AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 1999
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
EXCEL SWITCHING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
MASSACHUSETTS 04-2992806
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
255 INDEPENDENCE DRIVE
HYANNIS, MA 02601
(Address of Principal Executive Offices) (Zip Code)
--------------------
RASCOM, INC. 1996 STOCK PLAN
(Full Title of the Plan)
--------------------
CHRISTOPHER STAVROS, ESQ.
VICE PRESIDENT & GENERAL COUNSEL
EXCEL SWITCHING CORPORATION
255 INDEPENDENCE DRIVE
HYANNIS, MASSACHUSETTS 02601
(Name and Address of Agent For Service)
(508) 862-3000
(Telephone Number, Including Area Code, of Agent For Service)
------------------------------
Copy to:
Christopher Stavros, Esq. John Hession, Esq.
Excel SWITCHING Corporation TESTA, HURWITZ & THIBEAULT, LLP
255 Independence Drive High Street Tower, 125 High Street
Hyannis, Massachusetts 02601 Boston, Massachusetts 02110
(508) 862-3000 (617) 248-7000
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<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE REGISTRATION FEE (2)
------------------------------------ ---------- ------------- -------------- --------------------
STOCK OPTION PROGRAM
<S> <C> <C> <C> <C>
Common Stock (Par Value $.01 Per Share) 8,901 $ 2.25 $ 20,027 $ 5.57
Common Stock (Par Value $.01 Per Share) 3,481 $ 2.55 $ 8,876 $ 2.47
Common Stock (Par Value $.01 Per Share) 1,112 $ 3.04 $ 3,380 $ 0.94
Common Stock (Par Value $.01 Per Share) 2,670 $ 3.08 $ 8,223 $ 2.29
Common Stock (Par Value $.01 Per Share) 2,715 $ 3.14 $ 8,525 $ 2.37
Common Stock (Par Value $.01 Per Share) 1,424 $ 3.38 $ 4,813 $ 1.34
Common Stock (Par Value $.01 Per Share) 1,068 $ 3.41 $ 3,641 $ 1.01
Common Stock (Par Value $.01 Per Share) 934 $ 3.47 $ 3,240 $ 0.90
Common Stock (Par Value $.01 Per Share) 715 $ 3.60 $ 2,574 $ 0.72
Common Stock (Par Value $.01 Per Share) 416 $ 3.89 $ 1,618 $ 0.45
Common Stock (Par Value $.01 Per Share) 4,895 $ 4.09 $ 20,020 $ 5.57
Common Stock (Par Value $.01 Per Share) 667 $ 4.14 $ 2,761 $ 0.77
Common Stock (Par Value $.01 Per Share) 890 $ 4.16 $ 3,702 $ 1.03
Common Stock (Par Value $.01 Per Share) 667 $ 4.20 $ 2,801 $ 0.78
Common Stock (Par Value $.01 Per Share) 890 $ 4.22 $ 3,755 $ 1.04
Common Stock (Par Value $.01 Per Share) 4,613 $ 4.24 $ 19,559 $ 5.44
Common Stock (Par Value $.01 Per Share) 3,063 $ 4.27 $ 13,079 $ 3.64
Common Stock (Par Value $.01 Per Share) 1,446 $ 4.33 $ 6,261 $ 1.74
Common Stock (Par Value $.01 Per Share) 9,551 $ 4.50 $ 42,979 $ 11.95
Common Stock (Par Value $.01 Per Share) 3,338 $ 4.95 $ 16,523 $ 4.59
Common Stock (Par Value $.01 Per Share) 11,254 $ 6.75 $ 75,964 $ 21.12
TOTAL: 64,710 $ 75.73
- -------------------------------------------
</TABLE>
(1) Such shares are issuable upon exercise of outstanding options with fixed
exercise prices. Pursuant to Rule 457(h), the aggregate offering price
and the fee have been computed upon the basis of the price at which the
options may be exercised. The offering price per share set forth for such
shares is the exercise price per share at which such options are
exercisable.
