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As filed with the Securities and Exchange Commission on September 8, 1997
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Advanced Polymer Systems, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 94-2875566
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3696 Haven Avenue, Redwood City, California 94063
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(Address of Principal Executive Offices)
1997 Employee Stock Purchase Plan
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(Full Title of the Plan)
Michael P.J. O'Connell
Chief Financial Officer
Advanced Polymer Systems, Inc.
3696 Haven Avenue
Redwood City, California 94063
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(Name and Address of Agent For Service)
(415) 366-2626
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(Telephone Number, Including Area Code, of Agent For Service)
Copy to:
Richard A. Peers, Esq.
Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301-1908
(415) 324-7000
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September 8, 1997
10008-0006
Advanced Polymer Systems, Inc.
3696 Haven Avenue
Redwood City, California 94063
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Advanced Polymer Systems, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") which the Company proposes to file with
the Securities and Exchange Commission on September 8, 1997 for the purpose of
registering under the Securities Act of 1933, as amended, 400,000 shares of its
Common Stock, par value $.01 (the "Shares"). The Shares are issuable under the
Company's 1997 Stock Purchase Plan (the "Plan"}.
We have assumed the authenticity of all records, documents and
instruments submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
records, documents and instruments submitted to us as copies.
In rendering our opinion, we have examined the following records,
documents and instruments:
(a) The Certificate of Incorporation of the Company, certified by the
Delaware Secretaty of State as of September 5, 1997, and certified
to us by an officer of the Company as being complete and in full
force as of the date of this opinion;
(b) The Bylaws of the Company certified to us by an officer of the
Company as being complete and in full force and effect as of the
date of this opinion;
(c) A certificate of an officer of the Company (i) attaching records
certified to us as consituting all records of proceedings and
actions of the Board of Directors, including any committee
thereof, and stockholders of the Company relating to the Shares,
and the Registration Ststement, and (ii) certifying as to certain
factual matters;
Advanced Polymer Systems, Inc.
September 8, 1997 Page 2
(d) The Registration Statement;
(d) The Plan; and
(e) A letter from Boston Equiserve, the Company's transfer agent,
dated September 5, 1997, as to the number of shares of the
Company's Common Stock that were outstanding on September 4, 1997.
This opinion is limited to the federal law of the United States of
America and the General Corporation Law of the State of Delaware, and we
disclaim any opinion as to the laws of any other jurisdiction. We further
disclaim any opinion as to any other statute, rule, regulation, ordinance, order
or other promulgation of any other jurisdiction or any regional or local
governmental body or as to any related judicial or administrative opinion.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of this opinion, and
assuming that (i) the Registration Statement becomes and remains effective
during the period when the Shares are offered and issued, (ii) the full
consideration stated in the Plan is paid for each Share and that such
consideration in respect of each Share includes payment of cash or other lawful
consideration at least equal to the par value thereof, (iii) appropriate
certificates evidencing the Shares are executed and delivered by the Company,
and (iv) all applicable securities laws are complied with, it is our opinion
that when issued and sold by the Company, after payment therefore in the manner
provided in the Plan and the Registration Statement, the Shares will be legally
issued, fully paid and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon by
you for any other purpose, or relied upon by any other person, firm, corporation
or other entity for any purpose, without our prior written consent. We disclaim
any obligation to advise you of any change of law that occurs, or any facts of
which we may become aware, after the date of this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ HELLER EHRMAN WHITE & MCAULIFFE
The Board of Directors
Advanced Polymer Systems, Inc.:
We consent to the use of our report incorporated herein by reference.
KPMG Peat Marwick LLP
San Francisco, California
September 4, 1997
ADVANCED POLYMER SYSTEMS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. This Advanced Polymer Systems, Inc. 1997 Employee
Stock Purchase Plan is designed to encourage and assist employees of Advanced
Polymer Systems, Inc. and participating subsidiaries to acquire an equity
interest in the Company through the purchase of shares of Company common stock.
2. DEFINITIONS. As used herein, the following definitions shall
apply:
(a) "Administrator" shall mean the entity, either the Board or
the committee of the Board, responsible for administering this Plan, as provided
in Section 3.
(b) "Board" shall mean the Board of Directors of the Company,
as constituted from time to time.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
(d) "Company" shall mean Advanced Polymer Systems, Inc., a
Delaware corporation, and Participating Subsidiaries.
(e) "Common Stock" shall mean the Common Stock, $.01 par
value, of the Company.
(f) "Employee" shall mean any individual who is an employee of
the Company or a Participating Subsidiary within the meaning of Section 3401(c)
of the Code and the Treasury Regulations thereunder.
