<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended NOVEMBER 26, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from - to -
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Commission File Number 0-10558
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ALPHA MICROSYSTEMS
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(Exact name of registrant as specified in its charter)
CALIFORNIA 95-3108178
- ---------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2722 S. FAIRVIEW STREET, SANTA ANA, CA 92704
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(Address of principal executive offices)
Registrant's telephone number, including area code: (714) 957-8500
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of January 3, 1996, there were 6,595,453 shares of the registrant's common
stock outstanding.
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ALPHA MICROSYSTEMS
INDEX
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
PART I-- FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
at November 26, 1995 (Unaudited) and
February 26, 1995 3
Condensed Consolidated Statements of
Operations (Unaudited) for the Three
and Nine Months Ended November 26, 1995 and
November 27, 1994 4
Condensed Consolidated Statements of Cash Flows
(Unaudited) for the Nine Months Ended November 26,
1995 and November 27, 1994 5
Notes to Condensed Consolidated
Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II-- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
EXHIBIT INDEX 15
</TABLE>
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALPHA MICROSYSTEMS
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
November 26, February 26,
1995 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,155 $ 3,289
Accounts receivable, net 5,591 4,844
Inventories 1,264 1,948
Subsidiary held for sale - 269
Note receivable 236 -
Prepaid expenses and other current assets 763 564
-------- --------
Total current assets 9,009 10,914
Property and equipment, at cost 16,450 14,824
Less accumulated depreciation and amortization 11,969 11,220
-------- --------
Net property and equipment 4,481 3,604
Service contracts, net 953 1,039
Software costs, net 1,769 1,302
Goodwill, net 865 864
Other assets, net 173 179
-------- --------
$ 17,250 $ 17,902
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,525 $ 1,863
Deferred revenue 2,317 2,775
Other accrued liabilities 1,639 1,857
Accrued salaries and wages 156 836
Bank borrowings 500 -
Current portion of long-term debt 364 395
-------- --------
Total current liabilities 7,501 7,726
Long-term debt 232 140
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value; 5,000,000
shares authorized; none issued - -
Common stock, no par value; 20,000,000 shares
authorized; 6,565,403 and 6,557,403 shares
issued and outstanding at November 26, 1995 and
February 26, 1995, respectively 21,238 21,224
Accumulated deficit (11,623) (11,119)
Unamortized restricted stock plan expense (14) (19)
Foreign currency translation adjustment (84) (50)
-------- --------
Total shareholders' equity 9,517 10,036
-------- --------
$ 17,250 $ 17,902
======== ========
</TABLE>
See accompanying notes.
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ALPHA MICROSYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- -------------------------------------
November 26, November 27, November 26, November 27,
1995 1994 1995 1994
--------------- -------------- --------------- ------------------
<S> <C> <C> <C> <C>
Net sales:
Product $ 3,666 $ 4,772 $ 11,490 $ 14,325
Service 4,602 5,077 13,928 15,351
--------------- -------------- --------------- ------------------
Total net sales 8,268 9,849 25,418 29,676
--------------- -------------- --------------- ------------------
Cost of sales:
Product 2,401 2,911 6,962 9,104
Service 3,289 3,437 9,448 9,937
--------------- -------------- --------------- ------------------
Total cost of sales 5,690 6,348 16,410 19,041
--------------- -------------- --------------- ------------------
Gross Margin 2,578 3,501 9,008 10,635
Selling, general and administrative expense 2,716 3,205 8,277 9,925
Research and development expense 489 488 1,559 1,694
--------------- -------------- --------------- ------------------
Total operating expenses 3,205 3,693 9,836 11,619
--------------- -------------- --------------- ------------------
Loss from operations (627) (192) (828) (984)
Interest income (22) (37) (72) (114)
Interest expense 5 6 26 13
Other (income) expense, net 4 (15) (221) 53
Foreign exchange (gain) loss (17) 50 (57) (13)
--------------- -------------- --------------- ------------------
Total other (income) expenses (30) 4 (324) (61)
--------------- -------------- --------------- ------------------
Loss before taxes (597) (196) (504) (923)
Provision for income taxes - - - 5
--------------- -------------- --------------- ------------------
Net Loss $ (597) $ (196) $ (504) $ (928)
=============== ============== =============== ==================
Net loss per share $ (0.09) $ (0.03) $ (0.08) $ (0.14)
=============== ============== =============== ==================
Number of shares used in the
computation of per share amounts 6,565 6,557 6,561 6,548
=============== ============== =============== ==================
</TABLE>
See accompanying notes.
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ALPHA MICROSYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------------------
November 26, November 27,
1995 1994
------------------ ------------------
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (504) $ (928)
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities:
Gain on sale of fixed assets (211) -
Depreciation and amortization 1,612 2,255
Provision for losses on accounts receivable (25) 61
Inventory provision 143 52
Other changes in operating assets and liabilities:
Accounts receivable (802) (570)
Inventories 541 (255)
Prepaid expenses and current assets (160) (282)
Accounts payable and other
accrued liabilities 434 581
Accrued salaries and wages (694) (631)
Deferred revenue (494) (158)
Other, net 46 (28)
----------------- ------------------
Net cash (used in) provided by
operating activities (114) 97
----------------- ------------------
Cash flow from investing activities:
Proceeds from sale of fixed assets 280 -
Acquisition of businesses (80) (84)
Acquisition of service assets (96) (511)
Purchases of equipment and leasehold improvements (1,552) (745)
Capitalization of software costs (745) (598)
Other, net 3 (54)
----------------- ------------------
Net cash used in investing activities (2,190) (1,992)
----------------- ------------------
Cash flows from financing activities:
Proceeds from borrowings 500 -
Issuance of stock 19 66
Principal debt repayments (343) (659)
----------------- ------------------
Net cash provided by (used in) financing activities 176 (593)
----------------- ------------------
Effect of exchange rate changes on cash (6) 92
----------------- ------------------
Decrease in cash and cash equivalents (2,134) (2,396)
Cash and cash equivalents at beginning of period 3,289 6,251
----------------- ------------------
Cash and cash equivalents at end of period $ 1,155 $ 3,855
================= ==================
</TABLE>
See accompanying notes.
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<PAGE> 6
ALPHA MICROSYSTEMS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM ACCOUNTING POLICY
In the opinion of management of Alpha Microsystems (the "Company" or
"Alpha Micro"), the accompanying unaudited condensed consolidated financial
statements contain all adjustments necessary to fairly present the consolidated
financial position of the Company at November 26, 1995, the consolidated
results of its operations for the three and nine month periods ended November
26, 1995 and November 27, 1994 and its cash flows for the nine month periods
ended November 26, 1995 and November 27, 1994. These condensed consolidated
financial statements do not include all disclosures normally presented annually
under generally accepted accounting principles and, therefore, they should be
read in conjunction with the Company's annual report on Form 10-K for the year
ended February 26, 1995.
The results of operations for the nine month period ended November 26,
1995, are not necessarily indicative of the results to be expected for the full
fiscal year.
REVENUE RECOGNITION
The Company recognizes revenue on its hardware and software sales on
delivery, and recognizes revenue on its service sales and post contract
customer support on a straight line basis over the contract period. When
significant obligations remain after a software product has been delivered,
revenue is not recognized until obligations have been completed or are no
longer significant. The costs of any insignificant obligations are accrued when
the related revenue is recognized. Revenue is recognized only when collection
of the resulting receivable is probable.
PER SHARE INFORMATION
Per share information is based upon the weighted average common shares
outstanding during the periods ended November 26, 1995 and November 27, 1994.
TRANSLATION OF FOREIGN CURRENCIES
The Company's foreign entities use the local currency as the
functional currency. The Company translates all foreign entity assets and
liabilities at quarter-end exchange rates, all income and expense accounts at
average rates, and records adjustments resulting from translation in a separate
component of shareholders' equity.
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2. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out
method) or market. Inventories net of reserves for excess and obsolete
inventories of $1,882,000 and $1,723,000 at November 26, 1995 and February 26,
1995, respectively, are comprised of the following:
<TABLE>
<CAPTION>
(IN THOUSANDS)
-------------------------------------------------
NOVEMBER 26, FEBRUARY 26,
1995 1995
------------------- ------------------
<S> <C> <C>
Raw materials $ 136 $ 581
Work in process 8 180
Finished goods 1,120 1,187
------------------- ------------------
$ 1,264 $ 1,948
=================== ==================
</TABLE>
3. DEBT
On July 10, 1995, the Company signed an agreement for a revolving line
of credit up to a maximum limit of $2,000,000, based upon 70% of the eligible
accounts receivable and under which letters of credit and the foreign exchange
portion shall not exceed $500,000 in the aggregate at any one time. Borrowing
under the line of credit will bear interest of prime plus one and one half
percent (1.5%) and a commitment fee for the first year of $15,000. In
addition, the Company agreed to issue 50,000 warrants to the lender, after the
40,000 warrants the lender previously received had been canceled. The price of
the new warrants is at the market value of the Company's common stock as of the
date of the credit line. As of November 26, 1995, the Company had borrowings
under its credit line of $500,000.
The Company is currently negotiating new covenants with its bank since
the Company anticipates that it will breach certain covenants prior to fiscal
year end. Management believes that it will be successful in negotiating such
covenants based upon preliminary discussions with its bank, however, no
assurances can be made. The line of credit is secured by substantially all of
the Company's assets. Its availability is subject to current financial
covenants requiring that the Company maintain a quick ratio of not less than
1.3 to 1, a tangible net worth of not less than $5,900,000, and a ratio of
total liabilities to tangible net worth of no more than 1.0 to 1. The agreement
also includes covenants which require that the Company must not have two or
more consecutive quarterly losses exceeding $700,000 in aggregate, and the
Company must make a net profit on a consolidated basis for fiscal 1996.
4. NOTE RECEIVABLE
As part of the consideration for selling the Belgian subsidiary to a
member of local management, the Company received a note for 15,000,000 Belgian
francs which is payable over the next two years.
