<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 11, 1997
REGISTRATION NO. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
IPL SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2511897
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
124 Acton Street
Maynard, Massachusetts 01754
(508) 461-1000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
--------------------
1997 EQUITY INCENTIVE PLAN
(Full title of the plan)
--------------------
Harris Ravine
Chief Executive Officer
IPL SYSTEMS, INC.
124 Acton Street
Maynard, Massachusetts 01754
(508) 461-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copy to:
Jeremy D. Glaser, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================ =============== ================== =================== ==================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
- -------------------------------------------- --------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $.01 par value 1,195,500 $1.76(1) $2,103,200.00(1) $637.33
============================================ =============== ================== =================== ==================
</TABLE>
<PAGE> 2
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457. The price per share and aggregate
offering price are based upon the average of the high and low sale prices on
September 4, 1997 as reported on the Nasdaq SmallCap Market for shares issuable
under the Registrant's 1997 Equity Incentive Plan. The following chart shows the
calculation of the registration fee.
<TABLE>
<CAPTION>
- ------------------------------------------ ------------------ -------------------------- ----------------
Aggregate
Type of Shares Number of Shares Offering Price Per Share Offering Price
- ------------------------------------------ ------------------ -------------------------- ----------------
<S> <C> <C> <C>
Common Stock issuable under the 1997 1,195,500 $1.76 $2,103,200.00
Equity Incentive Plan
- ------------------------------------------ ------------------ -------------------------- ----------------
</TABLE>
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (File No. 00-10370) and amendments thereto filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the latest fiscal year covered by the report
referred to in (a) above.
(c) The section entitled The Merger Proposals (pp. 17-24) and the
Financial Statements of Andataco (pp. F-15 - F-24) contained in the Company's
definitive Proxy Statement filed with the Commission on May 6, 1997.
(d) The description of the Company's Class A Common Stock contained
in its Registration Statement on Form 8-A/A (File No. 00-10370), including any
amendment or report filed for the purpose of updating such description.
On June 3, 1997, the Company completed a business combination with
ANDATACO, a California corporation ("ANDATACO"), whereby ANDATACO was merged
with a wholly-owned subsidiary of the Company (the "Merger"). Although as a
legal matter the Merger resulted in ANDATACO becoming a subsidiary of the
Company, for financial reporting purposes the Merger was treated as a
recapitalization of ANDATACO and an acquisition of the Company by ANDATACO using
the purchase method of accounting (reverse acquisition). The financial reporting
requirements of the Securities and Exchange Commission require that the
financial statements reported by the Company subsequent to June 3, 1997, the
date of consummation the Merger, be those of ANDATACO, which financial
statements will include the results of operations of the Company for periods
subsequent to the consummation of the Merger. Consequently, the financial
information contained in the Annual Report on Form 10-K identified in Item 3(a)
above represents the Company's historical financial information. The financial
information of the Company prior to its acquisition of Andataco contained in the
Proxy Statement identified in Item 3(c) above reflects the historical financial
information of ANDATACO.
All reports and other documents filed after the date of this
Registration Statement by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act and prior to the filing of a post-effective amendment
that indicates that all shares of Class A Common Stock offered hereby have been
sold or which deregisters all shares of Class A Common Stock remaining unsold
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of the filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
2.
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 67 of Chapter 156B of the General Laws of Massachusetts
provides that officers and directors, subject to certain limitations, may be
indemnified by the Company to the extent authorized in its Articles of
Organization or by-laws adopted by the stockholders or vote adopted by the
holders of a majority of the shares of stock entitled to vote on the election of
directors and that officers who are not directors may be indemnified to the
extent authorized by the directors.
Article X of the Company's By-Laws provides as follows:
The corporation shall, to the extent legally permissible, indemnify
each person who may serve or who has served at any time as a director or officer
of the corporation or of any of its subsidiaries, or who at the request of the
corporation may serve or at any time has served as a director, officer or
trustee of, or in a similar capacity with, another organization or an employee
benefit plan, against all expenses and liabilities (including counsel fees,
judgments, fines, excise taxes, penalties and amounts payable in settlements)
reasonably incurred by or imposed upon such person in connection with any
threatened, pending or completed action, suit or other proceeding, whether
civil, criminal, administrative or investigative, in which he may become
involved by reason of his serving or having served in such capacity (other than
a proceeding voluntarily initiated by such person unless he is successful on the
merits, the proceeding was authorized by the corporation or the proceeding seeks
a declaratory judgment regarding his own conduct); provided that no
indemnification shall be provided for any such person with respect to any matter
as to which he shall have been finally adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interests of the corporation or, to the extent such matter relates to service
with respect to any employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan; and provided,
further, that as to any matter disposed of by a compromise payment by such
person, pursuant to a consent decree or otherwise, the payment and
indemnification thereof have been approved by the corporation, which approval
shall not unreasonably be withheld, or by a court of competent jurisdiction.
Such indemnification shall include payment by the corporation of expenses
incurred in defending a civil or criminal action or proceeding in advance of the
final disposition of such action or proceeding, upon receipt of an undertaking
by the person indemnified to repay such payment if he shall be adjudicated to be
not entitled to indemnification under this article, which undertaking may be
accepted without regard to the financial ability of such person to make
repayment.
A person entitled to indemnification hereunder whose duties include
service or responsibilities as a fiduciary with respect to a subsidiary or other
organization shall be deemed to have acted in good faith in the reasonable
belief that his action was in the best interests of the corporation if he acted
in good faith in the reasonable belief that his action was in the best interests
of such subsidiary or organization or of the participants or beneficiaries of,
or other persons with interests in, such subsidiary or organization to whom he
had a fiduciary duty.
Where indemnification hereunder requires authorization or approval
by the corporation, such authorization or approval shall be conclusively deemed
to have been obtained, and in any case where a director of the corporation
approves the payment of indemnification, such director shall be wholly
protected, if:
(i) the payment has been approved or ratified (1) by a
majority vote of a quorum of the directors consisting of persons who
are not at that time parties to the proceeding, (2) by a majority
vote of a committee of two or more directors who are not at that
time parties to the proceeding and are selected for this purpose by
the full board (in which selection directors who are parties may
participate), or (3) by a majority vote of a quorum of the
outstanding shares of stock of all classes entitled to vote for
directors, voting as a single class, which quorum shall consist of
stockholders who are not at that time parties to the proceeding; or
(ii) the action is taken in reliance upon the opinion of
independent legal counsel (who may be counsel to the corporation)
appointed for the purpose by vote of the directors or in the manner
specified in clauses (1), (2) or (3) of subparagraph (i); or
3.
<PAGE> 5
(iii) the payment is approved by a court of competent
jurisdiction; or
(iv) the directors have otherwise acted in accordance
with the standard of conduct set forth in the Massachusetts Business
Corporation Law.
