<PAGE>
As filed with the Securities and Exchange Commission on October 13, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________
EFFICIENT NETWORKS, INC.
(Exact name of Registrant as specified in its charter)
__________________
Delaware 72-2486845
(State or other jurisdiction of Efficient Networks, Inc. (I.R.S. Employer
incorporation or organization) Identification Number)
4201 Spring Valley Road, Suite 1200
Dallas, TX 75244-3666
(972) 991-3884
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
__________________
1998 DIRECTORS' STOCK OPTION PLAN
STOCK OPTION PLAN, AS AMENDED
__________________
Jill S. Manning
Chief Financial Officer
Efficient Networks, Inc.
4201 Spring Valley Road, Suite 1200
Dallas, TX 75244-3666
(972) 991-3884
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
__________________
Copy to:
Kenneth M. Siegel, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(650) 493-9300
__________________
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement. If any
of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following line: ______
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following line: X
---
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum Amount of
Title of Securities to Amount to be Offering Price Aggregate Registration
be Registered Registered Per Share Offering Price Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $0.001 par value issuable under:
1998 Directors' Stock Option Plan 215,000 $2.13(1) $ 457,950 $ 128
Stock Option Plan, as amended 6,564,329 $2.56(2) $16,804,682 $ 4,672
Total: 6,779,329 $ 4,800
==================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(h) under the Securities Act of 1933, as
amended. With respect to the 215,000 shares subject to outstanding options to
purchase Common Stock under the 1998 Directors' Stock Option Plan, the proposed
maximum offering price per share is equal to the weighted average exercise price
of $2.13 per share.
(2) Estimated pursuant to Rule 457(h) under the Securities Act of 1933, as
amended. With respect to the 6,564,329 shares subject to outstanding options to
purchase Common Stock under the Stock Option Plan, as amended, the proposed
maximum offering price per share is equal to the weighted average exercise price
of $2.56 per share.
<PAGE>
EFFICIENT NETWORKS, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Explanatory Note
- ----------------
This Registration Statement on From S-8 is being filed for the purpose of
registering 215,000 shares of the Registrant's Common Stock to be issued
pursuant to the Registrant's 1998 Directors' Stock Option Plan and 6,564,329
shares of the Registrant's Common Stock to be issued pursuant to the
Registrant's Stock Option Plan, as amended.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information filed with the Securities and
Exchange Commission (the "Commission") by the registrant are incorporated herein
by reference:
(a) The Registrant's Registration Statement on Form S-1 (Registration
No. 333-77795) as declared effective by the Commission on July 14, 1999.
(b) The Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1999 as filed with the Commission on September 13, 1999.
(c) The description of the Company's common stock which is contained
in the Company's Registration Statement on Form 8-A filed with the Commission on
June 22, 1999 pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any description of any securities of the
Registrant which is contained in any registration statement filed after the date
hereof under Section 12 of the Exchange Act, including any amendment or report
filed for the purpose of updating any such description.
All documents subsequently filed by the registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
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.
The class of securities to be offered is registered under Section 12 of the
Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's certificate of incorporation limits the liability of the
Registrant's directors to the maximum extent permitted by Delaware law. Delaware
law provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except
liability for any
<PAGE>
of the following: (i) any breach of their duty of loyalty to the corporation or
its stockholders; (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions; or (iv) any transaction
from which the director derived an improper personal benefit. This limitation of
liability does not apply to liabilities arising under the federal securities
laws and does not affect the availability of equitable remedies such as
injunctive relief or rescission.
The Registrant's certificate of incorporation and bylaws provide that it
will indemnify its directors and executive officers, and that it may indemnify
its other officers and employees and other agents, to the fullest extent
permitted by law. The Registrant believes that indemnification under its
bylaws covers at least negligence and gross negligence on the part of
indemnified parties. The Registrant's bylaws also permit it to secure insurance
on behalf of any officer, director, employee or other agent for any liability
arising out of his or her actions in such capacity, regardless of whether the
bylaws would permit indemnification.
The Registrant has entered into agreements to indemnify its directors and
executive officers, in addition to indemnification provided for in its bylaws.