(g) "Enrollment Date" shall have the meaning set forth in
Section 6.
(h) "Fair market value" means as of any given date: (i) the
closing price of the Common Stock on the Nasdaq National Market as reported in
the Wall Street Journal; or (ii) if the Common Stock is no longer quoted on the
Nasdaq National Market, but is listed on an established stock exchange or quoted
on any other established interdealer quotation system, the closing price for the
Common Stock on such exchange or system, as reported in the Wall Street Journal;
or (iii) in the absence of an established market for the Common Stock, the fair
market value of the Common Stock as determined by the Administrator in good
faith.
(i) "Lower Price Enrollment Date" shall have the meaning set
forth in Section 6.
(j) "Option Period" shall have the meaning set forth in
Section 7(b).
(k) "Participating Subsidiary" shall mean a Subsidiary which
has been designated by the Administrator as covered by the Plan.
(l) "Plan" shall mean this Advanced Polymer Systems, Inc. 1997
Employee Stock Purchase Plan, as it may be amended from time to time.
(m) "Purchase Date" shall have the meaning set forth in
Section 9(a).
(n) "Section" unless the context clearly indicates otherwise,
shall refer to a Section of this Plan.
(o) "Subsidiary" shall mean a "subsidiary corporation" of the
Company, whether now or hereafter existing, within the meaning of Section 424(f)
of the Code, but only for so long as it is a "subsidiary corporation."
(p) "Trading Day" means any day on which regular trading
occurs on any established stock exchange or market system on which the Common
Stock is traded.
3. ADMINISTRATION.
(a) Administrator. The Plan shall be administered by the Board
or, upon delegation by the Board, by a committee of the Board (in either case,
the "Administrator"). In connection with the administration of the Plan, the
Administrator shall have the powers possessed by the Board. The Administrator
may act only by a majority of its members. The Administrator may delegate
administrative duties to such employees of the Company as it deems proper, so
long as such delegation is not otherwise prohibited by Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, or other applicable law. The Board
at any time may terminate the authority delegated to any committee of the Board
pursuant to this Section 3(a) and revest in the Board the administration of the
Plan.
(b) Administrator Determinations Binding. The Administrator
may adopt, alter and repeal administrative rules, guidelines and practices
governing the Plan and the options granted under it as it shall deem advisable
from time to time, may interpret the terms and provisions of the Plan and the
Options granted under it, may correct any defect, omission or inconsistency in
the Plan or in any Option; and may otherwise supervise the administration of the
Plan and the Options granted under it. The Administrator may establish, under
guidelines from the Board, limits on the number of shares which may be purchased
by each participant on an annual or other periodic basis or on the number of
shares which may be purchased on any Purchase Date. All decisions made by the
Administrator under the Plan shall be binding on all persons, including the
Company and all participants in the Plan. No member of the Administrator shall
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be liable for any action that he or she has in good faith taken or failed to
take with respect to this Plan.
4. NUMBER OF SHARES.
(a) The Company has reserved for sale under the Plan 400,000
shares of Common Stock. Shares sold under the Plan may be newly issued shares or
shares reacquired in private transactions or open market purchases, but all
shares sold under the Plan, regardless of source, shall be counted against the
400,000 share limitation. If at any Purchase Date, the shares available under
the Plan are less than the number all participants would otherwise be entitled
to purchase on such date, purchases shall be reduced proportionately to
eliminate the deficit. If, at any Purchase Date, the shares which may be
purchased by a participant are restricted on account of a limit on the aggregate
shares which may be purchased per employee, purchases under each option shall be
reduced proportionately. Any funds that cannot be applied to the purchase of
shares due to such reductions shall be refunded to participants as soon as
administratively feasible.
(b) In the event of any reorganization, recapitalization,
stock split, reverse stock split, stock dividend, combination of shares, merger,
consolidation, offering of rights, or other similar change in the capital
structure of the Company, the Board may make such adjustment, if any, as it
deems appropriate in the number, kind, and purchase price of the shares
available for purchase under the Plan and in the maximum number of shares
subject to any option under the Plan.
5. ELIGIBILITY REQUIREMENTS.
(a) Each Employee of the Company, except those described in
the next paragraph, shall become eligible to participate in the Plan in
accordance with Section 6 on the first Enrollment Date on or following
commencement of his or her employment by the Company or following such period of
employment as is designated by the Administrator from time to time.
Participation in the Plan is entirely voluntary.