5. ACQUISITIONS
On September 15, 1995, the Company acquired the ongoing service
contracts and certain related assets of Instant Data Systems Incorporated
("IDS") for a purchase price of $300,000, plus a
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potential bonus payment of $50,000. The purchase price will be paid over
eighteen months, and the ultimate price and cash paid will depend upon the
contract revenues purchased.
6. TAXES
The Company has significant federal net operating loss carryforwards
totaling approximately $15.0 million at February 26, 1995, which begin expiring
in 2006. As a result, the Company recorded no tax provision for the nine months
ended November 26, 1995. If there is a greater than 50% change in the Company's
ownership during any three-year period, the utilization of the net operating
loss and general business credit carryforward can be limited. During the last
three-year period ended February 26, 1995, the Company had experienced an
approximate 41% change in ownership.
7. GOODWILL AND INTANGIBLES
Management routinely evaluates events or conditions that might
diminish the fair market value of intangible assets. Intangible assets include
acquired service contracts, capitalized computer software costs and goodwill.
The book value of goodwill and acquired service contracts is associated with
the acquisition of companies or assets. Software cost is the accumulation of
capitalized development costs or the assigned value of software associated with
an acquisition.
8. CONTINGENCIES
PRIOR LEASE OBLIGATIONS
The Company is in the process of negotiating the requirements and
costs associated with exiting its previous location and has not yet paid an
exit fee of $250,000. Although the Company has accrued an appropriate amount
for this contingency, it is still negotiating a payment schedule to minimize
the cash impact.
LITIGATION
Two former employees of Alpha Microsystems Belgium S.A. ("AMB") have
filed a lawsuit which asserts eight separate claims against AMB and the
Company. The primary claim is that AMB is in breach of its obligations under
Belgium employment law to pay salaries for a notice period of up to two years
and that the Company has alter ego liability for these obligations. The
employees are claiming compensatory damages in excess of $780,000 and
unspecified punitive damages. Management of the Company believes that the
claim is without merit.
A former Pick dealer, who the Company took to collection in order to
recover a past due amount of $19,166.90, has countersued alleging irreparable
damage, loss of current business, loss of business reputation and loss of
future business due to operating system failure and has claimed damages of
$1,050,000. The Company believes that the claim is without merit.
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<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
SUMMARY
The following table was derived from the Condensed Consolidated
Statements of Operations as a percentage of net sales for the three and nine
month periods ended November 26, 1995, and November 27, 1994:
<TABLE>
<CAPTION>
THREE MONTHS ENDEDATIONSHIP TO NET SALENINE MONTHS ENDED
----------------------------------------------------------------------
NOVEMBER 26, NOVEMBER 27, NOVEMBER 26, NOVEMBER 27,
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Costs of sales 68.8 64.5 64.6 64.2
------- ------- ------- -------
Gross margin 31.2 35.5 35.4 35.8
Selling general and administrative expense 32.8 32.5 32.6 33.4
Research and development expense 5.9 5.0 6.1 5.7
Interest income (0.3) (0.4) (0.3) (0.4)
Interest expense 0.1 0.1 0.1 -
Other (income) expense, net 0.1 (0.2) (0.9) 0.2
Foreign exchange (gain) loss (0.2) 0.5 (0.2) -
------- ------- ------- -------
Loss from operations before taxes (7.2) (2.0) (2.0) (3.1)
Provision (benefit) for income taxes - - - -
------- ------- ------- -------
Net loss (7.2)% (2.0)% (2.0)% (3.1)%
======= ======= ======= =======
</TABLE>
GENERAL
The Company, which for its first decade was principally a designer and
vendor of computer hardware and related systems software, continues to
transition its business towards areas which it believes offer greater growth
potential. The Company's strategy is to concentrate on vertical markets, and
expand its already broad base of support services, including field maintenance
and networking. In support of its strategy, the Company has continued its
efforts to consolidate European operations, reduce expenses and establish new
asset management techniques, and shift toward system assembly and integration.
Management intends to monitor market and business conditions and be flexible in
considering appropriate shifts in strategy.
During the first nine months of fiscal 1996, the Company incurred a
net loss of $504,000, or $0.08 per share. The loss was primarily due to
continued investment in the Company's food service administration (Panda) and
dental practice management (Alpha 2000) software products, for which revenues
have not yet sufficiently developed to offset this investment, and an
unexpectedly steep decline in revenues from the Company's traditional
AMOS-based hardware products during the third quarter. The Company experienced
a $2,835,000 reduction in product revenues during the first nine months of
fiscal 1996 when compared to the same period during the previous fiscal year.
A significant portion of this decline was associated with the sale of the PICK
64 and VSO product lines. In response to the third quarter results, the
Company has reduced personnel by 25 individuals as part of a consolidation of
the traditional hardware business with the Company's service operation and has
also taken other cost containment actions. The effects of these reductions are
not expected to have a significant impact until the first quarter of fiscal
1997.
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<PAGE> 10
The Company's strategic marketing efforts continue to progress with
its Alpha 2000 product which has been well received at several trade shows and
individually by key dental industry opinion leaders. Alpha 2000 is actively
being marketed and the Company has been taking orders for delivery in the
fourth quarter of the current fiscal year. So far this fiscal year the Company
has received four new orders for Panda from California school districts where
it has a direct sales force and it has been setting up Value Added Resellers
("VARs") and strategic relations to market Panda in other states.
Based upon the favorable market response but subject to resource
constraints, the Company intends to expand its sales and marketing resources
for both its dental and food service vertical products. While it is unlikely
that revenues from these products will increase sufficiently to offset the
additional investment in the short term, the Company believes that its
capabilities to gain a larger market share over the long term will be
significantly enhanced. The operating expenses associated with additional
marketing and sales efforts towards introducing these products will likely have
a negative impact on the Company's short-term performance.
RESULTS OF OPERATIONS
Nine Months Ended November 26, 1995 and November 27, 1994
Net sales decreased $4,258,000, or 14.3%, to $25,418,000 for the nine
month period ended November 26, 1995, from $29,676,000 for the same period
ended November 27, 1994. Total product revenues declined $2,835,000, or 19.8%
to $11,490,000 during the first nine months of fiscal 1996, from $14,325,000 for
the comparable period during fiscal 1995.
The decline in the product revenues was due to lower customer demand
for the Company's traditional AMOS-based hardware products, the sale of the
PICK and VSO product lines, and lower revenues from Belgian customers. PICK and
VSO revenues accounted for approximately $322,000 in the nine months ended
November 26, 1995, compared to approximately $1,182,000 in the comparable
period of fiscal 1995. The Belgian subsidiary, Alpha Microsystems Belgium, S.A.
("AMB"), which was sold to a member of its Belgian management team at the end
of fiscal 1995, had accounted for $2,051,000 in revenues in the first nine
months of fiscal 1995. In the first nine months of fiscal 1996, sales to the
Belgian company accounted for $1,506,000 in revenues. The negative impact of
reduced AMB revenues was offset, however, by the elimination of overhead and
other expenses associated with the subsidiary.
Total service revenue for the nine months ended November 26, 1995
declined $1,423,000, or 9.3%, to $13,928,000 from $15,351,000 for the same
period in the prior year. The decrease was attributable both to a reduction in
service revenue from operations recently acquired (Alpha Computer Services,
Inc. and MGI Group International, Inc.) and the continued decline in
traditional AMOS-based service contracts. The Company has expanded its base of
support services, including field maintenance and networking, and intends to
invest additional resources in this area.
Total gross margin for the Company for the nine months ended November
26, 1995 decreased to 35.4% compared to 35.8% during the same period last year.
While product gross margin for the first nine months of fiscal 1996
increased to 39.4% compared to 36.4% during the same period in the prior year,
product gross margin for the third quarter ended November 26, 1995 decreased to
34.5%. The increase in the nine month period ended November 26, 1995 was due
to a higher percentage of revenues from traditional hardware products with
higher gross margin as compared to the same period in the prior year in which a
higher percentage of lower margin PICK, VSO and non-proprietary products were
sold. The decrease in
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product gross margin for the third quarter ended in November 26, 1995 was the
result of lower revenue and the related effect of overhead absorption.
Service business gross margin declined to 32.2% during the nine months
ended November 26, 1995 from 35.3% during the same period in the prior year.
The decline was primarily due to reductions in cost of goods sold, primarily
labor costs, not fully offsetting the revenue decline. However, the service
organization reduced selling, general and administrative expenses which
assisted in partially offsetting the overall impact of the service revenue
decline. The service organization is focusing on obtaining new contracts for
its networking support services, supporting vertical markets with services, and
increasing third party services in an effort to improve revenues. Revenues from
these new areas of focus generally produce lower margins than the Company's
traditional service business.
Selling, general and administrative expenses decreased $1,648,000 to
$8,277,000 for the nine months ended November 26, 1995 from $9,925,000 for the
comparable period in the prior fiscal year. This reduction was primarily due
to the Company's decision to divest itself of non-core activities during the
first part of fiscal 1996. The reductions were approximately $789,000,
$394,000 and $160,000 due to the divestiture of AMB, VSO, and Imaging
operations, respectively. Selling, general and administrative expenses were
also reduced by streamlining certain other areas within the business. The
Company utilized some of these savings by investing in additional resources to
enhance its position in its vertical markets. Approximately $2,840,000 in
selling, general and administrative expenses in the first nine months of the
current fiscal year was due to this investment in vertical markets, compared to
$1,861,000 for the same period in the prior fiscal year.
On March 24, 1995 the Company sold its rights to reproduce and license
Pick64+ distributed database software to Sequoia Systems, Inc., for $100,000
cash and a $200,000 note receivable. In addition, the Company was entitled to
a potential earnout above the purchase price. On January 5, 1996 the Company
and Sequoia Systems, Inc. agreed to a final aggregate purchase price of
$340,000. The gain on sale for this transaction in the first quarter of this
fiscal year was $211,000.
