Executone Information Systems, Inc. 1984 Employee Stock Purchase Plan
As filed with the Securities and Exchange Commission on January 31, 1995.
Registration No. 33-
=========================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________________
EXECUTONE INFORMATION SYSTEMS, INC.
(Exact name of issuer as specified in its charter)
Virginia 86-0449210
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
478 Wheelers Farms Road
Milford, Connecticut 06460
(Address of principal executive offices) (Zip Code)
___________________________
EXECUTONE INFORMATION SYSTEMS, INC.
1984 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
_______________________
ALAN KESSMAN
Chairman of the Board of Directors, President, and Chief Executive Officer
EXECUTONE Information Systems, Inc.
478 Wheelers Farms Road
Milford, Connecticut 06460
(Name and address of agent for service)
(203) 876-7600
(Telephone number, including area code, of agent for service)
________________________
Copy to:
Thurston R. Moore, Esq.
Hunton & Williams
Riverfront Plaza
East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
_____________________________
The securities covered by this Registration Statement are to be issued from
time to time after the effective date of this Registration Statement.
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
___________________________________________________________
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price (1) Fee
<S> <C> <C> <C> <C>
Common Stock 1,000,000 $ 3.56 $ 3,560,000 $ 1,227.49
___________________________________________________________
(1) Solely for the purpose of calculating the registration fee, the price
per share of Common Stock has been estimated in accordance with Rule
457(h). The price per share of the common stock offered under the
EXECUTONE Information Systems, Inc. 1984 Employee Stock Purchase
Plan has been estimated to be $ 3.56, the average of the high and low sale
prices reported on January 26, 1995.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
EXECUTONE Information Systems, Inc. (the "Company") hereby
incorporates by reference in this Registration Statement the following
documents previously filed with the Securities and Exchange Commission:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, filed pursuant to Section 13 of the Securities
Exchange Act of 1934 ("Exchange Act"); and
(b) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1994, June 30, 1994, and September 30, 1994,
filed pursuant to Section 13 of the Exchange Act; and
(c) The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A filed pursuant to Section
12(g) of the Exchange Act.
All reports and definitive proxy or information statements filed
pursuant to Sections 13, 14, or 15(d) of the 1934 Act subsequent to the date
of this Registration Statement shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
date of filing of such documents until such time as there shall have been
filed a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities remaining unsold
at the time of such amendment.
The financial statements and schedules incorporated by reference in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firms
as experts in giving said reports.
Item 4. Description of Securities
Not Applicable
<PAGE>
Item 5. Interests of Named Experts and Counsel
The legality of the Common Stock being registered has been
passed upon by Hunton & Williams. A partner of Hunton & Williams is
a director of the registrant and beneficially owns 92,235 shares of the
Common Stock.
Item 6. Indemnification of Directors and Officers
The Virginia Stock Corporation Act permits, and the registrant's
Bylaws require, indemnification of the registrant's directors and officers
in a variety of circumstances, which may include indemnification for
liabilities under the Securities Act. Under sections 13.1-697 and 13.1-
702 of the Virginia Stock Corporation Act, a Virginia corporation
generally is authorized to indemnify its directors and officers in civil or
criminal actions if they acted in good faith and believed their conduct to
be in the best interests of the corporation and, in the case of criminal
actions, had no reasonable cause to believe that the conduct was
unlawful. The registrant's Bylaws require indemnification of directors and
officers with respect to certain liabilities, expenses and other amounts
imposed upon them by reason of having been a director or officer, except
in the case of willful misconduct or a knowing violation of criminal law.
In addition, the registrant carries insurance on behalf of directors,
officers, employees or agents that may cover liabilities under the
Securities Act. As permitted by the Virginia Stock Corporation Act, the
registrant's Bylaws provide that in any proceeding brought by a
stockholder of the registrant in the right of the registrant or brought by or
on behalf of stockholders of the registrant, no director or officer of the
registrant shall be liable to the registrant or its stockholders for monetary
damages with respect to any transaction, occurrence or course of
conduct, whether prior or subsequent to the effective date of such
Bylaws, except for liability resulting from such person's having engaged
in willful misconduct or a knowing violation of the criminal law or any
federal or state securities law. Sections 13.1-696 to -704 of the Virginia
Stock Corporation Act are hereby incorporated herein by reference.
