As filed with the Securities and Exchange Commission on May 25, 2000.
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VYYO INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 94-3241270
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
20400 Stevens Creek Boulevard, 8th Floor
Cupertino, California 95014
(408) 863-2300
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Principal Executive Offices)
1996 Equity Incentive Plan
1999 Employee and Consultant Equity Incentive Plan
Amended and Restated 2000 Employee and Consultant Equity Incentive Plan
2000 Employee Stock Purchase Plan
(Full Title of the Plans)
Davidi Gilo
Chief Executive Officer
Vyyo Inc.
20400 Stevens Creek Boulevard, 8th Floor
Cupertino, California 95014
(Name and Address of Agent for Service)
(408) 863-2300
(Telephone Number, including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Amount to Proposed Proposed
be Maximum Maximum Amount of
Title of Securities to be Registered(1) Offering Price Aggregate Registration
Registered Per Share Offering Price Fee
------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
1996 Equity Incentive Plan,
Common Stock, par value
$0.0001 per share 218,687 $.33 (2) $72,167 $20
- -------------------------------- ------------- ---------------- ---------------- --------------
1999 Employee and Consultant
Equity Incentive Plan, Common
Stock, par value $0.0001 per 1,102,500 $.50 (2) $551,250 $146
share
- -------------------------------- ------------- ---------------- ---------------- --------------
Amended and Restated 2000
Employee and Consultant Equity
Incentive Plan, Common Stock,
par value $0.0001 per share 3,255,400 $3.36 (2) $10,938,144 $2,888
- -------------------------------- ------------- ---------------- ---------------- --------------
Amended and Restated 2000
Employee and Consultant Equity
Incentive Plan, Common Stock,
par value $0.0001 per share 3,082,101 $16.75 (3) $51,625,191 $13,630
- -------------------------------- ------------- ---------------- ---------------- --------------
2000 Employee Stock Purchase
Plan, Common Stock, par value
$0.0001 per share 750,000 $14.24 (4) $10,680,000 $2,820
- -------------------------------- ------------- ---------------- ---------------- --------------
Total 8,408,688 $73,866,752 $19,504
================================ ============= ================ ================ ==============
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which may become issuable under any of the Plans being
registered pursuant to this Registration Statement by reason of any
stock dividend, stock split, recapitalization or any other similar
transaction effected without the receipt of consideration which results
in an increase in the number of the Registrant's outstanding shares of
Common Stock.
(2) Computed in accordance with Rule 457(h) under the Securities Act of
1933, as amended (the "Securities Act") solely for the purpose of
calculating the registration fee. The computation is based on the
weighted average per share exercise price (rounded to nearest cent) of
outstanding options under the referenced plan, the shares issuable
under which are registered hereby.
(3) Estimated solely for the purposes of calculating the registration fee
pursuant to Rules 457(c) and (h) under the Securities Act on the basis
of the average of the high and low sale prices for a share of common
stock of Vyyo Inc. as reported on the Nasdaq National Market on May 23,
2000.
(4) Estimated solely for the purposes of calculating the registration fee
pursuant to Rules 457(c) and (h) under the Securities Act on the basis
of the average of the high and low sale prices for a share of common
stock of Vyyo Inc. as reported on the Nasdaq National Market on May 23,
2000, multiplied by 85%, which is the percentage of the trading
purchase price applicable to purchases under the referenced plan.
The Registration Statement shall become effective upon filing in accordance
with Rule 462(a) under the Securities Act.
PART I
Item 1.Plan information*
Item 2.Registrant Information and Employee Plan Annual Information*
* The document(s) containing the information specified in Part I of Form
S-8 have been or will be sent or given to employees as specified by
Rule 428(b)(1) under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Vyyo Inc. (the "Company" or the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents:
(a) The Registrant's Prospectus, filed on April 17, 2000 pursuant to
Rule 424(b)3 under the Securities Act of 1933, as amended, which contains
audited financial statements for the year ended December 31, 1999,
Registrant's latest fiscal year for which such statements have been filed.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2000, filed with the Commission on May 5, 2000.
(c) The description of the Registrant's Common Stock contained in
Amendment No. 1 to the Registrant's Registration Statement on Form 8-A
filed with the Commission under Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on April 3, 2000, including any
amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.
Statements contained in this Registration Statement or in a document
incorporated by reference may be modified or superseded by later statements
in this Registration Statement or by statements in subsequent documents
incorporated by reference, in which case you should refer to the later
statement.
Item 4. Description of the Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The validity of the shares of common stock being offered will be
passed upon for the Company by Skadden, Arps, Slate, Meagher & Flom LLP,
Palo Alto, California. A partner at Skadden, Arps beneficially owns 65,342
shares of the Company's common stock.
