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As filed with the Securities and Exchange Commission on December 22, 1999
Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NETRIX CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 54-1345159
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
13595 Dulles Technology Drive
Herndon, Virginia 20171
(Address of Principal Executive Offices, Including Zip Code)
1999 LONG TERM INCENTIVE PLAN
(Full Title of the Plan)
Lynn C. Chapman
President
Netrix Corporation
13595 Dulles Technology Drive
Herndon, Virginia 20171
(703) 742-6000
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
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COPY TO:
Jay R. Schifferli, Esq.
KELLEY DRYE & WARREN LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
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CALCULATION OF REGISTRATION FEE
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Title of Amount to be Proposed Proposed Amount of
Securities Registered Maximum Maximum Registration
to be Registered Offering Aggregate Fee
Price Per Offering
Share(1) Price(1)
- --------------------------------------------------------------------------------
Common Stock,
par value $.05 4,825,000
per share Shares $13.75 $66,343,750 $17,514.75
================================================================================
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and (h) under the Securities Act of 1933, as
amended. The price per share is estimated based on the average of the high
and low trading prices for Netrix Corporation's Common Stock on December
15, 1999, as reported by the Nasdaq National Market.
================================================================================
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") by Netrix Corporation are hereby incorporated by reference in
this Registration Statement:
(a) Netrix Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, as filed with the Commission on April 15, 1999, and the
amendment thereto filed on June 18, 1999;
(b) Netrix Corporation's quarterly reports on Forms 10-Q for the quarters
ended:
(i) September 30, 1999 (filed with the Commission on November 15,
1999);
(ii) June 30, 1999 (filed with the Commission on August 16,
1999);
(iii) March 31, 1999 (filed with the Commission on May 17,
1999); and
(c) The description of the Netrix Corporation's common stock, $.05 par
value per share (the "Common Stock"), contained in Netrix's registration
statement on Form S-1, as amended, filed by Netrix Corporation with the
Commission on September 18, 1992, pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
All reports and documents filed by Netrix Corporation pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date hereof and prior
to the filing of a post-effective amendment to this Registration Statement
indicating that all securities offered hereby have been sold or deregistering
all such securities then remaining unsold, shall also be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof, commencing on the respective dates on which such reports and documents
are filed with the Commission. Any statement incorporated by reference herein
shall also be deemed to be modified or superseded for the purposes of this
Registration Statement and any amendment or supplement hereto to the extent that
another statement contained herein or in any other subsequently filed document
that also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Registration Statement or any amendment or supplement hereto.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
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completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding") (other than an action by or in the right of the
corporation) by reason of the fact that he or she 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 or her in connection with such action,
suit or proceeding if he or she acted in good faith and in a manner he or she
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 or her conduct was unlawful. A Delaware
corporation may indemnify any person under such Section in connection with a
proceeding by or in the right of the corporation to procure judgment in its
favor, as provided in the preceding sentence, against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
with the defense or settlement of such action, except that no indemnification
shall be made with respect thereto unless, and then only to the extent that, a
court of competent jurisdiction shall determine upon application that such
person is fairly and reasonably entitled to indemnity for such expenses as the
court shall deem proper. A Delaware corporation must indemnify present or former
directors and officers who are successful on the merits or otherwise in defense
of any action, suit or proceeding or in defense of any claim, issue or matter in
any proceeding, by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation, against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith. A
Delaware corporation may pay for the expenses (including attorneys' fees)
incurred by an officer or director in defending a proceeding in advance of the
final disposition upon receipt of an undertaking by or on behalf of such officer
or director to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation. Article XI of the
Registrant's Amended and Restated Bylaws provides for indemnification of
directors and officers to the fullest extent permitted by Section 145 of the
DGCL.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director shall not be personally liable to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for any
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) with respect to certain unlawful dividend
payments or stock redemptions or repurchases or (iv) for any transaction from
which the director derived an improper personal benefit. Article Ninth of the
Registrant's Amended and Restated Certificate of Incorporation eliminates the
liability of directors to the fullest extent permitted by Section 102(b)(7) of
the DGCL.
