<PAGE> 1
As filed with the Securities and Exchange Commission on July 20, 1999
Registration Number 333-____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INTERLIANT, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-397-8980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Two Manhattanville Road 10577
Purchase, New York (Zip Code)
(Address of Principal Executive Offices)
INTERLIANT, INC. 1998 STOCK OPTION PLAN
(Full Title of the Plan)
Bruce S. Klein, Esq.
Senior Vice President, General Counsel
and Secretary
Interliant, Inc.
Two Manhattanville Road
Purchase, New York 10577
(914) 640-9000
(Name, address and telephone number of agent for service)
Copies to:
E. Ann Gill, Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019-6092
(212) 259-8000
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED (1) PER UNIT (2) PRICE (2) REGISTRATION FEE
===================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock,
par value $0.01
per share 3,211,817 $17.625 $56,608,274.625 $15,737.10
===================================================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Interliant, Inc. 1998
Stock Option Plan (the "Plan") by reason of any stock dividend, stock
split, recapitalization, merger, consolidation or reorganization of or
by the Registrant which results in an increase in the number of the
Registrant's outstanding shares of Common Stock or shares issuable
pursuant to the options.
(2) In accordance with Rule 457(c) under the Securities Act of 1933, as
amended, solely for the purpose of calculating the registration fee
pursuant to Rule 457(h), the maximum offering price per share is based
on the average of the high and low prices of Interliant's Common Stock
on July 13, 1999 ($17.625) as reported on The Nasdaq National Market.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission by Interliant, Inc. ("Interliant") (File No. 000-26115) are
incorporated herein by reference and made a part hereof:
(a) Amendment No. 6, filed on July 6, 1999, to Interliant's
Registration Statement on Form S-1 (File No. 333-74403) filed
with the Securities and Exchange Commission (the "SEC") on
March 15, 1999 (as amended, the "Registration Statement"); and
(b) The description of the Common Stock of Interliant contained in
the Registration Statement; such description is qualified in
its entirety by reference to the (i) Amended and Restated
Certificate of Incorporation of Interliant, filed with the
Secretary of State of the State of Delaware on May 24, 1999,
the form of which was filed as Exhibit 3.1 to the Registration
Statement, and (ii) Amended and Restated By-Laws of
Interliant, the form of which was filed as Exhibit 3.2 to the
Registration Statement, and any amendment or report filed for
the purpose of updating that description.
All documents filed by Interliant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to 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 part hereof from the date of filing of such
documents.
The consolidated financial statements of Interliant and its
subsidiaries included in the Registration Statement for the fiscal year ended
December 31, 1998 have been incorporated herein by reference in reliance upon
the reports, also incorporated herein by reference, of Ernst & Young LLP,
independent auditors, given on their authority as experts in auditing and
accounting.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Interliant is a Delaware corporation. Reference is made to Section 145
of the Delaware General Corporation Law as to indemnification by Interliant of
its officers and directors. The general effect of such law is to empower a
corporation to indemnify any of its officers and directors against certain
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person to be indemnified in
connection with certain actions, suits or proceedings (threatened, pending or
completed) if the person to be indemnified acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Interliant's Amended and Restated Certificate of Incorporation and
Amended and Restated By-laws provide that Interliant shall indemnify officers
and directors and, to the extent permitted by the Board of Directors, employees
and agents of Interliant, to the full extent permitted by and in the manner
permissible under the laws of the State of Delaware. In addition, the By-Laws
permit the Board of Directors to authorize Interliant to purchase and maintain
insurance against any liability asserted against any director, officer, employee
or agent of Interliant arising out of his capacity as such.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The documents listed hereunder are filed as exhibits hereto.
<PAGE> 5
Exhibit Number Description
4 Interliant, Inc. 1998 Stock Option Plan.
5 Opinion and Consent of Dewey Ballantine LLP.
23.1 Consent of Dewey Ballantine LLP (included in
Exhibit 5 hereto).
23.2 Consent of Ernst & Young LLP with respect to the
financial statements of Interliant, Inc. (formerly
known as Sage Networks, Inc.)
23.3 Consent of Ernst & Young LLP with respect
to the financial statements of Rancher 1
Corp. (formerly known as Interliant,
Inc.)