Research and development expenses incurred for the nine months ended
November 26, 1995 decreased by $135,000 to $1,559,000 from $1,694,000 during
the same period in the prior fiscal year. Approximately $745,000 of new
software development expenses have been capitalized in the first nine months of
the current fiscal year, compared to $598,000 in the comparable period of the
prior fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended November 26, 1995 the Company's working
capital decreased by $1,679,000 to $1,509,000 from $3,188,000 at February 26,
1995. Net cash and cash equivalents decreased during the nine month period
ended November 26, 1995 by $2,134,000 to $1,155,000, primarily as a result of
the costs incurred in connection with the Company's move to its new facilities,
investment in development of vertical software and repayment of notes to the
previous owners of Alpha Computer Services ("ACS") and AlphaHealthCare ("AHC").
Net cash used in operating activities during the first nine months of the
current fiscal year was $114,000 compared to $97,000 provided by operating
activities during the same period in the prior fiscal year.
Inventories decreased from $1,948,000 at February 26, 1995 to
$1,264,000 at November 26, 1995. Management has placed strict controls on
inventory purchases to maintain a lower inventory level. Net accounts
receivable increased from $4,844,000 at February 26, 1995 to $5,591,000 at
November 27, 1995. This increase was primarily due to the receivable
associated with the sale of
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<PAGE> 12
the PICK product line and a larger portion of revenue coming from the European
operations which tend to extend longer payment terms.
The Company currently has a revolving line of credit up to a maximum
limit of $2,000,000, based upon 70% of the eligible accounts receivable and
under which letters of credit and the foreign exchange portion shall not exceed
$500,000 in the aggregate at any one time. The line of credit is secured by
substantially all of the Company's assets. Its availability is subject to
current financial covenants requiring that the Company maintain a quick ratio
of not less than 1.3 to 1, a tangible net worth of not less than $5,900,000,
and a ratio of total liabilities to tangible net worth of no more than 1.0 to
1. The agreement also includes covenants which require that the Company must
not have two or more consecutive quarterly losses exceeding $700,000 in
aggregate, and the Company must make a net profit on a consolidated basis for
fiscal 1996. Borrowings under the line of credit may bear interest of prime
plus one and one half percent (1.5%) and the commitment fee for the first year
is $15,000. In addition, the Company agreed to issue 50,000 warrants to the
lender, after the 40,000 warrants the lender previously received had been
canceled. The price of the new warrants is at the market value of the
Company's common stock as of the date of the credit line.
During the third quarter it was necessary for the Company to utilize
its credit line to fund its vertical market investment. As of November 26,
1995 the Company had borrowings under its credit line of $500,000.
The Company is currently negotiating new covenants with its bank since
the Company anticipates that it will be in breach of certain covenants prior to
fiscal year end. The Company believes that it will be successful in
renegotiating such covenants based upon preliminary discussions with its bank;
however, no assurances can be made.
The Company entered into a new 66-month lease and has moved into a
66,200 square foot facility located within one mile of its prior 104,000 square
foot facility effective July 1, 1996. The average annual rent for the new
facility is $285,000, compared to $680,000 in fiscal 1995 for the prior
facility. The lease extends through December 31, 2000 and the Company has an
option to extend the new lease term for an additional three years.
Under its new lease, the Company agreed to pay the up-front costs of
certain leasehold improvements. The leasehold improvements for which the
Company assumed responsibility include office construction, plumbing, wiring,
and general tenant improvements. The total cost of these improvements was
approximately $886,000, which will be depreciated over the life of the lease.
The cost of these improvements, fully recorded during the first nine months of
the current fiscal year, is the primary reason that gross property and
equipment increased to $16,450,000 at November 26, 1995, from $14,824,000 at
February 26, 1995.
The Company believes that the current cash position augmented by
operating activities will provide it with sufficient resources to finance its
working capital requirements for the remainder of the fiscal year. The
Company's future capital requirements depend on a variety of factors,
including, but not limited to, the rate of decline in the traditional business,
the success and timing and amount of investment required to penetrate the
vertical markets, and service revenue growth or decline.
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<PAGE> 13
PART II. OTHER INFORMATION
6. Exhibits and Reports on Form 8-K.
(a) See Exhibit Index.
(b) No Form 8-K was filed during the quarter ended
November 26, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALPHA MICROSYSTEMS
(Registrant)
Date: January 09, 1996 By:/s/ Douglas J. Tullio
-----------------------
President and
Chief Executive Officer
Date: January 09, 1996 By:/s/ Michael J. Lowell
-----------------------
Vice President and
Chief Financial Officer
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10-Q EXHIBITS
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<TABLE>
<S> <C>
10.150 Amendment to Loan Agreement by and between Registrant and
Silicon Valley Bank dated November 30, 1995.
10.151 Agreement to Grant Incentive Stock Option (Pursuant to 1993
Employee Stock Option Plan) between Registrant and Philip
D. Smith dated April 3, 1995 for 40,000 shares of common stock.
10.152 Agreement to Grant Incentive Stock Option (Pursuant to 1993
Employee Stock Option Plan) between Registrant and Michael
J. Lowell dated April 3, 1995 for 40,000 shares of common
stock.
10.153 Agreement to Grant Incentive Stock Option (Pursuant to 1993
Employee Stock Option Plan) between Registrant and Randy
Parks dated April 3, 1995 for 10,000 shares of common stock.
10.154 Agreement to Grant Incentive Stock Option (Pursuant to 1993
Employee Stock Option Plan) between Registrant and Peggy
Denson dated April 3, 1995 for 10,000 shares of common stock.
10.155 Agreement to Grant Incentive Stock Option (Pursuant to 1993
Employee Stock Option Plan) between Registrant and Douglas J.
Tullio dated May 5, 1995 for 15,000 shares of common stock.
10.156 Agreement to Grant Incentive Stock Option (Pursuant to 1993
Employee Stock Option Plan) between Registrant and John F.
Glade dated May 5, 1995 for 7,500 shares of common stock.
27 Financial Data Schedule.
</TABLE>
-15-
<PAGE> 1
EXHIBIT 10.150
[LOGO] SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: ALPHA MICROSYSTEMS
ADDRESS: 2722 SOUTH FAIRVIEW STREET
SANTA ANA, CALIFORNIA 92704
DATE: NOVEMBER 30, 1995
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON
VALLEY BANK ("Silicon") and the borrower named above (the "Borrower").
The Parties agree to amend the Loan and Security Agreement
between them (the "Loan Agreement") dated July 28, 1995, effective as of the
date hereof. (Capitalized terms used but not defined in this Amendment, shall
have the meanings set forth in the Loan Agreement.)
1. MODIFICATION TO FINANCIAL COVENANTS. The section of the
Schedule to the Loan Agreement entitled "Financial Covenants (Section 4.1) is
hereby deleted in its entirety and replaced with the following:
"FINANCIAL COVENANTS
(Section 4.1): Borrower shall comply with all of the following
covenants. Compliance shall be determined as of
the end of each month, except as otherwise
specifically provided below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick
Assets" to current liabilities of not less than
1.30 to 1.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net worth of
not less than $5,900,000.
DEBT TO TANGIBLE
NET WORTH RATIO: Borrower shall maintain a ratio of total
liabilities to tangible net worth of not more
than 1.00 to 1.
PROFITABILITY Borrower shall not incur a loss (after taxes)
for any fiscal year, provided that Borrower may
incur losses (after taxes) in two consecutive
fiscal quarters during any fiscal year if the
aggregate amount of such losses for such two
fiscal quarters does not exceed $700,000.
DEFINITIONS: "Current assets," and "current liabilities"
shall have the meanings ascribed to them in
accordance with generally accepted accounting
principles.
<PAGE> 2
"Tangible net worth" means the excess of total
assets over total liabilities, determined in
accordance with generally accepted accounting
principles, excluding however all assets which
would be classified as intangible assets under
generally accepted accounting principles,
including without limitation goodwill, licenses,
patents, trademarks, trade names, copyrights,
capitalized software and organizational costs,
licences and franchises.
"Quick Assets" means cash on hand or on deposit
in banks, readily marketable securities issued
by the United States, readily marketable
commercial paper rated "A-1" by Standard &
Poor's Corporation (or a similar rating by a
similar rating organization), certificates of
deposit and banker's acceptances, and accounts
receivable (net of allowance for doubtful
accounts).
DEFERRED REVENUES: For purposes of the above quick asset ratio,
deferred revenues shall not be counted as
current liabilities. For purposes of the above
debt to tangible net worth ratio, deferred
revenues shall not be counted in determining
total liabilities but shall be counted in
determining tangible net worth for purposes of
such ratio. For all other purposes deferred
revenues shall be counted as liabilities in
accordance with generally accepted accounting
principles.
SUBORDINATED DEBT: "Liabilities" for purposes of the foregoing
covenants do not include indebtedness which is
subordinated to the indebtedness to Silicon
under a subordination agreement in form
specified by Silicon or by language in the
instrument evidencing the indebtedness which is
acceptable to Silicon."
2. REPRESENTATIONS TRUE. Borrower represents and warrants
to Silicon that all representations and warranties set forth in the Loan
Agreement, as amended hereby, are true and correct.
3. GENERAL PROVISIONS. This Amendment, the Loan Agreement,
any prior written amendments to the Loan Agreement signed by Silicon and the
Borrower, and the other written documents and agreements between Silicon and
the Borrower set forth in full all of the representations and agreements of the
parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between Silicon and the Borrower shall continue in full force and
effect and the same are hereby ratified and confirmed.
