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As filed with the Securities and Exchange Commission on February 4, 2000
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DELAWARE 06-1555163
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
MCK COMMUNICATIONS, INC.
313 WASHINGTON STREET
NEWTON, MASSACHUSETTS 02548
(617) 464-6100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
FULL TITLE OF THE PLANS
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
1999 STOCK OPTION AND GRANT PLAN
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STEVEN J. BENSON
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND DIRECTOR
MCK COMMUNICATIONS, INC.
313 WASHINGTON STREET
NEWTON, MASSACHUSETTS 02458
(617) 454-6100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
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With copies to:
Sally Burke
MCK Communications, Inc.
313 Washington Street
Newton, Massachusetts 02548
(617) 464-6100
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------- ---------------- -------------------------- ---------------------- ------------------------
Title of Securities Amounts to be Proposed Maximum Proposed Maximum Amount of
Being Registered Registered (1) Offering Price Per Share Aggregate Offering Registration Fee
Price
- --------------------- ---------------- -------------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.001 per share 75,345(2) $ 0.01(2)(3) $ 753.45 $ .20
601,242(2) $ 0.10(2)(3) $ 60,124.20 $ 15.87
211,151(2) $ 0.20(2)(3) $ 42,230.20 $ 11.15
318,240(2) $ 1.63(2)(3) $ 518,731.20 $ 136.95
200,813(2) $ 8.17(2)(3) $ 1,640,642.20 $ 433.13
189,655(2) $12.75(2)(3) $ 2,418,101.20 $ 638.38
125,500(2) $13.50(2)(3) $ 1,694,250.00 $ 447.28
2,000 $16.00(3) $ 32,000.00 $ 8.45
500 $19.50(3) $ 9,750.00 $ 2.58
129,250 $22.50(3) $ 2,908,125.00 $ 767.75
6,500 $23.56(3) $ 153,140.00 $ 40.43
15,000 $28.63(3) $ 429,450.00 $ 113.37
10,000 $29.88(3) $ 298,800.00 $ 78.88
2,361,657 $27.31(4) $64,496,852.67 $17,027.17
--------- -------------- ----------
4,246,853 $74,702,950.12 $19,721.60
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</TABLE>
(1) Includes 3,060,000 shares to be offered pursuant to the 1999 Stock
Option and Grant Plan of the Registrant. This Registration Statement
also relates to such indeterminate number of additional shares of MCK
Communications, Inc. Common Stock as may be required pursuant to the
Amended and Restated 1996 Stock Option Plan and the 1999 Stock Option
and Grant Plan in the event of a stock dividend, reverse stock split,
split-up, recapitalization, forfeiture of stock under these plans or
other similar event.
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(2) The numbers of shares and the price per share of all options issued
prior to October 8, 1999 reflect a stock split of 1.53 to one that
occurred on this date.
(3) The Proposed Maximum Offering Price Per Share and the Proposed
Aggregate Offering Price are based on the price at which outstanding
options may be exercised, in accordance with Rule 457(h) under the
Securities Act of 1933, as amended (the "Securities Act"), and are
utilized solely for the purpose of calculating the registration fee.
(4) The Proposed Maximum Offering Price Per Share and the Proposed
Aggregate Offering Price are based upon the average of the high and low
prices for the Registrant's Common Stock, par value $.01 per share, as
reported on the Nasdaq National Market on January 31, 2000, in
accordance with Rules 457(h) and (c) under the Securities, and are
utilized solely for the purpose of calculating the registration fee.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. PLAN INFORMATION. *
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION. *
* Information required by Part I to be contained in the Section 10(a)
Prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933 (the "Securities Act") and the Introductory
Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
MCK Communications, Inc. (the "Registrant") hereby incorporates by
reference the following documents which have previously been filed with
the Securities and Exchange Commission:
(a) the Registrant's final prospectus dated October 22, 1999 as
filed with the Securities and Exchange Commission on October
22, 1999 pursuant to Rule 424(b) under the Securities Act (the
"Prospectus");
(b) all other reports filed with the Securities and Exchange
Commission by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since October 22, 1999; and
(c) the description of the Registrant's Common Stock contained in
the Registration Statement on Form 8-A dated October 18, 1999
as filed with the Securities and Exchange Commission on
October 18, 1999 pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended.