23.4 Consent of Urbach Kahn & Werlin PC
23.5 Consent of BSC&E
23.6 Consent of PricewaterhouseCoopers LLP
23.7 Consent of Frankel, Lodgen, Locher,
Golditch, Sardi & Howard
23.8 Consent of BDO Seidman, LLP
23.9 Consent of Deloitte & Touche LLP
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; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
<PAGE> 6
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange 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 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 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 this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, 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.
<PAGE> 7
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 New York, State of New York, on the 20th day of
July, 1999.
INTERLIANT, INC.
By: /s/ JAMES M. LIDESTRI
--------------------------------
James M. Lidestri
President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: July 20, 1999 By: /s/ JAMES M. LIDESTRI
--------------------------------
James M. Lidestri
President
(principal executive
officer)
Date: July 20, 1999 By: /s/ WILLIAM A. WILSON
--------------------------------
William A. Wilson
Chief Financial Officer
(principal financial and
accounting officer)
Date: July 20, 1999 By: /s/ LEONARD J. FASSLER
--------------------------------
Leonard J. Fassler
Co-Chairman of the Board
Date: July 20, 1999 By: /s/ BRADLEY A. FELD
--------------------------------
Bradley A. Feld
Co-Chairman of the Board
Date: July 20, 1999 By: /s/ STEPHEN W. MAGGS
--------------------------------
Stephen W. Maggs
Vice Chairman of the Board
Date: July 20, 1999 By: /s/ THOMAS C. DIRCKS
--------------------------------
Thomas C. Dircks
Director
<PAGE> 8
Date: July 20, 1999 By: /s/ JAY M. GATES
--------------------------------
Jay M. Gates
Director
Date: July 20, 1999 By: /s/ MERRIL M. HALPERN
--------------------------------
Merril M. Halpern
Director
Date: July 20, 1999 By: /s/ CHARLES R. LAX
--------------------------------
Charles R. Lax
Director
Date: July 20, 1999 By: /s/ PATRICIA A. M. RILEY
--------------------------------
Patricia A. M. Riley
Director
Date: July 20, 1999 By: /s/ JOHN B. LANDRY
--------------------------------
John B. Landry
Director
<PAGE> 9
INDEX TO EXHIBITS
Exhibit Number Description
4 Interliant, Inc. 1998 Stock Option Plan.
5 Opinion and Consent of Dewey Ballantine LLP.
23.1 Consent of Dewey Ballantine LLP (included in
Exhibit 5 hereto).
23.2 Consent of Ernst & Young LLP with respect to the
financial statements of Interliant, Inc. (formerly
known as Sage Networks, Inc.)
23.3 Consent of Ernst & Young LLP with respect
to the financial statements of Rancher 1
Corp. (formerly known as Interliant,
Inc.)
23.4 Consent of Urbach Kahn & Werlin PC
23.5 Consent of BSC&E
23.6 Consent of PricewaterhouseCoopers LLP
23.7 Consent of Frankel, Lodgen, Locher, Golditch,
Sardi & Howard
23.8 Consent of BDO Seidman, LLP
23.9 Consent of Deloitte & Touche LLP
<PAGE> 1
Exhibit 4
INTERLIANT, INC.
1998 STOCK OPTION PLAN
ARTICLE I
PURPOSE
This Interliant, Inc. 1998 Stock Option Plan is intended to advance the
interests of the Company and its stockholders and subsidiaries by attracting,
retaining and motivating the performance of selected officers, employees and
consultants of the Company of high caliber and potential upon whose judgment,
initiative and effort the Company is largely dependent for the successful
conduct of its business, and to encourage and enable such persons to acquire and
retain a proprietary interest in the Company by ownership of its stock.
ARTICLE II
DEFINITIONS
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" means the Company's Common Stock, par value $.01 per
share.
(d) "Committee" means the Compensation Committee of the Board or any
other committee of the Board appointed by the Board to administer the Plan from
time to time. The full Board shall also have the authority to exercise the
powers and duties of the Committee under the Plan.
(e) "Company" means Interliant, Inc., formerly known as Sage Networks,
Inc., a Delaware corporation.
(f) "Date of Grant" means the date on which an Option becomes effective
in accordance with Section 6.1 hereof.
