<PAGE> 1
As filed with the Securities and Exchange Commission on April 4, 1994
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
OCTEL COMMUNICATIONS CORPORATION
(Exact name of issuer as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 77-0029449
(State of Incorporation) (I.R.S. Employer Identification Number)
</TABLE>
890 Tasman Drive
Milpitas, California 95035-7439
(Address of principal executive offices)
1985 INCENTIVE STOCK PLAN
VMX, INC./OPCOM 1982 INCENTIVE STOCK OPTION PLAN
VMX, INC. 1983 STOCK OPTION PLAN
VMX, INC. 1986 STOCK OPTION PLAN
VMX, INC. 1989 STOCK OPTION PLAN
(Full title of the Plan)
Derek S. Daley, Esq.
Vice President, Secretary
and General Counsel
OCTEL COMMUNICATIONS CORPORATION
890 Tasman Drive
Milpitas, California 95035-7439
(408) 321-2000
(Name, address, including zip code and telephone number, including area code,
of agent for service)
Copy to:
Mark E. Bonham, Esq.
Christopher F. Boyd, Esq.
WILSON, SONSINI, GOODRICH & ROSATI, P.C.
Two Palo Alto Square
Palo Alto, California 94306
<TABLE>
<CAPTION>
=========================================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Per Offering Registration
to be Registered Registered Share Price Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value
- 1985 Incentive Stock Plan 2,300,000 $25.00(1) $57,500,000(1) $19,828
- VMX, Inc./OPCOM 24,110 $ 4.35(2) $ 104,879(2) $ 37
1982 Incentive Stock Option Plan
- VMX, Inc. 1983 Stock Option Plan 8,055 $14.70(3) $ 118,409(3) $ 41
- VMX, Inc. 1986 Stock Option Plan 87,350 $ 9.65(4) $ 842,928(4) $ 291
- VMX, Inc. 1989 Stock Option Plan 820,750 $16.05(5) $13,173,038(5) $ 4,543
---------- ----------- -------
TOTAL 3,240,265 $71,738,894 $24,740
=========================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee on the basis of the closing price of $25.00 per share
reported on the Nasdaq National Market on March 31, 1994.
(2) Calculated pursuant to Rule 457(h) on the basis of a weighted average
exercise price of $4.35 per share.
(3) Calculated pursuant to Rule 457(h) on the basis of a weighted average
exercise price of $14.70 per share.
(4) Calculated pursuant to Rule 457(h) on the basis of a weighted average
exercise price of $9.65 per share.
(5) Calculated pursuant to Rule 457(h) on the basis of a weighted average
exercise price of $16.05 per share.
<PAGE> 2
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information previously filed with the
Securities and Exchange Commission by Octel Communications Corporation (the
"Company") are hereby incorporated by reference in this Registration Statement:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1993, filed pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(2) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended September 30, 1993 and December 31, 1993, filed pursuant to
Section 13 of the Exchange Act.
(3) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-B filed February 12, 1990 pursuant
to Section 12(g) of the Exchange Act.
(4) The description of the Company's Common Share Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed August 1,
1990 pursuant to Section 12(g) of the Exchange Act.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities registered 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
part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Counsel for the Company, Wilson, Sonsini, Goodrich & Rosati,
Professional Corporation, Two Palo Alto Square, Palo Alto, California 94306,
has rendered an opinion to the effect that the Common Stock offered hereby is
duly and validly issued, fully paid and nonassessable. Certain members of
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, or investment
partnerships of which such persons are partners, beneficially own approximately
4,000 shares of the Company's Common Stock.
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<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Further, in accordance with the Delaware
General Corporation Law, the Company's Certificate of Incorporation eliminates
the liability of a director of the Company to the Company and its stockholders
for monetary damages for breaches of such director's fiduciary duty of care in
certain instances. Article VI of the Bylaws of the Company provides for
indemnification of certain agents to the maximum extent permitted by the
Delaware General Corporation Law. Persons covered by this indemnification
include any current or former directors, officers, employees and other agents
of the Company, as well as persons who serve at the request of the Company as
directors, officers, employees or agents of another enterprise.
In addition, the Company has entered into contractual agreements with
each director and certain officers of the Company designated by the Board to
indemnify such individuals to the full extent permitted by law. These
Agreements also resolve certain procedural and substantive matters that are not
covered, or are covered in less detail, in the Bylaws or by the Delaware
General Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- -------------------------------------------------------------
<S> <C>
4.1(1) 1985 Incentive Stock Plan, together with forms of agreements used thereunder
4.2 VMX, Inc./OPCOM 1982 Incentive Stock Option Plan
4.3 VMX, Inc. 1983 Stock Option Plan
4.4 VMX, Inc. 1986 Stock Option Plan
4.5 VMX, Inc. 1989 Stock Option Plan
5.1 Opinion of counsel as to legality of securities being registered
23.1 Consent of counsel (contained in Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick
23.3 Consent of Deloitte & Touche
24.1 Power of Attorney (see page II-4)
_____________
(1) Incorporated by reference to the Company's Registration Statement on Form S-8,
No. 33-73770, filed on January 4, 1994.
</TABLE>
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03/24/94 II-2
<PAGE> 4
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, 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, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
CFB043.W42(5P3)
03/24/94 II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milpitas, State of California, on this 30th day of
March, 1994.
OCTEL COMMUNICATIONS CORPORATION
/s/ DEREK S. DALEY, ESQ.
Derek S. Daley, Esq.
Vice President, Secretary and General Counsel
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Robert Cohn and Derek S. Daley,
and each of them acting individually, as his attorney-in-fact, each with full
power of substitution, for him in any and all capacities, to sign any and all
amendments to this Registration Statement on Form S-8, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitutes, may do or cause to be done by virtue
hereof.
CFB043.W42(5P3)
03/24/94 II-4
<PAGE> 6
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/ ROBERT COHN Chairman of the Board, President and March 30, 1994
- -----------------------------------------
(Robert Cohn) Chief Executive Officer
/s/ GARY A. WETSEL Executive Vice President and Chief March 30, 1994
- ----------------------------------------
(Gary A. Wetsel) Financial Officer
/s/ HERZEL ASHKENAZI Controller (Chief Accounting Officer) March 23, 1994
- -------------------------------------
(Herzel Ashkenazi)
/s/ LEO J. CHAMBERLAIN Director March 30, 1994
- -------------------------------------
(Leo J. Chamberlain)
/s/ JOHN FREIDENRICH Director March 30, 1994
- --------------------------------------
(John Freidenrich)
/s/ ROBERT C. HAWK Director March 30, 1994
- ---------------------------------------
(Robert C. Hawk)
/s/ DAG TELLEFSEN Director March 23, 1994
- ----------------------------------------
(Dag Tellefsen)
</TABLE>
II-5
CFB043.W42(5P3)
03/24/94
<PAGE> 7
OCTEL COMMUNICATIONS CORPORATION
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- -------------------------------------------------------------
<S> <C>
4.1(1) 1985 Incentive Stock Plan, togther with forms of agreement used thereunder
4.2 VMX, Inc./OPCOM 1982 Incentive Stock Option Plan
4.3 VMX, Inc. 1983 Stock Option Plan
4.4 VMX, Inc. 1986 Stock Option Plan
4.5 VMX, Inc. 1989 Stock Option Plan
5.1 Opinion of counsel as to legality of securities being registered
23.1 Consent of counsel (contained in Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick
23.3 Consent of Deloitte & Touche
24.1 Power of Attorney (see page II-4)
___________
(1) Incorporated by reference to the Company's Registration Statement on Form S-8,
No. 33-73770, filed on January 4, 1994.
</TABLE>
<PAGE> 1
EXHIBIT 4.2
OPCOM
1982 INCENTIVE STOCK OPTION PLAN
I. Purpose. The OPCOM 1982 Incentive Stock Option Plan (the
"Plan") is established to create additional incentive for key employees of
OPCOM and its parent and/or its subsidiary corporations (collectively referred
to as the "Company") to promote the financial success and progress of the
Company. For purposes of the Plan, a parent corporation and a subsidiary
corporation shall be as defined in Sections 425(e) and 425(f) of the Internal
Revenue Code of 1954, as amended, (the "Code").
II. Administration. The Plan shall be administered by the Board
of Directors (the "Board") and/or by a duly appointed committee of the Board
having such powers as shall be specified by the Board. Any subsequent
references to the Board shall also mean the committee if it has been appointed.
All questions of interpretation of the Plan or of any options granted under the
Plan (an "Option") shall be determined by the Board and shall be final and
binding upon all persons having an interest in the Plan and/or any Option.
III. Eligibility.
A. The Options may be granted only to employees
(including officers) of the Company. The Board shall, in its sole discretion,
determine which employees shall be granted Options (an "Optionee"). A director
of the Company shall not be eligible to be granted an Option unless the
director is also an employee of the Company. An Optionee may, if he is
otherwise eligible, be granted additional Options.
B. Except as set forth below, the aggregate fair market
value of the stock for which an employee may be granted options in any calendar
year under all incentive stock option plans of the Company as determined in
accordance with Section 422A(b)(8) of the Code shall not exceed $100,000 plus
any unused limit carryover to such year determined in accordance with Section
422A(c)(4) of the Code (the "fair market value limitation"); provided, however,
that in the event of an amendment to Section 422A of the Code, this Section
3(b) shall be automatically amended to make this provision no more restrictive
to the Optionee than necessary to insure qualification of the incentive stock
option as meeting the requirements of Section 422A of the Code. In the event
an employee receives an Option intended to be an incentive stock option which
is subsequently determined to have exceeded the fair market value limitation,
the Option shall be amended, if necessary, in accordance with applicable
Treasury Regulations and rulings to preserve to the maximum possible extent the
status of the Option as an incentive stock option (as defined in the Code).
The Board may grant options pursuant to the Plan in excess of the fair market
value limitation if separate Options are granted for the portion constituting
an incentive stock option and the portion constituting a non-qualified stock
option.
C. No employee shall be eligible to receive Options if
such employee owns stock possessing more than 10% of the total combined voting
power or value of all classes of stock of the Company within the meaning of
Section 422A(b)(6) of the Code.
<PAGE> 2
IV. Shares Subject to Option. The maximum number of shares which
may be issued under the Plan shall be 2,427,923 shares of the Company's
authorized but unissued common stock, subject to adjustment as provided in
paragraph 6(f). In the event that any outstanding Option for any reason
expires or is terminated or any shares issued pursuant to an Option are
repurchased by the Company pursuant to a repurchase option contained in the
Plan, any Option, and/or any amendment to an Option, the shares of common stock
allocable to the unexercised portion of such Option or so repurchased may again
be subject to an Option.