BORROWER: SILICON:
ALPHA MICROSYSTEMS SILICON VALLEY BANK
BY MICHAEL J. LOWELL BY MICHAEL P. QUAIN
-------------------------------- --------------------------------
PRESIDENT OR VICE PRESIDENT TITLE Assistant Vice President
-----------------------------
BY JOHN F. GLADE
--------------------------------
SECRETARY OR ASS'T SECRETARY
-2-
<PAGE> 3
GUARANTOR'S CONSENT
The undersigned guarantor acknowledges that its consent to the foregoing
Amendment is not required, but the undersigned nevertheless does hereby consent
to the foregoing Amendment and to the documents and agreements referred to
therein and to all future modifications and amendments thereto, and to any and
all other present and future documents and agreements between or among the
foregoing parties. Nothing herein shall in any way limit any of the terms or
provisions of the Continuing Guaranty executed by the undersigned in favor of
Silicon, which is hereby ratified and affirmed and shall continue in full force
and effect.
ALPHAHEALTHCARE, INC.
By: MICHAEL J. LOWELL
---------------------------------
Title: V.P. & CFO
------------------------------
-3-
<PAGE> 1
EXHIBIT 10.151
ALPHA MICROSYSTEMS
------------------
AGREEMENT TO GRANT INCENTIVE STOCK OPTION
-----------------------------------------
(pursuant to 1993 EMPLOYEE STOCK OPTION PLAN)
THIS AGREEMENT TO GRANT INCENTIVE STOCK OPTION ("Agreement")
is entered into effective as of April 3, 1995 between Alpha Microsystems (the
"Company") and Philip D. Smith ("Employee"). Unless otherwise defined herein,
capitalized words used in this Agreement shall have the same meaning as such
terms are defined in the Company's 1993 Employee Stock Option Plan (the
"Plan").
R E C I T A L S
---------------
A. The Company has adopted and the shareholders of the
Company have approved the Plan, which is intended to provide incentive to key
employees of the Company and its subsidiaries, to encourage proprietary
interest in the Company, to encourage employees to remain in the employee of
the Company and its subsidiaries, and to attract new employees with outstanding
qualifications.
B. Pursuant to the terms of the Plan, the Committee
appointed by the Board of the Company to administer the Plan (the "Committee")
has granted to Employee stock options as set forth herein.
C. Employee and the Company execute this Agreement to
reflect the terms of the options which have been granted to employee.
The parties hereto agree as follows:
1. Grant. Pursuant to action taken by the Committee on
April 3, 1995 (the "Effective Date"), the Company irrevocably granted to the
Employee as of the Effective Date the right and option to purchase all or any
part of an aggregate of Forty Thousand (40,000) shares of the Common Stock of
the Company, such number being subject to adjustment as set forth in the Plan,
on the terms and conditions set forth herein.
2. Purchase Price. The exercise price for which the
option may be exercised shall be One and Five-Eighths Dollars ($1- 5/8) per
share.
<PAGE> 2
3. Exercisability. The option granted herein shall
become exercisable in cumulative increments at the following times and in the
following amounts:
(a) with respect to 25% of the underlying shares
of Common Stock commencing, on the first anniversary of the Effective
Date;
(b) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the second
anniversary of the Effective Date;
(c) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the third anniversary
of the Effective Date; and
(d) with respect to the balance of the underlying
shares of Common Stock, commencing on the fourth anniversary of the
Effective Date of this Agreement.
The options granted hereunder shall lapse and expire on the
fifth (5th) anniversary of the Effective Date.
If Employee does not purchase the full number of shares he/she
is entitled to purchase in any one year, the right to purchase such shares
carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall automatically
become fully exercisable upon a "change in control of the Corporation," as such
term is defined in Section 12 of the Company's 1993 Stock Option Plan, as
amended.
4. Exercise. This option may be exercised, subject to
the terms and conditions herein by giving ten (10) days' prior written notice
of exercise to the Company, specifying the number of shares to be purchased and
the price to paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock valued at Fair Market Value, as defined in the Company's
1993 Stock Option Plan.
5. Termination of Employment. This option may not be
exercised after Employee ceases to be an Employee of the Company except to the
extent that this option was exercisable at the time of such cessation. This
option may not be exercised after its term expires or is otherwise canceled.
(a) Retirement. If Employee ceases to be an
employee because of Retirement (and not on account of misconduct as
determined below), then Employee may, subject to the restrictions
referred to in Section 7(f) of the Company's 1993 Stock Option Plan,
exercise this option at any time within ninety (90) days after
cessation of employment, but only to the extent that, at the date of
cessation of employment, Employee's right to exercise this option had
accrued pursuant to the terms of this Agreement and had not previously
been exercised.
-2-
<PAGE> 3
(b) Death. If Employee dies while he or she is
an employee, or having ceasing to be an employee, but during the
period during which he or she could have exercised this option under
this Agreement, and has not fully exercised this option, then this
option may be exercised in full, subject to the restrictions referred
to in Section 7(f) of the Plan, at any time within twelve (12) months
after the Employee's death by the executor or administrator of his or
her estate or by any person or persons who have acquired this option
directly from the Employee by bequest or inheritance, but, only to the
extent that, at the date of death, the Employee's right to exercise
this option had accrued and had not been forfeited pursuant to the
terms of this Agreement and had not been previously exercised.
(c) Disability. If Employee ceases active
service by reason of Disability, Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within twelve (12) months after
such cessation of employment, but, only to the extent that, at the
date of such cessation of employment, Employee's right to exercise
this option had accrued pursuant to the terms of this Agreement and
had not previously been exercised.
(d) Misconduct. If Employee resigns or is
discharged or terminated on account of misconduct (as defined in the
Plan), this option shall terminate and shall no longer be exercisable
upon notice of such resignation, discharge or termination. If
Employee resigns or is discharged or terminated on account of
misconduct, neither the Employee nor his/her estate shall be entitled
to exercise this option with respect to any Shares whatsoever after
such resignation, discharge or termination, whether or not after such
resignation, discharge or termination Employee may receive payment
from the Company for vacation pay, for services rendered prior to
resignation, discharge or termination, for services for the day on
which resignation, discharge or termination occurs, for salary in lieu
of notice, or for other benefits. Any determination made by the
Administrator that the Employee resigned or was discharged or
terminated for misconduct shall be binding on Employee.
(e) Other Reasons. If Employee ceases to be an
employee for any reason other than those mentioned above in
subsections (a), (b), (c) or (d), Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within thirty (30) days following
such cessation, discharge or termination, but, only to the extent
that, at the date of cessation, discharge or termination, Employee's
right to exercise this option had accrued pursuant to the terms of
this Agreement and had not previously been exercised.
Employee's service to or employment with the Company shall not
be considered as having been terminated while Employee is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) if the period of such leave does not exceed ninety (90) days, or,
if longer, so long as Employee's right to re-employment with the Company is
guaranteed either by statute or by contract. Where the period of such leave
exceeds ninety (90) days and where Employee's rights to re-employment is not
guaranteed either by
-3-
<PAGE> 4
statute or by contract, Employee's employment will be deemed to have terminated
on the ninety-first (91st) day of such leave.
6. Transferability. During the lifetime of Employee,
this option shall be exercisable only by Employee and shall not be assignable
or transferable. In the event of Employee's death, this option shall not be
transferable by Employee other than by will or the laws of descent and
distribution. Any other attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary of
involuntary, with respect to all or any part of this option or right hereunder,
shall be null and void and, at the Company's option shall cause all of
Employee's rights hereunder to terminate.
7. Securities Act and Other Regulatory Requirements.
This option is not exercisable, in whole or in part, and the Company is not
obligated to sell any share of the Company's Common Stock subject to this
option, if such exercise or sale, in the opinion of counsel for the Company,
would violate the Securities Act of 1933 (or any other federal or state
statutes having similar requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require as
a condition of issuance of any Common Stock under this option that Employee
furnish a written representation that he/she is acquiring the Common Stock for
investment and not with a view to distribution to the public.
Further, the Board of Directors of the Company may decide, in
its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors of the
Company.
8. Successor. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries, executors and administrators.
9. Paragraph Headings. Paragraph headings are for
convenience only and are not part of the contest.
10. Stock Option Plan. This Agreement shall be subject
to all of the provisions of the 1993 Stock Option Plan of the Company, as
amended from time to time, and such provisions are incorporated herein by this
reference.
11. Incentive Stock Option. This option is intended to
qualify as an Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). In the event the $100,000 limit
concerning the exercisability of incentive stock options by an optionee during
any calendar year is exceeded, only the portion of this option that exceeds
that limit shall constitute a nonstatutory stock option and this shall not
cause the terms of this Agreement to cease to apply or be effective.
-4-
<PAGE> 5
12. Construction. In the event of any conflict between
the terms and provisions of this Agreement and the terms and provisions of the
Plan, which are incorporated herein by reference, the terms and provisions of
the Plan shall prevail.
13. Execution. This Agreement is executed as of the date
first written above.
ALPHA MICROSYSTEMS
By: CLARKE E. REYNOLDS
---------------------
Clarke E. Reynolds,
Chairman of the Board
EMPLOYEE:
PHILIP D. SMITH
- -----------------------
Philip D. Smith
-5-
<PAGE> 1
EXHIBIT 10.152
ALPHA MICROSYSTEMS
------------------
AGREEMENT TO GRANT INCENTIVE STOCK OPTION
-----------------------------------------
(pursuant to 1993 EMPLOYEE STOCK OPTION PLAN)
THIS AGREEMENT TO GRANT INCENTIVE STOCK OPTION ("Agreement")
is entered into effective as of April 3, 1995 between Alpha Microsystems (the
"Company") and Michael J. Lowell ("Employee"). Unless otherwise defined
herein, capitalized words used in this Agreement shall have the same meaning as
such terms are defined in the Company's 1993 Employee Stock Option Plan (the
"Plan").
R E C I T A L S
---------------
A. The Company has adopted and the shareholders of the
Company have approved the Plan, which is intended to provide incentive to key
employees of the Company and its subsidiaries, to encourage proprietary
interest in the Company, to encourage employees to remain in the employee of
the Company and its subsidiaries, and to attract new employees with outstanding
qualifications.
B. Pursuant to the terms of the Plan, the Committee
appointed by the Board of the Company to administer the Plan (the "Committee")
has granted to Employee stock options as set forth herein.