(2) Calculated pursuant to Section 6(b) of the Securities Act of 1933.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The documents containing the information specified in this Item 1 will
be sent or given to employees, directors and others as specified by Rule
428(b)(1). In accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission") and the instructions to Form S-8, such
documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The documents containing the information specified in this Item 2 will
be sent or given to employees, directors or others as specified by Rule
428(b)(1). In accordance with the rules and regulations of the Commission and
the instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Registrant with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are incorporated by reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, filed pursuant to the Exchange Act which
contains audited financial statements for the fiscal year ended
December 31, 1998.
(b) The Registrant's Current Report on Form 8-K filed on April 23,
1999 pursuant to the Exchange Act.
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1999, filed on May 18, 1999 pursuant to
the Exchange Act.
(d) The section entitled "Description of Registrant's Securities to
be Registered," contained in the Registrant's Registration
Statement on Form 8-A, filed on October 23, 1997 pursuant to
Section 12 of the Exchange Act.
All documents subsequently filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered herein have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
3
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is required by its Restated By-laws and the Restated
Articles of Incorporation generally to indemnify any director, officer or
employee against all expenses and liabilities reasonably incurred by or imposed
upon such person in connection with any legal action in which such person is
involved by reason of such person's position with the Registrant unless such
person shall have been finally adjudicated in any action, suit or proceeding not
to have acted in good faith in the reasonable belief that such person's action
was in the best interests of the Registrant. The Registrant may pay expenses
incurred by any such person in defending a civil or criminal action or
proceeding in advance of the final disposition of such action upon the
Registrant's receipt of the undertaking of such person to repay such amount if
such person shall be adjudicated not to be entitled to indemnification.
The Registrant's Restated Articles of Incorporation include a provision
limiting the personal liability of a director of the Registrant to its
stockholders for monetary damages for breaches of their fiduciary duty except
(i) for any breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under section
sixty-one or sixty-two of Chapter 156B of the Massachusetts General Laws, or
(iv) for any transaction from which the director derived an improper benefit.
The Registrant maintains directors and officers liability insurance for
the benefit of its directors and certain of its officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 Restated Articles of Incorporation of the Registrant (filed as
Exhibit 3.1 to the Registrant's Annual Report on Form 10-K on
March 31, 1999 and incorporated herein by reference).
4.2 Restated By-Laws of the Registrant (filed as Exhibit 3.2 to
the Registrant's Annual Report filed on Form 10-K on March 31,
1999 and incorporated herein by reference).
4.3 RAScom 1996 Stock Plan
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in
Exhibit 5.1)
4
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24.1 Power of Attorney (included as part of the signature page to
this Registration Statement)
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:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to
include any financial statements required by Rule 3-19 of this
chapter at the start of any delayed offering or throughout a
continuous offering. Financial statements and information
otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the
prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and
other information necessary to ensure that all other
information in the prospectus is at least as current as the
date of those financial statements. Notwithstanding the
foregoing, with respect to registration statements on Form
F-3, a post-effective amendment need not be filed to include
financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such
financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Form F-3.
5
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the 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 Act and will be governed by the final
adjudication of such issue.
6
<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 Hyannis, Commonwealth of Massachusetts, on the 24th
day of May, 1999.
EXCEL SWITCHING CORPORATION
By: /s/ Robert P. Madonna
---------------------------------
Robert P. Madonna
President, Chief Executive Officer
and Chairman of the Board of Directors
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Excel Switching Corporation,
hereby severally constitute and appoint Christopher Stavros and Stephen S.
Galliker and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities (until revoked in writing) to sign all amendments (including
post-effective amendments) to this Registration Statement on Form S-8 of Excel
Switching Corporation, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary fully to all intents and purposes as he might or could do in person
thereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their or his substitute, may lawfully 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.
