As filed with the Securities and Exchange Commission on October 1, 1998.
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NEWCOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4485355
------------------------------ ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31166 Via Colinas
Westlake Village, California 91362
----------------------------- ------------------------------
(Address of Principal Executive Offices) (Zip Code)
NewCom, Inc.
1998 Employee Stock Purchase Plan and
NewCom, Inc.
Non-Employee Director Stock Option Plan
---------------------------------------------
(Full title of the plans)
Asif M. Khan COPY TO:
NewCom, Inc. L. William Caraccio, Esq.
31166 Via Colinas Pillsbury Madison & Sutro LLP
Westlake Village, CA 91362 2550 Hanover Street
(818) 597-3200 Palo Alto, California 94304-1115
(650) 233-4500
------------------------------
(Name, address and telephone number, including ______________________________
area code, of agent for service) (Counsel to the Registrant)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Securities Amount Maximum Offering Maximum Aggregate Amount of
To Be Registered To Be Registered(1) Price Per Share(2) Offering Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001
per share....................... 1,000,000 shares $4.50 $4,500,000 $1,327.50
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of 500,000 shares that are being registered pursuant to the
NewCom, Inc. 1998 Employee Stock Purchase Plan and 500,000 shares that are
being registered pursuant to the NewCom, Inc. Non-Employee Director Stock
Option Plan. In addition, pursuant to Rule 416 under the Securities Act of
1933, as amended, (the "Securities Act"), this Registration Statement
includes an indeterminate number of additional shares as may be issuable
as a result of the anti-dilution provisions described in the plans.
(2) This estimate is made pursuant to Rule 457(h) under the Securities Act, on
the basis of the high and low sales prices of the Common Stock on the
Nasdaq National Market, solely for the purposes of calculating the
registration fee.
-----------------
The Registration Statement shall become effective upon filing in accordance
with Rule 462 under the Securities Act of 1933.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
----------------------------------------------------
ITEM 1. PLAN INFORMATION.*
- ------ ----------------
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
- ------ -----------------------------------------------------------
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
- ------ -----------------------------------------------
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(1) Registrant's Annual Report on From 10-K for the fiscal
year ended February 28, 1998.
(2) Registrant's Quarterly Report on Form 10-Q for the period
ended May 31, 1998.
(3) The information with regard to the Registrant's capital
stock contained in the Registrant's Registration Statement on Form 8-A,
as filed with the Commission on September 15, 1998.
In addition, all documents subsequently filed by Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
after the date 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 this Registration Statement and to be a 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.
- ------ -----------------------------------------
Section 145 ("Section 145") of the DGCL provides generally and in
pertinent part that a Delaware corporation may indemnify its directors,
officers, employees and agents against expenses (including attorneys' fees),
judgments, fines and settlements actually and reasonably incurred by them in
connection with any civil, criminal, administrative or investigative action,
suit or proceeding (except actions by or in the right of the corporation), if,
they acted in good faith and in a manner they reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal suit or proceeding, they had no reasonable cause to believe their
conduct was unlawful. Section 145 further provides that, in connection with the
defense or settlement of any action
-2-
<PAGE>
by or in the right of the corporation, a Delaware corporation may indemnify its
directors, officers, employees and agents against expenses actually and
reasonably incurred by them if they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation, absent a determination by a court that such indemnity
is proper. Section 145 further permits a Delaware corporation to grant its
directors, officers, employees and agents additional rights of indemnification
through bylaw provisions and otherwise.
Section 145 further permits a Delaware corporation to purchase and
maintain insurance on behalf of any persons who are or were directors, officers,
employees or agents of the corporation, or are ore were serving at the request
of the corporation as directors, officers, employees or agents of the
corporation, or are or were serving at the request of the corporation as
directors, officers, employees or agents of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
them and incurred by them in any such capacity, or arising out of their status
as such, whether or not the corporation would have the power to indemnify them
against such liability under the other provisions of Section 145.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
liability for unauthorized acquisitions or redemptions of, or dividends on,
capital stock) or (iv) for any transaction from which the director derived an
improper personal benefit.
