<PAGE>
As filed with the Securities and Exchange Commission on December 10, 1996
File No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________________
CABLETRON SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2797263
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
35 INDUSTRIAL WAY
ROCHESTER, NEW HAMPSHIRE 03867
(Address of principal executive offices, including zip code)
_________________________
NETLINK, INC. 1993 STOCK PLAN
_________________________
(Full title of the plan)
David J. Kirkpatrick
Director of Finance and
Chief Financial Officer
Cabletron Systems, Inc.
35 Industrial Way
Rochester, New Hampshire 03867
(603) 332-9400
_________________________
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum Amount of
Title of securities to be Amount to be offering price per aggregate offering registration
registered registered share (1) price (1) fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $0.01 679,345 shares $1.00 $679,345 $205.86
- -------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ The maximum aggregate offering price for the shares of Cabletron Systems,
Inc. common stock, par value $0.01, offered hereby is based on the weighted
average per share exercise price of the options pursuant to which such shares
may be issued.
================================================================================
Exhibit Index on page 8.
-1-
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates the following documents herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
February 29, 1996 (which incorporates by reference certain information from
the Registrant's Proxy Statement relating to the 1996 Annual Meeting of
Shareholders) (File No. 1-10288).
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarters ended May
31, 1996 (as amended by Form 10-QA filed on July 18, 1996) and August 31,
1996 (File No. 1-10288).
(c) The Registrant's Current Report on Form 8-K filed on October 24, 1996 (File
No. 1-10288).
(d) The Registrant's Current Report on Form 8-K/A filed on October 25, 1996
(File No. 1-10288).
(e) The Registrant's Current Report on Form 8-K/A-2 filed on November 20, 1996
(File No. 1-10288).
(f) All other reports filed by the Registrant with the Securities and Exchange
Commission pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") since the end of the fiscal year
covered by the Registrant's Annual Report referred to above.
(g) The description of the common stock of the Registrant contained in the
Registrant's Registration Statement on Form 8-A (File No. 1-10288) filed on
April 9, 1989, including all amendments and reports filed for the purpose
of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-
effective amendment which indicates that all securities offered have been sold
or which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not required.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
No material interests.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-2-
<PAGE>
Section 145 of the Delaware General Corporation Law, as amended, provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal or investigative (other than an
action by or in the right of the corporation) by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Section 145 further
provides that a corporation similarly may indemnify any such person serving in
any such capacity who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor, against expenses actually and
reasonably incurred in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or such other
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to include in its certificate of incorporation a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law (relating to unlawful payment of dividends and
unlawful stock purchase and redemption), or (iv) for any transaction from which
the director derived an improper personal benefit.
The Registrant's Restated Certificate of Incorporation, as amended,
provides that the Company's Directors shall not be liable to the Registrant or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent that exculpation from liabilities is not
permitted under the Delaware General Corporation Law as in effect at the time
such liability is determined. The Restated Certificate of Incorporation, as
amended, further provides that the Registrant shall indemnify its directors and
officers to the full extent permitted by the law of the State of Delaware.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
-3-
<PAGE>
<TABLE>
<CAPTION>
Exhibit
<C> <S>
4.1. Specimen stock certificate representing Cabletron Common Stock
which is incorporated by reference to Exhibit 4.1 of the Cabletron's
Registration Statement on Form S-1 (File No. 33-28055).
5. Opinion of Ropes & Gray.
23.1. Consent of KMPG Peat Marwick LLP.
23.2. Consent of Ropes & Gray (contained in the opinion filed as Exhibit
5 to this registration statement).
24. Power of Attorney (included in Part II of this registration
statement under the caption "Signatures").
99.1. Netlink, Inc. 1993 Stock Plan.
99.2. Form of Non-Qualified Stock Option Agreement used in connection with the 1993
Stock Plan.
99.3. Form of Incentive Stock Option Agreement used in connection with the 1993 Stock
Plan.
99.4. Form of Stock Option Assumption Agreement used in connection with the 1993 Stock
Plan.
</TABLE>
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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above
shall not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
-4-
<PAGE>
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
-5-
<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 Rochester, State of New Hampshire on this 10th day
of December, 1996.
By: /s/ S. Robert Levine
----------------------------
S. Robert Levine
President, Chief Executive
Officer and Director
Each person whose signature appears below constitutes and appoints S.
Robert Levine, Craig R. Benson and David J. Kirkpatrick, and each of them
individually, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement on Form S-8 to be filed by Cabletron
Systems, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to be
done in and about the premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or their substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement on Form S-8 has been signed below by the following
persons in the capacities shown on the date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ S. Robert Levine President, Chief Executive Officer December 10, 1996
- --------------------------- (principal executive officer) and
S. Robert Levine Director
/s/ David J. Kirkpatrick Director of Finance and Chief Financial December 10, 1996
- --------------------------- Officer (principal financial and
David J. Kirkpatrick accounting officer)
/s/ Craig R. Benson Chairman, Chief Operating Officer and December 10, 1996
- --------------------------- Director
Craig R. Benson
/s/ Michael D. Myerow Secretary and Director December 10, 1996
- ---------------------------
Michael D. Myerow
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Paul R. Duncan Director December 10, 1996
- ---------------------------
Paul R. Duncan
/s/ Donald F. McGuinness Director December 10, 1996
- ---------------------------
Donald F. McGuinness
</TABLE>
-7-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
- ------- ------
Number Title of Exhibit Number
- ------- ---------------- ------
<C> <S> <C>
4.1. Specimen stock certificate representing Cabletron Common Stock which
is incorporated by reference to Exhibit 4.1 of the Cabletron's
Registration Statement on Form S-1 (File No. 33-28055).
5. Opinion of Ropes & Gray.
23.1. Consent of KMPG Peat Marwick LLP.
23.2. Consent of Ropes & Gray (contained in the opinion filed as Exhibit 5 to
this registration statement).
24. Power of Attorney (included in Part II of this registration statement
under the caption "Signatures").
99.1 Netlink, Inc. 1993 Stock Plan.
99.2. Form of Non-Qualified Stock Option Agreement used in connection with
the 1993 Stock Plan.
99.3. Form of Incentive Stock Option Agreement used in connection with the
1993 Stock Plan.
99.4. Form of Stock Option Assumption Agreement used in connection with
the 1993 Stock Plan.
</TABLE>
<PAGE>
EXHIBIT 5
December 10, 1996
Cabletron Systems, Inc.
35 Industrial Way
Rochester, NH 03867
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-8 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, for the registration of 679,345 shares of common stock,
$0.01 par value per share (the "Shares"), of Cabletron Systems, Inc., a Delaware
corporation (the "Company"), issuable upon exercise of options assumed by the
Company that had previously been issued under the Netlink, Inc. 1993 Stock Plan
(the "Plan").