<TABLE>
<CAPTION>
Signature Title(s) Date
<S> <C> <C>
/s/ Robert P. Madonna President, Chief Executive Officer May 24, 1999
- ------------------------------------ and Chairman of the Board of Directors
Robert P. Madonna (Principal Executive Officer)
/s/ Stephen S. Galliker Vice President Finance and May 24, 1999
- ------------------------------------ Administration and Chief Financial
Stephen S. Galliker Officer
(Principal Financial and Accounting Officer)
/s/ Christopher Stavros Director, Vice President, General May 24, 1999
- ------------------------------------ Counsel and Clerk
Christopher Stavros
/s/ Edward L. Breslow Director May 24, 1999
- ------------------------------------
Edward L. Breslow
/s/ John Loughlin Director May 24, 1999
- ------------------------------------
John Loughlin
</TABLE>
7
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 Restated Articles of Incorporation of the Registrant (filed as
Exhibit 3.1 to the Registrant's Annual Report on Form 10-K on
March 31, 1999 and incorporated herein by reference).
4.2 Restated By-Laws of the Registrant (filed as Exhibit 3.2 to
the Registrant's Annual Report filed on Form 10-K on March 31,
1999 and incorporated herein by reference).
4.3 RAScom 1996 Stock Plan
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in
Exhibit 5.1)
24.1 Power of Attorney (included as part of the signature page to
this Registration Statement)
Exhibit 4.3
RASCOM, INC.
1996 STOCK PLAN
---------------
1. PURPOSE. The purpose of the RAScom, Inc. 1996 Stock Plan (the "Plan")
is to encourage key employees of RAScom, Inc. (the "Company") and of any present
or future parent or subsidiary of the Company (collectively, "Related
Corporations") and other individuals who render services to the Company or a
Related Corporation, by providing opportunities to participate in the ownership
of the Company and its future growth through (a) the grant of options which
qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); (b) the grant of options
which do not qualify as ISOs ("Non-Qualified Options"); (c) awards of stock in
the Company ("Awards"); and (d) opportunities to make direct purchases of stock
in the Company ("Purchases"). Both ISOs and Non-Qualified Options are referred
to hereafter individually as an "Option" and collectively as "Options." Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation,"
respectively, as those terms are defined in Section 424 of the Code.
2. ADMINISTRATION OF THE PLAN.
A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be
administered by the Board of Directors of the Company (the "Board") or by
a committee appointed by the Board (the "Committee"); provided that the
Plan shall be administered to the extent required by Rule 16b-3
promulgated under the Securities Exchange Act of 1934 or any successor
provision ("Rule 16b-3"), by a disinterested administrator or
administrators within the meaning of Rule 16b-3. Hereinafter, all
references in this Plan to the "Committee" shall mean the Board if no
Committee has been appointed. Subject to ratification of the grant or
authorization of each Stock Right by the Board (if so required by
applicable state law), and subject to the terms of the Plan, the Committee
shall have the authority to (i) determine to whom (from among the class of
employees eligible under paragraph 3 to receive ISOs) ISOs shall be
granted, and to whom (from among the class of individuals and entities
eligible under paragraph 3 to receive Non-Qualified Options and Awards and
to make Purchases) Non-Qualified Options, Awards and authorizations to
make Purchases may be granted; (ii) determine the time or times at which
Options or Awards shall be granted or Purchases made; (iii) determine the
purchase price of shares subject to each Option or Purchase, which prices
shall not be less than the minimum price specified in paragraph 6; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified
Option; (v) determine (subject to paragraph 7) the time or times when each
Option shall become exercisable and the duration of the exercise period;
(vi) extend the period during which outstanding Options may be exercised;
(vii) determine whether restrictions such as repurchase options are to be
imposed on shares subject to Options, Awards and Purchases and the nature
of such restrictions, if any; and (viii) interpret the Plan and prescribe
and rescind rules and regulations relating to it. If the Committee
determines to issue a Non-Qualified Option, it shall take whatever actions
it deems necessary, under Section 422 of the Code and the regulations
promulgated thereunder, to ensure that such Option is not treated as an
ISO. The interpretation and construction by the Committee of any
provisions of the Plan or of any Stock Right granted under it shall be
final unless otherwise determined by the Board. The Committee may from
time to time adopt such rules and regulations for carrying out the Plan as
it may deem advisable. No member of the Board or the Committee shall be
liable for any action or determination made in good faith with respect to
the Plan or any Stock Right granted under it.
