As filed with the Securities and Exchange Commission on May 27, 1997
Registration No. 33-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement
Under the
Securities Act of 1933
DIGITAL LINK CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
California 77-0067742
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
217 Humboldt Court
Sunnyvale, California 94089
(Address of Principal Executive Offices)
1992 Equity Incentive Plan
(Full Title of the Plan)
Stanley E. Kazmierczak
Digital Link Corporation
217 Humboldt Court
Sunnyvale, California 94089
(Name and Address of Agent For Service)
(408) 745-6200
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Eileen Duffy Robinett, Esq.
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
CALCULATION OF REGISTRATION FEE
Proposed
Title of Securities Amount Proposed Maximum Amount of
to be Registered to be Maximum Offering Aggregate Registration
Registered Price Per Share Offering Price Fee
Common Stock,
no par value 800,000(1) $17.6875(2) $14,150,000(2) $4,287.88
(1) Additional shares available for grant and not yet subject to outstanding
options as of May 21, 1997 under the 1992 Equity Incentive Plan, as
amended.
(2) Estimated as of May 23, 1997 pursuant to Rule 457(c) solely for the
purpose of calculating the registration fee.
DIGITAL LINK CORPORATION
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's annual report on Form 10-K for the year ended
December 31, 1996 filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act") on March 28, 1997
(Commission File No. 0-23110);
(b) The Registrant's quarterly report on Form 10-Q for the quarter
ended March 31, 1997 filed under the Exchange Act on May 15,
1997 (Commission File No. 0-23110);
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A (Commission
File No. 0-23110) filed on December 20, 1993 with the Commission
under Section 12(g) of the Exchange Act, including any amendment
or report filed for the purpose of updating such description.
All documents subsequently filed by the Registrant 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 offered
have been sold or which deregisters all securities then remaining unsold,
shall be deemed incorporated by reference herein and to be a part hereof
from the date of the filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation include a provision that
eliminates the personal liability of its directors to the Registrant and its
shareholders for monetary damages for breach of the directors' fiduciary
duties in certain circumstances. This limitation has no effect on a
director's liability (i) for acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) for acts or
omissions that a director believes to be contrary to the best interests of
the Registrant or its shareholders or that involve the absence of good faith
on the part of the director, (iii) for any transaction from which a director
derived an improper personal benefit, (iv) for acts or omissions that show a
reckless disregard for the director's duty to the Registrant or its
shareholders in circumstances in which the director was aware, or should
have been aware, in the ordinary course of performing a director's duties,
of a risk of a serious injury to the Registrant or its shareholders, (v) for
acts or omissions that constitute an unexcused pattern of inattention that
amounts to an abdication of the director's duty to the Registrant or its
shareholders, (vi) under Section 310 of the California Corporations Code
(the "California Code") (concerning contracts or transactions between the
Registrant and a director) or (vii) under Section 316 of the California Code
(concerning directors' liability for improper dividends, loans and
guarantees). The provision does not extend to acts or ommissions of a
director in his capacity as an officer. Further, the provision has no effect
on claims arising under federal or state securities laws and will not affect
the availability of injunctions and other equitable remedies available to
the Registrant's shareholders for any violation of a director's fiduciary
duty to the Registrant or its shareholders.
The Registrant's Articles of Incorporation also include an
authorization for the Registrant to indemnify its agents (as defined in
Section 317 of the California Code), through bylaws provisions, by agreement
or otherwise, to the fullest extent permitted by law. Pursuant to this
latter provision, the Registrant's Bylaws provide for indemnification of the
Registrant's directors, officers and employees. In addition, the Registrant,
at its discretion, may provide indemnification to persons whom the Registrant
is not obligated to indemnify. The Bylaws also allow the Registrant to enter
into indemnity agreements with individual directors, officers, employees
and other agents. These indemnity agreements have been entered into with all
directors and provide the maximum indemnification permitted by law. These
agreements, together with the Registrant's Bylaws and Articles of
Incorporation, may require the Registrant, among other things, to indemnify
such directors against certain liabilities that may arise by reason of their
status or service as directors (other than liabilities resulting from willful
misconduct of a culpable nature), to advance expenses to them as they are
incurred, provided that they undertake to repay the amount advanced if it is
ultimately determined by a court that they are not entitled to
indemnification, and to obtain directors' and officers' insurance if
available on reasonable terms.
Section 317 of the California Code and the Registrant's Bylaws make
provision for the indemnification of officers, directors and other corporate
agents in terms sufficiently broad to indemnify such persons, under certain
circumstances, for liabilities (including reimbursement of expenses
incurred) arising under the Securities Act.
The Registrant carries directors' and officers' insurance.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.01 Registrant's Amended and Restated Articles of Incorporation
filed on February 7, 1994 (incorporated herein by reference to
Exhibit 3.01 of the Registrant's Form 10-K for the year ended
December 31, 1994 (the "1994 Form 10-K"), Commission File No.
0-23110).