The Restated Certificate of Incorporation and the Bylaws of the
Registrant provide for the indemnification of its directors, officers employees
and other agents to the fullest extent provided by the DGCL.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
- ------ -----------------------------------
Not applicable.
ITEM 8. EXHIBITS.
- ------ --------
See Index to Exhibits to this Form S-8, which is incorporated herein by
reference.
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 20% change in the maximum aggregate
offering price
-3-
<PAGE>
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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed 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 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.
(b) The undersigned Registrant hereby further 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 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.
-4-
<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 Westlake Village, State of California, on
September 29, 1998.
NEWCOM, INC.
/s/ Sultan W. Khan
By --------------------------------------
Sultan W. Khan
President
and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Sultan W. Khan and Steven C.
Veen, and each of them, his or her true and lawful attorneys-in-fact and agents,
each with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Registration Statement,
and to file the same, with 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 to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his
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 by the following persons in the
capacities and on the date indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Sultan W. Khan
- ----------------------- President and Chief Executive September 29, 1998
Sultan W. Khan Officer (Principal Executive
Officer) and Director
/s/ Asif M. Khan
- ----------------------- Executive Vice President, Director September 29, 1998
Asif M. Khan
/s/ Steven C. Veen
- ----------------------- Principal Financial and Accounting September 30, 1998
Steven C. Veen Officer and Director
/s/ Michael I. Froch
- ----------------------- Secretary and Director September 29, 1998
Michael I. Froch
-5-
<PAGE>
- ----------------------- Director September __, 1998
Zane R. Alsabery
/s/ James M. Curran
- ----------------------- Director September 23, 1998
James M. Curran
- ----------------------- Director September __, 1998
Saied Kashani
/s/ Gerald S. Papazian
- ----------------------- Director September 29, 1998
Gerald S. Papazian
- ----------------------- Director September __, 1998
Richard A. Rappaport
- ----------------------- Director September __, 1998
Alexander Remington
-6-
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Exhibit
------- -------
4.1 Amended and Restated Certificate of Incorporation of NewCom,
Inc. (incorporated by reference to Exhibit 3(i)(2) to the
Registrant's Registration Statement on Form S-1 (File No.
333-31431)).
4.2 Bylaws of the Registrant, as amended (incorporated by
reference to Exhibit 3(ii) to the Registrant's Registration
Statement on Form S-1 (File No. 333-31431)).
4.4 NewCom, Inc. 1998 Employee Stock Purchase Plan, adopted
effective July 21, 1998, filed herewith.
4.5 NewCom, Inc. Non-Employee Director Stock Option Plan,
adopted effective July 21, 1998, filed herewith.
5.1 Opinion of Pillsbury Madison & Sutro LLP, filed herewith.
23.1 Consent of Pannell Kerr Forster, filed herewith.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included on page 6).
-7-
Exhibit 4.4
-----------
NEWCOM, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
(Adopted Effective July 21, 1998)
<PAGE>
TABLE OF CONTENTS
Page
----
Section 1. Establishment of the Plan...............................A-3
Section 2. Definitions.............................................A-3
Section 3. Shares Authorized.......................................A-4
Section 4. Administration..........................................A-4
Section 5. Eligibility and Participation...........................A-4
Section 6. Participation Periods...................................A-4
Section 7. Purchase Price..........................................A-5
Section 8. Employee Contributions..................................A-5
Section 9. Plan Accounts; Purchase of Shares.......................A-5
Section 10. Withdrawal From the Plan................................A-6
Section 11. Effect of Termination of Employment or Death............A-6
Section 12. Rights Not Transferable.................................A-6
Section 13. Recapitalization, Etc...................................A-6
Section 14. Limitation on Stock Ownership...........................A-7
Section 15. No Rights as an Employee................................A-7
Section 16. Rights as a Stockholder.................................A-7
Section 17. Use of Funds............................................A-7
Section 18. Amendment or Termination of the Plan....................A-7
Section 19. Governing Law...........................................A-7
2
<PAGE>
NEWCOM, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. ESTABLISHMENT OF THE PLAN
The NewCom, Inc. 1998 Employee Stock Purchase Plan (the "Plan") is hereby
established to provide Eligible Employees with an opportunity to purchase the
Company's common stock so that they may increase their proprietary interest in
the success of the Company. The Plan, which provides for the purchase of stock
through payroll withholding, is intended to qualify under Section 423 of the
Code.