C. Employee and the Company execute this Agreement to
reflect the terms of the options which have been granted to employee.
The parties hereto agree as follows:
1. Grant. Pursuant to action taken by the Committee on
April 3, 1995 (the "Effective Date"), the Company irrevocably granted to the
Employee as of the Effective Date the right and option to purchase all or any
part of an aggregate of Forty Thousand (40,000) shares of the Common Stock of
the Company, such number being subject to adjustment as set forth in the Plan,
on the terms and conditions set forth herein.
2. Purchase Price. The exercise price for which the
option may be exercised shall be One and Five-Eighths Dollars ($1- 5/8) per
share.
<PAGE> 2
3. Exercisability. The option granted herein shall
become exercisable in cumulative increments at the following times and in the
following amounts:
(a) with respect to 25% of the underlying shares
of Common Stock commencing, on the first anniversary of the Effective
Date;
(b) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the second
anniversary of the Effective Date;
(c) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the third anniversary
of the Effective Date; and
(d) with respect to the balance of the underlying
shares of Common Stock, commencing on the fourth anniversary of the
Effective Date of this Agreement.
The options granted hereunder shall lapse and expire on the
fifth (5th) anniversary of the Effective Date.
If Employee does not purchase the full number of shares
he/she is entitled to purchase in any one year, the right to purchase such
shares carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall automatically
become fully exercisable upon a "change in control of the Corporation," as such
term is defined in Section 12 of the Company's 1993 Stock Option Plan, as
amended.
4. Exercise. This option may be exercised, subject to
the terms and conditions herein by giving ten (10) days' prior written notice
of exercise to the Company, specifying the number of shares to be purchased and
the price to paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock valued at Fair Market Value, as defined in the Company's
1993 Stock Option Plan.
5. Termination of Employment. This option may not be
exercised after Employee ceases to be an Employee of the Company except to the
extent that this option was exercisable at the time of such cessation. This
option may not be exercised after its term expires or is otherwise canceled.
(a) Retirement. If Employee ceases to be an
employee because of Retirement (and not on account of misconduct as
determined below), then Employee may, subject to the restrictions
referred to in Section 7(f) of the Company's 1993 Stock Option Plan,
exercise this option at any time within ninety (90) days after
cessation of employment, but only to the extent that, at the date of
cessation of employment, Employee's right to exercise this option had
accrued pursuant to the terms of this Agreement and had not previously
been exercised.
-2-
<PAGE> 3
(b) Death. If Employee dies while he or she is
an employee, or having ceasing to be an employee, but during the
period during which he or she could have exercised this option under
this Agreement, and has not fully exercised this option, then this
option may be exercised in full, subject to the restrictions referred
to in Section 7(f) of the Plan, at any time within twelve (12) months
after the Employee's death by the executor or administrator of his or
her estate or by any person or persons who have acquired this option
directly from the Employee by bequest or inheritance, but, only to the
extent that, at the date of death, the Employee's right to exercise
this option had accrued and had not been forfeited pursuant to the
terms of this Agreement and had not been previously exercised.
(c) Disability. If Employee ceases active
service by reason of Disability, Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within twelve (12) months after
such cessation of employment, but, only to the extent that, at the
date of such cessation of employment, Employee's right to exercise
this option had accrued pursuant to the terms of this Agreement and
had not previously been exercised.
(d) Misconduct. If Employee resigns or is
discharged or terminated on account of misconduct (as defined in the
Plan), this option shall terminate and shall no longer be exercisable
upon notice of such resignation, discharge or termination. If
Employee resigns or is discharged or terminated on account of
misconduct, neither the Employee nor his/her estate shall be entitled
to exercise this option with respect to any Shares whatsoever after
such resignation, discharge or termination, whether or not after such
resignation, discharge or termination Employee may receive payment
from the Company for vacation pay, for services rendered prior to
resignation, discharge or termination, for services for the day on
which resignation, discharge or termination occurs, for salary in lieu
of notice, or for other benefits. Any determination made by the
Administrator that the Employee resigned or was discharged or
terminated for misconduct shall be binding on Employee.
(e) Other Reasons. If Employee ceases to be an
employee for any reason other than those mentioned above in
subsections (a), (b), (c) or (d), Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within thirty (30) days following
such cessation, discharge or termination, but, only to the extent
that, at the date of cessation, discharge or termination, Employee's
right to exercise this option had accrued pursuant to the terms of
this Agreement and had not previously been exercised.
Employee's service to or employment with the Company shall not
be considered as having been terminated while Employee is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) if the period of such leave does not exceed ninety (90) days, or,
if longer, so long as Employee's right to re-employment with the Company is
guaranteed either by statute or by contract. Where the period of such leave
exceeds ninety (90) days and where Employee's rights to re-employment is not
guaranteed either by
-3-
<PAGE> 4
statute or by contract, Employee's employment will be deemed to have terminated
on the ninety-first (91st) day of such leave.
6. Transferability. During the lifetime of Employee,
this option shall be exercisable only by Employee and shall not be assignable
or transferable. In the event of Employee's death, this option shall not be
transferable by Employee other than by will or the laws of descent and
distribution. Any other attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary of
involuntary, with respect to all or any part of this option or right hereunder,
shall be null and void and, at the Company's option shall cause all of
Employee's rights hereunder to terminate.
7. Securities Act and Other Regulatory Requirements.
This option is not exercisable, in whole or in part, and the Company is not
obligated to sell any share of the Company's Common Stock subject to this
option, if such exercise or sale, in the opinion of counsel for the Company,
would violate the Securities Act of 1933 (or any other federal or state
statutes having similar requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require as
a condition of issuance of any Common Stock under this option that Employee
furnish a written representation that he/she is acquiring the Common Stock for
investment and not with a view to distribution to the public.
Further, the Board of Directors of the Company may decide, in
its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors of the
Company.
8. Successor. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries, executors and administrators.
9. Paragraph Headings. Paragraph headings are for
convenience only and are not part of the contest.
10. Stock Option Plan. This Agreement shall be subject
to all of the provisions of the 1993 Stock Option Plan of the Company, as
amended from time to time, and such provisions are incorporated herein by this
reference.
11. Incentive Stock Option. This option is intended to
qualify as an Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). In the event the $100,000 limit
concerning the exercisability of incentive stock options by an optionee during
any calendar year is exceeded, only the portion of this option that exceeds
that limit shall constitute a nonstatutory stock option and this shall not
cause the terms of this Agreement to cease to apply or be effective.
-4-
<PAGE> 5
12. Construction. In the event of any conflict between
the terms and provisions of this Agreement and the terms and provisions of the
Plan, which are incorporated herein by reference, the terms and provisions of
the Plan shall prevail.
13. Execution. This Agreement is executed as of the date
first written above.
ALPHA MICROSYSTEMS
By: CLARKE E. REYNOLDS
---------------------
Clarke E. Reynolds,
Chairman of the Board
EMPLOYEE:
MICHAEL J. LOWELL
- ------------------------
Michael J. Lowell
-5-
<PAGE> 1
EXHIBIT 10.153
ALPHA MICROSYSTEMS
------------------
AGREEMENT TO GRANT INCENTIVE STOCK OPTION
-----------------------------------------
(pursuant to 1993 EMPLOYEE STOCK OPTION PLAN)
THIS AGREEMENT TO GRANT INCENTIVE STOCK OPTION ("Agreement")
is entered into effective as of April 3, 1995 between Alpha Microsystems (the
"Company") and Randy Parks ("Employee"). Unless otherwise defined herein,
capitalized words used in this Agreement shall have the same meaning as such
terms are defined in the Company's 1993 Employee Stock Option Plan (the
"Plan").
R E C I T A L S
---------------
A. The Company has adopted and the shareholders of the
Company have approved the Plan, which is intended to provide incentive to key
employees of the Company and its subsidiaries, to encourage proprietary
interest in the Company, to encourage employees to remain in the employee of
the Company and its subsidiaries, and to attract new employees with outstanding
qualifications.
B. Pursuant to the terms of the Plan, the Committee
appointed by the Board of the Company to administer the Plan (the "Committee")
has granted to Employee stock options as set forth herein.
C. Employee and the Company execute this Agreement to
reflect the terms of the options which have been granted to employee.
The parties hereto agree as follows:
1. Grant. Pursuant to action taken by the Committee on
April 3, 1995 (the "Effective Date"), the Company irrevocably granted to the
Employee as of the Effective Date the right and option to purchase all or any
part of an aggregate of Ten Thousand (10,000) shares of the Common Stock of the
Company, such number being subject to adjustment as set forth in the Plan, on
the terms and conditions set forth herein.
2. Purchase Price. The exercise price for which the
option may be exercised shall be One and Five-Eighths Dollars ($1- 5/8) per
share.
<PAGE> 2
3. Exercisability. The option granted herein shall
become exercisable in cumulative increments at the following times and in the
following amounts:
(a) with respect to 25% of the underlying shares
of Common Stock commencing, on the first anniversary of the Effective
Date;
(b) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the second
anniversary of the Effective Date;
(c) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the third anniversary
of the Effective Date; and
(d) with respect to the balance of the underlying
shares of Common Stock, commencing on the fourth anniversary of the
Effective Date of this Agreement.
The options granted hereunder shall lapse and expire on the
fifth (5th) anniversary of the Effective Date.
If Employee does not purchase the full number of shares he/she
is entitled to purchase in any one year, the right to purchase such shares
carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall automatically
become fully exercisable upon a "change in control of the Corporation," as such
term is defined in Section 12 of the Company's 1993 Stock Option Plan, as
amended.
4. Exercise. This option may be exercised, subject to
the terms and conditions herein by giving ten (10) days' prior written notice
of exercise to the Company, specifying the number of shares to be purchased and
the price to paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock valued at Fair Market Value, as defined in the Company's
1993 Stock Option Plan.
5. Termination of Employment. This option may not be
exercised after Employee ceases to be an Employee of the Company except to the
extent that this option was exercisable at the time of such cessation. This
option may not be exercised after its term expires or is otherwise canceled.