4.02 Registrant's Certificate of Correction of Amended and Restated
Articles of Incorporation filed on April 7, 1994 (incorporated
herein by reference to Exhibit 3.02 of the 1994 Form 10-K,
Commission File No. 0-23110).
4.03 Registrant's Bylaws, as amended (incorporated herein by
reference to Exhibit 4.03 of Registrant's Registration
Statement on Form S-8 (No. 33-95176) filed with the Commission
on July 31, 1995.
4.04 Registrant's 1992 Equity Incentive Plan, as amended.
4.05 Form of Agreement for Registrant's 1992 Equity Incentive Plan,
as amended (incorporated herein by reference to Exhibit 10.06
of the 1994 Form 10-K, Commission File No. 0-23110).
4.06 Form of specimen certificate for Registrant's Common Stock
(incorporated herein by reference to Exhibit 4.01 of the
Registrant's Registration Statement on Form S-1 (No. 33-72642)
originally filed on December 8, 1993 (the "Form S-1")).
4.07 Registration Rights Agreement among Registrant, Vinita Gupta,
Summit Ventures, L.P., SV Eurofund C.V. and Summit Investors,
L.P. dated December 23, 1987 and certain exhibits thereto
(incorporated herein by reference to Exhibit 4.02 of the
Form S-1).
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
24.01 Power of Attorney (see page 7).
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference 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.
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.
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 provisions discussed in Item 6,
above, or otherwise, the Registrant has been advised that in the opinion of
the 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.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1996 and the
consolidated statements of income, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1996, incorporated
by reference in this Registration Statement, have been audited by Coopers &
Lybrand L.L.P, Independent Accountants, as set forth in their report thereon,
and are incorporated by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Sunnyvale, State of California,
on the 27th day of May, 1997.
DIGITAL LINK CORPORATION
By: /s/ Stanley E. Kazmierczak
Stanley E. Kazmierczak,
Vice President, Finance and Andministration,
Chief Financial Officer and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose
signature appears below constitutes and appoints Vinita Gupta and Stanley E.
Kazmierczak, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8, and
to file the same with all exhibits thereto and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he
or it might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or his or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
Principal Executive Officer:
/s/ Alan I. Fraser Chief Executive Officer and May 27, 1997
Alan I. Fraser President
Principal Financial Officer
and Principal Accounting
Officer:
/s/ Stanley E. Kazmierczak Vice President, Finance and May 27, 1997
Stanley E. Kazmierczak Administration , Chief Financial
Officer and Secretary
Additional Directors:
/s/ Richard Alberding Director May 27, 1997
Richard C. Alberding
/s/ Gregory Avis Director May 27, 1997
Gregory Avis
/s/ Narendra K. Gupta Director May 27, 1997
Narendra K. Gupta
/s/ Vinita Gupta Director May 27, 1997
Vinita Gupta
Exhibit Index
Sequentially
Numbered
Exhibit No. Description Page
4.01 Registrant's Amended and Restated Articles of
Incorporation filed on February 7, 1994 (incorporated
herein by reference to Exhibit 3.01 of the Registrant's
Form 10-K for the year ended December 31, 1994 (the
"1994 Form 10-K"), Commission File No. 0-23110).
4.02 Registrant's Certificate of Correction of Amended
and Restated Articles of Incorporation filed on
April 7, 1994 (incorporated herein by reference to
Exhibit 3.02 of the 1994 Form 10-K, Commission File
No. 0-23110).
4.03 Registrant's Bylaws, as amended (incorporated herein by
reference to Exhibit 4.03 of Registrant's Registration
Statement on Form S-8 (No. 33-95176) filed with the
Commission on July 31, 1995.
4.04 Registrant's 1992 Equity Incentive Plan, as amended. 9
4.05 Form of Agreement for Registrant's 1992 Equity Incentive
Plan, as amended (incorporated herein by reference to
Exhibit 10.06 of the 1994 Form 10-K, Commission File
No. 0-23110).
4.06 Form of specimen certificate for Registrant's Common
Stock (incorporated herein by reference to Exhibit
4.01 of this Registrant's Registration Statement on
Form S-1 (No. 33-72642) originally filed on December 8,
1993 (the "Form S-1")).
4.07 Registration Rights Agreement among Registrant,
Vinita Gupta, Summit Ventures, L.P., SV Eurofund C.V.
and Summit Investors, L.P. dated December 23, 1987 and
certain exhibits thereto (incorporated herein by reference
to Exhibit 4.02 of the Form S-1).
