<PAGE> 1
As filed with the Securities and Exchange Commission on June ,1996
Registration No. 33-_____
================================================================================
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------
NETFRAME SYSTEMS INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
Delaware 77-0081278
(State of Incorporation) (I.R.S. Employer Identification No.)
1545 Barber Lane
Milpitas, California 95035
(Address of Principal Executive Offices)
-----------------
1992 STOCK OPTION PLAN
1992 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
-----------------
DAN MCCAMMON
Vice President, Chief Financial Officer and Secretary
NETFRAME SYSTEMS INCORPORATED
1545 Barber Lane
Milpitas, California 95035
(408) 474-1000
(Name, Address and Telephone Number, Including Area Code,
of Agent For Service)
-----------------
Copy to:
RICHARD HART, ESQ.
Wilson, Sonsini, Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================
Proposed Proposed
Titles of Maximum Maximum Amount
Securities Amount Offering Aggregate of
to be to be Price Per Offering Registration
Registered Registered Unit* Price* Fee*
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value
- - Issued under
1992 Stock Option Plan 150,000 $4.375 $ 656,250.00 $226.29
Employee Stock Purchase Plan 500,000 $4.375 $2,187,500.00 $754.31
TOTAL 650,000 $4.375 $2,843,750.00 $980.60
=======
========================================================================================
</TABLE>
* Estimated in accordance with Rule 457 solely for the purpose of
calculating the registration fee on the basis of $4.375, which is the
average of the high and low prices of Registrant's Common Stock as
reported on the NASDAQ National Market Systems on June 26, 1996.
(ii)
<PAGE> 3
NETFRAME SYSTEMS INCORPORATED
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
There are hereby incorporated by reference into this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission") by the Registrant:
1. Registration Statement on Form S-8 dated June 14, 1994, Registration
No. 33-80194.
2. The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
3. The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1996.
4. The description of Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed on April 16, 1992,
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") which was declared effective on June 3, 1992, including any
amendment or report filed for the purpose of updating such description.
All documents filed by registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date hereof, and prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be part hereof from the date of
filing such documents.
<PAGE> 4
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 Amended and Restated Certificate of Incorporation
provides that, pursuant to Delaware law, its directors shall not be liable for
monetary damages for breach of the directors' fiduciary duty as a director to
the Registrant and its stockholders. This provision in the Amended and Restated
Certificate of Incorporation does not eliminate the directors' fiduciary duty,
and in appropriate circumstances equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Registrant for acts or omissions not in
good faith or involving intentional misconduct, for knowing violations of law,
for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
unlawful under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
In addition, the Registrant's Bylaws provide that the Registrant will
indemnify its directors and officers and may indemnify its employees and other
agents to the fullest extent permitted by law. The Registrant believes that
indemnification under its Bylaws covers at least negligence and gross negligence
by indemnified parties, and permits the Registrant to advance litigation
expenses in the case of stockholder derivative actions or other actions, against
an undertaking by the indemnified party to repay such advances if it is
ultimately determined that the indemnified party is not entitled to
indemnification. The Board of Directors of the Registrant has authorized the
purchase of liability insurance for its officers and directors.
The Registrant has entered into separate indemnification agreements
with its directors and officers. These agreements require the Registrant, among
other things, to indemnify them against certain liabilities that may arise by
reason of their status or service as directors or officers (other than
liabilities arising from actions not taken in good faith or in a manner the
indemnitee believed to be opposed to the best interests of the Registrant) to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified and to obtain directors' liability insurance if
available on reasonable terms. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or
persons controlling the Registrant pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. The Registrant believes that its Amended and Restated
Certificate of Incorporation and Bylaw provisions and indemnification agreements
are necessary to attract and retain qualified persons as directors and officers.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
-2-
<PAGE> 5
Item 8. EXHIBITS
Exhibit
Number Document
4.1 1992 Stock Option Plan, as amended through June 1996.
4.2* 1992 Employee Stock Purchase Plan, as amended through
June 1996.
5.1 Opinion of counsel as to legality of securities being
registered.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (See page 5).
-----------
* Incorporated by reference to Registration Statement on Form S-8
(File No. 33-80194) dated June 14, 1994.
Item 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
-3-
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, NetFRAME Systems Incorporated, a corporation organized and existing
under the laws of the State of Delaware, certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Milpitas, State of
California, on this 28th day of June, 1996.