These agreements, among other things, provide for indemnification of the
Registrant's directors and executive officers for expenses, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding
arising out of such person's services as a director or executive officer of the
Registrant or at its request. The Registrant believes that these provisions and
agreements are necessary to attract and retain qualified persons as directors
and executive officers. The Registrant also maintains directors and officers
liability insurance. At present, the Registrant is not aware of any pending
litigation or proceeding involving any director, officer, employee or agent of
its where indemnification will be required or permitted. Furthermore, the
Registrant is not aware of any threatened litigation or proceeding that might
result in a claim for indemnity by these individuals.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description of Document
- ------------- -----------------------------------------------------------------
4.1 1998 Directors' Stock Option Plan.
4.2 Stock Option Plan, as amended.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (See page II-4).
- --------------------------------------------------------------------------------
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(ii) 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.
(iii) 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 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Dallas, State of Texas, on October 11, 1999.
By: /s/ Mark A. Floyd
-----------------------------------------
Mark A. Floyd
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Mark A.
Floyd and Jill S. Manning jointly and severally, his attorneys-in-fact, each
with the power of substitution, for him in any and all capacities, to sign any
amendments to this Registration Statement on Form S-8 and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorney-in-fact, 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, as amended,
this Registration Statement of Form S-8 has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------------------- -------------------------------------- ----------------
<S> <C> <C>
/s/ Mark A. Floyd President, Chief Executive Officer and October 11, 1999
- ------------------------------------- Director (Principal Executive Officer)
Mark A. Floyd
/s/ Jill S. Manning Vice President and Chief Financial October 11, 1999
- ------------------------------------- Officer (Principal Financial Officer)
Jill S. Manning
Director
_____________________________________
Bruce W. Brown
/s/ James P. Gauer Director October 11, 1999
_____________________________________
James P. Gauer
Director
- -------------------------------------
Robert A. Hoff
/s/ William L. Martin III Director October 11, 1999
- -------------------------------------
William L. Martin III
/s/ Thomas H. Peterson Director October 11, 1999
- -------------------------------------
Thomas H. Peterson
/s/ Anthony T. Maher Director October 11, 1999
- -------------------------------------
Anthony T. Maher
/s/ Robert Hawk Director October 11, 1999
- -------------------------------------
Robert Hawk
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Document
- ----------- --------------------------------------------------------------------
4.1 1998 Directors' Stock Option Plan.
4.2 Stock Option Plan, as amended.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 4.1
EFFICIENT NETWORKS, INC.
1998 DIRECTORS' STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Directors' Stock Option
--------------------
Plan are to attract and retain the best available personnel for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.
All options granted hereunder shall be "nonstatutory stock options."
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Board" shall mean the Board of Directors of the Company.
-----
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
(c) "Common Stock" shall mean the Common Stock of the Company.
------------
(d) "Company" shall mean Efficient Networks, Inc., a Delaware
-------
corporation.
(e) "Continuous Status as a Director" shall mean the absence of any
-------------------------------
interruption or termination of service as a Director.
(f) "Director" shall mean a member of the Board.
--------
(g) "Employee" shall mean any person, including officers and
--------
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended.
(i) "Option" shall mean a stock option granted pursuant to the Plan.
------
All options shall be nonstatutory stock options (i.e., options that are not
intended to qualify as incentive stock options under Section 422 of the Code).
(j) "Optioned Stock" shall mean the Common Stock subject to an Option.
--------------
(k) "Outside Director" shall mean any member of the Board who is not
----------------
an employee of the Company.
(l) "Parent" shall mean a "parent corporation", whether now or
------
hereafter existing, as defined in Section 424(e) of the Code.
(m) "Plan" shall mean this 1998 Directors' Stock Option Plan.
----
<PAGE>
(n) "Share" shall mean a share of the Common Stock, as adjusted in
-----
accordance with Section 11 of the Plan.
(o) "Subsidiary" shall mean a "subsidiary corporation," whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 275,000 Shares (the "Pool") of Common Stock. The Shares may
be authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan. If Shares which were acquired upon exercise of an
Option are subsequently repurchased by the Company, such Shares shall not in any
event be returned to the Plan and shall not become available for future grant
under the Plan.
4. Administration of and Grants of Options under the Plan.
------------------------------------------------------
(a) Administrator. Except as otherwise required herein, the Plan
-------------
shall be administered by the Board.
(b) Procedure for Grants. All grants of Options hereunder shall be
--------------------
automatic and nondiscretionary and shall be made strictly in accordance with the
following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an
Option to purchase Shares (the "First Option") as follows: (A) with respect to
persons who are Outside Directors on the effective date of this Plan, as
determined in accordance with Section 6 hereof, 50,000 shares on such effective
date, and (B) with respect to any other person, 15,000 shares on the date on
which such person first becomes an Outside Director, whether through election by
the stockholders of the Company or appointment by the Board of Directors to fill
a vacancy.
