As filed with the Securities and Exchange Commission on May 14, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
STRATUS COMPUTER, INC.
(Exact name of registrant as specified in its charter)
04-2697554
(I.R.S. employer identification no.)
Massachusetts
(State or other jurisdiction of incorporation or organization)
55 Fairbanks Boulevard, Marlborough, MA 01752
(Address of principal executive offices) (Zip Code)
Stock Option Plan (January, 1983)
Non-Qualified Common Stock Option Plan
Employee Stock Purchase Plan
1997 Non-Qualified Common Stock Option Plan
(Full title of plans)
William E. Foster, Chief Executive Officer
Stratus Computer, Inc.
55 Fairbanks Boulevard
Marlborough, MA 01752
(Name and address of agent for service)
(508) 460-2000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount
to be to be price per offering of
registered registered (1) share (2) price (2) registration fee
---------- -------------- --------- --------- ----------------
Common Stock, 5,500,000 $40.9375 $225,156,250 $68,230
$.01 par value shares
(1) Plus such additional number of shares as may be required pursuant to the
Plans in the event of a stock dividend, split-up of shares, recapitalization or
other similar change in the Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee, in
accordance with Rule 457(h)(1), on the basis of the average of the high and low
prices of the Common Stock as reported on the New York Stock Exchange on May 8,
1997.
EXPLANATORY NOTE
This registration statement on Form S-8 covers an additional 1,500,000 shares
of Common Stock, $.01 par value, reserved for issuance under the Company's
Stock Option Plan (January 1983) and Non-Qualified Common Stock Option Plan,
an additional 1,000,000 shares of Common Stock reserved for issuance under
the Company's Employee Stock Purchase Plan, and 3,000,000 shares of Common
Stock reserved for issuance under the Company's 1997 Non-Qualified Common
Stock Option Plan (the aforementioned plans are referred to collectively
herein as the "Plans"). The Company has previously registered an aggregate
of 13,919,600 shares issued or issuable under the Plans (exclusive of the 1997
Non-Qualified Common Stock Option Plan) and the Company's Incentive Stock
Option Plan (now terminated) pursuant to the following registration statements
on Form S-8: 2-88104, 2-89901, 33-2174, 33-11864, 33-28742, 33-67758 and
33-64709.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") (File No. 0-12064) are hereby incorporated by
reference in this Registration Statement:
(a) The Company's annual report on Form 10-K for the year ended
December 29, 1996; and
(b) The Company's quarterly report on Form 10-Q for the quarter
ending March 30, 1997; and
(c) The description of the Company's capital stock that is contained in
the Company's Registration Statements (as amended) on Form 8-A filed with the
Commission on April 27, 1984, December 6, 1990 and April 3, 1995 and any
amendment or report filed by the Company with the Commission under the
Securities Exchange Act of 1934 for the purpose of updating such description.
In addition, all documents filed by the Company after the initial filing
date of this registration statement pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and prior to the filing of a post-effective amendment which indicates that all
shares registered hereunder have been sold or which de-registers all shares then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares registered hereby has been passed upon by
Choate, Hall & Stewart, Boston, Massachusetts. Richard N. Hoehn, a partner of
Choate, Hall & Stewart, is Clerk of the Company.
Item 6. Indemnification of Directors and Officers.
Section 67 of Chapter 156B of the Massachusetts General Laws provides
that a corporation may indemnify its directors and officers to the extent
specified in or authorized by (i) the articles of organization, (ii) a by-law
adopted by the stockholders, or (iii) a vote adopted by the holders of a
majority of the shares of stock entitled to vote on the election of directors.
Such Section further
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provides, however, that no indemnification may be provided with respect to any
matter as to which the officer or director is adjudicated not to have acted in
good faith in the reasonable belief that his action was in the best interest of
the corporation or, to the extent such matter relates to service with respect to
an employee benefit plan, in the best interest of the participants or
beneficiaries of such employee benefit plan.
Article V, Section 2 of the By-laws of the Company provides that every
person who is, or has been, a director or officer of the Company is entitled to
indemnification by the Company to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a
director or officer and against amounts paid or incurred by him in the
settlement thereof.
No indemnification is provided under the By-laws to a director or officer
with respect to any matter as to which he has been finally adjudicated not to
have acted in good faith in the reasonable belief that his action was in the
best interests of the corporation. Nor is indemnification provided to a director
or officer in the event of a settlement involving a payment by the officer or
director unless there has been a determination that such director or officer is
entitled to indemnification under Article V, Section 2 of the By-laws by one of
the following: (i) the court or other body approving the settlement; (ii) vote
of stockholders of the Company; (iii) vote of two-thirds of those directors of
the Company who are not themselves involved in the claim, action, suit or
proceeding, provided that a majority of the directors consists of members not so
involved; or (iv) written opinion of independent counsel.
The Company's By-laws authorize the Company to obtain insurance to cover
its indemnification obligations. The Company currently maintains director and
officer liability insurance for the benefit of its directors and certain of its
officers.
Article 6 of the Articles of Organization of the Company, as amended,
provides that, to the fullest extent permitted by the Massachusetts General
Laws, no director of the Company shall be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
*4.1 Article 4 of the Company's Articles of Organization, as amended.
**4.2 Articles I, II, IV and VII of the Company's Bylaws, as amended.
***4.3 Rights Agreement dated December 4, 1990.
5.1 Opinion of Choate, Hall & Stewart as to validity of shares being
registered.
10.1 The Company's Stock Option Plan (January, 1983) (Restatement Number 6
effective April 23, 1997)
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10.2 The Company's Non-Qualified Common Stock Option Plan (Restatement
Number 5 effective April 23, 1997).
10.3 The Company's Employee Stock Purchase Plan (amended and restated as
of April 23, 1997).
10.4 The Company's 1997 Non-Qualified Common Stock Option Plan (effective
January 13, 1997).
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Choate, Hall & Stewart (included in Exhibit 5.1).
24.1 Power of Attorney (part of page II-6).
- ---------------------------------
* Incorporated by reference to Exhibits 3.1 and 3.1(a) to the Company's Report
on Form 10-K filed with the Commission on March 31, 1997.
** Incorporated by reference to Exhibit 3.2(b) to the Company's Report on Form
10-K filed with the Commission on March 31, 1997.
*** Incorporated by reference to Exhibit 1 to the Registration Statement on Form
8-A filed by the Company with the Commission on December 6, 1990 as
amended by Amendment No. 1 thereto filed with the Commission on December 20,
1990.
Item 9. Undertakings.
(a) The Company hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) that, for the purpose o determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a posteffective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy expressed
in the Securities Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registrations
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Marlborough, Commonwealth of Massachusetts, on May 9,
1997.
Stratus Computer, Inc. (Issuer and Employer)
By: William E. Foster, Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints William E. Foster, Robert E. Donahue and
Eileen Casal, jointly and severally, his true and lawful attorneys-in-fact and
agents with full powers of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below on May 9, 1997 by the following persons in the
capacities indicated.
Name Capacity
/s/ William E. Foster President, Chief Executive Officer
(Principal Executive Officer) and Director
/s/ Robert E. Donahue Senior Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Alexander V. d'Arbeloff Director
/s/ Paul J. Ferri Director
/s/ Robert M. Morrill Director
/s/ Paul J. Severino Director
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INDEX TO EXHBITS
Exhibits Number
*4.1 Article 4 of the Company's Articles of Organization, as amended.
