As filed with the Securities and Exchange Commission on April 22, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ION NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2413505
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21 Meridian Road, Edison, New Jersey 08820
(Address of Principal Executive Offices) (Zip Code)
1998 STOCK OPTION PLAN
(Full title of the plan)
Stephen B. Gray, President
Ion Networks, Inc.
21 Meridian Road
Edison, New Jersey 08820
(Name and address of agent for service)
(732) 494-4440
(Telephone number, including area code, of agent for service)
with a copy to:
James Alterbaum, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) SHARE (2) PRICE (2) FEE (2)
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 3,000,000 $3.46875 $10,406,250 $2,892.94
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(b), there shall also be deemed covered hereby all
additional securities resulting from anti-dilution adjustments under the
1998 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the registration fee on
the basis of, pursuant to Rules 457(h) and 457(c), the average of the high
and low sales prices of the registrant's Common Stock on The Nasdaq Stock
Market on April 19, 1999.
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Company with
the Securities and Exchange Commission pursuant to Section 13(a) of the
Securities Exchange Act of 1934 (the "1934 Act") are incorporated herein by
reference:
(a) The registrant's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 1998, as amended by Amendment No. 1 thereto;
(b) The registrant's Quarterly Reports on Form 10-QSB for the
fiscal quarters ended June 30, 1998, September 30, 1998 and December 31, 1998,
respectively;
(c) The registrant's Current Reports on Form 8-K filed on May
19, 1998, March 12, 1999 and April 9, 1999, respectively; and
(d) The description of the registrant's Common Stock contained
in the registrant's Registration Statement on Form S-18 (No. 2-93800-NY) filed
on October 16, 1984 under the 1934 Act, including any amendment or report filed
for the purpose of updating such descriptions.
All documents filed subsequent to the date of this
Registration Statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934
Act and prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in general, that a corporation incorporated under the
laws of the State of Delaware, such as the registrant, may indemnify any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than a derivative action by or in the
right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. In the case of a derivative action, a Delaware corporation
may indemnify any such person against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
court determines such person is fairly and reasonably entitled to indemnity for
such expenses.
Article Tenth of the registrant's Certificate of Incorporation states
that the Corporation shall, to the fullest extent permitted by the DGCL,
indemnify any and all persons whom it shall have power to indemnify under
Section 145 thereof from and against any and all of the expenses (including,
without limitation, attorneys' fees and expenses), liabilities or other matters
referred to in or covered by such Section, and the indemnification so provided
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such person's official capacity and
as to action in another capacity while holding the position giving rise to the
entitlement of indemnification, and shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
the heirs, estate, executors and administrators of any such person.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
II-2
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------- -----------
3.1 Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware on August 5, 1998.
3.2 Certificate of Amendment of the Certificate of Incorporation,
as filed with the Secretary of State of the State of Delaware
on December 11, 1998.
3.3 By-Laws of the Company.
4.1 Registrant's 1998 Stock Option Plan.
4.2 Registrant's 1998 U.K. Sub-Plan.
5.1 Opinion of Parker, Chapin, Flattau & Klimpl, LLP as to the
legality of the Common Stock being offered and consent.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Parker Chapin Flattau & Klimpl, LLP (included in
Exhibit 5.1).
24.1 Powers of Attorney of certain officers and directors of the
registrant (included in signature page).
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
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 Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(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 offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 6
above, or otherwise, the registrant has been advised that in the opinion of the
II-4
<PAGE>
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Edison, State of New Jersey, on the 19th day of
April, 1999.
ION NETWORKS, INC.
By: /s/ Stephen B. Gray
----------------------------------------
Stephen B. Gray, President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Stephen B. Gray and John F.
McTigue and each of them with power of substitution, as his attorney-in-fact, in
all capacities, to sign any amendments to this registration statement (including
post-effective amendments) and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-facts or their
substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 19th day of April, 1999.
Signature Title
--------- -----
/s/ Stephen B. Gray President, Chief Executive Officer, Chief Operating
- ------------------------ Officer and Director
Stephen B. Gray
/s/ Stephen M. Deixler Chairman of the Board of Directors
- ------------------------
Stephen M. Deixler
/s/ John F. McTigue Chief Financial Officer and Treasurer (Principal
- ------------------------ Financial Officer and Principal Accounting Officer)
John F. McTigue
/s/ Michael Radomsky Executive Vice President, Secretary and Director
- ------------------------
Michael Radomsky
/s/ Alexander C. Stark Director
- ------------------------
Alexander C. Stark
/s/ Martin Ritchie Director
- ------------------------
Martin Ritchie
/s/ Alan Hardie Director
- ------------------------
Alan Hardie
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
3.1 Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware on August 5, 1998.
3.2 Certificate of Amendment of the Certificate of Incorporation,
as filed with the Secretary of State of the State of Delaware
on December 11, 1998.
3.3 By-Laws of the Company.
4.1 Registrant's 1998 Stock Option Plan.
4.2 Registrant's 1998 U.K. Sub-Plan.
5.1 Opinion of Parker, Chapin, Flattau & Klimpl, LLP as to the
legality of the Common Stock being offered and consent.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Parker Chapin Flattau & Klimpl, LLP (included in
Exhibit 5.1).
24.1 Powers of Attorney of certain officers and directors of the
registrant (included in signature page).
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
ION NETWORKS, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions and subject to the requirements of the
laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware
Code and the acts amendatory thereof and supplemental thereto, and known,
identified and referred to as the "General Corporation Law of the State of
Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"Corporation") is Ion Networks, Inc.
SECOND: The address, including street, number, city, and
county, of the registered office of the Corporation in the State of Delaware is
30 Old Rudnick Lane, Dover, Delaware 19901, County of Kent; and the name of the
registered agent of the Corporation in the State of Delaware is Bridge Service
Corp.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares which the Corporation
shall have authority to issue is Two Hundred (200), all of which are with one
cent ($.01) par value. All such shares are of one class and are shares of Common
Stock.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
David R. Fishkin c/o Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of the Corporation or of any creditor or stockholder
<PAGE>
thereof or on the application of any receiver of receivers appointed for the
Corporation under the provisions of section 291 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
EIGHTH: For management of the business and for the conduct
of the affairs of the Corporation, and in further definition, limitation and
regulation of the powers of the Corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the
affairs of the Corporation shall be vested in its Board of
Directors. The number of directors which shall constitute
the whole Board of Directors shall be fixed by, or in the
manner provided in, the Bylaws. The phrase "whole Board" and
the phrase "total number of directors" shall be deemed to
have the same meaning, to wit, the total number of directors
which the Corporation would have if there were no vacancies.
No election of directors need be by written ballot.
2. After the original or other By-laws of the Corporation
have been adopted, amended, or repealed, as the case may be,
in accordance with the provisions of Section 109 of the
General Corporation Law of the State of Delaware, and, after
the Corporation has received any payment for any of its
stock, the power to adopt, amend, or repeal the Bylaws of
the Corporation may be exercised by the Board of Directors
of the Corporation; provided, however, that any provision
for the classification of directors of the Corporation for
staggered terms pursuant to the provisions of subsection (d)
of Section 141 of the General Corporation law of the State
of Delaware shall be set forth in an initial Bylaw or in a
Bylaw adopted by the stockholders entitled to vote of the
Corporation unless provisions for such classification shall
be set forth in this certificate of incorporation.