In addition, all documents subsequently filed with the Securities and
Exchange Commission by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
hereto that indicates that all securities offered hereunder have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such
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documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to the
extent that a statement contained herein or in any subsequently filed document
which also is incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. DESCRIPTION OF SECURITIES.
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
Item 6 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with Section 145 of the General Corporation Law of the
State of Delaware ("DGCL"), Article VII of the Registrant's Restated Certificate
of Incorporation (the "Certificate") provides that no director of the Registrant
shall be personally liable to the Registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, or (iv)
for any transaction from which the director derived an improper personal
benefit. In addition, the Certificate provides that if the DGCL is amended to
authorize the further elimination or limitation of the personal liability of
directors, then the liability of a director of the Registrant shall be
eliminated or limited to the fullest extent permitted by the DGCL, as so
amended.
Article V of the Registrant's Amended and Restated By-laws (the
"By-laws") provides for indemnification by the Registrant of its directors,
officers and certain non-officer employees (including officers and certain
non-officer employees of subsidiaries) under certain circumstances against
expenses (including attorneys fees, judgments, fines and amounts paid in
settlement) reasonably incurred in connection with the defense or settlement of
any threatened, pending or completed legal proceeding in which any such person
is involved by reason of the fact that such person is or was a director, an
officer or an employee of the Registrant, or is acting in any capacity with
other entities at the written request of the registrant, if such person acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the Registrant, and with respect to criminal
actions or proceedings, that such person had no reasonable cause to believe his
or her conduct was unlawful.
Under Section 7 of the Underwriting Agreement filed as Exhibit 1.1 to
the MCK Communications, Inc. Registration Statement on Form S-1 (File No.
33-85281), the Underwriters have agreed to indemnify, under certain conditions,
the Registrant, its directors, certain officers and persons who control the
Registrant within the meaning of the Securities Act against certain liabilities.
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The Company carries directors' and officers' liability insurance
covering its directors and officers.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
The following is a complete list of exhibits filed or incorporated by
reference as part of this Registration Statement.
EXHIBITS
3.3 Form of Second Amended and Restated Certificate of
Incorporation of the Registrant*
3.5 Form of First Amended and Restated By-laws of the Registrant*
4.1 Specimen Certificate for Shares of Common Stock, par value
$.001 per share, of the Registrant*
5.1 Opinion of McDermott, Will & Emery LLP as to the legality of
the securities being offered
10.3 Amended and Restated 1996 Stock Option Plan of the Registrant*
10.4 1999 Stock Option and Grant Plan of the Registrant
23.1 Consent of McDermott, Will & Emery (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
23.3 Consent of PriceWaterhouseCoopers LLP
23.4 Powers of Attorney (included on signature pages to this
Registration Statement)
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*Incorporated by reference to the relevant exhibit to the MCK Communications,
Inc. Registration Statement on Form S-1 (File No. 333-85821), as amended, as
filed with the Securities and Exchange Commission.
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;
(ii) to reflect in the prospectus any acts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any
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increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a twenty percent (20%) change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the Registration Statement is on Form S-3, Form S-8 or
Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the undersigned Registrant pursuant to Section 13 or
Section 15 (d) of the Exchange Act that are incorporated by reference
in the Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the 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 Securities Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
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Pursuant to the requirements of the Securities Act, MCK Communications,
Inc. 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 Newton, Massachusetts on January 31, 2000.
MCK Communications, Inc.
By: /s/ Steven J. Benson
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Steven J. Benson
Chairman, Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints each of Steven J. Benson and Paul K.