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Section 145 of the DGCL permits a corporation to purchase and maintain
insurance on behalf of any person who 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 any liability asserted against
such person and incurred by such person in such capacity, or arising out of
their status as such, whether or not the corporation would have the power to
indemnify directors and officers against such liability. The Registrant has
obtained officers' and directors' liability insurance of $50 million for members
of its Board of Directors and executive officers. In addition, the Registrant
has entered into indemnification agreements with the directors and officers of
the Registrant, indemnifying each such person against losses, liabilities and
expenses arising out of any claims made against such person by reason of his or
her being a director or officer of the Registrant. Among other exclusions, the
Registrant shall not indemnify any person with respect to claims involving
receipt of a personal benefit to which the recipient is not entitled; the return
of profits from the sale of securities as contemplated by Section 16 of the
Exchange Act; or knowingly fraudulent, dishonest or willful misconduct.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION
4.1 Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to Netrix's registration statement on
Form S-1, filed on September 18, 1992, as amended)
4.2 Amendment to Certificate of Incorporation, dated August 26, 1999
(incorporated by reference to Exhibit 4.8 to Netrix's registration
statement on Form S-3, filed on June 18, 1999, as amended)
4.3 Amended and Restated By-laws (incorporated by reference to Exhibit
3.2 of Netrix's registration statement on Form S-1, filed on
September 18, 1992, as amended)
4.4 Specimen certificate of common stock (incorporated by reference to
Exhibit 4.2 to Netrix's registration statement on Form S-1, filed
on September 18, 1992, as amended)
*4.5 1999 Long-Term Incentive Plan
*5 Opinion of Kelley Drye & Warren LLP regarding the legality of the
Common Stock being registered.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5 hereto).
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*24 Power of Attorney (incorporated by reference to the signature page
of this Registration Statement).
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* Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this 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 do not apply
if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference into this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of Netrix Corporation's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
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report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, Netrix
Corporation 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 of 1933, as amended, 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 of 1933, as amended, and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Netrix
Corporation certifies that it has reasonable grounds to believe that it meets
all 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 Town of Herndon, State of Virginia, on December 17,
1999.
NETRIX CORPORATION
By: /s/ Steven T. Francesco
_______________________________________
Name: Steven T. Francesco
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Steven T. Francesco and Peter J. Kendrick, and each of them, as
attorneys-in-fact, with full power of substitution, to execute in the name and
on behalf of such person, individually and in each capacity stated below, and to
file any and all amendments to this Registration Statement, including any and
all post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
/s/ Steven T. Francesco Director, Chairman and Chief December 17, 1999
Steven T. Francesco Executive Officer
/s/ Lynn C. Chapman Director, President and Chief December 17, 1999
Lynn C. Chapman Operating Officer
/s/ Peter J. Kendrick Vice President-Finance and December 17, 1999
Peter J. Kendrick Administration, Chief Financial
Officer and Secretary
/s/ John M. Faccibene Director December 17, 1999
John M. Faccibene
- -------------------------- Director December___, 1999
Gregory C. McNulty
/s/ Richard Yalen Director December 17, 1999
Richard Yalen
/s/ Douglas J. Mello Director December 17, 1999
Douglas J. Mello
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 Amended and restated certificate of incorporation (incorporated by
reference to Exhibit 3.1 to Netrix's registration statement on Form
S-1, filed on September 18, 1992, as amended)
4.2 Amendment to certificate of incorporation, dated August 26, 1999
(incorporated by reference to Exhibit 4.8 to Netrix's registration
statement on Form S-3, filed on June 18, 1999, as amended)
4.3 Amended and restated by-laws (incorporated by reference to Exhibit
3.2 of Netrix's registration statement on Form S-1, filed on
September 18, 1992, as amended)
4.4 Specimen certificate of common stock (incorporated by reference to
Exhibit 4.2 to Netrix's registration statement on Form S-1, filed
on September 18, 1992, as amended)
*4.5 1999 Long-Term Incentive Plan
*5 Opinion of Kelley Drye & Warren LLP regarding the legality of the
Common Stock being registered.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5 hereto).
*24 Power of Attorney (incorporated by reference to the signature page
of this Registration Statement).
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* Filed herewith.
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NETRIX CORPORATION
1999 LONG-TERM INCENTIVE PLAN
1. PURPOSE. The purpose of this 1999 Long-Term Incentive Plan (the "Plan")
of Netrix Corporation, a Delaware corporation (the "Company"), is to advance the
interests of the Company and its stockholders by providing a means to attract,
retain, and reward directors, officers and other key employees and consultants
of the Company and its subsidiaries (including consultants providing services of
substantial value) and to enable such persons to acquire or increase a
proprietary interest in the Company, thereby promoting a closer identity of
interests between such persons and the Company's stockholders.
2. DEFINITIONS. The definitions of awards under the Plan, including
Options, SARs (including Limited SARs), Restricted Stock, Deferred Stock, Stock
granted as a bonus or in lieu of other awards, Dividend Equivalents, and Other
Stock-Based Awards, are set forth in Section 6 of the Plan. Such awards,
together with any other right or interest granted to a Participant under the
Plan, are termed "Awards." For purposes of the Plan, the following additional
terms shall be defined as set forth below:
(a) "AWARD AGREEMENT" means any written agreement, contract, or other
instrument or document evidencing an Award.