Item 7. Exemption from Registration Claimed
Not Applicable
Item 8. Exhibits
4(a) 1984 Employee Stock Purchase Plan (Incorporated by reference
to the Registrant's Registration Statement on Form S-8, File No.
33-23294).
4(b) Summary of Employee Stock Purchase Plan dated June 23,
1994.
5 Opinion of Hunton & Williams as to the legality of the securities
being registered.
24 Consent of Arthur Andersen & Co.
25 Power of Attorney. (See signature pages)
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement (i) to include any
prospectus required by Section 10(a) (3) of the 1933 Act, (ii) to reflect in
the prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration Statement, and (iii)
to include any material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any material
change to such information in the Registration Statement, including (but
not limited to) any addition or deletion of a managing underwriter;
provided, however, that paragraphs (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
undersigned Registrant pursuant to Section 13 or Section 15(d) of the
1934 Act that are incorporated by reference in the Registration
Statement; (2) that, for the purpose of determining any liability under the
1933 Act each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by
means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offerings.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of
the Registrant's annual report pursuant to section 13(a) or section 15(d)
of the 1934 Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the 1934 Act)
that is incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
issuer certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the County of New Haven, and the State of
Connecticut, on this 30th day of January, 1995.
EXECUTONE INFORMATION
SYSTEMS, INC.
By: Alan Kessman
Alan Kessman, Chairman
of the Board of Directors,
President and
Chief Executive Officer
POWER OF ATTORNEY
The undersigned directors of EXECUTONE Information Systems,
Inc., a Virginia corporation, do hereby constitute and appoint Alan
Kessman and Barbara C. Anderson, and each of them, their lawful
attorney and agent, with power and authority to do any and all acts and
things and to execute any and all instruments which said attorney and
agent determines may be necessary or advisable or required to enable
said corporation to comply with the Securities Act of 1933, as amended,
and any rules or regulations or requirements of the Securities and
Exchange Commission in connection with this Registration Statement.
Without limiting the generality of the foregoing power and authority, the
powers granted include the power and authority to sign the names of the
undersigned directors to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to
this Registration Statement, and to any and all instruments or documents
filed as part of or in conjunction with this Registration Statement or
amendments or supplements thereto, and each of the undersigned
hereby ratifies and confirms all that said attorney and agent shall do or
cause to be done by virtue hereof. This Power of Attorney may be
signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed
this Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
Alan Kessman Chairman of the Board January 30, 1995
(Alan Kessman) of Directors, President
and Chief Executive Officer
(Principal Executive Officer)
Stanley M. Blau Vice Chairman of the January 30, 1995
(Stanley M. Blau) Board of Directors
A. R. Guarascio Vice President, Finance January 30, 1995
(Anthony R. Guarascio) and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Thurston R. Moore Director January 30, 1995
(Thurston R. Moore)
Richard S. Rosenbloom Director January 30, 1995
(Richard S. Rosenbloom)
Director __________
(William R. Smart)
Director __________
(William J. Spencer)
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
EXECUTONE INFORMATION SYSTEMS, INC.
<PAGE>
EXECUTONE INFORMATION SYSTEMS, INC.
________________________________
SUMMARY OF EMPLOYEE STOCK PURCHASE PLAN
DATED JUNE 23, 1994
This document constitutes a prospectus covering securities that
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"). Under the EXECUTONE Information Systems, Inc.
Employee Stock Purchase Plan (the "Purchase Plan"), 1,750,000 shares
of the Common Stock, $.01 par value, of EXECUTONE Information
Systems, Inc. are reserved for purchase by eligible employees of the
Company and its designated subsidiaries. This summary sets forth
information concerning the Purchase Plan and will be distributed to
participating employees pursuant to the Securities Act.