**4.2 Articles I, II, IV and VII of the Company's Bylaws, as amended.
***4.3 Rights Agreement dated December 4, 1990.
5.1 Opinion of Choate, Hall & Stewart as to validity of shares being
registered.
10.1 The Company's Stock Option Plan (January, 1983) (Restatement
Number 6 effective April 23, 1997).
10.2 The Company's Non-Qualified Common Stock Option Plan
(Restatement Number 5 effective April 23, 1997).
10.3 The Company's Employee Stock Purchase Plan (amended and restated as
of April 23, 1997).
10.4 The Company's 1997 Non-Qualified Common Stock Option Plan
(effective January 13, 1997)
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Choate, Hall & Stewart
(included in Exhibit 5.1).
24.1 Power of Attorney (part of page II-6).
- ---------------------------------
* Incorporated by reference to Exhibits 3.1 and 3.1(a) to the Company's Report
on Form 10-K filed with the Commission on March 31, 1997.
** Incorporated by reference to Exhibit 3.2(b) to the Company's Report on Form
10-K filed with the Commission on March 31, 1997.
*** Incorporated by reference to Exhibit 1 to the Registration Statement on Form
8-A filed by the Company with the Commission on December 6, 1990 as
amended by Amendment No. 1 thereto filed with the Commission on December 20,
1990.
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Exhibit 5.1
CHOATE, HALL & STEWART
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
EXCHANGE PLACE
53 STATE STREET
BOSTON, MASSACHUSETTS 02109-2891
TELEPHONE (617) 248-5000
FACSIMILE (617) 248-4000
TELEX 49615860
May 14, 1997
Stratus Computer, Inc.
55 Fairbanks Boulevard
Marlborough, Massachusetts 01752
Ladies and Gentlemen:
This opinion is delivered to you in connection with the Registration
Statement on Form S-8 (the "Registration Statement") to be filed on or about
May 14, 1997 by Stratus Computer, Inc. (the "Company") under the Securities Act
of 1933, as amended, for registration under said Act of 5,500,000 shares of
common stock, $.01 par value (the "Common Stock"), of the Company.
We are familiar with the Company's Articles of Organization, as
amended, its By-Laws, as amended, and the records of its corporate proceedings.
We have also examined such other documents, records and certificates and made
such further investigation as we have deemed necessary for the purposes of this
opinion.
Based upon and subject to the foregoing, we are of the opinion that the
shares of Common Stock to be sold by the Company under its Stock Option Plan
(January, 1983), its Non-Qualified Common Stock Option Plan, its Employee Stock
Purchase Plan, and its 1997 Non-Qualified Common Stock Option Plan, as in effect
on the date hereof, when issued against receipt of the agreed purchase price
therefor, will be legally issued, fully paid and nonassessable.
We understand that this opinion is to be used in connection with the
Registration Statement and consent to the filing of this opinion as an exhibit
to the Registration Statement. We further consent to the reference to this firm
under the heading "Interests of Named Experts and Counsel" in Part II of the
Registration Statement.
Very truly yours,
CHOATE, HALL & STEWART
EXHIBIT 10.1
Restatement #1: Effective October 28, 1986
Restatement #2: Effective February 7, 1989
Restatement #3: Effective October 16, 1990
Restatement #4: Effective January 28, 1992
Restatement #5: Effective August 1, 1995
Restatement #6: Effective April 23, 1997
STRATUS COMPUTER, INC.
STOCK OPTION PLAN (January, 1983)
RESTATEMENT NUMBER SIX
1. Purpose. The purpose of this Plan is to advance the interests of Stratus
Computer, Inc. (the "Company") by providing an opportunity to selected key
employees of the Company and its subsidiaries to purchase stock of the Company
through the exercise of options granted under this Plan. By encouraging such
stock ownership, the Company seeks to attract, retain and motivate employees of
training, experience and ability. It is intended that this purpose will be
effected by the granting of stock options as provided herein.
2. Amendment and Restatement of Prior Plan. This plan continues, in amended and
restated form, the Incentive Stock Option Plan (January, 1983) (the "Incentive
Stock Option Plan"), as previously amended and restated effective October 28,
1986 ("Restatement Number One"), February 7, 1989 ("Restatement Number Two"),
October 16, 1990 ("Restatement Number Three"), January 28, 1992 ("Restatement
Number Four") which Amendment extended the termination date of the Plan until
December 31, 2003 and for purposes of Section 422(b)2 of the Internal Revenue
Code of 1986, as Amended (the "Code"), constitutes a new plan, and August 1,
1995 (Restatement Number 5) which Amendment caused the Plan to comply with the
requirements of Rule 16b-3 promulgated under Section 16 of the Securities
Exchange Act of 1934, as Amended ("Rule 16b-3"). This Stratus Computer, Inc.
Stock Option Plan (January, 1983) Restatement Number Six (the "Plan") effective
April 23, 1997, reflects Amendments to the Plan adopted by the Board of
Directors of the Company (the "Board") on October 22, 1996, the sole purpose
of which was to alter Plan definitions as a result of new rules issued for the
Securities Exchange Act of 1934, as amended, and further reflects amendments
adopted by the Board on January 13, 1997 and approved by the shareholders on
April 23, 1997 to (a) increase the maximum combined aggregate number of shares
reserved for issuance under the Plan by 1,500,000 to 10,880,200 and (b) increase
the maximum aggregate annual limitation on Shares for which options may be
granted to a participant under the Plan from 100,000 to 500,000.
3. Effective Date. The Plan became effective as of January 1, 1983. This
Restatement Number Six of the Plan became effective on April 23, 1997, the date
the last amendment incorporated in this restatement was approved by the
shareholders. To the extent at any time that amendments are made to the Plan for
which shareholder approval is necessary under applicable tax or securities laws
or under the Board action adopting such amendment, options that may be granted
only as a result of such amendments may be granted before such approval, but no
such options may be exercised until such approval is obtained and such options
will be null and void if such approval is not obtained.
4. Stock Subject to the Plan. The shares that may be granted under this Plan
shall not exceed in the aggregate 10,880,200 shares of the $.01 par value Common
Stock of the Company (the "Shares"); provided, however, that such maximum number
of Shares shall be reduced by the number of any Shares that are made subject to
options (which have not subsequently expired or been terminated before exercise)
pursuant to the Stratus Computer, Inc. Non-Qualified Common Stock Option Plan.
Any Shares subject to an option under this Plan which for any reason expires or
is terminated unexercised as to such Shares may again be the subject of an
option under the Plan. In addition, any Shares purchased by an optionee upon
exercise of an option under this Plan that are subsequently repurchased by the
Company pursuant to the terms of such option may again be the subject of an
option under the Plan. The Shares delivered upon exercise of options under this
Plan may, in whole or in part, be either authorized but unissued Shares or
issued Shares reacquired by the Company.
5. Administration. This Plan shall be administered by a committee (the "Stock
Option Committee") consisting of three (3) or more members of the Board who are
not employees of the Company, none of whom shall be eligible to participate in
the Plan and all of whom shall be "disinterested persons" as defined under Rule
16b-3. The Stock Option Committee shall be appointed by and shall serve at the
pleasure of the Board. Subject to the provisions of this Plan, said Committee
shall have full power to construe and interpret the Plan and to establish, amend
and rescind rules and regulations for its administration.