5.01 Opinion of Fenwick & West LLP. 10
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of Coopers & Lybrand L.L.P., Independent Accountants. 11
24.01 Power of Attorney (see page 7).
Exhibit 4.04
Registrant's 1992 Equity Incentive Plan, as amended
DIGITAL LINK CORPORATION
1992 EQUITY INCENTIVE PLAN
As Adopted February 18, 1992
As Amended December 3, 1993
As Amended February 24, 1995
As Amended February 12, 1997
1. PURPOSE. The purpose of the Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its subsidiaries
and affiliates, by offering them an opportunity to participate in the
Company's future performance through awards of Options, Restricted Stock
and Performance Bonuses. Capitalized terms not defined in the text are
defined in Section 24.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the total
number of Shares reserved and available for grant and issuance pursuant to
the Plan shall be 2,898,890 Shares. Subject to Sections 2.2 and 18, Shares
shall again be available for grant and issuance in connection with future
Awards under the Plan if: (a) any Shares that are subject to issuance upon
exercise of an Option cease to be subject to such Option for any reason
other than exercise of such Option, (b) any Shares that are subject to an
Award granted hereunder are forfeited or are repurchased by the Company, or
(c) an Award otherwise terminates without Shares being issued to the
Participant.
2.2 Adjustment of Shares. In the event that the number of outstanding
Shares is changed by a stock dividend, recapitalization, stock split,
reverse stock split, subdivision combination, reclassification or similar
change in the capital structure of the Company without consideration, then
(a) the number of Shares reserved for issuance under the Plan, (b) the
Exercise Prices of and number of Shares subject to outstanding Options, and
(c) the number of Shares subject to other outstanding Awards, shall be
proportionately adjusted, subject to any required action by the Board or
the shareholders of the Company and compliance with applicable securities
laws; provided, however, that fractions of a Share shall not be issued but
shall either be paid in cash at Fair Market Value or shall be rounded up to
the nearest whole number, as determined by the Committee.
3. ELIGIBILITY. Incentive Stock Options may be granted only to employees
(including officers and directors who are also employees) of the Company or
of a Parent or Subsidiary of the Company. All other Awards may be granted
to employees, officers, directors, consultants, independent contractors and
advisers of the Company or any Parent, Subsidiary or Affiliate of the
Company; provided such consultants, contractors and advisers render bona
fide services not in connection with the offer and sale of securities in a
capital-raising transaction. "Named Executive Officers" (as that term is
defined in Item 402(a)(3) of Regulation S-K promulgated under the Exchange
Act) shall each be eligible to receive up to an aggregate maximum of
500,000 Shares over the term of the Plan. A person may be granted more than
one Award under the Plan.
4. ADMINISTRATION.
4.1 Committee Authority. The Plan shall be administered by the Committee
or the Board acting as the Committee. Subject to the general purposes,
terms and conditions of the Plan, and to the direction of the Board, the
Committee shall have full power to implement and carry out the Plan. The
Committee shall have the authority to:
(a) construe and interpret the Plan, any Award Agreement and any other
agreement or documents executed pursuant to the Plan;
(b) prescribe, amend and rescind rules and regulations relating to the
Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination, in
tandem, in replacement of, or as alternatives to, other Awards under
the Plan or any other incentive or compensation plan of the Company,
a Subsidiary or Affiliate;
(g) grant waivers of Plan or Award conditions;
(h) accelerate the vesting, exercise or payment of Awards;
(i) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the
administration of the Plan.
4.2 Committee Discretion. Any determination made by the Committee with
respect to any Award shall be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of the
Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award
under the Plan. The Committee may delegate to one or more officers of the
Company the authority to grant an Award under the Plan to Participants who
are not Insiders of the Company.
4.3 Exchange Act Requirements. If the Company is subject to the Exchange
Act, the Company will take appropriate steps to comply with the
disinterested administration requirements of Section 16(b) of the Exchange
Act, which shall consist of the appointment by the Board of a Committee
consisting of not less than two members of the Board, each of whom is a
Disinterested Person. If two or more members of the Board are Outside
Directors, the Committee shall be comprised of at least two members of the
Board, all of whom are Outside Directors and Disinterested Persons.
5. OPTIONS. The Committee may grant Options to eligible persons and shall
determine whether such Options shall be Incentive Stock Options within the
meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the
number of Shares subject to the Option, the Exercise Price of the Option,
the period during which the Option may be exercised, and all other terms
and conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under the Plan shall be
evidenced by an Award Agreement which shall expressly identify the Option
as an ISO or NQSO ("Stock Option Agreement"), and be in such form and
contain such provisions (which need not be the same for each Participant)
as the Committee shall from time to time approve, and which shall comply
with and be subject to the terms and conditions of the Plan.
5.2 Date of Grant. The date of grant of an Option shall be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement will be
delivered to the Participant with a copy of the Plan within a reasonable
time after the granting of the Option.
5.3 Exercise Period. Options shall be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock Option
Agreement; provided, however, that no Option shall be exercisable after the
expiration of one hundred twenty (120) months from the date the Option is
granted, and provided further that no Option granted to a person who
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent
or Subsidiary of the Company ("Ten Percent Shareholder") shall be
exercisable after the expiration of five (5) years from the date of the
Option is granted. The Committee also may provide for the exercise of
Options either as to an increased percentage of Shares per year or as to
all remaining Shares.