(a) Retirement. If Employee ceases to be an
employee because of Retirement (and not on account of misconduct as
determined below), then Employee may, subject to the restrictions
referred to in Section 7(f) of the Company's 1993 Stock Option Plan,
exercise this option at any time within ninety (90) days after
cessation of employment, but only to the extent that, at the date of
cessation of employment, Employee's right to exercise this option had
accrued pursuant to the terms of this Agreement and had not previously
been exercised.
-2-
<PAGE> 3
(b) Death. If Employee dies while he or she is
an employee, or having ceasing to be an employee, but during the
period during which he or she could have exercised this option under
this Agreement, and has not fully exercised this option, then this
option may be exercised in full, subject to the restrictions referred
to in Section 7(f) of the Plan, at any time within twelve (12) months
after the Employee's death by the executor or administrator of his or
her estate or by any person or persons who have acquired this option
directly from the Employee by bequest or inheritance, but, only to the
extent that, at the date of death, the Employee's right to exercise
this option had accrued and had not been forfeited pursuant to the
terms of this Agreement and had not been previously exercised.
(c) Disability. If Employee ceases active
service by reason of Disability, Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within twelve (12) months after
such cessation of employment, but, only to the extent that, at the
date of such cessation of employment, Employee's right to exercise
this option had accrued pursuant to the terms of this Agreement and
had not previously been exercised.
(d) Misconduct. If Employee resigns or is
discharged or terminated on account of misconduct (as defined in the
Plan), this option shall terminate and shall no longer be exercisable
upon notice of such resignation, discharge or termination. If
Employee resigns or is discharged or terminated on account of
misconduct, neither the Employee nor his/her estate shall be entitled
to exercise this option with respect to any Shares whatsoever after
such resignation, discharge or termination, whether or not after such
resignation, discharge or termination Employee may receive payment
from the Company for vacation pay, for services rendered prior to
resignation, discharge or termination, for services for the day on
which resignation, discharge or termination occurs, for salary in lieu
of notice, or for other benefits. Any determination made by the
Administrator that the Employee resigned or was discharged or
terminated for misconduct shall be binding on Employee.
(e) Other Reasons. If Employee ceases to be an
employee for any reason other than those mentioned above in
subsections (a), (b), (c) or (d), Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within thirty (30) days following
such cessation, discharge or termination, but, only to the extent
that, at the date of cessation, discharge or termination, Employee's
right to exercise this option had accrued pursuant to the terms of
this Agreement and had not previously been exercised.
Employee's service to or employment with the Company shall not
be considered as having been terminated while Employee is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) if the period of such leave does not exceed ninety (90) days, or,
if longer, so long as Employee's right to re-employment with the Company is
guaranteed either by statute or by contract. Where the period of such leave
exceeds ninety (90) days and where Employee's rights to re-employment is not
guaranteed either by
-3-
<PAGE> 4
statute or by contract, Employee's employment will be deemed to have terminated
on the ninety-first (91st) day of such leave.
6. Transferability. During the lifetime of Employee,
this option shall be exercisable only by Employee and shall not be assignable
or transferable. In the event of Employee's death, this option shall not be
transferable by Employee other than by will or the laws of descent and
distribution. Any other attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary of
involuntary, with respect to all or any part of this option or right hereunder,
shall be null and void and, at the Company's option shall cause all of
Employee's rights hereunder to terminate.
7. Securities Act and Other Regulatory Requirements.
This option is not exercisable, in whole or in part, and the Company is not
obligated to sell any share of the Company's Common Stock subject to this
option, if such exercise or sale, in the opinion of counsel for the Company,
would violate the Securities Act of 1933 (or any other federal or state
statutes having similar requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require as
a condition of issuance of any Common Stock under this option that Employee
furnish a written representation that he/she is acquiring the Common Stock for
investment and not with a view to distribution to the public.
Further, the Board of Directors of the Company may decide, in
its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors of the
Company.
8. Successor. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries, executors and administrators.
9. Paragraph Headings. Paragraph headings are for
convenience only and are not part of the contest.
10. Stock Option Plan. This Agreement shall be subject
to all of the provisions of the 1993 Stock Option Plan of the Company, as
amended from time to time, and such provisions are incorporated herein by this
reference.
11. Incentive Stock Option. This option is intended to
qualify as an Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). In the event the $100,000 limit
concerning the exercisability of incentive stock options by an optionee during
any calendar year is exceeded, only the portion of this option that exceeds
that limit shall constitute a nonstatutory stock option and this shall not
cause the terms of this Agreement to cease to apply or be effective.
-4-
<PAGE> 5
12. Construction. In the event of any conflict between
the terms and provisions of this Agreement and the terms and provisions of the
Plan, which are incorporated herein by reference, the terms and provisions of
the Plan shall prevail.
13. Execution. This Agreement is executed as of the date
first written above.
ALPHA MICROSYSTEMS
By: CLARKE E. REYNOLDS
---------------------
Clarke E. Reynolds,
Chairman of the Board
EMPLOYEE:
RANDY PARKS
- --------------------
Randy Parks
-5-
<PAGE> 1
EXHIBIT 10.154
ALPHA MICROSYSTEMS
------------------
AGREEMENT TO GRANT INCENTIVE STOCK OPTION
-----------------------------------------
(pursuant to 1993 EMPLOYEE STOCK OPTION PLAN)
THIS AGREEMENT TO GRANT INCENTIVE STOCK OPTION ("Agreement")
is entered into effective as of April 3, 1995 between Alpha Microsystems (the
"Company") and Peggy Denson ("Employee"). Unless otherwise defined herein,
capitalized words used in this Agreement shall have the same meaning as such
terms are defined in the Company's 1993 Employee Stock Option Plan (the
"Plan").
R E C I T A L S
---------------
A. The Company has adopted and the shareholders of the
Company have approved the Plan, which is intended to provide incentive to key
employees of the Company and its subsidiaries, to encourage proprietary
interest in the Company, to encourage employees to remain in the employee of
the Company and its subsidiaries, and to attract new employees with outstanding
qualifications.
B. Pursuant to the terms of the Plan, the Committee
appointed by the Board of the Company to administer the Plan (the "Committee")
has granted to Employee stock options as set forth herein.
C. Employee and the Company execute this Agreement to
reflect the terms of the options which have been granted to employee.
The parties hereto agree as follows:
1. Grant. Pursuant to action taken by the Committee on
April 3, 1995 (the "Effective Date"), the Company irrevocably granted to the
Employee as of the Effective Date the right and option to purchase all or any
part of an aggregate of Ten Thousand (10,000) shares of the Common Stock of the
Company, such number being subject to adjustment as set forth in the Plan, on
the terms and conditions set forth herein.
2. Purchase Price. The exercise price for which the
option may be exercised shall be One and Five-Eighths Dollars ($1- 5/8) per
share.
<PAGE> 2
3. Exercisability. The option granted herein shall
become exercisable in cumulative increments at the following times and in the
following amounts:
(a) with respect to 25% of the underlying shares
of Common Stock commencing, on the first anniversary of the Effective
Date;
(b) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the second
anniversary of the Effective Date;
(c) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the third anniversary
of the Effective Date; and
(d) with respect to the balance of the underlying
shares of Common Stock, commencing on the fourth anniversary of the
Effective Date of this Agreement.
The options granted hereunder shall lapse and expire on the
fifth (5th) anniversary of the Effective Date.
If Employee does not purchase the full number of shares he/she
is entitled to purchase in any one year, the right to purchase such shares
carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall automatically
become fully exercisable upon a "change in control of the Corporation," as such
term is defined in Section 12 of the Company's 1993 Stock Option Plan, as
amended.
4. Exercise. This option may be exercised, subject to
the terms and conditions herein by giving ten (10) days' prior written notice
of exercise to the Company, specifying the number of shares to be purchased and
the price to paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock valued at Fair Market Value, as defined in the Company's
1993 Stock Option Plan.
5. Termination of Employment. This option may not be
exercised after Employee ceases to be an Employee of the Company except to the
extent that this option was exercisable at the time of such cessation. This
option may not be exercised after its term expires or is otherwise canceled.
(a) Retirement. If Employee ceases to be an
employee because of Retirement (and not on account of misconduct as
determined below), then Employee may, subject to the restrictions
referred to in Section 7(f) of the Company's 1993 Stock Option Plan,
exercise this option at any time within ninety (90) days after
cessation of employment, but only to the extent that, at the date of
cessation of employment, Employee's right to exercise this option had
accrued pursuant to the terms of this Agreement and had not previously
been exercised.
-2-
<PAGE> 3
(b) Death. If Employee dies while he or she is
an employee, or having ceasing to be an employee, but during the
period during which he or she could have exercised this option under
this Agreement, and has not fully exercised this option, then this
option may be exercised in full, subject to the restrictions referred
to in Section 7(f) of the Plan, at any time within twelve (12) months
after the Employee's death by the executor or administrator of his or
her estate or by any person or persons who have acquired this option
directly from the Employee by bequest or inheritance, but, only to the
extent that, at the date of death, the Employee's right to exercise
this option had accrued and had not been forfeited pursuant to the
terms of this Agreement and had not been previously exercised.
(c) Disability. If Employee ceases active
service by reason of Disability, Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within twelve (12) months after
such cessation of employment, but, only to the extent that, at the
date of such cessation of employment, Employee's right to exercise
this option had accrued pursuant to the terms of this Agreement and
had not previously been exercised.
(d) Misconduct. If Employee resigns or is
discharged or terminated on account of misconduct (as defined in the
Plan), this option shall terminate and shall no longer be exercisable
upon notice of such resignation, discharge or termination. If
Employee resigns or is discharged or terminated on account of
misconduct, neither the Employee nor his/her estate shall be entitled
to exercise this option with respect to any Shares whatsoever after
such resignation, discharge or termination, whether or not after such
resignation, discharge or termination Employee may receive payment
from the Company for vacation pay, for services rendered prior to
resignation, discharge or termination, for services for the day on
which resignation, discharge or termination occurs, for salary in lieu
of notice, or for other benefits. Any determination made by the
Administrator that the Employee resigned or was discharged or
terminated for misconduct shall be binding on Employee.