3. Whenever the Corporation shall be authorized to issue
only one class of stock, each outstanding share shall
entitle the holder thereof to notice of, and the right to
vote at, any meeting of stockholders. Whenever the
Corporation shall be authorized to issue more than one class
of stock, no outstanding share of any class of stock which
is denied voting power under the provisions of the
certificate of incorporation
-2-
<PAGE>
shall entitle the holder thereof to the right to vote at any
meeting of stockholders, except as the provisions of
paragraph (2) of subsection (b) of Section 242 of the
General Corporation Law of the State of Delaware shall
otherwise require; provided, that no share of any such class
which is otherwise denied voting power shall entitle the
holder thereof to vote upon the increase or decrease in the
number of authorized shares of said class.
NINTH: The personal liability of the directors of the
Corporation is hereby eliminated to the fullest extent permitted by paragraph
(7) of subsection (b) of Section 102 of the General Corporation Law of the State
of Delaware, as the same may be amended and supplemented.
TENTH: The Corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said Section from and
against any and all of the expenses (including, without limitation, attorneys
fees and expenses), liabilities or other matters referred to in or covered by
said Section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding the position giving rise to the entitlement to
indemnification, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, estate, executors and administrators of any such person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the Corporation by
this certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
IN WITNESS WHEREOF, the undersigned has signed this
certificate and does hereby affirm the statements contained therein as true
under the penalties of perjury this 5th day of August , 1998.
/s/ David R. Fishkin
--------------------------------
David R. Fishkin, Incorporator
-3-
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
BEFORE PAYMENT OF
ANY PART OF THE CAPITAL
OF
ION NETWORKS, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is Ion Networks, Inc.
2. The corporation has not received any payment for any of its
stock.
3. The certificate of incorporation of the corporation is
hereby amended by striking out Article Fourth thereof and by substituting in
lieu of said Article the following new Article:
" FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is Fifty Million Two
Hundred Thousand, consisting of Fifty Million (50,000,000)
shares of Common Stock with a par value of $.001 per share and
Two Hundred Thousand (200,000) shares of Preferred Stock with
a par value of $10.00 per share."
4. The amendment of the certificate of incorporation of the
corporation herein certified was duly adopted, pursuant to the provisions of
Section 241 of the General Corporation Law of the State of Delaware, by the sole
incorporator, no directors having been named in the certificate of incorporation
and no directors having been elected.
DATED: December 10, 1998
/s/ David R. Fishkin
----------------------------------------
David R. Fishkin, Sole Incorporator
EXHIBIT 3.3
BYLAWS
OF
ION NETWORKS, INC.
(A DELAWARE CORPORATION)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing stock in
the corporation shall be signed by, or in the name of, the corporation by the
Chairman or Vice- Chairman of the Board of Directors, if any, or by the
President or a Vice-President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the corporation. Any or all the
signatures on any such certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent, or
registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one
class of stock or more than one series of any class of stock, and whenever the
corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate theretofore issued by it, alleged to have
been lost, stolen, or destroyed, and the Board of Directors may require the
owner of the lost, stolen, or destroyed certificate, or his legal
representative, to give the corporation a bond sufficient to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss, theft, or destruction of any such certificate or the issuance of
any such new certificate or uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the
General Corporation Law, the Board of Directors of the corporation may provide
by resolution or resolutions that some or all of any or all classes or series of
the stock of the corporation shall be
<PAGE>
uncertificated shares. Within a reasonable time after the issuance or transfer
of any uncertificated shares, the corporation shall send to the registered owner
thereof any written notice prescribed by the General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be
required to, issue fractions of a share. If the corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or bearer form (represented by a
certificate) which shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share or an uncertificated fractional share shall, but scrip or
warrants shall not unless otherwise provided therein, entitle the holder to
exercise voting rights, to receive dividends thereon, and to participate in any
of the assets of the corporation in the event of liquidation. The Board of
Directors may cause scrip or warrants to be issued subject to the conditions
that they shall become void if not exchanged for certificates representing the
full shares or uncertificated full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
4. STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and, in the case of shares represented by certificates, on
surrender of the certificate or certificates for such shares of stock properly
endorsed and the payment of all taxes due thereon.
5. RECORD DATE FOR STOCKHOLDERS. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty nor less than ten days before the date of such
meeting. If no record date is fixed by the Board of Directors, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
In order that the corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the Board of Directors may fix
a record date, which record date shall not precede the
-2-
<PAGE>
date upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors, the
record date for determining the stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the Board of
Directors is required by the General Corporation Law, shall be the first date on
which a signed written consent setting forth the action taken or proposed to be
taken is delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested. If no record date has been fixed by the Board of Directors and prior
action by the Board of Directors is required by the General Corporation Law, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action. In
order that the corporation may determine the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion, or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
6. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom the General Corporation Law confers such rights
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any provision of law
may otherwise require.
-3-
<PAGE>
7. STOCKHOLDER MEETINGS
-TIME. The annual meeting shall be held on the date and at the time
fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the corporation, and each successive annual meeting shall be held on a date
within thirteen months after the date of the preceding annual meeting. A special
meeting shall be held on the date and at the time fixed by the directors.
-PLACE. Annual meetings and special meetings shall be held at such
place, within or without the State of Delaware, as the directors may, from time
to time, fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the Company's principal executive offices.
-CALL. Annual meetings and special meetings may be called by the
directors or by any officer instructed by the directors to call the meeting.
-NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
given, stating the place, date, and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have been
waived, and directed to each stockholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in the United States Mail. If a meeting is adjourned to
another time, not more than thirty days hence, and/or to another place, and if
an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned meeting.
Notice need not be given to any stockholder who submits a written waiver of
notice signed by him before or after the time stated therein. Attendance of a
stockholder at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice.
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<PAGE>
-STOCKHOLDER LIST. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the corporation, or to vote at any meeting of
stockholders.
-CONDUCT OF MEETING. Meetings of the stockholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the stockholders.
The Secretary of the corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the chairman of the meeting shall appoint a
secretary of the meeting.
-PROXY REPRESENTATION. Every stockholder may authorize another person
or persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and, if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy may
be made irrevocable regardless of whether the interest with which it is coupled
is an interest in the stock itself or an interest in the corporation generally.
-INSPECTORS. The directors, in advance of any meeting, may, but need
not, appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspectors at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots, or
consents, hear and determine all
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<PAGE>
challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots, or consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all stockholders.
On request of the person presiding at the meeting, the inspector or inspectors,
if any, shall make a report in writing of any challenge, question, or matter
determined by him or them and execute a certificate of any fact found by him or
them.
-QUORUM. The holders of a majority of the outstanding shares of stock
shall constitute a quorum at a meeting of stockholders for the transaction of
any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.