6. Eligible Employees. Options may be granted to such key employees of the
Company or of any of its subsidiaries, including members of the Board who are
also employees of the Company or any of its subsidiaries, as are selected by the
Stock Option Committee.
7. Duration of the Plan. This Plan shall terminate on December 31, 2003, unless
terminated earlier pursuant to Paragraph 13 hereafter, and no options may be
granted thereafter.
8. Restrictions on Incentive Options. Incentive options (but not nonqualified
options) granted under this Plan shall be subject to the following restrictions:
(a) Limitation on Number of Shares. (i) With respect to incentive options
granted before January 1, 1987, the aggregate fair market value, determined
as of the date the incentive option is granted, of the Shares for which an
employee may be granted incentive option in any calendar year shall not exceed
$100,000 plus any "unused limit carryovers," as that term is defined under
Section 422A(c)(4) of the Code (as in effect immediately prior to its amendment
by the Tax Reform Act of 1986), available in such year; or (ii) for incentive
options granted after December 31, 1986, the aggregate fair market value,
determined as of the date the incentive option is granted, of the Shares with
respect to which incentive options are exercisable for the first time by an
employee during any calendar year shall not exceed $100,000. In the event that
an employee is eligible to participate in any other incentive stock option plans
of the Company or any of its subsidiaries which are also intended to comply with
the provisions of Section 422 of the Code, the applicable annual limitation
shall apply to the aggregate number of Shares for which incentive stock options
may be granted under all such plans.
(b) 10% Stockholder. If any employee to whom an incentive option is granted
pursuant to the provisions of the Plan is on the date of grant the owner of
stock (as determined under Section 424(d) of the Code) possessing more than 10%
of the total combined voting power of all classes of stock of the Company or any
of its subsidiaries, then the following special provisions shall be applicable
to the incentive option granted to such individual:
(i) The option price per Share subject to such incentive option shall not be
less than 110% of the fair market value of one Share on the date of
grant; and The incentive option shall not have a term in excess of
five (5) years from the date of grant.
(c) Effect of Other Outstanding Incentive Options. No incentive option granted
before January 1, 1987 hereunder shall be exercisable by any optionee while
there is "outstanding," within the meaning of Section 422A(c)(7) of the Code (as
in effect immediately prior to its amendment by the Tax Reform Act of 1986), any
incentive option or other incentive stock option which was granted to the
optionee before the granting of the incentive option under this Plan and which
permits the optionee to purchase stock in (i) the Company, (ii) a corporation
which (at the time of the granting of the incentive option under this Plan) is
a parent or subsidiary of the Company, or (iii) a predecessor corporation of any
of such corporations.
9. Terms and Conditions of Options. Options granted under this Plan shall be
evidenced by stock option agreements in such form and not inconsistent with the
Plan as the Stock Option Committee shall approve from time to time, which
agreements shall evidence the following terms and conditions:
(a) Price. Subject to the condition of subparagraph (b)(i) of Paragraph 8, if
applicable, with respect to each incentive option, the purchase price per Share
of stock payable upon the exercise of each option granted hereunder shall be not
less than 100% of the fair market value of the stock on the day the option is
granted. With respect to each nonqualified option, the purchase price per Share
payable upon the exercise of each option granted hereunder shall be determined
by the Stock Option Committee at the time the option is granted and shall not be
less than 50% of the fair market value of one Share on the date of grant.
(b) Number of Shares. Each option agreement shall specify the number of Shares
to which it pertains.
(c) Limitation on Number of Shares. The maximum number of shares for which any
one participant may be granted non-qualified options in any calendar year under
this Plan shall not exceed 500,000 shares.
(d) Exercise of Options. Subject to the conditions on incentive options of
subparagraph (b)(ii) and (c) of Paragraph 8, if applicable, each option shall be
exercisable for the full amount or for any part thereof and at such intervals or
in such installments as the Stock Option Committee may determine at the time it
grants such option; provided, however, that no option shall be exercisable with
respect to any Shares later than ten (10) years after the date of the grant of
such option.
(e) Notice of Exercise and Payment. An option shall be exercisable only by
delivery of a written notice to the Stock Option Committee, any member of the
Committee, the Company's Treasurer, or any other officer of the Company
designated by the Committee to accept such notices on its behalf, specifying the
number of Shares for which it is exercised. If said Shares are not at the time
effectively registered under the Securities Act of 1933, as amended, the
optionee shall include with such notice a letter, in form and substance
satisfactory to the Company, confirming that the Shares are being purchased for
the optionee's own account for investment and not with a view to distribution.
Payment shall be made in full at the time of delivery to the optionee of a
certificate or certificates covering the number of Shares for which the option
was exercised. Payment shall be made (i) by cash or check, (ii) if permitted by
the Stock Option Committee, by delivery and assignment to the Company of Shares
of Company stock having a fair market value (as determined by the Stock Option
Committee) equal to the option price, (iii) [only with respect to optionees who
are officers or directors of the Company (or its affiliates) who, by reason of
their relationship to the Company, would be subject to Section 16 of the
Securities Exchange Act of 1934, as amended in connection with their acquisition
or disposition of Common Stock of the Company (a "Section 16 Person")], if
permitted by the Stock Option Committee, by promissory note, or (iv) by a
combination of (i), (ii) and (iii) (if applicable). The value of the Company
stock for such purpose shall be its fair market value as of the date the option
is exercised, as determined in accordance with procedures to be established by
the Stock Option Committee.
(f) Withholding Taxes; Delivery of Shares. The Company's obligation to deliver
Shares of Common Stock upon exercise of a nonqualified option, in whole or in
part, shall be subject to the optionee's satisfaction of all applicable federal,
state and local income and employment tax withholding obligations. The optionee
may satisfy the obligation, in whole or in part, by electing to have the Company
withhold Shares of Common Stock having a value equal to the amount required to
be withheld. The value of Shares to be withheld shall be based on the fair
market value of the Shares on the date the amount of tax to be withheld is to be
determined (the "Tax Date"). The optionee's election to have Shares withheld for
this purpose will be subject to the following restrictions: (1) the election
must be made prior to the Tax Date, (2) the election must be irrevocable, (3)
the election will be subject to the right of the Committee to disapprove the
election, and (4) if a participant is a Section 16 Person, such election must
comply in all respects with the requirements of Rule 16b-3.
(g) Non-Transferability. No option shall be transferable by the optionee
otherwise than by will or the laws of descent or distribution, and each option
shall be exercisable during his lifetime only by him.