(e) Other Reasons. If Employee ceases to be an
employee for any reason other than those mentioned above in
subsections (a), (b), (c) or (d), Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within thirty (30) days following
such cessation, discharge or termination, but, only to the extent
that, at the date of cessation, discharge or termination, Employee's
right to exercise this option had accrued pursuant to the terms of
this Agreement and had not previously been exercised.
Employee's service to or employment with the Company shall not
be considered as having been terminated while Employee is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) if the period of such leave does not exceed ninety (90) days, or,
if longer, so long as Employee's right to re-employment with the Company is
guaranteed either by statute or by contract. Where the period of such leave
exceeds ninety (90) days and where Employee's rights to re-employment is not
guaranteed either by
-3-
<PAGE> 4
statute or by contract, Employee's employment will be deemed to have terminated
on the ninety-first (91st) day of such leave.
6. Transferability. During the lifetime of Employee,
this option shall be exercisable only by Employee and shall not be assignable
or transferable. In the event of Employee's death, this option shall not be
transferable by Employee other than by will or the laws of descent and
distribution. Any other attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary of
involuntary, with respect to all or any part of this option or right hereunder,
shall be null and void and, at the Company's option shall cause all of
Employee's rights hereunder to terminate.
7. Securities Act and Other Regulatory Requirements.
This option is not exercisable, in whole or in part, and the Company is not
obligated to sell any share of the Company's Common Stock subject to this
option, if such exercise or sale, in the opinion of counsel for the Company,
would violate the Securities Act of 1933 (or any other federal or state
statutes having similar requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require as
a condition of issuance of any Common Stock under this option that Employee
furnish a written representation that he/she is acquiring the Common Stock for
investment and not with a view to distribution to the public.
Further, the Board of Directors of the Company may decide, in
its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors of the
Company.
8. Successor. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries, executors and administrators.
9. Paragraph Headings. Paragraph headings are for
convenience only and are not part of the contest.
10. Stock Option Plan. This Agreement shall be subject
to all of the provisions of the 1993 Stock Option Plan of the Company, as
amended from time to time, and such provisions are incorporated herein by this
reference.
11. Incentive Stock Option. This option is intended to
qualify as an Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). In the event the $100,000 limit
concerning the exercisability of incentive stock options by an optionee during
any calendar year is exceeded, only the portion of this option that exceeds
that limit shall constitute a nonstatutory stock option and this shall not
cause the terms of this Agreement to cease to apply or be effective.
-4-
<PAGE> 5
12. Construction. In the event of any conflict between
the terms and provisions of this Agreement and the terms and provisions of the
Plan, which are incorporated herein by reference, the terms and provisions of
the Plan shall prevail.
13. Execution. This Agreement is executed as of the date
first written above.
ALPHA MICROSYSTEMS
By: CLARKE E. REYNOLDS
---------------------
Clarke E. Reynolds,
Chairman of the Board
EMPLOYEE:
PEGGY DENSON
- ------------------
Peggy Denson
-5-
<PAGE> 1
EXHIBIT 10.155
ALPHA MICROSYSTEMS
------------------
AGREEMENT TO GRANT INCENTIVE STOCK OPTION
-----------------------------------------
(pursuant to 1993 EMPLOYEE STOCK OPTION PLAN)
THIS AGREEMENT TO GRANT INCENTIVE STOCK OPTION ("Agreement")
is entered into effective as of May 5, 1995 between Alpha Microsystems (the
"Company") and Douglas J. Tullio ("Employee"). Unless otherwise defined
herein, capitalized words used in this Agreement shall have the same meaning as
such terms are defined in the Company's 1993 Employee Stock Option Plan (the
"Plan").
R E C I T A L S
---------------
A. The Company has adopted and the shareholders of the
Company have approved the Plan, which is intended to provide incentive to key
employees of the Company and its subsidiaries, to encourage proprietary
interest in the Company, to encourage employees to remain in the employee of
the Company and its subsidiaries, and to attract new employees with outstanding
qualifications.
B. Pursuant to the terms of the Plan, the Committee
appointed by the Board of the Company to administer the Plan (the "Committee")
has granted to Employee stock options as set forth herein.
C. Employee and the Company execute this Agreement to
reflect the terms of the options which have been granted to employee.
The parties hereto agree as follows:
1. Grant. Pursuant to action taken by the Committee on
May 5, 1995 (the "Effective Date"), the Company irrevocably granted to the
Employee as of the Effective Date the right and option to purchase all or any
part of an aggregate of Fifteen Thousand (15,000) shares of the Common Stock of
the Company, such number being subject to adjustment as set forth in the Plan,
on the terms and conditions set forth herein.
2. Purchase Price. The exercise price for which the
option may be exercised shall be equal to the last sales price of the Common
Stock on the NASDAQ National Market System on the Effective Date, or if no sale
occurs on such date, the mean between the highest bid and lower asked price as
of the close of business on the Effective Date, which the parties acknowledge
was $.78125 ($25/32).
<PAGE> 2
3. Exercisability. The option granted herein shall
become exercisable in cumulative increments at the following times and in the
following amounts:
(a) with respect to 50% of the underlying shares
of Common Stock commencing, on the first anniversary of the Effective
Date;
(b) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the second
anniversary of the Effective Date; and
(c) with respect to the balance of the underlying
shares of Common Stock, commencing on the third anniversary of the
Effective Date of this Agreement.
The options granted hereunder shall lapse and expire on the
fifth (5th) anniversary of the Effective Date.
If Employee does not purchase the full number of shares he/she
is entitled to purchase in any one year, the right to purchase such shares
carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall automatically
become fully exercisable upon a "change in control of the Corporation," as such
term is defined in Section 12 of the Company's 1993 Stock Option Plan, as
amended.
4. Exercise. This option may be exercised, subject to
the terms and conditions herein by giving ten (10) days' prior written notice
of exercise to the Company, specifying the number of shares to be purchased and
the price to paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock valued at Fair Market Value, as defined in the Company's
1993 Stock Option Plan.
5. Termination of Employment. This option may not be
exercised after Employee ceases to be an Employee of the Company except to the
extent that this option was exercisable at the time of such cessation. This
option may not be exercised after its term expires or is otherwise canceled.
(a) Retirement. If Employee ceases to be an
employee because of Retirement (and not on account of misconduct as
determined below), then Employee may, subject to the restrictions
referred to in Section 7(f) of the Company's 1993 Stock Option Plan,
exercise this option at any time within ninety (90) days after
cessation of employment, but only to the extent that, at the date of
cessation of employment, Employee's right to exercise this option had
accrued pursuant to the terms of this Agreement and had not previously
been exercised.
(b) Death. If Employee dies while he or she is
an employee, or having ceasing to be an employee, but during the
period during which he or she could have exercised this option under
this Agreement, and has not fully exercised this option, then this
option may be exercised in full, subject to the restrictions referred
to in Section 7(f) of
-2-
<PAGE> 3
the Plan, at any time within twelve (12) months after the Employee's
death by the executor or administrator of his or her estate or by any
person or persons who have acquired this option directly from the
Employee by bequest or inheritance, but, only to the extent that, at
the date of death, the Employee's right to exercise this option had
accrued and had not been forfeited pursuant to the terms of this
Agreement and had not been previously exercised.
(c) Disability. If Employee ceases active
service by reason of Disability, Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within twelve (12) months after
such cessation of employment, but, only to the extent that, at the
date of such cessation of employment, Employee's right to exercise
this option had accrued pursuant to the terms of this Agreement and
had not previously been exercised.
(d) Misconduct. If Employee resigns or is
discharged or terminated on account of misconduct (as defined in the
Plan), this option shall terminate and shall no longer be exercisable
upon notice of such resignation, discharge or termination. If
Employee resigns or is discharged or terminated on account of
misconduct, neither the Employee nor his/her estate shall be entitled
to exercise this option with respect to any Shares whatsoever after
such resignation, discharge or termination, whether or not after such
resignation, discharge or termination Employee may receive payment
from the Company for vacation pay, for services rendered prior to
resignation, discharge or termination, for services for the day on
which resignation, discharge or termination occurs, for salary in lieu
of notice, or for other benefits. Any determination made by the
Administrator that the Employee resigned or was discharged or
terminated for misconduct shall be binding on Employee.
(e) Other Reasons. If Employee ceases to be an
employee for any reason other than those mentioned above in
subsections (a), (b), (c) or (d), Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within thirty (30) days following
such cessation, discharge or termination, but, only to the extent
that, at the date of cessation, discharge or termination, Employee's
right to exercise this option had accrued pursuant to the terms of
this Agreement and had not previously been exercised.
Employee's service to or employment with the Company shall not
be considered as having been terminated while Employee is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) if the period of such leave does not exceed ninety (90) days, or,
if longer, so long as Employee's right to re-employment with the Company is
guaranteed either by statute or by contract. Where the period of such leave
exceeds ninety (90) days and where Employee's rights to re-employment is not
guaranteed either by statute or by contract, Employee's employment will be
deemed to have terminated on the ninety-first (91st) day of such leave.
-3-
<PAGE> 4
6. Transferability. During the lifetime of Employee,
this option shall be exercisable only by Employee and shall not be assignable
or transferable. In the event of Employee's death, this option shall not be
transferable by Employee other than by will or the laws of descent and
distribution. Any other attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary of
involuntary, with respect to all or any part of this option or right hereunder,
shall be null and void and, at the Company's option shall cause all of
Employee's rights hereunder to terminate.