5.4 Exercise Price. The Exercise Price shall be determined by the
Committee when the Option is granted and may be not less than 85% of the
Fair Market Value of the Shares on the date of grant; provided that (i) the
Exercise Price of an ISO shall be not less than 100% of the Fair Market
Value of the Shares on the date of grant and (ii) the Exercise Price of any
Option granted to a Ten Percent Shareholder shall not be less than 110% of
the Fair Market Value of the Shares on the date of grant. Payment for the
Shares purchased may be made in accordance with Section 8 of the Plan.
5.5 Method of Exercise. Options may be exercised only by delivery to the
Company of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same
for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares, if any, and such representations and
agreements regarding Participant's investment intent and access to
information, if any, as may be required by the Company to comply with
applicable securities laws, together with payment in full of the Exercise
Price for the number of Shares being purchased.
5.6 Termination. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option shall always be subject to
the following:
(a) If the Participant is Terminated for any reason except death or
Disability, then Participant may exercise such Participant's Options
only to the extent that such Options would have been exercisable upon
the Termination Date no later than ninety (90) days after the
Termination Date (or such shorter time period as may be specified in
the Stock Option Agreement), or, if sooner, no later than the
expiration date of the Options.
(b) If the Participant is terminated because of death or Disability,
then Participant's Options may be exercised only to the extent that
such Options would have been exercisable by Participant on the
Termination Date, by Participant (or Participant's legal
representative or authorized assignee) no later than twelve (12)
months after the Termination Date (or such shorter time period as
may be specified in the Award Agreement), but in any event no later
than the expiration date of the Options.
5.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from
exercising the full number of Shares as to which the Option is then
exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISOs are exercisable
for the first time by a Participant during any calendar year (under the
Plan or under any other incentive stock option plan of the Company or any
Affiliate, Parent or Subsidiary of the Company) shall not exceed $100,000.
If the Fair Market Value of Shares on the date of grant with respect to
which ISOs are exercisable for the first time by a Participant during any
calendar year exceeds $100,000, the Options for the first $100,000 worth
of Shares to become exercisable in such calendar shall be ISOs and the
Options for the amount in excess of $100,000 that become exercisable in that
calendar year shall be NQSOs. In the event that the Code or the regulations
promulgated thereunder are amended after the Effective Date of the Plan to
provide for a different limit on the Fair Market Value of Shares permitted
to be subject to ISOs, such different limit shall be incorporated herein
and shall apply to any Options granted after the effective date of such
amendment.
5.9 Modification, Extension or Renewal. The Committee shall have the
power to modify, extend or renew outstanding Options and to authorize the
grant of new Options in substitution therefor, provided that any such
action may not, without the written consent of Participant, impair any of
Participant's rights under any Option previously granted. Any outstanding
ISO that is modified, extended, renewed or otherwise altered shall be
treated in accordance with Section 424(h) of the Code. The Committee shall
have the power to reduce the Exercise Price of outstanding Options without
the consent of Participants by a written notice to the Participants
affected; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4
of the Plan for Options granted on the date the action is taken to reduce
the Exercise Price.
5.10 No Disqualification. Notwithstanding any other provision in the
Plan, no term of the Plan relating to ISOs shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company
to sell to an eligible person Shares that are subject to restrictions. The
Committee shall determine to whom an offer will be made, the number of
Shares the person may purchase, the price to be paid (the "Purchase Price"),
the restrictions to which the Shares shall be subject, and all other terms
and conditions of the Restricted Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases made pursuant to the
Plan shall be evidenced by an Award Agreement ("Restricted Stock Purchase
Agreement") that shall be in such form (which need not be the same for each
Participant) as the Committee shall from time to time approve, and shall
comply with and be subject to the terms and conditions of the Plan. The
offer of Restricted Stock shall be accepted by the Participant's execution
and delivery of the Restricted Stock Purchase Agreement and payment for the
Shares to the Company within thirty (30) days from the date the Restricted
Stock Purchase Agreement is delivered to the person. If such person does
not execute and deliver the Restricted Stock Purchse Agreement along with
payment for the Shares to the Company within thirty (30) days, then the offer
shall terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award shall be at least 85% of the Fair Market Value of
the Shares when the Restricted Stock Award is granted, except in the case of
a sale to a Ten Percent Shareholder, in which case the Purchase Price shall
be 100% of the Fair Market Value. Payment of the Purchase Price may be made
in accordance with Section 8 of the Plan.
6.3 Restrictions. Restricted Stock Awards shall be subject to such
restrictions as the Committee may impose. The Committee may provide for
the lapse of such restrictions in installments and may accelerate or waive
such restrictions, in whole or part, based on length of service, performance
or such other factors or criteria as the Committee may determine.
7. PERFORMANCE BONUSES.
7.1 Awards of Performance Bonuses. A Performance Bonus is an award of
Shares (which may consist of Restricted Stock) for services rendered to the
Company or any Parent, Subsidiary or Affiliate of the Company. A
Performance Bonus may be awarded for past services already rendered to the
Company, or any Parent, Subsidiary or Affiliate of the Company; or may be
awarded upon satisfaction of such performance goals as are set out in
advance in Participant's individual Award Agreement (the "Performance
Bonus Agreement") that shall be in such form (which need not be the same
for each Participant) as the Committee shall from time to time approve, and
shall comply with and be subjected to the terms and conditions of the Plan.
