-----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, DcwLyNGSyYulYDIBf4qg08WBMULbSJpau0HgY/+piVfN3ZJtllhc9LDX6qYQ3Wjh HtoSnzHnDpSfZAFiuj9JHg== 0000891618-99-004836.txt : 19991103 0000891618-99-004836.hdr.sgml : 19991103 ACCESSION NUMBER: 0000891618-99-004836 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19991102 EFFECTIVENESS DATE: 19991102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENENTECH INC CENTRAL INDEX KEY: 0000318771 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 942347624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: SEC FILE NUMBER: 333-83989 FILM NUMBER: 99739824 BUSINESS ADDRESS: STREET 1: 1 DNA WAY CITY: SOUTH SAN FRANCISCO STATE: CA ZIP: 94080 BUSINESS PHONE: 4152251000 MAIL ADDRESS: STREET 1: 460 POINT SAN BRUNO BLVD STREET 2: . CITY: SOUTH SAN FRANCISCO STATE: CA ZIP: 94080 S-8 POS 1 POST-EFFECTIVE AMENDMENT TO FORM S-8 1 As filed with the Securities and Exchange Commission on November 2, 1999 Registration No. 333-83989 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- GENENTECH, INC. (Exact name of registrant as specified in its charter) Delaware 94-2345624 (State of Incorporation) (I.R.S. Employer Identification No.)
1 DNA Way South San Francisco, California 94080-4990 (Address of principal executive offices) (Zip Code) ---------------------- 1999 Stock Plan 1991 Employee Stock Plan (Full titles of the plans) Stephen G. Juelsgaard, Esq. Senior Vice President, General Counsel and Secretary Genentech, Inc. 1 DNA Way South San Francisco, California 94080-4990 (Name and address of agent for service) (650) 225-1000 (Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE ======================================================================================================================= Proposed Maximum Proposed Maximum Title of Securities Offering Aggregate Amount of to be Registered Amount to be Registered Price per Share(1) Offering Price(1) Registration Fee(2) - ----------------------------------------------------------------------------------------------------------------------- Common stock, par value 7,500,000 shares $99.30 $744,750,000 $211,335.60 $.02 per share =======================================================================================================================
(1) The Proposed Maximum Offering Price Per Share was estimated pursuant to Rules 457(c) and 457(h) promulgated under the Securities Act of 1933, as amended. Pursuant to Rule 457(h), in the case of an employee stock option plan, the aggregate offering price is to be computed upon the basis of the price at which the options may be exercised, or, if such price is not known, upon the basis of the average of the high and low reported prices pursuant to Rule 457(c). To be registered hereunder are 7,500,000 shares of the common stock, par value $.02 per share, of Genentech, Inc., which are referred to as the "Shares." Options covering 6,457,670 of the Shares have been granted under the 1999 Stock Plan and have an option exercise price of $97.00. Options covering 200,000 of the Shares have been granted under the 1991 Employee Stock Plan, and the weighted average exercise price of such options is $51.11. The actual exercise price of each option was determined with reference to the grant date of that option. The exercise price for the options under the 1999 Stock Plan covering the remaining 842,330 Shares is not known, and in accordance with Rule 457(c) was calculated with reference to the high and low prices of July 26, 1999 reported on the New York Stock Exchange of $126.00 and $130.75, respectively, the average of which is $128.375. The Proposed Maximum Offering Price Per Share represents the weighted average exercise price of the options covering the Shares, which is $99.30. (2) Previously paid. 2 PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3: INCORPORATION OF DOCUMENTS BY REFERENCE In this Registration Statement, "Genentech," "we," "us" and "our" refer to Genentech, Inc. The Securities and Exchange Commission, or SEC, allows us to "incorporate by reference" the information we file with it, which means we can disclose important information by referring to those documents. The information included in the following documents is incorporated by reference and is considered to be a part of this Registration Statement. The most recent information that we file with the SEC automatically updates and supersedes more dated information. We have previously filed the following documents with the SEC and incorporate them by reference into this Registration Statement: (a) Our annual report on Form 10-K for the year ended December 31, 1998; (b) Our quarterly reports on Form 10-Q for the quarters ended March 31, 1999, June 30, 1999 and September 30, 1999; (c) Our current report on Form 8-K dated June 28, 1999; (d) Our