<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 29, 1996
REGISTRATION NO. 333- __________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTELLIQUEST INFORMATION GROUP, INC.
(Exact name of Registrant as specified in its charter)
---------------
DELAWARE 74-2671492
-------- -----------
(State of incorporation) (I.R.S. Employer Identification No.)
1250 Capital of Texas Highway South
Building Two, Plaza One
Austin, Texas 78746
(Address of principal executive offices)
PIPELINE COMMUNICATIONS, INC.
1994 INCENTIVE STOCK OPTION PLAN
ADDITIONAL OPTIONS AND WARRANTS ISSUED TO
EMPLOYEES AND CONSULTANTS OF PIPELINE COMMUNICATIONS, INC.
(Full title of the Plans)
--------------
JAMES SCHELLHASE
Chief Operating Officer
INTELLIQUEST INFORMATION GROUP, INC.
1250 Capital of Texas Highway South
Building Two, Plaza One
Austin, Texas 78746
(512) 329-0808
(Name, address, and telephone number, including area code, of agent for service)
---------------
Copies to:
ALLEN L. MORGAN, ESQ.
CHRISTOPHER F. BOYD, ESQ.
CHRISTOPHER J. YOUNGER, ESQ.
WILSON, SONSINI, GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(415) 493-9300
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<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share Price Fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pipeline Communications, Inc.
1994 Incentive Stock Option Plan,
Common Stock, $0.001 par value 29,273 $11.32 $331,371(1) --
Additional Options and Warrants Issued to
Employees and Consultants of Pipeline
Communications, Inc.,
Common Stock, $0.001 par value 17,701 $ 8.73 $154,530(2) --
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
TOTAL 46,974 -- $485,901 $168
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</TABLE>
(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended (the "Securities Act") solely for the purpose of calculating the
total registration fee. Computation based on the weighted average exercise
price per share of $11.32 as to outstanding options to purchase 29,273
shares of Common Stock under the Pipeline Communications, Inc. 1994
Incentive Stock Option Plan.
(2) Estimated in accordance with Rule 457(h) under the Securities Act solely
for the purpose of calculating the total registration fee. Computation
based on the weighted average exercise price per share of $8.73 as to
outstanding options and warrants to purchase 17,701 shares of Common Stock
issued to employees and consultants of Pipeline Communications, Inc.
2
<PAGE>
INTELLIQUEST INFORMATION GROUP
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Registration Statement
the following documents and information heretofore filed with the Securities and
Exchange Commission (the "Commission"):
(a) The audited financial statements for the Registrant's fiscal year
ended December 31, 1995 contained in the Prospectus filed pursuant to Rule
424(b)(3) under the Securities Act on March 22, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996, filed pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(c) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed pursuant to Section 12(b) of the
Exchange Act on February 2, 1996, and as amended on March 22, 1996.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the filing of this Registration
Statement, and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in the
Registration Statement and to be part hereof from the date of filing of such
documents.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except for
liability (i) for any breach of their duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
The Registrant's Bylaws provide that the Registrant shall indemnity its
directors and executive officers and may indemnify its other officers and
employees and other agents to the fullest extent permitted by law. The
Registrant's Bylaws also permit it to secure insurance on behalf of any officer,
director, employee or other agent for
II-1
<PAGE>
any liability arising out of his or her actions in such capacity, regardless of
whether the Bylaws would permit indemnification.
The Registrant has entered into agreements to indemnify its directors and
executive officers, in addition to indemnification provided for in the
Registrant's Bylaws. These agreements, among other things, indemnify the
Registrant's directors and executive officers for certain expenses (including
attorneys' fees), judgments, fines and settlement amounts incurred by any such
person in any action or proceedings, including any action by or in the right of
the Registrant, arising out of such person's services as a director or executive
officer of the Registrant, any subsidiary of the Registrant or other company or
enterprise to which the person provides services at the request of the
Registrant. The Registrant also maintains insurance for the benefit of its
directors and executive officers insuring such persons against certain
liabilities, including liabilities under the securities laws.
In addition, the Underwriting Agreement dated March 22, 1996 among the
Registrant, the underwriters for the Registrant's initial public offering, and
certain stockholders provides for cross-indemnification among the Registrant,
the underwriters and those stockholders with respect to certain matters,
including matters arising under the Securities Act.
See also the undertakings set out in response to Item 9 herein.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
Exhibit
Number Description
--------- -----------------------------------------------------------
4.1 Pipeline Communications, Inc. 1994 Incentive Stock Option
Plan, with Exhibit
4.2 Form of Pipeline Communications, Inc. Warrant Agreement
4.3 Form of Pipeline Communications, Inc. Option Agreement
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, P.C. as to
legality of securities being registered.
23.1 Consent of Wilson, Sonsini, Goodrich & Rosati, P.C.
(contained in Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP, Independent Accountants.
24.1 Power of Attorney (see page II-4).
Item 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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.
II-2
<PAGE>
(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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be an initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the Delaware General Corporation Law, the
Certificate of Incorporation of the Registrant, the Bylaws of the Registrant,
Indemnification Agreements entered into between the Registrant and its officers
and directors, 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.
II-3
<PAGE>
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 Austin, State of Texas, on this 29th day of July,
1996.
INTELLIQUEST INFORMATION GROUP, INC.
By: /S/JAMES SCHELLHASE
------------------------------------------
James Schellhase
CHIEF OPERATING OFFICER,
CHIEF FINANCIAL OFFICER AND DIRECTOR
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, James Schellhase
and Peter Zandan, and each one of them, individually and without the other, his
or her attorney-in-fact, each with full power of substitution, for him or her in
any and all capacities, to sign any and all amendments to this Registration
Statement on Form S-8, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- ------------------------ -------------------------------- -------------
/s/ PETER ZANDAN Chairman of the Board and Chief July 29, 1996
- ------------------------ Executive Officer (Principal
Peter Zandan Executive Officer)
/s/ JAMES SCHELLHASE Chief Operating Officer, Chief July 29, 1996
- ------------------------ Financial Officer and Director
James Schellhase (Principal Finance and
Accounting Officer)
/s/ BRIAN SHARPLES President and Director July 29, 1996
- ------------------------
Brian Sharples
/s/ WILLIAM WOOD Director July 29, 1996
- ------------------------
William Wood
/s/ JOHN THORNTON Director July 29, 1996
- ------------------------
John Thornton
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
-------- ---------------------------------------------------------
4.1 Pipeline Communications, Inc. 1994 Incentive Stock Option
Plan, with Exhibit
4.2 Form of Pipeline Communications, Inc. Warrant Agreement
4.3 Form of Pipeline Communications, Inc. Option Agreement
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, P.C. as to
legality of securities being registered.
23.1 Consent of Wilson, Sonsini, Goodrich & Rosati, P.C.
(contained in Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP, Independent Accountants.
24.1 Power of Attorney (see page II-4).
<PAGE>
PIPELINE COMMUNICATIONS, INC.
