of any other rights to which the directors and officers may be entitled under a corporation's certificate of incorporation, bylaws, any agreement or otherwise. Reference is made to Article Nine of the Company's Restated Certificate of Incorporation, as amended, which appears as Exhibit 4.1 to this Registration Statement, which provides for indemnification of directors and officers. II-1 Reference is also made to Article IX of the Company's amended Bylaws which appear as Exhibit 4.2 to this Registration Statement and provides for indemnification of directors and officers. Additionally, the Company has entered into Indemnity Agreements with certain of its executive officers and directors. The Company has procured insurance that purports (i) to insure it against certain costs of indemnification that may be incurred by it pursuant to the provisions referred to above or otherwise and (ii) to insure the directors and officers of the Company against certain liabilities incurred by them in the discharge of their functions as directors and officers except for liabilities arising from their own malfeasance. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. ITEM 8. EXHIBITS. The following is a list of all exhibits filed as a part of this Registration Statement on Form S-8, including those incorporated herein by reference. EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - ------- ---------------------- 4.1 Restated Certificate of Incorporation of the Registrant. (1) 4.2 Amended and Restated Bylaws of the Registrant. (2) 4.3 Form of Common Stock Certificate. (2) 5.1 Opinion of Jones, Day, Reavis & Pogue. (3) 23.1 Consent of Ernst & Young LLP. (3) 23.2 Consent of Jones, Day, Reavis & Pogue is contained in the opinion filed as Exhibit 5.1 hereto. 24.1 Power of attorney. (Included on Signature Page hereof.) 99.1 Michaels Stores, Inc. 1997 Employees Stock Purchase Plan. (3) - --------------- (1) Previously filed as an Exhibit to the Registrant's Registration Statement on Form S-8 (No. 33-54726) and incorporated herein by reference. (2) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the year ended January 30, 1994 and incorporated herein by reference. (3) Filed herewith. II-2 ITEM 9. UNDERTAKINGS. A. The undersigned Registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of 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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof; and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the undersigned Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer, or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irving, State of Texas on June 17, 1997. MICHAELS STORES, INC. By: /s/ Bryan M. DeCordova -------------------------------------- Bryan M. DeCordova Executive Vice President - Chief Financial Officer Each person whose signature appears below authorizes R. Michael Rouleau, Bryan M. DeCordova and Mark V. Beasley, each of whom may act without joinder of the other, to execute in the name of each such person who is then an officer or director of the Registrant and to file any amendments to this Registration Statement necessary or advisable to enable the Registrant to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of this Registration Statement, which amendments may make such changes in the Registration Statement as such attorney may deem appropriate. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated. SIGNATURES TITLE ---------- ----- Chairman of the June 17, 1997 - ----------------------------- Board of Directors Sam Wyly /s/ Charles J. Wyly, Jr. Vice Chairman of the June 17, 1997 - ----------------------------- Board of Directors Charles J. Wyly, Jr. /s/ R. Michael Rouleau President and June 17, 1997 - ----------------------------- Chief Executive Officer R. Michael Rouleau (Principal Executive Officer) /s/ Bryan M. DeCordova Executive Vice President - June 17, 1997 - ----------------------------- Chief Financial Officer Bryan M. DeCordova (Principal Financial and Accounting Officer) /s/ Evan A. Wyly Managing Director June 17, 1997 - ----------------------------- Evan A. Wyly /s/ Donald R. Miller, Jr. Managing Director and June 17, 1997 - ----------------------------- Vice President - Market Donald R. Miller, Jr. Development /s/ Michael C. French Managing Director June 17, 1997 - ----------------------------- Michael C. French /s/ Dr. F. Jay Taylor Director June 17, 1997 - ----------------------------- Dr. F. Jay Taylor /s/ Richard E. Hanlon - ----------------------------- Richard E. Hanlon Director June 17, 1997 II-4 INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - ------ ---------------------- 4.1 Restated Certificate of Incorporation of the Registrant. (1) 4.2 Amended and Restated Bylaws of the Registrant. (2) 4.3 Form of Common Stock Certificate. (2) 5.1 Opinion of Jones, Day, Reavis & Pogue. (3) 23.1 Consent of Ernst & Young LLP. (3) 23.2 Consent of Jones, Day, Reavis & Pogue is contained in the opinion filed as Exhibit 5.1 hereto. 