NETFRAME SYSTEMS INCORPORATED
By: /s/ DAN McCAMMON
-------------------------
Dan McCammon,
Vice President,
Chief Financial Officer
and Secretary
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert L. Puette and Dan McCammon, and
each of them, as his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, 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, and to file the same, with all
exhibits thereto and other 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 connection therewith,
as fully and to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
-4-
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ ROBERT L. PUETTE Chairman of the Board, June 28, 1996
- ------------------------------ President and Chief
Robert L. Puette Executive Officer
(Principal Executive
Officer)
/s/ DAN McCAMMON Vice President, June 28, 1996
- ------------------------------ Chief Financial Officer
Dan McCammon and Secretary
(Principal Accounting
and Financial Officer)
/s/ GORDON E. EUBANKS, JR. Director June 28, 1996
- ------------------------------
Gordon E. Eubanks, Jr.
/s/ JAMES P. LALLY Director June 28, 1996
- ------------------------------
James P. Lally
/s/ EDWARD R. KOZEL Director June 28, 1996
- ------------------------------
Edward R. Kozel
</TABLE>
-5-
<PAGE> 8
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------
NetFRAME SYSTEMS INCORPORATED
----------
EXHIBITS
----------
================================================================================
<PAGE> 9
INDEX TO EXHIBITS
Exhibit
Number Description
4.1 1992 Stock Option Plan,
as amended through June 1996
5.1 Opinion of counsel as to legality of
securities being registered
23.1 Consent of Ernst & Young LLP, Independent
Auditors
23.2 Consent of Counsel (contained in
Exhibit 5.1)
24.1 Power of Attorney (See page 5)
<PAGE> 1
Exhibit 4.1
NetFRAME SYSTEMS INCORPORATED
1992 STOCK OPTION PLAN
(As Amended through June 1996)
1. Purposes of the Plan. The purposes of this 1992 Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or non-statutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code and the
regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(d) "Committee" means a Committee, if any, appointed by the
Board in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock, $0.001 par value
per share, of the Company.
(f) "Company" means NetFRAME Systems Incorporated, a Delaware
corporation.
(g) "Consultant" means any person, including an advisor, who
is engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, provided that the term Consultant shall not
include Directors who are not compensated for their services or are paid only a
Director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an
-1-
<PAGE> 2
Employee or Consultant shall not be considered interrupted in the case of: (i)
any leave of absence approved by the Administrator, including sick leave,
military leave, or any other personal leave; provided, however, that for
purposes of Incentive Stock Options, any such leave may not exceed ninety (90)
days, unless reemployment upon the expiration of such leave is guaranteed by
contract (including certain Company policies) or statute; or (ii) transfers
between locations of the Company or between the Company, its Parent, its
Subsidiaries or its successor.
(i) "Director" shall mean a member of the Board.
(j) "Disability" means total and permanent disability, as
defined in Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Subsidiary. The payment of Directors'
fees by the Company shall not be suffi cient to constitute "employment" by the
Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange (or, if listed on
more than one exchange, the exchange with the greatest volume of trading in
Common Stock) or system on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the bid and
asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in the Wall Street Journal or such other
source as the Administrator deems reliable;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(n) "Incentive Stock Option" means an Option that satisfies
the provisions of Section 422 of the Code.
-2-
<PAGE> 3
(o) "Nonstatutory Stock Option" means an Option that is not an
Incentive Stock Option.
(p) "Officer" means an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the
Plan.
(r) "Optioned Stock" means the Common Stock subject to an
Option.
(s) "Optionee" means an Employee or Consultant who holds an
Option.
(t) "Parent" corporation shall have the meaning defined in
Section 424(e) of the Code.
(u) "Plan" means this 1992 Stock Option Plan.
(v) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.
(w) "Subsidiary" corporation shall have the meaning defined in
Section 424(f) of the Code.
In addition, the terms "Rule 16b-3" and "Applicable Laws", the term
"10% Stockholder", and the term "Tax Date" shall have the meanings set forth,
respectively, in Sections 4, 7 and 8 below.
3. Stock Subject to the Plan. Subject to the provisions of Section 10
of the Plan, the total number of Shares reserved and available for purchase upon
exercise of Options under the Plan shall be 2,801,722. The Shares may be
authorized, but unissued, or reacquired stock. If an Option should expire or
become unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for other Options under the Plan. However,
should the Company reacquire Shares which were issued pursuant to the exercise
of an Option, such Shares shall not become available for future grant under the
Plan.
4. Administration of the Plan.
(a) Composition of Administrator.
