<PAGE>
As filed with the Securities and Exchange Commission on July 31, 1997.
Registration No. 333-
===================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
__________________________________
AMERICAN POWER CONVERSION CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Massachusetts 04-2722013
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
132 Fairgrounds Road, West Kingston, RI 02892
(Address of Principal Executive Offices)(Zip Code)
1993 Non-Employee Director Stock Option Plan
1997 Non-Employee Director Stock Option Plan
1997 Stock Option Plan
1997 Employee Stock Purchase Plan
(Full Title of the Plan)
____________________
Rodger B. Dowdell, Jr.
President and Chief Executive Officer
132 Fairgrounds Road
West Kingston, RI 02892
(401) 789-5735
(Name, address including zip code and telephone number,
including area code, of agent for service)
____________________
Copy to:
William B. Simmons, Jr., Esq.
TESTA, HURWITZ & THIBEAULT, LLP
High Street Tower
125 High Street
Boston, Massachusetts 02110
========================================================================
<PAGE>
========================================================================
CALCULATION OF REGISTRATION FEE
========================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Amount to be Offering Aggregate Amount of
Securities Registered Price Offering Registration
to be Per Share Price on Fee
Registered
<S> <C> <C> <S> <C> <C> <C> <C>
1993 Non-Employee Director Stock Option Plan
Common 40,000 shares $12.00 (1) $480,000 $145.45
Stock, $.01
par value
1997 Non-Employee Director Stock Option Plan
Common 20,000 shares $21.25 (1) $425,000 $128.79
Stock, $.01 180,000 shares $23.13 (2) $4,163,400 $1261.64
par value
1997 Stock Option Plan
Common 1,001,700 shares $16.625 (1) $16,653,262 $5,046.44
Stock, $.01 4,998,300 shares $23.13 (2) $115,610,679 $35,033.54
par value
1997 Employee Stock Purchase Plan
Common 1,000,000 shares $23.13 (2) $23,130,000 $7,009.09
Stock, $.01
par value
</TABLE>
TOTAL: 7,240,000 shares $48,624.95
=======================================================================
(1) Such shares are issuable upon exercise of outstanding
options with fixed exercise prices. Pursuant to Rule 457(h), the
aggregate offering price and the fee have been calculated upon
the basis of the price at which such options may be exercised.
(2) The price of $23.13 per share, which is the average of
the high and low prices of the Common Stock as reported on the
Nasdaq National Market System on July 29, 1997, is set forth
solely for purposes of calculating the filing fee pursuant to
Rules 457(c) and (h) for those shares without a fixed exercise price.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in this
Item 1 will be sent or given to employees, directors or others as
specified by Rule 428(b)(1). In accordance with the rules and
regulations of the Securities and Exchange Commission (the
"Commission") and the instructions to Form S-8, such documents
are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424.
Item 2. Registrant Information and Employee Plan Annual
Information.
The documents containing the information specified in this
Item 2 will be sent or given to employees as specified by Rule
428(b)(1). In accordance with the rules and regulations of the
Commission and the instructions to Form S-8, such documents are
not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by American Power Conversion
Corporation (the "Registrant") with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are incorporated in this Registration Statement by
reference as of their respective dates:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996;
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 30, 1997; and
(c) The description of the Registrant's Common Stock contained
in the Registrant's Registration Statement on Form 8-A filed
under Section 12(g) of the Exchange Act on August 29, 1988.
All documents subsequently filed with the Commission 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 herein have been sold
or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
Not applicable.
3
<PAGE>
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 67 of the Massachusetts Business Corporation Law
("Section 67") provides that a corporation may indemnify its
directors and officers to the extent specified in or authorized
by (i) the articles of organization, (ii) a by-law adopted by the
stockholders, or (iii) a vote adopted by the holders of a
majority of the shares of stock entitled to vote on the election
of directors. In all instances, the extent to which a
corporation provides indemnification to its directors and
officers under Section 67 is optional. The Company's By-laws
provide that each director and officer shall be indemnified by
the Company against liabilities and expenses in connection with
any legal proceeding to which such officer or director may become
a party by reason of being or having been an officer or director,
provided that such officer or director acted in good faith in the
reasonable belief that his or her action was in the best
interests of the Company. Reference is made to the Company's By-
laws filed as Exhibit 3.02 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 (File No. 0-
17126).
The Company maintains director and officers liability
insurance for the benefit of its directors and officers.
4
<PAGE>
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description of Exhibit
4.1 Articles of Organization of the Registrant,
as amended, (previously filed as Exhibit 3.01
to the Registrant's Annual Report on Form 10-
K for the fiscal year ended December 31, 1994
and incorporated herein by reference (File
No. 1-12432)).
4.2 By-laws of the Registrant (previously filed
as Exhibit 3.02 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by
reference (File No. 0-17126)).
4.3 1993 Non-Employee Director Stock Option Plan.
4.4 1997 Non-Employee Director Stock Option Plan.
4.5 1997 Stock Option Plan.
4.6 1997 Employee Stock Purchase Plan.
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Testa, Hurwitz & Thibeault, LLP
(included in Exhibit 5.1).
24.1 Power of Attorney (contained in the signature
page of this Registration Statement).
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:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii)To reflect in the prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent post-
5
<PAGE>
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i)
and (a)(1)(ii) do not apply if the information
required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the city of West Kingston and the state of Rhode
Island, on this 25th day of
July, 1997.
AMERICAN POWER CONVERSION CORPORATION
By: /s/ Rodger B. Dowdell, Jr.
Rodger B. Dowdell, Jr.,
President and Chief Executive Officer
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of American Power
Conversion Corporation, hereby severally constitute and appoint
Rodger B. Dowdell, Jr. and Donald Muir, and each of them singly,
our true and lawful attorneys, with full power to them and each
of them singly, to sign for us in our names in the capacities
indicated below, all pre-effective and post-effective amendments
to this registration statement, and generally do all things in
our names and on our behalf in such capacities to enable American
Power Conversion Corporation to comply with the provisions of the
Securities Act of 1933 and all requirements of the Securities and
Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title(s) Date
/s/ Rodger B. Dowdell, Jr. President and Chief July 25, 1997
Executive Officer
Rodger B. Dowdell, Jr. (Principal Executive
Officer)
/s/ Donald M. Muir Chief Financial Officer July 25, 1997
(Principal Financial and
Donald M. Muir Accounting Officer)
/s/ Emanuel E. Landsman Vice President, Clerk and July 24, 1997
Director
Emanuel E. Landsman
/s/ Neil E. Rasmussen Vice President and July 24, 1997
Neil E. Rasmussen Director
/s/ Ervin F. Lyons Director July 24, 1997
Ervin F. Lyons
/s/ James D. Gerson Director July 21,1997
James D. Gerson
7
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
4.1 Articles of Organization of the Registrant,
as amended, (previously filed as Exhibit 3.01
to the Registrant's Annual Report on Form 10-
K for the fiscal year ended December 31, 1994
and incorporated herein by reference (File
No. 1-12432)).
4.2 By-laws of the Registrant (previously filed
as Exhibit 3.02 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by
reference (File No. 0-17126)).
4.3 1993 Non-Employee Director Stock Option Plan.
4.4 1997 Non-Employee Director Stock Option Plan.
4.5 1997 Stock Option Plan.
4.6 1997 Employee Stock Purchase Plan.
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Testa, Hurwitz & Thibeault, LLP
(included in Exhibit 5.1).
24.1 Power of Attorney (contained in the signature
page of this Registration Statement).
8
<PAGE>
EXHIBIT 4.3
AMERICAN POWER CONVERSION CORPORATION
1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose. This Non-Qualified Stock Option Plan, to be
known as the 1993 Non-Employee Director Stock Option Plan
(hereinafter, this "Plan") is intended to promote the
interests of American Power Conversion Corporation
(hereinafter, the "Company") by providing an inducement to
retain the services of qualified persons who are not
employees or officers of the Company to serve as members of
its Board of Directors (the "Board").
2. Available Shares. The total number of shares of
Common Stock, par value $.01 per share, of the Company (the
"Common Stock"), for which options may be granted under this
Plan shall not exceed 20,000 shares, subject to adjustment
in accordance with paragraph 10 of this Plan. Shares
subject to this Plan are authorized but unissued shares of
Common Stock. If any options granted under this Plan are
surrendered before exercise or lapse without exercise, in
whole or in part, the shares reserved therefor shall not be
available under this Plan.
3. Administration. This Plan shall be administered by
the Board or by a committee appointed by the Board (the
"Committee"). In the event the Board fails to appoint or
refrains from appointing a Committee, the Board shall have
all power and authority to administer this Plan. In such
event, the word "Committee" wherever used herein shall be
deemed to mean the Board. The Committee shall, subject to
the provisions of the Plan, have the power to construe this
Plan, to determine all questions hereunder, and to adopt and
amend such rules and regulations for the administration of
this Plan as it may deem desirable. No member of the Board
or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan
or any option granted under it.
4. Automatic Grant of Options. Each person who is a
member of the Board on February 25, 1993 and who is not an
employee or officer of the Company on such date shall be
automatically granted on February 25, 1993, without further
action by the Board, an option to purchase 10,000 shares of
the Common Stock. The options to be granted under this
paragraph 4 shall be the only options ever to be granted at
any time to such member under this Plan. Notwithstanding
anything to the contrary set forth herein, if this Plan is
not approved by a majority of the Company's stockholders
present, or represented, and entitled to vote at the first
meeting of Stockholders of the Company following
February 25, 1993, then the Plan and the options granted on
February 25, 1993 shall terminate and become void, and no
further options shall be granted under this Plan.