24.1 Power of attorney. (Included on Signature Page hereof.) 99.1 Michaels Stores, Inc. 1997 Employees Stock Purchase Plan. (3) - --------------- (1) Previously filed as an Exhibit to the Registrant's Registration Statement on Form S-8 (No. 33-54726) and incorporated herein by reference. (2) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the year ended January 30, 1994 and incorporated herein by reference. (3) Filed herewith. II-5 EX-5.1 2 OPINION OF JONES DAY EXHIBIT 5.1 JONES, DAY, REAVIS & POGUE 2300 Trammell Crow Center 2001 Ross Avenue Dallas, Texas 75201 June 17, 1997 Michaels Stores, Inc. 8000 Bent Branch Drive Irving, Texas 75063 Re: Registration on Form S-8 of 1,000,000 Shares of Common Stock, par value $0.10 per share, of Michaels Stores, Inc. ------------------------------------------------------------- Ladies and Gentlemen: We are acting as counsel to Michaels Stores, Inc., a Delaware corporation (the "Company"), in connection with the registration of 1,000,000 shares (the "Shares") of Common Stock, par value $0.10 per share, of the Company pursuant to the Company's Registration Statement on Form S-8 (the "Registration Statement"). We have examined such documents, records, and matters of law as we have deemed necessary for purposes of this opinion. Based on such examination and on the assumptions set forth below, we are of the opinion that the Shares are duly authorized and, when issued and delivered in accordance with the provisions of the Company's 1997 Employees Stock Purchase Plan (the "Plan") against payment of the consideration therefor as provided in the Plan and having a value not less than the par value thereof, will be validly issued, fully paid, and nonassessable. In rendering the foregoing opinion, we have relied as to certain factual matters upon certificates of officers of the Company and public officials, and we have not independently checked or verified the accuracy of the statements contained therein. In addition, our examination of matters of law has been limited to the General Corporation Law of the State of Delaware and the federal laws of the United States of America, in each case as in effect on the date hereof. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. Very truly yours, /s/ Jones, Day, Reavis & Pogue EX-23.1 3 CONSENT OF ERNST & YOUNG EXHIBIT 23.1 ------------ CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) for the registration of 1,000,000 shares of its common stock pertaining to the Michaels Stores, Inc. 1997 Employees Stock Purchase Plan of our report dated March 12, 1997, with respect to the consolidated financial statements of Michaels Stores, Inc. incorporated by reference in its Annual Report (Form 10-K) for the year ended February 1, 1997, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP -------------------------------------- Ernst & Young LLP Dallas, Texas June 12, 1997 EX-99.1 4 EMPLOYEES STOCK PLAN EXHIBIT 99.1 ------------ MICHAELS STORES, INC. 1997 EMPLOYEES STOCK PURCHASE PLAN The purpose of this 1997 Employees Stock Purchase Plan (the "Plan") is to provide employees of Michaels Stores, Inc. (the "Company") a continued opportunity to purchase shares of the Company's common stock, par value $0.10 per share (the "Common Stock"), through quarterly offerings to be made on each consecutive February 1, May 1, August 1, and November 1. This Plan will become effective on the date the Company's current Employees Stock Purchase Plan terminates (the "Effective Date"). One million (1,000,000) shares of Common Stock in the aggregate have been approved for this purpose. 1. ADMINISTRATION. The Plan will be administered by a Committee appointed by the Board of Directors of the Company, consisting of at least two of its members. The Committee will have authority to make rules and regulations for the administration of the Plan. The Committee's interpretations and decisions with regard to the Plan shall be final and conclusive. 2. ELIGIBILITY. Employees of the Company and, at the discretion of the Committee, employees of one or more subsidiaries of the Company, will be eligible to participate in the Plan, in accordance with such rules as may be prescribed from time to time, which rules, however, shall neither permit nor deny participation in the Plan contrary to the requirements of Section 423(b) of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder. No employee may be granted an option 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 any subsidiary. For purposes of the preceding sentence, the rules of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee. 3. OFFERINGS. The Company will make one or more quarterly offerings to employees to purchase stock under the Plan. The effective date of each offering shall be the first day of each quarter beginning each February 1, May 1, August 1, and November 1 during the term of the Plan. Each offering period shall last three months. The measure of an employee's participation in an offering will be based on (i) a percentage of the amounts received as compensation by the participating employee during the offering period (or during such portion thereof as an employee may elect to participate), plus (ii) an elective amount of up to $1,000.00. 