As filed with the Securities and Exchange Commission on November 9, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Discovery Communications, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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35-2333914
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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One Discovery Place
Silver Spring, Maryland
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20910
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(Address of Principal Executive Offices)
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(Zip Code)
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Discovery Communications Inc.
2011 International Employee Stock Purchase Plan
(Full Title of the Plan)
Bruce L. Campbell
Discovery Communications, Inc.
One Discovery Place
Silver Spring, Maryland 20910
(Name and Address of Agent For Service)
(240) 662-2000
(Telephone Number, Including Area Code, of Agent For Service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b of the Exchange Act.
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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CALCULATION OF REGISTRATION FEE
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Title of
Securities to be Registered
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Amount
to be
Registered(1)
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Proposed
Maximum
Offering Price
Per Share
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Proposed
Maximum Aggregate
Offering Price
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Amount of
Registration Fee
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Series A Common Stock, $0.01 par value per share
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1,500,000 shares
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$43.45(2)
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$65,175,000.00(3)
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$7,469.06
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(1)
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In accordance with Rule 416 under the Securities Act of 1933, as amended, this registration statement shall be deemed to cover any additional securities that may from
time to time be offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
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(2)
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Consists of 1,500,000 shares of Series A Common Stock issuable under the Discovery Communications, Inc. 2011 International Employee Stock Purchase Plan (the
“Plan”).
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(3)
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Estimated solely for the purpose of calculating the registration fee pursuant to Rules 457(c) and 457(h) of the Securities Act of 1933, as amended, and based upon the
average of the high and low prices of the Registrant’s Series A Common Stock as reported on the Nasdaq Global Select Market on November 2, 2011.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan
Information.
The information required by Item 1 is included in documents sent or given to participants in the plans
covered by this registration statement pursuant to Rule 428(b)(1) of the Securities Act of 1933, as amended (the “Securities Act”).
Item 2. Registrant Information and Employee Plan Annual Information.
The written statement required by Item 2 is included in documents sent or given to participants in the plans covered by this
registration statement pursuant to Rule 428(b)(1) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The registrant is
subject to the informational and reporting requirements of Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the “Commission”). The following documents, which are on file with the Commission, are incorporated in this registration statement by reference:
(a) The registrant’s latest annual report filed pursuant to Section 13(a) or 15(d) of the Exchange Act or the latest prospectus
filed pursuant to Rule 424(b) under the Securities Act that contains audited financial statements for the registrant’s latest fiscal year for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the
document referred to in (a) above.
(c) The description of the securities contained in the registrant’s registration
statement on Form 8-A filed under the Exchange Act, including any amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be part hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this registration statement to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
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Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Wilmer Cutler Pickering Hale and Dorr LLP has opined as to the legality of the securities being offered by this registration statement.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (“DGCL”) provides, generally, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or proceeding (except actions by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation
against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. A corporation may similarly indemnify such person
for expenses actually and reasonably incurred by such person in connection with the defense or settlement of any action or suit by or in the right of the corporation, provided that such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and, in the case of claims, issues and matters as to which such person shall have been adjudged liable to the corporation, provided that a court shall have determined, upon
application, that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.
Section 102(b)(7) of the DGCL provides, generally, that the certificate of incorporation may contain a provision eliminating or
limiting the personal liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that such provision may not eliminate or limit the liability of a director (i) for
any breach of the director’s duty of loyalty to the corporation or its shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of Title
8 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. No such provision may eliminate or limit the liability of a director for any act or omission occurring prior to
the date when such provision became effective.
Article V, Section E of the Restated Certificate of Incorporation (the
“Charter”) of the registrant provides as follows:
1.
Limitation On Liability
. To the fullest extent
permitted by the DGCL as the same exists or may hereafter be amended, a director of Discovery shall not be liable to Discovery or any of its stockholders for monetary damages for breach of fiduciary duty as a director. Any amendment, repeal or
modification of this paragraph 1 shall be prospective only and shall not adversely affect any limitation, right or protection of a director of Discovery existing at the time of such amendment, repeal or modification.
2.