We have acted as counsel for the Company in connection with the
assumption of the Options and are familiar with the actions taken by the Company
in connection therewith. For purposes of this opinion we have examined the
Registration Statement, the Plan and such other documents as we have deemed
appropriate.
Based upon the foregoing, we are of the opinion that (i) the Shares
have been duly authorized and (ii) the Shares, when issued and sold in
accordance with the terms of the Options and Plan, will have been validly issued
and will be fully paid and non-assessable.
We hereby consent to your filing this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
<PAGE>
EXHIBIT 23.1
The Board of Directors
Cabletron Systems, Inc.:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
December 10, 1996
<PAGE>
EXHIBIT 99.1
NETLINK, INC.
1993 STOCK PLAN
---------------
1. PURPOSE. This 1993 Stock Plan (the "Plan") is intended to
-------
provide incentives: (a) to the officers and other employees of NETLINK, INC.
(the "Company"), and of any present or future parent or subsidiary of the
Company (collectively, "Related Corporations"), by providing them with
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"); (b) to
directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Options"); (c) to directors, officers, employees and consultants
of the Company and Related Corporations by providing them with awards of stock
in the Company ("Awards"); and (d) to directors, officers, employees and
consultants of the Company and Related Corporations by providing them with
opportunities to make direct purchases of stock in the Company ("Purchases").
Both ISOs and Non-Qualified Options are referred to hereafter individually as an
"Option" and collectively as "Options." Options, Awards and authorizations to
make Purchases are referred to hereafter collectively as "Stock Rights." 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 by
a committee appointed by the Board (the "Committee"); provided that, to
the extent required by Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 or any successor provision ("Rule 16b-3"), with
respect to specific grants of Stock Rights, the Plan shall be administered
by a disinterested administrator or administrators within the meaning of
Rule 16b-3. 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 Stock Right by the
Board (if so required by applicable state law), and subject to the terms
of the Plan, the
<PAGE>
Committee shall have the authority to (i) determine the employees of the
Company and Related Corporations (from among the class of employees
eligible under paragraph 3 to receive ISOs) to whom ISOs shall be granted,
and determine (from among the class of individuals and entities eligible
under paragraph 3 to receive Non-Qualified Options and Awards and to make
Purchases) to whom Non-Qualified Options, Awards and authorizations to
make Purchases may be granted; (ii) determine the time or times at which
Options or Awards shall be granted or Purchases made; (iii) determine the
option price of shares subject to each Option, which price shall not be
less than the minimum price specified in paragraph 6, and the purchase
price of shares subject to each Purchase; (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) determine
whether restrictions such as repurchase options are to be imposed on
shares subject to Options, Awards and Purchases and the nature of such
restrictions, if any, and (vii) 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 Stock Right 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
best. 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
Stock Right 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. Acts by a majority of the members of the Committee, 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 STOCK RIGHTS TO BOARD MEMBERS. Stock Rights may be
--------------------------------------
granted to members of the Board consistent with the provisions of the
first sentence of paragraph 2(A) above, if applicable. All grants of Stock
Rights to members of the Board shall in all other
<PAGE>
respects be made in accordance with the provisions of this Plan applicable
to other eligible persons. Consistent with the provisions of the first
sentence of paragraph 2(A) above, members of the Board who either (i) are
eligible to receive grants of Stock Rights pursuant to the Plan or (ii)
have been granted Stock Rights may vote on any matters affecting the
administration of the Plan or the grant of any Stock Rights pursuant to
the Plan, except that no such member shall act upon the granting to
himself of Stock Rights, 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 Stock Rights.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to employees
-----------------------------
of the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases 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 a Stock Right.
Granting of any Stock Right to any individual or entity shall neither entitle
the recipient to, nor disqualify the recipient from, participation in any other
grant of Stock Rights.
4. STOCK. The stock subject to Stock Rights shall be authorized but
-----
unissued shares of Common Stock of the Company, par value $.01 par value 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 1,223,813, subject to adjustment as provided in paragraph 13. If
any Stock Right 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 to such Stock
Right shall again be available for grants of Stock Rights under the Plan.
5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the Plan
------------------------
at any time after March 23, 1993 and prior to March 1, 2003. The date of grant
of a Stock Right under the Plan will be the date specified by the Committee at
the time it grants the Stock Right; provided, however, that such date shall not
be prior to the date on which the Committee acts to approve the grant.
<PAGE>
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
-------------------------------------
A. PRICE FOR NON-QUALIFIED OPTIONS. The exercise price per share
-------------------------------
specified in the agreement relating to each Non-Qualified Option granted
under the Plan shall in no event be less than the minimum legal
consideration required therefor under the laws of Delaware or 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.
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 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 List, 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. The "fair market value" of the stock issuable
upon exercise of an Option granted pursuant to the
<PAGE>
Plan within 120 days prior to the time the Common Stock is publicly traded
shall be deemed to be equal to the initial per share purchase price at
which the Common Stock is offered to the public. However, 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 as set forth 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 that any installment of any Option becomes
exercisable; provided that the
<PAGE>
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 after the passage of
three months from the date of termination of his or her employment, but in no
event later than on their specified expiration dates, except to 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. 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 grantee of any Stock Right 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 his death, by his estate, personal representative or
beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, at any time prior to the earlier of (i) the specified
expiration date of the ISO or (ii) the date one (1) year following the
date of the optionee's death.
<PAGE>
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 otherwise
exercisable on that date, at any time prior to the earlier of the
specified expiration date of the ISO or one (1) year 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 Stock Right shall be assignable or transferable
-------------
by the grantee except by will, by the laws of descent and distribution or
pursuant to a valid domestic relations order. Except as set forth in the
previous sentence, during the lifetime of a grantee each Stock Right shall be
exercisable only by such grantee.
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.
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
<PAGE>
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, 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, 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 the consideration payable with respect
to the outstanding shares of Common Stock in connection with the
Acquisition; or (ii) upon written notice to the optionees, provide that
all Options must be exercised, to the extent then exercisable, 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)
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 would have received if he had
exercised his 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.
E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the
<PAGE>
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 Stock Rights 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 STOCK RIGHTS. A Stock Right (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 Stock Right being exercised and
specify the number of shares as to which such Stock Right 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 Stock Right, (c)
at the discretion of the Committee, by delivery of the grantee'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
Stock Right 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
<PAGE>
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 a Stock Right shall not have the
rights of a shareholder with respect to the shares covered by such Stock Right
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
--------------------------
March 23, 1993, 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 March 23, 1994, any grants of
ISOs under the Plan made prior to that date will be rescinded. The Plan shall
expire at the end of the day on March 1, 2003 (except as to Options outstanding
on that date). Subject to the provisions of paragraph 5 above, Stock Rights 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 benefits
accruing to participants under the Plan may not be materially increased; (c) the
requirements as to eligibility for participation in the Plan may not be
materially modified; (d) the provisions of paragraph 3 regarding eligibility for
grants of ISOs may not be modified; (e) 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); (f) the
expiration date of the Plan may not be extended; and (g) the Board may not take
any action which would cause the Plan to fail to comply with Rule 16b-3. Except
as otherwise provided in this paragraph 15, in no event may action of the Board
or stockholders alter or impair the rights of a grantee, without such grantee's
consent, under any Stock Right previously granted to such grantee.