V. Time for Granting Options. All Options shall be granted, if
at all, within ten (10) years from the earlier of the date the Plan is adopted
by the Board or the date the Plan is duly approved by the stockholders of the
Company.
VI. Terms, Conditions and Form of Options. Subject to the
provisions of the Plan, the Board shall determine for each Option (which need
not be identical) the number of shares for which the Option shall be granted,
the option price of the Option, the exercisability of the Option and all other
terms and conditions of the Option. Options granted pursuant to the Plan shall
be evidenced by written agreements specifying the number of shares covered
thereby, in such form as the Board shall from time to time establish, which
agreements may incorporate all or any of the terms of the Plan by reference and
shall comply with and be subject to the following terms and conditions:
A. Option price. The option price shall be not less
than the fair market value as determined by the Board of the shares of common
stock of the Company on the date the option is granted.
B. Exercise Period of Options. The Board shall have the
power to set the time or times within which each Option shall be exercisable or
the event or events upon the occurrence of which all or a portion of each
Option shall be exercisable and the term of each Option; provided, however,
that no Option shall be exercisable after the expiration of ten years from the
date such Option is granted. Unless otherwise provided for by the Board in the
grant of the Option, any Option granted hereunder shall be exercisable in four
(4) equal annual installments, commencing one year after the date of the grant
of the Option.
C. Exercise of Options.
1. Options may be exercised only by written
notice to the Company, stating the number of shares being purchased and
accompanied by payment of the option price for the number of shares being
purchased (1) in cash, (2) by tender to the Company of shares of the Company's
common stock owned by the Optionee and having a fair market value not less than
the option price, (3) by cash for a portion of the option price and the
Optionee's promissory note for the balance of the option price with such note
being secured by the stock acquired pursuant to the then current form of joint
escrow instructions as approved by the Board or (4) by such other consideration
as the Board may approve at the time the Option is granted. Unless otherwise
specified by the Board at the time the Option is granted, the cash portion
specified in (3) above shall be five percent (5%) of the option price and the
principal amount set forth in the promissory note shall be due four years from
the date the Option is granted, with interest payable in quarterly installments
at the minimum interest rate to avoid imputed interest pursuant to Section 483
of the Internal Revenue Code.
2. At the time an option is exercised, in
whole or in part, or at any time thereafter as requested by the Company, the
Optionee shall make adequate provision for federal and state income tax
withholding obligations of the Company, if any, which arise upon exercise, in
whole or in part of the Option.
3. An Option, is not exercisable if there is
outstanding, within the meaning of Section 422A(c)(7) of the Code, any
incentive stock option (as defined in the Code) which was granted to the
Optionee before the granting of the Option; provided however, that in the event
of an amendment to
CFB043.W42(5P3)
03/24/94 -2-
<PAGE> 3
Section 422A of the Code, this Section 6(c)(ii) shall be automatically amended
to make this provision no more restrictive to the Optionee than necessary to
insure qualification of the incentive stock option as meeting the requirements
of Section 422A of the Code; provided further, however, that such restriction
on exercise shall not apply to an Option granted pursuant to the Plan which is
not an incentive stock option (as defined in the Code) and/or which is
designated by the Board as a non-qualified stock option.
4. An Option is not exercisable until such
time as the Plan is duly approved by the stockholders of the Company.
5. In the event of a merger or consolidation
in which the Company is not the surviving corporation or the sale of all or
substantially all of the Company s assets, all outstanding Options,
notwithstanding the terms of such Options, shall in the sole discretion of the
Board, be assumed by the successor corporation or become immediately
exercisable.
D. Options Non-Transferable. During the lifetime of the
Optionee, the Option shall be exercisable only by said Optionee. No Option
shall be assignable or transferable by the Optionee, except by will or by the
laws of descent and distribution.
E. Termination of Options. If an Optionee ceases to be
an employee of the Company for any reason except death or disability, any
Option, to the extent unexercised and exercisable by the Optionee on the date
on which the Optionee ceased to be an employee, may be exercised by the
Optionee within three months after the date on which the Optionee ceased to be
an employee, but in any event no later than the date of expiration of the
Option term. If the Optionee's employment with the Company is terminated
because of the death of the Optionee or disability of the Optionee within the
meaning of Section 105(d)(4) of the Code, any Option, to the extent unexercised
and exercisable by the Optionee on the date the Optionee ceased to be employed
by the Company, may be exercised by the Optionee (or the Optionee's legal
representative) at any time prior to the expiration of twelve (l2) months from
the date the Optionee ceased to be employed, but in any event no later than the
date of expiration of the Option term. An Optionee's employment shall be
deemed to have terminated on account of death if the Optionee dies within three
(3) months of the Optionee's termination of employment. Except as provided in
this paragraph 6(e), an Option shall terminate and may not be exercised after
the Optionee ceases to be an employee of the Company.
F. Effect of Change in Stock Subject to Plan.
Appropriate adjustments shall be made in the number and class of shares of
stock subject to this Plan and to any outstanding Options and in the exercise
price of any outstanding Options in the event of a stock dividend, stock split,
reverse stock split or like change in the capital structure of the Company.
G. Restriction on Issuance of Shares. The grant of
Options and the issuance of shares shall be subject to compliance with all of
the applicable requirements of law with respect to such securities, including
any required approval by the Commissioner of Corporations of the State of
California.
H. Rights as a Stockholder or Employee. No person shall
have any rights as a stockholder with respect to any shares covered by an
Option until the date of the issuance of a stock certificate(s) for the shares
for which the Option has been exercised. No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior
to the date such stock certificate(s) are issued, except as provided in
paragraph 6(f). Nothing in this Plan or in any Option agreement shall
CFB043.W42(5P3)
03/24/94 -3-
<PAGE> 4
confer upon any Optionee any right to continue in the employ of the Company or
interfere in any way with any right of the Company to terminate the Optionee's
employment at any time.
I. Fractional Shares. In no event shall the Company be
required to issue fractional shares upon the exercise of an Option.
VII. Termination or Amendment of Plan. The Board may at any time
terminate or amend the Plan, provided that without approval of stockholders
there shall be: (i) no increase in the total number of shares covered by the
Plan (except by operation of the provisions of subparagraph 6(f) above), and
(ii) no change in the class of persons eligible to receive Options. In any
case, no amendment may adversely affect any then outstanding Options or any
unexercised portions thereof without the consent of the Optionee unless such
amendment is required to enable the Option to qualify as an incentive stock
option (as defined in the Code).
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<PAGE> 1
EXHIBIT 4.3
1983 VMX, INC.
STOCK OPTION PLAN
1. Name. This Plan shall be known as the "1983 VMX, Inc. Stock
Option Plan" (herein called the "Plan").
2. Purpose. The purpose of the Plan is to promote the growth and
general prosperity of VMX, Inc. (the "Company") and its parent and subsidiary
corporations, if any, by permitting the Company to grant incentive stock
options ("ISO's") and nonstatutory stock options (together with ISO's, herein
called the "Options") to key employees, including officers and directors who
are also employees of the Company, or of any parent or subsidiary corporation
of the Company (as defined in Section 425 of the Internal Revenue Code of 1986,
as amended), whether such parent and/or subsidiaries are currently existing or
may hereafter be organized or acquired (herein called the "Affiliates"), to
purchase shares of Common Stock of the Company. Such Options will be granted
in order to attract and retain the best available personnel for positions of
substantial responsibility and to provide such employees with an additional
incentive to contribute to the success of the Company. It is the further
purpose of this Plan to ensure that the ISO's which are granted hereunder will
qualify as incentive stock options under Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code") such that the employees to whom such
ISO's are granted will be afforded the tax treatment set forth in Section
421(a) of the Code.
3. Administration. This Plan shall be administered by a
committee (herein called the "Committee") of not less than three (3)
"disinterested persons" (as hereinafter defined) appointed by the Board of
Directors of the Company. The Committee shall act by a majority vote at a
meeting or by a written statement signed by a majority of the members. Subject
to the express provisions of this Plan, the Committee shall determine the
individuals to whom Options shall be granted, the time or times at which
Options shall be granted, the number of shares of Common Stock to be subject to
each Option, the period of each Option, the option price of the Common Stock to
be issued under the Plan and the other terms and conditions thereof. For
purposes of this Plan, "disinterested person" shall have the meaning set forth
in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended. The Committee may, in its sole discretion accept the cancellation of
outstanding Options in exchange for the grant of new Options in substitution
thereof. Such exchange may, subject to the terms and conditions of the Plan,
be made on such terms or subject to such conditions as the Committee may
prescribe.
4. Stock Subject to Plan. Subject to the provisions of Paragraph
15 and 18 hereof, the maximum number of shares which may be optioned and sold
under the Plan as option is one million fifty thousand (1,050,000) shares of
the authorized, but unissued, or reacquired Common Stock of the Company. In
the event that any option shall, for any reason, terminate or expire or be
surrendered without having been exercised in full, the shares subject to such
option but not purchased hereunder shall again be available for Option to be
granted under this Plan.
<PAGE> 2
5. Eligibility. The Committee may grant Options to any key
employee, including officers and directors who are also employees, of the
Company or any of its Affiliates; provided, however, that an employee to whom
an ISO is granted may not, at the time the ISO is granted, own stock
representing more than ten percent (1O%) of the total combined voting power of
all classes of stock of the Company or of any of its Affiliates, as determined
in accordance with Section 425(d) of the Code. The forgoing ten percent (1O%)
limitation shall be inapplicable if, at the time the ISO is granted, the option
price is at least one hundred and ten percent (11O%) of the fair market value
of the Common Stock subject to the ISO and the ISO by its terms is not
exercisable after the expiration of five (5) years from the date the ISO is
granted. The persons to whom ISO's shall be granted shall herein be called the
"ISO Optionees" and the persons to whom Options shall be granted shall herein
be called "Optionees."