1994 INCENTIVE STOCK OPTION PLAN
COVERING 50,000 SHARES
EFFECTIVE AS OF SEPTEMBER 29, 1994, UNLESS OTHERWISE NOTED
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. Purpose; Effective Date.................................................1
2. Administration..........................................................1
3. Stock. .................................................................1
4. Fair Market Value.......................................................2
5. Eligibility to Receive Options; Type of Options.........................2
6. Grant of Options; Option Award Letters; Option Terms....................2
(a) Grant............................................................2
(b) Option Award Letters.............................................2
(c) Option Price.....................................................2
(d) Terms of Options.................................................2
(e) Terms of Exercise................................................2
(f) Method of Exercise...............................................3
(g) Time and Method of Payment.......................................3
(h) Effect of Termination of Employment, Retirement or Death on
Option Exercise..................................................3
(i) Restrictions on Transfer and Exercise of Options.................4
(j) Rights as a Shareholder..........................................4
(k) Conflicts........................................................4
7. Restrictions on the Transfer of the Stock...............................4
8. Repurchase of Issued Shares.............................................4
9. Company's Right of First Refusal........................................5
(a) Notice of Proposed Transfer......................................5
(b) Exercise of Right................................................5
(c) Purchase Price...................................................5
(d) Closing..........................................................5
(e) Company's Failure to Purchase....................................5
(f) Family Transfers.................................................5
(g) Termination Upon Public Offering.................................6
10. Adjustments Upon Changes in Capitalization..............................6
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<PAGE>
TABLE OF CONTENTS
(CONTINUED)
11. Stock Legends...........................................................7
12. Amendment and Termination of the Plan...................................7
13. Notices.................................................................7
14. Term of Plan............................................................8
15. Headings................................................................8
16. Governing Law...........................................................8
17. Gender and Number.......................................................8
18. Legal References........................................................8
19. No Rights to Employment.................................................8
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<PAGE>
PIPELINE COMMUNICATIONS, INC.
1994 INCENTIVE STOCK OPTION PLAN
1. PURPOSE; EFFECTIVE DATE.
(a) The purpose of this 1994 Incentive Stock Option Plan ("the PLAN")
is to further the growth and development of PIPELINE COMMUNICATIONS, INC., a
Georgia corporation (the "Company"), by encouraging officers other key employees
of the Company, and others associated with the Company, to obtain a proprietary
interest in the Company by purchasing its stock. The Company intends that the
Plan will reward such persons for prior service to the Company, provide such
persons with an added incentive to continue in the employ and service of the
Company, and stimulate their efforts in promoting the growth, efficiency and
profitability of the Company. The Company also intends that the Plan will
afford the Company a means of attracting to its service persons of outstanding
quality.
(b) It is further intended that the Plan qualify as an incentive
stock option plan, and that any option granted in accordance with the Plan
qualify as an incentive stock option, all within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "CODE").
(c) The Plan shall be effective as of September 29, 1994, and no
Options shall be granted hereunder prior to said date.
2. ADMINISTRATION.
(a) The Plan shall be administered and interpreted by the Company's
Board of Directors (the "BOARD"). Subject to the provisions of the Plan, the
Board shall have the authority and sole discretion to determine and designate,
from time to time, those persons to whom Options are to be granted, the purchase
price of the shares covered by each Option, the time or times at which Options
shall be granted and the manner in and conditions under which said Options are
exercisable (including, without limitation, any limitations or restrictions
thereon). In making such determinations, the Board may take into account the
nature of the services rendered by the respective persons to whom Options may be
granted, their present and potential contributions to the Company's success and
such other factors as the Board, in its sole discretion, shall deem relevant.
(b) Subject to the express provisions of the Plan, the Board also
shall have authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and provisions of
the instruments by which Options shall be evidenced (which shall not be
inconsistent with the terms of the Plan), and to make all other determinations
necessary or advisable for the administration of the Plan, all of which
determinations shall be final, binding and conclusive.
3. STOCK. The stock subject to the Options shall be authorized but
unissued or reacquired shares of the $.01 par value common stock of the Company
(the "COMMON STOCK"). Subject to readjustment in accordance with the provisions
of Section 10, the total number of shares of the Common Stock for which Options
may be granted to persons participating in the Plan shall not exceed 50,000
shares of Common Stock in the aggregate. In the event that any outstanding
Option under the Plan for any reason expires unexercised or is terminated
without exercise prior to the end of the period during which Options may be
granted, the shares of the Common Stock allocable to the unexercised portion of
such Option again may be subjected to an Option under the Plan.
<PAGE>
4. FAIR MARKET VALUE. For all purposes hereunder, the fair market value
of the Company's Common Stock shall be determined in good faith by the Board
from time to time and shall hereinafter be referred to as "FAIR MARKET VALUE."
5. ELIGIBILITY TO RECEIVE OPTIONS; TYPE OF OPTIONS.
The persons eligible to receive Options hereunder shall be officers
and other key employees of the Company, and other persons associated with the
Company who have made or are expected to make a significant contribution to the
Company. The Board from time to time may select such persons from that group to
whom Options are to be offered and granted hereunder; such selected persons
hereinafter are referred to individually as an "OPTIONEE" and collectively as
"OPTIONEES".
6. GRANT OF OPTIONS; OPTION AWARD LETTERS; OPTION TERMS.
(a) GRANT. Options may be granted by the Board to Optionees from
time to time and at such times as may be authorized by the Board. In its
authorization of the granting of an Option hereunder, the Board shall specify
the name of the Optionee and the number of shares of Common Stock subject to
such Option (the "Optioned Shares").
(b) OPTION AWARD LETTERS. The Board shall deliver to the Optionee
a letter evidencing such Option (the "OPTION AWARD LETTER") setting forth the
date on which the Board granted such Option (the "DATE OF GRANT"), the total
number of Optioned Shares, and the terms and conditions of such Option (to the
extent such terms and conditions are different from or in addition to the terms
and conditions provided in this Plan). Unless it expressly provides otherwise,
each Option Award Letter shall be subject to, and shall be deemed to incorporate
all the terms and conditions of, this Plan.
(c) OPTION PRICE. The purchase price of the Optioned Shares (the
"OPTION EXERCISE PRICE") shall be the Fair Market Value thereof (and not less
than 110 percent of the Fair Market Value in the case of Options granted to
Optionees who own more than 10 percent of the voting power of all classes of
stock of the Company), as determined by the Board, which determination shall be
final, binding and conclusive.
(d) TERMS OF OPTIONS. Terms of Options granted under the Plan shall
commence on the Date of Grant, and shall expire and cease to be exercisable on
such date as the Board may determine for each Option; provided, in no event
shall any Option be exercisable after 10 years after the Date of Grant (or 5
years in the case of Options granted to Optionees who own more than 10 percent
of the voting power of all classes of the Company's stock).
(e) TERMS OF EXERCISE. Subject to other applicable provisions of the
Plan, the Board may specify the terms and conditions under which each Option may
be exercised. Each Option shall become exercisable in such installments (which
need not be equal and which may or may not correspond to a vesting schedule
specified by the Board), or in full, and at such times as may be designated by
the Board. The exercise of an Option may be for less than the full number of
Optioned Shares, but, unless the Option Award Letter permits a smaller number,
such exercise shall not be for less than 100 Optioned Shares. Subject to the
other restrictions on exercise set forth herein, the unexercised portion of an
Option may be exercised at a later date by the Optionee; provided, the 100-share
requirement set forth above shall not apply to any exercise of an Option if such
Option is exercised with respect to all remaining Optioned Shares.
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<PAGE>
(f) METHOD OF EXERCISE.