Except for the specific options referred to above, no
other options shall be granted under this Plan.
5. Option Price. The purchase price of the stock
covered by an option granted pursuant to this Plan shall be
100% of the fair market value of such shares. The option
price will be subject to adjustment in accordance with the
provisions of paragraph 10 of this Plan. For purposes of
this Plan, "fair market value" shall be determined as of the
last business day for which the prices or quotes discussed
in this sentence are available prior to the date such option
is granted and shall mean the last reported sale price (on
that date) of the Common Stock on the NASDAQ National Market
List.
<PAGE>
6. Period of Option. Unless sooner terminated in
accordance with the provisions of paragraph 8 of this Plan,
an option granted hereunder shall expire on the date which
is ten (10) years after the date of grant of the option.
7. Vesting of Shares and Non-Transferability of Options.
(a) Vesting. Options granted under this Plan shall
not be exercisable until they become vested. Options
granted under this Plan shall vest in the optionee and thus
become exercisable with respect to 25% of the shares subject
to such option on the day preceding the first anniversary of
the date of grant, and shall vest with respect to an
additional 25% of the shares subject to such option on the
day preceding each subsequent annual anniversary of the date
of grant, through and including the day preceding the fourth
anniversary of the date of grant, when it will be vested
with respect to all of the shares subject thereto; provided
that the vesting of options on each annual vesting date is
conditioned on the optionee having continuously served as a
member of the Board through such date.
The number of shares as to which options may be exercised
shall be cumulative, so that once the option shall become
exercisable as to any shares it shall continue to be
exercisable as to said shares, until expiration or
termination of the option as provided in this Plan.
(b) Legend on Certificates. The certificates
representing such shares shall carry such appropriate
legend, and such written instructions shall be given to the
Company's transfer agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with
the requirements of the Securities Act of 1933 or any state
securities laws.
(c) Non-transferability. Any option granted pursuant
to this Plan shall not be assignable or transferable other
than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order (as defined
by the Internal Revenue Code of 1986, as amended, or Title I
of the Employment Retirement Income Security Act, or the
rules thereunder) and shall be exercisable during the
optionee's lifetime only by him.
8. Termination of Option Rights.
(a) In the event an optionee ceases to be a member of
the Board for any reason other than death or permanent
disability, any then unexercised portion of options granted
to such optionee shall, to the extent not then vested,
immediately terminate and become void; any portion of an
option which is then vested but has not been exercised at
the time the optionee so ceases to be a member of the Board
may be exercised, to the extent it is then vested, by the
optionee within 90 days of the date the optionee ceased to
be a member of the Board; and all options shall terminate
after such 90 days have expired.
(b) In the event that an optionee ceases to be a
member of the Board by reason of his death or permanent
disability, any option granted to such optionee shall be
immediately and automatically accelerated and become fully
vested and all unexercised options shall be exercisable by
<PAGE>
the optionee (or by the optionee's personal representative,
heir or legatee, in the event of death) until the scheduled
expiration date of the option.
9. Exercise of Option. Subject to the terms and
conditions of this Plan and the option agreements, an option
granted hereunder shall, to the extent then exercisable, be
exercisable in whole or in part by giving written notice to
the Company by mail or in person addressed to American Power
Conversion Corporation at its principal executive offices,
stating the number of shares with respect to which the
option is being exercised, accompanied by payment in full
for such shares, which payment shall be made by cash or
check; provided, however, that there shall be no such
exercise at any one time as to fewer than one hundred (100)
shares or all of the remaining shares then purchasable by
the person or persons exercising the option, if fewer than
one hundred (100) shares. The Company's transfer agent
shall, on behalf of the Company, prepare a certificate or
certificates representing such shares acquired pursuant to
exercise of the option, shall register the optionee as the
owner of such shares on the books of the Company and shall
cause the fully executed certificate(s) representing such
shares to be delivered to the optionee as soon as
practicable after payment of the option price in full. The
holder of an option shall not have any rights of a
stockholder with respect to the shares covered by the
option, except to the extent that one or more certificates
for such shares shall be delivered to him upon the due
exercise of the option.
10. Adjustments Upon Changes in Capitalization and Other
Matters. Upon the occurrence of any of the following
events, an optionee's rights with respect to options granted
to him hereunder shall be adjusted as hereinafter provided:
(a) Recapitalization. In the event that the
outstanding shares of Common Stock of the Company are
changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of any
recapitalization, reclassification, stock split, stock
dividend, combination or subdivision, appropriate adjustment
shall be made in the number and kind of shares available
under the Plan and under any Options granted under the Plan.
Such adjustment to outstanding Options shall be made without
change in the total price applicable to the unexercised
portion of such Options, and a corresponding adjustment in
the applicable Option price per share shall be made. No
such adjustment shall be made which would, within the
meaning of any applicable provisions of the Internal Revenue
Code of 1986, as amended, constitute a modification,
extension or renewal of any Option or a grant of additional
benefits to the holder of an Option.
(b) Reorganization. In case the Company is merged
into or consolidated with another corporation and the
Company is not the surviving corporation, or in case all or
substantially all of the assets or stock of the Company are
acquired by any other corporation, or in case of any other
reorganization or a liquidation of the Company, the Board of
Directors, or the board of directors of any corporation
assuming the obligations of the Company hereunder, shall, as
to outstanding Options, either (i) make appropriate
provision for the protection of any such outstanding Options
by the substitution on an equitable basis of appropriate
capital stock of the Company, or of the merged, consolidated
or otherwise reorganized corporation which will be issuable
in respect to the shares of Common Stock of the Company or
(ii) upon written notice to the optionees, provide that all
unexercised Options must be exercised within thirty (30)
days of the date of such notice or they will be terminated.
In any such case, the Board of Directors may, in its
discretion, accelerate the exercise dates of outstanding
Options.
(c) Issuances of Securities. 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 options. No adjustments shall be
made for dividends paid in cash or in property other than
securities of the Company.
(d) Adjustments. Upon the happening of any of the
foregoing events, the class and aggregate number of shares
set forth in paragraph 2 of this Plan that are subject to
options which previously have been granted under this Plan
shall be appropriately adjusted to reflect such events. The
<PAGE>
Board shall determine the specific adjustments to be made
under this paragraph 10 and its determination shall be
conclusive.
11. Restrictions on Issuance of Shares. Notwithstanding
the provisions of paragraphs 4 and 9 of this Plan, the
Company shall have no obligation to deliver any certificate
or certificates upon exercise of an option until one of the
following conditions shall be satisfied:
(i) The shares with respect to which the option has
been exercised are at the time of the issue of such
shares effectively registered under applicable Federal
and state securities laws as now in force or hereafter
amended; or
(ii) Counsel for the Company shall have given an
opinion that such shares are exempt from registration
under Federal and state securities laws as now in force
or hereafter amended; and the Company has complied with
all applicable laws and regulations with respect
thereto, including without limitation all regulations
required by any stock exchange upon which the Company's
outstanding Common Stock is then listed.
12. Representation of Optionee. If requested by the
Company, the optionee shall deliver to the Company written
representations and warranties upon exercise of the option
that are necessary to show compliance with Federal and state
securities laws, including to the effect that a purchase of
shares under the option is made for investment and not with
a view to their distribution (as that term is used in the
Securities Act of 1933).
13. Option Agreement. Each option granted under the
provisions of this Plan shall be evidenced by an option
agreement, which agreement shall be duly executed and
delivered on behalf of the Company and by the optionee to
whom such option is granted. The option agreement shall
contain such terms, provisions and conditions not
inconsistent with this Plan as may be determined by the
officer executing it.
14. Termination and Amendment of Plan. Options may no
longer be granted under this Plan after February 25, 1993,
and this Plan shall terminate when all options granted
hereunder are no longer outstanding. The Board may at any
time terminate this Plan or make such modification or
amendment thereof as it deems advisable; provided, however,
that the Board may not, without approval by the affirmative
vote of the holders of a majority of the shares of Common
Stock present in person or by proxy and entitled to vote at
the meeting, (a) increase the maximum number of shares for
which options may be granted under this Plan or the number
of shares for which an option may be granted to any
participating director hereunder except as set forth in
paragraph 10, (b) change the provisions of this Plan
regarding the termination of the options or the times when
they may be exercised, (c) change the period during which
any options may be granted or remain outstanding or the date
on which this Plan shall terminate, (d) change the
designation of the class of persons eligible to receive
options, or otherwise change paragraph 4, (e) materially
increase the benefits accruing to option holders under this
Plan, or (f) amend this Plan in any manner which would cause
Rule 16b-3 to become inapplicable to this Plan; and provided
further that the provisions of this Plan specified in
Rule 16b-3(c)(2)(ii)(A) may not be amended more than once
every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income
Security Act, or the rules thereunder. Termination or any
modification or amendment of this Plan shall not, without
consent of a participant, affect his rights under an option
previously granted to him.
<PAGE>
15. Governing Law. The validity and construction of this
Plan and the instruments evidencing options shall be
governed by the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of conflicts of law
thereof.
<PAGE>
EXHIBIT 4.4
AMERICAN POWER CONVERSION CORPORATION
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose. This Non-Qualified Stock Option Plan, to be
known as the 1997 Non-Employee Director Stock Option Plan
(hereinafter, this "Plan") is intended to promote the
interests of American Power Conversion Corporation
(hereinafter, the "Company") by providing an inducement to
obtain and retain the services of qualified persons who are
not employees or officers of the Company to serve as members
of its Board of Directors (the "Board").