SECTION 2. DEFINITIONS
(a) "Board of Directors" or "Board" means the Board of Directors of the
Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Company" means NewCom, Inc., a Delaware corporation.
(d) "Compensation" means all base straight time gross earnings paid to a
Participant during a Participation Period in cash or in kind including
overtime, commissions, shift differential, incentive compensation,
incentive payments, bonuses, and other forms of compensation.
(e) "Date of Participation" means the first day of a Participation Period.
(f) "Eligible Employee" means any Employee of a Participating Company (i)
whose customary employment is for more than five per calendar year and
for more than 20 hours per week and (ii) who is an Employee at the
commencement of a Participation Period.
(g) "Employee" means any common-law employee of a Participating Company
who has completed at least ninety (90) days of employment with such
Participating Company.
(h) "Fair Market Value" means the price per share of Stock, determined by
the Committee as follows:
1. If the Stock is traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite transactions
report for such date;
2. If the Stock is traded over-the-counter on the date in question
and is classified as a national issue, then the Fair Market Value
shall be equal to the last-transaction price quoted by the NASDAQ
system for such date;
3. If the Stock is traded over-the-counter on the date in question
but is not classified as a national market issue, then the Fair
Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the NASDAQ system
for such date; and
4. If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith
on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in the Western Edition of The Wall Street
Journal. Such determination shall be conclusive and binding on all persons.
(i) "Participant" means an Eligible Employee who elects to participate in
the Plan, as provided in Section 5 hereof.
(j) "Participating Company" means the Company and such present or future
Subsidiaries of the Company as the Board of Directors shall from time
to time designate.
3
<PAGE>
(k) "Participation Period" means a period during which contributions may
be made toward the purchase of Stock under the Plan, as determined
pursuant to Section 6.
(1) "Plan Account" means the account established for each Participant
pursuant to Section 9(a).
(m) "Purchase Price" means the price at which Participants may purchase
Stock under Section 5 of the Plan, as determined pursuant to Section
7.
(n) "Stock" means the shares of common stock of the Company.
(o) "Subsidiary" means a subsidiary corporation as defined in Section 424
of the Code.
SECTION 3. SHARES AUTHORIZED
The maximum aggregate number of shares that may be offered under the Plan
shall be 500,000 shares of Stock, subject to adjustment as provided in
Section 13 hereof.
SECTION 4. ADMINISTRATION
The Plan shall be administered by the Company, and the interpretation and
construction by the Company of any provision of the Plan or of any right to
purchase stock qualified hereunder shall be conclusive and binding on all
persons.
SECTION 5. ELIGIBILITY AND PARTICIPATION
(a) Any person who qualifies or will qualify as an Eligible Employee on
the Date of Participation with respect to a Participation Period may
elect to participate in the Plan for such Participation Period. An
Eligible Employee may elect to participate by executing the
participation agreement prescribed for such purpose by the Company.
The participation agreement shall be filed with the Company no later
than the deadline stated on the participation agreement, and if none
is stated, then no later than the first day of the Participation
Period. The Eligible Employee shall designate on the participation
agreement the percentage or amount of his or her Compensation which he
or she elects to have withheld for the purchase of Stock, which may be
any whole percentage or dollar amount of the Participant's
Compensation, provided that the aggregate amount so withheld may not
exceed 25% of the Participant's Compensation during the relevant
Participation Period.
(b) By enrolling in the Plan, a Participant shall be deemed to have
elected to purchase the maximum number of whole shares of Stock which
can be purchased with the amount of the Participant's Compensation
which is withheld during the Participation Period, subject to any
limitations imposed pursuant to Section 6, and/or Section 14.