Zurlo such person's true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for such period and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file with same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that any said attorney-in-fact
and agent, or any substitute or substitutes of any of them, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Steven J. Benson Chairman of the Board, (Chief January 31, 2000
- ------------------------ Executive Officer, President,
Steven J. Benson Chairman and Director)
/s/ Paul K. Zurlo Chief Financial Officer January 31, 2000
- ------------------------ (Principal Financial
Paul K. Zurlo and Accounting Officer)
/s/ Calvin K. Manz Director January 31, 2000
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Calvin K. Manz
/s/ John B. Landry Director January 31, 2000
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John B. Landry
/s/ Gregory M. Avis Director January 31, 2000
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Gregory M. Avis
/s/ Michael H. Balmuth Director January 31, 2000
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Michael H. Balmuth
/s/ Paul Severino Director January 31, 2000
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Paul Severino
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EXHIBIT INDEX
EXHIBITS
3.3 Form of Second Amended and Restated Certificate of
Incorporation of the Registrant*
3.5 Form of First Amended and Restated By-laws of the Registrant*
4.1 Specimen Certificate for Shares of Common Stock, par value
$.001 per share, of the Registrant*
5.1 Opinion of McDermott, Will & Emery LLP as to the legality of
the securities being offered
10.3 Amended and Restated 1996 Stock Option Plan of the Registrant*
10.4 1999 Stock Option and Grant Plan of the Registrant
23.1 Consent of McDermott, Will & Emery (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
23.3 Consent of PriceWaterhouseCoopers LLP
23.4 Powers of Attorney (included on signature pages to this
Registration Statement)
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*Incorporated by reference to the relevant exhibit to the MCK Communications,
Inc. Registration Statement on Form S-1 (File No. 333-85821), as amended, as
filed with the Securities and Exchange Commission.
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EXHIBIT 5.1
McDermott, Will & Emery
February 1, 2000
MCK Communications, Inc.
313 Washington Street
Newton, MA 02548
Ladies and Gentlemen:
Re: Registration Statement on Form S-8
This opinion is delivered in our capacity as counsel to MCK
Communications, Inc. (the "Company") in connection with the preparation and
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act") of a registration Statement on Form S-8 (the
"Registration Statement") relating to 4,246,853 shares of Common Stock, par
value $.001 per share (the "Registered Shares"). Of the Registered Shares, the
Company is authorized to issue 1,186,853 shares pursuant to the Amended and
Restated 1996 Stock Option Plan and 3,060,000 shares pursuant to the 1999 Stock
Option and Grant Plan (collectively, the "Plans").
As counsel for the Company, we have examined a copy of the Plans and
the Company's Second Amended and Restated Certificate of Incorporation and the
First Amended and Restated By-laws, each as presently in effect, and such
records, certificates and other documents of the Company as we have deemed
necessary or appropriate for the purposes of this opinion.
We are attorneys admitted to practice in the Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdiction
other than the laws of the United States of America, the Commonwealth of
Massachusetts and the Delaware General Corporation Law, the applicable
provisions of the Delaware Constitution and the reported judicial decisions
interpreting the laws.
Based on the foregoing, we are of the opinion that upon the issuance
and delivery of the Registered Shares against payment therefor in accordance
with the terms of the respective Plans and any agreement thereunder, the
Registered Shares will be legally issued, fully paid and non-assessable shares
of the Company's Common Stock under the General Corporation Law of the State of
Delaware.
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The foregoing assumes all requisite steps will be taken to comply with
the requirements of the Act, applicable requirements of state laws regulating
the offer and sale of securities and applicable requirements of the National
Association of Securities Dealers, Inc.
We hereby consent to being named as counsel to the Company in the
Registration Statement and to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ McDermott, Will & Emery
---------------------------
McDermott, Will & Emery
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MCK COMMUNICATIONS, INC.