Item 6. Indemnification of Directors and Officers
Section 102 of the Delaware General Corporation Law, or the DGCL, as
amended, allows a corporation to eliminate the personal liability of
directors of a corporation to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director, except where
the director breached his duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or knowingly violated a law, authorized
the payment of a dividend or approved a stock repurchase in violation of
Delaware corporate law or obtained an improper personal benefit.
Section 145 of the DGCL provides, among other things, that the
Company may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding (other than an action by or in the right of the Company) by
reason of the fact that the person is or was a director, officer, agent or
employee of the Company or is or was serving at the Company's request as a
director, officer, agent, or employee of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, including
attorneys' ties, judgment, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with the action, suit
or proceeding. The power to indemnify applies (a) if the person is
successful on the merits or otherwise in defense of any action, suit or
proceeding, or (b) if the person acted in good faith and in a manner he
reasonably believed to be in the best interest, or not opposed to the best
interest, of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of the
Company as well, but only to the extent of defense expenses (including
attorneys' fees but excluding amounts paid in settlement) actually and
reasonably incurred and not to any satisfaction of judgment or settlement
of the claim itself, and with the further limitation that in these actions
no indemnification shall be made in the event of any adjudication of
negligence or misconduct in the performance of his duties to the Company,
unless the court believes that in light of all the circumstances
indemnification should apply.
Section 174 of the DGCL provides, among other things, that a
director, who willfully or negligently approves of an unlawful payment of
dividends or an unlawful stock purchase or redemption, may be held liable
for these actions. A director who was either absent when the unlawful
actions were approved or dissented at the time, may avoid liability by
causing his or her dissent to these actions to be entered in the books
containing the minutes of the meetings of the board of directors at the
time the action occurred or immediately after the absent director receives
notice of the unlawful acts.
The Company's Certificate of Incorporation includes a provision that
limits the liability of its directors to the maximum extent permitted by
Delaware law. Delaware law provides that directors will not be personally
liable for monetary damages for breach of their fiduciary duties as
directors, except liability for:
- any breach of their duty of loyalty to the corporation or its
stockholders;
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- unlawful payments of dividends or unlawful stock repurchases or
redemptions; or
- any transaction from which the director derived an improper
personal benefit.
The Company's certificate of incorporation and bylaws generally
provide that the Company will indemnify, to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law, any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit, investigation, administrative hearing or any
other proceeding by reason of the fact that he or she is or was a director
or officer of ours, or is or was serving at the Company's request as a
director, officer, employee or agent of another entity, against expenses
incurred by him or her in connection with that proceeding. An officer or
director will not be entitled to indemnification by the Company if:
- the officer or director did not act in good faith and in a manner
reasonably believed to be in, or not opposed to, the Company's best
interests; or
- with respect to any criminal action or proceeding, the officer or
director had reasonable cause to believe his or her conduct was
unlawful.
The Company has entered into indemnification agreements with the
Company's directors containing provisions which require us, among other
things, to indemnify the Company's directors against various liabilities
that may arise by virtue of their status or service as directors and to
advance their expenses incurred as a result of any proceeding against them
as to which they could be indemnified. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions or otherwise, the Company has been informed 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.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See Index to Exhibits.
Item 9. Undertakings
1. The undersigned Registrant hereby undertakes:
(a) 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 facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(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)(i) and (a)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and, the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the Registration Statement.
(b) 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 herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) 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.
2. 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 Section
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 herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
3. 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cupertino, State of California,
on the 25th day of May, 2000.
VYYO INC.
By: /s/ Davidi Gilo
-----------------
Davidi Gilo
Chairman of the Board
and Chief Executive Officer
Each person whose signature appears below hereby constitutes and
appoints Davidi Gilo and Eran Pilovsky, and each of them, his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) and additions to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby grants
to such attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents
or his substitute or substitutes 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.