-VOTING. Each share of stock shall entitle the holders thereof to one
vote. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of directors. Any other action shall be authorized by a majority of
the votes cast except where the General Corporation Law prescribes a different
percentage of votes and/or a different exercise of voting power, and except as
may be otherwise prescribed by the provisions of the certificate of
incorporation and these Bylaws. In the election of directors, and for any other
action, voting need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the
General Corporation Law to be taken at any annual meeting or special meeting of
stockholders, or any action which may be taken at any annual or special meeting
of stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. Action taken pursuant to this paragraph shall be
subject to the provisions of Section 228 of the General Corporation Law.
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITIONS. The business and affairs of the
corporation shall be managed by or under the direction of the Board of Directors
of the corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Delaware. The number
of directors constituting the whole board shall be not less than 3 nor more than
15. Subject to the foregoing
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<PAGE>
limitation, such number may be fixed from time to time by action of the
stockholders or of the directors, or, if the number is not fixed, the number
shall be one. The number of directors may be increased or decreased by action of
the stockholders or of the directors.
3. ELECTION AND TERM. Directors who are elected at an annual meeting of
stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until the next annual meeting of
stockholders and until their successors are elected and qualified or until their
earlier resignation or removal. Any director may resign at any time upon written
notice to the corporation. Except as the General Corporation Law may otherwise
require, in the interim between annual meetings of stockholders or of special
meetings of stockholders called for the election of directors and/or for the
removal of one or more directors and for the filling of any vacancy in that
connection, newly created directorships and any vacancies in the Board of
Directors, including unfilled vacancies resulting from the removal of directors
for cause or without cause, may be filled by the vote of a majority of the
remaining directors then in office, although less than a quorum, or by the sole
remaining director.
4. MEETINGS.
-TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
-PLACE. Meetings shall be held at such place within or without the
State of Delaware as shall be fixed by the Board.
-CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, or a majority of the directors in office.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required
for regular meetings for which the time and place have been fixed. Written,
oral, or any other mode of notice of the time and place shall be given for
special meetings in sufficient time for the convenient assembly of the directors
thereat. Notice need not be given to any director or to any member of a
committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the directors need be specified in any
written waiver of notice.
-QUORUM AND ACTION. A majority of the whole Board shall constitute a
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors
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<PAGE>
in office shall constitute a quorum, provided that such majority shall
constitute at least one-third of the whole Board. A majority of the directors
present, whether or not a quorum is present, may adjourn a meeting to another
time and place. Except as herein otherwise provided, and except as otherwise
provided by the General Corporation Law, the vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board. The quorum and voting provisions herein stated shall not be construed
as conflicting with any provisions of the General Corporation Law and these
Bylaws which govern a meeting of directors held to fill vacancies and newly
created directorships in the Board or action of disinterested directors.
Any member or members of the Board of Directors or of any committee
designated by the Board, may participate in a meeting of the Board, or any such
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
-CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the Vice-Chairman
of the Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the
General Corporation Law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.
6. COMMITTEES. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of any member of any such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise powers and authority of the Board of Directors in the management of
the business and affairs of the corporation with the exception of any authority
the delegation of which is prohibited by Section 141 of the General Corporation
Law, and may authorize the seal of the corporation to be affixed to all papers
which may require it.
7. WRITTEN ACTION. Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be taken without
a meeting if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
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<PAGE>
8. CONFERENCE TELEPHONE The Board of Directors of any committee
designated thereby may participate in a meeting of such Board or committee by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time, and participation by such means shall constitute presence in person at a
meeting.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President, a
Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by the
Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board, an
Executive Vice-President, one or more other Vice-Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other officers
with such titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board of
Directors choosing him, no officer other than the Chairman or Vice-Chairman of
the Board, if any, need be a director. Any number of offices may be held by the
same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him, each officer
shall be chosen for a term which shall continue until the meeting of the Board
of Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and perform
such duties in the management and operation of the corporation as prescribed in
these Bylaws and shall have such additional authority and duties as may be
designated by the Board of Directors. Any officer may be removed, with or
without cause and upon no prior notice, by the Board of Directors. Any vacancy
in any office may be filled by the Board of Directors.
1. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be a member
of the Board and shall preside at its meetings and at all meetings of
stockholders. He shall hold such offices, if any, and have such powers and
perform such duties as may be prescribed by the Board.
2. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer, subject to the
direction and under the supervision of the Board, shall have general charge of
the business and affairs of the corporation and shall keep the Board fully
advised. At the direction of the Board, he shall have power in the name of the
corporation and on its behalf to execute any and all deeds, mortgages,
contracts, agreements and other instruments in writing. He shall employ and
discharge employees and agents of the corporation, except such as shall hold
their offices by appointment of the Board, but he may delegate these powers to
other officers as to employees under their immediate supervision. He shall see
that the acts of the executive officers conform to the policies of the
corporation as determined by the Board and shall have such powers and perform
such other
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<PAGE>
duties as may from time to time be assigned to him by the Board.
3. PRESIDENT. The President, subject to the direction and under the
supervision of the Board, shall perform such duties as generally pertain to the
office of President, as well as such further duties as may be prescribed by the
Board.
4. CHIEF OPERATING OFFICER. The Chief Operating Officer, subject to the
direction and under the supervision of the Board, shall perform such duties as
generally pertain to the office of Chief Operating Officer, as well as such
further duties as may be prescribed by the Board.
5. CHIEF FINANCIAL OFFICER. The Chief Financial Officer, subject to the
direction and under the supervision of the Board, shall perform such duties as
generally pertain to the office of Chief Financial Officer, as well as such
further duties as may be prescribed by the Board.
6. VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board, if any,
shall be a member of the Board. If the office of Chairman of the Board be
vacant, or if the Chairman of the Board be absent, he shall preside at meetings
of the stockholders and of the Board. He shall have such powers and perform such
duties as may be prescribed by the Board.
7. VICE PRESIDENTS. Each Vice President shall have such powers and
perform such duties as the Board or the Chairman of the Board, the Chief
Executive Officer, the President or the Vice Chairman of the Board, if any, may
from time to time prescribe, and shall perform such other duties as may be
prescribed in these Bylaws. In the absence or inability to act of the Chairman
of the Board, the Chief Executive Officer, the President and Vice Chairman of
the Board, the Vice President next in order as designated by the Board, or in
the absence of such designation, senior in length of service in such capacity,
who shall be present and able to act, shall perform all the duties and may
exercise any of the powers of the President, subject to the control of the
Board. The performance of any duty by a Vice President shall be conclusive
evidence of his power to act.
8. TREASURER. The Treasurer shall have the care and custody of all
funds and securities of the corporation which may come into his control and he
shall deposit the same to the credit of the corporation in such banks or other
depositary or depositories as the Board may designate. He may endorse all
commercial documents requiring endorsements for or on behalf of the corporation
and may sign all receipts and vouchers for payments made to the corporation. He
shall render an account of his transactions to the Board as often as it shall
require the same and shall at all reasonable times exhibit his books and
accounts to any director, and shall cause to be entered regularly in books kept
for that purpose full and accurate account of all moneys received and disbursed
by him on account of the corporation. He shall, if required by the Board, give
the corporation a bond in such sums and with such securities as shall be
satisfactory to the Board, conditioned upon the faithful performance of his
duties and for the restoration to the corporation
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<PAGE>
in case of his death, resignation, retirement or removal from office of all
books, papers, vouchers, money and other property of whatever kind in his
possession, or under his control, belonging to the corporation. He shall have
such further powers and duties as are incident to the position of Treasurer,
subject to the control of the Board.