(i) Administration With Respect to Directors and
Officers. With respect to grants of Options to Employees who are also Officers
or Directors of the Company, the Plan shall be administered by (A) the Board, if
the Board may administer the Plan in compliance with the rules governing a plan
intended to qualify as a discretionary plan under Rule 16b-3 promulgated under
the
-3-
<PAGE> 4
Exchange Act or any successor rule ("Rule 16b-3"), or (B) a Committee designated
by the Board to administer the Plan, which Committee shall be constituted (I) in
such a manner as to comply with the rules governing a plan intended to qualify
as a discretionary plan under Rule 16b-3 and (II) in such a manner as to satisfy
the legal requirements, if any, relating to the administration of incentive
stock option plans under applicable state corporate and securities laws and
under the Code (the "Applicable Laws").
(ii) Administration With Respect to Consultants and
Other Employees. With respect to grants of Options to Employees or Consultants
who are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable
Laws.
(iii) Multiple Administrative Bodies. If permitted by
Rule 16b-3 and by the Applicable Laws, the Plan may (but need not) be
administered by different administrative bodies with respect to Directors,
non-Director Officers, and Employees and Consultants who are neither Directors
nor Officers.
(iv) General. Once a Committee has been appointed
pursuant to subsection (i) or (ii) of this Section 4(a), such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of any Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies (however caused) or
remove all members of the Committee and thereafter directly administer the Plan,
all to the extent permitted by the Applicable Laws, and, in the case of a
Committee appointed under subsection (i) hereof, to the extent permitted by Rule
16b-3 as it applies to a plan intended to qualify thereunder as a discretionary
plan.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and, in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(m) of the Plan;
(ii) to select the Officers, Consultants and
Employees to whom Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options
are granted hereunder;
(iv) to determine the number of shares of Common
Stock to be covered by each such Option granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
-4-
<PAGE> 5
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option granted hereunder
(including, but not limited to, whether such Option is an Incentive Stock Option
or a Nonstatutory Stock Option, the exercise price and any restriction or
limitation, or any vesting acceleration or waiver of forfeiture restrictions
regarding any Option or other award and/or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator shall
determine, in its sole discretion); provided, however, that in the event of a
merger or asset sale, the applicable provisions of Section 10 of the Plan shall
govern vesting acceleration;
(vii) to determine whether and under what
circumstances an Option may be settled in cash under subsection 7(a)(vii)
instead of Common Stock;
(viii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;
(ix) to interpret the Plan;
(x) to prescribe, amend and rescind rules and
regulations relating to the Plan;
(xi) with the consent of the holder thereof, to
modify or amend each Option; and
(xii) to make all other determinations deemed
necessary or advisable for the administration of the Plan.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.
5. Eligibility.
(a) Persons Eligible. Nonstatutory Stock Options may be
granted only to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Optionee who has been granted an Option may, if he
or she is otherwise eligible, be granted additional Options.
(b) No Employment Agreement. Neither the Plan nor any Option
agreement shall confer upon any Optionee any right with respect to continuation
of employment by or service as a Consultant to the Company, nor shall it
interfere in any way with the Optionee's right or the Company's right to
terminate the Optionee's employment or consulting relationship at any time.
(c) The following limitations shall apply to grants of Options
to Employees:
-5-
<PAGE> 6
(i) No Employee shall be granted, in any fiscal year
of the Company, Options to purchase more than 250,000 Shares.
(ii) In connection with his or her initial
employment, an Employee may be granted Options to purchase up to an additional
250,000 Shares which shall not count against the limit set forth in subsection
(i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option is canceled in the same fiscal year
of the Company in which it was granted (other than in connection with a
transaction described in Section 13), the canceled Option will be counted
against the limits set forth in subsections (i) and (ii) above. For this
purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.
6. Term of Plan. Subject to Section 15 of the Plan, the Plan shall
become effective upon the earlier to occur of its adoption by the Board or its
approval by the stockholders of the Company as described in Section 15. It shall
continue in effect for a term of ten (10) years unless sooner ter minated under
Section 12 of the Plan.