Name Title Date
---- ----- ----
/s/ Davidi Gilo Chairman of the Board
Davidi Gilo and Chief Executive May 25, 2000
Officer (Principal
Executive Officer)
/s/ Eran Pilovsky Vice President - May 25, 2000
Eran Pilovsky Finance and Chief
Financial Officer
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ Lewis S. Broad Director May 25, 2000
Lewis S. Broad
/s/ Neill H. Brownstein Director May 25, 2000
Neill H. Brownstein
/s/ Avraham Fischer Director May 25, 2000
Avraham Fischer
/s/ John P. Griffin Director May 25, 2000
John P. Griffin
/s/ Samuel L. Kaplan Director May 25, 2000
Samuel L. Kaplan
/s/ Alan L. Zimmerman Director May 25, 2000
Alan L. Zimmerman
EXHIBIT INDEX
Exhibit
Number
4.1* Specimen common stock certificate
4.2* Registration Rights and Lock-Up Agreement, dated as of April 21,
1996, by and among the Registrant and certain holders of the Series A
Preferred Stock and Series C Preferred Stock
4.3* Amendment to Registration Rights and Lock-Up Agreement, dated as of
August 13, 1999, by and among the Registrant and certain holders of
the Series A Preferred Stock and Series C Preferred Stock
4.4* Amendment No. 2 to Registration Rights and Lock-Up Agreement, dated
as of February 4, 2000, by and among the Registrant and certain
holders of the Series A Preferred Stock and Series C Preferred Stock
4.5* Warrant, dated April 23, 1996, issued by the Registrant to PhaseCom
Investor Group Limited Partnership
4.6* 1997 Series A-2 Warrant, dated December 29, 1997, issued by the
Registrant to Eli David
4.7* 1998 Series A-2 Warrant, dated February 26, 1998, issued by the
Registrant to Eli David
4.8* Form of 1998 Series B-1 Warrant, dated June 30, 1998, issued by the
Registrant to Selawi Business, S.A. and Shaul Berger
4.9* Warrant, dated June 2, 1999, issued by the Registrant to Biblica
Investment Limited
4.10* 1998 Series A-1 Warrant, dated February 3, 1998, issued by the
Registrant to Eli David
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
10.2* 1996 Equity Incentive Plan
10.3* 1999 Employee and Consultant Equity Incentive Plan
10.4* Amended and Restated 2000 Employee and Consultant Equity Incentive Plan
10.5 2000 Employee Stock Purchase Plan
* Incorporated by reference to the Registrant's Registration Statement
on Form S-1 (file no. 333-96129), declared effective on April 3,
2000.
Exhibit 5.1
May 25, 2000
Vyyo Inc.
20400 Stevens Creek Boulevard, 8th Floor
Cupertino, California 95014
Re: Vyyo Inc.
Form S-8 Registration Statement
Ladies and Gentlemen:
We have acted as special counsel to Vyyo Inc., a Delaware
corporation (the "Company"), in connection with the registration of
8,404,688 shares (the "Shares") of the Company's common stock, par value
$0.0001 per share (the "Common Stock"), issuable pursuant to the Company's
1996 Equity Incentive Plan, 1999 Employee and Consultant Equity Incentive
Plan, Amended and Restated 2000 Employee and Consultant Equity Incentive
Plan, and 2000 Employee Stock Purchase Plan (collectively the "Plans").
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act
of 1933, as amended (the "Act").
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Company's Registration Statement on Form S-8 (the "Registration Statement")
as filed with the Securities and Exchange Commission (the "Commission") on
May 25, 2000 under the Act; (ii) a specimen certificate representing the
Common Stock; (iii) the Third Amended and Restated Certificate of
Incorporation of the Company, as presently in effect; (iv) the Amended and
Restated Bylaws of the Company, as presently in effect; (v) the Plans; and
(vi) certain resolutions of the Board of Directors of the Company relating
to the issuance and sale of the Shares and related matters. We have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such records of the Company and such agreements,
certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a
basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter
documents. In making our examination of documents executed or to be
executed by parties other than the Company, we have assumed that such
parties had or will have the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution
and delivery by such parties of such documents and the validity and binding
effect thereof. As to any facts material to the opinions expressed herein
that we have not independently established or verified, we have relied upon
statements and representations of officers and other representatives of the
Company and others. In rendering the opinion set forth below, we have
assumed that the certificates representing the Shares will be manually
signed by one of the authorized officers of the transfer agent and
registrar for the Common Stock and registered by such transfer agent and
registrar and will conform to the specimen thereof examined by us.
We have also assumed that each award agreement setting forth the
terms of each grant of options or other awards under the Plans are
consistent with the Plans and have been duly authorized and validly
executed and delivered by the parties thereto, and that the consideration
received by the Company for the Shares delivered pursuant to the Plans will
be in an amount at least equal to the par value of such Shares.
Members of our firm are admitted to the bar in the State of
California, and we do not express any opinion with respect to the law of
any jurisdiction other than Delaware corporate law.
Based upon and subject to the foregoing, we are of the opinion
that the Shares have been duly authorized for issuance by the Company and,
when issued and paid for in accordance with the terms and conditions of the
Plans, the Shares will be validly issued and, subject to any restrictions
imposed by the Plans, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the
Commission as Exhibit 5.1 to the Registration Statement. In giving this
consent, we do not thereby admit that we are included in the category of
persons whose consent is required under Section 7 of the Act or the rules
and regulations of the Commission.