Performance Bonuses may vary from Participant to Participant and between
groups of Participants, and may be based upon the achievement of the
Company, Parent, Subsidiary or Affiliate and/or individual performance
factors or upon such other criteria as the Committee may determine.
7.2 Terms of Performance Bonuses. The Committee shall determine the
number of Shares to be awarded to the Participant and whether such Shares
shall be Restricted Stock. If the Performance Bonus is being earned upon
the satisfaction of performance goals pursuant to a Performance Bonus
Agreement, then the Committee shall determine: (a) the nature, length and
starting date of any performance period (the "Performance Period") for each
Performance Bonus; (b) the performance goals and criteria to be used to
measure the performance; (c) the number of Shares that may be awarded to the
Participant; and (d) the extent to which such Performance Bonuses have been
earned. Performance Periods may overlap and Participants may participate
simultaneously with respect to Performance Bonuses that are subject to
different Performance Periods and different performances goals and criteria.
The number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance factors applicable to the Performance
Bonuses to take into account changes in law and accounting or tax rules and
to make such adjustments as the Committee deems necessary or appropriate to
reflect the inclusion or exclusion of the impact of extraordinary or
unusual items, events or circumstances to avoid windfalls or hardships.
7.3 Form of Payment. The earned portion of a Performance Bonus may be
paid currently or on a deferred basis with such interest or dividends
equivalent as may be determined by the Committee. Payment may be made in
the form of cash, whole Shares, including Restricted Stock, or a
combination thereof, either in a lump sum payment or in installments, all
as the Committee shall determine.
7.4 Termination During Performance Period. If a Participant is
Terminated during a Performance Period for any reason, then such
Participant shall be entitled to payment (whether in cash, Shares or
otherwise) with respect to the Performance Bonus only to the extent earned
in accordance with the Performance Bonus Agreement, unless the Committee
shall determine otherwise.
8. PAYMENT FOR SHARE PURCHASES.
8.1 Payment. Payment for Shares purchased pursuant to the Plan may be
made in cash (by check) or, where expressly approved for the Participant by
the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of Shares that either: (1) have been owned by
Participant for more than six (6) months and have been paid for within
the meaning of SEC Rule 144 (and, if such shares were purchased from
the Company by use of a promissory note, such note has been fully paid
with respect to such Shares); or (2) were obtained by Participant in
the public market;
(c) by tender of a full recourse promissory note having such terms as may
be approved by the Committee and bearing interest at a rate
sufficient to avoid imputation of income under Sections 483 and 1274
of the Code; provided, however, that Participants who are not
employees of the Company shall not be entitled to purchase Shares
with a promissory note unless the note is adequately secured by
collateral other than the Shares;
(d) by waiver of compensation due or accrued to Participant for services
rendered;
(e) by tender of property;
(f) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from Participant and a
broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD Dealer") whereby Participant irrevocably
elects to exercise the Option and to sell a portion of the Shares
so purchased to pay for the Exercise Price and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(2) through a "margin" commitment from Participant and an NASD Dealer
whereby Participant irrevocably elects to exercise the Option and
to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the exercise price directly
to the Company; or
(g) by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may help the Participant pay for
Shares purchased under the Plan by authorizing a guarantee by the Company
of a third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under the Plan, the Company shall have the
right to require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such Shares.
Whenever, under the Plan, payments are to be made in cash, such payment
shall be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.
9.2 Stock Withholding. When under applicable tax laws a Participant
incurs tax liability in connection with the exercise or vesting of any
Award that is subject to tax withholding, and the Participant is obligated
to pay the Company the amount required to be withheld, the Participant may
satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having
a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date"). All elections by a Participant to have Shares
withheld for this purpose shall be made in writing in a form acceptable to
the Committee and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, then except as provided below, the election shall be
irrevocable as to the particular Shares as to which the election is
made;
(c) all elections shall be subject to the consent or disapproval of the
Committee;
(d) if the Participant is an Insider and if the Company is subject to
Section 16(b) of the Exchange Act: (1) the election may not be made
within six (6) months of the date of grant of the Award, except
as otherwise permitted by SEC Rule 16b-3(e) under the Exchange Act, and
(2) either (A) the election to use stock withholding must be
irrevocably made at least six (6) months prior to the Tax Date
(although such election may be revoked at any time at least six (6)
months prior to the Tax Date) or (B) the exercise of the Option or
election to use stock withholding must be made in the ten (10) day
period beginning on the third day following the release of the
Company's quarterly or annual summary statement of sales or earnings;