(h) Termination of Options. Each option shall terminate and may no longer be
exercised if the optionee ceases for any reason to be a employee of the Company,
or its parent or a subsidiary, except that:
(i) if the optionee's employment shall have terminated for any reason other than
cause, disability (as defined below) or death, he may at any time within a
period of thirty (30) days after such termination of employment exercise his
option to the extent that the option was exercisable by him on the date of
termination of his employment;
(ii) if the optionee's employment shall have been terminated because of
disability within the meaning of Section 22(e)(3) of the Code, with respect to
incentive options granted to the optionee, the optionee may, at any time within
a period of one (1) year after such termination of employment, and with respect
to nonqualified options granted to the optionee, the optionee may, at any time
within a period of one year and one day after such termination of employment,
exercise his option to the extent that the option was exercisable by him on the
date of termination of his employment; and
(iii) if the optionee dies at a time when the option was exercisable by him,
then his estate, personal representative or beneficiary to whom it has been
transferred pursuant to paragraph 9(g) hereof may exercise the option to the
extent the optionee might have exercised it at the time of his death; (a) at any
time within a period of six (6) months following his death if the optionee was
not an employee at the time of his death, or, (b) in the event his employment
with the Company is terminated by his death, one (1) year following such
termination of employment. In no case, however, may an option be exercised to
any extent by anyone after the date of expiration of the option.
(i) Rights as Shareholder. The optionee shall have no rights as a shareholder
with respect to any Shares covered by his option until the date of issuance of a
stock certificate to him for such Shares.
10. Stock Dividends; Stock Splits; Stock Combinations; Recapitalizations.
Appropriate adjustment shall be made in the maximum number of Shares of Common
Stock subject to the Plan and in the number, kind, and option price of Shares
covered by outstanding options granted hereunder to give effect to any stock
dividends or other distribution (which exceeds five percent of the total number
of Shares of Common Stock outstanding at the close of business on the date fixed
for the determination of stockholders entitled to receive such stock dividend or
distribution), stock splits, stock combinations, recapitalizations and other
similar changes in the capital structure of the Company after the effective date
of the Plan.
11. Merger; Sale of Assets; Dissolution. In the event of a change of the Common
Stock resulting from a merger or similar reorganization as to which the Company
is the surviving corporation, the number and kind of Shares which thereafter may
be optioned and sold under this Plan and the number and kind of Shares then
subject to options granted hereunder and the price per share thereof shall be
appropriately adjusted in such manner as the Stock Option Committee may deem
equitable to prevent substantial dilution or enlargement of the rights available
or granted hereunder. Except as otherwise determined by the Board, a merger or
a similar reorganization which the Company does not survive, or a sale of
all or substantially all of the assets of the Company, shall cause every
option outstanding hereunder to terminate, to the extent not then exercised,
unless any surviving entity agrees to assume the obligations hereunder.
12.Definitions.
(a) The term "key employees" means those executive, administrative, operational
or managerial employees who are determined by the Stock Option Committee to be
eligible for options under this Plan.
(b) The term "option", unless otherwise indicated, means either an incentive
option or a nonqualified option. The term "options" refers to both incentive
options or nonqualified options.
(c) The term "optionee" means a key employee to whom an option is granted under
this Plan.
(d) The term "parent" shall have, for purposes of this Plan, the meaning
ascribed to it under Section 424(e) of the Code.
(e) The term "subsidiary" shall, for purposes of this Plan, have the meaning
ascribed to it under Section 424(f) of the Code.
13. Termination or Amendment of Plan. The Board may at any time terminate this
Plan or make such changes in or additions to the Plan as it deems advisable
without further action on the part of the shareholders of the Company, provided:
(a) that no such termination or amendment shall adversely affect or impair any
then outstanding option without the consent of the optionee holding such option;
and
(b) that any such amendment which:
(i) increases the maximum number of Shares subject to this Plan
(subject to the provisions of Section 10),
(ii) changes the class of persons eligible to participate in this Plan,
or
(iii) materially increases the benefits accruing to participants under
this Plan;
shall be subject to approval by the shareholders of the Company within one (1)
year from the effective date of such amendment and shall be null and void if
such approval is not obtained.
EXHIBIT 10.2
Restatement #3 Effective: October 16, 1990 & January 28, 1992
Restatement #4 Effective: August 1, 1995
Restatement #5 Effective: April 23, 1997
STRATUS COMPUTER, INC.
NON-QUALIFIED COMMON STOCK OPTION PLAN
RESTATEMENT NUMBER FIVE
1. Purpose. The purpose of this Plan is to advance the interests of Stratus
Computer, Inc. (the "Company") by providing an opportunity to selected employees
and directors of the Company and its subsidiaries (including foreign
subsidiaries) to purchase common stock of the Company through the exercise of
options granted under this Plan. By encouraging such stock ownership, the
Company seeks to attract, retain and motivate employees and directors of
experience and ability. It is intended that this purpose will be effected by the
granting of non-qualified stock options as provided herein.
2. Amendment and Restatement of Prior Plan. The Stratus Computer, Inc.
Non-qualified Stock Option Plan initially adopted on November 27, 1984 (the
"Plan") continues as previously amended and restated effective October 16, 1990
("Restatement Number 2"), January 28, 1992 ("Restatement Number 3") to extend
the termination date of the Plan until December 31, 2004, and August 1, 1995
(Restatement Number 4) to cause the Plan to comply with the requirements of Rule
16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as
Amended ("Rule 16b-3"). This Restatement Number Five of the Plan, effective
April 23, 1997, reflects Amendments to the Plan adopted by the Board of
Directors of the Company (the "Board") on October 22, 1996, the sole purpose of
which as to alter Plan definitions as a result of new rules issued for the
Securities Act of 1934, as amended and further reflects amendments adopted
by the Board on December 17, 1996 and January 13, 1997, and approved by the
shareholders on April 23, 1997 to (a) increase the number of shares for which
options are to be granted to outside Directors from 6,000 to 8,000 upon new
appointment and from 3,000 to 4,000 annually thereafter; (b) increase the
maximum combined aggregate number of shares reserved for issuance under
the Plan by 1,500,000 to 10,880,200, and (c) increase the maximum aggregate
annual limitation on shares for which options may be granted to a participant
under the Plan from 100,000 to 500,000.
3. Effective Date. The Plan originally became effective as of November 27,
1984. This restatement of the Plan became effective on April 23, 1997, the date
the last amendment incorporated in this restatement was approved by the
shareholders.
4. Stock Subject to the Plan. The number of shares that may be granted under
this Plan shall not exceed in the aggregate 10,880,200 shares of the Common
Stock, $.01 par value, of the Company ("the "Shares"); provided, however, that
such maximum number of Shares shall be reduced by the number of any Shares that
are made subject to options (which have not subsequently expired or been
terminated before exercise) pursuant to the Stratus Computer, Inc. Stock Option
Plan (January 1983). Any Shares subject to an option which for any reason
expires or is terminated unexercised as to such Shares may again be the subject
of an option under the Plan. In addition any Shares purchased by an optionee
upon exercise of an option under this Plan that are subsequently repurchased by
the Company pursuant to the terms of such option may again be the subject of an
option under the Plan. The Shares delivered upon exercise of options under this
Plan may, in whole or in part, be either authorized but unissued Shares or
issued Shares reacquired by the Company.
5. Administration. This Plan shall be administered by a committee consisting
of two (2) or more members of the Board of Directors of the Company (the
"Board"), all of whom are "disinterested persons" as defined under Rule 16b-3
(the "Committee"). Subject to the provisions of this Plan, the Committee shall
have full power to construe and interpret the Plan and to establish, amend and
rescind rules and regulations for its administration. Any decisions made with
respect thereto shall be final and binding on the Company, the optionee and all
other persons.
6. Eligible Participants. Options may be granted to such employees and directors
of the Company or of any of its subsidiaries as are selected by the Committee.