16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS. 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
<PAGE>
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.
17. APPLICATION OF FUNDS. The proceeds received by the Company from the
--------------------
sale of shares pursuant to Options granted and Purchases authorized 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 he 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 grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, 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 Stock Right 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 of an Option, (ii) the grant of an Award, (iii) the
making of a Purchase of Common Stock for less than its fair market value, or
(iv) the vesting or transferability of restricted stock or securities acquired
by exercising a Stock Right, on the grantee's making satisfactory arrangement
for such withholding. Such arrangement may include payment by the grantee in
cash or by check of the amount of the withholding taxes or, at the discretion of
the Committee, by the grantee's delivery of previously held shares of Common
Stock or the withholding from the shares of Common Stock otherwise deliverable
upon exercise of a Stock Right shares having an aggregate fair market value
equal to the amount of such withholding taxes.
<PAGE>
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 grantees of Stock Rights in connection
with the Plan.
21. GOVERNING LAW; CONSTRUCTION. The validity and construction of the
---------------------------
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of North Carolina, or the laws of any jurisdiction in which the Company or its
successors in interest may be organized. In construing this Plan, the singular
shall include the plural, unless the context otherwise requires.
<PAGE>
EXHIBIT 99.2
NETLINK, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
Netlink, Inc., a Delaware corporation (the "Company"), hereby grants as of the
25th day of July, 1996 to EMPLOYEE NAME (the "Optionee"), an option to purchase
a maximum of 2,500 shares (the "Option Shares") of its Common Stock, $.01 par
value ("Common Stock"), at the price of $0.35 per share, on the following terms
and conditions:
1. GRANT UNDER 1993 STOCK PLAN. This option is granted pursuant to and is
---------------------------
governed by the Company's 1993 Stock Plan (the "Plan") and, unless the context
otherwise requires, terms used herein shall have the same meaning as in the
Plan. Determinations made in connection with this option pursuant to the Plan
shall be governed by the Plan as it exists on this date.
2. GRANT AS NON-QUALIFIED OPTION; OTHER OPTIONS. This option shall be
--------------------------------------------
treated for federal income tax purposes as a Non-Qualified Option (rather than
an incentive stock option). Except as may be otherwise provided above, this
option is in addition to any other options heretofore or hereafter granted to
the Optionee by the Company or any Related Corporation (as defined in the Plan),
but a duplicate original of this instrument shall not affect the grant of
another option.
3. VESTING OF OPTION IF BUSINESS RELATIONSHIP CONTINUES. If the Optionee
----------------------------------------------------
has continued to serve the Company or any Related Corporation in the capacity of
an employee, officer, director, or consultant (such service is described herein
as maintaining or being involved in a "Business Relationship with the Company")
on the following dates, the Optionee may exercise this option for the number of
shares of Common Stock set opposite the applicable date:
<TABLE>
<CAPTION>
Date through which service is performed # of shares
- --------------------------------------- -----------
Vested at date of grant None
<S> <C> <C>
October 24, 1996 an additional 156
January 24, 1997 an additional 157
April 24, 1997 an additional 156
July 24, 1997 an additional 156
October 24, 1997 an additional 156
January 24, 1998 an additional 157
April 24, 1998 an additional 156
July 24, 1998 an additional 156
October 24, 1998 an additional 156
January 24, 1999 an additional 157
April 24, 1999 an additional 156
July 24, 1999 an additional 156
October 24, 1999 an additional 156
January 24, 2000 an additional 157
April 24, 2000 an additional 156
July 24, 2000 an additional 156
---
Total 2,500
</TABLE>
<PAGE>
The foregoing rights are cumulative and, while the Optionee continues to
maintain a Business Relationship with the Company or any Related Corporation,
may be exercised up to and including the date which is ten years from the date
this option is granted. All of the foregoing rights are subject to Sections 4
and 5, as appropriate, if the Optionee ceases to maintain a Business
Relationship with the Company and all Related Corporations or dies, becomes
disables or undergoes dissolution while involved in a Business Relationship with
the Company.
4. TERMINATION OF BUSINESS RELATIONSHIP.
------------------------------------
(A) TERMINATION OTHER THAN FOR CAUSE: If the Optionee's Business
--------------------------------
Relationship with the Company and all Related Corporations is terminated, other
than by reason of death, disability or dissolution as defined in Section 5 or
termination for Cause as defined in Section 4(c), no further installments of
this option shall become exercisable, and this option shall terminate after the
passage of ninety (90) days from the date the Business Relationship ceases, but
in no event later than the scheduled expiration date. In such a case, the
Optionee's only rights hereunder shall be those which are properly exercised
before the termination of this option.
(B) TERMINATION FOR CAUSE: If the Optionee's Business Relationship
---------------------
with the Company is terminated for Cause (as defined in Section 4(c)), this
option shall terminate upon the Optionee's receipt of written notice of such
termination and shall thereafter not be exercisable to any extent whatsoever.
(C) DEFINITION OF CAUSE: "Cause" shall mean conduct involving one or
-------------------
more of the following: (i) The substantial and continuing failure of the
Optionee, after notice thereof, to render services to the Company or Related
Corporation in accordance with the terms or requirements of the Optionee's
Business Relationship with the Company; (ii) disloyalty, gross negligence,
willful misconduct, dishonesty or breach of fiduciary duty to the Company or
Related Corporation; (iii) the commission of an act of embezzlement or fraud;
(iv) deliberate disregard of the rules or policies of the Company or Related
Corporation which results in direct or indirect loss, damage or injury to the
Company or Related Corporation; (v) the unauthorized disclosure of any trade
secret or confidential information of the Company or Related Corporation; or
(vi) the commission of an act which constitutes unfair competition with the
Company or Related Corporation or which induces any customer or supplier to
break a contract with the Company or Related Corporation.
5. DEATH; DISABILITY; DISSOLUTION.
------------------------------
(A) DEATH: If the Optionee is a natural person who dies while
-----
involved in a Business Relationship with the Company, this option may be
exercised, to the extent otherwise exercisable on the date of his or her death,
by the Optionee's estate, personal representative or beneficiary to whom this
option has been assigned pursuant to Section 10, at any time within one (1) year
after the date of death, but not later than the scheduled expiration date.
(B) DISABILITY: If the Optionee is a natural person whose Business
----------
Relationship with the Company is terminated by reason of his or her disability
(as defined in the Plan), this option may be exercised, to
<PAGE>
the extent otherwise exercisable on the date the Business Relationship was
terminated, at any time within one (1) year after such termination, but not
later than the scheduled expiration date.