Very truly yours,
/s/Skadden Arps Slate Meagher & Flom LLP
Exhibit 10.5
VYYO INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED, EFFECTIVE AS OF MAY 1, 2000)
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this plan is the Vyyo Inc. 2000 Employee Stock
Purchase Plan (the "Plan"). The Plan was adopted by the Board (defined
below) on February 2, 2000, and approved by the stockholders of the Company
(defined below) on February 2, 2000. The purpose of the Plan is to provide
Employees (defined below) of the Company (defined below), its Parent
(defined below) and any Designated Subsidiary (defined below) with the
opportunity to purchase Common Stock (defined below) through accumulated
payroll deductions. It is the intention of the Company that the Plan
qualify as an "employee stock purchase plan" within the meaning of Section
423 of the Code (defined below), and that the provisions of the Plan be
construed in a manner consistent with the requirements of such Section of
the Code.
For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Administrator" means the Board, or if and to the extent
the Board does not administer the Plan, the Committee in accordance with
Section 11 below.
(b) "Board" shall mean the Board of Directors of the
Company.
(c) "Change in Capitalization" shall mean any increase,
reduction, change or exchange of Shares for a different number of shares
and/or kind of shares or other securities of the Company by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
issuance of warrants or rights, stock dividend, stock split or reverse
stock split, combination or exchange of Shares, repurchase of Shares,
change in corporate structure or otherwise.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any successor thereto.
(e) "Committee" shall mean a committee appointed by the
Board to administer the Plan and to perform the functions set forth herein.
(f) "Common Stock" shall mean the common stock, $0.0001 par
value, of the Company.
(g) "Company" shall mean Vyyo Inc., a Delaware corporation.
(h) "Compensation" shall mean the fixed salary or wage paid
by the Company to an Employee as reported by the Company to the United
States government for Federal income tax purposes, including an Employee's
portion of salary deferral contributions pursuant to Section 401(k) of the
Code and any amount excludable pursuant to Section 125 of the Code, but
excluding any payments for overtime, shift premium, incentive
compensation, bonuses, commissions, severance pay, expense reimbursements
or any credit or benefit under any employee plan maintained by the
Company.
(i) "Continuous Status as an Employee" shall mean the
absence of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in the
case of a leave of absence agreed to in writing by the Company, its Parent
or a Designated Subsidiary, as appropriate, provided that (x) such leave is
for a period of not more than 90 days or (y) reemployment with the Company,
its Parent or a Designated Subsidiary, as appropriate, is guaranteed by
contract or statute upon expiration of such leave.
(j) "Designated Subsidiary" shall mean a Subsidiary that has
been designated by the Administrator from time to time in its sole
discretion as eligible to participate in the Plan.
(k) "Employee" shall mean any person who is customarily
employed for at least twenty (20) hours per week and more than five (5)
months in a calendar year by the Company, its Parent or a Designated
Subsidiary.
(l) "Enrollment Date" shall mean the first Trading Day of
each Offering Period.
(m) "Fair Market Value" as of a particular date shall mean
the fair market value of the Shares as determined by the Administrator in
its sole discretion; provided, however, that (i) if the Shares are admitted
to trading on a national securities exchange, fair market value of the
Shares on any date shall be the closing sale price reported for the Shares
on such exchange on such date or, if no sale was reported on such date, on
the last date preceding such date on which a sale was reported, (ii) if the
Shares are admitted to quotation on the National Association of Securities
Dealers Automated Quotation ("Nasdaq") System or other comparable quotation
system and have been designated as a National Market System ("NMS")
security, fair market value of the Shares on any date shall be the closing
sale price reported for the Shares on such system on such date or, if no
sale was reported on such date, on the last date preceding such date on
which a sale was reported, or (iii) if the Shares are admitted to quotation
on the Nasdaq System but have not been designated as an NMS security, fair
market value of the Shares on any date shall be the average of the highest
bid and lowest asked prices of the Shares on such system on such date or,
if no bid and ask prices were reported on such date, on the last date
preceding such date on which both bid and ask prices were reported.
Notwithstanding anything to the contrary contained herein, for purposes of
the Enrollment Date of the first Offering Period under the Plan, fair
market value of the Shares shall be the initial price to the public as set
forth in the final prospectus included within the registration statement in
Form S-1 filed with the Securities and Exchange Commission for the initial
underwritten public offering of the Stock (the "Registration Statement").
(n) "Offering Period" shall mean a period as described in
Section 3 hereof.