7. Options Granted to Outside Directors. The provisions of this paragraph 7
govern the granting and terms of options for nonemployee members of the Board
("Outside Directors"). These provisions supersede all other provisions of the
Plan to the extent such other provisions are inconsistent with this Paragraph 7.
For purposes of this Paragraph 7, "Shares" shall mean the total number of Shares
available under the Plan as such number may be affected by stock splits or
combinations, stock dividends, and similar recapitalizations.
(a) any options granted to an Outside Director shall have a term of ten (10)
years and shall be immediately exercisable in full or in part.
(b) The following vesting and repurchase provisions shall be imposed upon any
Shares purchased by an Outside Director upon exercise of any option granted
under the Plan:
(i) The number of "Vested Shares" subject to the option shall be determined as
follows: Six and on quarter percent (6.25%) of the Shares subject to the option
shall become Vested Shares at the end of each consecutive three-month period
measured from the effective date of the option agreement, so long as the
Director continues to perform services for the Company, until the fourth
anniversary of such effective date at which time one hundred percent (100%) of
such Shares will be Vested Shares. If the Director's performance of services for
the Company ceases by reason of death or disability (as determined by the
Committee), an additional thirty percent (30%) of such Shares shall become
Vested Shares (or, if more than seventy percent (70%) of such Shares had
previously become Vested Shares, the balance of such Shares shall become Vested
Shares). If, at the time the Outside Director ceases to perform services for
the Company or any of its subsidiaries, the Outside Director owns Shares
acquired pursuant to the option that are not Vested Shares, the Company shall
have the right, but not the obligation, to repurchase such nonvested Shares
for a purchase price equal to the option price per share at which the Outside
Director acquired such Shares. All Shares issued upon exercise of such an
option will bear an appropriate legend which describes this restriction.
(ii) Upon notice from the Company of exercise of its repurchase rights described
in this paragraph 7(d), certificates for the Shares to be repurchased shall be
transferred by the holder to the Company against payment by the Company of the
purchase price. If the Company shall fail to exercise its repurchase rights
within thirty (30) days after being notified of the Outside Director's cessation
of services or sixty (60) days after the acquisition of Shares pursuant to such
option, whichever occurs later, the repurchase rights of this paragraph with
respect to such Shares shall terminate.
(iii) No Shares subject to repurchase rights pursuant to the provisions of this
paragraph 7(d) shall be transferred unless the transferee acknowledges to the
Company in writing that such Shares are subject to such rights.
(iv) If the holder of Shares subject to such repurchase rights fails to comply
with any of the provisions of this paragraph, the Company, at its election and
in addition to its other remedies, may suspend the right to receive dividends on
such Shares, or may refuse to register on its books any transfer of such Shares
or otherwise to recognize any transfer or change of ownership of such Shares,
until the provisions of this paragraph are complied with to the satisfaction of
the Company.
(v) The Company may, at its election, cause the certificate or certificates for
any Shares issued pursuant to the option, so long as such Shares are subject to
the right of repurchase by the Company pursuant to this paragraph, to be held in
escrow by an agent chosen by the Company, which escrow agent may be, without
limitation, an officer of the Company or the stock transfer agent of the
Company. The escrow agent shall furnish the registered holder of the Shares
represented by such escrowed certificate(s) a written agreement to deliver, free
of escrow, (i) a certificate or certificates for any such Shares that are Vested
Shares and (ii) amounts equal to the purchase price paid for any such Shares
repurchased by the Company pursuant to this paragraph.
(c) Each Outside Director shall be granted an annual stock option award of 4,000
shares at the fair market value of the Company's stock on the date of each
annual shareholder meeting and each new Outside Director shall be awarded a
onetime stock option grant of 8,000 shares at the fair market value of such
Company's stock on the date he or she first joins the Board.
8. Duration of the Plan. This Plan shall terminate on December 31, 2004,
unless terminated earlier pursuant to Paragraph 11 hereof, and no options may be
granted thereafter.
9. Terms and Conditions of Options. Subject to the provisions of Paragraph 7
concerning options granted to Outside Directors, options granted under this Plan
shall be evidenced by stock option agreements in such form and not inconsistent
with the Plan as the Committee shall approve from time to time, which agreements
shall evidence the following terms and conditions:
(a) Price. Each option agreement shall specify the purchase price per share of
stock payable upon the exercise of the option granted thereunder, which price
shall not be less than 50% of the fair market value of one share on the date of
grant in the case of options granted to individuals whose transactions in
Company stock could subject the individual to suit under Section 16(b) of the
Securities Exchange Act of 1934 ("Section 16 Persons").
(b) Number of Shares. Each option agreement shall specify the number of
Shares to which it pertains.
(c) Limitation on Number of Shares. The maximum number of shares for which any
one participant may be granted options in any calendar year shall not exceed
500,000 shares.
(d) Exercise of Options. Except as provided in Paragraph 7 each option shall
be exercisable for the full amount or for any part thereof and at such intervals
or in such installments as is specified in the option agreement pertaining
thereto;
provided, however, that no option shall be exercisable with respect to any
shares later than ten (10) years after the date of grant of such option.
(e) Notice of Exercise and Payment. Each option hereunder shall be exercisable
only by delivery of a written notice to the Company's Treasurer or any other
officer of the Company designated by the Committee to accept such notices on its
behalf, specifying the number of Shares for which it is exercised. If said
Shares are not at that time effectively registered under the Securities Act of
1933, as amended, the optionee shall include with such notice a letter, in form
and substance satisfactory to the Company, confirming that the Shares are being
purchased for the optionee's own account for investment and not with a view to
distribution. Payment shall be made in full at the time the option is exercised.
Payment shall be made (i) by cash or check, (ii) if permitted by the Committee,
by delivery and assignment to the Company of Shares of Company stock having a
fair market value (as determined by the Committee) equal to the option price,
(iii) only with respect to optionees who are Section 16 Persons, and if
permitted by the Committee, by promissory note, or (iv) by a combination of (i),
(ii) and (iii) (if applicable).
(f) Withholding Taxes; Delivery of Shares. The Company's obligation to deliver
Shares of Common Stock upon exercise of the option, in whole or in part, shall
be subject to the optionee's satisfaction of all applicable federal, state and
local income and employment tax withholding obligations. The optionee may
satisfy the obligation, in whole or in part, by electing to have the Company
withhold Shares of Common Stock having a value equal to the amount required to
be withheld. The value of Shares to be withheld shall be based on the fair
market value of the Shares on the date the amount of tax to be withheld is to be
determined (the "Tax Date"). The optionee's election to have Shares withheld for
this purpose will be subject to the following restrictions: (1) the election
must be made prior to the Tax Date, (2) the election must be irrevocable, (3)
the election will be subject to the right of the Committee to disapprove the
election, and (4) if a participant is a Section 16 Person, such election must
comply in all respects with the requirements of Rule 16b-3.