(C) EFFECT OF TERMINATION: At the expiration of such one-year period
---------------------
provided in paragraph (a) or (b) of this Section 5 or the scheduled expiration
date, whichever is the earlier, this option shall terminate and the only rights
hereunder shall be those as to which the option was properly exercised before
such termination.
(D) DISSOLUTION: If the Optionee is a corporation, partnership,
-----------
trust or other entity that is dissolved, is liquidated, becomes insolvent or
enters into a merger or acquisition with respect to which the Optionee is not
the surviving entity, at a time when the Optionee is involved in a Business
Relationship with the Company, this option shall immediately terminate as of the
date of such event, and the only rights hereunder shall be those as to which
this option was properly exercised before such dissolution or other event.
6. PARTIAL EXERCISE. This option may be exercised in part at any time and
----------------
from time to time within the above limits, except that this option may not be
exercised for a fraction of a share unless such exercise is with respect to the
final installment of stock subject to this option and cash in lieu of a
fractional share must be paid, in accordance with Paragraph 13(G) of the Plan,
to permit the Optionee to exercise completely such final installment. Any
fractional share with respect to which an installment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Optionee in accordance with the terms hereof.
7. PAYMENT OF PRICE.
----------------
(A) FORM OF PAYMENT: The option price shall be paid in the following
---------------
manner:
(i) in cash or by check;
(ii) subject to paragraph 7(b) below, by delivery of
shares of the Company's Common Stock having a fair market
value (as determined by the Committee) equal as of the
date of exercise to the option price;
(iii) by delivery of an assignment satisfactory in
form and substance to the Company of a sufficient amount
of the proceeds from the sale of the Option Shares and an
instruction to the broker or selling agent to pay that
amount to the Company; or
(iv) by any combination of the foregoing.
(B) LIMITATIONS ON PAYMENT BY DELIVERY OF COMMON STOCK: If the
--------------------------------------------------
Optionee delivers Common Stock held by the Optionee ("Old Stock") to the Company
in full or partial payment of the option price, and the Old Stock so delivered
is subject to restrictions or limitations imposed by agreement between the
Optionee and the Company, an equivalent number of Option Shares shall be subject
to all restrictions and limitations applicable to the Old Stock to the extent
that the Optionee paid for the Option Shares by delivery of Old Stock, in
addition to any restrictions or limitations imposed by this Agreement.
Notwithstanding the foregoing, the Optionee may not pay
<PAGE>
any part of the exercise price hereof by transferring Common Stock to the
Company unless such Common Stock has been owned by the Optionee free of any
substantial risk of forfeiture for at least six months.
8. RESTRICTIONS ON TRANSFER. Option Shares may not be transferred without
------------------------
the Company's written consent except by will, by the laws of descent and
distribution, or in accordance with the provisions of Section 16, if applicable.
Option Shares will be of an illiquid nature and will be deemed to be "restricted
securities" for purposes of the Securities Act of 1993, as amended.
Accordingly, such shares must be sold in compliance with the registration
requirements of such Act or an exemption therefrom.
9. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of
---------------------------
this Agreement, this option may be exercised by written notice to the Company,
at the principal executive office of the Company, or to such transfer agent as
the Company shall designate. Such notice shall state the election to exercise
this option and the number of Option Shares for which it is being exercised and
shall be signed by the person or persons so exercising this option. Such notice
shall be accompanied by payment of the full purchase price of such shares, and
the Company shall deliver a certificate or certificates representing such shares
as soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option(or, if this option shall be exercised by the Optionee and
if the Optionee shall so request in the notice exercising this option, shall be
registered in the name of the Optionee and another person jointly, with right of
survivorship). In the event this option shall be exercised, pursuant to Section
5 hereof, by any person or persons other than the Optionee, such notice shall be
accompanied by appropriate proof of the right of such person or persons to
exercise this option.
10. OPTION NOT TRANSFERABLE. This option is not transferable or assignable
-----------------------
except by will or by the laws of descent and distribution. During the
Optionee's lifetime, only the Optionee can exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this
--------------------------------
option imposes no obligation on the Optionee to exercise it.
12. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP. Neither the Plan, this
-----------------------------------------------
Agreement, nor the grant of this option imposes any obligation on the Company or
any Related Corporation to continue to maintain a Business Relationship with the
Optionee.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall have no
---------------------------------------
rights as a stockholder with respect to the Option Shares until such time as the
Optionee has exercised this option by delivering a notice of exercise and has
paid in full the purchase price for the number of shares for which this option
is to be so exercised in accordance with Section 9. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to such date of exercise.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. The Plan contains provisions
----------------------------------------
covering the treatment of options in a number of contingencies such as stock
splits and mergers. Provisions in the Plan for adjustment with respect to stock
subject to options and the related provisions with respect to successors to the
business of the Company are hereby made applicable hereunder and are
incorporated herein by reference.
<PAGE>
15. WITHHOLDING TAXES. If the Company or any Related Corporation in its
-----------------
discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Optionee hereby agrees that the Company or any Related
Corporation may withhold from the Optionee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Optionee on exercise of this option. The
Optionee further agrees that, if the Company or Related Corporation does not
withhold an amount from the Optionee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Optionee will make reimbursement on demand, in cash, for the amount
underwithheld.
16. COMPANY'S RIGHT OF FIRST REFUSAL.
--------------------------------
(A) EXERCISE OF RIGHT: If the Optionee or his or her
-----------------
legal representative (the "Transferor") desires to transfer all or any part of
the Option Shares to any person other than the Company (an "Offeror"), the
Transferor shall: (i) obtain in writing an irrevocable and unconditional bona
fide offer (the "Offer") for the purchase thereof from the Offeror; and (ii)
give written notice (the "Option Notice") to the Company setting forth the
Optionee's desire to transfer such shares, which Option Notice shall be
accompanied by a photocopy of the Offer and the price and terms of the bona fide
offer. Upon receipt of the Option Notice, the Company shall have an assignable
option to purchase any or all of such shares (the "Company Option Shares")
specified in the Option Notice, such option to be exercisable by giving, within
30 days after receipt of the Option Notice, a written counter-notice to the
Transferor. If the Company elects to purchase any or all of such Company Option
Shares, it shall be obligated to purchase, and the Optionee shall be obligated
to sell to the Company, such Company Option Shares at the price and terms
indicated in the Offer within 30 days from the date of delivery by the Company
of such counter-notice.