6. Option Price. The option price for the Common Stock to be
issued under the Plan shall not be less than the fair market value of the
Common Stock of the Company at the time that the Option is granted, as such
fair market value shall be determined from time to time in good faith and in
the sole discretion of the Committee. The minimum option price shall be one
hundred ten percent (110%) of the fair market value of the Common Stock subject
to an ISO if the ISO Optionee, at the time the ISO is granted, would own stock
possessing more than ten percent (10%) of the total combined voting power of
the Company or any of its Affiliates. With respect to an ISO granted prior to
January 1, 1987, the aggregate fair market value (determined as of the time the
ISO is granted) of the shares of Common Stock for which any ISO Optionee may be
granted ISO's in any calendar year (under all such plans of the Company and its
Affiliates) shall not exceed the amount of One Hundred Thousand and 00/100
Dollars ($100,000.00), plus any unused limit carryover (as determined in
accordance with Section 422(c)(4) of the Code and the rules and regulations
promulgated thereunder) to such year. With respect to an ISO granted after
December 31, 1986, the aggregate fair market value (determined as of the time
the ISO is granted) of the shares of Common Stock with respect to which an ISO
is exercisable for the first time by any ISO optionee during any calendar year
(under all such plans of the Company and its Affiliates) shall not exceed
$100,000.
7. Grant of Options. Options shall be granted on such dates as
may be determined from time to time by the Committee; provided, however, that
all Options shall be granted within ten (10) years from the date that the Plan
is adopted by the Board of Directors of the Company in accordance with
Paragraph 19 hereof. If the Committee so determines and the applicable
instrument or instruments evidencing the Option so provide, the exercise of all
or any part of an Option granted under this Plan may result in the reduction or
termination of another Option granted under this Plan to the extent so
determined and provided.
8. Exercise of Option.
(a) Subject to Paragraph 13 and 14 hereof, the Options
shall be exercisable in four (4) equal annual installments. The first
installment shall not be exercisable until the expiration of one (1) year from
the date the Option is granted and each succeeding installment shall not be
exercisable until the expiration of one (1) year from the date that the prior
installment became exercisable. When the right to exercise any installment
accrues the shares of Common Stock included in such installment may be
purchased at that time or from time to time thereafter; provided, however, that
no Option shall be exercisable after the expiration of ten (10) years from the
date such Option is granted (except as otherwise set forth in Paragraph 5
hereof). Notwithstanding subparagraph (b) below, ISO's granted hereunder on or
before December 31, 1986 may not be exercised by an ISO Optionee while there is
outstanding (within the meaning of Section 422A(c)(7) of the Code) any
incentive stock option which was granted before the granting of such ISO to the
ISO Optionee to purchase stock in the company or in a corporation which (at the
time of the granting of such ISO) is an Affiliate of the Company.
(b) Notwithstanding the above (other than the last
sentence of sub-paragraph (a)), at the Committee's sole discretion, the
Committee agrees to permit exercise of option prior to vesting, but no earlier
than the expiration of one year from the date such option was granted, upon the
execution, by the Optionee,
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<PAGE> 3
of an agreement, satisfactory to the Committee, providing the Company with
repurchase rights on such terms as the Committee deems appropriate.
9. Payment of Purchase Price. Upon the exercise of an Option, or
any portion thereof, the Company may, in the sole and absolute discretion of
the Committee, finance ninety percent (90%) of the purchase price of the shares
of Common Stock being purchased pursuant to such Option. Any and all
promissory notes payable to the Company by reason of such financing shall bear
interest at the rate of two (2) percentage points over prime rate established
by the Board of Directors of the Company on December 15 of each year, which
interest rate shall fluctuate accordingly throughout the term of the note.
Such financing shall be upon such other terms and conditions as may be
established from time to time by the Committee. In the event of such
financing, the remaining ten percent (10%) of the purchase price must be paid
in full to the Company at the time of the exercise of the Option. If such
purchase is not financed by the Company, such purchase price must be paid in
full to the Company at the time of the exercise of the Option. The Committee
shall have the sole and absolute discretion to determine whether or not
property other than cash may be used to purchase the shares of Common stock
hereunder and, if so, to determine the value of the property received.
10. Form of Option. ISO's granted pursuant to this Plan shall be
evidenced by Incentive Stock Option Agreements in such form as the Committee
shall from time to time adopt and nonstatutory stock options granted pursuant
to this Plan shall be evidenced by Non-qualified Stock Option Agreements in
such form as the Committee shall from time to time adopt (together, the
"Agreements"). Each Option granted under this Plan shall be exercisable on
such date or dates and during such period and for such number of shares of
Common Stock as shall be determined pursuant to the provisions of this Plan and
the Agreement with respect to such Options.
11. Options Not Transferable. Options granted under this Plan may
not be sold, pledged, assigned, hypothecated or otherwise transferred in any
manner other than by will or the laws of descent and distribution and shall not
be assignable by operation of law or subject to execution, attachment or
similar process. Options may be exercised during the lifetime of an Optionee
only by such Optionee. Any attempted sale, pledge, assignment, hypothecation
or other transfer of an Option contrary to the provisions hereof and the levy
of any execution, attachment or similar process upon an Option shall be null
and void and without force or effect. No transfer of any Options by will or by
the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions of this Agreement
with respect to such Option.
12. Shares Not Transferable. As a condition to the transfer of
these shares of Common Stock issued under this Plan, the Company may require an
opinion of counsel, satisfactory to the Company, to the effect that such
transfer will not be in violation of the Securities Act of 1933 or any other
applicable securities laws or that such transfer has been registered under
federal and all applicable state securities laws. Further, the Company shall
be authorized to refrain from delivering or transferring shares of Common Stock
issued under this Plan until the Committee has determined that the Optionee has
tendered to the Company any federal, state or local tax owed by the Optionee as
a result of exercising the Option, or disposing of any Common Stock, when the
Company has a legal liability to satisfy such tax. The Company shall not be
liable for damages due to delay in the delivery or issuance of any stock
certificate for any reason whatsoever, including, but not limited to, a delay
caused by listing requirements of any securities exchange or any
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registration requirements under the Securities Act of 1933, the Securities
Exchange Act of 1934, or under any ocher state or federal law, rule or
regulation.
13. Termination of Employment. If an Optioneeos employment with
the Company or any of its Affiliates shall be terminated by the Company or any
of its Affiliates with or without cause, or by the act of the Optionee, except
by reason of his/her disability (within the meaning of Section 105(d)(4) of the
Code), the Optionee shall have the right, during the period ending on the day
one (1) month after such termination, to exercise any Options to the extent
they were exercisable at the date of such termination of employment and shall
not have been exercised. Thereafter, all of the Optionee's rights hereunder
shall cease. If an Optionee's employment with the Company or any of its
Affiliates shall terminate by reason of death, Paragraph 14 shall apply and the
person or persons set forth therein shall have the right, during the period
ending on the day one (1) year after the date of death, to exercise any Options
hereunder to the extent it would have been exercisable by the Optionee at the
date of death and shall not have been exercised. If an Optionee's employment
with the Company or any of its Affiliates shall terminate by reason of
disability, such disabled Optionee shall have the right, during the period
ending on the day one (1) year after such termination, to exercise any Options
to the extent it was exercisable at the date of such termination of employment
and shall not have been exercised.
14. Effect of Death. Upon the death of an Optionee, the legal
representative, executor or administrator of the estate of such Optionee or the
person or persons to whom any Options granted hereunder shall have been validly
transferred by the legal representative, executor or administrator pursuant to
a will or the laws of descent and distribution shall have the right to exercise
any of the Options of the Optionee to the extent that such Options would have
been exercisable by the Optionee in accordance with the provisions of
Paragraphs 8 and 13 hereof.
15. Changes in Capitalization. In the event that the number of
outstanding shares of Common Stock of the Company shall be changed by reason of
split- ups or combinations of shares or recapitalization or by reason of stock
dividends, the number of shares for which Options may thereafter be granted
under this Plan, the number of shares then subject to Options theretofore
granted under this Plan and the price per share payable upon exercise of such
Options shall be appropriately adjusted as determined by the Committee so as to
reflect such change. Options may also contain provisions for their
continuation or for other equitable adjustments after changes in shares of
Common Stock resulting from reorganization, sale, merger, consolidation or
similar occurrences.
16. Merger or Sale. In the event that the Company shall be the
surviving corporation in any merger or consolidation, any Option granted
hereunder shall continue in force and effect, subject to adjustment in the
price and number of shares thereunder to reflect the capital adjustment
resulting from the merger or consolidation. In the event that the Company is
not the surviving corporation in any merger or consolidation, or in the event
that the Company sells or exchanges substantially all of its assets, the
four-year period referred to in the first and second sentences of Paragraph
8(a) of this Plan shall not apply to any outstanding Options, and all
outstanding Options shall be exercisable, subject, however, to the remaining
provisions of Paragraph B(a) of this Plan.
17. Representations of Optionee. As a condition to the grant of
any portion of an Option, the Company may require the Optionee to represent and
warrant that, as of the time of any such exercise, the shares are being
purchased only for investment and without any present intention to sell or
distribute such
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<PAGE> 5
shares if, in the opinion of counsel for the Company, such a representation is
required under the Securities Act of 1933 or any other applicable law,
regulation or rule of any governmental agency.
18. Reservation of Shares. During the term of this Plan, the
Company will at all times reserve and keep available, and will seek or obtain
from any regulatory body having jurisdiction any requisite authority in order
to issue and sell such number of shares of its Common Stock as shall be
sufficient to satisfy the requirements of the Plan. The inability of the
Company to obtain the authority from any regulatory body having jurisdiction
which is deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any shares of its Common Stock hereunder shall relieve the Company
of any liability in respect to the nonissuance or sale of such Common Stock as
to which such requisite authority shall not have been obtained.
19. Term of Plan. This Plan shall become effective upon its
adoption by the Board of Directors of the Company and its approval within
twelve (12) months thereafter by the holders of a majority of all the issued
and outstanding capital stock of the Company, voting as a single class and
represented at an annual or special meeting of the stockholders of the Company
or by a written statement signed by a majority of such stockholders.
20. Amendment of the Plan. The Board of Directors of the Company
may amend the Plan from time to time in such respects as the Board may deem
advisable without the approval of the stockholders of the Company unless such
amendment would (a) increase the maximum number of shares of Common Stock as to
which ISO's may be granted under the Plan; or (b) change the class of employees
eligible to receive ISO's under the Plan; or (c) disqualify an ISO granted
under the Plan from satisfying the requirement for an incentive stock option
under the Code, and provided, further, that the affirmative vote of the holders
of a majority of the securities of the Company present, or represented, and
entitled to vote at a meeting duly held in accordance with the laws of the
State of Delaware shall be required to approve any amendment to the Plan which
would, as determined for purposes of Rule 16b-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934 (or any successor
provision at the time in effect), (x) materially increase the benefits accruing
to participants under the Plan, (y) materially increase the number of shares of
Common Stock which may be issued under the Plan, or (z) materially modify the
requirements as to eligibility for participation in the Plan.
