As filed with the Securities and Exchange Commission on July 6, 1999
Registration No. 333-___________
- -------------------------------------------------------------------------------
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)
1993 Employee Stock Purchase Plan
(Full Title of the Plan)
Naresh C. Kapahi
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
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Proposed
Amount Proposed Maximum Amount of
to be Maximum Offering Aggregate Registration
Title of Securities to be Registered Registered Price Per Share Offering Price Fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 300,000(1) $7.375(2) $2,212,500(2) $670.45
=======================================================================================================
</TABLE>
(1) Additional shares authorized to be issued as of June 7, 1999 under the
1993 Employee Stock Purchase Plan, as amended.
(2) Estimated as of June 29, 1999 pursuant to Rule 457(c) and (h) solely
for the purpose of calculating the registration fee.
<PAGE>
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, 1998 filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
on March 29, 1999 (Commission File No. 0-23110);
(b) The Registrant's quarterly report on Form 10-Q for the
quarter ended March 31, 1999 filed under the Exchange
Act on May 14, 1999 (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.
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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
<PAGE>
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 omissions 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).
<PAGE>
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 1993 Employee Stock Purchase Plan, as
amended.
4.05 Form of Agreement for Registrant's 1993 Employee Stock
Purchase Plan, as amended (incorporated herein by
reference to Exhibit 10.07 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 PricewaterhouseCoopers LLP, 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.
<PAGE>
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 financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K of Digital Link Corporation for the year ended
December 31, 1998 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sunnyvale, State of California, on the 6th day of
July, 1999.
DIGITAL LINK CORPORATION
By: /s/ N. C. Kapahi
-----------------------------
Naresh C. Kapahi
Vice President, Finance and
Operations, Chief Financial Officer
and Secretary
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Vinita Gupta and Naresh C. Kapahi, 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/ Vinita Gupta Chariman of the Board, July 6, 1999
- ----------------------- Chief Executive Officer
Vinita Gupta and President
Principal Financial Officer
and Principal Accounting
Officer:
/s/ N. C. Kapahi Vice President, Finance and July 6, 1999
- ----------------------- Operations, Chief Financial
Naresh C. Kapahi Officer and Secretary
Additional Directors:
/s/ R. C. Alberding Director July 6, 1999
- -----------------------
Richard C. Alberding
/s/ Louis Golm Director July 6, 1999
- ----------------------
Louis Golm
/s/ Narendra Gupta Director July 6, 1999
- ----------------------
Narendra K. Gupta
/s/ Stephen L. Von Rump Director July 6, 1999
- -----------------------
Stephen L. Von Rump
<PAGE>
Exhibit Index
Exhibit No. Description
- ----------- -----------
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 1993 Employee Stock Purchase Plan, as amended.
4.05 Form of Agreement for Registrant's 1993 Employee Stock Purchase
Plan, as amended (incorporated herein by reference to Exhibit
10.07 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
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.01 Power of Attorney (see page 7).
Exhibit 4.04
DIGITAL LINK CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
Adopted by the Board of Directors on December 3,
1993 Amended February 12, 1997, February 8, 1999
and June 7, 1999
1. Establishment of Plan. Digital Link Corporation (the "Company")
proposes to grant options for purchase of the Company's Common Stock to eligible
employees of the Company and its Subsidiaries (as hereinafter defined) pursuant
to this Employee Stock Purchase Plan (this "Plan"). For purposes of this Plan,
"Parent Corporation" and "Subsidiary" (collectively, "Subsidiaries") shall have
the same meanings as "parent corporation" and "subsidiary corporation" in
Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code"). The Company intends the Plan to qualify as an "employee
stock purchase plan" under Section 423 of the Code (including any amendments to
or replacements of such section), and the Plan shall be so construed. Any term
not expressly defined in the Plan but defined for purposes of Section 423 of the
Code shall have the same definition herein. A total of 600,000 shares of the
Company's Common Stock is reserved for issuance under the Plan. Such number
shall be subject to adjustments effected in accordance with Section 14 of the
Plan.
2. Purpose. The purpose of the Plan is to provide employees of the
Company and Subsidiaries designated by the Board of Directors of the Company
(the "Board") as eligible to participate in the Plan with a convenient means of
acquiring an equity interest in the Company through payroll deductions, to
enhance such employees' sense of participation in the affairs of the Company and
Subsidiaries, and to provide an incentive for continued employment.