(iii) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 15,000 Shares (a "Subsequent Option") on January 1 of each
year, provided that, on such date, he or she shall have served on the Board for
at least six (6) months prior to the date of such Annual Meeting.
(iv) Notwithstanding the provisions of subsections (ii), (iii)
and (iv) hereof, in the event that a grant would cause the number of Shares
subject to outstanding Options plus the number of Shares previously purchased
upon exercise of Options to exceed the Pool, then each such automatic grant
shall be for that number of Shares determined by dividing the total number of
Shares remaining available for grant by the number of Outside Directors
receiving an Option on such date on the automatic grant date. Any further grants
shall then be deferred until such time, if any, as additional Shares become
available for grant under the Plan through action of the stockholders to
increase the number of Shares which may be issued under the Plan or through
cancellation or expiration of Options previously granted hereunder.
<PAGE>
(v) Notwithstanding the provisions of subsections (ii), (iii)
and (iv) hereof, any grant of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 17 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in accordance
with Section 17 hereof.
(vi) The terms of each First Option granted hereunder shall be as
follows:
(1) the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof
(2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the First Option, determined in
accordance with Section 8 hereof.
(3) the First Option shall become exercisable in
installments cumulatively as to 25% of the Shares subject to the First Option on
each of the first, second, third and fourth anniversaries of the date of grant
of the Option.
(vii) The terms of each Subsequent Option granted hereunder shall
be as follows:
(1) the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof
(2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the Subsequent Option determined
in accordance with Section 8 hereof.
(3) the Subsequent Option shall become exercisable as to one
hundred percent (100%) of the Shares subject to the Subsequent Option on the
fourth anniversary of the date of grant of the Subsequent Option.
(c) Powers of the Board. Subject to the provisions and restrictions
-------------------
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per share of Options to be granted, which exercise price
shall be determined in accordance with Section 8(a) of the Plan, (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan: (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (vi) to make all other communications deemed necessary or
advisable for the administration of the Plan.
(d) Effect of Board's Decision. All decisions, determinations and
--------------------------
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
(e) Suspension or Termination of Option. If the President or his or
-----------------------------------
her designee reasonably believes that an Optionee has committed an act of
misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the Outside
Director accused of such misconduct). If the Board of Directors (excluding the
Outside Director accused of such misconduct) determines an Optionee has
committed an act of embezzlement, fraud, dishonesty, nonpayment of an obligation
owed to the Company, breach of fiduciary duty or deliberate disregard of the
Company rules resulting in loss, damage or injury to the Company, or if an
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engage in any conduct constituting unfair competition,
induces
<PAGE>
any Company customer to breach a contract with the Company or induces any
principal for whom the Company acts as agent to terminate such agency
relationship, neither the Optionee nor his or her estate shall be entitled to
exercise any option whatsoever. In making such determination, the Board of
Directors (excluding the Outside Director accused of such misconduct) shall act
fairly and shall give the Optionee an opportunity to appear and present evidence
on Optionee's behalf at a hearing before the Board or a committee of the Board.
5. Eligibility. Options may be granted only to Outside Directors. All
-----------
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.
6. Term of Plan: Effective Date. The Plan shall become effective upon
----------------------------
its adoption by the Board. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be ten (10) years from
--------------
the date of grant thereof.
8. Exercise Price and Consideration.
--------------------------------
(a) Exercise Price. The per Share exercise price for the Shares to be
--------------
issued pursuant to exercise of an Option shall be 100% of the fair market value
per Share on the date of grant of the Option.
(b) Fair Market Value. The fair market value shall be determined by
-----------------
the Board; provided, however, that where there is a public market for the Common
Stock, the fair market value per Share shall be the mean of the bid and asked
prices of the Common Stock in the over-the-counter market on the date of grant,
as reported in The Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotation
("Nasdaq") System) or, in the event the Common Stock is traded on the Nasdaq
National Market or listed on a stock exchange, the fair market value per Share
shall be the closing price on such system or exchange on the date of grant of
the Option, as reported in The Wall Street Journal. With respect to any Options
granted hereunder concurrently with the initial effectiveness of the Plan, the
fair market value shall be the Price to Public as set forth in the final
prospectus relating to such initial public offering.