(o) "Parent" shall mean any corporation (other than the Com
pany) in an unbroken chain of corporations ending with the Company if, at
the time of the granting of an option, each of the corporations other than
the Company owns Shares possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain, whether or not such corporation now exists or
hereafter acquires the Company.
(p) "Participant" shall mean an Employee who elects to
participate in the Plan pursuant to Section 4 hereof.
(q) "Purchase Date" shall mean the last Trading Day of each
Purchase Period.
(r) "Purchase Period" shall mean the approximately six-month
period commencing after one Purchase Date and ending with the next Purchase
Date, except that the first Purchase Period of any Offering Period shall
commence on the Enrollment Date and end on the next Purchase Date;
provided, however, that the first Purchase Period of the first Offering
Period under the Plan shall commence on the first Trading Day on which the
Securities and Exchange Commission declares the Company's Registration
Statement effective and shall end on the last Trading Day on or prior to
November 14, 2000.
(s) "Purchase Price" shall mean an amount equal to the
lesser of (i) 85% of the Fair Market Value of a Share on the Enrollment
Date or (ii) 85% of the Fair Market Value of Share on the Purchase Date.
(t) "Share" shall mean a share of Common Stock.
(u) "Subsidiary" shall mean any corporation (other than the
Company) in an unbroken chain of corporations, beginning with the Company,
if, at the time of the granting of an option, each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain, whether or not such
corporation now exists or is hereafter organized or acquired by the Company
or a Subsidiary.
(v) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.
SECTION 2. ELIGIBILITY.
(a) Subject to the limitations set forth in Section 2(b)
hereof, any person who is an Employee as of an Enrollment Date shall be
eligible to participate in the Plan in accordance with Section 4 hereof and
shall be granted an option for the Offering Period commencing on such
Enrollment Date.
(b) Notwithstanding any provision of the Plan to the
contrary, no Employee shall be granted an option under the Plan (i) if such
Employee (or any other person whose stock would be attributed to such
Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of
the Company, its Parent or of any Subsidiary, or (ii) if such grant would
permit such Employee's right to purchase stock under all employee stock
purchase plans (described in Section 423 of the Code) of the Company, its
Parent and of any Subsidiary to accrue at a rate that exceeds twenty-five
thousand dollars ($25,000) of Fair Market Value of such stock (determined
at the time such option is granted) for any calendar year in which such
option would be outstanding. Any amounts received from an Employee that
cannot be used to purchase Shares as a result of this limitation shall be
returned as soon as reasonably practicable to the Employee without
interest.
SECTION 3. OFFERING PERIODS.
The Plan shall be implemented by a series of consecutive,
overlapping twenty-four month Offering Periods, with a new Offering Period
commencing on the first Trading Day on or after May 15 (beginning in the
year 2001) and November 15 (beginning in the year 2000) of each year, or at
such other time or times as may be determined by the Administrator, and
ending on the last Trading Day on or before November 14 and May 14,
respectively, occurring twenty-four months later or at such other time or
times as may be determined by the Administrator; provided, however, that
the first Offering Period under the Plan shall commence with the first
Trading Day on or after the date on which the Securities and Exchange
Commission declares the Company's Registration Statement effective and
shall end on the last Trading Day on or before May 14, 2002. The Plan shall
continue until terminated in accordance with Section 17 hereof. Subject to
Section 17 hereof, the Administrator shall have the power to change the
duration and/or the frequency of Offering Periods with respect to future
offerings and shall use its best efforts to notify Employees of any such
change at least fifteen (15) days prior to the scheduled beginning of the
first Offering Period to be affected. In no event shall any option granted
hereunder be exercisable more than twenty-seven (27) months from its date
of grant.
To the extent permitted by applicable laws, if the Fair
Market Value of a share of Common Stock on any Purchase Date in an Offering
Period is lower than the Fair Market Value of a share of Common Stock on
the Enrollment Date of such Offering Period, then all Participants in such
Offering Period shall be automatically withdrawn from such Offering Period
immediately after the exercise of their option on such Purchase Date and
automatically re-enrolled in the immediately following Offering Period as
of the first day thereof.
SECTION 4. ENROLLMENT; PARTICIPATION.
(a) On each Enrollment Date, the Company shall commence an
offering by granting each eligible Employee who has elected to participate
in such Offering Period pursuant to Section 4(b) hereof an option to
purchase on each Purchase Date of such Offering Period up to a number of
Shares determined by dividing each Employee's payroll deductions
accumulated prior to such Purchase Date and retained in the Participant's
account as of such Purchase Date by the applicable Purchase Price; provided
that in no event shall a Participant be permitted to purchase during each
Offering Period more than 15,000 Shares (subject to any adjustment pursuant
to Section 16 hereof), provided, further, that such purchase shall be
subject to the limitations set forth in Sections 2(b) and 10 hereof.