1999 STOCK OPTION AND GRANT PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the MCK Communications, Inc. 1999 Stock Option
and Grant Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees, directors, consultants, advisors and other key persons
of MCK Communications, Inc. (the "Company") and its Subsidiaries (as defined
below) upon whose judgment, initiative and efforts the Company largely depends
for the successful conduct of its business to acquire a proprietary interest in
the Company. It is anticipated that providing such persons with a direct stake
in the Company's welfare will assure a closer identification of their interests
with those of the Company, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, and Unrestricted Stock Awards.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" has the meaning specified in Section 2.
"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 13.
"Fair Market Value" of the Stock on any given date means (i) if the
Stock is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Fair Market Value on any given date
shall not be less than the average of the highest bid and lowest asked prices of
the Stock reported for such date or, if no bid and asked prices were reported
for such date, for the last day preceding such date for which such prices were
reported; or (ii) if the Stock is admitted to trading on a national securities
exchange or the NASDAQ National Market System, then clause (i) shall not apply
and the Fair Market Value on any date shall not be less than the closing price
reported for the Stock on such exchange or system for such date or, if no sales
were reported for such date, for the last date preceding such date for which a
sale was reported; or (iii) if the Stock is not publicly traded on a securities
exchange or traded in the over-the-counter market or, if traded or quoted, there
are no transactions or quotations within the last ten trading days or trading
has been halted for
<PAGE> 2
extraordinary reasons, the Fair Market Value on any given date shall be
determined in good faith by the Committee with reference to the rules and
principles of valuation set forth in Section 20.2031-2 of the Treasury
Regulations; and (iv) notwithstanding the foregoing, the Fair Market Value of
the Stock on the effective date of the Initial Public Offering shall be the
offering price to the public of the Stock on such date.
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
"Independent Director" means a member of the Board who is neither an
employee or officer of the Company or any Subsidiary.
"Initial Public Offering" means the first underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Stock to the public.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Restricted Stock Award" means any Award granted pursuant to Section 6.
"Stock" means the Common Stock, par value $.001 per share, of the
Company, subject to adjustments pursuant to Section 3.
"Subsidiary" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities, beginning with
the Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
"Unrestricted Stock Award" means any Award granted pursuant to Section
7.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS.
(a) COMMITTEE. The Plan shall be administered by the Board of Directors
of the Company, or at the discretion of the Board, by a committee of the Board
consisting of not less than two Directors; PROVIDED, HOWEVER, that if each
member of the Committee is not (i) a "Non-Employee Director" within the meaning
of Rule 16b-3(a)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (ii) an "Outside Director" within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder, any Awards
granted to individuals subject to the reporting requirements of Section 16 of
the Exchange Act
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shall be approved by the Board of Directors. All references herein to the
Committee shall be deemed to refer to the entity then responsible for
administration of the Plan at the relevant time (i.e., either the Board of
Directors or a committee of the Board, as applicable).
(b) POWERS OF COMMITTEE. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(1) to select the officers, employees, Independent Directors,
consultants, advisers and key persons of the Company and its Subsidiaries to
whom Awards may from time to time be granted;
(2) to determine the time or times of grant, and the extent,
if any, of Incentive Stock Options, Non-Qualified Stock Options, Restricted
Stock Awards and Unrestricted Stock Awards, or any combination of the foregoing,
granted to any one or more participants;
(3) to determine the number of shares of Stock to be covered
by any Award;
(4) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards;
(5) to accelerate at any time the exercisability or vesting of
all or any portion of any Award and/or to include provisions in Awards providing
for such acceleration,
(6) to impose any limitations on Awards granted under the
Plan, including limitations on transfers repurchase provisions and the like and
to exercise repurchase rights or obligations;
(7) subject to the provisions of Section 5(a)(3), to extend at
any time the period in which Stock Options may be exercised;
(8) to determine at any time whether, to what extent, and
under what circumstances Stock and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or credit
amounts constituting interest (at rates determined by the Committee) or
dividends or deemed dividends on such deferrals; and
(9) at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable, to interpret the terms and provisions of
the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the plan.
-3-
<PAGE> 4
All decisions and interpretations of the Committee shall be
binding on all persons, including the Company and Plan participants.