Indemnification
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(a)
Right to Indemnification
. Discovery shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was
or is
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made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason
of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of Discovery or while a director or officer of Discovery is or was serving at the request of Discovery as a director, officer, employee,
representative or agent of another corporation or of a partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered
and expenses (including attorneys’ fees) incurred by such person. Such right of indemnification shall inure whether or not the claim asserted is based on matters that antedate the adoption of Article V, Section E of the Charter. Discovery shall
be required to indemnify or make advances to a person in connection with a proceeding (or part thereof) initiated by such person only if the proceeding (or part thereof) was authorized by the board of directors of Discovery.
(b)
Prepayment of Expenses
. Discovery shall pay the expenses (including attorneys’ fees) incurred by a director or officer in
defending any proceeding in advance of its final disposition; provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking
by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this paragraph or otherwise.
(c)
Claims
. If a claim for indemnification or payment of expenses under this paragraph is not paid in full within 30 days after a
written claim therefor has been received by Discovery, the claimant may file suit to recover the unpaid amount of such claim and, to the extent permitted by law, shall be entitled to be paid the expense of prosecuting such claim. In any such action
Discovery shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.
(d)
Non-Exclusivity of Rights
. The rights conferred on any person by this paragraph shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute,
provision of the Charter, the bylaws of Discovery, agreement, vote of stockholders or resolution of disinterested directors or otherwise.
(e)
Insurance
. The board of directors may, to the full extent permitted by applicable law as it presently exists, or may hereafter be amended from time to time, authorize an appropriate officer or
officers to purchase and maintain at Discovery’s expense insurance: (i) to indemnify Discovery for any obligation which it incurs as a result of the indemnification of directors and officers under the provisions of Article V, Section E of
the Charter; and (ii) to indemnify or insure directors and officers against liability in instances in which they may not otherwise be indemnified by Discovery under the provisions of Article V, Section E of the Charter.
(f)
Other Indemnification
. Discovery’s obligation, if any, to indemnify any person who was or is serving at its request as a
director, officer, employee or agent of another corporation, partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity shall be reduced by any amount such person may collect as indemnification from such other
corporation, partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity.
3.
Amendment or
Repeal
. Any amendment, modification or repeal of the foregoing provisions of Article V, Section E of the Charter shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the
time of such amendment, modification or repeal.
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Sections 9 through 15 of Article II of the registrant’s By-laws, as amended, contain
provisions that are substantially similar to the Charter provisions described above.
Item 7. Exemption from
Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibit Index immediately preceding the
exhibits is incorporated herein by reference.
Item 9. Undertakings.
1.
Item 512(a) of Regulation S-K
. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration
statement;
provided, however,
that paragraphs (i) and (ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
2.
Item 512(b) of Regulation S-K
. The undersigned registrant hereby
undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
3.
Item 512(h) of Regulation S-K
. Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant pursuant to
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the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Silver Spring, State of Maryland, on this 9th day of November, 2011.
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DISCOVERY COMMUNICATIONS, INC.