2. Available Shares. The total number of shares of
Common Stock, par value $.01 per share, of the Company (the
"Common Stock") for which options may be granted under this
Plan shall not exceed 200,000 shares, subject to adjustment
in accordance with paragraph 10 of this Plan. Shares
subject to this Plan are authorized but unissued shares or
shares that were once issued and subsequently reacquired by
the Company. If any options granted under this Plan are
surrendered before exercise or lapse without exercise, in
whole or in part, the shares reserved therefor shall
continue to be available under this Plan.
3. Administration. This Plan shall be administered by
the Board or by a committee appointed by the Board (the
"Committee"). In the event the Board fails to appoint or
refrains from appointing a Committee, the Board shall have
all power and authority to administer this Plan. In such
event, the word "Committee" wherever used herein shall be
deemed to mean the Board. The Committee shall, subject to
the provisions of the Plan, have the power to construe this
Plan, to determine all questions hereunder, and to adopt and
amend such rules and regulations for the administration of
this Plan as it may deem desirable. No member of the Board
or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan
or any option granted under it.
4. Automatic Grant of Options. Subject to the
availability of shares under this Plan, each person who is a
member of the Board and who is not an employee or officer of
the Company (a "Non-Employee Director") on the date of
shareholder approval of the Plan and on February 12th of
each year thereafter shall be automatically granted on such
date, without further action by the Board, an option to
purchase 10,000 shares of the Common Stock. Options to be
granted under this paragraph 4 shall be the only options
ever to be granted at any time to any person under this
Plan. The number of shares covered by options granted
under this paragraph 4 shall be subject to adjustment in
accordance with the provisions of paragraph 10 of this Plan.
Notwithstanding anything to the contrary set forth
herein, if this Plan is not approved by a majority of the
Company's stockholders present, or represented, and voting
on such matter at the first meeting of Shareholders of the
Company following the Approval Date, then the Plan and the
options granted pursuant to this Section 4 shall terminate
and become void, and no further options shall be granted
under this Plan.
5. Option Price. The purchase price of the stock
covered by an option granted pursuant to this Plan shall be
100% of the fair market value of such shares on the day the
option is granted. The option price will be subject to
adjustment in accordance with the provisions of paragraph 10
of this Plan. For purposes of this Plan, if, at the time an
option is granted under the Plan, the Company's Common Stock
<PAGE>
is publicly traded, "fair market value" shall be determined
as of the last business day for which the prices or quotes
discussed in this sentence are available prior to the date
such option is granted and shall mean (i) the average (on
that date) of the high and low prices of the Common Stock on
the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded
on a national securities exchange; or (ii) the last reported
sale price (on that date) of the Common Stock on the Nasdaq
National Market, if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price
(or average of bid prices) last quoted (on that date) by an
established quotation service for over-the-counter
securities, if the Common Stock is not reported on the
Nasdaq National Market List.
6. Period of Option. Unless sooner terminated in
accordance with the provisions of paragraph 8 of this Plan,
an option granted hereunder shall expire on the date which
is ten (10) years after the date of grant of the option.
7. (a) Exercisability of Shares and Non-Transferability
of Options. Options granted under this Plan shall become
exercisable by the optionee in accordance with the following
schedule, provided that the optionee has continuously served
as a member of the Board through such date:
Percentage of Option
Shares for which
Option Will be Exercisable Date of Vesting
0% Less than two years
from the date of grant
25% Two years but less
than two and one-half years
from the date of grant
An additional 9.375%
Every six months thereafter
The number of shares as to which options may be exercised
shall be cumulative, so that once the option shall become
exercisable as to any shares it shall continue to be
exercisable as to said shares, until expiration or
termination of the option as provided in this Plan.
(b) Non-transferability. Any option granted pursuant
to this Plan shall not be assignable or transferable other
than by will or the laws of descent and distribution or
pursuant to a domestic relations order and shall be
exercisable during the optionee's lifetime only by him or
her.
8. Termination of Option Rights.
(a) In the event an optionee ceases to be a member of
the Board for any reason other than death or permanent
disability, any then unexercised portion of options granted
to such optionee shall, to the extent not then vested,
immediately terminate and become void; any portion of an
option which is then vested but has not been exercised at
the time the optionee so ceases to be a member of the Board
may be exercised, to the extent it is then vested, by the
optionee within 90 days of the date the optionee ceased to
be a member of the Board; and all options shall terminate
after such 90 days have expired.
(b) In the event that an optionee ceases to be a
member of the Board by reason of his or her death or
permanent disability, any option granted to such optionee
shall be immediately and automatically accelerated and
become fully vested and all unexercised options shall be
<PAGE>
exercisable by the optionee (or by the optionee's personal
representative, heir or legatee, in the event of death)
until the scheduled expiration date of the option.
9. Exercise of Option. Subject to the terms and
conditions of this Plan and the option agreements, an option
granted hereunder shall, to the extent then exercisable, be
exercisable in whole or in part by giving written notice to
the Company by mail or in person addressed to American Power
Conversion Corporation at its principal executive offices,
stating the number of shares with respect to which the
option is being exercised, accompanied by payment in full
for such shares. Payment may be (a) in United States
dollars in cash or by check, (b) in whole or in part in
shares of the Common Stock of the Company already owned by
the person or persons exercising the option or shares
subject to the option being exercised (subject to such
restrictions and guidelines as the Board may adopt from time
to time), valued at fair market value determined in
accordance with the provisions of paragraph 5 or
(c) consistent with applicable law, through the delivery of
an assignment to the Company of a sufficient amount of the
proceeds from the sale of the Common Stock acquired upon
exercise of the option and an authorization to the broker or
selling agent to pay that amount to the Company, which sale
shall be at the participant's direction at the time of
exercise. There shall be no such exercise at any one time
as to fewer than one hundred (100) shares or all of the
remaining shares then purchasable by the person or persons
exercising the option, if fewer than one hundred (100)
shares. The Company's transfer agent shall, on behalf of
the Company, prepare a certificate or certificates
representing such shares acquired pursuant to exercise of
the option, shall register the optionee as the owner of such
shares on the books of the Company and shall cause the fully
executed certificate(s) representing such shares to be
delivered to the optionee as soon as practicable after
payment of the option price in full. The holder of an
option shall not have any rights of a stockholder with
respect to the shares covered by the option, except to the
extent that one or more certificates for such shares shall
be delivered to him or her upon the due exercise of the
option.
10. Adjustments Upon Changes in Capitalization and Other
Events. Upon the occurrence of any of the following events,
an optionee's rights with respect to options granted to him
or her hereunder shall be adjusted as hereinafter provided:
(a) Stock Dividends and Stock Splits. If the shares
of Common Stock shall be subdivided or combined into a
greater or smaller number of shares or if the Company
shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of
shares of Common Stock deliverable upon the exercise of
options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such
subdivision, combination or stock dividend.
(b) Recapitalization Adjustments. If the Company is
to be consolidated with or acquired by another entity in
a merger, sale of all or substantially all of the
Company's assets or otherwise, each option granted under
this plan which is outstanding but unvested as of the
effective date of such event shall become exercisable in
full immediately prior to the effective date of such
event. In the event of a reorganization,
recapitalization, merger, consolidation, or any other
change in the corporate structure or shares of the
Company, to the extent permitted by Rule 16b-3 under the
Securities Exchange Act of 1934, adjustments in the
number and kind of shares authorized by this Plan and in
the number and kind of shares covered by, and in the
option price of outstanding options under this Plan
necessary to maintain the proportionate interest of the
optionee and preserve, without exceeding, the value of
such option, shall be made. Notwithstanding the
foregoing, no such adjustment shall be made which would,
<PAGE>
within the meaning of any applicable provisions of the
Internal Revenue Code of 1986, as amended, constitute a
modification, extension or renewal of any Option or a
grant of additional benefits to the holder of an Option.
(c) Issuances of Securities. 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 options.
No adjustments shall be made for dividends paid in cash
or in property other than securities of the Company.
(d) Adjustments. Upon the happening of any of the
foregoing events, the class and aggregate number of
shares set forth in paragraphs 2 and 4 of this Plan that
are subject to options which previously have been or
subsequently may be granted under this Plan shall also
be appropriately adjusted to reflect such events. The
Board shall determine the specific adjustments to be
made under this paragraph 10 and its determination shall
be conclusive.
11. Restrictions on Issuance of Shares. Notwithstanding
the provisions of paragraphs 4 and 9 of this Plan, the
Company shall have no obligation to deliver any certificate
or certificates upon exercise of an option until one of the
following conditions shall be satisfied:
(i) The issuance of shares with respect to which the
option has been exercised is at the time of the issue of
such shares effectively registered under applicable
Federal and state securities laws as now in force or
hereafter amended; or
(ii) Counsel for the Company shall have given an
opinion that the issuance of such shares is exempt from
registration under Federal and state securities laws as
now in force or hereafter amended; and the Company has
complied with all applicable laws and regulations with
respect thereto, including without limitation all
regulations required by any stock exchange upon which
the Company's outstanding Common Stock is then listed.
12. Legend on Certificates. The certificates
representing shares issued pursuant to the exercise of an
option granted hereunder shall carry such appropriate
legend, and such written instructions shall be given to the
Company's transfer agent, as may be deemed necessary or
advisable by counsel to the Company in order to comply with
the requirements of the Securities Act of 1933 or any state
securities laws.