(i) All Options granted hereunder shall be exercised by written
notice directed to the Board at the Company's principal place of business or to
such other person as the Board may direct. Each notice of exercise shall
identify the Option which the Optionee is exercising (in whole or in part) and
shall be accompanied by payment of the Option Exercise Price for the number of
Optioned Shares specified in such notice. The date on which an option is
exercised is referred to herein as the "EXERCISE DATE".
(ii) Within a reasonable time after exercise, the Company shall
make delivery of certificates representing the shares purchased thereby (the
"ISSUED SHARES"); provided, if any law or regulation requires the Company to
take any action with respect to the shares specified in such notice before the
issuance thereof (including compliance with applicable securities laws), then
the delivery of such certificates shall be delayed for the period necessary to
take such action.
(g) TIME AND METHOD OF PAYMENT. The Option Exercise Price shall be
payable upon the exercise of the Option in an amount equal to the number of
Optioned Shares then being purchased times the per share Option Exercise Price.
Payment shall be in cash or by personal check.
(h) EFFECT OF TERMINATION OF EMPLOYMENT, RETIREMENT OR DEATH ON
OPTION EXERCISE. Except as provided in parts (i), (ii), (iii) and (iv) of this
subsection 6(h), no Option shall be exercisable unless the Optionee thereof
shall have been an employee of the Company continuously from the Date of the
Grant until the Exercise Date.
(i) TERMINATION WITHOUT CAUSE. Unless otherwise provided in the
Option Award Letter, in the event an Optionee during his life ceases to be an
employee of the Company for any reason other than a Termination for Cause
(addressed in part (iv) below), a voluntary termination without the Company's
prior written consent (addressed in part (iv) below), retirement with the
consent of the Company (addressed in part (ii) below), disability (addressed in
part (ii) below) or death (addressed in part (iii) below), any Option or
unexercised portion thereof granted to him shall terminate on, and shall not be
exercisable after, the earlier to occur of (A) the expiration date of the
Option, or (B) one (1) month after termination of employment. Prior to the
earlier of the dates specified in clauses (A) and (B) above, the Option shall be
exercisable only in accordance with its terms and only for the number of shares
exercisable on the date of termination of employment. The question of whether
an authorized leave of absence or absence for military or government service or
for any other reason shall constitute a termination of employment for purposes
of the Plan shall be determined by the Board, which determination shall be final
and conclusive.
(ii) RETIREMENT OR DISABILITY. Unless otherwise provided in the
Option Award Letter, upon an Optionee's retirement with the Company's consent or
the termination of an Optionee's employment due to disability as determined by
the Board in its sole discretion, any Option or unexercised portion thereof
granted to such Optionee which is otherwise exercisable shall terminate on the
earlier to occur of (a) the date of expiration of the Option, or (b) one (1)
month after termination of employment (1 year in the case of termination due to
disability) after the date on which such Optionee ceases to be an employee of
the Company. Prior to the earlier of such dates,
the Option shall be exercisable only in accordance with its terms and only for
the number of shares exercisable on the date such Optionee's employment ceases
due to such retirement or disability.
(iii) DEATH. Unless otherwise provided in the Option Award
Letter, in the event of the death of an Optionee while he is an employee of the
Company or within one (1) month after the date of his
-3-
<PAGE>
termination for any reason (other than for Cause), any Option or unexercised
portion thereof granted to him may be exercised by his executors,
administrators, heirs or legatees at any time prior to the earlier of the
expiration of the Option or the expiration of 1 year from the date of death of
such Optionee. Such exercise shall be effected pursuant to the terms of this
Section 5 as if such executors, administrators, heirs or legatees are the named
Optionee.
(iv) TERMINATION FOR CAUSE; QUITTING. Unless otherwise provided
in the Option Award Letter, if an Optionee is terminated for Cause, or if an
Optionee voluntarily terminates his employment without the Company's prior
written consent, this Option shall terminate forthwith and shall not be
exercisable thereafter, without any other action having to be taken by the
Company. For purposes of this Plan, "TERMINATION FOR CAUSE" means a termination
of an Optionee's employment by the Company due to any one or more of the
following: (i) Optionee's dishonesty; (ii) a felony conviction of Optionee;
(iii) conducting any activities in competition with the Company; (iv) conducting
any business activity outside of the Company which adversely impacts performance
of his duties for the Company, after notification thereof by the Company;
(v) continuing unwillingness or inability to perform reasonable tasks assigned;
or (vi) engaging in any acts with the purpose or effect of significantly
disrupting the Company's operations or significantly harming its business or
prospects. For purposes of the preceding sentence, an Optionee's resignation in
anticipation of his Termination for Cause shall also constitute Termination for
Cause.
(i) RESTRICTIONS ON TRANSFER AND EXERCISE OF OPTIONS. No Option
shall be assignable or transferable by the Optionee except by will or by the
laws of descent and distribution; and, during the lifetime of an Optionee, the
Option shall be exercisable only by him.
(j) RIGHTS AS A SHAREHOLDER. An Optionee shall have no rights as a
shareholder with respect to Optioned Shares until the date of the issuance of
Issued Shares to him and only after the Option Exercise Price of such shares is
fully paid. Unless specified in Section 10, no adjustment will be made for
dividends or other rights for which the record date is prior to the date of such
issuance.
(k) CONFLICTS. In the event of any conflict between the provisions
of an Option Award Letter and the Plan, the Plan shall control.
7. RESTRICTIONS ON THE TRANSFER OF THE STOCK. After the exercise of an
Option, all Issued Shares obtained thereby shall be subject to the provisions of
Sections 7, 8 and 9 of this Plan, and the restrictions contained therein, as
applicable, shall apply to such Issued Shares after any permitted transfer
thereof by the Optionee. By exercise of an Option, each Optionee agrees to be
bound by the terms and provisions of Sections 7, 8 and 9 of this Plan. However,
the provisions of Sections 7, 8 and 9 of this Plan shall terminate immediately
upon the closing of a firm commitment underwritten public offering of Common
Stock.
8. REPURCHASE OF ISSUED SHARES. In the event an Optionee's employment
with the Company terminates for any reason after an Optionee has purchased any
Issued Shares upon the exercise of an Option, then the Company shall have the
right (but not the obligation) to repurchase some or all of such Issued Shares
from such Optionee at the Option Exercise Price paid for such Issued Shares plus
interest thereon from the Exercise Date at the prime rate in effect for
NationsBank, N.A. in Atlanta, Georgia on the Exercise Date (the "REPURCHASE
PRICE"). To exercise such repurchase rights, the Company must give the Optionee
notice within 90 days after such termination that it is exercising its rights,
and stating the number of Issued Shares to be repurchased and the date, time and
place of the closing of such repurchase. At the closing, the Optionee shall
transfer to the Company the Issued Shares to be repurchased, and the Company
shall pay the Optionee the Repurchase Price in cash.
-4-
<PAGE>
9. COMPANY'S RIGHT OF FIRST REFUSAL. Before an Optionee may Transfer any
Issued Shares, the Company shall have a right of first refusal to purchase the
Issued Shares on the terms and conditions set forth in this Section (the "RIGHT
OF FIRST REFUSAL"). For purposes of this Section, a "TRANSFER" shall mean any
sale, assignment, transfer, conveyance, gift or other alienation.