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By:
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/s/ Bruce L. Campbell
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Bruce L. Campbell
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Chief Development Officer, General Counsel and Corporate Secretary
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POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Discovery Communications, Inc. hereby severally constitute and appoint Bruce L. Campbell,
and Bradley E. Singer, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the registration statement on Form S-8 filed herewith
and any and all subsequent amendments to said registration statement, and generally to do all such things in our names and on our behalf in our capacities as officers and directors to enable Discovery Communications, Inc. to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration
statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ David M. Zaslav
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President and Chief Executive Officer, and Director (Principal Executive Officer)
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November 9, 2011
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David M. Zaslav
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/s/ John S. Hendricks
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Founder, Chairman of the Board, and Director
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November 9, 2011
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John S. Hendricks
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/s/ Bradley E. Singer
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Senior Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
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November 9, 2011
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Bradley E. Singer
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/s/ Thomas R. Colan
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Executive Vice President and Chief Accounting Officer
(Principal Accounting Officer)
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November 9, 2011
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Thomas R. Colan
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/s/ Robert R. Beck
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Director
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November 9, 2011
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Robert R. Beck
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Director
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November , 2011
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Robert R. Bennett
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/s/ Paul A. Gould
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Director
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November 9, 2011
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Paul A. Gould
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/s/ Lawrence S. Kramer
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Director
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November 9, 2011
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Lawrence S. Kramer
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/s/ John C. Malone
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Director
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November 9, 2011
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John C. Malone
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/s/ Robert J. Miron
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Director
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November 9, 2011
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Robert J. Miron
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/s/ Steven A. Miron
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Director
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November 9, 2011
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Steven A. Miron
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/s/ M. LaVoy Robison
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Director
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November 9, 2011
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M. LaVoy Robison
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/s/ J. David Wargo
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Director
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November 9, 2011
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J. David Wargo
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INDEX TO EXHIBITS
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Number
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Description
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4.1
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Form of Restated Certificate of Incorporation of Discovery Communications, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Registration Statement on Form
S-4, SEC File No. 333-151586)
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4.2
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Bylaws of Discovery Communications, Inc., as amended (incorporated by reference to Exhibit 3.2 to the Form 8-K filed on November 16, 2009, SEC File No. 001-34177)
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5
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Opinion of Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Registrant
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23.1
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Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5)
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23.2
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Consent of PricewaterhouseCoopers LLP
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24
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Power of attorney (included on the signature pages of this registration statement)
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99.1
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Discovery Communications, Inc. 2011 International Employee Stock Purchase Plan
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Exhibit 5
November 9, 2011
Discovery Communications, Inc.
One Discovery Place
Silver Spring, Maryland 20910
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Re:
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Discovery Communications, Inc.
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2011 International Employee Stock Purchase Plan
Ladies and Gentlemen:
We have assisted in the preparation of a Registration Statement on Form S-8 (the “
Registration Statement
”) to be filed with the
Securities and Exchange Commission (the “
Commission
”) under the Securities Act of 1933, as amended (the “
Securities Act
”), relating to an aggregate of 1,500,000 shares of Series A common stock, $0.01 par value per
share (the “
Shares
”), of Discovery Communications, Inc., a Delaware corporation (the “
Company
”), issuable under the Discovery Communications, Inc. 2011 International Employee Stock Purchase Plan (the
“
Plan
”).
We have examined the Certificate of Incorporation and By-laws of the Company, each as amended and restated to date,
and originals, or copies certified to our satisfaction, of all pertinent records of the meetings of the directors and stockholders of the Company, the Registration Statement and such other documents relating to the Company as we have deemed material
for the purposes of this opinion.
In our examination of the foregoing documents, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, photostatic or other copies, the authenticity of the originals of any such documents and the legal
competence of all signatories to such documents.
We assume that the appropriate action will be taken, prior to the offer and sale of the
Shares in accordance with the Plan, to register and qualify the Shares for sale under all applicable state securities or “blue sky” laws.
We express no opinion herein as to the laws of any state or jurisdiction other than the General Corporation Law of the State of Delaware and the federal laws of the United States of America.
It is understood that this opinion is to be used only in connection with the offer and sale of the Shares while the Registration Statement is in effect.
Please note that we are opining only as to the matters expressly set forth herein, and no opinion should be inferred as to any other matters.
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Discovery Communications, Inc.
November 9, 2011
Page 2
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Based on the foregoing, we are of the opinion that the Shares have been duly authorized for issuance
and, when the Shares are issued and paid for in accordance with the terms and conditions of the Plan, the Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission in connection with the Registration Statement in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the
Securities Act. In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.
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Very truly yours,
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WILMER CUTLER PICKERING
HALE AND DORR LLP
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By:
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/s/ Erika L. Robinson
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Erika L. Robinson, a Partner
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Exhibit 99.1
DISCOVERY COMMUNICATIONS, INC.