current report on Form 8-K dated July 28, 1999; and (e) The description under the heading "Description of Capital Stock" relating to our common stock in the prospectus included in our Amendment No. 3 to the Registration Statement on Form S-3 (Registration No. 333-80601) filed with the SEC on July 16, 1999, and the description under the heading "Description of Capital Stock" relating to the common stock in the our final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, which is commonly known as the Securities Act, including any amendment or report filed for the purpose of updating that description. We also incorporate by reference all documents subsequently filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which is commonly known as the Exchange Act, until all of the shares registered under this Registration Statement are sold. We will provide without charge to each person to whom a prospectus is delivered, including any beneficial owner, a copy of any or all of the information that has been incorporated by reference in this Registration Statement. If you would like to obtain this information from us, please direct your request to the Investor Relations Department, either in writing or by telephone, to Genentech, Inc., 1 DNA Way, South San Francisco, California 94080, Attention Investor Relations (650) 225-1260. ITEM 4: DESCRIPTION OF SECURITIES We have incorporated by reference the description under the heading "Description of Capital Stock" relating to our common stock in the prospectus included in our Amendment No. 3 to the Registration Statement on Form S-3 (Registration No. 333-80601) filed with the SEC on July 16, 1999, and the description under the heading "Description of Capital Stock" relating to the common stock in the our final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act, including any amendment or report filed for the purpose of updating that description. ITEM 5: INTERESTS OF NAMED EXPERTS AND COUNSEL Stephen G. Juelsgaard, Senior Vice President, General Counsel and Secretary of Genentech, is an officer of Genentech and has received options under our 1999 Stock Plan and our 1991 Employee Stock Plan. 3 ITEM 6: INDEMNIFICATION OF DIRECTORS AND OFFICERS Our certificate of incorporation limits, to the fullest extent permitted by Delaware corporate law, the personal liability of directors for monetary damages for breach of their fiduciary duties. Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") provides, in summary, that directors and officers of Delaware corporations are entitled, under certain circumstances, to be indemnified against all expenses and liabilities (including attorneys' fees) incurred by them as a result of suits brought against them in their capacity as a director or officer, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful; provided, that no indemnification may be made against expenses in respect of any claim, issue or matter as to which they shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, they are fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Any such indemnification may be made by the corporation only as authorized in each specific case upon a determination by the stockholders or disinterested directors that indemnification is proper because the indemnitee has met the applicable standard of conduct. Our board of directors may provide similar indemnification to our officers, employees and agents as it deems appropriate and as authorized by Delaware law. We may purchase insurance on behalf of any director, officer, employee or agent against any expense incurred by such person in his or her capacity. Our certificate of incorporation also provides that Roche and the officers or directors of Roche Holdings, Inc., or Roche, which is our majority stockholder, will not be presumed liable to us or our stockholders for breach of any fiduciary duty or duty of loyalty, failure to act in the best interests of Genentech, or receipt of any improper personal benefit, simply because Roche or any director or officer of Roche, in good faith, takes any action, exercises any right or gives or withholds any consent with respect to any agreement or contract between Roche and Genentech. In addition, Roche will not be liable to us or our stockholders for breach of any fiduciary duty if Roche pursues or acquires a potential corporate opportunity of ours or does not inform us of a potential corporate opportunity. If a director, officer or employee of Genentech who is also a director, officer or employee of Roche knows of a potential transaction or matter that may be a corporate opportunity both for Genentech and Roche, the director, officer or employee is entitled to offer the corporate opportunity to us or Roche as the director, officer or employee deems appropriate under the circumstances