<PAGE> 1
As filed with the Securities and Exchange Commission on November 10, 1998
File No. 333-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PICTURETEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2835972
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
100 Minutemen Road
Andover, Massachusetts 01810
(Address of Principal Executive Offices)
1998 ACQUISITION STOCK OPTION PLAN
________________________
(Full title of the Plan)
W. Robert Kellegrew, Esq.
General Counsel
PictureTel Corporation
100 Minuteman Road
Andover, Massachusetts 01810
(978) 292-5000
____________________________________________________
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================
Title Of Securities Amount Proposed Maximum Proposed Maximum Amount Of
To Be To Be Offering Price Per Aggregate Offering Registration
Registered Registered Share (1) Price (1) Fee
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
Par Value $.01 400,000 shares $7.25 $2,900,000 $807.00
=================================================================================================
</TABLE>
(1) ESTIMATED SOLELY FOR THE PURPOSE OF DETERMINING THE REGISTRATION FEE. FOR
THE PURPOSE OF DETERMINING THE REGISTRATION FEE, THE MAXIMUM OFFERING PRICE
PER SHARE AND AGGREGATE OFFERING PRICE HAVE BEEN DETERMINED, PURSUANT TO
RULE 457(H) OF THE SECURITIES ACT OF 1933, ON THE BASIS OF THE AVERAGE OF
THE HIGH AND LOW PRICES OF THE COMMON STOCK, PAR VALUE $.01 PER SHARE (THE
"COMMON STOCK"), OF PICTURETEL CORPORATION, REPORTED ON THE NATIONAL
ASSOCIATION OF SECURITY DEALERS, INC. AUTOMATED QUOTATIONS NATIONAL MARKET
SYSTEM ON NOVEMBER 6, 1998.
EXHIBIT INDEX ON PAGE II-6
Page 1 of 6 Pages
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
PictureTel Corporation (the "Registrant" or the "Company") hereby
incorporates the following documents herein by reference:
(a) The Registrant's Prospectus filed with the Securities and Exchange
Commission (the "Commission") on September 22, 1998 under the
Securities Act of 1933, as amended, in connection with the
Registrant's Registration Statement on Form S-4 relating to the
Merger of SNI Acquisition Corporation, a California corporation and
an indirect wholly owned subsidiary of PictureTel ("Merger Sub"),
with and into Starlight Networks Incorporated, a California
corporation ("Starlight"), pursuant to an Agreement and Plan of
Merger dated as of August 14, 1998 by and among PictureTel,
PictureTel Technology Corporation, a Delaware corporation and a
wholly owned subsidiary of PictureTel, Merger Sub and Starlight.
(b) Quarterly Report on Form 10-Q for the quarter ended June 30, 1998,
as filed with the Commission pursuant to Section 13 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
on August 12, 1998.
(c) Form of the Registrant's Common Stock Certificate (Incorporated by
Reference to Exhibit 4(b) to the Registrant's Registration
Statement on Form S-8, No. 33-36315, as filed with the Commission
on August 10, 1990.)
All documents subsequently filed by the Registrant pursuant to Section
13(a), Section 13(c), Section 14 and Section 15(d) of the Exchange Act prior to
the filing of a post-effective amendment to this Registration Statement that
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated herein by
reference from the date of filing of such documents.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended,
provides that a corporation 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 or investigative (other than an
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 director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other 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. Section 145 further provides that a corporation similarly may
indemnify any such person serving in any such capacity who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the
II-1
<PAGE> 3
corporation to procure a judgment in its favor, against expenses actually and
reasonably incurred 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 interest of the
corporation and 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 Delaware Court
of Chancery or such other court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person in fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to include in its certificate of incorporation a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided, however, that such provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Registrant's Third Restated Certificate of Incorporation provides
that the Registrant's directors shall not be liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent and only to the extent that exculpation from liabilities is
not permitted under the Delaware General Corporation Law as in effect at the
time such liability is determined.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
II-2
<PAGE> 4
Item 8. EXHIBITS.
Exhibit
3.1. Third Restated Certificate of Incorporation of the Registrant
(Incorporated by Reference to Exhibit 3.1.4 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 27,
1992).
3.2. Amended and Restated By-Laws of the Registrant (Incorporated by
Reference to Exhibit 1 to the Registrant's Current Report on
Form 8-K as filed with the Commission on September 14, 1994).
5. Opinion of Ropes & Gray.
10.1 1998 Acquisition Stock Option Plan.