2011 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
August 15, 2011
This Plan provides eligible employees of certain non-U.S. affiliates (the “
Eligible Employers
”) of Discovery Communications, Inc. (the “
Company
”) with
opportunities to purchase shares of the Company’s Series A common stock, $0.01 par value (the “
Common Stock
”). Shares of Common Stock for this Plan will be drawn from the shares authorized under the Company’s 2011
Employee Stock Purchase Plan (the “
DESPP
”). The Company’s Compensation Committee (the “
Committee
”) of the Company’s Board of Directors (the “
Board
”) has authorized the
use of 5 million shares of Common Stock in the aggregate from the DESPP, subject to any adjustment in parallel with the adjustments made under Section 15 of the DESPP, with the Plan commencing as determined by the Committee. The Plan is
not to be treated as part of the DESPP, other than with respect to the source of shares, for any purpose under Section 423 of the Internal Revenue Code of 1986, as amended (the “
Code
”).
1.
Administration
. The Plan will be administered by the Board or the Committee. The Board or the Committee has authority to make
rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto will be final and conclusive.
2.
Eligibility
. All employees of the Eligible Employers designated by the Board or the Committee from time to time (a “
Designated Affiliate
”), are eligible to participate in
any one or more of the offerings of Options (as defined in Section 9) to purchase Common Stock under the Plan provided that:
(a) to the extent local law permits such a requirement, they are customarily employed by a Designated Affiliate for more than 20 hours a week;
(b) they have been employed by a Designated Affiliate for at least 30 days before enrolling in the Plan; and
(c) they are employees of a Designated Affiliate on the first day of the applicable Plan Period
(as defined below).
No employee may be granted an Option hereunder if such employee, immediately after the Option is
granted, owns 5% or more of the total combined voting power or value of the stock of the Company or any subsidiary. For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code apply in determining the
stock ownership of an employee, and all stock that the employee has a contractual right to purchase will be treated as stock owned by the employee.
The Company retains the discretion to determine which eligible employees may participate in an offering consistent with Treasury Regulation Sections 1.423-2(e) and (f).
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3.
Offerings and Plan Periods
. The Company will make one or more offerings
(“
Offerings
”) to employees to purchase stock under this Plan. Offerings may apply to all Designated Affiliates or to any combination of those entities. As specified in the Plan, the Board or the Committee can vary many
operational features of the Plan on an Offering by Offering basis and can determine that a decision made for one Offering will or will not continue to apply to future Offerings until prospectively revised. Any decisions made on an Offering by
Offering basis must comply with the requirement to provide equal rights and privileges to all participants, except as applicable local law otherwise requires. Offerings will begin on such dates as the Board or the Committee may determine from time
to time (the “
Offering Commencement Dates
”) and will run for a specified number of up to 24 months (a “
Plan Period
”) during which employee contributions will be made and held for the purchase of Common
Stock at the end of the Plan Period. The Board or the Committee may, at its discretion and on an Offering by Offering basis, choose differing Plan Periods of 24 months or less and/or choose differing Offering Commencement Dates.
4.
Participation
. An employee eligible on the Offering Commencement Date of any Offering may participate in such Offering by
completing and forwarding such documentation in such manner as the Committee may determine at least 10 days before the applicable Offering Commencement Date. The form will authorize a regular payroll deduction from the Compensation
received by the employee during the Plan Period. Unless an employee files a new form or withdraws from the Plan, his or her deductions and purchases will continue at the same rate for future Offerings under the Plan as long as the Plan remains in
effect. The term “Compensation” means the employee’s total cash compensation from the Designated Affiliates, excluding allowances and reimbursements for expenses such as relocation allowances for travel expenses, income or gains
associated with the grant or vesting of restricted stock, income or gains on the exercise of Company stock options or stock appreciation rights, and similar items and, on an Offering by Offering basis, such other forms of compensation as the
Committee may determine.
5.
Deductions
. The applicable Designated Affiliate will maintain payroll deduction accounts
for all participating employees or provide such other system for accounting for participation as the Board or the Committee determines. (References in the Plan to “payroll deduction” should be read to include such other systems for
accounting for participation, including direct payment by employees to the Designated Affiliate.) With respect to any Offering made under this Plan and where permitted by applicable local law, an employee may authorize a payroll deduction in any
dollar amount up to a maximum of ten percent of the Compensation he or she receives during the Plan Period or such shorter period during which deductions from payroll are made. The Board or the Committee may, at its discretion, designate a lower
maximum contribution rate. Payroll deductions may be at the rate of whole percentages of Compensation with any change in compensation during the Plan Period to result in an automatic corresponding change in the dollar amount withheld as soon as
practicable following the change. The Board or the Committee may establish a minimum payroll deduction percentage with respect to Compensation from time to time. The Board or the Committee may also permit participation by payment through other
means, including direct payment to the Company, on an Offering by Offering or country by country basis.