(b) The following Employees are not eligible to participate in
the Plan:
(i) Employees who would, immediately upon enrollment
in the Plan, own directly or indirectly, or hold options or rights to acquire
stock possessing, five percent (5%) or more of the total combined voting power
or value of all classes of stock of the Company or any subsidiary of the
Company; and
(ii) Employees who are customarily employed by the
Company fewer than twenty (20) hours per week or fewer than five (5) months in
any calendar year.
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6. ENROLLMENT. Any eligible employee may enroll or re-enroll in
the Plan each year as of the close of the first trading day of: (a) May and
November of each such year; or (b) such other days as may be established by the
Board from time to time (the "Enrollment Dates"); provided, that the first
Enrollment Date shall be April 30, 1997. In order to enroll, an eligible
employee must complete, sign, and submit to the Company an enrollment form. Any
enrollment form received by the Company by the 20th day of the month preceding
an Enrollment Date (or by the Enrollment Date in the case of employees hired
after such 20th day or in the case of the first Enrollment Date), or such other
date established by the Administrator from time to time, will be effective on
that Enrollment Date. In addition, the Administrator may re-enroll existing
participants in the Plan on any Enrollment Date (the "Lower Price Enrollment
Date") on which the fair market value of the Common Stock is lower than the fair
market value on such participant's existing Enrollment Date. A participant may
elect not to re-enroll on a Lower Price Enrollment Date by filing a written
statement with the Company declaring such election prior to the Lower Price
Enrollment Date.
7. GRANT OF OPTION ENROLLMENT.
(a) Enrollment or re-enrollment by a participant in the Plan
on an Enrollment Date will constitute the grant by the Company to the
participant of an option to purchase shares of Common Stock from the Company
under the Plan. Any participant whose option expires and who has not withdrawn
from the Plan will automatically be re-enrolled in the Plan and granted a new
option on the Enrollment Date immediately following the date on which the option
expires.
(b) Except as provided in Section 10, each option granted
under the Plan shall have the following terms:
(i) the option will have a term of not more than
twenty-four (24) months or such shorter option period as may be established by
the Board from time to time (the "Option Period"). Notwithstanding the
foregoing, however, whether or not all shares have been purchased thereunder,
the option will expire on the earlier to occur of: (A) the completion of the
purchase of shares on the last Purchase Date occurring within twenty-four (24)
months after the Enrollment Date for such option, or such shorter option period
as may be established by the Board before an Enrollment Date for all options to
be granted on such date; or (B) the date on which the employee's participation
in the Plan terminates for any reason;
(ii) payment for shares purchased under the option
will be made only through payroll withholding in accordance with Section 8;
(iii) purchase of shares upon exercise of the option
will be effected only on the Purchase Dates established in accordance with
Section 9;
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(iv) the option, if not altered, amended or revoked
by the Company prior to the relevant Purchase Date, may be accepted only by (x)
there having been withheld from the compensation of the employee in accordance
with the terms of the Plan amounts sufficient to purchase the Common Stock
intended to be purchased under the option, and (y) the employee being employed
by the Company and not having withdrawn from the Plan on the relevant Purchase
Date.
(v) the price per share under the option will be
determined as provided in Section 9;
(vi) the maximum number of shares available for
purchase under an option for each one percent (1%) of compensation designated by
an employee in accordance with Section 8 will, unless otherwise established by
the Board before an Enrollment Date for all options to be granted on such date,
be determined by dividing $25,000 by the fair market value of a share of Common
Stock on the Enrollment Date, dividing the result by the maximum number of
percentage points that an employee may designate under Section 8 at the time
such option is granted, and multiplying the result by the number of calendar
years included in whole or in part in the period from grant to expiration of the
option;
(vii) the option (taken together with all other
options then outstanding under this and all other similar stock purchase plans
of the Company and any subsidiary of the Company, collectively "Options") will
in no event give the participant the right to purchase shares at a rate per
calendar year which accrues in excess of $25,000 of fair market value of such
shares, less the fair market value of any shares accrued and already purchased
during such year under Options which have expired or terminated, determined at
the applicable Enrollment Dates; and
(viii) the option will in all respects be subject to
the terms and conditions of the Plan, as interpreted by the Administrator from
time to time.