(c) Once enrolled, a Participant will continue to participate in the Plan
for each succeeding Participation Period until he or she terminates
participation or ceases to qualify as an Eligible Employee. A
Participant who withdraws from the Plan in accordance with Section 10
may again become a Participant, if he or she then is an Eligible
Employee, by following the procedure described in Section 5(a).
SECTION 6. PARTICIPATION PERIODS
(a) The Plan shall be implemented in one or more Participation Periods of
not more than the maximum number of months permitted under Code
Section 423. The Compensation Committee of the Board shall determine
the commencement date and duration of each Participation Period; the
purchase dates that may occur during a Purchase Period and the maximum
number of shares that may be purchased by a Participant during the
Participation period.
(b) Unless modified by the Compensation Committee of the Board pursuant to
the preceding paragraph, each Participation Period shall last for
three consecutive months. The first Participation Period shall
4
<PAGE>
commence on August 1, 1998 and end on October 31, 1998. Sequential
three month Participation Periods shall commence on each November 1,
February 1, May I and August I thereafter.
(c) At the beginning of each Participation Period, each Participant is
automatically granted an option to purchase shares of Stock. The
option may be exercised at the end of a Participation Period to the
extent of the payroll deductions accumulated during such Participation
Period.
SECTION 7. PURCHASE PRICE
The Purchase Price for each share of Stock shall be eighty-five percent
(85%) of the Fair Market Value of such share on the last trading day prior to
the date shares are purchased.
SECTION 8. EMPLOYEE CONTRIBUTIONS
A Participant may purchase shares of Stock solely by means of payroll
deductions. Payroll deductions, as designated by the Participant pursuant to
Section 5(a), shall commence with the first paycheck issued during the
Participation Period and shall be deducted from each subsequent paycheck
throughout the Participation Period. If a Participant desires to decrease the
rate of payroll withholding during the Participation Period, he or she may do so
one time during a Participation Period by filing a new participation agreement
with the Company. Such decrease will be effective as of the first day of the
second payroll period that begins following the receipt of the new participation
agreement. If a Participant desires to increase the rate of payroll withholding,
he or she may do so effective for the next Participation Period by filing a new
participation agreement with the Company on or before the date specified by the
Company, and if none is stated, then no later than the first day of the
Participation Period for which such change is to be effective.
SECTION 9. PLAN ACCOUNTS; PURCHASE OF SHARES
(a) The Company will maintain a Plan Account on its books in the name of
each Participant. At the close of each pay period, the amount deducted
from the Participant's Compensation will be credited to the
Participant's Plan Account.
(b) As of the last day of each Participation Period, the amount then in
the Participant's Plan Account will be divided by the Purchase Price,
and the number of whole shares of Stock which results (subject to the
limitations described in Sections 5(b), 9(c) and 14) shall be
purchased from the Company with the funds in the Participant's Plan
Account. Share certificates representing the number of shares of Stock
so purchased shall be delivered to the Company and kept in an account
pursuant to a participation agreement between each Participant and the
Company and subject to the conditions described therein which may
include a requirement that shares of Stock be held and not sold for
certain time periods.
(c) In the event that the aggregate number of shares which all
Participants elect to purchase during a Participation Period shall
exceed the number of shares remaining available for issuance under the
Plan, then the number of shares to which each Participant shall become
entitled shall be determined by multiplying the number of shares
available for issuance by a fraction the numerator of which is the sum
of the number of shares the Participant has elected to purchase
pursuant to Section 5, and the denominator of which is the sum of the
number of shares which all employees have elected to purchase pursuant
to Section 5. Any cash amount remaining in the Participant's Plan
Account under these circumstances shall be refunded to the
Participant.
(d) Any amount remaining in the Participant's Plan Account caused by a
surplus due to fractional shares after deducting the amount of the
Purchase Price for the number of whole shares issued to the
Participant shall be carried over in the Participant's Plan Account
for the next succeeding Participation Period, without interest. Any
amount remaining in the Participant's Plan Account caused by anything
other than a surplus due to fractional shares shall be refunded to the
Participant in cash, without interest.
5
<PAGE>
(e) As soon as practicable following the end of each Participation Period,
the Company shall deliver to each Participant a Plan Account statement
setting forth the amount of payroll deductions, the purchase price,
the number of shares purchased and the remaining cash balance, if any.