23.1. Consent of Ropes & Gray (See Exhibit 5).
23.2. Consent of PricewaterhouseCoopers, LLP.
24. Power of Attorney (Included on Signature Page).
Item 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement, to include any material
information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement.
(2) That, for the purpose 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 herein, 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.
(b) 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 the Registration
Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the
II-3
<PAGE> 5
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-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 on Form S-8 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Andover, The Commonwealth
of Massachusetts, on this 30th day of October, 1998.
PICTURETEL CORPORATION
By: /s/ Bruce R. Bond
--------------------------------------------
Name: Bruce R. Bond
Title: Chairman of the Board
President and Chief Executive Officer
POWER OF ATTORNEY
Dated: October 30, 1998
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes and constitutes W. Robert Kellegrew and Bruce R. Bond, and
each of them singly, his true and lawful attorneys, with full power to them, to
execute in the name and on behalf of such person in the capacities indicated
below any and all amendments (including any post-effective amendments) to this
Registration Statement and to file the same, with exhibits thereto, and other
documents in connection therewith, making such changes in this Registration
Statement as the Registrant deems appropriate, and hereby ratifies and confirms
his signature as it may be signed by said attorneys, or any of them, to any and
all such amendments.
<TABLE>
<CAPTION>
Signature Capacity in Which Signed Date
- --------- ------------------------ ----
<S> <C> <C>
/s/ Bruce R. Bond Chairman of the Board, October 30, 1998
- -------------------------- President and Chief Executive
Bruce R. Bond Officer (Principal Executive
Officer)
/s/ Norman E. Gaut Director October 30, 1998
- -------------------------
Norman E. Gaut
Director October 30, 1998
- -------------------------
David B. Levi
/s/ Robert T. Knight Director October 30, 1998
- -------------------------
Robert T. Knight
/s/ Enzo Torresi Director October 30, 1998
- -------------------------
Enzo Torresi
/s/ Arthur L. Fatum Vice President and Chief November 9, 1998
- ------------------------- Financial Officer (Principal
Arthur L. Fatum Accounting Officer and
Principal Financial Officer)
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
Number Title of Exhibit
- ------ ----------------
3.1. Third Restated Certificate of Incorporation of the Registrant
(Incorporated by Reference to Exhibit 3.1.4 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 27,
1992).
3.2. Amended and Restated By-Laws of the Registrant (Incorporated by
Reference to Exhibit 1 to the Registrant's Current Report on Form
8-K as filed with the Commission on September 14, 1994)
5. Opinion of Ropes & Gray
10.1 1998 Acquisition Stock Option Plan.
23.1. Consent of Ropes & Gray (See Exhibit 5).
23.2. Consent of PricewaterhouseCoopers, LLP.
24. Power of Attorney (Included on Signature Page).
II-6
<PAGE> 1
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2624
(617) 951-7000
FAX: (617) 951-7050
November 10, 1998
PictureTel Corporation
100 Minuteman Road
Andover, MA 01810
Re: PICTURETEL CORPORATION
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-8 (the "Registration Statement") filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, for the
registration of 400,000 shares of Common Stock, par value $.01 per share (the
"Shares"), of PictureTel Corporation, a Delaware corporation (the "Company"),
under the 1998 Acquisition Stock Option Plan (the "Plan"). The Shares are to be
sold from time to time pursuant to the Plan.
We have acted as counsel for the Company and are familiar with the
action taken by the Company in connection with the Plan. For purposes of this
opinion, we have examined the Plan and such other documents, records,
certificates, and other instruments as we have deemed necessary.
For purposes of our opinion, we have assumed that (i) any consideration
received by the Company upon the issuance or exercise of any option granted
under the Plan will at least be equal to the par value of the Shares issuable
upon the exercise of any such option, and (ii) the number of Shares to be issued
upon any such exercise, together with the total number of shares of the
Company's Common Stock previously outstanding, will not exceed the authorized
number of shares of Common Stock specified in the Company's certificate of
incorporation as then in effect.
We express no opinion as to the applicability of compliance with or
effect of federal law or the law of any jurisdiction other than The Commonwealth
of Massachusetts and the General Corporation Law of the State of Delaware.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, when the Shares have been issued and sold and consideration
received therefor by the Company in accordance with the terms of the Plan, the
Shares will be validly issued, fully paid, and non-assessable.