(B) SALE OF OPTION SHARES TO OFFEROR: The Transferor may, for 60 days
--------------------------------
after the expiration of the 30-day period during which the Company may give the
counter-notice, sell, pursuant to the terms of the Offer, any or all of such
Company Option Shares not purchased or agreed to be purchased by the Company or
its assignee; provided, however, that the Transferor shall not sell such Company
-------- -------
Option Shares to the Offeror if the Offeror is a competitor of the Company and
the Company gives written notice to the Transferor, within 30 days of its
receipt of the Option Notice, stating that the Transferor shall not sell such
Company Option Shares to such Offeror; and provided, further, that prior to the
-------- -------
sale of such Company Option Shares to the Offeror, the Offeror shall execute an
agreement with the Company pursuant to which the Offeror agrees to be subject to
the restrictions set forth in this Section 16. If any or all of such Company
Option Shares are not sold pursuant to an Offer within the time permitted above,
the unsold Company Option Shares shall remain subject to the terms of this
Section 16.
(C) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE: If there shall be any
--------------------------------------------
change in the Common Stock of the Company through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares, or the like, the restrictions contained in this Section 16
shall apply with equal force to additional and/or substitute securities, if any,
received by the Optionee in exchange for, or by virtue of his or her ownership
of, Company Option Shares.
<PAGE>
(D) FAILURE TO DELIVER COMPANY OPTION SHARES: If the Transferor fails or
----------------------------------------
refuses to deliver on a timely basis duly endorsed certificates representing
Company Option Shares to be sold to the Company or its assignee pursuant to this
Section 16, the Company shall have the right to deposit the purchase price
for such Company Option Shares in a special account with any bank or trust
company in the state of North Carolina, giving notice of such deposit to the
Transferor, whereupon such Company Option Shares shall be deemed to have been
purchased by the Company. All such monies shall be held by the bank or trust
company for the benefit of the Transferor. All monies deposited with the bank
or trust company remaining unclaimed for two years after the date of deposit
shall be repaid by the bank or trust company to the Company on demand, and the
Transferor shall thereafter look only to the Company for payment. The Company
may place a legend on any stock certificate delivered to the Transferor
reflecting the restrictions on transfer provided in Section 8 hereof and this
Section 16.
(E) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL: The first refusal
----------------------------------------------
rights of the Company set forth above shall remain in effect until such time, if
ever, as a distribution to the public is made of shares of the Company's Common
Stock pursuant to a registration statement filed under the Securities Act of
1933, as amended, or a successor statute, at which time the first refusal rights
of the Company set forth herein will automatically expire.
17. LOCK-UP AGREEMENT. The Optionee agrees that in connection with an
-----------------
underwritten public offering of Common Stock, upon the request of the Company or
the principal underwriter managing such public offering, this Option and the
Option Shares may not be sold, offered for sale or otherwise disposed of without
the prior written consent of the Company or such underwriter, as the case may
be, for at least 180 days or such other period of time as the Board of Directors
may determine.
18. ARBITRATION. Any dispute, controversy, or claim arising out of, in
-----------
connection with, or relating to the performance of this Agreement or its
termination shall be settled by arbitration in the State of North Carolina,
pursuant to the rules then enacted by the American Arbitration Association. Any
award shall be final, binding and conclusive upon the parties and a judgment
rendered thereon may be entered in any court having jurisdiction thereof.
19. PROVISION OF DOCUMENTATION TO EMPLOYEE. By signing this Agreement the
--------------------------------------
Optionee acknowledges receipt of a copy of this Agreement.
20. MISCELLANEOUS.
-------------
(A) NOTICES: All notices hereunder shall be in writing and shall be
-------
deemed given when sent by certified or registered mail, postage prepaid, return
receipt requested, to the addresses
set forth below. The addresses for such notices may be changed from time to
time by written notice given in the manner provided for herein.
(B) ENTIRE AGREEMENT; MODIFICATION: This Agreement constitutes the
------------------------------
entire agreement between the parties relative to the subject matter of this
Agreement. This Agreement may be modified, amended or rescinded only by a
written agreement executed by both parties.
<PAGE>
(C) SEVERABILITY: The invalidity, illegality or unenforceability of
------------
any provision of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision.
(D) SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors and
assigns, subject to the limitations set forth in Section 10 hereof.
(E) GOVERNING LAW: This Agreement shall be governed by and
-------------
interpreted in accordance with the laws of the State of North Carolina, without
giving effect to the principles of the conflicts of laws thereof. The preceding
choice of law provision shall apply to all claims, under any theory whatsoever,
arising out of the relationship of the parties contemplated herein.
21. ACCELERATION OF VESTING OF OPTION FOR BUSINESS COMBINATIONS: 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 (an
"Acquisition"), then this option shall, immediately prior to the consummation of
such Acquisition, become fully vested and immediately exercisable by the
Optionee.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
instrument to be executed as of the date first above written.
Netlink, Inc.
1881 Worcester Road
Framingham, MA 01701
By: _____________________
Jerry M. Joyner
Secretary & Director of
Finance
Optionee
Print Name of Optionee
Street Address
City, State Zip Code
Optionee's Social Security Number
By: _____________________
Print Name of Optionee
<PAGE>
EXHIBIT 99.3
NETLINK, INC.
INCENTIVE STOCK OPTION AGREEMENT
NETLINK, INC., a Delaware corporation (the "Company"), hereby grants as of the
25th day of July, 1996 to EMPLOYEE NAME (the "Employee") an option to purchase a
maximum of 2,000 shares (the "Option Shares") of its Common Stock, $.01 par
value ("Common Stock"), at the price of $0.35 per share, on the following terms
and conditions:
1. GRANT UNDER THE 1993 STOCK PLAN. This option is granted pursuant to and is
-------------------------------
governed by the Company's 1993 Stock Plan (the "Plan") and, unless the
context otherwise requires, terms used herein shall have the same meaning
as in the Plan. Determinations made in connection with this option pursuant
to the Plan shall be governed by the Plan as it exists on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS. This option is intended to
----------------------------------------------
qualify as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). Notwithstanding the above,
this option shall be treated as a Non-Qualified Option if the Plan is not
approved by the Company's stockholders prior to March 23, 1994. Except as
may be otherwise provided above, this option is in addition to any other
options heretofore or hereafter granted to the Employee by the Company or
any Related Corporation (as defined in the Plan), but a duplicate original
of this instrument shall not effect the grant of another option.
<PAGE>
3. VESTING OF OPTION IF EMPLOYMENT CONTINUES. If the Employee has continued
-----------------------------------------
to be employed by the Company or any Related Corporation on the following
dates, the Employee may exercise this option for the number of shares of
Common Stock set opposite the applicable date:
<TABLE>
<CAPTION>
Date through which employed # of shares
--------------------------- -----------
<S> <C> <C>
Vested at date of grant None
October 24, 1996 an additional 125
January 24, 1997 an additional 125
April 24, 1997 an additional 125
July 24, 1997 an additional 125
October 24, 1997 an additional 125
January 24, 1998 an additional 125
April 24, 1998 an additional 125
July 24, 1998 an additional 125
October 24, 1998 an additional 125
January 24, 1999 an additional 125
April 24, 1999 an additional 125
July 24, 1999 an additional 125
October 24, 1999 an additional 125
January 24, 2000 an additional 125
April 24, 2000 an additional 125
July 24, 2000 an additional 125
-----
Total 2,000
</TABLE>
The foregoing rights are cumulative and, while the Employee continues to be
employed by the Company or any Related Corporation, may be exercised on or
before the date which is ten years from the date this option is granted. All of
the foregoing rights are subject to Sections 4 and 5, as appropriate, if the
Employee ceases to be employed by the Company and all Related Corporations.