(a) NOTICE OF PROPOSED TRANSFER. If an Optionee proposes to Transfer
any Issued Shares, the Optionee shall deliver to the Company a written notice
(the "FIRST REFUSAL NOTICE") stating: (i) the Optionee's bona fide intention to
Transfer such Issued Shares; (ii) the name of each proposed transferee
("PROPOSED TRANSFEREE"); (iii) the number of Issued Shares to be Transferred to
each Proposed Transferee; (iv) the bona fide cash price or other consideration
for which the Optionee proposes to Transfer the Issued Shares (the "OFFERED
PRICE"); (v) all the other terms and conditions of the proposed Transfer; (vi)
the proposed closing date for the proposed Transfer; and (vii) that the Optionee
shall sell the Issued Shares to the Company under the terms of this Section.
(b) EXERCISE OF RIGHT. At any time within 120 days after receipt of
the First Refusal Notice, the Company may, by giving written notice to the
Optionee, elect to purchase any or all of the Issued Shares proposed to be
Transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with subsection (c) below.
(c) PURCHASE PRICE. The purchase price for the Issued Shares
purchased under this Section shall be the Offered Price. If the Offered Price
includes consideration other than cash, the cash equivalent value of the non-
cash consideration shall be determined by the Board of Directors of the Company
in good faith.
(d) CLOSING. The closing of the Company's purchase of the Issued
Shares under this Section shall take place within 45 days after the Company
receives the First Refusal Notice, or the closing date specified in the First
Refusal Notice, whichever is later. Payment of the purchase price shall be
made, at the option of the Company, either (i) in cash (by check), (ii) by
cancellation of all or a portion of any outstanding indebtedness of the Optionee
to the Company, (iii) by any combination of (i) and (ii), or (iv) in the manner
set forth in the First Refusal Notice.
(e) COMPANY'S FAILURE TO PURCHASE. If all of the Issued Shares
proposed in the First Refusal Notice to be Transferred to a Proposed Transferee
are not purchased by the Company as provided in this Section, then the Optionee
may Transfer such Issued Shares to that Proposed Transferee at the Offered Price
(or at a higher price) and on all the other terms and conditions stated in the
First Refusal Notice, provided that (i) such Transfer is consummated within 30
days after the date of the First Refusal Notice, (ii) any such Transfer is
effected in accordance with any applicable securities laws, and (iii) the
Proposed Transferee agrees in writing that the provisions of this Section shall
continue to apply to the Issued Shares in the hands of such Proposed Transferee.
If the Issued Shares described in the First Refusal Notice are not so
Transferred to the Proposed Transferee within such 30-day period, a new First
Refusal Notice shall be given to the Company, and the Company shall again be
offered the Right of First Refusal, before any Issued Shares held by the
Optionee may be Transferred.
(f) FAMILY TRANSFERS. Anything to the contrary contained in this
Section notwithstanding, the Transfer of any or all of the Issued Shares, during
Optionee's lifetime or on Optionee's death by will or intestacy, to Optionee's
IMMEDIATE FAMILY or a trust for the benefit of Optionee or Optionees's immediate
family shall be exempt from the provisions of this Section; provided that, as a
condition to receiving the Issued Shares, the transferee or other recipient
shall agree in writing to receive and hold the Issued Shares so Transferred
subject to the provisions of this Section, and to Transfer such Issued Shares no
further except in accordance with the
-5-
<PAGE>
terms of this Section. As used herein, "IMMEDIATE FAMILY" shall mean spouse,
lineal descendant or antecedent, father, mother, brother or sister.
(g) TERMINATION UPON PUBLIC OFFERING. The provisions of this Section
9 shall cease to have any effect 90 days after any firm underwritten, SEC-
registered public offering of the Common Stock; provided, however, all Optionees
shall be subject to all applicable restrictions on transfer imposed under
federal and state securities laws, as well as any other restrictions voluntarily
entered into in connection with such public offering or otherwise.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) In the event that the outstanding shares of the Common Stock of
the Company are hereafter increased or decreased (or changed into or exchanged
for a different number or kind of shares or other securities of the Company) by
reason of a recapitalization, reclassification, stock split, combination of
shares or dividend payable in shares of the Common Stock, the following rules
shall apply:
(i) The Board shall make such adjustments as it deems
appropriate in the number and kind of shares available for the granting of
Options under the Plan.
(ii) The Board also shall make such adjustments as it deems
appropriate in the number and kind of shares as to which outstanding Options, or
portions thereof then unexercised, shall be exercisable, to the end that the
Optionee's proportionate interest shall be maintained (as close as practicable)
as before the occurrence of such event; any such adjustment in any outstanding
Options shall be made without change in the total price applicable to the
unexercised portion of such Option and with a corresponding adjustment in the
Option Exercise Price per share. No fractional shares shall be issued or
covered by an Option in making the foregoing adjustments, and the number of
shares available under the Plan or the number of shares subject to any
outstanding Options shall be the next lower number of shares, rounding all
fractions downward.
(iii) Any adjustment to or assumption of Options under this
subsection (a) shall be made in accordance with Code Section 425(a) and the
regulations promulgated thereunder so as to preserve the status of such Options
as incentive stock options under Code Section 422.
(b) Subject to any required action by the shareholders, if the
Company shall be a party to any reorganization involving merger, consolidation,
acquisition of the stock or acquisition of the assets of the Company, the Board,
in its discretion, may (but need not) declare that:
(i) any or all outstanding Options granted hereunder shall
become immediately nonforfeitable and exercisable (to the extent permitted under
federal or state securities laws);
(ii) any Option granted but not yet exercised shall pertain to
and apply, with appropriate adjustment as determined by the Board, to the
securities of the resulting corporation to which a holder of the number of
shares of the Common Stock subject to such Options would have been entitled;
and/or
(iii) any or all Options granted hereunder are to become
immediately nonforfeitable and exercisable (to the extent permitted under
federal or state securities laws) and are to be terminated after giving at least
30 days' notice to the Optionees to whom such Options have been granted.
-6-
<PAGE>
(c) If the Board adopts a plan of dissolution and liquidation that is
approved by the shareholders of the Company, the Board shall give each Optionee
notice of such event at least 10 days prior to its effective date, and the
rights of all Optionees shall become immediately nonforfeitable and exercisable
on the effective date (to the extent permitted under federal or state securities
laws).
(d) Any issuance by the Company of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of the Common Stock subject to any Option. The grant of Options
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, consolidate or dissolve, or to
liquidate, sell or transfer all or any part of its business or assets.
11. STOCK LEGENDS. All certificates issued pursuant to the exercise of
any Option shall be marked with the following restrictive legend or similar
legend, if such marking, in the opinion of counsel to the Company, is necessary
or desirable:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ISSUED UNDER THE TERMS OF
THE COMPANY'S 1994 STOCK OPTION PLAN. THE SALE OF THE SHARES EVIDENCED BY THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), THE GEORGIA SECURITIES ACT OF 1973, AS AMENDED (THE "GEORGIA
ACT") OR ANY OTHER STATE SECURITIES LAWS (COLLECTIVELY, THE "STATE SECURITIES
ACTS"), AND HAVE BEEN ISSUED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACTS, INCLUDING SECTION 10-5-9(13) OF THE
GEORGIA ACT. THE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN ANY MANNER EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES ACTS, UNLESS
THE COMPANY SHALL DETERMINE, UPON ADVICE OF COUNSEL, THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE, AND (ii) AS IS PERMITTED BY THE PROVISIONS OF THE
COMPANY'S 1994 INCENTIVE STOCK OPTION PLAN."