Any indemnification or advance of expenses under Article X shall be
paid promptly, and in any event within 30 days, after the receipt by the
corporation of a written request therefor from the person to be indemnified,
unless with respect to a claim for indemnification the corporation shall have
determined that the person is not entitled to indemnification. If the
corporation denies the request or if payment is not made within such 30 day
period, the person seeking to be indemnified may at any time thereafter seek to
enforce his rights hereunder in a court of competent jurisdiction and, if
successful in whole or in part, he shall be entitled also to indemnification for
the expenses of prosecuting such action. Unless otherwise provided by law, the
burden of proving that the person is not entitled to indemnification shall be on
the corporation.
The right of indemnification under this article shall be a contract
right inuring to the benefit of the directors, officers and other persons
entitled to be indemnified hereunder and no amendment or repeal of this article
shall adversely affect any right of such director, officer or other person
existing at the time of such amendment or repeal.
The indemnification provided in Article X of the Bylaws shall inure
to the benefit of the heirs, executors and administrators of a director, officer
or other person entitled to indemnification hereunder. The indemnification
provided in Article X of the Bylaws may, to the extent authorized by the
corporation, apply to the directors, officers and other persons associated with
constituent corporations that have been merged into or consolidated with the
corporation who would have been entitled to indemnification hereunder had they
served in such capacity with or at the request of the corporation.
The right of indemnification under Article X of the Bylaws shall be
in addition to and not exclusive of all other rights to which such director or
officer or other persons may be entitled. Nothing contained in Article X of the
Bylaws shall affect any rights to indemnification to which corporation employees
or agents other than directors and officers and other persons entitled to
indemnification hereunder may be entitled by contract or otherwise under law.
The Company also has entered into agreements with its officers and
directors affirming the Company's obligation to indemnify them against all
claims arising out of their services to or for the Company, except as prohibited
by law, and providing various other protections to such officers and directors.
At present, there is no pending litigation or proceeding involving a
director, officer or key employee of the Company as to which indemnification is
being sought nor is the Company aware of any threatened litigation that may
result in claims for indemnification by any officer or director.
All directors and officers are insured up to an aggregate amount of
$8,000,000 under a Directors and Officers Liability and Company Reimbursement
Policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
* 4.1 Restated Articles of Organization dated March 27, 1981 and Articles of Amendment
dated May 12, 1981, July 8, 1992 and June 3, 1997.
</TABLE>
4.
<PAGE> 6
<TABLE>
<S> <C>
** 4.2 Restated Bylaws.
5.1 Opinion of Palmer & Dodge LLP.
23.1 Consent of Palmer & Dodge LLP. Reference is made to Exhibit 5.1.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Price Waterhouse LLP.
24.1 Power of Attorney. Reference is made to page 7.
99.1 Registrant's 1997 Equity Incentive Plan (the "1997 Plan").
99.2 Form of Incentive Stock Option Agreement under the 1997 Plan.
99.3 Form of Non-Statutory Stock Option Agreement under the 1997 Plan.
</TABLE>
- -----------------------
* Filed as Exhibit 3.1 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992 (except for the
Amendment dated June 3, 1997 filed as Exhibit 3.1 herein) and
incorporated herein by reference.
** Filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987 and incorporated herein
by reference.
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 of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(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;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
5.
<PAGE> 7
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
6.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 San
Diego, State of California, on September 11, 1997.
IPL SYSTEMS, INC.
By: /s/ Harris Ravine
---------------------------
Harris Ravine
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Harris Ravine and Richard A. Hudzik, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or his substitutes or substitute, 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.
<TABLE>
<CAPTION>
<S> <C> <C>
Chief Executive Officer and
Chairman of the Board
/s/ Harris Ravine (Principal Executive Officer) September 11, 1997
- ----------------------------------
Harris Ravine
/s/ W. David Sykes President and Director September 11, 1997
- ----------------------------------
W. David Sykes
Chief Financial Officer
/s/ Richard A. Hudzik (Principal Financial and Accounting September 11, 1997
- ---------------------------------- Officer)
Richard A. Hudzik
/s/ Stephen J. Ippolito Director September 11, 1997
- ----------------------------------
Stephen J. Ippolito
/s/ Cornelius P. McMullan Director September 11, 1997
- ----------------------------------
Cornelius P. McMullan
</TABLE>
7.
<PAGE> 9
EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
* 4.1 Restated Articles of Organization dated March 27, 1981
and Articles of Amendment dated May 12, 1981, July 8
1992 and June 3, 1997.
** 4.2 Restated Bylaws.
5.1 Opinion of Palmer & Dodge LLP.
23.1 Consent of Palmer & Dodge LLP. Reference is made to Exhibit 5.1.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Price Waterhouse LLP.
24.1 Power of Attorney. Reference is made to page 7.
99.1 Registrant's 1997 Equity Incentive Plan (the "1997 Plan").
99.2 Form of Incentive Stock Option Agreement under the 1997 Plan.
99.3 Form of Non-Statutory Stock Option Agreement under the 1997 Plan.
</TABLE>
-----------------------
* Filed as Exhibit 3.1 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992 (except for the
Amendment dated June 3, 1997 filed as Exhibit 3.1 herein) and
incorporated herein by reference.
** Filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987 and incorporated herein
by reference.
8.
<PAGE> 1
EXHIBIT 4.1
FEDERAL IDENTIFICATION
NO. 04-2511897
THE COMMONWEALTH OF MASSACHUSETTS
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(GENERAL LAWS, CHAPTER 146B, SECTION 72)
We, Ronald J. Gellert , * President/XXXXXXXXXXXXXXX
-----------------------------------------------
and Nathaniel S. Gardiner , * Clerk/XXXXXXXXXXXXXXX
---------------------------------------------------
of IPL Systems, Inc. ,
----------------------------------------------------------------------------
(Exact name of corporation)
located at: 124 Acton Street, Maynard, MA 01754 ,
-------------------------------------------------------------------
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment affecting articles numbered:
3
- --------------------------------------------------------------------------------
(Number those articles 1, 2, 3, 4, 5, and/or 6 being amended)
of the Articles of Organization were duly adopted at a meeting held on May 29 -
June 3, 1997, by vote of:
2,816,960 shares of Class A Common Stock of 5,633,819 shares outstanding,
(type, class & series, if any)
_________ shares of ______________________________ of _________ shares
(type, class & series, if any)
outstanding and
_________ shares of ______________________________ of _________ shares
(type, class & series, if any)
outstanding.
(1)**being at least a majority of each type, class or series outstanding and
entitled to vote thereon:/XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXX
* Delete the inapplicable words.