B. COMMITTEE ACTIONS. The Committee may select one of its members
as its chairman, and shall hold meetings at such time and places as it may
determine. A majority of the Committee shall
<PAGE>
constitute a quorum and acts of a majority of the members of the Committee
at a meeting at which a quorum is present, or acts reduced to or approved
in writing by all the members of the Committee (if consistent with
applicable state law), shall be the valid acts of the Committee. From time
to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies however
caused, or remove all members of the Committee and thereafter directly
administer the Plan.
C. GRANT OF STOCK RIGHTS TO BOARD MEMBERS. Subject to the
provisions of the first sentence of paragraph 2(A) above, if applicable,
Stock Rights may be granted to members of the Board. All grants of Stock
Rights to members of the Board shall in all other respects be made in
accordance with the provisions of this Plan applicable to other eligible
persons. Consistent with the provisions of the first sentence of Paragraph
2(A) above, members of the Board who either (i) are eligible to receive
grants of Stock Rights pursuant to the Plan or (ii) have been granted
Stock Rights may vote on any matters affecting the administration of the
Plan or the grant of any Stock Rights pursuant to the Plan, except that no
such member shall act upon the granting to himself or herself of Stock
Rights, but any such member may be counted in determining the existence of
a quorum at any meeting of the Board during which action is taken with
respect to the granting to such member of Stock Rights.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to employees of
the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify such individual or entity from,
participation in any other grant of Stock Rights.
4. STOCK. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock of the Company, par value $.001 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is 1,000,000, subject to adjustment as provided in paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the unpurchased shares of
Common Stock subject to such Option shall again be available for grants of Stock
Rights under the Plan.
5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the Plan at
any time on or after June 5, 1996 and prior to the end of the day on June 4,
2006. The date of grant of a Stock Right under the Plan will be the date
specified by the Committee at the time it grants the Stock Right; provided,
however, that such date shall not be prior to the date on which the Committee
acts to approve the grant.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
A. PRICE FOR NON-QUALIFIED OPTIONS, AWARDS AND PURCHASES. The
exercise price per share specified in the agreement relating to each
Non-Qualified Option granted, and the purchase price per share of stock
granted in any Award or authorized as a Purchase, under the Plan shall in
no event be less than the minimum legal consideration required therefor
under the laws of any jurisdiction in which the Company or its successors
in interest may be organized.
B. PRICE FOR ISOS. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less
than the fair market value per share of Common Stock on the date of such
grant. In the case of an ISO to be granted to an employee owning stock
possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any
<PAGE>
Related Corporation, the price per share specified in the agreement
relating to such ISO shall not be less than one hundred ten percent (110%)
of the fair market value per share of Common Stock on the date of grant.
For purposes of determining stock ownership under this paragraph, the
rules of Section 424(d) of the Code shall apply.
C. $100,000 ANNUAL LIMITATION ON ISO VESTING. Each eligible
employee may be granted Options treated as ISOs only to the extent that,
in the aggregate under this Plan and all incentive stock option plans of
the Company and any Related Corporation, ISOs do not become exercisable
for the first time by such employee during any calendar year with respect
to stock having a fair market value (determined at the time the ISOs were
granted) in excess of $100,000. The Company intends to designate any
Options granted in excess of such limitation as Non-Qualified Options.
D. DETERMINATION OF FAIR MARKET VALUE. If, at the time an Option
is granted under the Plan, the Company's Common Stock is publicly traded,
"fair market value" shall be determined as of the date of grant or, if the
prices or quotes discussed in this sentence are unavailable for such date,
the last business day for which such prices or quotes are available prior
to the date of grant and shall mean (i) the average (on that date) of the
high and low prices of the Common Stock on the principal national
securities exchange on which the Common Stock is traded, if the Common
Stock is then traded on a national securities exchange; or (ii) the last
reported sale price (on that date) of the Common Stock on the Nasdaq
National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the closing bid price (or average of bid
prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the
Nasdaq National Market. If the Common Stock is not publicly traded at the
time an Option is granted under the Plan, "fair market value" shall mean
the fair value of the Common Stock as determined by the Committee after
taking into consideration all factors which it deems appropriate,
including, without limitation, recent sale and offer prices of the Common
Stock in private transactions negotiated at arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(B). Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9 through
12, each Option granted under the Plan shall be exercisable as follows:
A. VESTING. The Option shall either be fully exercisable on the
date of grant or shall become exercisable thereafter in such installments
as the Committee may specify.
B. FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of
the Option, unless otherwise specified by the Committee.
C. PARTIAL EXERCISE. Each Option or installment may be exercised
at any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable.
D. ACCELERATION OF VESTING. The Committee shall have the right to
accelerate the date that any installment of any Option becomes
exercisable; provided that the Committee shall not, without the
<PAGE>
consent of an optionee, accelerate the permitted exercise date of any
installment of any Option granted to any employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to paragraph 16)
if such acceleration would violate the annual vesting limitation contained
in Section 422(d) of the Code, as described in paragraph 6(C).
Notwithstanding the immediately preceding sentence, upon the occurrence of
a Change in Control (as hereinafter defined) of the Company fifty percent
(50%) of the then-unvested options held by such optionee shall become
immediately vested and exercisable without regard to the annual vesting
limitation contained in Section 422(d) of the Code; provided, however,
that this provision shall be of no force or effect if the Company receives
written confirmation from its independent public accountants that such
acceleration would prevent the Company from accounting for such Change in
Control as a "pooling of interests" if the Board of Directors has
determined that such accounting is desired. For purposes of this Plan and
any Options granted hereunder, a "Change in Control" shall have occurred
if at any time any of the following events shall occur (expressly
excluding from this definition any issuance of securities by the Company
in an underwritten, firm commitment public offering registered under the
Securities Act of 1933, as amended).
(i) The Company is merged or consolidated or reorganized into or
with another corporation or other legal person, and as a result of
such merger, consolidation or reorganization, less than a majority
of the combined voting power of the then-outstanding securities of
such surviving, resulting or reorganized corporation or person
immediately after such transaction is held in the aggregate by the
holders of the then-outstanding securities entitled to vote
generally in the election of directors of the Company ("Voting
Stock") immediately prior to such transaction; or
(ii) The Company sells or otherwise transfers all or substantially
all of its assets to any other corporation or other legal person,
and as a result of such sale or transfer less than a majority of the
combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale or transfer is
held in the aggregate by the holders of the Voting Stock of the
Company immediately prior to such sale or transfer.
9. TERMINATION OF EMPLOYMENT. Subject to the provisions of paragraph 8,
above and unless otherwise specified in the agreement relating to such ISO, if
an ISO optionee ceases to be employed by the Company and all Related
Corporations other than by reason of death or disability as defined in paragraph
10, no further installments of his or her ISOs shall become exercisable, and his
or her ISOs shall terminate on the earlier of (a) three months after the date of
termination of his or her employment, or (b) their specified expiration dates,
except to the extent that such ISOs (or unexercised installments thereof) have
been converted into Non-Qualified Options pursuant to paragraph 16. For purposes
of this paragraph 9, employment shall be considered as continuing uninterrupted
during any bona fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the period of such
leave does not exceed 90 days or, if longer, any period during which such
optionee's right to reemployment is guaranteed by statute. A bona fide leave of
absence with the written approval of the Committee shall not be considered an
interruption of employment under this paragraph 9, provided that such written
approval contractually obligates the Company or any Related Corporation to
continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
10. DEATH; DISABILITY.
A. DEATH. If an ISO optionee ceases to be employed by the Company
and all Related Corporations by reason of his or her death, any ISO owned
by such optionee may be exercised, to the
<PAGE>
extent otherwise exercisable on the date of death, by the estate, personal
representative or beneficiary who has acquired the ISO by will or by the
laws of descent and distribution, until the earlier of (i) the specified
expiration date of the ISO or (ii) 360 days from the date of the
optionee's death.