(c) Form of Consideration. The consideration to be paid for the
---------------------
Shares to be issued upon exercise of an Option shall consist entirely of cash,
check, other Shares of Common Stock having a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised (which, if acquired from the Company, shall have been
held for at least six months), or any combination of such methods of payment
and/or any other consideration or method of payment as shall be permitted under
applicable corporate law.
9. Exercise of Option.
------------------
(a) Procedure for Exercise: Rights as a Stockholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof-, provided, however, that no Options shall be exercisable prior to
the date that stockholder approval of the Plan in accordance with Section 17
hereof has been obtained.
<PAGE>
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as a Director. If an Outside Director
-----------------------------------
ceases to serve as a Director, he or she may, but only within ninety (90) days
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination. Notwithstanding the foregoing, in no event may the Option
be exercised after its term set forth in Section 7 has expired. To the extent
that such Outside Director was not entitled to exercise an Option at the date of
such termination, or does not exercise such Option (which he or she was entitled
to exercise) within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding Section 9(b) above, in
----------------------
the event a Director is unable to continue his or her service as a Director with
the Company as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Internal Revenue Code), he or she may, but only
within six (6) months (or such other period of time not exceeding twelve (12)
months as is determined by the Board) from the date of such termination,
exercise his or her Option to the extent he or she was entitled to exercise it
at the date of such termination. Notwithstanding the foregoing, in no event may
the Option be exercised after the term set forth in Section 7 has expired. To
the extent that he or she was not entitled to exercise the Option at the date of
termination, or if he or she does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
-----------------
(i) During the term of the Option who is, at the time of his or
her death, a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within six (6) months following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
would have accrued had the Optionee continued living and remained in a
Continuous Status as Director for six (6) months (or such lesser period of time
as is determined by the Board) after the date of death. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth in
Section 7 has expired.
(ii) Within three (3) months after the termination of Continuous
Status as a Director, the Option may be exercised, at any time within six (6)
months following the date of death, by the
<PAGE>
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of termination. Notwithstanding the foregoing, in no
event may the option be exercised after its term set forth in Section 7 has
expired.
10. Nontransferability of Options. The Option may not be sold, pledged,
-----------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution or pursuant to a qualified
domestic relations order (as defined by the Code or the rules thereunder). The
designation of a beneficiary by an Optionee does not constitute a transfer. An
Option may be exercised during the lifetime of an Optionee only by the Optionee
or a transferee permitted by this Section.
11. Adjustments Upon Changes in Capitalization: Corporate Transactions.
------------------------------------------------------------------
(a) Adjustment. Subject to any required action by the stockholders of
----------
the Company, the number of shares of Common Stock covered by each outstanding
Option, the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per share of Common Stock covered by each such
outstanding Option, and the number of shares issuable pursuant to-the automatic
grant provisions of Section 4 hereof shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Corporate Transactions. In the event of (i) a dissolution or
----------------------
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to vote are
exchanged, the Company shall give to the Eligible Director, at the time of
adoption of the plan for liquidation, dissolution, sale, merger, consolidation
or reorganization, either a reasonable time thereafter within which to exercise
the Option, including Shares as to which the Option would not be otherwise
exercisable, prior to the effectiveness of such liquidation, dissolution, sale,
merger, consolidation or reorganization, at the end of which time the Option
shall terminate, or the right to exercise the Option, including Shares as to
which the Option would not be otherwise exercisable (or receive a substitute
option with comparable terms), as to an equivalent number of shares of stock of
the corporation succeeding the Company or acquiring the business by reason of
such liquidation, dissolution, sale, merger, consolidation or reorganization.
12. Time of Granting Option. The date of grant of an Option shall, for
-----------------------
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may amend or terminate the
-------------------------
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary and desirable
<PAGE>
to comply with Rule 16b-3 under the Exchange Act (or any other applicable law or
regulation), the Company shall obtain approval of the stockholders of the
Company to Plan amendments to the extent and in the manner required by such law
or regulation.
(b) Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan that would impair the rights of any Optionee shall not
affect Options already granted to such Optionee, and such Options shall remain
in full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee and the Board, which
agreement must be in writing and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
16. Option Agreement. Options shall be evidenced by written option
----------------
agreements in such form as the Board shall approve.
17. Stockholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the stockholders of the Company at or prior to the first annual
meeting of stockholders held subsequent to the granting of an Option hereunder.