(b) "BENEFICIARY" shall mean the person, persons, trust, or trusts which
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under this Plan upon such Participant's death or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust, or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
(c) "BOARD" means the Board of Directors of the Company.
(d) A "CHANGE IN CONTROL" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended) of any voting security of the Company and immediately after such
acquisition such Person is, directly or indirectly, the Beneficial Owner of
voting securities representing 50% or more of the total voting power of all
of the then-outstanding voting securities of the Company;
(ii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation of
any such transaction if stockholder approval is not sought or obtained,
other than any such transaction which would result in at least 75% of the
total voting power represented by the voting securities of the surviving
entity outstanding immediately after such transaction being Beneficially
Owned by at least 75% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power of
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each such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iii) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(e) "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
regulations thereunder and successor provisions and regulations thereto.
(f) "COMMITTEE" means the Compensation Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan;
PROVIDED, HOWEVER, that to the extent necessary to comply with Rule 16b-3, the
Committee shall consist of two or more directors, each of whom is a
"disinterested person" within the meaning of Rule 16b-3.
(g) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include rules thereunder and successor provisions and rules thereto.
(h) "FAIR MARKET VALUE" means, with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee, provided, however, that (i) if the Stock is listed on a
national securities exchange or quoted in an interdealer quotation system, the
Fair Market Value of such Stock on a given date shall be based upon the last
sales price or, if unavailable, the average of the closing bid and asked prices
per share of the Stock on such date (or, if there was no trading or quotation in
the Stock on such date, on the next preceding date on which there was trading or
quotation) as provided by one of such organizations, (ii) the "fair market
value" of Stock on the date on which shares of Stock are first issued and sold
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission shall be the Initial Public Offering price of
the shares so issued and sold, as set forth in the first final prospectus used
in such offering and (iii) the "fair market value" of Stock prior to the date of
the Initial Public Offering shall be as determined by the Board of Directors.
(i) "INITIAL PUBLIC OFFERING" shall mean an initial public offering of
shares of Stock in a firm commitment underwriting registered with the Securities
and Exchange Commission in compliance with the provisions of the 1933 Act.
(j) "ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.
(k) "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board who is not
otherwise an employee of the Company or any subsidiary.
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(l) "PARTICIPANT" means a person who, at a time when eligible under Section
5 hereof, has been granted an Award under the Plan.
(m) "RULE 16B-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
(n) "STOCK" means the Common Stock, $.0 1 par value, of the Company and
such other securities as may be substituted for Stock or such other securities
pursuant to Section 4.
3. ADMINISTRATION.
(a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
(i) to select Participants to whom Awards may be granted;
(ii) to determine the type or types of Awards to be granted to each
Participant;
(iii) to determine the number of Awards to be granted, the number of
shares of Stock to which an Award will relate, the terms and conditions of
any Award granted under the Plan (including, but not limited to, any
exercise price, grant price, or purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions relating to
transferability or forfeiture, exercisability, or settlement of an Award,
and waivers or accelerations thereof, and waivers of or modifications to
performance conditions relating to an Award, based in each case on such
considerations as the Committee shall determine), and all other matters to
be determined in connection with an Award;
(iv) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Stock, other Awards, or other property, or an Award
may be cancelled, forfeited, or surrendered;
(v) to determine whether, to what extent, and under what circumstances
cash, Stock, other Awards, or other property payable with respect to an
Award will be deferred either automatically, at the election of the
Committee, or at the election of the Participant;
(vi) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(vii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
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(viii) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement, or other instrument
hereunder; and
(ix) to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.
(b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Company's
Certificate of Incorporation or Bylaws, or applicable law, the Committee shall
have sole discretion in exercising authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, subsidiaries of the Company, Participants,
any person claiming any rights under the Plan from or through any Participant,
and stockholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. The Committee may delegate to officers
or managers of the Company or any subsidiary of the Company the authority,
subject to such terms as the Committee shall determine, to perform
administrative functions and, with respect to Participants not subject to
Section 16 of the Exchange Act, to perform such other functions as the Committee
may determine, to the extent permitted under Rule 16b-3, if applicable, and
other applicable law.
(c) LIMITATION OF LIABILITY. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished to
him by any officer or other employee of the Company or any subsidiary, the
Company's independent certified public accountants, or any executive
compensation consultant, legal counsel, or other professional retained by the
Company to assist in the administration of the Plan. No member of the Committee,
nor any officer or employee of the Company acting on behalf of the Committee,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Committee and any officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination, or interpretation.