Any attempted transfer of the certificate representing these shares which is in
violation of the preceding restrictions will not be recognized by the Company,
nor will any transferee of such shares be recognized as the owner thereof by the
Company.
12. AMENDMENT AND TERMINATION OF THE PLAN. The Board shall have the power
to add to, amend or repeal any of the provisions of the Plan, to suspend the
operation of the entire Plan or any of its provisions for any period or periods,
or to terminate the Plan in whole or in part. Notwithstanding the above
provisions, no such addition, amendment, repeal, suspension or termination shall
affect, in any way, the rights of the Optionees who have outstanding Options
without the consent of such Optionees, nor may any such change in the Plan be
made without the prior approval of the holders of a majority of the outstanding
common stock of the Company if (i) such change would cause the Plan to fail to
qualify as an "Incentive Stock Option Plan" pursuant to Code Section 422, or
(ii) such shareholder approval is required under Code Section 422 or any other
applicable law or regulation.
13. NOTICES. All notices or other communications by an Optionee to the
Board pursuant to or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Board at the location, or
by the person, designated by the Board for the receipt thereof.
-7-
<PAGE>
14. TERM OF PLAN. Subject to the terms of Section 12, the Plan shall
terminate upon the later of (i) the complete exercise or lapse of the last
outstanding Option or (ii) the last date upon which an Option may be granted
hereunder.
15. HEADINGS. Section and other headings contained in this Plan are for
reference purposes only and are in no way intended to define, interpret,
describe or limit the scope, extent or intent of this Plan or any provision
hereof.
16. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Georgia.
17. GENDER AND NUMBER. Wherever applicable, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
18. LEGAL REFERENCES. Any references in this Plan to a provision of law
which is, subsequent to the effective date of this Plan, revised, modified,
finalized or redesignated, shall automatically be deemed a reference to such
revised, modified, finalized or redesignated provision of law.
19. NO RIGHTS TO EMPLOYMENT. Nothing contained in this Plan shall be
construed to give any individual any right to employment with the Company or any
parent or subsidiary corporation of the Company.
-8-
<PAGE>
Date: , 19
--------------- --
-iii-
<PAGE>
EXHIBIT A
PIPELINE COMMUNICATIONS, INC.
1994 INCENTIVE STOCK OPTION PLAN
NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
This Notice is given pursuant to the terms of the Incentive Stock Option
Award Letter, dated ______________, 19__, from PIPELINE COMMUNICATIONS, INC.
(the "Company") to the undersigned Optionee, which Award Letter granted
Optionee an Incentive Stock Option to purchase a certain amount of the Company's
Common Stock (the "Option"). The Award Letter is incorporated herein by
reference.
EXERCISE OF OPTION. Optionee hereby exercises the Option to purchase the
following number of Optioned Shares (the "Issued Shares"):
Shares.
-----------------------------
PAYMENT. Optionee hereby delivers the full Option Price with respect to
the Issued Shares purchased, which consists of cash or a check in the total
amount of $ .
----------------------------------------------------------------
REPRESENTATION AND AGREEMENTS. Optionee hereby makes the following
representations to and agreements with the Company in connection with the
purchase of Issued Shares under the Option:
1. Optionee is a bona fide resident of, and has his/her principal residence
in, the following state:
(state of residence).
-----------------------------
2. Optionee is acquiring the Issued Shares for investment for his/her own
account with no present intent to directly or indirectly resell, transfer,
distribute or participate in a distribution of the Issued Shares or any portion
thereof in violation of applicable federal and state securities laws.
3. Optionee is not acquiring the Issued Shares based upon any representation,
oral or written, by the Company or any representative of the Company with
respect to the future value of, income from, or tax consequences relating to the
Issued Shares but rather upon an independent examination and judgment as to the
prospects of the Company. Further, Optionee acknowledges that no federal or
state administrative entity responsible for securities registration or
enforcement has made any recommendation or endorsement of the Issued Shares or
any findings as to the fairness of an investment in the Issued Shares.
<PAGE>
4. Optionee has received and reviewed such financial information and records
of the Company as Optionee deemed necessary, and the Company has made available
to Optionee the opportunity to ask questions of, and to receive answers from,
representatives of the Company and to obtain additional information relative to
the Company and Optionee's investment therein (to the extent the Company
possesses such information or could acquire it without unreasonable effort or
expense). All such materials and information requested by Optionee have been
made available to and examined by Optionee.
5. Optionee understands that the Company may refuse to issue the Issued
Shares, or to permit any proposed sale, transfer, pledge or other disposition of
the Issued Shares except pursuant to an effective registration statement under
the federal Securities Act of 1933, as amended (the " 1933 Act") and any
applicable state securities acts, or pursuant to exemptions from such
registration requirements; that the certificate(s) evidencing the Issued Shares,
or any substitutions therefor, may contain a legend substantially to that
effect; and that Optionee shall cooperate with the Company in connection with
any such registration statement or exemptions. Optionee understands that the
Company is under no obligation to register the issuance or resale of the Issued
Shares under the 1933 Act or any state securities act or to take any other
action necessary to comply with an available exemption or regulation under any
such acts in order to permit Optionee to sell, transfer or otherwise dispose of
the Issued Shares.
OPTIONEE:
--------------------------------------------
Signature
--------------------------------------------
Print or Type Name
Date: , 19
--------------- --
PIPELINE COMMUNICATIONS, INC. hereby acknowledges receipt of this Notice of
Exercise and payment for the Issued Shares purchased thereunder.
PIPELINE COMMUNICATIONS, INC.
By:
----------------------------------------
Date: , 19
--------------- --
-iv-
<PAGE>
EXHIBIT A
PIPELINE COMMUNICATIONS, INC.
1994 INCENTIVE STOCK OPTION PLAN
INCENTIVE STOCK OPTION AWARD LETTER
[Optionee]
[Address]
Number of Shares:
-----------
Option Exercise Price Per Share: $
-------------
Date of Grant:
-----------------
Option Expiration Date:
-----------------
Greetings:
The purpose of this letter is to advise you of the grant to you, effective the
above-noted Date of Grant, of an Incentive Stock Option to buy up to the number
of shares noted above (the "Optioned Shares") of the Common Stock of PIPELINE
COMMUNICATIONS, INC. (the "Company"). The Option has been granted under the
Company's 1994 Incentive Stock Option Plan, as amended, which is incorporated
herein by reference (the "Plan").
Unless sooner exercised, or unless earlier terminated under the terms of the
Plan, the Option will expire and cease to be exercisable after the above-noted
Option Expiration Date.
The Option Exercise Price per share shall be as noted above.
<PAGE>
This Option shall become exercisable, and the Option Shares may be purchased,
according to the following vesting schedule:
Number of May Be Purchased
Shares On or After
------------------------------- --------------------------------------
----- ------------
----- ------------
----- ------------
----- ------------
The Option may be exercised by your delivery to the Secretary of the Company of:
1. A written notice of exercise executed by you (the "Notice of Exercise") in
the form attached hereto as Exhibit "A", and
2. The Option Exercise Price for the Optioned Shares with respect to which you
are exercising the Option.
The exercise of the Option and the ownership of Shares after such exercise
are governed by the terms of the Plan.
Sincerely,
PIPELINE COMMUNICATIONS, INC.