(c) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Committee, in
its discretion, may delegate to the Chief Executive Officer of the Company all
or part of the Committee's authority and duties with respect to Awards,
including the granting thereof, to individuals who are not subject to the
reporting and other provisions of Section 16 of the Act or "covered employees"
within the meaning of Section 162(m) of the Code. Any such delegation by the
Committee shall include a limitation as to the amount of Awards that may be
granted during the period of delegation and shall contain guidelines as to the
determination of the exercise price of any Option, the price of other Awards and
the vesting criteria. The Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any prior actions of
the Committee's delegate or delegates that were consistent with the terms of the
Plan.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) STOCK ISSUABLE. The maximum number of shares of Stock
reserved and available for issuance under the Plan shall be 2,000,000 shares of
Stock. For purposes of the foregoing limitations, the shares of Stock underlying
any Awards which are forfeited, canceled, reacquired by the Company, satisfied
without the issuance of Stock or otherwise terminated (other than by exercise)
shall be added back to the shares of Stock available for issuance under the
Plan. Subject to such overall limitation, shares of Stock may be issued up to
such maximum number pursuant to any type or types of Award; PROVIDED, HOWEVER,
that from and after the date the plan is subject to Section 162(m) of the Code,
Awards with respect to no more than 500,000 shares of Stock may be granted to
any one individual participant during any one calendar year period. The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company.
(b) RECAPITALIZATIONS. If, through or as a result of any
merger, consolidation, sale of all or substantially all of the assets of the
Company, reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other similar transaction, the outstanding
shares of Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company or any successor
company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, the Committee shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, (ii) the number of Stock Options, or other Awards that
can be granted to any one individual participant, (iii) the number and kind of
shares or other securities subject to any then outstanding Awards under the
Plan, and (iv) the price for each share subject to any then outstanding Stock
Options or other Awards under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of shares) as to which
such Stock Options remain exercisable and the repurchase price for shares
subject to repurchase. The adjustment by the Committee shall be final, binding
and conclusive. No fractional shares of
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Stock shall be issued under the Plan resulting from any such adjustment, but the
Committee in its discretion may make cash payment in lieu of fractional shares.
(c) MERGERS AND OTHER TRANSACTIONS. In the case of (i) the
dissolution or liquidation of the Company, (ii) a merger, reorganization or
consolidation between the Company and another person or entity (other than a
holding company or subsidiary of the Company) as a result of which the holders
of the Company's outstanding voting stock immediately prior to the transaction
hold less than a majority of the outstanding voting stock of the surviving
entity immediately after the transaction, (iii) the sale of all or substantially
all of the assets of the Company to an unrelated person or entity, or (iv) the
sale of all of the Stock of the Company to an unrelated person or entity (in
each case, a "Transaction"), fifty percent (50%) of the outstanding Awards held
by participants, to the extent not fully vested and exercisable, shall become
fully vested and exercisable, except with respect to specific awards as the
Committee otherwise determines at the time of grant of such awards. In addition,
unless provision is made in connection with the Transaction for the assumption
of the Awards heretofore granted, or the substitution of such Awards with new
Awards of the successor entity or parent thereof, with appropriate adjustment as
to the number and kind of shares and, if appropriate, the per share exercise
prices, as provided in Section 3(b) above, all of the remaining outstanding
Awards held by participants, to the extent not fully vested and exercisable,
shall become fully vested and exercisable, except with respect to specific
awards as the Committee otherwise determines. Upon the effectiveness of the
transaction, the Plan and all Awards ("Contractual Awards") granted hereunder
shall, unless assumed by the successor entity, terminate. In the event of such
termination, each optionee shall be permitted to exercise for a period of at
least 15 days prior to the date of such termination all outstanding Awards held
by such optionee which are then exercisable.
(d) SUBSTITUTE AWARDS. The Committee may grant Awards under
the Plan in substitution for stock and stock based awards held by employees of
another corporation who become employees of the Company or a Subsidiary as the
result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY.