4. STOCK SUBJECT TO PLAN.
(a) AMOUNT OF STOCK RESERVED. The total amount of Stock that may be subject
to outstanding Awards, determined immediately after the grant of any Award,
shall not exceed [2,925,000] shares of the total number of shares of Stock
outstanding. Shares subject to ISOs, Restricted Stock or Deferred Stock Awards
shall not be deemed delivered if such Awards are forfeited, expire or otherwise
terminate without delivery of shares to the Participant. If an Award valued by
reference to Stock may only be settled in cash, the number of shares to which
such Award relates shall be deemed to be Stock subject to such Award for
purposes of this Section 4(a). Any shares of Stock delivered pursuant to an
Award may consist, in whole or in part, of authorized and unissued shares or
treasury shares.
(b) ADJUSTMENTS. In the event of any dividend or other distribution
(whether in the form of cash, Stock, or other property), recapitalization,
forward or reverse split, reorganization, merger, consolidation, spin-off,
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combination, repurchase, or share exchange, or other similar corporate
transaction or event, affects the Stock such that an adjustment is appropriate
in order to prevent dilution or enlargement of the rights of Participants under
the Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of shares of Stock deemed to be
available thereafter for grants of Awards under Section 4(a) (including with
respect to the limitations relating to ISOs and to Restricted and Deferred
Stock), (ii) the number and kind of shares of Stock that may be delivered or
deliverable in respect of outstanding Awards, and (iii) the exercise price,
grant price, or purchase price relating to any Award (or, if deemed appropriate,
the Committee may make provision for a cash payment with respect to any
outstanding Award). In addition, the Committee is authorized to make adjustments
in the terms and conditions of, and the criteria included in, Awards (including,
without limitation, cash payments in exchange for an Award or substitution of
Awards using stock of a successor or other entity) in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or any subsidiary or the financial
statements of the Company or any subsidiary, or in response to changes in
applicable laws, regulations, or accounting principles. The foregoing
notwithstanding, no adjustments shall be authorized under this Section 4(c) with
respect to ISOs or SARs in tandem therewith to the extent that such authority
would cause the Plan to violate Section 422(b)(1) of the Code, and no such
adjustment shall be authorized with respect to Options or other Awards granted
in accordance with Section 7(1) hereof to the extent that such authority would
cause such Options or other Awards to fail to qualify as "performance-based
compensation" under Section 162(m)(4)(C) of the Code and regulations thereunder
(including Regulation 1. 162-27(e)(2)).
5. ELIGIBILITY. Executive officers and other key employees of the Company
and its subsidiaries, including any director and persons who provide consulting
or other services to the Company deemed by the Committee to be of substantial
value to the Company, are eligible to be granted Awards under the Plan. In
addition, a person who has been offered employment by the Company or its
subsidiaries is eligible to be granted an Award under the Plan, provided that
such Award shall be cancelled if such person fails to commence such employment,
and no payment of value may be made in connection with such Award until such
person has commenced such employment. The foregoing notwithstanding,
Non-Employee Directors who are members of the Committee shall not be eligible to
be granted Awards under the Plan.
6. SPECIFIC TERMS OF AWARDS.
(a) GENERAL. Awards may be granted on the terms and conditions set forth in
this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 8(e)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of termination of employment or service of the
Participant. Except as provided in Sections 6(1), 6(h), or 7(a), or to the
extent required to comply with requirements of the Delaware General Corporation
Law that lawful consideration be paid for Stock, only services may be required
as consideration for the grant (but not the exercise) of any Award.
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(b) OPTIONS. The Committee is authorized to grant Options to Participants
(including "reload" options automatically granted to offset specified exercises
of options) on the following terms and conditions:
(i) EXERCISE PRICE. The exercise price per share of Stock purchasable
under an Option shall be determined by the Committee.
(ii) TIME AND METHOD OF EXERCISE. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part, the
methods by which such exercise price may be paid or deemed to be paid, the
form of such payment, including, without limitation, cash, Stock, other
Awards or awards granted under other Company plans, or other property
(including notes or other contractual obligations of Participants to make
payment on a deferred basis, such as through "cashless exercise"
arrangements, to the extent permitted by applicable law), and the methods
by which Stock will be delivered or deemed to be delivered to Participants.
(iii) ISOS. The terms of any ISO granted under the Plan shall comply
in all respects with the provisions of Section 422 of the Code, including
but not limited to the requirement that no ISO shall be granted more than
ten years after the effective date of the Plan. Anything in the Plan to the
contrary notwithstanding, no term of the Plan relating to ISOs shall not be
interpreted, amended, or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify either the Plan or
any ISO under Section 422 of the Code.