(g) "Eligible Person" means any person who is an officer, employee or
consultant of the Company or any Subsidiary.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE> 2
(i) "Fair Market Value" of the Common Stock as of any date means the
average of the closing prices of the sales of Common Stock on all securities
exchanges on which the Common Stock is listed or, if on any day the Common Stock
is not so listed, the sales price of the Common Stock as reported on the Nasdaq
National Market as of 4:00 P.M. New York Time, on such day or, if the Common
Stock is not reported on the Nasdaq National Market, the average of the
representative bid and asked prices quoted over a period of 21 trading days
consisting of the day as of which Fair Market Value is being determined and the
20 consecutive trading days prior to such day. If at any time the Common Stock
is not listed on any securities exchange or quoted on the Nasdaq National
Market, Fair Market Value will be determined in good faith by the Committee in
whatever manner it considers appropriate. Fair Market Value will be determined
without regard to any restriction on transferability of the Common Stock other
than any such restriction which by its terms will never lapse.
(j) "Incentive Stock Option" means a stock option granted under the
Plan that is intended to meet the requirements of Section 422 of the Code and
the regulations promulgated thereunder.
(k) "Nonqualified Stock Option" means a stock option granted under the
Plan that is not an Incentive Stock Option.
(l) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option granted under the Plan.
(m) "Optionee" means an Eligible Person to whom an Option has been
granted, which Option has not expired, under the Plan.
(n) "Option Price" means the price at which each share of Common Stock
subject to an Option may be purchased, determined in accordance with Section 6.2
hereof.
(o) "Plan" means this Interliant, Inc. 1998 Stock Option Plan.
(p) "Stock Option Agreement" means an agreement between the Company and
an Optionee under which the Optionee may purchase Common Stock under the Plan.
(q) "Subsidiary" means a subsidiary corporation of the Company, within
the meaning of Section 424(f) of the Code.
(r) "Ten-Percent Owner" means an Optionee who, at the time an Incentive
Stock Option is granted, owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company, its parent,
if any, or any Subsidiary, within the meaning of Sections 422(b)(6) and 424(d)
of the Code.
2
<PAGE> 3
ARTICLE III
ELIGIBILITY
All Eligible Persons are eligible to receive a grant of an Option under
the Plan. The Committee shall, in its sole discretion, determine and designate
from time to time those Eligible Persons who are to be granted an Option.
ARTICLE IV
ADMINISTRATION
4.1 Committee Members. The Plan shall be administered by a
Committee comprised of no fewer than two persons selected by the Board, or by
the full Board. Solely to the extent deemed necessary or advisable by the Board,
each Committee member shall meet the definition of a "nonemployee director" for
purposes of such Rule 16b-3 under the Exchange Act and of an "outside director"
under Section 162(m) of the Code.
4.2 Committee Authority. Subject to the express provisions of
the Plan, the Committee shall have the authority, in its discretion, to
determine the Eligible Persons to whom an Option shall be granted, the time or
times at which an Option shall be granted, the number of shares of Common Stock
subject to each Option, the Option Price of the shares subject to each Option
and the time or times when each Option shall become exercisable and the duration
of the exercise period. Subject to the express provisions of the Plan, the
Committee shall also have discretionary authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the details and provisions of each Stock Option Agreement, and to make all the
determinations necessary or advisable in the administration of the Plan. All
such actions and determinations by the Committee shall be conclusively binding
for all purposes and upon all persons. No Committee member shall be liable for
any action or determination made in good faith with respect to the Plan, any
Option or any Stock Option Agreement entered into hereunder.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Number of Shares. Subject to adjustment pursuant to the provisions
of Section 5.2 hereof, the maximum number of shares of Common Stock which may be
issued and sold hereunder shall be 3,800,000 shares. Shares of Common Stock
issued and sold under the Plan may be either authorized but unissued shares or
shares held in the Company's treasury. Shares of Common Stock covered by an
Option that shall have been exercised shall not again be available for an Option
grant. If an Option shall terminate for any reason (including, without
limitation, the cancellation of an Option pursuant to Section
3
<PAGE> 4
6.6 hereof) without being wholly exercised, the number of shares to which such
Option termination relates shall again be available for grant hereunder.
5.2 Antidilution. In the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger or consolidation, or
the sale, conveyance, or other transfer by the Company of all or substantially
all of its property, or any other change in the corporate structure or shares of
the Company, pursuant to any of which events the then outstanding shares of
Common Stock are split up or combined, or are changed into, become exchangeable
at the holder's election for, or entitle the holder thereof to, cash, other
shares of stock, or any of the consideration, or in the case of any other
transaction described in Section 424(a) of the Code, the Committee may (i)
change the number and kind of shares (including by substitution of shares of
another corporation) subject to the Options and/or the Option Price of such
shares in the manner that it shall deem to be equitable and appropriate or (ii)
provide for an appropriate and proportionate cash settlement or distribution. In
no event may any such change be made to an Incentive Stock Option which would
constitute a "modification" within the meaning of Section 424(h)(3) of the Code
without the written consent of the Optionee adversely affected thereby.