13. Representation of Optionee. If requested by the
Company, the optionee shall deliver to the Company written
representations and warranties upon exercise of the option
that are necessary to show compliance with Federal and state
securities laws, including representations and warranties to
the effect that a purchase of shares under the option is
made for investment and not with a view to their
distribution (as that term is used in the Securities Act of
1933).
14. Option Agreement. Each option granted under the
provisions of this Plan shall be evidenced by an option
agreement, which agreement shall be duly executed and
delivered on behalf of the Company and by the optionee to
whom such option is granted. The option agreement shall
contain such terms, provisions and conditions not
inconsistent with this Plan as may be determined by the
officer executing it.
15. Termination and Amendment of Plan. Options may no
longer be granted under this Plan after February 12, 2007,
and this Plan shall terminate when all options granted or to
<PAGE>
be granted hereunder are no longer outstanding. The Board
may at any time terminate this Plan or make such
modification or amendment thereof as it deems advisable;
provided, however, that the Board may not, without approval
of the stockholders, (a) increase the maximum number of
shares for which options may be granted under this Plan
(except by adjustment pursuant to Section 10),
(b) materially modify the requirements as to eligibility to
participate in this Plan or (c) materially increase benefits
accruing to option holders under this Plan. Termination or
any modification or amendment of this Plan shall not,
without consent of a participant, affect his or her rights
under an option previously granted to him or her.
16. Withholding of Income Taxes. Upon the exercise of an
option, the Company, in accordance with Section 3402(a) of
the Internal Revenue Code, may require the optionee to pay
withholding taxes in respect of amounts considered to be
compensation includible in the optionee's gross income.
17. Compliance with Regulations. It is the Company's
intent that the Plan comply in all respects with Rule 16b-3
under the Securities Exchange Act of 1934 (or any successor
or amended provision thereof) and any applicable Securities
and Exchange Commission interpretations thereof. If any
provision of this Plan is deemed not to be in compliance
with Rule 16b-3, the provision shall be null and void.
18. Governing Law. The validity and construction of this
Plan and the instruments evidencing options shall be
governed by the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of conflicts of law
thereof.
<PAGE>
EXHIBIT 4.5
AMERICAN POWER CONVERSION CORPORATION
1997 STOCK OPTION PLAN
1. Purpose. The purpose of this 1997 Stock Option
Plan (the "Plan") is to encourage employees of American
Power Conversion Corporation (the "Company") and of any
present or future parent or subsidiary of the Company
(collectively, "Related Corporations"), and other
individuals who render services to the Company or a Related
Corporation, by providing opportunities to purchase stock in
the Company pursuant to options granted hereunder which
qualify as "incentive stock options" ("ISOs") under
Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code") and options which do not qualify as
ISOs ("Non-Qualified Options"). Both ISOs and Non-Qualified
Options are referred to hereafter individually as an
"Option" and collectively as "Options." As used herein, the
terms "parent" and "subsidiary" mean "parent corporation"
and "subsidiary corporation," respectively, as those terms
are defined in Section 424 of the Code.
2. Administration of the Plan.
A. Board or Committee Administration. The Plan
shall be administered by the Board of Directors of the
Company (the "Board") or, subject to paragraph 2(D)
(relating to compliance with Section 162(m) of the
Code), by a committee appointed by the Board (the
"Committee"). Hereinafter, all references in this Plan
to the "Committee" shall mean the Board if no Committee
has been appointed. Subject to ratification of the
grant or authorization of each Option by the Board (if
so required by applicable state law), and subject to
the terms of the Plan, the Committee shall have the
authority to (i) determine to whom (from among the
class of employees eligible under paragraph 3 to
receive ISOs) ISOs shall be granted, and to whom (from
among the class of individuals and entities eligible
under paragraph 3 to receive Non-Qualified Options) Non-
Qualified Options may be granted; (ii) determine the
time or times at which Options shall be granted;
(iii) determine the exercise price of shares subject to
each Option, which price shall not be less than the
minimum price specified in paragraph 6; (iv) determine
whether each Option granted shall be an ISO or a Non-
Qualified Option; (v) determine (subject to
paragraph 7) the time or times when each Option shall
become exercisable and the duration of the exercise
period; (vi) extend the period during which outstanding
Options may be exercised; (vii) determine whether
restrictions such as repurchase options are to be
imposed on shares subject to Options and the nature of
such restrictions, if any; and (viii) interpret the
Plan and prescribe and rescind rules and regulations
relating to it. If the Committee determines to issue a
Non-Qualified Option, it shall take whatever actions it
deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such
Option is not treated as an ISO. The interpretation
and construction by the Committee of any provisions of
the Plan or of any Option granted under it shall be
final unless otherwise determined by the Board. The
Committee may from time to time adopt such rules and
regulations for carrying out the Plan as it may deem
advisable. No member of the Board or the Committee
shall be liable for any action or determination made in
good faith with respect to the Plan or any Option
granted under it.
B. Committee Actions. The Committee may select
one of its members as its chairman, and shall hold
meetings at such time and places as it may determine.
<PAGE>
A majority of the Committee shall constitute a quorum
and acts by a majority of the members of the Committee
at a meeting at which a quorum is present, or acts
reduced to or approved in writing by a majority of the
members of the Committee (if consistent with applicable
state law), shall constitute the valid acts of the
Committee. From time to time the Board may increase
the size of the 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.
C. Grant of Options to Board Members. Options
may be granted to members of the Board. All grants of
Options to members of the Board shall in all respects
be made in accordance with the provisions of this Plan
applicable to other eligible persons. Members of the
Board who either (i) are eligible to receive grants of
Options pursuant to the Plan or (ii) have been granted
Options may vote on any matters affecting the
administration of the Plan or the grant of any Options
pursuant to the Plan, except that no such member shall
act upon the granting to himself or herself of Options,
but any such member may be counted in determining the
existence of a quorum at any meeting of the Board
during which action is taken with respect to the
granting to such member of Options.
D. Performance-Based Compensation. The Board,
in its discretion, may take such action as may be
necessary to ensure that Options granted under the Plan
qualify as "qualified performance-based compensation"
within the meaning of Section 162(m) of the Code and
applicable regulations promulgated thereunder
("Performance-Based Compensation"). Such action may
include, in the Board's discretion, some or all of the
following (i) if the Board determines that Options
granted under the Plan generally shall constitute
Performance-Based Compensation, the Plan shall be
administered, to the extent required for such Options
to constitute Performance-Based Compensation, by a
Committee consisting solely of two or more "outside
directors" (as defined in applicable regulations
promulgated under Section 162(m) of the Code), (ii) if
any Non-Qualified Options with an exercise price less
than the fair market value per share of Common Stock
are granted under the Plan and the Board determines
that such Options should constitute Performance-Based
Compensation, such options shall be made exercisable
only upon the attainment of a pre-established,
objective performance goal established by the
Committee, and such grant shall be submitted for, and
shall be contingent upon shareholder approval and (iii)
Options granted under the Plan may be subject to such
other terms and conditions as are necessary for
compensation recognized in connection with the exercise
or disposition of such Option or the disposition of
Common Stock acquired pursuant to such Option, to
constitute Performance-Based Compensation.
3. Eligible Employees and Others. ISOs may be granted
only to employees of the Company or any Related Corporation.
Non-Qualified Options may be granted to any employee,
officer or director (whether or not also an employee) or
consultant of the Company or any Related Corporation. The
Committee may take into consideration a recipient's
individual circumstances in determining whether to grant an
ISO or a Non-Qualified Option. The granting of any Option
to any individual or entity shall neither entitle that
individual or entity to, nor disqualify such individual or
entity from, participation in any other grant of Options.
4. Stock. The stock subject to Options shall be
authorized but unissued shares of Common Stock of the
Company, par value $.01 per share (the "Common Stock"), or
shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued
pursuant to the Plan is 6,000,000, subject to adjustment as
<PAGE>
provided in paragraph 13. If any Option granted under the
Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be
exercisable in whole or in part or shall be repurchased by
the Company, the shares subject to such Option shall again
be available for grants of Options under the Plan.
No employee of the Company or any Related
Corporation may be granted Options to acquire, in the
aggregate, more than 4,200,000 of the shares of Common Stock
under the Plan during any fiscal year of the Company. If
any Option granted under the Plan shall expire or terminate
for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in
part or shall be repurchased by the Company, the shares
subject to such Option shall be included in the
determination of the aggregate number of shares of Common
Stock deemed to have been granted to such employee under the
Plan.
5. Granting of Options. Options may be granted under
the Plan at any time after February 12, 1997 and prior to
February 12, 2007. The date of grant of an Option under the
Plan will be the date specified by the Committee at the time
it grants the Option; provided, however, that such date
shall not be prior to the date on which the Committee acts
to approve the grant.
6. Minimum Option Price; ISO Limitations.
A. Price for Non-Qualified Options. Subject to
Paragraph 2(D) (relating to compliance with Section
162(m) of the Code), the exercise price per share
specified in the agreement relating to each Non-
Qualified Option granted under the Plan may be less
than the fair market value of the Common Stock of the
Company on the date of grant; provided that in no event
shall such exercise price be less than the minimum
legal consideration required therefor under the laws of
any jurisdiction in which the Company or its successors
in interest may be organized.
