-----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, SlvZGF9Tx+tIAINf581YboHR9tfP0PRcVvrrV+XbPrti4fPrAfbepRf5tDIBLqED tPNRuDgim3m0wPdFpjKO5g== 0001047469-98-002764.txt : 19980202 0001047469-98-002764.hdr.sgml : 19980202 ACCESSION NUMBER: 0001047469-98-002764 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980130 EFFECTIVENESS DATE: 19980130 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENCAD INC CENTRAL INDEX KEY: 0000913599 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 953672088 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-45327 FILM NUMBER: 98518466 BUSINESS ADDRESS: STREET 1: 6059 CORNERSTONE COURT W CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6196775179 MAIL ADDRESS: STREET 1: 6059 CORNERSTONE COURT WEST CITY: SANSAN DIEGO STATE: CA ZIP: 92122 S-8 1 FORM S-8 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 30, 1998 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 Registrant as specified in its charter) DELAWARE 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) 1993 EMPLOYEE STOCK PURCHASE PLAN (Full title of the Plan) DAVID A. PURCELL CHAIRMAN AND CHIEF EXECUTIVE OFFICER ENCAD, INC. 6059 CORNERSTONE COURT, WEST SAN DIEGO, CALIFORNIA 92121 (619) 452-0882 (Telephone number, including area code, of agent for service) 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 Price Fee ----------- ----------- ---------- ----- --- 1993 EMPLOYEE STOCK PURCHASE PLAN Common Stock, $0.001 par value 120,000 shares $24.28 (2) $2,913,608(2) $859.51 Aggregate Filing Fee $859.51
(1) This Registration Statement shall also cover any additional shares of Common Stock which become issuable under the 1993 Employee Stock Purchase Plan, as amended by reason of any stock dividend, stock split, recapitalization or any other similar transaction without receipt of consideration which results in an increase in the number of outstanding shares of Common Stock of ENCAD, Inc. (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 January 29, 1998 as reported on the Nasdaq National Market. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE ENCAD, Inc. (the "Registrant") hereby incorporates by reference into this Registration Statement the following documents previously filed with the Securities and Exchange Commission (the "SEC"): (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996, as amended, filed with the SEC on March 28, 1997; (b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1997, June 30, 1997 and September 30, 1997, filed with the SEC on May 5, 1997, August 8, 1997 and November 14, 1997, respectively; and (c) The Registrant's Registration Statement No. 001-12652 on Form 8-A filed with the SEC on December 6, 1993 in which the terms, rights and provisions applicable to the Registrant's Common Stock are described. All reports and definitive proxy or information statements filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "1934 Act") after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also 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 4. DESCRIPTION OF SECURITIES Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant's Bylaws (the "Bylaws") provide that the Registrant shall, to the fullest extent authorized by Delaware law, indemnify any director who is made, or is threatened to be made, a party to an action or proceeding, whether civil or criminal, administrative or investigative, by reason of being a director of the Registrant or a predecessor corporation of the Registrant, or is or was serving at the request of the Registrant as a director or officer of another corporation; provided, however, that the Registrant shall indemnify any such agent in connection with a proceeding initiated by such agent only if such proceeding was authorized by the Registrant's Board of Directors (the "Board"). The Bylaws further provide that such indemnification provisions shall: (i) not be deemed to be exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement or vote of stockholder or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, (ii) continue as to a person who has ceased to be a director, and (iii) inure to the benefit of the heirs, executors and administrators of such a person. The Bylaws provide that the Registrant's obligation to provide indemnification shall be offset to the extent of any other source of indemnification or any otherwise applicable insurance coverage under a policy maintained by the Registrant or any other person. The Bylaws further provide that the Board in its discretion shall have the power to indemnify any person, other than a director, made a party to any action, suit or proceeding by reason of the fact that he, his testator or intestate, is or was an officer or employee of the corporation. In addition, the Registrant's Certificate of Incorporation (the "Certificate of Incorporation") provides that, pursuant to Delaware law, its directors shall not be personally liable 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 Registrant or its stockholders, (ii) for acts or omissions not in good faith or involving intentional misconduct, (iii) for knowing violations of law, (iv) for actions leading to improper personal benefit to the director, and (iv) for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of Delaware General Corporation Law. The Registrant maintains a directors' and officers' liability insurance policy that, subject to certain limitations, terms and conditions, will insure the directors and officers of the Registrant against losses arising from wrongful acts (as defined by the policy) in his or her capacity as a director or officer. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. ITEM 8. EXHIBITS Exhibit No. Exhibit - ----------- ------- 4 Instruments Defining Rights of Stockholders. Reference is made to Registrant's Registration Statement No. 001-12652 on Form 8-A, which is incorporated herein by reference pursuant to Item 3(d) of this Registration Statement. 