7. Options.
(a) Grants. The Administrator, in its discretion, may grant
Options to eligible participants and shall determine whether such Options shall
be Incentive Stock Options or Nonstatu tory Stock Options. Each Option shall be
evidenced by a written Option agreement which shall expressly identify the
Options as Incentive Stock Options or as Nonstatutory Stock Options, and be in
such form and contain such provisions as the Administrator shall from time to
time deem appropriate. Without limiting the foregoing, the Administrator may, at
any time, or from time to time, authorize the Company, with the consent of the
respective recipients, to issue Options in exchange for the surrender and
cancellation of any or all outstanding Options. Option agreements shall contain
the following terms and conditions:
(i) Exercise Price; Number of Shares. The per Share
exercise price for the Shares issuable upon exercise of an Option shall be such
price as is determined by the Administrator, but shall in no event be less than
100% of the Fair Market Value of Common Stock, determined as of the date of
grant of the Option. In the event that the Administrator shall subsequently
amend the Option to reduce the exercise price, the exercise price shall be no
less than 100% of the Fair Market Value as of the date of that amendment.
The Option agreement shall specify the number of Shares to which it
pertains.
-6-
<PAGE> 7
(ii) Waiting Period; Exercisability; Term. At the
time an Option is granted, the Administrator will determine the terms and
conditions to be satisfied before Shares may be purchased, including the dates
on which Shares subject to the Option may first be purchased or the conditions
which must be satisfied prior to purchase. The Administrator may specify that an
Option may not be exercised until the completion of the service period specified
at the time of grant. (Any such period is referred to herein as the "waiting
period".) At the time an Option is granted, the Administrator shall fix the
period within which the Option may be exercised, which shall not be less than
the waiting period, if any, nor more than ten (10) years from the date of grant.
(iii) Form of Payment. The consideration to be paid
for the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant) and may
consist entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares
which (x) in the case of Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six months on the date of surrender and (y)
have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, (5)
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds required to pay the exercise price, (6) any combination of the
foregoing methods of payment, or (7) such other consideration and method of
payment for the issuance of Shares to the extent permitted under Applicable
Laws.
(iv) Special Incentive Stock Option Provisions. In
addition to the foregoing, Options granted under the Plan which are intended to
be Incentive Stock Options under Section 422 of the Code shall be subject to the
following terms and conditions:
(A) Dollar Limitation. To the extent that
the aggregate Fair Market Value of (i) the Shares with respect to which Options
designated as Incentive Stock Options plus (ii) the shares of stock of the
Company, Parent and any Subsidiary with respect to which other incentive stock
options are exercisable for the first time by an Optionee during any calendar
year under all plans of the Company and any Parent and Subsidiary exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options. For
purposes of the preceding sentence, (i) Options shall be taken into account in
the order in which they were granted, and (ii) the Fair Market Value of the
Shares shall be determined as of the time the Option or other incentive stock
option is granted.
(B) General. Except as modified by the
preceding provisions of this subsection 7(a)(iv) and except as otherwise limited
by Section 422 of the Code, all of the provisions of the Plan shall be
applicable to the Incentive Stock Options granted hereunder.
(v) 10% Stockholder. If any Optionee to whom an
Incentive Stock Option is to be granted pursuant to the provisions of the Plan
is, on the date of grant, the owner of Common Stock (as determined under Section
424(d) of the Code) possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any Subsidiary (a "10%
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<PAGE> 8
Stockholder"), then the following special provisions shall be applicable to the
Option granted to such individual:
(A) The per Share Option price of Shares
subject to such Incentive Stock Option shall not be less than 110% of the Fair
Market Value of Common Stock on the date of grant; and
(B) The Option shall not have a term in
excess of five (5) years from the date of grant.
(vi) Rule 16b-3. Grants of options to Directors,
Officers and 10% Stockholders must comply with the applicable provisions of Rule
16b-3 and such Options shall contain such additional conditions or restrictions,
if any, as may be required by Rule 16b-3 to be in the written Option Agreement
in order to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
(vii) Other Provisions. Each Option granted under the
Plan may contain such other terms, provisions, and conditions not inconsistent
with the Plan as may be determined by the Administrator.
(viii) Buyout Provisions. The Administrator may at
any time offer to buy out, for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made. Any such
cash offer made to an Officer or Director shall comply with the provisions of
Rule 16-3 relating to cash settlement of stock appreciation rights. This
provision is intended only to clarify the powers of the Administrator and shall
not in any way be deemed to create any rights on the part of Optionees to buyout
offers or payments.
(b) Method of Exercise.
(i) Exercisability. Any Option granted hereunder
shall be exercisable at such times and under such conditions as determined by
the Administrator and as shall be permissible under the terms of the Plan.
(ii) No Fractional Shares. An Option may not be
exercised for a fraction of a Share.
