<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EMC CORPORATION
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(Exact name of issuer as specified in its charter)
Massachusetts 04-2680009
- --------------------------------- ------------------------------------
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
35 Parkwood Drive, Hopkinton, Massachusetts 01748 (508) 435-1000
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(Address and telephone number, including area code, of registrant's principal
executive offices)
EMC CORPORATION
Millennia III, Inc. 1996 Stock Option Plan
------------------------------------------
Common Stock Option Program
------------------------------------------
(Full title of the Plans)
Paul T. Dacier, Esq.
Vice President and General Counsel
EMC Corporation
171 South Street
Hopkinton, Massachusetts 01748
(508) 435-1000
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
----------------------------
Copy to:
Marilyn French, Esq.
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to be Price Offering Registration
to be Registered Registered(1) Per Share Price Fee(2)
- -------------------------- ------------ --------- --------- ------------
<S> <C> <C> <C> <C>
MILLENNIA III, INC.
1996 STOCK OPTION PLAN
Common Stock, par 36,492(3) $1.48 $54,008.16 $15.94
value $.01 per share
COMMON STOCK OPTION PROGRAM
Common Stock, par 100,000(4) $42.25 $4,225,000.00 $1,246.38
value $.01 per share
</TABLE>
================================================================================
(1) Also registered hereunder are such additional number of shares of common
stock, presently indeterminable, as may be necessary to satisfy the
antidilution provisions of the Plan and Agreements (as defined below) to
which this Registration Statement relates.
(2) The registration fee has been calculated on the basis of the price at which
the options may be exercised.
(3) Represents shares that may be issued upon exercise of options granted under
the Millennia III, Inc. 1996 Stock Option Plan (the "Plan").
(4) Represents shares that may be issued to employees of certain subsidiaries
of the Company upon exercise of options granted pursuant to non-qualified
stock option agreements in the form filed herewith (the "Agreements").
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- ------ ---------------------------------------
The Company hereby incorporates by reference the documents listed in (a)
through (c) below. In addition, all documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934 (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 thereof from the date of filing of such
documents.
(a) The Company's latest annual report filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 or the latest Prospectus
filed pursuant to Rule 424(b) under the Securities Act of 1933, which
contains either directly or by incorporation by reference audited
financial statements for the Company's latest fiscal year for which
such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year
covered by the annual report or the Prospectus referred to in (a)
above.
(c) The description of the Company's Common Stock which is contained on
Form 8-A filed by the Company under Section 12 of the Securities
Exchange Act of 1934, as amended, on March 4, 1988.
Item 4. Description of Securities
- ------ -------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
- ------ --------------------------------------
The consolidated financial statements of the Company as of December 31,
1997 and December 31, 1996 and for each of the three years in the period ended
December 31, 1997 appearing in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 incorporated by reference in this
Registration Statement have been incorporated by reference herein in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of such firm as experts in accounting and auditing.
The validity of the authorization and issuance of the Common Stock offered
hereby will be passed upon for the Company by Hutchins, Wheeler & Dittmar, a
Professional Corporation, Boston, Massachusetts.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers
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Section 67 of Chapter 156B of the General Laws of the Commonwealth of
Massachusetts provides as follows:
"Section 67. Indemnification of directors, officers, employees and other
agents of a corporation, and persons who serve at its request as directors,
officers, employees or other agents of another organization, or who serve at its
request in any capacity with respect to any employee benefit plan, may be
provided by it to whatever extent shall be specified in or authorized by (i) the
articles of organization or (ii) a by-law adopted by the stockholders or (iii) a
vote adopted by the holders of a majority of the shares of stock entitled to
vote on the election of directors. Except as the articles of organization or by-
laws otherwise require, indemnification of any persons referred to in the
preceding sentence who are not directors of the corporation may be provided by
it to the extent authorized by the directors. Such indemnification may include
payment by the corporation of expenses incurred in defending a civil or criminal
action or proceeding in advance of the final disposition of such action or
proceeding, upon receipt of an undertaking by the person indemnified to repay
such payment if he shall be adjudicated to be not entitled to indemnification
under this section which undertaking may be accepted without reference to the
financial ability of such person to make repayment. Any such indemnification
may be provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan.
No indemnification shall be provided for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or to the extent that such matter relates to service
with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
The absence of any express provision for indemnification shall not limit
any right of indemnification existing independently of this section.
A corporation shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability."
Section 7 of the By-Laws of the Company provides as follows:
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<PAGE>
"SECTION 7. INDEMNIFICATION OF DIRECTORS AND OFFICERS
---------
The corporation shall, to the extent legally permissible, indemnify each of
its directors and officers (including persons who act at its request as
directors, officers or trustees of another organization or in any capacity with
respect to any employee benefit plan) against all liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees, reasonably incurred by him in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, in which he may be involved or with which he may be
threatened, while in office or thereafter, by reason of his being or having been
such a director or officer, except with respect to any matter as to which he
shall have been adjudicated in any proceeding not to have acted in good faith in
the reasonable belief that his action was in the best interests of the
corporation (any person serving another organization in one or more of the
indicated capacities at the request of the corporation who shall have acted in
good faith in the reasonable belief that his action was in the best interests of
such other organization to be deemed as having acted in such manner with respect
to the corporation) or, to the extent that such matter relates to service with
respect to any employee benefit plan, in the best interest of the participants
or beneficiaries of such employee benefit plan; provided, however, that as to
any matter disposed of by a compromise payment by such director or officer,
pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless such compromise shall
be approved as in the best interests of the corporation, after notice that it
involves such indemnification: (a) by a disinterested majority of the directors
then in office; or (b) by a majority of the disinterested directors then in
office, provided that there has been obtained an opinion in writing of
independent legal counsel to the effect that such director or officer appears to
have acted in good faith in the reasonable belief that his action was in the
best interests of the corporation; or (c) by the holders of a majority of the
outstanding stock at the time entitled to vote for directors, voting as a single
class, exclusive of any stock owned by any interested director or officer.
Expenses, including counsel fees, reasonably incurred by any director or officer
in connection with the defense or disposition of any such action, suit or other
proceeding may be paid from time to time by the corporation in advance of the
final disposition thereof upon receipt of an undertaking by such director or
officer to repay the amounts so paid to the corporation if it is ultimately
determined that indemnification for such expenses is not authorized under this
Section 7. The right of indemnification hereby provided shall not be exclusive
of or affect any other rights to which any director or officer may be entitled.
As used in this section, the terms, "director" and "officer" include their
respective heirs, executors and administrators, and an "interested" director or
officer is one against whom in such capacity the proceedings in question or
another proceeding on the same or similar grounds is then pending. Nothing
contained in this Section shall affect any rights to indemnification to which
corporate personnel other than directors or officers may be entitled by contract
or otherwise under law."
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<PAGE>
Item 7. Exemption from Registration Claimed
- ------ -----------------------------------
Not applicable.
Item 8. Exhibits
- ------ --------
Number Description
- ------------------
3.1 Articles of Organization, as amended. Incorporated by reference from
Registration Statement on Form S-1 of the Registrant filed February
26, 1986, as amended (File No. 33-3656), from Registration Statement
on Form S-1 of the Registrant, as amended (File No. 33-17218), from
the Registrant's Annual Report on Form 10-K for the fiscal year ended
January 2, 1993 (File No. 0-14367), from the Registration Statement on
Form S-1 of the Registrant, as amended (File No. 33-67224), from the
Registrant's Report on Form 8-K dated November 19, 1993 and from the
Registrant's Report on Form 8-K filed May 26, 1995.
3.2 Bylaws, as amended. Incorporated by reference from Registration
Statement on Form S-3 of the Registrant filed August 5, 1998, as
amended (File No. 333-60177).
4.1 Millennia III, Inc. 1996 Stock Option Plan
4.2 Form of Stock Option Agreement used in connection with the
Registrant's Common Stock Option Program
5.1 Opinion of Hutchins, Wheeler & Dittmar, a Professional Corporation.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Public Accountants
23.2 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation
(included in Exhibit 5.1)
Item 9. Undertakings
- ------ ------------
The undersigned Registrant hereby undertakes the following:
(a) The undersigned Registrant hereby undertakes:
II-4
<PAGE>
(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
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 Section 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.
(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 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
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) The undersigned registrant hereby undertakes, that, 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
II-5
<PAGE>
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-6
<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 Hopkinton, Massachusetts on August 10, 1998.
EMC CORPORATION
/s/ William J. Teuber, Jr.
By: ___________________________________
William J. Teuber, Jr.,
Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS THAT each person whose signature appears
below severally constitutes and appoints Colin G. Patteson, William J. Teuber,
Jr. and Paul T. Dacier, and each of them singly, with the power to act without
the other, as attorneys-in-fact, each with the power of substitution, for him or
her in any and all capacities, to sign any amendment to this Registration
Statement and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting to
said attorneys-in-fact, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact or
any of them, or their or his substitute or substitutes, may lawfully 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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Richard J. Egan
__________________________ Chairman of the Board of Directors August 10, 1998
RICHARD J. EGAN (Principal Executive Officer)
/s/ Michael C. Ruettgers
__________________________ President and Chief Executive Officer August 10, 1998
MICHAEL C. RUETTGERS and Director
/s/ Colin G. Patteson
__________________________ Senior Vice President, Chief August 10, 1998
COLIN G. PATTESON Administrative Officer and Treasurer
(Principal Financial Officer)
/s/ William J. Teuber, Jr.
__________________________ Vice President and Chief Financial August 10, 1998
WILLIAM J. TEUBER, JR. Officer (Principal Accounting Officer)
</TABLE>
II-7
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Michael J. Cronin Director August 10, 1998
_______________________
MICHAEL J. CRONIN
/s/ John F. Cunningham Director August 10, 1998
_______________________
JOHN F. CUNNINGHAM
/s/ John R. Egan Director August 10, 1998
_______________________
JOHN R. EGAN
/s/ Maureen E. Egan Director August 10, 1998
_______________________
MAUREEN E. EGAN
/s/ W. Paul Fitzgerald Director August 10, 1998
_______________________
W. PAUL FITZGERALD
/s/ Joseph F. Oliveri Director August 10, 1998
_______________________
JOSEPH F. OLIVERI
</TABLE>
II-8
<PAGE>
Item 8. Exhibits
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Number Description
- ------ -----------
3.1 Articles of Organization, as amended. Incorporated by reference from
Registration Statement on Form S-1 of the Registrant filed February 26,
1986, as amended (File No. 33-3656), from Registration Statement on
Form S-1 of the Registrant, as amended (File No. 33-17218), from the
Registrant's Annual Report on Form 10-K for the fiscal year ended
January 2, 1993 (File No. 0-14367), from the Registration Statement on
Form S-1 of the Registrant, as amended (File No. 33-67224), from the
Registrant's Report on Form 8-K dated November 19, 1993 and from the
Registrant's Report on Form 8-K filed May 26, 1995.