(iv) TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Committee, upon termination of a Participant's employment with the Company
and its subsidiaries, such Participant may exercise any Options during the
three month period following such termination of employment, but only to
the extent such Option was exercisable immediately prior to such
termination of employment. Notwithstanding the foregoing, if the Committee
determines that such termination is for cause, all Options held by the
Participant shall immediately terminate.
(c) STOCK APPRECIATION RIGHTS. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(i) RIGHT TO PAYMENT. An SAR shall confer on the Participant to
whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one share of Stock on the date
of exercise (or, if the Committee shall so determine in the case of
any such right other than one related to an ISO, the Fair Market Value
of one share at any time during a specified period before or after the
date of exercise), over (B) the grant price of the SAR as determined
by the Committee as of the date of grant of the SAR, which, except as
provided in Section 7(a), shall be not less than the Fair Market Value
of one share of Stock on the date of grant.
(ii) OTHER TERMS. The Committee shall determine the time or times
at which an SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in
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settlement, method by which Stock will be delivered or deemed to be
delivered to Participants, whether or not an SAR shall be in tandem
with any other Award, and any other terms and conditions of any SAR.
Limited SARs that may only be exercised upon the occurrence of a
Change in Control may be granted on such terms, not inconsistent with
this Section 6(c), as the Committee may determine. Limited SARs may be
either freestanding or in tandem with other Awards.
(d) RESTRICTED STOCK. The Committee is authorized to grant Restricted Stock
to Participants on the following terms and conditions:
(i) GRANT AND RESTRICTIONS. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions, if any,
as the Committee may impose, which restrictions may lapse separately
or in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine. Except to
the extent restricted under the terms of the Plan and any Award
Agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder
including, without limitation, the right to vote Restricted Stock or
the right to receive dividends thereon.
(ii) FORFEITURE. Except as otherwise determined by the Committee,
upon termination of employment or service (as determined under
criteria established by the Committee) during the applicable
restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited and reacquired by the Company;
PROVIDED, HOWEVER, that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating
to Restricted Stock will be waived in whole or in part in the event of
termination resulting from specified causes. Notwithstanding anything
contained herein to the contrary (other than Section 7(g)), all
Restricted Stock Awards, other than an Award granted pursuant to
Section 7(1), shall be forfeited upon a Participant's termination of
employment or other service with the Company and its subsidiaries
within three years of the date the award is granted, provided,
however, that the Committee may make exceptions in the event such
termination is by reason of the Participant's death or disability.
(iii) CERTIFICATES FOR STOCK. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the
name of the Participant, such certificates shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable
to such Restricted Stock, the Company shall retain physical possession
of the certificate, and the Participant shall have delivered a stock
power to the Company, endorsed in blank, relating to the Restricted
Stock.
(iv) DIVIDENDS. Dividends paid on Restricted Stock shall be
either paid at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of
such dividends, or the payment of such dividends shall be deferred
and/or the amount or value thereof automatically reinvested in
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additional Restricted Stock, other Awards, or other investment
vehicles, as the Committee shall determine or permit the Participant
to elect. Stock distributed in connection with a Stock split or Stock
dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same extent as
the Restricted Stock with respect to which such Stock or other
property has been distributed.
(e) DEFERRED STOCK. The Committee is authorized to grant Deferred Stock to
Participants, subject to the following terms and conditions:
(i) AWARD AND RESTRICTIONS. Delivery of Stock will occur upon
expiration of the deferral period specified for an Award of Deferred
Stock by the Committee (or, if permitted by the Committee, as elected
by the Participant). In addition, Deferred Stock shall be subject to
such restrictions as the Committee may impose, if any, which
restrictions may lapse at the expiration of the deferral period or at
earlier specified times, separately or in combination, in
installments, or otherwise, as the Committee may determine.
(ii) FORFEITURE. Except as otherwise determined by the Committee,
upon termination of employment or service (as determined under
criteria established by the Committee) during the applicable deferral
period or portion thereof to which forfeiture conditions apply (as
provided in the Award Agreement evidencing the Deferred Stock), all
Deferred Stock that is at that time subject to deferral (other than a
deferral at the election of the Participant) shall be forfeited;
PROVIDED, HOWEVER, that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating
to Deferred Stock will be waived in whole or in part in the event of
termination resulting from specified causes. Notwithstanding anything
contained herein to the contrary (other than Section 7(g)), all
Deferred Stock Awards, other than an Award granted pursuant to Section
7(1), shall be forfeited upon a Participant's termination of
employment or other service with the Company and its subsidiaries
within three years of the date the award is granted, provided,
however, that the Committee may make exceptions in the event such
termination is by reason of the Participant's death or disability.