in his or her sole discretion, and no such director, officer or employee will be liable to us or our stockholders for breach of any fiduciary duty or duty of loyalty or failure to act in our best interests or the derivation of any improper personal benefit by reason of the fact that such director, officer or employee offered such corporate opportunity to Roche (rather than to us) or did not communicate information regarding such corporate opportunity to us, or Roche pursues or acquires such corporate opportunity for itself or directs such corporate opportunity to another person or does not communicate the corporate opportunity to us. Neither Roche nor any officer or director thereof shall be liable to us or our stockholders for breach of any fiduciary duty or duty of loyalty or failure to act in (or not opposed to) our best interests or the derivation of any improper personal benefit by reason of the fact that Roche or an officer of director thereof in good faith takes any action or exercises any rights or gives or withholds any consent in connection with any agreement or contract between Roche and Genentech. No vote cast or other action taken by any person who is an officer, director or other representative of Roche, which vote is cast or action is taken by such person in his capacity as a director of Genentech, shall constitute an action of or the exercise of a right by or a consent of Roche for the purpose of any such agreement or contract. ITEM 7: EXEMPTION FROM REGISTRATION CLAIMED Not applicable. 4 ITEM 8: EXHIBITS
EXHIBIT NUMBER 5 Opinion of Stephen G. Juelsgaard, Esq. 15.1 Letter re: Unaudited Interim Financial Information.(*) 23.1 Consent of Ernst & Young LLP, independent auditors.(*) 23.2 Consent of Stephen G. Juelsgaard, Esq. is contained in Exhibit 5 to this Registration Statement. 24 Power of Attorney is contained on the signature pages.(**) 99.1 1999 Stock Plan.(*) 99.2 1991 Employee Stock Plan (as amended effective April 13, 1999). - ------------------
(*) Previously filed. (**) Previously filed with respect to Arthur D. Levinson, Louis J. Lavigne, Jr., John M. Whiting, Franz B. Humer and Jonathan K.C. Knowles. ITEM 9: UNDERTAKINGS 1. The undersigned registrant hereby 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; (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 prospectus filed with the SEC 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. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(i) and (a)(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 issuer pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference herein. 5 (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 herein, 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 undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be 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 SEC 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. 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned 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 Post-Effective Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of South San Francisco, State of California, on November 2, 1999. GENENTECH, INC. By: /s/ CYNTHIA J. LADD --------------------------------- Name: Cynthia J. Ladd Title: Vice President, Corporate Law and Assistant Secretary 7 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Arthur D. Levinson and Cynthia J. Ladd, and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Post-Effective Amendment No. 1 to the Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE * Principal Executive Officer and Director November 2, 1999 - ------------------------------------- Arthur D. Levinson * Principal Financial Officer November 2, 1999 - ------------------------------------- Louis J. Lavigne, Jr. * Principal Accounting Officer November 2, 1999 - ------------------------------------- John M. Whiting Director - ------------------------------------- Herbert W. Boyer * Director November 2, 1999 - ------------------------------------- Franz B. Humer * Director November 2, 1999 - ------------------------------------- Jonathan K.C. Knowles Director - ------------------------------------- Charles A. Sanders /s/ MARK RICHMOND Director November 2, 1999 - ------------------------------------- Mark Richmond *By: /s/ CYNTHIA J. LADD - ------------------------------------- Cynthia J. Ladd Attorney-in-fact
8 EXHIBIT INDEX
EXHIBIT NUMBER 5 Opinion of Stephen G. Juelsgaard, Esq. 15.1 Letter re: Unaudited Interim Financial Information.(*) 23.1 Consent of Ernst & Young LLP, independent auditors.(*) 23.2 Consent of Stephen G. Juelsgaard, Esq. is contained in Exhibit 5 to this Registration Statement. 24 Power of Attorney is contained on the signature pages.(**) 99.1 1999 Stock Plan.(*) 99.2 1991 Employee Stock Plan (as amended effective April 13, 1999).