General Information
The Purchase Plan was adopted by the Company's Board of
Directors on December 17, 1984 and approved by the shareholders of
the Company on April 19, 1985. Amendments to increase the number of
shares issuable under the Purchase Plan were adopted by the
shareholders of the Company on July 7, 1988, June 20, 1990,
September 17, 1991, and June 23, 1994. A total of 2,750,000 shares of
Common Stock currently are reserved for issuance under the Purchase
Plan. The purpose of the Purchase Plan is to provide eligible employees
of the Company and designated subsidiaries of the Company with an
opportunity to purchase Common Stock of the Company through payroll
deductions. As of the date of this Prospectus, approximately 2,400
employees of the Company were eligible to participate in the Purchase
Plan, and approximately 265 were participants.
The Purchase Plan, and the right of participants to make
purchases thereunder, is intended to satisfy the requirements of Sections
421 and 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). See "FEDERAL INCOME TAX CONSEQUENCES". The
Purchase Plan is not a qualified deferred compensation plan under
Section 401(a) of the Code and is not subject to the provisions of the
Employee Retirement Income Security Act of 1974.
<PAGE>
Administration
The Purchase Plan is administered by a committee appointed by
the Board of Directors (the "Committee"). The Committee is currently the
Compensation Committee of the Board of Directors whose members are
William J. Spencer, Thurston R. Moore, William R. Smart and Richard S.
Rosenbloom. Committee members serve at the pleasure of the Board of
Directors, and there is no fixed term for membership on the Committee.
The Company anticipates that the members of the Committee ordinarily
will be "disinterested" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). All questions of interpretation or application of the Purchase Plan
are determined in the sole discretion of the Committee, and such
decisions are final and binding upon all participants. No charges for
administrative or other costs may be made against the payroll deductions
of a participant in the Purchase Plan. Members of the Board of Directors
or the Committee receive no additional compensation for their services
in connection with the administration of the Purchase Plan.
Who May Participate
Any person who is a full-time employee of the Company or a
designated subsidiary on the first day of an offering period and who is
customarily employed for at least twenty hours per week and more than
three months in a calendar year is eligible to participate in the Purchase
Plan. See "Variations by the Committee" below. Members of the
Committee are not eligible to participate in the Purchase Plan while they
serve on the Committee or during any other period if such participation
would jeopardize their status as "disinterested" within the meaning of
Rule 16b-3.
Offering Dates
The Company intends, but is not obligated, to grant options under
the Purchase Plan during the semi-annual offering periods. Subject to
that limitation, each offering period is to be of six month's duration,
commencing on January 1 and July 1 of each year. In the event of
dissolution, liquidation, merger or sale of substantially all of the assets
of the Company, the offering period will terminate immediately prior to the
consummation of such action unless otherwise provided by the
Committee.
<PAGE>
Exhibit 4(b)
How the Plan Works
Eligible employees become participants in the Purchase Plan by
delivering to the Company's Stock Plan Administrator, prior to the first
day of the applicable offering period (the "Offering Date") and prior to any
earlier deadlines established by the Stock Plan Administrator, a
subscription agreement authorizing payroll deductions. In its discretion,
the Committee may set a later time for filing the subscription agreement.
An employee who becomes eligible to participate in the Purchase Plan
after the commencement of an offering period may not participate in the
Purchase Plan until the commencement of the next offering. See
"Variations by the Committee" below.
The purchase price per share at which shares are sold under the
Purchase Plan is the lower of (i) 85% of the fair market value of a share
of Common Stock on the Offering Date or (ii) 85% of the fair market value
of a share of Common Stock on the last day of the offering period (the
"Exercise Date"). The fair market value of the Common Stock on a given
date shall be the closing price on the NASDAQ National Market System
as reported in the Wall Street Journal (or, if not so reported, as otherwise
reported by the NASDAQ National Market System on such date).
Payment of Purchase Price; Payroll Deductions
The purchase price of the shares is accumulated by payroll
deductions over the offering period. The amount deducted may not
exceed 10% of a participant's compensation during the offering period.
Compensation means the gross amount of wages, including bonuses and
commissions, or salary payable to a participant in each regular payroll
period, including any increase or decrease during the offering period.
Compensation is determined before giving effect to any "401(k)" election
that a participant may have made.
