SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
ADEPT TECHNOLOGY, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ADEPT TECHNOLOGY, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------------------------
(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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[GRAPHIC OMITTED]
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 31, 1997
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Adept
Technology, Inc., a California corporation (the "Company"), will be held on
Friday, October 31, 1997 at 9:00 a.m. local time, at the Santa Clara Marriott,
2700 Mission College Boulevard, Santa Clara, California 95054 for the following
purposes:
1. To elect five (5) directors to serve until the next Annual Meeting of
Shareholders or until their successors are duly elected and qualified.
2. To approve an amendment to the Company's 1995 Employee Stock Purchase
Plan to increase by 500,000 shares to 800,000 the number of shares
reserved for issuance thereunder.
3. To approve an amendment to the Company's 1993 Stock Plan ("Stock Plan")
to increase by 1,000,000 shares to 2,462,500 the number of shares
reserved for issuance thereunder and to approve the material terms of the
Stock Plan, including, but not limited to, limitations on the number of
options that may be granted to participants under the Stock Plan in any
fiscal year.
4. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending June 30, 1998.
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only shareholders of record at the close of
business on September 24, 1997 are entitled to notice of and to vote at the
meeting.
FOR THE BOARD OF DIRECTORS OF
ADEPT TECHNOLOGY, INC.
/s/ Bruce E. Shimano
-----------------------------
Bruce E. Shimano
Secretary
San Jose, California
October 6, 1997
YOUR VOTE IS IMPORTANT.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IN
ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN
IT IN THE ENCLOSED ENVELOPE. ANY SHAREHOLDER ATTENDING THE MEETING MAY VOTE IN
PERSON EVEN IF HE OR SHE HAS RETURNED A PROXY.
ADEPT TECHNOLOGY, INC.
PROXY STATEMENT FOR 1997
ANNUAL MEETING OF SHAREHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Adept Technology, Inc., a California corporation (the "Company"), for use at the
Annual Meeting of Shareholders (the "Annual Meeting") to be held Friday, October
31, 1997 at 9:00 a.m. local time, or at any adjournment or postponement thereof,
for the purposes set forth herein and in the accompanying Notice of Annual
Meeting of Shareholders. The Annual Meeting will be held at the Santa Clara
Marriott, 2700 Mission College Boulevard, Santa Clara, California 95054. The
Company's principal executive office is located at 150 Rose Orchard Parkway, San
Jose, California 95134, and its telephone number at that location is (408)
432-0888.
These proxy solicitation materials and the Annual Report to Shareholders
for the fiscal year ended June 30, 1997, including financial statements, were
first mailed on or about October 6, 1997 to all shareholders entitled to vote at
the meeting.
Record Date and Shares Outstanding
Shareholders of record at the close of business on September 24, 1997 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. At
the Record Date, 8,280,785 shares of the Company's Common Stock, no par value,
were issued and outstanding and held of record by 423 shareholders.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the meeting and voting in person.
Voting and Solicitation
Each shareholder is entitled to one vote for each share of Common Stock
held by such shareholder on the Record Date. Every shareholder voting for the
election of directors (Proposal One) may cumulate such shareholder's votes and
give one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of shares that such shareholder is entitled to
vote, or distribute such shareholder's votes on the same principle among as many
candidates as the shareholder may select, provided that votes cannot be cast for
more than five candidates. However, no shareholder shall be entitled to cumulate
votes unless the candidate's name has been placed in nomination prior to the
voting and the shareholder, or any other shareholder, has given notice at the
meeting, prior to the voting, of the intention to cumulate the shareholder's
votes. On all other matters, each share of Common Stock has one vote. A quorum
comprising the holders of a majority of the outstanding shares of Common Stock
on the Record Date must be present or represented for the transaction of
business at the Annual Meeting. Abstentions and broker non-votes will be counted
as present for the purpose of determining the presence of a quorum for the
transaction of business but will not be treated as votes cast for purposes of
the proposals presented herein.
1
The cost of this solicitation will be borne by the Company. The Company has
retained the services of Corporate Investor Communications, Inc. to aid in the
solicitation of proxies from brokers, bank nominees, and other institutional
owners. The Company estimates that it will pay Corporate Investor
Communications, Inc. a fee of approximately $6,000 for its services and will
reimburse it for reasonable out-of-pocket expenses. In addition, the Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such beneficial
owners. Proxies may also be solicited by certain of the Company's directors,
officers and regular employees, without additional compensation, personally or
by telephone, facsimile, telegram, or other means of communication.
Deadline for Receipt of Shareholder Proposals for 1998 Annual Meeting
Proposals of shareholders of the Company that are intended to be presented
by such shareholders at the Company's 1998 Annual Meeting of Shareholders must
be received by the Company no later than June 8, 1998 in order that they may be
considered for inclusion in the proxy statement and form of proxy relating to
that meeting.
2
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of five (5) directors is to be elected at the Annual Meeting. The
Board of Directors of the Company has authorized the nomination at the Annual
Meeting of the persons named herein as candidates. Unless otherwise instructed,
the proxy holders will vote the proxies received by them for the Company's five
nominees named below, all of whom are presently directors of the Company. In the
event that any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. The Company is not aware of any nominee who will be unable or will
decline to serve as a director. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner (in accordance with cumulative voting)
as will assure the election of as many of the nominees listed below as possible,
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders. The term of office for each person elected as a director will
continue until the next Annual Meeting of Shareholders or until a successor has
been elected and qualified.
Vote Required
If a quorum is present and voting, the five nominees receiving the highest
number of affirmative votes will be elected to the Board of Directors.
Abstentions and broker non-votes are not counted in the election of directors.
Nominees
The names of the nominees and certain information about them are set forth
below:
Director
Name of Nominee Age Position(s) with the Company Since
- ----------------------------- ----- --------------------------------------------------- ---------
Brian R. Carlisle ......... 46 Chairman of the Board and Chief Executive Officer 1983
Bruce E. Shimano ......... 48 Vice President, Research and Development, 1983
Secretary and Director
Michael P. Kelly (1) ...... 49 Director 1997
Cary R. Mock (1)(2) ...... 54 Director 1990
John E. Pomeroy (2) ...... 56 Director 1994
<FN>
- ------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
</FN>
There is no family relationship between any director or executive officer
of the Company.
Brian R. Carlisle has served as the Company's Chief Executive Officer and
Chairman of the Board of Directors since he co-founded the Company in June 1983.
From June 1980 to June 1983, he served as General Manager of Unimation, Inc.
("Unimation"), and from June 1977 to June 1980, he served as project manager of
the West Coast Division of Unimation. At Unimation, Mr. Carlisle was responsible
for new product strategy and development for Unimation's electric robots,
control systems, sensing systems and other robotics applications. Mr. Carlisle
received B.S. and M.S. degrees in Mechanical Engineering from Stanford
University.
Bruce E. Shimano has served as the Company's Vice President, Research and
Development, Secretary, and as a director since he co-founded the Company in
June 1983. Prior to that time, he was Director of Software Development at
Unimation. Mr. Shimano received B.S., M.S. and Ph.D. degrees in Mechanical
Engineering from Stanford University.
3
Michael P. Kelly has served as a director of the Company since April 1997.
Since 1994, Mr. Kelly has served as a managing director of Broadview Associates,
LLC, a corporate finance advisory firm. From 1993 to 1994, Mr. Kelly served as
the president of Emerald Partners, a mergers and acquisitions firm, and as a
managing director of Emerald Partners' predecessor Flemings from 1988 to 1993.
From 1985 to 1988, Mr. Kelly was a partner at Touche Ross & Co., an independent
accounting firm. Mr. Kelly received a B.A. degree from Western Illinois
University and a M.B.A. degree from St. Louis University.
Cary R. Mock has served as a director of the Company since December 1990.
Since January 1996, Mr. Mock has served as a financial advisor specializing in
acquisitions and related corporate development activities. From October 1983 to
December 1995, Mr. Mock served as Director of Acquisitions and Divestitures for
Westinghouse Electric Corporation ("Westinghouse"), having served in other
positions since joining Westinghouse in 1964. Mr. Mock received a B.S. degree in
Electrical Engineering from the Massachusetts Institute of Technology and an
M.B.A. degree from the State University of New York at Buffalo.
John E. Pomeroy has served as a director of the Company since August 1994.
Since May 1987, Mr. Pomeroy has served as President and Chief Executive Officer
of Dover Technologies, a subsidiary of Dover Corporation and a manufacturer of
production equipment for printed circuit board assembly. Mr. Pomeroy is also a
director of HADCO Corporation, a supplier of electronic interconnect products
and services. Mr. Pomeroy received a B.S. degree in Electrical Engineering from
Purdue University.
The Board of Directors recommends a vote "FOR" all five nominees listed above.
Board Meetings and Committees
The Board of Directors of the Company held a total of 4 meetings during
fiscal 1997. Each incumbent director attended all meetings of the Board of
Directors during the period of fiscal 1997 in which he served as a director and
all meetings of the committees thereof, if any, upon which such director served
during the period in which such individual was a director of the Company. The
Board of Directors has an Audit Committee and a Compensation Committee. The
Board of Directors has no nominating committee or any committee performing such
functions.
The Audit Committee is responsible for overseeing actions taken by the
Company's independent auditors and reviewing the Company's internal financial
procedures and controls. From July 1997 until April 1997, the Audit Committee
consisted of Messrs. Mock and Pomeroy. Mr. Kelly became a member of the Audit
Committee contemporaneously with his becoming a director in April 1997, and Mr.
Pomeroy resigned from the Audit Committee at that time. The Audit Committee met
once during fiscal 1997.
The Compensation Committee, which consisted of Messrs. Mock and Pomeroy
during fiscal 1997, is responsible for determining salaries, incentives and
other forms of compensation for directors, officers and other employees of the
Company and administering various incentive compensation and benefit plans. The
Compensation Committee met twice during fiscal 1997.