B. Price for ISOs. The exercise price per share
specified in the agreement relating to each ISO granted
under the Plan shall not be less than the fair market
value per share of Common Stock on the date of such
grant. In the case of an ISO to be granted to an
employee owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes
of stock of the Company or any Related Corporation, the
price per share specified in the agreement relating to
such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common
Stock on the date of grant. For purposes of
determining stock ownership under this paragraph, the
rules of Section 424(d) of the Code shall apply.
C. $100,000 Annual Limitation on ISO Vesting.
Each eligible employee may be granted Options treated
as ISOs only to the extent that, in the aggregate under
this Plan and all incentive stock option plans of the
Company and any Related Corporation, ISOs do not become
exercisable for the first time by such employee during
any calendar year with respect to stock having a fair
market value (determined at the time the ISOs were
granted) in excess of $100,000. The Company intends to
designate any Options granted in excess of such
limitation as Non-Qualified Options, and the Company
shall issue separate certificates to the optionee with
respect to Options that are Non-Qualified Options and
Option that are ISOs.
D. Determination of Fair Market Value. If, at
the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market
value" shall be determined as of the date of grant or,
if the prices or quotes discussed in this sentence are
unavailable for such date, the last business day for
which such prices or quotes are available prior to the
<PAGE>
date of grant and shall mean (i) the average (on that
date) of the high and low prices of the Common Stock on
the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; or (ii) the
last reported sale price (on that date) of the Common
Stock on the Nasdaq National Market, if the Common
Stock is not then traded on a national securities
exchange; or (iii) the closing bid price (or average of
bid prices) last quoted (on that date) by an
established quotation service for over-the-counter
securities, if the Common Stock is not reported on the
Nasdaq National Market. If the Common Stock is not
publicly traded at the time an Option is granted under
the Plan, "fair market value" shall be deemed to be the
fair value of the Common Stock as determined by the
Committee after taking into consideration all factors
which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common
Stock in private transactions negotiated at arm's
length.
7. Option Duration. Subject to earlier termination as
provided in paragraphs 9 and 10 or in the agreement relating
to such Option, each Option shall expire on the date
specified by the Committee, but not more than (i) ten years
from the date of grant in the case of Options generally and
(ii) five years from the date of grant in the case of ISOs
granted to an employee owning stock possessing more than
ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Related Corporation,
as determined under paragraph 6(B). Subject to earlier
termination as provided in paragraphs 9 and 10, the term of
each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any
part of such ISO that is converted into a Non-Qualified
Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of
paragraphs 9 through 12, each Option granted under the Plan
shall be exercisable as follows:
A. Vesting. The Option shall either be fully
exercisable on the date of grant or shall become
exercisable thereafter in such installments as the
Committee may specify.
B. Full Vesting of Installments. Once an
installment becomes exercisable it shall remain
exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment
may be exercised at any time or from time to time, in
whole or in part, for up to the total number of shares
with respect to which it is then exercisable.
D. Acceleration of Vesting. The Committee shall
have the right to accelerate the date on which any
installment of any Option becomes exercisable; provided
that the Committee shall not, without the consent of an
optionee, accelerate the permitted exercise date of any
installment of any Option granted to any employee as an
ISO (and not previously converted into a Non-Qualified
Option pursuant to paragraph 16) if such acceleration
would violate the annual vesting limitation contained
in Section 422(d) of the Code, as described in
paragraph 6(C).
9. Termination of Employment. Unless otherwise
specified in the agreement relating to such ISO, if an ISO
optionee ceases to be employed by the Company and all
Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further
installments of his or her ISOs shall become exercisable,
and his or her ISOs shall terminate on the earlier of (a)
the passage of three months after the date of termination of
his or her employment, or (b) expiration dates, except to
<PAGE>
the extent that such ISOs (or unexercised installments
thereof) have been converted into Non-Qualified Options
pursuant to paragraph 16. For purposes of this paragraph 9,
employment shall be considered as continuing uninterrupted
during any bona fide leave of absence (such as those
attributable to illness, military obligations or
governmental service) provided that the period of such leave
does not exceed 90 days or, if longer, any period during
which such optionee's right to reemployment is guaranteed by
statute or by contract. A bona fide leave of absence with
the written approval of the Committee shall not be
considered an interruption of employment under this
paragraph 9, provided that such written approval
contractually obligates the Company or any Related
Corporation to continue the employment of the optionee after
the approved period of absence. ISOs granted under the Plan
shall not be affected by any change of employment within or
among the Company and Related Corporations, so long as the
optionee continues to be an employee of the Company or any
Related Corporation. Nothing in the Plan shall be deemed to
give any optionee the right to be retained in employment or
other service by the Company or any Related Corporation for
any period of time.
10. Death; Disability.
A. Death. If an ISO optionee ceases to be
employed by the Company and all Related Corporations by
reason of his or her death, any ISO owned by such
optionee may be exercised, to the extent otherwise
exercisable on the date of death, by the estate,
personal representative or beneficiary who has acquired
the ISO by will or by the laws of descent and
distribution, until the earlier of (i) the specified
expiration date of the ISO or (ii) 180 days from the
date of the optionee's death.
B. Disability. If an ISO optionee ceases to be
employed by the Company and all Related Corporations by
reason of his or her disability, such optionee shall
have the right to exercise any ISO held by him or her
on the date of termination of employment, to the extent
of the number of shares with respect to which he or she
could have exercised it on that date, until the earlier
of (i) the specified expiration date of the ISO or
(ii) 180 days from the date of the termination of the
optionee's employment. For the purposes of the Plan,
the term "disability" shall mean "permanent and total
disability" as defined in Section 22(e)(3) of the Code
or any successor statute.
11. Assignability. No ISO shall be assignable or
transferable by the optionee except by will or by the laws
of descent and distribution, and during the lifetime of an
optionee each Option shall be exercisable only by such
optionee. Non-Qualified Options shall be transferable to
the extent set forth in the agreement relating thereto.
12. Terms and Conditions of Options. Options shall be
evidenced by instruments (which need not be identical) in
such forms as the Committee may from time to time approve.
Such instruments shall conform to the terms and conditions
set forth in paragraphs 6 through 11 hereof and may contain
such other provisions as the Committee deems advisable which
are not inconsistent with the Plan, including restrictions
applicable to shares of Common Stock issuable upon exercise
of Options. The Committee may specify that any Non-
Qualified Option shall be subject to the restrictions set
forth herein with respect to ISOs, or to such other
termination and cancellation provisions as the Committee may
determine. The Committee may from time to time confer
authority and responsibility on one or more of its own
members and/or one or more officers of the Company to
execute and deliver such instruments. The proper officers
of the Company are authorized and directed to take any and
all action necessary or advisable from time to time to carry
out the terms of such instruments.
<PAGE>
13. Adjustments. Upon the occurrence of any of the
following events, an optionee's rights with respect to
Options granted to such optionee hereunder shall be adjusted
as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and
the Company relating to such Option:
A. Stock Dividends and Stock Splits. If the
shares of Common Stock shall be subdivided or combined
into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a
stock dividend on its outstanding Common Stock, the
number of shares of Common Stock deliverable upon the
exercise of Options shall be appropriately increased or
decreased proportionately, and appropriate adjustments
shall be made in the purchase price per share to
reflect such subdivision, combination or stock
dividend.
B. Consolidations or Mergers. If the Company is
to be consolidated with or acquired by another entity
in a merger or other reorganization in which the
holders of the outstanding voting stock of the Company
immediately preceding the consummation of such event,
shall, immediately following such event, hold, as a
group, less than a majority of the voting securities of
the surviving or successor entity, or in the event of a
sale of all or substantially all of the Company's
assets or otherwise (each, an "Acquisition"), the
Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding Options,
either (i) make appropriate provision for the
continuation of such Options by substituting on an
equitable basis for the shares then subject to such
Options either (a) the consideration payable with
respect to the outstanding shares of Common Stock in
connection with the Acquisition, (b) shares of stock of
the surviving or successor corporation or (c) such
other securities as the Successor Board deems
appropriate, the fair market value of which shall not
materially exceed the fair market value of the shares
of Common Stock subject to such Options immediately
preceding the Acquisition; or (ii) upon written notice
to the optionees, provide that all Options must be
exercised, to the extent then exercisable or to be
exercisable as a result of the Acquisition, within a
specified number of days of the date of such notice, at
the end of which period the Options shall terminate; or
(iii) terminate all Options in exchange for a cash
payment equal to the excess of the fair market value of
the shares subject to such Options (to the extent then
exercisable or to be exercisable as a result of the
Acquisition) over the exercise price thereof.
C. Recapitalization or Reorganization. In the
event of a recapitalization or reorganization of the
Company (other than a transaction described in
subparagraph B above) pursuant to which securities of
the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an
optionee upon exercising an Option shall be entitled to
receive for the purchase price paid upon such exercise
the securities he or she would have received if he or
she had exercised such Option prior to such
recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the
foregoing, any adjustments made pursuant to
subparagraphs A, B or C with respect to ISOs shall be
made only after the Committee, after consulting with
counsel for the Company, determines whether such
adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424 of the
Code) or would cause any adverse tax consequences for
the holders of such ISOs. If the Committee determines
that such adjustments made with respect to ISOs would
constitute a modification of such ISOs or would cause
adverse tax consequences to the holders, it may refrain
from making such adjustments.
<PAGE>
E. Dissolution or Liquidation. In the event of
the proposed dissolution or liquidation of the Company,
each Option will terminate immediately prior to the
consummation of such proposed action or at such other
time and subject to such other conditions as shall be
determined by the Committee.