3. Administration. This Plan may be administered by the Board or a
committee of not less than two members of the Board appointed to administer the
Plan (the "Committee"). As used in this Plan, references to the "Committee"
shall mean either such committee or the Board if no committee has been
established. Subject to the provisions of the Plan and the limitations of
Section 423 of the Code or any successor provision in the Code, all questions of
interpretation or application of the Plan shall be determined by the Board and
its decisions shall be final and binding upon all participants. Members of the
Board shall receive no compensation for their services in connection with the
administration of the Plan, other than standard fees as established from time to
time by the Board for services rendered by Board members serving on Board
committees. All expenses incurred in connection with the administration of the
Plan shall be paid by the Company.
4. Eligibility. Any employee of the Company or the Subsidiaries
designated by the Board as eligible to participate in the plan is eligible to
participate in an Offering Period under the Plan except the following:
(a) employees who are not employed by the Company or Subsidiaries
one (1) day prior to the beginning of such Offering Period;
(b) employees who are customarily employed for less than 20 hours
per week;
(c) employees who are customarily employed for less than 5 months
in a calendar year;
(d) employees who, together with any other person whose stock would
be attributed to such employee pursuant to Section 424(d) of the Code, own stock
or hold options to purchase stock or who, as a result of being granted an option
under the Plan with respect to such Offering Period, would own stock or hold
options to purchase stock possessing 5 percent or more of the total combined
voting power or value of all classes of stock of the Company or any of its
Subsidiaries.
5. Offering Dates. The Offering Periods of the Plan (the "Offering
Period") shall be of 6 months duration commencing May 1 and November 1 of each
year and ending on October 31 and April 30 respectively, during which payroll
deductions of the participant are accumulated under this Plan. The first
Offering Period will begin on May 1, 1994. The first day of each Offering Period
is referred to as the "Offering Date". The last business day of each Offering
Period is referred to as the "Purchase Date". The Board shall have the power to
change the duration of Offering Periods with respect to future offerings without
stockholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected.
<PAGE>
6. Participation in the Plan. Eligible employees may become
participants in an Offering Period under the Plan on the first Offering Date
after satisfying the eligibility requirements by delivering a subscription
agreement to the Company's or Subsidiary's (whichever employs such employee)
treasury department (the "Treasury Department") not later than the one day prior
to such Offering Date unless a later time for filing the subscription agreement
authorizing payroll deductions is set by the Board for all eligible employees
with respect to a given Offering Period. An eligible employee who does not
deliver a subscription agreement to the Treasury Department by such date after
becoming eligible to participate in such Offering Period shall not participate
in that Offering Period or any subsequent Offering Period unless such employee
enrolls in the Plan by filing a subscription agreement with the Treasury
Department not later than one day preceding a subsequent Offering Date. Once an
employee becomes a participant in an Offering Period, such employee will
automatically participate in the Offering Period commencing immediately
following the last day of the prior Offering Period unless the employee
withdraws from the Plan or terminates further participation in the Offering
Period as set forth in Section 11 below. Such participant is not required to
file any additional subscription agreement in order to continue participation in
the Plan.
7. Grant of Option on Enrollment. Enrollment by an eligible employee in
the Plan with respect to an Offering Period will constitute the grant (as of the
Offering Date) by the Company to such employee of an option to purchase on the
Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing the amount accumulated in such employee's payroll
deduction account during such Offering Period by the lower of (i) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Offering Date or (ii) eighty-five percent (85%) of the fair market value
of a share of the Company's Common Stock on the Purchase Date; provided,
however, that the number of shares of the Company's Common Stock subject to any
option granted pursuant to this Plan shall not exceed the lesser of (a) the
maximum number of shares set by the Board pursuant to Section 10(c) below with
respect to the applicable Offering Period, or (b) 200% of the number of shares
determined by using 85% of the fair market value of a share of the Company's
Common Stock on the Offering Date as the denominator. Fair market value of a
share of the Company's Common Stock shall be determined as provided in Section 8
hereof.
8. Purchase Price. The purchase price per share at which a share of
Common Stock will be sold in any Offering Period shall be 85 percent of the
lesser of:
(a) The fair market value on the Offering Date; or
(b) The fair market value on the Purchase Date.
For purposes of the Plan, the term "fair market value" on a
given date shall mean the fair market value of the Company's Common Stock as
determined by the Committee from time to time in good faith. If a public market
exists for the shares, the fair market value shall be the closing price for the
Common Stock of the Company on the last trading day prior to the date of
determination, or, in the event the Common Stock of the Company is listed on the
Nasdaq National Market, the fair market value shall be the closing price of the
Common Stock on the last trading day prior to the determination date as quoted
on the Nasdaq National Market and reported in The Wall Street Journal.