4
PROPOSAL TWO
AMENDMENT OF 1995 EMPLOYEE STOCK PURCHASE PLAN
At the Annual Meeting, the shareholders are being asked to approve an
amendment of the Company's 1995 Employee Stock Purchase Plan (the "Purchase
Plan") to increase the number of shares reserved for issuance thereunder by
500,000 shares. The adoption of the Purchase Plan was approved by the Board of
Directors and the shareholders in October 1995. A total of 300,000 shares of
Common Stock have been reserved for issuance under the Purchase Plan without
giving effect to the 500,000 share increase proposed herein. As of September 24,
1997, a total of 283,295 shares had been issued to employees at a weighted
average purchase price of $6.06 per share under the Purchase Plan, and 16,705
shares remained available for future issuance.
The closing sales price of the Common Stock of the Company on the Nasdaq
National Market on September 30, 1997 was $13.00 per share. See "Purchase
Price."
Vote Required
The affirmative vote of a majority of the Votes Cast will be required to
approve the amendment to the Purchase Plan. For this purpose, "Votes Cast" is
defined to be the shares of the Company's Common Stock represented and voting at
the Annual Meeting. In addition, the affirmative votes must constitute at least
a majority of the required quorum, which quorum is a majority of the shares
outstanding at the Record Date. Votes that are cast against the proposal will be
counted for purposes of determining both (i) the presence or absence of a quorum
and (ii) the total number of Votes Cast with respect to the proposal.
Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business but will not be
included in the total number of Votes Cast with respect to this proposal.
The Board of Directors recommends that shareholders vote "FOR"
the Amendment to the Purchase Plan.
The essential terms of the Purchase Plan, as amended, are summarized as
follows:
Purpose
The purpose of the Purchase Plan is to provide employees of the Company and
of any subsidiary designated by the Board of Directors to participate in the
Purchase Plan with an opportunity to purchase Common Stock of the Company
through accumulated payroll deductions. The Purchase Plan is intended to qualify
as an "Employee Stock Purchase Plan" under Sections 421 and 423 of the Internal
Revenue Code of 1986, as amended (the "Code").
Administration
The Purchase Plan provides for administration by the Board of Directors of
the Company or a committee appointed by the Board. The Purchase Plan is
currently administered by the Board of Directors. All questions of
interpretation or application of the Purchase Plan are determined by the Board
of Directors or its appointed committee, and its decisions are final and binding
upon all participants. No charge for administrative or other costs may be made
against the payroll deductions of a participant in the Purchase Plan. Members of
the Board receive no additional compensation for their services in connection
with the administration of the Purchase Plan.
Offering Periods
The Purchase Plan has offering periods of twelve months, each divided into
two six-month purchase periods. The offering periods commence on or after the
first trading day after May 1 and November 1 of each year. The Board of
Directors has the power to alter the duration of the offering periods with
respect to future offerings without shareholder approval if such change is
announced at least five days prior to the scheduled beginning of the first
offering period to be affected.
5
Eligibility
Any person who (i) is a regular employee scheduled to work at least twenty
hours per week and more than five months in a calendar year and (ii) was
employed by the Company (or by any subsidiary designated from time to time by
the Board of Directors) on the enrollment date is eligible to participate in the
Purchase Plan. Eligible employees become participants in the Purchase Plan by
delivering to the Company's payroll office a subscription agreement authorizing
payroll deductions. An employee who becomes eligible to participate in the
Purchase Plan after the commencement of an offering period may not participate
in the Purchase Plan until the commencement of the next offering period.
Notwithstanding the foregoing, no employee is permitted to subscribe for
shares under the Purchase Plan (a) if, immediately after the grant of the
option, the employee would own, and/or hold outstanding options to purchase, 5%
or more of the voting stock or value of all classes of stock of the Company or
(b) if such a subscription would permit such employee's rights to purchase stock
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) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time. Furthermore, if the number of shares which would otherwise be placed under
option at the beginning of an offering period exceeds the number of shares then
available under the Purchase Plan, a pro rata allocation of the shares remaining
shall be made in as equitable a manner as is practicable.
Purchase Price
The price at which shares are sold to participating employees is
eighty-five percent (85%) of the lower of the fair market value per share of the
Common Stock on (i) the first day of the offering period or (ii) the last day of
the purchase period. The fair market value of the Common Stock on a given date
is determined by reference to the closing sales price of the Common Stock on the
Nasdaq National Market, as reported in The Wall Street Journal or such other
source as the Board deems reliable. The closing sale price per share of the
Company's Common Stock on the Nasdaq National Market on September 30, 1997 was
$13.00.
Payment of Purchase Price; Payroll Deductions
The purchase price of the shares is accumulated by payroll deductions over
the offering period. The deductions may not exceed 15% of a participant's
compensation. Compensation is defined as all base straight time gross earnings,
commissions, and payments for overtime. A participant may discontinue his or her
participation in the Purchase Plan and may decrease the rate of payroll
deductions at any time during the offering period. A participant may increase
the rate of payroll deductions at the beginning of each purchase period. Payroll
deductions shall commence on the first payday following the offering date and
shall continue at the same rate until the end of the offering period unless
sooner terminated as provided in the Purchase Plan. No interest shall accrue on
the payroll deductions of a participant in the Purchase Plan.
Purchase of Stock; Exercise of Option
By executing a subscription agreement to participate in the Purchase Plan,
the employee is entitled to have shares placed under option to him or her. The
maximum number of shares placed under option to a participant in an offering is
that number determined by dividing the amount of the participant's compensation
which he or she has elected to have withheld for the purchase period by the
lower of (i) 85% of the fair market value of a share of Common Stock at the
beginning of the offering period or (ii) 85% of the fair market value of a share
of Common Stock on the last day of the purchase period, in either case, as long
as the total number of shares issued to a participant for any purchase period
does not exceed a number determined by dividing $12,500 by the market value of a
share of Common Stock at the beginning of the offering period. Unless the
employee's participation is discontinued, the option for the purchase of shares
will be exercised automatically at the end of the purchase period at the
applicable price.
6
Withdrawal
While each participant in the Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest in a given offering may be terminated in whole, but not in part, by
signing and delivering to the Company a notice of withdrawal from the Purchase
Plan. Such withdrawal may be elected at any time prior to the end of the
applicable offering period. Any withdrawal by the employee during a given
offering automatically terminates the employee's interest in that offering.
Termination of Employment
Termination of a participant's employment for any reason, including
retirement or death, cancels his or her participation in the Purchase Plan
immediately. In such event, the payroll deductions credited to the participant's
account will be returned without interest to such participant or, in the case of
death, to the person or persons entitled thereto as specified by the employee in
the subscription agreement.
Adjustments Upon Changes in Capitalization or Merger
In the event of any changes in the capitalization of the Company, such as a
stock split or stock dividend, resulting in an increase or decrease in the
number of shares of Common Stock, effected without receipt of consideration by
the Company, appropriate adjustments will be made by the Company in the shares
subject to purchase and in the purchase price per share, subject to any required
action by the Company's shareholders.
In the event of the proposed dissolution or liquidation of the Company, the
offering period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the
Purchase Plan shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation, unless the Board determines, in the exercise of its sole discretion
and in lieu of such assumption or substitution, to shorten the offering period
then in progress. If the Board shortens the offering period in the event of a
merger or sale of assets, the Board shall notify each participant in writing at
least ten (10) business days prior to the new exercise date under the Purchase
Plan.
Nonassignability
No rights or accumulated payroll deductions of an employee under the
Purchase Plan may be pledged, assigned, or transferred for any reason and any
such attempt may be treated by the Company as an election to withdraw from the
Purchase Plan.
Amendment and Termination of the Purchase Plan
The Board of Directors may at any time amend or terminate the Purchase
Plan. Such termination will not affect options previously granted, provided that
an offering period may be terminated by the Board of Directors on any exercise
date if the Board determines that termination of the Plan is in the best
interest of the Company and its shareholders. In addition, no amendment may make
any changes in an option granted prior thereto which adversely affects the
rights of any participant. No amendment may be made to the Purchase Plan without
prior approval of the shareholders of the Company if such amendment would
increase the number of shares reserved under the Purchase Plan, materially
modify the eligibility requirements, or materially increase the benefits which
may accrue to participants under the Purchase Plan. Unless terminated earlier,
the Purchase Plan will terminate in October 2005.
Certain United States Federal Income Tax Information
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Section 423 of the
Code. Under these provisions, no income will be taxable to a participant at the
time of grant of an option or purchase of shares under the Purchase Plan. Upon
sale or other disposition of the shares (including by way of gift), the
participant will generally be subject to tax and the amount of the tax will
depend upon the period the participant has held the shares. Upon the sale
7
or exchange of the shares more than two years after the first day of the
offering period and one year after the date the shares are purchased, any gain
or loss will be treated as long-term capital gain or loss. For dispositions
occurring after July 28, 1997, long-term capital gains will be taxed at a rate
of 10% (for persons in the 15% tax bracket) or 20% (for other individuals) if
the stock was held for more than 18 months from the date of purchase. A rate of
28% will apply in the case of stock held more than one year after exercise but
not more than 18 months. If the shares are sold or otherwise disposed of more
than two years from the first day of the offering period and more than one year
from the date of the shares are purchased, the participant will recognize
ordinary income measured as the lesser of (a) the excess of the fair market
value of the shares at the time of such sale or disposition over the purchase
price, or (b) an amount equal to 15% of the fair market value of the shares as
of the first day of the offering period. Any additional gain will be treated as
long-term capital gain. If the shares are sold or otherwise disposed of before
the expiration of these holding periods, the participant will recognize ordinary
income generally measured as the excess of the fair market value of the shares
on the date the shares are purchased over the purchase price. Any additional
gain or loss of such sale or disposition will be long-term or short-term capital
gain or loss, depending on the holding period. Generally, the Company is
entitled to a deduction for ordinary income recognized by participants upon a
sale or disposition of shares prior to the expiration of the holding period(s)
described above.