F. Issuances of Securities. 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 Options.
No adjustments shall be made for dividends paid in cash
or in property other than securities of the Company.
G. Fractional Shares. No fractional shares
shall be issued under the Plan and the optionee shall
receive from the Company cash in lieu of such
fractional shares.
H. Adjustments. Upon the happening of any of
the events described in subparagraphs A, B or C above,
the class and aggregate number of shares set forth in
paragraph 4 hereof that are subject to Options which
previously have been or subsequently may be granted
under the Plan shall also be appropriately adjusted to
reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine
the specific adjustments to be made under this
paragraph 13 and, subject to paragraph 2, its
determination shall be conclusive.
14. Means of Exercising Options. An Option (or any
part or installment thereof) shall be exercised by giving
written notice to the Company at its principal office
address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being
exercised and specify the number of shares as to which such
Option is being exercised, accompanied by full payment of
the purchase price therefor either (a) in United States
dollars in cash or by check, (b) at the discretion of the
Committee, through delivery of shares of Common Stock having
a fair market value equal as of the date of the exercise to
the cash exercise price of the Option, (c) at the discretion
of the Committee, by delivery of the optionee's personal
recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable
Federal rate, as defined in Section 1274(d) of the Code,
(d) at the discretion of the Committee and consistent with
applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and
an authorization to the broker or selling agent to pay that
amount to the Company, which sale shall be at the
participant's direction at the time of exercise, or (e) at
the discretion of the Committee, by any combination of (a),
(b), (c) and (d) above. If the Committee exercises its
discretion to permit payment of the exercise price of an ISO
by means of the methods set forth in clauses (b), (c), (d)
or (e) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in
question. The holder of an Option shall not have the rights
of a shareholder with respect to the shares covered by his
Option until the date of issuance of a stock certificate to
such holder for such shares. Except as expressly provided
above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be
made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted
by the Board on February 12, 1997, subject, with respect to
the validation of ISOs granted under the Plan, to approval
of the Plan by the stockholders of the Company at the next
Meeting of Stockholders or, in lieu thereof, by written
consent. If the approval of stockholders is not obtained
prior to February 11, 1998, any grants of ISOs under the
<PAGE>
Plan made prior to that date will be rescinded. The Plan
shall expire at the end of the day on February 12, 2007
(except as to Options outstanding on that date). Subject to
the provisions of paragraph 5 above, Options may be granted
under the Plan prior to the date of stockholder approval of
the Plan. The Board may terminate or amend the Plan in any
respect at any time, except that, without the approval of
the stockholders obtained within 12 months before or after
the Board adopts a resolution authorizing any of the
following actions: (a) the total number of shares that may
be issued under the Plan may not be increased (except by
adjustment pursuant to paragraph 13); (b) the provisions of
paragraph 3 regarding eligibility for grants of ISOs may not
be modified; (c) the provisions of paragraph 6(B) regarding
the exercise price at which shares may be offered pursuant
to ISOs may not be modified (except by adjustment pursuant
to paragraph 13) and (d) the expiration date of the Plan may
not be extended. Except as otherwise provided in this
paragraph 15, in no event may action of the Board or
stockholders alter or impair the rights of an optionee,
without such optionee's consent, under any Option previously
granted to such optionee.
16. Conversion of ISOs into Non-Qualified Options.
Subject to paragraph 13(D), without the prior written
consent of the holder of an ISO, the Committee shall not
alter the terms of such ISO (including the means of
exercising such ISO) if such alteration would constitute a
modification (within the meaning of Section 424(h)(3) of the
Code). The Committee, at the written request or with the
written consent of any optionee, may in its discretion take
such actions as may be necessary to convert such optionee's
ISOs (or any installments or portions of installments
thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to
the expiration of such ISOs, regardless of whether the
optionee is an employee of the Company or a Related
Corporation at the time of such conversion. Such actions
may include, but shall not be limited to, extending the
exercise period or reducing the exercise price of the
appropriate installments of such ISOs. At the time of such
conversion, the Committee (with the consent of the optionee)
may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be
inconsistent with this Plan. Nothing in the Plan shall be
deemed to give any optionee the right to have such
optionee's ISOs converted into Non-Qualified Options, and no
such conversion shall occur until and unless the Committee
takes appropriate action. Upon the taking of such action
the Company shall issue separate certificates to the
optionee with respect to Options that are Non-Qualified
Options and Options that are ISOs.
17. Application Of Funds. The proceeds received by the
Company from the sale of shares pursuant to Options granted
under the Plan shall be used for general corporate purposes.
18. Notice to Company of Disqualifying Disposition. By
accepting an ISO granted under the Plan, each optionee
agrees to notify the Company in writing immediately after
such optionee makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and
regulations thereunder) of any stock acquired pursuant to
the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition
occurring on or before the later of (a) the date two years
following the date the ISO was granted or (b) the date
one year following the date the ISO was exercised.
19. Withholding of Additional Income Taxes. Upon the
exercise of a Non-Qualified Option, the transfer of a Non-
Qualified Stock Option pursuant to an arm's length
transaction, the making of a Disqualifying Disposition (as
defined in paragraph 18), the vesting or transfer of
restricted stock or securities acquired on the exercise of a
Option hereunder, or the making of a distribution or other
payment with respect to such stock or securities, the
Company may withhold taxes in respect of amounts that
constitute compensation includible in gross income. The
Committee in its discretion may condition (i) the exercise
<PAGE>
of an Option (ii) the transfer of a Non-Qualified Stock
Option, or (iii) the vesting or transferability of
restricted stock or securities acquired by exercising an
Option, on the optionee's making satisfactory arrangement
for such withholding. Such arrangement may include payment
by the optionee in cash or by check of the amount of the
withholding taxes or, at the discretion of the Committee, by
the optionee's delivery of previously held shares of Common
Stock or the withholding from the shares of Common Stock
otherwise deliverable upon exercise of a Option shares
having an aggregate fair market value equal to the amount of
such withholding taxes.
20. Governmental Regulation. The Company's obligation
to sell and deliver shares of the Common Stock under this
Plan is subject to the approval of any governmental
authority required in connection with the authorization,
issuance or sale of such shares.
Government regulations may impose reporting or other
obligations on the Company with respect to the Plan. For
example, the Company may be required to send tax information
statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file
tax information returns reporting the income received by
optionees in connection with the Plan.
21. Governing Law. The validity and construction of
the Plan and the instruments evidencing Options shall be
governed by the laws of The Commonwealth of Massachusetts,
or the laws of any jurisdiction in which the Company or its
successors in interest may be organized.
<PAGE>
EXHIBIT 4.6
AMERICAN POWER CONVERSION CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
Article 1 - Purpose.
This 1997 Employee Stock Purchase Plan (the "Plan") is
intended to encourage stock ownership by all eligible
employees of American Power Conversion Corporation (the
"Company"), a Massachusetts corporation, and its
participating subsidiaries (as defined in Article 17) so
that they may share in the growth of the Company by
acquiring or increasing their proprietary interest in the
Company. The Plan is designed to encourage eligible
employees to remain in the employ of the Company and its
participating subsidiaries. The Plan is intended to
constitute an "employee stock purchase plan" within the
meaning of Section 423(b) of the Internal Revenue Code
of 1986, as amended (the "Code").
Article 2 - Administration of the Plan.
The Plan may be administered by a committee appointed by
the Board of Directors of the Company (the "Committee").
The Committee shall consist of not less than two members of
the Company's Board of Directors. The Board of Directors
may from time to time remove members from, or add members
to, the Committee. Vacancies on the Committee, howsoever
caused, shall be filled by the Board of Directors. The
Committee may select one of its members as Chairman, and
shall hold meetings at such times and places as it may
determine. Acts by a majority of the Committee, or acts
reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the
Committee.
The interpretation and construction by the Committee of
any provisions of the Plan or of any option granted under it
shall be final, unless otherwise determined by the Board of
Directors. The Committee may from time to time adopt such
rules and regulations for carrying out the Plan as it may
deem best, provided that any such rules and regulations
shall be applied on a uniform basis to all employees under
the Plan. No member of the Board of Directors or the
Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any option
granted under it.
In the event the Board of Directors fails to appoint or
refrains from appointing a Committee, the Board of Directors
shall have all power and authority to administer the Plan.
In such event, the word "Committee" wherever used herein
shall be deemed to mean the Board of Directors.
Article 3 - Eligible Employees.
All employees of the Company or any of its participating
subsidiaries whose customary employment is more than
20 hours per week and for more than five months in any
calendar year shall be eligible to receive options under the
Plan to purchase common stock of the Company, and all
eligible employees shall have the same rights and privileges
hereunder. Persons who are eligible employees on the first
business day of any Payment Period (as defined in Article 5)
shall receive their options as of such day. Persons who
become eligible employees after any date on which options
are granted under the Plan shall be granted options on the
<PAGE>
first day of the next succeeding Payment Period on which
options are granted to eligible employees under the Plan.
In no event, however, may an employee be granted an option
if such employee, immediately after the option was granted,
would be treated as owning stock possessing five percent or
more of the total combined voting power or value of all
classes of stock of the Company or of any parent corporation
or subsidiary corporation, as the terms "parent corporation"
and "subsidiary corporation" are defined in Section 424(e)
and (f) of the Code. For purposes of determining stock
ownership under this paragraph, the rules of Section 424(d)
of the Code shall apply, and stock which the employee may
purchase under outstanding options shall be treated as stock
owned by the employee.