21. Termination of the Plan. The Board of Directors of the Company
may terminate the Plan at any time. Any such termination shall not affect any
restrictions previously imposed upon the shares of Common Stock issued pursuant
to this Plan or upon the Options already granted and such restrictions and
Options shall remain in full force and effect thereafter as if this Plan had
not been terminated.
22. Legend. In order to enforce the restrictions imposed upon the
shares of Common Stock of the Company which are issued under this Plan, the
Committee may cause a legend or legends to be placed on any certificates
representing shares issued under this Plan, which legend or legends shall make
appropriate reference to the restrictions imposed hereunder.
23. Conformity with Internal Revenue Code. ISO's granted under
this Plan are intended to satisfy all requirements for incentive stock options
under the Code and, notwithstanding any other provision of this Plan, the Plan
and all ISO's granted under it shall be so construed and all contrary
provisions shall be so limited in scope and effect and, to the extent they
cannot be so limited, they shall be void.
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<PAGE> 6
24. Effect of the Plan. Neither the adoption of the Plan nor the
action of the Board of Directors of the Company shall be deemed to give any
employee any right to be granted an Option to purchase shares of Common Stock
of the Company or any other rights except as may be evidenced by an Agreement,
or any amendment thereto, duly authorized by the Committee and then only to the
extent and on the terms and conditions expressly set forth therein. Nothing in
the Plan or in the Option granted hereunder or in any Agreement relating
thereto shall confer upon any Optionee the right to continue in the employ of
the Company.
25. Other Compensation Plans. The adoption of the Plan shall not
affect any other stock option or incentive or other compensation plans in
effect for the Company, nor shall the Plan preclude the Company from
establishing any other forms or incentive or other compensation for employees
of the Company.
26. Successors and Assigns. The Plan shall be binding upon the
successors and assigns of the Company.
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<PAGE> 1
EXHIBIT 4.4
VMX, INC.
1986 STOCK OPTION PLAN
1. Name. This Plan shall be known as the "VMX, Inc. 1986 Stock
Option Plan" (herein called the "Plan").
2. Purpose. The purpose of the Plan is to promote the growth and
general prosperity of VMX, Inc. (the "Company") and its parent and subsidiary
corporations, if any, by permitting the Company to grant both incentive stock
options ("ISO's") and nonstatutory stock options (together with ISO's, herein
called the "Options") to key employees, including officers and directors who
are also employees of the Company, or of any parent or subsidiary corporation
of the Company (as defined in Section 425 of the Internal Revenue Code of 1954,
as amended (the "Code")), whether such parent and/or subsidiaries are currently
existing or may hereafter be organized or acquired (herein called the
"Affiliates"), to purchase shares of the common stock (the "Common Stock") of
the Company. Such Options will be granted in order to attract and retain the
best available personnel for positions of substantial responsibility and to
provide such employees with an additional incentive to contribute to the
success of the Company. It is the further purpose of this Plan that the ISO's
which are granted hereunder are intended to qualify as incentive stock options
under Section 422A of the Code.
3. Administration. This Plan shall be administered by a
committee (herein called the "Committee") of not less that three (3)
"disinterested persons" (as hereinafter defined) appointed by the Board of
Directors of the Company. The Committee shall act by a majority vote at a
meeting or by a written statement signed by a majority of the members. Subject
to the express provisions of this Plan, the Committee shall determine the
individuals to whom Options shall be granted, the time or times at which
Options shall be granted, the number of shares of Common Stock to be subject to
each Option, the period of each Option, the option price of the Common Stock to
be issued under the Plan, the other terms and conditions of the Options, and
take any actions deemed necessary or advisable for the administration of the
Plan. For purposes of this Plan, "disinterested person" shall mean any person
who is an Administrator of the Plan who is not at the time he exercises
discretion in administering the Plan eligible and has not at any time within
one year prior thereto been eligible for selection as a person to whom stock
may be allocated or to whom stock options or stock appreciation rights may be
granted pursuant to the Plan or any other plan of the Company or any of its
Affiliates entitling the participants therein to acquire stock, stock options
or stock appreciation rights of the Company or any of its Affiliates.
4. Stock Subject to Plan. Subject to the provisions of
Paragraphs 15 and 18 hereof, the maximum number of shares which may be optioned
and sold under the Plan as Options are Five Hundred Thousand (500,000) shares
of the authorized, but unissued, or reacquired Common Stock of the Company. In
the event that any Option shall, for any reason, terminate or expire or be
surrendered without having been exercised in full, the shares subject to such
Option but not purchased hereunder shall again be available to be granted as
Options under this Plan.
<PAGE> 2
5. Eligibility. The Committee may grant Options to any key
employee, including officers and directors who are also employees, of the
Company or any of its Affiliates; provided, however, that an employee to whom
an ISO is granted may not, at the time the ISO is granted, own stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any of its Affiliates, as determined
in accordance with Section 425(d) of the Code. The foregoing ten percent (10%)
limitation shall be inapplicable If, at the time the ISO is granted, the option
price is at least one hundred and ten percent (110%) of the fair market value
of the Common Stock subject to the ISO and the ISO by its terms is not
exercisable after the expiration of five (5) years from the date the ISO is
granted. The persons to whom ISO's shall be granted shall herein be called the
"ISO Optionees" and the persons to whom Options shall be granted shall herein
be called "Optionees."
6. Option Price. The option price for the Common Stock to be
issued under the Plan pursuant to an ISO shall not be less than the fair market
value of the Common Stock of the Company at the time that the ISO is granted,
as such fair market value shall be determined from time to time in good faith
and in the sole discretion of the Committee. The minimum option price shall be
one hundred ten percent (110%) of the fair market value of the Common Stock
subject to an ISO if the ISO Optionee, at the time the ISO is granted, would
own stock possessing more than ten percent (10%) of the total combined voting
power of the Company or any of its Affiliates. The aggregate fair market value
(determined as of the time the ISO is granted) of the shares of Common Stock
for which any ISO Optionee may be granted ISO's in any calendar year (under all
such plans of the Company and its Affiliates) shall not exceed the amount of
One Hundred Thousand and 00/100 Dollars ($100,000.00), plus any unused limit
carryover (as determined in accordance with Section 422A(c)(4) of the Code and
the rules and regulations promulgated thereunder) to such year.
The option price for the Common Stock to be issued under the Plan
pursuant to a nonstatutory stock option shall be determined from time to time
in the sole discretion of the Committee.
7. Grant of Options. Options shall be granted on such dates as
may be determined from time to time by the Committee; provided, however, that
all Options shall be granted within ten (10) years from the date that the Plan
is adopted by the Board of Directors of the Company in accordance with
Paragraph 19 hereof. If the Committee so determines and the applicable
instrument or instruments evidencing the Option so provide, the exercise of all
or any part of an Option granted under this Plan may result in the reduction or
termination of another Option granted under this Plan to the extent so
determined and provided.
8. Exercise of Option.
(a) Subject to Paragraphs 13 and 14 hereof, the Options
shall be exercisable in four (4) equal annual installments. The first
installment shall not be exercisable until the expiration of one (1)
year from the date the Option is granted and each succeeding-
installment shall not be exercisable until the expiration of one (1)
year from the date that the prior installment became exercisable.
When the right to exercise any installment accrues the shares of Colon
Stock included in such installment may be purchased at that time or
from time to time thereafter; provided, however, that no Option shall
be exercisable after the expiration of ten (10) years from the date
such Option Is granted (except as otherwise set forth in Paragraph 5
hereof ). Notwithstanding subparagraph (b) below, ISO's granted
hereunder may not be exercised by an ISO Optionee while there is
outstanding (within the meaning of Section 422A(c)(7) of the Code) any
incentive stock option which was granted before the granting of such
ISO to the ISO Optionee to purchase stock in the Company or in a
corporation which (at the time of the granting of such ISO) is an
Affiliate of the Company; provided, however, that the restrictions on
exercise set forth in this sentence will remain applicable only to the
extent necessary for an ISO to qualify as an incentive stock option
pursuant to the Code.
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<PAGE> 3
(b) Notwithstanding the above (other than the last
sentence of subparagraph (a)), at the Committee's sole discretion, the
Committee may agree to permit exercise of an Option prior to vesting,
but no earlier than the expiration of one year from the date such
Option was granted, upon the execution, by the Optionee, of an
Agreement, satisfactory to the Committee, providing the Company with
repurchase rights on such terms as the Committee deems appropriate.
9. Payment of Purchase Price. Upon the exercise of an Option, or
any portion thereof, the purchase price must be paid in full to the Company.
The Committee shall have the sole and absolute discretion to determine whether
or not property other than cash may be used to purchase the shares of Common
Stock hereunder and, if so, to determine the value of the property received.
The Committee is expressly authorized to accept shares of Common Stock owned by
an Optionee in payment of the exercise price for an Option.
Upon the exercise of an Option, or any portion thereof, the Company
may, in the sole and absolute discretion of the Company, finance ninety percent
(90%) of the purchase price of the shares of the Common Stock being purchased
pursuant to such Option. Any and all promissory notes payable to the Company
by reason of such financing shall bear interest at the rate of two (2)
percentage points over prime rate established by the Board of Directors of the
Company on December 15th of each year, which interest rate shall fluctuate
accordingly throughout the term of the note. Such financing shall be upon such
other terms and conditions as may be established from time to time by the
Committee. In the event of such financing, the remaining ten percent (10%) of
the purchase price must be paid in full to the Company at the time of the
exercise of the Option. If such purchase is not financed by the Company, such
purchase price must be paid in full to the Company at the time of the exercise
of the Option.
10. Form of Option. ISO's granted pursuant to this Plan shall be
evidenced by Incentive Stock Option Agreements in such form as the Committee
shall from time to time adopt and nonstatutory stock options granted pursuant
to this Plan shall be evidenced by Non-qualified Stock Option Agreements in
such form as the Committee shall from time to time adopt (together, the
"Agreements"). Each Option granted under this Plan shall be exercisable on
such date or dates and during such period and for such number of shares of
Common Stock as shall be determined pursuant to the provisions of this Plan and
the Agreement with respect to such Options.