3.2 Bylaws, as amended. Incorporated by reference from Registration
Statement on Form S-3 of the Registrant filed August 5, 1998, as
amended (File No. 333-60177).
4.1 Millennia III, Inc. 1996 Stock Option Plan
4.2 Form of Stock Option Agreement used in connection with the Registrant's
Common Stock Option Program
5.1 Opinion of Hutchins, Wheeler & Dittmar, a Professional Corporation.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Public Accountants
23.2 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation
(included in Exhibit 5.1)
<PAGE>
EXHIBIT 4.1
Explanatory Note: The Millennia III, Inc. 1996 Stock Option Plan was assumed
by EMC Corporation pursuant to an Agreement and Plan of
Merger dated as of July 1, 1998 except that the options
granted thereunder relate to rights to purchase shares of
Common Stock, $.01 par value per share, of EMC Corporation.
<PAGE>
EXHIBIT 4.1
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- --------------------------------------------------------------------------------
MILLENNIA III, INC.
1996 STOCK OPTION PLAN
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- --------------------------------------------------------------------------------
<PAGE>
Millennia III, Inc.
1996 STOCK OPTION PLAN
TABLE OF CONTENTS
Page
----
<PAGE>
Millennia III, Inc.
1996 STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1996 Stock Option Plan (the "Plan") is to encourage
----
directors, consultants and key employees of Millennia III, Inc. (the "Company")
-------
and its Subsidiaries (as hereinafter defined) to continue their association with
the Company, by providing favorable opportunities for such persons to
participate in the ownership of the Company and in its future growth through the
granting of stock options (the "Options") which may either be options designed
-------
to qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") (an "ISO") or options not
---- ---
intended to qualify for any special tax treatment under the Code (a "NQO"). The
---
term "Subsidiary" as used in the Plan means a corporation of which the Company
----------
owns, directly or indirectly through an unbroken chain of ownership, fifty
percent (50%) or more of the total combined voting power of all classes of
stock. A person to whom an Option has been granted pursuant to the Plan is
hereinafter referred to as an "Optionee".
--------
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company
(the "Board of Directors") or by a committee appointed by the Board of Directors
(the "Committee"), which shall have the authority to adopt, amend and rescind
such rules and regulations as, in its opinion, may be advisable in the
administration of the Plan. Unless the Board of Directors otherwise provides
for the method by which the appointed committee shall operate, the Committee
shall select one of its members as Chairman and shall hold meetings at such
times and places as it may determine. A majority of the Committee shall
constitute a quorum and acts of the Committee at which a quorum is present, or
acts reduced to or approved in writing by all the members of the Committee,
shall be the valid acts of the Committee. Hereinafter, all references in this
Plan to the "Committee" shall mean the Board of Directors if no Committee has
been appointed. All questions of interpretation and application of such rules
and regulations, of the Plan or of Options granted thereunder shall be subject
to the determination, which shall be final and binding, of a majority of the
Committee. The Plan shall be administered in such a manner as to permit those
Options granted hereunder and specially designated under Section 4 hereof to
qualify as "incentive stock options" as described in Section 422A of the Code.
3. OPTION SHARES
The stock subject to Options under the Plan shall be shares of the
Company's common stock, par value $0.001 per share (the "Stock"). At no time
-----
shall the number of shares of Stock with respect
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 2
to which outstanding Options have been granted plus the number of shares of
Stock issued as a result of the exercise of options under the Plan and which are
still outstanding exceed in the aggregate 130,500 shares (the "Option Pool");
-----------
provided that such aggregate number of shares shall be subject to adjustment in
accordance with the provisions of Section 17. In the event that any outstanding
Option shall expire for any reason or shall terminate by reason of the death or
severance of employment of the Optionee, the surrender of any such Option, or
any other cause, the shares of Stock allocable to the unexercised portion of
such Option may again be subject to an option under the Plan. Should the Company
repurchase any shares of Stock which were acquired pursuant to the exercise of
options granted under the Plan, such shares may be returned to the Option Pool
pursuant to a vote of the Committee, subject, however, to the Option Pool size
limitation set forth above.
4. AUTHORITY TO GRANT OPTIONS
The Committee may grant from time to time, to such eligible individuals as
it shall from time to time determine, an Option or Options to buy a stated
number of shares of Stock under the terms and conditions of the Plan, each of
which Option or Options shall be designated at the time of grant as either an
ISO or a NQO. Subject only to any applicable limitations set forth elsewhere in
the Plan, the number of shares of Stock to be covered by any Option shall be as
determined by the Committee. The Committee shall have the right, with the
consent of the Optionee, to convert an ISO granted under the Plan into a NQO and
to impose such conditions on the exercise of the resulting NQO as the Committee
may in its discretion determine, provided that such conditions shall not be
inconsistent with the Plan.
5. WRITTEN AGREEMENT
Options granted hereunder shall be embodied in written option agreements
(which need not be identical) in such forms as the Committee may from time to
time approve (each an "Option Agreement"). Option Agreements shall be subject
----------------
to the terms and conditions prescribed herein and shall be signed by the
Optionee and by the President or any Vice President of the Company for and in
the name and on behalf of the Company. An Option Agreement shall indicate
whether the subject Option has been designated an ISO or a NQO. The written
Option Agreement for any Option may contain such provisions not inconsistent
with this Plan as the Committee in its discretion may deem advisable.
6. ELIGIBILITY
The individuals who shall be eligible for grant of Options under the Plan
shall be key employees (including officers who may be members of the Board of
Directors), directors who are not employees and other individuals who render
services of special importance to the management, operation, or development of
the Company or a Subsidiary, and who have contributed or may be
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 3
expected to contribute materially to the success of the Company or a Subsidiary.
No Option designated as an ISO shall be granted to any individual who is not an
employee of the Company or a Subsidiary.
If required to insure compliance with Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), the selection of a director as a
------------
participant and the number of shares for which an Option may be granted to such
director shall be determined either (i) by the Board of Directors, of which a
majority, as well as a majority of the directors acting in the matter, shall be
"disinterested persons" (as hereinafter defined) or (ii) by, or only in
accordance with, the recommendations of a committee of three or more persons
having full authority to act in the matter, of which all members shall be
"disinterested persons". For purposes of the Plan, a director or member of such
committee shall be deemed to be "disinterested" only if such person qualifies as
a "disinterested person" within the meaning of Rule 16b-3 under the Exchange
Act, or any successor rule, as such term is interpreted from time to time.
7. OPTION PRICE
The price at which shares may be purchased pursuant to an Option shall be
specified by the Committee at the time the Option is granted, but shall in no
event be less than the par value of such shares and, in the case of an incentive
stock option, except as set forth in the following sentence, shall not be less
than one hundred percent (100%) of the fair market value of the shares of Stock
on the date the ISO is granted. In the case of any employee who owns (or is
considered under Section 424(d) of the Code as owning) stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Subsidiary, the price at which shares may be so
purchased pursuant to an incentive stock option shall be not less than one
hundred ten percent (110%) of the fair market value of the Stock on the date the
ISO is granted.
For purposes of the Plan, the "fair market value" of a share of Stock on
any date specified herein shall mean (a) the last reported sales price, regular
way, or, in the event that no sale takes place on such day, the average of the
reported lowest closing bid and asked prices, regular way, in either case (i) as
reported on the New York Stock Exchange Composite Tape, or (ii) if the Stock is
not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such security is listed or
admitted to trading, or (iii) if not then listed or admitted to trading on any
national securities exchange, on the NASDAQ National Market System; or (b) if
the stock is not quoted on such National Market System, (i) the average of the
closing bid and asked prices on each such day in the over-the-counter market as
reported by NASDAQ, or (ii) if bid and asked prices for such security on each
such day shall not have been reported through NASDAQ, the average of the bid and
asked prices for such day as furnished by any New York Stock Exchange member
firm regularly making a market in such security selected for such purpose by the
Committee; or (c) if the Stock is not then listed or admitted to trading on any
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 4
national exchange or quoted in the over-the-counter market, the fair value
thereof determined in good faith by the Committee as of a date which is within
thirty (30) days of the date as of which the determination is to be made;
provided however that any method of determining fair market value employed by
the Committee with respect to an ISO shall be consistent with any applicable
laws or regulations pertaining to "incentive stock options".
8. DURATION OF OPTIONS
The duration of any Option shall be specified by the Committee in the
Option Agreement, but no ISO shall be exercisable after the expiration of ten
(10) years from the date such Option is granted. In the case of any employee
who owns (or is considered under Section 424(d) of the Code as owning) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Subsidiary, no ISO shall be exercisable
after the expiration of five (5) years from the date such Option is granted.
The Committee, in its sole and absolute discretion, may extend any Option
theretofore granted subject to the aforesaid limits and may provide that an
Option shall be exercisable during its entire duration or during any lesser
period of time.
9. RESTRICTION ON EXERCISE OF OPTIONS
Notwithstanding any other provision of the Plan, the aggregate fair market
value (determined as of the time the Option is granted) of the Stock with
respect to which ISOs may be exercisable for the first time by an Optionee
during any calendar year (under the Plan or any other incentive stock option
plan(s) of the Company or any Subsidiary) shall not exceed $100,000. Subject to
the foregoing, each Option may be exercised so long as it is valid and
outstanding from time to time, in part or as a whole, in such manner and subject
to such conditions as the Committee, in its sole and absolute discretion, may
provide in the Option Agreement.
10. EXERCISE OF OPTIONS
Each Option may be exercised from time to time in such amounts as is
provided in the Option Agreement by the delivery of written notice to the
Company setting forth the number of shares with respect to which the Option is
to be exercised, accompanied by payment of the option price of such shares,
which payment shall be made, subject to the alternative provisions of this
Section, in cash or by such cash equivalents, payable to the order of the
Company in an amount in United States dollars equal to the option price of such
shares, as the Committee in its discretion shall consider acceptable. Such
notice shall be delivered in person to the Secretary of the Company or shall be
sent by registered mail, return receipt requested, to the Secretary of the
Company, in which case delivery shall be deemed made on the date such notice is
deposited in the mail.