Exercise of the option shall occur as provided in Section 6 hereof, unless
the Participant has withdrawn pursuant to Section 8 hereof. The option with
respect to an Offering Period shall expire on the last Purchase Date with
respect to such Offering Period or the withdrawal date if earlier.
(b) Subject to the limitations set forth in Section 2(b)
hereof, an Employee may elect to become a Participant in the Plan by
completing and filing a subscription agreement authorizing the Company to
make payroll deductions (as set forth in Section 5 hereof) at least five
(5) business days prior to the applicable Enrollment Date unless a later
time for filing the subscription agreement is set by the Administrator for
all Employees. Unless a Participant, by giving written notice (or such
other notice as may from time to time be prescribed by the Administrator),
elects not to participate with respect to any subsequent Offering Period,
the Participant shall be deemed to have accepted each new offer and to have
authorized payroll deductions in respect thereof during each subsequent
Offering Period.
SECTION 5. PAYROLL DEDUCTIONS.
(a) An Employee may, in accordance with rules and procedures
adopted by the Administrator and subject to the limitation set forth in
Section 2(b) hereof, authorize payroll deductions in amounts which are not
less than one percent (1%) and not more than fifteen percent (15%) of such
Employee's Compensation on each payday during the Offering Period. Payroll
deductions shall commence on the first payroll paid following the
Enrollment Date, and shall end on the last payroll paid prior to each
Purchase Date of the Offering Period to which the subscription agreement is
applicable, unless sooner terminated by the Participant's withdrawal from
the Plan or termination of the Participant's Continuous Status as an
Employee as provided in Section 8 hereof. A Participant may increase or
decrease his or her rate of payroll deductions at any time during an
Offering Period by giving written notice (or such other notice as may from
time to time be prescribed by the Administrator), but not more than once
during each Purchase Period. The change in rate shall be effective the
first full payroll period following five (5) business days after the
Company's receipt of the new subscription agreement unless the Company
elects to process a given change in rate of payroll deductions more
quickly.
(b) All payroll deductions made by a Participant shall be
credited to such Participant's account under the Plan and shall be withheld
in whole percentages only. A Participant may not make any additional
payments into such account.
(c) Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 2(b) hereof, a
Participant's rate of payroll deductions may be decreased by the Company to
zero percent (0%) at any time during an Offering Period. Payroll deductions
shall recommence at the rate provided for in such Participant's
subscription agreement at the beginning of the first Offering Period which
is scheduled to end the following calendar year, unless a Participant
increases or decreases the rate of his or her payroll deductions as
provided in Section 5(a) hereof, or terminates his or her participation in
the Plan as provided in Section 8 hereof.
SECTION 6. PURCHASE OF SHARES.
Unless a Participant withdraws from the Plan as provided in
Section 8 hereof, such Participant's election to purchase Shares shall be
exercised automatically on each Purchase Date, and the maximum number of
whole Shares subject to option shall be purchased for each Participant at
the applicable Purchase Price with the accumulated payroll deductions in
each Participant's account as of the Purchase Date. No fractional Shares
may be purchased hereunder. Any payroll deductions accumulated in a
Participant's account following the purchase of Shares on any Purchase Date
that are not sufficient to purchase a full Share shall be retained in the
Participant's account for the subsequent Offering Period, subject to
earlier withdrawal by the Participant as provided in Section 8 hereof. Any
additional amounts remaining in a Participant's account following the
purchase of Shares on any Purchase Date that are equal to, or in excess of,
the amount required under this Section 6 to purchase at least one full
Share shall be returned to the Participant as soon as reasonably
practicable following the Purchase Date. During a Participant's lifetime, a
Participant's option to purchase Shares hereunder is exercisable only by
the Participant.
SECTION 7. DELIVERY OF SHARES; WITHDRAWAL OR SALE OF SHARES.
As promptly as reasonably practicable after each Purchase
Date, the Company shall either arrange the delivery of the whole Shares
purchased on such date by each Participant to the Participant's brokerage
account or arrange the delivery to the Participant of a share certificate
representing such Shares.