11. Options Not Transferable. Options granted under this Plan may
not be sold, pledged, assigned, hypothecated or otherwise transferred in any
manner other than by will or the laws of descent and distribution and shall not
be assignable by operation of law or subject to execution, attachment or
similar process. Options may be exercised during the lifetime of an Optionee
only by such Optionee. Any attempted sale, pledge, assignment, hypothecation
or other transfer of an Option contrary to the provisions hereof and the levy
of any execution, attachment or similar process upon an Option shall be null
and void and without force or effect. No transfer of any Options by will or by
the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferree or transferees of the terms and conditions of this Agreement
with respect to such Option.
12. Shares Not Transferable. As a condition to the transfer of
these shares of Common Stock issued under this Plan, the Company may require an
opinion of counsel, satisfactory to the Company, to the effect that such
transfer will not be in violation of the Securities Act of 1933 or any other
applicable securities
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<PAGE> 4
laws or that such transfer has been registered under federal and all applicable
state securities laws. Further, the Company shall be authorized to refrain
from delivering or transferring shares of Common Stock issued under this Plan
until the Committee has determined that such delivery or transfer will not
violate applicable securities laws and that the Optionee has tendered to the
Company any federal, state or local tax owed by the Optionee as a result of
exercising the Option, or disposing of any Common Stock, when the Company has a
legal liability to satisfy such tax. The Company shall not be liable for
damages due to delay in the delivery or issuance of any stock certificate for
any reason whatsoever, including, but not limited to, a delay caused by listing
requirements of any securities exchange or any registration retirements under
the Securities Act of 1933, the Securities Exchange Act of 1934, or under any
other state or federal law, rule or regulation. The Company is under no
obligation to take any action or incur any expense in order to register or
qualify the delivery or transfer of shares of Common Stock under applicable
securities laws or to perfect any exemption from such registration or
qualification. Furthermore, the Company will have no liability to any Optionee
for refusing to deliver or transfer shares of Common Stock if such refusal is
based upon the foregoing provisions of this Paragraph 12.
13. Termination of Employment. If an Optionee's employment with
the Company or any of its Affiliates shall be terminated by the Company or any
of its Affiliates with or without cause, or by the act of the Optionee, except
by reason of his/her disability (within the meaning of Section 105(d)(4) of the
Code) or death, the Optionee shall have the right, during the period ending on
the day one (1) month after such termination, to exercise any Options to the
extent they were exercisable at the date of such termination of employment and
shall not have been exercised. Thereafter, all of the Optionee's rights
hereunder shall cease. If an Optionee's employment with the Company or any of
its Affiliates shall terminate by reason of death, Paragraph 14 shall apply and
the person or persons set forth therein shall have the right (subject to the
expiration of the term of an Option), during the period ending three (3) months
after the date of death, to exercise any Options hereunder to the extent they
would have been exercisable by the Optionee at the date of death and shall not
have been exercised. If an Optionee's employment with the Company or any of
its Affiliates shall terminate by reason of disability, such disabled Optionee
shall have the right (subject to the expiration of the term of an Option),
during the period ending on the day one (1) year after such termination, to
exercise any Options to the extent they were exercisable at the date of such
termination of employment and shall not have been exercised.
14. Effect of Death. Upon the death of an Optionee, the legal
representative, executor or administrator of the estate of such Optionee or the
person or persons to whom any Options granted hereunder shall have been validly
transferred by the legal representative, executor or administrator pursuant to
a will or the laws of descent and distribution shall have the right (subject to
the expiration of the term of an Option) to exercise any of the Options of the
Optionee to the extent that such Options would have been exercisable by the
Optionee in accordance with the provisions of Paragraphs 8 and 13 hereof.
15. Chances in Capitalization. In the event that the number of
outstanding shares of Common Stock of the Company shall be changed by reason of
stock splits, stock dividends, reverse stock splits, combinations of shares or
similar transactions, the number of shares for which Options may thereafter be
granted under this Plan, the number of shares then subject to Options
theretofore granted under this Plan and the price per share payable upon
exercise of such Options shall be appropriately adjusted as determined by the
Committee so as to reflect such change. Options may also contain provisions
for their continuation or for other equitable adjustments after changes in
shares of Common Stock resulting from reorganization, sale, merger,
consolidation or similar occurrences.
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<PAGE> 5
16. Merger or Sale. In the event that the Company shall be the
surviving corporation in any merger or consolidation, any Option granted
hereunder shall continue in force and effect, subject to adjustment in the
price and number of shares thereunder to reflect the capital adjustment
resulting from the merger or consolidation. In the event that the Company is
not to be the surviving corporation in any merger or consolidation, or in the
event that the Company intends to sell or exchange substantially all of its
assets, it shall give each Optionee 30 days prior written notice of such
transaction. Upon forwarding such notice, the four-year period referred to in
the first and second sentences of Paragraph 8(a) of this Plan shall not apply
to any outstanding Options, and all outstanding Options shall become
immediately exercisable, subject, however, to the remaining provisions of
Paragraph 8(a) of this Plan. Upon consummation of such transaction all
outstanding Options will automatically terminate.
17. Representations of Optionee. As a condition to the grant of
any portion of an Option, the Company may require the Optionee to represent and
warrant that, as of the time of any such exercise; the shares are being
purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933 or any other
applicable law, regulation or rule of any governmental agency. Furthermore,
the Company may annotate such restrictions on transfer of shares issued upon
exercise of an Option as it deems necessary to prevent violation of applicable
securities laws.
18. Reservation of Shares. During the term of this Plan, the
Company will at all times reserve and keep available, and will seek or obtain
from any regulatory body having jurisdiction any requisite authority in order
to issue and sell such number of shares of its Common Stock as shall be
sufficient to satisfy the requirements of the Plan. The inability of the
Company to obtain the authority from any regulatory body having jurisdiction
which is deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any shares of its Common Stock hereunder shall relieve the Company
of any liability in respect to the nonissuance or sale of such Common Stock as
to which such requIsite authority shall not have been obtained.
19. Term of Plan. This Plan shall become effective upon its
adoption by the Board of Directors of the Company and its approval within
twelve (12) months thereafter by the holders of a majority of all the issued
and outstanding capital stock of the Company, voting as a single class and
represented at an annual or special meeting of the stockholders of the Company
or by a written statement signed by a majority of such stockholders.
20. Amendment of the Plan. The Board of Directors of the Company
may amend the Plan from time to time in such respects as the Board may deem
advisable without the approval of the stockholders of the Company unless such
amendment would (a) increase the maximum number of shares of Common Stock as to
which ISO's may be granted under the Plan; or (b) change the class of employees
eligible to receive ISO's under the Plan; or (c) disqualify an ISO granted
under the Plan from satisfying the requirement for an incentive stock option
under the Code, and provided, further, that the affirmative vote of the holders
of a majority of the securities of the Company present, or represented, and
entitled to vote at a meeting duly held in accordance with the laws of the
State of Delaware shall be required to approve any amendment to the Plan which
would, as determined for purposes of Rule 16b-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934 (or any successor
provision at the time in effect), (x) materially increase the benefits accruing
to participants under the Plan, (y) materially increase the number of shares of
Common Stock which may be issued under the Plan, or (z) materially modify the
requirements as to eligibility for participation in the Plan.
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21. Termination of the Plan. The Board of Directors of the
Company may terminate the Plan at any time. Any such termination shall not
affect any restrictions previously imposed upon the shares of Common Stock
issued pursuant to this Plan or upon the Options already granted, and such
restrictions and Options shall remain in full force and effect thereafter as if
this Plan had not been terminated.
22. Legend. In order to enforce the restrictions imposed upon the
shares of Common Stock of the Company which are issued under this Plan, the
Committee may cause a legend or legends to be placed on any certificates
representing shares issued under this Plan, which legend or legends shall make
appropriate reference to the restrictions imposed hereunder.
23. Conformity with Internal Revenue Code. ISO's granted under
this Plan are intended to satisfy all requirements for incentive stock options
under the Code and, notwithstanding any other provision of this Plan, the Plan
and all ISO's granted under it shall be so construed and all contrary
provisions shall be so limited in scope and effect and, to the extent they
cannot be so limited, they shall be void.
24. Effect of the Plan. Neither the adoption of the Plan nor the
action of the Board of Directors of the Company shall be deemed to give any
employee any right to be granted an Option to purchase shares of Common Stock
of the Company or any other rights except as may be evidenced by an Agreement,
or any amendment thereto, duly authorized by the Committee and then only to the
extent and on the terms and conditions expressly set forth therein. Nothing in
the Plan or in the Option granted hereunder or in any Agreement relating
thereto shall confer upon any Optionee the right to continue in the employ of
the Company.
25. Other Compensation Plans. The adoption of the Plan shall not
affect any other stock option or incentive or other compensation plans in
effect for the Company, nor shall the Plan preclude the Company from
establishing any other forms or incentive or other compensation for employees
of the Company.
26. Successors and Assigns. The Plan shall be binding upon the
successors and assigns of the Company.
27. Modification, Extension and Renewal of Options. Within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent
not previously exercised) for the granting of new Options in substitution
therefor. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, alter or impair his rights or obligations
under such Option.
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<PAGE> 1
EXHIBIT 4.5
VMX, INC.
1989 STOCK OPTION PLAN
I. PURPOSES OF THE PLAN
A. The VMX, Inc. 1989 Stock Option Plan (the "Plan") is
intended to promote the interests of VMX, Inc., a Delaware corporation (the
"Company"), by providing a method whereby those employees (including officers
and directors who are employees) of the Company (or its parent or subsidiary
corporations) responsible for the management, growth and financial success of
the Company (or its parent or subsidiary corporations) may be offered
incentives and rewards which will encourage them to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Company and
continue to render services to the Company (or its parent or subsidiary
corporations).
B. The Plan is also intended to consolidate the
provisions of the three pre-existing stock option plans of the Company listed
below (the "Predecessor Plans") into a single successor plan document and to
combine into one aggregate share pool the number of shares of the Company's
common stock which would otherwise be issuable separately under each of the
following Predecessor Plans:
(i) the 1981 ECS Stock Option Plan,
(ii) the 1983 Stock Option Plan, and
(iii) the 1986 Stock Option Plan
C. For purposes of the Plan, the following provisions
shall be applicable in determining the parent and subsidiary corporations of
the Company:
(i) Any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company
shall be considered to be a parent corporation of the Company,
provided each such corporation in the unbroken chain (other
than the Company) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the
other corporations in such chain.