** Delete the inapplicable clause.
(1) For amendments adopted pursuant to Chapter 156B, Section 70.
(2) For amendments adopted pursuant to Chapter 156B, Section 71.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on one side only of separate 8 1/2 x
11 sheets of paper with a left margin of at least 1 inch. Additions to more
than one article may be made on a single sheet so long as each article
requiring each addition is clearly indicated.
- --------------------------------------------------------------------------------
- -----------------
Examiner
- -----------------
Name
Approved
C [ ]
P [ ]
M [ ]
R.A. [ ]
4
- -----------------
P.C.
<PAGE> 2
To change the number of shares and par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
<TABLE>
<CAPTION>
- -------------------------------- ---------------------------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- -------------------------------- ---------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- ----------- -------------------- ---------------- -------------------- -------------
<S> <C> <C> <C> <C>
Common: Class A Common: 20,000,000 $0.01
- ----------- -------------------- ---------------- -------------------- -------------
Class C 2,250,000 $0.01
- ----------- -------------------- ---------------- -------------------- -------------
Preferred: Preferred:
- ----------- -------------------- ---------------- -------------------- -------------
</TABLE>
Change the total authorized to:
<TABLE>
<CAPTION>
- -------------------------------- ---------------------------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- -------------------------------- ---------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- ----------- -------------------- ---------------- -------------------- -------------
<S> <C> <C> <C> <C>
Common: Class A Common: 30,000,000 $0.01
- ----------- -------------------- ---------------- -------------------- -------------
Class C 2,250,000 $0.01
- ----------- -------------------- ---------------- -------------------- -------------
Preferred: Preferred:
- ----------- -------------------- ---------------- -------------------- -------------
</TABLE>
<PAGE> 3
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
Later effective date: n/a
SIGNED UNDER THE PENALTIES OF PERJURY, this 3rd day of June, 1997.
/s/ , * President/XXXXXXXXXXXXXXX
- --------------------------------------------------
/s/ , * Clerk/XXXXXXXXXXXXXXX
- ------------------------------------------------------
* Delete the inappropriate words.
<PAGE> 4
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(GENERAL LAWS, CHAPTER 156B, SECTION 72)
===============================================================================
I hereby approve the within Articles of Amendment, and the filing fee in the
amount of $10,000.00 having been paid, said articles is deemed to have been
filed with me this 3rd day of June, 1997.
Effective date:
----------------------------------------------------------------
/s/ WILLIAM FRANCIS GALVIN
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
FEE PAID
JUN 03 1997
CASHIERS
SECRETARY'S OFFICE
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Nathaniel S. Gardiner, Esq.
Palmer & Dodge LLP
- -------------------------------------------------------------------------------
One Beacon Street
- -------------------------------------------------------------------------------
Boston, MA 02108
- -------------------------------------------------------------------------------
<PAGE> 1
[PALMER & DODGE LETTERHEAD]
EXHIBIT 5.1
September 11, 1997
IPL Systems, Inc.
124 Acton Street
Maynard, Massachusetts 01754
We are rendering this opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") filed by IPL Systems, Inc.
(the "Company") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Act"), on or about the date hereof. The
Registration Statement relates to 1,195,000 shares (the "Shares") of the
Company's Class A Common Stock, $.01 par value, offered pursuant to the
provisions of the Company's 1997 Equity Incentive Plan (the "Plan").
In connection with this opinion, we have examined and relied upon the
Registration Statement, the Plan, the Company's Restated Articles of
Organization, and Bylaws, as amended, and the originals or copies
certified to our satisfaction of such records, documents, certificates,
memoranda and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below. We have assumed the
genuineness and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof and
the due execution and delivery of all documents where due execution and
delivery are a prerequisite to the effectiveness thereof.
Based upon the foregoing, we are of the opinion that, when issued in
accordance with the terms of the Plan and the options or other rights granted
thereunder, the Shares will be duly authorized, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Palmer & Dodge LLP
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of IPL Systems, Inc. on Form S-8 of our reports dated February 21,
1997 (except for Note 14, for which the date is March 7, 1997) (which expresses
an unqualified opinion and includes an explanatory paragraph relating to the
ability of the Company to continue as a going concern) appearing in the Annual
Report on Form 10-K of IPL Systems, Inc. for the year ended December 31, 1996.
Boston, Massachusetts
September 8, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 22, 1997, which appears on
page F-15 of the IPL Systems, Inc. Proxy Statement dated May 6, 1997.
PRICE WATERHOUSE LLP
San Diego, California
September 11, 1997
<PAGE> 1
EXHIBIT 99.1
IPL SYSTEMS, INC.
1997 EQUITY INCENTIVE PLAN
ADOPTED SEPTEMBER 11, 1997
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to benefit from increases in value of the stock of
the Company through the granting of (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, and (iii) Stock Appreciation Rights, all as defined
below.
(b) The Company, by means of the Plan, seeks to retain the services
of persons who are now Employees or Directors of or Consultants to the Company
or its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
(c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be either Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options, or Stock Appreciation Rights
granted pursuant to Section 7 hereof. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and
in such form as issued pursuant to Section 6, and a separate certificate or
certificates will be issued for shares purchased on exercise of each type of
Option.
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" means a Committee appointed by the Board in
accordance with subsection 3(c) of the Plan.
(e) "COMPANY" means IPL Systems, Inc., a Massachusetts corporation.
1.
<PAGE> 2
(f) "CONCURRENT STOCK APPRECIATION RIGHT" or "CONCURRENT RIGHT"
means a right granted pursuant to subsection 8(b)(2) of the Plan.
(g) "CONSULTANT" means any person, including an advisor, engaged by
the Company or an Affiliate to render consulting services and who is compensated
for such services, provided that the term "Consultant" shall not include
Directors who are paid only a director's fee by the Company or who are not
compensated by the Company for their services as Directors.
(h) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means
that the service of an individual to the Company, whether as an Employee,
Director or Consultant, is not interrupted or terminated. The Board, in its sole
discretion, may determine whether Continuous Status as an Employee, Director or
Consultant shall be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; or (ii) transfers between the Company, Affiliates or their
successors.
(i) "COVERED EMPLOYEE" means the chief executive officer and the
four (4) other highest compensated officers of the Company for whom total
compensation is required to be reported to shareholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.
(j) "DIRECTOR" means a member of the Board.
(k) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(m) "FAIR MARKET VALUE" means, as of any date, the fair market value
of the common stock of the Company determined by the Board pursuant to Rule
260.140.50 of Title 10 of the California Code of Regulations.
(n) "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "INDEPENDENT STOCK APPRECIATION RIGHT" or "INDEPENDENT RIGHT"
means a right granted pursuant to subsection 8(b)(3) of the Plan.