By:
----------------------------------------------
Date: , 19
-------------- --
-viii-
<PAGE>
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"1933 ACT") OR THE SECURITIES LAWS OF ANY STATE. THIS SECURITY MAY NOT BE SOLD
OR TRANSFERRED EXCEPT IN A TRANSACTION REGISTERED UNDER THE 1933 ACT AND
APPLICABLE STATE SECURITIES LAWS OR IN TRANSACTIONS THAT, IN THE OPINION OF THE
ISSUER, ARE EXEMPT FROM REGISTRATION THEREUNDER.
STOCK PURCHASE WARRANTS
(Void after October 31, 1996)
PIPELINE COMMUNICATIONS, INC.
a Georgia Corporation
CERTIFICATE EVIDENCING _______ WARRANTS
(ONE WARRANT IS REQUIRED FOR THE
PURCHASE OF ONE SHARE OF COMMON
STOCK, SUBJECT TO ADJUSTMENT AS
HEREIN PROVIDED)
THIS IS TO CERTIFY THAT ___________, or his assigns, is entitled to purchase
___________ shares of the no par value common stock (the "COMMON STOCK") of
PIPELINE COMMUNICATIONS, INC., a Georgia corporation (the "COMPANY"), at a price
of $______ per share (the "WARRANT PRICE"), at any time after the date hereof
and before 5:00 p.m., Atlanta, Georgia time on October 31, 1996.
1. ADJUSTMENTS. The number and kind of securities purchasable upon
the exercise of the Warrants and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:
(a) In the case of any reclassification of the Common Stock issuable
upon exercise of each Warrant, or in the case of any consolidation or merger of
the Company with or into another corporation (other than a merger with another
corporation in which the Company is a continuing corporation and which does not
result in any reclassification of the Common Stock issuable upon exercise of
each Warrant), or in the case of any sale of all or substantially all of the
assets of the Company, the Company, or such successor or purchasing corporation,
as the case may be, shall execute a new Warrant certificate, providing that the
holder of these Warrants shall have the right to exercise such new Warrants and
upon such exercise to receive, in lieu of each share of Common Stock theretofore
issuable upon exercise of these Warrants, the number and kind of shares of
stock, other securities, money or property receivable upon such
reclassification, change, consolidation or merger by a holder of shares of the
Common Stock. Such new Warrant certificate shall provide for adjustments which
shall be as nearly
<PAGE>
equivalent as may be practicable to the adjustments provided for herein. The
provisions of this paragraph (a) shall similarly apply to successive
reclassifications, changes, consolidations or mergers.
(b) If the Company at any time while these Warrants remain
outstanding and unexpired shall split, subdivide or combine the Common Stock,
the Warrant Price shall be proportionately decreased in the case of a split or
subdivision or increased in the case of a combination.
(c) If the Company at any time while these Warrants are outstanding
and unexpired shall pay a dividend with respect to the Common Stock payable in
shares of Common Stock, then the Warrant Price shall be adjusted, from and after
the date of determination of the shareholders entitled to receive such dividend,
to that price determined by multiplying the Warrant Price in effect immediately
prior to such date of determination by a fraction (i) the numerator of which
shall be the total number of shares of the Common Stock outstanding immediately
prior to such dividend, and (ii) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such dividend.
Upon each adjustment in the Warrant Price pursuant to paragraphs (a),
(b) or (c) above, the number of shares of Common Stock purchasable hereunder
shall be adjusted, to the nearest whole share, to the product obtained by
multiplying the number of shares of Common Stock purchasable immediately prior
to such adjustment in the Warrant Price by a fraction (i) the numerator of which
shall be the Warrant Price immediately prior to such adjustment, and (ii) the
denominator of which shall be the Warrant Price immediately after such
adjustment.
2. NOTICE. In case any voluntary or involuntary dissolution,
liquidation, or winding up of the Company shall at any time be proposed, the
Company shall give at least 20 days prior written notice thereof to the
registered holder hereof stating the date on which such event is to take place
and the date (which shall be at least 20 days after the giving of such notice)
as of which the holders of shares of Common Stock of record shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such dissolution, liquidation, or winding up (on which date, in the event such
dissolution, liquidation or winding-up shall actually take place, the Warrants
and all rights with respect hereto shall terminate).
3. EXERCISE. Exercise may be made of all or part of the Warrants
evidenced hereby to the extent permitted hereunder by surrendering this
Certificate, by the delivery of a duly executed Election to Exercise in the form
of Exhibit "A" hereto, to the Company at its principal office, or at such other
place as the Company shall designate, accompanied by payment in full of the
purchase price payable in respect of the Warrants being exercised. If less than
all the Warrants evidenced by the Certificate are exercised, the Company will,
upon such exercise, execute and deliver to the registered holder hereof a new
Certificate (dated the date hereof) evidencing the Warrants not so exercised.
As promptly as practicable after surrender of this Certificate and the receipt
of payment as aforesaid, the Company shall issue and deliver to the registered
holder hereof, on its written order, a certificate or certificates for the
number of shares of Common Stock issuable upon the exercise of such Warrants in
accordance with the provisions hereof.
-2-
<PAGE>
4. NO FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of the Warrants. If the
full exercise of the Warrants requires the issuance of any fraction of a share,
the Company shall pay the holder thereof an amount in cash equal to such
fraction multiplied by the current market value of a whole share. The current
market value shall equal, if the Common Stock is listed on a national securities
exchange, the last reported sale price on such exchange prior to the date of the
exercise of the Warrants or, if the Common Stock is quoted in the National
Association of Securities Dealers, Inc. Automated Quotation System, the last
reported sales price or mean of the last reported bid and asked prices (as the
case may be) reported by NASDAQ or, if the Common Stock is not so listed or
quoted, the price determined in good faith by the Company.
5. TRANSFER. This Certificate and the Warrants evidenced hereby may be
transferred only by surrendering this Certificate for cancellation at the
principal office of the Company accompanied by duly executed transfer
instruments in form reasonably satisfactory to the Company. Warrants may be
divided or combined into a Certificate or Certificates evidencing the same
aggregate number of Warrants.
6. REGISTERED OWNER. The person in whose name this Certificate is
registered shall be deemed the owner hereof and of the Warrants evidenced hereby
for all purposes. The registered owner of this Certificate shall not be
entitled, by virtue of being such registered owner, to any fights whatsoever as
a shareholder of the Company.
7. SECURITIES LAW MATTERS. At the time of exercise, the holder shall
execute an Investment Agreement in the form attached hereto as EXHIBIT "B"
stating in detail (among other things) that the shares issued pursuant to the
Warrants have not been registered under the federal or state securities laws,
and that such shares may not be transferred without the shares being registered
or without an opinion of counsel reasonably satisfactory to the Company that
such registration is not needed.
8. EXPIRATION. The Warrants evidenced by this Certificate shall be
wholly void for all purposes after 5:00 p.m., Atlanta, Georgia time, on October
31, 1996.
9. NO ASSIGNMENT. Neither this Certificate nor the Warrants evidenced
hereby may be assigned without the prior written consent of the Company, which
consent may be withheld for any reason, and any attempted assignment thereof
shall be void AB INITIO.
10. NOTICE. All notices and other communications required or permitted
hereunder may be given by hand, mail, telex, or facsimile transmission
addressed, if to the Company, at its offices at 1600 ParkWood Circle, Suite 550,
Atlanta, Georgia 30339, Attention: President, and if to the holder, to the
address noted on the Company's records.