ARTICLE VI
OPTIONS
6.1 Grant of Option. An Option may be granted to any Eligible Person
selected by the Committee. The grant of an Option shall first be effective upon
the date it is approved by the Committee, except to the extent the Committee
shall specify a later date upon which the grant of an Option shall first be
effective. Each Option shall be designated, at the discretion of the Committee,
as an Incentive Stock Option or a Nonqualified Stock Option, provided that
Incentive Stock Options may only be granted to Eligible Persons who are
considered employees of the Company or any Subsidiary for purposes of Section
422 of the Code. The Company and the Optionee shall execute a Stock Option
Agreement which shall set forth such terms and conditions of the Option as may
be determined by the Committee to be consistent with the Plan, and which may
include additional provisions and restrictions that are not inconsistent with
the Plan.
6.2 Option Price. The Option Price shall be determined by the
Committee; provided, however, that the Option Price shall not be less than 100
percent of the Fair Market Value of a share of Common Stock on the trading date
immediately preceding the Date of Grant.
6.3 Vesting; Term of Option. Unless otherwise specified by the
Committee in the Stock Option Agreement for an Optionee, an Option shall vest
and become exercisable in cumulative annual installments, each of which shall
relate to one-fourth of the number of shares of Common Stock originally covered
thereby (as may be adjusted in accordance with Section 5.2 hereof), on the
first, second, third and fourth anniversaries of
4
<PAGE> 5
the Date of Grant, respectively, provided that the Optionee remains an Eligible
Person on each such anniversary. Notwithstanding the foregoing, the Committee,
in its sole discretion, may accelerate the exercisability of any Option at any
time, and an Option may become vested and exercisable in accordance with the
provisions of Articles VIII and IX hereof. Subject to Article VIII hereof, the
period during which a vested Option may be exercised shall be ten years from the
Date of Grant, unless a shorter exercise period is specified by the Committee in
the Stock Option Agreement for an Optionee.
6.4 Option Exercise; Withholding. An Option may be exercised in whole
or in part at any time, with respect to whole shares only, within the period
permitted for the exercise thereof, and shall be exercised by written notice of
intent to exercise the Option with respect to a specified number of shares
delivered to the Company at its principal office, and payment in full to the
Company at said office of the amount of the Option Price for the number of
shares of the Common Stock with respect to which the Option is then being
exercised. Payment of the Option Price shall be made (i) in cash or by cash
equivalent, (ii) at the discretion of the Committee, in Common Stock owned by
the Optionee for more than six months on the date of exercise, valued at the
Fair Market Value of such shares on the trading date immediately preceding the
date of exercise or (iii) at the discretion of the Committee, by a combination
of such cash and such Common Stock. In addition to and at the time of payment of
the Option Price, the Optionee shall pay to the Company in cash or, at the
discretion of the Committee, in Common Stock the full amount of all federal and
state withholding and other employment taxes applicable to the taxable income of
such Optionee resulting from such exercise.
6.5 Limited Transferability of Option. All Options shall be
nontransferable except upon the Optionee's death, by the Optionee's will or the
laws of descent and distribution. No transfer of an Option by the Optionee by
will or by laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and an authenticated copy of the will and/or such other evidence as the
Committee may deem necessary to establish the validity of the transfer. During
the lifetime of an Optionee, the Option shall be exercisable only by him, except
that, in the case of an Optionee who is legally incapacitated, the Option shall
be exercisable by his guardian or legal representative.
6.6 Cancellation, Substitution and Amendment of Options. The Committee
shall have the authority to effect, at any time and from time to time, with the
consent of the affected Optionees, (i) the cancellation of any or all
outstanding Options and the grant in substitution therefor of new Options
covering the same or different numbers of shares of Common Stock and having an
Option Price which may be the same as or different than the Option Price of the
cancelled Options or (ii) the amendment of the terms of any and all outstanding
Options.