8. PAYROLL AND TAX WITHHOLDING; USE BY COMPANY.
(a) Each participant shall elect to have amounts withheld from
his or her compensation paid by the Company during the Option Period, at a rate
equal to any whole percentage up to a maximum of ten percent (10%), or such
lesser percentage as the Board may establish from time to time before an
Enrollment Date. Compensation includes regular salary payments, annual and
quarterly bonuses, hire-on bonuses, cash recognition awards, commissions,
overtime pay, shift premiums, and elective contributions by the participant to
qualified employee benefit plans, but excludes all other payments including,
without limitation, long-term disability or workers compensation payments, car
allowances, employee referral bonuses, relocation payments, expense
reimbursements (including but not limited to travel, entertainment, and moving
expenses), salary gross-up
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payments, and non-cash recognition awards. The participant shall designate a
rate of withholding in his or her enrollment form and may elect to increase or
decrease the rate of contribution effective as of any Enrollment Date, by
delivery to the Company, not later than ten (10) days before such Enrollment
Date, of a written notice indicating the revised withholding rate.
(b) Payroll withholdings shall be credited to an account
maintained for purposes of the Plan on behalf of each participant, as soon as
administratively feasible after the withholding occurs. The Company shall be
entitled to use the withholdings for any corporate purpose, shall have no
obligation to pay interest on withholdings to any participant, and shall not be
obligated to segregate withholdings.
(c) Upon disposition of shares acquired by exercise of an
option, the participant shall pay, or make provision adequate to the Company for
payment of, all federal, state, and other tax (and similar) withholdings that
the Company determines, in its discretion, are required due to the disposition,
including any such withholding that the Company determines in its discretion is
necessary to allow the Company to claim tax deductions or other benefits in
connection with the disposition. A participant shall make such similar
provisions for payment that the Company determines, in its discretion, are
required due to the exercise of an option, including such provisions as are
necessary to allow the Company to claim tax deductions or other benefits in
connection with the exercise of the option.
9. PURCHASE OF SHARES.
(a) On the last Trading Day immediately preceding an
Enrollment Date (other than the first Enrollment Date), or on such other days as
may be established by the Board from time to time prior to an Enrollment Date
for all options to be granted on such Enrollment Date (each a "Purchase Date"),
the Company shall apply the funds then credited to each participant's payroll
withholdings account to the purchase of whole shares of Common Stock. The cost
to the participant for the shares purchased under any option shall be not less
than eighty-five percent (85%) of the lower of:
(i) the fair market value of the Common Stock on the
Enrollment Date for such option; or
(ii) the fair market value of the Common Stock on the
date such option is exercised.
(b) Any funds in an amount less than the cost of one share of
Common Stock left in a participant's payroll withholdings account on a Purchase
Date shall be carried forward in such account for application on the next
Purchase Date.
(c) Notwithstanding the terms of Section 9(a), no funds
credited to any employee's payroll withholdings account
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shall be used to purchase Common Stock on any date prior to the date that the
Plan has been approved by the stockholders of the Company, as noted in Section
21. If such approval is not forthcoming within one year from the date that the
Plan was approved by the Board of Directors, all amounts withheld shall be
distributed to the participants as soon as administratively feasible.
10. WITHDRAWAL FROM THE PLAN. A participant may withdraw from the
Plan in full (but not in part) at any time, effective after written notice
thereof is received by the Company. Unless the Administrator elects to permit a
withdrawing participant to invest funds credited to his or her withholding
account on the Purchase Date immediately following notice of withdrawal, all
funds credited to a participant's payroll withholdings account shall be
distributed to him or her without interest within sixty (60) days after notice
of withdrawal is received by the Company. Any eligible employee who has
withdrawn from the Plan may enroll in the Plan again on any subsequent
Enrollment Date in accordance with the provisions of Section 6.
11. TERMINATION OF EMPLOYMENT. Participation in the Plan
terminates immediately when a participant ceases to be employed by the Company
for any reason whatsoever (including death or disability) or otherwise becomes
ineligible to participate in the Plan. As soon as administratively feasible
after termination, the Company shall pay to the participant or his or her
beneficiary or legal representative, all amounts credited to the participant's
payroll withholdings account; provided, however, that if a participant ceases to
be employed by the Company because of the commencement of employment with a
Subsidiary of the Company that is not a Participating Subsidiary, funds then
credited to such participant's payroll withholdings account shall be applied to
the purchase of whole shares of Common Stock at the next Purchase Date and any
funds remaining after such purchase shall be paid to the participant.
12. DESIGNATION OF BENEFICIARY.
(a) Each participant may designate one or more beneficiaries
in the event of death and may, in his or her sole discretion, change such
designation at any time. Any such designation shall be effective upon receipt in
written form by the Company and shall control over any disposition by will or
otherwise.