-3-
<PAGE>
Date: , 19
------------- -- --
PIPELINE COMMUNICATIONS, INC.
ATTEST:
By:
--------------------------- ----------------------------------------
A. Matthews Thompson Secretary
Chief Executive Officer
-4-
<PAGE>
EXHIBIT A TO
STOCK PURCHASE WARRANTS
ELECTION TO EXERCISE
The undersigned hereby elects to purchase _____ shares of no par value
Common Stock of PIPELINE COMMUNICATIONS, INC. under and pursuant to the
provisions of the foregoing Certificate evidencing _____ Stock Purchase
Warrants. The Company is hereby requested to issue Certificate(s) representing
said Shares in the name of the undersigned at the address set forth following
its signature in denominations as indicated.
Upon the exercise of the Warrants, the holder shall deliver a written
Investment Agreement to the Company in the form attached to the Warrants as
EXHIBIT "B" and shall otherwise reasonable comply with any applicable federal
and state securities laws.
All shares issued upon the exercise of the Warrants shall bear an
appropriate investment legend in the form set forth in the Investment Agreement
attached to the Warrants as EXHIBIT "B".
DATED this day of , 19 .
-------------- -------------- --
-----------------------------------------------
Address -------------------------------------
-------------------------------------
Issue Certificate(s) as Follows:
Certificates for shares each.
- -------- --------
Certificates for shares each.
- -------- --------
Certificates for shares each.
- -------- --------
<PAGE>
EXHIBIT B TO
STOCK PURCHASE WARRANTS
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO PIPELINE
COMMUNICATIONS, INC. BEFORE THE COMMON STOCK WILL BE TRANSFERRED.
INVESTMENT AGREEMENT
, 19
------------ -- --
Pipeline Communications, Inc.
1600 ParkWood Circle
Suite 550
Atlanta, Georgia 30339
ATTN: President
Gentlemen:
The undersigned,__________ ("Purchaser" intends to acquire up to shares of
Common Stock (the "Common Stock"), no par value, of Pipeline Communications,
Inc. (the "Company") from the Company pursuant to the exercise of certain Stock
Purchase Warrants held by Purchaser. The Common Stock will be issued to
Purchaser in a transaction not involving a public offering and pursuant to an
exemption from registration under the Securities Act of 1933, as amended (the "
1933 Act"). In connection with such purchase and in order to comply with the
exemption from registration relied upon by the Company, Purchaser represents,
warrants and agrees as follows:
Purchaser is a [individual resident of ____________] [corporation organized
under the laws of __________ ] [other:_______________ ], and Purchaser is
acquiring the Common Stock for [his] [its] own account, to hold for investment,
and Purchaser shall not make any sale, transfer or other disposition of the
Common Stock in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission (the "SEC") or
in violation of any applicable state securities law.
Purchaser has been advised that the issuance of Common Stock is not being
registered under the 1933 Act on the ground that this transaction is exempt from
registration under Section 3(b) or 4(2) of the 1933 Act, as not involving any
public offering, and that reliance by the Company on such exemption is
predicated in part on Purchaser's representations set forth in this letter.
Purchaser also has been advised that neither the Common Stock nor issuance
thereof if being registered under the securities laws of any state.
Purchaser has been informed that the Common Stock must be held indefinitely
unless it is subsequently registered for sale under the 1933 Act and applicable
state securities laws, or unless
<PAGE>
exemptions from such registration are available with respect to any proposed
transfer or disposition by Purchaser of the Common Stock.
Purchaser also understands and agrees that there will be placed on the
certificate for the Common Stock, or any substitutions therefore, a legend
stating in substance:
"The sale of the shares represented by this certificate has not been
registered under the securities act of 1933, as amended (the "Act"), or any
applicable state securities law. The shares have been acquired for
investment and not with a view to or for resale in connection with the
distribution thereof. No disposition of the shares may be made in the
absence of an effective registration statement under the Act and compliance
with applicable state securities laws or an opinion of counsel acceptable
to this corporation to the effect that such disposition without
registration is in compliance with the Act and any applicable state
securities laws."
Purchaser agrees to cooperate with the Company in every way reasonably
requested by the Company in order to enable the Company to comply with such
applicable federal and state securities laws (including but not limited to
exemptions from registration thereunder) as may be available to the Company; and
that such cooperation may include the execution and delivery of additional
representations, acknowledgments and agreements as the Company reasonably may
request in connection therewith.
Purchaser has read and understands these documents in their entirety and
has not relied on any information other than that contained in such documents in
making its decision to acquire the Common Stock.
Each Purchaser has had the opportunity to talk personally with officers of
the Company about such information and has had an opportunity to ask questions
and receive answers about the offering and to obtain additional information for
verification purposes.
Very truly yours,
-------------------------------------------
(Name of Purchaser)
Accepted and agreed to as of the day of , 19 .
---- -------- ---
PIPELINE COMMUNICATIONS, INC.
By:
---------------------------
-2-
<PAGE>
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement"), dated as of ________, 19__ is by
and between PIPELINE COMMUNICATIONS, INC., a Georgia corporation (the
"Company"), and _____________________, (the "Optionee").
WHEREAS, the Board of Directors of the Company has determined that the
Optionee is to be granted, on the terms and conditions set forth herein, an
option (the "Option") to purchase a specified number of shares of the common
stock, no par value, of the Company (the "Common Stock").
NOW, THEREFORE, the Company and the Optionee hereby agree as follows:
1. GRANT OF OPTION: NUMBER OF SHARES AND OPTION PRICE. The Option is for
up to _____________ (___) shares of Common Stock (the "Option Shares") at a
price of $____ per share.
2. PERIOD OF OPTION AND CONDITIONS OF EXERCISE.(a) The Option shall
expire on the date that falls seven (7) years after the Option Date (the
"Expiration Date"). Upon the Expiration Date, the Optionee shall no longer be
entitled to exercise the Option.
(b) Prior to the Expiration Date the Optionee may exercise the Option
at any time and from time to time with respect to all or part of the Option
Shares. If requested by the Company, the Optionee shall deliver this Agreement
to the Secretary of the Company at the time of exercise of the Option so that a
notation may be made in this Agreement as to such exercise. After such notation
has been made, this Agreement shall then be returned to the Optionee.
(c) To exercise the Option, the Optionee must deliver to the
Secretary of the Company at its corporate headquarters the Notice of Exercise
attached as the Exhibit to this Agreement together with payment of the aggregate
exercise price in cash or as otherwise may be approved by the Company.
(d) The Optionee shall not be deemed to be a holder of any Option
Shares following the exercise of the Option until the full exercise price for
such shares has been paid and a stock certificate has been issued and delivered
for such shares.
3. ADJUSTMENT IN NUMBER OF SHARES. In the event of any change in the
outstanding shares of Common Stock by reason of any stock dividend, stock split,
or similar corporate change involving the Common Stock, the aggregate number and
kind of shares subject to this Option shall be proportionately adjusted.
4. OPTION NOT TRANSFERABLE. The Option is not transferable other than by
will or under the laws of descent and distribution. During the lifetime of the
Optionee, the Option may be exercised only by the Optionee.
<PAGE>
5. INVESTMENT REPRESENTATION (a) The Optionee acknowledges that the
Option and the Option Shares obtainable upon exercise of the Option have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), or under applicable state securities laws.