5
<PAGE> 6
ARTICLE VII
ADDITIONAL RULES FOR ISOS
7.1 Ten-Percent Owners. Notwithstanding any other provisions of this
Plan to the contrary, in the case of an Incentive Stock Option granted to a
Ten-Percent Owner, (i) the period during which any such Incentive Stock Option
may be exercised shall not be greater than five years from the Date of Grant and
(ii) the Option Price of such Incentive Stock Option shall not be less than 110
percent of the Fair Market Value of a share of Common Stock on the Date of
Grant.
7.2 Annual Limits. No Incentive Stock Option shall be granted to an
Optionee as a result of which the aggregate fair market value (determined as of
the date of grant) of the stock with respect to which incentive stock options
are exercisable for the first time in any calendar year under the Plan, and any
other stock option plans of the Company, any Subsidiary or any parent
corporation, would exceed $100,000, determined in accordance with Section 422(d)
of the Code. This limitation shall be applied by taking options into account in
the order in which granted.
7.3 Disqualifying Dispositions. If shares of Common Stock acquired by
exercise of an Incentive Stock Option are disposed of within two years following
the Date of Grant or within one year following the transfer of such shares to
the Optionee upon exercise, the Optionee shall, within 10 days after such
disposition, notify the Company in writing of the date and terms of such
disposition and provide such other information regarding the disposition as the
Committee may reasonably require.
7.4 Other Terms and Conditions. Any Incentive Stock Option granted
hereunder shall contain such additional terms and conditions, not inconsistent
with the terms of this Plan, as are deemed necessary or desirable by the
Committee, which terms, together with the terms of this Plan, shall be intended
and interpreted to cause such Incentive Stock Option to qualify as an "incentive
stock option" under Section 422 of the Code.
ARTICLE VIII
TERMINATION OF SERVICE
8.1 Death. Unless otherwise specified by the Committee in the Stock
Option Agreement for an Optionee, if an Optionee shall die at any time after the
Date of Grant and while he is an Eligible Person, the executor or administrator
of the estate of the decedent, or the person or persons to whom an Option shall
have been validly transferred in accordance with Section 6.5 hereof pursuant to
will or the laws of descent and distribution, shall have the right, during the
period ending one year after the date of the Optionee's death (subject to
Sections 6.3 and 7.1 hereof concerning the maximum term of an Option), to
exercise the Optionee's Option to the extent that it was exercisable at the date
of the
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<PAGE> 7
Optionee's death and shall not have been previously exercised. The Committee may
determine at or after grant to make any portion of his Option that is not
exercisable at the date of death immediately vested and exercisable.
8.2 Disability. Unless otherwise specified by the Committee in the
Stock Option Agreement for an Optionee, if an Optionee's employment or other
service with the Company or any Subsidiary shall be terminated as a result of
his permanent and total disability (within the meaning of Section 22(e)(3) of
the Code) at any time after the Date of Grant and while he is an Eligible
Person, the Optionee (or in the case of an Optionee who is legally
incapacitated, his guardian or legal representative) shall have the right,
during a period ending one year after the date of his disability (subject to
Sections 6.3 and 7.1 hereof concerning the maximum term of an Option), to
exercise an Option to the extent that it was exercisable at the date of such
termination of employment or other service and shall not have been exercised.
The Committee may determine at or after grant to make any portion of his Option
that is not exercisable at the date of termination of employment or other
service due to disability immediately vested and exercisable.
8.3 Termination for Cause. Unless otherwise specified by the Committee
in the Stock Option Agreement for an Optionee, if an Optionee's employment or
other service with the Company or any Subsidiary shall be terminated for cause,
the Optionee's right to exercise any unexercised portion of an Option shall
immediately terminate and all rights thereunder shall cease. For purposes of
this Section 8.3, termination for "cause" shall include, but not be limited to,
embezzlement or misappropriation of corporate funds, any acts of dishonesty
resulting in conviction for a felony, misconduct resulting in material injury to
the Company or any Subsidiary, significant activities harmful to the reputation
of the Company or any Subsidiary, a significant violation of Company or
Subsidiary policy, willful refusal to perform, or substantial disregard of, the
duties properly assigned to the Optionee, or a significant violation of any
contractual, statutory or common law duty of loyalty to the Company or any
Subsidiary. The Committee shall have the power to determine whether the Optionee
has been terminated for cause and the date upon which such termination for cause
occurs. Any such determination shall be final, conclusive and binding upon the
Optionee.