Participants in the Plan will be such officers and other
employees, Independent Directors, consultants, advisors and other key persons of
the Company and its Subsidiaries who are responsible for or contribute to the
management, growth or profitability of the Company and its Subsidiaries as are
selected from time to time by the Committee, in its sole discretion.
SECTION 5. STOCK OPTIONS.
Any Stock Option granted under the Plan shall be pursuant to a
stock option agreement which shall be in such form as the Committee may from
time to time approve. Option agreements need not be identical.
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Stock Options granted under the Plan may be either Incentive
Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be
granted only to employees of the Company or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. Non-Qualified
Stock Options may be granted to officers, employees, Independent Directors,
advisors, consultants and other key persons of the Company and its Subsidiaries.
To the extent that any Option does not qualify as an Incentive Stock Option, it
shall be deemed a Non-Qualified Stock option.
No Incentive Stock Option shall be granted under the Plan
after August 19, 2009.
(a) TERMS OF STOCK OPTIONS. Stock Options granted under the
plan shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan as the Committee shall deem desirable:
(1) EXERCISE PRICE. The exercise price per share for
the Stock covered by a Stock Option shall be determined by the Committee at the
time of grant but shall not be less than 100% of the Fair Market Value in the
case of Incentive Stock Options. If an employee owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation and an Incentive Stock Option is
granted to such employee, the option price of such Incentive Stock Option shall
be not less than 110% of the Fair Market Value on the grant date.
(2) GRANT OF DISCOUNT OPTIONS IN LIEU OF CASH
COMPENSATION. Upon the request of a participant and with the consent of the
Committee, such participant may elect each calendar year to receive a
Non-Qualified Stock Option in lieu of any cash bonus or other compensation to
which he may become entitled during the following calendar year, but only if
such participant makes an irrevocable election to waive receipt of all or a
portion of such cash compensation. Such election shall be made on or before the
date set by the Committee which date shall be no later than 15 days (or such
shorter period permitted by the Committee) preceding January 1 of the calendar
year for which the cash compensation would otherwise be paid. A Non-Qualified
Stock Option shall be granted to each participant who made such an irrevocable
election on the date the waived cash compensation would otherwise be paid. The
exercise price per share shall be determined by the Committee. The number of
shares of Stock subject to the stock Option shall be determined by dividing the
amount of the waived cash compensation by the difference between the Fair Market
Value of the Stock on the date the Stock Option is granted and the exercise
price per share of the Stock Option. The Stock Option shall be granted for a
whole number of shares so determined; the value of any fractional share shall be
paid in cash.
(3) OPTION TERM. The term of each Stock Option shall
be fixed by the Committee, but no Incentive Stock Option shall be exercisable
more than ten years after the date the Option is granted. If an employee owns or
is deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of Stock of the
Company or any parent or subsidiary corporation and an Incentive Stock Option
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is granted to such employee, the term of such Option shall be no more than five
years from the date of grant.
(4) EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Stock
Options shall become vested and exercisable at such time or times, whether or
not in installments, as shall be determined by the Committee at or after the
grant date; PROVIDED, HOWEVER, that Stock Options granted in lieu of cash
compensation shall be exercisable in full as of the grant date. The Committee
may at any time accelerate the exercisability of all or any portion of any Stock
Option. An optionee shall have the rights of a stockholder only as to shares
acquired upon the exercise of a Stock Option and not as to unexercised Stock
Options.
(5) METHOD OF EXERCISE. Stock Options may be
exercised in whole or in part, by giving written notice of exercise to the
Company, specifying the number of shares to be purchased. Payment of the
purchase price may be made by one or more of the following methods; provided,
however, that the methods set forth in subsections (B) and (C) below shall
become available only after the closing of the Initial Public Offering:
(i) In cash by certified or bank check or
other instrument acceptable to the Committee,
(ii) In the form of shares of Stock that are
not then subject to restrictions under any Company plan and that have been held
by the optionee free of such restrictions for at least six months, if permitted
by the Committee in its discretion. such surrendered shares shall be valued at
Fair Market Value on the exercise date;
(iii) By the optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that
in the event the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Committee shall prescribe as
a condition of such payment procedure; or
(iv) By the optionee delivering to the
Company a promissory note if the Board has authorized the loan of funds to the
optionee for the purpose of enabling or assisting the optionee to effect the
exercise of his Stock Option; PROVIDED THAT at least so much of the exercise
price as represents the par value of the Stock shall be paid other than with a
promissory note.