The foregoing is only a summary of the effect of federal income taxation
upon the participant and the Company with respect to the shares purchased under
the Purchase Plan. Reference should be made to the applicable provisions of the
Code. In additional, the summary does not discuss the tax consequences of a
participant's death or the income tax laws of any state or foreign country in
which the participant may reside.
Participation in the Purchase Plan; New Plan Benefits
Participation in the Purchase Plan is voluntary and is dependent on each
eligible employee's election to participate and his or her determination as to
the level of payroll deductions. Accordingly, future purchases under the
Purchase Plan are not determinable. Non-employee directors are not eligible to
participate in the Purchase Plan.
The following table sets forth certain information regarding shares
purchased during the fiscal year ended June 30, 1997 by each of the executive
officers named in the Summary Compensation Table below who participated in the
Purchase Plan, all current executive officers as a group, and all other
employees who participated in the Purchase Plan as a group:
Number of Shares Dollar
Name of Individual or Identity of Group and Position Purchased (#) Value ($) (1)
- ---------------------------------------------------------------------------- ------------------ --------------
Brian R. Carlisle, Chairman of the Board and Chief Executive Officer ...... 3,908 $ 3,793
Charles S. Duncheon, Senior Vice President, Marketing and Sales ......... 2,513 $ 2,433
Bruce E. Shimano, Vice President, Research and Development and Secretary ... 2,093 $ 2,032
James E. Kuhl, Vice President, Operations ................................. 2,791 $ 2,708
Richard J. Casler, Vice President, Engineering ........................... 853 $ 832
All Current Executive Officers as a group (6 Persons) ..................... 14,919 $ 14,479
Non-Employee Directors as a group ....................................... * *
All Other Employees as a group .......................................... 206,544 $200,463
<FN>
- ------------
* Not eligible to participate in the Purchase Plan.
(1) Market value of shares on date of purchase minus the purchase price under
the Purchase Plan.
</FN>
8
PROPOSAL THREE
AMENDMENT OF 1993 STOCK PLAN
At the Annual Meeting, the shareholders are being asked to approve an
amendment of the Company's 1993 Stock Plan (the "Stock Plan") to increase the
number of shares of Common Stock reserved for issuance thereunder by 1,000,000
shares and to approve the material terms of the Stock Plan, including, but not
limited to, a limitation of 200,000 shares on the number of shares subject to
options granted to any optionee under the Stock Plan (400,000 shares in
connection with grants upon an optionee's initial employment). The Stock Plan
was adopted by the Board of Directors in April 1993 and was subsequently
approved by the shareholders in June 1993. In October 1995, the Board of
Directors adopted and the shareholders approved an amendment to the Stock Plan
to increase the number of shares of Common Stock reserved for issuance
thereunder by 650,000 shares. As of September 24, 1997, options to purchase an
aggregate of 1,224,300 shares of the Company's Common Stock were outstanding,
with a weighted average exercise price of $7.27 per share, and 80,423 shares
(excluding the 1,000,000 shares subject to shareholder approval at this Annual
Meeting) were available for future grant. In addition, 157,777 shares had been
purchased pursuant to exercise of stock options under the Stock Plan.
In August 1997, the Board of Directors effected certain amendments to the
Stock Plan in order to take advantage of the revision of certain rules and
regulations under Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), relating to the administration of the Stock Plan and the
eligibility of non-employee directors to receive option grants under the Stock
Plan. Previously, non-employee directors were not eligible to receive option
grants under the Stock Plan. In addition, the Board of Directors approved an
amendment to the Stock Plan, subject to shareholder approval, to increase the
number of shares reserved for issuance thereunder by 1,000,000 shares, thereby
increasing the total number of shares issuable under the Stock Plan from
1,462,500 to 2,462,500.
The Stock Plan, as amended, authorizes the Board of Directors to grant
stock options to eligible employees, non-employee directors and consultants of
the Company. The Stock Plan is structured to allow the Board of Directors broad
discretion in creating equity incentives in order to assist the Company in
attracting, retaining and motivating the best available personnel for the
successful conduct of the Company's business. The Company has had a
long-standing practice of linking key employee compensation to corporate
performance because it believes that this increases employee motivation to
improve shareholder value. The Company has, therefore, consistently included
equity incentives as a significant component of compensation for a broad range
of the Company's employees. This practice has enabled the Company to attract and
retain the talent that it continues to require.
The Board of Directors believes that the remaining shares available for
grant under the Stock Plan are insufficient to accomplish the purposes of the
Stock Plan described above. The Company anticipates there will be a need to hire
additional technical or management employees during fiscal 1998, and it will be
necessary to offer equity incentives to attract and motivate these individuals,
particularly in the extremely competitive job market in Silicon Valley. In
addition, in order to retain the services of valuable employees as the Company
matures and its employee base grows larger, it will be necessary to grant
additional options to current employees as older options become fully vested.
For these reasons, the Board of Directors recommends that the shareholders vote
"FOR" approval of the amendment to the Stock Plan and approval of the material
terms of the Stock Plan.
Vote Required
The affirmative vote of a majority of the Votes Cast will be required to
approve the amendment to the Stock Plan. For this purpose, "Votes Cast" is
defined to be the shares of the Company's Common Stock represented and voting of
the Annual Meeting. In addition, the affirmative votes must constitute at least
a majority of the required quorum, which quorum is a majority of the shares
outstanding at the Record Date. Votes that are cast against the proposal will be
counted for purposes of determining both
9
(i) the presence or absence of a quorum and (ii) the total number of Votes Cast
with respect to the proposal. Abstentions and broker non-votes will be counted
for purposes of determining the presence or absence of a quorum for the
transaction of business but will not be counted for purposes of determining the
total number of Votes Cast with respect to the proposal.
The essential terms of the Stock Plan are summarized as follows:
Purpose
The purposes of the Stock Plan are to attract, retain and motivate the best
available personnel for positions of substantial responsibility, to provide
additional incentive to employees, non-employee directors and consultants of the
Company, and to promote the success of the Company's business.
Administration
The Stock Plan may be administered by the Board of Directors of the Company
or by a Committee of the Board. The Stock Plan is currently being administered
by the Compensation Committee of the Board of Directors, except that grants to
executive officers are approved by the Compensation Committee, the Board of
Directors or other committees thereof to the extent required for the grants to
be considered as being from a discretionary plan pursuant to Rule 16b-3
promulgated under the Exchange Act or to the extent that the options are
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Code. The Board or the committee appointed to administer
the Stock Plan are referred to in this description as the "Administrator." The
Administrator determines the terms of options granted, including the exercise
price, number of shares subject to the option and the exercisability thereof.
All questions of interpretation are determined by the Administrator and its
decisions are final and binding upon all participants. Members of the Board or
its committees receive no additional compensation for their services in
connection with the administration of the Stock Plan.
Eligibility and Performance-based Compensation Limitations
The Stock Plan provides that either incentive or nonqualified stock options
may be granted to employees (including officers and employee directors) of the
Company or any of its designated subsidiaries. In addition, the Stock Plan
provides that nonqualified stock options may be granted to consultants of the
Company or any of its designated subsidiaries and to non-employee directors of
the Company. The Administrator selects the optionees and determines the number
of shares to be subject to each option. In making such determination, there are
taken into account the duties and responsibilities of the optionee, the value of
the optionee's services, the optionee's present and potential contribution to
the success of the Company and other relevant factors.
No employee will be granted, in any fiscal year of the Company, options to
purchase more than 200,000 shares of Common Stock, except that in connection
with an employee's initial employment, he or she may be granted options to
purchase up to an additional 200,000 shares. The foregoing limitation, which
will be adjusted proportionately in connection with any change in the Company's
capitalization, is intended to satisfy the requirements applicable to options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Code. In addition, there is a limit of $100,000 on the
aggregate fair market value of shares subject to all incentive stock options
which are exercisable for the first time in any calendar year by an employee.
Terms of Options
Each option granted pursuant to the Stock Plan is evidenced by a stock
option agreement between the Company and the optionee to whom such option is
granted and is subject to the following additional terms and conditions:
(1) Exercise of the Option: The Administrator determines when options
granted under the Stock Plan may be exercisable. An option is exercised by
giving written notice of exercise to the Company, specifying the number of
shares of Common Stock to be purchased and tendering payment to the Company of
the purchase price. Payment for shares issued upon exercise of an option may
consist of cash, check, promissory note, delivery of shares of the Company's
Common Stock previously owned for at least six months or that were not acquired
from the Company, subject to certain additional conditions. Payment
10
may also be made by a cashless exercise procedure under which the optionee
provides irrevocable instructions to a brokerage firm to sell the purchased
shares and to remit to the Company, out of the sale proceeds, an amount equal to
the exercise price plus all applicable withholding taxes or such other
consideration as determined by the Administrator and as permitted by the
California Corporations Code.
Options may be exercised at any time on or following the date the options
are first exercisable but in no event later than the expiration of the option as
set forth in the Notice of Grant. An Option may not be exercised for a fraction
of a share.
(2) Option Price: The option price of non-qualified options granted under
the Stock Plan is determined by the Administrator, provided that non-qualified
options intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Code must be granted with an exercise price
equal to the fair market value of the Company's Common Stock on the date of
grant. Incentive stock options granted under the Stock Plan must be granted with
an exercise price equal to the fair market value of the Company's Common Stock
on the date of grant, except in the case of grants of incentive stock options
granted to employees who, at the time of grant, own stock representing more than
10% of the voting power of all outstanding classes of the Company's capital
stock. In such cases, the applicable exercise price of incentive stock options
granted to such employees cannot be less than 110% of the fair market value of
the Company's Common Stock on the date of grant. The Stock Plan provides that,
because the Company's Common Stock is currently traded on the Nasdaq National
Market, the fair market value per share will be the closing price on the Nasdaq
National Market on the date of grant of the option, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable.