If such stockholder approval is obtained at a duly held stockholders' meeting,
it may be obtained by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present or represented and entitled to vote
therein. If such stockholder approval is obtained by written consent, it may be
obtained by the written consent of the holders of a majority of the outstanding
shares of the Company. Options may be granted, but not exercised, before such
stockholder approval.
<PAGE>
Exhibit 4.2
EFFICIENT NETWORKS, INC. STOCK OPTION PLAN
July 28,1993
(as amended to date)
On July 23, 1993, the Board of Directors of Efficient Networks, Inc. (the
"Company") adopted, and the shareholders of the Company approved, the Efficient
Networks, Inc. Stock Option Plan. The Plan (as amended to date) is as follows:
1. PURPOSE. The purpose of the Plan is to provide employees,
consultants, directors and other persons who perform services to or on behalf of
the Company with a proprietary interest in the Company through the granting of
options.
2. ADMINISTRATION. The Plan will be administered by the Board of
Directors.
3. PARTICIPANTS. The Board shall, from time to time, select the
particular employees, consultants, directors or other appropriate persons who
provide services to or on behalf of the Company to whom options are to be
granted, and who will, upon such grant, become participants in the Plan (the
"Participants").
4. STOCK OWNERSHIP LIMITATION. No option may be granted to a Participant
who owns more then 10% of the voting power of all classes of stock of the
Company. This limitation will not apply if the option price is at least 110% of
the fair market value of the stock at the time the option is granted and the
option is not exercisable more than five years from the date it is granted.
5. SHARES SUBJECT TO PLAN. The Board may not grant options under the
Plan for more than 10.0 million shares of Common Stock of the Company, but this
number may be adjusted to reflect, if deemed appropriate by the Board, any stock
dividend, stock split, share combination, recapitalization or the like, of or by
the Company. Shares to be optioned and sold may be made available from either
authorized but unissued Common Stock or Common Stock held by the Company in its
treasury. Shares that by reason of the expiration of an option or otherwise are
no longer subject to purchase pursuant to an option granted under the Plan may
be reoffered under the Plan.
6. LIMITATION ON AMOUNT. The aggregate fair market value (determined at
the time of grant) of the shares of Common Stock which any Participant is first
eligible to purchase in any calendar year by exercise of incentive stock options
(within the meaning of Section 422A of the Internal Revenue Code) granted under
this Plan and all incentive stock option plans of the Company shall not exceed
$100,000. For this purpose, the fair market value (determined at the respective
date of grant of each option) of the stock purchasable by exercise of an
incentive stock option (or an installment thereof) shall be counted against the
$100,000 annual limitation for a Participant only for the calendar year such
stock is first purchasable under the terms of the option.
7. ALLOTMENT OF SHARES. The Board shall determine the number of shares
of Common Stock to be offered from time to time by grant of options to members
of management of the Company. The grant of an option to a Participant shall not
be deemed either to entitle the Participant to, or to disqualify the Participant
from, participation in any other grant of options under the Plan.
8. GRANT OF OPTIONS. The Board is authorized to grant Incentive Options
and Nonqualified Options under the Plan. The grant of options shall be
evidenced by stock option agreements containing such
<PAGE>
terms and provisions as are approved by the Board, but not inconsistent with the
Plan, including provisions that may be necessary to assure that the option is an
incentive stock option under the Internal Revenue Code. The Company shall
execute stock option agreements upon instructions from the Board.
9. OPTION PRICE. The option price for Incentive Options shall not be
less than 100% of the fair market value per share of the Common Stock on the
date the option is granted. The Board shall determine the fair market value of
the Common Stock on the date of grant, and shall set forth the determination in
its minutes, using any reasonable valuation method. The option price for
Nonqualified Options shall be determined in the discretion of the Board.
10. OPTION PERIOD. The Option Period will begin on the date the option is
granted, which will be the date the Board authorizes the option unless the Board
specifies a later date. No option may terminate later than 10 years from the
date the option is granted. The Board may provide for the exercise of options
in installments and upon such terms, conditions and restrictions as it may
determine. The Board may provide for termination of the option in the case of
termination of employment or any other reason.
11. RIGHTS IN EVENT OF DEATH OR DISABILITY. If a participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue
Code) while in the employ of the Company, but prior to termination of his right
to exercise an option in accordance with the provisions of his stock option
agreement without having totally exercised the option, the option agreement may
provide that it may be exercised, to the extent of the shares with respect to
which the option could have been exercised by the participant on the date of the
participant's death or disability, by (i) the participant's estate or by the
person who acquired the right to exercise the option by bequest or inheritance
or by reason of the death of the participant in the event of the participant's
death, or (ii) the participant or his personal representative in the event of
the participant's disability, provided the option is exercised prior to the date
of its expiration or not more than one year from the date of the participant's
death or disability, whichever occurs first. The date of disability of a
participant shall be determined by the Company.