9. SECRETARY. The Secretary shall record the proceedings of meetings of
the Board and of the stockholders in a book kept for that purpose and shall
attend to the giving and serving of all notices of the corporation. He shall
have custody of the seal of the corporation and shall affix the seal to all
certificates of shares of stock of the corporation (if required by the form of
such certificates) and to such other papers or documents as may be proper and,
when the seal is so affixed, he shall attest the same by his signature wherever
required. He shall have charge of the stock certificate book, transfer book and
stock ledger, and such other books and papers as the Board may direct. He shall,
in general, perform all duties of Secretary, subject to the control of the
Board.
10. ASSISTANT TREASURERS. In the absence or inability of the Treasurer
to act, any Assistant Treasurer may perform all the duties and exercise all of
the powers of the Treasurer, subject to the control of the Board. The
performance of any such duty shall be conclusive evidence of his power to act.
An Assistant Treasurer shall also perform such other duties as the Treasurer or
the Board may from time to time assign to him.
11. ASSISTANT SECRETARIES. In the absence or inability of the Secretary
to act, any Assistant Secretary may perform all the duties and exercise all the
powers of the Secretary, subject to the control of the Board. The performance of
any such duty shall be conclusive evidence of his power to act. An Assistant
Secretary shall also perform such other duties as the Secretary or the Board may
from time to time assign to him.
12. OTHER OFFICERS. Other officers shall perform such duties and have
such powers as may from time to time be assigned to them by the Board.
13. DELEGATION OF DUTIES. In case of the absence of any officer of the
corporation, or for any other reason that the Board may deem sufficient, the
Board may confer, for the time being, the powers or duties, or any of them, of
such officer upon any other officer, or upon any director.
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors
shall prescribe.
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ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject
to change, by the Board of Directors.
ARTICLE VI
AMENDMENTS
Subject to the provisions of the certificate of incorporation and the
provisions of the General Corporation Law, the power to amend, alter, or repeal
these Bylaws and to adopt new Bylaws may be exercised by the Board of Directors
or by the stockholders.
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EXHIBIT 4.1
1998 STOCK OPTION PLAN
OF
ION NETWORKS, INC.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan")
is designed to provide an incentive to key employees (including directors and
officers who are key employees) and to consultants and directors who are not
employees of ION NETWORKS, INC., a Delaware corporation (the "Company"), or any
of its Subsidiaries (as such term is defined in Paragraph 19), and to offer an
additional inducement in obtaining the services of such individuals. The Plan
provides for the grant of "incentive stock options" ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and nonqualified stock options which do not qualify as ISOs ("NQSOs"). The
Company makes no representation or warranty, express or implied, as to the
qualification of any option as an "incentive stock option" under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Paragraph 12, the aggregate number of shares of Common Stock, $.01 par value per
share, of the Company ("Common Stock") for which options may be granted under
the Plan shall not exceed 3,000,000. Such shares of Common Stock may, in the
discretion of the Board of Directors of the Company (the "Board of Directors"),
consist either in whole or in part of authorized but unissued shares of Common
Stock or shares of Common Stock held in the treasury of the Company. Subject to
the provisions of Paragraph 13, any shares of Common Stock subject to an option
which for any reason expires, is canceled or is terminated unexercised or which
ceases for any reason to be exercisable shall again become available for the
granting of options under the Plan. The Company shall at all times during the
term of the Plan reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by the Board of Directors or a committee of the Board of Directors (the
"Committee") consisting of not less than two (2) directors, each of whom shall
be a "non-employee director" within the meaning of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (as the same may be in effect
and interpreted from time to time, "Rule 16b-3"). Unless otherwise provided in
the By-Laws of the Company or by resolution of the Board of Directors, a
majority of the members of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, and any acts approved in writing by all members without a meeting,
shall be the acts of the Committee.
Subject to the express provisions of the Plan, the Committee
shall have the authority, in its sole discretion, to determine the persons who
shall be granted options; the times
<PAGE>
when they shall receive options; whether an option granted to an employee shall
be an ISO or a NQSO; the number of shares of Common Stock to be subject to each
option; the term of each option; the date each option shall become exercisable;
whether an option shall be exercisable in whole or in installments, and, if in
installments, the number of shares of Common Stock to be subject to each
installment; whether the installments shall be cumulative; the date each
installment shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any option or installment; whether shares
of Common Stock may be issued upon the exercise of an option as partly paid,
and, if so, the dates when future installments of the exercise price shall
become due and the amounts of such installments; the exercise price of each
option; the form of payment of the exercise price; the fair market value of a
share of Common Stock; whether and under what conditions to restrict the sale or
other disposition of the shares of Common Stock acquired upon the exercise of an
option and, if so, whether and under what conditions to waive any such
restriction; whether and under what conditions to subject the exercise of all or
any portion of an option to the fulfillment of certain restrictions or
contingencies as specified in the contract referred to in Paragraph 11 (the
"Contract"), including without limitation, restrictions or contingencies
relating to entering into a covenant not to compete with the Company, its Parent
(as such term is defined in Paragraph 19) and Subsidiaries, to financial
objectives for the Company, any of its Subsidiaries, a division, a product line
or other category, and/or the period of continued employment of the optionee
with the Company or any of its Subsidiaries, and to determine whether such
restrictions or contingencies have been met; the amount, if any, necessary to
satisfy the obligation of the Company, any of its Subsidiaries or a Parent to
withhold taxes or other amounts; whether an optionee is Disabled (as such term
is defined in Paragraph 19); with the consent of the optionee, to cancel or
modify an option, provided that the modified provision is permitted to be
included in an option granted under the Plan on the date of the modification,
and provided further, that in the case of a modification (within the meaning of
Section 424(h) of the Code) of an ISO, such option as modified would be
permitted to be granted on the date of such modification under the terms of the
Plan; to construe the respective Contracts and the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to approve any provision of
the Plan or any option granted under the Plan or any amendment to either which,
under Rule 16b-3, requires the approval of the Board of Directors, a committee
of non-employee directors or the shareholders to be exempt (unless otherwise
specifically provided herein); and to make all other determinations necessary or
advisable for administering the Plan. Any controversy or claim arising out of or
relating to the Plan, any option granted under the Plan or any Contract shall be
determined unilaterally by the Committee in its sole discretion. The
determinations of the Committee on the matters referred to in this Paragraph 3
shall be conclusive and binding on the parties.
No member or former member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted hereunder. In addition, each member and former member of the
Committee shall be indemnified and held harmless by the Company from and against
any liability, claim for damages and expenses in connection therewith by reason
of any action or failure to act under or in connection with the
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Plan, any option granted hereunder or any Contract to the fullest extent
permitted with respect to directors under the Company's certificate of
incorporation, By-Laws and applicable law.