(f) BONUS STOCK AND AWARDS IN LIEU OF CASH OBLIGATIONS. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company obligations to pay cash under other plans or compensatory
arrangements, provided that, in the case of Participants subject to Section 16
of the Exchange Act, such cash amounts are determined under such other plans in
a manner that complies with applicable requirements of Rule 16b-3 so that the
acquisition of Stock or Awards hereunder shall be exempt from Section 16(b)
liability. Stock or Awards granted hereunder shall be subject to such other
terms as shall be determined by the Committee.
(g) DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend
Equivalents to a Participant, entitling the Participant to receive cash, Stock,
other Awards, or other property equal in value to dividends paid with respect to
a specified number of shares of Stock, or other periodic payments. Dividend
Equivalents may be awarded on a free-standing basis or in connection with
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another Award. The Committee may provide that Dividend Equivalents shall be paid
or distributed when accrued or shall be deemed to have been reinvested in
additional Stock, Awards, or other investment vehicles as the Committee may
specify.
(h) OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into Stock, purchase rights for Stock, Awards with value and
payment contingent upon performance of the Company or any other factors
designated by the Committee, and Awards valued by reference to the book value of
Stock or the value of securities of or the performance of specified
subsidiaries. The Committee shall determine the terms and conditions of such
Awards. Stock delivered pursuant to an Award in the nature of a purchase right
granted under this Section 6(h) shall be purchased for such consideration, paid
for at such times, by such methods, and in such forms, including, without
limitation, cash, Stock, other Awards, or other property, as the Committee shall
determine. Cash awards, as an element of or supplement to any other Award under
the Plan, shall also be authorized pursuant to this Section 6(h).
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for, any other Award
granted under the Plan or any award granted under any other plan of the Company,
any subsidiary, or any business entity to be acquired by the Company or a
subsidiary, or any other right of a Participant to receive payment from the
Company or any subsidiary. Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards.
(b) TERM OF AWARDS. The term of each Award shall be for such period as may
be determined by the Committee; PROVIDED, HOWEVER, that in no event shall the
term of any ISO or an SAR granted in tandem therewith exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code).
(c) FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a subsidiary
upon the grant or exercise of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Stock, other
Awards, or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in Stock.
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(d) RULE 16B-3 COMPLIANCE.
(i) SIX-MONTH HOLDING PERIOD. Unless a Participant could
otherwise exercise a derivative security or dispose of Stock delivered
upon exercise of a derivative security granted under the Plan without
incurring liability under Section 16(b) of the Exchange Act, (i) Stock
delivered under the Plan other than upon exercise or conversion of a
derivative security granted under the Plan shall be held for at least
six months from the date of acquisition, and (ii), with respect to a
derivative security granted under the Plan, at least six months shall
elapse from the date of acquisition of the derivative security to the
date of disposition of the derivative security (other than upon
exercise or conversion) or its underlying equity security.
(ii) TRANSFERABILITY. Except as otherwise provided by the
Committee, Awards under the Plan are not transferable except as
designated by the Participant by will or by the laws of descent and
distribution (or pursuant to a Beneficiary designation).
(iii) REFORMATION TO COMPLY WITH EXCHANGE ACT RULES. It is the
intent of the Company that this Plan comply in all respects with
applicable provisions of Rule 1 6b-3 or Rule 1 6a- 1(c) (3) under the
Exchange Act in connection with any grant of Awards to or other
transaction by a Participant who is subject to Section 16 of the
Exchange Act (except for transactions exempted under alternative
Exchange Act Rules or acknowledged in writing to be non-exempt by such
Participant). Accordingly, if any provision of this Plan or any Award
Agreement relating to an Award does not comply with the requirements
of Rule 1 6b-3 or Rule 1 6a- 1(c) (3) as then applicable to any such
transaction, such provision will be construed or deemed amended to the
extent necessary to conform to the applicable requirements of Rule
16b-3 or Rule 16a-1 (c)(3) so that such Participant shall avoid
liability under Section 16(b). In addition, other provisions of the
Plan notwithstanding, the exercise price of any Award carrying a right
to exercise granted to a Participant subject to Section 16 of the
Exchange Act shall be not less than 50% of the Fair Market Value of
Stock as of the date such Award is granted if such pricing limitation
is required under Rule 16b-3 at the time of such grant.