Payment instruments will be received subject to collection.
The delivery of certificates representing the shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase price for
such shares and the fulfillment of any other requirements contained in the Stock
Option or applicable provisions of laws.
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(6) TERMINATION. Unless otherwise provided in the
option agreement or determined by the Committee, upon the optionee's termination
of employment (or other business relationship) with the Company and its
Subsidiaries, the optionee's rights in his Stock Options shall automatically
terminate.
(7) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the
extent required for "incentive stock option" treatment under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the time of grant) of
the shares of Stock with respect to which Incentive Stock Options granted under
this Plan and any other plan of the Company or its parent and subsidiary
corporations become exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000. To the extent that any Stock Option
exceeds this limit, it shall constitute a Non-Qualified Stock Option.
(b) RELOAD OPTIONS. At the discretion of the Committee,
Options granted under the Plan may include a "reload" feature pursuant to which
an optionee exercising an Option by the delivery of number of shares of stock in
accordance with Section 5(a)(5)(ii) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Committee may provide) to purchase that number of shares of Stock equal to the
number delivered to exercise the original Option.
(c) NON-TRANSFERABILITY OF OPTIONS. No Stock option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee; provided, however, that an optionee
may transfer, without consideration for the transfer, the Non-Qualified Stock
Options to members of his immediate family, to trusts for the benefit of such
family members, to partnerships in which such family members are the only
partners, or to charitable organization so long as the transferee agrees in
writing to be bound by the terms and conditions of this Plan and the applicable
Option Agreement.
SECTION 6. RESTRICTED STOCK AWARDS
(a) NATURE OF RESTRICTED STOCK AWARDS. A Restricted Stock
Award is an Award entitling the recipient to acquire, at par value or such other
purchase price determined by the Committee, shares of Stock subject to such
restrictions and conditions as the Committee may determine at the time of grant
("Restricted Stock"). Conditions may be based on continuing employment (or other
business relationship) and/or achievement or pre-established performance goals
and objectives.
(b) RIGHTS AS A STOCKHOLDER. Upon execution of a written
instrument setting forth the Restricted Stock Award and paying any applicable
purchase price, a participant shall have the rights of a stockholder with
respect to the voting of the Restricted Stock, subject to such conditions
contained in the written instrument evidencing the Restricted Stock Award.
Unless the Committee shall otherwise determine, certificates evidencing the
Restricted Stock shall
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remain in the possession of the Company until such Restricted Stock is vested as
provided in Section 6(d) below.
(c) RESTRICTIONS. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the written instrument evidencing the
Restricted Stock Award. If a participant's employment (or other business
relationship) with the Company and its Subsidiaries terminates under the
conditions specified in the relevant instrument relating to the Award, or upon
such other event or events as may be stated in the instrument evidencing the
Award, the Company or its assigns shall have the right or shall agree, as may be
specified in the relevant instrument, to repurchase some or all of the shares of
Stock subject to the Award at such purchase price as is set forth in such
instrument.
(d) VESTING OF RESTRICTED STOCK. The Committee at the time of
grant shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which Restricted Stock
shall become vested, subject to such further rights of the Company or its
assigns as may be specified in the instrument evidencing the Restricted Stock
Award.
(e) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The
written instrument evidencing the Restricted Stock Award may require or permit
the immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.