4. ELIGIBILITY. The Committee may from time to time,
consistent with the purposes of the Plan, grant options to such key employees
(including officers and directors who are key employees) of, or consultants to,
the Company or any of its Subsidiaries, and to such directors of the Company
who, at the time of grant, are not common law employees of the Company or of any
of its Subsidiaries, as the Committee may determine in its sole discretion. Such
options granted shall cover such number of shares of Common Stock as the
Committee may determine in its sole discretion; provided, however, that the
maximum number of shares subject to options that may be granted to any employee
during any calendar year under the Plan shall be 400,000 shares; and provided
further that the aggregate market value (determined at the time the option is
granted) of the shares of Common Stock for which any eligible employee may be
granted ISOs under the Plan or any other plan of the Company, or of a Parent or
a Subsidiary of the Company, which are exercisable for the first time by such
optionee during any calendar year shall not exceed $100,000. The $100,000 ISO
limitation shall be applied by taking ISOs into account in the order in which
they were granted. Any option (or the portion thereof) granted in excess of such
ISO limitation amount shall be treated as a NQSO to the extent of such excess.
5. EXERCISE PRICE. The exercise price of the shares of Common
Stock under each option shall be determined by the Committee in its sole
discretion; provided, however, that the exercise price of an ISO shall not be
less than the fair market value of the Common Stock subject to such option on
the date of grant; and provided further that if, at the time an ISO is granted,
the optionee owns (or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the exercise
price of such ISO shall not be less than 110% of the fair market value of the
Common Stock subject to such ISO on the date of grant.
The fair market value of a share of Common Stock on any day
shall be (a) if the principal market for the Common Stock is a national
securities exchange, the average of the highest and lowest sales prices per
share of the Common Stock on such day as reported by such exchange or on a
consolidated tape reflecting transactions on such exchange, (b) if the principal
market for the Common Stock is not a national securities exchange and the Common
Stock is quoted on the Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales
price information is available with respect to the Common Stock, the average of
the highest and lowest sales prices per share of the Common Stock on such day on
Nasdaq, or (ii) if such information is not available, the average of the highest
bid and the lowest asked prices per share for the Common Stock on such day on
Nasdaq, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on Nasdaq, the average of
the highest bid and lowest asked prices per share for the Common Stock on such
day as reported on the OTC Bulletin Board Service or by National Quotation
Bureau, Incorporated or a comparable service; provided that if clauses (a), (b)
and (c) of this Paragraph are all inapplicable, or if no
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<PAGE>
trades have been made or no quotes are available for such day, the fair market
value of a share of Common Stock shall be determined by the Committee by any
method consistent with applicable regulations adopted by the Treasury Department
relating to stock options.
6. TERM. Each option granted pursuant to the Plan shall be for
such term as is established by the Committee, in its sole discretion, at or
before the time such option is granted; provided, however, that the term of each
ISO granted pursuant to the Plan shall be for a period not exceeding 10 years
from the date of grant thereof, and provided further that if, at the time an ISO
is granted, the optionee owns (or is deemed to own under Section 424(d) of the
Code) stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, of any of its Subsidiaries or of a Parent, the
term of the ISO shall be for a period not exceeding five years from the date of
grant. Options shall be subject to earlier termination as hereinafter provided.
7. EXERCISE. An option (or any installment thereof), to the
extent then exercisable, shall be exercised by giving written notice to the
Company at its principal office stating which option is being exercised,
specifying the number of shares of Common Stock as to which such option is being
exercised and accompanied by payment in full of the aggregate exercise price
therefor (or the amount due on exercise if the applicable Contract permits
installment payments) (a) in cash and/or by certified check or (b) with the
authorization of the Committee, with cash, a certified check and/or with
previously acquired shares of Common Stock, having an aggregate fair market
value (determined in accordance with Paragraph 5), on the date of exercise,
equal to the aggregate exercise price of all options being exercised; provided,
however, that in no case may shares be tendered if such tender would require the
Company to incur a charge against its earnings for financial accounting
purposes.
The Committee may, in its sole discretion, permit payment of
the exercise price of an option by delivery by the optionee of a properly
executed notice, together with a copy of his irrevocable instructions to a
broker acceptable to the Committee to deliver promptly to the Company the amount
of sale or loan proceeds sufficient to pay such exercise price. In connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.
An optionee shall not have the rights of a shareholder with
respect to such shares of Common Stock to be received upon the exercise of an
option until the date of issuance of a stock certificate to him for such shares
or, in the case of uncertificated shares, until the date an entry is made on the
books of the Company's transfer agent representing such shares; provided,
however, that until such stock certificate is issued or until such book entry is
made, any optionee using previously acquired shares of Common Stock in payment
of an option exercise price shall continue to have the rights of a shareholder
with respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be
purchased or issued under the Plan.
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<PAGE>
8. TERMINATION OF RELATIONSHIP. Except as may otherwise be
expressly provided in the applicable Contract, any optionee whose employment or
consulting relationship with the Company (and its Parent and Subsidiaries) has
terminated for any reason other than the death or Disability of the optionee may
exercise any option granted to him as an employee or consultant, to the extent
exercisable on the date of such termination, at any time within three months
after the date of termination, but not thereafter and in no event after the date
the option would otherwise have expired; provided, however, that if such
relationship is terminated either (a) for cause, or (b) without the consent of
the Company, such option shall terminate immediately. Except as may otherwise be
expressly provided in the applicable Contract, options granted under the Plan to
an employee or consultant of the Company or any of its Subsidiaries shall not be
affected by any change in the status of the holder so long as he continues to be
an employee or a consultant of the Company, its Parent or any of the
Subsidiaries (regardless of a change in status from one to the other or having
been transferred from one corporation to another).
For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the time of
the determination, the individual was an employee of such corporation for
purposes of Section 422(a) of the Code. As a result, an individual on military,
sick leave or other bona fide leave of absence shall continue to be considered
an employee for purposes of the Plan during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the individual's right
to reemployment with the corporation, any of its Subsidiaries or a Parent is
guaranteed either by statute or by contract. If the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed by statute or
by contract, the employment relationship shall be deemed to have terminated on
the 91st day of such leave.
Except as may otherwise be expressly provided in the
applicable Contract, an optionee whose directorship with the Company has
terminated for any reason other than his death or Disability may exercise the
options granted to him as a director who was not an employee of or consultant to
the Company or any of its Subsidiaries, to the extent exercisable on the date of
such termination, at any time within three months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if his directorship is terminated for
cause, such option shall terminate immediately.
Nothing in the Plan or in any option granted under the Plan
shall confer on any person any right to continue in the employ or as a
consultant of the Company, its Parent or any of its Subsidiaries, or as a
director of the Company, or interfere in any way with any right of the Company,
its Parent or any of its Subsidiaries to terminate such relationship at any time
for any reason whatsoever without liability to the Company, its Parent or any of
its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise
be expressly provided in the applicable Contract, if an optionee dies (a) while
he is employed by, or a consultant to, the Company, its Parent or any of its
Subsidiaries, (b) within three months after
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<PAGE>
the termination of his employment or consulting relationship with the Company,
its Parent and its Subsidiaries (unless such termination was for cause or
without the consent of the Company) or (c) within one year following the
termination of such employment or consulting relationship by reason of his
Disability, the options granted to him as an employee of, or consultant to, the
Company or any of its Subsidiaries, may be exercised, to the extent exercisable
on the date of his death, by his Legal Representative (as such term is defined
in Paragraph 19), at any time within one year after death, but not thereafter
and in no event after the date the option would otherwise have expired. Except
as may otherwise be expressly provided in the applicable Contract, any optionee
whose employment or consulting relationship with the Company, its Parent and its
Subsidiaries has terminated by reason of his Disability may exercise such
options, to the extent exercisable upon the effective date of such termination,
at any time within one year after such date, but not thereafter and in no event
after the date the option would otherwise have expired.