(e) LOAN PROVISIONS. With the consent of the Committee, and subject at all
times to, and only to the extent, if any, and in accordance with, laws and
regulations and other binding obligations or provisions applicable to the
Company, the Company may make, guarantee, or arrange for a loan or loans to a
Participant with respect to the exercise of any Option or other payment in
connection with any Award, including the payment by a Participant of any or all
federal, state, or local income or other taxes due in connection with any Award.
Subject to such limitations, the Committee shall have full authority to decide
whether to make a loan or loans hereunder and to determine the amount, terms,
and provisions of any such loan or loans, including the interest rate to be
charged in respect of any such loan or loans, whether the loan or loans are to
be with or without recourse against the borrower, the terms on which the loan is
to be repaid and conditions, if any, under which the loan or loans may be
forgiven.
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(f) PERFORMANCE-BASED AWARDS TO "COVERED EMPLOYEES". Other provisions of
the Plan notwithstanding, the provisions of this Section 7(1) shall apply to any
Award the exercisability or settlement of which is subject to the achievement of
performance conditions (other than an Option or SAR granted with an exercise or
base price at least equal to 100% of Fair Market Value of Stock on the date of
grant) if such Award is granted to a person who, at the time of grant, is a
"covered employee." The definition of "covered employee," and other terms used
in this Section 7(1), shall be interpreted in a manner consistent with Section
162(m) of the Code and regulations thereunder (including Regulation 1.162-27).
The performance objectives for an Award subject to this Section 7(1) shall
consist of one or more business criteria and a targeted level or levels of
performance with respect to such criteria, as specified by the Committee but
subject to this Section 7(1). Performance objectives shall be objective and
shall otherwise meet the requirements (including the shareholder approval
requirements) of Section 162(m)(4)(C) of the Code and regulations thereunder
(including Regulation 1. 162-27(e)(2)). The following business criteria shall be
used by the Committee in connection with a performance objective:
(1) Annual earnings before payment of taxes and interest;
(2) Annual earnings per share; and/or
(3) Annual return on common equity.
Achievement of performance objectives shall be measured over a period of one,
two, three, or four years, as specified by the Committee. No business criteria
other than those named above may be used in establishing the performance
objective for an Award to a covered employee. For each such Award relating to a
covered employee, the Committee shall establish the targeted level or levels of
performance for each business criteria. Performance objectives may differ for
Awards under this Section 7(1) to different covered employees. The Committee may
determine that an Award under this Section 7(1) shall be payable upon
achievement of any one of the performance objectives or may require that two or
more of the performance objectives must be achieved in order for an Award to be
payable. The Committee may, in its discretion, reduce the amount of a payout
otherwise to be made in connection with an Award under this Section 7(1), but
may not exercise discretion to increase such amount, and the Committee may
consider other performance criteria in exercising such discretion. All
determinations by the Committee as to the achievement of performance objectives
shall be made in writing. The Committee may not delegate any responsibility
under this Section 7(1).
(g) ACCELERATION UPON A CHANGE OF CONTROL. Notwithstanding anything
contained herein to the contrary, unless otherwise provided by the Committee in
an Award Agreement, all conditions and/or restrictions relating to the continued
performance of services and/or the achievement of performance objectives with
respect to the exercisability or full enjoyment of an Award shall immediately
lapse upon a Change in Control.
8. GENERAL PROVISIONS.
(a) COMPLIANCE WITH LEGAL AND EXCHANGE REQUIREMENTS. The Company shall not
be obligated to deliver Stock upon the exercise or settlement of any Award or
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take other actions under the Plan until the Company shall have determined that
applicable federal and state laws, rules, and regulations have been complied
with and such approvals of any regulatory or governmental agency have been
obtained and contractual obligations to which the Award may be subject have been
satisfied. The Company, in its discretion, may postpone the issuance or delivery
of Stock under any Award until completion of such stock exchange listing or
registration or qualification of such Stock or other required action under any
federal or state law, rule, or regulation as the Company may consider
appropriate, and may require any Participant to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of Stock under the Plan.
(b) TRANSFERABILITY. Except as otherwise set forth in Section 7(d)(ii),
Awards and other rights of Participants under the Plan may not be transferred to
third parties, pledged, mortgaged, hypothecated, or otherwise encumbered, and
shall not be subject to claims of creditors.
(c) NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee or person
providing consulting or other services the right to be retained in the employ or
service of the Company or any of its subsidiaries, nor shall it interfere in any
way with the right of the Company or any of its subsidiaries to terminate any
employee's employment or terminate any contract with a person providing
consulting or other services at any time.
(d) TAXES. The Company or any subsidiary is authorized to withhold from any
Award granted or to be settled, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations.