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 5
Alternatively, payment of the option price may be made, in whole or in
part, in shares of Stock owned by the Optionee; provided, however, that the
Optionee may not make payment in shares of Stock that he acquired upon the
earlier exercise of any ISO, unless he has held the shares until at least two
(2) years after the date the ISO was granted and at least one (1) year after the
date the ISO was exercised. If payment is made in whole or in part in shares of
Stock, then the Optionee shall deliver to the Company in payment of the option
price of the shares with respect of which such Option is exercised (i)
certificates registered in the name of such Optionee representing a number of
shares of Stock legally and beneficially owned by such Optionee, free of all
liens, claims and encumbrances of every kind and having a fair market value on
the date of delivery of such notice equal to the option price of the shares with
respect to which such Option is to be exercised, such certificates to be
accompanied by stock powers duly endorsed in blank by the record holder of the
shares represented by such certificates; and (ii) if the option price of the
shares with respect to which such Option is to be exercised exceeds such fair
market value, cash or such cash equivalents payable to the order to the Company,
in an amount in United States dollars equal to the amount of such excess, as the
Committee in its discretion shall consider acceptable. Notwithstanding the
foregoing provisions of this Section, the Committee, in its sole discretion, may
refuse to accept shares of Stock in payment of the option price of the shares
with respect to which such Option is to be exercised and, in that event, any
certificates representing shares of Stock which were delivered to the Company
with such written notice shall be returned to such Optionee together with notice
by the Company to such Optionee of the refusal of the Committee to accept such
shares of Stock.
Alternatively, if the Option Agreement so specifies or if the Committee in
its sole and absolute discretion permits, payment of the option price may be
made in part by a promissory note executed by the Optionee and collaterally
secured by the Stock obtained upon exercise of the Option, providing for
repayment at such time or times as the Committee shall specify; provided,
however, (a) that such promissory note shall provide for repayment no later than
five (5) years from the date of exercise and for interest at a rate not less
than the "base" rate announced on the date of exercise by The First National
Bank of Boston, (b) that in any event an amount not less than the par value of
the shares of Stock with respect to which the Option is being exercised must be
paid in cash, cash equivalents, or shares of Stock in accordance with this
Section and (c) the payment of such exercise price by promissory note does not
violate any applicable laws or regulations, including, without limitation,
margin lending rules. The decision as to whether to permit partial payment by a
promissory note for Stock to be issued upon exercise of any Option granted shall
rest entirely in the discretion of the Committee.
As promptly as practicable after the receipt by the Company of (i) written
notice from the Optionee setting forth the number of shares with respect to
which such Option is to be exercised and (ii) payment of the option price of
such shares in the form required by the foregoing provisions of this Section,
the Company shall cause to be delivered to such Optionee certificates
representing the number of shares with respect to which such Option has been so
exercised. Notwithstanding the
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 6
foregoing, if an Optionee owes money to or is otherwise indebted to the Company
at the time of his or her exercise of an Option then in addition to other rights
which the Company may have, the Company may in its sole discretion refuse to
issue shares upon such exercise and may set off such debt against the value of
such shares or may retain such shares to the extent of the amount of such debt.
11. NONTRANSFERABILITY OF OPTIONS
No Option shall be transferable by the Optionee, either voluntarily or by
operation of law, except by will or pursuant to the laws of descent and
distribution. During the life of an Optionee, an Option shall be exercisable
only by such Optionee.
12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE COMPANY
For purposes of this Section, employment by or involvement with (in the
case of an Optionee who is not an employee) a Subsidiary shall be considered
employment by or involvement with the Company. NQOs shall be exercisable
following an Optionee's termination of employment or involvement with the
Company to the extent provided below with respect to ISOs unless otherwise set
forth in the Option Agreement for such non-qualified options. Except as may be
otherwise expressly provided herein, Options designated incentive stock options
shall be exercisable after the Optionee's termination of employment with the
Company only within the period of three (3) months after the date the Optionee
ceases to be in the employ of the Company, and only to the extent to which the
Optionee was entitled to exercise the Option immediately prior to the
termination of his or her employment. If, before the date of expiration of the
Option, the Optionee shall be retired in good standing from the employ of the
Company for reasons of age under the then established rules of the Company, the
Option shall terminate on the earlier of such date of expiration or three (3)
months after the date of such retirement. In the event of the death of the
holder of an Option before the date of expiration of such Option and while in
the employ of the Company or during the three (3) month period described in the
preceding sentence, or in the event of the retirement of the Optionee for
reasons of disability (within the meaning of Section 22(e)(3) of the Code), such
Option shall terminate on the earlier of such date of expiration or one (l) year
following the date of such death or retirement. After the death of the
Optionee, his or her executors, administrators or any persons to whom his or her
Option may be transferred by will or by the laws of descent and distribution
shall have the right at any time prior to such termination to exercise the
Option to the extent to which the Optionee was entitled to exercise the Option
on the date of his or her death.
Authorized leave of absence or absence on military or government service
shall not constitute severance of the employment relationship between the
Company and the Optionee for purposes of the Plan, provided that either (i) such
absence is for a period of no more than ninety (90) days or (ii)
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 7
the Optionee's right to re-employment after such absence is guaranteed either by
statute or by contract.
13. REQUIREMENTS OF LAW
The Company shall not be required to sell or issue any shares of Stock upon
the exercise of any Option if the issuance of such shares shall constitute or
result in a violation by the Optionee or the Company of any provisions of any
law, statute or regulation of any governmental authority. Specifically, in
connection with the Securities Act of 1933, as amended (the "Securities Act"),
--------------
and any applicable state securities or "blue sky" law (a "Blue Sky Law"), upon
------------
exercise of any Option the Company shall not be required to issue such shares
unless the Committee has received evidence satisfactory to it to the effect that
the holder of such Option will not transfer such shares except pursuant to a
registration statement in effect under the Securities Act and Blue Sky Laws or
unless an opinion of counsel satisfactory to the Company has been received by
the Company to the effect that such registration and compliance is not required.
Any determination in this connection by the Committee shall be final, binding
and conclusive. The Company shall not be obligated to take any other
affirmative action in order to cause the exercise of an Option or the issuance
of shares of Stock pursuant thereto to comply with any law or regulations of any
governmental authority, including, without limitation, the Securities Act or
applicable Blue Sky Laws.
Notwithstanding any other provision of the Plan to the contrary, the
Company may refuse to permit transfer of shares of Stock if in the opinion of
its legal counsel such transfer would violate federal or state securities laws
or subject the Company to liability thereunder. Any sale, assignment, transfer,
pledge or other disposition of shares of Stock received upon exercise of any
Option (or any other shares or securities derived therefrom) which is not in
accordance with the provisions of this Section shall be void and of no effect
and shall not be recognized by the Company.
The Company shall not be required to sell or issue any shares upon the
exercise of any Option if the Committee is advised by counsel that the issuance
of such shares would result in the termination of any then effective election of
the Company to be taxed as an S corporation pursuant to the Code.
Legend on Certificates. The Committee may cause any certificate
-----------------------
representing shares of Stock acquired upon exercise of an Option (and any other
shares or securities derived therefrom) to bear a legend to the effect that the
securities represented by such certificate have not been registered under the
Securities Act or any applicable state securities laws, and may not be sold,
assigned, transferred, pledged or otherwise disposed of except in accordance
with the Plan and applicable agreements binding the holder and the Company or
any of its stockholders.
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 8
14. NO RIGHTS AS STOCKHOLDER
No Optionee shall have rights as a stockholder with respect to shares
covered by his or her Option until the date of issuance of a stock certificate
for such shares. Except as otherwise provided in Section 17 no adjustment for
dividends or other rights shall be made if the record date therefor is prior to
the date of issuance of such certificate.
15. EMPLOYMENT OBLIGATION
Nothing in this Plan nor the granting of any Option under this Plan shall
(i) impose upon the Company or any Subsidiary any obligation to employ or
continue to employ any Optionee, or to engage or retain the services of any
person, (ii) diminish or affect the right of the Company or any Subsidiary to
terminate the employment or services of any person or (iii) affect the ability
of the Company to increase or decrease the compensation of any person. The
existence of any Option shall not be taken into account in determining any
damages relating to termination of employment for any reason.
16. FORFEITURE AS A RESULT OF TERMINATION FOR CAUSE
Notwithstanding anything to the contrary in the Plan, if the Committee
determines, after full consideration of the facts presented on behalf of both
the Company and an Optionee, that
a. the Optionee has been engaged in fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his or her employment by
or involvement with the Company or a Subsidiary, which damaged the Company
or a Subsidiary, or has made unauthorized disclosure of trade secrets or
other proprietary information of the Company or a Subsidiary or of a third
party who has entrusted such information to the Company or a Subsidiary, or
b. the Optionee's employment or involvement was otherwise terminated for
"cause", as defined in any employment agreement with the Optionee, if
applicable, or if there is no such agreement, as determined by the
Committee, which may determine that "cause" includes among other matters
the failure or inability of the Optionee to carry out his or her assigned
duties diligently and in a manner satisfactory to the Company,
then the Optionee's right to exercise an Option shall terminate as of the date
of such act (in the case of (a)) or such termination (in the case of (b)) and
the Optionee shall forfeit all unexercised Options. If an Optionee whose
behavior the Company asserts falls within the provisions of (a) or (b) above has
exercised or attempts to exercise an Option prior to a decision of the
Committee, the Company shall not be required to recognize such exercise until
the Committee has made its decision and, in
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 9
the event of any exercise shall have taken place, it shall be of no force and
effect (and void ab initio) if the Committee makes an adverse determination;
provided, however, if the Committee finds in favor of the Optionee then the
Optionee will be deemed to have exercised such Options retroactively as of the
date he or she originally gave written notice of his or her attempt to exercise
or actual exercise, as the case may be. The decision of the Committee as to the
cause of an Optionee's discharge and the damage done to the Company or a
Subsidiary shall be final, binding and conclusive. No decision of the Committee,
however, shall affect in any manner the finality of the discharge of such
Optionee by the Company or a Subsidiary.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options shall not affect in any way the right
or power of the Company or its stockholders to make or authorize any
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business or any merger or consolidation of
the Company or any issue of bonds, debentures, preferred or preference stock,
whether or not convertible into the Stock or other securities, ranking prior to
the Stock or affecting the rights thereof, or warrants, rights or options to
acquire the same, or the dissolution or liquidation of the Company or any sale
or transfer of all or any part of its assets or business or any other corporate
act or proceeding, whether of a similar character or otherwise.