Except as may otherwise be expressly provided in the
applicable Contract, if an optionee dies (a) while he is a director of the
Company, (b) within three months after the termination of his directorship with
the Company (unless such termination was for cause) or (c) within one year after
the termination of his directorship by reason of his Disability, the options
granted to him as a director who was not an employee of or consultant to the
Company or any of its Subsidiaries, may be exercised, to the extent exercisable
on the date of his death, by his Legal Representative at any time within one
year after death, but not thereafter and in no event after the date the option
would otherwise have expired. Except as may otherwise be expressly provided in
the applicable Contract, an optionee whose directorship with the Company has
terminated by reason of Disability, may exercise such options, to the extent
exercisable on the effective date of such termination, at any time within one
year after such date, but not thereafter and in no event after the date the
option would otherwise have expired.
10. COMPLIANCE WITH SECURITIES LAWS. It is a condition to the
exercise of any option that either (a) a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of Common Stock to be issued upon such exercise shall be effective and
current at the time of exercise, or (b) there is an exemption from registration
under the Securities Act for the issuance of the shares of Common Stock upon
such exercise. Nothing herein shall be construed as requiring the Company to
register shares subject to any option under the Securities Act or to keep any
Registration Statement effective or current.
The Committee may require, in its sole discretion, as a
condition to the grant or exercise of an option, that the optionee execute and
deliver to the Company his representations and warranties, in form, substance
and scope satisfactory to the Committee, which the Committee determines is
necessary or convenient to facilitate the perfection of an exemption from the
registration requirements of the Securities Act, applicable state securities
laws or other legal requirement, including without limitation, that (a) the
shares of Common Stock to be issued upon exercise of the option are being
acquired by the optionee for his own account, for investment only and not with a
view to the resale or distribution thereof, and (b) any subsequent resale or
- 6 -
<PAGE>
distribution of shares of Common Stock by such optionee will be made only
pursuant to (i) a Registration Statement under the Securities Act which is
effective and current with respect to the shares of Common Stock being sold, or
(ii) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption, the optionee, prior to any offer of sale or
sale of such shares of Common Stock, shall provide the Company with a favorable
written opinion of counsel satisfactory to the Company, in form, substance and
scope satisfactory to the Company, as to the applicability of such exemption to
the proposed sale or distribution.
In addition, if at any time the Committee shall determine that
the listing or qualification of the shares of Common Stock subject to such
option on any securities exchange, Nasdaq or under any applicable law, or that
the consent or approval of any governmental agency or regulatory body, is
necessary or desirable as a condition to, or in connection with, the granting of
an option or the issuance of shares of Common Stock thereunder, such option may
not be granted or exercised in whole or in part, as the case may be, unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by
an appropriate Contract which shall be duly executed by the Company and the
optionee. Such Contract shall contain such terms, provisions and conditions not
inconsistent herewith as may be determined by the Committee in its sole
discretion. The terms of each option and Contract need not be identical.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
Notwithstanding any other provision of the Plan, in the event of any change in
the outstanding Common Stock by reason of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spinoff, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Plan, the
aggregate number and kind of shares subject to each outstanding option and the
exercise price thereof, and the maximum number of shares subject to options that
may be granted to any employee in any calendar year, shall be appropriately
adjusted by the Board of Directors, whose determination shall be conclusive and
binding on all parties thereto. Such adjustment may provide for the elimination
of fractional shares that might otherwise be subject to options without payment
therefor.
In the event of (a) the liquidation or dissolution of the
Company, (b) a merger in which the Company is not the surviving corporation or a
consolidation, or (c) any transaction (or series of related transactions) in
which (i) more than 50% of the outstanding Common Stock is transferred or
exchanged for other consideration or (ii) shares of Common Stock in excess of
the number of shares of Common Stock outstanding immediately preceding the
transaction are issued (other than to shareholders of the Company with respect
to their shares of stock in the Company),
- 7 -
<PAGE>
any outstanding options shall terminate upon the earliest of any such event,
unless other provision is made therefor in the transaction.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was
adopted by the Board of Directors on June 12, 1998. No option may be granted
under the Plan after June 11, 2008. The Board of Directors, without further
approval of the Company's shareholders, may at any time suspend or terminate the
Plan, in whole or in part, or amend it from time to time in such respects as it
may deem advisable, including without limitation, in order that ISOs granted
hereunder meet the requirements for "incentive stock options" under the Code, to
comply with the provisions of Rule 16b-3 promulgated the Exchange Act or Section
162(m) of the Code or any change in applicable law or regulation, ruling or
interpretation of any governmental agency or regulatory body; provided, however,
that no amendment shall be effective without the requisite prior or subsequent
shareholder approval which would (a) except as contemplated in Paragraph 12,
increase the maximum number of shares of Common Stock for which options may be
granted under the Plan or change the maximum number of shares for which options
may be granted to employees in any calendar year, (b) change the eligibility
requirements for individuals entitled to receive options hereunder or (c) make
any change for which applicable law or any governmental agency or regulatory
body requires shareholder approval. No termination, suspension or amendment of
the Plan shall adversely affect the rights of an optionee under any option
granted under the Plan without such optionee's consent. The power of the
Committee to construe and administer any option granted under the Plan prior to
the termination or suspension of the Plan shall continue after such termination
or during such suspension.
14. NON TRANSFERABILITY OF OPTIONS. No option granted under
the Plan shall be transferable other than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the optionee,
only by the optionee or his Legal Representatives. Except to the extent provided
above, options may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process, and any such attempted
assignment, transfer, pledge, hypothecation or disposition shall be null and
void ab initio and of no force or effect.
15. WITHHOLDING TAXES. The Company, or its Subsidiary or
Parent, as applicable, may withhold (a) cash or (b) with the consent of the
Committee, shares of Common Stock to be issued upon exercise of an option or a
combination of cash and shares, having an aggregate fair market value
(determined in accordance with Paragraph 5) equal to the amount which the
Committee determines is necessary to satisfy the obligation of the Company, a
Subsidiary or Parent to withhold Federal, state and local income taxes or other
amounts incurred by reason of the grant, vesting, exercise or disposition of an
option or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the optionee to pay to the Company such
amount, in cash, promptly upon demand. The Company shall not be required to
issue any shares of Common Stock pursuant to any such option until all required
payments have been made.