4. PARTICIPATION. An employee eligible on the effective date of any offering may participate in such offering at any time by completing and forwarding a payroll deduction authorization form to the appropriate payroll location. The form will authorize a regular payroll deduction from the employee's compensation, and must specify the date on which such deduction is to commence, which may not be retroactive. In addition, an eligible employee on the effective date of any offering may elect to participate in the offering by contributing to his or her account (as defined in Section 5) all or a portion of the elective amount (which shall not exceed $1,000.00 during any offering period). Such eligible employee shall notify the Company of such election in writing prior to the beginning of the last day of the offering period. Such election to contribute all or a portion of the elective amount shall be effective as of the later of the receipt of notice by the Company or the receipt of the contribution. 5. MAINTENANCE OF ACCOUNTS; PAYROLL DEDUCTIONS. The Company will maintain accounts for all participating employees. With respect to any offering made under the Plan, an employee may authorize a payroll deduction in terms of whole number percentages up to a maximum of 10% of the basic or regular rate of compensation an employee receives during the offering period (or during such portion thereof as an employee may elect to participate). Payroll deductions will be credited to an employee's account as of the last day of such payroll period. An employee may at any time increase or decrease the employee's payroll deduction by filing a new payroll deduction authorization form. The change may not become effective sooner than the next pay period after receipt of the form. A payroll deduction may be increased only once and reduced only once during any offering period. In the event an employee elects to participate in an offering by contributing to his or her account, such contribution must be received by the Company from the participating employee during the offering period prior to the beginning of the last day of the offering period (at which time the amount received will be credited to the employee's account). 6. LIMIT ON SIZE OF OPTION. No employee may be granted an option which permits his or her rights to purchase stock under the Plan, and any other stock purchase plan of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such stock (determined at the effective date of the offering) for each calendar year in which the option is outstanding at any time. 7. PURCHASE OF SHARES. Each employee participating in any offering under the Plan will be granted an option, upon the effective date of such offering, for as many shares of Common Stock as the participating employee may elect to purchase with the following amounts: (a) up to 10% of the basic or regular rate of compensation received during the specified offering period (or during such portion thereof as an employee may elect to participate), to be paid by payroll deductions during such period; (b) an elective amount paid by the participating employee into his or her account of up to $1,000.00; and (c) the balance, if any, carried forward from the employee's account for the preceding offering period pursuant to the final paragraph of this Section 7. The purchase price for each share purchased will be 85% of the average market price on the last day of a month when there are sufficient funds in the employee's account to purchase one or more full shares. As of the last day of a month during any offering, the account of each participant employee shall be totaled. If such account contains sufficient funds to purchase one or more full shares as of that date, the employee shall be deemed to have exercised an option to purchase such share or shares at such price; the employee's account shall be charged for the amount of purchase; and the ownership of such share or shares shall be appropriately evidenced on the books of the Company. Subsequent shares covered by the employee's option will be purchased in the same manner, whenever sufficient funds have again accrued in the employee's account. A participating employee may not purchase a share under any offering beyond the end of the offering period with respect thereto. Any balance remaining in an employee's account at the end of an offering period will be carried forward into the employee's account for the following offering period. In no event will the balance carried forward be equal to or greater than the purchase price of one share on the last day of the offering period. 