9. Payment Of Purchase Price; Changes In Payroll Deductions; Issuance
Of Shares.
(a) The purchase price of the shares is accumulated by regular
payroll deductions made during each Offering Period. The deductions are made as
a percentage of the participant's compensation in one percent increments not
less than 2 percent nor greater than 10 percent, or such lower limit set by the
Committee. Compensation shall mean base salary and commissions, excluding
overtime, shift premiums and bonuses; provided, however, that for purposes of
determining a participant's compensation, any election by such participant to
reduce his or her regular cash remuneration under Sections 125 or 401(k) of the
Code shall be treated as if the participant did not make such election. Payroll
deductions shall commence on the first payday following the Offering Date and
shall continue to the end of the Offering Period unless sooner altered or
terminated as provided in the Plan.
(b) A participant may lower (but not increase) the rate of payroll
deductions during an Offering Period by filing with the Treasury Department a
new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than 15 days after
the Treasury Department's receipt of the authorization and shall continue for
the remainder of the Offering Period unless changed as described below.
<PAGE>
Such change in the rate of payroll deductions may be made at any time during an
Offering Period, but not more than one change may be made effective during any
Offering Period. A participant may increase or decrease the rate of payroll
deductions for any subsequent Offering Period by filing with the Treasury
Department a new authorization for payroll deductions not later than the 15th
day of the month before the beginning of such Offering Period.
(c) All payroll deductions made for a participant are credited to
his or her account under the Plan and are deposited with the general funds of
the Company. No interest accrues on the payroll deductions. All payroll
deductions received or held by the Company may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.
(d) On each Purchase Date, so long as the Plan remains in effect
and provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under the Plan and have all payroll
deductions accumulated in the account maintained on behalf of the participant as
of that date returned to the participant, the Company shall apply the funds then
in the participant's account to the purchase of whole shares of Common Stock
reserved under the option granted to such participant with respect to the
Offering Period to the extent that such option is exercisable on the Purchase
Date. The purchase price per share shall be as specified in Section 8 of the
Plan. Any cash remaining in a participant's account after such purchase of
shares shall be refunded to such participant in cash, without interest;
provided, however, that any amount remaining in such participant's account on a
Purchase Date which is less than the amount necessary to purchase a full share
of Common Stock of the Company shall be carried forward, without interest, into
the next Offering Period. In the event that the Plan has been oversubscribed,
all funds not used to purchase shares on the Purchase Date shall be returned to
the participant, without interest. No Common Stock shall be purchased on a
Purchase Date on behalf of any employee whose participation in the Plan has
terminated prior to such Purchase Date.
(e) As promptly as practicable after the Purchase Date, the Company
shall arrange the delivery to each participant of a certificate representing the
shares purchased upon exercise of his option.
(f) During a participant's lifetime, such participant's option to
purchase shares hereunder is exercisable only by him or her. The participant
will have no interest or voting right in shares covered by his or her option
until such option has been exercised. Shares to be delivered to a participant
under the Plan will be registered in the name of the participant or in the name
of the participant and his or her spouse.
10. Limitations on Shares to be Purchased.
(a) No employee shall be entitled to purchase stock under the Plan
at a rate which, when aggregated with his or her rights to purchase stock under
all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in the Plan.
(b) No more than 200% of the number of shares determined by using
85% of the fair market value of a share of the Company's Common Stock on the
Offering Date as the denominator may be purchased by a participant on any single
Purchase Date.
(c) No employee shall be entitled to purchase more than the
Maximum Share Amount (as defined below) on any single Purchase Date. Not less
than thirty days prior to the commencement of any Offering Period, the Board
may, in its sole discretion, set a maximum number of shares which may be
purchased by any employee at any single Purchase Date (hereinafter the "Maximum
Share Amount"). In no event shall the Maximum Share Amount exceed the amounts
permitted under Section 10(b) above. If a new Maximum Share Amount is set, then
all participants must be notified of such Maximum Share Amount not less than
fifteen days prior to the commencement of the next Offering Period. Once the
Maximum Share Amount is set, it shall continue to apply with respect to all
succeeding Purchase Dates and Offering Periods unless revised by the Board as
set forth above.
(d) If the number of shares to be purchased on a Purchase Date by
all employees participating in the Plan exceeds the number of shares then
available for issuance under the Plan, the Company will make a pro rata
allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Board shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares to
be purchased under a participant's option to each participant affected thereby.