12. PAYMENT. Full payment for shares purchased upon exercising an option
shall be made in cash or by check at the time of exercise, or on such other
terms as are set forth in the applicable option agreement. No shares may be
issued until full payment of the purchase price therefor has been made, and a
participant will have none of the rights of a stockholder until shares are
issued to him.
13. EXERCISE OF OPTION. Options granted under the Plan may be exercised
during the Option Period, at such times, in such amounts, In accordance with
such terms and subject to such restrictions as are set forth in the applicable
stock option agreements. In no event may an option be exercised or shares be
issued pursuant to an option if any requisite action, approval or consent of any
governmental authority of any kind having jurisdiction over the exercise of
options shall not have been taken or secured.
14. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of shares of
Common Stock covered by each outstanding option granted under the Plan and the
option price may be adjusted to ref fact, as deemed appropriate by the Board,
any stock dividend, stock split, share combination, exchange of shares,
recapitalization, merger, consolidation, separation, reorganization, liquidation
or the like, of or by the Company.
15. NON-ASSIGNABILITY. Options may not be transferred other than by will
or by the laws of descent and distribution. During a participant's lifetime,
options granted to a participant may be exercised only by the participant.
<PAGE>
16. INTERPRETATION. The Board shall interpret the Plan and shall
prescribe such rules and regulations in connection with the operation of the
Plan as it determines to be advisable for the administration of the Plan. The
Board may rescind and amend its rules and regulations.
17. AMENDMENT OR DISCONTINUANCE. The Plan may be amended or discontinued
by the Board without the approval of the stockholders of the Company, except
that any amendment that would (a) materially increase the benefits accruing to
participants under the Plan, (b) materially increase the number of securities
that may be issued under the Plan, or (c) materially modify the requirements of
eligibility for participation in the Plan must be approved by the stockholders
of the Company.
18. EFFECT OF PLAN. Neither the adoption of the Plan nor any action of
the Board shall be deemed to give any officer or Participant any right to be
granted an option to purchase Common Stock of the Company or any other rights
except as may be evidenced by the stock option agreement, or any amendment
thereto, duly authorized by the Board and executed on behalf of the Company and
then only to the extent and on the terms and conditions expressly set forth
therein.
19. TERM. Unless sooner terminated by action of the Board, the Plan will
terminate on December 31, 2003. The Board may not grant options under the Plan
after that date, but options granted before that date will continue to be
effective in accordance with their terms.
20. DEFINITIONS. For the purpose of this Plan, unless the context
requires otherwise, the following terms shall have the meanings indicated:
(a) "Board" means the Board of Directors Of the Company.
(b) "Common Stock" means the Common Stock which the Company is
currently authorized to issue or may in the future be authorized to issue (as
long as the common stock varies from that currently authorized, if at all, only
in amount of par value).
(c) "Incentive Option" means an option granted under the Plan which
meets the requirements of Section 422A of the Internal Revenue Code.
(d) "Nonqualified Option" means an option granted under the Plan which
is not intended to be an Incentive Option.
(e) "Option Period" means the period during which an option may be
exercised.
(f) "Plan" means this Stock Option Plan, as amended from time to time.
<PAGE>
Exhibit 5.1
Wilson Sonsini Goodrich & Rosati
Palo Alto, California
October 12, 1999
Efficient Networks, Inc.
4201 Spring Valley Road, Suite 1200
Dallas, TX 75244-3666
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about October 12, 1999 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 215,000 shares of your Common Stock
reserved for issuance under the 1998 Directors' Stock Option Plan and 6,564,329
shares of your Common Stock reserved for issuance under the Stock Option Plan,
as amended (collectively, the "Plans"). As your legal counsel, we have examined
the proceedings taken and are familiar with the proceedings proposed to be taken
by you in connection with the sale and issuance of such Common Stock under the
Plans.
It is our opinion that, when issued and sold in the respective manners
referred to in the Plans and pursuant to the agreements which accompany the
Plans, the Common Stock issued and sold thereby will be legally and validly
issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati, P.C.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use of our reports incorporated by reference herein.
/s/ KPMG LLP
KPMG LLP
October 12, 1999