SECTION 10. WITHDRAWAL FROM THE PLAN
A Participant may elect to withdraw from participation under the Plan at
any time up to the last day of a Participation Period by filing the prescribed
form with the Company. As soon as practicable after a withdrawal, payroll
deductions shall cease and all amounts credited to the Participant's Plan
Account will be refunded in cash, without interest. A Participant who has
withdrawn from the Plan shall not be a Participant in future Participation
Periods, unless he or she again enrolls in accordance with the provisions of
Section 5.
SECTION 11. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH
(a) Termination of employment as an Eligible Employee for any reason,
including death, shall be treated as an automatic withdrawal from the
Plan under Section 10. A transfer from one Participating Company to
another shall not be treated as a termination of employment.
(b) A Participant may file a written designation of a beneficiary who is
to receive any shares and cash, if any, from the Participant's Account
under the Plan in the event of such Participant's death subsequent to
the purchase of shares but prior to delivery to him of such shares and
cash. In addition, a Participant may file a written designation of a
beneficiary who is to receive any cash from the Participant's Account
under the Plan in the event of such Participant's death prior to the
last day of a Participation Period.
(c) Such designation of beneficiary may be changed by the Participant at
any time by written notice. In the event of the death of a Participant
in the absence of a valid designation of a beneficiary who is living
at the time of such Participant's death, the Company shall deliver
such shares and/or cash to the executor or administrator of the estate
of the Participant; or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to
any one or more dependents or relatives of the Participant; or if no
spouse, dependent or relative is known to the Company, then to such
other person as the Company may designate.
SECTION 12. RIGHTS NOT TRANSFERABLE
The rights or interests of any Participant in the Plan, or in any Stock or
moneys to which he or she may be entitled under the Plan, shall not be
transferable by voluntary or involuntary assignment or by operation of law, or
by any other manner other than as permitted by the Code or by will or the laws
of descent and distribution. If a Participant in any manner attempts to
transfer, assign or otherwise encumber his or her rights or interest under the
Plan, other than as permitted by the Code or by will or the laws of descent and
distribution, such act shall be treated as an automatic withdrawal under Section
10.
SECTION 13. RECAPITALIZATION, ETC.
(a) The aggregate number of shares of Stock offered under the Plan, the
number and price of shares which any Participant has elected to
purchase pursuant to Section 5 and the maximum number of shares which
a Participant may elect to purchase under the Plan in any
Participation Period shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock resulting
from a subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend, or other increase or
decrease in such shares effected without receipt of consideration by
the Company.
(b) In the event of a dissolution or liquidation of the Company, or a
merger or consolidation to which the Company is a constituent
corporation, this Plan shall terminate, unless the plan of merger,
6
<PAGE>
consolidation or reorganization provides otherwise, and all amounts
which each Participant has paid towards the Purchase Price of Stock
hereunder shall be refunded, without interest.
(c) The Plan shall in no event be construed to restrict in any way the
Company's right to undertake a dissolution, liquidation, merger,
consolidation or other reorganization.
SECTION 14. LIMITATION ON STOCK OWNERSHIP
Notwithstanding any provision herein to the contrary, no Participant shall
be permitted to elect to participate in the Plan (i) if such Participant,
immediately after his or her election to participate, would own stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or any parent or Subsidiary of the Company, or
(ii) if under the terms of the Plan the rights of the Employee to purchase Stock
under this Plan and all other qualified employee stock purchase plans of the
Company or its Subsidiaries would accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of the Fair Market Value of such Stock (determined at
the time such right is granted) for each calendar year for which such right is
outstanding at any time. For purposes of this Section 14, ownership of stock
shall be determined by the attribution rules of Section 424(d) of the Code, and
Participants shall be considered to own any stock which they have a right to
purchase under this or any other stock plan.
SECTION 15. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person the right to
remain in the employ of a Participating Company. Each Participating Company
reserves the right to terminate the employment of any person at any time and for
any reason.