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<PAGE>
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such
legend or legends upon the certificates for shares of Common Stock issued upon
exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it determines,
in its sole discretion, to be necessary or appropriate to (a) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, applicable state securities laws or other legal
requirements, (b) implement the provisions of the Plan or any agreement between
the Company and the optionee with respect to such shares of Common Stock, or (c)
permit the Company to determine the occurrence of a "disqualifying disposition,"
as described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.
The Company shall pay all issuance taxes with respect to the
issuance of shares of Common Stock upon the exercise of an option granted under
the Plan, as well as all fees and expenses incurred by the Company in connection
with such issuance.
17. USE OF PROCEEDS. The cash proceeds to be received upon the
exercise of an option under the Plan shall be added to the general funds of the
Company and used for such corporate purposes as the Board of Directors may
determine, in its sole discretion.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN
CONSTITUENT CORPORATIONS. Anything in this Plan to the contrary notwithstanding,
the Board of Directors may, without further approval by the shareholders,
substitute new options for prior options of a Constituent Corporation (as such
term is defined in Paragraph 19) or assume the prior options of such Constituent
Corporation.
19. DEFINITIONS.
(a) "Constituent Corporation" shall mean any
corporation which engages with the Company, its Parent or any Subsidiary in a
transaction to which Section 424(a) of the Code applies (or would apply if the
option assumed or substituted were an ISO), or any Parent or any Subsidiary of
such corporation.
(b) "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(c) "Legal Representative" shall mean the
executor, administrator or other person who at the time is entitled by law to
exercise the rights of a deceased or incapacitated optionee with respect to an
option granted under the Plan.
(d) "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
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<PAGE>
(e) "Subsidiary" shall have the same definition
as "subsidiary corporation" in Section 424(f) of the Code.
20. GOVERNING LAW. The Plan, such options as may be granted
hereunder, the Contracts and all related matters shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflict or choice of law provisions.
Neither the Plan nor any Contract shall be construed or
interpreted with any presumption against the Company by reason of the Company
causing the Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or plural shall include the
singular and plural, and any term stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter.
21. PARTIAL INVALIDITY. The invalidity, illegality or
unenforceability of any provision in the Plan, any option or Contract shall not
affect the validity, legality or enforceability of any other provision, all of
which shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.
22. SHAREHOLDER APPROVAL. The Plan shall be subject to
approval by a majority of the votes of all outstanding shares entitled to vote
hereon at the next duly held meeting of the Company's shareholders at which a
quorum is present or by majority written consent of the Company's shareholders.
No options granted hereunder may be exercised prior to such approval, provided
that, the date of grant of any option shall be determined as if the Plan had not
been subject to such approval. Notwithstanding the foregoing, if the Plan is not
approved by a vote of the shareholders of the Company on or before October 1,
1998, the Plan and any options granted hereunder shall terminate.
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EXHIBIT 4.2
ION NETWORKS, INC.
1998 STOCK OPTION PLAN
1998 U.K. Sub-Plan/U.K. Approved Rules
In pursuance of its powers under the Ion Networks, Inc. 1998 Stock Option Plan
(the "Plan"), the Board of Directors, or a duly appointed committee of the Board
of Directors (the "Committee") of Ion Networks, Inc. (the "Company") has adopted
these rules (the "UK Rules") for the purposes of operating the Plan with regard
to such options ("Options") which the UK Rules are expressed to extend at the
time when the Option is granted. Unless the context requires otherwise, all
expressions used in the UK Rules have the same meaning as the Plan. The Plan, as
supplemented by the UK Rules, is referred to hereinafter as the "Sub-Plan". For
the avoidance of doubt, the terms of the Plan (insofar as they have not been
disapplied by Rule p of the UK Rules) shall form part of the Sub-Plan.
(a) The shares over which Options may be granted under the
Sub-Plan form part of the ordinary share capital (as defined
in Section 832(1) Income and Corporation Taxes Act 1988)
("ICTA 1988") of the Company and must at all times, including
the time of grant and the time of exercise, comply with the
terms of the Plan and comply with the requirements of
paragraphs 10 to 14 Schedule 9 ICTA 1988.
(b) The companies participating in this Sub-Plan are the Company
and all companies controlled by the Company within the meaning
of Section 840 ICTA 1988 ("Subsidiaries").
(c) The shares of Common Stock to be acquired on exercise of the
Option in accordance with the terms of the Sub-Plan will be:
(i) fully paid up;
(ii) not redeemable;
(iii) not subject to any restrictions other than
restrictions which attach to all shares of the same
class. For the purpose of this clause, the term
"restrictions" includes restrictions which are deemed
to attach to the shares under any contract,
agreement, arrangement or condition as referred to in
paragraph 13 Schedule 9 ICTA 1988.
(d) An Option granted under this Sub-Plan shall not be exercisable
for more than ten years after the date of grant.
<PAGE>
(e) To the extent any restrictions or contingencies have been
imposed by the Committee under the provisions contained in
Paragraph 3 of the Plan, these restrictions or contingencies
shall:
(i) be objective and set out in full at the time of grant
in the stock option contract referred to at Paragraph
11 of the Plan;
(ii) be such that rights to exercise such Option after the
fulfillment or attainment of any restrictions or
contingencies so specified shall not be dependent on
the further discretion of any person; and
(iii) not be capable of amendment, variation or waiver
unless an event occurs which causes the Committee
reasonably to consider that waived, varied or amended
restrictions or contingencies would be a fairer
measure of performance and would be no more difficult
to satisfy.
(f) No Option will be granted to an employee or director under
this Sub-Plan, or where an Option has previously been granted,
no Option shall be exercised by an optionholder if at that
time he has, or any time within the preceding 12 months has
had, a material interest for the purposes of Schedule 9 ICTA
1988 in either the Company being a close company (within the
meaning of Chapter I of Part XI of ICTA 1988) or in a company
being a close company which has control (within the meaning of
Section 840 ICTA 1988) of the Company or in a company being a
close company and a member of a consortium (as defined in
Section 187(7) ICTA 1988) which owns the Company. In
determining whether a company is a close company for this
purpose, Section 414(1)(a) ICTA 1988 (exclusion of companies
not resident in the United Kingdom) and Section 415 of ICTA
1988 (exclusion of certain companies with listed shares) shall
be disregarded.
(g) Notwithstanding any provision of the Plan, no Option will be
granted to an employee or director under this Sub-Plan in
relation to which the exercise price is manifestly less than
the fair market value (as defined in Section 187(2) ICTA 1988)
of the Company's Common Stock on the date of grant of the
Option. The exercise price shall be stated at the date of
grant of the Option and determined in accordance with
Paragraph 5 of the Plan, save that the exercise price of an
Option granted under the Sub-Plan shall be not less than one
hundred percent (100%) of the fair market value of the stock
on the date of grant, and shall be agreed in advance with the
Shares Valuation Division of the Inland Revenue or otherwise
determined with the agreement of the Shares Valuation
Division.
(h) Notwithstanding Paragraph 7 of the Plan, settlement of the
exercise price may not be in the form of previously acquired
shares of Common Stock and payment of the amount due on
exercise may not be made in installments.
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<PAGE>
(i) Any alteration or amendment to this Sub-Plan shall not have
effect unless approved by the Board of Inland Revenue. The
Company undertakes to provide details thereof to the Board of
Inland Revenue without delay for this purpose.