The number of shares of Stock in the Option Pool (less the number of shares
theretofore delivered upon exercise of Options) and the number of shares of
Stock covered by any outstanding Option and the price per share payable upon
exercise thereof (provided that in no event shall the option price be less than
the par value of such shares) shall be proportionately adjusted for any increase
or decrease in the number of issued and outstanding shares of Stock resulting
from the subdivision, split, combination or consolidation of shares of Stock or
any other capital adjustment, the payment of a stock dividend or any other
increase in such shares effected without receipt of consideration by the Company
or any other decrease therein effected without a distribution of cash or
property in connection therewith, provided, however, that no adjustment shall be
made that would constitute a modification as defined in Section 424(h)(3) of the
Code.
In the event the Company merges or consolidates with a wholly-owned
subsidiary for the purpose of reincorporating itself under the laws of another
jurisdiction, the Optionees will be entitled to acquire shares of the common
stock of the reincorporated Company upon the same terms and conditions as were
in effect immediately prior to such reincorporation (unless such reincorporation
involves a change in the number of shares, in which case proportional
adjustments shall be made as provided above) and the Plan, unless otherwise
rescinded by the Committee, will remain the Plan of the reincorporated Company.
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 10
Except as otherwise provided in the preceding paragraph, if the Company is
merged or consolidated with another corporation, whether or not the Company is
the surviving entity, or if the Company is liquidated or sells or otherwise
disposes of all or substantially all of its assets to another entity while
unexercised Options remain outstanding under the Plan, or in other circumstances
in which the Committee in its sole and absolute discretion deems it appropriate
for the provisions of this paragraph to apply, (a) subject to the provisions of
clause (c) below, after the effective date of such merger, consolidation,
liquidation, sale or other event (in each case, an "Applicable Event", as the
----------------
case may be, each holder of an outstanding Option shall be entitled, upon
exercise of such Option, to receive in lieu of shares of Stock, such stock or
other securities or property as he or she would have received had he exercised
such Option immediately prior to the Applicable Event; (b) the Committee may, in
its sole and absolute discretion, waive, generally or in more specific cases,
any limitations imposed pursuant to Section 9 (even if the effect of such waiver
is to disqualify the Option as an ISO) or Section 19 so that some or all Options
from and after a date prior to the effective date of such Applicable Event
specified by the Committee, in its sole and absolute discretion, shall be
exercisable in full; and (c) all outstanding and unexercised Options may, in its
sole and absolute discretion, be cancelled by the Committee as of the effective
date of any such Applicable Event; provided, however, notice of any such
cancellation shall be given to each holder of an Option not less than thirty
(30) days preceding the effective date of such Applicable Event; and provided
further, however, that the Committee may in its sole and absolute discretion,
waive, generally or in one or more specific instances, any limitations imposed
pursuant to Section 9 (even if the effect of such waiver is to disqualify the
Option as an ISO) or Section 19 with respect to any Option so that such Option
shall be exercisable in full or in part, as the Committee may, in its sole and
absolute discretion, determine, during such thirty (30) day period.
Except as expressly provided herein, the issue by the Company of shares of
Stock or other securities of any class or securities convertible into or
exchangeable or exercisable for shares of Stock or other securities of any class
for cash or property or for labor or services either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number, class or price of shares of Stock then subject to
outstanding Options.
18. AMENDMENT OR TERMINATION OF PLAN
The Committee may, in its sole and absolute discretion, modify, revise or
terminate the Plan at any time and from time to time; provided, however, that
without the further approval of the holders of at least a majority of the
outstanding shares of Stock, the Committee may not (a) materially increase the
benefits accruing to Optionees under the Plan or make any "modifications" as
that term is defined under Section 424(h)(3) (or its successor) of the Code if
such increase in benefits or modifications would adversely affect (i) the
availability to the Plan of the protections of
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 11
Section 16(b) of the Securities Exchange Act, if applicable to the Company, or
(ii) the qualification of the Plan or any Options for "incentive stock option"
treatment under Section 422 of the Code; (b) change the aggregate number of
shares of Stock which may be issued under Options pursuant to the provisions of
the Plan; (c) reduce the option price at which ISOs may be granted to an amount
less than the fair market value per share, or 110% of fair market value as the
case may be, at the time the Option is granted; or (d) change the class of
persons eligible to receive ISOs. Notwithstanding the preceding sentence, the
Committee shall in all events have the power and authority to make such changes
in the Plan and in the regulations and administrative provisions hereunder or in
any outstanding Option as, in the opinion of counsel for the Company, may be
necessary or appropriate from time to time to enable any Option granted pursuant
to the Plan to qualify as an ISO or such other stock option as may be defined
under the Code, as amended from time to time, so as to receive preferential
federal income tax treatment. The termination or any modification or amendment
of the Plan shall not, without the consent of an Optionee, affect his or her
rights under an Option previously granted to him or her. With the consent of the
Optionee affected, the Committee may amend outstanding option agreements in a
manner not inconsistent with the Plan.
19. CERTAIN RIGHTS OF THE COMPANY
Unless an Optionee's Option Agreement specifically provides to the
contrary, or an Optionee has entered into an employment, stockholder or other
agreement with the Company which provides for the repurchase of options or stock
in the event such Optionee's employment or involvement with the Company
terminates, the provisions of this Section 19 shall apply to each Option granted
under the Plan and to the shares of Stock acquired on exercise thereof.
a. Voluntary or Involuntary Transfers of Stock. Shares of Stock acquired
-------------------------------------------
by an Optionee pursuant to the exercise of an Option or Options granted under
the Plan shall not be voluntarily transferred by the Optionee without the
written consent of the Board which consent may be withheld or conditioned as the
Board sees fit. If such Stock is subject to an involuntary transfer, including
by reason of death, a divorce settlement or judicial proceeding, the Company
shall have the right to repurchase all or any shares of such Stock (including
any Stock subsequently acquired by the Optionee upon exercise of an Option if
the Stock so acquired is subject to such involuntary transfer) at a price equal
to the Repurchase Price at the time of the involuntary transfer event. The
Company may exercise its repurchase right no later than 180 days following the
later of (a) the date of such involuntary transfer of such shares of Stock, (b)
the date of any such subsequent acquisition of Stock upon exercise of an Option
and (c) the Board of Director's receipt of written notice of the occurrence of
such transfer event. Any such shares of Stock as to which the Company does not
exercise its repurchase rights within such period shall thereafter be free of
the restrictions of this Section 19.
Repurchase Price. As used herein the term "Repurchase Price" shall mean
---------------- ----------------
the fair market value of a share of Stock as determined in good faith by a
majority of the disinterested members of
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 12
the Board of Directors of the Company.
In making their determination of fair market value of a share of Stock the Board
of Directors will not take into account that the Stock may be illiquid or may
constitute a minority interest in the Company.
b. Termination of Employment or Involvement. If an Optionee's employment
----------------------------------------
by or involvement with the Company (including, for this purpose, any Subsidiary)
shall terminate for any reason other than the Optionee's death or a Justifiable
Termination or Optionee's retirement for reasons of age or disability in
accordance with the then policy of the Company, the Company shall have the right
to repurchase all or any of such shares of Stock at a price equal to the
Repurchase Price at the time of such repurchase. In addition, if at the time of
such termination an Optionee holds an Option granted under the Plan which is by
its terms exercisable after such termination, the Company shall have the right
to repurchase all or any part of the shares of Stock acquired pursuant to the
exercise of such Option, at the Repurchase Price. In the case of a Justifiable
Termination (which term shall mean termination on account of the Optionee's
malfeasance or Optionee's violation of any agreement with the Company or any
similar justifiable cause) the Company shall have the right to repurchase all or
any of such shares of Stock at the option exercise price per share. If the
option price for any repurchased shares has been paid by the Optionee's
promissory note pursuant to Section 10, then the repurchase price for such
shares of Stock shall be first applied to the repayment of the outstanding
amount, if any, due under such note in respect of the repurchased shares, and
any accrued but unpaid interest thereon. The Company's right to repurchase
shares of Stock may be exercised at any time during the period beginning on the
date of the Optionee's termination of employment or involvement and ending one
hundred twenty (120) days after the later of (i) the date of such termination
and (ii) the date on which shares of Stock subject to the repurchase rights of
this Section 19 are acquired by the Optionee. Any such shares of Stock as to
which the Company does not exercise its repurchase rights within such period
shall thereafter be free of the restrictions of this Section 19.
c. Securities Laws; Transfers In Violation of Plan. Notwithstanding any
-----------------------------------------------
other provision of this Plan the Company may refuse to permit transfer of the
Offered Shares if in the opinion of its legal counsel such transfer would
violate securities laws or subject the Company to liability thereunder. Any
sale, transfer, pledge or other disposition of shares of Stock which is not in
accordance with the provisions of this Section 19 shall be void and of no effect
and shall not be recognized by the Company.
20. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective and shall be deemed to have been adopted on
November __, 1996 subject only to ratification by the holders of at least a
majority of the outstanding shares of Stock within twelve (12) months after such
date. Unless the Plan shall have terminated earlier, the
<PAGE>
Millennia III, Inc.
1996 Stock Option Plan
Page 13
Plan shall terminate on the tenth (10th) anniversary of its effective date, and
no Option shall be granted pursuant to the Plan after the day preceding the
tenth (10th) anniversary of its effective date.
<PAGE>
Exhibit 1 to Stock Option Plan
Form of Incentive Stock Option Certificate
MILLENNIA III, INC.
Incentive Stock Option Agreement
--------------------------------
Option Certificate Number: _________________
Specific Terms of the Option
- ----------------------------
Subject to the terms and conditions hereinafter set forth and the terms and
conditions of the Millennia III, Inc. 1996 Stock Option Plan (the "Plan"),
----
Millennia III, Inc., a Delaware corporation (the "Company") hereby grants the
-------
following option to purchase Common Stock, par value $0.001 per share (the
"Stock") of the Company:
- ------
1. Name of Person to Whom the Option is granted (the "Optionee"): .
-------- --------------
2. Date of Grant of Option: .
------------------
3. An Option for shares of Common Stock.
---------
4. Option Exercise Price (per share): $ .
-----
5. Term of Option: Subject to Section 9 below, this Option expires at 5:00 pm
Eastern Time on .