(iii) Procedure for Exercise; Rights as a
Stockholder. An Option shall be deemed to be exercised when the Company
receives: (i) written notice of such exercise in accordance with the terms of
the Option from the person entitled to exercise the Option and (ii) full payment
for the Shares with respect to which the Option is exercised. Full payment may
consist of any consider ation and method of payment allowable under subsection
7(a)(iii) of the Plan, as authorized by the Administrator (and, in the case of
an Incentive Stock Option, determined at the time of grant) and
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permitted by the Option Agreement. Shares issued upon exercise of an Option
shall be issued in the name of the Optionee or, if requested by the Optionee, in
the name of the Optionee and his or her spouse. Until the issuance (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 10 of the Plan.
(iv) Effect of Exercise. Exercise of an Option in any
manner shall result in a decrease in the number of Shares which thereafter shall
be available, both for purposes of the Plan and for sale under the Option, by
the number of Shares as to which the Option is exercised.
(c) Effect of Termination of Employee or Consultant Status.
(i) Termination of Employment or Consulting
Relationship. In the event an Optionee's Continuous Status as an Employee or
Consultant terminates (other than upon the Optionee's death or Disability), the
Optionee may exercise his or her Option, but only within such period of time not
to exceed six months as is determined by the Administrator (with such
determination being made at the time of grant and not exceeding ninety (90) days
in the case of an Incentive Stock Option) from the date of such termination, and
only to the extent that the Optionee was entitled to exercise it at the date of
such termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). If, at the date of termination,
the Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall be returned to the Plan
as of the termination date. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and all remaining Shares covered by such Option shall be returned to
the Plan at the end of such period.
(ii) Disability of Optionee. In the event an
Optionee's Continuous Status as an Employee or Consultant terminates as a result
of the Optionee's Disability, the Optionee may exercise his or her Option, but
only within six months from the date of such termination, and only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). If, at the date of termination due to
Disability, the Optionee is not entitled to exercise his or her entire Option,
the Shares covered by the unexercisable portion of the Option shall be returned
to the Plan as of the date of Disability. If, after such termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and all remaining Shares covered by such Option
shall be returned to the Plan at the end of such period.
(iii) Death of Optionee. In the event of an
Optionee's death, the Optionee's estate or a person who acquired the right to
exercise the deceased Optionee's Option by bequest or inheritance may exercise
the Option, but only within six months following the date of death, and only
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to the extent that the Optionee was entitled to exercise it at the date of death
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). If, at the time of death, the Optionee was not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall be returned to the Plan as of the date
of death. If, after death, the Optionee's estate or a person who acquired the
right to exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall be returned to the Plan at the end of such
period.
8. Stock Withholding to Satisfy Withholding Tax Obligations.
(a) Ability to Use Stock for Withholding. At the discretion of
the Administrator, Optionees may satisfy withholding obligations as provided in
this Section 8. When an Optionee incurs tax liability in connection with the
exercise of an Option, which tax liability is subject to tax withholding under
applicable tax laws, and the Optionee is obligated to pay the Company an amount
required to be withheld under applicable tax laws, the Optionee may satisfy the
withholding tax obligation by electing to have the Company withhold from the
Shares to be issued upon exercise of the Option that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined (the "Tax Date").
(b) Election to Have Stock Withheld. All elections by an
Optionee to have Shares withheld for this purpose shall be made in writing in a
form acceptable to the Administrator and shall be subject to the following
restrictions:
(i) the election must be made on or prior to the
applicable Tax Date;
(ii) once made, the election shall be irrevocable as
to the particular Shares of the Option as to which the election is made (unless
otherwise permitted by applicable tax regulations under the Code);
(iii) all elections shall be subject to the consent
or disapproval of the Administrator; and
(iv) if the Optionee is a Director, Officer or 10%
Stockholder, the election must comply with the applicable provisions of Rule
16b-3 and shall be subject to such additional conditions or restrictions as may
be required thereunder to qualify for the maximum exemption from Section 16 of
the Exchange Act with respect to Plan transactions.
(c) Section 83(b) Election. In the event the election to have
Shares withheld is made by an Optionee, no election is filed under Section 83(b)
of the Code and the Tax Date is deferred under Section 83 of the Code, the
Optionee shall receive the full number of Shares with respect to which the
Option is exercised but such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
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<PAGE> 11
9. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 9.
10. Adjustments Upon Changes in Capitalization or Merger.
(a) Stock Splits and Similar Events. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Option, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per Share covered by each outstanding Option, shall
be proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the aggregate number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed for this purpose to
have been "effected without receipt of consideration". Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liqui dation of the Company, all outstanding Options 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 any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his Option
as to all or any part of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable.