SECTION 7. UNRESTRICTED STOCK AWARDS
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Committee may, in
its sole discretion, grant (or sell at a purchase price determined by the
Committee) an Unrestricted Stock Award to any participant, pursuant to which
such participant may receive shares of Stock free of any vesting restrictions
("Unrestricted Stock") under the Plan. Unrestricted Stock Awards may be granted
or sold as described in the preceding sentence in respect of past services or
other valid consideration, or in lieu of any cash compensation due to such
individual.
(b) ELECTIONS TO RECEIVE UNRESTRICTED STOCK IN LIEU OF
COMPENSATION. Upon the request of a participant and with the consent of the
Committee, each such participant may, pursuant to an advance written election
delivered to the Company no later than the date specified by the Committee,
receive a portion of the cash compensation otherwise due to such participant in
the form of shares of Unrestricted Stock either currently or on a deferred
basis.
(c) RESTRICTIONS ON TRANSFERS. The right to receive shares of
Unrestricted Stock on a deferred basis may not be sold, assigned, transferred,
pledged or otherwise encumbered, other than by will or the laws of descent and
distribution.
SECTION 8. TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later
than the date as of which the value of an Award or of any Stock or other amounts
received thereunder first becomes includable in the gross income of the
participant for Federal income tax purposes, pay to the
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Company, or make arrangements satisfactory to the Committee regarding payment
of, any federal, state, or local taxes of any kind required by law to be
withheld with respect to such income. The Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(b) PAYMENT IN STOCK. Subject to approval by the Committee, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
SECTION 9. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be
deemed a termination of employment:
(a) a transfer to the employment of the Company from a
subsidiary or from the Company to a Subsidiary, or from one Subsidiary to
another; or
(b) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Company, if the employee's
right to re-employment is guaranteed either by a statute or by contract or under
the policy pursuant to which the leave of absence was granted or if the
Committee otherwise so provides in writing.
SECTION 10. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Committee may, at any time, amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price in a manner not inconsistent with the terms of the
Plan), but such price, if any, must satisfy the requirements which would apply
to the substitute or amended Award if it were then initially granted under this
Plan for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the holder's consent. If and to the extent determined by the
Committee to be required by the Act to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code, Plan
amendments shall be subject to approval by the Company's stockholders who are
eligible to vote at a meeting of stockholders.
SECTION 11. STATUS OF PLAN
With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
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obligations to deliver Stock or make payments with respect to Awards hereunder,
PROVIDED THAT the existence of such trusts or other arrangements is consistent
with the foregoing sentence.
SECTION 12. GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The
Committee may require each person acquiring Stock pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until
all applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Committee may require the placing of such
stop orders and restrictive legends on certificates for Stock and Awards, as it
deems appropriate.
(b) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS.
Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, including trusts, and such arrangements
may be either generally applicable or applicable only in specific cases. The
adopting of this Plan and the grant of Awards do not confer upon any employee
any right to continued employment with the Company or any Subsidiary.
SECTION 13. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a
majority of the shares of Stock of the Company present or represented and
entitled to vote at a meeting of stockholders. Subject to such approval by the
stockholders and to the requirement that no Stock may be issued hereunder prior
to such approval, Stock Options and other Awards may be granted hereunder on and
after adoption of this Plan by the Board.
SECTION 14. GOVERNING LAW
This Plan shall be governed by Delaware law except to the extent such
law is preempted by federal law.
Adopted and Effective: August 20, 1999
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Amended and Restated 1996 Stock Option Plan and 1999
Stock Option and Grant Plan of MCK Communications, Inc., of our report dated
July 30, 1999, except as to Note 14, as to which the date is October 8, 1999,
with respect to the consolidated financial statements of MCK Communications,
Inc. as of April 30, 1999 and 1998 and for the years ended April 30, 1999 and
1998 included in its Registration Statement (Form S-1/A No. 333-8521) filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 2, 2000
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To: MCK Communications, Inc.
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-8 of our
report dated June 20, 1997, on our audits of the financial statements of MCK
Communications, Inc., as of April 30, 1997.
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Calgary, Alberta
Date: February 1, 2000