SECTION 16. RIGHTS AS A STOCKHOLDER
A Participant shall have no rights as a stockholder with respect to any
shares he or she may have a right to purchase under the Plan until the date of
issuance of a stock certificate to the brokerage account designated by the
Company for shares of Stock issued pursuant to the Plan, subject to the
stockholders approval of the adoption of the Plan.
SECTION 17. USE OF FUNDS
All payroll deductions received or held by the Company under the Plan may
be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions in separate accounts.
SECTION 18. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors shall have the right to amend, modify or terminate
the Plan at any time without notice. An amendment of the Plan shall be subject
to stockholder approval only to the extent required by applicable laws,
regulations or rules.
SECTION 19. GOVERNING
Law The Plan shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California. To record the adoption of
the Plan by the Board of Directors, effective as July 21, 1998 and subject to
stockholder approval, the Company has caused its authorized officer to execute
the same on July , 1998.
NEWCOM, INC.
By /s/ Sultan Khan
-------------------------------------
Its President
NEWCOM, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Adopted Effective July 21, 1998)
ARTICLE 1. INTRODUCTION
The Plan was adopted by the Board on July 21, 1998, subject to approval
by the Company's stockholders.
The purpose of the Plan is to promote the long-term success of the
Company and the creation of stockholder value encouraging the attraction and
retention of Non-Employee Directors. The Plan seeks to achieve this purpose by
providing for nonstatutory stock options.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware (except their choice-of-law provisions).
Capitalized terms used herein are defined in Article 12 below.
ARTICLE 2. ADMINISTRATION
The material terms of each option grant (including the timing and
pricing of the option grant) shall be determined by the express terms of the
Plan, and neither the Board nor any committee of the Board shall exercise any
discretionary functions with respect to option grants made pursuant to the Plan.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS
3.1 Basic Limitation. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Common Shares issued upon the exercise of Options under the Plan shall not
exceed five hundred thousand (500,000) shares. The limitation of this Section
3.1 shall be subject to adjustment pursuant to Article 7.
3.2 Additional Shares. If Options are forfeited or terminate for any
other reason before being exercised, then the corresponding Common Shares shall
again become available for Options under the Plan.
ARTICLE 4. ELIGIBILITY
Only Non-Employee Directors shall be eligible for the grant of Options
under the Plan.
ARTICLE 5. OPTIONS
5.1 Stock Option Agreement. Each grant of an Option under
the Plan shall be evidenced by a Stock Option Agreement between
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the Optionee and the Company. Such Option shall be subject to
all applicable terms of the Plan.
5.2 Initial Grants. Upon the Initial Grant Date, each Non-Employee
Director automatically shall be granted an option to purchase fifty thousand
(50,000) Common Shares. The Initial Grant Date shall be the later to occur of
(i) the date the Director Plan is approved by the stockholders of the Company
and (ii) the expiration or earlier termination of the one-year lock-up provision
set forth in the Company's underwriting agreement with Joseph Charles. Each such
Option shall vest while the Optionee continues to serve as a member of the Board
as to twelve thousand five hundred (12,500) shares on each anniversary of the
date the Optionee's status as a NonEmployee Director commenced and shall expire
if not exercised on the tenth anniversary of the date of grant or, if earlier,
on the first anniversary of the termination of the Optionee's status as a
Non-Employee Director. Each Non-Employee Director first elected to the Board
after the effective date of the Plan shall be granted an option to purchase
fifty thousand (50,000) Common Shares. Each such Option shall vest while the
Optionee continues to serve as a member of the Board as to twelve thousand five
hundred (12,500) shares on each anniversary of the date of grant and shall
expire if not exercised on the tenth anniversary of the date of grant or, if
earlier, on the first anniversary of the termination of the Optionee's status as
a Non-Employee Director.
5.3 Effect of Death or Disability. Each Option shall be fully vested in
the event of the Optionee's death or permanent disability (within the meaning of
section 22(e)(3) of the Code) while serving as a Non-Employee Director.
5.4 Effect of Change in Control. Each Option shall become fully
exercisable as to all Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.