5 Opinion and Consent of Brobeck, Phleger & Harrison LLP. 23.1 Consent of Deloitte & Touche, LLP, Independent Public Accountants. 23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-5 of this Registration Statement. 99.1 1993 Employee Stock Purchase Plan, as amended. 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 of 1933, as amended (the "1933 Act"), (ii) to reflect in the prospectus any facts or events arising after the effective date of this 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 this 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 clauses (1)(i) and (1)(ii) shall 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 1934 Act that are incorporated by reference into this Registration Statement; (2) that for the purpose of determining any liability under the 1933 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 upon the termination of the Registrant's 1993 Employee Stock Purchase Plan, as amended. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference into 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 1933 Act may be permitted to directors, officers or controlling persons of the Registrant pursuant to the indemnity provisions summarized in Item 6 or otherwise, the Registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 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 1933 Act and will be governed by the final adjudication of such issue. 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 the City of West San Diego, State of California on January 30, 1998. ENCAD, INC. By: /s/ DAVID A. PURCELL ------------------------------------- David A. Purcell Chairman and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That the undersigned officers and directors of ENCAD, Inc., a Delaware corporation, do hereby constitute and appoint David A. Purcell and Richard A. Plante and each of them, the lawful attorneys-in-fact 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, or either 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 regulation 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 thereto, and each of the undersigned hereby ratifies and confirms all that said attorneys and agents, or either one 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, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signatures Title Date - ---------- ----- ---- /s/ DAVID A. PURCELL - -------------------- Chairman and January 30, 1998 David A. Purcell Chief Executive Officer (Principal Executive Officer) Signatures Title Date - ---------- ----- ---- /s/ RICHARD A. PLANTE - --------------------- President and January 30, 1998 Richard A. Plante Chief Operating Officer /s/ TODD W. SCHMIDT - -------------------- Vice President and January 30, 1998 Todd W. Schmidt Chief Financial Officer (Principal Financial and Accounting Officer) /s/ ROBERT V. ADAMS - -------------------- Director January 30, 1998 Robert V. Adams /s/ RONALD J. HALL - -------------------- Director January 30, 1998 Ronald J. Hall /s/ HOWARD L. JENKINS - --------------------- Director January 30, 1998 Howard L. Jenkins /s/ CHARLES E. VOLPE - -------------------- Director January 30, 1998 Charles E. Volpe /s/ CRAIG S. ANDREWS - -------------------- Director January 30, 1998 Craig S. Andrews SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 EXHIBITS TO FORM S-8 UNDER SECURITIES ACT OF 1933 ENCAD, INC. EXHIBIT INDEX Exhibit No. Exhibit - ------- ------- 4 Instruments Defining Rights of Stockholders. Reference is made to Registrant's Registration Statement No. 00-112652 on Form 8-A, which is incorporated herein by reference pursuant to Item 3(d) of this Registration Statement. 5 Opinion and Consent of Brobeck, Phleger & Harrison LLP. 23.1 Consent of Deloitte & Touche LLP, Independent Public Accountants. 23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-5 of this Registration Statement. 99.1 1993 Employee Stock Purchase Plan, as amended. EX-5 2 EXHIBIT 5 EXHIBIT 5 Opinion and Consent of Brobeck, Phleger & Harrison LLP January 29, 1998 ENCAD, Inc. 6059 Cornerstone Court, West West San Diego, CA 92121 Re: ENCAD, Inc. (the "Company") Registration Statement for Registration of 120,000 Shares of Common Stock --------------------------------- Ladies and Gentlemen: We refer to your registration on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended, of 120,000 shares of Common Stock for issuance under the Company's 1993 Employee Stock Purchase Plan, as amended. We advise you that, in our opinion, when such shares have been issued and sold pursuant to the applicable provisions of the Company's 1993 Employee Stock Purchase Plan, as amended, and in accordance with the Registration Statement, such shares will be validly issued, fully paid and non-assessable shares of the Company's Common Stock. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ BROBECK, PHLEGER & HARRISON LLP ----------------------------------- BROBECK, PHLEGER & HARRISON LLP EX-23.1 3 EXHIBIT 23.1 EXHIBIT 23.1 Consent of Deloitte & Touche LLP, Independent Public Accountants INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of ENCAD, Inc. on Form S-8 of our report dated February 4, 1997, appearing in the Annual Report on Form 10-K of ENCAD, Inc. for the year ended December 31, 1996. /s/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP San Diego, California January 29, 1998 EX-99.1 4 EXHIBIT 99.1 EXHIBIT 99.1 1993 Employee Stock Purchase Plan, as amended ENCAD, INC. 1993 EMPLOYEE STOCK PURCHASE PLAN (AS AMENDED, JULY 17, 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. 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. 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 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 520,000 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. 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 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. 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. 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. 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. -----END PRIVACY-ENHANCED MESSAGE-----