Article 4 - Stock Subject to the Plan.
The stock subject to the options under the Plan shall be
shares of the Company's authorized but unissued common
stock, par value $.01 per share (the "Common Stock"), or
shares of Common Stock reacquired by the Company, including
shares purchased in the open market. The aggregate number
of shares which may be issued pursuant to the Plan is
1,000,000, subject to adjustment as provided in Article 12.
If any option granted under the Plan shall expire or
terminate for any reason without having been exercised in
full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject thereto
shall again be available under the Plan.
Article 5 - Payment Period and Stock Options.
The first Payment Period during which payroll deductions
will be accumulated under the Plan shall commence on January
1, 1998 and shall end on December 31, 1998. For the
remainder of the duration of the Plan, Payment Periods shall
consist of the twelve-month periods commencing on January
1st and ending on December 31st of each calendar year.
Once each year, on the first business day of each Payment
Period, the Company will grant to each eligible employee who
is then a participant in the Plan an option to purchase on
the last day of such Payment Period, at the Option Price
hereinafter provided for, a maximum of 3,000 shares, on
condition that such employee remains eligible to participate
in the Plan throughout the remainder of such Payment Period.
The participant shall be entitled to exercise the option so
granted only to the extent of the participant's accumulated
payroll deductions on the last day of such Payment Period.
If the participant's accumulated payroll deductions on the
last day of the Payment Period would enable the participant
to purchase more than 3,000 shares except for the 3,000 -
share limitation, the excess of the amount of the
accumulated payroll deductions over the aggregate purchase
price of the 3,000 shares shall be promptly refunded to the
participant by the Company, without interest. The Option
Price per share for each Payment Period shall be the lesser
of (i) 85% of the average market price of the Common Stock
on the first business day of the Payment Period or (ii) 85%
of the average market price of the Common Stock on the last
business day of the Payment Period, in either event rounded
up to the nearest cent. The foregoing limitation on the
number of shares subject to option and the Option Price
shall be subject to adjustment as provided in Article 12.
For purposes of the Plan, the term "average market price"
on any date means (i) the average (on that date) of the high
and low prices of the Common Stock on the principal national
securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market, if
the Common Stock is not then traded on a national securities
<PAGE>
exchange; or (iii) the average of the closing bid and asked
prices last quoted (on that date) by an established
quotation service for over-the-counter securities, if the
Common Stock is not reported on the NASDAQ National Market;
or (iv) if the Common Stock is not publicly traded, the fair
market value of the Common Stock as determined by the
Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent
sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
For purposes of the Plan, the term "business day" means a
day on which there is trading on the NASDAQ National Market
or the aforementioned national securities exchange,
whichever is applicable pursuant to the preceding paragraph;
and if neither is applicable, a day that is not a Saturday,
Sunday or legal holiday in Rhode Island.
No employee shall be granted an option which permits the
employee's right to purchase stock under the Plan, and under
all other Section 423(b) employee stock purchase plans of
the Company and any parent or subsidiary corporations, to
accrue at a rate which exceeds $25,000 of fair market value
of such stock (determined on the date or dates that options
on such stock were granted) for each calendar year in which
such option is outstanding at any time. The purpose of the
limitation in the preceding sentence is to comply with
Section 423(b)(8) of the Code. If the participant's
accumulated payroll deductions on the last day of the
Payment Period would otherwise enable the participant to
purchase Common Stock in excess of the Section 423(b)(8)
limitation described in this paragraph, the excess of the
amount of the accumulated payroll deductions over the
aggregate purchase price of the shares actually purchased
shall be promptly refunded to the participant by the
Company, without interest.
Article 6 - Exercise of Option.
Each eligible employee who continues to be a participant
in the Plan on the last day of a Payment Period shall be
deemed to have exercised his or her option on such date and
shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the
purpose of the Plan as the participant's accumulated payroll
deductions on such date will pay for at the Option Price,
subject to the 3,000 -share limit of the option and the
Section 423(b)(8) limitation described in Article 5. If the
individual is not a participant on the last day of a Payment
Period, then he or she shall not be entitled to exercise his
or her option. Only full shares of Common Stock may be
purchased under the Plan. Unused payroll deductions
remaining in a participant's account at the end of a Payment
Period by reason of the inability to purchase a fractional
share shall be carried forward to the next Payment Period.
Article 7 - Authorization for Entering the Plan.
An employee may elect to enter the Plan by filling out,
signing and delivering to the Company an authorization:
A. Stating the percentage to be deducted regularly
from the employee's pay;
B. Authorizing the purchase of stock for the
employee in each Payment Period in accordance with the
terms of the Plan; and
C. Specifying the exact name or names in which stock
purchased for the employee is to be issued as provided
under Article 11 hereof.
<PAGE>
Such authorization must be received by the Company at least
ten days before the first day of the next succeeding Payment
Period and shall take effect only if the employee is an
eligible employee on the first business day of such Payment
Period.
Unless a participant files a new authorization or
withdraws from the Plan, the deductions and purchases under
the authorization the participant has on file under the Plan
will continue from one Payment Period to succeeding Payment
Periods as long as the Plan remains in effect.
The Company will accumulate and hold for each
participant's account the amounts deducted from his or her
pay. No interest will be paid on these amounts.
Article 8 - Maximum Amount of Payroll Deductions.
An employee may authorize payroll deductions in an amount
(expressed as a whole percentage) not less than one percent
(1%) but not more than ten percent (10%) of the employee's
base pay or salary.
Article 9 - Change in Payroll Deductions.
Deductions may not be increased or decreased during a
Payment Period. However, a participant may withdraw in full
from the Plan.
Article 10 - Withdrawal from the Plan.
A participant may withdraw from the Plan (in whole but
not in part) at any time prior to the last day of a Payment
Period by delivering a withdrawal notice to the Company.
To re-enter the Plan, an employee who has previously
withdrawn must file a new authorization at least ten days
before the first day of the next Payment Period in which he
or she wishes to participate. The employee's re-entry into
the Plan becomes effective at the beginning of such Payment
Period, provided that he or she is an eligible employee on
the first business day of the Payment Period.
Article 11 - Issuance of Stock.
Certificates for stock issued to participants shall be
delivered as soon as practicable after each Payment Period
by the Company's transfer agent.
Stock purchased under the Plan shall be issued only in
the name of the participant, or if the participant's
authorization so specifies, in the name of the participant
and another person of legal age as joint tenants with rights
of survivorship.
Article 12 - Adjustments.
Upon the happening of any of the following described
events, a participant's rights under options granted under
the Plan shall be adjusted as hereinafter provided:
A. In the event that the shares of Common Stock
shall be subdivided or combined into a greater or
smaller number of shares or if, upon a reorganization,
split-up, liquidation, recapitalization or the like of
the Company, the shares of Common Stock shall be
exchanged for other securities of the Company, each
participant shall be entitled, subject to the conditions
<PAGE>
herein stated, to purchase such number of shares of
Common Stock or amount of other securities of the
Company as were exchangeable for the number of shares of
Common Stock that such participant would have been
entitled to purchase except for such action, and
appropriate adjustments shall be made in the purchase
price per share to reflect such subdivision, combination
or exchange; and
B. In the event the Company shall issue any of its
shares as a stock dividend upon or with respect to the
shares of stock of the class which shall at the time be
subject to option hereunder, each participant upon
exercising such an option shall be entitled to receive
(for the purchase price paid upon such exercise) the
shares as to which the participant is exercising his or
her option and, in addition thereto (at no additional
cost), such number of shares of the class or classes in
which such stock dividend or dividends were declared or
paid, and such amount of cash in lieu of fractional
shares, as is equal to the number of shares thereof and
the amount of cash in lieu of fractional shares,
respectively, which the participant would have received
if the participant had been the holder of the shares as
to which the participant is exercising his or her option
at all times between the date of the granting of such
option and the date of its exercise.
Upon the happening of any of the foregoing events, the
class and aggregate number of shares set forth in Article 4
hereof which are subject to options which have been or may
be granted under the Plan and the limitations set forth in
the second paragraph of Article 5 shall also be
appropriately adjusted to reflect the events specified in
paragraphs A and B above. Notwithstanding the foregoing,
any adjustments made pursuant to paragraphs A or B shall be
made only after the Committee, based on advice of counsel
for the Company, determines whether such adjustments would
constitute a "modification" (as that term is defined in
Section 424 of the Code). If the Committee determines that
such adjustments would constitute a modification, it may
refrain from making such adjustments.
If the Company is to be consolidated with or acquired by
another entity in a merger, a sale of all or substantially
all of the Company's assets or otherwise (an "Acquisition"),
the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the
"Successor Board") shall, with respect to options then
outstanding under the Plan, either (i) make appropriate
provision for the continuation of such options by arranging
for the substitution on an equitable basis for the shares
then subject to such options either (a) the consideration
payable with respect to the outstanding shares of the Common
Stock in connection with the Acquisition, (b) shares of
stock of the successor corporation, or a parent or
subsidiary of such corporation, or (c) such other securities
as the Successor Board deems appropriate, the fair market
value of which shall not materially exceed the fair market
value of the shares of Common Stock subject to such options
immediately preceding the Acquisition; or (ii) terminate
each participant's options in exchange for a cash payment
equal to the excess of (a) the fair market value on the date
of the Acquisition, of the number of shares of Common Stock
that the participant's accumulated payroll deductions as of
the date of the Acquisition could purchase, at an option
price determined with reference only to the first business
day of the applicable Payment Period and subject to the
3,000-share, Code Section 423(b)(8) and fractional-share
limitations on the amount of stock a participant would be
entitled to purchase, over (b) the result of multiplying
such number of shares by such option price.