8.4 Other Termination of Service. Unless otherwise specified by the
Committee in the Stock Option Agreement for an Optionee, if an Optionee's
employment or other service with the Company or any Subsidiary shall be
terminated for any reason other than death, permanent and total disability or
termination for cause, the Optionee shall have the right, during the period
ending 90 days after such termination (subject to Sections 6.3 and 7.1 hereof
concerning the maximum term of an Option), to exercise an Option to the extent
that it was exercisable at the date of such termination and shall not have been
exercised. For purposes of this Section 8.4, an Optionee shall not be considered
to have terminated employment or other service with the Company or any
Subsidiary until the expiration of the period of any military, sick leave or
other bona fide leave of absence, up to a maximum period of 90 days (or such
greater period during which the Optionee is guaranteed reemployment either by
statute or contract).
7
<PAGE> 8
ARTICLE IX
CHANGE IN CONTROL
9.1 Change in Control. Upon a "change in control" of the Company (as
defined below), each outstanding Option, to the extent that it shall not
otherwise have become vested and exercisable, shall automatically become fully
and immediately vested and exercisable, without regard to any otherwise
applicable vesting requirement under Section 6.3 hereof; provided, however, that
no such vesting shall occur if provision has been made in writing in connection
with such transaction for (a) the continuation of the Plan and/or the assumption
of such Options by a successor corporation (or a parent or subsidiary thereof)
or (b) the substitution for such Options of new options covering the stock of a
successor corporation (or a parent or subsidiary thereof), with appropriate
adjustments as to the number and kinds of shares and exercise prices. In the
event of any such continuation, assumption or substitution, the Plan and/or such
Options shall continue in the manner and under the terms so provided.
9.2 Definition. For purposes of Section 9.1 hereof, a "change in
control" of the Company shall mean:
(i) an acquisition subsequent to the date hereof by any
person, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person"), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (A) the then outstanding shares of Common Stock or (B)
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company and (3) any acquisition by
an employee benefit plan (or related trust) sponsored or maintained by
the Company;
(ii) a change in the composition of the Board such that during
any period of two consecutive years, individuals who at the beginning
of such period constitute the Board, and any new director (other than a
director designated by a person who has entered into an agreement with
the Company to effect a transaction described in paragraphs (i), (iii)
or (iv) of this section) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the members thereof;
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(iii) the approval by the stockholders of the Company of a
merger, consolidation, reorganization or similar corporate transaction,
whether or not the Company is the surviving corporation in such
transaction, in which outstanding shares of Common Stock are converted
into (A) shares of stock of another company, other than a conversion
into shares of voting common stock of the successor corporation (or a
holding company thereof) representing 80% of the voting power of all
capital stock thereof outstanding immediately after the merger or
consolidation or (B) other securities (of either the Company or another
company) or cash or other property;
(iv) the approval by the stockholders of the Company of (A)
the sale or other disposition of all or substantially all of the assets
of the Company or (B) a complete liquidation or dissolution of the
Company; or
(v) the adoption by the Board of a resolution to the effect
that any person has acquired effective control of the business and
affairs of the Company.
ARTICLE X
STOCK CERTIFICATES
10.1 Issuance of Certificates. Subject to Section 10.2 hereof,
the Company shall issue a stock certificate in the name of the Optionee (or
other person exercising the Option in accordance with the provisions of the
Plan) for the shares of Common Stock purchased by exercise of an Option as soon
as practicable after due exercise and payment of the aggregate Option Price for
such shares. A separate stock certificate or separate stock certificates shall
be issued for any shares of Common Stock purchased pursuant to the exercise of
an Option that is an Incentive Stock Option, which certificate or certificates
shall not include any shares of Common Stock that were purchased pursuant to the
exercise of an Option that is a Nonqualified Stock Option.
10.2 Conditions. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock purchased upon the exercise
of any Option granted hereunder or any portion thereof prior to fulfillment of
all of the following conditions:
(i) the completion of any registration or other qualification
of such shares, under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body, that the Committee shall in its sole
discretion deem necessary or advisable;
(ii) the obtaining of any approval or other clearance from any
federal or state governmental agency which the Committee shall in its
sole discretion determine to be necessary or advisable;
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(iii) the lapse of such reasonable period of time following
the exercise of the Option as the Committee from time to time may
establish for reasons of administrative convenience;
(iv) satisfaction by the Optionee of all applicable
withholding taxes or other withholding liabilities; and
(v) if required by the Committee, in its sole discretion, the
receipt by the Company from an Optionee of (i) a representation in
writing that the shares of Common Stock received upon exercise of an
Option are being acquired for investment and not with a view to
distribution and (ii) such other representations and warranties as are
deemed necessary by counsel to the Company.