SECTION 8. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A Participant may withdraw all, but not less than all,
of the payroll deductions credited to such Participant's account (that have
not been used to purchase Shares) under the Plan by giving written notice
to the Company at least five (5) business days prior to the Purchase Date
of the Offering Period in which the withdrawal occurs. Withdrawal of
payroll deductions shall be deemed to be a withdrawal from the Plan. All of
the payroll deductions credited to such Participant's account (that have
not been used to purchase Shares) shall be paid to such Participant
promptly after receipt of such Participant's notice of withdrawal, and such
Participant's eligibility to participate in the Plan for the Offering
Period in which the withdrawal occurs shall be automatically terminated. No
further payroll deductions for the purchase of Shares shall be made for
such Participant during such Offering Period. If a Participant withdraws
from an Offering Period, payroll deductions for such Participant shall not
resume at the beginning of the succeeding Offering Period unless the
Participant timely delivers to the Company a new subscription agreement in
accordance with the provisions of Section 4 hereof. A Participant's
withdrawal from an Offering Period shall not have any effect upon a
Participant's eligibility to participate in any similar plan which may
hereafter be adopted by the Company or in succeeding Offering Periods which
commence after termination of the Offering Period from which the
Participant withdraws.
(b) Upon termination of a Participant's Continuous Status as
an Employee during the Offering Period for any reason, including
Participant's voluntary termination, retirement or death, all the payroll
deductions credited to such Participant's account (that have not been used
to purchase Shares) shall be returned to such Participant or, in the case
of such Participant's death, to the person or persons entitled thereto
under Section 12 hereof, and such Participant's option shall be
automatically terminated. Such termination shall be deemed a withdrawal
from the Plan.
SECTION 9. INTEREST.
No interest shall accrue on or be payable by the Company
with respect to the payroll deductions of a Participant in the Plan.
SECTION 10. STOCK SUBJECT TO PLAN.
(a) Subject to adjustment upon Changes in Capitalization of
the Company as provided in Section 16 hereof, the maximum aggregate number
of Shares which shall be reserved for sale under the Plan shall be 750,000
Shares, plus an annual increase to be added on the first day of the
Company's fiscal year (beginning 2001) equal to the lesser of (i) 300,000
shares or (ii) one percent (1%) of the number of outstanding shares of
Common Stock on the last Trading Day of the immediately preceding fiscal
year. Such Shares shall be available as of the first day of the first
Offering Period that commences in each such fiscal year. The Shares may
consist, in whole or in part, of authorized and unissued Shares or treasury
Shares. If the total number of Shares which would otherwise be subject to
options granted pursuant to Section 2(a) hereof on an Enrollment Date
exceeds the number of Shares then available under the Plan (after deduction
of all Shares for which options have been exercised or are then
outstanding), the Administrator shall make a pro rata allocation of the
Shares remaining available for option grant in as uniform a manner as shall
be practicable and as it shall determine to be equitable. In such event,
the Administrator shall give written notice to each Participant of such
reduction of the number of option Shares affected thereby and shall
similarly reduce the rate of payroll deductions, if necessary.
(b) No Participant shall have rights as a stockholder with
respect to any option granted hereunder until the date on which such Shares
shall be deemed to have been purchased by the Participant in accordance
with Section 6 hereof.
(c) Shares purchased on behalf of a Participant under the
Plan shall be registered in the name of the Participant or, if requested in
writing by the Participant, in the names of the Participant and the
Participant's spouse.
SECTION 11. ADMINISTRATION.
The Plan shall be administered by the Board or a Committee.
The Board or the Committee shall have full power and authority, subject to
the provisions of the Plan, to promulgate such rules and regulations as it
deems necessary for the proper administration of the Plan, to interpret the
provisions and supervise the administration of the Plan, and to take all
action in connection therewith or in relation thereto as it deems necessary
or advisable. Any decision reduced to writing and signed by a majority of
the members of the Committee shall be fully effective as if it had been
made at a meeting duly held. The Company shall pay all expenses incurred in
the administration of the Plan. No member of the Board or Committee shall
be personally liable for any action, determination, or interpretation made
in good faith with respect to the Plan, and all members of the Board or
Committee shall be fully indemnified by the Company with respect to any
such action, determination or interpretation.
All decisions, determinations and interpretations of the
Board or Committee shall be final and binding on all persons, including the
Company, its Parent, any Subsidiary, the Employee (or any person claiming
any rights under the Plan through any Employee) and any stockholder of the
Company, its Parent or any Subsidiary.
The Committee may adopt rules or procedures relating to the
operation and administration of the Plan to accommodate the specific
requirements of local laws and procedures. Without limiting the generality
of the foregoing, the Committee is specifically authorized to adopt rules
and procedures regarding handling of payroll deductions, payment of
interest, conversion of local currency, payroll tax, withholding procedures
and handling of stock certificates which vary with local requirements. The
Committee may also adopt sub-plans applicable to particular Subsidiaries or
locations, which sub-plans may be designed to be outside the scope of
Section 423 of the Code. The rules of such sub-plans may take precedence
over other provisions of this Plan, with the exception of Section 10(a),
but unless otherwise superseded by the terms of such sub-plan, the
provisions of this Plan shall govern the operation of such sub-plan.