Effective with the offering period beginning July 1, 1991, no
participant may subscribe for or purchase more than 1,000 shares of
Common Stock in any one offering period. A participant may discontinue
his participation in the Purchase Plan, and may decrease, but not
increase, the rate of payroll deductions at any time during the offering
period by completing and filing with the Company a new authorization for
payroll deduction, which change shall be effective as soon as practicable
after the Company's receipt of a new authorization. Payroll deductions
<PAGE>
Exhibit 4(b)
shall commence on the first payday following the Offering Date and shall
continue at the same rate until the Exercise Date unless sooner
terminated or decreased as provided in the Purchase Plan.
All payroll deductions are credited to the participant's account
under the Purchase Plan and are deposited with the general funds of the
Company. To the extent that a participant's payroll deductions exceed
the amount required to purchase the shares subject to option, such
excess will be credited to the participant's account for the following
offering period or, if the participant does not continue to participate in the
Purchase Plan, will be refunded to the participant without interest. All
payroll deductions received or held by the Company may be used by the
Company for any corporate purpose.
Purchase of Stock; Exercise of Option
Upon execution of a subscription agreement to participate in the
Purchase Plan, a participant is entitled to have an option granted to him.
The number of shares placed under option to a participant in an offering
period is determined by dividing the total amount of the participant's
payroll deductions accumulated during that offering period by the option
price, subject to the 1,000-share limit per participant and the limit on
payroll deductions. See "Payment of Purchase Price; Payroll
Deductions" for limitations on payroll deductions. Unless the employee's
participation is discontinued, his option for the purchase of shares will be
exercised automatically on the Exercise Date at the applicable price.
See "Withdrawal from the Purchase Plan".
Notwithstanding the foregoing, no participant shall be permitted to
subscribe for shares under the Purchase Plan, if, immediately after the
grant of the option, the participant would own, directly or indirectly (under
the attribution rules of Section 425(d) of the Code), 5% or more of the
total combined voting power or value of all classes of stock of the
Company or its subsidiaries (including stock which may be purchased
through subscriptions under the Purchase Plan or pursuant to any other
options). In addition, no participant may be granted an option which
would permit the participant to acquire under the Purchase Plan more
than $25,000 worth of stock (determined at the fair market value of the
shares on the Offering Date) in any calendar year. Furthermore, if the
total number of shares which would otherwise be issued upon the
exercise of options exceeds the number of shares then available under
<PAGE>
Exhibit 4(b)
the Purchase Plan, a pro rata allocation of shares remaining shall be
made in as equitable a manner as is practicable. Delivery of shares
acquired under the Purchase Plan will be made by the Company, in
accordance with each participant's instructions, as promptly as
practicable after the Exercise Date of each offering. Shares issued to a
participant may be registered in the name of the participant or in the
name of the participant and his spouse.
Transfers of Shares Purchased
Effective with the Offering Period commencing January 1, 1991,
no shares purchased pursuant to the Purchase Plan may be sold or
transferred prior to one year following the Exercise Date with respect to
such shares; provided, however, that transfers that do not constitute a
change in beneficial ownership of the shares (e.g., transfer into a
broker's name for the account of the participant) and transfers by will or
the laws of descent and distribution will be permitted during the one-year
holding period.
Withdrawal from the Plan
While each participant in the Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest in a given offering period may be terminated in whole, but not in
part, by the participant's signing and delivering to the Company, at least
three business days before the Exercise Date, a notice of withdrawal
from the Purchase Plan. In the event of withdrawal, all of the payroll
deductions credited to the participant's account will be paid to him as
soon as practicable after receipt of his notice of withdrawal, and no
further payroll deductions will be made from the participant's salary or
wages during the offering period.
A withdrawal of accumulated payroll deductions for a given
offering automatically terminates the participant's interest in that offering
period. The Purchase Plan provides an option to purchase Common
Stock, and that option may or may not be exercised. By executing the
subscription agreement, the employee does not become obligated to
make the stock purchase; rather, the subscription agreement is merely
an election by the employee to have an option granted to him. Unless
the employee's participation is discontinued, the option for the purchase
of shares will be exercised automatically as of the Exercise Date, and the
<PAGE>
Exhibit 4(b)
maximum number of whole shares subject to option will be purchased for
the employee at the applicable price. A participant's withdrawal from an
offering does not have any effect upon such participant's eligibility to
participate in subsequent offerings under the Purchase Plan.