5.5 Modification or Assumption of Options. Within the limitations of
the Plan, the Board may extend or assume outstanding options or may accept the
cancellation of outstanding options (whether granted by the Company or by
another issuer) in return for the grant of new options at the same or a
different exercise price. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, alter or impair his or her
rights or obligations under such Option.
5.6 Exercise Before Vesting. Each Option shall be immediately
exercisable for any or all of the Option shares. However, any Common Shares
purchased under the Option shall be subject to repurchase by the Company, at the
Exercise Price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. The Company's repurchase right shall
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lapse at the same rate as the Option vests. Common Shares subject to the
Company's repurchase rights shall not be permitted to be sold, transferred or
otherwise disposed of by the Optionee prior to the lapse of such rights.
ARTICLE 6. EXERCISE PRICE AND PAYMENT FOR OPTION SHARES
6.1 Exercise Price. The Exercise Price per share shall be
equal to one hundred percent (100%) of the Fair Market Value per
Common Share on the option grant date.
6.2 Payment. The Exercise Price shall become immediately due upon
exercise of the Option and shall be payable in one or more of the forms
specified below:
(i) cash or check made payable to the Company,
(ii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Company's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise
Date, or
(iii) to the extent the Option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable written instructions to
(a) a Company-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes
required to be withheld by the Company by reason of such exercise and
(b) the Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the Exercise Price for the purchased shares must be made on the
Exercise Date.
ARTICLE 7. PROTECTION AGAINST DILUTION
7.1 Adjustments. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spinoff
or a similar occurrence, the Board shall make such adjustments as it, in its
sole discretion, deems appropriate in the number of Common Shares covered by
each outstanding Option and/or the Exercise Price under each outstanding Option.
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Except as provided in this Article 7, an Optionee shall have no rights
by reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
7.2 Reorganizations. In the event that the Company is a party to a
merger or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement may provide, without
limitation, for the assumption of outstanding Options by the surviving
corporation or its parent, for their continuation by the Company (if the Company
is a surviving corporation), for accelerated vesting and accelerated expiration,
or for settlement in cash.
ARTICLE 8. LIMITATION ON RIGHTS
8.1 Retention Rights. Neither the Plan nor any Option granted under the
Plan shall be deemed to give any individual a right to remain a director of the
Company, a Parent or a Subsidiary. The Company and its Parents and Subsidiaries
reserve the right to terminate the service of any employee, consultant or
director at any time, with or without cause, subject to applicable laws, the
Company's certificate of incorporation and by-laws and a written employment
agreement (if any).
8.2 Stockholder's Rights. An Optionee shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Option prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued.
8.3 Regulatory Requirements. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Option prior to the satisfaction of all legal requirements relating to
the issuance of such Common Shares, to their registration, qualification or
listing or to an exemption from registration, qualification or listing.
ARTICLE 9. WITHHOLDING TAXES
To the extent required by applicable federal, state, local or foreign
law, an Optionee or his or her successor shall make arrangements satisfactory to
the Company for the satisfaction of any withholding tax obligations that arise
in connection with the Plan. The Company shall not be required to issue any
Common
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Shares or make any cash payment under the Plan until such obligations are
satisfied.
ARTICLE 10. ASSIGNMENT OR TRANSFER OF OPTIONS
Except as provided in Article 9, an Option granted under the Plan shall
not be anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor's process, whether voluntarily, involuntarily or by
operation of law. An Option may be exercised during the lifetime of the Optionee
only by him or her or by his or her guardian or legal representative. Any act in
violation of this Article 10 shall be void. However, this Article 10 shall not
preclude an Optionee from designating a beneficiary who will receive any
outstanding Options in the event of the Optionee's death, nor shall it preclude
a transfer of Options by will or by the laws of descent and distribution.
ARTICLE 11. FUTURE OF THE PLAN
11.1 Term of the Plan. The Plan, as set forth herein, shall become
effective on July 21, 1998, subject to the approval of the Company's
stockholders within twelve (12) months of such date. The Plan shall remain in
effect until it is terminated under Section 11.2.