2.
<PAGE> 3
(p) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does not
receive compensation (directly or indirectly) from the company, or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
of 1933 ("Regulation S-K"), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.
(q) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(r) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(s) "OPTION" means a stock option granted pursuant to the Plan.
(t) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.
(u) "OPTIONEE" means a person who holds an outstanding Option.
(v) "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliate corporation" (within the
meaning of the Treasury regulations promulgated under Section 162(m) of the
Code), is not a former employee of the Company or an "affiliated corporation"
receiving compensation for prior services (other than benefits under a tax
qualified pension plan), was not an officer of the Company or an "affiliated
corporation" at any time, and is not currently receiving director or indirect
remuneration from the Company or an "affiliated corporation" for services in any
capacity other than as a Director, or (ii) is otherwise considered an "outside
director" for purposes of 162(m) of the Code.
(w) "PLAN" means this IPL Systems, Inc. 1997 Equity Incentive Plan.
(x) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(y) "STOCK APPRECIATION RIGHT" means any of the various types of
rights which may be granted under Section 8 of the Plan.
3.
<PAGE> 4
(z) "STOCK AWARD" means any right granted under the Plan, including
any Option, and any Stock Appreciation Right.
(aa) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
(bb) "TANDEM STOCK APPRECIATION RIGHT" or "TANDEM RIGHT" means a
right granted pursuant to subsection 8(b)(1) of the Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; whether a Stock Award will be an Incentive
Stock Option, a Nonstatutory Stock Option, or a Stock Appreciation Right, or a
combination of the foregoing; the provisions of each Stock Award granted (which
need not be identical), including the time or times when a person shall be
permitted to receive stock pursuant to a Stock Award; whether a person shall be
permitted to receive stock upon exercise of an Independent Stock Appreciation
Right; and the number of shares with respect to which a Stock Award shall be
granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock
Award Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.
(iii) To amend the Plan or a Stock Award as provided in
Section 14.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee shall be Non-Employee Directors and/or Outside Directors. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board (and references in this Plan to the Board shall thereafter be to
the Committee), subject,
4.
<PAGE> 5
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.
Notwithstanding the foregoing, but only to the extent permitted by applicable
law, the Board may delegate to any executive officer or executive officers of
the Company authority to grant Stock Awards to eligible persons who are not then
subject to Section 16 of the Exchange Act and the term "Committee" shall apply
to any such executive officer or executive officers to whom such authority has
been delegated. Any such delegation, however, shall include aggregate and
individual limits on the size of Stock Awards to be made by such a committee.
(d) Any requirement that an administrator of the Plan be a
Non-Employee Director shall not apply if the Board or the Committee expressly
declares that such requirement shall not apply. Any Non-Employee Director shall
otherwise comply with the requirements of Rule 16b-3.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 11 relating to adjustments
upon changes in stock, the stock that may be issued pursuant to Stock Awards
shall not exceed in the aggregate One Million One Hundred Ninety-Five Thousand
Five Hundred_ (1,195,500) shares of the Company's common stock. If any Stock
Award shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full, the stock not acquired under such Stock
Award shall revert to and again become available for issuance under the Plan.
Shares subject to Stock Appreciation Rights exercised in accordance with Section
7 of the Plan shall not be available for subsequent issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
5. ELIGIBILITY.
(a) All Employees, Directors and Consultants of the Company (or any
business entity in which the Company owns directly or indirectly fifty percent
(50%) or more of the total voting power) capable of contributing significantly
to the successful performance of the Company, other than an employee who has
irrevocably elected not to be eligible, are eligible to be Participants in the
Plan.
(b) No person shall be eligible for the grant of an Option if, at
the time of grant, such person owns (or is deemed to own pursuant to Section
424(d) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any of its
Affiliates unless the exercise price of such
5.
<PAGE> 6
Option is at least one hundred ten percent (110%) of the Fair Market Value of
such stock at the date of grant and if the Option is an Incentive Stock Option
the Option is not exercisable after the expiration of five (5) years from the
date of grant.
(c) Subject to the provisions of Section 11 relating to adjustments
upon changes in stock, no person shall be eligible to be granted Options and
Stock Appreciation Rights under the Plan covering more than Six Hundred Thousand
(600,000) shares of the Company's common stock.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.
(b) PRICE. The Board will establish the exercise price of a Stock
Award at the time the Stock Award is granted. The exercise price will not be
less than one hundred percent (100%) of the Fair Market Value of the Common
Stock on the date of the Stock Award, provided that in the case of a
Nonstatutory Stock Option granted to a new employee of the Company within ninety
(90) days of the date of employment, the exercise price may be less than one
hundred percent (100%) of Fair Market Value on the date of such Award; provided,
however, that in no event will the exercise price be less than eighty-five
percent (85%) of Fair Market Value on the date of grant.
(c) CONSIDERATION. The purchase price of stock acquired pursuant to
an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board, as determined either at the time of the grant of
the Option or at any time thereafter, (A) by delivery to the Company of other
common stock of the Company, (B) according to a deferred payment or other
arrangement (which may include, without limiting the generality of the
foregoing, the use of other common stock of the Company) with the person to whom
the Option is granted or to whom the Option is transferred pursuant to
subsection 6(d), or (C) in any other form of legal consideration that may be
acceptable to the Board.
In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
6.
<PAGE> 7
(d) TRANSFERABILITY. An Option shall not be transferable except by
will or by the laws of descent and distribution, and shall be exercisable during
the lifetime of the person to whom the Option is granted only by such person's
guardian or legal representative; provided, however, that the Board may, in its
discretion, waive such restriction in any case when such restriction is no
longer required by applicable law.
(e) VESTING. The total number of shares of stock subject to an
Option may, but need not, be allotted in periodic installments (which may, but
need not, be equal). The Option Agreement may provide that from time to time
during each of such installment periods, the Option may become exercisable
("vest") with respect to some or all of the shares allotted to that period, and
may be exercised with respect to some or all of the shares allotted to such
period and/or any prior period as to which the Option became vested but was not
fully exercised. The vesting provisions of individual Options may vary, but in
the case of an Option granted to a non-officer employee will provide for vesting
of at least twenty percent (20%) per year of the total number of shares subject
to the Option. The provisions of this subsection 6(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.
(f) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months after the termination of the Optionee's Continuous Status as an Employee,
Director or Consultant (or such longer or shorter period, which in no event
shall be less than thirty (30) days, specified in the Option Agreement), or (ii)
the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination, the Optionee does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.