(3) Termination Of Employment: The Stock Plan provides that if the
optionee's continuous status as an employee, director or consultant by the
Company is terminated for any reason, other than death or disability, options
may be exercised to the extent they were exercisable on the date of termination
within 30 days (or such other period not exceeding three months in the case of
incentive stock options as the Administrator may determine) after such
termination, but in no event later than the expiration date of the term of such
option as set forth in the Notice of Grant. An optionee may be exempt from this
rule if the optionee is on a leave of absence approved by the Board or if the
optionee is transferred to a subsidiary or parent of the Company.
(4) Death: If an optionee should die while an employee, director or a
consultant of the Company, options may be exercised to the extent they were
exercisable on the date of termination at any time within six months after the
date of death but in no event later than the expiration of the term of such
option as set forth in the Notice of Grant.
(5) Disability: If an optionee's continuous status as an employee, director
or consultant is terminated due to a disability, options may be exercised to the
extent they were exercisable on the date of termination at any time within six
months from the date of such termination but in no event later than the
expiration of the term of such option as set forth in the Notice of Grant.
(6) Termination of Options: Options granted under the Stock Plan expire no
later than ten years from the date of grant. However, incentive stock options
granted to an optionee who, immediately before the grant of such option, owned
more than 10% of the total combined voting power of all classes of stock of the
Company or a parent or subsidiary corporation, may not have a term of more than
five years. No option may be exercised by any person after such expiration.
(7) Nontransferability of Options: Unless determined otherwise by the
Administrator, an option is not transferable by the optionee, other than by will
or the laws of descent and distribution, and is exercisable only by the optionee
during his or her lifetime or, in the event of death, by a person who acquires
the right to exercise the option by bequest or inheritance or by reason of the
death of the optionee. If the Administrator makes an option transferable, such
option shall contain such additional terms and conditions as the Administrator
deems appropriate.
11
Adjustment Upon Changes in Capitalization or Merger
In the event any change, such as a stock split or dividend, is made in the
Company's capitalization which results in an increase or decrease in the number
of outstanding shares of Common Stock without receipt of consideration by the
Company, an appropriate adjustment shall be made in the option price and in the
number of shares subject to each option. In the event of the proposed
dissolution or liquidation of the Company, the Board is required to notify
holders of options under the Stock Plan at least 15 days prior to the proposed
action, and all outstanding options not previously exercised will terminate
automatically upon such dissolution or liquidation.
In the event of a proposed sale of the assets of the Company or the merger
of the Company with or into another corporation, all options outstanding under
the Stock Plan will be assumed or an equivalent option will be substituted by
the successor corporation. If the successor corporation refuses to fully assume
all options, the Board shall have the discretion to (i) permit each optionee to
exercise such options prior to such transaction for all shares of Common Stock
subject to such options, including shares for which such options would not
otherwise be exercisable or (ii) terminate such options with respect to unvested
shares. Options outstanding under the Stock Plan will be considered assumed if,
following the merger or sale of assets, the option or right granted to the
Optionee by the purchaser or acquiror confers the right to receive for each
share of Common Stock subject to such options the consideration received in the
merger or sale of assets in exchange for outstanding shares of the Common Stock
on the date of the transaction; provided, however, that if the consideration
received in the merger or sale of assets was not solely common stock of the
successor corporation or its parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon
exercise of the Option to be solely common stock of the successor corporation or
its parent equal in fair market value to the per share consideration received by
holders of the Company's Common Stock in the merger or sale of assets.
Amendment and Termination
The Board of Directors may amend, alter, suspend, or terminate the Stock
Plan at any time or may terminate it without approval of the shareholders.
Shareholder approval is required for any amendment to the Stock Plan to the
extent necessary or desirable to comply with Rule 16b-3 promulgated under
Section 16 of the Exchange Act or Section 422 of the Code, or any successor rule
or statute or other applicable law, including the requirements of any exchange
or automatic quotation system on which the Company's Common Stock may be listed.
No action by the Board of Directors or shareholders may alter or impair any
option previously granted under the Stock Plan without the consent of the
optionee. Unless terminated earlier, the Stock Plan will terminate in June 2003.
Tax Information
Options granted under the Stock Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonqualified options.
Incentive Stock Options
The Code provides favorable federal income for tax treatment to holders of
options qualifying as incentive stock options. Even if designated as incentive
stock options in the applicable option agreement, any options in excess of the
$100,000 limit on exercisability in any calendar year will be deemed to be
non-qualified stock options and treated as described under the caption
"Non-Qualified Stock Options." If an option granted under the Stock Plan is
treated as an incentive stock option, the optionee will recognize no income upon
grant of the option and will recognize no income upon exercise of the Option
unless the alternative minimum tax rules apply. The Company will not be allowed
a deduction for federal tax purposes in connection with the exercise of an
incentive stock option.
Upon the sale or exchange of shares issued more than two years after grant
of the option and one year after exercise of the option (the "Incentive Stock
Option Holding Periods"), any gain or loss will be treated as long-term capital
gain or loss. For dispositions occurring after July 28, 1997, long-term capital
gains will be taxed at a rate of 10% (for persons in the 15% tax bracket) or 20%
(for other individuals),
12
if the stock was held for more than 18 months from the date of exercise. A rate
of 28% will apply in the case of stock held more than one year after exercise
but not more than 18 months. If the Incentive Stock Option Holding Periods are
not satisfied (i.e., the optionee makes a disqualifying disposition), the
optionee will recognize ordinary income at the time of sale or exchange equal to
the difference between the exercise price and the lower of (i) the fair market
value of the shares at the date of the option exercise or (ii) the sale price of
the shares. A different rule for measuring ordinary income upon such a premature
disposition may apply if the optionee is also an officer, director, or 10%
shareholder of the Company. Generally, the Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Any gain or loss recognized on such a premature disposition of the shares in
excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain or loss, depending on the holding period.
Non-Qualified Stock Options
All other options which do not qualify as incentive stock options are
referred to as non-qualified stock options. Non-qualified stock options granted
under the Stock Plan will not qualify for any special tax benefits to the
optionee. An optionee will not recognize any taxable income at the time he or
she is granted a non-qualified option. However, if shares subject to a
repurchase option of the Company (i.e., unvested shares) are purchased upon
exercise of a non-qualified option, no tax will be imposed at the time of
exercise with respect to such unvested shares (and the optionee's long-term
capital gain holding period will not begin at such time) unless the optionee
files an election with the Internal Revenue Service pursuant to Section 83(b) of
the Code within 30 days after the date of exercise. In the absence of such
election, the optionee is taxed (and the long-term capital gain holding period
begins) at the time at which the shares vest (i.e., the time at which the
repurchase option lapses with respect to such shares), and the optionee
recognizes compensation income in the amount of the difference between the value
of the shares at that time and the option exercise price. If a Section 83(b)
election is timely filed, the unvested shares will be treated for federal income
tax purposes as if they had been vested at the time of exercise. Taxation upon
exercise of the option may also be deferred (unless a Section 83(b) election is
filed) in the case of an optionee who is subject to Section 16(b) of the
Exchange Act.
Upon the exercise of an option, the optionee will recognize ordinary income
generally measured as the excess of the then fair market value of the shares
purchased over the purchase price. Any taxable income recognized in connection
with an option exercise by an optionee who is also an employee of the Company
will be subject to tax withholding by the Company. Upon a resale of the shares
issued upon exercise of a non-qualified option, any difference between the sales
price and the fair market value of the shares on the date of exercise of the
nonstatutory option (or the fair market value of the shares on the date they
become vested, if a Section 83(b) election has not been timely filed) will be
treated as capital gain or loss. Under current law, the federal tax rate on net
capital gain is capped at 28%. Capital losses are allowed in full against
capital gains plus $3,000 of other income.
Generally, the Company will be entitled to a tax deduction in the same
amount as the ordinary income recognized by the optionee with respect to shares
acquired upon exercise of a nonqualified option.
Alternative Minimum Tax
The exercise of an incentive stock option may subject the optionee to
alternative minimum tax ("AMT") under Section 55 of the Code. The AMT is
calculated by applying a tax rate of 26% to alternative minimum taxable income
("AMTI") up to $175,000, and 28% to AMTI above $175,000. AMTI is equal to (i)
taxable income adjusted for certain items (including the difference between the
exercise price and the fair market value of shares underlying an incentive stock
option at exercise), plus (ii) items of tax preference, less (iii) an exclusion
of $45,000 for joint returns and $33,750 for individual returns (including the
difference between the exercise price and the fair market value of shares
underlying an incentive stock option at exercise). However, these exclusion
amounts are reduced by an amount equal to 25% of the amount by which the
taxpayer's AMTI exceeds $150,000 and $112,500 for joint and individual filers,
respectively. Under certain circumstances, an optionee may affect the timing and
measurement of AMTI by filing an election with the Internal Revenue Service
under Section 83(b) within 30 days after the date of exercise of an incentive
stock option.
13
Tax Summary
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Stock Plan, does not purport to be complete, and does not
discuss the tax consequences of the optionee's death or the income tax laws of
any municipality, state or foreign country in which an optionee may reside.
Participation in the Stock Plan; New Plan Benefits
The grant of options under the Stock Plan to consultants, non-employee
directors and executive officers, including the officers named in the Summary
Compensation Table below, is subject to the discretion of the Administrator. As
of the date of this proxy statement, there has been no determination by the
Administrator with respect to future awards under the Stock Plan. Accordingly,
future awards are not determinable. The table of option grants under "Executive
Compensation and Other Matters Option Grants in Last Fiscal Year" provides
information with respect to the grant of options to the chief executive officer
and the other executive officers named in the Summary Compensation Table below
during fiscal 1997. Non-employee directors were not eligible to participate in
the Stock Plan in fiscal 1997. Information regarding options granted to
non-employee Directors pursuant to the 1995 Director Option Plan during fiscal
1997 is set forth under the heading "Executive Compensation and Other Matters
Compensation of Directors." During fiscal 1997, all current executive officers
as a group and all other employees as a group received options to purchase
255,000 shares and 188,630 shares, respectively, pursuant to the Stock Plan.