(g) Termination of Options. Each option shall terminate and may no longer be
exercised if the optionee ceases for any reason to be an employee or director of
the Company or any of its subsidiaries, subject to the following provisions:
(i) if the optionee's employment or service as a director shall have been
terminated for any reason other than cause, death or disability, the optionee
may at any time within a period of thirty (30) days after such termination of
employment or service as a director, if and to the extent permitted by the
option agreement, exercise the option to the extent it was exercisable on the
date of termination of the optionee's employment or service as a director;
(ii) if the optionee's employment or service as a director shall have been
terminated because of disability within the meaning of Section 22(e) (3) of the
Internal Revenue Code of 1986, as amended (the "Code"), the optionee may at any
time within a period not longer than one (1) year and one day after such
termination of employment or service as a director, if and to the extent
permitted by the option agreement, exercise the option to the extent that the
option was exercisable on the date of termination of the optionee's employment
or service as a director; and
(iii) if the optionee dies at a time when he might have exercised the option,
then his estate, personal representative or beneficiary to whom it has been
transferred pursuant to Paragraph 8(i) hereof may at any time within a period
not longer than one (1) year after the optionee's death, if and to the extent
permitted by the option agreement, exercise the option to the extent the
optionee might have exercised it at the time of this death;
provided, however, that no option may be exercised to any extent by
anyone after the date of expiration of the option.
(h) Rights as Shareholder. The optionee shall have no rights as a shareholder
with respect to any Shares covered by his option until the purchase thereof.
(i) Non-Transferability. No option shall be transferable by the optionee
otherwise than by will or the laws of descent or distribution, and each option
shall be exercisable during his lifetime only by him.
(j) Repurchase of Shares by the Company. Subject to the provisions in Paragraph
7, any Shares purchased by an optionee upon exercise of an option may in the
discretion of the Committee be subject to repurchase by the Company if and to
the extent specifically set forth in the option agreement pursuant to which the
Shares were purchased.
9. Stock Dividends; Stock Splits; Stock Combinations; Recapitalizations.
Appropriate adjustment shall be made in the maximum number of Shares of Common
Stock subject to the Plan and to the number of Shares of Common Stock fixed in
Section 7(c) above, to give effect to any stock dividends, stock splits, stock
combinations, recapitalizations and other similar changes in the capital
structure of the Company. Appropriate adjustment shall be made in the number,
kind, and option price of Shares covered by any outstanding option hereunder to
give effect to any stock dividends, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the
Company after the date such option is granted.
10. Merger; Sales of Assets; Dissolution. In the event of a change of the Common
Stock resulting from a merger or similar reorganization as to which the Company
is the surviving corporation, the number and kind of Shares which thereafter may
be optioned and sold under the Plan and the number and kind of Shares then
subject to options granted hereunder and the price per share thereof shall be
appropriately adjusted in such manner as the Board may deem equitable to prevent
substantial dilution or enlargement of the rights available or granted
hereunder. Except as otherwise determined by the Board of Directors, a merger or
a similar reorganization which the company does not survive, or a sale of all or
substantially all of the assets of the Company, shall cause every option
outstanding hereunder to terminate, to the extent not then exercised, unless any
surviving entity agrees to assume the obligations hereunder.
11. Termination or Amendment of Plan. The Board may at any time terminate
the Plan or make such changes in or additions to the Plan as it deems advisable
without further action on the part of the Shareholders of the Company provided:
(a) that no such termination or amendment shall adversely affect or
impair any then outstanding option without the consent of the optionee holding
such option;
(b) that any such amendment which:
(i) increases the maximum number of Shares subject to the
Plan (subject to the provisions of Section 9);
(ii) changes the class of person eligible to participate in
the Plan; or
(iii) materially increases the benefits accruing to
participants under the Plan
shall be subject to approval by the shareholders of the Company within
one (1) year from the effective date of such amendment and shall be null and
void if such approval is not obtained; and
(c) that Section 7(c) of the Plan may not be amended or modified
more than once in any six-month period.
EXHIBIT 10.3
STRATUS COMPUTER, INC.
EMPLOYEE STOCK PURCHASE PLAN
Amended and Restated Effective as of April 23, 1997
1. PURPOSE. The purpose of this Employee Stock Purchase Plan (the "Plan") is to
provide employees of Stratus Computer, Inc. (the "Company"), and its
subsidiaries, who wish to become shareholders of the Company an opportunity to
purchase Common Stock of the Company (the "Shares"). The Plan is intended to
qualify as an "employee stock purchase plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended (the "Code").
2. ELIGIBLE EMPLOYEES. Subject to provisions of Sections 7, 8 and 9 below, any
individual who is in the full-time employment (as defined below) of the Company,
or any of its subsidiaries (as defined in Section 424(f) of the Code) the
employees of which are designated by the Board of Directors as eligible to
participate in the Plan, is eligible to participate in any Offering of Shares
(as defined in Section 3 below) made by the Company hereunder. Regular Full-time
or Regular Part-time employment shall include all employees whose customary
employment is:
(a) in excess of twenty (20) hours per week, and
(b) more than five (5) months in the relevant calendar year,
in the calendar year during which said Offering Date occurs or in the
calendar year immediately preceding such year.
3. OFFERING DATES. From time to time, the Company, by action of the Board of
Directors, will grant rights to purchase Shares to employees eligible to
participate in the Plan pursuant to one or more offerings (each of which is an
"Offering") on a date or series of dates (each of which is an "Offering Date")
designated for this purpose by the Board of Directors.
4. PRICES. The price per share for each grant of rights hereunder shall be
the lesser of:
(a) eighty-five percent (85%) of the fair market value of a Share
on the Offering Date on which such right was granted; or
(b) eighty-five percent (85%) of the fair market value of a Share
on the date such right is exercised.
At its discretion, the Board of Directors may determine a higher price
for a grant of rights.
5. EXERCISE OF RIGHTS AND METHOD OF PAYMENT.
(a) Rights granted under the Plan will be exercisable periodically
on specified dates as determined by the Board of Directors.
(b) The method of payment for Shares purchased upon exercise of rights
granted hereunder shall be through regular payroll deductions or by lump sum
cash payment, or both, as determined by the Board of Directors; provided,
however, that payment through regular payroll deductions may in no event
commence before the date on which a prospectus (or, if permitted by the Code, an
Information Statement) with respect to the Offering of the Shares covered by the
Plan is provided to each participating employee. No interest shall be paid upon
payroll deductions unless specifically provided for by the Board of Directors.
(c) Any payments received by the Company from a participating employee
and not utilized for the purchase of Shares upon exercise of a right granted
hereunder shall be promptly returned to such employee by the Company after
termination of the right to which the payment relates.
6. TERM OF RIGHTS. Rights granted on any Offering Date shall be exercisable upon
the expiration of such period ("Offering Period") as shall be determined by the
Board of Directors when it authorizes the Offering, provided that such Offering
Period shall in no event be longer than twenty-seven (27) months.
7. SHARES SUBJECT TO THE PLAN. No more than four million one hundred thousand
(4,100,000) Shares may be sold pursuant to rights granted under the Plan.
Appropriate adjustments in the above figure, in the number of Shares covered by
outstanding rights granted hereunder, in the exercise price of the rights and in
the maximum number of Shares which an employee may purchase (pursuant to Section
9 below) shall be made to give effect to any mergers, consolidations,
reorganizations, recapitalizations, stock splits, stock dividends or other
relevant changes in the capitalization of the Company occurring after the
effective date of the Plan, provided that no fractional Shares shall be subject
to a right and each right shall be adjusted downward to the nearest full Share.