<PAGE>
4. TERMINATION OF EMPLOYMENT.
-------------------------
(a) Termination Other Than for Cause: If the Employee ceases to be employed
by the Company and all Related Corporations, other than by reason of
death or disability as defined in Section 5 or termination for Cause as
defined in Section 4(c), no further installments of this option shall
become exercisable, and this option shall terminate after the passage
of three months from the Employee's last day of employment, but in no
event later than the scheduled expiration date. In such a case, the
Employee's only rights hereunder shall be those which are properly
exercised before the termination of this option.
(b) Termination for Cause: If the employment of the Employee is terminated
for Cause (as defined in Section 4(c)), this option shall terminate
upon the Employee's receipt of written notice of such termination and
shall thereafter not be exercisable to any extent whatsoever.
(c) Definition of Cause: "Cause" shall mean conduct involving one or more
of the following: (i) the substantial and continuing failure of the
Employee, after notice thereof, to render services to the Company or
Related Corporation in accordance with the terms or requirements of his
or her employment; (ii) disloyalty, gross negligence, willful
misconduct, dishonesty or breach of fiduciary duty to the Company or
Related Corporation; (iii) the commission of an act of embezzlement or
fraud; (iv) deliberate disregard of the rules or policies of the
Company or Related
<PAGE>
Corporation which results in direct or indirect loss, damage or injury
to the Company or Related Corporation; (v) the unauthorized disclosure
of any trade secret or confidential information of the Company or
Related Corporation; or (vi) the commission of an act which constitutes
unfair competition with the Company or Related Corporation or which
induces any customer or supplier to breach a contract with the Company
or Related Corporation.
5. DEATH; DISABILITY.
-----------------
(a) Death: If the Employee dies while in the employ of the Company or any
Related Corporation, this option may be exercised, to the extent
otherwise exercisable on the date of his or her death, by the
Employee's estate, personal representative or beneficiary to whom this
option has been assigned pursuant to Section 10, at any time within one
(1) year after the date of death, but not later than the scheduled
expiration date.
(b) Disability: If the Employee ceases to be employed by the Company and
all Related Corporations by reason of his or her disability (as defined
in the Plan), this option may be exercised, to the extent otherwise
exercisable on the date of the termination of his or her employment, at
any time within one (1) year after such termination, but not later than
the scheduled expiration date.
(c) Effect of Termination: At the expiration of the one-year period
provided in paragraph (a) or (b) of this Section 5 or the scheduled
expiration date, whichever is the earlier, this option shall terminate
and the only rights hereunder shall be
<PAGE>
those as to which the option was properly exercised before such
termination.
6. PARTIAL EXERCISE. This option may be exercised in part at any time and from
----------------
time to time within the above limits, except that this option may not be
exercised for a fraction of a share unless such exercise is with respect to
the final installment of stock subject to this option and cash in lieu of a
fractional share must be paid, in accordance with [Paragraph 13(G)] of the
Plan, to permit the Employee to exercise completely such final installment.
Any fractional share with respect to which an installment of this option
cannot be exercised because of the limitation contained in the preceding
sentence shall remain subject to this option and shall be available for
later purchase by the Employee in accordance with the terms hereof.
7. PAYMENT OF PRICE.
----------------
(a) The option price shall be paid in the following manner:
(i) in cash or by check;
(ii) subject to paragraph 7(b) below, by delivery of shares of the
Company's Common Stock having a fair market value (as determined
by the Committee) equal as of the date of exercise to the option
price;
(iii) by delivery of an assignment satisfactory in form and substance to
the Company of a sufficient amount of the proceeds from the sale
of the Option Shares and an instruction to the broker or selling
agent to pay that amount to the Company; or
<PAGE>
(iv) by any combination of the foregoing.
(b) Limitations on Payment by Delivery of Common Stock:
If the Employee delivers Common Stock held by the Employee ("Old Stock")
to the Company in full or partial payment of the option price, and the
Old Stock so delivered is subject to restrictions or limitations imposed
by agreement between the Employee and the Company, an equivalent number
of Option Shares shall be subject to all restrictions and limitations
applicable to the Old Stock to the extent that the Employee paid for the
Option Shares by delivery of Old Stock, in addition to any restrictions
or limitations imposed by this Agreement. Notwithstanding the foregoing,
the Employee may not pay any part of the exercise price hereof by
transferring Common Stock to the Company unless such Common Stock has
been owned by the Employee free of any substantial risk of forfeiture
for at least six months.
8. RESTRICTIONS ON RESALE. Option Shares may not be transferred without the
----------------------
Company's written consent except by will or by the laws of descent and
distribution. Option Shares will be of an illiquid nature and will be deemed
to be "restricted securities" for purposes of the Securities Act of 1933, as
amended. Accordingly, such shares must be sold in compliance with the
registration requirements of such Act or an exemption therefrom.
9. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
---------------------------
Agreement, this option may be
<PAGE>
exercised by written notice to the Company at its principal executive
office, or to such transfer agent as the Company shall designate. Such
notice shall state the election to exercise this option and the number of
Option Shares for which it is being exercised and shall be signed by the
person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such shares
as soon as practicable after the notice shall be received. Such certificate
or certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the
Employee and if the Employee shall so request in the notice exercising this
option, shall be registered in the name of the Employee and another person
jointly, with right of survivorship). In the event this option shall be
exercised, pursuant to Section 5 hereof, by any person or persons other than
the Employee, such notice shall be accompanied by appropriate proof of the
right of such person or persons to exercise this option.
10. OPTION NOT TRANSFERABLE. This option is not transferable or assignable
-----------------------
except by will or by the laws of descent and distribution. During the
Employee's lifetime only the Employee can exercise this option.
11. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of this option
--------------------------------
imposes no obligation on the Employee to exercise it.
12. NO OBLIGATION TO CONTINUE EMPLOYMENT. Neither the Plan, this Agreement, nor
------------------------------------
the grant of this option
<PAGE>
imposes any obligation on the Company or any
Related Corporation to continue the Employee in employment.
13. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Employee shall have no rights
---------------------------------------
as a stockholder with respect to the Option Shares until such time as the
Employee has exercised this option by delivering a notice of exercise and
has paid in full the purchase price for the shares so exercised in
accordance with Section 9. Except as is expressly provided in the Plan with
respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the
record date is prior to such date of exercise.
14. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. The Plan contains provisions
----------------------------------------
covering the treatment of options in a number of contingencies such as stock
splits and mergers. Provisions in the Plan for adjustment with respect to
stock subject to options and the related provisions with respect to
successors to the business of the Company are hereby made applicable
hereunder and are incorporated herein by reference.
15. EARLY DISPOSITION. The Employee agrees to notify the Company in writing
-----------------
immediately after the Employee transfers any Option Shares, if such transfer
occurs on or before the later of (a) the date two years after the date of
this Agreement or (b) the date the Employee acquired such Option Shares. The
Employee also agrees to provide the Company with any information concerning
any such transfer required by the Company for tax purposes.
<PAGE>
16. WITHHOLDING TAXES. If the Company or any Related Corporation in its
-----------------
discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or
the lapse of restrictions on, any Common Stock or other property acquired
pursuant to this option, the Employee hereby agrees that the Company or any
Related Corporation may withhold from the Employee's wages or other
remuneration the appropriate amount of tax. At the discretion of the Company
or Related Corporation, the amount required to be withheld may be withheld
in cash from such wages or other remuneration or in kind from the Common
Stock or other property otherwise deliverable to the Employee on exercise of
this option. The Employee further agrees that, if the Company or any Related
Corporation does not withhold an amount from the Employee's wages or other
remuneration sufficient to satisfy the withholding obligation of the Company
or Related Corporation, the Employee will make reimbursement on demand, in
cash, for the amount underwithheld.
17. COMPANY'S RIGHT OF FIRST REFUSAL.
--------------------------------
(a) Exercise of Right: If the Employee desires to transfer all or any part
of the Option Shares to any person other than the Company (an
"Offeror"), the Employee shall: (i) obtain in writing an irrevocable and
unconditional bona fide offer (the "Offer") for the purchase thereof
from the Offeror; and (ii) give written notice (the "Option Notice") to
the Company setting forth the Employee's desire to transfer such shares,
which Option Notice shall be accompanied by a photocopy of the Offer and
shall set forth at least the name and address of the Offeror and the
price and terms
<PAGE>
of the Offer. Upon receipt of the Option Notice, the Company shall have
an assignable option to purchase any or all of such Option Shares (the
"Company Option Shares") specified in the Option Notice, such option to
be exercisable by giving, within 30 days after receipt of the Option
Notice, a written counter-notice to the Employee. If the Company elects
to purchase any or all of such Company Option Shares, it shall be
obligated to purchase, and the Employee shall be obligated to sell to
the Company, such Company Option Shares at the price and terms indicated
in the Offer within 30 days from the date of delivery by the Company of
such counter-notice.
(b) Sale of Option Shares to Offeror: The Employee may, for 60 days after
the expiration of the 30-day option period as set forth in Section
17(a), sell to the Offeror, pursuant to the terms of the Offer, any or
all of such Company Option Shares not purchased or agreed to be
purchased by the Company or its assignee; provided, however, that the
Employee shall not sell such Company Option Shares to such Offeror if
such Offeror is a competitor of the Company and the Company gives
written notice to the Employee, within 30 days of its receipt of the
Option Notice, stating that the Employee shall not sell his or her
Company Option Shares to such Offeror; and provided, further, that prior
to the sale of such Option Shares to an offeror, such Offeror shall
execute an agreement with the Company pursuant to which such Offeror
agrees to be subject to the restrictions set forth in this Section 17.
If any or all of such Company Option Shares are not sold pursuant to an
Offer within the time permitted above, the unsold
<PAGE>
Company Option Shares shall remain subject to the terms
of this Section 17.
(c) Adjustments for Changes in Capital Structure: If there shall be any
change in the Common Stock of the Company through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split,
combination or exchange of shares, or the like, the restrictions
contained in this Section 17 shall apply with equal force to additional
and/or substitute securities, if any, received by the Employee in
exchange for, or by virtue of his or her ownership of, Option Shares.
(d) Failure to Deliver Option Shares: If the Employee fails or refuses to
deliver on a timely basis duly endorsed certificates representing
Company Option Shares to be sold to the Company or its assignee pursuant
to this Section 17, the Company shall have the right to deposit the
purchase price for such Company Option Shares in a special account with
any bank or trust company in the state of North Carolina, giving notice
of such deposit to the Employee, whereupon such Company Option Shares
shall be deemed to have been purchased by the Company. All such monies
shall be held by the bank or trust company for the benefit of the
Employee. All monies deposited with the bank or trust company but
remaining unclaimed for two years after the date of deposit shall be
repaid by the bank or trust company to the Company on demand, and the
Employee shall thereafter look only to the Company for payment. The
Company may place a legend on any certificate for Option Shares
delivered to the Employee reflecting the
<PAGE>
restrictions on transfer provided in Section 8 hereof and this
Section 17.
(e) Expiration of Company's Right of First Refusal: The first refusal rights
of the Company set forth above shall remain in effect until such time,
if ever, as a distribution to the public is made of shares of the
Company's Common Stock pursuant to a registration statement filed under
the Securities Act of 1933, as amended, or a successor statute, at which
time the refusal rights of the Company set forth herein will
automatically expire.
18. LOCK-UP AGREEMENT. The Employee agrees that in connection with an
-----------------
underwritten public offering of Common Stock, upon the request of the
Company or the principal underwriter managing such public offering, this
Option and the Option Shares may not be sold, offered for sale or otherwise
disposed of without the prior written consent of the Company or such
underwriter, as the case may be, for at least 180 days or such other period
of time as the Board of Directors may determine.
19. ARBITRATION. Any dispute, controversy, or claim arising out of, in
-----------
connection with, or relating to the performance of this Agreement or its
termination shall be settled by arbitration in the state of North Carolina,
pursuant to the rules then enacted by the American Arbitration Association.
Any award shall be final, binding and conclusive upon the parties and a
judgment rendered thereon may be entered in any court having jurisdiction
thereof.
<PAGE>
20. PROVISION OF DOCUMENTATION TO EMPLOYEE. By signing this Agreement the
--------------------------------------
Employee acknowledges receipt of a copy of this Agreement and a copy of the
Plan.
21. MISCELLANEOUS.
-------------
(a) Notices: All notices hereunder shall be in writing and shall be deemed
given when sent by certified or registered mail, postage prepaid, return
receipt requested, to the address set forth below. The addresses for
such notices may be changed from time to time by written notice given in
the manner provided for herein.
(b) Entire Agreement; Modification: This Agreement constitutes the entire
agreement between the parties relative to the subject matter hereof, and
supersedes all proposals, written or oral, and all other communications
between the parties relating to the subject matter of this Agreement.
This Agreement may be modified, amended or rescinded only by a written
agreement executed by both parties.
(c) Severability: The invalidity, illegality or unenforceability of any
provision of this Agreement shall in no way affect the validity,
legality or enforceability of any other provision.