(ii) Each corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company
shall be considered to be a subsidiary of the Company,
provided each such corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain.
<PAGE> 2
II. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Company's Board
of Directors (the "Board"). The Board, however, may at any time appoint one or
more committees (each separately referred to as the "Committee") of two (2) or
more members and delegate to each such Committee one or more administrative
functions under the Plan. To the extent one or more such Committees are
appointed, at least one of such Committees (the "Primary Committee") shall be
comprised of at least three (3) members of the Board and shall have the sole
and exclusive authority to make option grants to employees of the Company or
its parent or subsidiary corporations who are at the time either officers or
members of the board of directors of the Company or any parent corporation. No
member of the Primary Committee while serving as such shall be (nor during the
one- year period immediately preceding his/her appointment to the Primary
Committee shall have been) eligible to receive option grants or stock awards
under this Plan or any other stock option, stock purchase, stock bonus or other
stock plan of the Company or its parent or subsidiary corporations, except for
the periodic option grants to which such member may be entitled pursuant to the
Company's Restated 1989 Non-Statutory Stock Option Plan.
B. Members of each Committee shall serve for such period
of time as the Board may determine and shall be subject to removal by the Board
at any time. The Board may also at any time terminate the functions of any
Committee and reassume all powers and authority previously delegated to the
Committee. However, for any and all periods during which the majority of the
Board is not comprised of individuals who qualify as disinterested persons
within the meaning of paragraph (d)(3) of Rule l6b-3 of the Securities and
Exchange Commission (or any successor rule), as such term is interpreted from
time to time, the Primary Committee shall have the sole and exclusive authority
to make discretionary option grants under the Plan to employees of the Company
or its parent or subsidiary corporations who are at the time members of the
board of directors of the Company or any parent corporation.
C. The Plan Administrator (the Board or any Committee,
to the extent such Committee is at the time responsible for the administration
of the Plan) shall have full power and authority (subject to the provisions of
the Plan) to establish such rules and regulations as it may deem appropriate
for the proper administration of the Plan and to make such determinations
under, and issue such interpretations of, the Plan and any outstanding option
as it may deem necessary or advisable. Decisions of the Plan Administrator
shall be final and binding on all parties who have an interest in the Plan or
any outstanding option.
III. ELIGIBILITY FOR OPTION GRANTS
A. The persons eligible to receive option grants under
the Plan shall be limited to those employees (including officers and directors
who are employees) of the Company (or its parent or subsidiary corporations)
who contribute to the management, growth and financial success of the Company
(or its parent or subsidiary corporations) or who may reasonably be anticipated
to contribute to such management, growth and success in the future.
B. The Plan Administrator shall have full authority to
determine which eligible individuals are to receive option grants under the
Plan, the number of shares to be covered by each such grant, whether the
granted option is to be an incentive stock option ("Incentive Option") which
satisfies the requirements of Section 422A of the Internal Revenue Code or a
non-statutory option not intended to meet such requirements, the time or times
at which each such option is to become exercisable, and the maximum term for
which the option is to be outstanding.
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IV. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of
the Company's authorized but unissued or reacquired Common Stock, par value
$0.05 per share. The aggregate number of shares which may be issued over the
term of the Plan shall not exceed 3,809,975 shares.1 Since this Plan is
designed to supersede the Predecessor Plans, no further shares of Common Stock
shall be issued, from and after the effective date of this Plan, under (i) the
1981 ECS Stock Option Plan, (ii) the 1983 Stock Option Plan or (iii) the 1986
Stock Option Plan. Any and all shares of Common Stock issuable pursuant to
options outstanding under such Predecessor Plans as of the effective date of
this Plan shall, upon the exercise of such options, be issued under this Plan
and shall accordingly reduce, on a one-for-one basis, the number of shares of
Common Stock thereafter issuable under this Plan.
B. Should an option expire or terminate for any reason
prior to exercise or surrender in full (including options cancelled in
accordance with the cancellation-regrant provisions of Section VIII of the
Plan), the shares subject to the portion of the option not so exercised or
surrendered shall be available for subsequent option grants under the Plan.
Shares subject to any option or portion thereof surrendered in accordance with
Section IX of the Plan and shares repurchased by the Company pursuant to its
repurchase rights under the Plan shall not be available for subsequent option
grants under the Plan.
C. In the event any change is made to the Common Stock
issuable under the Plan by reason of any stock split, stock dividend,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made to (i) the aggregate number of shares
issuable under the Plan and (ii) the number of shares and price per share of
the Common Stock subject to each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder.
V. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator and may, at the discretion of the Plan
Administrator, be either Incentive Options or nonstatutory options. Each
granted option shall be evidenced by one or more instruments in the form
approved by the Plan Administrator; provided, however, that each such
instrument shall comply with and incorporate the terms and conditions specified
below. Each instrument evidencing an Incentive Option shall, in addition, be
subject to the applicable provisions of Section VI.
1. Option Price.
A. The option price per share shall be fixed by the Plan
Administrator; provided, however, that in no event shall the option price per
share be less than one-hundred percent (100%) of the fair market value per
share of Common Stock on the date of the option graft.
____________________
1 Represents the sum of (i) the aggregate number of shares
available, as of August 10, 1989, for issuance under the Predecessor Plans,
including the 275,400-share increase authorized this date under the 1986
Stock Option Plan, plus (ii) the additional 900,000 shares authorized for
issuance under this Plan.
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<PAGE> 4
B. The option price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section X and
the instrument evidencing the grant, be payable in one of the alternative forms
specified below:
(i) full payment in cash or cash equivalents; or
(ii) full payment in shares of Common Stock held
by the optionee for the requisite period necessary to avoid a charge
to the Company's earnings for financial reporting purposes and valued
at fair market value on the Exercise Date (as such term is defined
below); or
(iii) payment through a combination of shares of
Common Stock held by the optionee for the requisite period necessary
to avoid a charge to the Company's earnings for financial reporting
purposes and valued at fair market value on the Exercise Date and cash
or cash equivalents, equal in the aggregate to the option price.
For purposes of this subparagraph B, the Exercise Date shall
be the first date on which the Company shall have received both written notice
of the exercise of the option and payment of the option price for the purchased
shares.
C. The fair market value per share of Common Stock on
any relevant date under subparagraph A or B above (and for all other valuation
purposes under the Plan) shall be determined in accordance with the following
provisions:
(i) If the Common Stock is not at the time listed
or admitted to trading on any national stock exchange but is traded in
the over-the-counter market, the fair market value shall be the
closing bid price (or, if available, the closing selling price) per
share of Common Stock on the date in question in the over-the-counter
market, as such price is reported by the National Association of
Securities Dealers through its NASDAQ system or any successor system.
If there is no reported closing bid price (or closing selling price)
for the Common Stock on the date in question, then the closing bid
price (or closing selling price) on the last preceding date for which
such quotations exist shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or
admitted to trading on any national stock exchange, then the fair
market value shall be the closing selling price per share of Common
Stock on the date in question on the stock exchange determined by the
Board to be the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock on such
exchange on the date in question, then the fair market value shall be
the closing selling price on the exchange on the last preceding date
for which such quotation exists.
2. Term and Exercise of Options.
Each option granted under the Plan shall be exercisable and
shall vest at such time or times, during such period, and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
instrument evidencing such option; provided, however, that no such option shall
have a maximum term in excess of ten (10) years from the grant date.
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<PAGE> 5
3. Transferability of Options
A. During the lifetime of the optionee, the option shall
be exercisable only by the optionee and shall not be assignable or transferable
by the optionee otherwise than by will or by the laws of descent and
distribution.
B. Any attempted sale, pledge, assignment, hypothecation
or other transfer of the option contrary to the provisions of the Plan and any
levy of execution, attachment or similar process upon the option shall be null
and void and without force or effect.
C. No transfer of the option by will or the laws of
descent and distribution shall be effective to bind the Company unless there is
furnished to the Plan Administrator written notice thereof and an authenticated
copy of the will and such other evidence as the Plan Administrator may deem
necessary to establish the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions of the instruments
evidencing such option.
4. Termination of Service
A. Should an optionee (i) cease to remain in Service for
any reason (including death or permanent disability) while the holder of one or
more outstanding options under the Plan or (ii) die within three (3) months
after cessation of Service, then such option or options shall not remain
exercisable for more than a thirty-six (36) month period (or such shorter
period determined by the Plan Administrator and specified in the instrument
evidencing the grant) following the latter of (i) the date of such cessation of
Service or (ii) the date of the optionee's death. Under no circumstances,
however, shall any such option be exercisable after the specified expiration
date of the option term. Each such option shall, during such thirty-six (36)
month or shorter period, be exercisable only to the extent of the number of
shares (if any) for which the option is exercisable on the date of the
optionee's cessation of Service. Upon the expiration of such thirty-six (36)
month or shorter period or (if earlier) upon the expiration of the option term,
the option shall terminate and cease to be exercisable.
B. To the extent any option remains exercisable, in
accordance with subparagraph A. above, for one or more option shares following
the optionee's death, such option may be exercised by the personal
representative of the optionee's estate or by the person or persons to whom the
option is transferred pursuant to the optionee's will or in accordance with the
laws of descent and distribution. Any such exercise must occur prior to the
earlier of (i) thirty-six (36) months following the date of the optionee's
death or (ii) the specified expiration date of the option term. Upon the
occurrence of the earlier event, the option shall terminate and cease to be
exercisable.
C. Should (i) the optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty, willful
misconduct, fraud or embezzlement) or should (ii) the optionee make or attempt
to make any unauthorized use or disclosure of confidential information or trade
secrets of the Company or its parent or subsidiary corporations, then in any
such event all outstanding options held by the optionee under the Plan shall
terminate and cease to be exercisable immediately upon such termination of
Service or such unauthorized use or disclosure of confidential or secret
information or attempt thereat.
D. Notwithstanding subparagraph A above, the Plan
Administrator shall have complete discretion, exercisable either at the time
the option is granted or at the time the optionee ceases Service, to
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<PAGE> 6
establish as a provision applicable to the exercise of one or more options
granted under the Plan that during the limited period of exercisability
provided under subparagraph A above, the option may be exercised not only with
respect to the number of shares for which it is exercisable at the time of the
optionee's cessation of Service but also with respect to one or more subsequent
installments of purchasable shares for which the option would otherwise have
become exercisable had such cessation of Service not occurred.