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6.
Deduction Changes
. An employee participating through payroll deduction may
decrease or discontinue his or her payroll deduction once during any Plan Period, by completing and forwarding such documentation in such manner as the Committee may determine. However, an employee may not increase his or her payroll
deduction during a Plan Period. If an employee elects to discontinue his or her payroll deductions during a Plan Period, but does not elect to withdraw his or her funds pursuant to Section 8 hereof, funds deducted before his or her election to
discontinue will be applied to the purchase of Common Stock on the Exercise Date (as defined below).
7.
Interest
.
Interest will not be paid on any employee accounts, except to the extent that the Board or the Committee, in its sole discretion, elects to credit employee accounts with interest at such rate as it may from time to time determine or as local
law otherwise requires.
8.
Withdrawal of Funds
. An employee may not less than 10 days before the close of business on
the last business day in a Plan Period and for any reason permanently draw out the balance accumulated in the employee’s account and thereby withdraw from participation in an Offering. (The Board or the Committee, on an Offering by Offering
basis, may specify an earlier deadline for withdrawal.) Partial withdrawals are not permitted. The employee may not begin participation again during the remainder of the Plan Period during which the employee withdrew his or her balance. The employee
may participate in any subsequent Offering in accordance with terms and conditions established by the Board or the Committee.
9.
Purchase of Shares
.
(a)
Number of Shares
. On the Offering Commencement Date of each Plan Period, the Company will grant to each eligible employee who is then a participant in the Plan an option (an
“
Option
”) to purchase on the last business day of such Plan Period (the “
Exercise Date
”) at the applicable purchase price (the “
Option Price
”) up to a whole number of shares of
Common Stock to be determined in advance of an Offering and specified on an Offering by Offering Basis;
provided
,
however
, that no employee may be granted an Option that permits his or her rights to purchase Common Stock under this
Plan and any other employee stock purchase plan (as defined in Section 423(b) of the Code) of the Company and its subsidiaries, to accrue at a rate that exceeds $25,000 of the fair market value of such Common Stock (determined at the date such
Option is granted) for each calendar year in which the Option is outstanding at any time.
(b)
Option Price
. The Board
or the Committee will determine the Option Price for each Plan Period, including whether such Option Price will be determined based on the lesser of the closing price of the Common Stock on (i) the first business day of the Plan Period or
(ii) the Exercise Date or will be based solely on the closing price of the Common Stock on the Exercise Date;
provided
,
however
, that such Option Price must be at least 85% of the applicable closing price. In the absence of a
determination by the Board or the Committee, the Option Price will be 85% of the closing price of the Common Stock on the Exercise Date. The closing price will be (a) the closing price (for the primary trading session) on any national
securities exchange on which the Common Stock is listed or (b) the average of the closing bid and asked prices in the over-the-counter-market, whichever is applicable, as published in
The Wall Street Journal
or another source selected by
the Board or the Committee on the business day preceding the
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applicable date of grant or purchase. If no sales of Common Stock were made on such a day, the price of the Common Stock will be the reported price for the next preceding day on which sales were
made.
(c)
Exercise of Option
. Each employee who continues to be a participant in the Plan on the Exercise Date will be
deemed to have exercised his or her Option at the Option Price on such date and will be deemed to have purchased from the Company the number of shares of Common Stock reserved for the purpose of the Plan that his or her accumulated payroll
deductions or other account balance on such date will pay for, but not in excess of the maximum numbers determined in the manner set forth above. The Board or the Committee may specify on an Offering by Offering basis whether fractional shares of
Common Stock will be purchased.
(d)
Return of Unused Payroll Deductions
. Any balance remaining in an employee’s
payroll deduction or other account balance at the end of a Plan Period will be automatically refunded to the employee, except that, assuming fractional share purchases are not permitted for the particular Offering, any balance that is less than the
purchase price of one share of Common Stock will be carried forward into the employee’s payroll deduction or other account balance for the following Offering, unless the employee elects not to participate in the following Offering under the
Plan, in which case the balance in the employee’s account shall be refunded.