10.3 Legends. The Company reserves the right to legend any
certificate for shares of Common Stock, conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.
ARTICLE XI
EFFECTIVE DATE, TERMINATION AND AMENDMENT
11.1 Effective Date. The Plan shall become effective upon its
adoption by the Board and its approval by the stockholders of the Company.
11.2 Termination. The Plan shall terminate on the date
immediately preceding the tenth anniversary of the date the Plan is adopted by
the Board. The Board may, in its sole discretion and at any earlier date,
terminate the Plan. Notwithstanding the foregoing, no termination of the Plan
shall in any manner affect any Option theretofore granted without the consent of
the Optionee or the permitted transferee of the Option.
11.3 Amendment. The Board may at any time and from time to
time and in any respect, amend or modify the Plan. Solely to the extent deemed
necessary or advisable by the Board, for purposes of complying with Sections 422
or 162(m) of the Code or rules of any securities exchange or for any other
reason, the Board may seek the approval of any such amendment by the Company's
stockholders. Any such approval shall be by the affirmative votes of the
stockholders of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with applicable state law and the Certificate of
Incorporation and By-Laws of the Company. Notwithstanding the foregoing, no
amendment or modification of the Plan shall in any manner affect any Option
theretofore granted without the consent of the Optionee or the permitted
transferee of the Option.
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ARTICLE XII
MISCELLANEOUS
12.1 Employment or other Service. Nothing in the Plan, in the
grant of any Option or in any Stock Option Agreement shall confer upon any
Eligible Person the right to continue in the capacity in which he is employed by
or otherwise provides services to the Company or any Subsidiary. Notwithstanding
anything contained in the Plan to the contrary, unless otherwise provided in a
Stock Option Agreement, no Option shall be affected by any change of duties or
position of the Optionee (including a transfer to or from the Company or any
Subsidiary), so long as such Optionee continues to be an Eligible Person.
12.2 Rights as Shareholder. An Optionee or the permitted
transferee of an Option shall have no rights as a shareholder with respect to
any shares subject to such Option prior to the purchase of such shares by
exercise of such Option as provided herein. Nothing contained herein or in the
Stock Option Agreement relating to any Option shall create an obligation on the
part of the Company to repurchase any shares of Common Stock purchased
hereunder.
12.3 Other Compensation and Benefit Plans. The adoption of the
Plan shall not affect any other stock option or incentive or other compensation
plans in effect for the Company or any Subsidiary, nor shall the Plan preclude
the Company from establishing any other forms of incentive or other compensation
for employees of the Company or any Subsidiary. The amount of any compensation
deemed to be received by an Optionee as a result of the exercise of an Option or
the sale of shares received upon such exercise shall not constitute compensation
with respect to which any other employee benefits of such Optionee are
determined, including, without limitation, benefits under any bonus, pension,
profit sharing, life insurance or salary continuation plan, except as otherwise
specifically determined by the Board or the Committee or provided by the terms
of such plan.
12.4 Plan Binding on Successors. The Plan shall be binding
upon the Company, its successors and assigns, and the Optionee, his executor,
administrator and permitted transferees.
12.5 Construction and Interpretation. Whenever used herein,
nouns in the singular shall include the plural, and the masculine pronoun shall
include the feminine gender. Headings of Articles and Sections hereof are
inserted for convenience and reference and constitute no part of the Plan.
12.6 Severability. If any provision of the Plan or any Stock
Option Agreement shall be determined to be illegal or unenforceable by any court
of law in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable
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in accordance with their terms, and all provisions shall remain enforceable in
any other jurisdiction.
12.7 Governing Law. The validity and construction of this Plan
and of the Stock Option Agreements shall be governed by the laws of the State of
Delaware.
INTERLIANT, INC.
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Exhibit 5
[DB Letterhead]
July 20, 1999
Interliant, Inc.
Two Manhattanville Road
New York, NY 10577
Gentlemen:
We have acted as counsel to Interliant, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company of a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, for the registration
of 3,211,817 shares of the Company's common stock, $.01 par value per share (the
"Shares"), that may be issued upon exercise of stock options pursuant to the
Company's 1998 Stock Option Plan (the "Plan").