<PAGE> 2
PictureTel Corporation -2-
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement. It is understood that this opinion is to be used only in
connection with the offer and sale of the Shares while the Registration
Statement is in effect.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
<PAGE> 1
PICTURETEL CORPORATION
1998 ACQUISITION STOCK OPTION PLAN
1. PURPOSE
The purpose of this Acquisition Stock Option Plan (the "Plan") is to
advance the interests of PictureTel Corporation (the "Company") and its
subsidiaries by enhancing the ability of the Company and its subsidiaries to
complete acquisitions and attract and retain employees of and consultants to
businesses acquired by the Company who are in a position to make significant
contributions to the future success of the Company and to encourage them to take
into account the long-term interests of the Company.
The Plan provides for the award of options to purchase shares of the
common stock, par value $0.01 per share, of the Company ("Stock"). Options
granted pursuant to the Plan will not be "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. ELIGIBILITY FOR AWARDS
It is intended that the options hereunder be issued only to employees
(excluding directors and officers of the Company) of or consultants to
businesses acquired by the Company who, in the opinion of the Board of
Directors, are in a position to make a significant contribution to the future
success of the Company and its subsidiaries. A subsidiary for purposes of the
Plan shall be a corporation in which the Company owns, directly or indirectly,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock. Persons selected for awards under the Plan are referred
to herein as "participants."
3. ADMINISTRATION
The Plan shall be administered by the Board of Directors (the "Board of
Directors") of the Company. The Board of Directors shall have authority, not
inconsistent with the express provisions of the Plan, (a) to grant awards
consisting of options to such participants as the Board of Directors may select;
(b) to determine the time or times when awards shall be granted and the number
of shares of Stock subject to each award; (c) to determine the terms and
conditions of each award; (d) to prescribe the form or forms of any instruments
evidencing awards and any other instruments required under the Plan and to
change such forms from time to time; (e) to adopt, amend and rescind rules and
regulations for the administration of the Plan; and (f) to interpret the Plan
and to decide any questions and settle all controversies and disputes that may
arise in connection with the Plan. Such determinations of the Board of Directors
shall be conclusive and shall bind all parties. Subject to Section 8 the Board
of Directors shall also have the authority, both generally and in particular
instances, to waive compliance by a participant with any obligation
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<PAGE> 2
to be performed by the participant under an award, to waive any condition or
provision of an award, and to amend or cancel any award (and if an award is
canceled, to grant a new award on such terms as the Board of Directors shall
specify) except that the Board of Directors may not take any action with respect
to an outstanding award that would adversely affect the rights of the
participant under such award without such participant's consent. Nothing in the
preceding sentence shall be construed as limiting the power of the Board of
Directors to make adjustments required by Section 5(c) and Section 6(i).
The Board of Directors may, in its discretion, delegate some or all of
its powers with respect to the Plan to a committee (the "Committee"), in which
event all references in this Plan, as appropriate, to the Board of Directors
shall be deemed to refer to the Committee. The Committee, if one is appointed,
shall consist of at least two (2) directors. A majority of the members of the
Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members.
4. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which it is approved by
the Board of Directors of the Company.
No awards shall be granted under the Plan after the completion of ten
(10) years from the date on which the Plan was adopted by the Board of
Directors, but awards previously granted may extend beyond that date.
5. SHARES SUBJECT TO THE PLAN
(a) NUMBER OF SHARES. Subject to adjustment as provided in Section
5(c), the aggregate number of shares of Stock that may be delivered upon the
exercise of awards granted under the Plan shall be 400,000. If any award granted
under the Plan terminates without having been exercised in full, or upon
exercise is satisfied other than by delivery of Stock, the number of shares of
Stock as to which such award was not exercised shall be available for future
grants within the limits set forth in this Section 5(a).
(b) SHARES TO BE DELIVERED. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board of Directors so decides in its
sole discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
(c) CHANGES IN STOCK. In the event of a stock dividend, stock split
or combination of shares, recapitalization or other change in the Company's
capital stock, the number and kind of shares of Stock subject to awards then
outstanding or subsequently granted under the Plan, the
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<PAGE> 3
exercise price of such awards, the maximum number of shares of Stock that may be
delivered under the Plan, and other relevant provisions shall be appropriately
adjusted by the Board of Directors, whose determination shall be binding on all
persons.