B. DISABILITY. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his or her disability,
such optionee shall have the right to exercise any ISO held by him or her
on the date of termination of employment, for the number of shares for
which he or she could have exercised it on that date, until the earlier of
(i) the specified expiration date of the ISO or (ii) 180 days from the
date of the termination of the optionee's employment. For the purposes of
the Plan, the term "disability" shall mean "permanent and total
disability" as defined in Section 22(e)(3) of the Code or any successor
statute.
11. ASSIGNABILITY. No Stock Right shall be assignable or transferable by
the grantee except by will, by the laws of descent and distribution or, in the
case of Non-Qualified Options only, pursuant to a valid domestic relations
order. Except as set forth in the previous sentence, during the lifetime of a
grantee each Stock Right shall be exercisable only by such grantee.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of shares of Common
Stock deliverable upon the exercise of Options shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall
be made in the purchase price per share to reflect such subdivision,
combination or stock dividend.
B. CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated
with or acquired by another entity in a merger or other reorganization as
described in paragraph 8D(i) hereof immediately preceding the consummation
of such event, shall, immediately following such event, hold, as a group,
less than a majority of the voting securities of the surviving or
successor entity, or in the event of a sale of all or substantially all of
the Company's assets or otherwise (each, an "Acquisition"), the Committee
or the board of directors of any entity assuming the obligations of the
Company hereunder (the "Successor Board"), shall, as to outstanding
Options, either (i) make appropriate provision for the continuation of
such Options by substituting on an equitable basis for the shares then
subject to such Options either (a) the consideration payable with respect
to the outstanding shares of Common Stock in connection with the
Acquisition, (b) shares of stock of the surviving or successor corporation
or
<PAGE>
(c) such other securities as the Successor Board deems appropriate, the
fair market value of which shall not materially exceed the fair market
value of the shares of Common Stock subject to such Options immediately
preceding the Acquisition; or (ii) terminate all Options in exchange for a
cash payment equal to the excess of the fair market value of the shares
subject to such Options (to the extent then exercisable or to be
exercisable as a result of the Acquisition) over the exercise price
thereof.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon
exercising an Option shall be entitled to receive for the purchase price
paid upon such exercise the securities he or she would have received if he
or she had exercised such Option prior to such recapitalization or
reorganization.
D. MODIFICATION OF ISOS. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect to ISOs
shall be made only after the Committee, after consulting with counsel for
the Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424 of the
Code) or would cause any adverse tax consequences for the holders of such
ISOs. If the Committee determines that such adjustments made with respect
to ISOs would constitute a modification of such ISOs or would cause
adverse tax consequences to the holders, it may refrain from making such
adjustments.
E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such
other time and subject to such other conditions as shall be determined by
the Committee.
F. ISSUANCES OF SECURITIES. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the
Company.
G. FRACTIONAL SHARES. No fractional shares shall be issued under
the Plan and the optionee shall receive from the Company cash in lieu of
such fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the events described
in subparagraphs A, B or C above, the class and aggregate number of shares
set forth in paragraph 4 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall
also be appropriately adjusted to reflect the events described in such
subparagraphs. The Committee or the Successor Board shall determine the
specific adjustments to be made under this paragraph 13 and, subject to
paragraph 2, its determination shall be conclusive.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (d) at the
<PAGE>
discretion of the Committee, by any combination of (a), (b), and (c) above. If
the Committee exercises its discretion to permit payment of the exercise price
of an ISO by means of the methods set forth in clauses (b), (c), or (d) of the
preceding sentence, such discretion shall be exercised in writing at the time of
the grant of the ISO in question. The holder of an Option shall not have the
rights of a shareholder with respect to the shares covered by such Option until
the date of issuance of a stock certificate to such holder for such shares.
Except as expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on June
5, 1996, subject, with respect to the validation of ISOs granted under the Plan,
to approval of the Plan by the stockholders of the Company at the next Meeting
of Stockholders or, in lieu thereof, by written consent. If the approval of
stockholders is not obtained prior to June 5, 1997, any grants of ISOs under the
Plan made prior to that date will be rescinded. The Plan shall expire at the end
of the day on June 4, 2006 (except as to Options outstanding on that date).