10.
Issuance of Certificates
.
Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the
Company’s sole discretion) in the name of a brokerage firm, bank, or other nominee holder designated by the employee. The Company may, in its sole discretion and in compliance with applicable laws, authorize the use of book entry registration
of shares in lieu of issuing stock certificates.
11.
Effect of Termination of Employment, Death, or Change in
Employer
. If a participating employee’s employment ends before the last business day of a Plan Period, no payroll deduction will be taken from any pay then due and owing to the employee and the balance in the employee’s account will be
paid to the employee. If the employee dies before the last business day of a Plan Period, the Company will, upon notification of such death, pay the balance of the employee’s account (a) to the executor or administrator of the
employee’s estate or (b) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate. If, before the last business day of the Plan
Period, the Designated Affiliate by which an employee is employed ceases to be a Designated Affiliate of the Company, or if the employee is transferred to the Company or an affiliate of the Company that is not a Designated Affiliate or not such
other subsidiary of the Company as designated by the Compensation Committee, the employee will be deemed to have terminated employment for the purposes of this Plan.
12.
Participants Not Stockholders
. Neither the granting of an Option to an employee nor the deductions from his or her pay or other plan contributions will make such employee a stockholder of
the shares of Common Stock covered by an Option under this Plan until he or she has purchased and received such shares.
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13.
Options Not Transferable
. Options under this Plan are not transferable by a
participating employee other than by will or the laws of descent and distribution and are exercisable during the employee’s lifetime only by the employee.
14.
Application of Funds
. All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for any corporate purpose, in each case except as
local law requires otherwise.
15.
Adjustment for Changes in Common Stock and Certain Other Events
. Adjustments for
changes in capitalization or “Reorganization Events” (as defined in Section 15(b)(1) of the DESPP) will be dealt with as provided in Section 15 of the DESPP, except as local law requires otherwise.
16.
Amendment of the Plan
. The Board or the Committee may at any time, and from time to time, amend or suspend this Plan or any
portion thereof.
17.
Insufficient Shares
. If the total number of shares of Common Stock specified in elections to be
purchased under any Offering plus the number of shares purchased under previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan from the DESPP, the Board or the Committee will allot the shares then available
on a pro-rata basis, with the proration based on account balances.
18.
Termination of the Plan
. This Plan may be
terminated at any time by the Board or the Committee. Upon termination of this Plan all amounts in the accounts of participating employees shall be promptly refunded.
19.
Governmental Regulations
. The Company’s obligation to sell and deliver Common Stock under this Plan is subject to listing on a national stock exchange (to the extent the Common Stock
is then so listed or quoted) and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock.
20.
Governing Law
. The Plan will be governed by Delaware law except to the extent that such law is preempted by federal or other applicable local law.
21.
Issuance of Shares
. Shares will be issued from the shares available under the DESPP as specified in Section 21 of the
DESPP.
22.
Required Holding Period
. The Board or the Committee may provide, on an Offering by Offering basis, that
participants may not sell or otherwise transfer shares purchased under the Plan until the lapse of a specified period after the date of purchase, except in the event of and in connection with a Reorganization Event or on such other events (including
death, disability, termination of employment, or hardship situation (subject to rules similar to those the Company applies under its 401(k) plan)) as the Board or the Committee may determine. During this restricted period, unless the Board or the
Committee consents to another approach, the Participants must retain their shares at a broker designated by the Board or the Committee.
23.
Withholding
. Each affected employee must, no later than the date of the event creating the tax liability, make provision satisfactory to the Board for payment of any taxes
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required by law to be withheld in connection with any transaction related to Options granted to or shares acquired by such employee pursuant to the Plan. The Company may, to the extent permitted
by law, deduct any such taxes from any payment of any kind otherwise due to an employee.
24.
Effective Date
. The Plan
shall take effect on September 15, 2011.
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Adopted by the Compensation Committee
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on August 15, 2011
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