The Board of Directors may also adjust the number of shares subject to
outstanding awards and the exercise price and the terms of outstanding awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, consolidations or mergers (except those described in
Section 6(i)), acquisitions or dispositions of stock or property or any other
event if it is determined by the Board of Directors that such adjustment is
appropriate to avoid distortion in the operation of the Plan.
6. TERMS AND CONDITIONS OF OPTIONS
(a) EXERCISE PRICE OF OPTIONS. The exercise price of each option shall
be determined by the Board of Directors, but the exercise price, in the case of
an original issue of authorized stock, shall not be less than fifty percent
(50%) of the fair market value per share of the Stock at the time the option is
granted. For purposes of this Plan, fair market value of a share of stock on any
date shall be the average of the bid and asked prices at the close of the
trading day in the over-the-counter market with respect to such Stock as
reported by the National Association of Securities Dealers, Inc. Automated
Quotations System or such similar system on which the Stock is quoted.
(b) DURATION OF OPTIONS. Options shall be exercisable during such
period or periods as the Board of Directors may specify. The latest date on
which an option may be exercised (the "Final Exercise Date") shall be the date
that is ten (10) years from the date the option was granted or such earlier date
as the Board of Directors may specify at the time the option is granted.
(c) EXERCISE OF OPTIONS. Options shall become exercisable at such time
or times and upon such conditions as the Board of Directors shall specify. In
the case of an option not immediately exercisable in full, the Board of
Directors may at any time accelerate the time at which all or any part of the
option may be exercised.
(1) Options may be exercised only in writing. Written notice
of exercise must be signed by the proper person and furnished to the
Company, together with (i) such documents as the Board of Directors may
require and (ii) payment in full as specified below in Section 6(d) for
the number of shares for which the option is exercised.
(2) The delivery of Stock upon the exercise of an option shall
be subject to compliance with (i) applicable federal and state laws and
regulations, (ii) if the outstanding Stock is at the time listed on any
stock exchange, the listing requirements of such exchange, and (iii)
Company counsel's approval of all other legal matters in connection
with the issuance and delivery of such Stock. If the sale of Stock has
not been registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the option, such
representations or agreements as counsel for the Company
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<PAGE> 4
may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Stock bear an appropriate legend
restricting transfer.
(3) The Board of Directors shall have the right to require
that the participant exercising the option remit to the Company an
amount sufficient to satisfy any federal, state, or local withholding
tax requirements (or make other arrangements satisfactory to the
Company with regard to such taxes) prior to the delivery of any Stock
pursuant to the exercise of the option. If permitted by the Board of
Directors, either at the time of the grant of the option or the time of
exercise, the participant may elect, at such time and in such manner as
the Board of Directors may prescribe, to satisfy such withholding
obligation by (i) delivering to the Company Stock (which in the case of
Stock acquired from the Company shall have been owned by the
participant for at least six months prior to the delivery date) having
a fair market value equal to such withholding obligation, or (ii)
requesting that the Company withhold from the shares of Stock to be
delivered upon the exercise a number of shares of Stock having a fair
market value equal to such withholding obligation.
(4) If an option is exercised by the executor or
administrator of a deceased participant, or by the person or persons to
whom the option has been transferred by the participant's will or the
applicable laws of descent and distribution, the Company shall be under
no obligation to deliver Stock pursuant to such exercise until the
Company is satisfied as to the authority of the person or persons
exercising the option.
(d) PAYMENT FOR AND DELIVERY OF STOCK. Stock purchased upon
exercise of an option under the Plan shall be paid for as follows: (1) in cash
or by personal check, certified check, bank draft or money order payable to the
order of the Company; or (2) if so permitted by the Board of Directors, (i)
through the delivery of shares of Stock (which, in the case of Stock acquired
from the Company, shall have been held for at least six (6) months prior to
delivery) having a fair market value on the last business day preceding the date
of exercise equal to the purchase price or (ii) by delivery of a promissory note
of the participant to the Company, such note to be payable on such terms as are
specified by the Board of Directors, provided, however, that if the Stock
delivered upon exercise is an original issuance of authorized Stock, at least so
much of the purchase price as constitutes the par value of the Stock shall be
paid in cash, (iii) by delivery of an unconditional and irrevocable undertaking
by a broker to deliver promptly to the Company sufficient funds to pay the
exercise price or (iv) by any combination of the permissible forms of payment;
provided, however, that if the Stock delivered upon exercise of the option is an
original issue of authorized Stock, at least so much of the exercise price as
represents the par value of such Stock shall be paid other than by a personal
check or promissory note of the person exercising the option.