Any agreement of merger or consolidation will include provisions for protection
of the then existing rights of participating employees under the Plan. Either
authorized and unissued Shares or issued Shares heretofore or hereafter
reacquired by the Company may be made subject to rights under the Plan. If for
any reason any right under the Plan terminates in whole or in part, Shares
subject to such terminated right may again be subjected to a right under the
Plan.
8. LIMITATIONS ON GRANTS
(a) No employee shall be granted a right hereunder if such employee,
immediately after the right is granted, would own stock or rights to purchase
stock possessing five percent (5%) or more of the total combined voting power or
value of
all classes of stock of the Company, or of any subsidiary, computed in
accordance with Sections 423(b)(3) and 424(d) of the Code.
(b) No employee shall be granted a right which permits his right to
purchase shares under all employee stock purchase plans of the Company and its
subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) (or such other maximum as may be prescribed from time to time by the
Code) of the fair market value of such Shares (determined at the time such right
is granted) for each calendar year in which such right is outstanding at any
time in accordance with the provisions of Section 423(b)(8) of the Code.
(c) No right granted to any participating employee under a single
Offering shall cover more shares than may be purchased at an exercise price
equal to that percentage of the employee's annual rate of compensation on the
date the employee elects to participate in the Offering as determined by the
Board of Directors from time to time.
9. LIMIT ON PARTICIPATION. Participation in an Offering shall be limited
to eligible employees who elect to participate in such Offering in the manner,
and within the time limitation, established by the Board of Directors when it
authorizes the Offering.
10. CANCELLATION OF ELECTION TO PARTICIPATE. An employee who has elected to
participate in an Offering may cancel such election (unless such employee shall
have waived this cancellation right in accordance with procedures established by
the Board of Directors) as to all (but not part) of the rights granted under
such Offering by giving written notice of such cancellation to the Company
before the expiration of the Offering Period. Any amounts paid by the employee
for the Shares or withheld for the purchase of Shares from the employeeOs
compensation through payroll deductions shall be paid to the employee, without
interest, upon such cancellation.
11. TERMINATION OF EMPLOYMENT. Upon termination of employment for any reason,
including the death of the employee, before the date on which any rights granted
under the Plan are exercisable, all such rights shall immediately terminate and
amounts paid by the employee for the Shares or withheld for the purchase of
Shares from the employee's compensation through payroll deductions shall be paid
to the employee or to the employee's estate, without interest.
12. EMPLOYEE'S RIGHTS AS SHAREHOLDERS. No participating employee shall have any
rights as a shareholder in the Shares covered by a right granted hereunder until
such rights have been exercised, full payment has been made for the
corresponding Shares and the Share certificates are actually issued.
13. RIGHTS NOT TRANSFERABLE. Rights under the Plan are not assignable or
transferable by a participating employee and are exercisable only by the
employee.
14. TERMINATION OR AMENDMENT OF PLAN
The Board of Directors may at any time terminate or amend this Plan
without notice and without further action on the part of shareholders of the
Company, provided:
(a) that no such termination or amendment shall adversely affect
the then existing rights of any participating employee;
(b) that any such amendment which:
(i) increases the number of Shares subject to the Plan (subject
to the provisions of Section 7);
(ii) changes the class of persons eligible to participate
under the Plan; or
(iii) materially increases the benefits accruing to participants
under the Plan
shall be subject to approval of the shareholders of the Company.
15. EFFECTIVE DATE AND APPROVALS. The Plan was originally adopted by the Board
of Directors on November 15, 1983, became effective on December 31, 1983, and
was approved by the shareholders of the Company on May 22, 1984. The Purchase
Plan originally provided for the reservation of 200,000 shares of Common Stock
for issuance upon the exercise of the right to purchase such shares which was
increased by Board of Director and Stockholder approvals on March 26, 1985, and
May 29, 1985, respectively, with an amendment to 700,000 shares of Common Stock.
On December 13, 1988, and February 7, 1989, respectively, the Board of Directors
adopted, subject to stockholder approval, a Restatement of the Employee Stock
Purchase Plan increasing the number of shares available for purchase by
1,000,000 shares, to a total of 1,700,000 shares and extending its term for an
additional five (5) years to and including December 31, 1994. These changes were
approved by the stockholders on April 25, 1989. An amendment to the Purchase
Plan was adopted by the Board of Directors on January 29, 1991, and approved by
the stockholders on April 23, 1991, increasing the number of shares available
for issuance under the Plan by 1,000,000 to 2,700,000. The Board of Directors
adopted an amendment on January 25, 1994, extending the term of the Plan by an
additional ten (10) years through December 31, 2004. This amendment was approved
by the stockholders on April 19, 1994. An amendment to the Plan adopted by the
Board of Directors on January 31, 1995, and approved by the stockholders on
April 25, 1995, increased the number of shares available for issuance under the
Plan by 400,000 to 3,100,000. An amendment to the Purchase Plan was adopted by
the Board of Directors on August 1, 1995, to ensure that the plan administrators
were "disinterested persons" for purposes of Section 16(b)(3) of the Exchange
Act. On October 22, 1996 the Board of Directors adopted an Amendment to the Plan
allowing officers that withdraw from an offering to participate in the next
offering without waiting six (6) months, in compliance with the new Rules for
the Exchange Act. On January 13, 1997, the Board of Directors approved an
amendment to increase the aggregate number of shares that may be issued under
the Plan by 1,000,000 to 4,100,000, subject to stockholder approval. This
Amendment was approved by the stockholders on April 23, 1997. This restatement
of the Plan became effective on April 23, 1997, the date it was adopted by the
stockholders.
The Company's obligation to offer, sell and deliver its Shares
under the Plan is subject to the approval of any governmental authority required
in connection with the authorized issuance or sale of such Shares and is further
subject to the Company receiving the opinion of its counsel that all applicable
securities laws have been complied with.
16. TERM OF PLAN. No rights shall be granted under the Plan after
December 31, 2004.
17. ADMINISTRATION OF THE PLAN. The Board of Directors or any committee or
person(s) to whom it delegates its authority (the "Administrator") shall
administer, interpret and apply all provisions of the Plan. The Administrator
may waive such provisions of the Plan as it deems necessary to meet special
circumstances not anticipated or covered expressly by the Plan. Nothing
contained in this Section shall be deemed to authorize the Administrator to
alter or administer the provisions of the Plan in a manner inconsistent with the
provisions of Section 423 of the Code.
EXHIBIT 10.4
STRATUS COMPUTER, INC.
1997 NON-QUALIFIED COMMON STOCK OPTION PLAN
1. Purpose. The purpose of this Plan is to advance the interests of Stratus
Computer, Inc. (the "Company") by providing an opportunity to selected employees
and consultants of the Company and its subsidiaries (including foreign
subsidiaries) to purchase common stock of the Company through the exercise of
options granted under this Plan. By encouraging such stock ownership, the
Company seeks to attract, retain and motivate employees of experience and
ability. It is intended that this purpose will be effected by the granting of
non-qualified stock options as provided herein.
2. Effective Date. The Plan became effective as of January 13, 1997.
3. Stock Subject to the Plan. The number of shares that may be granted under
this Plan shall not exceed in the aggregate 3,000,000 shares of the Common
Stock, $.01 par value, of the Company ("the "Shares").