(e) CHANGES TO THE PLAN AND AWARDS. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any such action shall be subject to the approval of the Company's stockholders
at or before the next annual meeting of stockholders for which the record date
is after such Board action if such stockholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to stockholders for approval; PROVIDED, HOWEVER, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to
him. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue, or terminate, any Award theretofore granted and any Award
Agreement relating thereto; PROVIDED, HOWEVER, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under such Award.
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(f) NO RIGHTS TO AWARDS; NO STOCKHOLDER RIGHTS. No Participant, employee,
or other person shall have any claim to be granted any Award under the Plan, and
there is no obligation for uniformity of treatment of Participants, employees,
and other persons. No Award shall confer on any Participant any of the rights of
a stockholder of the Company unless and until Stock is duly issued or
transferred and delivered to the Participant in accordance with the terms of the
Award.
(g) UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
PROVIDED, HOWEVER, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Stock, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.
(h) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the
Board nor its submission to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.
(i) NO FRACTIONAL SHARES. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) COMPLIANCE WITH CODE SECTION 162(M). It is the intent of the Company
that Options and other Awards subject to the performance objectives specified
under Section 7(1) granted under the Plan to persons who are "covered employees"
within the meaning of Code Section 162(m) and regulations thereunder (including
Regulation 1. 162-27(c)(2)) shall constitute "qualified performance-based
compensation" within the meaning of Code Section 162(m) and regulations
thereunder (including Regulation 1.162-27(e), and subject to the transition
rules under Regulation 1. 162-27(h)(2)) thereunder. Accordingly, if any
provision of the Plan or any Award Agreement relating to such an Award granted
to a "covered employee" does not comply or is inconsistent with the requirements
of Code Section 162(m) or regulations thereunder, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person discretion to increase the amount of compensation otherwise
payable to a "covered employee" in connection with any such Award upon
attainment of the performance objectives.
(k) GOVERNING LAW. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan, and any Award Agreement shall be
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determined in accordance with the Delaware General Corporation Law, without
giving effect to principles of conflicts of laws, and applicable federal law.
(l) EFFECTIVE DATE; PLAN TERMINATION. The Plan shall become effective as of
the date of its adoption by the Board and shall continue in effect until
terminated by the Board.
<PAGE>
EXHIBIT 5.1
KELLEY DRYE & WARREN LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
(203) 324-1400
December 22, 1999
Board of Directors
Netrix Corporation
13595 Dulles Technology Drive
Herndon, VA 20171
Ladies and Gentlemen:
We have acted as special counsel to Netrix Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of up to 4,825,000 shares (the "Shares") of
the Company's common stock, par value $.05 per share, issuable pursuant to the
Company's 1999 Long-Term Incentive Plan, 1991 Restated Stock Option Plan, 1988
Nonqualified Stock Option Plan and Restated Employee Stock Award Plan (the
"Plans"). In connection therewith, the Company will file a Registration
Statement on Form S-8 (File No. 333-__________) (the "Registration Statement")
with the Securities and Exchange Commission (the "Commission"). As such special
counsel, you have requested our opinion as to matters described herein relating
to the issuance of the Shares.
In connection with the delivery of the within opinion we have
examined: the Plans; the Company's Certificate of Incorporation, as amended, as
in effect on the date hereof; the Company's By-Laws as in effect on the date
hereof; minutes of the Company's corporate proceedings, as made available to us
by officers of the Company; an executed copy of the Registration Statement, and
all documents incorporated by reference therein and exhibits thereto, in the
form filed or to be filed with the Commission; and such matters of law deemed
necessary by us in order to deliver the within opinion. In the course of such
examination, we have assumed the genuineness of all signatures, the authority of
all signatories to sign on behalf of their principals, if any, the authenticity
of all documents submitted to us as original documents and the conformity to
original documents of all documents submitted to us as certified or photostatic
copies. As to certain factual matters, we have relied upon information furnished
to us by officers of the Company.
Based on the foregoing and solely in reliance thereon, it is our
opinion that the Shares have been duly authorized and, when issued and paid for
as contemplated by the Plans, will be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement, and to all references to our firm included in the
Registration Statement, as of the date hereof. In giving such consent, we do not
admit that we are in the category of persons whose consent is required under
<PAGE>
Section 7 of the Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
KELLEY DRYE & WARREN LLP
By: /s/ Jay R. Schifferli
__________________________
A Partner
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated April 14, 1999
included (or incorporated by reference) in Netrix Corporation's Form 10-K/A for
the year ended December 31, 1998 and to all references to our Firm included in
this registration statement.
ARTHUR ANDERSEN LLP
Vienna, Virginia
December 21, 1999