SECTION 12. DESIGNATION OF BENEFICIARY.
(a) A Participant may file, on forms supplied by and
delivered to the Company, a written designation of a beneficiary who is to
receive Shares and/or cash, if any, remaining in such Participant's account
under the Plan in the event of the Participant's death.
(b) Such designation of beneficiary may be changed by the
Participant at any time by written notice. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under
the Plan who is living at the time of such Participant's death, the Company
shall deliver the balance of the Shares and/or cash credited to
Participant's account to the executor or administrator of the estate of the
Participant or, if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver
such Shares and/or cash to the spouse or to any one or more dependents or
relatives of the Participant, or if no spouse, dependent or relative is
known to the Company, then to such other person as the Company may
designate.
SECTION 13. TRANSFERABILITY.
Neither payroll deductions credited to a Participant's
account nor any rights with regard to the exercise of an option or any
rights to receive Shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by the laws of
descent and distribution or as provided in Section 12 hereof) by the
Participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such
act as an election to withdraw funds in accordance with Section 8 hereof.
SECTION 14. USE OF FUNDS.
All payroll deductions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
SECTION 15. REPORTS.
Individual accounts shall be maintained by the Company for
each Participant in the Plan. Statements of account shall be given to each
Participant at least annually which statements shall set forth the amounts
of payroll deductions, the Purchase Price, the number of Shares purchased
and the remaining cash balance, if any.
SECTION 16. EFFECT OF CERTAIN CHANGES.
In the event of a Change in Capitalization or the
distribution of an extraordinary dividend, the Administrator shall
conclusively determine the appropriate equitable adjustments, if any, to
be made under the Plan, including without limitation adjustments to the
number of Shares which have been authorized for issuance under the Plan,
but have not yet been placed under option, as well as the Purchase Price of
each option under the Plan which has not yet been exercised. In the event
of a Change in Control of the Company (as defined in the Stock Purchase
Agreement), the Offering Period shall terminate unless otherwise provided
by the Administrator.
SECTION 17. AMENDMENT OR TERMINATION.
The Board may at any time terminate or amend the Plan.
Except as provided in Section 16 hereof, no such termination may adversely
affect options previously granted and no amendment may make any change in
any option theretofore granted which adversely affects the rights of any
Participant. To the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation
or stock exchange rule), the Company shall obtain stockholder approval in
such a manner and to such a degree as required.
SECTION 18. NOTICES.
All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been
duly given when they are received in a timely manner in the form specified
by the Company at the location, or by the person, designated by the Company
for the receipt thereof.
SECTION 19. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.
(a) This Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of
the State of California without giving effect to the choice of law
principles thereof, except to the extent that such law is preempted by
Federal law.
(b) The obligation of the Company to sell or deliver Shares
with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal
and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Administrator.
SECTION 20. WITHHOLDING OF TAXES.
If the Participant makes a disposition, within the meaning
of Section 424(c) of the Code of any Share or Shares issued to Participant
pursuant to Participant's exercise of an option, and such disposition
occurs within the two-year period commencing on the day after the
Enrollment Date or within the one-year period commencing on the day after
the Purchase Date, Participant shall, within ten (10) days of such
disposition, notify the Company thereof and thereafter immediately deliver
to the Company any amount of Federal, state or local income taxes and other
amounts which the Company informs the Participant the Company may be
required to withhold.
SECTION 21. EFFECTIVE DATE.
Subject to the approval of the Plan by the stockholders of
the Company within twelve (12) months before or after the date the Plan is
adopted by the Board, the Plan shall be effective as of the first Trading
Day on or after the date on which the Securities and Exchange Commission
declares the Company's Registration Statement effective (the "Effective
Date").
SECTION 22. TERM OF PLAN.
No option shall be granted pursuant to the Plan and no
Offering Period shall commence on or after the tenth anniversary of the
Effective Date, but options theretofore granted may extend beyond that
date.
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Vyyo Inc. pertaining to the 1996 Equity Incentive Plan, the
1999 Employee and Consultant Equity Incentive Plan, the Amended and
Restated 2000 Employee and Consultant Equity Incentive Plan and the 2000
Employee Stock Purchase Plan, of our report dated January 28, 2000, with
respect to the financial statements of Vyyo Inc., included in its
Registration Statement (Form S-1 No. 333-96129), as amended, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
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San Jose, California
May 25, 2000