(c) Sale of Assets or Merger. In the event of a merger of the
Company with or into another corporation, the Option shall be assumed or an
equivalent option shall be substituted by the successor corporation or a Parent
or Subsidiary of such successor corporation. In the event that such successor
corporation does not agree to assume the Option or to substitute an equivalent
option, the Board shall, in lieu of such assumption or substitution, provide for
the Optionee to have the right to exercise the Option as to all of the Optioned
Stock, including Shares as to which the Option would not otherwise be
exercisable. If the Board makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger, the Board shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option will terminate upon the
expiration of such period. For the purposes of this paragraph, the Option shall
be considered assumed if, following the merger or sale of assets, the assumed
option confers the right to purchase, for each Share of Optioned Stock subject
to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the
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<PAGE> 12
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Board may, with the consent of the successor corporation and the
participant, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in Fair Market
Value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
(d) No Other Adjustments. Except as expressly provided herein,
no issuance 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
subject to an Option.
11. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other later date as is determined by the
Administrator. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
12. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend, or terminate the Plan. The Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as is to the extent necessary and desirable to comply with Rule 16b-3 under the
Exchange Act or Section 422 of the Code (or any other applicable law or
regulation, including the requirements of any exchange or quotation system on
which the Common Stock is) in such a manner and to such a degree as is listed or
quoted in such a manner and to such a degree as is required by such law or
regulation.
(b) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee with respect to Options already granted unless mutually agreed
otherwise between the Optionee and the Administrator, which agreement must be in
a writing signed by the Optionee and the Company.
13. Conditions Upon Issuance of Shares.
(a) Compliance with Laws. Shares shall not be issued upon
exercise of an Option unless such exercise and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, state securities
laws and the requirements of any stock exchange or quotation system upon which
the Shares may then be listed or
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<PAGE> 13
quoted, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
(b) Investment Intent. As a condition to the exercise of an
Option or the issuance of Shares upon exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
(c) No Company Liability. Inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the non-issuance or sale of such Shares as to which such requisite authority
shall not have been obtained.
(d) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option exceeds, as of the date of grant, the number of Shares
which may be issued under the Plan without additional stockholder approval, such
Option shall be void with respect to such excess Optioned Stock, unless
stockholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan to permit full exercise of the Option is timely
obtained in accordance with Section 15 of the Plan.
14. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan and the Options granted
hereunder.
15. Stockholder Approval.
(a) Requirement. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted as provided in Section 6 and at or prior to
the first annual meeting of stockholders held subsequent to the first granting
of an Option hereunder. Such stockholder approval shall be obtained in the
manner and to the degree that is required under applicable federal and state
laws.
(b) Manner of Solicitation. Approval of the Plan by the
stockholders of the Company shall be solicited substantially in accordance with
Section 14(a) of the Exchange Act and the rules and regulations promulgated
thereunder.
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EXHIBIT 5.1
June 28, 1996
NetFRAME Systems Incorporated
1545 Barber Lane
Milpitas, California 95035
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined (i) the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by NetFRAME Systems Incorporated, a
Delaware corporation (the "Registrant" or "you"), with the Securities and
Exchange Commission on or about June 28, 1996 in connection with the
registration under the Securities Act of 1933, as amended (the "1933 Act"), of
150,000 and 500,000 additional shares of your Common Stock, $.001 par value (the
"Shares"), reserved for issuance pursuant to the 1992 Stock Option Plan, as
amended and 1992 Employee Stock Purchase Plan, as amended (the "Plans"),
respectively. As your legal counsel, we have reviewed the actions proposed to be
taken by you in connection with the proposed sale and issuance of the Shares by
the Registrant under the Plan.
It is our opinion that, upon completion of the actions being taken, or
contemplated by us as your counsel to be taken by you prior to the issuance of
the Shares pursuant to the Registration Statement and the Plan, and upon
completion of the actions being taken in order to permit such transactions to be
carried out in accordance with the securities laws of the various states where
required, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement and any subsequent amendment thereto.
Very truly yours,
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
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EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1992 Stock Option Plan and 1992 Employee Stock
Purchase Plan of NetFRAME Systems Incorporated of our report dated January 22,
1996, with respect to the consolidated financial statements and schedule of
NetFRAME Systems Incorporated, included in its Annual Report (Form 10-K) for
the year ended December 31, 1995, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
San Jose, California
June 28, 1996