<PAGE>
(e) Any payroll deductions accumulated in a participant's account
which are not used to purchase stock due to the limitations in this Section 10
shall be returned to the participant as soon as practicable after the end of the
Offering Period, without interest.
11. Withdrawal.
(a) Each participant may withdraw from an Offering Period under
the Plan by signing and delivering to the Treasury Department notice on a form
provided for such purpose. Such withdrawal may be elected at any time at least
15 days prior to the end of an Offering Period.
(b) Upon withdrawal from the Plan, the accumulated payroll
deductions shall be returned to the withdrawn participant, without interest, and
his or her interest in the Plan shall terminate. In the event a participant
voluntarily elects to withdraw from the Plan, he or she may not resume his or
her participation in the Plan during the same Offering Period, but he or she may
participate in any Offering Period under the Plan which commences on a date
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth above for initial participation in
the Plan.
12. Termination of Employment. Termination of a participant's
employment for any reason, including retirement, death or the failure of a
participant to remain an eligible employee, immediately terminates his or her
participation in the Plan. In such event, the payroll deductions credited to the
participant's account will be returned to him or her or, in the case of his or
her death, to his or her legal representative, without interest. For purposes of
this Section 12, an employee will not be deemed to have terminated employment or
failed to remain in the continuous employ of the Company in the case of sick
leave, military leave, or any other leave of absence approved by the Board;
provided that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.
13. Return of Payroll Deductions. In the event a participant's interest
in the Plan is terminated by withdrawal, termination of employment or otherwise,
or in the event the Plan is terminated by the Board, the Company shall promptly
deliver to the participant all payroll deductions credited to his account. No
interest shall accrue on the payroll deductions of a participant in the Plan.
14. Capital Changes. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each option
under the Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under the Plan but have not
yet been placed under option (collectively, the "Reserves"), as well as the
price per share of Common Stock covered by each option under the Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding shares of Common Stock of the
Company resulting from a stock split or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
issued and outstanding shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination shall be final, binding and conclusive. Except as expressly
provided herein, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under the Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the optioned
stock, including shares which would not otherwise be exercisable. In the event
of (i) 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 stockholders of
the Company or their relative stock holdings and the options under this Plan are
assumed, converted or replaced by the successor corporation, which assumption
will be binding on all participants), (ii) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company
immediately prior to such merger (other than any stockholder that merges, or
which owns or controls another corporation that merges, with the Company in such
merger) cease to own their shares or other equity interest in the Company, (iii)
the sale of substantially all of the assets of the Company, or (iv) the
acquisition, sale, or transfer
<PAGE>
of more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
that the participant shall have the right to exercise the option as to all of
the optioned stock. If the Board makes an option exercisable in lieu of
assumption or substitution in the event of a merger, consolidation or sale of
assets, the Board shall notify the participant that the option shall be fully
exercisable for a period of twenty (20) days from the date of such notice, and
the option will terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation.
15. Nonassignability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.
16. Reports. Individual accounts will be maintained for each
participant in the Plan. Each participant shall receive promptly after the end
of each Offering Period a report of his or her account setting forth the total
payroll deductions accumulated, the number of shares purchased, the per share
price thereof and the remaining cash balance, if any, carried forward to the
next Offering Period.
17. Notice of Disposition. Each participant shall notify the Company if
the participant disposes of any of the shares purchased in any Offering Period
pursuant to this Plan if such disposition occurs within two years from the
Offering Date or within one year from the Purchase Date on which such shares
were purchased (the "Notice Period"). Unless such participant is disposing of
any of such shares during the Notice Period, such participant shall keep the
certificates representing such shares in his or her name (and not in the name of
a nominee) during the Notice Period. The Company may, at any time during the
Notice Period, place a legend or legends on any certificate representing shares
acquired pursuant to the Plan requesting the Company's transfer agent to notify
the Company of any transfer of the shares. The obligation of the participant to
provide such notice shall continue notwithstanding the placement of any such
legend on the certificates.
18. No Rights to Continued Employment. Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Subsidiary, or restrict the right of the Company or
any Subsidiary to terminate such employee's employment.
19. Equal Rights And Privileges. All eligible employees shall have
equal rights and privileges with respect to the Plan so that the Plan qualifies
as an "employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Any provision of
the Plan which is inconsistent with Section 423 or any successor provision of
the Code shall, without further act or amendment by the Company or the Board, be
reformed to comply with the requirements of Section 423. This Section 19 shall
take precedence over all other provisions in the Plan.
20. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
21. Term; Stockholder Approval. This Plan shall become effective on the
date that it is adopted by the Board of the Company. This Plan shall be approved
by the stockholders of the Company, in any manner permitted by applicable
corporate law, within twelve months before or after the date this Plan is
adopted by the Board. No purchase of shares pursuant to the Plan shall occur
prior to such stockholder approval. The Plan shall continue until the earlier to
occur of termination by the Board, issuance of all of the shares of Common Stock
reserved for issuance under the Plan, or ten (10) years from the adoption of the
Plan by the Board.
<PAGE>
22. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to the end of an Offering Period but prior to delivery to him of such
shares and cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under the
Plan in the event of such participant's death prior to a Purchase Date.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares or cash to the executor or administrator of the estate of
the participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver such
shares or cash to the spouse or to any one or more dependents or relatives of
the participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or automated quotation
system upon which the shares may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.
24. Applicable Law. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.
25. Amendment or Termination of the Plan. The Board may at any time
amend, terminate or the extend the term of the Plan, except that any such
termination cannot affect options previously granted under the Plan, nor may any
amendment make any change in an option previously granted which would adversely
affect the right of any participant, nor may any amendment be made without
approval of the stockholders of the Company obtained in accordance with Section
21 hereof within 12 months of the adoption of such amendment (or earlier if
required by Section 21) if such amendment would:
(a) increase the number of shares that may be issued under the
Plan;
(b) change the designation of the employees (or class of
employees) eligible for participation in the Plan.
EXHIBIT 5.01
July 6, 1999
Digital Link Corporation
217 Humboldt Court
Sunnyvale, CA 94089-1300
Gentlemen/Ladies:
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 (the "Commission") on or about July 6, 1999 in connection
with the registration under the Securities Act of 1933, as amended, of an
aggregate of 300,000 shares of your Common Stock (the "Stock"), subject to
issuance by you upon the exercise of purchase rights granted or to be granted
under your 1993 Employee Stock Purchase Plan, as amended (the "Purchase Plan").
In rendering this opinion, we have examined the following:
(1) your registration statement on Form 8-A (File Number 0-23110)
filed with the Commission on or about December 20, 1993,
together with the order of effectiveness issued by the
Commission therefor on January 31, 1994;
(2) the Registration Statement, together with the Exhibits filed
as a part thereof, including those that are incorporated by
reference therein;
(3) the Prospectus prepared in connection with the Registration
Statement;
(4) the minutes of meetings and actions by written consent of the
shareholders and Board of Directors that are contained in your
minute books that are in our possession that relate to the
300,000 shares under the Purchase Plan that are being
registered under the Registration Statement;
(5) the stock records that you have provided to us consisting of a
certificate from your transfer agent of even date herewith
verifying the number of your issued and outstanding shares of
capital stock as of the date hereof and a certificate from you
of even date herewith verifying the number of options and
warrants respecting your capital and of any rights to purchase
capital stock;
(6) the Nasdaq National Market Notification Form for Listing of
Additional Shares filed with the Nasdaq Stock Market with
respect to the Stock; and
(7) a Management Certificate addressed to us and dated of even
date herewith executed by the Company containing certain
factual and other representations.
<PAGE>
Digital Link Corporation
July 6, 1999
Page 2
We have also confirmed the continued effectiveness of your registration
under the Securities Exchange Act of 1934, as amended, by telephone call to the
offices of the Commission.
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 and completeness of all documents submitted
to us as originals, the conformity to originals and completeness of all
documents submitted to us as copies, the legal capacity of all natural persons
executing the same, the lack of any undisclosed termination, modification,
waiver or amendment to any document reviewed by us and the due authorization,
execution and delivery of all documents where due authorization, 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 referred to above. We have
made no independent investigation 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 cause us to
believe that the opinion expressed herein is not accurate.
We are admitted to practice law in the State of California, and we
express no opinion herein with respect to the application or effect of the laws
of any jurisdiction other than the existing laws of the United States of America
and the State of California.
Based upon the foregoing, it is our opinion that the 300,000 shares of
Stock that may be issued and sold by you upon the exercise of purchase rights
granted or to be granted under the Purchase Plan, when issued and sold in
accordance with the applicable plan and purchase agreements to be entered into
thereunder, and in the manner referred to in the relevant Prospectus associated
with the Registration Statement, will be 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 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 we assume no obligation to
update this opinion should circumstances change after the date hereof. This
opinion 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
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 19, 1999, on our audits of the
consolidated financial statements and financial statement schedule which appear
in Digital Link Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998. We also consent to the reference to us under the heading
"EXPERTS" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
San Jose, California
July 2, 1999