------------
6. Exercise Schedule: Provided that on the dates set forth below the Optionee is
still employed by the Company or, if the Optionee is not employed by the Company
the Optionee is still actively involved in the Company (as determined by the
Board of Directors) the Option will become exercisable as follows and as
provided in Section 9 below:
The Option will Cumulative
On This Become Exercisable as Number
Date To This Number of Shares Exercisable
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
<PAGE>
Does Section 19 of the Plan apply to Stock covered by this Option? Yes ___
No ___.
Millennia III, Inc.
By: X
------------------------------- ---------------------------------
Title: (Signature of Optionee)
------------------------- Date:
-----------------------------
Optionee's Address:
-----------------------------------------------------
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 3
OTHER TERMS OF THE OPTION
- -------------------------
WHEREAS, the Board of Directors (the "Board") has authorized the grant of
-----
stock options upon certain terms and conditions set forth herein; and
WHEREAS, the Board has authorized the grant of this stock option pursuant
and subject to the terms of the Plan, a copy of which is available from the
Company and is hereby incorporated herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the Company and the Optionee agree as set forth
above and as follows:
7. Grant. Pursuant and subject to the Plan, the Company does hereby grant
-----
to the Optionee a stock option (the "Option") to purchase from the Company the
------
number of shares of its Common Stock set forth in Section 3 upon the terms and
conditions set forth in the Plan and upon the additional terms and conditions
contained herein. This Option is intended to qualify for special federal income
tax treatment as an "incentive stock option" pursuant to Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code").
----
8. Option Price. This Option may be exercised at the option price per
------------
share of Stock set forth in Section 4 hereof, subject to adjustment as provided
herein and in the Plan.
9. Term and Exercisability of Option. This Option shall expire on the date
---------------------------------
determined pursuant to Section 5 hereof and shall be exercisable prior to that
date in accordance with and subject to the conditions set forth in the Plan and
those conditions, if any, set forth in Section 6 hereof. In addition in the
event that before this Option has been exercised in full, the Optionee ceases to
be an employee of the Company for any reason other than death or a termination
for dishonesty or other "cause" as provided in Section 16 of the Plan, the
Optionee may exercise this Option to the extent that he or she might have
exercised it on the date of termination of his or her employment, during the
period ending on the earlier of (i) the date on which the Option expires in
accordance with Section 5 of this Agreement or (ii) three months after the date
of termination of the Optionee's employment by the Company. In the event of the
death of the Optionee before this Option has been exercised in full, the
personal representative of the Optionee may exercise this Option to the extent
that the Optionee might have exercised it on the date of his or her death,
during the period ending on the earlier of (i) the date on which the Option
expires in accordance with Section 5 of this Agreement or (ii) the first
anniversary of the date of the Optionee's death.
10. Method of Exercise. To the extent that the right to purchase shares
------------------
of Stock has accrued hereunder, this Option may be exercised from time to time
by written notice to the Company substantially in the form attached hereto as
Exhibit A, stating the number of shares with respect to
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 4
which this Option is being exercised, and accompanied by payment in full of the
option price for the number of shares to be delivered, by means of payment
acceptable to the Company in accordance with Section 10 of the Plan. As soon as
practicable after its receipt of such notice, the Company shall, without
transfer or issue tax to the Optionee (or other person entitled to exercise this
Option), deliver to the Optionee (or other person entitled to exercise this
Option), at the principal executive offices of the Company or such other place
as shall be mutually acceptable, a certificate or certificates for such shares
out of theretofore authorized but unissued shares or reacquired shares of its
Stock as the Company may elect; provided, however, that the time of such
delivery may be postponed by the Company for such period as may be required for
it with reasonable diligence to comply with any applicable requirements of law.
Payment of the option price may be made in cash or cash equivalents, or, in
accordance with the terms and conditions of Section 10 of the Plan, (a) in whole
or in part in shares of Common Stock of the Company, or (b) in part by
promissory note of the Optionee in the form attached hereto as Exhibit B;
provided, however, that the Board reserves the right upon receipt of any written
notice of exercise from the Optionee to require payment in cash with respect to
the shares contemplated in such notice. If the Optionee (or other person
entitled to exercise this Option) fails to pay for and accept delivery of all of
the shares specified in such notice upon tender of delivery thereof, his or her
right to exercise this Option with respect to such shares not paid for may be
terminated by the Company.
11. Non-assignability of Option Rights. This Option shall not be
----------------------------------
assignable or transferable by the Optionee except by will or by the laws of
descent and distribution. During the life of the Optionee, this Option shall be
exercisable only by him or her.
12. Compliance with Securities Act. The Company shall not be obligated to
------------------------------
sell or issue any shares of Stock or other securities pursuant to the exercise
of this Option unless the shares of Stock or other securities with respect to
which this Option is being exercised are at that time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. In the event shares or other securities shall
be issued which shall not be so registered, the Optionee hereby represents,
warrants and agrees that he or she will receive such shares or other securities
for investment and not with a view to their resale or distribution, and will
execute an appropriate investment letter satisfactory to the Company and its
counsel.
13. Legends. The Optionee hereby acknowledges that the stock certificate
-------
or certificates evidencing shares of Stock or other securities issued pursuant
to any exercise of this Option will bear a legend setting forth the restrictions
on their transferability described in Section 12 hereof and, if applicable to
this Option, in Section 19 of the Plan.
14. Rights as Stockholder. The Optionee shall have no rights as a
---------------------
stockholder with respect to any shares of Stock or other securities covered by
this Option until the date of issuance of a
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 5
certificate to him or her for such shares or other securities. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
15. Notice to Company of Disqualifying Disposition. The Optionee hereby
----------------------------------------------
agrees that he or she will promptly give notice to the Company in the event that
he or she sells, transfers, exchanges or otherwise disposes of any shares of
Stock or other securities obtained pursuant to any exercise of this Option
before the day after the later of (a) the second anniversary of the date of
grant set forth at the conclusion of this Agreement and (b) the first
anniversary of the date on which the shares of Stock or other securities were
transferred to him or her pursuant to his or her exercise of this Option.
16. Termination or Amendment of Plan. The Board may in its sole and
--------------------------------
absolute discretion at any time terminate or from time to time modify and amend
the Plan, but no such termination or amendment will affect rights and
obligations under this Option.
17. Effect Upon Employment. Nothing in this Option or the Plan shall be
----------------------
construed to impose any obligation upon the Company to employ the Optionee or to
retain the Optionee in its employ, or continue its involvement with, the
Optionee.
18. Time for Acceptance. Unless the Optionee shall evidence his
-------------------
acceptance of this Option by execution of this Agreement within seven (7) days
after its delivery to him or her, the Option and this Agreement shall be null
and void.
19. General Provisions.
------------------
a. Amendment; Waivers. This Agreement, including the Plan, contains the
------------------
full and complete understanding and agreement of the parties hereto as to the
subject matter hereof and may not be modified or amended, nor may any provision
hereof be waived, except by a further written agreement duly signed by each of
the parties. The waiver by either of the parties hereto of any provision hereof
in any instance shall not operate as a waiver of any other provision hereof or
in any other instance.
b. Binding Effect. This Agreement shall inure to the benefit of and be
--------------
binding upon the parties hereto and their respective heirs, executors,
administrators, representatives, successors and assigns.
c. Construction. This Agreement is to be construed in accordance with the
------------
terms of the Plan. In case of any conflict between the Plan and this Agreement,
the Plan shall control. The titles of the sections of this Agreement and of the
Plan are included for convenience only and shall not be
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 6
construed as modifying or affecting their provisions. The masculine gender shall
include both sexes; the singular shall include the plural and the plural the
singular unless the context otherwise requires.
d. Notices. Any notice in connection with this Agreement shall be deemed
-------
to have been properly delivered if it is in writing and is delivered in hand or
sent by registered mail to the party addressed as follows, unless another
address has been substituted by notice so given:
To the Optionee: To his or her address as listed on the books of the
Company.
To the Company: Millennia III, Inc.
14 Ridge Lane
Weston, Connecticut 06883
Copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: Stephen A. Evans
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 7
EXHIBIT A to Incentive Stock Option
[FORM FOR EXERCISE OF INCENTIVE STOCK OPTION]
Millennia III, Inc.
14 Ridge Lane
Weston, Connecticut 06883
RE: Exercise of Incentive Stock Option under Millennia III, Inc. 1996 Stock
-----------------------------------------------------------------------
Option Plan
-----------
Gentlemen:
Please take notice that the undersigned hereby elects to exercise the stock
option granted to on , 199 by and to the extent of
------------- -------- -
purchasing shares of the Common Stock of Millennia III, Inc. for the
--------
option price of $ per share, subject to the terms and conditions of the
---------
Incentive Stock Option Agreement between and Millennia III, Inc.
-------------
dated as of , 199 .
----------- -
The undersigned encloses herewith payment, in cash or in such other
property as is permitted under the Plan, of the purchase price for said shares.
If the undersigned is making payment of any part of the purchase price by
- -------------------------------------------------------------------------
delivery of shares of Common Stock of Millennia III, Inc., he or she hereby
- ---------------------------------------------------------------------------
confirms that he or she has investigated and considered the possible income tax
- -------------------------------------------------------------------------------
consequences to him or her of making such payments in that form.
- ---------------------------------------------------------------
The undersigned hereby specifically confirms to Millennia III, Inc. that he
or she is acquiring said shares for investment and not with a view to their sale
or distribution, and that said shares shall be held subject to all of the terms
and conditions of said Incentive Stock Option Agreement.