An Optionee's Option Agreement may also provide that if the exercise
of the Option following the termination of the Optionee's Continuous Status as
an Employee, Director, or Consultant (other than upon the Optionee's death or
disability) would result in liability under Section 16(b) of the Exchange Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in the Option Agreement, or (ii) the tenth (10th) day
after the last date on which such exercise would result in such liability under
Section 16(b) of the Exchange Act. Finally, an Optionee's Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionee's Continuous Status as an Employee, Director or Consultant (other than
upon the Optionee's death or disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements under
7.
<PAGE> 8
the Act, then the Option shall terminate on the earlier of (i) the expiration of
the term of the Option set forth in the first paragraph of this subsection 6(f),
or (ii) the expiration of a period of three (3) months after the termination of
the Optionee's Continuous Status as an Employee, Director or Consultant during
which the exercise of the Option would not be in violation of such registration
requirements.
(g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Status as an Employee, Director or Consultant terminates as a result of the
Optionee's disability, the Optionee may exercise his or her Option (to the
extent that the Optionee was entitled to exercise it as of the date of
termination), but only within such period of time ending on the earlier of (i)
the date twelve (12) months following such termination (or such longer or
shorter period, which in no event shall be less than six (6) months, specified
in the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, at the date of termination, the Optionee
is not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
(h) DEATH OF OPTIONEE. In the event of the death of an Optionee
during, or within a period specified in the Option Agreement after the
termination of, the Optionee's Continuous Status as an Employee, Director or
Consultant, the Option may be exercised (to the extent the Optionee was entitled
to exercise the Option as of the date of death) by the Optionee's estate, by a
person who acquired the right to exercise the Option by bequest or inheritance
or by a person designated to exercise the option upon the Optionee's death
pursuant to subsection 6(d), but only within the period ending on the earlier of
(i) the date eighteen (18) months following the date of death (or such longer or
shorter period, which in no event shall be less than six (6) months, specified
in the Option Agreement), or (ii) the expiration of the term of such Option as
set forth in the Option Agreement. If, at the time of death, the Optionee was
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after death, the Option is not exercised within
the time specified herein, the Option shall terminate, and the shares covered by
such Option shall revert to and again become available for issuance under the
Plan.
(i) RE-LOAD OPTIONS. Without in any way limiting the authority of
the Board to make or not to make grants of Options hereunder, the Board shall
have the authority (but not an obligation) to include as part of any Option
Agreement a provision entitling the Optionee to a further Option (a "Re-Load
Option") in the event the Optionee exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other
8.
<PAGE> 9
shares of Common Stock in accordance with this Plan and the terms and conditions
of the Option Agreement. Any such Re-Load Option (i) shall be for a number of
shares equal to the number of shares surrendered as part or all of the exercise
price of such Option; (ii) shall have an expiration date which is the same as
the expiration date of the Option the exercise of which gave rise to such
Re-Load Option; and (iii) shall have an exercise price which is equal to one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Re-Load Option on the date of exercise of the original Option.
Notwithstanding the foregoing, a Re-Load Option which is granted to a ten
percent (10%) shareholder (as described in subsection 5(c)), shall have an
exercise price which is equal to one hundred ten percent (110%) of the Fair
Market Value of the stock subject to the Re-Load Option on the date of exercise
of the original Option and shall have a term which is no longer than five (5)
years.
Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board may designate at the time of the grant
of the original Option; provided, however, that the designation of any Re-Load
Option as an Incentive Stock Option shall be subject to the one hundred thousand
dollar ($100,000) annual limitation on exercisability of Incentive Stock Options
described in subsection 10(f) of the Plan and in Section 422(d) of the Code.
There shall be no Re-Load Options on a Re-Load Option. Any such Re-Load Option
shall be subject to the availability of sufficient shares under subsection 4(a)
and shall be subject to such other terms and conditions as the Board may
determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Options.
7. STOCK APPRECIATION RIGHTS.
(a) The Board (or Committee) shall have full power and authority,
exercisable in its discretion, to grant Stock Appreciation Rights under the Plan
to Employees or Directors of or Consultants to, the Company or its Affiliates.
To exercise any outstanding Stock Appreciation Right, the holder must provide
written notice of exercise to the Company in compliance with the provisions of
the Stock Award Agreement evidencing such right. If a Stock Appreciation Right
is granted to an individual who is at the time subject to Section 16(b) of the
Exchange Act (a "Section 16(b) Insider"), the Stock Award Agreement of grant
shall incorporate all the terms and conditions at the time necessary to assure
that the subsequent exercise of such right shall qualify for the safe-harbor
exemption from short-swing profit liability provided by Rule 16b-3 promulgated
under the Exchange Act (or any successor rule or regulation). No limitation
shall exist on the aggregate amount of cash payments the Company may make under
the Plan in connection with the exercise of a Stock Appreciation Rights.
(b) Three types of Stock Appreciation Rights shall be authorized for
issuance under the Plan:
9.
<PAGE> 10
(i) TANDEM STOCK APPRECIATION RIGHTS. Tandem Stock
Appreciation Rights will be granted appurtenant to an Option, and shall, except
as specifically set forth in this Section 8, be subject to the same terms and
conditions applicable to the particular Option grant to which it pertains.
Tandem Stock Appreciation Rights will require the holder to elect between the
exercise of the underlying Option for shares of stock and the surrender, in
whole or in part, of such Option for an appreciation distribution. The
appreciation distribution payable on the exercised Tandem Right shall be in cash
(or, if so provided, in an equivalent number of shares of stock based on Fair
Market Value on the date of the Option surrender) in an amount up to the excess
of (A) the Fair Market Value (on the date of the Option surrender) of the number
of shares of stock covered by that portion of the surrendered Option in which
the Optionee is vested over (B) the aggregate exercise price payable for such
vested shares.
(ii) CONCURRENT STOCK APPRECIATION RIGHTS. Concurrent
Rights will be granted appurtenant to an Option and may apply to all or any
portion of the shares of stock subject to the underlying Option and shall,
except as specifically set forth in this Section 8, be subject to the same terms
and conditions applicable to the particular Option grant to which it pertains. A
Concurrent Right shall be exercised automatically at the same time the
underlying Option is exercised with respect to the particular shares of stock to
which the Concurrent Right pertains. The appreciation distribution payable on an
exercised Concurrent Right shall be in cash (or, if so provided, in an
equivalent number of shares of stock based on Fair Market Value on the date of
the exercise of the Concurrent Right) in an amount equal to such portion as
shall be determined by the Board at the time of the grant of the excess of (A)
the aggregate Fair Market Value (on the date of the exercise of the Concurrent
Right) of the vested shares of stock purchased under the underlying Option which
have Concurrent Rights appurtenant to them over (B) the aggregate exercise price
paid for such shares.
(iii) INDEPENDENT STOCK APPRECIATION RIGHTS. Independent
Rights will be granted independently of any Option and shall, except as
specifically set forth in this Section 8, be subject to the same terms and
conditions applicable to Nonstatutory Stock Options as set forth in Section 6.