(b) The Company shall not be obligated to issue any shares of Common
Stock under this Option unless such issuance is in compliance with all
applicable laws and any applicable requirements of any securities exchange on
which the Common Stock is traded. Prior to the issuance of any shares of Common
Stock, the Company may require a written statement from the proposed recipient
as evidence of such compliance, including an acknowledgment by the recipient
that the recipient is acquiring the shares for investment and not for the
purpose or with the intention of distributing the shares. Accordingly, the
Optionee acknowledges that, prior to the issuance of the Option Shares, the
Company may delay the delivery of certificates for the Option Shares for such
time as the Company deems necessary or desirable for such compliance. The
Optionee shall provide such information as the Company deems necessary or
desirable to secure such compliance. The Optionee understands that the Company
is under no obligation to register, qualify or list the Option Shares with the
Securities and Exchange Commission, any state securities commission or any stock
exchange, to effect such compliance.
6. RIGHT OF FIRST REFUSAL.(a) Before any transfer of Option Shares is
transacted, the Company shall have the irrevocable, exclusive right (but not the
obligation) to repurchase any or all such Option Shares proposed to be
transferred, no transfer of such securities shall be valid or effective until
the Company has been afforded the opportunity to exercise such right of first
refusal, and the transferee must agree in writing to be bound by the terms of
this Section 6 with respect to the Option Shares.
(b) The repurchase price shall be equal to the price per Option Share
offered to the Participant by the bidding third party (states in terms of
economic equivalency as to any noncash or deferred consideration). Such price
shall apply, however, only to transfers made on BONA FIDE terms for fair
consideration. In all other instances, the repurchase price shall equal the
Market Price, if there is one, or the Book Value of the Purchase Option Shares
if there is no Market Price. For purposes herein, "Market Price" shall mean, if
the Common Stock of the Company is publicly traded on an exchange or over the
counter, the last closing price or bid price of the Common Stock; and "Book
Value" shall mean the shareholders' equity of the Company (as determined by the
Company's independent accountants, in accordance with the accounting principles
customarily applied in connection with the preparation of the Company's annual
financial statements, but not necessarily pursuant to an audit of the Company's
books of account, unless an audit thereof would have otherwise been performed),
as of the last day of the Company's fiscal year immediately preceding the
receipt by the Company of the written notice described in (c) below, divided by
the number of outstanding shares of the Company's capital stock at such date.
(c) The Company may exercise its right of first refusal with respect
to such Option Shares at any time within fourteen (14) days after it has
received written notice of the proposed transfer accompanied by a complete
description of the terms and background of such transfer and a copy of the
BONAFIDE offer, provided that such period shall be extended by the amount of
time (if any) entailed in determining the Book Value, if so required.
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<PAGE>
(d) In the event the proposed transfer does not occur within thirty
(3) days after the expiration of the Company's right of refusal, the Company
once again shall be accorded a right of first refusal, the Company once again
shall be accorded a right of first refusal with respect to such Option Shares,
as if the foregoing procedure had not occurred.
7. EXERCISE OF RIGHT OF FIRST REFUSAL. The Company may exercise its
right of first refusal pursuant to Section 6 by giving the Optionee written
notice to such effect. Such notice shall also specify a proposed closing date
for the exchange of the purchase price and the certificates for the Option
Shares, which shall be within ten (10) days of the date such notice is given or
the closing date proposed in the BONA FIDE offer, whichever is later. The
payment of the purchase price hereunder may be paid, at the option of the
Company, by a monthly installment note of the Company due within one year and
bearing interest at a commercially reasonable rate, or, if more acceptable to
the Company, upon the same terms provided in the BONAFIDE offer.
8. TERMINATION OF RIGHT OF FIRST REFUSAL. The right of first refusal
granted by Section 6 shall terminate at the earlier of (i) the date on which a
public market exists for the Common Stock (or any other stock issued in exchange
for the Option Shares); and (ii) the date on which the Company sells all or
substantially all of its assets, or engages in a liquidation of all or
substantially all of its assets. For purposes of this Agreement, a "public
market" shall be deemed to exist at such time as a Public Offering has closed.
9. LEGENDS. The share certificates evidencing the Option Shares may
contain such legends as may be desirable or required in keeping with applicable
state corporation and securities laws.
10. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been given
when delivered by personal delivery, by facsimile transmission or by mail, to
the following address:
To Optionee:
To the Company:
Pipeline Communications, Inc.
380 Interstate North Parkway
Suite 310
Atlanta, GA 30339
or at such other address or facsimile number as the parties hereto shall have
last designated by notice to the other party. Any notice given by personal
delivery or mail shall be deemed to have been delivered on the date of receipt
of such delivery at such address; and any notice given by facsimile transmission
shall be deemed to have been delivered on the date of transmission if received
during business hours on
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<PAGE>
a business day, or the next business day after transmission if received after
business hours on a business day or at any time on a non-business day.
11. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company or the
Optionee to enforce at any time any provision of this Agreement shall in no way
be construed to be a waiver of such provisions or of any other provision hereof.
12. AMENDMENTS. This Agreement may be amended or modified only by an
instrument in writing signed by the Optionee and an authorized representative of
the Company. Except as provided in Section 14, no third party shall be entitled
to claim the benefit of or enforce this Agreement.
13. GOVERNING LAW. This Agreement has been entered into, and shall be
governed by and construed according to the laws of, the State of Georgia,
without regard to the conflicts of law rules thereof.
14. SUCCESSORS AND ASSIGNS. This Agreement shall insure to the benefit
of, and be binding on, the successors and assigns of the Company, and such
persons as may be permitted to succeed to the rights of the Optionee hereunder
with respect to the Option and the Option Shares. The parties shall take such
steps as reasonably may be necessary, including but not limited to the execution
and delivery of an agreement to replace this Agreement, to give effect to the
provision of this Section 14 in a way that the relative benefits and obligations
of the parties (and their successors and assigns) under this Agreement are
preserved as closely as possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
PIPELINE COMMUNICATIONS, INC.
By:
--------------------------------------
A . Matthews Thompson
Chairman, CEO
--------------------------------------
(Optionee)
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<PAGE>
EXHIBIT 5.1
July 29, 1996
IntelliQuest Information Group, Inc.
1250 Capital of Texas Highway South
Building Two, Plaza One
Austin, Texas 78746
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about July 29, 1996 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 46,974 shares of your
Common Stock (the "Shares") reserved for issuance under the Pipeline
Communications, Inc. 1994 Incentive Stock Option Plan (the "Plan"). As your
legal counsel, we have examined the proceedings taken and are familiar with the
proceedings proposed to be taken by you in connection with the sale and issuance
of the Shares under such Plan.
It is our opinion that, when issued and sold in the manner referred to in
the Plan and pursuant to the respective agreements which accompany each grant
under the Plan, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever it appears in the
Registration Statement and any amendment thereto.
Very truly yours,
/s/Wilson, Sonsini, Goodrich & Rosati
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
<PAGE>
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE LLP, INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 31, 1996 except for Note 1
which is as of March 19, 1996, which appears on page F-2 of the Registration
Statement on Form S-1 (No. 333-00844) of IntelliQuest Information Group, Inc.
Price Waterhouse LLP
Austin Texas
July 29, 1996