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
fiscal year ending June 30, 1998, and recommends that shareholders vote for
ratification of such appointment. Notwithstanding the selection, the Board of
Directors, in its discretion, may direct the appointment of new independent
auditors at any time during the year, if the Board of Directors feels that such
a change would be in the best interests of the Company and its shareholders. In
the event of a negative vote on ratification, the Board of Directors will
reconsider its selection.
Ernst & Young LLP has audited the Company's financial statements annually
since 1984. Representatives of Ernst & Young LLP are expected to be present at
the meeting with the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions.
The Board recommends a vote "FOR" the ratification of the appointment of
Ernst & Young LLP as the Company's independent auditors for the
fiscal year ending June 30, 1998.
14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock of the Company as of September 24, 1997 as to (i) each
person who is known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director, (iii) each of the
executive officers named in the Summary Compensation Table and (iv) all
directors and executive officers as a group.
Common Stock
Five Percent Shareholders, Beneficially Owned Approximate Percentage
Directors and Certain Executive Officers Owned Owned(1)
- ------------------------------------------------------------------------ -------------------- -----------------------
J.P. Morgan & Co., Incorporated (2) ................................. 823,300 9.9%
60 Wall Street
New York, NY 10260
Brian R. Carlisle (3) ................................................ 315,171 3.8%
Bruce E. Shimano (4) ................................................ 296,120 3.6%
John E. Pomeroy (5) ................................................... 11,915 *
Cary R. Mock (6) ...................................................... 7,749 *
Michael P. Kelly ...................................................... -- *
Charles S. Duncheon (7) ............................................. 161,302 1.9%
James E. Kuhl (8) ................................................... 47,696 *
Richard J. Casler, Jr. (9) .......................................... 18,061 *
All directors and executive officers as a group (9 persons) (10) ...... 896,140 10.4%
<FN>
- ------------
* Less than 1%
(1) Applicable percentage ownership is based on 8,280,785 shares of Common
Stock outstanding as of September 24, 1997 together with applicable
options for the shareholder. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
includes voting and investment power with respect to shares. Shares of
Common Stock subject to options currently exercisable or exercisable
within 60 days after September 24, 1997, are deemed outstanding for
computing the percentage ownership of the person holding the options, but
are not deemed outstanding for computing the percentage of any other
person.
(2) Reflects ownership as reported on Schedule 13G/A dated January 31, 1997
filed with the Securities and Exchange Commission. J.P. Morgan & Co.,
Incorporated has sole dispositive power as to all of these shares and has
sole voting power as to 495,500 of such shares.
(3) Includes 93,750 shares of Common Stock which may be acquired upon exercise
of stock options which are presently exercisable or will become
exercisable within 60 days of September 24, 1997. Mr. Carlisle is Chairman
of the Board and Chief Executive Officer of the Company.
(4) Includes 50,937 shares of Common Stock which may be acquired upon exercise
of stock options which are presently exercisable or will become
exercisable within 60 days of September 24, 1997 and 12,500 shares held by
Mr. Shimano as custodian for his children under the California Uniform
Transfers to Minors Act. Mr. Shimano is Vice President, Research and
Development, Secretary and a director of the Company.
(5) Includes 11,915 shares of Common Stock which may be acquired upon exercise
of stock options which are presently exercisable or will become
exercisable within 60 days of September 24, 1997.
(6) Includes 7,749 shares of Common Stock which may be acquired upon exercise
of stock options which are presently exercisable or will become
exercisable within 60 days of September 24, 1997.
(7) Includes 52,416 shares of Common Stock which may be acquired upon exercise
of stock options which are presently exercisable or will become
exercisable within 60 days of September 24, 1997 and 4,500 shares held by
Mr. Duncheon's wife. Mr. Duncheon is Senior Vice President, Marketing and
Sales of the Company.
(8) Includes 44,262 shares of Common Stock which may be acquired upon exercise
of stock options which are exercisable or will become exercisable within
60 days of September 24, 1997. In September 1997, Mr. Kuhl announced his
intention to resign from his position as the Company's Vice President,
Operations, but he has agreed to remain in his current position until a
successor is appointed.
(9) Includes 25,561 shares of Common Stock which may be acquired upon exercise
of stock options which are presently exercisable or will become
exercisable within 60 days of September 24, 1997. Mr. Casler is the
Company's Vice President, Engineering.
(10) Includes 310,943 shares of Common Stock which may be acquired upon
exercise of stock options which are presently exercisable or will become
exercisable within 60 days of September 24, 1997.
</FN>
15
EXECUTIVE COMPENSATION AND OTHER MATTERS
Executive Compensation
The following Summary Compensation Table sets forth certain information
regarding the compensation of the Chief Executive Officer of the Company and the
other four most highly compensated executive officers of the Company for
services rendered in all capacities to the Company for the fiscal year ended
June 30, 1997.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
-------------
Awards
-------------
Number of
Annual Compensation (1) Securities
Fiscal ------------------------ Underlying All Other
Name and Principal Position Year Salary Bonus (2) Options Compensation($)
- -------------------------------- -------- ---------- ----------- ------------- ----------------
Brian R. Carlisle ............ 1997 $218,782 $ -- 100,000 $ 13,949 (3)
Chairman of the Board and Chief 1996 210,000 25,000 -- 19,550 (4)
Executive Officer 1995 200,769 25,000 -- 13,294 (5)
Charles S. Duncheon ......... 1997 173,020 46,283 50,000 10,458 (3)
Senior Vice President, 1996 166,132 70,000 -- 13,586 (4)
Marketing and Sales 1995 158,246 63,968 1,250 18,125 (5)
Bruce E. Shimano ............ 1997 167,330 -- 75,000 10,382 (3)
Vice President, Research and 1996 160,677 15,000 -- 14,572 (4)
Development and Secretary 1995 153,016 17,075 12,789 12,789 (5)
James E. Kuhl(6) ............ 1997 157,574 -- 10,000 10,340 (3)
Vice President, Operations 1996 150,000 2,000 6,750 10,738 (4)
1995 135,220 2,610 6,750 9,847 (5)
Richard J. Casler ............ 1997 141,457 -- 10,000 9,283 (3)
Vice President, Engineering 1996 136,000 14,000 6,250 9,171 (4)
1995 124,818 15,444 1,250 40,581 (5)
<FN>
- ------------
(1) Other than salary and bonus described herein, the Company did not pay the
persons named in the Summary Compensation Table any compensation, including
incidental personal benefits, in excess of 10% of such executive officer's
salary.
(2) Bonus compensation consists in part of (i) bonuses earned in fiscal 1995
and paid in fiscal 1996 of $25,000 for Mr. Carlisle, $28,764 for Mr.
Duncheon, $17,075 for Mr. Shimano, $2,610 for Mr. Kuhl and $15,444 for Mr.
Casler and commission income of $35,204 for Mr. Duncheon; and (ii) bonuses
earned in fiscal 1996 and paid in fiscal 1997 of $25,000 for Mr. Carlisle,
$6,370 for Mr. Duncheon, $15,000 for Mr. Shimano, $2,000 for Mr. Kuhl and
$14,000 for Mr. Casler; and commission income of $63,630 for Mr. Duncheon.
There are no arrangements with the executive officers pursuant to which
bonuses are earned or paid, except as set forth under "Certain
Transactions."
(3) Other compensation for fiscal 1997 consisted of (i) group term life excess
premiums of $844 for Mr. Carlisle, $668 for Mr. Duncheon, $646 for Mr.
Shimano, $604 for Mr. Kuhl and $548 for Mr. Casler; (ii) automobile
allowances of $12,104 for Mr. Carlisle, $8,790 for Mr. Duncheon, $8,736 for
Mr. Shimano, $8,736 for Mr. Kuhl, and $8,736 for Mr. Casler; and (iii)
matching contributions under its 401(k) Plan of $1,000 for each of Messrs.
Carlisle, Duncheon, Shimano.
(4) Other compensation for fiscal 1996 consists of (i) group term life excess
premiums of $755 for Mr. Carlisle, $592 for Mr. Duncheon, $953 for Mr.
Shimano, $1,378 for Mr. Kuhl and $435 for Mr. Casler; (ii) automobile
allowances of $13,894 for Mr. Carlisle, $12,370 for Mr. Duncheon, $8,736
for Mr.
16
Shimano, $8,736 for Mr. Kuhl and $8,736 for Mr. Casler; (iii) matching
contributions of $624 by the Company under its 401(k) Plan for each of
Messrs. Carlisle, Duncheon, Shimano and Kuhl; and (iv) reimbursement of
accrued interest on outstanding note obligations to the Company of $4,277
for each of Messrs. Carlisle and Shimano. The note obligations of Messrs.
Carlisle and Shimano were incurred in connection with the purchase of
Common Stock of the Company and were repaid in January 1996.
(5) Other compensation for fiscal 1995 consists of (i) group term life excess
premiums of $723 for Mr. Carlisle, $570 for Mr. Duncheon, $551 for Mr.