(d) Successors and Assigns: This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, subject to the limitations set forth in Section 10 hereof.
<PAGE>
(e) Governing Law: This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts, without
giving effect to the principles of the conflicts of laws thereof.
22. ACCELERATION OF VESTING OF OPTION FOR BUSINESS COMBINATIONS. 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 (an
"Acquisition"), then this option shall, immediately prior to the
consummation of such Acquisition, become fully vested and immediately
exercisable in its entirety by the Employee.
IN WITNESS WHEREOF, the Company and the Employee have caused this instrument to
be executed as of the date first above written.
for: Netlink, Inc.
1881 Worcester Road ___________________________
Framingham, MA 01701 (Employee's Signature)
Jerry M. Joyner
- ---------------------------- -----------------------------
(Signature) (Street Address)
Director of Finance & Administration
- ------------------------------------ ----------------------------
(Title) (City, State, and Zip Code)
<PAGE>
EXHIBIT 99.4
Form of Stock Option Assumption Agreement used in connection
with the Netlink, Inc. 1993 Stock Plan
1993 STOCK PLAN
CABLETRON SYSTEMS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
---------------------------------
OPTIONEE:
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 10th day of December,
1996 by Cabletron Systems, Inc., a Delaware corporation ("Cabletron").
WHEREAS, _____________ ("Optionee") holds one or more outstanding options
to purchase shares of the common stock of Netlink, Inc., a Delaware corporation
("Netlink"), which were granted to Optionee under the Netlink, Inc. 1993 Stock
Plan (the "Plan"), and are evidenced by a Stock Option Agreement (the "Option
Agreement") between Netlink and Optionee.
WHEREAS, Netlink has this day been acquired by Cabletron through merger of
a wholly-owned Cabletron subsidiary, Cabletron Merger, Inc. ("Merger Sub"), with
and into Netlink (the "Merger") pursuant to the Agreement and Plan of Merger
dated as of September 26, 1996 by and among Cabletron, Netlink and Merger Sub
(the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Cabletron to assume
all obligations of Netlink under all options outstanding under the Plan at the
consummation of the Merger and to issue to the holder of each outstanding option
a notice setting forth such holder's rights after consummation of the Merger.
WHEREAS, pursuant to the provisions of the Merger Agreement, the exchange
ratio in effect for the Merger is .29201 of a share of Cabletron common stock
("Cabletron Stock") for each outstanding share of Netlink common stock (the
"Exchange Ratio").
<PAGE>
WHEREAS, this Agreement is to become effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options under the Plan which have become
necessary by reason of the assumption of those options by Cabletron in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Netlink common stock subject to the stock
options held by Optionee under the Plan immediately prior to the Effective Time
(the "Netlink Options") and the exercise price payable per share are set forth
in Exhibit A hereto. Cabletron hereby assumes, as of the Effective Time, all
the duties and obligations of Netlink under each of the Netlink Options. In
connection with such assumption, the number of shares of Cabletron Stock
purchasable under each Netlink Option hereby assumed and the exercise price
payable thereunder have been adjusted to reflect the Exchange Ratio at which
shares of Netlink common stock were converted into shares of Cabletron Stock in
consummation of the Merger. Accordingly, the number of shares of Cabletron Stock
subject to each Netlink Option hereby assumed, and the adjusted exercise price
payable per share of Cabletron Stock under the assumed Netlink Option, shall be
as indicated for that option in attached Exhibit B.
2. The intent of the foregoing adjustments to each assumed Netlink Option
is to assure that the spread between the aggregate fair market value of the
shares of Cabletron Stock purchasable under that option and the aggregate
exercise price as adjusted hereunder will, immediately after the consummation of
the Merger, equal the spread which existed, immediately prior to the Merger,
between the then aggregate fair market value of the Netlink common stock subject
to the Netlink Option and the aggregate exercise price in effect at such time
under the Option Agreement. Such adjustments are also designed to preserve, on
a per share basis immediately after the Merger, the same ratio of exercise price
per option share to fair market value per share which existed under the Netlink
Option immediately prior to the Merger.
3. The following provisions shall govern each Netlink Option hereby
assumed by Cabletron:
- Unless the context otherwise requires, all references to the "Company"
in each Option Agreement and in the Plan (as incorporated into such Option
Agreement) shall mean Cabletron, all references to "Common Stock" shall mean
shares of Cabletron Stock, and all
<PAGE>
references to the "Committee" shall mean the Incentive Compensation Committee of
the Board of Directors of Cabletron.
- The grant date and the expiration date of each assumed Netlink Option
and all other provisions which govern either the exercisability or the
termination of the assumed Netlink Option shall remain the same as set forth in
the Option Agreement applicable to that option and shall accordingly govern and
control Optionee's rights under this Agreement to purchase Cabletron Stock.
- Each assumed Netlink Option, upon the consummation of the Merger, became
exercisable in full, with the number of shares of Cabletron Stock subject to
each such Netlink Option adjusted to reflect the Exchange Ratio.
- For purposes of applying any and all provisions of the Option Agreement
relating to Optionee's status as an employee with the Company, Optionee shall be
deemed to continue in such employee status for so long as Optionee renders
services as an employee to Cabletron or any present or future Cabletron
subsidiary, including (without limitation) Netlink. Accordingly, the provisions
of the Option Agreement governing the termination of the assumed Netlink Option
upon the Optionee's cessation of employee status with Netlink shall hereafter be
applied on the basis of the Optionee's cessation of employee status with
Cabletron and its subsidiaries, and each assumed Netlink Option shall
accordingly terminate, within the designated time period in effect under the
Option Agreement for that option, following such cessation of employment with
Cabletron and its subsidiaries.
- The adjusted exercise price payable for the Cabletron Stock subject to
each assumed Netlink Option shall be payable in any of the forms authorized
under the Option Agreement applicable to that option. For purposes of
determining the holding period of any shares of Cabletron Stock delivered in
payment of such adjusted exercise price, the period for which such shares were
held as Netlink common stock prior to the Merger shall be taken into account.
- In order to exercise each assumed Netlink Option, Optionee must deliver
to Cabletron a written notice of exercise in which the number of shares of
Cabletron Stock to be purchased thereunder must be indicated. The exercise
notice should be delivered to Cabletron at the following address:
<PAGE>
Cabletron Systems, Inc.
35 Industrial Way
Rochester, New Hampshire 03867
Attention: Edward Cortes
4. Except to the extent specifically modified by this Stock Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
IN WITNESS WHEREOF, Cabletron Systems, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 10th day of December, 1996.
CABLETRON SYSTEMS, INC.
By:______________________________
<PAGE>
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of Netlink, Inc.
Common Stock (Pre-Merger)
<PAGE>
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of Cabletron Systems, Inc.
Common Stock (Post-Merger)