Subject to the provisions of paragraph 5 above, Options may be granted under the
Plan prior to the date of stockholder approval of the Plan. The Board may
terminate or amend the Plan in any respect at any time, except that, without the
approval of the stockholders obtained within 12 months before or after the Board
adopts a resolution authorizing any of the following actions: (a) the total
number of shares that may be issued under the Plan may not be increased (except
by adjustment pursuant to paragraph 13); (b) the benefits accruing to
participants under the Plan may not be materially increased; (c) the
requirements as to eligibility for participation in the Plan may not be
materially modified; (d) the provisions of paragraph 3 regarding eligibility for
grants of ISOs may not be modified; (e) the provisions of paragraph 6(B)
regarding the exercise price at which shares may be offered pursuant to ISOs may
not be modified (except by adjustment pursuant to paragraph 13); (f) the
expiration date of the Plan may not be extended; and (g) the Board may not take
any action which would cause the Plan to fail to comply with Rule 16b-3. Except
as otherwise provided in this paragraph 15, in no event may action of the Board
or stockholders alter or impair the rights of a grantee, without such grantee's
consent, under any Option previously granted to such grantee.
16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS. The Committee, at the
written request or with the written consent of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but shall not be limited to, extending the exercise
period or reducing the exercise price of the appropriate installments of such
ISOs. At the time of such conversion, the Committee (with the consent of the
optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Committee takes appropriate action.
17. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
<PAGE>
19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Committee in its discretion may
condition (i) the exercise of an Option, (ii) the grant of an Award, (iii) the
making of a Purchase of Common Stock for less than its fair market value, or
(iv) the vesting or transferability of restricted stock or securities acquired
by exercising an Option, on the grantee's making satisfactory arrangement for
such withholding. Such arrangement may include payment by the grantee in cash or
by check of the amount of the withholding taxes or, at the discretion of the
Committee, by the grantee's delivery of previously held shares of Common Stock
or the withholding from the shares of Common Stock otherwise deliverable upon
exercise of a Option shares having an aggregate fair market value equal to the
amount of such withholding taxes.
20. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
21. GOVERNING LAW. The validity and construction of the Plan and the
instruments evidencing Options shall be governed by the laws of the Commonwealth
of Massachusetts or the laws of any jurisdiction in which the Company or its
successors in interest may be organized.
Exhibit 5.1
May 24, 1999
Excel Switching Corporation
255 Independence Drive
Hyannis, Massachusetts 02601
Re: Registration Statement on Form S-8 Relating to the
RAScom, Inc. 1996 Stock Plan (the "Plan")
Ladies and Gentlemen:
Reference is made to the above-captioned Registration Statement on Form
S-8 (the "Registration Statement") filed by Excel Switching Corporation (the
"Company") with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, relating to an aggregate of 64,710 shares of Common Stock,
$.01 par value, of the Company (the "Shares").
We are counsel to the Company and are familiar with the proceedings of its
stockholders and Board of Directors. We have examined original or certified
copies of the Company's restated certificate of incorporation, the Company's
restated by-laws, the corporate records of the Company to the date hereof, and
such other certificates, documents, records and materials as we have deemed
necessary in connection with this opinion letter.
We are members only of the Bar of the Commonwealth of Massachusetts and
are not experts in, and express no opinion regarding, the laws of any
jurisdiction other than the Commonwealth of Massachusetts and the United States
of America, and the General Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that the
Shares issued or proposed to be issued by the Company pursuant to the Plan will
be, upon receipt of the consideration provided for in the Plan, validly issued,
fully paid and nonassessable after issuance of such Shares in accordance with
the terms of the Plan.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
------------------------------------
TESTA, HURWITZ & THIBEAULT, LLP
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated January 26,
1999 included in Excel Switching Corporation's Form 10-K for the year ended
December 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
--------------------------
ARTHUR ANDERSEN LLP
Boston, Massachusetts
May 24, 1999