Very truly yours,
- --------------------- ---------------------------------------
Date (Signed by _____________ or other party
duly exercising option)
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 8
Exhibit B to Incentive Stock Option
[FORM OF TERM NOTE IN PAYMENT OF EXERCISE PRICE OF OPTIONS]
PROMISSORY NOTE
$ Date:
------------------------ ---------------
FOR VALUE RECEIVED, the undersigned (the "Payor") hereby promises to pay to
-----
the order of Millennia III, Inc. (the "Payee") at the principal office of Payee
-----
in Connecticut on or before , 19 the sum of
------------- --
($ ) with interest from the
- ----------------------------------------- ----------
date hereof on the principal amount hereof from time to time unpaid at the rate
of percent ( %) per annum (being the "base rate" of The First National Bank
---- -
of Boston on the date hereof). Interest on the outstanding principal amount
hereof shall be due and payable quarterly on the last business day of March,
June, September and December in each year during the term of this Note, and at
maturity commencing . The Payor authorizes the Payee to withhold such
----------
interest from his regular monthly or other salary payment or other compensation
and to apply such withheld amount to interest due hereon and also agrees to
execute such instruments and other documents as the Payee may from time to time
request to reflect such right of withholding. [THE PAYOR SHALL ON OF
---------
EACH YEAR, COMMENCING IN , PAY AN AMOUNT EQUAL TO PERCENT ( %) OF THE
---- --- ---
ORIGINAL PRINCIPAL AMOUNT OF THIS NOTE, TOGETHER WITH ALL ACCRUED AND UNPAID
INTEREST THEREON.]
All payments on this Note shall be first applied against accrued but unpaid
interest to the extent thereof, and then to the outstanding principal amount.
The Payor shall have the right to prepay the principal amount of this Note
in whole or in part at any time without penalty, but together with all but
unpaid accrued interest on the outstanding principal amount. No such prepayment
amount shall affect the obligation of the Payor to make the payments required by
the last sentence of the first paragraph of this Note.
Payor shall pay principal, interest, and other amounts under, and in
accordance with the terms of, this Note, free and clear of and without deduction
for any and all present and future taxes, levies, imposts, deductions, charges,
withholdings, and all liabilities with respect thereto, excluding taxes measured
by income.
Should the indebtedness evidenced by this Note or any part thereof be
collected by legal action, or in bankruptcy, receivership or other court
proceedings, or should this Note be placed in the hands of attorneys for
collection after default, Payor agrees to pay, upon demand by Payee, in addition
to principal and interest and other sums, if any, due and payable hereon, court
costs and
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 9
reasonable attorneys' fees and other reasonable collection charges, to the
maximum extent permitted by applicable law.
This Note represents the obligation of the Payor to pay on an installment
basis the balance of the purchase price of shares of Common Stock of the Payee
to be issued to the Payor promptly after the date hereof (the "Shares"), plus
------
interest on such purchase price, pursuant to a stock option granted on ________
pursuant to the Stock Option Agreement dated , 199 (the "Agreement").
-------- - ---------
[NOTWITHSTANDING ANY OTHER PROVISION OF THIS NOTE OR THE AGREEMENT, PAYOR
AND PAYEE AGREE THAT PAYOR SHALL HAVE NO PERSONAL LIABILITY WITH RESPECT TO THE
PAYMENT OF ANY AMOUNT DUE UNDER THIS NOTE, THE SOLE RECOURSE OF THE PAYEE BEING
TO THE SHARES.]
Upon the occurrence of any of the following events (an "acceleration
event"):
(a) Failure of the Payor to perform or observe any of his obligations
under this Note or the Agreement, or acceleration of the Payor's obligation
to make payment of the purchase price of the Shares pursuant to the
provisions of the Agreement; or
(b) Commencement of voluntary or involuntary proceedings in respect
of the Payor under any federal or state bankruptcy, insolvency,
receivership or other similar law; or
(c) Termination of the Payor's employment by the Payee;
then, and in any such event, the holder of this Note at its election may
forthwith declare the entire principal amount of this Note, together with
accrued interest thereon, immediately due and payable, and this Note shall
thereupon forthwith become so due and payable without presentation, protest
or further demand or notice of any kind, all of which are expressly waived.
The Payor hereby waives the presentment, demand, notice of protest and all
other demands and notices in connection with delivery, acceptance, performance,
default or enforcement hereof. No delay or omission on the part of the holder of
this Note in exercising any right hereunder shall operate as a waiver of such
right or of any other right hereunder, no course of dealing between the Payor
and the holder shall operate as a waiver of any of the holder's rights hereunder
unless set forth in a writing signed by the holder, and a waiver on any one
occasion shall not be construed as a bar to or waiver of any right on any future
occasion. The Payor further agrees to pay the costs, fees and expenses
(including reasonable attorneys' fees) of collection and enforcement of this
Note.
<PAGE>
Millennia III, Inc.
Form of Incentive Stock Option Certificate
Page 10
Any provision of this Note to the contrary notwithstanding, changes in or
additions to this Note may be made, or compliance with any term, covenant,
agreement, condition or provision set forth herein may be omitted or waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the consent in writing of Payee and Payor,
and each such change, addition or waiver shall be binding upon each future
holder of the Note and Payor. Any consent may be given subject to satisfaction
of conditions stated therein.
This Note shall be binding upon and shall inure to the benefit of the Payor
and the Payee and their respective successors and assigns, including, without
limitation, successors by operation of law pursuant to any merger, consolidation
or sale of assets involving any of the parties.
This Note shall be deemed to be a contract made under and to be construed
in accordance with and governed by the applicable law of the United States of
America and the laws of the State of Delaware.
This Note is executed as, and shall be effective as, a sealed instrument
and shall be binding upon the estate and any successor of the Payor.
Witness:
------------------------------ -----------------------------------
Payor
<PAGE>
Exhibit 2 to Stock Option Plan
Form of Non-Qualified Stock Option Certificate
MILLENNIA III, INC.
Nonqualified Stock Option Agreement
-----------------------------------
Option Certificate Number:
-----------------
Specific Terms of the Option
- ----------------------------
Subject to the terms and conditions hereinafter set forth and the terms and
conditions of the Millennia III, Inc. 1996 Stock Option Plan (the "Plan"),
----
Millennia III, Inc., a Delaware corporation (the "Company") hereby grants the
-------
following option to purchase Common Stock, par value $0.001 per share (the
"Stock") of the Company:
- ------
1. Name of Person to Whom the Option is granted (the "Optionee"): .
-------- --------------
2. Date of Grant of Option: .
---------------
3. An Option for shares of Common Stock.
-------
4. Option Exercise Price (per share): $ .
-----
5. Term of Option: Subject to Section 9 below, this Option expires at 5:00 pm
Eastern Time on .
------------
6. Exercise Schedule: Provided that on the dates set forth below the Optionee is
still employed by the Company or, if the Optionee is not employed by the Company
the Optionee is still actively involved in the Company (as determined by the
Board of Directors) the Option will become exercisable as follows and as
provided in Section 9 below:
The Option will Cumulative
On This Become Exercisable as Number
Date To This Number of Shares Exercisable
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
- ---------------------------- ------------------------ ------------------------
<PAGE>
Does Section 19 of the Plan apply to Stockcovered by this Option? Yes ___
No ___.
Millennia III, Inc.
By: X
------------------------- --------------------------------------
Title: (Signature of Optionee)
------------------- Date:
----------------------------------
Optionee's Address:
----------------------------------------------------------
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 3
OTHER TERMS OF THE OPTION
- -------------------------
WHEREAS, the Board of Directors (the "Board") has authorized the grant of
-----
stock options upon certain terms and conditions set forth herein; and
WHEREAS, the Board has authorized the grant of this stock option pursuant
and subject to the terms of the Plan, a copy of which is available from the
Company and is hereby incorporated herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the Company and the Optionee agree as set forth
above and as follows:
7. Grant. Pursuant and subject to the Plan, the Company does hereby grant
-----
to the Optionee a stock option (the "Option") to purchase from the Company the
------
number of shares of its Common Stock set forth in Section 3 upon the terms and
conditions set forth in the Plan and upon the additional terms and conditions
contained herein. This Option is a non-qualified stock option and is NOT
intended to qualify for special federal income tax treatment as an "incentive
stock option" pursuant to Section 422A of the Internal Revenue Code of 1986, as
amended.
8. Option Price. This Option may be exercised at the option price per
------------
share of Stock set forth in Section 4 hereof, subject to adjustment as provided
herein and in the Plan.
9. Term and Exercisability of Option. This Option shall expire on the date
---------------------------------
determined pursuant to Section 5 hereof and shall be exercisable prior to that
date in accordance with and subject to the conditions set forth in the Plan and
those conditions, if any, set forth in Section 6 hereof. In addition in the
event that before this Option has been exercised in full, the Optionee ceases to
be an employee of the Company for any reason other than death or a termination
for dishonesty or other "cause" as provided in Section 16 of the Plan, the
Optionee may exercise this Option to the extent that he or she might have
exercised it on the date of termination of his or her employment, during the
period ending on the earlier of (i) the date on which the Option expires in
accordance with Section 5 of this Agreement or (ii) three months after the date
of termination of the Optionee's employment by the Company. In the event of the
death of the Optionee before this Option has been exercised in full, the
personal representative of the Optionee may exercise this Option to the extent
that the Optionee might have exercised it on the date of his or her death,
during the period ending on the earlier of (i) the date on which the Option
expires in accordance with Section 5 of this Agreement or (ii) the first
anniversary of the date of the Optionee's death.
10. Method of Exercise. To the extent that the right to purchase shares
------------------
of Stock has accrued hereunder, this Option may be exercised from time to time
by written notice to the Company substantially in the form attached hereto as
Exhibit A, stating the number of shares with respect to
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 4
which this Option is being exercised, and accompanied by payment in full of the
option price for the number of shares to be delivered, by means of payment
acceptable to the Company in accordance with Section 10 of the Plan. As soon as
practicable after its receipt of such notice, the Company shall, without
transfer or issue tax to the Optionee (or other person entitled to exercise this
Option), deliver to the Optionee (or other person entitled to exercise this
Option), at the principal executive offices of the Company or such other place
as shall be mutually acceptable, a certificate or certificates for such shares
out of theretofore authorized but unissued shares or reacquired shares of its
Stock as the Company may elect; provided, however, that the time of such
delivery may be postponed by the Company for such period as may be required for
it with reasonable diligence to comply with any applicable requirements of law.
Payment of the option price may be made in cash or cash equivalents, [or, in
accordance with the terms and conditions of Section 10 of the Plan, (a) in whole
or in part in shares of Common Stock of the Company, or (b) in part by
promissory note of the Optionee in the form attached hereto as Exhibit B;
provided, however, that the Board reserves the right upon receipt of any written
notice of exercise from the Optionee to require payment in cash with respect to
the shares contemplated in such notice]/1/. If the Optionee (or other person
entitled to exercise this Option) fails to pay for and accept delivery of all of
the shares specified in such notice upon tender of delivery thereof, his or her
right to exercise this Option with respect to such shares not paid for may be
terminated by the Company.