The Committee or Successor Board shall determine the
adjustments to be made under this Article 12, and its
determination shall be conclusive.
Article 13 - No Transfer or Assignment of Employee's Rights.
An option granted under the Plan may not be transferred
or assigned and may be exercised only by the participant.
<PAGE>
Article 14 - Termination of Employee's Rights.
Whenever a participant ceases to be an eligible employee
because of retirement, voluntary or involuntary termination,
resignation, layoff, discharge, death or for any other
reason, his or her rights under the Plan shall immediately
terminate, and the Company shall promptly refund, without
interest, the entire balance of his or her payroll deduction
account under the Plan. Notwithstanding the foregoing,
eligible employment shall be treated as continuing intact
while a participant is on military leave, sick leave or
other bona fide leave of absence, for up to 90 days, or for
so long as the participant's right to re-employment is
guaranteed either by statute or by contract, if longer than
90 days.
If a participant's payroll deductions are interrupted by
any legal process, a withdrawal notice will be considered as
having been received from the participant on the day the
interruption occurs.
Article 15 - Termination and Amendments to Plan.
Unless terminated sooner as provided below, the Plan
shall terminate at the end of the day February 11, 2007.
The Plan may be terminated at any time by the Company's
Board of Directors but such termination shall not affect
options then outstanding under the Plan. It will terminate
in any case when all or substantially all of the unissued
shares of stock reserved for the purposes of the Plan have
been purchased. If at any time shares of stock reserved for
the purpose of the Plan remain available for purchase but
not in sufficient number to satisfy all then unfilled
purchase requirements, the available shares shall be
apportioned among participants in proportion to the amount
of payroll deductions accumulated on behalf of each
participant that would otherwise be used to purchase stock,
and the Plan shall terminate. Upon such termination or any
other termination of the Plan, all payroll deductions not
used to purchase stock will be refunded, without interest.
The Committee or the Board of Directors may from time to
time adopt amendments to the Plan provided that, without the
approval of the stockholders of the Company, no amendment
may (i) increase the number of shares that may be issued
under the Plan; (ii) change the class of employees eligible
to receive options under the Plan, if such action would be
treated as the adoption of a new plan for purposes of
Section 423(b) of the Code; or (iii) cause Rule 16b-3 under
the Securities Exchange Act of 1934 to become inapplicable
to the Plan.
Article 16 - Limits on Sale of Stock Purchased under the
Plan.
The Plan is intended to provide shares of Common Stock
for investment and not for resale. The Company does not,
however, intend to restrict or influence any employee in the
conduct of his or her own affairs. An employee may,
therefore, sell stock purchased under the Plan at any time
the employee chooses, subject to compliance with any
applicable federal or state securities laws and subject to
any restrictions imposed under Article 21 to ensure that tax
withholding obligations are satisfied. THE EMPLOYEE ASSUMES
THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE
STOCK.
Article 17 - Participating Subsidiaries.
The term "participating subsidiary" shall mean any
present or future subsidiary of the Company, as that term is
defined in Section 424(f) of the Code, which is designated
from time to time by the Board of Directors to participate
<PAGE>
in the Plan. The Board of Directors shall have the power to
make such designation before or after the Plan is approved
by the stockholders.
Article 18 - Optionees Not Stockholders.
Neither the granting of an option to an employee nor the
deductions from his or her pay shall constitute such
employee a stockholder of the shares covered by an option
until such shares have been actually purchased by the
employee.
Article 19 - Application of Funds.
The proceeds received by the Company from the sale of
Common Stock pursuant to options granted under the Plan will
be used for general corporate purposes.
Article 20 - Notice to Company of Disqualifying Disposition.
By electing to participate in the Plan, each participant
agrees to notify the Company in writing immediately after
the participant transfers Common Stock acquired under the
Plan, if such transfer occurs within two years after the
first business day of the Payment Period in which such
Common Stock was acquired. Each participant further agrees
to provide any information about such a transfer as may be
requested by the Company or any subsidiary corporation in
order to assist it in complying with the tax laws. Such
dispositions generally are treated as "disqualifying
dispositions" under Sections 421 and 424 of the Code, which
have certain tax consequences to participants and to the
Company and its participating subsidiaries.
Article 21 - Withholding of Additional Income Taxes.
By electing to participate in the Plan, each participant
acknowledges that the Company and its participating
subsidiaries are required to withhold taxes with respect to
the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the
Plan, and each participant agrees that the Company and its
participating subsidiaries may deduct additional amounts
from the participant's compensation, when amounts are added
to the participant's account, used to purchase Common Stock
or refunded, in order to satisfy such withholding
obligations. Each participant further acknowledges that
when Common Stock is purchased under the Plan the Company
and its participating subsidiaries may be required to
withhold taxes with respect to all or a portion of the
difference between the fair market value of the Common Stock
purchased and its purchase price, and each participant
agrees that such taxes may be withheld from compensation
otherwise payable to such participant. It is intended that
tax withholding will be accomplished in such a manner that
the full amount of payroll deductions elected by the
participant under Article 7 will be used to purchase Common
Stock. However, if amounts sufficient to satisfy applicable
tax withholding obligations have not been withheld from
compensation otherwise payable to any participant, then,
notwithstanding any other provision of the Plan, the Company
may withhold such taxes from the participant's accumulated
payroll deductions and apply the net amount to the purchase
of Common Stock, unless the participant pays to the Company,
prior to the exercise date, an amount sufficient to satisfy
such withholding obligations. Each participant further
acknowledges that the Company and its participating
subsidiaries may be required to withhold taxes in connection
with the disposition of stock acquired under the Plan and
agrees that the Company or any participating subsidiary may
take whatever action it considers appropriate to satisfy
such withholding requirements, including deducting from
compensation otherwise payable to such participant an amount
sufficient to satisfy such withholding requirements or
<PAGE>
conditioning any disposition of Common Stock by the
participant upon the payment to the Company or such
subsidiary of an amount sufficient to satisfy such
withholding requirements.
Article 22 - Governmental Regulations.
The Company's obligation to sell and deliver shares of
Common Stock under the Plan is subject to the approval of
any governmental authority required in connection with the
authorization, issuance or sale of such shares.
Government regulations may impose reporting or other
obligations on the Company with respect to the Plan. For
example, the Company may be required to identify shares of
Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and
former employees who transfer title to such shares.
Article 23 - Governing Law.
The validity and construction of the Plan shall be
governed by the laws of Commonwealth of Massachusetts,
without giving effect to the principles of conflicts of law
thereof.
Article 24 - Approval of Board of Directors and Stockholders
of the Company.
The Plan was adopted by the Board of Directors on
February 12, 1997 and was approved by the stockholders of
the Company on April 21, 1997.
<PAGE>
EXHIBIT 5.1
_____________________
TESTA, HURWITZ & THIBEAULT, LLP
_____________________
Attorneys at Law
High Street Tower, 125 High Street
Boston, Massachusetts 02110
Office (617) 248-7000 Fax (617) 248-7100
July 31, 1997
American Power Conversion Corporation
132 Fairgrounds Road
West Kingston, RI 02892
Re: Registration Statement on Form S-8 Relating to the
1993 Non-Employee Director Stock Option Plan,
1997 Non-Employee Director Stock Option Plan, the
1997 Stock Option Plan and the 1997 Employee Stock
Purchase Plan (collectively, the "Plans")
Ladies and Gentlemen:
Reference is made to the above-captioned Registration
Statement on Form S-8 (the "Registration Statement") filed
by American Power Conversion Corporation (the "Company")
with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to an aggregate
of 7,240,000 shares of Common Stock, $.01 par value per
share, of the Company issuable pursuant to the Plans (the
"Shares").
We are counsel to the Company and are familiar with the
proceedings of its stockholders and Board of Directors. We
have examined original or certified copies of the Company's
Articles of Organization, as amended, the Company's by-laws,
as amended, the corporate records of the Company to the date
hereof, and such other certificates, documents, records and
materials as we have deemed necessary in connection with
this opinion letter.
We are members only of the Bar of the Commonwealth of
Massachusetts and are not experts in, and express no opinion
regarding, the laws of any jurisdiction other than the
Commonwealth of Massachusetts and the United States of
America.
Based upon and subject to the foregoing, we are of the
opinion that the Shares issued or proposed to be issued by
the Company pursuant to the Plans will be, upon receipt of
the consideration provided for in the Plans, validly issued,
fully paid and nonassessable after issuance of such Shares
in accordance with the terms of the Plans.
<PAGE>
We hereby consent to the filing of this opinion as
Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
TESTA, HURWITZ & THIBEAULT, LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement on Form S-8 of American Power
Conversion Corporation and related prospectus pertaining to
the 1993 Non-Employee Director Stock Option Plan, the 1997
Non-Employee Director Stock Option Plan, the 1997 Stock
Option Plan and the 1997 Employee Stock Purchase Plan of our
report dated February 10, 1997, relating to the consolidated
balance sheets of American Power Conversion Corporation as
of December 31, 1996 and 1995, and related consolidated
statements of income, shareholders' equity and cash flows
for each of the years in the three year period ended
December 31, 1996, and related schedule, which report
appears in the 1996 annual report on Form 10-K of American
Power Conversion Corporation.
(signed) KPMG Peat Marwick LLP
Providence, Rhode Island
July 29, 1997