(e) RIGHTS AS SHAREHOLDER. A participant shall not have the rights
of a shareholder with regard to awards under the Plan except as to Stock
actually received by the participant under the Plan.
-4-
<PAGE> 5
(f) NONTRANSFERABILITY OF AWARDS. Except as the Board of Directors
may otherwise determine, no award may be transferred other than by will or by
the laws of descent and distribution, and during a participant's lifetime an
award may be exercised only by the participant.
(g) DEATH. If a participant dies or ceases to be an employee by
reason of permanent disability (as determined by the Board of Directors), each
option held by the participant immediately prior to death or such permanent
disability may be exercised, to the extent it was exercisable immediately prior
to death or such permanent disability, by the participant or by the
participant's executor or administrator or by the person or persons to whom the
option is transferred by will or the applicable laws of descent and
distribution, at any time within the one-year period (or such longer or shorter
period as the Board of Directors may determine) beginning with the date of the
participant's death or permanent disability but in no event beyond the Final
Exercise Date. Except as the Board of Directors may otherwise determine, all
options held by a participant immediately prior to death or such permanent
disability that are not then exercisable shall terminate on the date of death.
(h) TERMINATION OF SERVICE OTHER THAN BY DEATH OR PERMANENT
DISABILITY. If a participant's employment with the Company and its subsidiaries
terminates for any reason other than by death or permanent disability, unless
the Board of Directors shall otherwise determine, all options held by the
employee that are not then exercisable shall terminate. Options that are
exercisable on the date employment terminates shall continue to be exercisable
for a period of three (3) months (or such longer period as the Board of
Directors may determine, but in no event beyond the Final Exercise Date) unless
the employee was discharged for cause that in the opinion of the Board of
Directors casts such discredit on the employee as to justify immediate
termination of the employee's options. After completion of the post-termination
exercise period, such options shall terminate to the extent not previously
exercised, expired or terminated. For purposes of this Section 6(h), employment
shall not be considered terminated (i) in the case of sick leave or other bona
fide leave of absence approved for purposes of the Plan by the Board of
Directors, so long as the employee's right to reemployment is guaranteed either
by statute or by contract, or (ii) in the case of a transfer of employment
between the Company and a subsidiary or between subsidiaries, or to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option. For purposes of this Section 6(h), a
change in a classification by the Company to a "W-9 employee" or "W-9
consultant" shall be treated as a termination of employment.
In the case of a participant who is not an employee, provisions
relating to the exercisability of options following termination of service shall
be specified in the award. If not so specified, all options held by such
participant that are not then exercisable shall terminate upon termination of
service. Options that are exercisable on the date the participant's service as a
consultant or adviser terminates shall continue to be exercisable for a period
of three (3) months (or such longer period as the Board of Directors may
determine, but in no event beyond the Final Exercise Date) unless the consultant
or adviser was terminated for cause that in the opinion of the Board of
Directors casts such discredit on him or her as to justify immediate termination
of his or her options. After
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<PAGE> 6
completion of the post-termination exercise period, such options shall terminate
to the extent not previously exercised, expired or terminated.
(i) MERGERS, CHANGE IN CONTROL, ETC.
(1) Immediately prior to the occurrence of a Change in Control,
each outstanding option granted hereunder shall automatically become exercisable
in full unless the Board of Directors shall otherwise expressly provide to the
contrary at the time of grant. In addition to the foregoing, the Board of
Directors may, in its sole discretion, at any time prior to or after a Change in
Control provide that some or all of the unexercised portion of any one or more
outstanding options shall be immediately exercisable and vested.
(2) In the event of a consolidation or merger in which the
Company is not the surviving corporation or which results in the acquisition of
substantially all the outstanding capital stock by a single person or entity or
by a group of persons and/or entities acting in concert, or in the event of the
complete liquidation of the Company or the sale or transfer of substantially all
of the assets of the Company (a "Covered Transaction"), all outstanding options
will terminate as of the effective date of the Covered Transaction; provided,
however, that at least twenty (20) days prior to the effective date of any such
merger, consolidation, liquidation or sale of assets, but subject to Section
6(i)(3) and Section 6(i)(4), the Board of Directors shall make all outstanding
options exercisable immediately prior to consummation of such Covered
Transaction to the extent that such options are not exercisable immediately
prior to the consummation of the Covered Transaction pursuant to this Section
6(i)(1).