provided, however, that prior to the date the Company elects to comply
with the requirements of Rule 16b-3, as amended effective May 1, 1992,
the provisions of former Rule 16b-3(e) of the Exchange Act shall
apply with respect to any such elections; and
(e) in the event that the Tax Date is deferred until six months after
the delivery of Shares under Section 83(b) of the Code, the
Participant shall receive the full number of Shares with respect
to which the exercise occurs, but such Participant shall be
unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
10. PRIVILEGES OF STOCK OWNERSHIP.
10.1 Voting and Dividends. No Participant shall have any of the rights
of a shareholder with respect to any Shares until the Shares are issued to
the Participant. After Shares are issued to the Participant, the
Participant shall be a shareholder and have all the rights of a shareholder
with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares;
provided, that if such Shares are Restricted Stock, then any new, additional
or different securities the Participant may become entitled to receive with
respect to such Shares by virtue of a stock dividend, stock split or any
other change in the corporate or capital structure of the Company shall be
subject to the same restrictions as the Restricted Stock; provided, further,
that the Participant shall have no right to retain dividents or distributions
with respect to Shares that are repurchased at the Participant's original
Purchase Price purusant to Section 12.
10.2 Financial Statements. The Company shall provide financial
statements to each Participant prior to such Participant's purchase of
Shares under the Plan, and to each Participant annually during the period
such Participant has Options outstanding; provided, however, the Company
shall not be required to provide such financial statements to Participants
whose services in connection with the Company assure them access to
equivalent information.
11. TRANSFERABILITY. Awards granted under the Plan, and any interest
therein, shall not be transferable or assignable by Participant, and may
not be made subject to execution, attachment or similar process, otherwise
than by will or by the laws of descent and distribution or as consistent
with the specific Plan and Award Agreement provisions relating thereto.
During the lifetime of the Participant an Award shall be exercisable only
by the Participant, and any elections with respect to an Award, may be made
only by the Participant.
12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement
(a) a right of first refusal to purchase all Shares that a Participant (or
a subsequent transferee) may propose to transfer to a third party, and/or
(b) a right to repurchase a portion of or all Shares held by a Participant
following such Participant's Termination at any time within ninety (90) days
after the later of Participant's Termination Date and the date Participant
purchases Shares under the Plan, for cash or cancellation of purchase money
indebtedness, at: (A) with respect to Shares that are "vested", the higher
of: (1) Participant's original Purchase Price, or (2) the Fair Market Value
of such Shares on Participant's Termination Date, provided, such right of
repurchase terminates when the Company's securities become publicly traded;
or (B) with respect to Shares that are not "vested", at the Participant's
original Purchase Price, provided, that the right to repurchase at the
original Purchase Price lapses at the rate of at least 20% per year over
5 years from the date the Shares were purchased, and if the right to
repurchase is assignable, the assignee must pay the Company upon assignment of
the right to repurchase, cash equal to the excess of the Fair Market Value
of the Shares over the original Purchase Price.
13. CERTIFICATES. All certificates for Shares or other securities
delivered under the Plan shall be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of
the SEC or any stock exchange or automated quotation system upon which the
Shares may be listed.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit
all certificates, together with stock powers or other instruments of
transfer approved by the Committee, appropriately endorsed in blank, with
the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory
note as partial or full consideration for the purchase of Shares under the
Plan shall be required to pledge and deposit with the Company all or part of
the Shares so purchased as collateral to secure the payment of Participant's
obligation to the Company under the promissory note; provided, however, that
the Committee may require or accept other or additional forms of collateral
to secure the payment of such obligation and, in any event, the Company shall
have full recourse against the Participant under the promissory note
notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, Participant shall be required
to execute and deliver a written pledge agreement in such form as the
Committee shall from time to time approve. The Shares purchased with the
promissory note may be released from the pledge on a pro rata basis as the
promissory note is paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any
time buy from a Participant an Award previously granted with payment in
cash, Shares (including Restricted Stock) or other consideration, based on
such terms and conditions as the Committee and the Participant shall agree.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be
effective unless such Award is in compliance with all applicable federal
and state securities laws, rules and regulations of any governmental body,
and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed, as they are in effect on the date
of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in the Plan, the Company shall have no
obligation to issue or deliver certificates for Shares under the Plan prior
to (a) obtaining approval from any governmental agency that the Company
determines is necessary or advisable, or (b) completion of any registration
or other qualification of such shares under any state or federal law or
ruling of any governmental body that the Company determines to be necessary
or advisable. The Company shall be under no obligation to register the
Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company shall have no
liability for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted
under the Plan shall confer on any Participant any right to continue in the
employ of, or other relationship with, the Company or any Parent, Subsidiary
or Affiliate of the Company or limit in any way the right of the Company or
any Parent, Subsidiary or Affiliate of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor. In the event of
(a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction,
or other transaction in which there is no substantial change in the
shareholders of the Company and the Awards granted under the Plan are
assumed or replaced by the successor corporation, which assumption shall be
binding on all Participants), (b) a dissolution or liquidation of the
Company, (c) the sale of substantially all of the assets of the Company, or
(d) any other transaction which qualifies as a corporate transaction" under
Section 424(a) of the Code wherein the shareholders of the Company give up
all of their equity interest in the Company (except for the acquisition,
sale or transfer of all or substantially all of the outstanding shares of
the Company), any or all outstanding Awards may be assumed or replaced by
the successor corporation, which assumption or replacement shall be binding
on all Participants. In the alternative, the successor corporation may
substitute equivalent Awards or provide substantially similar consideration
to Participants as was provided to shareholders (after taking into account
the existing provisions of the Awards). The successor corporation may
also issue, in place of outstanding Shares of the Company held by the
Participant, substantially similar shares or other property subject
repurchase restrictions no less favorable to the Participant.