They shall be denominated in share equivalents. The appreciation distribution
payable on the exercised Independent Right shall be not greater than an amount
equal to the excess of (A) the aggregate Fair Market Value (on the date of the
exercise of the Independent Right) of a number of shares of Company stock equal
to the number of share equivalents in which the holder is vested under such
Independent Right, and with respect to which the holder is exercising the
Independent Right on such date, over (B) the aggregate Fair Market Value (as
determined on the date of the grant of the Independent Right, or if so provided
in the Independent Stock Appreciation Right on the date of hire as an Employee
if such date is within ninety (90) days of the date of grant and such value is
not less than eighty-five percent (85%) of the aggregate Fair Market Value on
the date of grant) of such number of shares of Company stock. The
10.
<PAGE> 11
appreciation distribution payable on the exercised Independent Right shall be in
cash or, if so provided, in an equivalent number of shares of stock based on
Fair Market Value on the date of the exercise of the Independent Right.
8. CANCELLATION AND RE-GRANT OF OPTIONS. The Board shall have the
authority to effect, at any time and from time to time, (i) the repricing of any
outstanding Options and/or any Stock Appreciation Rights under the Plan and/or
(ii) with the consent of the affected holders of Options and/or Stock
Appreciation Rights, the cancellation of any outstanding Options and/or any
Stock Appreciation Rights under the Plan and the grant in substitution therefor
of new Options and/or Stock Appreciation Rights under the Plan covering the same
or different numbers of shares of stock, but having an exercise price per share
not less than eighty-five percent (85%) of the Fair Market Value (one hundred
percent (100%) of the Fair Market Value in the case of an Incentive Stock Option
or, in the case of a ten percent (10%) shareholder (as described in subsection
5(c)), not less than one hundred ten percent (110%) of the Fair Market Value)
per share of stock on the new grant date. Notwithstanding the foregoing, the
Board may grant an Option and/or Stock Appreciation Right with an exercise price
lower than that set forth above if such Option and/or Stock Appreciation Right
is granted as part of a transaction to which section 424(a) of the Code applies.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Award; provided,
however, that this undertaking shall not require the Company to register under
the Securities Act of 1933, as amended (the "Securities Act") either the Plan,
any Stock Award or any stock issued or issuable pursuant to any such Stock
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such Stock Awards unless and until such authority is obtained.
10. MISCELLANEOUS.
(a) Proceeds from the sale of stock pursuant to Stock Awards shall
constitute general funds of the Company.
(b) Neither an Employee, Director or Consultant nor any person to
whom a Stock Award is transferred under subsection 6(d), or 7(a) shall be deemed
to be the holder
11.
<PAGE> 12
of, or to have any of the rights of a holder with respect to, any shares subject
to such Stock Award unless and until such person has satisfied all requirements
for exercise of the Stock Award pursuant to its terms.
(c) Throughout the term of any Stock Award, the Company shall
deliver to the holder of such Stock Award, not later than one hundred twenty
(120) days after the close of each of the Company's fiscal years during the term
of such Stock Award, a balance sheet and an income statement. This section shall
not apply when issuance is limited to key employees whose duties in connection
with the Company assure them access to equivalent information.
(d) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Director, Consultant or
other holder of Stock Awards any right to continue in the employ of the Company
or any Affiliate (or to continue acting as a Director or Consultant) or shall
affect the right of the Company or any Affiliate to terminate the employment of
any Employee with or without cause, to remove any Director as provided in the
Company's Bylaws and the provisions of the General Corporation Law of the
Commonwealth of Massachusetts or to terminate the relationship of any Consultant
in accordance with the terms of that Consultant's agreement with the Company or
Affiliate to which such Consultant is providing services.
(e) To the extent that the aggregate Fair Market Value (determined
at the time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) shall be treated as Nonstatutory Stock
Options.
(f) The Company may require any person to whom a Stock Award is
granted, or any person to whom a Stock Award is transferred pursuant to
subsection 6(d) or 7(b), as a condition of exercising or acquiring stock under
any Stock Award, (1) to give written assurances satisfactory to the Company, if
any, that are necessary to ensure compliance with federal securities laws. These
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the exercise or acquisition
of stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (ii) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws.
(g) To the extent provided by the terms of a Stock Award Agreement,
the person to whom a Stock Award is granted may satisfy any federal, state or
local tax withholding obligation relating to the exercise or acquisition of
stock under a Stock
12.
<PAGE> 13
Award by any of the following means or by a combination of such means: (1)
tendering a cash payment; (2) authorizing the Company to withhold shares from
the shares of the common stock otherwise issuable to the participant as a result
of the exercise or acquisition of stock under the Stock Award; or (3) delivering
to the Company owned and unencumbered shares of the common stock of the Company.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any Stock Award, without the receipt of consideration by the Company
(through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan pursuant to
subsection 4(a), and the outstanding Stock Awards will be appropriately adjusted
in the class(es) and number of shares and price per share of stock subject to
such outstanding Stock Awards. Such adjustments shall be made by the Board or
the Committee, the determination of which shall be final, binding and
conclusive. If considered appropriate, the Board or the Committee may make a
provision for a cash payment with respect to all or part of an outstanding Stock
Award instead of or in addition to any such adjustment.
(b) In the event of: (1) a merger or consolidation in which the
Company is not the surviving corporation; (2) a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise; or (3) a sale of all or substantially all of the assets of the
Company, then: (i) any surviving or acquiring corporation shall assume any Stock
Awards outstanding under the Plan or shall substitute similar stock awards
(including an award to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 11(b)) for those outstanding
under the Plan, or (ii) in the event any surviving or acquiring corporation
refuses to assume such Stock Awards or to substitute similar Stock Awards for
those outstanding under the Plan, then such Stock Awards shall be terminated if
not exercised prior to such event. In the event of a dissolution or liquidation
of the Company, any Stock Awards outstanding under the Plan shall terminate if
not exercised prior to such event.
12. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in Section 11 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
shareholders of the Company to
13.
<PAGE> 14
the extent shareholder approval is necessary for the Plan to satisfy the
requirements of Section 422 of the Code, Rule 16b-3 under the Exchange Act or
any Nasdaq or securities exchange listing requirements.
(b) The Board may, in its sole discretion, submit any other
amendment to the Plan for shareholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of Section 162(m) of
the Code and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible
Employees, Directors or Consultants with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless:
(i) the Company requests the consent of the person to whom the Stock Award was
granted and (ii) such person consents in writing.