- ------------------ (*) Previously filed. (**) Previously filed with respect to Arthur D. Levinson, Louis J. Lavigne, Jr., John M. Whiting, Franz B. Humer and Jonathan K.C. Knowles. EX-5 2 OPINION OF STEPHEN G. JUELSGAARD, ESQ. 1 EXHIBIT 5 November 2, 1999 Ladies and Gentlemen: I am Senior Vice President, General Counsel and Secretary of Genentech, Inc. (the "Company"). In connection with this opinion, I have examined the following documents: o the Company's Post-Effective Amendment No. 1 Registration Statement on Form S-8, registration number 333-83989 (the "Registration Statement") to be filed with the Securities and Exchange Commission covering the offering of 7,500,000 shares of the Company's Common Stock, par value $.02 per share (the "Shares"), pursuant to the Company's 1999 Stock Plan and 1991 Employee Stock Plan (the "Plans") and the related Prospectuses; o the Company's Amended and Restated Certificate of Incorporation and Bylaws; and o such other documents, records, certificates, memoranda and other instruments as I deem necessary as a basis for this opinion. I have assumed the genuineness and authenticity of all documents submitted to me as originals, the conformity to originals of all documents submitted to me as copies thereof, and the due execution and delivery of all documents where due execution and delivery are a prerequisite to the effectiveness thereof. On the basis of the foregoing, and in reliance thereon, I am of the opinion that the Shares, when sold and issued in accordance with the Registration Statement and either of the Plans and the related Prospectus, will be validly issued, fully paid, and nonassessable (except as to shares issued pursuant to certain deferred payment arrangements, which will be fully paid and nonassessable when such deferred payments are made in full). I am admitted to practice only in the State of California. The opinions set forth herein are limited to matters of the General Corporation Law of the state of Delaware and the federal securities laws of the United States. I consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ STEPHEN G. JUELSGAARD ----------------------------- Stephen G. Juelsgaard Senior Vice President, General Counsel and Secretary EX-99.2 3 1991 EMPLOYEE STOCK PLAN 1 EXHIBIT 99.2 GENENTECH, INC. 1991 Employee Stock Plan (As amended effective April 13, 1999) 1. Purpose The purpose of this 1991 Employee Stock Plan (the "Plan") is to provide employees of Genentech, Inc. (the "Company"), and its U.S. subsidiaries designated by the Company's Board of Directors, who wish to become stockholders of the Company an opportunity to purchase (i) shares of Callable Putable Common Stock of the Company, or (ii) shares of Common Stock of the Company, to the extent shares of Callable Putable Common Stock are converted to Common Stock in accordance with the Company's Certificate of Incorporation (the shares referred to in clauses (i) and (ii) above being hereinafter referred to collectively as the "Shares"). The Plan is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). 2. Eligible Employees Subject to the provisions of Sections 7, 8 and 9 below, any individual who is in the full-time employment of the Company on the day on which a Grant Date (as defined in Section 3 below) occurs is eligible to participate in an offering of Shares made by the Company hereunder. In addition, the Board of Directors may at any time designate one or more of the Company's U.S. subsidiary corporations (as defined in Section 425(f) of the Code) to be included in an offering of Shares under the Plan. Full-time employment shall mean employment by the Company or its designated U.S. subsidiary for: (a) 20 hours or more per week; and (b) more than five months in the calendar year. 3. Grant Dates From time to time, the Board of Directors may fix a date (a "Grant Date") or a series of dates (each of which is a "Grant Date") on which the Company will grant rights to purchase Shares ("Rights") to employees eligible to participate. 4. Prices The purchase price per Share for Shares covered by a grant of Rights hereunder shall be determined by the Board of Directors, but in no event shall be less than the lesser of: (a) eighty-five percent (85%) of the fair market value of a Share on the Grant Date on which such Right was granted; or (b) eighty-five percent (85%) of the fair market value of a Share on the date such Right is exercised as to that Share. 5. Exercise of Rights and Method of Payment (a) Rights granted under the Plan will be exercisable on specific dates as determined by the Board of Directors. (b) The method of payment for Shares purchased upon exercise of Rights granted hereunder shall be through regular payroll deductions or by lump sum cash payment, or both, as determined by the Board of 1 2 Directors. No interest shall be paid upon payroll deductions or other payments in exercise of Rights unless specifically provided for by the Board of Directors. 