E. For purposes of the foregoing provisions of this
Section V.4 (and for all other purposes under the Plan):
(i) The optionee shall be deemed to remain in
Service for so long as such individual renders services on a
periodic basis to the Company (or any parent or subsidiary
corporation) in the capacity of an Employee, a non-employee
member of the board of directors or an independent consultant
or advisor.
(ii) The optionee shall be considered to be an
Employee for so long as such individual remains in the employ
of the Company or one or more of its parent or subsidiary
corporations.
(iii) The term permanent disability shall have the
meaning assigned to such term in Section 22(e)(3) of the
Internal Revenue Code.
5. Stockholder Rights.
An optionee shall have none of the rights of a stockholder
with respect to any shares covered by the option until such individual shall
have exercised the option, paid the option price and been issued a stock
certificate for the purchased shares. No adjustments shall be made for
dividends, distributions or other rights for which the record date is prior to
the date such stock certificate is issued.
6. Repurchase Rights.
One or more shares of Common Stock issuable under the Plan
may, in the discretion of the Plan Administrator, be subject to repurchase in
accordance with the following provisions:
A. The Company (or its assigns) may be granted the
right, exercisable upon the optionee's cessation of Service, to repurchase at
the option price any or all unvested shares of Common Stock acquired by an
optionee under the Plan. Any such repurchase right shall be exercisable by the
Company (or its assigns) upon such terms and conditions (including the
establishment of the appropriate vesting schedule for the purchased shares) as
the Plan Administrator may specify in the instrument evidencing such right.
B. The Company's repurchase rights may be assigned to
any person or entity selected by the Plan Administrator, including one or more
stockholders of the Company. If the selected assignee is other than a parent
or subsidiary corporation of the Company, then that assignee must make a cash
payment to the Company, at the time of the assignment, in an amount equal to
the excess (if any) of the fair market value of the unvested shares subject to
the assigned repurchase right over the aggregate repurchase price payable for
such unvested shares.
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<PAGE> 7
C. All outstanding repurchase rights shall automatically
terminate, and all purchased shares under the Plan shall immediately vest in
full, upon the occurrence of any Corporate Transaction under Section VII.
However, an outstanding repurchase right shall not so terminate and none of the
purchased shares subject thereto shall so vest if (and to the extent): (i) such
repurchase right is to be assigned to the successor corporation (or parent
thereof) in connection with the Corporate Transaction or (ii) the accelerated
vesting of the shares subject to such repurchase right is precluded by other
limitations imposed by the Plan Administrator at the time of the option grant.
VI. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable
to all Incentive Options granted under the Plan. Options which are
specifically designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.
A. Option Price. The option price per share of the
Common Stock subject to an Incentive Option shall in no event be less than one
hundred percent (100%) of the fair market value per share of Common Stock on
the date of grant.
B. Sequential Exercise Rule. No Incentive Option
granted prior to January 1, 1987 under the Predecessor Plans superseded by this
Plan may be exercised while there remains outstanding (within the meaning of
subsection (c)(7) of Section 422A of the Internal Revenue Code) any other
pre-1987 Incentive Option which was granted at an earlier date to the optionee
to purchase stock in the Company or in any other corporation which is on the
date of grant of the later option either a parent or subsidiary corporation of
the Company or a predecessor corporation of any of such corporations.
C. Dollar Limitation. The following dollar limitations
shall be in effect for Incentive Options granted under the Plan:
(i) Pre-1987 Grants. The aggregate fair market
value (determined as of the respective date or dates of grant) of the
Common Stock which may be made the subject of Incentive Options
granted under the Predecessor Plans (or any other option plan of the
Company or its parent or subsidiary corporations) to any Employee in
any one calendar year prior to the 1987 calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000), plus any unused
Carryover to such pre-1987 calendar year. For purposes of the
preceding limitation, the term "Carryover" means one-half (1/2) of the
amount by which the sum of One Hundred Thousand Dollars ($100,000)
exceeds the aggregate fair market value (determined as of the
respective date or dates of grant) of the Common Stock for which the
Employee was previously granted Incentive Options under the
Predecessor Plans (or any other option plan of the Company or its
parent or subsidiary corporations) in each calendar year after 1980
and prior to 1987. The unused Carryover shall be available for each
of the three (3) pre-1987 calendar years immediately following the
calendar year in which the Carryover arises and shall increase the
basic $100,000 limitation otherwise applicable to the Employee for
each such pre-1987 calendar year by an amount equal to the Carryover,
less the portion thereof used in prior calendar years. Incentive
Options granted the Employee during any pre-1987 calendar year shall
first be applied against the basic $100,000 limitation in effect for
such calendar year and then applied against any of the Employee's
unused Carryovers to such calendar year, in the order in which such
Carryovers arose in prior calendar years.
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<PAGE> 8
(ii) Post-1986 Grants. The aggregate fair market
value (determined as of the respective date or dates of grant) of the
Common Stock for which one or more options granted after December 31,
1986 to any Employee under this Plan (or any other option plan of the
Company or its parent or subsidiary corporations, including the
Predecessor Plans) may for the first time become exercisable as
incentive stock options under the Federal tax laws during any one
post-1986 calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). To the extent the Employee holds two or
more such post-1986 options which become exercisable for the first
time in the same calendar year, the foregoing limitation on the
exercisability thereof as incentive stock options under the Federal
tax laws shall be applied on the basis of the order in which such
options are granted.
Except as modified by the preceding provisions of this Section
VI, all the provisions of the Plan shall be applicable to the Incentive Options
granted hereunder.
VII. CORPORATE TRANSACTIONS/CHANGES IN CONTROL
A. In the event of any of the following
stockholder-approved transactions (a "Corporate Transaction"):
(i) a merger or acquisition in which the Company
is not the surviving entity, except for a transaction the
principal purpose of which is to change the State of the
Company's incorporation,
(ii) the sale, transfer or other disposition of
all or substantially all of the assets of the Company, or
(iii) any reverse merger in which the Company is
the surviving entity but in which fifty percent (50%) or more
of the Company's outstanding voting stock is transferred to
holders different from those who held the stock immediately
prior to such merger,
then the exercisability of each option outstanding under the Plan shall be
automatically accelerated so that each such option shall, immediately prior to
the specified effective date for the Corporate Transaction, become fully
exercisable with respect to the total number of shares of Common Stock
purchasable under such option and may be exercised for all or any portion of
such shares. However, an outstanding option under the Plan shall not be so
accelerated if and to the extent: (i) such option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation or
parent thereof or be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation or parent thereof, (ii) such
option is to be replaced by a comparable cash incentive program of the
successor corporation based on the value of the option at the time of the
Corporate Transaction, or (iii) the acceleration of such option is subject to
other limitations imposed by the Plan Administrator at the time of grant. The
determination of comparability under clause (i) or (ii) above shall be made by
the Plan Administrator, and its determination shall be final, binding and
conclusive.
B. Upon the consummation of the Corporate Transaction,
all outstanding options under the Plan shall, to the extent not previously
exercised or assumed by the successor corporation or its parent company,
terminate and cease to be outstanding.
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<PAGE> 9
C. If the Company is the surviving entity in any merger
or other business combination, then each option which remains outstanding under
the Plan immediately after such merger or other business combination may, in
the discretion of the Plan Administrator, be appropriately adjusted to apply
and pertain to the number and class of securities which would be issuable, in
consummation of such merger or business combination, to an actual holder of the
same number of shares of Common Stock as are subject to such option immediately
prior to such merger or business combination. Appropriate adjustments may also
be made to the option price payable per share, provided the aggregate option
price payable for such securities shall remain the same. In addition, the
class and number of securities available for issuance under the Plan following
the consummation of such merger or business combination may also be
appropriately adjusted.
D. The grant of options under this Plan shall in no way
affect the right of the Company to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.
E. With respect to any one of the following transactions
(a "Change in Control"):
(i) a person or related group of persons,other
than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company, acquires
ownership of fifty percent (50%) or more of the Company's outstanding
Common Stock pursuant to a tender or exchange offer which the Board
does not recommend the Company's stockholders to accept, or
(ii) a change in the composition of the Board
occurs such that those individuals who were elected to the Board at
the last stockholders meeting at which there was not a contested
election for Board membership subsequently cease to comprise a
majority of the Board by reason of a contested election,
the Plan Administrator shall have the discretionary authority, exercisable at
any time whether before or after the Change in Control, to provide for the
automatic acceleration of one or more outstanding options under the Plan (or
the termination of the outstanding repurchase rights) upon the occurrence of
such Change in Control. The Plan Administrator may also impose limitations
upon the automatic acceleration of such options (or the termination of such
repurchase rights) to the extent it may deem appropriate.
F. Any options accelerated upon such a Change in Control
will remain fully exercisable until the expiration or sooner termination of the
option term.
G. In connection with any Corporate Transaction or
Change in Control, the exercise of any accelerated pre-1987 Incentive Option
shall remain subject to the applicable limitations of Section VI.B, and the
exercisability as an incentive stock option under the Federal tax laws of any
accelerated post-1986 option shall be subject to the applicable dollar
limitations of Section VI.C(ii).
VIII. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of
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<PAGE> 10
shares of Common Stock but having an option price per share not less than
one-hundred percent (100%) of the fair market value per share of Common Stock
on the new grant date.
IX. SURRENDER OF OPTIONS FOR CASH OR STOCK
A. One or more optionees may be granted the right,
exercisable upon such terms and conditions as the Plan Administrator may
establish, to surrender all or part of an unexercised option under the Plan in
exchange for a distribution from the Company in an amount equal to the excess
of (i) the fair market value (at date of surrender) of the number of shares in
which the optionee is at the time vested under the surrendered option (or
surrendered portion thereof) over (ii) the aggregate option price payable for
such vested shares.
B. No surrender of an option shall be effective
hereunder unless it is approved by the Plan Administrator. If the surrender is
so approved, then the distribution to which the optionee shall accordingly
become entitled under this Section IX may be made in shares of Common Stock
valued at fair market value on the date of surrender, in cash, or partly in
shares and partly in cash, as the Plan Administrator shall in its sole
discretion deem appropriate.
C. If the surrender of an option is rejected by the Plan
Administrator, then the optionee shall retain whatever rights the optionee had
under the surrendered option (or surrendered portion thereof) on the date of
surrender and may exercise such rights at any time prior to the later of (i)
five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the date of the option grant.