Termination of Employment
Termination of employment with the Company and its affiliates for
any reason prior to the Exercise Date cancels a participant's participation
in the Purchase Plan, and the total amount withheld from his salary or
wages will be repaid to him without interest. If a participant's customary
employment is reduced to twenty hours per week or less or three months
or less in a calendar year, he will be deemed to have terminated
employment for purposes of the Purchase Plan.
Notwithstanding the foregoing, a participant may exercise his
option if his employment terminates on account of retirement under a
pension plan on or after the normal retirement date established by the
Company. A participant also may exercise his option if his employment
is terminated for reasons other than death, for cause or voluntarily by the
participant.
Variations by the Committee
The Purchase Plan provides that the Committee may establish
special Offering Dates for individuals who become employees of the
Company or an affiliate after January 1 or July 1 by reason of an
acquisition, merger, reorganization or similar action and who otherwise
satisfy the Purchase Plan's eligibility requirements. The Committee may
establish other special rules to facilitate the grant of options to such
employees including, for example, the manner in which payroll deduction
authorizations will be made. The option price of options granted to such
employees will not be less than the lesser of (i) eighty-five percent of the
Common Stock's fair market value on the date the option is granted or (ii)
eighty-five percent of the Common Stock's fair market value on the
Exercise Date.
Capital Changes
In the event of a change in the capitalization of the Company,
such as stock splits or stock dividends, which results in an increase or
<PAGE>
Exhibit 4(b)
decrease in the number of shares of Common Stock outstanding without
receipt of consideration by the Company, or in the event of any
reorganization or recapitalization, appropriate adjustments will be made
by the Board in the purchase price per share under option, as well as the
number of shares reserved under the Purchase Plan, subject to any
required action by the shareholders of the Company. In the event of a
reorganization, consolidation or merger of the Company with another
corporation or a sale of all or substantially all of the assets of the
Company, each participant shall, at the time of issuance of stock under
such corporate event, be entitled to receive upon exercise of his option
the same number and kind of shares of stock or other property or cash
as he would have been entitled to receive if his option had been
exercised immediately before such corporate event.
Assignment of Interest
No rights or accumulated payroll deductions of an employee under
the Purchase Plan may be pledged, assigned or transferred for any
reason.
Reports
Individual accounts will be maintained for each participant in the
Purchase Plan. After each Exercise Date each participant shall receive
a report of his or her account setting forth the total amount of payroll
deductions accumulated, the per share purchase price, the number of
shares purchased and the remaining cash balance, if any.
Use of Funds
All funds received or held by the Company under the Purchase
Plan may be used for any corporate purpose during the offering period.
At the end of the offering period, funds held under the Purchase Plan will
be used to purchase Common Stock from the Company. Fractional
shares of Common Stock will not be purchased, and amounts not used
to subscribe for the Corporation's stock will be credited to the
participant's account for the succeeding offering period, or if the
participant does not participate in the Purchase Plan during the
succeeding offering period, that amount will be paid to him.
<PAGE>
Exhibit 4(b)
Liens on Funds Under the Plan
All funds received or held by the Company under the Purchase
Plan may be used for any corporate purpose and, therefore, nothing in
the Purchase Plan prevents the Company from creating a lien on funds
withheld under the Purchase Plan.
Amendment and Termination of the Plan
The Board may at any time amend or terminate the Purchase
Plan. Except as explained under the heading "Capital Changes", no
such termination shall affect options previously granted. Nor may any
amendment or termination of the Purchase Plan make any change in an
option granted prior thereto which adversely affects the rights of any
participant. No amendment may be made to the Purchase Plan without
prior approval of the shareholders of the Company if such amendment
would increase the number of shares reserved under the Purchase Plan
(except as explained under the heading "Capital Changes") or change
the corporations or class of corporations whose employees are eligible
to participate in the Purchase Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the effect of federal income taxation
upon the participant and the Company with respect to the shares
purchased under the Purchase Plan. The Company does not undertake
to provide tax or financial advice to participants. In that regard,
participants are encouraged to consult with their individual tax and
financial advisors.
The Purchase Plan, and the right of participants to make
purchases thereunder, is intended to satisfy the requirements of Sections
421 and 423 of the Code. Under these provisions, no income will be
taxable to a participant at the time of the grant of the option or the
purchase of shares. As summarized below, a participant may become
liable for tax upon disposition of the shares acquired under the Purchase
Plan, and the method of taxation will depend upon the participant's
holding period.