(b) As soon as administratively feasible after the death of a
participant, amounts credited to his or her account shall be paid in cash to the
designated beneficiaries or, in the absence of a designation, to the executor,
administrator, or other legal representative of the participant's estate. Such
payment shall relieve the Company of further liability with respect to the Plan
on account of the deceased participant. If more than one beneficiary is
designated, each beneficiary shall
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receive an equal portion of the account unless the participant has given express
contrary written instructions.
13. ASSIGNMENT.
(a) The rights of a participant under the Plan shall not be
assignable by such participant, by operation of law or otherwise. No participant
may create a lien on any funds, securities, rights, or other property held by
the Company for the account of the participant under the Plan, except to the
extent that there has been a designation of beneficiaries in accordance with the
Plan, and except to the extent permitted by the laws of descent and distribution
if beneficiaries have not been designated.
(b) A participant's right to purchase shares under the Plan
shall be exercisable only during the participant's lifetime and only by him or
her, except that a participant may direct the Company in the enrollment form to
issue share certificates to the participant and his or her spouse in community
property, to the participant jointly with one or more other persons with right
of survivorship, or to certain forms of trusts approved by the Administrator.
14. ADMINISTRATIVE ASSISTANCE. If the Administrator in its
discretion so elects, it may retain a brokerage firm, bank, or other financial
institution to assist in the purchase of shares, delivery of reports, or other
administrative aspects of the Plan. If the Administrator so elects, each
participant shall (unless prohibited by the laws of the nation of his or her
employment or residence) be deemed upon enrollment in the Plan to have
authorized the establishment of an account on his or her behalf at such
institution. Shares purchased by a participant under the Plan shall be held in
the account in the name in which the share certificate would otherwise be issued
pursuant to Section 13(b).
15. COSTS. All costs and expenses incurred in administering the
Plan shall be paid by the Company, except that any stamp duties or transfer
taxes applicable to participation in the Plan may be charged to the account of
such participant by the Company. Any brokerage fees for the purchase of shares
by a participant shall be paid by the Company, but brokerage fees for the resale
of shares by a participant shall be borne by the participant.
16. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have
equal rights and privileges with respect to the Plan so that the Plan qualifies
as an "employee stock purchase plan" within the meaning of Section 423 of the
Code and the related Treasury Regulations. Any provision of the Plan which is
inconsistent with Section 423 of the Code shall without further act or amendment
by the Company or the Board be reformed to comply with the requirements of
Section 423. This Section 16 shall take precedence over all other provisions of
the Plan.
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17. APPLICABLE LAW. The Plan shall be governed by the substantive
laws (excluding the conflict of laws rules) of the State of California.
18. MODIFICATION AND TERMINATION.
(a) The Board may amend, alter, or terminate the Plan at any
time, including amendments to outstanding options. No amendment shall require
stockholder approval, except:
(i) for an increase in the number of shares reserved
for purchase under the Plan;
(ii) to the extent required for the Plan to comply
with Section 423 of the Code;
(iii) to the extent required by other applicable
laws, regulations or rules; or
(iv) to the extent the Board otherwise concludes that
stockholder approval is advisable.
(b) In the event the Plan is terminated, the Board may elect
to terminate all outstanding options either immediately or upon completion of
the purchase of shares on the next Purchase Date, or may elect to permit options
to expire in accordance with their terms (and participation to continue through
such expiration dates). If the options are terminated prior to expiration, all
funds contributed to the Plan that have not been used to purchase shares shall
be returned to the participants as soon as administratively feasible.
(c) In the event of the sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation, or the dissolution or liquidation of the Company, each option
outstanding under the Plan shall be assumed by any purchaser of all or
substantially all of the assets of the Company or by a successor by merger to
the Company (or the parent company of such purchaser or successor) in compliance
with Section 424 of the Code, unless otherwise provided by the Board in its sole
discretion, in which event, a Purchase Date shall occur immediately before the
effective date of such event.
19. RIGHTS AS AN EMPLOYEE. Nothing in the Plan shall be construed
to give any person the right to remain in the employ of the Company or to affect
the Company's right to terminate the employment of any person at any time with
or without cause.
20. RIGHTS AS A SHAREHOLDER; DELIVERY OF CERTIFICATES. Unless
otherwise determined by the Board, certificates evidencing shares purchased on
any Purchase Date shall be delivered to a participant only if he or she makes a
written request to the Administrator. Participants shall be treated as the
owners of their shares effective as of the Purchase Date.
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21. BOARD AND SHAREHOLDER APPROVAL. The Plan was approved by the
Board of Directors on March 5, 1997, and by the holders of a majority of the
votes cast at a duly held shareholders' meeting on June 18, 1997, at which a
quorum of the voting power of the Company was represented in person or by proxy.
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