D. Notwithstanding the foregoing provisions of this
Section IX, one or more officers or directors of the Company subject to the
short-swing profit restrictions of the Federal securities laws may, in the sole
discretion of the Plan Administrator, be granted the unconditional right
(exercisable for a period not to exceed thirty (30) days following a Change in
Control under Section VII) to surrender any or all options at that time held by
such individual under the Plan, to the extent such options (I) have been
outstanding for a period of at least six (6) months and (II) are at the time
exercisable for vested shares. In exchange therefor, the Company shall make an
appreciation distribution equal in amount to the excess of (i) the fair market
value (on the date of surrender) of the number of shares in which the optionee
is at the time vested under the surrendered option (or surrendered portion
thereof) over (ii) the aggregate option price payable for such vested shares.
The distribution to which such individual shall become entitled upon such
pre-authorized surrender shall be made entirely in cash and shall not require
the concurrent approval of the Plan Administrator.
E. For purposes of subparagraph D. above, the fair
market value per share of the vested Common Stock subject to the surrendered
option shall be deemed to be equal to the greater of (a) the value per share on
the date of surrender, as determined in accordance with the valuation
provisions of Section V.1.C., or (b) the highest reported price per share paid
in effecting the Change in Control. However, if the surrendered option is an
Incentive Option, then the fair market value of the vested shares subject to
the surrendered option shall not exceed the value per share determined under
clause (a) above.
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X. LOANS OR GUARANTEE OF LOANS
The Plan Administrator may assist any optionee (including any
officer or director) in the exercise of one or more options under the Plan by
(a) authorizing the extension of a loan to such optionee from the Company, (b)
permitting the optionee to pay the option price for the purchased Common Stock
in installments over a period of years or (c) authorizing a guarantee by the
Company of a third-party loan to the optionee. The terms of any loan,
installment method of payment or guarantee (including the interest rate and
terms of repayment) will be established by the Plan Administrator in its sole
discretion. Loans, installment payments and guarantees may be granted without
security or collateral, but the maximum credit available to the optionee shall
not exceed the sum of (i) the aggregate option price (less par value) of the
purchased shares plus (ii) any Federal and State income and employment tax
liability incurred by the optionee in connection with the exercise of the
option.
XI. TAX WITHHOLDING
A. The Company's obligation to deliver shares upon the
exercise or surrender of stock options or stock appreciation rights granted
under Section IV or IX shall be subject to the satisfaction of all applicable
Federal, State and local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion and
upon such terms and conditions as it may deem appropriate (including the
applicable safe-harbor provisions of SEC Rule l6b-3 or any successor rule or
regulation) provide any or all optionees with the election to have the Company
withhold, from the shares of Common Stock issued under the Plan, one or more of
such shares with an aggregate fair market value equal to the designated
percentage (any multiple of 5% specified by the optionee) of the Federal and
State income tax liability incurred in connection with the acquisition of such
shares. In lieu of such direct withholding, one or more optionees may also be
granted the right to deliver shares of Common Stock to the Company in
satisfaction of such tax liability. The withheld or delivered shares shall be
valued at fair market value on the determination date for the applicable tax
liability.
XII. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects whatsoever;
provided, however, that no such amendment or modification shall, without the
consent of the holders, adversely affect rights and obligations with respect to
options at the time outstanding under the Plan; and provided further that the
Board shall not, without the approval of the Company's stockholders, (i)
increase the maximum number of shares issuable under the Plan, except for
permissible adjustments under Section IV, (ii) materially modify the
eligibility requirements for the grant of options under the Plan or (iii)
otherwise materially increase the benefits accruing to participants under the
Plan.
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XIII. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan, including the aggregate 1,175,400-share
increase2 in the number of shares of Common Stock issuable under the combined
share pool for this Plan and the Predecessor Plans, was adopted by the Board on
August 10, 1989 and is intended to supersede and replace the Predecessor Plans
as of such date. However, no option granted under this Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
stockholders. If such stockholder approval is not obtained within twelve (12)
months after the date of the Board's adoption of the Plan, then any options
previously granted under this Plan (including options granted pursuant to the
1,175,400- share increase) shall terminate, no further options shall be granted
hereunder, and the provisions of the Predecessor Plans (other than the 275,400
share-increase adopted under the 1986 Stock Option Plan) shall remain in
effect. Subject to the foregoing limitations, the Board may grant options
under this Plan at any time after the adoption date of this Plan and before the
date specified herein for termination of the Plan.
B. The provisions of this Plan shall apply only to
options granted under the Plan from and after the date of its adoption by the
Board. Each option issued and outstanding under the Predecessor Plans
immediately prior to such adoption date shall continue to be governed by the
terms and conditions of the particular plan under which such option was granted
(and the instrument evidencing such grant) as in effect on the grant date, and
nothing in this Plan shall be deemed to affect or otherwise modify the rights
or obligations of the holders of such prior options with respect to the
acquisition of shares of Common Stock thereunder. However, any and all shares
issued pursuant to such options shall reduce, on a one-for-one basis, the
number of shares of Common Stock available for issuance under this Plan.
C. Unless sooner terminated in accordance with Section
VII, the Plan shall terminate upon the earlier of (i) August 9, 1999 or (ii)
the date on which all shares available for issuance under the Plan shall have
been issued pursuant to the exercise or surrender of options granted hereunder.
If the date of termination is determined under clause (i) above, then options
outstanding on such date shall thereafter continue to have force and effect in
accordance with the provisions of the instruments evidencing such options.
D. Options may be granted under this Plan to purchase
shares of Common Stock in excess of the number of shares then available for
issuance under the Plan, provided (i) an amendment to increase the maximum
number of shares issuable under the Plan is adopted by the Board prior to the
initial grant of any such option and within one year thereafter such amendment
is approved by the Company's stockholders and (ii) each option granted is not
to become exercisable, in whole or in part, at any time prior to the obtaining
of such stockholder approval.
XIV. USE OF PROCEEDS
Any cash proceeds received by the Company from the sale of
shares pursuant to options granted under the Plan shall be used for general
corporate purposes.
____________________
2 Includes the 275,400-share increase authorized under the 1986
Stock Option Plan plus the additional 900,000-share increase authorized
pursuant to this Plan.
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XV. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any
stock option or stock appreciation right hereunder, and the issuance of stock
upon the exercise or surrender of any such option or right shall be subject to
the procurement by the Company of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options and
rights granted under it and the stock issued pursuant to it.
B. The Company shall deliver financial and other
information regarding the Company, on an annual or other periodic basis, to
each individual holding an outstanding option under the Plan, to the extent the
Company is required to provide such information pursuant to Section
260.140.41.2 of the Rules of the California Corporations Commissioner. Such
obligation shall be deemed satisfied to the extent the Company provides such
option holders, concurrently, with copies of the annual and quarterly reports
provided the Company's stockholders in accordance with the reporting
requirements of the Securities Exchange of 1934, as amended.
XVI. TEN PERCENT STOCKHOLDER PROVISIONS
If any individual to whom an option is to be granted pursuant
to the provisions of the Plan (including options granted pursuant to the
cancellation and regrant provisions of Section VIII of the Plan) is on the date
of grant the owner of stock (as determined under Section 425(d) of the Internal
Revenue Code) possessing 10% or more of the total combined voting power of all
classes of stock of the Company or any one of its parent or subsidiary
corporations, then the following provisions shall be in effect for any or all
options granted to such 10% stockholder under this Plan:
A. The option price per share shall not be less than one
hundred and ten percent (110%) of the fair market value per share of Common
Stock on the grant date.
B. The option shall not have a maximum term in excess of
five (5) years from the grant date.
XVII. MISCELLANEOUS PROVISIONS
A. Neither the adoption of this Plan nor any action of
the Plan Administrator in connection with this Plan shall be deemed to confer
any right upon any individual to receive an option grant under the Plan or to
purchase shares of Common Stock from the Company, except to the extent of the
express terms and conditions of the instrument evidencing an actual option
grant made to such individual under this Plan.
B. No provision of the Plan or of any instrument
evidencing the grant of an option under the Plan shall confer upon the optionee
any right to continue in the Service of the Company (or any parent or
subsidiary corporation employing or retaining the optionee) for any period of
specific duration or be construed to interfere with or otherwise restrict in
any way the rights of the Company (or any parent or subsidiary corporation
employing or retaining the optionee) to terminate the optionee's Service at any
time for any reason whatsoever, whether with or without cause.
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<PAGE> 14
C. The adoption of this Plan shall not preclude the
company from establishing any other incentive or other compensation programs
for employees of the Company or its parent or subsidiary corporations.
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<PAGE> 1
March 31, 1994
Octel Communications Corporation
890 Tasman Drive
Milpitas, CA 95035-7439
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about April 1, 1994 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 3,240,965 shares of your Common Stock
(the "Shares"), which are to be issued pursuant to the 1985 Incentive Stock
Plan and four VMX, Inc. ("VMX") stock option plans: the 1982 VMX/OPCOM Stock
Option Plan, the 1983 VMX Stock Option Plan, the 1986 VMX Stock Option Plan and
the 1989 VMX Stock Option Plan. As your legal counsel, we have examined the
proceedings proposed to be taken in connection with the issuance and sale of
the Shares to be issued under the Plans.
It is our opinion that the Shares, when issued and sold in the manner
referred to in the Plans and pursuant to the agreements which accompany the
Plans, will be legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement, including any Prospectus constituting
a part thereof, and any amendments thereto.
Very truly yours,
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
EXHIBIT 5.1
BET
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Octel Communications Corporation:
We consent to incorporation by reference in the registration statement
on Form S-8 of Octel Communications Corporation of our reports
dated July 23, 1993, relating to the consolidated balance sheets of Octel
Communications Corporation and subsidiaries as of June 30, 1993 and 1992, and
the related consolidated statements of income, stockholders' equity, and cash
flows and related schedules for the years then ended which reports are
incorporated by reference or appear in the June 30, 1993 annual report on Form
10-K of Octel Communications Corporation.
KPMG PEAT MARWICK
Palo Alto, California
March 31, 1994
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<PAGE> 1
Exhibit 23.3
CONSENT OF DELOITTE & TOUCHE
We consent to the incorporation by reference in this Registration
Statement of Octel Communications Corporation on Form S-8 of our report on the
1991 consolidated financial statements dated July 24, 1991, appearing in the
Annual Report on Form 10-K of Octel Communications Corporation for the year
ended June 30, 1993.
DELOITTE & TOUCHE
San Jose, California
March 31, 1994
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