11. Non-assignability of Option Rights. This Option shall not be
----------------------------------
assignable or transferable by the Optionee except by will or by the laws of
descent and distribution. During the life of the Optionee, this Option shall be
exercisable only by him or her.
12. Compliance with Securities Act. The Company shall not be obligated to
------------------------------
sell or issue any shares of Stock or other securities pursuant to the exercise
of this Option unless the shares of Stock or other securities with respect to
which this Option is being exercised are at that time effectively registered or
exempt from registration under the Securities Act of 1933, as amended, and
applicable state securities laws. In the event shares or other securities shall
be issued which shall not be so registered, the Optionee hereby represents,
warrants and agrees that he or she will receive such shares or other securities
for investment and not with a view to their resale or distribution, and will
execute an appropriate investment letter satisfactory to the Company and its
counsel.
13. Legends. The Optionee hereby acknowledges that the stock certificate
-------
or certificates evidencing shares of Stock or other securities issued pursuant
to any exercise of this Option will bear a legend setting forth the restrictions
on their transferability described in Section 12 hereof and, if applicable to
this Option, in Section 19 of the Plan.
/1/ Review.
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 5
14. Rights as Stockholder. The Optionee shall have no rights as a
---------------------
stockholder with respect to any shares of Stock or other securities covered by
this Option until the date of issuance of a certificate to him or her for such
shares or other securities. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate is
issued.
15. Withholding Taxes. The Optionee hereby agrees, as a condition to any
-----------------
exercise of this Option, to provide to the Company an amount sufficient to
satisfy its obligation to withhold certain federal, state and local taxes
arising by reason of such exercise (the "Withholding Amount") by (a) authorizing
------------------
the Company to withhold the Withholding Amount from his or her cash
compensation, or (b) remitting the Withholding Amount to the Company in cash;
provided that to the extent that the Withholding Amount is not provided by one
or a combination of such methods, the Company in its discretion may refuse to
issue such Stock or may withhold from the Stock delivered upon exercise of this
Option that number of shares having a fair market value, on the date of
exercise, sufficient to eliminate any deficiency in the Withholding Amount.
16. Termination or Amendment of Plan. The Board may in its sole and
--------------------------------
absolute discretion at any time terminate or from time to time modify and amend
the Plan, but no such termination or amendment will affect rights and
obligations under this Option.
17. Effect Upon Employment. Nothing in this Option or the Plan shall be
----------------------
construed to impose any obligation upon the Company to employ the Optionee or to
retain the Optionee in its employ, or continue its involvement with, the
Optionee.
18. Time for Acceptance. Unless the Optionee shall evidence his
-------------------
acceptance of this Option by execution of this Agreement within seven (7) days
after its delivery to him or her, the Option and this Agreement shall be null
and void.
19. General Provisions.
------------------
a. Amendment; Waivers. This Agreement, including the Plan, contains the
------------------
full and complete understanding and agreement of the parties hereto as to the
subject matter hereof and may not be modified or amended, nor may any provision
hereof be waived, except by a further written agreement duly signed by each of
the parties. The waiver by either of the parties hereto of any provision hereof
in any instance shall not operate as a waiver of any other provision hereof or
in any other instance.
b. Binding Effect. This Agreement shall inure to the benefit of and be
--------------
binding upon the parties hereto and their respective heirs, executors,
administrators, representatives, successors and assigns.
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 6
c. Construction. This Agreement is to be construed in accordance with the
------------
terms of the Plan. In case of any conflict between the Plan and this Agreement,
the Plan shall control. The titles of the sections of this Agreement and of the
Plan are included for convenience only and shall not be construed as modifying
or affecting their provisions. The masculine gender shall include both sexes;
the singular shall include the plural and the plural the singular unless the
context otherwise requires.
d. Notices. Any notice in connection with this Agreement shall be deemed
-------
to have been properly delivered if it is in writing and is delivered in hand or
sent by registered mail to the party addressed as follows, unless another
address has been substituted by notice so given:
To the Optionee: To his or her address as listed on the books of the
Company.
To the Company: Millennia III, Inc.
14 Ridge Lane
Weston, Connecticut 06883
Copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: Stephen A. Evans
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 7
Exhibit A to Non-qualified Stock Option
[FORM FOR EXERCISE OF NON-QUALIFIED STOCK OPTION]
Millennia III, Inc.
14 Ridge Lane
Weston, Connecticut 06883
RE: Exercise of Non-qualified Option under Millennia III, Inc. 1996 Stock
---------------------------------------------------------------------
Option Plan
-----------
Gentlemen:
Please take notice that the undersigned hereby elects to exercise the stock
option granted to on , 199 by and to the extent of
------------- -------- -
purchasing shares of the Common Stock of Millennia III, Inc. (the
--------
"Company") for the option price of $ per share, subject to the terms
- -------- ---------
and conditions of the Non-qualified Stock Option Agreement between
-------------
and the Company dated as of , 199 .
----------- -
The undersigned encloses herewith payment, in cash or in such other
property as is permitted under the Plan of the purchase price for said shares.
If the undersigned is making payment of any part of the purchase price by
- -------------------------------------------------------------------------
delivery of shares of Common Stock of the Company, he or she hereby confirms
- ----------------------------------------------------------------------------
that he or she has investigated and considered the possible income tax
- ----------------------------------------------------------------------
consequences to him or her of making such payments in that form. The
- ---------------------------------------------------------------
undersigned hereby agrees to provide the Company with an amount sufficient to
satisfy the obligation of the Company to withhold certain taxes.
The undersigned hereby specifically confirms to Millennia III, Inc. that he
or she is acquiring said shares for investment and not with a view to their sale
or distribution, and that said shares shall be held subject to all of the terms
and conditions of said Stock Option Agreement.
Very truly yours,
- ------------------ ---------------------------------------
Date (Signed by or other party
-------------
duly exercising option)
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 8
Exhibit B to Nonqualified Stock Option
[FORM OF TERM NOTE IN PAYMENT OF EXERCISE PRICE OF OPTIONS]
PROMISSORY NOTE
$ Date:
--------------------- ------------------
FOR VALUE RECEIVED, the undersigned (the "Payor") hereby promises to pay to
-----
the order of Millennia III, Inc. (the "Payee") at the principal office of Payee
-----
in Connecticut on or before , 19 the sum of
------------- --
_________________________________________ ($__________) with interest from the
- ----------------------------------------- ----------
date hereof on the principal amount hereof from time to time unpaid at the rate
of percent ( %) per annum (being the "base rate" of The First National Bank
---- -
of Boston on the date hereof). Interest on the outstanding principal amount
hereof shall be due and payable quarterly on the last business day of March,
June, September and December in each year during the term of this Note, and at
maturity commencing . The Payor authorizes the Payee to withhold such
----------
interest from his regular monthly or other salary payment or other compensation
and to apply such withheld amount to interest due hereon and also agrees to
execute such instruments and other documents as the Payee may from time to time
request to reflect such right of withholding. [THE PAYOR SHALL ON OF
---------
EACH YEAR, COMMENCING IN , PAY AN AMOUNT EQUAL TO PERCENT ( %) OF THE
---- --- ---
ORIGINAL PRINCIPAL AMOUNT OF THIS NOTE, TOGETHER WITH ALL ACCRUED AND UNPAID
INTEREST THEREON.]
All payments on this Note shall be first applied against accrued but unpaid
interest to the extent thereof, and then to the outstanding principal amount.
The Payor shall have the right to prepay the principal amount of this Note
in whole or in part at any time without penalty, but together with all but
unpaid accrued interest on the outstanding principal amount. No such prepayment
amount shall affect the obligation of the Payor to make the payments required by
the last sentence of the first paragraph of this Note.
Payor shall pay principal, interest, and other amounts under, and in
accordance with the terms of, this Note, free and clear of and without deduction
for any and all present and future taxes, levies, imposts, deductions, charges,
withholdings, and all liabilities with respect thereto, excluding taxes measured
by income.
Should the indebtedness evidenced by this Note or any part thereof be
collected by legal action, or in bankruptcy, receivership or other court
proceedings, or should this Note be placed in the hands of attorneys for
collection after default, Payor agrees to pay, upon demand by Payee, in addition
to principal and interest and other sums, if any, due and payable hereon, court
costs and
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 9
reasonable attorneys' fees and other reasonable collection charges, to the
maximum extent permitted by applicable law.
This Note represents the obligation of the Payor to pay on an installment
basis the balance of the purchase price of shares of Common Stock of the Payee
to be issued to the Payor promptly after the date hereof (the "Shares"), plus
------
interest on such purchase price, pursuant to a stock option granted on
--------
pursuant to the Stock Option Agreement dated , 199 (the "Agreement").
-------- - ---------
[NOTWITHSTANDING ANY OTHER PROVISION OF THIS NOTE OR THE AGREEMENT, PAYOR
AND PAYEE AGREE THAT PAYOR SHALL HAVE NO PERSONAL LIABILITY WITH RESPECT TO THE
PAYMENT OF ANY AMOUNT DUE UNDER THIS NOTE, THE SOLE RECOURSE OF THE PAYEE BEING
TO THE SHARES.]
Upon the occurrence of any of the following events (an "acceleration
event"):
(a) Failure of the Payor to perform or observe any of his obligations
under this Note or the Agreement, or acceleration of the Payor's obligation
to make payment of the purchase price of the Shares pursuant to the
provisions of the Agreement; or
(b) Commencement of voluntary or involuntary proceedings in respect
of the Payor under any federal or state bankruptcy, insolvency,
receivership or other similar law; or
(c) Termination of the Payor's employment by the Payee;
then, and in any such event, the holder of this Note at its election may
forthwith declare the entire principal amount of this Note, together with
accrued interest thereon, immediately due and payable, and this Note shall
thereupon forthwith become so due and payable without presentation, protest
or further demand or notice of any kind, all of which are expressly waived.
The Payor hereby waives the presentment, demand, notice of protest and all
other demands and notices in connection with delivery, acceptance, performance,
default or enforcement hereof. No delay or omission on the part of the holder of
this Note in exercising any right hereunder shall operate as a waiver of such
right or of any other right hereunder, no course of dealing between the Payor
and the holder shall operate as a waiver of any of the holder's rights hereunder
unless set forth in a writing signed by the holder, and a waiver on any one
occasion shall not be construed as a bar to or waiver of any right on any future
occasion. The Payor further agrees to pay the costs, fees and expenses
(including reasonable attorneys' fees) of collection and enforcement of this
Note.