(j) Notwithstanding Paragraph 11 of the Plan, any material
alteration of the standard form of stock option agreement
shall not have effect unless approved by the Board of Inland
Revenue.
(k) No adjustment pursuant to Paragraph 12 of the Plan shall be
made to any Option which has been granted under the Sub-Plan
unless such adjustment would be permitted under the Plan and
is a variation in the share capital of which the scheme shares
form part under paragraph 29 Schedule 9 ICTA 1988. Where so
permitted, no such adjustment shall take effect until the
approval of the Board of Inland Revenue shall have been
obtained thereto.
(l) For the avoidance of doubt it is stated that the Company is
the grantor as defined in paragraph 1(1) Schedule 9 ICTA 1988.
(m) Any Option granted to an employee or director under this
Sub-Plan shall be limited to take effect so that immediately
following such grant, the aggregate market value (determined
at the time prescribed by paragraph 28 Schedule 9 ICTA 1988
and calculated in accordance with the provisions of the said
Schedule 9) of shares of Common Stock which the optionholder
can acquire under this Sub-Plan and any other scheme or
schemes, not being a savings-related share option scheme,
approved under the said Schedule 9 and established by the
grantor or by any associated company (as defined in Section
416 ICTA 1988) of the grantor (and not exercised), shall not
exceed(pound)30,000 or such other sum as may be prescribed
from time to time by paragraph 28 Schedule 9 ICTA 1988,
provided always that this limit shall not exceed the
limitations set out in the Plan.
(n) An Option will only be granted under this Sub-Plan to an
employee (other than one who is a director) or a full-time
director of the Company or a subsidiary participating in this
Sub-Plan. For this purpose, a full-time director is one who is
employed by the Company required to work at least 25 hours a
week excluding meal-times in the business of the Company or
its Subsidiaries. For the avoidance of doubt an Option will
not be granted under this Sub-Plan to a consultant or director
who is not an employee of the Company or any of its
Subsidiaries, and all references in the Plan to Options
granted to consultants shall be disregarded.
(o) The Company shall, not later than 30 days after the actual
receipt of the written notice of exercise of an Option given
in accordance with the provisions of the Plan, together with
the payment of the aggregate exercise price in respect of the
shares of Common
-3-
<PAGE>
Stock to be issued or transferred pursuant to the exercise of
an Option, allot and issue credited as fully paid or transfer
to the Optionee and cause to be registered in his name the
number of shares of Common Stock specified in the written
notice.
(p) The following shall not form part of and shall therefore be
disregarded for the purposes of the Sub-Plan:
(i) in Paragraph 3 of the Plan, the words "the fair
market value of a share of Common Stock; whether and
under what conditions to restrict the sale or other
disposition of the shares of Common Stock acquired
upon the exercise of an Option and if so whether and
under what circumstances to waive such restriction;
whether to accelerate the date of exercise of any
option or installment; whether shares of Common Stock
may be issued upon the exercise of an option as
partly paid, and, if so, the dates when future
installments of the exercise price shall become due
and the amounts of such installment; and with the
consent of the optionee, to cancel or modify an
option, provided that the modified provision is
permitted to be included in an Option granted under
the terms of the Plan";
(ii) in the first paragraph of Paragraph 7, the
parenthetical that reads, "or the amount due on
exercise if the applicable Contract permits
installment payments" and the language from "(b)" to
the end of that paragraph; and
(iii) all references in the Plan to "Incentive Stock
Options" or "Non-Qualified Stock Options."
(q) This Sub-Plan shall not become effective in any manner until
and unless a closing occurs in connection with that certain
Share Purchase Agreement dated as of August 17, 1998, as
amended, by and among the Company, SolCom Systems Limited
("SolCom") and certain shareholders and shareholders'
representatives of SolCom.
ADOPTED ON BEHALF OF THE COMPANY:
By: /s/ Stephen B. Gray
------------------------------------------
Stephen B. Gray
President and Chief Executive Officer
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EXHIBIT 5.1
[PARKER CHAPIN FLATTAU & KLIMPL, LLP LETTERHEAD]
April 19, 1999
Ion Networks, Inc.
21 Meridian Road
Edison, New Jersey 08820
RE: ION NETWORKS, INC.
Gentlemen:
We have acted as counsel to Ion Networks, Inc. (the "Company")
in connection with its Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission relating to
the offering of up to 3,000,000 shares of common stock, par value $.001 per
share (the "Common Stock"), to employees and directors of, and consultants to,
the Company or any parent or subsidiary of the Company upon the exercise of
options which have been, or may from time to time be, granted by the Company
under the Company's 1998 Stock Option Plan (the "Plan"), and such additional
indeterminate number of shares of Common Stock as may be issued under the
anti-dilution provisions of the Plan.
In rendering the opinions expressed below, we have examined
the Certificate of Incorporation of the Company, as amended, the By-laws of the
Company and minutes of the corporate proceedings of the Company relating to the
Plan. In addition, we have examined and relied upon such other matters of law,
certificates and examinations of public officials as we have deemed relevant to
the rendering of this opinion. We have not examined each option contract in
respect of options granted under the Plan. We have, however, examined the form
of option contract which the Company has advised us is the form of option
contract used by it under the Plan. We have also been informed by the Company
that each option contract between the Company and option holders under the Plan
is substantially in the form of the option contract we have examined. In all of
our examinations, we have assumed the accuracy of all information furnished to
us, the genuineness of all documents, the conformity to originals of all
documents submitted to us as certified, conformed, facsimile or photostatic
copies thereof, as well as the genuineness of all signatures on all such
documents.
Where reference is made in this opinion to matters within our
knowledge, or to facts and circumstances known to us, such reference means the
actual knowledge of those attorneys within the firm who have given substantive
attention to the foregoing agreements and instruments, without, however,
independent investigation of any matter except as otherwise expressly noted
therein.
<PAGE>
Our opinion is limited to the date hereof and we do not in any
event undertake to advise you of any facts or circumstances occurring or coming
to our attention subsequent to the date hereof.
Finally, we are counsel admitted to practice only in the State
of New York, and we express no opinions as to the applicable laws of any
jurisdiction other than those of the State of New York and the United States of
America.
Based upon and subject to the foregoing, we are of the opinion
that the shares of the Company's Common Stock to be issued pursuant to the
exercise of options granted or to be granted under the Plan will be, when issued
pursuant to the provisions of the Plan, validly issued, fully-paid and
non-assessable.
We consent to the filing of a copy of this opinion as an
exhibit to the Company's Registration Statement with respect to the Plan.
Very truly yours,
/S/ PARKER CHAPIN FLATTAU & KLIMPL, LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Ion Networks, Inc. (formerly MicroFrame, Inc.) on Form S-8 of our report dated
June 26, 1998, on our audits of the consolidated financial statements of
MicroFrame, Inc. and Subsidiary as of March 31, 1998 and 1997, and for the years
ended March 31, 1998 and 1997, which report is included in the Annual Report on
Form 10-KSB.
/S/ PRICEWATERHOUSECOOPERS LLP
New York, New York
April 19, 1999