1. If the shares are disposed of at least two years after the
<PAGE>
Exhibit 4(b)
Offering Date and at least one year after the Exercise Date. In this event
the lesser of (a) the excess of the fair market value of the shares at the
time of disposition over the amount paid for the shares under the option
(the "Purchase Price") or (b) excess of the fair market value of the shares
on the Offering Date over 85% of the shares' fair market value on that
date will be treated as ordinary income to the participant. Any further
gain upon such disposition will be taxed at long-term capital gain rates.
If the shares are sold and the sales price is less than the Purchase Price,
there is no ordinary income, and the participant may recognize a capital
loss for the difference. The preceding discussion applies to any
disposition following the participant's death without regard to the period
that the shares were held by the participant.
2. If the shares are sold or disposed of (including by way of
gift) before the expiration of the holding periods described above. In this
event, the excess of the fair market value of the shares on the Exercise
Date over the Purchase Price will be treated as ordinary income to the
participant (even if no gain is realized on the sale or a gratuitous transfer
of the shares is made). The balance of any gain will be treated as capital
gain. Even if the shares are sold for less than their fair market value on
the Exercise Date, the same amount of ordinary income is recognizable
to a participant; and a capital loss may be recognized equal to the
difference between the sales price and the fair market value of the
shares on the Exercise Date.
The participant's basis in shares acquired under the Purchase
Plan is equal to the sum of the ordinary income recognizable by the
participant and the purchase price of the shares.
The Company is entitled to a deduction for amounts taxed as
ordinary income to a participant, but only to the extent that the ordinary
income is recognized upon disposition of shares before the expiration of
the holding periods described above.
INDEMNIFICATION UNDER THE SECURITIES ACT
Indemnification may be permitted to directors, officers and
controlling persons of the Company against liability under the Securities
Act pursuant to provisions of the Company's Articles of Incorporation and
Bylaws and provisions of certain insurance policies maintained by the
Company. Insofar as indemnification for liabilities arising under the
<PAGE>
Exhibit 4(b)
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
INCORPORATION OF DOCUMENTS BY REFERENCE
All reports, such as Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, and definitive proxy or information statements,
filed by the Company under the Exchange Act during 1991 and
thereafter, as well as the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A under
the Exchange Act, are incorporated by reference in this Summary. A
copy of any of these documents, as well as this Summary and the
Company's current Annual Report to Shareholders, is available without
charge to any participant in the Purchase Plan, upon written or oral
request to EXECUTONE Information Systems, Inc., Attention: Corporate
Secretary, 478 Wheelers Farms Road, Milford, Connecticut 06460, (203)
876-7600.
<PAGE>
Exhibit 5
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Telephone (804) 788-8200
Facsimile (804) 788-8218
January 31, 1995
The Board of Directors
EXECUTONE Information Systems, Inc.
478 Wheelers Farms Road
Milford, CT 06460
EXECUTONE Information Systems, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to EXECUTONE Information Systems, Inc.,
a Virginia corporation (the "Company"), in connection with the preparation
and filing of a registration statement on Form S-8 under the Securities Act of
1933, as amended, with respect to 1,000,000 shares of the Company's
Common Stock, $.01 par value per share (the "Shares"), to be offered pursuant
to the Company's 1984 Employee Stock Purchase Plan (the "Plan").
In rendering this opinion, we have relied upon, among other things, our
examination of the Plan and of such records of the Company and certificates
of its officers and of public officials as we have deemed necessary.
Based upon the foregoing and the further qualifications stated below,
we are of the opinion that:
1. the Company is duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Virginia; and
2. the Shares have been duly authorized and, when issued in
accordance with the terms of the Plan, will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to such registration statement.
Very truly yours,
<PAGE>
Exhibit 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports
dated January 27, 1994, included or incorporated by reference in
EXECUTONE Information Systems, Inc.'s Form 10-K for the year ended
December 31, 1993, and to all references to our firm included in this
registration statement
ARTHUR ANDERSEN LLP
Stamford, Connecticut,
January 26, 1995