Shimano, $487 for Mr. Kuhl and $449 for Mr. Casler; (ii) automobile
allowances of $9,103 for Mr. Carlisle, $10,407 for Mr. Duncheon, $8,770 for
Mr. Shimano, $8,736 for Mr. Kuhl and $9,643 for Mr. Casler; (iii) matching
contributions of $624 by the Company under its 401(k) Plan for each of
Messrs. Carlisle, Duncheon, Shimano and Kuhl; (iv) reimbursement of $29,999
of relocation expenses for Mr. Casler; (v) reimbursement of accrued
interest on outstanding note obligations to the Company of $2,844 for each
of Messrs. Carlisle and Shimano and $490 for Mr. Casler; and (vi)
reimbursement of certain interest expenses for Mr. Duncheon totaling
$6,524. The note obligations of Messrs. Carlisle and Shimano were incurred
in connection with the purchase of Common Stock of the Company and were
repaid in January 1996. The Company's interest expense reimbursements to
Mr. Casler relate to note obligations of Mr. Casler to the Company that
were repaid in June 1995. The Company's reimbursement of Mr. Duncheon's
interest expenses relates to a bank loan obtained by Mr. Duncheon.
(6) Mr. Kuhl resigned from his position as the Company's Vice President,
Operations in September 1997 but has agreed to remain as an employee of the
Company until a successor is appointed.
</FN>
17
OPTION GRANTS IN FISCAL YEAR 1997
The following table sets forth certain information regarding the grant of
stock options to the persons named in the Summary Compensation Table during the
fiscal year ended June 30, 1997.
Potential Realizable
Individual Grants Value at Assumed
------------------------------------------------------------------ Annual Rates
Number of Percentage of of Stock Price
Securities Total Options Appreciation for
Underlying Granted to Exercise Option Term(3)
Options Employees in Price Per Expiration ------------------------
Name Granted Fiscal Year Share(1)(2) Date 5% 10%
- ------------------------------- ----------------- --------------- ------------- ------------ ---------- -----------
Brian R. Carlisle ............ 100,000(4) 22.5 $ 6.50 8/8/06 $408,782 $1,035,933
Charles S. Duncheon ......... 50,000(4) 11.3 6.50 8/8/06 204,391 517,966
Bruce E. Shimano ............ 75,000(4) 16.9 6.50 8/8/06 306,586 776,949
James E. Kuhl(5) ............ 10,000(4) 2.3 6.50 8/8/06 40,878 103,593
Richard J. Casler, Jr. ...... 10,000(4) 2.3 6.50 8/8/06 40,878 103,593
<FN>
- ------------
* Less than 1%.
(1) Options were granted at an exercise price equal to the fair market value of
the Company's Common Stock on the date of grant.
(2) Exercise price may be paid in cash, promissory note, by delivery of
already-owned shares subject to certain conditions, or pursuant to a
cashless exercise procedure under which the optionee provides irrevocable
instructions to a brokerage firm to sell the purchased shares and to remit
to the Company, out of the sale proceeds, an amount equal to the exercise
price plus all applicable withholding taxes.
(3) Potential realizable value is based on the assumption that the Common Stock
of the Company appreciates at the annual rate shown (compounded annually)
from the date of grant until the expiration of the ten year option term.
These numbers are calculated based on the requirements promulgated by the
Securities and Exchange Commission and do not reflect the Company's
estimates of future stock price growth.
(4) Each of the options becomes exercisable as to 1|M/48 of the option shares
each month with full vesting occurring on the fourth anniversary of the
date of grant.
(5) Mr. Kuhl resigned from his position as the Company's Vice President,
Operations in September 1997 but has agreed to remain as an employee of the
Company until a successor is appointed.
</FN>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information regarding the exercise
of stock options in the last fiscal year by the persons named in the Summary
Compensation Table and the value of options held by such individuals as of June
30, 1997.
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Value June 30, 1997(#) June 30, 1997($)(2)
on Realized ------------------------------- ------------------------------
Name Exercise (1) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------- ---------- ---------- ------------- --------------- ------------- --------------
Brian R. Carlisle ............ -- -- 82,030 80,470 $ 508,912 $ 187,963
Charles S. Duncheon ......... 62,500 340,625 46,332 40,668 290,776 95,824
Bruce E. Shimano ............ 35,000 183,625 41,822 60,678 232,944 143,431
James E. Kuhl ............... -- -- 42,340 1,160 265,119 25,306
Richard J. Casler, Jr. ...... 7,250 52,427 23,738 11,512 154,091 24,647
<FN>
- ------------
(1) Market value of the Company's Common Stock at the exercise date minus the
exercise price.
(2) Market value of the Company's Common Stock at fiscal year-end minus the
exercise price.
</FN>
18
Employment Contracts and Change-In-Control Arrangements
The Company currently has no employment contracts with any of the executive
officers listed in the Summary Compensation Table, and no compensatory plan or
arrangement with such executive officers which are activated upon resignation,
termination or retirement of any such executive officer upon a change in control
of the Company.
Compensation of Directors
No director currently receives any cash compensation for attendance at
Board or committee meetings, except that directors will be reimbursed for travel
and lodging expenses incurred in attending Board and committee meetings. The
Company's 1995 Director Option Plan provides that options shall be granted to
non-employee directors of the Company pursuant to an automatic nondiscretionary
grant mechanism. In addition, upon joining the Board of Directors, each new
non-employee director is granted an option automatically to purchase 15,000
shares of Common Stock. Each non-employee director is subsequently granted an
option to purchase 3,000 shares of Common Stock at the first meeting of the
Board of Directors following the Annual Meeting of Shareholders. Each such
option is granted at the fair market value of the Common Stock on the date of
grant. The initial options granted to non-employee directors vest at a rate of
25% on the first anniversary date of grant and at a rate of 1/48th of the shares
per month thereafter, and subsequent options granted to non-employee directors
become exercisable at a rate of 1/48 of the shares subject to such additional
options on the monthly anniversary of the date of grant.
Compensation Committee Interlocks and Insider Participation
In fiscal 1997, the Compensation Committee consisted of Messrs. Mock and
Pomeroy. There are no interlocking relationships, as described by the Securities
and Exchange Commission, between the Compensation Committee members.
19
Report of Compensation Committee
This Report of the Compensation Committee shall not be deemed to be
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933, as
amended (the "Securities Act") or under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
"filed with" or "soliciting material" under such acts.
The following is the Report of the Compensation Committee describing the
compensation policies and rationales applicable to the Company's executive
officers with respect to the compensation paid to such executive officers for
the fiscal year ended June 30, 1997.
General. The responsibilities of the Compensation Committee are to
administer the Company's various incentive plans, including the Stock Plan and
the Purchase Plan (collectively, the "Equity Plans") and to set compensation
policies applicable to the Company's executive officers. The Committee's
fundamental policy is to offer the Company's executive officers competitive
compensation opportunities based upon overall Company performance, their
individual contribution to the financial success of the Company and their
personal performance. It is the Committee's objective to have a substantial
portion of each officer's compensation contingent upon the Company's
performance, as well as upon such officer's own level of performance.
Accordingly, each executive officer's compensation package is comprised of three
elements: (i) base salary, which is established primarily on the basis of
individual performance and market considerations; (ii) annual variable
performance awards payable in cash and tied to the Company's achievement of
financial performance goals and the executive's contribution, and (iii)
long-term stock-based incentive awards, which strengthen the mutuality of
interests between the executive officers and the shareholders.
Base Salary. Individual salaries are determined based on individual
experience, performance and breadth of responsibility within the Company. The
Compensation Committee reviews these factors for each executive officer each
year. In addition, the Compensation Committee considers executive officers'
salaries for relative competitiveness within the Company's industry.
Commissions and Bonuses. The Company has established a bonus plan for its
executive officers. However, no bonuses were paid pursuant to the bonus plan for
the fiscal year ended June 30, 1997 due to the Company's failure to achieve
certain levels of operating profit. In addition, the Company has a sales
commission plan for Mr. Duncheon pursuant to which Mr. Duncheon will receive
$46,283 in fiscal 1998 for commissions earned in fiscal 1997.
Equity Plans. The Equity Plans are long-term incentive plans for employees.
These plans are intended to align shareholder and employee interests by creating
a direct link between long-term rewards and the value of the Company's shares.
The Compensation Committee believes that long-term stock ownership by executive
officers and employees is an important factor in retaining valued employees and
in achieving growth in share value. The options utilize vesting periods that
encourage employees to continue in the employ of the Company. Because the value
of an option bears a direct relationship to the Company's stock price, the
Compensation Committee believes that options motivate executive officers and
employees to manage the Company in a manner which will benefit all shareholders.
The Equity Plans authorize the Compensation Committee to award stock
options to employees at any time. The size of stock option grants is determined
by a number of factors, including comparable grants to executive officers and
employees by other companies which compete in the Company's industry, as well as
the relative position and responsibilities of executive officers and other
employees with the Company, the individual performance of the executive officer
or employee over the previous fiscal year and the anticipated contribution of
the executive officer or employee to the attainment of the Company's long-term
strategic performance goals. The exercise price per share of each stock option
is generally equal to the prevailing market value of a share of the Company's
Common Stock on the date such option is granted. The Committee views stock
option grants as an important component of its long-term, performance-based
compensation philosophy.
20
CEO Compensation. The compensation of Brian R. Carlisle, President and
Chief Executive Officer, consists of base salary, typically an annual bonus and
occasionally incentive stock options. The Board of Directors periodically
reviews Mr. Carlisle's base salary and bonus and revises his compensation based
on the Board's overall evaluation of his performance toward the achievement of
the Company's financial, strategic and other goals, with consideration given to
competitive chief executive officer compensation information. The Compensation
Committee believes that the Company's success is dependent in part upon the
efforts of its Chief Executive Officer. In fiscal 1997, Mr. Carlisle earned a
base salary of $218,782 as set by the Compensation Committee. Mr. Carlisle was
granted stock options to purchase 100,000 shares of Common Stock at an exercise
price of $6.50 per share in fiscal 1997.
Tax Deductibility of Executive Compensation
The Board has considered the potential future effects of Section 162(m) of
the Internal Revenue Code on the compensation paid to the Company's executive
officers. Section 162(m) disallows a tax deduction for any publicly-held
corporation for individual compensation exceeding $1 million in any taxable year
for any of the executive officers named in the proxy statement, unless such
compensation is performance-based. The Company has adopted a policy that, where
reasonably practicable, the Company will seek to qualify the variable
compensation paid to its executive officers for an exemption from the
deductibility limitations of Section 162(m).