6. Terms of Rights Rights granted hereunder shall be exercisable during a twenty-seven (27) month period or such shorter period as determined by the Board of Directors. All Rights granted to an employee shall terminate upon termination of full-time employment of the employee. Any payments received by the Company from a participating employee with respect to a Right granted hereunder and not utilized for the purchase of Shares upon exercise of such Right shall be promptly returned to such employee by the Company after termination of such Right, except that amounts that were not so utilized because such amounts were insufficient to purchase a whole Share may be applied toward the purchase of Shares pursuant to a Right subsequently granted hereunder, if any. 7. Shares Subject to the Plan No more than five million three hundred thousand (5,300,000) Shares may be sold pursuant to Rights granted under the Plan. Appropriate adjustments in the above figure, in the number of Shares covered by outstanding Rights granted hereunder, in the exercise price of the Rights and in the maximum number of Shares which an employee may purchase (pursuant to Section 9 below) shall be made to give effect to any mergers, consolidations, reorganizations, recapitalizations, stock splits, stock dividends or other relevant changes in the capitalization of the Company occurring after the effective date of the Plan, provided that no fractional Shares shall be subject to a Right and each Right shall be adjusted downward to the nearest full Share. Any agreement of merger or consolidation will include provisions for protection of the then existing Rights of participating employees under the Plan. Either authorized and unissued Shares or issued Shares heretofore or hereafter reacquired by the Company may be made subject to Rights under the Plan. If for any reason any Right under the Plan terminates in whole or in part, Shares subject to such terminated Right may again be subject to a Right under the Plan. 8. Limitations on Grants Anything to the contrary notwithstanding, pursuant to Section 423 of the Code: (a) No employee shall be granted a Right hereunder if such employee, immediately after the Right is granted, owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company, its parent corporation (as defined in Section 425(c) of the Code) or any subsidiary corporation, in each case computed in accordance with Section 423(b)(3) of the Code. (b) No employee shall be granted a Right which permits his Rights to purchase Shares under all employee stock purchase plans of the Company and its subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) (or such other maximum as may be prescribed from time to time by the Code) of fair market value of such Shares (determined at the time such Right is granted) for each calendar year in which such Right is outstanding at any time, all in accordance with the provisions of Section 423(b)(8) of the Code. 9. Limits on Participation (a) Participation shall be limited to eligible employees who enroll under the Plan. (b) No Right granted to any participating employee shall cover more than twelve thousand (12,000) Shares. (c) No more than One Hundred Eighty Thousand (180,000) Shares may be purchased during any calendar quarter upon the exercise of Rights granted under the Plan; provided, however, that for those calendar quarters in which the Company pays regular annual bonuses to eligible employees, the maximum aggregate numbers of Shares which may be purchased upon the exercise of Rights shall be Two Hundred Thousand (200,000) Shares. If the aggregate purchases of Shares upon exercises of Rights granted under the Plan 2 3 would exceed the applicable maximum number for a particular calendar quarter, the maximum permitted number of Shares shall be allocated to the exercising participants in proportion to the number of Shares they would otherwise purchase during such calendar quarter. 10. Employee's Rights as Stockholder No participating employee shall have any Rights as a stockholder in the Shares covered by a Right granted hereunder until such Right has been exercised, full payment has been made for the corresponding Shares and the purchase has been entered in the records of the Transfer Agent for the Shares. 11. Rights Not Transferable Rights under the Plan are not assignable or transferable by a participating employee. 12. Amendments or Discontinuance of the Plan The Board of Directors of the Company shall have the right to amend, modify or terminate the Plan at any time without notice; provided, however, that the then existing Rights of all participating employees shall not be adversely affected thereby, except that in the case of a participating employee of a foreign branch of the Company or a designated U.S. subsidiary corporation the Plan may be varied to conform with local laws, and provided further that, subject to the provisions of Section 7 above, no such amendment to the Plan shall, without the approval of the stockholders of the Company: (a) Increase the total number of Shares which may be offered under the Plan; (b) Amend the Plan in any manner which would render Rights granted hereunder unqualified for special tax treatment under Section 421 of the Code. 13. Effective Date and Approvals The Plan shall become effective as of January 1, 1991. The Company's obligation to offer, sell or deliver its Shares under the Plan is subject to the approval of the Company's stockholders and any governmental approval required in connection with the authorized issuance or sale of such Shares and is further subject to the determination by the Company that all applicable securities laws have been complied with. 14. Administration of the Plan The Board of Directors or any committee or person(s) to whom it delegates its authority (the "Administrator") shall administer, interpret and apply all provisions of the Plan. The Administrator may waive such provisions of the Plan as it deems necessary to meet special circumstances not anticipated or covered expressly by the Plan. Nothing contained in this Section shall be deemed to authorize the Administrator to alter or administer the provisions of the Plan in a manner inconsistent with the provisions of Section 423 of the Code. 3 -----END PRIVACY-ENHANCED MESSAGE-----