(e) The Board at any time, and from time to time, may amend the
terms of some or all Stock Awards; provided, however, that if the Board
determines that the effect of an amendment, taken as a whole, would be to impair
rights and obligations under any Stock Award then such amendment shall not be
effective as to a particular Stock Award unless: (i) the Company requests the
consent of the person to whom the Stock Award was granted and (ii) such person
consents in writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the shareholders of the Company,
whichever is earlier. No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated.
(b) Rights and obligations under any Stock Award granted while the
Plan is in effect shall not be impaired by suspension or termination of the
Plan, except with the written consent of the person to whom the Stock Award was
granted.
14.
<PAGE> 15
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
Stock Awards granted under the Plan shall be exercised unless and until the Plan
has been approved by the shareholders of the Company, which approval shall be
within twelve (12) months before or after the date the Plan is adopted by the
Board, and, if required, an appropriate permit has been issued by the
Commissioner of Corporations of the State of California.
<PAGE> 1
EXHIBIT 99.2
INCENTIVE STOCK OPTION
, Optionee:
IPL SYSTEMS, INC. (the "Company"), pursuant to its 1997 Equity Incentive
Plan (the "Plan"), has granted to you, the optionee named above, an option to
purchase shares of the common stock of the Company ("Common Stock"). This option
is intended to qualify as an "incentive stock option" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants. Defined terms not explicitly
defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is ______________________
(_________).
2. VESTING. Subject to the limitations contained herein, __________
[INDICATE A FRACTION OR PERCENTAGE (E.G., 25% OR 12/48THS)] of the shares will
vest (become exercisable) on ____________, 19__ and __________ of the shares
will then vest each ____________ [INDICATE APPLICABLE TIME PERIOD (E.G., MONTH
OR YEAR)] thereafter until either (i) you cease to provide services to the
Company for any reason, or (ii) this option becomes fully vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this option is
___________________________ ($___________) per share, being not less than the
fair market value of the Common Stock on the date of grant of this option.
(b) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You may elect, to the extent permitted by applicable statutes
and regulations, to make payment of the exercise price under one of the
following alternatives:
1.
<PAGE> 2
(i) Payment of the exercise price per share in cash (including
check) at the time of exercise;
(ii) Payment pursuant to a program developed under Regulation
T as promulgated by the Federal Reserve Board which, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the Company or
the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds;
(iii) Provided that at the time of exercise the Company's
Common Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of payment
permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. WHOLE SHARES. This option may not be exercised for any number of shares
which would require the issuance of anything other than whole shares.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this option may not be exercised unless the shares issuable
upon exercise of this option are then registered under the Act or, if such
shares are not then so registered, the Company has determined that such exercise
and issuance would be exempt from the registration requirements of the Act.
6. TERM. The term of this option commences on __________, 19__, the date
of grant, and expires on ________________________ (the "Expiration Date," which
date shall be no more than ten (10) years from the date this option is granted),
unless this option expires sooner as set forth below or in the Plan. In no event
may this option be exercised on or after the Expiration Date. This option shall
terminate prior to the Expiration Date as follows: [THREE (3) MONTHS/THIRTY (30)
DAYS] after the termination of your Continuous Status as an Employee, Director
or Consultant with the Company or an Affiliate of the Company unless one of the
following circumstances exists:
(a) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your disability. This option will then expire on the
earlier of the Expiration Date set forth above or twelve (12) months following
such termination of Continuous Status as an Employee, Director or Consultant.
You should be aware that if your disability is not considered a permanent and
total disability within the meaning of Section 422(c)(6) of the Code, and you
exercise this option more than three (3) months
2.
<PAGE> 3
following the date of your termination of employment, your exercise will be
treated for tax purposes as the exercise of a "nonstatutory stock option"
instead of an "incentive stock option."
(b) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your death or your death occurs within [THREE (3)
MONTHS/THIRTY (30) DAYS] following your termination of Continuous Status as an
Employee, Director or Consultant for any other reason. This option will then
expire on the earlier of the Expiration Date set forth above or eighteen (18)
months after your death.
(c) If during any part of such [THREE (3) MONTH/THIRTY (30) DAY]
period you may not exercise your option solely because of the condition set
forth in paragraph 5 above, then your option will not expire until the earlier
of the Expiration Date set forth above or until this option shall have been
exercisable for an aggregate period of [THREE (3) MONTHS/THIRTY (30) DAYS] after
your termination of Continuous Status as an Employee, Director or Consultant.
(d) If your exercise of the option within [THREE (3) MONTHS/THIRTY
(30) DAYS] after termination of your Continuous Status as an Employee, Director
or Consultant with the Company or with an Affiliate of the Company would result
in liability under section 16(b) of the Securities Exchange Act of 1934, then
your option will expire on the earlier of (i) the Expiration Date set forth
above, (ii) the tenth (10th) day after the last date upon which exercise would
result in such liability or (iii) six (6) months and ten (10) days after the
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of Continuous
Status as an Employee, Director or Consultant only as to that number of shares
as to which it was exercisable on the date of termination of Continuous Status
as an Employee, Director or Consultant under the provisions of paragraph 2 of
this option.
In order to obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate of the Company, except in the event of your death or permanent and
total disability. The Company has provided for continued vesting or extended
exercisability of your option under certain circumstances for your benefit, but
cannot guarantee that your option will necessarily be treated as an "incentive
stock option" if you provide services to the Company or an Affiliate of the
Company as a consultant or exercise your option more than three (3) months after
the date your employment with the Company and all Affiliates of the Company
terminates.
3.
<PAGE> 4
7. EXERCISE.
(a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any exercise of
this option, the Company may require you to enter an arrangement providing for
the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (1) the exercise of this option; (2) the lapse of
any substantial risk of forfeiture to which the shares are subject at the time
of exercise; or (3) the disposition of shares acquired upon such exercise; and
(ii) you will notify the Company in writing within fifteen
(15) days after the date of any disposition of any of the shares of the Common
Stock issued upon exercise of this option that occurs within two (2) years after
the date of this option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of this option.
8. TRANSFERABILITY. This option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Option is granted only by such person's
guardian or legal representative; provided, however, that the Board may, in its
discretion, waive such restriction in any case when such restriction is no
longer required by applicable law.
9. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing in this option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in this option shall obligate the Company or any Affiliate of the
Company, or their respective shareholders, Board of Directors, officers or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
10. NOTICES. Any notices provided for in this option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
4.
<PAGE> 5
11. GOVERNING PLAN DOCUMENT. This option is subject to all the provisions
of the Plan, a copy of which is attached hereto and its provisions are hereby
made a part of this option, including without limitation the provisions of
Section 6 of the Plan relating to option provisions, and is further subject to
all interpretations, amendments, rules and regulations which may from time to
time be promulgated and adopted pursuant to the Plan. In the event of any
conflict between the provisions of this option and those of the Plan, the
provisions of the Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
-----------------------------------
By
---------------------------------
Duly authorized on behalf of the
Board of Directors
ATTACHMENTS:
IPL Systems, Inc. 1997 Equity Incentive Plan
Notice of Exercise
5.