Any Shares subject to an option which for any reason expires or is terminated
unexercised as to such Shares may again be the subject of an option under the
Plan. In addition any Shares purchased by an optionee upon exercise of an option
under this Plan that are subsequently repurchased by the Company pursuant to the
terms of such option may again be the subject of an option under the Plan. The
Shares delivered upon exercise of options under this Plan may, in whole or in
part, be either authorized but unissued Shares or issued Shares reacquired by
the Company.
4. Administration. This Plan shall be administered by a committee consisting of
two (2) or more members of the Board of Directors of the Company (the "Board"),
all of whom are "non-employee directors" as defined under Section 16 of the
Securities Exchange Act of 1934 (the "Committee"). Subject to the provisions of
this Plan, the Committee shall have full power to construe and interpret the
Plan and to establish, amend and rescind rules and regulations for its
administration. Any decisions made with respect thereto shall be final and
binding on the Company, the optionee and all other persons.
5. Eligible Participants. Options may be granted to such employees of or
consultants to the Company or any of its subsidiaries as are selected by the
Committee.
6. Duration of the Plan. This Plan shall terminate on December 31, 2006,
unless terminated earlier pursuant to Paragraph 10 hereof, and no options may be
granted thereafter.
7. Terms and Conditions of Options. Options granted under this Plan shall be
evidenced by stock option agreements in such form and not inconsistent with the
Plan as the Committee shall approve from time to time, which agreements shall
evidence the following terms and conditions:
(a) Price. Each option agreement shall specify the purchase price per
share of stock payable upon the exercise of the option granted thereunder.
(b) Number of Shares. Each option agreement shall specify the number of
Shares to which it pertains.
(c) Exercise of Options. Each option shall be exercisable for the full amount or
for any part thereof and at such intervals or in such installments as is
specified in the option agreement pertaining thereto; provided, however, that no
option shall be exercisable with respect to any shares later than ten (10) years
after the date of grant of such option.
(d) Notice of Exercise and Payment. Each option hereunder shall be exercisable
only by delivery of a written notice to the Company's Treasurer or any other
officer of the Company designated by the Committee to accept such notices on its
behalf, specifying the number of Shares for which it is exercised. If said
Shares are not at that time effectively registered under the Securities Act of
1933, as amended, the optionee shall include with such notice a letter, in form
and substance satisfactory to the Company, confirming that the Shares are being
purchased for the optionee's own account for investment and not with a view to
distribution. Payment shall be made in full at the time the option is exercised.
Payment shall be made (i) by cash or check, (ii) if permitted by the Committee,
by delivery and assignment to the Company of Shares of Company stock having a
fair market value (as determined by the Committee) equal to the option price,
(iii) if permitted by the Committee, by promissory note, or (iv) by a
combination of (i), (ii) and (iii) (if applicable).
(e) Withholding Taxes; Delivery of Shares. The Company's obligation to deliver
Shares of Common Stock upon exercise of the option, in whole or in part, shall
be subject to the optionee's satisfaction of all applicable federal, state and
local income and employment tax withholding obligations. The optionee may
satisfy the obligation, in whole or in part, by electing to have the Company
withhold Shares of Common Stock having a value equal to the amount required to
be withheld. The value of Shares to be withheld shall be based on the fair
market value of the Shares on the date the amount of tax to be withheld is to be
determined (the "Tax Date"). The optionee's election to have Shares withheld for
this purpose will be subject to the following restrictions: (1) the election
must be made prior to the Tax Date, (2) the election must be irrevocable, and
(3) the election will be subject to the right of the Committee to disapprove the
election.
(f) Termination of Options. Each option shall terminate and may no longer be
exercised if the optionee ceases for any reason to be an employee of or
consultant to the Company or any of its subsidiaries, subject to the following
provisions:
(i) if the optionee's employment shall have been terminated for any reason other
than cause, death or disability, the optionee may at any time within a period of
thirty (30) days after such termination of employment, if and to the extent
permitted by the option agreement, exercise the option to the extent it was
exercisable on the date of termination of the optionee's employment;
(ii) if the optionee's employment shall have been terminated because of
disability within the meaning of Section 22(e) (3) of the Internal Revenue Code
of 1986, as amended (the "Code"), the optionee may at any time within a period
not longer than one (1) year and one day after such termination of employment,
if and to the extent permitted by the option agreement, exercise the option to
the extent that the option was exercisable on the date of termination of the
optionee's employment;
(iii) if the optionee dies at a time when he might have exercised the option,
then his estate, personal representative or beneficiary to whom it has been
transferred pursuant to Paragraph 7(h) hereof may at any time within a period
not longer than one (1) year after the optionee's death, if and to the extent
permitted by the option agreement, exercise the option to the extent the
optionee might have exercised it at the time of this death; and
(iv) if the optionee's consulting engagement shall have been
terminated, the optionee may thereafter exercise the option to the extent
permitted by the option agreement;
provided, however, that no option may be exercised to any extent by
anyone after the date of expiration of the option.
(g) Rights as Shareholder. The optionee shall have no rights as a shareholder
with respect to any Shares covered by his option until the purchase thereof.
(h) Non-Transferability. No option shall be transferable by the optionee
otherwise than by will or the laws of descent or distribution, and each option
shall be exercisable during his lifetime only by him.
(i) Repurchase of Shares by the Company. Any Shares purchased by an optionee
upon exercise of an option may in the discretion of the Committee be subject to
repurchase by the Company if and to the extent specifically set forth in the
option agreement pursuant to which the Shares were purchased.
8. Stock Dividends; Stock Splits; Stock Combinations; Recapitalizations.
Appropriate adjustment shall be made in the maximum number of Shares of Common
Stock subject to the Plan, to give effect to any stock dividends, stock splits,
stock combinations, recapitalizations and other similar changes in the capital
structure of the Company. Appropriate adjustment shall be made in the number,
kind, and option price of Shares covered by any outstanding option hereunder to
give effect to any stock dividends, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the
Company after the date such option is granted.
9. Merger; Sales of Assets; Dissolution. In the event of a change of the Common
Stock resulting from a merger or similar reorganization as to which the Company
is the surviving corporation, the number and kind of Shares which thereafter may
be optioned and sold under the Plan and the number and kind of Shares then
subject to options granted hereunder and the price per share thereof shall be
appropriately adjusted in such manner as the Board may deem equitable to prevent
substantial dilution or enlargement of the rights available or granted
hereunder. Except as otherwise determined by the Board of Directors, a merger or
a similar reorganization which the company does not survive, or a sale of all or
substantially all of the assets of the Company, shall cause every option
outstanding hereunder to terminate, to the extent not then exercised, unless any
surviving entity agrees to assume the obligations hereunder.
10. Termination or Amendment of Plan. The Board may at any time terminate the
Plan or make such changes in or additions to the Plan as it deems advisable,
provided that no such termination or amendment shall adversely affect or impair
any then outstanding option without the consent of the optionee holding such
option.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) for the registration of 5,500,000 shares of common stock
pertaining to the Stock Option Plan (January, 1983), Non-Qualified Common Stock
Option Plan, Employee Stock Purchase Plan, and 1997 Non-Qualified Common Stock
Option Plan of Stratus Computer, Inc. of our report dated January 21, 1997 with
respect to the consolidated financial statements of Stratus Computer, Inc.
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 29, 1996, and the related financial statement schedule included
therein, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
May 12, 1997