Respectfully submitted,
Cary R. Mock
John E. Pomeroy
The Compensation Committee
21
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
ADEPT TECHNOLOGY, INC., THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
The stock price performance graph set forth below under the caption
"Performance Graph" shall not be deemed to be incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act or under the Exchange Act, except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed "filed with" or "soliciting material" under such
Acts.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regualation S-T]
12/15/95 6/30/96 6/30/97
----------- --------- ----------
Adept Technology, Inc. 100 147 92
1996 Peer Group 100 82 112
1997 Peer Group 100 82 120
NASDAQ Stock Market (U.S.) 100 116 141
This graph assumes that $100 was invested on December 15, 1995 in the
Company's Common Stock and in the Nasdaq Stock Market US Index and in two Peer
Group Indices and that, with respect to the indices, all dividends were
reinvested. The Company has revised the component companies in its 1997 Peer
Group Index by deleting one company from the 1996 Peer Group Index and adding
two other companies to more fully reflect a peer group of companies whose lines
of business are comparable to the Company's. Pursuant to the rules of the
Securities and Exchange Commission, the Company is providing both peer group
indices herein for the transition year.
No dividends have been declared or paid on the Company's Common Stock. The
Company intends to retain its earnings, if any, to fund its business and does
not anticipate paying any cash dividends in the foreseeable future. Shareholder
returns over the period indicated should not be considered indicative of future
shareholder returns.
22
Certain Transactions
There were no reportable transactions under this item during fiscal 1997.
All future transactions, including loans, between the Company and its officers,
directors, principal shareholders and their affiliates will be approved by a
majority of the Board of Directors, including a majority of the independent and
disinterested outside directors, and will continue to be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the National
Association of Securities Dealers, Inc. Executive officers, directors and
greater than ten percent stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Based solely on
its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that during
fiscal 1997 all executive officers and directors of the Company complied with
all applicable filing requirements.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend.
ADJOURNMENT OF THE ANNUAL MEETING
In the event that there are not sufficient votes to approve the any
proposal incorporated herein at the time of the Annual Meeting, such proposal
could not be approved unless the Annual Meeting were adjourned in order to
permit further solicitation of proxies from holders of the Company's Common
Stock. Proxies that are being solicited by the Company's Board grant
discretionary authority to vote for any such adjournment, if necessary. If it is
necessary to adjourn the Annual Meeting, and the adjournment is for a period of
less than 45 days, no notice of the time and place of the adjourned meeting is
required to be given to the shareholders other than an announcement of such time
and place at the Annual Meeting. A majority of the shares represented and voting
at the Annual Meeting is required to approve such adjournment, regardless of
whether there is a quorum present at the Annual Meeting.
THE BOARD OF DIRECTORS
Dated: October 6, 1997
23
APPENDIX A
ADEPT TECHNOLOGY, INC.
1993 STOCK PLAN
(as amended September, 1997)
1. Purposes of the Plan. The purposes of this Stock Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, Directors and Consultants of the
Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board in accordance
with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Adept Technology, Inc., a California corporation.
(h) "Consultant" means any person, including an advisor, who is engaged
by the Company or any Parent or Subsidiary to render services and is compensated
for such services.
(i) "Continuous Status as an Employee, Director or Consultant" means
that the employment relationship, directorship or consulting relationship is not
interrupted or terminated by the Company, any Parent or Subsidiary. Continuous
Status as an Employee, Director or Consultant shall not be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; provided,
however, that for purposes of Incentive Stock Options, any such leave may not
exceed ninety (90) days, unless reemployment upon the expiration of such leave
is guaranteed by contract (including certain Company policies) or statute; or
(ii) transfers between locations of the Company or between the Company, its
Parent, its Subsidiaries or its successor.
(j) "Director" means a member of the Board.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported, as quoted on such exchange or system for
the last market trading day prior to the time of determination) as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(o) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(p) "Notice of Grant" means a written notice evidencing certain terms
and conditions of an individual Option grant. The Notice of Grant is part of the
Option Agreement.
-2-
(q) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(t) "Optioned Stock" means the Common Stock subject to an Option.
(u) "Optionee" means an Employee, Director or Consultant who receives
an Option.
(v) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(w) "Plan" means this 1993 Stock Plan.
(x) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(y) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 below.
(z) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,462,500. The Shares may be authorized, but unissued, or
reacquired Common Stock. However, should the Company reacquire Shares which were
issued pursuant to the exercise of an Option, such Shares shall not become
available for future grant under the Plan.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
-3-
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be administered
by different Committees with respect to different groups of Employees, Directors
and Consultants.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan
and in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(l) of the Plan;
(ii) to select the Employees, Directors and Consultants to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of Shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), and any
restriction or limitation regarding any Option or the Shares of
-4-
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan;
(x) to modify or amend each Option (subject to Section 13(b) of
the Plan);
(xi) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the
amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option previously granted by
the Administrator;
(xiii) to determine the terms and restrictions applicable to
Options; and
(xiv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted to Employees, Directors
and Consultants. Incentive Stock Options may be granted only to Employees. An
Employee, Director or Consultant who has been granted an Option may, if
otherwise eligible, be granted additional Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such
-5-
designations, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Options designated as Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year (under
all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such
excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect
to continuation of Optionee's employment relationship, directorship or
consulting relationship with the Company, nor shall it interfere in any way with
his or her right or the Company's right to terminate his or her employment
relationship, directorship or consulting relationship at any time, with or
without cause.
(e) The following limitations shall apply to grants of Options to
Employees:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 200,000 Shares, provided, however, that
in connection with his or her initial employment, an Employee may be granted
Options to purchase up to 400,000 Shares. To the extent such a new Employee is
granted Options to purchase more than 200,000 shares, he or she shall not be
entitled to additional grants during such fiscal year.
(ii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 11.
(iii) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 11), the cancelled Option will be counted against the
limits set forth in subsection (i) above. For this purpose, if the exercise
price of an Option is reduced, the transaction will be treated as a cancellation
of the Option and the grant of a new Option.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the shareholders of the Company
as described in Section 17 of the Plan. It shall continue in effect for a term
of ten (10) years unless sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Notice of Grant. However, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the
-6-
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Notice of Grant.
8. Option Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.
(b) At the time an Option is granted, the Administrator shall fix the
period within which the Option may be exercised and shall determine any
conditions which must be satisfied before the Option may be exercised. In so
doing, the Administrator may specify that an Option may not be exercised until
the completion of a service period.
(c) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an
-7-
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price, (6) any combination of the foregoing methods
of payment, or (7) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws. In making its
determination as to the type of consideration to accept, the Board shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(c) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Continuous Status as an Employee, Director or
Consultant. In the event of termination of an Optionee's Continuous Status as an
Employee, Director or Consultant with the Company, such Optionee may, but only
within such period of time as is determined by the Administrator, of at least
thirty (30) days, with such determination in the case of an Incentive Stock
Option not exceeding three (3) months after the date of such termination (but in
no event later than the expiration date of the term of such Option as set forth
in the Notice of Grant), exercise his or her Option to the extent that Optionee
was entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
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(c) Disability of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event of termination of an Optionee's Continuous Status as an
Employee, Director or Consultant as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only
within six (6) months from the date of such termination (but in no event later
than the expiration date of the term of such Option as set forth in the Notice
of Grant), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(d) Death of Optionee. In the event of termination of an Optionee's
Continuous Status as an Employee, Director or Consultant as a result of the
death of an Optionee, the Option may be exercised, at any time within six (6)
months following the date of death (but in no event later than the expiration
date of the term of such Option as set forth in the Notice of Grant), by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent the Optionee was entitled to
exercise the Option at the date of death. To the extent that Optionee was not
entitled to exercise the Option at the date of death, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.
11. Adjustments Upon Changes in Capitalization; Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares of Common Stock covered by
each outstanding Option, and the number of Shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per Share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued Shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not
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be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of Shares of stock of any class, or securities
convertible into Shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Board shall have the discretion either
(i) to permit each Optionee to exercise the Option as to all of the Optioned
Stock, including Shares as to which it would not otherwise be exercisable or
(ii) to terminate the Option with respect to unvested Shares. If an Option is
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee that the Option
shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, and the Option shall terminate upon the expiration of such period.
For the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or asset sale, the option confers the right to purchase,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or asset sale, the consideration (whether stock, cash, or other
securities or property) received in the merger or asset sale by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or asset sale was not
solely common stock of the successor corporation or its parent, the
Administrator may, with the consent of the successor corporation and the
participant, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its parent equal in fair market
value to the per Share consideration received by holders of Common Stock in the
merger or asset sale.
12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee, Director or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.
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13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Applicable Laws, the Company
shall obtain shareholder approval of any Plan amendment in such a manner and to
such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16. Agreements. Options shall be evidenced by written agreements in such
form as the Board shall approve from time to time.
17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.
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APPENDIX B
ADEPT TECHNOLOGY, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
(as amended September, 1997)
The following constitute the provisions of the 1995 Employee Stock Purchase
Plan of Adept Technology, Inc.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan, accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the common stock of the Company.
(d) "Company" shall mean Adept Technology, Inc. and any Designated
Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross earnings,
commissions, and payments for overtime.
(f) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "Employee" shall mean any individual who is an employee of the
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the
91st day of such leave.
(h) "Enrollment Date" shall mean the first day of each Offering Period.
(i) "Exercise Date" shall mean the last day of each Purchase Period.
(j) "Fair Market Value" shall mean, as of any date, the value of Common
Stock determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sale price for the Common Stock (or the
mean of the closing bid and asked prices, if no sales were reported), as quoted
on such exchange (or the exchange with the greatest volume of trading in Common
Stock) or system on the date of such determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable; or
(2) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of such determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable; or
(3) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the Board.