18.2 Expiration of Awards. In the event such successor corporation, if
any, refuses to assume or substitute the Awards, as provided above,
pursuant to a transaction described in Subsection 18.1(a) above, such
Awards shall expire on (and, if the Company has reserved to itself a right
to repurchase Shares issued pursuant to an Award, such right shall terminate
on the consummation of) such transaction at such time and on such conditions
as the Board shall determine. In the event such successor corporation, if
any, refuses to assume or substitute the Awards as provided above, pursuant
to a transaction described in Subsections 18.1(b), (c) or (d) above, or
there is no successor corporation, and if the Company ceases to exist as
a separate corporate entity, then notwithstanding any contrary terms in the
Award Agreement, the Awards shall expire on a date at least twenty (20) days
after the Board gives written notice to Participants specifying the terms
and conditions of such termination.
18.3 Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 18, in the event
of the occurrence of any transaction described in Section 18.1, any
outstanding Awards shall be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation, sale of assets
or other "corporate transaction."
18.4 Assumption of Awards by the Company. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise,
by either (a) granting an Award under the Plan in substitution of the award,
or (b) assuming the award as if it had been granted under the Plan if the
terms of such assumed award could be applied to an Award granted under the
Plan. Such substitution or assumption shall be permissible if the holder
of the substituted or assumed award would have been eligible to be granted
an Award under the Plan if the other company had applied the rules of the
Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall remain
unchanged (except the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company elects
to grant a new Option rather than assuming an existing option such new
Option may be granted with a similarly adjusted Exercise Price.
19. ADOPTION AND SHAREHOLDER APPROVAL. The Plan shall become effective on
the date that it is adopted by the Board (the "Effective Date"). The Plan
shall be approved by the shareholders of the Company, consistent with
applicable laws, within twelve months before or after the Effective Date.
Upon the Effective Date, the Board may grant Awards pursuant to the Plan;
provided, however, that: (a) no Option may be exercised prior to initial
shareholder approval of the Plan; (b) no Option shall be exercised prior to
the time an increase in the number of Shares has been approved by the
shareholders of the Company; and (c) in the event that shareholder approval
is not obtained within the time period provided herein all Awards granted
hereunder and any Shares issued pursuant to any Award shall be rescinded.
After the Company becomes subject to Section 16(b) of the Exchange Act, the
Company will comply with the requirements of Rule 16b-3 (or its successor),
as amended with respect to shareholder approval.
20. TERM OF PLAN. The Plan will terminate ten (10) years from the
Effective Date.
21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend the Plan in any respect including (but not limited to) amendment
of any form of Award Agreement or instrument to be executed pursuant to the
Plan; provided, however, that the Board shall not, without the approval of
the shareholders of the Company, amend the Plan in any manner that requires
such shareholder approval pursuant to the Code or the regulations
promulgated thereunder as such provisions apply to ISO plans or pursuant to
the Exchange Act or Rule 16b-3 (or its successor), as amended thereunder.
22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the
Board, the submission of the Plan to the shareholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
23. GOVERNING LAW. The Plan and all agreements, documents and instruments
entered into pursuant to the Plan shall be governed by and construed in
accordance with the internal laws of the State of California, excluding
that body of law pertaining to conflict of laws.
24. DEFINITIONS. As used in the Plan, the following terms shall have the
following meanings:
"Affiliate" means any corporation that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the
terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management
and policies of the corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Award" means any award under the Plan, including any Option, Restricted
Stock or Performance Bonus.
"Award Agreement" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms
and conditions of the Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee appointed by the Board to administer the
Plan, or if no committee is appointed, the Board.
"Company" means Digital Link Corporation, a corporation organized under
the laws of the State of California, or any successor corporation.
"Disability" means a disability, whether temporary or permanent, partial
or total, within the meaning of Section 22(e)(3) of the Code, as determined
by the Committee.
"Disinterested Person" shall have the meaning set forth in Rule
16b-3(c)(2)(i) as promulgated by the SEC under Section 16(b) of the
Exchange Act, as such rule is amended from time to time and as interpreted
by the SEC.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"Fair Market Value" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National Market,
its closing sale price on the Nasdaq National Market on the last
trading day prior to the date of determination;
(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, the last reported sale price or, if
no such reported sale takes place on such date, the average of the
closing bid and asked prices on the principal national securities
exchange on which the Common Stock is listed or admitted to trading;
(c) if such Common Stock is publicly traded but is not quoted on the
NASDAQ National Market System nor listed or admitted to trading on a
national securities exchange, then the average of the closing bid and
asked prices, as reported by The Wall Street Journal, for the
over-the-counter market; or
(d) if none of the foregoing is applicable, by the Board of Directors of
the Company in good faith.