<PAGE> 6
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it
sets forth the entire understanding between the undersigned optionee and the
Company and its Affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE
-----------------
(Initial)
OTHER
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
OPTIONEE
Address:
---------------------------
---------------------------
6.
<PAGE> 1
EXHIBIT 99.3
NONSTATUTORY STOCK OPTION
, Optionee:
IPL SYSTEMS, INC. (the "Company"), pursuant to its 1997 Equity Incentive
Plan (the "Plan"), has granted to you, the optionee named above, an option to
purchase shares of the common stock of the Company ("Common Stock"). This option
is not intended to qualify and will not be treated as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants. Defined terms not explicitly
defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is _____________________
(____________).
2. VESTING. Subject to the limitations contained herein, __________
[INDICATE A FRACTION OR PERCENTAGE (E.G., 25% OR 12/48THS)] of the shares will
vest (become exercisable) on ____________, 19__ and __________ of the shares
will then vest each ____________ [INDICATE APPLICABLE TIME PERIOD (E.G., MONTH
OR YEAR)] thereafter until either (i) you cease to provide services to the
Company for any reason, or (ii) this option becomes fully vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this option is
_______________ ($____________) per share, being not less than 85% of the fair
market value of the Common Stock on the date of grant of this option.
(b) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You
1.
<PAGE> 2
may elect, to the extent permitted by applicable statutes and regulations, to
make payment of the exercise price under one of the following alternatives:
(i) Payment of the exercise price per share in cash (including
check) at the time of exercise;
(ii) Payment pursuant to a program developed under Regulation
T as promulgated by the Federal Reserve Board which, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the Company or
the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds;
(iii) Provided that at the time of exercise the Company's
Common Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of payment
permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. WHOLE SHARES. This option may not be exercised for any number of shares
which would require the issuance of anything other than whole shares.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this option may not be exercised unless the shares issuable
upon exercise of this option are then registered under the Act or, if such
shares are not then so registered, the Company has determined that such exercise
and issuance would be exempt from the registration requirements of the Act.
6. TERM. The term of this option commences on _________, 19__, the date of
grant and expires on _____________________ (the "Expiration Date," which date
shall be no more than ten (10) years from the date this option is granted),
unless this option expires sooner as set forth below or in the Plan. In no event
may this option be exercised on or after the Expiration Date. This option shall
terminate prior to the Expiration Date as follows: [THREE (3) MONTHS/THIRTY (30)
DAYS] after the termination of your Continuous Status as an Employee, Director
or Consultant with the Company or an Affiliate of the Company for any reason or
for no reason unless:
(a) such termination of Continuous Status as an Employee, Director
or Consultant is due to your disability, in which event the option shall expire
on the earlier
2.
<PAGE> 3
of the Expiration Date set forth above or twelve (12) months following such
termination of Continuous Status as an Employee, Director or Consultant; or
(b) such termination of Continuous Status as an Employee, Director
or Consultant is due to your death or your death occurs within [THREE (3)
MONTHS/THIRTY (30) DAYS] following your termination for any other reason, in
which event the option shall expire on the earlier of the Expiration Date set
forth above or eighteen (18) months after your death; or
(c) during any part of such [THREE (3) MONTH/THIRTY (30) DAY] period
the option is not exercisable solely because of the condition set forth in
paragraph 5 above, in which event the option shall not expire until the earlier
of the Expiration Date set forth above or until it shall have been exercisable
for an aggregate period of [THREE (3) MONTHS/THIRTY (30) DAYS] after the
termination of Continuous Status as an Employee, Director or Consultant; or
(d) exercise of the option within [THREE (3) MONTHS/THIRTY (30)
DAYS] after termination of your Continuous Status as an Employee, Director or
Consultant with the Company or with an Affiliate of the Company would result in
liability under section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act), in which case the option will expire on the earlier of (i) the
Expiration Date set forth above, (ii) the tenth (10th) day after the last date
upon which exercise would result in such liability or (iii) six (6) months and
ten (10) days after the termination of your Continuous Status as an Employee,
Director or Consultant with the Company or an Affiliate of the Company.
However, this option may be exercised following termination of Continuous
Status as an Employee, Director or Consultant only as to that number of shares
as to which it was exercisable on the date of termination of Continuous Status
as an Employee, Director or Consultant under the provisions of paragraph 2 of
this option.
7. EXERCISE.
(a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require.
(b) By exercising this option you agree that as a precondition to
the completion of any exercise of this option, the Company may require you to
enter an arrangement providing for the cash payment by you to the Company of any
tax withholding obligation of the Company arising by reason of: (1) the exercise
of this option; (2) the lapse of any substantial risk of forfeiture to which the
shares are subject at
3.
<PAGE> 4
the time of exercise; or (3) the disposition of shares acquired upon such
exercise. You also agree that any exercise of this option has not been completed
and that the Company is under no obligation to issue any Common Stock to you
until such an arrangement is established or the Company's tax withholding
obligations are satisfied, as determined by the Company; and
8. TRANSFERABILITY. This option shall not be transferable except by will
or by the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the Option is granted only by such person's
guardian or legal representative; provided, however, that the Board may, in it
discretion, waive such restriction in any case when such restriction is no
longer required by applicable law.
9. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing in this option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in this option shall obligate the Company or any Affiliate of the
Company, or their respective shareholders, Board of Directors, officers, or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
10. NOTICES. Any notices provided for in this option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
11. GOVERNING PLAN DOCUMENT. This option is subject to all the provisions
of the Plan, a copy of which is attached hereto and its provisions are hereby
made a part of this option, including without limitation the provisions of
Section 6 of the Plan relating to option provisions, and is further subject to
all interpretations, amendments, rules and regulations which may from time to
time be promulgated and adopted pursuant to the Plan. In the event of any
conflict between the provisions of this option and those of the Plan, the
provisions of the Plan shall control.
4.
<PAGE> 5
Dated the ____ day of __________________, 19__.
Very truly yours,
-----------------------------------
By
---------------------------------
Duly authorized on behalf of the
Board of Directors
ATTACHMENTS:
IPL Systems, Inc. 1997 Equity Incentive Plan
Notice of Exercise
5.
<PAGE> 6
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it
sets forth the entire understanding between the undersigned optionee and the
Company and its Affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE
--------------
(Initial)
OTHER
----------------------------------
----------------------------------
----------------------------------
-----------------------------------
OPTIONEE
Address:
---------------------------
---------------------------
6.