8. WITHDRAWAL FROM OFFERING. An employee may at any time and for any reason withdraw from participation in an offering, and thereby draw out the balance accumulated in the employee's account. The employee may thereafter begin participation again only once during the remainder of the offering period. Withdrawals from an employee's account are not permitted unless the employee withdraws from an offering. Partial withdrawals from the employee's account will not be permitted. 9. ISSUANCE OF CERTIFICATES. The Company will issue or cause its transfer agent to issue to Plan participants certificates representing shares of Common Stock purchased by such Plan participant upon written request. 10. REGISTRATION OF CERTIFICATES. Certificates may be registered only in the name of the employee, or, if the employee so indicates on the employee's payroll deduction authorization form, in the employee's name jointly with a member of the employee's family, with right of survivorship. An employee who is a resident of a jurisdiction 2 which does not recognize such a joint tenancy may have certificates registered in the employee's name as tenant in common or as community property with a member of the employee's family, without right of survivorship. 11. DEFINITIONS. The phrase "average market price" means the average of the high and low sale prices of Common Stock on a given day, or if no sales of Common Stock were made on that day, the average of the high and low sale prices of Common Stock on the next preceding day on which sales were made, as reported by NASDAQ/NMS or, if the Common Stock is no longer listed for trading in NASDAQ/NMS, the principal domestic securities exchange on which the Common Stock is then listed for trading. The term "subsidiary" means a subsidiary of the Company within the meaning of Section 424(f) of the Code and the regulations promulgated thereunder. 12. RIGHTS AS A STOCKHOLDER. None of the rights or privileges of a stockholder of the Company shall exist with respect to shares purchased under the Plan unless and until such full shares shall have been appropriately evidenced on the books of the Company. 13. RIGHTS ON RETIREMENT, DEATH, OR TERMINATION OF EMPLOYMENT. In the event of a participating employee's retirement, death, or termination of employment ("ineligibility"), no payroll deduction shall be taken from any pay due and owing to the employee once ineligible, and the employee's account shall be paid to the employee or, in the event of the employee's death, to the employee's estate. 14. RIGHTS NOT TRANSFERABLE. Rights under the Plan or under an offering are not transferable by a participant employee other than by will or the laws of descent and distribution, and are exercisable during the employee's lifetime only by the employee. 15. APPLICATION OF FUNDS. All funds received or held by the Company under the Plan may be used for any corporate purpose. 16. ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event of a subdivision of outstanding shares, or the payment of a stock dividend, the number of shares approved for the Plan shall be increased proportionately, and such other adjustment shall be made as may be deemed equitable by the Board of Directors. In the event of any other change affecting Common Stock, such adjustment shall be made as may be deemed equitable by the Board of Directors to give proper effect to such event. 17. AMENDMENT OF THE PLAN. The Board of Directors may at any time, or from time to time, amend the Plan in any respect, except that, without the approval of the stockholders of the Company not later than 12 months after the date of approval of such amendment by the Board of Directors, no amendment shall be effective if it would (a) increase or decrease the number of shares approved for the Plan (other than as provided in Section 16) or (b) change the designation of subsidiaries eligible to participate in the Plan. 18. TERMINATION OF THE PLAN. The Plan and all rights of employees under any offering hereunder shall terminate: (a) On the day that participating employees become entitled to purchase a number of shares equal to or greater than the number of shares remaining available for purchase under the Plan, unless extended by the Board; or (b) at any time, at the discretion of the Board of Directors. If on the day the Plan terminates participating employees are entitled to purchase a number of shares greater than the number of shares remaining available for purchase under the Plan, the available shares shall be allocated by the Committee among such participating employees in such manner as it deems fair. Upon termination of the Plan, all amounts in the accounts of participating employees shall be carried forward into the employee's payroll deduction account under a successor plan, if any, or promptly refunded. 3 19. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver Common Stock under the Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance, or sale of such stock. 4 -----END PRIVACY-ENHANCED MESSAGE-----