<PAGE>
Millennia III, Inc.
Form of Non-Qualified Stock Option Certificate
Page 10
Any provision of this Note to the contrary notwithstanding, changes in or
additions to this Note may be made, or compliance with any term, covenant,
agreement, condition or provision set forth herein may be omitted or waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the consent in writing of Payee and Payor,
and each such change, addition or waiver shall be binding upon each future
holder of the Note and Payor. Any consent may be given subject to satisfaction
of conditions stated therein.
This Note shall be binding upon and shall inure to the benefit of the Payor
and the Payee and their respective successors and assigns, including, without
limitation, successors by operation of law pursuant to any merger, consolidation
or sale of assets involving any of the parties.
This Note shall be deemed to be a contract made under and to be construed
in accordance with and governed by the applicable law of the United States of
America and the laws of the State of Delaware.
This Note is executed as, and shall be effective as, a sealed instrument
and shall be binding upon the estate and any successor of the Payor.
Witness:
--------------------------------- ----------------------------------
Payor
<PAGE>
EXHIBIT 4.2
EMC CORPORATION
STOCK OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION
AGREEMENT entered into as of the 23rd day of April, 1998 by and between EMC
Corporation, a Massachusetts corporation (the "Company"), and the undersigned
employee of an indirect wholly-owned subsidiary of the Company (the "Employee").
WHEREAS, the Company desires to grant the Employee a non-qualified stock
option to acquire shares of the Company's common stock, $.01 par value per share
("Common Stock"); and
WHEREAS, the Employee desires to accept such option subject to the terms
and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Employee, intending to be
legally bound, hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Employee a non-
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qualified stock option (the "Option") to purchase all (or any part) of the
aggregate number of shares of Common Stock set forth on the signature page
hereto (the "Shares") on the terms and conditions hereinafter set forth. This
option shall not be treated as an incentive stock option under Section 422A of
the Internal Revenue Code of 1986, as amended (the "Code").
2. Purchase Price. The purchase price ("Purchase Price") for the Shares
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covered by the Option shall be the closing price of a share of Common Stock on
April 22, 1998, which amount per Share is set forth on the signature page
hereto.
3. Time of Exercise of Options; Vesting. On or after the first
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anniversary of the date hereof, twenty percent (20%) of the Shares subject to
the Option shall vest, and on or after each of the next four successive
anniversaries of the date hereof, an additional twenty percent (20%) of the
Shares shall vest. On or after the fifth anniversary of the date hereof, the
Employee (or person to whom the Option was transferred according to Section 6
hereof) shall be entitled to exercise the Option and purchase the amount of
Shares which have become vested in accordance with the foregoing schedule.
4. Term of Options: Vesting.
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(a) Term.
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(1) Each Option shall expire not later than ten (10) years from the
date hereof, but shall be subject to earlier termination as provided in
subsections (2) and (3) below.
(2) If the Employee is terminated for any reason (including death),
the Option hereby granted to the Employee shall terminate on the date of such
termination with respect to any Shares subject to options which are not vested
on the date of such termination. That portion of the Option with respect to any
Shares vested on the date of such termination shall terminate one hundred eighty
(180) days following the fifth anniversary date of the date of this Agreement.
(b) Vesting. If the Employee ceases to be an employee of the Company
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or one of its subsidiaries, at any time, for any reason or for no reason, the
Option granted to the Employee hereunder shall vest only to the extent that the
right to purchase Shares under such Option has accrued and is in effect on the
date such Employee ceases to be an employee.
5. Manner of Exercise of Option.
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(a) To the extent that the right to purchase shares has accrued and is in
effect pursuant to a vested Option in accordance with the terms hereof, the
number of available Shares may be purchased in full (or in part) on or after the
fifth anniversary date hereof by giving written notice to the Company stating
the number of Shares purchased and accompanied by payment in full for such
Shares. Payment shall be either wholly in cash or be a certified or bank
cashier's check or money order payable to the Company. Upon such purchase,
delivery of a certificate for paid-up, non-assessable Shares shall be made at
the principal office of the Company to the person exercising the Option.
(b) The Company shall at all times during the term of the option reserve
and keep available such number of shares of its Common Stock as will be
sufficient to satisfy the requirements of the Option. The Employee shall not
have any of the rights of a shareholder of the Company in respect of the Shares
until one or more certificates for such Shares shall be delivered to the
Employee upon the purchase of Shares pursuant to a vested Option in accordance
with this Agreement.
(c) Notwithstanding the provision of Section 5(a) of this Agreement, the
Company may delay the issuance of Shares covered by the vesting of this option
and the delivery of a certificate for such Shares until notice of the following
conditions shall be satisfied:
(i) The Shares purchase pursuant to a Vested Option are at the time of
the issuance of such Shares effectively registered or qualified under applicable
Federal and state securities acts now in force or as hereafter amended; or
(ii) Counsel for the Company shall have given an opinion, which
opinion shall not be unreasonable conditioned or withheld, that such Shares are
exempt from registration and
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qualification under applicable federal and state securities acts now in force or
as hereafter amended.
(iii) The Company shall use its best efforts to promptly meet the
condition under items (i) and (ii) above.
6. Non-Transferability. The rights of the Employee to purchase Shares
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pursuant to a vested Option shall not be assignable or transferable by the
Employee otherwise than by will or the laws of descent and distribution, and
such Shares may be purchased during the lifetime of the Employee only by the
Employee. The Option shall be null and void and without effect upon the
bankruptcy of the Employee or upon any attempted assignment or transfer, except
as hereinabove provided, including without limitation any purported assignment,
whether voluntary or by operation of law, pledge, hypothecation or other
disposition contrary to the provisions hereof, or levy of execution, attachment,
trustee process or similar process, whether legal or equitable, upon the option.
7. Adjustments on Changes in Capitalization. In the event that the
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outstanding shares of the Common Stock of the Company are changed into or
exchanged for a different number of kind of shares or other securities of the
Company or of another corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, combination
of shares, or dividends payable in capital stock, appropriate adjustment shall
be made in the number and kind of shares as to which outstanding options or
portions thereof then accrued and in effect, shall be subject to vesting. In
accordance herewith, the proportionate interest of the optionee shall be
maintained as before the occurrence of such event; such adjustment in
outstanding options shall be made without change in the price applicable to the
non-vested portion of such options and with a corresponding adjustment in the
option price per share. No fraction of a share shall be purchasable or
deliverable upon the exercise of any Option, but in the event any adjustment
here under of the number of shares covered by the Option shall cause such number
to include a fraction of a share, such fraction shall be adjusted to the nearest
smaller whole number of shares.
8. No Special Employment Rights. Nothing contained in this Agreement
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shall be construed or deemed by any person under any circumstances to bind the
Company or any of its subsidiaries to continue the employment of the Employee
for the period within which this Option may vest.
9. Rights as a Shareholder. The Employee shall have no rights as a
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shareholder with respect to any Shares which may be purchased upon the vesting
of this Option unless and until a certificate or certificates representing such
Shares are duly issued and delivered to the Employee. Except as otherwise
expressly provided herein no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate is
issued.
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10. Withholding Taxes. Whenever Shares are to be issued upon the vesting
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of this Option, the Company shall have the right to require the Employee to
remit to the Company an amount sufficient to satisfy all federal, foreign, state
and local withholding tax requirements prior to the delivery of any certificate
or certificates for such Shares.
11. Execution of Key Employee Agreement. The Employee acknowledges and
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agrees that the grant of this Option is contingent upon the execution and
delivery by the Employee of the Key Employee Agreement attached hereto.
[Remainder of Page Intentionally Left Blank]
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EMC CORPORATION
STOCK OPTION AGREEMENT
Counterpart Signature Page
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its corporate seal to be hereto affixed by its officer thereunto duly
authorized, and the Employee has hereunto set his hand and seal, all as of the
day and year first above written.
EMC CORPORATION EMPLOYEE
By: ________________________ _______________________________
(signature) (signature)
- ---------------------------- -------------------------------
(print name)
- ---------------------------- -------------------------------
(print title) (print address)
_______________________________
_______________________________
(Number of Share)
$______________________________
Exercise Price Per Share
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EXHIBIT 5.1
August 10, 1998
EMC Corporation
35 Parkwood Drive
Hopkinton, MA 01748
Ladies and Gentlemen:
We have served as special counsel to EMC Corporation, a Massachusetts
corporation (the "Company"), in connection with the registration on Form S-8 of
up to (i) 36,492 shares of Common Stock, $.01 par value per share, of the
Company ("Common Stock") under the Millennia III, Inc. 1996 Stock Option Plan
(the "Plan"); and (ii) 100,000 shares of Common Stock under stock option
agreements issued to employees of certain subsidiaries of the Company (the
"Agreements").
As such counsel, we have examined the registration statement on Form S-8 to
which a copy of this opinion will be attached as an exhibit, the Plan, the
Agreements, the corporate records of the Company, including its charter, By-
laws, minutes of meetings of its Board of Directors and such other documents as
we have deemed necessary as a basis for the opinions herein expressed.
Based upon the foregoing, and having regard for such legal considerations as
we deem relevant, we are of the opinion that:
1. The Company is a corporation duly incorporated and validly existing
under the laws of the Commonwealth of Massachusetts.
2. The Company is authorized to issue 750,000,000 shares of Common Stock
and 25,000,000 shares of preferred stock having a par value of $.01 per share.
3. The shares of Common Stock proposed to be issued pursuant to the
Registration Statement, when sold in accordance with the terms of the Plan and
the Agreements, as the case may be, will be legally issued, fully paid and non-
assessable.
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EMC Corporation
July 10, 1998
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Interests
of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
/s/ Hutchins Wheeler & Dittmar
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HUTCHINS, WHEELER & DITTMAR
A Professional Corporation
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EXHIBIT 23.1
CONSENT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-8 of our report dated January 21, 1998 on our audits of the
consolidated financial statements and the consolidated financial statement
schedule of EMC Corporation as of December 31, 1997 and December 31, 1996 and
for each of the three years in the period ended December 31, 1997. We also
consent to the reference to our firm under the caption "Interests of Named
Experts and Counsel".
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 10, 1998