"Insider" means an officer or director of the Company or any other person
whose transactions in the Company's Common Stock are subject to Section 16(b)
of the Exchange Act.
"Outside Director" shall mean any director who is not (i) a current
employee of the Company or any Parent, Subsidiary or Affiliate of the
Company, (ii) a former employee of the Company or any Parent, Subsidiary or
Affiliate of the Company who is receiving compensation for prior services
(other than benefits under a tax-qualified pension plan), (iii) a current
or former officer of the Company or any Parent, Subsidiary or Affiliate of
the Company or (iv) currently receiving compensation for personal services
in any capacity, other than as a director, from the Company or any Parent,
Subsidiary or Affiliate of the Company; provided, however, that at such time
as the term "Outside Director", as used in Section 162(m) is defined in
regulations promulgated under Section 162(m) of the Code, "Outside Director"
shall have the meaning set forth in such regulations, as amended from time
to time and as interpreted by the Internal Revenue Service.
"Option" means an award of an option to purchase Shares pursuant to
Section 5.
"Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if at the time of the
granting of an Award under the Plan, each of such corporations other than
the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
"Participant" means a person who receives an Award under the Plan.
"Performance Bonus" means an award of Shares or cash pursuant to Section 7.
"Plan" means this Digital Link Corporation 1992 Equity Incentive Plan,
as amended from time to time.
"Restricted Stock" means an award of Shares pursuant to Section 6.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock reserved for issuance
under the Plan, as adjusted pursuant to Section 2, and any successor
security.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
"Termination" or "Terminated" means, for purposes of the Plan with
respect to a Participant, that the Participant has ceased to provide
services as an employee, director, consultant, independent contractor or
adviser, to the Company or a Parent, Subsidiary or Affiliate of the Company,
except in the case of sick leave, military leave, or any other leave of
absence approved by the Committee, provided, that such leave is for a
period of not more than ninety (90) days, or reinstatement upon the
expiration of such leave is guaranteed by contract or statute. The
Committee shall have sole discretion as to whether a Participant has ceased
to provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").
Exhibit 5.01
Opinion of Fenwick & West LLP
May 23, 1997
Digital Link Corporation
217 Humboldt Court
Sunnyvale, California 94089
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on
Form S-8 (the "Registration Statement") to be filed by you with the
Securities and Exchange Commission on or about May 27, 1997 in connection
with the registration under the Securities Act of 1933, as amended, of an
aggregate of 800,000 shares of your Common Stock (the "Stock") subject to
issuance by you upon the exercise of stock options to be granted by you
under your 1992 Equity Incentive Plan, as amended (the "1992 Plan").
In rendering this opinion, we have examined the following:
(1) the Registration Statement, together with the Exhibits filed as
a part thereof;
(2) the Prospectuses prepared in connection with the Registration
Statement;
(3) copies of the minutes of meetings the Company's Board of
Directors and shareholders provided to us by you relating to the
amendment to the 1992 Plan to increase by 800,000 the number of
shares reserved for issuance under the 1992 Plan; and
(4) a Management Certificate addressed to us of even date herewith
executed by the Company containing certain factual and other
representations.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the legal capacity of all natural persons executing the same, the
lack of any undisclosed terminations, modifications, waivers or amendments
to any documents reviewed by us and the due execution and delivery of all
documents where due execution and delivery are prerequisites to the
effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from records
included in the documents referred to above. We have made no independent
investigations or other attempt to verify the accuracy of any of such
information or to determine the existence or non-existence of any other
factual matters; however, we are not aware of any facts that would lead us
to believe that the opinion expressed herein is not accurate.
Based upon the foregoing, it is our opinion that the 800,000
shares of Stock that may be issued and sold by you upon the exercise of
stock options to be granted under the 1992 Plan, when issued and sold in
accordance with the 1992 Plan and stock options or purchase agreements to
be entered into thereunder, and in the manner referred to in the relevant
Prospectus associated with the Registration Statement, will be legally
issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to us, if any,
in the Registration Statement, the Prospectus constituting a part thereof
and any amendments thereto.
This opinion speaks only as of its date and is intended solely for the
your use as an exhibit to the Registration Statement for the purpose of the
above sale of the Stock and is not to be relied upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
By: /s/ Eileen Duffy Robinett
Partner
Exhibit 23.02
Consent of Coopers & Lybrand L.L.P.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
of Digital Link Corporation on Form S-8 for shares of common stock available
for grant under the 1992 Equity Incentive Plan of our reports dated January
21, 1997, on our audits of the consolidated financial statements and
financial statement schedule of Digital Link Corporation as of December 31,
1996 and 1995, and for the years ended December 31, 1996, 1995 and 1994,
appearing in the Company's 1996 Annual Report on Form 10-K filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended.
COOPERS & LYBRAND L.L.P.
San Jose, California
May 27, 1997