7. Securities Act and Other Regulatory Requirements.
This option is not exercisable, in whole or in part, and the Company is not
obligated to sell any share of the Company's Common Stock subject to this
option, if such exercise or sale, in the opinion of counsel for the Company,
would violate the Securities Act of 1933 (or any other federal or state
statutes having similar requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require as
a condition of issuance of any Common Stock under this option that Employee
furnish a written representation that he/she is acquiring the Common Stock for
investment and not with a view to distribution to the public.
Further, the Board of Directors of the Company may decide, in
its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors of the
Company.
8. Successor. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries, executors and administrators.
9. Paragraph Headings. Paragraph headings are for
convenience only and are not part of the contest.
10. Stock Option Plan. This Agreement shall be subject
to all of the provisions of the 1993 Stock Option Plan of the Company, as
amended from time to time, and such provisions are incorporated herein by this
reference.
11. Incentive Stock Option. This option is intended to
qualify as an Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). In the event the $100,000 limit
concerning the exercisability of incentive stock options by an optionee during
any calendar year is exceeded, only the portion of this option that exceeds
that limit shall constitute a nonstatutory stock option and this shall not
cause the terms of this Agreement to cease to apply or be effective.
-4-
<PAGE> 5
12. Construction. In the event of any conflict between
the terms and provisions of this Agreement and the terms and provisions of the
Plan, which are incorporated herein by reference, the terms and provisions of
the Plan shall prevail.
13. Execution. This Agreement is executed as of the date
first written above.
ALPHA MICROSYSTEMS
By: CLARKE E. REYNOLDS
---------------------
Clarke E. Reynolds,
Chairman of the Board
EMPLOYEE:
DOUGLAS J. TULLIO
- ------------------------
Douglas J. Tullio
-5-
<PAGE> 1
EXHIBIT 10.156
ALPHA MICROSYSTEMS
------------------
AGREEMENT TO GRANT INCENTIVE STOCK OPTION
-----------------------------------------
(pursuant to 1993 EMPLOYEE STOCK OPTION PLAN)
THIS AGREEMENT TO GRANT INCENTIVE STOCK OPTION ("Agreement")
is entered into effective as of May 5, 1995 between Alpha Microsystems (the
"Company") and John F. Glade ("Employee"). Unless otherwise defined herein,
capitalized words used in this Agreement shall have the same meaning as such
terms are defined in the Company's 1993 Employee Stock Option Plan (the
"Plan").
R E C I T A L S
---------------
A. The Company has adopted and the shareholders of the
Company have approved the Plan, which is intended to provide incentive to key
employees of the Company and its subsidiaries, to encourage proprietary
interest in the Company, to encourage employees to remain in the employee of
the Company and its subsidiaries, and to attract new employees with outstanding
qualifications.
B. Pursuant to the terms of the Plan, the Committee
appointed by the Board of the Company to administer the Plan (the "Committee")
has granted to Employee stock options as set forth herein.
C. Employee and the Company execute this Agreement to
reflect the terms of the options which have been granted to employee.
The parties hereto agree as follows:
1. Grant. Pursuant to action taken by the Committee on
May 5, 1995 (the "Effective Date"), the Company irrevocably granted to the
Employee as of the Effective Date the right and option to purchase all or any
part of an aggregate of Seven Thousand Five Hundred (7,500) shares of the
Common Stock of the Company, such number being subject to adjustment as set
forth in the Plan, on the terms and conditions set forth herein.
2. Purchase Price. The exercise price for which the
option may be exercised shall be equal to the last sales price of the Common
Stock on the NASDAQ National Market System on the Effective Date, or if no sale
occurs on such date, the mean between the highest bid and lower asked price as
of the close of business on the Effective Date, which the parties acknowledge
was $.78125 ($25/32).
<PAGE> 2
3. Exercisability. The option granted herein shall
become exercisable in cumulative increments at the following times and in the
following amounts:
(a) with respect to 50% of the underlying shares
of Common Stock commencing, on the first anniversary of the Effective
Date;
(b) with respect to an additional 25% of the
underlying shares of Common Stock, commencing on the second
anniversary of the Effective Date; and
(c) with respect to the balance of the underlying
shares of Common Stock, commencing on the third anniversary of the
Effective Date of this Agreement.
The options granted hereunder shall lapse and expire on the
fifth (5th) anniversary of the Effective Date.
If Employee does not purchase the full number of shares he/she
is entitled to purchase in any one year, the right to purchase such shares
carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall automatically
become fully exercisable upon a "change in control of the Corporation," as such
term is defined in Section 12 of the Company's 1993 Stock Option Plan, as
amended.
4. Exercise. This option may be exercised, subject to
the terms and conditions herein by giving ten (10) days' prior written notice
of exercise to the Company, specifying the number of shares to be purchased and
the price to paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock valued at Fair Market Value, as defined in the Company's
1993 Stock Option Plan.
5. Termination of Employment. This option may not be
exercised after Employee ceases to be an Employee of the Company except to the
extent that this option was exercisable at the time of such cessation. This
option may not be exercised after its term expires or is otherwise canceled.
(a) Retirement. If Employee ceases to be an
employee because of Retirement (and not on account of misconduct as
determined below), then Employee may, subject to the restrictions
referred to in Section 7(f) of the Company's 1993 Stock Option Plan,
exercise this option at any time within ninety (90) days after
cessation of employment, but only to the extent that, at the date of
cessation of employment, Employee's right to exercise this option had
accrued pursuant to the terms of this Agreement and had not previously
been exercised.
(b) Death. If Employee dies while he or she is
an employee, or having ceasing to be an employee, but during the
period during which he or she could have exercised this option under
this Agreement, and has not fully exercised this option, then this
option may be exercised in full, subject to the restrictions referred
to in Section 7(f) of
-2-
<PAGE> 3
the Plan, at any time within twelve (12) months after the Employee's
death by the executor or administrator of his or her estate or by any
person or persons who have acquired this option directly from the
Employee by bequest or inheritance, but, only to the extent that, at
the date of death, the Employee's right to exercise this option had
accrued and had not been forfeited pursuant to the terms of this
Agreement and had not been previously exercised.
(c) Disability. If Employee ceases active
service by reason of Disability, Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within twelve (12) months after
such cessation of employment, but, only to the extent that, at the
date of such cessation of employment, Employee's right to exercise
this option had accrued pursuant to the terms of this Agreement and
had not previously been exercised.
(d) Misconduct. If Employee resigns or is
discharged or terminated on account of misconduct (as defined in the
Plan), this option shall terminate and shall no longer be exercisable
upon notice of such resignation, discharge or termination. If
Employee resigns or is discharged or terminated on account of
misconduct, neither the Employee nor his/her estate shall be entitled
to exercise this option with respect to any Shares whatsoever after
such resignation, discharge or termination, whether or not after such
resignation, discharge or termination Employee may receive payment
from the Company for vacation pay, for services rendered prior to
resignation, discharge or termination, for services for the day on
which resignation, discharge or termination occurs, for salary in lieu
of notice, or for other benefits. Any determination made by the
Administrator that the Employee resigned or was discharged or
terminated for misconduct shall be binding on Employee.
(e) Other Reasons. If Employee ceases to be an
employee for any reason other than those mentioned above in
subsections (a), (b), (c) or (d), Employee shall have the right,
subject to the restrictions referred to in Section 7(f) of the Plan,
to exercise this option at any time within thirty (30) days following
such cessation, discharge or termination, but, only to the extent
that, at the date of cessation, discharge or termination, Employee's
right to exercise this option had accrued pursuant to the terms of
this Agreement and had not previously been exercised.
Employee's service to or employment with the Company shall not
be considered as having been terminated while Employee is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) if the period of such leave does not exceed ninety (90) days, or,
if longer, so long as Employee's right to re-employment with the Company is
guaranteed either by statute or by contract. Where the period of such leave
exceeds ninety (90) days and where Employee's rights to re-employment is not
guaranteed either by statute or by contract, Employee's employment will be
deemed to have terminated on the ninety-first (91st) day of such leave.
-3-
<PAGE> 4
6. Transferability. During the lifetime of Employee,
this option shall be exercisable only by Employee and shall not be assignable
or transferable. In the event of Employee's death, this option shall not be
transferable by Employee other than by will or the laws of descent and
distribution. Any other attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary of
involuntary, with respect to all or any part of this option or right hereunder,
shall be null and void and, at the Company's option shall cause all of
Employee's rights hereunder to terminate.
7. Securities Act and Other Regulatory Requirements.
This option is not exercisable, in whole or in part, and the Company is not
obligated to sell any share of the Company's Common Stock subject to this
option, if such exercise or sale, in the opinion of counsel for the Company,
would violate the Securities Act of 1933 (or any other federal or state
statutes having similar requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require as
a condition of issuance of any Common Stock under this option that Employee
furnish a written representation that he/she is acquiring the Common Stock for
investment and not with a view to distribution to the public.
Further, the Board of Directors of the Company may decide, in
its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors of the
Company.
8. Successor. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, beneficiaries, executors and administrators.
9. Paragraph Headings. Paragraph headings are for
convenience only and are not part of the contest.
10. Stock Option Plan. This Agreement shall be subject
to all of the provisions of the 1993 Stock Option Plan of the Company, as
amended from time to time, and such provisions are incorporated herein by this
reference.
11. Incentive Stock Option. This option is intended to
qualify as an Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). In the event the $100,000 limit
concerning the exercisability of incentive stock options by an optionee during
any calendar year is exceeded, only the portion of this option that exceeds
that limit shall constitute a nonstatutory stock option and this shall not
cause the terms of this Agreement to cease to apply or be effective.
-4-
<PAGE> 5
12. Construction. In the event of any conflict between
the terms and provisions of this Agreement and the terms and provisions of the
Plan, which are incorporated herein by reference, the terms and provisions of
the Plan shall prevail.
13. Execution. This Agreement is executed as of the date
first written above.
ALPHA MICROSYSTEMS
By: CLARKE E. REYNOLDS
---------------------
Clarke E. Reynolds,
Chairman of the Board
EMPLOYEE:
JOHN F. GLADE
- ---------------------
John F. Glade
-5-
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0
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