We have examined and are familiar with originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and officers of the Company
and such other instruments as we have deemed necessary or appropriate as a basis
for the opinions expressed below.
Based on the foregoing, we are of the opinion that:
1. the issuance of the Shares upon exercise of options granted
under the Plan has been lawfully and duly authorized; and
2. the Shares that may be issued and delivered in accordance
with the terms of the Plan, including payment of the exercise price therefor,
will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement. In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
DEWEY BALLANTINE LLP
/s/ DEWEY BALLANTINE LLP
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts in the Registration
Statement Form S-8 pertaining to the Interliant, Inc. 1998 Stock Option Plan of
Interliant, Inc. and to the incorporation by reference therein of our report
dated February 15, 1999, except for the second to last paragraph of Note 12, as
to which the date is March 10, 1999, with respect to the consolidated financial
statements of Interliant, Inc. (formerly known as Sage Networks, Inc.) as of
December 31, 1997 and 1998, and for the period December 8, 1997 (inception) to
December 31, 1997 and the year ended December 31, 1998, included in Amendment
No. 6 to the registration statement on Form S-1 (No. 333-74403) of Interliant,
Inc., and the related prospectus dated July 7, 1999, filed with the Securities
and Exchange Commission.
Ernst & Young LLP
/s/ Ernst & Young LLP
Boston, Massachusetts
July 15, 1999
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated February 26, 1999, except for Note 11, as to which
the date is March 10, 1999, with respect to the financial statements of
Interliant, Inc. (which is not the registrant and which is referred to in the
prospectus as Interliant Texas) appearing in the registration statement on Form
S-1 (SEC File No. 333-74403) of Interliant, Inc. (formerly Sage Networks, Inc.)
filed with the Securities and Exchange Commission pursuant to the Securities
Act of 1933.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Houston, Texas
July 15, 1999
<PAGE> 1
Exhibit 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of our
report dated July 13, 1998, relating to the financial statement of Tri Star Web
Creations, Inc., our reported dated September 4, 1998 relating to the
consolidated financial statements of GEN International, Inc. and Subsidiaries,
and our report dated January 24, 1999 relating to the financial statements of
Digiweb, Inc., which reports appear in the registration statement on Form S-1
(SEC File No. 333-74403) of Interliant, Inc. filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933.
/s/ Urbach Kahn & Werlin PC
New York, New York
July 15, 1999
<PAGE> 1
Exhibit 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of our
report dated March 19, 1999, relating to the financial statements of Clever
Computers, Inc. which appears in the registration statement on Form S-1 (SEC
File No. 333-7403) of Interliant, Inc. filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
/s/ DSC&E
Atlanta, Georgia
July 19, 1999
<PAGE> 1
Exhibit 23.6
[PRICEWATERHOUSECOOPERS LOGO]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report, which includes an explanatory paragraph
regarding basis of presentation, dated August 18, 1998 relating to the
financial statements of HostAmerica, a division of HomeCom Communications, Inc.,
which appears in the Registration Statement on Form S-1 (SEC File No.
333-74403) of Interliant, Inc. filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Atlanta, Georgia
July 15, 1999
<PAGE> 1
Exhibit 23.7
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of our
report dated September 11, 1998, relating to the financial statements B.N.
Technology, Inc. dba Internet Communications, which appears in the registration
statement on Form S-1 (SEC File No 333-74403) of Interliant, Inc. filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933.
/s/ Frankel, Lodgen, Locher, Golditch, Sardi & Howard
Encino, California
July 15, 1999
<PAGE> 1
Exhibit 23.8
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Interliant, Inc.
Cambridge, MA
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated January
15, 1999, relating to the combined financial statements of Telephonetics
International, Inc. and Affiliate appearing in the Registration Statement on
Form S-1 (SEC File No. 333-74403) of Interliant, Inc. filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1933.
/s/ BDO Seidman, LLP
Miami, Florida
July 16, 1999
<PAGE> 1
Exhibit 23.9
INDEPENDENT AUDITORS' CONSENT
We consent to the incoporation by reference in this Registration
Statement of Interliant, Inc. on Form S-8 of our report dated February 2, 1999
(February 17, 1999 as to Note 10) relating to the financial statements of Net
Daemons Associates, Inc. appearing in Amendment NO. 6 to Registration Statement
No. 333-74403 of Interliant, Inc.
/s/ Deloitte & Touche LLP
Boston Massachusetts
July 15, 1999