11.2 Amendment or Termination. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Options shall be granted under the
Plan after the termination thereof. The termination of the Plan, or any
amendment thereof, shall not affect any Option previously granted under the
Plan.
ARTICLE 12. DEFINITIONS
12.1 "Board" means the Company's Board of Directors, as constituted
from time to time.
12.2 "Change in Control" shall be deemed to occur upon any "person" (as
defined in Section 13(d) of the Exchange Act), other than the Company, its
Parent or Subsidiary or employee benefit plan or trust maintained by the
Company, its Parent or Subsidiary, becoming the "beneficial owner" (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of more than
twenty-five percent (25%) of the Common Shares of the Company outstanding at
such time, without the prior approval of the Board.
12.3 "Code" means the Internal Revenue Code of 1986, as
amended.
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12.4 "Common Share" means one share of the common stock of
the Company.
12.5 "Company" means NewCom, Inc., a Delaware corporation.
12.6 "Exchange Act" means the Securities Exchange Act of
1934, as amended.
12.7 "Exercise Price" means the amount for which one Common Share may
be purchased upon exercise of such Option, as specified in the applicable Stock
Option Agreement.
12.8 "Fair Market Value" means the market price of Common Shares,
determined by the Board as follows:
(a) If the Common Shares were traded on a stock exchange on
the date in question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite transactions report
for such date;
(b) If the Common Shares were traded over-the-counter on the
date in question but were not classified as a national market issue,
then the Fair Market Value shall be equal to the mean between the last
reported representative bid and asked prices quoted by the NASDAQ
system for such date;
(c) If the Common Shares were traded over-the-counter on the
date in question and were classified as a national market issue, then
the Fair Market Value shall be equal to the last-transaction price
quoted by the Nasdaq system for such date; and
(d) If none of the foregoing provisions is applicable, then
the Fair Market Value shall be determined by the Board in good faith on
such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Board
shall be based on the prices reported in the Western Edition of The Wall Street
Journal. Such determination shall be conclusive and binding on all persons.
12.9 "Non-Employee Director" shall mean a member of the Board who is
not a common-law employee of the Company.
12.10 "Option" means an option granted under the Plan and entitling the
holder to purchase Common Shares.
12.11 "Optionee" means an individual or estate who holds an
Option.
12.12 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns
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stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be considered a Parent commencing as of such date.
12.13 "Plan" means the NewCom, Inc. Non-Employee Director Stock Option
Plan, as amended from time to time.
12.14 "Stock Option Agreement" means the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.
12.15 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A corporation
that attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.
ARTICLE 13. EXECUTION
To record the adoption of the Plan by the Board, the Company has caused
its duly authorized officer to affix the corporate name and seal hereto.
NEWCOM, INC.
By /s/ Sultan Khan
----------------------------------
Its President
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EXHIBIT 5.1
PILLSBURY MADISON & SUTRO LLP
2550 Hanover Street
Palo Alto, CA 94304-1115
Tel: (650) 233-4500
Fax: (650 233-4545
September 30, 1998
NewCom, Inc.
31166 Via Colinas
Westlake Village, CA 91362
Re: Registration Statement on Form S-8
Gentlemen:
With reference to the Registration Statement on Form S-8 to be filed by
NewCom, Inc., a Delaware corporation (the "Company"), with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, relating to one million (1,000,000) shares of the Company's Common
Stock issuable pursuant to the Company's 1998 Employee Stock Purchase Plan and
the Company's Non-Employee Director Stock Option Plan (the "Plans"), it is our
opinion that such shares of the Common Stock of the Company, when issued and
sold in accordance with the Plans will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ Pillsbury Madison & Sutro LLP
EXHlBIT 23.1
------------
CONSENT OF PANNELL KERR FORSTER
-------------------------------
We consent to the incorporation by reference in this Registration Statement of
NewCom, Inc. on Form S-8 of our report dated June 10, 1998, which appears on
page F-2 of NewCom, Inc.'s annual report on Form 10-K.
/s/ PANNELL KERR FORSTER
Pannell Kerr Forster
Certified Public Accountants
A Professional Corporation
September 30, 1998