(k) "Offering Period" shall mean the period of approximately twelve
(12) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after May 1 and November 1
of each year and terminating on the last Trading Day in the period ending twelve
months later. The duration and timing of Offering Periods may be changed
pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(n) "Purchase Period" shall mean the approximately six month period
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date.
(o) "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which have not yet been exercised and the number
of shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.
(p) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which national stock exchanges
and the Nasdaq System are open for trading.
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3. Eligibility.
(a) Any Employee (as defined in Section 2(g)), who shall be employed by
the Company on a given Enrollment Date shall be eligible to participate in the
Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own capital stock of
the Company and/or hold outstanding options to purchase such stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Subsidiary, or (ii) which
permits his or her rights to purchase stock 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) worth of stock (determined at the fair
market value of the shares at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1 and November 1 each year, or on such other date as
the Board shall determine, and continuing thereafter until terminated in
accordance with Section 19 hereof. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding fifteen percent (15%) of the
Compensation which he or she receives on each pay day during the Offering
Period, and the aggregate of such payroll deductions during the Offering Period
shall not exceed fifteen percent (15%) of the participant's Compensation during
said Offering Period.
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(b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and will be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof by completing or filing with the Company a new
subscription agreement authorizing a change in payroll deduction rate. The Board
may, in its discretion, limit the number of participation rate changes during
any Offering Period. The change in rate shall be effective with the first full
payroll period following five (5) business days after the Company's receipt of
the new subscription agreement unless the Company elects to process a given
change in participation more quickly. A participant's subscription agreement
shall remain in effect for successive Offering Periods unless terminated as
provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to 0% at such time during any Purchase
Period which is scheduled to end during the current calendar year (the "Current
Purchase Period") that the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Purchase Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Purchase Period which is scheduled to
end in the following calendar year, unless terminated by the participant as
provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at the
time some or all of the Company's Common Stock issued under the Plan is disposed
of, the participant must make adequate provision for the Company's federal,
state, or other tax withholding obligations, if any, which arise upon the
exercise of the option or the disposition of the Common Stock. At any time, the
Company may, but will not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than a
number of Shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof, and
shall expire on the last day of the Offering Period.
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8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on which a
purchase of shares occurs, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account will be paid to such participant promptly after
receipt of notice of withdrawal and such participant's option for the Offering
Period will be automatically terminated, and no further payroll deductions for
the purchase of shares will be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions will not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.
(b) Upon a participant's ceasing to be an Employee (as defined in
Section 2(g) hereof), for any reason, he or she will be deemed to have elected
to withdraw from the Plan and the payroll deductions credited to such
participant's account during the Offering Period but not yet used to exercise
the option will be returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under Section 14 hereof, and
such participant's option will be automatically terminated. The preceding
sentence notwithstanding, a participant who receives payment in lieu of notice
of termination of employment shall be treated as continuing to be an Employee
for the participant's customary number of hours per week of employment during
the period in which the participant is subject to such payment in lieu of
notice.
11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be Eight Hundred Thousand
(800,000) shares, subject to adjustment upon changes in capitalization of the
Company as provided in Section 18 hereof. If, on
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a given Exercise Date, the number of shares with respect to which options are to
be exercised exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.
(b) The participant will have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
13. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 14 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 10 hereof.
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16. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
18. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the Reserves as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration". Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Periods will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each option under the Plan shall be assumed or
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board determines,
in the exercise of its sole discretion and in lieu of such assumption or
substitution, to shorten the Offering Periods then in progress by setting a new
Exercise Date (the "New Exercise Date"). If the Board shortens the Offering
Periods then in progress in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for his option has been changed to the New Exercise Date and that his
option will be exercised automatically on the New Exercise Date, unless prior to
such date he has withdrawn from the Offering Period as provided in Section 10
hereof. For purposes of this paragraph, an option granted under the Plan shall
be deemed to be assumed if, following the sale of assets or merger, the option
confers the right to purchase, for each share of option stock subject to the
option immediately prior to the sale of assets or merger, the consideration
(whether stock, cash or other securities or property) received in the sale of
assets or merger by holders of Common Stock for each
-7-
share of Common Stock held on the effective date of the transaction (and if such
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of Common Stock);
provided, however, that if such consideration received in the sale of assets or
merger was not solely common stock of the successor corporation or its parent
(as defined in Section 424(e) of the Code), the Board may, with the consent of
the successor corporation, provide for the consideration to be received upon
exercise of the option to be solely common stock of the successor corporation or
its parent equal in fair market value to the per share consideration received by
holders of Common Stock and the sale of assets or merger.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 18 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best
interests of the Company and its shareholders. Except as provided in Section 18
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law or regulation), the Company shall obtain shareholder
approval in such a manner and to such a degree as required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
-8-
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
22. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 19 hereof.
23. Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations or stock exchange or quotation
system rules, if the Fair Market Value of the Common Stock on any Exercise Date
in an Offering Period is lower than the Fair Market Value of the Common Stock on
the Enrollment Date of such Offering Period, then all participants in such
Offering Period shall be automatically withdrawn from such Offering Period
immediately after the exercise of their option on such Exercise Date and
automatically re-enrolled in the immediately following Offering Period as of the
first day thereof.
-9-
EXHIBIT A
ADEPT TECHNOLOGY, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. ___________________________________ hereby elects to participate in the
Adept Technology, Inc. 1995 Employee Stock Purchase Plan (the "Employee
Stock Purchase Plan") and subscribes to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement
and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday [(0-15%)] during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise
my option.
4. I have received a copy of the complete "Adept Technology, Inc. 1995
Employee Stock Purchase Plan." I understand that my participation in
the Employee Stock Purchase Plan is in all respects subject to the
terms of the Plan. I understand that my ability to exercise the option
under this Subscription Agreement is subject to obtaining shareholder
approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should
be issued in the name(s) of (Employee or Employee and spouse only):
_________________________________.
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after
the Exercise Date, I will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in an
amount equal to the excess of the fair market value of the shares at
the time such shares were purchased over the price which I paid for the
shares. I hereby agree to notify the Company in writing within 30 days
after the date of any disposition of my shares and I will make adequate
provision for Federal,
state or other tax withholding obligations, if any, which arise upon
the disposition of the Common Stock. The Company may, but will not be
obligated to, withhold from my compensation the amount necessary to
meet any applicable withholding obligation including any withholding
necessary to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common Stock by
me. If I dispose of such shares at any time after the expiration of the
2-year and 1-year holding periods, I understand that I will be treated
for federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as
ordinary income only to the extent of an amount equal to the lesser of
(1) the excess of the fair market value of the shares at the time of
such disposition over the purchase price which I paid for the shares,
or (2) 15% of the fair market value of the shares on the first day of
the Offering Period. The remainder of the gain, if any, recognized on
such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print) __________________________________________________________
(First) (Middle) (Last)
____________________________ __________________________________________
Relationship
__________________________________________
(Address)
-2-
Employee's Social
Security Number: __________________________________________
Employee's Address: __________________________________________
__________________________________________
__________________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated: _________________________ __________________________________________
Signature of Employee
__________________________________________
Spouse's Signature
(If beneficiary other than spouse)
-3-
EXHIBIT B
ADEPT TECHNOLOGY, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Adept Technology,
Inc. 1995 Employee Stock Purchase Plan which began on ____________, 19____ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.
Name and Address of Participant:
________________________________
________________________________
________________________________
Signature:
________________________________
Date:__________________________
APPENDIX C
PROXY ADEPT TECHNOLOGY, INC. PROXY
1997 ANNUAL MEETING OF SHAREHOLDERS
October 31, 1997
This Proxy is solicited on behalf of the Board of Directors
The undersigned shareholder of ADEPT TECHNOLOGY, INC., a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated October 6, 1997, and hereby
appoints Brian R. Carlisle and Betsy A. Lange, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 1997 Annual Meeting
of Shareholders of ADEPT TECHNOLOGY, INC. to be held on October 31, 1997 at 9:00
a.m. local time, at the Santa Clara Marriott, 2700 Mission College Boulevard,
Santa Clara, California 95054 and at any adjournment or adjournments thereof,
and to vote all shares of Common Stock which the undersigned would be entitled
to vote if then and there personally present, on the matters set forth on the
reverse side.
(Continued, and to be signed on the other side)
[X] Please mark
your votes
as this
WITHHOLD
FOR FOR ALL
[ ] [ ]
1. ELECTION OF DIRECTORS:
NOMINEES:
Brian R. Carlisle,
Bruce E. Shimano, Michael P. Kelly,
Cary R. Mock, John E. Pomeroy
INSTRUCTION: If you wish to withhold authority to vote for any individual
nominee, write that nominee's name in the
space provided below.
- --------------------------------------------------------------------------------
2. Proposal to approve an amendment to the 1995 Employee Stock Purchase Plan to FOR AGAINST ABSTAIN
increase by 500,000 shares to 800,000 the number of shares reserved for [ ] [ ] [ ]
issuance thereunder.
3. Proposal to approve an amendment to the 1993 Stock Plan to increase by FOR AGAINST ABSTAIN
1,000,000 shares to 2,462,500 the number of shares reserved for issuance [ ] [ ] [ ]
thereunder and to approve the material terms of the 1993 Stock Plan.
4. Proposal to ratify the appointment of Ernst & Young LLP as the independent FOR AGAINST ABSTAIN
auditors of the Company for the fiscal year ending June 30, 1998. [ ] [ ] [ ]
and, in their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment or adjournments thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE AMENDMENT OF THE EMPLOYEE
STOCK PURCHASE PLAN, FOR THE AMENDMENT AND APPROVAL OF THE 1993 STOCK PLAN, FOR
THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
Signature(s) ------------------------------------------------------------------ Dated---------------------- , 1997
(This Proxy should be marked, dated and signed by the shareholder(s) exactly as
his or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)