(3) If an outstanding option is subject to performance or other
conditions (other than conditions relating the mere passage of time and
continued employment) which will not have been satisfied at the time of the
Covered Transaction, the Board of Directors may, in its sole discretion, remove
such conditions. If, however, the Board of Directors does not remove such
conditions, such option will terminate, because the conditions have not been
satisfied, as of the date of the Covered Transaction notwithstanding Section
6(i)(2).
(4) With respect to an outstanding option held by a participant
who, following the Covered Transaction, will be employed by a corporation which
is the surviving or acquiring corporation in such transaction or an affiliate of
such corporation, the Board of Directors may, in lieu of the action described in
Section 6(i)(2) or in addition to any option being exercisable immediately prior
to consummation of the Covered Transaction pursuant to Section 6(i)(1), arrange
to have such surviving or acquiring corporation or affiliate assume the option
or grant to the participant a replacement option which, in the judgment of the
Board of Directors, is substantially equivalent to the option.
(5) A "Change in Control" shall be deemed to have occurred if
any of the following conditions shall have been satisfied: (i) any Person after
the date of the approval of this Plan becomes the Beneficial Owner, directly or
indirectly, of securities of the Company
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representing twenty-five percent (25%) or more of the combined voting power of
the then outstanding securities of the Company; (ii) during any period of not
more than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors and any new director (other than a director
designated by a Person who has entered into an agreement with the Company to
effect a transaction described in clauses (i), (ii) or (iii) of this paragraph)
whose election by the Board of Directors or nomination for election by the
stockholders of the Company was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or (iii) the
shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent, either by remaining outstanding or being
converted into voting securities of the surviving entity, sixty percent (60%) or
more of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company or similar transaction in which no person
acquires twenty five percent (25%) or more of the combined voting power of the
then outstanding securities of the Company; or (iv) the shareholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all the
assets of the Company. The term "Person" shall have the meaning given in Section
3 (a) (9) of the Securities Exchange Act of 1934, as modified and used in
Section 13 and Section 14 (d) thereof; provided, however, a Person shall not
include (i) the Company, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or (iii) a corporation or other
entity owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
The term "Beneficial Owner" shall have the meaning defined in Rule 13d-3 under
the Securities Exchange Act of 1934 as amended from time to time.
7. EMPLOYMENT RIGHTS
Neither the adoption of the Plan nor the grant of awards shall confer
upon any participant any right to continue as an employee or director of, or
consultant or adviser to, the Company or any parent or subsidiary or affect in
any way the right of the Company or any parent or subsidiary to terminate them
at any time. Except as specifically provided by the Board of Directors in any
particular case, the loss of existing or potential profit in awards granted
under this Plan shall not constitute an element of damages in the event of
termination of the relationship of a participant even if the termination is in
violation of an obligation of the Company to the participant by contract or
otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
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Neither the adoption of the Plan nor the grant of awards to a
participant shall affect the Company's right to make awards to such participant
that are not subject to the Plan, to issue to such participant Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Stock may be
issued.
The Board of Directors may at any time discontinue granting awards
under the Plan. With the consent of the participant, the Board of Directors may
at any time cancel an existing award in whole or in part and grant another award
for such number of shares as the Board of Directors specifies. The Board of
Directors may at any time or times amend the Plan or any outstanding award for
the purpose of satisfying the requirements of the Code or of any changes in
applicable laws or regulations or for any other purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to further grants of
awards, but no such amendment shall adversely affect the rights of any
participant (without the participant's consent) under any award previously
granted.
9. GOVERNING LAW
This Plan shall be governed by, construed and enforced in accordance
with the laws of The Commonwealth of Massachusetts.
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EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report, which includes an explanatory paragraph
regarding the restatement of the financial statements for the year ended
December 31, 1996, dated February 25, 1998, which appears in the 1997
PictureTel Corporation Annual Report on Form 10-K, on our audits of the
consolidated financial statements of PictureTel Corporation as of December 31,
1997 and 1996 and for each of the three years in the period ended December 31,
1997. We also consent to the incorporation by reference of such report to the
Financial Statement Schedule for the three years ended December 31, 1997 listed
under Item 14(a) of PictureTel Corporation's Annual Report on Form 10-K for the
year ended December 31, 1997 when such schedule is read in conjunction with the
financial statements referred to in our report. The audits referred to in such
report also included this Financial Statement Schedule.
PricewaterhouseCoopers LLP
--------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 10, 1998
